Kornit Digital Reports 2017 Fourth Quarter and Full Year Results

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ROSH-HA`AYIN, Israel, Feb. 13, 2018 (GLOBE NEWSWIRE) -- 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.

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.”

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 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.

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.

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Globe Newswire: 21:05 GMT Tuesday 13th February 2018

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