Shamir fourth quarter revenues increase 5.4% to $39.1 million

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 fourth quarter and year ended December 31, 2010.

For the quarter ended December 31, 2010, revenues increased 5.4% to $39.1 million, compared with revenues of $37.1 million for the same period in 2009. Gross profit for the quarter was $21.1 million, or 54.0% of revenues, compared with gross profit of $20.4 million, or 55.0% of revenues for the same period last year.

For the quarter ended December 31, 2010, operating income was $3.3 million, or 8.6% of revenues, compared with operating income of $4.5 million, or 12.3% of revenues for the same period last year.  The reduction in operating income year-over-year was primarily due to the mix of products sold which negatively affected gross profit, costs associated with the Company's previously announced transaction with Essilor International, restructuring costs in France and an increase in marketing and selling expenses.

Net income for the quarter was $3.0 million, compared with net income of $3.5 million for the same period in 2009. Net income attributable to Shamir's shareholders was $2.8 million or $0.16 per diluted share, compared with $3.3 million or $0.20 per diluted share for the same period in 2009.

Excluding the effect of non-cash stock-based compensation expenses, amortization of intangible assets, restructuring costs in France in 2010 and Essilor transaction costs in 2010, operating income for the quarter was $4.6 million, or 11.8% of revenues, compared with operating income of $5.0 million, or 13.5% of revenues, for the same period last year.

Excluding the effect of non-cash stock-based compensation expenses, amortization of intangible assets, accretion of redeemable non-controlling interest, restructuring costs in France in 2010 and Essilor transaction costs in 2010, all net of tax, net income attributable to Shamir's shareholders for the quarter was $3.9 million, or $0.22 per diluted share, compared with net income of $3.6 million, or $0.22 per diluted share for the same period last year.  

For the year ended December 31, 2010, revenues increased 11.0% to $158.0 million, compared with revenues of $142.4 million for the year 2009. Gross profit for the year 2010 was $86.5 million, or 54.8% of revenues, compared with gross profit of $76.9 million, or 54.0% of revenues for last year.

For the year ended December 31, 2010, operating income increased 14.0% to $19.8 million, or 12.5% of revenues, compared with operating income of $17.3 million, or 12.2% of revenues for last year.

Net income for the year increased 17.5% to $15.6 million, compared with net income of $13.3 million for  the year 2009. Net income attributable to Shamir's shareholders increased 15.8% to $14.8 million or $0.87 per diluted share, compared with $12.8 million or $0.77 per diluted share for the year 2009.

Excluding the effect of non-cash stock-based compensation expenses, amortization of intangible assets, restructuring costs in France in 2010, Essilor transaction costs in 2010 and compensation to the Company's former chief executive officer in 2009, operating income for the year was $23.4 million, or 14.8% of revenues, compared with operating income of $19.2 million, or 13.5% of revenues, for last year.

Excluding the effect of non-cash stock-based compensation expenses, amortization of intangible assets, accretion of redeemable non-controlling interest, restructuring costs in France in 2010, Essilor transaction costs in 2010 and compensation to the Company's former chief executive officer in 2009, all net of tax, net income attributable to Shamir's shareholders for the year increased 24.2% to $17.7 million, or $1.05 per diluted share, compared with net income of $14.3 million or $0.86 per diluted share for 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 December 31, 2010, the Company had cash and cash equivalents, including short-term investments of $28.4 million.

Commenting on the results, Amos Netzer, Chief Executive Officer of Shamir, said, "I am satisfied with our results for 2010.  During the year, we continued to successfully increase the recognition for Shamir-branded products, a testament to the strength of our organic growth and strategic acquisition strategy.  We also continued to have similar success with our efforts to optimize our operations as was demonstrated in the fourth quarter in France, where we went from a two-subsidiary structure, down to a single, more efficient structure."

Mr. Netzer continued, "Most recently, we expanded our reach in Israel through the acquisition of the operations of a local distributor.  Through this action, we expect to achieve improved access to customers and to drive increased sales volume.  In addition, we expect to complete the acquisition of the operation of a local Italian laboratory in the second quarter to expand our footprint in Italy."

SOURCE Shamir Optical Industries Ltd.