Camtek(US:CAMT)2021-08-04 17:20Financial Data and Key Metrics Changes - The company reported record revenues of $67.5 million for Q2 2021, an increase of 82% year-over-year and 18% quarter-over-quarter [20][24] - Gross margin improved to 52.1% compared to 46.1% in Q2 2020 and 50.7% in the previous quarter [21] - Operating margin was 27.4%, up from 17.2% in Q2 2020 and slightly higher than 27.2% in the previous quarter [23] - Net income for Q2 2021 was $17.1 million, or $0.38 per diluted share, compared to $6.3 million or $0.16 per share in Q2 2020 [24] Business Line Data and Key Metrics Changes - 88% of sales came from Asia, with 60% of systems sold for advanced packaging applications [16] - CMOS image sensors accounted for 18% of revenues, indicating solid performance in this segment [16] Market Data and Key Metrics Changes - The company expects continuous sales growth in the next two quarters, driven by demand in the semiconductor market, particularly from the transition to 5G and increased data center needs [10][11] - The automotive industry is undergoing significant changes, which the company anticipates will benefit its operations in the coming years [11] Company Strategy and Development Direction - The company is expanding production capacity to support long-term growth, including adding cleanroom space and increasing inventory levels [17] - The focus remains on high-growth segments, leveraging technology leadership and local support to outperform industry growth [15] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the market, noting strong demand for semiconductor components and a healthy backlog for the second half of the year [18] - The company expects Q3 revenues to be between $69 million and $71 million, reflecting ongoing demand [26] Other Important Information - The company is actively pursuing M&A opportunities, viewing it as a priority for cash use, although progress has been slower due to travel restrictions [58][62] - Inventory levels increased to $59 million to support current demand and ensure availability of key components [25] Q&A Session Summary Question: Clarification on revenue strength in Q2 - Management noted that both CMOS image sensors and advanced packaging saw stronger-than-expected performance, contributing to revenue growth [29][30] Question: Visibility into early 2022 - Management indicated positive customer sentiment and solid forecasts for the DRAM market, suggesting a strong outlook for early 2022 [32][34] Question: Supply chain issues impacting margins - Management acknowledged some supply chain pressures but stated they have managed to mitigate significant impacts on margins [36] Question: Advanced packaging demand trends - Management confirmed that the trend towards more bumps per wafer is a secular trend, indicating long-term growth potential in advanced packaging [40][42] Question: CMOS image sensor outsourcing trends - Management viewed the trend of IDMs outsourcing to foundries as neutral and expected continued healthy growth in the CMOS image sensor segment [46][48] Question: Inventory building perspective - Management confirmed that inventory building is ongoing and not expected to peak in Q3, as they prepare for continued revenue growth [64] Question: Areas of interest for M&A - Management is focused on finding companies with good synergy and profitability, although the process has been slowed by travel restrictions [62]