Orbotech Reports Second Quarter 2016 Results

About Orbotech Ltd.

Orbotech Ltd. (NASDAQ: ORBK) is a global innovator of enabling technologies used in the manufacture of the world's most sophisticated consumer and industrial products throughout the electronics and adjacent industries.  The Company is a leading provider of yield enhancement and production solutions for electronics reading, writing and connecting, used by manufacturers of printed circuit boards, flat panel displays, advanced packaging, micro-electro-mechanical systems and other electronic components.  Today virtually every electronic device in the world is produced using Orbotech systems.  For more information, visit http://www.orbotech.com.

Cautionary Statement Regarding Forward-Looking Statements

Except for historical information, the matters discussed in this press release are forward-looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995.  These statements relate to, among other things, future prospects, developments and business strategies and involve certain risks and uncertainties.  The words "anticipate," "believe," "could," "will," "plan," "expect" and "would" and similar terms and phrases, including references to assumptions, have been used in this press release to identify forward-looking statements.  These forward-looking statements are made based on management's expectations and beliefs concerning future events affecting Orbotech and are subject to uncertainties and factors relating to Orbotech's operations and business environment, all of which are difficult to predict and many of which are beyond the Company's control.  Many factors could cause the actual results to differ materially from those projected including, without limitation, cyclicality in the industries in which the Company operates, the Company's production capacity, timing and occurrence of product acceptance (the Company defines 'bookings' and 'backlog' as purchase arrangements with customers that are based on mutually agreed terms, which, in some cases for bookings and backlog, may still be subject to completion of written documentation and may be changed or cancelled by the customer, often without penalty), fluctuations in product mix, within and among divisions, worldwide economic conditions generally, especially in the industries in which the Company operates, the timing and strength of product and service offerings by the Company and its competitors, changes in business or pricing strategies, changes in the prevailing political and regulatory framework in which the relevant parties operate, including as a result of the so-called 'Brexit' process, or in economic or technological trends or conditions, including currency fluctuations, inflation and consumer confidence, on a global, regional or national basis, the level of consumer demand for sophisticated devices such as smartphones, tablets and other electronic devices as well as automobiles, the Company's global operations and its ability to comply with varying legal, regulatory, exchange, tax and customs regimes, the Company's ability to achieve strategic initiatives, including related to its acquisition strategy, the Company's debt and corporate financing activities; the final timing and outcome (each, expected in mid-to-late 2016), and impact of the criminal matter and ongoing investigation in Korea, including any impact on existing or future business opportunities in Korea and elsewhere, any civil actions related to the Korean matter brought by third parties, including the Company's customers, which may result in monetary judgments or settlements, expenses associated with the Korean Matter, ongoing or increased hostilities in Israel and the surrounding areas, and other risks detailed in the Company's SEC reports, including the Company's Annual Report on Form 20-F for the year ended December 31, 2015, and subsequent SEC filings.  The Company assumes no obligation to update the information in this press release to reflect new information, future events or otherwise, except as required by law.

Non-GAAP Financial Measures

Non-GAAP net income, non-GAAP net income margin, non-GAAP net income per share detailed in the Reconciliation exclude charges, income or losses, as applicable, related to one or more of the following: (i) equity-based compensation expenses; (ii) certain items associated with acquisitions, including amortization of intangibles and acquisition costs; (iii) certain items associated with sale or disposition of businesses; (iv) tax impact; and/or (v) share in losses of associated company; and/or (vi) charges associated with the financing activities related to the retirement of the abovementioned 2014 Credit Agreement.

The Company uses the non-GAAP measures indicated in the Reconciliation to supplement the Company's financial results presented on a GAAP basis.  These non-GAAP measures exclude equity based compensation expenses, amortization of intangible assets, share in losses/profits of associated companies, as well as certain financial and other expenses and items that are believed to be helpful in understanding and comparing past operating and financial performance with current results.  Management uses all of the non-GAAP measures to evaluate the Company's operating and financial performance in light of business objectives and for planning purposes.  These measures are not in accordance with GAAP and may differ from non-GAAP methods of accounting and reporting used by other companies.  Orbotech believes that these measures enhance investors' ability to review the Company's business from the same perspective as the Company's management and facilitate comparisons with results for prior periods.  In addition, these non-GAAP measures are among the primary factors management uses in planning for and forecasting future periods.  However, the non-GAAP measures presented are subject to limitations as an analytical tool because they exclude certain recurring items (such as, equity compensation, interest expense and amortization of intangible assets) as described below and in the Reconciliation.  The presentation of this additional non-GAAP information should not be considered in isolation or as a substitute for net income; net income attributable to Orbotech Ltd. or earnings per share prepared in accordance with GAAP, and should be read only in conjunction with the Company's consolidated financial statements prepared in accordance with GAAP.  For a quantification of the adjustments made to comparable GAAP measures, please see the Reconciliation.

The effect of equity-based compensation expenses has been excluded from the non-GAAP measures.  Although equity-based compensation is a key incentive offered to employees, and the Company believes such compensation contributed to the revenues earned during the periods presented and also believes it will contribute to the generation of future period revenues, the Company continues to evaluate its business performance excluding equity based compensation expenses.  Equity-based compensation expenses will recur in future periods.

The effects of amortization of intangible assets have also been excluded from the measures.  This item is inconsistent in amount and frequency and is significantly affected by the timing and size of acquisitions and dispositions.  Investors should note that the use of intangible assets contributed to revenues earned during the periods presented and will contribute to future period revenues as well.  Amortization of intangible assets will recur in future periods and the Company may be required to record impairment charges in the future.  The Company believes that it is useful for investors to understand the effects of these items on total operating expenses.

The effects of a sale or disposition of a business have also been excluded from the non-GAAP measures. This item is inconsistent in amount and frequency. By excluding the item from the non-GAAP measures, management is better able to evaluate the Company's ability to utilize its existing businesses and estimate the long-term value that remaining businesses will generate for the Company. Furthermore, the Company believes that this adjustment correlates more closely with the sustainability of the Company's operating performance.

Adjusted EBITDA is also a non-GAAP financial measure.  The Company defines adjusted EBITDA as net income attributable to Orbotech Ltd., further adjusted, in addition to the items described above, to exclude taxes on income, financial expenses (income) – net and depreciation.  The Company presents adjusted EBITDA because it considers it to be an important supplemental measure and believes it is frequently used by securities analysts, investors and other interested parties in the evaluation of companies in Orbotech's industry.  Adjusted EBITDA margin is a measurement of Orbotech's adjusted EBITDA as a percentage of its revenues.  Although the Company believes its presentation of adjusted EBITDA is useful, its adjusted EBITDA measure may not be comparable to similarly named measures presented by other companies.

For more information about all of the foregoing items, see the Reconciliation, the Company's Annual Report on Form 20-F filed with the SEC for the year ended December 31, 2015 and its other SEC filings.

Company Contact:
Rami Rozen
Director of Investor Relations

Orbotech Ltd

Tel: +972-8-942 3582

Email Contact

 

Tally Kaplan Porat

Head of Corporate Marketing

Orbotech Ltd

Tel: +972-8-942 3603

Email Contact

 

ORBOTECH LTD.

CONDENSED CONSOLIDATED BALANCE SHEETS

U. S. dollars in thousands

 (Unaudited)


June 30



December 31



2016



2015


ASSETS












CURRENT ASSETS:






    Cash and cash equivalents 

$     177,767



$      162,102


    Restricted cash 

12,816



13,617


Marketable securities




409


    Short-term bank deposits

3,062



9,550


    Accounts receivable:






      Trade

291,416



284,192


      Other

47,555



55,906


    Inventories

134,365



133,250


              T o t a l  current assets

666,981



659,026








INVESTMENTS AND NON-CURRENT ASSETS:






    Marketable securities

5,934



5,637


    Funds in respect of employee rights upon retirement

8,425



8,130


    Deferred income taxes 

20,306



20,147


    Equity method investee and other receivables

10,051



10,144



44,716



44,058








PROPERTY, PLANT AND EQUIPMENT, net

61,155



58,982








OTHER INTANGIBLE ASSETS, net

96,500



109,635








GOODWILL

170,177



170,177








              T o t a l  assets

$  1,039,529



$   1,041,878














LIABILITIES AND EQUITY












CURRENT LIABILITIES:






   Current maturities of long-term loan

$       20,000



$        13,937


    Accounts payable and accruals:






      Trade

61,365



65,037


      Other

97,283



94,930


    Deferred income

27,738



29,282


              T o t a l  current liabilities

206,386



203,186








LONG-TERM LIABILITIES:






    Long-term loan, net

88,031



218,372


    Liability for employee rights upon retirement

22,835



21,535


    Deferred income taxes

15,465



16,984


    Other tax liabilities

10,753



14,045


              T o t a l  long-term liabilities

137,084



270,936








              T o t a l  liabilities

343,470



474,122








EQUITY: 






    Share capital 

2,363



2,209


    Additional paid-in capital

412,842



306,612


    Retained earnings

389,815



360,721


    Accumulated other comprehensive loss

(8,487)



(1,506)



796,533



668,036


    Less treasury shares, at cost

(99,539)



(99,539)


               T o t a l  Orbotech Ltd. shareholders' equity

696,994



568,497


    Non-controlling interest

(935)



(741)


               T o t a l  equity

696,059



567,756








              T o t a l  liabilities and equity

$  1,039,529



$   1,041,878


 

 

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

U.S. dollars in thousands (except per share data)

 (Unaudited)








6 months ended


3 months ended


June 30


June 30


2016


2015


2016


2015









Revenues 

$386,407


$373,779


$195,980


$188,995

Cost of revenues

210,895


204,938


106,071


103,231

Gross profit

175,512


168,841


89,909


85,764









Operating expenses: 








Research and development, net

52,704


50,819


26,135


25,040

Selling, general and administrative

61,289


59,027


31,266


30,055

Equity in earnings of Frontline

(1,677)


(2,222)


(1,041)


(1,351)

Amortization of intangible assets

13,135


16,028


6,840


7,110

Gain from the sale of the Thermal activity



(628)




(628)

Total operating expenses

125,451


123,024


63,200


60,226









Operating income

50,061


45,817


26,709


25,538

Financial expenses - net

14,147


12,268


9,483


5,796









Income before taxes on income

35,914


33,549


17,226


19,742

Taxes on income

6,714


8,368


3,869


6,616

Share in losses of equity method investee

300


215


150


115









Net income

28,900


24,966


13,207


13,011

Net gain (loss) attributable to 








the non-controlling interests

(194)


161


(133)


8









Net income attributable to Orbotech Ltd. 

$29,094


$24,805


$13,340


$13,003

















Basic earnings per share

$0.67


$0.59


$0.30


$0.31









Diluted earnings per share

$0.65


$0.58


$0.30


$0.30

















Weighted average number of shares (in thousands)








used in computation of:








Basic earnings per share

43,603


42,120


44,019


42,279

Diluted earnings per share

44,527


43,110


44,992


43,360

 

 

ORBOTECH LTD.

RECONCILIATION OF GAAP TO NON-GAAP RESULTS

U.S. dollars in thousands (except per share data)

 (Unaudited)


















6 months ended


3 months ended


June 30


June 30


2016


2015


2016


2015

















Reported operating income on GAAP basis

$50,061


$45,817


$26,709


$25,538

Equity-based compensation expenses

2,958


1,749


1,278


860

Amortization of intangible assets

13,135


16,028


6,840


7,110

Gain from the sale of the Thermal activity



(628)




(628)

Non-GAAP operating income

$66,154


$62,966


$34,827


$32,880









Reported net income attributable to Orbotech Ltd. on GAAP basis

$29,094


$24,805


$13,340


$13,003

Equity- based compensation expenses

2,958


1,749


1,278


860

Amortization of intangible assets

13,135


16,028


6,840


7,110

Gain from the sale of the Thermal activity



(628)




(628)

Tax adjustments re non-GAAP adjustments

(1,523)


1,511


(794)


2,460

Share in losses of associated company

300


215


150


115

Charges associated with the retirement of the 2014 Credit Agreement

6,228




6,228



Non-GAAP net income

$50,192


$43,680


$27,042


$22,920









GAAP earnings per diluted share

$0.65


$0.58


$0.30


$0.30









Non-GAAP earnings per diluted share

$1.13


$1.01


$0.60


$0.53









Shares used in earnings per diluted share calculation-in thousands

44,527


43,110


44,992


43,360

 

 

ORBOTECH LTD.

RECONCILIATION OF GAAP NET INCOME TO ADJUSTED EBITDA

U.S. dollars in thousands  

 (Unaudited)


















6 months ended


3 months ended


June 30


June 30


2016


2015


2016


2015

















Net income attributable to Orbotech Ltd. on GAAP basis

$29,094


$24,805


$13,340


$13,003

Minority interest and equity losses 

106


376


17


123

Tax expenses

6,714


8,368


3,869


6,616

Financial expenses

14,147


12,268


9,483


5,796

Depreciation and amortization 

21,398


23,518


11,147


10,858

Gain from the sale of the Thermal activity



(628)




(628)

Equity-based compensation expenses

2,958


1,749


1,278


860

ADJUSTED EBITDA

$74,417


$70,455


$39,134


$36,628









 

 

ORBOTECH LTD.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

U.S. dollars in thousands


 (Unaudited)






6 months ended


3 months ended




June 30


June 30




2016


2015


2016


2015

CASH FLOWS FROM OPERATING ACTIVITIES:


















Net income

$       28,900


$       24,966


$            13,207


$              13,011

Adjustment to reconcile net income to net cash 









provided by operating activities:









Depreciation and amortization

21,398


23,518


11,147


10,858


Compensation relating to equity awards granted to 










employees and others - net

2,958


1,749


1,278


860


Decrease (increase) in liability for employee rights upon retirement, net

879


(207)


632


(383)


Long- term loans discount amortization

1,866


397


1,566


277


Deferred financing costs amortization

5,460


1,038


4,662


726


Deferred income taxes

(1,678)


803


(464)


(1,531)


Amortization of premium and accretion of discount on marketable










Securities, net

94


99


28


49


Equity in earnings of Frontline, net of dividend received 

839


602


650


(34)


Other

388


614


238


115


Gain from the sale of the Thermal activity 



(628)




(628)


Decrease (increase) in accounts receivable:










Trade

(7,224)


5,558


(2,899)


7,226



Other

(3,703)


569


(986)


(2,524)


Increase (decrease) in accounts payable and accruals:










Trade

(3,672)


(12,887)


(5,310)


(15,198)



Deferred income

(1,544)


(7,559)


(2,394)


(6,713)



Other

(6,396)


(1,993)


(652)


7,915


Decrease (increase) in inventories

(1,115)


10,274


1,015


11,246

Net cash provided by operating activities 

37,450


46,913


21,718


25,272











CASH FLOWS FROM INVESTING ACTIVITIES:


















Purchase of property, plant and equipment

(12,115)


(7,119)


(6,358)


(3,937)

Consideration received for the sale of the Thermal activity 

12,000


10,000


12,000


10,000

Withdraw of (investment in) bank deposits

6,488


1,465


(19)


(1,511)

Purchase of marketable securities

(2,244)


(154)


(976)


(154)

Redemption of marketable securities

2,337




1,180



Investment in equity method investee 

(1,000)


(1,500)





Decrease (increase) in restricted cash 

801


(2,979)


(1,442)


265

Increase in funds in respect of employee









rights upon retirement

126


393


66


393

Net cash provided by investing activities

6,393


106


4,451


5,056











CASH FLOWS FROM FINANCING ACTIVITIES:








Repayment of long-term loan 

(239,635)


(20,750)


(214,028)


(20,000)

Bank loan, net of $2 millions financing costs

108,031




108,031



Issuance of shares, net 

99,962




99,962



Employee stock options exercised

3,464


6,161


1,389


4,009

Net cash used in financing activities

(28,178)


(14,589)


(4,646)


(15,991)











Net increase in cash and cash equivalents

15,665


32,430


21,523


14,337

Cash and cash equivalents at beginning of period

162,102


136,367


156,244


154,460











CASH AND CASH EQUIVALENTS AT END OF PERIOD

$     177,767


$     168,797


$          177,767


$            168,797











 

To view the original version on PR Newswire, visit: http://www.prnewswire.com/news-releases/orbotech-reports-second-quarter-2016-results-300308318.html

SOURCE Orbotech Ltd.

Contact:
Orbotech Ltd.



« Previous Page 1 | 2             



Review Article Be the first to review this article
Aldec Webinar Nov 30

Featured Video
Editorial
Peggy AycinenaWhat Would Joe Do?
by Peggy Aycinena
Computer History Museum: the Future of War is Here
More Editorial  
Jobs
Senior PIC Test Development Engineer for Infinera Corp at Sunnyvale, CA
REVISED***Director Product Line RF/IC for EDA Careers at San Jose, CA
Principal PIC Hardware Controls Engineer for Infinera Corp at Sunnyvale, CA
ASIC Design Engineer for Infinera Corp at Sunnyvale, CA
Senior SW Developer for EDA Careers at San Jose, CA
Upcoming Events
“Empowering Leadership with WIT and WISDOM” at SEMI 673 South Milpitas Blvd. Milpitas CA - Nov 28, 2017
Artificial Intelligence and Convolution Neural Networks Discussion at San Jose State University Student Union Theater San Jose CA - Dec 4, 2017
Silicon Valley's Only Comprehensive Embedded Systems Conference at San Jose Convention Center 150 W. San Carlos St. San Jose CA - Dec 5 - 7, 2017
Oski Technology’s Decoding Formal Club Meeting at The Conference Center San Jose CA - Dec 7, 2017



Internet Business Systems © 2017 Internet Business Systems, Inc.
25 North 14th Steet, Suite 710, San Jose, CA 95112
+1 (408) 882-6554 — Contact Us, or visit our other sites:
AECCafe - Architectural Design and Engineering TechJobsCafe - Technical Jobs and Resumes GISCafe - Geographical Information Services  MCADCafe - Mechanical Design and Engineering ShareCG - Share Computer Graphic (CG) Animation, 3D Art and 3D Models
  Privacy PolicyAdvertise