Shamir Optical Industry Ltd. Reports First Quarter 2010 Results

KIBBUTZ SHAMIR, Israel, May 10 /PRNewswire-FirstCall/ -- Shamir Optical Industry Ltd. (Nasdaq: SHMR) ("Shamir"), a leading provider of innovative products and technology to the ophthalmic lens market, today announced unaudited financial results for the first quarter ended March 31, 2010.

For the quarter ended March 31, 2010, revenues increased 18.2% to $40.1 million, compared with revenues of $33.9 million for the same period in 2009. Gross profit for the quarter was $21.8 million, or 54.5% of revenues, compared with gross profit of $17.9 million, or 52.6% of revenues for the same period last year.

For the quarter ended March 31, 2010, operating income increased 41.3% to $5.5 million, or 13.6% of revenues, compared with operating income of $3.9 million, or 11.4% of revenues for the same period last year.  

Net income for the quarter increased 78.3% to $3.9 million, compared with net income of $2.2 million for the same period in 2009. Net income attributable to Shamir's shareholders was $3.7 million or $0.22 per diluted share, compared with $2.1 million or $0.13 per diluted share for the same period in 2009.

For the quarter ended March 31, 2010, excluding the effect of non-cash stock-based compensation expenses and amortization of intangible assets, operating income was $6.0 million, or 14.9% of revenues, compared with operating income of $4.3 million, or 12.6% of revenues, for the same period last year.

Excluding the effect of non-cash stock-based compensation expenses, accretion of redeemable non-controlling interest, net of tax, and amortization of intangible assets, net of tax, net income attributable to Shamir's shareholders for the quarter was $4.2 million, or $0.25 per diluted share, compared with net income of $2.5 million, or $0.15 per diluted share for the same period last year.

The reconciliation of GAAP operating income and net income to non-GAAP operating income and non-GAAP net income is set forth below.

As of March 31, 2010, the Company had cash and cash equivalents, including short-term investments of $30.1 million.

Commenting on first quarter results, Amos Netzer, chief executive officer of Shamir, said, "Shamir had a strong first quarter 2010 across all of its major operating regions. Our favorable results reflect the progress we continue to achieve throughout our operations, which includes the strengthening of our brand as well as the improvements we have made in our sales and manufacturing capabilities. The investments we have made in both people and geographic expansion have allowed us to increase our market share."

For the fiscal year ending December 31, 2010, Shamir confirmed its previous estimate for 2010 revenue growth in the range of 8%-12%, under the assumption of December 2009 exchange rates.

Conference Call:

Shamir has scheduled a conference call for 10:00 a.m. ET today to discuss first quarter results.  To participate in the call, please dial (888) 562-3356 (U.S. and Canada) or (973) 582-2700 (International).  The conference ID for this event is 72108068.  For those unable to participate there will be replay available from 1:00 p.m. ET on May 10, 2010 through 11:59 p.m. EDT, May 17, 2010.  Please call: (800) 642-1687 (U.S. and Canada) (706) 645-9291 (International).  The ID code for the replay is 72108068.

The call will be available as a live, listen-only webcast at www.kcsa.com. Please go to the KCSA website at least 15 minutes prior to the scheduled start time to register, download and install any necessary audio software. A 30-day archive of the webcast will be available approximately 2 hours after the conclusion of the live call.

About non – GAAP financial measures

This press release includes non-GAAP financial measures - non-GAAP operating income and non-GAAP net income – that exclude certain charges. The presentation of this financial information is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with GAAP. Management of Shamir believes that non-GAAP operating income and non-GAAP net income provides meaningful supplemental information because these numbers reflect our core operational results and are used by management internally to review Shamir's financial results.

About Shamir

Shamir is a leading provider of innovative products and technology to the spectacle lens market. Utilizing its proprietary technology, the company develops, designs, manufactures, and markets progressive lenses to sell to the ophthalmic market. In addition, Shamir utilizes its technology to provide design services to optical lens manufacturers under service and royalty agreements. Progressive lenses are used to treat presbyopia, a vision condition where the eye loses its ability to focus on close objects. Progressive lenses combine several optical strengths into a single lens to provide a gradual and seamless transition from near to intermediate, to distant vision. Shamir differentiates its products from its competitors' primarily through lens design. Shamir's leading lenses are marketed under a variety of trade names, including Shamir Genesis(TM), Shamir Piccolo(TM), Shamir Office(TM), Shamir Autograph(TM) and Shamir Smart(TM). Shamir believes that it has one of the world's preeminent research and development teams for progressive lenses, molds, and complementary technologies and tools. Shamir developed software dedicated to the design of progressive lenses. This software is based on Shamir's proprietary mathematical algorithms that optimize designs of progressive lenses for a variety of activities and environments. Shamir also has created software tools specifically designed for research and development and production requirements, including Eye Point Technology software, which simulates human vision.

Safe Harbor Statement

Statements concerning Shamir's business outlook or future economic performance; product introductions and plans and objectives related thereto; and assumptions made or expectations as to any future events, conditions, performance or other matters, are "forward-looking statements" as that term is defined under U.S. federal securities laws. Forward-looking statements are subject to various risks, uncertainties and other factors that could cause actual results to differ materially from those stated in such statements. These risks, uncertainties and factors include, but are not limited to: The conflicts in the region; the effects of competition in our industry, and changes in our relationships with optical laboratories, distributors, research and development partners and other third parties; the effects of the international expansion of our operations and our ability to manage our growth, including our ability to manage potential future acquisitions; the effect of global economic conditions in general and conditions in Shamir's industry and target markets in particular; shifts in supply and demand; market acceptance of new products and continuing products' demand; the impact of competitive products and pricing on Shamir's and its customers' products and markets; timely product and technology development/upgrades and the ability to manage changes in market conditions as needed; interest rate fluctuations; and other factors detailed in Shamir's filings with the Securities and Exchange Commission. Shamir assumes no obligation to update the information in this release.

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SOURCE Shamir Optical Industry Ltd.