UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
FORM 6-K
 
Report of Foreign Private Issuer
Pursuant to Rule 13a-16 or 15d-16
under the Securities Exchange Act of 1934
 
For the Month of August 2017
 
CAMTEK LTD.
(Translation of Registrant’s Name into English)
 
Ramat Gavriel Industrial Zone
P.O. Box 544
Migdal Haemek 23150
ISRAEL
(Address of Principal Corporate Offices)
 
Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.
 
Form 20-F x Form 40-F
 
Indicate by check mark whether the registrant by furnishing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities and Exchange Act of 1934.
 
Yes o No
 

 
SIGNATURE
 
        Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
 
 
CAMTEK LTD.
(Registrant)

By: /s/ Moshe Eisenberg
——————————————
Moshe Eisenberg,
Chief Financial Officer
 
Dated: August 3, 2017
 

 

Camtek Ltd.
P.O.Box 544, Ramat Gabriel Industrial Park
Migdal Ha’Emek 23150,  ISRAEL
Tel: +972 (4) 604-8100   Fax: +972 (4) 644-0523
E-Mail:    Info@camtek.com  Web site: http://www.camtek.com
 
CAMTEK LTD.
Moshe Eisenberg, CFO
Tel: +972 4 604 8308
Mobile: +972 54 900 7100
moshee@camtek.com
 
INTERNATIONAL INVESTOR RELATIONS
GK Investor Relations
Ehud Helft/Gavriel Frohwein
Tel: (US) 1 646 688 3559
camtek@gkir.com
 
 
FOR IMMEDIATE RELEASE
 
CAMTEK ANNOUNCES SECOND QUARTER 2017 RESULTS

Camtek becomes a pure-play semiconductor company;
Expects continued growth with 15% operating margin in Q4-2017

MIGDAL HAEMEK, Israel – August 3, 2017 – Camtek Ltd. (NASDAQ: CAMT; TASE: CAMT), today announced its financial results for the quarter ended June 30, 2017.

Recent Highlights
·
Signed an agreement to sell the PCB business for up to $35 million;
·
Reached final settlement with Rudolph Technologies; and
·
Adjusted FIT related expenses to a run rate of $100-125K per quarter.

Financial Highlights of the Second Quarter 2017
·
Total revenues (including revenue from the discontinued PCB operations) were $34.3 million, ahead of the guidance range;
·
Record revenues in the semiconductor segment of $22.7 million, up 14% year over year;
·
GAAP net loss of $3.9 million; mainly due to the $13 million settlement charge
·
Non-GAAP net income of $3.8 million;
·
Strong operating cash flow of $3.8 million; end of quarter net cash of $27.1 million;

Guidance for the Second Half of 2017

Due to the significant business changes that Camtek has undergone, Camtek is providing additional metrics to enable investors and analysts to better model the new business structure for the remainder of 2017.

Third quarter revenues (semiconductors only) are expected to be between $23-24 million, a year-over-year increase of 12% with gross margins at around 50% and double-digit operating margins.

Fourth quarter revenues are expected to be slightly higher than those of the third quarter while operating costs are expected to reduce and benefit from the reduction in legal and FIT expenses. Non-GAAP operating margins are expected to improve to an approximately 15% in the fourth quarter of 2017 with continued improvement in 2018.


 
Due to the expected sale of Camtek’s PCB business, the results of this unit ceased to be consolidated into Camtek’s financial statements and are accounted for as discontinued operations in both the current period ended June 30, 2017 as well as the comparative periods. Following the settlement with Rudolph Technologies, there is a one-time charge of $13 million on GAAP net income in the second quarter 2017 results. This amount is excluded from the non-GAAP results. A reconciliation between the GAAP and non-GAAP results appears in the tables at the end of this press release.

Rafi Amit, Camtek’s CEO, commented, “The past few months have been very significant for Camtek from a strategic perspective. We are divesting our PCB business at a time of positive momentum in that sector, to a Shanghai-based private equity fund. Following our decision to focus on ink development and a strategic cooperation with a world leading ink developer and manufacturer, we managed to adjust our FIT-related expenses. We also settled outstanding IP litigation which has been an overhang for more than a decade, and this allows us to significantly reduce our ongoing legal-related expenses. Following these initiatives, Camtek has now become a focused semiconductor inspection and metrology company. We have a very strong balance sheet, opening up many potential opportunities on which we intend to capitalize. Our goal is to cement ourselves as the leading advanced packaging inspection and metrology Company for the semiconductor industry.”

 “Looking ahead, we expect to see longer-term higher revenue growth rates for Camtek. Additionally, we expect to demonstrate higher gross margins and lower operating expenses, leading to significantly improved operating margins. This should be evident already in the coming quarters, and we expect our fourth quarter results to demonstrate approximately 15% operating margin with potential for further improvement in 2018,” continued Mr. Amit.

Concluded Mr. Amit, “We believe the recent actions we have taken will enable the value in Camtek to become more apparent and increase shareholder value. We look forward to taking our business to the next level over the coming years, with even greater vigor and focus.”

Second Quarter 2017 Financial Results

Revenues for the second quarter of 2017 were $22.7 million. This compares to second quarter 2016 revenues of $19.8 million, a growth of 14%. Revenues do not include those of the PCB business, whose sale is expected to close in the third quarter, which are accounted for as discontinued operations.

Gross profit on a GAAP and non-GAAP basis in the quarter totaled $11.2 million (49.2% of revenues), compared to $10.0 million (50.5% of revenues) in the second quarter 2016. The variance in the gross margin is a function of the product and sales mix in the quarter.

Operating loss on a GAAP basis in the quarter totaled $11.0 million, compared to an operating income of $0.8 million (3.9% of revenues), in the second quarter 2016. This includes the one-time $13 million charge for the Rudolph settlement.

Operating profit on a non-GAAP basis in the quarter totaled $2.1 million (9.2% of revenues), compared to $0.9 million (4.5% of revenues), in the second quarter 2016.

Net loss on a GAAP basis in the quarter totaled $3.9 million, or $0.11 per share. This compares to net income of $1.3 million, or $0.04 per diluted share, in the second quarter 2016. This includes a deferred tax income of $5.5 million and the results of the discontinued operations.

Net income on a non-GAAP basis in the quarter totaled $3.8 million, or $0.11 per diluted share. This compares to net income of $1.5 million, or $0.04 per diluted share, in the second quarter 2016.

Cash and cash equivalents as of June 30, 2017 were $27.1 million compared to $24.3 million as of March 31, 2017. The $13 million settlement amount is expected to be paid in the third quarter. The Company reported a positive operating cash flow of $3.7 million during the quarter.



Conference Call

Camtek will host a conference call today, August 3, 2017, at 9:00 am ET.

Rafi Amit, CEO, Moshe Eisenberg, CFO and Ramy Langer, VP Head of the Semiconductors Division will host the call and will be available to answer questions after presenting the results. To participate, please call one of the following telephone numbers a few minutes before the start of the call.

US:
1 888 407 2553
 
at 9:00 am Eastern Time
Israel:
03 918 0610
 
at 4:00 pm Israel Time
International:
+972 3 918 0610
   
 
For those unable to participate, the teleconference will be available for replay on Camtek’s website at http://www.camtek.com beginning 24 hours after the call.
 
ABOUT CAMTEK LTD.

Camtek Ltd. provides automated and technologically advanced solutions dedicated to enhancing production processes, increasing products yield and reliability, enabling and supporting customer’s latest technologies in the Semiconductors, Printed Circuit Boards (PCB) and IC Substrates industries.

Camtek addresses the specific needs of these interconnected industries with dedicated solutions based on a wide and advanced platform of technologies including intelligent imaging, image processing and functional inkjet printing.
 
This press release is available at www.camtek.com
 
This press release may contain projections or other forward-looking statements regarding future events or the future performance of the Company. These statements are only predictions and may change as time passes. We do not assume any obligation to update that information. Actual events or results may differ materially from those projected, including as a result of changing industry and market trends, reduced demand for our products, the timely development of our new products and their adoption by the market, increased competition in the industry, intellectual property litigation, price reductions as well as due to risks identified in the documents filed by the Company with the SEC.
 
Use of non-GAAP Measures
 
This press release provides financial measures that exclude: (i) settlement expenses; (ii) tax benefits; (iii) share based compensation expenses; (iv) write off of inventory and fixed-assets related to the discontinued FIT product line; and (v) revaluation of liabilities with respect to the acquisition of Printar, and are therefore not calculated in accordance with generally accepted accounting principles (GAAP). Management believes that these Non-GAAP financial measures provide meaningful supplemental information regarding our performance. The presentation of this non-GAAP financial information is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with GAAP. Management uses both GAAP and non-GAAP measures when evaluating the business internally and therefore felt it is important to make these non-GAAP adjustments available to investors. A reconciliation between the GAAP and non-GAAP results appears in the tables at the end of this press release.
 

Camtek Ltd.
 
Consolidated Balance Sheets
(In thousands)
 
   
June 30,
   
December 31,
 
   
2017
   
2016
 
   
U.S. Dollars (In thousands)
 
Assets
           
             
Current assets
           
Cash and cash equivalents
   
27,122
     
19,740
 
Trade accounts receivable, net
   
21,371
     
22,066
 
Inventories
   
20,681
     
16,647
 
Due from affiliated companies
   
367
     
-
 
Other current assets
   
1,506
     
2,039
 
Deferred tax asset
   
4,649
     
894
 
Current assets held for sale
   
27,030
     
25,018
 
                 
Total current assets
   
102,726
     
86,404
 
                 
Fixed assets, net
   
15,618
     
13,725
 
                 
Long-term inventory
   
1,390
     
1,461
 
Deferred tax asset
   
4,894
     
3,179
 
Other assets, net
   
270
     
270
 
Intangible assets, net
   
474
     
519
 
                 
     
7,028
     
5,429
 
                 
Total assets
   
125,372
     
105,558
 
                 
Liabilities and shareholders’ equity
               
                 
Current liabilities
               
Trade accounts payable
   
12,515
     
10,304
 
Other current liabilities
   
29,308
     
14,722
 
Due to affiliated companies
   
-
     
18
 
Current liabilities held for sale
   
9,423
     
6,482
 
                 
Total current liabilities
   
51,246
     
31,526
 
                 
Long term liabilities
               
Liability for employee severance benefits
   
928
     
667
 
     
928
     
667
 
                 
Total liabilities
   
52,174
     
32,193
 
                 
Shareholders’ equity
               
Ordinary shares NIS 0.01 par value, 100,000,000 shares authorized at June 30, 2017 and at December 31, 2016;
               
37,490,367 issued shares at June 30, 2017 and 37,440,552 at December 31, 2016;
               
35,397,911 shares outstanding at June 30, 2016 and 35,348,176 at December 31, 2016
   
148
     
148
 
Additional paid-in capital
   
76,874
     
76,463
 
Accumulated losses
   
(1,926
)
   
(1,348
)
     
75,096
     
75,263
 
Treasury stock, at cost (2,092,376  as of June 30, 2017 and December 31, 2016)
   
(1,898
)
   
(1,898
)
                 
Total shareholders' equity
   
73,198
     
73,365
 
                 
Total liabilities and shareholders' equity
   
125,372
     
105,558
 
 
*          On July 18, 2017, Camtek signed a definitive agreement with an affiliate of Principle Capital, a Shanghai-based privet-equity fund, to sell its PCB business. In accordance with U.S. generally accepted accounting principles (“U.S. GAAP”), the financial position and results of operations of the PCB business are presented as discontinued operation and, as such, have been excluded from continuing operation for all period presented.
 

Camtek Ltd.
 
Consolidated Statements of Operations
(in thousands, except share data)
 
   
Six Months ended
June 30,
   
Three Months
ended June 30,
   
Year ended
December 31,
 
   
2017
   
2016
   
2017
   
2016
   
2016
 
   
U.S. dollars
   
U.S. dollars
   
U.S. dollars
 
Revenues
   
43,828
     
36,669
     
22,682
     
19,835
     
79,228
 
Cost of revenues
   
22,384
     
18,665
     
11,527
     
9,828
     
41,807
 
Reorganization and impairment
   
-
     
-
     
-
     
-
     
4,931
 
                                         
Gross profit
   
21,444
     
18,004
     
11,155
     
10,007
     
32,490
 
                                         
Research and development costs
   
6,852
     
6,497
     
3,413
     
3,295
     
12,630
 
Selling, general and administrative expenses
   
11,159
     
10,887
     
5,754
     
5,936
     
21,900
 
Reorganization and impairment
   
-
     
-
     
-
     
-
     
(4,059
)
Expenses from settlement
   
13,000
     
-
     
13,000
     
-
     
-
 
                                         
Operating income (loss)
   
(9,567
)
   
620
     
(11,012
)
   
776
     
2,019
 
                                         
Financial expenses, net
   
(209
)
   
(379
)
   
(56
)
   
(160
)
   
(847
)
                                         
Income (loss) from continuing operations
                                       
 before income taxes
   
(9,776
)
   
241
     
(11,068
)
   
616
     
1,172
 
                                         
Income tax benefit (expense)
   
5,364
     
(147
)
   
5,404
     
(108
)
   
(303
)
                                         
Income (loss) from continuing operations
   
(4,412
)
   
94
     
(5,664
)
   
508
     
869
 
                                         
Discontinued operation
                                       
Income from discontinued operation
                                       
Income before tax benefit (expense)
   
4,339
     
1,499
     
1,981
     
984
     
4,450
 
Income tax benefit (expense)
   
(505
)
   
(284
)
   
(194
)
   
(207
)
   
(585
)
                                         
Income from discontinued operation
   
3,834
     
1,215
     
1,787
     
777
     
3,865
 
                                         
Net income (loss)
   
(578
)
   
1,309
     
(3,877
)
   
1,285
     
4,734
 
                                         
Net income (loss) per ordinary share:
                                       
                                         
Basic earnings from continuing operation
   
(0.12
)
   
0.00
     
(0.16
)
   
0.01
     
0.02
 
                                         
Basic earnings from discontinued operation
   
0.11
     
0.03
     
0.05
     
0.02
     
0.11
 
                                         
Diluted earnings from continuing operation
   
(0.12
)
   
0.00
     
(0.16
)
   
0.01
     
0.02
 
                                         
Diluted earnings from discontinued operation
   
0.11
     
0.03
     
0.05
     
0.02
     
0.11
 
                                         
Weighted average number of ordinary shares outstanding:
                                       
                                         
Basic
   
35,359
     
35,348
     
35,369
     
35,348
     
35,348
 
                                         
Diluted
   
35,359
     
35,359
     
35,369
     
35,358
     
35,376
 
 
*          On July 18, 2017, Camtek signed a definitive agreement with an affiliate of Principle Capital, a Shanghai-based privet-equity fund, to sell its PCB business. In accordance with U.S. generally accepted accounting principles (“U.S. GAAP”), the financial position and results of operations of the PCB business are presented as discontinued operation and, as such, have been excluded from continuing operation for all period presented.



Camtek Ltd.
 
Reconciliation of GAAP To Non-GAAP results
(In thousands, except share data)

   
Six Months ended
June 30,
   
Three Months ended
June 30,
   
Year ended
December 31,
 
   
2017
   
2016
   
2017
   
2016
   
2016
 
   
U.S. dollars
   
U.S. dollars
   
U.S. dollars
 
Reported net income (loss) attributable to Camtek Ltd. on GAAP basis
   
(578
)
   
1,309
     
(3,877
)
   
1,285
     
4,734
 
                                         
Settlement expense, net of tax (1)
   
12,025
     
-
     
12,025
     
-
     
-
 
Realization of deferred tax assets (2)
   
(4,495
)
   
-
     
(4,495
)
   
-
     
-
 
Effect of FIT reorganization (3)
   
-
     
-
     
-
     
-
     
872
 
Acquisition of Sela and Printar related expenses (4)
   
-
     
183
     
-
     
93
     
183
 
Share-based compensation
   
184
     
173
     
92
     
108
     
363
 
Attributable to discontinued operations
   
43
     
28
     
22
     
14
     
66
 
                                         
Non-GAAP net income
   
7,179
     
1,693
     
3,767
     
1,500
     
6,218
 
                                         
Non –GAAP net income  per share , basic and diluted
   
0.20
     
0.05
     
0.11
     
0.04
     
0.18
 
                                         
Gross margin on GAAP basis from continuing operations
   
48.9
%
   
49.1
%
   
49.2
%
   
50.5
%
   
41.0
%
Reported gross profit on GAAP basis
   
21,444
     
18,004
     
11,155
     
10,007
     
32,490
 
                                         
Effect of FIT reorganization (3)
   
-
     
-
     
-
     
-
     
4,931
 
Share-based compensation
   
19
     
17
     
9
     
15
     
31
 
                                         
Non- GAAP gross margin
   
21,463
     
18,021
     
11,164
     
10,022
     
47.3
%
Non-GAAP gross profit
   
48.9
%
   
49.1
%
   
49.2
%
   
50.5
%
   
37,452
 
                                         
Reported operating income (loss) attributable to Camtek Ltd. on GAAP basis from continuing operations
   
(9,567
)
   
620
     
(11,012
)
   
776
     
2,019
 
Settlement expense (1)
   
13,000
     
-
     
13,000
     
-
     
-
 
Effect of FIT reorganization (3)
   
-
     
-
     
-
     
-
     
872
 
Share-based compensation
   
184
     
173
     
92
     
108
     
363
 
                                         
Non-GAAP operating income
   
3,617
     
793
     
2,080
     
884
     
3,254
 
 
(1)
During the three and the six months ended June 30, 2017, the Company recorded a provision of $13 million ($12 million net of tax) in conjunction settlement with Rudolph Technologies Inc.
 
(2)
During the three and the six months ended June 30, 2017 the Company recorded net income of $4.5 million as a result of a decrease in the valuation allowance on deferred tax assets following the evaluation of the realizability of the assets based on projected future earnings.
 
(3)
During the year ended December 31, 2016, the Company recorded reorganization costs with regard to the FIT activities of  $0.9 million, consisting of: (1) inventory and fixed asset write-offs of $4.9 million, recorded under cost of revenues line item; (2) other expenses of $0.1 million, recorded under cost of revenues line item; (3) fixed asset write-offs of $0.7 million, recorded under operating expenses; (4) other expenses of $0.2 million, recorded under operating expenses; and (5) income from write-off of liabilities to OCS $5.0 million, recorded under operating expenses.
 
(4)
During the three and the six months ended June 30, 2016 and the twelve months ended December 31, 2016, the Company recorded acquisition expenses of $0.2 million, $0.1 million and $0.2 million, respectively, consisting of revaluation adjustments of $0.2 million, $0.1 million and $0.2 million, respectively, of contingent consideration and certain future liabilities recorded at fair value. These amounts are recorded under finance expenses line item.