Highlights
Kornit Digital Ltd. (NASDAQ:KRNT), a leading provider of digital
printing solutions for the global printed textile industry, today
reported results for the fourth quarter and fiscal year ended
December 31, 2017.
Non-GAAP figures in today’s press release are
presented using a different methodology compared to previous
periods as a result of comments from the US Securities and Exchange
Commission. These changes also impact the Company's guidance
methodology. The Company will provide additional information in
today's earnings call, details of which can be found at the end of
today's press release.
Revenues for the fourth quarter of 2017 were
$30.0 million, which represents a decrease of $2.0 million compared
to the prior year. The non-cash impact of the warrants deducted
from revenues amounted to $0.4 million in the fourth quarter of
2017 and $2.0 million in the fourth quarter of 2016. Lower
revenues were driven by a large customer who, as previously
disclosed, was unable to take a scheduled delivery of a large
number of systems due to unforeseen protracted delays in the
receipt of regulatory permits.
GAAP net loss in the fourth quarter of 2017 was
$0.4 million, or ($0.01) per diluted share, compared to GAAP net
income of $0.8 million, or $0.03 per diluted share in the fourth
quarter of 2016. On a non-GAAP basis net income was $1.5 million,
or $0.04 per diluted share, compared to prior-year non-GAAP net
income of $3.0 million, or $0.09 per diluted share.
Gabi Seligsohn, Kornit Digital’s Chief Executive
Officer commented, “The second half of 2017 was challenging as the
previously announced order delay negatively impacted our results
for the year. Customer timing issues notwithstanding, we believe
consumer behavior affecting retail business models reached a
tipping point in 2017, forcing the supply chain to react and
positioning Kornit exceptionally well to capture large scale volume
with screen printers. To that end, we generated meaningful interest
from high volume printers at our recent trade shows, which
underscores the capability of our newest technologies that offer a
materially lower cost per print.”
Seligsohn added, “We expect a meaningful uptick
in our growth rate in 2018 driven by higher adoption rates of our
products by screen printers, incremental deliveries on key customer
programs and the success of new product introductions including our
recently announced Avalanche HD6, which is currently being
installed at multiple customer sites. These new systems and upgrade
kits offer significant savings on cost per print in conjunction
with high definition imaging and improved hand-feel. These growth
drivers are supported by improving trends in European and Asian
markets and a revamped North America sales team, all of which
contribute to our optimism in the year ahead.”
Fourth Quarter Results of
Operations Kornit reported fourth quarter revenues which
are net of the non-cash impact of warrants deducted from revenues,
of $30.0 million, compared with the prior-year level of $32.0
million. The total non-cash impact of the warrants deducted from
revenues was $0.4 million in 2017, and $2.0 million in 2016. Lower
sales were the result of previously disclosed program delays
associated with permitting at a large customer site.
On a GAAP basis, fourth quarter gross profit was
$14.5 million, compared with $13.6 million, in the prior-year.
Non-GAAP gross profit in the fourth quarter was $14.6 million, or
48.9% of sales, compared with $14.9 million, or 46.6% of sales in
the prior-year. Higher gross margins primarily reflected a
seasonally stronger contribution from ink and consumables.
On a GAAP basis, total operating expenses in the
fourth quarter were $15 million, compared to $12.8 million in the
prior period. Non-GAAP operating expenses in the fourth quarter
increased to $13.5 million, or 45.1% of sales, compared to $11.8
million, or 36.9% of sales in the prior year. The increase in
total operating expenses was consistent with the previously stated
growth strategy, as the Company continues to execute to its global
infrastructure build out and was particularly impacted by costs
associated with increased headcount expenses.
Fourth quarter GAAP research and development
expenses were $5.6 million, compared to the prior-year period of
$5.1 million. Fourth quarter non-GAAP research and development
expenses were $5.4 million, or 18.2% of sales, compared to $4.9
million, or 15.5% of sales in the prior-year.
On a GAAP basis, fourth quarter operating loss
was $0.5 million, compared to the prior year period operating
income of $0.8 million. Non-GAAP operating income in the fourth
quarter decreased to $1.1 million, compared to $3.1 million in the
prior year. As a percent of sales, adjusted operating margin for
the fourth quarter was 3.8% of sales, compared with 9.7% of sales
in the prior year.
On a GAAP basis, the Company reported a net loss
of $0.4 million, or ($0.01) per diluted share, compared to a net
income of $0.8 million, in the fourth quarter of 2016. Non-GAAP net
income for the fourth quarter of 2017 was $1.5 million, or $0.04
per diluted share, compared to $3.0 million in the prior year
period.
Full Year 2017 Results of
OperationsFull year 2017 GAAP revenues which are net of
the non-cash impact of the warrants deducted from revenues were
$114.1 million, compared to revenues of $108.7 million in the prior
year. The full year impact from warrants was $2.9 million in 2017,
and $2.0 million in 2016. Higher sales compared to the prior year
were primarily related to higher volume of products sold, the
success of new product introductions and incremental sales from
services. For the full-year, the Company recorded 89.4% of revenue
from products, and 10.6% of revenue from services.
Full year GAAP gross profit was $54.1 million,
compared to $49.4 million in the prior year. Non-GAAP gross profit
for the full year 2017 was $54.8 million, or 48.1% of sales,
compared to $52.6 million, or 48.4% of sales for the full year
2016.
Full year 2017 operating expenses on a GAAP
basis were $56.2 million, compared to $48 million for the full year
of 2016. Non-GAAP operating expenses for the full year of 2017 were
$50.7 million, or 44.4% of sales, compared to the prior year level
of $44 million, or 40.5% of sales. The increase in total operating
expenses was consistent with the previously stated growth strategy,
as the Company continues to execute to its global infrastructure
build out.
Full year 2017 research and development expenses
on a GAAP basis were $20.8 million, compared to the prior year of
$17.4 million. Full year non-GAAP research and development expenses
were $20.1 million, or 17.6% of sales, compared to $17.0 million,
or 15.6% of sales in the prior year.
Full year 2017 GAAP operating loss decreased to
$2.1 million, compared to operating income of $1.4 million in the
year ago period. Non-GAAP operating income in the full year
2017 decreased to $4.1 million, compared to the prior year period
of $8.6 million.
On a GAAP basis, full year 2017 net losses were
$2.0 million, or ($0.06) per diluted share, compared to $0.8
million in the prior year. Non-GAAP full year 2017 net income
was $4 million, or $0.04 per diluted share, compared with non-GAAP
net income of $7.8 million in the prior year.
Balance Sheet and Cash FlowAt
December 31, 2017, the Company had cash, cash equivalent, short
term deposits and marketable securities of $97.5 million.
Cash flow from operating activity for fourth quarter 2017 was
$12.0 million. Cash flow from operations for the full-year of 2017
were $6.0 million.
First Quarter 2018 Guidance The
Company will discuss the details of its guidance live during its
earnings conference call, which will be available for replay via
webcast at ir.kornit.com.
Conference Call InformationGabi
Seligsohn, the Company’s Chief Executive Officer, and Guy Avidan,
the Company’s Chief Financial Officer, will host a conference call
today at 5:00 p.m. ET, or 0:00 a.m. Israel time, to discuss the
results, followed by a question and answer session for the
investment community. A live webcast of the call can be
accessed at ir.kornit.com. To access the call, participants may
dial toll-free at 1-800-289-0438 or +1-323-794-2423. The toll-free
Israeli number is 1 80 921 2883. The confirmation code is
9278278.
To listen to a telephonic replay of the
conference call, dial toll-free 1-844-512-2921 or +1-412-317-6671
(international) and enter confirmation code 9278278. The telephonic
replay will be available beginning at 8:00 p.m. ET on Tuesday,
February 13, 2018, and will last through 11:59 p.m. ET on Tuesday,
February 27, 2018. The call will also be available for replay
via the webcast link on Kornit’s Investor Relations website.
Forward Looking
StatementsCertain statements in this press release are
"forward-looking statements" within the meaning of the Private
Securities Litigation Reform Act of 1995 and other U.S. securities
laws. Forward-looking statements are characterized by the use of
forward-looking terminology such as "will," "expects,"
"anticipates," "continue," "believes," "should," "intended,"
"guidance," "preliminary," "future," "planned," or other words.
These forward-looking statements include, but are not limited to,
statements relating to the company's objectives, plans and
strategies, statements of preliminary or projected results of
operations or of financial condition and all statements that
address activities, events or developments that the company
intends, expects, projects, believes or anticipates will or may
occur in the future. Forward-looking statements are not guarantees
of future performance and are subject to risks and uncertainties.
The company has based these forward-looking statements on
assumptions and assessments made by its management in light of
their experience and their perception of historical trends, current
conditions, expected future developments and other factors they
believe to be appropriate. Important factors that could cause
actual results, developments and business decisions to differ
materially from those anticipated in these forward-looking
statements include, among other things: our success in developing,
introducing and selling new or improved products and product
enhancements, our ability to consummate sales to large accounts
with multi-system delivery plans, our ability to fill orders for
our systems, our ability to continue to increase sales of our
systems and ink and consumables, our ability to leverage our global
infrastructure build-out, the development of the market for digital
textile printing, availability of alternative ink, competition,
sales concentration, changes to our relationships with suppliers,
our success in marketing, and those factors referred to under "Risk
Factors" in the company's final prospectus filed with the U.S.
Securities and Exchange Commission on January 26, 2017. Any
forward-looking statements in this press release are made as of the
date hereof, and the company undertakes no obligation to publicly
update or revise any forward-looking statements, whether as a
result of new information, future events or otherwise, except as
required by law.
Non-GAAP Discussion
DisclosureNon-GAAP financial measures consist of GAAP
financial measures adjusted to exclude excess cost of acquired
inventory, share-based compensation expenses, acquisition related
costs, restructuring expenses, onetime tax expenses and
amortization of acquired intangible assets. 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. These
non-GAAP measures are among the primary factors management uses in
planning for and forecasting future periods. Furthermore, the
non-GAAP measures are regularly used internally to understand,
manage and evaluate our business and make operating decisions, and
we believe that they are useful to investors as a consistent and
comparable measure of the ongoing performance of our business.
However, 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 only in conjunction with our
consolidated financial statements prepared in accordance with GAAP.
Additionally, these non-GAAP financial measures may differ
materially from the non-GAAP financial measures used by other
companies.
About KornitKornit Digital
(NASDAQ:KRNT) develops, manufactures and markets industrial digital
printing technologies for the garment, apparel and textile
industries. Kornit delivers complete solutions, including digital
printing systems, inks, consumables, software and after-sales
support. Leading the digital direct-to-garment printing market with
its exclusive eco-friendly NeoPigment printing process, Kornit
caters directly to the changing needs of the textile printing value
chain. Kornit’s technology enables innovative business models based
on web-to-print, on-demand and mass customization concepts. With
its immense experience in the direct-to-garment market, Kornit also
offers a revolutionary approach to the roll-to-roll textile
printing industry: digitally printing with a single ink set onto
multiple types of fabric with no additional finishing processes.
Founded in 2003, Kornit Digital is a global company, headquartered
in Israel with offices in the USA, Europe and Asia Pacific, and
serves customers in more than 100 countries worldwide.
|
|
|
|
KORNIT DIGITAL LTD. |
|
AND ITS SUBSIDIARIES |
|
CONSOLIDATED STATEMENTS OF
OPERATIONS |
|
(U.S. dollars in thousands, except share and per share
data) |
|
|
|
|
|
|
|
|
|
|
|
Year Ended |
|
Three Months Ended |
|
|
December 31, |
|
December 31, |
|
|
2017 |
|
2016 |
|
2017 |
|
2016 |
|
|
(Unaudited) |
|
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
Revenues |
|
|
|
|
|
|
|
|
Products |
$ |
101,953 |
|
|
$ |
100,818 |
|
$ |
26,219 |
|
|
$ |
29,189 |
|
|
Services |
|
12,135 |
|
|
|
7,876 |
|
|
3,731 |
|
|
|
2,798 |
|
|
Total revenues |
|
114,088 |
|
|
|
108,694 |
|
|
29,950 |
|
|
|
31,987 |
|
|
|
|
|
|
|
|
|
|
|
Cost of revenues |
|
|
|
|
|
|
|
|
Products |
|
46,480 |
|
|
|
46,483 |
|
|
11,834 |
|
|
|
14,282 |
|
|
Services |
|
13,497 |
|
|
|
12,801 |
|
|
3,661 |
|
|
|
4,078 |
|
|
Total cost of
revenues |
|
59,977 |
|
|
|
59,284 |
|
|
15,495 |
|
|
|
18,360 |
|
|
|
|
|
|
|
|
|
|
|
Gross profit |
|
54,111 |
|
|
|
49,410 |
|
|
14,455 |
|
|
|
13,627 |
|
|
|
|
|
|
|
|
|
|
|
Operating
expenses: |
|
|
|
|
|
|
|
|
Research and
development |
|
20,834 |
|
|
|
17,383 |
|
|
5,647 |
|
|
|
5,090 |
|
|
Selling and
marketing |
|
21,279 |
|
|
|
18,338 |
|
|
5,153 |
|
|
|
4,753 |
|
|
General and
administrative |
|
13,578 |
|
|
|
12,259 |
|
|
4,033 |
|
|
|
2,980 |
|
|
Restructuring
expenses |
|
503 |
|
|
|
- |
|
|
164 |
|
|
|
- |
|
|
Total operating
expenses |
|
56,194 |
|
|
|
47,980 |
|
|
14,997 |
|
|
|
12,823 |
|
|
Operating income
(loss) |
|
(2,083 |
) |
|
|
1,430 |
|
|
(542 |
) |
|
|
804 |
|
|
Financial income (expenses), net |
|
452 |
|
|
|
46 |
|
|
154 |
|
|
|
(47 |
) |
|
Income
(loss) before taxes on income |
|
(1,631 |
) |
|
|
1,476 |
|
|
(388 |
) |
|
|
757 |
|
|
|
|
|
|
|
|
|
|
|
Taxes on income
(benefit) |
|
384 |
|
|
|
648 |
|
|
(19 |
) |
|
|
(63 |
) |
|
Net income (loss) |
|
(2,015 |
) |
|
|
828 |
|
|
(369 |
) |
|
|
820 |
|
|
|
|
|
|
|
|
|
|
|
Basic net income (loss) per share |
$ |
(0.06 |
) |
|
$ |
0.03 |
|
$ |
(0.01 |
) |
|
$ |
0.03 |
|
|
|
|
|
|
|
|
|
|
|
Weighted average number
of shares |
|
|
|
|
|
|
|
|
used in computing basic
net |
|
|
|
|
|
|
|
|
income
(loss) per share |
|
33,574,147 |
|
|
|
30,562,255 |
|
|
34,064,165 |
|
|
|
30,820,905 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted net
income (loss) per share |
$ |
(0.06 |
) |
|
$ |
0.03 |
|
$ |
(0.01 |
) |
|
$ |
0.03 |
|
|
|
|
|
|
|
|
|
|
|
Weighted average number
of shares |
|
|
|
|
|
|
|
|
used in computing
diluted |
|
|
|
|
|
|
|
|
net
income (loss) per share |
|
33,574,147 |
|
|
|
31,732,532 |
|
|
34,064,165 |
|
|
|
31,850,639 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
KORNIT DIGITAL LTD. |
|
AND ITS SUBSIDIARIES |
|
RECONCILATION OF GAAP TO
NON-GAAP
CONSOLIDATED
STATEMENTS
OF
OPERATIONS |
|
(U.S. dollars in thousands, except share and per share
data) |
|
|
|
Year Ended |
|
|
|
Three Months Ended |
|
|
|
December 31, |
|
|
|
December 31, |
|
|
|
2017 |
|
2016 |
|
|
|
2017 |
|
2016 |
|
|
|
(Unaudited) |
|
|
|
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP cost of revenues |
$ |
59,977 |
|
|
$ |
59,284 |
|
|
|
|
$ |
15,495 |
|
|
$ |
18,360 |
|
|
Cost of
product recorded for share-based compensation (1) |
|
(419 |
) |
|
|
(311 |
) |
|
|
|
|
(94 |
) |
|
|
(85 |
) |
|
Cost of
service recorded for share-based compensation (1) |
|
(210 |
) |
|
|
(171 |
) |
|
|
|
|
(63 |
) |
|
|
(60 |
) |
|
Intangible
assets amortization (3) |
|
(100 |
) |
|
|
(225 |
) |
|
|
|
|
(25 |
) |
|
|
(56 |
) |
|
Excess cost
on acquired inventory (a) |
|
- |
|
|
|
(2,471 |
) |
|
|
|
|
- |
|
|
|
(1,073 |
) |
|
Non-GAAP cost of revenues |
$ |
59,248 |
|
|
$ |
56,106 |
|
|
|
|
$ |
15,313 |
|
|
$ |
17,086 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP gross
profit |
$ |
54,111 |
|
|
$ |
49,410 |
|
|
|
|
$ |
14,455 |
|
|
$ |
13,627 |
|
|
Gross
profit adjustments |
|
729 |
|
|
|
3,178 |
|
|
|
|
|
182 |
|
|
|
1,274 |
|
|
Non-GAAP
gross profit |
$ |
54,840 |
|
|
$ |
52,588 |
|
|
|
|
$ |
14,637 |
|
|
$ |
14,901 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP operating expenses |
$ |
56,194 |
|
|
$ |
47,980 |
|
|
|
|
$ |
14,997 |
|
|
$ |
12,823 |
|
|
Expenses
recorded for share-based compensation (1) |
|
(3,782 |
) |
|
|
(2,512 |
) |
|
|
|
|
(1,061 |
) |
|
|
(769 |
) |
|
Acquisition
related expenses (2) |
|
- |
|
|
|
(937 |
) |
|
|
|
|
- |
|
|
|
(106 |
) |
|
Intangible
assets amortization (3) |
|
(1,210 |
) |
|
|
(294 |
) |
|
|
|
|
(267 |
) |
|
|
(147 |
) |
|
Other one
time expense |
|
- |
|
|
|
(241 |
) |
|
|
|
|
- |
|
|
|
- |
|
|
Restructuring expenses |
|
(503 |
) |
|
|
- |
|
|
|
|
|
(164 |
) |
|
|
- |
|
|
Non-GAAP operating expenses |
$ |
50,699 |
|
|
$ |
43,996 |
|
|
|
|
$ |
13,505 |
|
|
$ |
11,801 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP Taxes
on income (benefit) |
$ |
(68 |
) |
|
$ |
602 |
|
|
|
|
$ |
(173 |
) |
|
$ |
(16 |
) |
|
Tax effect
on to the above non-GAAP adjustments |
|
583 |
|
|
|
168 |
|
|
|
|
|
140 |
|
|
|
75 |
|
|
Impact of
the US tax reform (b) |
|
(355 |
) |
|
|
- |
|
|
|
|
|
(355 |
) |
|
|
- |
|
|
Non-GAAP
Taxes on income (benefit) |
$ |
160 |
|
|
$ |
770 |
|
|
|
|
$ |
(388 |
) |
|
$ |
59 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP net income (loss) |
$ |
(2,015 |
) |
|
$ |
828 |
|
|
|
|
$ |
(369 |
) |
|
$ |
820 |
|
|
Expenses
recorded for share-based compensation (1) |
|
4,411 |
|
|
|
2,994 |
|
|
|
|
|
1,218 |
|
|
|
914 |
|
|
Acquisition
related expenses (2) |
|
- |
|
|
|
937 |
|
|
|
|
|
- |
|
|
|
106 |
|
|
Intangible
assets amortization (3) |
|
1,310 |
|
|
|
519 |
|
|
|
|
|
292 |
|
|
|
203 |
|
|
Excess cost
on acquired inventory (a) |
|
- |
|
|
|
2,471 |
|
|
|
|
|
- |
|
|
|
1,073 |
|
|
Other one
time expense |
|
- |
|
|
|
241 |
|
|
|
|
|
- |
|
|
|
- |
|
|
Restructuring expenses |
|
503 |
|
|
|
- |
|
|
|
|
|
164 |
|
|
|
- |
|
|
Tax effect
on to the above non-GAAP adjustments |
|
(583 |
) |
|
|
(168 |
) |
|
|
|
|
(140 |
) |
|
|
(75 |
) |
|
Impact of
the US tax reform (b) |
|
355 |
|
|
|
- |
|
|
|
|
|
355 |
|
|
|
- |
|
|
Non-GAAP net income (*) |
$ |
3,981 |
|
|
$ |
7,822 |
|
|
|
|
$ |
1,520 |
|
|
$ |
3,041 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP diluted earning (loss) per share |
$ |
(0.06 |
) |
|
$ |
0.03 |
|
|
|
|
$ |
(0.01 |
) |
|
$ |
0.03 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP diluted earning (loss) per share |
$ |
0.11 |
|
|
$ |
0.24 |
|
|
|
|
$ |
0.04 |
|
|
$ |
0.09 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted
average number of shares |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted
average number of shares used in computing diluted |
|
|
|
|
|
|
|
|
|
|
GAAP net
earning (loss) per share |
|
33,574,147 |
|
|
|
31,732,532 |
|
|
|
|
|
34,064,165 |
|
|
|
31,850,639 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted
average number of shares used in computing diluted |
|
|
|
|
|
|
|
|
|
|
non GAAP
net earning per share |
|
34,942,014 |
|
|
|
32,035,680 |
|
|
|
|
|
35,130,831 |
|
|
|
32,145,815 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
Expenses recorded for share-based compensation |
|
|
|
|
|
|
|
|
|
|
|
Cost
of product |
|
419 |
|
|
|
311 |
|
|
|
|
|
94 |
|
|
|
85 |
|
|
|
Cost
of service |
|
210 |
|
|
|
171 |
|
|
|
|
|
63 |
|
|
|
60 |
|
|
|
Research
and development |
|
775 |
|
|
|
217 |
|
|
|
|
|
206 |
|
|
|
91 |
|
|
|
Selling
and marketing |
|
920 |
|
|
|
654 |
|
|
|
|
|
232 |
|
|
|
219 |
|
|
|
General
and administrative |
|
2,087 |
|
|
|
1,641 |
|
|
|
|
|
623 |
|
|
|
459 |
|
|
|
|
|
4,411 |
|
|
|
2,994 |
|
|
|
|
|
1,218 |
|
|
|
914 |
|
|
(2)
Acquisition related expenses |
|
|
|
|
|
|
|
|
|
|
|
Research
and development |
|
- |
|
|
|
200 |
|
|
|
|
|
- |
|
|
|
50 |
|
|
|
Selling
and marketing |
|
- |
|
|
|
56 |
|
|
|
|
|
- |
|
|
|
56 |
|
|
|
General
and administrative |
|
- |
|
|
|
681 |
|
|
|
|
|
- |
|
|
|
- |
|
|
|
|
|
- |
|
|
|
937 |
|
|
|
|
|
- |
|
|
|
106 |
|
|
(3)
Intangible assets amortization |
|
|
|
|
|
|
|
|
|
|
|
Cost
of product |
|
100 |
|
|
|
225 |
|
|
|
|
|
25 |
|
|
|
56 |
|
|
|
Selling and marketing |
|
1,210 |
|
|
|
294 |
|
|
|
|
|
267 |
|
|
|
147 |
|
|
|
|
|
1,310 |
|
|
|
519 |
|
|
|
|
|
292 |
|
|
|
203 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a) |
Consists of charges to cost of revenues for the difference
between the higher carrying cost of the acquired inventory from a
distributer purchased on July 1, 2016 which was recorded at fair
value and the standard cost of the Company's inventory, which
adversely impacts the Company's gross profit |
|
(b) |
One-time charge of $355 associated with the enactment of U.S.
tax reform due to its unique non-recurring nature |
|
(*) |
Non-GAAP net income has been updated from prior reports (a) to
remove the adjustment for the non-cash impact of the warrants
deducted from revenues, and (b) to reflect the impact on taxes on
income related to the non-GAAP adjustment. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
KORNIT DIGITAL LTD. |
|
AND ITS SUBSIDIARIES |
|
CONDENSED
CONSOLIDATED
BALANCE
SHEETS |
|
(U.S. dollars in thousands) |
|
|
|
December 31, |
|
December 31, |
|
|
|
2017 |
|
2016 |
|
|
|
(Unaudited) |
|
(Unaudited) |
|
ASSETS |
|
|
|
|
|
CURRENT ASSETS: |
|
|
|
|
|
Cash and cash
equivalents |
|
$ |
18,629 |
|
$ |
22,789 |
|
Short term deposit |
|
|
4,500 |
|
|
- |
|
Available for sale
marketable securities |
|
|
5,537 |
|
|
16,500 |
|
Trade receivables,
net |
|
|
23,245 |
|
|
31,638 |
|
Other accounts
receivables and prepaid expenses |
|
|
2,661 |
|
|
3,735 |
|
Inventory |
|
|
34,855 |
|
|
24,122 |
|
Total current
assets |
|
|
89,427 |
|
|
98,784 |
|
|
|
|
|
|
|
LONG-TERM ASSETS: |
|
|
|
|
|
Available for sale
marketable securities |
|
|
68,835 |
|
|
21,724 |
|
Severance pay fund |
|
|
523 |
|
|
768 |
|
Deferred tax asset |
|
|
564 |
|
|
439 |
|
Property and equipment,
net |
|
|
11,230 |
|
|
9,247 |
|
Intangible assets,
net |
|
|
2,076 |
|
|
3,385 |
|
Goodwill |
|
|
5,092 |
|
|
5,092 |
|
Other assets |
|
|
627 |
|
|
607 |
|
Total long-term
assets |
|
|
88,947 |
|
|
41,262 |
|
|
|
|
|
|
|
Total assets |
|
$ |
178,374 |
|
$ |
140,046 |
|
|
|
|
|
|
|
LIABILITIES AND SHAREHOLDERS' EQUITY |
|
|
|
|
|
CURRENT
LIABILITIES: |
|
|
|
|
|
Trade payables |
|
$ |
12,439 |
|
$ |
16,433 |
|
Employees and payroll
accruals |
|
|
6,338 |
|
|
5,918 |
|
Deferred revenues and
advances from customers |
|
|
1,697 |
|
|
1,679 |
|
Other payables and
accrued expenses |
|
|
5,046 |
|
|
6,103 |
|
Total current
liabilities |
|
|
25,520 |
|
|
30,133 |
|
|
|
|
|
|
|
LONG-TERM
LIABILITIES: |
|
|
|
|
|
Accrued severance
pay |
|
|
1,232 |
|
|
1,269 |
|
Payment obligation
related to acquisition |
|
|
334 |
|
|
1,070 |
|
Other long-term
liabilities |
|
|
589 |
|
|
386 |
|
Total long-term
liabilities |
|
|
2,155 |
|
|
2,725 |
|
|
|
|
|
|
|
SHAREHOLDERS'
EQUITY |
|
|
150,699 |
|
|
107,188 |
|
|
|
|
|
|
|
Total liabilities and
shareholders' equity |
|
$ |
178,374 |
|
$ |
140,046 |
|
|
|
|
|
|
|
|
|
KORNIT DIGITAL LTD. |
|
AND ITS SUBSIDIARIES |
|
CONSOLIDATED STATEMENTS OF CASH
FLOWS |
|
(U.S. dollars in thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended |
|
Three Months Ended |
|
|
December 31, |
|
December 31, |
|
|
2017 |
|
2016 |
|
2017 |
|
2016 |
|
|
(Unaudited) |
|
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
Cash flows from
operating activities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Income (loss) |
$ |
(2,015 |
) |
|
$ |
828 |
|
|
$ |
(369 |
) |
|
$ |
820 |
|
|
Adjustments to
reconcile net income (loss) to net cash provided by operating
activities: |
|
|
|
|
|
|
|
|
Depreciation and
amortization |
|
4,814 |
|
|
|
2,964 |
|
|
|
1,183 |
|
|
|
957 |
|
|
Fair value of warrants
deducted from revenues |
|
2,895 |
|
|
|
2,030 |
|
|
|
393 |
|
|
|
2,030 |
|
|
Share-based
compensation |
|
4,411 |
|
|
|
2,994 |
|
|
|
1,218 |
|
|
|
914 |
|
|
Tax benefit related to
exercise of stock options |
|
- |
|
|
|
(71 |
) |
|
|
- |
|
|
|
(71 |
) |
|
Amortization of premium
on marketable securities |
|
546 |
|
|
|
454 |
|
|
|
142 |
|
|
|
113 |
|
|
Realized gain on sale
of marketable securities |
|
(34 |
) |
|
|
(6 |
) |
|
|
(5 |
) |
|
|
(3 |
) |
|
Decrease (increase) in
trade receivables |
|
9,081 |
|
|
|
(9,258 |
) |
|
|
9,811 |
|
|
|
(2,528 |
) |
|
Decrease (increase) in
other receivables and prepaid expenses |
|
1,100 |
|
|
|
(411 |
) |
|
|
1,502 |
|
|
|
118 |
|
|
Decrease (increase) in
inventory |
|
(10,629 |
) |
|
|
(6,061 |
) |
|
|
1,002 |
|
|
|
(1,322 |
) |
|
Decrease (increase) in
deferred taxes, net |
|
(125 |
) |
|
|
(181 |
) |
|
|
516 |
|
|
|
187 |
|
|
Decrease (increase) in
other long term assets |
|
(10 |
) |
|
|
(217 |
) |
|
|
5 |
|
|
|
(19 |
) |
|
Increase (decrease) in
trade payables |
|
(3,635 |
) |
|
|
2,819 |
|
|
|
(2,097 |
) |
|
|
1,370 |
|
|
Increase in employees
and payroll accruals |
|
360 |
|
|
|
1,550 |
|
|
|
554 |
|
|
|
1,351 |
|
|
Increase (decrease) in
deferred revenues and advances from customers |
|
(31 |
) |
|
|
675 |
|
|
|
(248 |
) |
|
|
377 |
|
|
Increase (decrease) in
other payables and accrued expenses |
|
(461 |
) |
|
|
1,879 |
|
|
|
(1,215 |
) |
|
|
(182 |
) |
|
Increase (decrease) in
accrued severance pay, net |
|
208 |
|
|
|
180 |
|
|
|
(34 |
) |
|
|
338 |
|
|
Increase (decrease) in
other long term liabilities |
|
203 |
|
|
|
386 |
|
|
|
(298 |
) |
|
|
296 |
|
|
Loss from sale of
property and Equipment |
|
228 |
|
|
|
9 |
|
|
|
- |
|
|
|
3 |
|
|
Foreign currency
translation gain (loss) on inter company balances with foreign
subsidiaries |
|
(916 |
) |
|
|
393 |
|
|
|
(124 |
) |
|
|
531 |
|
|
Net cash provided by
operating activities |
|
5,990 |
|
|
|
956 |
|
|
|
11,936 |
|
|
|
5,280 |
|
|
|
|
|
|
|
|
|
|
|
Cash flows from
investing activities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Purchase of property
and equipment |
|
(5,660 |
) |
|
|
(5,462 |
) |
|
|
(1,160 |
) |
|
|
(975 |
) |
|
Proceeds from sale of
property and equipment |
|
6 |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
Cash paid in connection
with acquisition |
|
- |
|
|
|
(9,206 |
) |
|
|
- |
|
|
|
- |
|
|
Proceeds from
(investment in) bank deposits, net |
|
(4,500 |
) |
|
|
22,000 |
|
|
|
(4,500 |
) |
|
|
- |
|
|
Proceeds from sale of
marketable securities |
|
39,353 |
|
|
|
2,086 |
|
|
|
1,041 |
|
|
|
563 |
|
|
Proceeds from maturity
of marketable securities |
|
7,240 |
|
|
|
4,500 |
|
|
|
500 |
|
|
|
1,000 |
|
|
Purchase of marketable
securities |
|
(83,183 |
) |
|
|
(11,455 |
) |
|
|
(3,928 |
) |
|
|
(1,891 |
) |
|
Net cash provided by
(used in) investing activities |
|
(46,744 |
) |
|
|
2,463 |
|
|
|
(8,047 |
) |
|
|
(1,303 |
) |
|
|
|
|
|
|
|
|
|
|
Cash flows from
financing activities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Proceeds from issuance
of ordinary shares in a follow on offering, net |
|
35,077 |
|
|
|
|
|
- |
|
|
|
- |
|
|
Exercise of employee
stock options |
|
2,760 |
|
|
|
958 |
|
|
|
417 |
|
|
|
394 |
|
|
Payment of issuance
cost related to warrants |
|
- |
|
|
|
(90 |
) |
|
|
- |
|
|
|
(90 |
) |
|
Tax benefit related to
exercise of stock options |
|
- |
|
|
|
71 |
|
|
|
- |
|
|
|
71 |
|
|
Payment of contingent
consideration |
|
(1,400 |
) |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
Net cash provided by
financing activities |
|
36,437 |
|
|
|
939 |
|
|
|
417 |
|
|
|
375 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign currency
translation adjustments on cash and cash equivalents |
|
157 |
|
|
|
(33 |
) |
|
|
33 |
|
|
|
(40 |
) |
|
Increase (decrease) in
cash and cash equivalents |
|
(4,317 |
) |
|
|
4,358 |
|
|
|
4,306 |
|
|
|
4,352 |
|
|
Cash and cash
equivalents at the beginning of the period |
|
22,789 |
|
|
|
18,464 |
|
|
|
14,290 |
|
|
|
18,477 |
|
|
Cash and cash
equivalents at the end of the period |
|
18,629 |
|
|
|
22,789 |
|
|
|
18,629 |
|
|
|
22,789 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-cash
investing and financing activities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Purchase
of property and equipment on credit |
|
427 |
|
|
|
808 |
|
|
|
427 |
|
|
|
808 |
|
|
Inventory transferred
to be used as property and equipment |
|
397 |
|
|
|
1,090 |
|
|
|
126 |
|
|
|
290 |
|
|
Issuance expenses on
credit |
|
- |
|
|
|
362 |
|
|
|
- |
|
|
|
362 |
|
|
|
|
|
|
|
|
|
|
|
Investor Contact:Michael Callahan, ICR(203)
682-8311Michael.Callahan@icrinc.com
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