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Cimatron Reports Record Q4 and Full Year 2012 Results Across all Operating Parameters

February 19, 2013

GIVAT SHMUEL, Israel, Feb. 19, 2013 /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 fourth quarter and full year of 2012.

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

  • Record revenues of $42.3M in 2012 and $12.4M in Q4/12
  • Record non-GAAP operating profit of $6.1M in 2012 and $2.3M in Q4/12 with operating margins of 14% and 19%, respectively
  • Record $5.7M operating cash flow in 2012 (excluding a one-time royalty payment of $2.5M to the Israeli Office of the Chief Scientist)
  • 39% increase in GAAP net profit in 2012 to $3.7M

Commenting on the results, Danny Haran, President and Chief Executive Officer of Cimatron, noted, “We are excited to report a record fourth quarter, rounding out the best year in Cimatron’s history. We continue to see strong demand for our products, as well as robust growth in maintenance revenues from existing and new customers. On a constant currency basis, in 2012, our revenues grew by 7%. We achieved these strong results despite a delay in some US-based projects towards the end of the fourth quarter, which were attributed to customer ‘Fiscal Cliff’ concerns. These delays are believed to be behind us, as indicated by initial results in January.”

Continued Mr. Haran, “We look forward to an even stronger 2013. Based on what we are currently seeing in the market, combined with the current demand across our product portfolio, we expect to continue to grow our top line in 2013. This, we believe, will be translated into increased growth in operating profit due to the strong operating leverage inherent in our business model, which allows us to bring a great portion of any revenue increase down to the operating profit.”

“We aim to release a new and exciting version of CimatronE, version 11, towards the end of Q1 2013. Soon after that, the GibbsCAM 2013 version release is planned. With numerous improvements and advances, we believe these innovations will greatly support our sales efforts in 2013.

“Cimatron is currently exploring new opportunities in the field of additive manufacturing, also known as 3D Printing. Over the last few years, some of our customers and business partners have increasingly started to use and apply this emerging technology to their manufacturing processes, and we are researching how we can better serve our customers and partners in this exciting new way of manufacturing.

“At this point, Cimatron has no revenues from additive manufacturing. Yet, we believe that additive and hybrid manufacturing have great potential to emerge in many directions, and that our knowledge and vast expertise in 3D modeling and manufacturing will allow us to take part in this field, as it becomes more and more commonly used, side by side with traditional subtractive manufacturing techniques,” concluded Mr. Haran.

The following provides details on Cimatron’s GAAP and non-GAAP results for the fourth quarter and full year of 2012:

GAAP:
Revenues for the fourth quarter of 2012 were $12.4 million, compared to $12.2 million recorded in the fourth quarter of 2011. In the full year ended December 31, 2012, revenues were $42.3 million, compared to $40.7 million in 2011.

Gross Profit for the fourth quarter of 2012 was $10.8 million, as compared to $10.7 million in the same period in 2011. Gross margin in the fourth quarter of 2012 was 88% of revenues, the same as in the fourth quarter of 2011. In 2012 as a whole, gross profit was $37.2 million, compared to $35.3 million in 2011. Gross margin for the year ended December 31(st), 2012 was 88% compared to a gross margin of 87% in 2011.

Operating profit in the fourth quarter of 2012 was $2.1 million, as compared to $1.9 million in the same period in 2011. In 2012 as a whole, Cimatron recorded an operating profit of $5.5 million, compared to an operating profit of $4.1 million in 2011.

Net Profit for the fourth quarter of 2012 was $1.3 million, or $0.14 per diluted share, compared to a net profit of $1.4 million, or $0.15 per diluted share, recorded in the same quarter of 2011. In 2012 as a whole, net profit was $3.7 million, or $0.40 per diluted share, compared to a net profit of $2.7 million, or $0.29 per diluted share, in 2011.

Non-GAAP:
Revenues for the fourth quarter of 2012 were $12.4 million, compared to $12.2 million recorded in the fourth quarter of 2011. In the full year ended December 31, 2012, revenues were $42.3 million, compared to $40.7 million in 2011.

Gross Profit for the fourth quarter of 2012 was $11.0 million, as compared to $10.9 million in the same period in 2011. Gross margin in the fourth quarter of 2012 was 89% the same as in the fourth quarter of 2011. In 2012 as a whole, gross profit was $37.4 million, compared to $35.9 million in 2011. Gross margin for the year ended December 31(st), 2012 was 88%, the same as in 2011.

Operating Profit in the fourth quarter of 2012 was $2.3 million, as compared to $2.2 million in the same period in 2011. In 2012 as a whole, Cimatron recorded an operating profit of $6.1 million, compared to an operating profit of $5.1 million in 2011.

Net profit for the fourth quarter of 2012 was $1.7 million, or $0.18 per diluted share, compared to a net profit of $1.6 million, or $0.18 per diluted share, recorded in the same quarter of 2011. In 2012 as a whole, net profit was $4.4 million, or $0.47 per diluted share, compared to a net profit of $4.5 million, or $0.48 per diluted share, in 2011.

The contrast between non-GAAP operating profit (which rose in the full year of 2012 compared to 2011) and non-GAAP net profit (which was in 2012 at the same level as in 2011) was mainly attributable to an increase in income tax expense. Income tax expense constituted 26% of income before taxes in 2012, causing a more significant reduction in non-GAAP net profit, whereas it constituted only 10% of income before taxes in 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, February 19(th), 2013, 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: +972-3-9180644

Israel: 03-9180644

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: 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.

    Company Contact:                   Investor Relations contact
    ----------------                   --------------------------
    Ilan Erez, Chief Financial Officer Ehud Helft/Kenny Green
    Cimatron Ltd.                      CCG Investor Relations
    Tel.; 972-73-237-0114              Tel: (US) 1 646 201 9246
    Email: ilane@cimatron.com          Email: Cimatron@ccgisrael.com

                                                                   CIMATRON LIMITED
                                                          CONSOLIDATED STATEMENTS OF INCOME
                                                 (US Dollars in thousands, except for per share data)

                                                                                  Three months ended          Twelve months ended
                                                                                  ------------------          -------------------
                                                                                     December 31,                 December 31,
                                                                                     2012               2011              2012      2011
                                                                                     ----               ----              ----      ----

    Total revenue                                                                  12,357             12,226            42,314    40,714

    Total cost of revenue                                                           1,522              1,477             5,092     5,383

    Gross profit                                                                   10,835             10,749            37,222    35,331

                                 Research and development expenses,
                                 net                                                2,066              2,031             7,001     6,739

                                                                                    6,658              6,799            24,677    24,453
                                 Selling, general and
                                 administrative expenses

    Operating income                                                                2,111              1,919             5,544     4,139

                                 Financial income (expenses), net                      16               (186)              (35)     (195)

                                Taxes on income                                      (771)              (339)           (1,770)   (1,327)

                                Other                                                 (23)                 3               (30)       (6)

    Net income                                                                      1,333              1,397             3,709     2,611

                                 Less: Net (income) loss
                                 attributable to the
                                 noncontrolling interest                               14                 44               (10)       57

    Net income attributable to
     Cimatron's shareholders                                                       $1,347             $1,441            $3,699    $2,668
                                                                                   ======             ======            ======    ======
    Net income per share -basic
     and diluted                                                                    $0.14              $0.15             $0.40     $0.29
                                                                                    =====              =====             =====     =====

    Weighted average number of
     shares outstanding

                                Basic EPS (in thousands)                            9,338              9,300             9,323     9,252

                                Diluted EPS (in thousands)                          9,348              9,315             9,337     9,292

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

                                                                                                                                                                                 Three months ended                                                  Twelve months ended
                                                                                                                                                                                 ------------------                                                  -------------------
                                                                                                                                                                                    December 31,                                                        December 31,
                                                                                                                                                                                                    2012                                                                   2011                                         2012                                       2011
                                                                                                                                                                                                    ----                                                                   ----                                         ----                                       ----
                                                                                                                                                                         GAAP            Adj.             NON-GAAP                              GAAP             Adj.            NON-GAAP         GAAP         Adj.           NON-GAAP         GAAP         Adj.         NON-GAAP
                                                                                                                                                                         ----            ----             --------                              ----             ----            --------         ----         ----           --------         ----         ----         --------

    Total revenue                                                                                                                                                 12,357           -              12,357                             12,226                -             12,226           42,314            -         42,314           40,714            -       40,714

    Total cost of revenue                                                                                                                                          1,522                           1,375                              1,477                               1,330            5,092                       4,923            5,383                     4,795
                                                                                                                                                                                                    (147)                                                                  (147)                                        (588)                                      (588)
                                                                                              Non-cash amortization of acquired intangible assets
                                                                                                                                                                                                                                                                                                                  419
                                                                                              One-time income from OCS agreement

    Gross profit                                                                                                                                                              10,835                 147                             10,982           10,749                147           10,896       37,222            169           37,391       35,331          588           35,919

                                                                                              Research and development expenses, net                                           2,066                   -                              2,066            2,031                  -            2,031        7,001              -            7,001        6,739            -            6,739

                                                                                              Selling, general and administrative expenses (1)                                 6,658                 (50)                             6,608            6,799                (99)           6,700       24,677           (346)          24,331       24,453         (402)          24,051

    Operating income                                                                                                                                                           2,111                 197                              2,308            1,919                246            2,165        5,544            515            6,059        4,139          990            5,129

                                                                                               Financial income (expenses), net                                                   16                   -                                 16             (186)                 -             (186)         (35)             -              (35)        (195)           -             (195)

                                                                                              Taxes on income (2)                                                               (771)                169                               (602)            (339)               (44)            (383)      (1,770)           197           (1,573)      (1,327)         843             (484)

                                                                                              Other                                                                              (23)                  -                                (23)               3                  -                3          (30)             -              (30)          (6)           -               (6)

    Net income                                                                                                                                                                 1,333                 366                              1,699            1,397                202            1,599        3,709            712            4,421        2,611        1,833            4,444

                                                                                              Less: Net (income) loss attributable to the noncontrolling interest                 14                   -                                 14               44                  -               44          (10)             -              (10)          57            -               57

    Net income attributable to Cimatron's shareholders                                                                                                                        $1,347                $366                             $1,713           $1,441               $202           $1,643       $3,699           $712           $4,411       $2,668       $1,833           $4,501
                                                                                                                                                                              ======                ====                             ======           ======               ====           ======       ======           ====           ======       ======       ======           ======
    Net income per share - basic                                                                                                                                   $0.14                           $0.18                              $0.15                               $0.18            $0.40                       $0.47            $0.29                     $0.49
                                                                                                                                                                   =====                           =====                              =====                               =====            =====                       =====            =====                     =====
    Net income per share - diluted                                                                                                                                 $0.14                           $0.18                              $0.15                               $0.18            $0.40                       $0.47            $0.29                     $0.48
                                                                                                                                                                   =====                           =====                              =====                               =====            =====                       =====            =====                     =====

    Weighted average number of shares outstanding

                                                                                              Basic EPS (in thousands)                                                         9,338                                                  9,338            9,300                               9,300        9,323                           9,323        9,252                         9,252

                                                                                              Diluted EPS (in thousands)                                                       9,348                                                  9,348            9,315                               9,315        9,337                           9,337        9,292                         9,292

    (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 tax provisions.

          CIMATRON LIMITED
    CONSOLIDATED BALANCE SHEETS
     (US Dollars in thousands)

                                                                                                                                          December 31,                                    December 31,
                                                                                                                                          ------------                                    ------------
                                                                                                                                                              2012                                            2011
                                                                                                                                                              ----                                            ----

                                 ASSETS
    CURRENT ASSETS:
                                  Total cash, cash
                                  equivalents and
                                  short-term
                                  investments                                                                       $11,903                                         $11,787
                                 Trade receivables                                                                    6,049                                           5,840
                                  Other current
                                  assets                                                                              1,788                                           1,452

                                  Total current
                                  assets                                                                             19,740                                          19,079
                                                                                                                     ------                                          ------

                                  Deposits with
                                  insurance
                                  companies and
                                  severance pay
                                  fund                                                                                3,296                                           3,069
                                                                                                                      -----                                           -----

                                  Net property and
                                  equipment                                                                             875                                           1,009
                                                                                                                        ---                                           -----

                                  Total other
                                  assets                                                                             10,499                                          11,365
                                                                                                                     ------                                          ------

                                                              Total assets                                                                                 $34,410                                         $34,522
                                                                                                                                                           =======                                         =======

                                  LIABILITIES AND
                                  SHAREHOLDERS' EQUITY
    CURRENT LIABILITIES:
                                  Short-term bank
                                  credit                                                                                 $1                                             $87
                                 Trade payables                                                                       1,169                                           1,072
                                  Accrued expenses
                                  and other
                                  liabilities                                                                         7,204                                           9,048
                                 Deferred revenues                                                                    2,843                                           2,403

                                  Total current
                                  liabilities                                                                        11,217                                          12,610
                                                                                                                     ------                                          ------

    LONG-TERM LIABILITIES:
                                  Accrued severance
                                  pay                                                                                 4,453                                           4,135
                                 Long-term loan                                                                           -                                               6
                                  Deferred tax
                                  liability                                                                             275                                             639

                                 Total long-term liabilities                                                          4,728                                           4,780
                                                                                                                      -----                                           -----

                                  Total shareholders'
                                  equity                                                                             18,465                                          17,132

                                                               Total liabilities and
                                                               shareholders' equity                                                                        $34,410                                         $34,522
                                                                                                                                                           =======                                         =======


                                                                                                                                           CIMATRON LIMITED

                                                                                                                             STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY

                                                                                                                                       (US Dollars in thousands)

                                                              Noncontrolling Interest          Share capital     Additional paid-in capital                 Accumulated other comprehensive income   Retained earnings (accumulated
                                                                                                                                                                            (loss)                              deficit)                Treasury stock        Comprehensive income (loss)       Total shareholders' equity
                                                                      -----------------------      -------------  --------------------------                 --------------------------------------    ------------------------------   --------------         --------------------------       --------------------------
    Balance at December 31, 2011                                                        $(131)              $313                     $18,999                                                  $(446)                             $(851)                $(752)                                                            $17,132
                                                                                        =====               ====                     =======                                                  =====                              =====                 =====                                                             =======
    Changes during the twelve months ended December 31, 2012:
    Net income                                                                             10                                                                                                                                    3,699                                                    3,709                            3,709
    Cash dividend paid                                                                                                                                                                                                          (2,872)                                                                                   (2,872)
    Exercise of share options                                                                                  -                         112                                                                                                                                                                                 112
    Unrealized gain on derivative instruments                                                                                                                                                   277                                                                                         277                              277
    Other                                                                                 149                                                                                                  (146)                                                                                          3                                3
    Foreign currency translation adjustment                                                                                                                                                     104                                                                                         104                              104
                                                                                                                                                                                                ---                                                                                         ---                              ---
    Total comprehensive income                                                                                                                                                                                                                                                            4,093
                                                                                                                                                                                                                                                                                          =====
    Balance at December 31, 2012                                                          $28               $313                     $19,111                                                  $(211)                              $(24)                $(752)                                                            $18,465
                                                                                          ===               ====                     =======                                                  =====                               ====                 =====                                                             =======

                                            CIMATRON LIMITED
                                        STATEMENTS OF CASH FLOWS
                                        (US Dollars in thousands)

                                                   Twelve months ended
                                                      December 31,
                                                      ------------
                                                                    2012      2011
                                                                    ----      ----

    Cash flows from operating
     activities:
    Net income                                                  $3,709    $2,611

    Adjustments to reconcile
     net income
       to net cash provided by
        operating activities:
    Depreciation and
     amortization                                                1,307     1,376
    Increase (decrease) in
     accrued severance pay                                         159      (135)
    Deferred taxes, net                                           (683)      504

    Changes in assets and
     liabilities:
    Decrease (Increase) in
     accounts receivable and
     prepaid expenses                                              178      (222)
    Increase in inventory                                          (12)       (2)
    Decrease (increase) in
     deposits with insurance
     companies and severance
     pay fund                                                     (227)      210
    Increase (decrease) in
     trade payables, accrued
     expenses and other
     liabilities                                                (1,258)      228
    Net cash provided by
     operating activities                                        3,173     4,570
                                                                 -----     -----

    Cash flows from investing
     activities:
    Proceeds from sale of
     property and equipment                                          1         -
    Purchase of property and
     equipment                                                    (265)     (428)
    Cash and cash equivalents
     disposed of discontinued
     operations                                                    (52)        -
    Net cash used in investing
     activities                                                   (316)     (428)
                                                                  ----      ----

    Cash flows from financing
     activities:
    Short-term bank credit                                         (83)      (10)
    Long-term bank credit                                           (8)      (87)
    Cash dividend paid                                          (2,872)   (3,216)
    Proceeds from issuance of
     shares upon exercise of
     options                                                       112       733
    Net cash used in financing
     activities                                                 (2,851)   (2,580)
                                                                ------    ------

    Net increase in cash and
     cash equivalents                                                6     1,562
    Effect of exchange rate
     changes on cash                                               110         4
    Cash and cash equivalents
     at beginning of period                                     11,787    10,221
    Cash and cash equivalents
     at end of period                                          $11,903   $11,787
                                                               =======   =======

    Appendix A - Non-cash
     transactions
                Purchase of property on
                credit                                              $5       $19

SOURCE Cimatron Limited


Source: PR Newswire