Cimatron Reports Revenues of $10.6M and Record Second Quarter Non-GAAP Operating Profit of $1.7M in Q2/12
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Cimatron Reports Revenues of $10.6M and Record Second Quarter Non-GAAP Operating Profit of $1.7M in Q2/12

Announces agreement with the Office of Chief Scientist (OCS)

GIVAT SHMUEL, Israel, August 9, 2012 — (PRNewswire) —

Cimatron Limited (NASDAQ and TASE: CIMT), a leading provider of integrated CAD/CAM software solutions for the toolmaking and manufacturing industries, today announced financial results for the second quarter and first half of 2012.  

Highlights of Cimatron's results for these periods include the following:

 

Concurrently with the announcement of its results, Cimatron today also announced it reached an agreement with the Office of Chief Scientist in the Israeli Ministry of Industry, Trade and Labor (OCS). Under the agreement, Cimatron paid to the OCS in July 2012 an amount of approximately $2.5M, and the OCS exempted Cimatron from any further royalty reports and payments, other than as may be required under applicable law in the event of transfer of know how outside of Israel. As a result of this agreement, Cimatron recorded additional income of approximately $0.4M in the second quarter of 2012, reflected as a lower cost of revenue in the GAAP Statements of Income for the second quarter of 2012. Such income was excluded from the non-GAAP results for the second quarter of 2012, in order to make comparisons to previous periods easier.

Commenting on the results, Danny Haran, President and Chief Executive Officer of Cimatron, noted "We are pleased to report a strong second quarter, with healthy growth in revenues and record Q2 non-GAAP operating profit. So far, 2012 unfolds to our satisfaction and according to plans. Yet, we cannot be oblivious to the ominous signs of economic slowdown, notably in Europe. We remain cautious as we move on with our business plans. I am confident that our competitive product portfolio, strong cash flow and prudent budget control will help us cope well with whatever conditions and challenges the market may present in the near future." concluded Mr. Haran.

The following provides details on Cimatron's GAAP and non-GAAP results for the second quarter and first six months of 2012:

GAAP:

Revenues for the second quarter of 2012 were $10.6 million, compared to $10.0 million recorded in the second quarter of 2011. For the first six months of 2012, revenues were $20.5 million, compared to $18.9 million in the same period of 2011.  

Gross Profit for the second quarter of 2012 was $9.7 million, as compared to $8.7 million in the same period in 2011. Gross margin in the second quarter of 2012 was 91% of revenues, compared to a gross margin of 87% in the second quarter of 2011. For the first six months of 2012, gross income was $18.1 million, compared to $16.3 million in the same period of 2011. Gross margin for the six months ended June 30th, 2012 was 89% compared to a gross margin of 86% for the first six months of 2011. The higher gross margins in the second quarter and first six months of 2012 as compared to the parallel periods in 2011 mainly reflect the agreement with the OCS.

Operating profit in the second quarter of 2012 was $1.8 million, compared to an operating profit of $1.0 million in the second quarter of 2011. In the first six months of 2012, Cimatron recorded an operating profit of $2.7 million, compared to an operating profit of $1.5 million in the first six months of 2011.  

Net Profit for the second quarter of 2012 was $1.0 million, or $0.11 per diluted share, compared to a net profit of $0.9 million, or $0.09 per diluted share, recorded in the same quarter of 2011.  In the first six months of 2012, net profit was $1.8 million, or $0.20 per diluted share, compared to a net profit of $1.2 million, or $0.13 per diluted share, in the first six months of 2011.  

Non-GAAP:

Revenues for the second quarter of 2012 were $10.6 million, compared to $10.0 million recorded in the second quarter of 2011. For the first six months of 2012, revenues were $20.5 million, compared to $18.9 million in the same period of 2011.  

Gross Profit for the second quarter of 2012 was $9.4 million, as compared to $8.8 million in the same period in 2011. Gross margin in the second quarter of 2012 was 89% of revenues, the same as in the second quarter of 2011. In the first six months of 2012, gross income was $18.0 million, compared to $16.5 million in the first six months of 2011. Gross margin for the six months ended June 30th, 2012 was 88%, the same as in the first six months of 2011.

Operating Profit in the second quarter of 2012 was $1.7 million, compared to an operating profit of $1.3 million in the second quarter of 2011. In the first six months of 2012, Cimatron recorded an operating profit of $2.8 million, compared to an operating profit of $2.0 million in the first six months of 2011.  

Net profit for the second quarter of 2012 was $1.0 million, or $0.11 per diluted share, compared to a net profit of $1.3 million, or $0.14 per diluted share, recorded in the same quarter of 2011.  In the first six months of 2012, net profit was $2.0 million, or $0.22 per diluted share, compared to a net profit of $2.0 million, or $0.22 per diluted share, in the first six months of 2011.  

Conference Call

Cimatron's management will host a conference call today, August 9th, 2012, at 9:00 EDT, 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.

USA: +1-888-668-9141

International: +972-3-9180609

Israel: 03-9180609

For those unable to listen to the live call, a replay of the call will be available beginning on the day after the call at the investor relations section of Cimatron's website, at: http://www.cimatron.com

Reconciliation between results on a GAAP and non-GAAP basis is provided in a table immediately following the Consolidated Statements of Income included herein. 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 and other accounting entries. The purpose of such adjustments is to give an indication of our performance exclusive of non-cash charges and other items that are considered by management to be outside of 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 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 results. These non-GAAP financial measures may differ materially from the non-GAAP financial measures used by other companies.

About Cimatron

With 30 years of experience and more than 40,000 installations worldwide, Cimatron is a leading provider of integrated, CAD/CAM software 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 and ultimately shorten product delivery time.

The Cimatron product line includes the CimatronE and GibbsCAM brands with software solutions for mold design, die design, electrode design, 2.5 to 5 Axis 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's shares are publicly traded on the NASDAQ exchange and the TASE under the symbol CIMT. For more information, please visit Cimatron's 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 Cimatron'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 future performance and involve risks and uncertainties, many of which are beyond Cimatron'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 cycles, new product development, assimilating future acquisitions, maintaining relationships with customers and partners, and increased competition. For more details about the risks and uncertainties related to Cimatron's business, refer to Cimatron's filings with the Securities and Exchange Commission. Cimatron 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.

                                         CIMATRON LIMITED
                               CONSOLIDATED STATEMENTS OF INCOME
                       (US Dollars in thousands, except for per share data)
 
                                                Three months ended       Six months ended
                                                      June 30,                June 30,
                                                  2012       2011        2012        2011
 
    Total revenue                                10,608      9,975      20,494      18,869
 
    Total cost of revenue                           934      1,273       2,352       2,618
 
    Gross profit                                  9,674      8,702      18,142      16,251
 
    Research and development expenses, net        1,629      1,500       3,322       3,054
 
    Selling, general and administrative expenses  6,215      6,155      12,101      11,726
    Operating income                              1,830      1,047       2,719       1,471
 
    Financial income (expenses), net               (205)        38         (92)        154
 
    Taxes on income                                (626)      (195)       (800)       (422)
 
    Other                                            (4)        (8)         11         (10)
 
    Net income                                      995        882       1,838       1,193
 
     Less: Net (income) loss attributable to the
    noncontrolling interest                           3         (1)         (9)         27
 
    Net income attributable to Cimatron's         $ 998      $ 881     $ 1,829     $ 1,220
    shareholders
   
    Net income per share - basic and diluted     $ 0.11     $ 0.09      $ 0.20      $ 0.13
 
    Weighted average number of shares outstanding
 
      Basic EPS (in thousands)                    9,309      9,298       9,305       9,202
 
      Diluted EPS (in thousands)                  9,329      9,314       9,323       9,276

                                        CIMATRON LIMITED
                      RECONCILIATION BETWEEN GAAP AND NON-GAAP INFORMATION
                      (US Dollars in thousands, except for per share data)

 
                                                     Three months ended
                                                           June 30,
                                            2012                           2011
                                   GAAP      Adj.     NON-GAAP     GAAP    Adj.   NON-GAAP
 
    Total revenue                10,608        -        10,608    9,975      -       9,975
 
    Total cost of revenue           934                  1,206    1,273              1,126
     Non-cash amortization of               (147)                         (147)
      acquired intangible assets
     One-time income from OCS                419
      agreement

    Gross profit                  9,674     (272)        9,402    8,702    147       8,849
 
     Research and development     1,629        -         1,629    1,500      -       1,500
      expenses, net
 
     Selling, general and         6,215      (98)        6,117    6,155   (103)      6,052
      administrative expenses (1)
    Operating income              1,830     (174)        1,656    1,047    250       1,297
 
     Financial income (expenses),  (205)       -          (205)      38      -          38
      net
 
     Taxes on income (2)           (626)     209          (417)    (195)   150         (45)
 
     Other                           (4)       -            (4)      (8)     -          (8)
 
    Net income                      995       35         1,030      882    400       1,282
 
    Less: Net (income) loss           3        -             3       (1)     -          (1)
     attributable to the 
     noncontrolling interest
    Net income attributable       $ 998     $ 35       $ 1,033    $ 881  $ 400     $ 1,281
     to Cimatron's shareholders
    Net income per share - basic $ 0.11                 $ 0.11   $ 0.09             $ 0.14
     and diluted
 
    Weighted average number of shares outstanding
 
     Basic EPS (in thousands)     9,309                  9,309    9,298              9,298
 
     Diluted EPS (in thousands)   9,329                  9,329    9,314              9,314

(1) Non-GAAP adjustment to exclude non-cash amortization of acquired intangible assets. (2) Non-GAAP adjustment to exclude the effect of deferred taxes and other non-cash tax provisions.

Table continued below.


                                         CIMATRON LIMITED
                        RECONCILIATION BETWEEN GAAP AND NON-GAAP INFORMATION
                        (US Dollars in thousands, except for per share data)

     
                                                        Six months ended
                                                            June 30,
                                             2012                         2011
                                    GAAP     Adj.    NON-GAAP    GAAP     Adj.    NON-GAAP
 
     Total revenue                 20,494      -     20,494      18,869      -     18,869
 
     Total cost of revenue          2,352             2,477       2,618             2,324
      Non-cash amortization of              (294)                         (294)
       acquired intangible assets
      One-time income from OCS               419
       agreement
 
     Gross profit                  18,142   (125)    18,017      16,251    294     16,545
 
     Research and development       3,322      -      3,322       3,054      -      3,054
      expenses, net
 
     Selling, general and         12,101    (197)    11,904      11,726   (204)    11,522
      administrative expenses (1)
     Operating income              2,719      72      2,791       1,471    498      1,969
 
     Financial income (expenses),    (92)      -        (92)        154      -        154
      net
 
     Taxes on income (2)            (800)    118       (682)       (422)   322       (100)
 
     Other                            11       -         11         (10)     -        (10)
 
     Net income                    1,838     190      2,028       1,193    820      2,013
 
     Less: Net (income) loss          (9)      -         (9)         27      -         27
      attributable to the 
      noncontrolling interest 
 
     Net income attributable     $ 1,829   $ 190    $ 2,019     $ 1,220  $ 820    $ 2,040
      to Cimatron's shareholders
     Net income per share -       $ 0.20             $ 0.22      $ 0.13            $ 0.22
      basic and diluted
 
     Weighted average number of shares outstanding
 
      Basic EPS (in thousands)     9,305              9,305       9,202             9,202
 
      Diluted EPS (in thousands)   9,323              9,323       9,276             9,276

(1) Non-GAAP adjustment to exclude non-cash amortization of acquired intangible assets. (2) Non-GAAP adjustment to exclude the effect of deferred taxes and other non-cash tax provisions.  

    
                                      CIMATRON LIMITED
                                CONSOLIDATED BALANCE SHEETS                                  (US Dollars in thousands)

   
                                                               June 30,    December 31,
                                                                 2012          2011
 
    ASSETS
    CURRENT ASSETS:
     Total cash, cash equivalents and short-term investments  $ 14,685      $ 11,787
     Trade receivables                                           5,190         5,840
     Other current assets                                        1,916         1,452
      Total current assets                                      21,791        19,079
 
      Deposits with insurance companies and severance pay fund   3,064         3,069
 
      Net property and equipment                                   987         1,009
 
      Total other assets                                        10,782        11,365
 
       Total assets                                           $ 36,624      $ 34,522
 
    LIABILITIES AND SHAREHOLDERS' EQUITY
    CURRENT LIABILITIES:
         Short-term bank credit                                   $ 46          $ 87
         Trade payables                                          1,016         1,072
         Accrued expenses and other liabilities                  8,205         9,048
         Deferred revenues                                       5,756         2,403
          Total current liabilities                             15,023        12,610
 
    LONG-TERM LIABILITIES:
         Accrued severance pay                                   4,058         4,135
         Long-term loan                                              -             6
         Deferred tax liability                                    457           639
         Total long-term liabilities                             4,515         4,780
 
         Total shareholders' equity                             17,086        17,132
           Total liabilities and shareholders' equity         $ 36,624      $ 34,522



                                 CIMATRON LIMITED  
                     STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY  
                            (US Dollars in thousands)                             

                                                     
                                                               Accumulated
                                                Additional        other
                       Noncontrolling   Share    paid-in      comprehensive
                          Interest     capital   capital      income (loss)
 
    Balance at
    December 31, 2011     $ (131)      $ 313    $ 18,999        $ (446)
    Changes during
    the six months
    ended June 30,
    2012:
    Net income                 9
    Cash dividend
    paid
    Exercise of share
    options                                -          40
    Unrealized gain
    on derivative
    instruments                                                    149
    Other                                                          (93)
    Foreign currency
    translation
    adjustment                                                    (121)
    Total
    comprehensive
    income
    Balance at June
    30, 2012              $ (122)      $ 313    $ 19,039        $ (511)



Table continued below.

                                 CIMATRON LIMITED
                   STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY     
                            (US Dollars in thousands)                             

                                                  
                                                  
                           Retained
                           earnings                                      Total
                         (accumulated   Treasury     Comprehensive    shareholders'
                           deficit)      stock       income (loss)       equity
 
    Balance at
    December 31, 2011      $ (851)     $ (752)                         $ 17,132
    Changes during the
    six months ended
    June 30, 2012:
    Net income              1,829                          1,838          1,838
    Cash dividend paid     (1,859)                                       (1,859)
    Exercise of share
    options                                                                  40
    Unrealized gain on
    derivative
    instruments                                              149            149
    Other                                                    (93)           (93)
    Foreign currency
    translation
    adjustment                                              (121)          (121)
    Total
    comprehensive
    income                                                 1,773
    Balance at June
    30, 2012               $ (881)     $ (752)                         $ 17,086



                                CIMATRON LIMITED
                           STATEMENTS OF CASH FLOWS

(US Dollars in thousands)

     
                                                            Six months ended
                                                                June 30,
                                                            2012       2011
 
    Cash flows from operating activities:
    Net income                                           $ 1,838    $ 1,193
 
    Adjustments to reconcile net income
    to net cash provided by operating activities:
    Depreciation and amortization                            686        692
    Increase (decrease) in accrued severance pay            (476)       195
    Loss from sale of property and equipment, net             (2)         -
    Deferred taxes, net                                     (180)       319
 
    Changes in assets and liabilities:
    Decrease in accounts receivable and prepaid expenses     528         80
    Decrease (increase) in inventory                          (1)        19
    Decrease (increase) in deposits with insurance             5       (129)
     companies and severance pay fund
    Increase in trade payables, accrued expenses and       2,329      2,274
     other liabilities
    Net cash provided by operating activities              4,727      4,643
 
    Cash flows from investing activities:
    Proceeds from sale of property and equipment               1          -
    Purchase of property and equipment                      (126)       (87)
    Net cash used in investing activities                   (125)       (87)
 
    Cash flows from financing activities:
    Short-term bank credit                                   (58)        (4)
    Long-term bank credit                                     (7)       (43)
    Cash dividend paid                                    (1,611)    (1,208)
    Proceeds from issuance of shares upon exercise of         40        733
    options
    Net cash used in financing activities                 (1,636)      (522)
 
    Net increase in cash and cash equivalents              2,966      4,034
    Effect of exchange rate changes on cash                  (68)       238
    Cash and cash equivalents at beginning of period      11,787     10,221
    Cash and cash equivalents at end of period          $ 14,685   $ 14,493
 
    Appendix A - Non-cash transactions
     Purchase of property on credit                         $ 89       $ 28

 

Contact:
Cimatron Ltd