Camtek Ltd. — Annual Report 2007

Feb 20, 2008

Camtek Ltd. P.O.Box 544, Ramat Gabriel Industrial Park Migdal Ha’Emek 23150, ISRAEL Tel: +972 (4) 604-8100 Fax: +972 (4) 644-0523 E-Mail: Info@camtek.co.il Web site: http://www.camtek.co.il

20-2-07

FOR IMMEDIATE RELEASE

CAMTEK ANNOUNCES 2007 FOURTH QUARTER AND FULL YEAR RESULTS

Sequential growth in revenues and profitability

MIGDAL HAEMEK, Israel – February 20, 2008 – Camtek Ltd. (NASDAQ and TASE: CAMT), today announced results for the fourth quarter and year ended December 31, 2007.

The Company reported revenues for the fourth quarter of 2007 of $21.0 million, equivalent to the $21.0 million reported in the fourth quarter of 2006, and an increase of 4% sequentially from $20.1 million in the third quarter of 2007.

Gross profit margin for the fourth quarter of 2007 was 43.7%, as compared to 44.5% for the fourth quarter of 2006, and 37.6% for the third quarter of 2007.

Income before tax for the fourth quarter of 2007 was $0.2 million. This compares to a loss before tax of $2.5 million in the fourth quarter of 2006. For the previous quarter in 2007, income before tax was $0.2 million.

Interpretation No. 48, “Accounting for Uncertainty in Income Taxes-an interpretation of FASB Statement No. 109” (“FIN 48”), was effective for the Company, for the first time, in fiscal year 2007. The Company has not yet completed a thorough review of the application of FIN 48 as it relates to its subsidiaries abroad for the determination of its effects, if any, on its results of operations and financial position. The Company will, if necessary, issue a supplemental press release following the completion of its analysis of the effects of FIN 48 to report any material adjustment to its net loss and loss per share for the year ended December 31, 2007.

Net income (without impact of FIN 48 review) for the fourth quarter of 2007 was $0.3 million, or $0.01 per diluted share. This compares to a net loss of $2.2 million, or $0.07 per diluted share, in the fourth quarter of 2006. For the previous quarter in 2007, net income (without impact of FIN 48 review) was $87 thousand, or $0.00 per diluted share.

The Company reported a positive operating cash flow of $2.7 million in the fourth quarter.

Revenues for the year ended December 31, 2007, were $71.0 million, a decrease of 29% from $100.1 million reported for the year ended December 31, 2006. Gross profit margin for 2007 was 40.9%, compared to 51.6% in 2006. Net loss (without impact of FIN 48 review) for the year ended December 31, 2007 was $7.5 million, or $0.25 per diluted share, compared to a net income of $11.6 million, or $0.39 per diluted share, for the year ended December 31, 2006.

“The fourth quarter continued and built on the positive trend that we resumed in the third quarter. We are very pleased to present much improved margins and a positive cash flow,” commented Rafi Amit, Camtek’s CEO. “We are seeing an increase in demand for our systems

for the semiconductor manufacturing and packaging industry, and we believe this is very sustainable going forward. Our sales to the PCB industry have remained solid throughout the second half of the year, and we see it as indicative of the warm acceptance of our new generation of products as well as the strengthening of our competitive position in this market.”

Mr. Amit continued, “In line with our long-term strategy, we are maintaining our on-going R&D investment in continually enhancing our products to deliver increasing value to our customers. In 2007 we enhanced the Falcon line with even higher throughput and detection ability and introduced a new generation of AOI and Verification systems to the PCB market. In 2008, we plan to introduce additional products and expand our market coverage.”

Mr. Amit concluded, “Assuming that the stream of incoming orders from the semiconductors and PCB industries remains in its current course, we expect revenues for the first quarter of 2008 to come at a similar level to that we reported today.”

Camtek will host a conference call today, February 20, at 9:00am ET. Rafi Amit, Chief Executive Officer, and Ronit Dulberg, Chief Financial Officer will host the call and will be available to answer questions after presenting the results.

To participate, please call one of the following telephone numbers at least 10 minutes before the start of the call, referencing the “Camtek fourth quarter 2007 results conference call”.

US toll free: 1 888 935 4577 at 9:00 a.m. Eastern Time Israel toll free: 1 809 246 002 at 4:00 p.m. Israel Time International: +1 718 354 1389

For those unable to participate, the teleconference will be available for replay on Camtek’s website www.camtek.co.il beginning 24 hours after the call.

ABOUT CAMTEK LTD.

With headquarters in Migdal Ha'Emek Israel, Camtek Ltd., designs, develops, manufactures, and markets automatic optical inspection systems and related products. Camtek’s automatic inspection systems are used to enhance both production processes and yield for manufacturers in the printed circuit board industry, the high density interconnect substrate industry and the semiconductor manufacturing and packaging industry.

This press release is available at www.camtek.co.il

Contact Details

CAMTEK IR INTERNATIONAL Ronit Dulberg, CFO GK International IR Tel: +972-4-604-8308 Ehud Helft / Kenny Green Fax: +972-4-604 8300 Tel: (US) 1 646 201 9246 Mobile: +972-54-9050776 info@gkir.com ronitd@camtek.co.il

This press release may contain projections or other forward-looking statements regarding future events or the future performance of the Company. These statements are only predictions and may change as time passes. We do not assume any obligation to update that information. Actual events or results may differ materially from those projected, including as a result of changing industry and market trends, reduced demand for our products, the timely development of our new products and their adoption by the market, increased competition in the industry, price reductions as well as due to risks identified in the documents filed by the Company with the SEC.

Consolidated Balance Sheets

(in thousands, except share data)

ASSETSCURRENT ASSETSCash and cash equivalentsMarketable securitiesAccounts receivable, netInventoriesDue from affiliatesOther current assetsDeferred taxTotal current assetsFixed assets, netMarketable securitiesDeferred taxOther assetsTotal assetsLIABILITIESCURRENT LIABILITIESAccounts payable –tradeDue to affiliatesOther current liabilitiesTotal current liabilitiesConvertible loanLiability for employee severance benefitsTotal liabilitiesSHAREHOLDERS’ EQUITYOrdinary shares NIS 0.01 par value, authorized 100,000,000shares,issued 31,145,334 in 2007 and 31,052,474 in 2006,outstanding30,133,715 in 2007 and 30,040,855 in 2006.Additional paid-in capitalAccumulated other comprehensive lossUnrealized loss on marketable securitiesRetained earningsTreasury stock, at cost (1,011,619 shares in 2007 and 2006)Total shareholders' equityTotal liabilities and shareholders' equityNote: Without impact of FIN 48 review

DecemberDecember20072006U.S. Dollars18,60123,3581,3952,09923,50029,43434,24341,4142511802,6232,372656580,67898,92215,32510,7291,075-3803699937862,4481,15598,451110,8067,96011,80186681411,23312,83120,05925,4465,0005,00026822225,32730,66813213259,87859,420-(1)14,10721,58074,11781,131(993)(993)73,12480,13898,451110,806

Consolidated Statements of Operations

(in thousands, except share data)

(in thousands, except share data)
RevenuesCost of revenuesGross profitResearch and development costsSelling, general and administrativeexpensesOperating income (loss)Financial income (expenses), netIncome (loss) before income taxesIncome taxNet income (loss)Net income (loss) per ordinaryshare:BasicDilutedWeighted average number ofordinaryshares outstanding:BasicDiluted	Three Months endedDecember 31,20072006U.S. dollars21,02821,00611,84111,6669,1879,3402,9633,6626,0988,1209,06111,782126(2,442)66(115)192(2,557)55333247(2,224)0.01(0.07)0.01(0.07)30,21230,20030,21230,200	Year endedDecember 31,
		20072006U.S. dollars	2006
	21,02811,8419,1872,9636,0989,06112666192552470.010.0130,21230,212	70,96941,94029,02912,11124,11936,230(7,201)(128)(7,329)(144)(7,473)(0.25)(0.25)30,14530,145	100,05548,442
			51,613
			11,83127,850
			39,68111,932
			(288)
			11,644
			(41)
			11,603
			0.40
			0.39
			29,176
			29,553

Note: Without impact of FIN 48 review