Highlights
Kornit Digital Ltd. (NASDAQ:KRNT), a leading provider of digital
printing solutions for the global printed textile industry, today
reported results for the third quarter ended September 30, 2017.
Third quarter GAAP revenues which are net of the
fair value of the warrants associated with revenues recognized from
Amazon in the period were $28.5 million, compared to the prior year
period of $30.9 million. On a non-GAAP basis, Kornit reported sales
of $28.6 million, down from the prior year level of $30.9 million.
Lower revenues were driven by a previously disclosed large customer
who was unable to take scheduled delivery of a large number of
systems due to unforeseen protracted delays in the receipt of
regulatory permits. Excluding this customer issue, the Company
continued to realize growth in sales of systems, ink and
consumables and services.
Gabi Seligsohn, Kornit Digital’s Chief Executive
Officer commented, “As mentioned during our pre-announcement call
at the end of September, our financial results during the quarter
were strongly impacted by a customer delay. While our near term
business is impacted by this postponed customer order and slower
than expected ramp up in Vulcan revenues, we see the concept of
proximity decoration gaining momentum, and driving demand in the
apparel industry for direct-to-garment systems which should lead to
significant growth in 2018.”
During the third quarter, Kornit attended
several events, including SGIA in New Orleans where the Company
showcased its latest technology and introduced neon ink printing on
its Allegro roll-to-roll printer, which enables new and creative
applications for customers and was well received by event
participants. Seligsohn added, “During this important event we
noted a strong uptick in interest from screen printers, which is a
direct response to their customers demanding smaller batch
manufacturing requiring digital capabilities. This is encouraging
to the long-term adoption rate of our highest throughput systems,
such as the Vulcan and Avalanche.”
Third Quarter Results of
Operations Third quarter GAAP sales which are net of the
fair value of the warrants associated with revenues recognized from
Amazon during the period was $28.5 million, down from the prior
year level of $30.9 million. On a non-GAAP basis, Kornit reported
sales of $28.6 million, down from the prior year level of $30.9
million.
GAAP third quarter gross profit increased by
7.2% to $14.6 million, or 51.3% of sales, compared with $13.6
million, or 44.1% of sales, in the prior year. GAAP gross margin
was 51.3%, compared with 44.1% in the third quarter of 2016. Higher
gross margin was driven by mix shift weighted towards ink and
consumables, as a result of customer shipment delays during the
period. Non-GAAP gross profit in the third quarter was $15 million,
or 52.3% of sales, compared with $15.2 million, or 49.2% of sales
in the prior year.
GAAP total operating expenses in the third
quarter were $14.8 million, or 52% of sales, compared to $13.0
million, or 41.9% of sales, in the prior year period. The increase
in operating expenses as a percentage of sales was consistent with
the Kornit's previously communicated plans to continue to invest in
its global infrastructure buildout. Non-GAAP operating expenses in
the third quarter increased to $13.2 million, or 46.2% of sales,
compared to $11.4 million, or 36.7% of sales in the prior year.
Third quarter GAAP research and development
expenses were $5.9 million, or 20.5% of sales, compared to the
prior year period of $4.4 million, or 14.2% of sales. Third quarter
non-GAAP research and development expenses were $5.6 million, or
19.5% of sales, compared to $4.4 million, or 14.2% of sales in the
prior year.
Third quarter GAAP selling and marketing
expenses were $5.3 million, or 18.6% of sales compared to the prior
year period of $4.8 million, or 15.6% of sales. Third quarter
non-GAAP selling and marketing expenses were $4.8 million, or 16.7%
of sales, compared to $4.6 million, or 14.8% of sales in the prior
year.
Third quarter GAAP general and administrative
expenses were $3.4 million, or 12% of sales, compared to the prior
year period of $3.8 million, or 12.1% of sales. Third quarter
non-GAAP general and administrative expenses were $2.9 million, or
10.1% of sales, compared to $2.4 million, or 7.8% of sales in the
prior year.
On a GAAP basis, third quarter operating loss
was $0.2 million, or (0.7%) of sales, compared to the prior year
period profit of $0.7 million, or 2.1% of sales. Non-GAAP operating
profit in the third quarter decreased to $1.7 million, compared to
$3.9 million in the prior year. As a percent of sales, non-GAAP
operating margin for the third quarter was 6.1% of sales, compared
with 12.5% of sales in the prior year.
On a GAAP basis, the Company reported a net loss
of $(0.1) million, or $(0.00) per diluted share, compared to net
income of $0.4 million, or $0.01 per diluted share in the third
quarter of 2016. Non-GAAP net income for the third quarter of
2017 was $1.7 million, or $0.05 per diluted share, compared to $3.5
million, or $0.11 per diluted share, in the prior year period.
Balance Sheet and Cash FlowAt
September 30, 2017, the Company had cash and marketable securities
of $86.5 million, and no long-term debt. Cash flow used in
operations for the third quarter of 2017 was $5.9 million,
attributable mostly to the increase in inventory.
Fourth Quarter 2017 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 1-800-289-0498 or +1-719-457-2647. The toll-free
Israeli number is 1 80 925 8243. The confirmation code is
8033685.
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 8033685. The telephonic
replay will be available beginning at 8:00 p.m. ET on Tuesday,
November 7, 2017, and will last through 11:59 p.m. ET on Tuesday,
November 21, 2017. 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 Annual Report on Form 20-F filed with the
U.S. Securities and Exchange Commission on March 30, 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 impact of the fair value of
warrants deducted from revenues, acquisition related expenses,
share-based compensation expenses, 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. The Company has not reconciled its
non-GAAP guidance to the nearest equivalent GAAP measure. Such
reconciliation is not available without unreasonable effort because
the fair value of the warrants which is a key element of the
Company’s non-GAAP financial measures is impacted by the Company’s
share price, which is information the Company cannot predict.
About
Kornit
Kornit 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) |
|
|
|
|
|
|
|
|
|
Nine Months Ended |
|
Three Months Ended |
|
September 30, |
|
September 30, |
|
|
2017 |
|
|
|
2016 |
|
|
2017 |
|
|
|
2016 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Unaudited) |
|
(Unaudited) |
|
|
|
|
|
|
|
|
Revenues, net |
$ |
84,138 |
|
|
$ |
76,707 |
|
$ |
28,447 |
|
|
$ |
30,920 |
|
Cost of revenues |
|
44,482 |
|
|
|
40,924 |
|
|
13,851 |
|
|
|
17,299 |
|
Gross profit |
|
39,656 |
|
|
|
35,783 |
|
|
14,596 |
|
|
|
13,621 |
|
|
|
|
|
|
|
|
|
Operating
expenses: |
|
|
|
|
|
|
|
Research and
development |
|
15,187 |
|
|
|
12,293 |
|
|
5,845 |
|
|
|
4,397 |
|
Selling and
marketing |
|
16,126 |
|
|
|
13,585 |
|
|
5,297 |
|
|
|
4,813 |
|
General and
administrative |
|
9,545 |
|
|
|
9,279 |
|
|
3,407 |
|
|
|
3,751 |
|
Restructuring
expenses |
|
339 |
|
|
|
- |
|
|
246 |
|
|
|
- |
|
Total
operating |
|
41,197 |
|
|
|
35,157 |
|
|
14,795 |
|
|
|
12,961 |
|
Operating income
(loss) |
|
(1,541 |
) |
|
|
626 |
|
|
(199 |
) |
|
|
660 |
|
Financial income (expenses), net |
|
298 |
|
|
|
93 |
|
|
205 |
|
|
|
(3 |
) |
Income
(loss) before taxes on income |
|
(1,243 |
) |
|
|
719 |
|
|
6 |
|
|
|
657 |
|
|
|
|
|
|
|
|
|
Taxes on
income |
|
403 |
|
|
|
711 |
|
|
130 |
|
|
|
296 |
|
Net income (loss) |
|
(1,646 |
) |
|
|
8 |
|
|
(124 |
) |
|
|
361 |
|
|
|
|
|
|
|
|
|
Basic net income (loss) per share |
$ |
(0.05 |
) |
|
$ |
0.00 |
|
$ |
(0.00 |
) |
|
$ |
0.01 |
|
|
|
|
|
|
|
|
|
Weighted average number
of shares |
|
|
|
|
|
|
|
used in computing basic
net |
|
|
|
|
|
|
|
income
(loss) per share |
|
34,445,168 |
|
|
|
30,474,462 |
|
|
34,883,772 |
|
|
|
34,883,772 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted net
income (loss) per share |
$ |
(0.05 |
) |
|
$ |
0.00 |
|
$ |
(0.00 |
) |
|
$ |
0.01 |
|
|
|
|
|
|
|
|
|
Weighted average number
of shares |
|
|
|
|
|
|
|
used in computing
diluted |
|
|
|
|
|
|
|
net
income (loss) per share |
|
34,445,168 |
|
|
31,739,909 |
|
|
34,883,772 |
|
|
|
31,795,707 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
KORNIT DIGITAL LTD. |
AND ITS SUBSIDIARIES |
RECONCILIATION OF GAAP TO
NON-GAAP
CONSOLIDATED
STATEMENTS
OF
OPERATIONS |
(U.S. dollars in thousands, except share and per share
data) |
|
|
Nine Months Ended |
|
|
Three Months Ended |
|
September 30, |
|
|
September 30, |
|
|
2017 |
|
|
|
2016 |
|
|
|
|
2017 |
|
|
|
2016 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Unaudited) |
|
|
(Unaudited) |
|
|
|
|
|
|
|
|
|
GAAP revenues |
$ |
84,138 |
|
|
$ |
76,707 |
|
|
|
$ |
28,447 |
|
|
$ |
30,920 |
|
Fair value
of warrants deducted from revenues (a) |
|
2,502 |
|
|
|
- |
|
|
|
|
149 |
|
|
|
- |
|
Non-GAAP revenues |
$ |
86,640 |
|
|
$ |
76,707 |
|
|
|
$ |
28,596 |
|
|
$ |
30,920 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP cost of revenues |
$ |
44,482 |
|
|
$ |
40,924 |
|
|
|
$ |
13,851 |
|
|
$ |
17,299 |
|
Expenses
recorded for share-based compensation (1) |
|
(472 |
) |
|
|
(337 |
) |
|
|
|
(185 |
) |
|
|
(131 |
) |
Intangible
assets amortization (3) |
|
(75 |
) |
|
|
(169 |
) |
|
|
|
(25 |
) |
|
|
(56 |
) |
Excess cost
of acquired inventory (b) |
|
- |
|
|
|
(1,398 |
) |
|
|
|
- |
|
|
|
(1,398 |
) |
Non-GAAP cost of revenues |
$ |
43,935 |
|
|
$ |
39,020 |
|
|
|
$ |
13,641 |
|
|
$ |
15,714 |
|
|
|
|
|
|
|
|
|
|
GAAP gross
profit |
$ |
39,656 |
|
|
$ |
35,783 |
|
|
|
$ |
14,596 |
|
|
$ |
13,621 |
|
Gross
profit adjustments |
|
3,049 |
|
|
|
1,904 |
|
|
|
|
359 |
|
|
|
1,585 |
|
Non-GAAP
gross profit |
$ |
42,705 |
|
|
$ |
37,687 |
|
|
|
$ |
14,955 |
|
|
$ |
15,206 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP operating expenses |
$ |
41,197 |
|
|
$ |
35,157 |
|
|
|
$ |
14,795 |
|
|
$ |
12,961 |
|
Expenses
recorded for share-based compensation (1) |
|
(2,721 |
) |
|
|
(1,743 |
) |
|
|
|
(1,060 |
) |
|
|
(487 |
) |
Acquisition
related expenses (2) |
|
- |
|
|
|
(831 |
) |
|
|
|
- |
|
|
|
(731 |
) |
Intangible
assets amortization (3) |
|
(943 |
) |
|
|
(147 |
) |
|
|
|
(266 |
) |
|
|
(147 |
) |
Other one
time expense |
|
- |
|
|
|
(241 |
) |
|
|
|
- |
|
|
|
(241 |
) |
Restructuring expenses |
|
(339 |
) |
|
|
- |
|
|
|
|
(246 |
) |
|
|
- |
|
Non-GAAP operating expenses |
$ |
37,194 |
|
|
$ |
32,195 |
|
|
|
$ |
13,223 |
|
|
$ |
11,355 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP tax
and financial expenses (income) |
$ |
105 |
|
|
$ |
618 |
|
|
|
$ |
(75 |
) |
|
$ |
299 |
|
Taxes on
income related to non-GAAP adjustments |
|
443 |
|
|
|
93 |
|
|
|
|
137 |
|
|
|
62 |
|
Non-GAAP
tax and financial expenses (income) |
$ |
548 |
|
|
$ |
711 |
|
|
|
$ |
62 |
|
|
$ |
361 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP net income (loss) |
$ |
(1,646 |
) |
|
$ |
8 |
|
|
|
$ |
(124 |
) |
|
$ |
361 |
|
Fair value
of warrants deducted from revenues (a) |
|
2,502 |
|
|
|
- |
|
|
|
|
149 |
|
|
|
- |
|
Expenses
recorded for share-based compensation (1) |
|
3,193 |
|
|
|
2,080 |
|
|
|
|
1,245 |
|
|
|
618 |
|
Acquisition
related expenses (2) |
|
- |
|
|
|
831 |
|
|
|
|
- |
|
|
|
731 |
|
Intangible
assets amortization (3) |
|
1,018 |
|
|
|
316 |
|
|
|
|
291 |
|
|
|
203 |
|
Excess cost
of acquired inventory (b) |
|
- |
|
|
|
1,398 |
|
|
|
|
- |
|
|
|
1,398 |
|
Other one
time expense |
|
- |
|
|
|
241 |
|
|
|
|
- |
|
|
|
241 |
|
Restructuring expenses |
|
339 |
|
|
|
- |
|
|
|
|
246 |
|
|
|
- |
|
Taxes on
income related to non-GAAP adjustments |
|
(443 |
) |
|
|
(93 |
) |
|
|
|
(137 |
) |
|
|
(62 |
) |
Non-GAAP net income |
$ |
4,963 |
|
|
$ |
4,781 |
(*) |
|
|
$ |
1,670 |
|
|
$ |
3,490 |
(*) |
|
|
|
|
|
|
|
|
|
|
|
GAAP diluted income (loss) per share |
$ |
(0.05 |
) |
|
$ |
0.00 |
|
|
|
$ |
(0.00 |
) |
|
$ |
0.01 |
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP diluted income per share |
$ |
0.14 |
|
|
$ |
0.15 |
|
|
|
$ |
0.05 |
|
|
$ |
0.11 |
|
|
|
|
|
|
|
|
|
|
Weighted
average number of shares |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted
average number of shares used in computing diluted |
|
|
|
|
|
|
|
|
GAAP net
income (loss) per share |
34,445,168 |
|
|
31,739,909 |
|
|
|
|
34,883,772 |
|
|
31,795,707 |
|
|
|
|
|
|
|
|
|
Weighted
average number of shares used in computing diluted |
|
|
|
|
|
|
|
|
non
GAAP net income per share |
34,877,281 |
|
|
32,018,295 |
|
|
|
|
35,242,293 |
|
|
32,043,179 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
Expenses recorded for share-based compensation |
|
|
|
|
|
|
|
|
|
Cost of
revenues |
|
472 |
|
|
|
337 |
|
|
|
|
185 |
|
|
|
131 |
|
|
Research
and development |
|
569 |
|
|
|
126 |
|
|
|
|
272 |
|
|
|
(30 |
) |
|
Selling
and marketing |
|
688 |
|
|
|
435 |
|
|
|
|
258 |
|
|
|
103 |
|
|
General
and administrative |
|
1,464 |
|
|
|
1,182 |
|
|
|
|
530 |
|
|
|
414 |
|
|
|
|
3,193 |
|
|
|
2,080 |
|
|
|
|
1,245 |
|
|
|
618 |
|
(2)
Acquisition related expenses |
|
|
|
|
|
|
|
|
|
Research
and development |
|
- |
|
|
|
150 |
|
|
|
|
- |
|
|
|
50 |
|
|
General
and administrative |
|
- |
|
|
|
681 |
|
|
|
|
- |
|
|
|
681 |
|
|
|
|
- |
|
|
|
831 |
|
|
|
|
- |
|
|
|
731 |
|
(3)
Intangible assets amortization |
|
|
|
|
|
|
|
|
|
Cost of
revenues |
|
75 |
|
|
|
169 |
|
|
|
|
25 |
|
|
|
56 |
|
|
Selling
and marketing |
|
943 |
|
|
|
147 |
|
|
|
|
266 |
|
|
|
147 |
|
|
|
|
1,018 |
|
|
|
316 |
|
|
|
|
291 |
|
|
|
203 |
|
|
|
|
|
|
|
|
|
|
|
(a) |
Reflects a non cash
expense for warrants granted to Amazon that is being accounted for
as deduction from revenues |
|
|
|
|
|
|
|
|
(b) |
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 |
|
(*) |
Non-GAAP
net income updated from prior reports to reflect taxes on income
related to non-GAAP adjustment. |
|
|
|
|
|
|
KORNIT DIGITAL LTD. |
|
AND ITS SUBSIDIARIES |
|
CONDENSED
CONSOLIDATED
BALANCE
SHEETS |
|
(U.S. dollars in thousands) |
|
|
|
|
|
September 30, |
|
December 31, |
|
|
|
2017 |
|
2016 |
|
|
|
(Unaudited) |
|
|
|
ASSETS |
|
|
|
|
|
CURRENT ASSETS: |
|
|
|
|
|
Cash and cash
equivalents |
|
$ |
14,290 |
|
$ |
22,789 |
|
Available for sale
marketable securities |
|
|
3,709 |
|
|
16,500 |
|
Trade receivables,
net |
|
|
32,926 |
|
|
31,638 |
|
Other accounts
receivables and prepaid expenses |
|
|
4,112 |
|
|
3,735 |
|
Inventory |
|
|
35,865 |
|
|
24,122 |
|
Total current
assets |
|
|
90,902 |
|
|
98,784 |
|
|
|
|
|
|
|
LONG-TERM ASSETS: |
|
|
|
|
|
Available for sale
marketable securities |
|
|
68,478 |
|
|
21,724 |
|
Severance pay fund |
|
|
503 |
|
|
768 |
|
Deferred tax asset |
|
|
1,080 |
|
|
439 |
|
Property and equipment,
net |
|
|
10,565 |
|
|
9,247 |
|
Intangible assets,
net |
|
|
2,367 |
|
|
3,385 |
|
Goodwill |
|
|
5,092 |
|
|
5,092 |
|
Other assets |
|
|
631 |
|
|
607 |
|
Total long-term
assets |
|
|
88,716 |
|
|
41,262 |
|
|
|
|
|
|
|
Total assets |
|
$ |
179,618 |
|
$ |
140,046 |
|
|
|
|
|
|
|
LIABILITIES AND SHAREHOLDERS' EQUITY |
|
|
|
|
|
CURRENT
LIABILITIES: |
|
|
|
|
|
Trade payables |
|
$ |
14,243 |
|
$ |
16,433 |
|
Employees and payroll
accruals |
|
|
5,772 |
|
|
5,918 |
|
Deferred revenues and
advances from customers |
|
|
1,943 |
|
|
1,679 |
|
Other payables and
accrued expenses |
|
|
6,259 |
|
|
6,103 |
|
Total current
liabilities |
|
|
28,217 |
|
|
30,133 |
|
|
|
|
|
|
|
LONG-TERM
LIABILITIES: |
|
|
|
|
|
Accrued severance
pay |
|
|
1,246 |
|
|
1,269 |
|
Payment obligation
related to acquisition |
|
|
323 |
|
|
1,070 |
|
Other long-term
liabilities |
|
|
887 |
|
|
386 |
|
|
|
|
|
|
|
Total long-term
liabilities |
|
|
2,456 |
|
|
2,725 |
|
|
|
|
|
|
|
SHAREHOLDERS'
EQUITY |
|
|
148,945 |
|
|
107,188 |
|
|
|
|
|
|
|
Total liabilities and
shareholders' equity |
|
$ |
179,618 |
|
$ |
140,046 |
|
|
|
|
|
|
|
|
|
|
|
KORNIT DIGITAL LTD. |
|
|
AND ITS SUBSIDIARIES |
|
|
CONSOLIDATED STATEMENTS OF CASH
FLOWS |
|
|
(U.S. dollars in thousands) |
|
|
|
|
|
|
|
|
|
Nine Months Ended |
|
Three Months Ended |
|
|
|
September 30, |
|
September 30, |
|
|
|
|
2017 |
|
|
|
2016 |
|
|
|
2017 |
|
|
|
2016 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Unaudited) |
|
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from
operating activities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) |
$ |
(1,646 |
) |
|
$ |
8 |
|
|
$ |
(124 |
) |
|
$ |
361 |
|
|
|
Adjustments to
reconcile net income (loss) to net cash provided by (used in)
operating activities: |
|
|
|
|
|
|
|
|
|
Depreciation and
amortization |
|
3,631 |
|
|
|
2,007 |
|
|
|
1,204 |
|
|
|
897 |
|
|
|
Fair value of warrants
deducted from revenues |
|
2,502 |
|
|
|
- |
|
|
|
149 |
|
|
|
- |
|
|
|
Share-based
compensation |
|
3,193 |
|
|
|
2,080 |
|
|
|
1,245 |
|
|
|
618 |
|
|
|
Amortization of premium
on marketable securities |
|
404 |
|
|
|
341 |
|
|
|
127 |
|
|
|
120 |
|
|
|
Realized gain on sale
of marketable securities |
|
(29 |
) |
|
|
(3 |
) |
|
|
- |
|
|
|
- |
|
|
|
Increase (decrease) in
accrued severance pay, net |
|
242 |
|
|
|
(158 |
) |
|
|
214 |
|
|
|
(113 |
) |
|
|
Increase in trade
receivables |
|
(730 |
) |
|
|
(6,730 |
) |
|
|
(3,624 |
) |
|
|
(3,170 |
) |
|
|
Decrease in other
receivables and prepaid expenses |
|
(396 |
) |
|
|
(529 |
) |
|
|
(1,143 |
) |
|
|
(1,020 |
) |
|
|
Decrease (increase) in
inventory |
|
(11,631 |
) |
|
|
(4,739 |
) |
|
|
(2,979 |
) |
|
|
264 |
|
|
|
Increase in deferred
taxes, net |
|
(641 |
) |
|
|
(368 |
) |
|
|
(458 |
) |
|
|
(236 |
) |
|
|
Increase in other long
term assets |
|
(15 |
) |
|
|
(198 |
) |
|
|
(209 |
) |
|
|
(230 |
) |
|
|
Increase (decrease) in
trade payables |
|
(1,538 |
) |
|
|
1,449 |
|
|
|
522 |
|
|
|
3,129 |
|
|
|
Increase
(decrease) in employees and payroll accruals |
|
(194 |
) |
|
|
199 |
|
|
|
639 |
|
|
|
459 |
|
|
|
Increase in deferred
revenues |
|
217 |
|
|
|
298 |
|
|
|
909 |
|
|
|
95 |
|
|
|
Increase in other
payables and accrued expenses |
|
754 |
|
|
|
2,061 |
|
|
|
632 |
|
|
|
1,209 |
|
|
|
Increase in other long
term liabilities |
|
501 |
|
|
|
90 |
|
|
|
132 |
|
|
|
135 |
|
|
|
Loss from sale of
property and equipment |
|
228 |
|
|
|
6 |
|
|
|
199 |
|
|
|
6 |
|
|
|
Foreign currency
translation loss on inter company balances with foreign
subsidiaries |
|
(798 |
) |
|
|
(138 |
) |
|
|
(203 |
) |
|
|
(56 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by
(used in) operating activities |
|
(5,946 |
) |
|
|
(4,324 |
) |
|
|
(2,768 |
) |
|
|
2,468 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from
investing activities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Purchase of property
and equipment |
|
(4,500 |
) |
|
|
(4,487 |
) |
|
|
(1,069 |
) |
|
|
(2,954 |
) |
|
|
Proceeds from sale of
property and equipment |
|
6 |
|
|
|
- |
|
|
|
6 |
|
|
|
- |
|
|
|
Cash paid in connection
with acquisition |
|
- |
|
|
|
(9,206 |
) |
|
|
- |
|
|
|
(9,206 |
) |
|
|
Proceeds from bank
deposits, net |
|
- |
|
|
|
22,000 |
|
|
|
- |
|
|
|
18,001 |
|
|
|
Proceeds from sale of
marketable securities |
|
38,312 |
|
|
|
1,523 |
|
|
|
- |
|
|
|
- |
|
|
|
Proceeds from maturity
of marketable securities |
|
6,740 |
|
|
|
3,500 |
|
|
|
- |
|
|
|
1,000 |
|
|
|
Purchase of marketable
securities |
|
(79,255 |
) |
|
|
(9,564 |
) |
|
|
(8,607 |
) |
|
|
(2,433 |
) |
|
|
Net cash provided by
(used in) investing activities |
|
(38,697 |
) |
|
|
3,766 |
|
|
|
(9,670 |
) |
|
|
4,408 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from
financing activities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Proceeds from issuance
of ordinary shares in a follow on offering, net |
|
35,077 |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
Exercise of employee
stock options |
|
2,343 |
|
|
|
564 |
|
|
|
996 |
|
|
|
291 |
|
|
|
Payment of contingent
consideration |
|
(1,400 |
) |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
Net cash provided by
financing activities |
|
36,020 |
|
|
|
564 |
|
|
|
996 |
|
|
|
291 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign currency
translation adjustments on cash and cash equivalents |
|
124 |
|
|
|
7 |
|
|
|
25 |
|
|
|
1 |
|
|
|
Increase (decrease) in
cash and cash equivalents |
|
(8,623 |
) |
|
|
6 |
|
|
|
(11,442 |
) |
|
|
7,167 |
|
|
|
Cash and cash
equivalents at the beginning of the period |
|
22,789 |
|
|
|
18,464 |
|
|
|
25,707 |
|
|
|
11,309 |
|
|
|
Cash and cash
equivalents at the end of the period |
|
14,290 |
|
|
|
18,477 |
|
|
|
14,290 |
|
|
|
18,477 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-cash
investing and financing activities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Purchase
of property and equipment on credit |
|
142 |
|
|
|
95 |
|
|
|
142 |
|
|
|
95 |
|
|
|
Inventory transferred
to be used as property and equipment |
|
293 |
|
|
|
1,090 |
|
|
|
126 |
|
|
|
290 |
|
|
|
|
|
|
|
|
|
|
|
|
Investor Contact:Michael Callahan, ICR(203)
682-8311Michael.Callahan@icrinc.com
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