Cimatron Reports $1.0M Non-GAAP Operating Profit in the Third Quarter of 2012 Declares dividend of NIS 0.41 (approximately US$0.105) per share

GIVAT SHMUEL, Israel, November 7, 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 third quarter and first nine months of 2012.  

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

  • 3% year-over-year revenue increase on a constant currency basis in Q3 2012
  • 27% year-over-year non-GAAP operating profit increase in the first nine months of 2012
  • $5.1M positive cash flow from operating activities in the first nine months of 2012, excluding a one-time payment of $2.5M to the Office of Chief Scientist in the Israeli Ministry of Industry, Trade and Labor (OCS)

Concurrently with the announcement of its results, Cimatron today also declared a cash dividend of NIS 0.41 (approximately US$0.105) per share on outstanding ordinary shares, representing a total dividend payment of approximately $1.0 million. The dividend is payable on December 17, 2012 to shareholders of record at the close of business on November 28, 2012. Commenting on the results, Danny Haran, President and Chief Executive Officer of Cimatron, noted "Revenue in the third quarter of 2012 increased by 3% compared to the third quarter of 2011 on a constant currency basis (down 2% in nominal values), with the highest growth coming from North America, and a healthy growth in Europe, mainly in Germany and Italy. Typically, the third quarter of each calendar year is our weakest of the year, and the third quarter of 2012 was no exception. Yet, we are pleased with our continued healthy operating profit margins and cash flows. Cash flow from operating activities in the first nine months of 2012 was $5.1M (excluding the $2.5M one-time payment to the OCS that we announced in August this year). Our confidence in continued profitability and positive cash flows going forward allows us to announce yet another dividend distribution of approximately $1M payable on December 17, 2012 to shareholders of record at the close of business on November 28, 2012." concluded Mr. Haran.

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

GAAP:

Revenues for the third quarter of 2012 were $9.5 million, compared to $9.6 million recorded in the third quarter of 2011. For the first nine months of 2012, revenues were $30.0 million, compared to $28.5 million in the same period of 2011.  

Gross Profit for the third quarter of 2012 was $8.2 million, as compared to $8.3 million in the same period in 2011. Gross margin in the third quarter of 2012 was 87% of revenues, the same as in the third quarter of 2011. For the first nine months of 2012, gross profit was $26.4 million, compared to $24.6 million in the same period of 2011. Gross margin for the nine months ended September 30th, 2012 was 88% compared to a gross margin of 86% for the first nine months of 2011. The higher gross margin in the first nine months of 2012 as compared to the parallel period in 2011 mainly reflects the agreement with the OCS that was announced in August 2012.

Operating profit in the third quarter of 2012 was $0.7 million, the same as in the third quarter of 2011. In the first nine months of 2012, Cimatron recorded an operating profit of $3.4 million, compared to an operating profit of $2.2 million in the first nine months of 2011.  

Net Profit for the third quarter of 2012 was $0.5 million, or $0.06 per diluted share, compared to a net profit of $0.0 million, or $0.00 per diluted share, recorded in the same quarter of 2011.  In the first nine months of 2012, net profit was $2.4 million, or $0.25 per diluted share, compared to a net profit of $1.2 million, or $0.13 per diluted share, in the first nine months of 2011.  

Non-GAAP:

Revenues for the third quarter of 2012 were $9.5 million, compared to $9.6 million recorded in the third quarter of 2011. For the first nine months of 2012, revenues were $30.0 million, compared to $28.5 million in the same period of 2011.  

Gross Profit for the third quarter of 2012 was $8.4 million, as compared to $8.5 million in the same period in 2011. Gross margin in the third quarter of 2012 was 89% of revenues, compared to 88% of revenues in the third quarter of 2011. In the first nine months of 2012, gross profit was $26.4 million, compared to $25.0 million in the first nine months of 2011. Gross margin for the nine months ended September 30th, 2012 was 88%, the same as in the first nine months of 2011.

Operating Profit in the third quarter of 2012 was $1.0 million, the same as in the third quarter of 2011. In the first nine months of 2012, Cimatron recorded an operating profit of $3.8 million, compared to an operating profit of $3.0 million in the first nine months of 2011.  

Net profit for the third quarter of 2012 was $0.7 million, or $0.07 per diluted share, compared to a net profit of $0.8 million, or $0.09 per diluted share, recorded in the same quarter of 2011. In the first nine months of 2012, net profit was $2.7 million, or $0.29 per diluted share, compared to a net profit of $2.9 million, or $0.31 per diluted share, in the first nine months of 2011.

The contrast between non-GAAP operating profit (which rose in the first nine months of 2012 compared to the same period of 2011) and non-GAAP net profit (which slightly declined in the first nine months of 2012 compared to the corresponding period of 2011) was mainly attributable to an increase in income tax expense.  Income tax expense constituted 26% of income before taxes in the first nine months of 2012, causing a more significant reduction in non-GAAP net profit, whereas it constituted only 3% of income before taxes in the first nine months of 2011. The main reason for the higher effective tax rate in 2012 is the Company's having completed the use of its remaining U.S. tax loss carry-forwards towards the end of 2011.

Conference Call

Cimatron's management will host a conference call today, November 7th, 2012, 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.

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   Nine months ended
                                                    September 30,       September 30,
                                                   2012      2011      2012      2011
 
    Total revenue                                 9,463     9,619    29,957    28,488
 
    Total cost of revenue                         1,218     1,288     3,570     3,906
 
    Gross profit                                  8,245     8,331    26,387    24,582
 
    Research and development expenses, net        1,613     1,654     4,935     4,708
 
    Selling, general and administrative expenses  5,918     5,928    18,019    17,654
    Operating income                                714       749     3,433     2,220
 
    Financial income (expenses), net                 41      (163)      (51)       (9)
 
    Taxes on income                                (199)     (566)     (999)     (988)
 
    Other                                           (18)        1        (7)       (9)
 
    Net income                                      538        21     2,376     1,214
 
    Less: Net (income) loss attributable to the
    noncontrolling interest                         (15)      (14)      (24)       13
 
    Net income attributable to Cimatron's
    shareholders                                  $ 523       $ 7   $ 2,352   $ 1,227
    Net income per share - basic and diluted     $ 0.06    $ 0.00    $ 0.25    $ 0.13
 
    Weighted average number of shares outstanding
 
    Basic EPS (in thousands)                      9,314     9,300     9,308     9,235
 
    Diluted EPS (in thousands)                    9,331     9,315     9,325     9,284


CIMATRON LIMITED

RECONCILIATION BETWEEN GAAP AND NON-GAAP INFORMATION

(US Dollars in thousands, except for per share data)

                                                     Three months ended
                                                         September 30,
                                                2012                      2011
                                        GAAP    Adj.   NON-GAAP   GAAP    Adj.   NON-GAAP
 
    Total revenue                      9,463      -      9,463   9,619      -      9,619
 
    Total cost of revenue              1,218             1,071   1,288             1,141
    Non-cash amortization
    of acquired intangible assets              (147)                     (147)
    One-time income from OCS agreement
 
    Gross profit                       8,245    147      8,392   8,331    147      8,478
 
    Research and development expenses,
    net                                1,613      -      1,613   1,654      -      1,654
 
    Selling, general and 
    administrative expenses(1)         5,918    (99)     5,819   5,928    (99)     5,829
    Operating income                     714    246        960     749    246        995
 
    Financial income (expenses), net      41      -         41    (163)     -       (163)
 
    Taxes on income (2)                 (199)   (90)      (289)   (566)   565         (1)
 
    Other                                (18)     -        (18)      1      -          1
 
    Net income                           538    156        694      21    811        832
 
    Less: Net (income) loss 
    attributable to the
    noncontrolling interest              (15)     -        (15)    (14)     -        (14)
 
    Net income attributable to 
    Cimatron's shareholders            $ 523  $ 156      $ 679     $ 7  $ 811      $ 818
    Net income per share - basic 
    and diluted                       $ 0.06            $ 0.07  $ 0.00            $ 0.09
 
    Weighted average number of 
    shares outstanding
 
        Basic EPS (in thousands)       9,314             9,314   9,300             9,300
        Diluted EPS (in thousands)     9,331             9,331   9,315             9,315
 
    (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…

                                                     Nine months ended
                                                        September 30,
                                                2012                      2011
                                        GAAP    Adj.   NON-GAAP   GAAP    Adj.   NON-GAAP
 
    Total revenue                     29,957      -     29,957  28,488      -     28,488
 
    Total cost of revenue              3,570             3,548   3,906             3,465
    Non-cash amortization of 
    acquired intangible assets                 (441)                     (441)
    One-time income from OCS agreement          419
 
    Gross profit                      26,387     22     26,409  24,582    441     25,023
 
    Research and development 
    expenses, net                      4,935      -      4,935   4,708      -      4,708
 
    Selling, general and 
    administrative expenses(1)        18,019   (296)    17,723  17,654   (303)    17,351
    Operating income                   3,433    318      3,751   2,220    744      2,964
 
    Financial income (expenses), net     (51)     -        (51)     (9)     -         (9)
 
    Taxes on income(2)                  (999)    28       (971)   (988)   887       (101)
 
    Other                                 (7)     -         (7)     (9)     -         (9)
 
    Net income                         2,376    346      2,722   1,214  1,631      2,845
 
    Less: Net (income) loss 
    attributable to the
    noncontrolling interest              (24)     -        (24)     13      -         13
 
    Net income attributable to 
    Cimatron's shareholders          $ 2,352  $ 346    $ 2,698 $ 1,227 $ 1,631   $ 2,858
    Net income per share
    - basic and diluted               $ 0.25            $ 0.29  $ 0.13            $ 0.31
 
    Weighted average number 
    of shares outstanding
 
        Basic EPS (in thousands)       9,308             9,308   9,235             9,235
        Diluted EPS (in thousands)     9,325             9,325   9,284             9,284
 
    (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)

                                                              September 30,  December 31,
                                                                   2012          2011
 
                 ASSETS
    CURRENT
    ASSETS:
             Total cash, cash equivalents and short-term
             investments                                         $ 12,276     $ 11,787
             Trade receivables                                      4,555        5,840
             Other current assets                                   1,669        1,452
             Total current assets                                  18,500       19,079
 
             Deposits with insurance companies and severance 
             pay fund                                               3,132        3,069
 
             Net property and equipment                               941        1,009
 
             Total other assets                                    10,649       11,365
 
             Total assets                                        $ 33,222     $ 34,522
 
             LIABILITIES AND SHAREHOLDERS' EQUITY
    CURRENT
    LIABILITIES:
             Short-term bank credit                                  $ 47         $ 87
             Trade payables                                         1,052        1,072
             Accrued expenses and other liabilities                 5,263        9,048
             Deferred revenues                                      4,468        2,403
             Total current liabilities                             10,830       12,610
 
    LONG-TERM
    LIABILITIES:
             Accrued severance pay                                  4,193        4,135
             Long-term loan                                             -            6
             Deferred tax liability                                   366          639
             Total long-term liabilities                            4,559        4,780
 
             Total shareholders' equity                            17,833       17,132
             Total liabilities and shareholders' equity          $ 33,222     $ 34,522


CIMATRON LIMITED

STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY

 (US Dollars in thousands)

                                                                    Accumulated
                                                                       other
                                                        Additional comprehensive
                                 Noncontrolling  Share   paid-in      income
                                    Interest    capital  capital      (loss)
    Balance at December 31,
    2011                              $ (131)   $ 313   $ 18,999       $ (446)
    Changes during the nine
    months ended September 30,
    2012:
    Net income                             24
    Cash dividend paid
    Exercise of share options                       -         40
    Unrealized gain on
    derivative instruments                                                 218
    Other                                                                    7
    Foreign currency
    translation adjustment                                                (77)
    Total comprehensive income
    Balance at September 30,
    2012                              $ (107)   $ 313   $ 19,039       $ (298)


Table continued…

                                 Retained
                                 earnings                                Total
                               (accumulated  Treasury  Comprehensive  shareholders'
                                 deficit)     stock    income (loss)    equity
    Balance at December 31,
    2011                           $ (851)  $ (752)                    $ 17,132
    Changes during the nine
    months ended September
    30, 2012:
    Net income                      2,352                  2,376         2,376
    Cash dividend paid             (1,863)                              (1,863)
    Exercise of share
    options                                                                 40
    Unrealized gain on
    derivative instruments                                   218           218
    Other                                                      7             7
    Foreign currency
    translation adjustment                                   (77)          (77)
    Total comprehensive
    income                                                 2,524
    Balance at September 30,
    2012                           $ (362)  $ (752)                   $ 17,833


CIMATRON LIMITED

STATEMENTS OF CASH FLOWS

(US Dollars in thousands)

                                                                   Nine months ended
                                                                     September 30,
                                                                   2012        2011
 
    Cash flows from operating activities:
    Net income                                                   $ 2,376     $ 1,214
 
    Adjustments to reconcile net income
    to net cash provided by operating activities:
    Depreciation and amortization                                  1,007       1,042
    Increase (decrease) in accrued severance pay                      63         (56)
    Deferred taxes, net                                             (272)        561
 
    Changes in assets and liabilities:
    Decrease in accounts receivable and prepaid expenses           1,051          23
 
    Decrease (increase) in inventory
                                                                      (2)         (6)
    Decrease (increase) in deposits with insurance 
    companies and severance pay fund                                 (63)        130
    Increase in trade payables, accrued expenses 
    and other liabilities                                         (1,587)      1,210
    Net cash provided by operating activities                      2,573       4,118
 
    Cash flows from investing activities:
    Proceeds from sale of property and equipment                       1           -
    Purchase of property and equipment                              (243)       (282)
    Net cash used in investing activities                           (242)       (282)
 
    Cash flows from financing activities:
    Short-term bank credit                                           (40)         (5)
    Long-term bank credit                                             (7)        (35)
    Cash dividend paid                                            (1,863)     (3,216)
    Proceeds from issuance of shares upon exercise of options         40         733
    Net cash used in financing activities                         (1,870)     (2,523)
 
    Net increase in cash and cash equivalents                        461       1,313
    Effect of exchange rate changes on cash                           28          16
    Cash and cash equivalents at beginning of period              11,787      10,221
    Cash and cash equivalents at end of period                  $ 12,276    $ 11,550
    Appendix A - Non-cash transactions
        Purchase of property on credit                               $ 5       $ 119


Contact:

Ilan Erez, Chief Financial Officer    
Cimatron Ltd.        
Tel.: +972-73-237-0114    
E-mail: ilane@cimatron.com


SOURCE Cimatron Ltd



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