Financial Performance - Revenues for 2018 were $123.174 million, a 32% increase from $93.485 million in 2017[22] - Gross profit for 2018 was $60.796 million, representing a gross margin of approximately 49.3%[22] - Operating income for 2018 was $20.033 million, compared to an operating loss of $3.037 million in 2017[22] - Net income from continuing operations for 2018 was $18.731 million, significantly up from $1.688 million in 2017[22] - The company reported basic earnings per share of $0.52 for 2018, compared to $0.05 in 2017[22] Assets and Liabilities - Total assets as of December 31, 2018, were $141.547 million, an increase from $113.036 million in 2017[23] - Total liabilities increased to $40.140 million in 2018, compared to $28.735 million in 2017[23] - Total shareholders' equity rose to $101.407 million in 2018, up from $84.301 million in 2017[23] Research and Development - Research and development costs increased to $14.581 million in 2018, up from $13.534 million in 2017[22] - The company has invested significantly in R&D to enhance performance, reduce costs, and improve reliability of its Inspection and Metrology systems[147] Market and Sales - Sales in the Asia Pacific region accounted for approximately 80% of total revenues in 2018, with China representing about 30% of total revenues[40] - The Asia Pacific region accounted for $98.47 million of the total revenue in 2018, representing a 24% increase from $79.11 million in 2017[154] - Sales in the Asia Pacific region accounted for approximately 80% of total revenues in 2018, with 71% of those revenues coming from South Korea, China, and Taiwan[188] Risks and Challenges - The company faces risks from political and economic instability in Asia, which could significantly decline future revenues and adversely affect results of operations and cash flow[40] - The company has experienced significant fluctuations in quarterly operating results, complicating planning processes and reducing predictability of earnings[42][43] - Future acquisitions may lead to integration difficulties, management distraction, and potential impairment charges, which could harm business operations[47] - The company relies on a limited number of suppliers, and disruptions in supply could lead to delays in product delivery and increased costs[49][50] - The sales process for new products may take longer, increasing costs and delaying time to market, which could negatively impact revenues and cash flow[63] - The company has historically incurred significant losses and negative cash flows, raising concerns about sustaining profitable operations in the future[71] - Compliance with evolving data protection laws, such as GDPR, may incur significant costs and impact business prospects[60] - Fluctuations in currency exchange rates may result in additional expenses and affect product competitiveness, impacting profitability[61][62] - The company differentiates its products through intellectual property, but inadequate protection may affect competitive advantage[70] - The company is subject to ongoing costs associated with compliance to the Dodd-Frank Act regarding conflict minerals, which may impact future sales if products are found to contain non-conflict-free minerals[74] - The company faces risks related to operations in Israel, including potential disruptions from regional hostilities and military service obligations for employees[96][104] - The company may be classified as a passive foreign investment company (PFIC), which could adversely affect U.S. shareholders' tax returns and the value of shares[91] - Changes in U.S. federal tax laws could impact the company's operations and investors[93] Corporate Governance - Priortech holds a controlling interest of 41.92% in the company, which may lead to conflicts of interest and affect shareholder voting outcomes[83] - Following the Chroma Transaction, Priortech and Chroma will collectively own approximately 44.5% of the company's shares, indicating joint control[84] - The company is subject to certain restrictions under Israeli law that could delay or prevent a change in control[123] Compliance and Regulations - The company believes it has complied with environmental regulations, and such compliance has not materially affected its financial condition or cash flows[75] - The company has documented and tested its internal control systems to comply with the Sarbanes-Oxley Act, but future effectiveness cannot be guaranteed, which may affect investor confidence and share price[77] - The company’s revenue recognition policy was updated in 2018 to comply with Topic 606, affecting how revenue is recognized from product sales and service contracts[191] Transactions and Acquisitions - The company sold its PCB inspection business unit for a total cash payment of $32 million, with an additional potential payment of up to $3 million based on the unit's financial performance in 2018[129] - The Chroma Transaction involves the acquisition of 6,117,440 shares at $9.5 per share, resulting in Chroma holding approximately 20.5% of the company[132] - The company received government grants totaling $7.0 million as of December 31, 2018, which includes liabilities assumed from Printar[110] Facilities and Operations - The company has operations in the Asia Pacific region, North America, and Europe, with its headquarters located in Israel[127] - The company’s main facilities occupy 84,500 square feet, with 16,000 square feet dedicated to manufacturing[180] - The company completed the expansion of its facilities with a new building of approximately 10,500 square feet in 2018[180] - The company maintains several months' inventory of critical components to meet manufacturing needs during periods of increased demand[160] Shareholder Information - The company's share price has shown significant volatility, ranging from $5.75 to $10.78 between January 1, 2018, and February 28, 2019, which may affect investors' ability to sell shares profitably[79] - The company’s principal shareholder, Priortech, holds 41.92% of the outstanding ordinary shares, subject to dilution upon closing of the Chroma Transaction[177] Accounting Standards - The Company adopted ASU No. 2017-09 early, which amends the scope of modification accounting for share-based payment arrangements[210] - The adoption of ASU No. 2017-09 did not impact the Company's consolidated financial position[210] - The ASU is effective for fiscal years beginning after December 15, 2017[210] - The guidance provided by the ASU relates to changes in terms or conditions of share-based payment awards[210] - The Company is required to apply modification accounting under ASC 718 for certain changes[210] - The early adoption reflects the Company's proactive approach to accounting standards[210] - No impact on results of operations and cash flows was reported due to the adoption[210] - The Company continues to monitor the implications of new accounting standards[210] - The modification accounting is relevant for share-based payment arrangements[210] - The Company remains compliant with the latest accounting standards[210]

Camtek Ltd. (NASDAQ:CAMT) Q4 2018 Earnings Conference Call February 13, 2019 10:00 AM ET Company Participants Kenny Green - GK Investor Relations Rafi Amit - Chief Executive Officer Moshe Eisenberg - Chief Financial Officer Ramy Langer - Chief Operating Officer Conference Call Participants Craig Ellis - B. Riley Gus Richard - Northland Securities Ladies and gentlemen, thank you for standing by. Welcome to Camtek's Fourth Quarter and Full Year 2018 Results Conference Call. All participants are at present in ...