Camtek Ltd

NASDAQ:CAMT

Earnings Call Transcript 2021-Q1

[Kenny Green, Investor Relations]

Ladies and gentlemen, thank you for standing by. I would like to welcome all of you to Camtek’s First Quarter 2021 Results Zoom Webinar. My name is Kenny Green and I am part of the Investor Relations team at Camtek.

All other than the presenters are currently muted. Following the formal presentation, I’ll provide some instructions for participating in the live Q&A session.

I would like to remind everyone that this conference call is being recorded and the recording will be available in Camtek’s website from tomorrow. You should have all received by now the company’s press release, and if not, you can review it on the company’s website.

With me today on the call, we have Mr. Rafi Amit, Camtek’s CEO; Mr. Moshe Eisenberg, Camtek’s CFO; and Mr. Ramy Langer, Camtek’s COO.

Rafi, will open by providing an overview of Camtek’s results and discuss recent market trends, Moshe will then summarize the financial results of the quarter. Following that, Rafi, Moshe, and Ramy will be available to take your questions.

Before we begin, I would like to remind everyone, that certain information provided on this call are internal company estimates unless otherwise specified. These statements are only predictions and may change as time passes. Statements on this call are made as of today and the company undertakes no obligation to update any of the forward-looking information contained, whether as a result of new information, future events, changes and expectations or otherwise.

Investors are reminded that these forward-looking statements are subject to risks and uncertainties that may cause actual events or results to differ materially from those projected, including as a result of the effects of general economic conditions, the effects of the COVID-19 crisis on global markets and on the markets in which we operate, including the risk of a continued disruption to our and our customers, providers, business partners and contractors business as a result of the outbreak and effects of the pandemic.

Risks related to the concentration of a significant portion of Camtek’s expected business in certain countries, particularly China from which we expect to generate significant portion of our revenue for the foreseeable future, but also Taiwan and Korea, including the risks of deviations from our expectations regarding timing and size of orders from customers in these countries, changing industry and market trends, reduced demand for our services and products, the timely development of new services and products and their adoption by the market, increased competition in the industry and price reductions, and as well as due to risks and uncertainties identified in the company’s filings with the SEC. Please note that the Safe Harbor statement in today’s press release also covers the contents of this conference call.

Furthermore, during this call, certain non-GAAP financial measures will be discussed. These are used by management to make strategic decisions, forecast future results and evaluate the company’s current performance. We believe that the presentation of non-GAAP financial measures are useful to investors understanding and assessment of the company’s ongoing corporations and prospects of the future. A full reconciliation of non-GAAP to GAAP financial measures are included in today’s earnings release.

And with that, I will now like to hand over the call to Rafi Amit, Camtek’s CEO. Rafi, please go ahead.

[Rafi Amit, Chief Executive Officer]

Yes. Thanks, Kenny. Good morning and thank you for joining our call today. High demand in our market, excellent performance of our systems and the strong position that Camtek is gained in the market allow us to continue demonstrating record financial performance quarter-after-quarter.

We ended the first quarter of 2021 with $57.4 million revenue, 51% gross margin and 27% operating margin. The impressive profitability is a result of a rapid increase in sales and favorable product mix.

Before I review the first quarter, I would like to give a brief overview of the market environment. We are experiencing demand from all territories and especially from Asia. We expect to continue showing an increase in sales in the next two quarters. Our revenue guidance for the second quarter is a $63 million to $65 million.

There are several markets trends driving the demand for semiconductor component and for our systems. The demand for product such as laptop and tablet that had been stabilized before COVID-19 is increase due working from home.

Working from home is also led to heavy investment in data center, cloud and communications infrastructures. The massive amount of data that is sent and stored in the cloud is deriving demand for advanced memory, AI devices and high performance computing.

5G cellular communications has been adopted by the market earlier than expected, resulting in high demand for electronic components. 5G cellular phones contain more RF devices, cameras and advanced packaging compared with the previous generations, thus requiring more inspection and metrology of all components.

The automotive industry is also undergoing major changes with the shifting to electric cars and advanced driver assistance systems technologies, resulting in demand for extensive electronic components. This component must meet zero defect policy requiring 100% inspection of all components in cars.

We see adoption of high end advanced packaging in new devices as the industry is deriving smaller geometric and using heterogeneous integration to deliver products with higher performance and lower power consumption. We are major player in this space and we expect to expand our business as the industry is implementing new applications with high end advanced packaging.

Regarding Q1 highlights, 88% of our sales came from Asia, with China being the largest territory, 50% of our installed system are for advanced packaging applications, which is expected to continue growing in the coming quarters. Other applications in which we pay a major role are compound semi, MEMS, CIS, RF and macro defect inspection in the front end.

During the quarter, we delivered multiple systems order to several Tier 1 customers, as well as single system order to over 20 customers. We continue to execute well under the COVID-19 circumstances. Most of our employees in Israel are vaccinated and return to work from office which will no doubt improve our overall efficiency.

To summarize, high demand for semiconductor components have been leading to an increasing demand for inspection systems. Camtek can provide its customers with reliable high performance systems tailored to their special requirements. Camtek is strongly positioned in the market and as a things stand today, we expect 2021 to be an exceptional record year in sales, growth and profitability.

I would like to hand over to Moshe for more details financial discussion of the financial results. Moshe?

[Moshe Eisenberg, Chief Financial Officer]

Thank you, Rafi. In my financial summary ahead, I will provide the results on a non-GAAP basis. The reconciliation between the GAAP results and the non-GAAP results appears in the tables at the end of the press release issued earlier today.

First Quarter revenues came at the record $57.4 million, an increase of 90% compared with the first quarter of 2020 and 18% compared with the previous quarter. Assuming the mid range of our Q2 guidance, we expect the revenue in the first half of 2021 to be 80% higher than the same period last year.

Gross profit for the quarter was $29.1 million. The gross margin for the quarter was 50.7% versus 45.2% in the first quarter of last year and 48.2% last quarter. The improvement in the gross margin was due to the significant growth in revenues, as well as more profitable products and sales mix this quarter.

Operating expenses in the quarter were $13.5 million. This is compared with $10 million in the first quarter of last year and to the $14.2 million reported in the previous quarter. The decrease from the previous quarter is mostly due to a more favorable sales channel mix.

Operating profit in the quarter was $15.6 million, compared to the $3.7 million reported in the first quarter of last year. Operating margin was 27.2%, compared to 12.2% in the first quarter of last year and 18.9% last quarter.

The rapid growth in revenue while we are still in the process of adjusting our expense structure to support this increased business volume contributed to the high operating margin. Yet I expect that our operating profitability will be ahead of our model.

Net income for the first quarter of 2021 was $14.6 million or $0.33 per diluted share. This is compared to a net income of $3.6 million or $0.09 per share in the first quarter of last year. Total diluted number of shares, as of the end of Q1 was 44.5 million shares.

Turning to some high level balance sheet and cash flow metrics. Inventory level went up by $5 million to support the continuing growth expected in the coming quarters. Accounts receivable went up by $13.5 million due to the increased sales and timing of collection.

We generated $2.7 million in cash from operations in the quarter. This quarter’s cash flow was affected by the above mentioned working capital requirements. Net cash and cash equivalent and short-term deposits as of March 31, 2021, were $169.9 million. And together with the $10 million that we have in long-term deposits, the total cash and deposits amounted to $180 million. This compared with $177.8 million at the end of 2020. With the current business momentum, we expect revenues of $63 million to $65 million in the second quarter.

And with that, Rafi, Ramy and myself will be open to take your questions. Kenny?

[Kenny Green, Investor Relations]

Thank you, Moshe. At this time, we will begin the question-and-answer session. [Operator Instructions] Our first question will be from Craig Ellis of B. Riley. Craig, please unmute yourself and go ahead.

[Craig Ellis, B. Riley]

Yeah. Thanks for taking the question and congratulations on a very strong first quarter results and second quarter outlook team. I’ll start with a clarification just on two income statement items. Moshe for operating expense, you talked about expanding to support growth in the business, how quickly can operating expense dollars expand? And then, secondly, related to the income statement, very nice gross margin improvement and with the increase in the second quarter, should we expect the volume part of the gross margin drivers to mean that gross margin could even expand further in 2Q?

[Moshe Eisenberg, Chief Financial Officer]

Okay. Thank you, Craig. So, well, I will start with the second question. With respect to gross margin. Overall, indeed the business volume contributed to the improved gross margin also the product mix was very favorable this quarter. We believe that the company can operate within this magnitude in the next few quarters. So, we are talking between 50% to 52% gross margin in the coming quarters.

With respect to our operating expenses, obviously, with the increased volume we will increase operating expenses to support it, delay item that will be increasing R&D obviously, as well as several market in which has a direct relationship to the business volume and sales channels, whether we are working direct or indirect has a major impact on the operating expenses. So, it will go up but not significantly in the coming quarters. So such that we expect operating profitability to remain high this year.

[Craig Ellis, B. Riley]

That makes sense. And then the first real question is for Rafi. Rafi, I think, I heard in your prepared remarks, an expectation for the third quarter’s revenues to increase sequentially. So the question is really two-fold. One, given that the trailing five quarter average sequential revenue gains have been around $6 million or $7 million, is that a reasonable expectation for the third quarter? And where do you have comparatively higher visibility in your business for the third quarter in the back half of the year across CMOS Image Sensor, front-end background inspection or high bandwidth memory? Thank you.

[Rafi Amit, Chief Executive Officer]

No. I can tell you, in general, as we said, we can see continue growing in second quarter and also in the third quarter. I believe we can see a few million each quarter gross rate. Regarding the type of applications, as we said before in general, the advanced packaging is the major one, but all of them, we -- as we mentioned before, we can see compound semis, CMOS Image Sensor, RF, MEMS, all of them continue about in the same level.

[Craig Ellis, B. Riley]

That’s helpful. And then finally for me, the company has a very substantial cash balance of $180 million, including $10 million of securities. So the question is, how are you thinking about redeploying that to create value, I know in a COVID world, it’s hard to get out and do the things that are needed that are often precedent actions to M&A. But can you just express how you’re looking at activating that cash for creating further value for shareholders? Thanks.

[Rafi Amit, Chief Executive Officer]

Okay. Look, we invest a lot of efforts of searching for available companies for M&A. I would say that assuming, we eventually we find a good company. Hopefully, we can visit. We can make due diligence. And we can come to a decision. This is something that is unclear at this point. It’s depending where. Some territory you can fly, you can visit. Some of them you cannot do it.

So we don’t know yet. We have few potential companies that we consider and definitely this is one of our strategies to do it and we invest a lot of efforts. But it’s too early to say something. I would say, when we find a company when we start the process, we will share it with the public.

[Craig Ellis, B. Riley]

That’s helpful. Thanks, team. I’ll get back in the queue.

[Moshe Eisenberg, Chief Financial Officer]

Thank you.

[Kenny Green, Investor Relations]

Thank you, Craig. Okay. Our next question will be from of Charles Shi of Needham. Charles, your line is open. Go ahead.

[Charles Shi, Needham]

Thanks for taking my question. Can you hear me?

[Kenny Green, Investor Relations]

Yeah. We can.

[Charles Shi, Needham]

Great. Thanks. So I want to ask slightly longer term questions a little bit looking beyond 2021 into 2022. So, first, let me start with your memory business. One of your largest memory customer, SK Hynix, yesterday announced that they are pulling in 2022 CapEx in 2021. And the decision was kind of made near the end of last month. And I know you’ve been expecting your memory revenue, which has been quite muted since last year, but that pickup up as early as the end of this year or first half 2022. Do you see any of the pull-ins, I mean, maybe not specifically from this customer, but overall DRAM or memory in general into the second half this year?

[Rafi Amit, Chief Executive Officer]

Hey, Ramy, would you like to answer please.

[Ramy Langer, Chief Operating Officer]

Yeah. I will answer. Look, Charles, in general, we see a lot of activity in this case and we’re working very closely with our customers. And I expect that there will be business, I still believe that will only happen starting early next year. If there will be any business, of course, we will be able to accommodate it. So -- but I’m not sure we will see in the second half, I believe it will be -- if any it will be very late this year, early next year.

[Charles Shi, Needham]

Okay. Thanks, Ramy. So it looks like that there is at least for now there’s a no change in terms of color for your memory side of the business. So I want to…

[Ramy Langer, Chief Operating Officer]

At least there is no change.

[Charles Shi, Needham]

Great. Great. Thanks. So maybe let me move on in the other major segment -- market segment for you guys, CMOS Image Sensor. I thought you, Rafi you did say, you expect the revenue will maintain at about the same level throughout this year very steady, stable and continue the strength. I wonder whether you’re seeing any signal for 2022, whether the investment level for CMOS Image Sensor can up again next year. I think one thing we did hear, one of the largest CIS customers, Sony, last night that did update on their long-term -- mid- to long-term CapEx and think they are raising their CapEx up by 25% for the next three years relative to the previous three year period. I wonder is it the right expectation for us to see your CIS revenue to go back to the 2020 level or close to that level next year and which means year-over-year growth from this year’s level?

[Rafi Amit, Chief Executive Officer]

So, Charles, first of all, this year level is not low. We will see about 10% of our revenues and it’s significantly increased compared to last year. So 10% of the business this year will go to CMOS Image Sensors.

And it’s very hard to say at this stage, whether we will see the increase or what is the magnitude of the increase. In general, we’re speaking with several customers. They are all talking about adding capacity in the foreseeable future, meaning late this year beginning of next year. So I do expect the 2022 will be a positive year for the CMOS Image Sensors whether it will reach last year, it’s hard to say, but definitely it will be a positive year for this segment.

[Charles Shi, Needham]

Correct. Maybe my last question, we know we’re talking about potential upside for memory, potential upside for CMOS Image Sensor. On your advanced packaging side of your business definitely this year is very, very strong. And I think some of the concern, I mean, more of the pessimistic people would think maybe your business on that side -- on advanced packaging side could be peaking. Obviously, you have a very well diversified business? You have posted seven consecutive year of growth because of your diversified exposure to different end markets. However, specifically on advanced packaging, I wonder what your early view about 2022 is like at this point of time?

[Rafi Amit, Chief Executive Officer]

Well, if we look from a -- what we talk with our customers and what we look at understanding the trends and definitely we believe that the advanced packaging will continue to grow in the foreseeable future, meaning in the next few years.

Now, one of the major additions is there continuous integration and which is primarily today for high performance computing. But definitely, this is a trend, Rafi mentioned it and -- in the script that -- and so we believe that this market continues to grow. There were a lot of new devices that we’re adopting advanced packaging for all the good reasons.

So if today, most of the business is Fan-In or wafer level chips in packaging and Fan-Out. And I would say they produce integration. It’s something in the range of about 10% of the business. This last 10% will definitely continue to grow and become far more significant in the next few years.

So we clearly look from the market point of view, where we understand the trends and where our customers are going. Definitely the advanced packaging will continue to be a major portion of our business and will continue to grow.

[Charles Shi, Needham]

Thank you. Thanks. Congrats on the nice results. I’ll go back to the queue. Thanks.

[Rafi Amit, Chief Executive Officer]

Thank you.

[Moshe Eisenberg, Chief Financial Officer]

Thank you.

[Kenny Green, Investor Relations]

Thanks. Thanks, Charles.

[Charles Shi, Needham]

Thanks.

[Kenny Green, Investor Relations]

And our next questions will be from Gus Richard of Northland. Just as a reminder to anyone who wants to ask a question, please raise your hands on the platform and we’ll open you up with. Gus, you may go ahead and ask. Yeah, you have to unmute yourself Gus. Gus?

[Gus Richard, Northland]

There we go. Can you hear me?

[Kenny Green, Investor Relations]

Yes. We can.

[Gus Richard, Northland]

Yeah. Sorry. Hey. I just want to cut your business a little bit differently and think about just the applications in terms of 2D, 3D and other applications that are driving your inspection tools. If you give us a little color around that and sort of where you’re winning, when you think about it in that dimension?

[Rafi Amit, Chief Executive Officer]

Ramy, please.

[Ramy Langer, Chief Operating Officer]

I am trying to think where we are willing to try an answer you. But let’s see broadly, if we take about 3D and 2D. So on the -- there is on the advanced packaging, I would say, 50% is what we call 3D or the metrology portion and 2D is the other 50% of the business. And this is definitely a business that is -- we started today only, I would say, two years or three years ago. So that’s definitely an area that we are starting to dominate in the last few years. So I would say this is from the advanced packaging that these two businesses will continue to grow.

Now if we look at the other businesses. So if you take, for example, a 5G, so 5G is driving very strongly, our CMOS Image Sensors and its driving the overall demand in the semiconductor that we see. If you look at the automotive business, this is coming, we see there the compound semi and in the power applications, we see drive very strong drive -- a drive there. And again, the overall 2D business is growing and we are very well in trend, I would say, in several major providers for this segment.

If we continue and move along, and we look at the cloud, definitely there, it’s the memory business, high performance computing, with the heterogeneous integration it will take a big share, again there we are very well positioned.

And if we talk about the, I would say, the overall a business like, laptops, tablets, all of the above, then the overall semi consumption affect us very positively. We’ll see the demands coming from the OSATs and the IDMs that we are serving. And again there, we see the high performance computing, especially for the high end portion like the gaming application.

So there we gain twice on the memory and also from the heterogeneous integration. So, overall, when we look at the difference segment of the end products, and the different applications that we are supporting, so I think we’re well positioned in all of the above. Did I answer you, Gus?

[Gus Richard, Northland]

That’s very helpful. And let me try to cut it yet another way. Semi conductor unit growth is roughly 15% this year is kind of what people are saying, you’re going 80% in the first half, clearly outperformance relative to the unit growth? When you think about the applications you address and the growth of those applications versus -- and new applications versus market share gains. Can you attribute your outperformance on a relative basis to those two metrics, again market share gains and outperformance to the application you address?

[Ramy Langer, Chief Operating Officer]

So I would -- first of all, I understand the question, it’s very hard to give you a very quick answer, but definitely we are gaining market share and I think in the areas that we are strong in the advanced packaging definitely we are gaining market share and I know they are specific to customers that switch from the competition to us. So that’s definitely to give you whether how many percent of the growth it is, it is very hard to say, but it is definitely significant.

I think where we are growing the business and taking market share is the overall inspection business that we didn’t participate in the past. If we talk about the compound semi and power area, we never participated there.

If we talk about the content, which is roughly I would say 10% of our business, definitely it’s a new business, we are growing, definitely taking market share. I think we took some market in the CMOS Image Sensors last year. I’m expecting this to attribute to some of the growth that we’ll see this year as well.

And so it’s definitely a mix between these two areas and but it’s very hard for me to tell you that 40% will come from there, 40% will come from others. And also we will end up the year and we will see where the growth is coming from.

I think there is one more aspect that we need to keep in mind. A lot of the applications that we are talking require 100% inspection. So the growth of the inspection and the metrology is much higher than the growth of the business or the actual number that we see the 20% that you see in equipment. I think, Rafi, had alluded to a number of times during his discussions. And I think this really plays very well to the actual segment that we are serving.

If you take, for example, heterogeneous integration, this kind of process requires, because it’s a new process, because it is very complex. It requires a lot of inspection and metrology steps, which play very much into our play into our growth. So I think it is more complex, but I hope I was able to put enough color into your question.

[Gus Richard, Northland]

Yah. Yes.

[Rafi Amit, Chief Executive Officer]

I would like to -- so I would like to add one more comment about this, because when you talk about 15% growth in the semiconductor. I assume you talk about, let’s say, number of wafer of equivalent to 12-inch wafers. But actually we inspect the -- not the amount of wafer, but sometime we inspect the complexity of the wafers, assuming that we can see a trend moving from wire bonding to wafer level package.

It’s totally different in wire bonding, maybe nobody make an inspection or make sampling when you move to wafer level package, you do 100% inspection. So technology change definitely change the demand for inspection machines, you have to consider it. The same is the DRAM -- is the -- when we talk about DRAM, again, moving from wire bonding to 3D IC. All these shifting change the demand for equipment, inspection equipment.

[Gus Richard, Northland]

The 15% was referring to unit growth, just to be clear. But thank you. That all was very helpful.

[Rafi Amit, Chief Executive Officer]

Okay.

[Kenny Green, Investor Relations]

Thank you, Gus. And we’ll now move over to Patrick Ho of Stifel. Patrick, your line is open. Go ahead.

[Patrick Ho, Stifel]

Thank you very much and congrats on a nice quarter. I’m not surprised to see the inventory levels increase given the strong demand environment. Maybe Moshe, if you can give a little color whether you’re building any inventory, given some of the supply chain shortages that are in the ecosystem overall. Is the inventory built just specifically on the near-term demand or are you trying to build a little bit of buffer to ensure that the momentum that you’ve built over the last few quarters can continue?

[Rafi Amit, Chief Executive Officer]

Hi, Patrick. Yes. We obviously most of the inventory is for immediate use in the next couple of quarters. But given the shortage and in order to be well prepared for the growth beyond that, we are also building inventory of certain inventory pieces that we feel that might be in shortage. So there are some elements in the inventory which relates to the shortage.

[Patrick Ho, Stifel]

Great. That’s helpful. And maybe as my follow up question for, Ramy, you gave a lot of good color in terms of the heterogeneous integration, some of the applications there that are driving demand as we look into next year. Can you talk about qualitatively the development work you’re doing with a lot of potential customers, because they’re not only just for heterogeneous integration, but a lot of new processes, a lot of new stacking techniques are emerging? And how long does it take in these types of development works to turn it from the engineering side over to high volume buys for the customer?

[Ramy Langer, Chief Operating Officer]

When -- from the customer’s point of view, I think, that these kinds of technologies have been develop for quite a few years, the concepts have been on the drawing development stage requiring, I think, today we are in the stage, where these technologies are ramping to production and believe that within two years to three years, they will be very common in the industry. And a view as we talked about high performance computing will be based on heterogeneous integration.

Today, you already see graphics cards from certain vendors already using these technologies. The high bandwidth memory is definitely a portion of the heterogeneous integration, the fused noise, the CPU is very, very common, right, by quality of venues. So definitely this is something that is already happening and is starting to move away.

And from our point of view, definitely, there is a lot of development. What we have been doing here is a lot of hard work is just working with our customers and there are few customers, working with them on the application. This is something that is ongoing as part of our business.

And so this is I will say one portion and alongside we have a roadmap, understanding exactly what our customers need and I would say two years to three years. And we are developing products and technologies that will meet their requirements. So I believe that we are well positioned to respond to the market needs in the specific applications that we are a major player.

[Patrick Ho, Stifel]

Great. Thank you.

[Kenny Green, Investor Relations]

Thank you, Patrick. Just as a reminder to everyone if you have a question, please raise your hand on the platform. Also the other follow on question, we’ll be happy to take them. And we will give a few moments to see if there are any additional questions. Okay. We have a follow-on question from Charles Shi of Needham. Charles, your line is open.

[Charles Shi, Needham]

Hi. Thanks. Thanks for taking additional questions from me. Just want to go back to some of the comments. So you said the 55% of the systems installed are coming from advanced packaging application, I assume, because of a slightly higher 3D metrology in the mix for advanced packaging applications, but revenue contribution is probably slightly higher than that, I wonder for the full year given that backlog total revenue is probably a little bit above your original expectation whether advanced packaging contribution this year is above the 60% number is sort of indicated that three months ago or is it more approaching 70% for this year? And another one maybe I’ll just ask you together, any update on your macro content inspection side of the business. Is it still expecting to grow in line with a corporate growth this year or do you expect slightly outperformance given the share gain momentum you’re making?

[Rafi Amit, Chief Executive Officer]

And so, I think, and if we look at the Charles let me, I’ll start with the advanced packaging. So we started and we said, we’re about -- just about 50% this year. And I think this portion would probably grow a little as we move along in the year, I think, it will strengthen and it has the potential this year to reach even close to 60%. This segment is very, very strong this year.

So I think we will be anywhere between the 55% to 60% this year. Definitely a little bit above our expectation. And no doubt with the heterogeneous integration and all the Fan-Out and Fan-In activities definitely there is a lot of growth in this part of the industry.

Regarding the front end and what we call the macro inspection portion, I don’t know it will outperform. This year definitely we’re continuing to grow this business. We are a getting to new customers. We are broadening our presence. I’m not sure at this stage, we’re going to outperform what we have done in previous year. It will be definitely be in the double-digit numbers this year.

[Charles Shi, Needham]

Got it. Thank you.

[Kenny Green, Investor Relations]

Thank you, Charles. We now have a question from Raymond Rund of Shaker Investments. Raymond, your line is open.

[Raymond Rund, Shaker Investments]

Thank you very much. I was wondering if you could just give us the quarter’s breakdown in revenue by application, if you gave that earlier, I’m sorry, but I didn’t hear it?

[Rafi Amit, Chief Executive Officer]

Hi, Raymond. We don’t provide specific details of the breakdown of the applications. But as we’ve mentioned before on a very high level, we said that we are around 55% in advance packaging. And we said around 10% on the CMOS Image Sensors and the rest is all other applications that we support.

[Raymond Rund, Shaker Investments]

Thank you. That satisfies the need.

[Rafi Amit, Chief Executive Officer]

Thank you.

[Kenny Green, Investor Relations]

Thank you, Raymond. And I believe that ends our Q&A session. Before I hand over back to Rafi for his closing statements, I want to let you all know that, in the coming hours, we will upload a recording of this conference call to the Investor Relations section of Camtek’s website at www.camtek.com.

I would also like to thank Rafi, Moshe and Ramy for hosting this call with investors. I also want to thank all of you for joining this call and we would appreciate any feedback you have with regard to our new format.

And with that, Rafi, I would like to hand over to you for your closing statement. Please go ahead.

[Rafi Amit, Chief Executive Officer]

Okay. I would like to thank you all for your continued interest in our business. Again, I would like to thank all our employees and my management team for their tremendous performance and we look forward to continue it. To our investor, I thank your long-term support. I look forward to talking with you again next quarter. Thank you and good-bye.