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TheStreet Open House

Orbotech Announces First Quarter 2011 Results And Updates Guidance

Stocks in this article: ORBK

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.

ORBOTECH LTD.
CONDENSED CONSOLIDATED BALANCE SHEETS
AT MARCH 31, 2011
   
March 31 December 31
2 0 1 1 2 0 1 0
U. S. dollars in thousands

A s s e t s

 

CURRENT ASSETS:

Cash and cash equivalents 191,232 179,503
Short-term bank deposits 2,780 2,780
Accounts receivable:
Trade 165,312 153,518
Other 30,964 29,919
Deferred income taxes 6,252 5,913
Inventories 114,188 112,812
Assets of discontinued operations 2,774   12,351  
T o t a l current assets 513,502   496,796  
 

INVESTMENTS AND NON-CURRENT ASSETS:

Marketable securities 1,052 2,549
Funds in respect of employee rights upon retirement 12,950 13,017
Deferred income taxes 11,060 12,679
Other 29   29  
25,091   28,274  
 

PROPERTY, PLANT AND EQUIPMENT, net

24,072   24,842  
 

GOODWILL

12,034   12,034  
 

OTHER INTANGIBLE ASSETS, net

63,324   66,395  
   
638,023   628,341  
 
 

Liabilities and equity

 

CURRENT LIABILITIES:

Current maturities of long-term bank loan 32,000 32,000
Accounts payable and accruals:
Trade 32,262 26,535
Other 52,003 55,290
Deferred income 25,848 24,421
Liabilities of discontinued operations 3,115   2,172  
T o t a l current liabilities 145,228 140,418
 

LONG-TERM LIABILITIES:

Long-term bank loan 88,000 96,000
Liability for employee rights upon retirement 27,138 27,501
Deferred income taxes 2,188 2,188
Other tax liabilities 12,572   12,679  
T o t a l long-term liabilities 129,898 138,368
   
T o t a l liabilities 275,126   278,786  
 

EQUITY:

Share capital 1,768 1,758
Additional paid-in capital 177,054 174,940
Retained earnings 238,005 226,809
Accumulated other comprehensive income 1,476   1,454  
418,303 404,961
Less treasury shares, at cost (57,192 ) (57,192 )
T o t a l Orbotech Ltd. shareholders' equity 361,111 347,769
Non-controlling interest 1,786   1,786  
T o t a l equity 362,897   349,555  
   
638,023   628,341  
ORBOTECH LTD.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
FOR THE THREE MONTH PERIOD ENDED MARCH 31, 2011
     
12 months

3  m o n t h s    e n d e d

ended

M a r c h   3 1

December 31
2 0 1 1 2 0 1 0   2 0 1 0
U.S. dollars in thousands (except per share data)
 

REVENUES

134,211 99,987 529,355
 

COST OF REVENUES

78,516 57,901 312,901
     

GROSS PROFIT

55,695 42,086 216,454
 

RESEARCH AND DEVELOPMENT COSTS - net

20,229 17,110 78,327
 

SELLING, GENERAL AND ADMINISTRATIVE

EXPENSES

17,354 14,509 66,264

 

AMORTIZATION OF INTANGIBLE ASSETS

3,071 3,544 14,176
     

OPERATING INCOME

15,041 6,923 57,687

 

FINANCIAL EXPENSES- net

2,123 2,391 7,284

 

     

INCOME FROM CONTINUING OPERATIONS

BEFORE TAXES ON INCOME

12,918 4,532 50,403
 

TAXES ON INCOME

1,830 998 7,397
     

NET INCOME FROM CONTINUING OPERATIONS

11,088 3,534 43,006
 

INCOME (LOSS) FROM DISCONTINUED

OPERATIONS, NET OF TAX

108 (1,940 ) (8,717 )
     

NET INCOME

11,196 1,594 34,289
 

NET INCOME (LOSS) ATTRIBUTABLE TO

THE NON-CONTROLLING INTEREST

- (17 ) 144
     

NET INCOME ATTRIBUTABLE TO ORBOTECH LTD.

  11,196   1,611     34,145  
 

AMOUNTS ATTRIBUTABLE TO ORBOTECH LTD.:

INCOME FROM CONTINUING OPERATIONS

11,088 3,551 42,862
 

INCOME (LOSS) FROM DISCONTINUED OPERATIONS, NET OF TAX

108 (1,940 ) (8,717 )
     

NET INCOME ATTRIBUTABLE TO ORBOTECH LTD.

  11,196   1,611     34,145  
 
 

EARNINGS PER SHARE:

INCOME FROM CONTINUING OPERATIONS:

BASIC

$ 0.31 $ 0.10   $ 1.23  
 

DILUTED

$ 0.30 $ 0.10   $ 1.20  
 

NET INCOME ATTRIBUTABLE TO ORBOTECH LTD.:

BASIC

$ 0.32 $ 0.05   $ 0.98  
 

DILUTED

$ 0.31 $ 0.05   $ 0.95  
 
 

 

WEIGHTED AVERAGE NUMBER OF SHARES USED IN COMPUTATION       OF EARNINGS PER SHARE - IN THOUSANDS:

BASIC

  35,229   34,819     34,911  
 

DILUTED

  36,458   35,641     35,778  
ORBOTECH LTD.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTH PERIOD ENDED MARCH 31, 2011
         
 
12 months

3  m o n t h s    e n d e d

ended

M a r c h   3 1

December 31
2 0 1 1 2 0 1 0 2 0 1 0
U.S. dollars in thousands

CASH FLOWS FROM OPERATING ACTIVITIES:

 
Net income 11,196 1,594 34,289
Adjustment to reconcile net income to net cash
provided by (used in) operating activities:
Loss (income) from discontinued operations (108 ) 1,940 8,717
Depreciation and amortization 5,090 4,437 23,665
Compensation relating to equity awards granted to
employees and others - net 1,057 1,376 4,725
Increase (decrease) in liability for employee rights upon retirement (363 ) 606 2,589
Deferred income taxes 1,280 1,524 (3,866 )
Loss (gain) from sales and write down of marketable securities 157 (46 ) 1,252
Other, including capital loss (gain) 5 (1,147 )
Increase in accounts receivable:
Trade (11,794 ) (8,096 ) (5,755 )
Other (1,084 ) (221 ) (4,673 )
Increase (decrease) in accounts payable and accruals:
Trade 5,727 6,766 1,434
Deferred income and other (1,931 ) (3,345 ) 15,870
Increase in inventories (1,376 ) (3,981 ) (19,018 )
Net cash provided by operating activities - continuing operations 7,851 2,559 58,082
Net cash provided by (used in) operating activities - discontinued operations 864   (1,002 ) (8,972 )
Net cash provided by operating activities 8,715   1,557   49,110  
 

CASH FLOWS FROM INVESTING ACTIVITIES:

 
Purchase of property, plant and equipment (1,249 ) (720 ) (6,752 )
Placement of bank deposits (2,780 )
Sales of marketable securities 1,340 6,742
Proceeds from disposal of property, plant and equipment 20
Decrease (increase) in funds in respect of employee
rights upon retirement 67   (457 ) (617 )
Net cash provided by (used in) investing activities - continuing operations 158 (1,177 ) (3,387 )
Net cash provided by (used in) investing activities - discontinued operations 9,155   (5 ) (268 )
Net cash provided by (used in) investing activities 9,313   (1,182 ) (3,655 )
 

CASH FLOWS FROM FINANCING ACTIVITIES:

 
Repayment of long-term bank loan (8,000 ) (8,000 ) (32,000 )
Employee stock options excercised 1,067 902
Acquisition of non-contolling interest     (511 )
Net cash used in financing activities (6,933 ) (8,000 ) (31,609 )
     
Currency translation adjustments on cash and cash equivalents 26   (178 ) (220 )
     
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 11,121 (7,803 ) 13,626
 
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 180,859 167,233 167,233
     
CASH AND CASH EQUIVALENTS AT END OF PERIOD 191,980 159,430 180,859
 
LESS - CASH AND CASH EQUIVALENTS OF DISCONTINUED
OPERATIONS AT END OF PERIOD 748 727 1,356
CASH AND CASH EQUIVALENTS OF CONTINUING      
OPERATIONS AT END OF PERIOD 191,232   158,703   179,503  
ORBOTECH LTD.
RECONCILIATION OF GAAP TO NON-GAAP RESULTS FROM CONTINUING OPERATIONS
FOR THE THREE MONTH PERIOD ENDED MARCH 31, 2011
     
 
12 months

3  m o n t h s    e n d e d

ended

M a r c h   3 1

December 31
2 0 1 1 2 0 1 0 2 0 1 0
U.S. dollars in thousands (except per share data)
 
 

Reported net income attributable to Orbotech Ltd. on GAAP basis

  11,196     1,611     34,145  
 
Non-operating income (expenses):
Financial expenses - net (2,123 ) (2,391 ) (7,284 )
Taxes on income (1,830 ) (998 ) (7,397 )
Net loss (income) attributable to the non-controlling interest - 17 (144 )
Income (loss) from discontinued operations*   108     (1,940 )   (8,717 )
  (3,845 )   (5,312 )   (23,542 )
     
 
Reported operating income on GAAP basis 15,041 6,923 57,687
 
Equity based compensation expenses 1,057 1,376 4,725
Amortization of intangible assets   3,071     3,544     14,176  
Non-GAAP operating income 19,169 11,843 76,588
 
Non-operating expenses (3,845 ) (5,312 ) (23,542 )
Income (loss) from discontinued operations* 108 (1,940 ) (8,717 )
     

Non-GAAP net income from continuing operations

  15,216     8,471     61,763  
 
Non-GAAP earnings per diluted share $ 0.42   $ 0.24   $ 1.73  
 
Shares used in earnings per diluted share calculation-in thousands   36,458     35,641     35,778  
 
 
* The loss from discontinued operations, net of tax, was attributable to the re-classification during 2010 of OMS and OMD as discontinued operations.




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