Sarine Reports Record Results For Q1

(IDEX Online News) – Sarine Technologies Ltd, a worldwide leader in the development, manufacturing, marketing and sale of precision technology products for the planning, processing, evaluation and measurement of diamonds and gems, has announced record financial results for the first quarter ended March 31.

Since Sarine launched its inclusion mapping systems in 2009, growing global demand for it has underpinned the accelerated market penetration of the Galaxy family of products and services. In the first quarter, the group continued to see robust orders for Galaxy family systems, especially of the Solaris model.

With deliveries of 14 systems to customers and the deployment of one Galaxy system to its new service centre in New York during the quarter, the group boosted its total installed base to just under 160 as of 31 March 2014. The expanded Galaxy family related recurrent revenue base, together with increased sales of Sarine’s traditional planning products, with over 1,000 systems and software-only workstations delivered during the quarter, drove first quarter revenue up by 21 percent to $24.4 million, of which over 30 percent was recurrent in nature.

Bolstered by the growth in sales volume and recurring revenue, gross profit climbed 22 percent to $17.8 million and gross profit margin improved to 73 percent. After accounting for additional research and development expenses to support the group's business development in the polished diamond sector, the group still reported record profit from operations of $10.9 million.

Due to the enactment of higher tax rates in Israel for 2014, income tax expenses jumped 61 percent from $1.1 million in the first quarter of 2013 to $1.8 million in the first quarter of 2014. Notwithstanding this, the group also achieved record net profit of $9.1 million, an increase of 13 percent over the previous corresponding period.

“Currently, the Galaxy family systems have no true competition in the marketplace. Our world-leading integrative mapping solution and extensive installed base of rough diamond planning systems also present a strong penetration barrier to any would be competition for our inclusion mapping products and services. We will continue to leverage on this competitive advantage to accelerate the deliveries of our Galaxy/Solaris systems,” said Chief Executive Officer Uzi Levami.

The latest addition to the family, Galaxy Ultra, commenced commercial services in India and Israel in early 2014. The group will extend Galaxy Ultra services to additional service centers later this year and begin deliveries to customers in the third quarter. Given the prevailing favorable business conditions, Sarine said it expects the recurring revenue stream from its growing installed base of Galaxy family systems to continue expanding throughout this year.

“On the polished diamond business front, the Group’s marketing efforts for Sarine Light in the US, Taiwan and Korea are progressing with launch customers likely to be signed in the second quarter. The group views FY2014 as an important transition year for its business development in the polished diamond trade sector as marketing efforts for Sarine Light will be expanded to HK and China, to be followed by additional Asian markets (e.g., Thailand, Malaysia, Indonesia and Singapore) in late 2014 or early 2015.

“The group expects significant revenue contribution from Sarine Light in FY2015 and thereafter. Following successful tests, the group has also launched the Sarine Loupe by offering the innovative imaging services on a limited basis in India and Israel. This service will expand accordingly with the increase in system production during upcoming months and lead to the full commercialization of Sarine Loupe in the third quarter of 2014.”