• 2011 full year:
  • Record annual revenues: $565.3 million
  • 2011 non-GAAP earnings: $1.69 per share (diluted) before inventory write-down.
  • 2011 GAAP earnings: $1.33 per share (diluted), before inventory write-down
  • Gross Margin - 41.7% (before inventory write-down) up from 40.9% in 2010
• 2012 preliminary guidance:
  • Revenues for 2012: approximately $500 million.
  • Revenues for the first half 2012: approximately $190 - 200 million
  • 2012 non-GAAP earnings: $1.40 - $1.50 per share (diluted)
  • 2012 GAAP earnings: $1.00 - $1.10 per share (diluted)

YAVNE, Israel -- (Business Wire)

ORBOTECH LTD. (NASDAQ/GSM SYMBOL: ORBK) today announced its consolidated financial results for the fourth quarter and year ended December 31, 2011; and is providing preliminary guidance for 2012.

Commenting on the results, Rani Cohen, President and Chief Executive Officer, said: “With the posting of our fourth quarter results we are pleased to report record annual revenues for Orbotech in 2011, as well as strong cash flow and net income. During the year we saw healthy growth in the global demand for sophisticated devices such as smartphones, tablets and other mobile connected devices. This trend helped us achieve 30% year over year growth in our PCB business, including touch screen and other electronics component manufacturing which has added considerably to our total available market, confirming our industry leadership. Orbotech enters 2012 with an outstanding product portfolio and we believe we are well positioned to capitalize on the continuing upswing in these industries, where our equipment is becoming increasingly critical to manufacturers. At the same time, capital expenditure in the FPD industry is in the midst of a significant downturn; however, we expect that it will improve in the latter part of 2012 and have taken steps to align our infrastructure accordingly, which will result in a charge of approximately $2 million in the first quarter of 2012. Overall, we look forward to a gradual recovery in the FPD industry during 2012 and to continued improvement in our PCB and electronics component manufacturing business.”

Revenues for the fourth quarter of 2011 totaled $133.3 million, compared to $144.4 million in the third quarter of 2011 and $128.4 million in the fourth quarter of 2010. GAAP net income for the fourth quarter of 2011 was $2.5 million, or $0.06 per share (diluted), compared to GAAP net income of $14.7 million, or $0.34 per share (diluted), for the third quarter of 2011 and GAAP net income of $4.0 million, or $0.11 per share (diluted), in the fourth quarter of 2010. Net income for the fourth quarter of 2011 includes a write-down of $6.7 million of inventories relating primarily to excess inventories of components for certain of our FPD products in connection with the current cyclical downturn in the FPD industry.

Revenues for the year ended December 31, 2011 totaled $565.3 million, compared to $529.4 million in 2010. GAAP net income for the year ended December 31, 2011 was $47.3 million, or $1.16 per share (diluted), compared to a GAAP net income of $34.1 million, or $0.95 per share (diluted), in 2010. Net income for the year ended December 31, 2011 includes a write-down of $6.7 million.

Non-GAAP net income from continuing operations for the fourth quarter of 2011 was $6.5 million, or $0.15 per share (diluted), compared to non-GAAP net income from continuing operations of $10.7 million, or $0.30 per share (diluted), in the fourth quarter of 2010.

Non-GAAP net income from continuing operations for the year ended December 31, 2011 was $62.2 million, or $1.52 per share (diluted), compared to non-GAAP net income from continuing operations of $61.8 million, or $1.73 per share (diluted), for the year ended December 31, 2010. Non-GAAP net income for the year ended December 31, 2011 includes a write-down of $6.7 million, as noted above. A reconciliation of each of the Company’s non-GAAP measures to the comparable GAAP measure is included at the end of this press release.

The weighted average number of Ordinary Shares used in the computation of the Company’s earnings per share for each period is included in the financial statements included as part of this press release. As at December 31, 2011, the number of Ordinary Shares outstanding was approximately 43.3 million. The average number of Ordinary Shares for 2011 for purposes of the Company’s 2011 earning per share calculation is 40.8 million compared to average number of Ordinary Shares for 2010 of 35.8 million.

Sales of equipment to the PCB industry were $52.6 million in the fourth quarter of 2011, compared to $56.6 million in the third quarter of 2011, and $50.1 million in the fourth quarter of 2010. Sales of equipment to the FPD industry were $42.6 million in the fourth quarter of 2011, compared to $49.6 million in the third quarter of 2011, and $42.7 million in the fourth quarter of last year. Sales of character recognition products were $2.1 million in the fourth quarter of 2011, compared to $1.8 million in the third quarter of 2011, and $2.5 million recorded in the fourth quarter of 2010.

In addition, service revenue for the fourth quarter of 2011 was $36.0 million, compared to $36.4 million in the third quarter of 2011, and $33.1 million in the fourth quarter of 2010.

The Company completed the quarter with cash, cash equivalents and short-term bank deposits of approximately $296.5 million; and debt of $96.0 million, compared with cash, cash equivalents and short-term bank deposits of approximately $288.8 million; and debt of $104.0 million at the end of the third quarter of 2011.

An earnings conference call for the Company’s fourth quarter 2011 results is scheduled for Monday, February 13, 2012, at 9:00 a.m. EST. The dial-in number for the conference call is 630-395-0298, and a replay will be available on telephone number 203-369-0806 until February 27, 2012. The pass code is Q4. A live web cast of the conference call and a replay can also be heard by accessing the investor relations section on the Company’s website at www.orbotech.com.

About Orbotech Ltd.

Orbotech Ltd. (NASDAQ/GSM: ORBK) has been at the cutting edge of the electronics industry supply chain, as an innovator of enabling technologies used in the manufacture of the world’s most sophisticated consumer and industrial products, for over 30 years. The Company is a leading provider of yield-enhancing and production solutions, primarily for manufacturers of printed circuit boards, flat panel displays and other electronic components; and today, virtually every electronic device is produced using Orbotech technology. The Company also applies its core expertise and resources in other advanced technology areas, including character recognition for check and forms processing and solar photovoltaic manufacturing. Headquartered in Israel and operating from multiple locations internationally, Orbotech’s highly talented and inter-disciplinary professionals design, manufacture, sell and service the Company’s end-to-end portfolio of solutions for the benefit of customers the world over. For more information please see the Company’s filings with the U.S. Securities and Exchange Commission at www.sec.gov. and visit the Company’s corporate website at www.orbotech.com. The corporate website is not incorporated herein by reference and is included as an inactive textual reference only.

Cautionary Statement Regarding Forward-Looking Statements and Non-GAAP Financial Measures

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 its 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, 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 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 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, 2010. 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 net income, non-GAAP net income from continuing operations and non-GAAP net income from continuing operations 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 and impairment of intangibles; and/or (iii) our discontinued operations. Management uses these 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. 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. The reasons why management uses these measures, the usefulness of these measures and the material limitations on the usefulness of these measures are set forth below. For a detailed explanation of the adjustments made to comparable GAAP measures, please see the Reconciliation.

To supplement the Company’s financial results presented on a GAAP basis, the Company uses the non-GAAP measures indicated in the Reconciliation, which exclude equity based compensation expenses, amortization of intangible assets, in-process research and development charges and impairment and restructuring charges, as well as certain financial expenses and non-recurring income items that are believed to be helpful in understanding and comparing past operating and financial performance with current results. However, the non-GAAP measures presented are subject to limitations as an analytical tool because they exclude recurring items (such as equity compensation and amortization of intangible assets) as described below and because they do not reflect certain cash expenditures that are required to operate the Company’s business, such as interest expense and taxes. Accordingly, these non-GAAP financial measures are not meant to be considered in isolation or as a substitute for comparable GAAP measures and should be read only in conjunction with the Company’s consolidated financial statements prepared in accordance with GAAP. Management regularly utilizes supplemental non-GAAP financial measures internally to understand, manage and evaluate the Company’s business and make operating decisions. These non-GAAP measures are among the primary factors management uses in planning for and forecasting future periods. Non-GAAP financial measures reflect adjustments based on the following items, as well as the related income tax effects.

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. 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 additional 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. For more information about these items, see the Reconciliation and the Company’s Annual Report on Form 20-F filed with the SEC for the year ended December 31, 2010.

* The loss (income) from discontinued operations, net of tax, was attributable to the re-classification during 2010 of Orbotech Medical Solutions Ltd. and Orbotech Medical Denmark A/S as discontinued operations.

Contacts:

Orbotech Ltd.
Adrian Auman, +972-8-942-3560
Corporate Vice President Investor Relations and Special Projects
or
Orbotech, Inc.
Michelle Harnish, +1-603-289-7937
Marketing Communications Manager

Source: Orbotech Ltd.