CAMTEK ANNOUNCES RESULTS FOR THE FOURTH QUARTER AND FULL YEAR OF 2023

Rhea-AI Summary

Camtek Ltd. expects a 30% YoY growth in the first quarter of 2024 with record revenue in FY 2024. The company reported revenues of $88.7 million in the fourth quarter of 2023, an 8% increase YoY, and revenues of $315.4 million for the full year 2023. Management anticipates a record year in 2024 driven by high demand for high performance computing.

Positive

• Camtek Ltd. expects a 30% YoY growth in the first quarter of 2024 with record revenue in FY 2024.
• Revenues of $88.7 million were reported in the fourth quarter of 2023, marking an 8% increase year-over-year.
• Full year 2023 revenues totaled $315.4 million, slightly below the previous year.
• Operating cash flow for 2023 was $79.3 million, leading to a year-end total cash balance of $449 million.
• Management attributes the strong performance to high demand for high performance computing, with orders for close to 300 systems in the second half of 2023.
• The acquisition of FRT in the fourth quarter of 2023 is expected to contribute positively to the company's results in 2024 and beyond.

Negative

• None.

Insights

Financial Analyst

Revenue Growth and Operating Efficiency: Camtek's announcement of an 8% year-over-year revenue increase in Q4 2023 and a projected 30% YoY growth for Q1 2024 indicates robust demand, particularly in high performance computing (HPC). This growth trajectory, despite a slight revenue decline in FY 2023, suggests that the company's strategic positioning in markets for HBM and chiplet devices is paying dividends. The operating margins, both GAAP and non-GAAP, reflect a healthy profitability level, although a slight contraction from the previous year signals increased costs or investments. Investors should monitor the company's ability to maintain or improve these margins in the face of potential industry-wide cost pressures.

Market Research Analyst

Market Position and Competitive Landscape: Camtek's strong order book, with close to 300 systems ordered in the latter half of 2023, underscores its competitive position in the semiconductor equipment industry. The emphasis on tier-1 customers and advanced packaging applications aligns with industry trends towards miniaturization and high-speed data processing. The acquisition of FRT metrology could further enhance Camtek's product offerings, potentially opening up new market segments. However, it is crucial to assess how this acquisition integrates with the existing business and whether it can contribute to the anticipated record revenues without diluting focus or margins.

Technology Industry Analyst

Innovation and Product Development: The demand for HPC and AI applications is a significant growth driver for companies like Camtek. The focus on HBM and chiplet devices indicates a strategic alignment with emerging technological trends. The successful integration and performance of the FRT metrology acquisition could provide Camtek with a competitive edge in metrology, an area critical for ensuring the quality and reliability of advanced semiconductor devices. Long-term, the company's innovation and expansion into new technologies are likely to determine its market share and resilience against industry cyclicality.

EXPECTS 30% YoY GROWTH IN THE FIRST QUARTER WITH RECORD REVENUE IN FY 2024 

MIGDAL HAEMEK, Israel, Feb. 20, 2024 /PRNewswire/ -- Camtek Ltd. (NASDAQ: CAMT) (TASE: CAMT), today announced its financial results for the fourth quarter and year ended December 31, 2023.

Highlights of the Fourth Quarter of 2023

• Revenues of $88.7 million, an 8% increase year-over-year;
• GAAP operating income of $17.2 million; non-GAAP operating income of $25.5 million, representing an operating margin of 19.4% and 28.7% respectively;
• GAAP net income of $20.8 million and non-GAAP net income of $28.2 million;
• Strong operating cash flow of $34.2 million; and
• Completion of FRT metrology acquisition.

Highlights of the Full Year 2023

• Revenues of $315.4 million, 1.7% below those of last year;
• GAAP operating income of $65.4 million; non-GAAP operating income of $83.3 million; representing operating margins of 20.7% and 26.4%, respectively;
• GAAP net income of $78.6 million; non-GAAP net income of $95.7 million; and
• Operating cash flow of $79.3 million in 2023, which led to a year-end total cash, short-term and long-term deposits and marketable securities balance of $449 million.

Forward-Looking Expectations

Management expects revenues in the first quarter of 2024 between $93-95 million, representing a mid-point 30% increase over the first quarter of 2023, with further growth leading to a year of record revenue for Camtek.

Management Comment 

Rafi Amit, Camtek's CEO commented, "The high demand for high performance computing (HPC) was the main driver behind our record fourth quarter, bringing our full year 2023 revenues to $315 million. We received orders for close to 300 systems in the second half of 2023, which puts us in an excellent position going into 2024. This achievement was primarily due to our strong position with tier-1 customers that manufacture HBM (High Bandwidth Memory) and chiplet devices for AI applications. In addition, we have seen continued strong demand from our OSAT customers, driven by other advanced packaging applications."

Continued Mr. Amit, "During the fourth quarter of 2023 we completed the acquisition of FRT and we are confident that this business will meet our expectations in 2024 and beyond. Looking ahead, we anticipate 2024 to be a record year for Camtek even without the contribution of FRT to our results."  

Fourth Quarter 2023 Financial Results 

Revenues for the fourth quarter of 2023 were $88.7 million. This compares to fourth quarter 2022 revenues of $82.2 million, a year-over-year growth of 8%.

Gross profit on a GAAP basis in the quarter totaled $39.8 million (44.9% of revenues), compared to a gross profit of $39.9 million (48.6% of revenues) in the fourth quarter of 2022.

Gross profit on a non-GAAP basis in the quarter totaled $43.7 million (49.2% of revenues), up 9% compared to a gross profit of $40.2 million (49.0% of revenues) in the fourth quarter of 2022.

Operating profit on a GAAP basis in the quarter totaled $17.2 million (19.4% of revenues), compared to an operating profit of $20.5 million (24.9% of revenues) in the fourth quarter of 2022.

Operating profit on a non-GAAP basis in the quarter totaled $25.5 million (28.7% of revenues), an increase of 12% compared to $22.8 million (27.8% of revenues) in the fourth quarter of 2022.

Net income on a GAAP basis in the quarter totaled $20.8 million, or $0.42 per diluted share, compared to net income of $21.7 million, or $0.45 per diluted share, in the fourth quarter of 2022.

Net income on a non-GAAP basis in the quarter totaled $28.2 million, or $0.57 per diluted share, compared to a non-GAAP net income of $24.0 million, or $0.50 per diluted share, in the fourth quarter of 2022. 

Full Year 2023 Results Summary

Revenues for 2022 were $315.4 million, compared to the $320.9 million reported in 2022, a slight decline of 1.7%.

Gross profit on a GAAP basis totaled $147.6 million (46.8% of revenues), compared to $159.9 million (49.8% of revenues) in 2022. 

Gross profit on a non-GAAP basis totaled $152.7 million (48.4% of revenues), compared to $161.1 million (50.2% of revenues) in 2022. 

Operating income on a GAAP basis totaled $65.4 million (20.7% of revenues), compared to operating income of $81.5 million (25.4% of revenues) in 2022.  

Operating income on a non-GAAP basis totaled $83.3 million (26.4% of revenues), an increase of 20% compared to $92.0 million (28.7% of revenues) in 2022.

Net income on a GAAP basis totaled $78.6 million, or $1.61 per diluted share. This is compared to net income of $79.9 million, or $1.66 per diluted share, in 2022.

Net income on a non-GAAP basis totaled $95.7 million, or $1.96 per diluted share. This is an increase of 27% compared to net income of $90.5 million, or $1.88 per diluted share, in 2022.

Cash and cash equivalents, short-term and long-term deposits, and marketable securities, as of December 31, 2023, were $448.6 million compared to $478.7 million as of December 31, 2022 and $517.1 million as of September 30, 2023. During the fourth quarter, the Company generated an operating cash flow of $34.2 million.

Conference Call

Camtek will host a video conference call/webinar today via Zoom, on Tuesday, February 20, 2024, at 9:00 am ET (16:00 Israel time).

Rafi Amit, CEO, Moshe Eisenberg, CFO and Ramy Langer, COO will host the call and will be available to answer questions after presenting the results.

To participate in the webinar, please register using the following link, which will provide access to the video call:

https://us06web.zoom.us/webinar/register/WN_bNKd27BfSJmYAcuLiB6DZQ 

For those wishing to listen via phone, following registration, the dial in link will be sent. For any problems in registering, please email Camtek's investor relations a few hours in advance of the call.

For those unable to participate, a recording will be available on Camtek's website at http://www.camtek.com  within a few hours after the call.

A summary presentation of the quarterly results will also be available on Camtek's website.

ABOUT CAMTEK LTD.

Camtek is a leading high-end inspection and metrology equipment provider for the semiconductor industry. Camtek's systems inspect IC and measure IC features on wafers in various phases of the production process of semiconductor devices, from front-end and mid-end and up to the beginning of assembly (Post Dicing). Camtek's systems inspect and measures wafers for some of the most demanding semiconductor market segments, including Advanced Interconnect Packaging, Heterogenous Integration, Memory and HBM, CMOS Image Sensors, Compound Semiconductors, MEMS, and RF, serving numerous industry's leading global IDMs, OSATs, and foundries.

With manufacturing facilities in Israel and Germany, and eight offices around the world, Camtek provides state of the art solutions in line with customers' requirements.

This press release is available at http://www.camtek.com 

This press release contains statements that may constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements are based on Camtek's current beliefs, expectations and assumptions about its business and industry, all of which may change.  Forward-looking statements can be identified by the use of words including "believe," "anticipate," "should," "intend," "plan," "will," "may," "expect," "estimate," "project," "positioned," "strategy," and similar expressions that are intended to identify forward-looking statements, including statements relating to the compound semiconductors market and our position in this market and the anticipated timing of delivery of the systems. These forward-looking statements involve known and unknown risks and uncertainties that may cause the actual results, performance or achievements of Camtek to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Factors that may cause our actual results to differ materially from those contained in the forward-looking statements include, but are not limited to the effects of the evolving nature of the war situation in Israel, including in Gaza with the Hamas and in Lebanon with the Hezbollah and the related evolving regional conflict, including without limitation, the Houti attacks on marine vessels; the impact of war in Ukraine, rising inflation, rising interest rates, volatile exchange rates and commodities' prices, ; our dependency upon the semiconductor industry and the risk that unfavorable economic conditions or low capital expenditures may negatively impact our operating results; anticipated trends and impacts related to industry component and substrate shortages and other supply chain challenges; the future purchase, use, and availability of components supplied by third parties; impurities and other disruptions to our customers' operations, which could lower production yields or interrupt manufacturing, and could result in the cancellation or delay of purchase of our products; formal or informal imposition by countries of new or revised export and/or import and doing-business regulations or sanctions, including but not limited to changes in U.S. trade policies, changes or uncertainty related to the U.S. government entity list and changes in the ability to sell products incorporating U.S originated technology, which can be made without prior notice, and our ability to effectively address such global trade issues and changes;  the risks relating to the concentration of a significant portion of our business in certain countries in the Asia Pacific Region, particularly China (which is our largest territory), Taiwan and Korea, some of which might be subject to the trade restrictions referred to above or involved in trade wars with countries which might impose such trade restrictions; changing industry and market trends; reduced demand for our products; potential adverse reactions or changes to business relationships resulting from the completion of the transaction with FRT, and ongoing or potential litigations or disputes, incidental to the conduct of FRT's business and other risks related to the integration of FRT's business into Camtek business; and those other factors discussed in our Annual Report on Form 20-F and other documents filed by the Company with the SEC as well as other documents that may be subsequently filed by Camtek from time to time with the SEC. We caution you not to place undue reliance on forward-looking statements, which speak only as of the date hereof. Camtek does not assume any obligation to update any forward-looking statements in order to reflect events or circumstances that may arise after the date of this release unless required by law. 

While we believe that we have a reasonable basis for each forward-looking statement contained in this press release, we caution you that these statements are based on a combination of facts and factors currently known by us and our projections of the future, about which we cannot be certain. In addition, any forward-looking statements represent Camtek's views only as of the date of this press release and should not be relied upon as representing its views as of any subsequent date. Camtek does not assume any obligation to update any forward-looking statements unless required by law.

This press release provides financial measures that exclude: (i) share based compensation expenses; and  (ii) acquisition related expenses, 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. The results reported in this press-release are preliminary unaudited results, and investors should be aware of possible discrepancies between these results and the audited results to be reported, due to various factors.

 

CAMTEK LTD and its subsidiaries
Consolidated Balance Sheets
(In thousands)
	December 31,			December 31,
	2023			2022
	U.S. Dollars
Assets
Current assets
Cash and cash equivalents		119,968			148,156
Short-term deposits		215,250			251,500
Marketable securities		18,816			-
Trade accounts receivable, net		87,300			80,611
Inventories		85,905			65,541
Other current assets		19,548			11,156
Total current assets		546,787			556,964
Long-term deposits		21,000			79,000
Marketable securities		73,576			-
Long-term inventory		9,023			5,357
Deferred tax asset, net		2,642			1,004
Other assets, net		1,370			1,024
Property, plant and equipment, net		41,987			33,141
Intangible assets, net		16,937			597
Goodwill		74,345			-
Total non- current assets		240,880			120,123
Total assets		787,667			677,087
Liabilities and shareholders' equity
Current liabilities
Trade accounts payable	42,187				31,667
Other current liabilities	54,487				56,833
Total current liabilities	96,674				88,500
Long-term liabilities
Deferred tax liabilities, net	7,541				-
Other long-term liabilities	10,473				8,748
Convertible notes	196,831				195,737
Total long-term liabilities	214,845				204,485
Total liabilities	311,519				292,985
Commitments and contingencies
Shareholders' equity
Ordinary shares NIS 0.01 par value, 100,000,000 shares authorized at December 31, 2023 and at December 31, 2022;
46,993,998 issued shares at December 31, 2023 and 46,505,318 at December 31, 2022;
44,901,622 shares outstanding at December 31, 2023 and 44,412,942 at December 31, 2022	176				175
Additional paid-in capital	200,389				187,105
Accumulated other comprehensive income	129				-
Retained earnings	277,352				198,720
	478,046				386,000
Treasury stock, at cost (2,092,376 as of December 31, 2023 and December 31, 2022)	(1,898)				(1,898)
Total shareholders' equity	476,148				384,102
Total liabilities and shareholders' equity	787,667				677,087

 

			CAMTEK LTD. and its subsidiaries
Consolidated Statements of Income
(in thousands, except share data)
	Year ended December 31,		Three Months ended December 31,
	2023	2022	2023	2022
	U.S. dollars		U.S. dollars
Revenues	315,375	320,909	88,690	82,175
Cost of revenues	167,742	161,053	48,902	42,229
Gross profit	147,633	159,856	39,788	39,946
Research and development costs	31,470	28,859	8,042	6,684
Selling, general and administrative expense	50,751	49,499	14,527	12,801
	82,221	78,358	22,569	19,485
Operating income	65,412	81,498	17,219	20,461
Financial income, net	22,218	6,690	5,682	3,801
Income before income taxes	87,630	88,188	22,901	24,262
Income taxes expense	(8,998)	(8,239)	(2,111)	(2,589)
Net income	78,632	79,949	20,790	21,673

 

Net income per ordinary share:
	Year ended December 31,		Three Months ended December 31,
	2023	2022	2023	2022
	U.S. dollars		U.S. dollars
Basic net earnings	1.76	1.81	0.46	0.49
Diluted net earnings	1.61	1.66	0.42	0.45
Weighted average number of ordinary shares outstanding:
Basic	44,725	44,158	44,882	44,397
Diluted	48,863	48,229	49,149	48,332

 

Reconciliation of GAAP To Non-GAAP results
(In thousands, except share data)
	Year ended December 31,		Three Months ended December 31,
	2023	2022	2023	2022
	U.S. dollars		U.S. dollars
Reported net income attributable to Camtek Ltd. on GAAP basis	78,632	79,949	20,790	21,673
Acquisition of FRT related expenses (1)	4,550	-	4,550	-
Share-based compensation	12,525	10,523	2,868	2,371
Non-GAAP net income	95,707	90,472	28,208	24,044
Non–GAAP net income per diluted share	1.96	1.88	0.57	0.50
Gross margin on GAAP basis Reported gross profit on GAAP basis	46.8% 147,633	49.8% 159,856	44.9% 39,788	48.6% 39,946
Acquisition of FRT related expenses (1)	3,492	-	3,492	-
Share-based compensation	1,591	1,217	395	295
Non-GAAP gross margin	48.4 %	50.2 %	49.2 %	49.0 %
Non-GAAP gross profit	152,716	161,073	43,675	40,241
Reported operating income (loss) attributable to Camtek Ltd. on GAAP basis	65,412	81,498	17,219	20,461
Acquisition of FRT related expenses (1)	5,406	-	5,406	-
Share-based compensation	12,525	10,523	2,868	2,371
Non-GAAP operating income	83,343	92,021	25,493	22,832

 

(1) During the twelve months and three months ended December 31, 2024, the Company recorded acquisition expenses of $4.5 million for both periods, consisting of: (1) inventory written-up to fair value in purchase accounting charges of $2.2 million, for both periods. This amount recorded under cost of revenues line item. (2) $0.4 million amortization of intangible assets acquired recorded under cost of revenues line item. (3) Inventory write-off of $0.9 million recorded under costs of revenues line item. (4) $0.2 million amortization of intangible assets acquired recorded under sales and marketing expenses line item. (5) Acquisition expenses of $1.7 million recorded under general and administrative expenses line item. (6) $0.9 million reversal of tax provision related to the above adjustment, recorded under the tax expense line item.

CAMTEK LTD.
Moshe Eisenberg, CFO
Tel: +972 4 604 8308
Mobile: +972 54 900 7100
moshee@camtek.com 

INTERNATIONAL INVESTOR RELATIONS  
EK Global Investor Relations
Ehud Helft
Tel: (US) 1 212 378 8040
camtek@ekgir.com

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SOURCE Camtek Ltd.

FAQ

What is Camtek Ltd.'s expected revenue growth in the first quarter of 2024?

Camtek Ltd. expects a 30% YoY growth in the first quarter of 2024.

What were Camtek Ltd.'s revenues in the fourth quarter of 2023?

Camtek Ltd. reported revenues of $88.7 million in the fourth quarter of 2023, an 8% increase year-over-year.

What were Camtek Ltd.'s full year 2023 revenues?

Camtek Ltd. reported revenues of $315.4 million for the full year 2023.

What was Camtek Ltd.'s operating cash flow for 2023?

Camtek Ltd.'s operating cash flow for 2023 was $79.3 million.

What was the total cash balance for Camtek Ltd. at the end of 2023?

Camtek Ltd. had a year-end total cash balance of $449 million.

What drove Camtek Ltd.'s strong performance in 2023?

Camtek Ltd.'s strong performance in 2023 was driven by high demand for high performance computing.

What is the expected impact of the acquisition of FRT on Camtek Ltd.'s results?

The acquisition of FRT in the fourth quarter of 2023 is expected to contribute positively to Camtek Ltd.'s results in 2024 and beyond.