Shamir Optical Industry Ltd Reports Fourth Quarter and Year-End 2005 Results
Tuesday February 28, 4:15 pm ET
Fourth Quarter Revenues of $20.1 Million
Fourth Quarter Net Income of $2.1 Million, or $0.13 Per Diluted Share
KIBBUTZ SHAMIR, Israel, Feb. 28 /PRNewswire-FirstCall/ --
Shamir Optical Industry Ltd (Nasdaq: SHMR - News), a leading provider of innovative products and technology to the progressive ophthalmic lens market, today announced unaudited financial results for the fourth quarter and year ended December 31, 2005.
For the fourth quarter of 2005, revenues were $20.1 million compared to revenues of $19.8 million for the fourth quarter of 2004. Revenues were negatively affected by a shift in the recognition of a $0.9 million sale of products, which was included in the Company's forecast for the fourth quarter. Although the order was shipped during the fourth quarter, these revenues will be recognized in 2006. Revenues during the quarter were also negatively affected by the decrease of the Euro compared to the Dollar.
Gross profit for the quarter was $11.4 million, or 56.8% of revenues, compared to gross profit of $11.2 million, or 56.3% of revenues for the same period last year.
For the fourth quarter of 2005, operating income was $2.6 million, or 13.0% of revenues, a decrease of 20.4% from operating income of $3.3 million, or 16.5% of revenues for the same period last year. During the quarter, Shamir established a new operation in France and expanded its marketing and distribution platform in Turkey. These activities resulted in an operational loss of $0.8 million.
Net income for the quarter was $2.1 million or $0.13 per diluted share, an increase of 10.6% compared to pro forma net income of $1.9 million for the comparable period in 2004.
Excluding the effects of non-cash stock-based compensation expenses for the fourth quarter of 2005, operating income was $2.7 million, or 13.6% of revenues. This was a decrease of 17.7% from operating income of $3.3 million for the same period last year.
Excluding the effects of non-cash stock-based compensation expenses, net income for the quarter was $2.3 million, compared to $2.0 million for the comparable period in 2004. The reconciliation of GAAP net income to adjusted net income is set forth below in this release.
For the year ended December 31, 2005, revenues were $80.4 million, an increase of 12.8% compared to revenues of $71.3 million for the same period of 2004. Gross profit for the year was $44.3 million, or 55.2% of revenues, an increase of 17.1% from a gross profit of $37.9 million, or 53.1% of revenues for the same period last year.
For the year ended December 31, 2005, operating income was $12.1 million, or 15.1% of revenues, a decrease of 3.4% from operating income of $12.5 million, or 17.6% of revenues for the same period last year. Net income for the year was $8.1 million or $0.51 per diluted share, an increase of 14.1% compared to pro forma net income of $7.1 million for the comparable period in 2004.
Excluding the effects of non-cash stock-based compensation expenses, for the year ended December 31, 2005, operating income was $12.7 million, or 15.8% of revenues, compared to operating income of $12.6 million, or 17.7 % of revenues, for the same period last year.
Excluding the effects of non-cash stock-based compensation expenses and non-cash tax effect of changes in status from a non-taxable to a taxable entity, net income for the year was $9.0 million, or 11.2% of revenues. This was an increase of 25.5% from net income of $7.2 million for the same period last year.
The reconciliation of GAAP operating income and net income to adjusted operating income and adjusted net income is set forth below in this release.
As of December 31, 2005, the Company had cash and cash equivalents including short-term investments of $42.0 million.
Commenting on its fourth quarter results, Giora Ben-Zeev, Chief Executive Officer of Shamir Optical, said, "2005 was an exciting and gratifying year for Shamir. In March, we listed our shares on NASDAQ and throughout the year we made strategic investments in our operations and sales and marketing platform, aimed at worldwide expansion and positioning Shamir for future growth."
"Our results this quarter and last year demonstrated year-over-year growth on both the top and bottom line. We believe these results are a good indication of our ability to deliver quality optical lenses and innovative technology, which combined with our strengthening competitive position, contributed to our solid results."
Mr. Ben-Zeev added, "In 2005, we established a presence in Turkey and started to penetrate this growing market. In France, we established a sales and distribution platform to market finished spectacle lenses to major optical chains and retail outlets. We believe the French market offers Shamir significant opportunity."
"In South Africa we purchased 51% of our South African distributor in order to expand our operations in this market. In early 2006, we formed a joint venture in Israel with a leading marketing company of branded frames and contact lenses, to market our lenses to the Israeli ophthalmic market, including major optical chains and retail outlets. To support the local market's demand and the production needs in Europe, we will soon establish a lab in Israel, based on the Free-Form technology."
"I believe the actions we took during 2005 to expand and support the growth of our UK laboratory have been effective, and as a result we are beginning to gain traction in the UK market. Additionally, our U.S. subsidiary reaffirmed its position in the United States as evidenced by its increased revenues."
Mr. Ben-Zeev concluded, "In 2006, we remain committed to delivering world-class products and increasing Shamir's presence in both new and existing markets as we continue to develop a solid platform from which we can build on our success."
FY 2006 Guidance (in millions):
Revenues $91 - $96
GAAP Earnings $ 9.1 - $10
Non-GAAP Earnings $10.3 - $11.2
Shamir Optical has scheduled a conference call for 9:00 a.m. EST tomorrow, Wednesday, March 1, 2006, to discuss fourth quarter and year-end results. To participate in the call, please dial 800-247-9979 (U.S. and Canada), or 973-409-9254 (International). For those unable to participate there will be replay available from 12:00 p.m. EST on March 1, 2006 through 11:59 p.m. EST, March 8, 2006. To listen to the replay, please call: 877-519-4471 (U.S. and Canada), 973-341-3080 (International). The ID code for the replay is 7038902. http://biz.yahoo.com/prnews/060228/nytu141.html?.v=46