Advanced Vision Technology (A.V.T.) Ltd. 3 Months Report 2016 January 1st - March 31st

Transcription

1 Advanced Vision Technology (A.V.T.) Ltd. 3 Months Report 2016 January 1st - March 31st 1

2 Dear Shareholder, In the first quarter of 2016, total order bookings were $14.8 million, compared with $12.9 million in the same period last year, representing an increase of 14.7%. Total revenues for the first quarter amounted to $12.3 million, compared with $13 million in the same period last year. The higher level of bookings together with the lower total revenues compared with Q1 2015, were translated into an increase in our backlog. Advanced Vision Technology (A.V.T.) Ltd. (which shall be referred hereinafter as the Company or we, our and AVT ) presented a strong order booking performance in Americas, as well as solid performance in EMEA and Asia Pacific. Solid order bookings of our solutions in the packaging, label and commercial markets as well as order booking received from our digital OEM partners supported the first quarter performance. In the Label market, we enjoyed the fruit of the strategic alliance with Erhart & Leimer (E+L), with solid order booking performance of both our Helios and NYSCAN product lines. GAAP operating income in the first quarter of 2016 was $0.24 million, compared with $1.39 million in the same period last year. Net loss in the first quarter of 2016 was $0.38 million compared with net income of $0.87 in the same period last year. Net loss in the first quarter of 2016 was attributable to the accounting treatment of the company s activities to hedge its exposure to fluctuations in the exchange rates of non-usd currencies. In the first quarter, AVT continued to enhance its digital market presence. We installed our first Apollo 30K in Japan, a 100% inspection solution for the HP Indigo Folding Carton press, offering unique workflow mechanism enabling quality control of a single Carton pack. During March and April we showcased the Apollo 20K, Apollo 30K and Helios systems installed on HP Indigo presses at the Dscoop (HP User Group) Americas event in San Antonio, the DSCOOP EMEA in Israel, and 3 other HP Indigo pre-drupa events in Israel. We are pleased with the good order booking performance we had during Q1. However, we were unable to convert enough of this booking into revenues during this quarter and we expect to recognize revenues from this order booking during the remainder of We look forward to the upcoming Drupa exhibition that will commence on May 31st, at which AVT will introduce a set of next-generation solutions and technologies. We see a good business atmosphere in most of the relevant geographies we are active in and a good pipeline for the balance of the year. Sincerely yours, Jaron Lotan, President & CEO 2

3 Financial Results For the first three months of 2016 The following table sets forth consolidated income statements data for each of the three month periods ended March 31, 2016 and March 31, 2015 and for the year ended December 31, 2015 (in thousands U.S. dollars): Three months ended Year ended Revenues 12,344 12,964 51,489 Cost of revenues 6,147 6,075 24,394 Gross profit 6,197 6,889 27,095 Gross margin in % 50.20% 53.14% 52.65% Operating expenses: Research and development 2,241 1,920 8,057 Selling and marketing 2,425 2,348 9,547 General and administrative 1,294 1,235 5,430 Total operating expenses 5,960 5,503 23,034 Operating income 237 1,386 4,061 Financial expense, net (687) (198) (546) Income (loss) before taxes on income (450) 1,188 3,515 Taxes on income (tax benefit) (70) Net income (loss) (380) 866 2,778 3

4 The following table sets forth selected consolidated income statement data for each of the three month periods ended March 31, 2016 and March 31, 2015 and for the year ended December 31, 2015, expressed as a percentage of total revenues: Three months ended Year ended Revenues 100% 100% 100% Cost of revenues Gross profit Operating expenses: Research and development Selling and marketing General and administrative Total operating expenses Operating income Financial expense, net (5.57) (1.53) (1.06) Income (loss) before taxes on income (3.65) Taxes on income (tax benefit) (0.57) Net income (loss) (3.08)

5 The following table sets forth selected NON-GAAP consolidated income data adjusted to exclude non-cash amortization of acquired intangible assets, non-cash finance expense related to future earn-out payments as part of the agreement with E+L and stock based compensation expense ( Non-GAAP ) for the three month periods ended March 31, 2016 and March 31, 2015 and for the year ended December 31, 2015 (in thousands of US dollars): GAAP Adjustments Non GAAP Non GAAP Non GAAP Revenues 12,344 12,344 12,964 51,489 Cost of revenues 6, ,059 6,066 24,147 Gross profit 6,197 6,285 6,898 27,342 Gross margin in % 50.20% 50.92% 53.21% 53.10% Operating expenses: Research and development 2, ,227 1,905 7,994 Selling and marketing 2, ,395 2,323 9,416 General and administrative 1, ,246 1,197 5,249 Total operating expenses 5, ,868 5,425 22,659 Operating income ,473 4,683 Financial expense, net (687) 72 (615) (198) (402) Income (loss) before taxes on income (450) 252 (198) 1,275 4,281 Taxes on income (tax benefit) (70) (70) Net income (loss) (380) 252 (128) 953 3,544 Revenues Revenues are derived primarily from the sale of our systems. Additional revenues are generated through the sale of support services, training and software updates to customers. Revenues in the first three months of 2016 totaled $12.3 million, compared with $13.0 million during the first three months of 2015 and $13.0 million during the last three months of The decrease in total revenues in the first three months of 2016 compared with the same period last year is due primarily to delay in product shipments to customers which increased our backlog. During the first three months of 2016 order booking totaled $14.8 million compared with Q order booking of $12.9 million. The ratio of order booking to revenues in the first three months of 2016 was 120.1% compared with 99.7% in Q

6 As of March 31, 2016, order backlog totaled $23.9 million representing an increase of 39.8% compared with the backlog balance at March 31, 2015 and an increase of 6.7% when compared to Q We estimate that 30%-40% of this backlog will materialize into revenue during Q2 2016, while the majority of the balance will materialize into revenue over the following three quarters and The following chart sets forth a breakdown of revenues by territory for each of the three month periods ended March 31, 2016 and March 31, 2015: During the first three months of 2016, Europe generated 41% of total revenues compared with 37% in the first three months of 2015, while the Americas contributed 43% of total revenues compared with 44% in the first three months of Revenues generated in Asia-Pacific contributed 16% of total revenues compared with 19% in the first three months of Cost of Revenues / Gross Profit Cost of revenues includes materials, labor, manufacturing overhead and an estimation of costs associated with installation, warranty and training. It is our practice to provide a one-year warranty to the end-user. A provision, based on our experience and engineering estimates, is taken to cover costs in connection with such warranty for the 12 month period commencing at the end of installation. Gross margin in the first quarter of 2016 was 50.2% compared with 53.1% in Q Non-GAAP gross margin in the first quarter of 2016 was 50.9% compared with 53.2% for the same period in The decrease in gross margin for the first quarter of 2016 in comparison to the same period in 2015 is due to the decrease in revenues due to fixed cost utilization. 6

7 The following table sets forth selected consolidated expense data for each of the five quarters ended , , , and expressed as a percentage of total revenue: Research and Development During the first three months of 2016, research and development expenses were $2,241 thousand, compared with $1,920 thousand in the first three months of Non-GAAP research and development expenses in the first three months of 2016 increased to $2,227 thousand, compared with $1,905 thousand in the first three months of The increase in research and development expenses compared with the same period last year is due to increase in cost of personnel and consultants. Selling and Marketing During the first three months of 2016 selling and marketing expenses were $2,425 thousand, compared with $2,348 thousand in the respective period of Non-GAAP selling and marketing expenses during the first three months of 2016 were $2,395 thousand, compared with $2,323 thousand in the respective period of The increase compared with the same period last year is attributable primarily to increase in marketing activities, such as exhibitions. General and Administrative During the first three months of 2016 general and administrative expenses were $1,294 thousand, compared with $1,235 thousand in the first three months of

8 Non-GAAP general and administrative expenses in the first three months of 2016 were $1,246 thousand, compared with $1,197 thousand in the first three months of Stock-Based Compensation Starting in January 1, 2006 we record based on ASC 718 share-based payments as expenses based on their fair value at the grant date. The compensation is recorded over the requisite service period. The measurement of the benefit is based on the Monte Carlo simulation. Total stock-based compensation expense recorded during the first three months of 2016 was $78 thousand compared with $75 thousand in the first three months of Operating and Net Income Net loss for the three months ended March 31, 2015 was $380 thousand or loss of $ per share compared with net income of $866 thousand or diluted earnings of $0.14 per share for the same period in Non-GAAP net loss for the three months ended March 30, 2016 was $128 thousand compared with net income of $953 thousand for the same period in Non-GAAP operating income during the first three months of 2016 was $417 thousand compared with $1,473 thousand in the first three months of The decrease in Non-GAAP operating income is primarily due to lower revenue in the first three months of 2016 and higher operating expenses. Consolidated operating expenses were 48.3% of revenues in the first three months of 2016 compared with 42.4% in the first three months of Consolidated Non-GAAP operating margin was 3.4% of revenues in the first three months of 2016 compared with 11.3% in the first three months of EBITDA excluding stock-based compensation expense in the first three months of 2016 was $534 thousand as compared with $1,573 thousand in the first three months of The decrease in operating income is primarily due to lower revenue during Q and the increase of the operating expenses. Financial Expense, net and Financial Instruments Financial expense is comprised of exchange rate differences and bank fess less income from bank deposits. Net financial expense during the first three months of 2016 was $687 thousand compared with $198 thousand during the first three months of Financial expenses for the first three months of 2016 was $728 thousand compared to $218 thousand for the first three months of An income of $41 thousand was generated from interest on bank deposits compared with $20 thousand for the same period in We operate internationally, which gives rise to exposure to market risks, mainly from changes in foreign currency exchange rates. We use financial instruments and derivatives to hedge our future cash flows in 8

9 connection with payroll and related expenses and anticipated revenues which are denominated in non-dollar currencies. The increase in financial expense is attributable primarily to changes in fair value of such financial instruments and derivatives. All derivative instruments are recognized in the balance sheet at their fair value. On the date that we enter into a derivative contract we designate the derivatives which qualify to hedging accounting under GAAP, as either an effective hedging instrument or a non-effective hedging instrument. For derivative financial instruments that are designated and qualify as a cash flow hedge, the effective portions of changes in fair value and time value of the spot component are recorded in other comprehensive income, net of taxes, as gains (losses) in respect of derivative instruments designated for cash flow hedge, and are recognized in the statement of operations when the hedged item affects earnings. Ineffective portions of changes in the fair value of cash flow hedges, if any, are recognized immediately in the statement of operations as financial expenses - net. Changes in the fair value of other derivatives not designated as hedging instruments are recognized in the statement of operations among financial expenses - net and resulted in a loss of $568 thousand, and a gain of $168 thousand in the three months ended March 31, 2016 and 2015, respectively. Cash flows from derivatives that qualify as an effective cash flow hedge are recognized as cash flows from operating activities in the same category as that of the hedged item. In addition to net income, comprehensive income includes gains or losses in respect of derivative instruments designated as cash flow hedges. Total comprehensive income amounted to $347 thousand in the three months ended March 31, No comprehensive income was recorded during the three months ended March 31, Taxes We operate within multiple taxing jurisdictions and are subject to audit in those jurisdictions. In our opinion, an adequate asset and provision for income taxes has been made in the financial statements. This asset and provision takes into consideration potential tax liability in Israel and other jurisdictions. The Company has in the past benefitted from and continues to benefit from certain Israeli government programs and tax legislation, particularly as a result of the status of a significant portion of the Company s existing production facilities in Israel under the Law for the Encouragement of Capital Investments, 1959 (the Investment Law ). According to an amendment to the Investment Law, effective as of August 5, 2013, (the Amendment ), income derived by Preferred Companies from Preferred Enterprises, referred to as Preferred Income, is subject to a uniform tax rate of 16% in 2014 and thereafter (or 9%, in areas designated as Development Zone A). Pursuant to the Amendment, the Company has irrevocably elected to implement the Amendment with respect to its previous Approved and Privileged Enterprises so that income derived therefrom is now treated as Preferred Income. As of January 1, 2014, dividends distributed from Preferred Income would subject the recipient to a 20% tax (or lower, if so provided under an applicable tax treaty), which would generally be withheld by the distributing company. 9

10 Liquidity and Capital Resources As of March 31, 2016 our total current assets were $37.6 million, including a cash and financial investment balance of $14.7 million compared with cash and financial investments of $17.7 million as of December 31, During the first three months of 2016, $762 thousand were provided by operating activities compared with $417 thousand provided by operating activities during the same period in The increase in cash generated from operating activities is due partially to the increase in customer advances and the decrease of the trade receivable balance. Days sales outstanding ( DSO ) in accounts receivable at the end of Q were 77 days compared with 62 days at the end of Q and 75 days as of December 31, Our net capital expenditures on fixed assets were $122 thousand in the first three months of 2016, compared with $177 thousand in the respective period of Effective October, 2014, the District Court in Tel Aviv, Israel, approved the company's request to allow the reduction of its capital by up to US$12 million, after the Israeli Tax Authority informed the District Court that it does not object to the ruling. Therefore, per applicable Israeli law, the board of directors of the company may opt to declare dividends and/or adopt a share buy-back program, which will consume up to an aggregate of US$12 million of the company's capital. On March 18, 2015, the board of directors resolved to distribute an extra-ordinary gross dividend of $1.0 per share which was paid on April 2, 2015, in the total amount of $6.1 million. On March 1, 2016, the board of directors resolved to distribute an extra-ordinary gross dividend of $0.75 per share which was paid on March 22, 2016, in the total amount of $4.6 million. In February 2016, one of our customers in the United States, filed a lawsuit against AVT Inc. claiming for breach of contract and consequential damages. The Company s management believes that the complaint is without merit and intends to contest it vigorously. However, since the lawsuit is in the early stages, the Company is unable to predict the final outcome of this lawsuit. No provision has been made in respect to this claim. 10

11 Employees Our employees are our most valuable asset, driving our commitment to technological leadership and outstanding customer support. Our team repeatedly demonstrates our vision, and has the motivation, innovation and commitment to customer satisfaction that are the key ingredients for growth. As of March 31, 2016, 231 people were employed by AVT worldwide compared with 229 employees on December 31, 2015 and 223 employees on March 31, The breakdown of employees by function is as follows: Our employees are based in the following geographies: 11

12 ADVANCED VISION TECHNOLOGY (A.V.T.) LTD. AND ITS SUBSIDIARIES INTERIM CONSOLIDATED FINANCIAL STATEMENTS AS OF MARCH 31, 2016 IN U.S. DOLLARS UNAUDITED INDEX Page Independent Auditors' Review Report 13 Consolidated Balance Sheets Consolidated Statements of Income and Other Comprehensive Income (Loss) 16 Consolidated Statements of Changes in Shareholders' Equity 17 Consolidated Statements of Cash Flows 18 Notes to Consolidated Financial Statements

13 Kost Forer Gabbay & Kasierer 3 Aminadav St. Tel-Aviv , Israel Tel: Fax: ey.com The Board of Directors Advanced Vision Technology (A.V.T.) Ltd. We have reviewed the condensed consolidated financial information of Advanced Vision Technology (A.V.T.) Ltd. and its subsidiaries, (the "Company") which comprise the consolidated balance sheet as of March 31, 2016, and the related condensed consolidated statements of income and other comprehensive income (loss) for the three-month periods ended March 31, 2016 and 2015, and the condensed consolidated statement of changes in shareholders' equity for the three month period ended March 31, 2016 and the condensed consolidated statements of cash flows for the three month periods ended March 31, 2016 and Management s Responsibility for the Financial Information Management is responsible for the preparation and fair presentation of the condensed consolidated financial information in conformity with U.S. generally accepted accounting principles; this responsibility includes the design, implementation, and maintenance of internal control sufficient to provide a reasonable basis for the preparation and fair presentation of interim financial information in conformity with U.S. generally accepted accounting principles. Auditors' Responsibility Our responsibility is to conduct our reviews in accordance with auditing standards generally accepted in the United States applicable to reviews of interim financial information. A review of interim financial information consists principally of applying analytical procedures and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with auditing standards generally accepted in the United States, the objective of which is the expression of an opinion regarding the financial information. Accordingly, we do not express such an opinion. Conclusion Based on our reviews, we are not aware of any material modifications that should be made to the condensed consolidated financial information referred to above for it to be in conformity with U.S. generally accepted accounting principles. Report on Condensed Consolidated Financial Statements as of December 31, 2015 and for the year then ended We have previously audited, in accordance with auditing standards generally accepted in the United States, the consolidated balance sheet of the Company as of December 31, 2015, and the related consolidated statements of income and other comprehensive income (loss), changes in shareholders equity, and cash flows for the year then ended; and we expressed an unmodified audit opinion on those audited consolidated financial statements in our report dated March 1, In our opinion, the accompanying condensed consolidated financial statements of the Company as of December 31, 2015, and for the year then ended are consistent, in all material respects, with the consolidated financial statements from which they have been derived. Tel-Aviv, Israel May 9, 2016 KOST FORER GABBAY & KASIERER A Member of Ernst & Young Global

14 ADVANCED VISION TECHNOLOGY (A.V.T.) LTD. AND ITS SUBSIDIARIES CONSOLIDATED BALANCE SHEETS U.S. dollars in thousands ASSETS March 31, December 31, Unaudited CURRENT ASSETS: Cash and cash equivalents $ 4,681 $ 7,665 Short-term deposits 10,062 10,025 Trade receivables 10,386 10,657 Inventories 7,733 7,136 Other accounts receivable and prepaid expenses 4,743 4,452 Total current assets 37,605 39,935 LONG-TERM ASSETS: Deferred income taxes 1,844 1,899 Severance pay fund 2,543 2,488 Total long-term assets 4,387 4,387 PROPERTY AND EQUIPMENT, NET 1,437 1,466 INTANGIBLE ASSETS, NET 2,727 2,829 GOODWILL Total assets $ 46,949 $ 49,410 The accompanying notes are an integral part of the interim consolidated financial statements

15 CONSOLIDATED BALANCE SHEETS U.S. dollars in thousands (except share and per share data) ADVANCED VISION TECHNOLOGY (A.V.T.) LTD. AND ITS SUBSIDIARIES LIABILITIES AND SHAREHOLDERS' EQUITY March 31, December 31, Unaudited CURRENT LIABILITIES: Trade payables $ 3,475 $ 2,873 Employees and payroll accruals 2,758 3,123 Customer advances and deferred revenues 2,747 2,148 Accrued expenses and other liabilities 7,059 5,991 Total current liabilities 16,039 14,135 LONG-TERM LIABILIITIES: Accrued severance pay 3,934 3,832 Other long-term liability 1,235 1,208 5,169 5,040 SHAREHOLDERS' EQUITY: Share capital: Ordinary shares of New Israeli Shekels (NIS) 2 par value: 15,000,000 shares authorized at March 31, 2016 and December 31, 2015; 6,921,802 and 6,913,627 shares issued at March 31, 2016 and December 31, 2015 respectively; 6,102,680 and 6,094,505 shares outstanding at March 31, 2016 and December 31, 2015, respectively 3,747 3,743 Additional paid-in capital 65,860 65,748 Treasury shares at cost - 819,122 shares as of March 31, 2016 and December 31, 2015 (6,902) (6,902) Accumulated other comprehensive income (loss) 319 (28) Accumulated deficit (37,283) (32,326) Total shareholders' equity 25,741 30,235 Total liabilities and shareholders' equity $ 46,949 $ 49,410 The accompanying notes are an integral part of the interim consolidated financial statements. May 9, 2016 Date of approval of the financial statements Jaron Lotan CEO Udi Bar Sela CFO

16 ADVANCED VISION TECHNOLOGY (A.V.T.) LTD. AND ITS SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME AND OTHER COMPREHENSIVE INCOME (LOSS) U.S. dollars in thousands (except share and per share data) Three months ended March 31, Year ended December 31, Unaudited Revenues $ 12,344 $ 12,964 $ 51,489 Cost of revenues 6,147 6,075 24,394 Gross profit 6,197 6,889 27,095 Operating expenses: Research and development 2,241 1,920 8,057 Selling and marketing 2,425 2,348 9,547 General and administrative 1,294 1,235 5,430 Total operating expenses 5,960 5,503 23,034 Operating income 237 1,386 4,061 Financial expense, net (687) (198) (546) Income (loss) before taxes on income (450) 1,188 3,515 Taxes on income (tax benefit) (70) Net income (loss) $ (380) $ 866 $ 2,778 Other comprehensive income (loss): Unrealized income (loss) on foreign currency cash flow hedge, net of tax (28) Total comprehensive income (loss) $ (33) $ 866 $ 2,750 Basic earnings (loss) per ordinary share $ (0.06) $ 0.14 $ 0.46 Diluted earnings (loss) per ordinary share $ (0.06) $ 0.14 $ 0.45 The accompanying notes are an integral part of the interim consolidated financial statements

17 ADVANCED VISION TECHNOLOGY (A.V.T.) LTD. AND ITS SUBSIDIARIES CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY U.S. dollars in thousands Share capital Additional paid-in capital Treasury shares at cost Accumulated other comprehensive income (loss) Accumulated deficit Total shareholders' equity Balance as of January 1, ,714 65,150 (6,902) - (29,044) 32,918 Issuance of shares upon exercise of options Stock-based compensation related to options granted to employees Dividend paid to shareholders (6,060) (6,060) Unrealized loss on foreign currency cash flow hedge, net of tax (28) - (28) Net income ,778 2,778 Balance as of December 31, ,743 65,748 (6,902) (28) (32,326) 30,235 Issuance of shares upon exercise of options Stock-based compensation related to options granted to employees Dividend paid to shareholders (4,577) (4,577) Unrealized income on foreign currency cash flow hedge, net of tax Net loss (380) (380) Balance as of March 31, 2016 (unaudited) $ 3,747 $ 65,860 $ (6,902) $ 319 $ (37,283) $ 25,741 The accompanying notes are an integral part of the interim consolidated financial statements

18 ADVANCED VISION TECHNOLOGY (A.V.T.) LTD. AND ITS SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS U.S. dollars in thousands Three months ended March 31, Unaudited Year ended December 31, Cash flows from operating activities: Net income (loss) $ (380) $ 866 $ 2,778 Adjustments to reconcile net income (loss) to net cash provided by operating activities: Stock-based compensation related to options granted to employees Depreciation of property and equipment Amortization of intangible assets Valuation of earn-out Decrease (increase) in trade receivables, net 271 (968) (2,487) Revaluation of short-term deposits (37) 23 3 Decrease (increase) in inventories (597) 258 (1,059) Decrease (increase) in other accounts receivable and prepaid expenses (595) Decrease (increase) in deferred income taxes, net (38) Increase (decrease) in trade payables 602 (615) (237) Increase (decrease) in employees and payroll accruals (365) Increase (decrease) in customer advances and deferred revenues 599 (329) (542) Increase in accrued expenses and other liabilities Increase (decrease) in accrued severance pay, net 47 (43) (31) Net cash provided by operating activities Cash flows from investing activities: Proceeds from maturity of short-term deposits - - 1,140 Purchase of property and equipment (122) (177) (619) Acquisition of inspection activity - - (2,353) Net cash used in investing activities (122) (177) (1,832) Cash flows from financing activities: Dividend paid to shareholders ( net of withholding tax) (3,662) - (6,060) Proceeds from exercise of options granted to employees Net cash provided by (used in) financing activities (3,624) 101 (5,779) Increase (decrease) in cash and cash equivalents (2,984) 341 (7,383) Cash and cash equivalents at the beginning of the year 7,665 15,048 15,048 Cash and cash equivalents at the end of the year $ 4,681 $ 15,389 $ 7,665 Supplemental disclosure of cash flow information: Cash paid during the year for income taxes $ 240 $ 59 $ 701 Non cash transactions: Earn-out payment obligations incurred as part of the acquisition of the inspection activity - - $ 1,432 Dividend declared and payable $ 915 $ 6,060 - The accompanying notes are an integral part of the interim consolidated financial statements

19 ADVANCED VISION TECHNOLOGY (A.V.T.) LTD. AND ITS SUBSIDIARIES NOTE 1:- GENERAL Advanced Vision Technology (A.V.T.) Ltd. ("A.V.T.") and its wholly-owned subsidiaries ("the Company") design, develop, manufacture, market and support an advanced video-based print inspection system that automatically detects defects in various types of printing processes as well as closed loop color control (CLC) systems, color management and reporting software, and remote digital ink fountain control systems to leading commercial printers and press manufacturers worldwide. NOTE 2:- SIGNIFICANT ACCOUNTING POLICIES The significant accounting policies applied in the annual financial statements of the Company as of December 31, 2015 are applied consistently in these financial statements. In 2016 the Company elected to present other comprehensive income together with net income in one statement. Comparative data for 2015 were re-presented accordingly. NOTE 3: UNAUDITED INTERIM CONSOLIDATED FINANCIAL STATEMENTS The accompanying unaudited interim consolidated financial statements have been prepared in conformity with U.S. generally accepted accounting principles relating to condensed interim financial information. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three month period ended March 31, 2016 are not necessarily indicative of the results that may be expected for the year ended December 31, These unaudited interim consolidated financial statements should be read in conjunction with the consolidated financial statements and related notes included in our Annual Report for the year ended December 31, NOTE 4: SHAREHOLDERS EQUITY On March 1, 2016, the board of directors resolved to distribute an extra-ordinary dividend of $0.75 per share which was paid on March 22,