Givat Shmuel, Israel, – November 17, 2008– Cimatron Limited (NASDAQ: CIMT), a leading provider of integrated CAD/CAM solutions for the toolmaking and manufacturing industries, today announced financial results for the third quarter and first nine months of 2008.
Third quarter 2008 Financial Highlights, compared to the third quarter of 2007:
- Revenues on a non-GAAP Basis: 27.8% increase to $10.1 million
- Net Income on a non- GAAP Basis: 23.5% increase to $0.65 million
- Revenues on GAAP Basis: 24.6% increase to $9.9 million
- Net Income on GAAP Basis: 77.2% decrease to $0.11 million
Revenue on a non-GAAP basis in 2008 excludes the effect of business combination accounting rules on the acquired deferred maintenance revenue balance of Gibbs. Expenses on a non-GAAP basis exclude the non-cash amortization of acquired intangible assets of Microsystem and Gibbs, and the deferred taxes related to these acquisition- related items.
The following provides further details on Cimatron's GAAP and non-GAAP figures in the third quarter and the first nine months of 2008:
Revenues on a GAAP basis for the third quarter of 2008 increased 24.6% to $9.9 million, as compared to $7.9 million in the third quarter of 2007. For the first nine months of 2008, revenue increased by 63.0% to $30.6 million, compared to $18.8 million in the same period of 2007.
Gross Income on a GAAP basis for the third quarter of 2008 was $8.2 million as compared to $6.4 million in the same period in 2007. Gross margin in the third quarter was 82.7%, compared to 80.6% in Q3 2007. For the first nine months of 2008, gross income was $24.9 million, compared to $15.5 million in the same period of 2007. Gross margin for the nine months ended on September 30th, 2008 was 81.6% of revenues as compared to 82.9% of revenues in the same period of 2007.
Operating Income on a GAAP basis in the third quarter of 2008 was $19 thousand, compared to operating income of $450 thousand in the third quarter of 2007. In the first nine months of 2008, Cimatron had an operating loss of $(126) thousand, compared to operating income of $845 thousand in the first nine months of 2007.
Net Income on a GAAP basis for the quarter was $111 thousand, or $0.01 per diluted share, compared to net income of $486 thousand, or $0.06 per diluted share recorded in the same quarter of 2007. In the first nine months of 2008 net income was $18 thousand, or $0.0 per diluted share, compared to net income of $958 thousand, or $0.12 per diluted share, in the first nine months of 2007.
Revenues on a non-GAAP basis for the third quarter of 2008 increased 27.8% to $10.1 million, as compared to $7.9 million in the third quarter of 2007. For the first nine months of 2008, revenue increased by 66.9% to $31.3 million, compared to $18.8 million in the same period of 2007.
Gross Income on a non-GAAP basis for the third quarter of 2008 was $8.5 million as compared to $6.4 million in the same period in 2007. Gross margin in the third quarter of 2008 was 84.5%, compared to 80.6% in Q3 2007. In the first nine months of 2008, gross income increased 68.0% to $26.1 million, compared to $15.5 million in the first nine months of 2007. Gross margin for the nine months ended on September 30th, 2008 was 83.4% of revenues as compared to 82.9% of revenues in the same period of 2007.
Operating Income on a non-GAAP basis in the third quarter of 2008 was $514 thousand, as compared to operating income of $487 thousand in the third quarter of 2007. In the first nine months of 2008, Cimatron reports operating income increase to $1.36 million, compared to operating income of $902 thousand in the first nine months of 2007.
Net Income on a non-GAAP basis in the third quarter of 2008 increased 23.5% to $646 thousand or $0.07 per diluted share, as compared to net income of $523 thousand, or $0.07 per diluted share in the third quarter of 2007. In the first nine months of 2008, net profit increased by 59.6% to $1.6 million, or $0.17 per diluted share, compared to a net profit of $1.0 million, or $0.13 per diluted share, in the first nine months of 2007.
Commenting on the results, Danny Haran, President and Chief Executive Officer of Cimatron, said, "We are pleased to present an increase in revenues and profits on a non-GAAP basis, following the merger transaction with Gibbs and Associates. Cimatron, being an active player in the automotive, consumer, and production markets, may very well be affected by a prolonged global economic slowdown. However, we believe that our strong balance sheet and cash reserves are important assets in the current worldwide financial turmoil. While exercising tight budget control, we continue to invest in both the CimatronE and GibbsCAM product lines. In particular, we accelerated the process of selling GibbsCAM for high-end multi-axis machines, a lucrative market segment believed to be more recession resilient than other segments of the manufacturing market. With over $6M in cash, broad product offerings, and strong distribution channels, we believe that Cimatron is well positioned to meet the challenges and take advantage of the opportunities that lie ahead", concluded Mr. Haran.
Cimatron's management will host a conference call on Tuesday, November 18th, at 9:00 EST, 16:00 Israel time. On the call, management will review and discuss the results, and will answer questions by investors.
To participate, please call one of the following teleconferencing numbers. Please begin placing your call at least 5 minutes before the conference call commences.
For those unable to listen to the live call, a replay of the call will be available from the day after the call under the investor relations section of Cimatron's website, at: www.cimatron.com
Reconciliation between results on a GAAP and Non-GAAP basis is provided in a table immediately following the Consolidated Statements of Operation (Non-GAAP basis). Non-GAAP financial measures consist of GAAP financial measures adjusted to include recognition of deferred revenues of acquired companies and to exclude amortization of acquired intangible assets and deferred income tax, as well as certain business combination accounting entries. The purpose of such adjustments is to give an indication of our performance exclusive of non-GAAP charges and other items that are considered by management to be outside our core operating results. Our non-GAAP financial measures are not meant to be considered in isolation or as a substitute for comparable GAAP measures, and should be read in conjunction with our consolidated financial statements prepared in accordance with GAAP.
Our management regularly uses our supplemental non-GAAP financial measures internally to understand, manage and evaluate our business and make operating decisions. We believe that these non- GAAP measures help investors to understand our current and future operating cash flow and performance, especially as our two most recent acquisitions have resulted in amortization and non-cash items that have had a material impact on our GAAP profits. These non-GAAP financial measures may differ materially from the non-GAAP financial measures used by other companies.
With over 25 years of experience and more than 40,000 installations worldwide, Cimatron is a leading provider of integrated, CAD/CAM solutions for mold, tool and die makers as well as manufacturers of discrete parts. Cimatron is committed to providing comprehensive, cost-effective solutions that streamline manufacturing cycles, enable collaboration with outside vendors, and ultimately shorten product delivery time.
The Cimatron product line includes the CimatronE and GibbsCAM brands with solutions for mold design, die design, electrodes design, 2.5 to 5 axes milling, wire EDM, turn, Mill-turn, rotary milling, multi-task machining, and tombstone machining. Cimatron's subsidiaries and extensive distribution network serve and support customers in the automotive, aerospace, medical, consumer plastics, electronics, and other industries in over 40 countries worldwide.
Cimatron is publicly traded on the NASDAQ exchange under the symbol CIMT. For more information, please visit the company web site at: http://www.cimatron.com.
Safe Harbor Statement
This press release includes forward looking statements, within the meaning of the Private Securities Litigation Reform Act Of 1995, which are subject to risk and uncertainties that could cause actual results to differ materially from those anticipated. Such statements may relate to the company's plans, objectives and expected financial and operating results. The words "may," "could," "would," "will," "believe," "anticipate," "estimate," "expect," "intend," "plan," and similar expressions or variations thereof are intended to identify forward-looking statements. Investors are cautioned that any such forward-looking statements are not guarantees of the future performance and involve risks and uncertainties, many of which are beyond the company's ability to control. The risks and uncertainties that may affect forward looking statements include, but are not limited to: currency fluctuations, global economic and political conditions, marketing demand for Cimatron products and services, long sales cycle, new product development, assimilating future acquisitions, maintaining relationships with customers and partners, and increased competition. For more details about the risks and uncertainties of the business, refer to the Company's filings with the Securities and Exchanges Commission. The company cannot assess the impact of or the extent to which any single factor or risk, or combination of them, may cause. Cimatron undertakes no obligation to publicly update or revise any forward looking statements, whether as a result of new information, future events or otherwise.