Orbotech Reports Second Quarter 2016 Results

(PRNewswire) —

2016 second quarter highlights

  • Revenues of $196 million
  • Gross margin of 45.9%
  • GAAP EPS of $0.30 (diluted); Non-GAAP EPS of $0.60 (diluted)

2016 third quarter guidance

  • Revenue range: $200 million to $208 million
  • Gross margin of 45.5%-46.0%

ORBOTECH LTD. (NASDAQ: ORBK) (the "Company") today announced its consolidated financial results for the quarter ended June 30, 2016.

Commenting on the results, Asher Levy, Chief Executive Officer, said: "We are pleased to report another quarter of robust top line revenue growth and improved profitability.  Our results during the quarter maintain the positive business momentum generated in the first quarter and reflect solid execution of our business model.  We are committed to preserving our industry leadership through technological innovation which is, in part, the fruit of ongoing, intensive dialogue and collaboration with our key customers and leading designers.  During the second quarter we introduced several new, cutting-edge products in our three major divisions, which we believe will not only improve our competitive position but will also create further growth opportunities and increase our total available market.  As a provider of critical production solutions across three prominent business areas, we expect, in the second half of 2016, to continue to support the leading global manufacturers as they invest in capital expenditure to facilitate the creation of new products by deploying increasingly sophisticated and efficient manufacturing and process enabling solutions."

Revenues for the second quarter of 2016 totaled $196.0 million, compared with $189.0 million in the second quarter of 2015, and $190.4 million in the first quarter of 2016.

In the Company's Production Solutions for Electronics Industry segment:

  • Revenues from the Company's semiconductor device ("SD") business were $67.5 million (including $53.6 million in equipment sales) in the second quarter of 2016. This compares to SD revenues of $60.5 million (including $45.7 million in equipment sales) in the second quarter of 2015.
  • Revenues from the Company's printed circuit board ("PCB") business were $72.6 million (including $43.8 million in equipment sales) in the second quarter of 2016. This compares to PCB revenues of $65.4 million (including $37.0 million in equipment sales) in the second quarter of 2015.
  • Revenues from the Company's flat panel display ("FPD") business were $49.9 million (including $39.8 million in equipment sales) in the second quarter of 2016. This compares to FPD revenues of $53.6 million (including $44.4 million in equipment sales) in the second quarter of 2015.

Service revenues for the second quarter of 2016 were $55.0 million, compared with $54.4 million in the second quarter of 2015.

Revenues in the Company's other segments totaled $6.0 million in the second quarter of 2016, compared with $9.4 million in the second quarter of 2015.

Gross profit and gross margin in the second quarter of 2016 were $89.9 million and 45.9%, respectively, compared with $85.8 million and 45.4%, respectively, in the second quarter of 2015.

GAAP net income and GAAP net income margin for the second quarter of 2016 were $13.3 million and 6.8% respectively, compared with $13.0 million, and 6.9% for the second quarter of 2015.

GAAP earnings per share (diluted) for the second quarter of 2016 were $0.30 per share, compared with $0.30 per share (diluted), for the second quarter of 2015.  During the second quarter of 2016, the Company recorded a charge of $6.2 million associated with the financing activities related to the retirement of its Credit Agreement, dated as of August 7, 2014, with JPMorgan.

Adjusted EBITDA (as defined below) and adjusted EBITDA margin for the second quarter of 2016 were $39.1 million and 20.0%, respectively, compared with $36.6 million and 19.4%, respectively, in the second quarter of 2015.

Non-GAAP net income and non-GAAP net income margin for the second quarter of 2016 were $27.0 million and 13.8%, respectively, compared with $22.9 million and 12.1%, for the second quarter of 2015.

Non-GAAP earnings per share (diluted) for the second quarter of 2016 were $0.60, compared with $0.53 per share (diluted), for the second quarter of 2015.

A reconciliation of each of the Company's non-GAAP measures to the comparable GAAP measure (the "Reconciliation") is included at the end of this press release.

As of June 30, 2016, with the completion of its debt refinancing, the Company had cash, cash equivalents (including restricted cash), short-term bank deposits and marketable securities of $199.6 million, and debt of $110 million.  During the second quarter of 2016, the Company generated cash from operations of $21.7 million; and cash of $100 million, net, from the sale of 3,850,000 ordinary shares.  The additional weighted average number of ordinary shares used in the computation of the Company's earnings per share for the second quarter of 2016 was 642,000 shares.  As of June 30, 2016, the actual number of ordinary shares outstanding was approximately 47.4 million.

Third Quarter 2016 Guidance

The Company expects revenues for the third quarter of 2016 to be in the range of $200 million to $208 million, and gross margin to be 45.5%-46.0%.

Conference Call

An earnings conference call for the Company's second quarter 2016 results is scheduled for today, August 3, 2016 at 9:00 a.m. EDT.  The dial-in number for the conference call is +1-646-254-3366 or (US toll-free) 877-280-1254 and a replay will be available on telephone number +1-347-366-9565 or (US toll-free) 800-358-7735 until August 17, 2016.  The pass code is 214292 or Orbotech Q2.  A live webcast of the conference call can also be heard by accessing the Company's website here http://investors.orbotech.com/phoenix.zhtml?c=71865&p=irol-EventDetails&EventId=5216451 . The webcast will remain available for 12 months at: http://investors.orbotech.com/phoenix.zhtml?c=71865&p=irol-audioarchives

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