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Cimatron, Limited (CIMT)
Q4 2012 Earnings Conference Call
February 19, 2013 9:00 AM ET
Danny Haran – President & CEO
Ilan Erez – CFO
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If you have not received a copy of today’s earnings release and would like to do so, please download it from the company’s website, www.cimatron.com, at the Investors page.
As a reminder, this conference is being recorded today, February 19, 2013. With us on the line today are Mr. Danny Haran, Cimatron's President and CEO and Mr. Ilan Erez, Cimatron's CFO. Before I turn the call over to Mr. Danny Haran, I would like to remind everyone that statements made during this conference call that are not historical facts containing forward-looking information with respect to plans, projections, or future performance of Cimatron, the occurrence of which involves certain risks and uncertainties, which could cause actual results to differ materially from those currently anticipated. Such risks and uncertainties include economic and political conditions globally and in Israel, the impact of competition, supply constraints, as well as certain other risks and uncertainties which are detailed in Cimatron's filings with the various securities authorities.
The results that will be presented on this call are on a non-GAAP basis, as Cimatron's management believes that such results better represent the actual state of Cimatron's business, and make comparisons to previous periods easier. Cimatron also publishes its results on a GAAP basis, as well as reconciliation between results on a GAAP and non-GAAP basis, and those can be found in the press release issued earlier today. The term “Constant Currency” relates to data, after eliminating from it the effect of exchange rate fluctuations between comparable periods.
I would like to turn over the call to Mr. Danny Haran, Cimatron's President and CEO. Mr. Haran, would you like to begin?
Thank you. Good morning and welcome to Cimatron’s Fourth Quarter 2012 Results Conference Call. We are very pleased to report an all time record quarter rounding out the debt fear in Cimatron’s history. As we have said many times in the past, the operating leverage in our business, that is our cost structure and business model allows us to translate a significant portion of any revenue growth, into operating profit growth. This year was no exception with 58% of the revenue growth hitting the operating profit line.
Over the last three months, we declared two cash distributions amounting in total to approximately $7.9 million. This came in addition to two dividends which we declared and paid in 2012, totaling $2.9 million. It is our honor to share the rewards of our success with our shareholders and we will continue to look at further distributions subject to our cash needs and market conditions. We are looking forward to another strong year in 2013. We expect to release two major product versions shortly, both of CimatronE and for GibbsCAM, and we are confident that they will continue to support our business success and growth in all our target markets.
Recently, we have been asked about our plans and involvement in additive manufacturing, more popularly known as 3D printing. Allow me to take this opportunity to (inaudible) into the topic. First of all as you all know, Cimatron is a software company. More likely than not, we will remain in the software business and support this industry from the software side rather than getting involved in the hardware side of additive manufacturing including machines or material. However, from the software side of additive manufacturing we are looking for ways that we can bring added value to our customers and partners. We believe that additive manufacturing has a great potential in areas of manufacturing such as prototyping, (inaudible) all production of complex parts in small quantities. Our focus is geared towards metal additive manufacturing, which seems more tightly related to our traditional manufacturing market. In particular, we are exploring hybrid manufacturing for additive and subtractive technologies are used together, taking advantage of the benefit of each technology offers.
We are currently at the early stages of our research and it is too early to state when and how exactly this will have a significant effect on our business, but we believe that we are well positioned to serve this segment of the market and enjoy the new opportunities that may come with it.
In summary, we are pleased with our performance and growth in 2012 and we see ourselves in great market position as we move into 2013. We hope to present an even stronger year in 2013 in terms of the topline and even more so, on the bottom line.
Ilan Erez, our CFO will now review the financial statements. Ilan please.
Thank you Danny. Hello everybody and thank you for joining us. Revenues for the fourth quarter of 2012 were $12.4 million compared to $12.2 million in the fourth quarter of 2011. In 2012, revenues were $42.3 million compared to $40.7 million in the corresponding period of 2011 representing an increase of 7% on a constant currency basis.
The revenue breakdown in Q4’12 was as follows, license revenues 49%, maintenance revenue 43% and other professional services revenue, 8%. The geographical revenue breakdown for the quarter was as follows, Europe 44%, North America 35%, Asia Pacific 18% and the rest of the world 3%. Gross margin for the fourth quarter was 89% of revenue, the same as for the corresponding quarter of 2011. In full 2012, gross margin was 88% of revenue, the same as in 2011.