EXHIBIT 99.1 Investor Relations Contacts: Roni Gavrielov Jeffrey Goldberger/Marybeth Csaby KM / KCSA Investor Relations KCSA Strategic Communications +972-3-516-7620 212-896-1249/212-896-1236 roni@km-ir.co.il jgoldberger@kcsa.com / mcsaby@kcsa.com SHAMIR OPTICAL INDUSTRY LTD. REPORTS FIRST QUARTER 2010 RESULTS --REVENUE INCREASED 18.2% YEAR-OVER-YEAR --NET INCOME INCREASED 78.3% YEAR-OVER-YEAR KIBBUTZ SHAMIR, ISRAEL, MAY 10, 2010 - 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."
SHAMIR / PAGE 2 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.
SHAMIR / PAGE 3 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. (TABLES TO FOLLOW) ================================================================================
SHAMIR OPTICAL INDUSTRY LTD. Consolidated Balance Sheets (US DOLLARS IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA) As of December 31, As of March 31, 2009 2010 --------- --------- (Unaudited) (Unaudited) CURRENT ASSETS: Cash and cash equivalents $ 19,929 $ 16,605 Short-term investment 11,679 13,539 Trade receivables (1) 33,648 37,574 Other receivables and prepaid expenses 7,918 8,423 Inventory 26,946 25,587 --------- --------- TOTAL CURRENT ASSETS 100,120 101,728 LONG-TERM INVESTMENTS: Severance pay fund 2,909 2,979 Long-term receivables 427 415 Investments in affiliates 1,306 1,298 --------- --------- TOTAL LONG-TERM INVESTMENTS 4,642 4,692 PROPERTY, PLANT AND EQUIPMENT, NET 38,568 36,736 OTHER ASSETS 7,439 7,022 GOODWILL 12,945 13,366 --------- --------- TOTAL ASSETS $ 163,714 $ 163,544 ========= ========= CURRENT LIABILITIES: Short-term bank credit and loans $ 11,033 $ 8,874 Current maturities of long-term loans 6,879 5,873 Trade payables 11,680 11,719 Accrued expenses and other liabilities 15,447 15,061 --------- --------- TOTAL CURRENT LIABILITIES 45,039 41,527 LONG-TERM LIABILITIES: Long-term loans 12,599 11,631 Capital leases 2,367 2,051 Accrued severance pay 3,270 3,421 Other long-term liabilities 2,763 2,942 Deferred income taxes 2,224 2,174 --------- --------- TOTAL LONG-TERM LIABILITIES 23,223 22,219 Redeemable non-controlling interest 690 702 --------- --------- EQUITY: Share capital Common shares of NIS 0.01 par value Authorized: 100,000,000 shares at December 31, 2009 and March 31, 2010; Issued and outstanding: 16,592,345 and 16,773,596 shares at December 31, 2009 and March 31, 2010, respectively 37 38 Additional paid-in capital 68,230 69,844 Accumulated other comprehensive income (1,122) (2,577) Retained earnings 24,795 28,488 --------- --------- Total Shamir Optical Industry Ltd. Shareholders' equity 91,940 95,793 Non-controlling interests 2,822 3,303 --------- --------- TOTAL EQUITY 94,762 99,096 --------- --------- TOTAL LIABILITIES AND EQUITY $ 163,714 $ 163,544 ========= ========= (1) Net of allowance for doubtful accounts of $ 3,076 and $ 3,088 as of December 31, 2009 and March 31, 2010, respectively
Three Months Ended March 31, ----------------------- 2009 2010 -------- -------- (Unaudited) (Unaudited) Revenues, net $ 33,920 $ 40,095 Cost of revenues 16,065 18,257 -------- -------- Gross profit 17,855 21,838 Operating Expenses: Research and development costs 741 1,089 Selling and marketing expenses 9,865 11,170 General and administrative expenses 3,380 4,114 -------- -------- Total operating expenses 13,986 16,373 -------- -------- Operating income 3,869 5,465 Financial expenses and other, net 833 166 -------- -------- Income before taxes on income 3,036 5,299 Taxes on income 867 1,277 -------- -------- Income after taxes on income 2,169 4,022 Equity in earnings of affiliates, net (27) (1) Accretion of redeemable non controlling interest - 107 -------- -------- Net income $ 2,196 $ 3,916 Net income attributable to non-controlling interests 74 223 -------- -------- Net income attributable to Shamir Optical Industry Ltd. Shareholders $ 2,122 $ 3,693 ======== ======== Net earnings per share: Basic $ 0.13 $ 0.22 ======== ======== Diluted $ 0.13 $ 0.22 ======== ======== Number of shares: Basic 16,424 16,679 Dilutive 16,453 16,767
SHAMIR OPTICAL INDUSTRY LTD. Reconciliation of Non-GAAP Operating Income and Net Income (US DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA) Three Months Ended March 31, ---------------------- 2009 2010 ------- ------- (Unaudited) (Unaudited) Operating income $ 3,869 $ 5,465 Non-GAAP adjustment: Stock based compensation 147 137 Amortization of intangible assets 244 357 ------- ------- Non-GAAP operating income $ 4,260 $ 5,959 ======= ======= Net income attributable to Shamir Optical Industry Ltd. Shareholders $ 2,122 $ 3,693 Non-GAAP adjustment: Stock based compensation 147 137 Amortization of intangible assets, net 185 264 Accretion of redeemable non controlling interest - 107 ------- ------- Non-GAAP net income attributable to Shamir Optical Industry Ltd. Shareholders $ 2,454 $ 4,201 ======= ======= Net earnings per share: Basic $ 0.15 $ 0.25 ======= ======= Diluted $ 0.15 $ 0.25 ======= ======= Number of shares: Basic 16,424 16,679 Dilutive 16,453 16,767