Camtek Ltd (CAMT) 2009 Q1 法說會逐字稿

Ladies and gentlemen, thank you for standing by. Welcome to the Camtek First Quarter 2009 Results Conference Call. All participants are present in a listen-only mode. Following management's formal presentation, instructions will be given for the question-and-answer session. As a reminder, this conference is being recorded May 19th, 2009.

Before I turn the call over to Ms. Fiona Darmon, I would like to remind everyone that statements contained in this conference call which are not historical facts contain forward-looking information with respect to plans, projections or future performance of the Company, the occurrence of which involve certain risks and uncertainties which could cause actual results to differ materially from those currently anticipated.

Such risks and uncertainties include dependence on economic and political conditions in Israel, the impact of the competition, supply constraints, as well as certain other risks and uncertainties which are detailed in the Company's filings with the various securities authorities.

I would like to now hand over the call to Ms. Fiona Darmon of GK Investor Relations. Ms. Fiona, would you like to begin?

Yes, thank you, operator, and good day to all of you. I would like to welcome you all to Camtek's First Quarter 2009 Results Conference Call and thank Camtek's management for hosting this call today. With us on the line are Mr. Rafi Amit, Camtek's CEO, Mr. Roy Porat, Camtek Israel's General Manager, and Mrs. Mira Rosenzweig, the Company's CFO.

Roy will start the call by discussing recent developments within the Company and in the market and we'll discuss the outlook. Mira will then give an overview of Camtek's performance in the quarter and summarize the financial results. We will then open the call and will be happy to take investors' questions.

I would now like to hand over the call to Roy. Roy, please?

Thank you, Fiona. Hello, everyone, and welcome to our First Quarter 2009 Results Conference Call. On behalf of Camtek's management, I would like to thank every one of you for your continued interest in our business and for joining us today.

Revenues for the first quarter of 2009 amounted to $9.3 million, a reflection of the backdrop of global recession. All our products serve a supply chain in the economic industry. This industry has been strongly affected by the global economic crisis. Therefore, our sales to both semiconductor and PCB companies continue to suffer in the quarter.

Revenues from the PCB business in the first quarter of 2009 amounted to $7 million. However, since the end of the first quarter, we have started to witness a growing interest from the PCB market with increased capacity usage by our customers. In fact, while in the first quarter PCB revenues were $7 million, we cautiously estimate that the second quarter will be higher. The visibility for the third quarter of 2009 is still limited.

In the semiconductor market, despite the ongoing sector weakness, we generated orders, although at low level, and reported $2.3 million in revenues for the quarter. The second quarter still looks flat and we don't yet see any significant signs of improvement in this space. We do, however, see an increase in utilization, though not yet at levels that will result in customer producing additional equipment.

We at Camtek are focused on providing high quality service and products to our customers. Especially noteworthy is our quickly timed and ability to meet special customer needs that require tailored solutions for technology-driven challenges. In parallel, we are continuing our intensive R&D efforts. Following our strategy to add more product lines in order to better leverage and efficiently manage our global sales and marketing infrastructure, yesterday we announced the acquisition of Printar's assets.

Printar is engaged in developing, manufacturing, sales and marketing of direct digital material deposition systems and inks for the PCB industry, with two major fields of activity, Solder Mask and Legend. Printar introduced its first Legend system six years ago and maintains an install base of more than 45 Legend systems. Printar's technology provides high performance, one-step, environment-friendly, and relatively low-cost process in comparison with traditional processes.

The technology can also be applicable in future and various other applications in the field of electronic manufacturing. We expect that the acquisition of Printar's assets will enable us to offer our customers, in the PCB industry, a broader range of products while relying on existing operational, R&D, and sales and marketing infrastructure. We intend to continue to provide services to Printar's current customers by leveraging our well-established customer support, service and sales infrastructure, and launch a new Solder Mask system based on acquired technology later on this year.

Looking ahead, we believe we are structured such, when our industry cycle begins, to return to growth. We will have the ability to quickly ramp up operations. We enter the second quarter cautiously optimistic in the PCB industry and believe that we navigate the climate and we will emerge a stronger and more profitable company.

And with that, I would like to hand over to our CFO, Mira Rosenzweig, to summarize the financial results.

Thank you, Roy, and hello, everyone. You can find the [same results] in the press release issued earlier today. Revenues for the first quarter of 2009 were $9.3 million, 56% below the $21.3 million reported in the first quarter of 2008 and 25% below the $12.4 million reported in the fourth quarter.

As Roy noted, this is mainly due to the global impact on the electronics industry. Revenue breakdown in the first quarter of 2009 was 75% PCB and IC substrates and 25% semiconductor manufacturing and packaging products. Our geographical breakdown on the revenue for the quarter was USA 19%, Europe 3%, the total Pacific Rim 73%, which consists of Japan 13%, China 44%, Taiwan 7%, and the rest of Asia 9%. The balance of 5% was the rest of the world.

Our operating expenses reached $8.4 million in the quarter, made up of R&D at $2.6 million and selling and G&A of $3.8 million, as well as $2 million of legal expenses under the G&A. Operating expenses in the first quarter of last year were $9.4 million and in the prior quarter was $8.6 million. Operating loss for the first quarter of 2009 was $5 million compared with an operating income of approximately $100,000 in the first quarter of last year and an operating loss of $5.6 million in the prior quarter.

Our net loss from the first quarter of 2009 was $5.5 million or $0.19 per share. This is compared to a net income of $0.5 million or $0.02 per share in the first quarter of 2008. For the previous quarter, net loss was $5.5 million or $0.19 per share. Net loss in the first quarter of 2009 was influenced by the considerably lower revenue and approximately $2 million of legal expenses related to the lawsuit that Rudolph Technologies has filed against Camtek.

Cash-on-cash equivalent at March 31, 2009 amounted to $11.4 million. In terms of cash, we continue to efficiently manage inventory to preserve cash. As mentioned last quarter, our current inventory should support our expected production in 2009 with little additional cash layout. Furthermore, this quarter, we benefited from the initial contribution of the cost cutting and reorganization measures implemented at the end of 2008 and during the quarter. These savings will be more evident in the coming quarter. Needless to say, we continue to monitor the situation on a day-to-day basis and ready to respond to changes as needed.

It is important to note that while we are constantly reviewing where we can reduce our costs, the preservation of our overall R&D capabilities and maintenance of our technological edge remain of great importance. Our R&D teams are continuing to develop new products and capabilities to meet the needs of the technology-driven [business].

The Company reported a negative operating cash flow of $2.9 million in the first quarter. Our days sold were at 156 days, based on current level of revenues compared with 134 days that were reported in the previous quarter. We are content with our level of collection.

And now, I would like to turn the call back to Mr. Roy Porat. Roy?

Thank you, Mira. In summary, we believe we have navigated this downturn as we should. Our structure is effective and we are maintaining our competitive edge and strong relationship we have with our customers. While the downturn has been tough, we do see signs of improvement in the coming quarter in the PCB industry and we hope this marks trends of -- a trend change in cycle. We believe that we will emerge from this downturn in a better shape and more competitive than when we entered it and as we have done in all the past industry-wide slowdowns.

We'll now open for questions and answers.

Thank you. Ladies and gentlemen, at this time we will begin the question-and-answer session. (Operator Instructions).

The first question is from [Amir Shostek] of [Klaus Enan]. Please go ahead.

What is the situation between the UN orders regarding the American court to judge the [few] million dollars to trade Rudolph? Is there $2 million expenses that were recorded in this quarter related to this sum?

We have filed and conducted post-file motions and proceedings which, according to the Company's estimates may affect the validity of the verdict including, among others, the question of damages and the level. Rudolph also has filed a few post motions and as of today, there have been no decisions by the court on any of the motions. I hope I have answered the question.

For the question, the $2 million are related to the lawsuit. Yes.

Is the $2 million -- is that a part of the $5 million or $6 million that Rudolph -- it's like -- expenditure from your accountant said it should be written in the third quarter reviews or it's something else? If they are [right], you have to pay orders [ready of the] $2 million and another $5 million?

No, no, no.

No, no. The $2 million, Amir, is the current legal fees. It's not a provision on the jury -- the amount that the jury decided. But please note that the $2 million related to the court case and this was this quarter -- this quarter in all expenses.

I understand.

There's no judgment yet, meaning that the court has not entered a judgment, so it's only a jury decision. So, no judgment has been issued by the court yet.

Regarding that issue and generally, if you reported that you have to now, before Printar acquisition, 11 point something million dollars in your cash. How would you think you can manage the near future when you have an asset risk acquisition less than $8 million? And then, maybe you have to pay orders and then you have to pay the fluent expenditures on the company's operation. So, how you can -- what are your plans regarding the cash?

Okay. Camtek has a small balance sheet with zero debt and we are constantly reviewing alternative financing opportunities. And we are working and it's under process.

But you -- regarding the current cash flow, it should end in the end of this year.

The current cash flow is only part of the top needs. Right now, we have zero debt to banks. We haven't used even $0.01 from the banks. So, if we go and use a lot of equity and asset we have and we can get money from the bank, we have enough money to manage any type of demands.

Another question regarding the report. You said that you have visibility that you would have iron in the second quarter. Can you sell to the -- not exactly, but the numbers that you sell when you discounted or you -- the trend was down. Now, you --the trend may be up. Should we know what is the strength of the trend?

I don't think we're going to give guidance right now for the coming quarter, so I wouldn't want to go into numbers. But as you indicated, yes, we do see more utilization in semiconductor. We do see more orders from PCB. But the conditions are still very vague and unclear. So, I don't think it would be correct for us to give guidance with exact numbers.

And the last question is how does the agreement with Raytex should influence the Company situation?

I think -- Raytex is, I would say, a long-term project. I don't anticipate the ongoing project with Raytex will influence the Company's results and it's not going to happen in the next couple of quarters. It's something that is more long-term.

All right. Thank you.

There are no further questions at this time. Before I ask Mr. Porat to go ahead with his closing statement, I'd like to remind participants that a replay of this call will be available on Camtek's website, www.camtek.co.il beginning tomorrow. Mr. Porat, would you like to make your concluding statement?

I would like to thank you for continued interest in our business. We look forward to speaking with you again over the next few quarters. Thank you and good-bye.

Thank you. This concludes the Camtek's First Quarter 2009 Results Conference Call. Thank you for your participation. You may go ahead and disconnect.