As previously reported, the Company’s Korean subsidiary and six local employees have been indicted in Korea and the investigation into the actions of employees of the Company and its subsidiaries outside Korea is ongoing. The Company’s Korean subsidiary continues to co-operate with the Korean authorities in this matter. The Company incurred $2.3 million of expenses related to this matter during the second quarter of 2012, which are recorded in general and administrative expenses. The Company expects to continue to incur expenses associated with this matter for at least the remainder of 2012, but due to the uncertain nature and timing of such proceedings cannot predict the timing or amount of these expenses. The Company believes there are meritorious defenses to the prosecutor’s allegations and its Korean subsidiary intends to continue defending itself and its employees vigorously. Despite the ongoing legal matters in Korea, the Company has continued pursuing business activity in Korea, including orders for FPD and PCB equipment from customers located there and, in recent weeks, shipping products for delivery to customers in Korea. The Company remains committed to its business in Korea, including supporting its extensive customer base there through its local Korean subsidiary and worldwide support and research and development organization.Given the cyclicality and other uncertainties prevalent within the industries which Orbotech serves, as well as the fluctuations in product mix, the Company will not be providing earnings per share guidance. As already disclosed, the Company has withdrawn all of its previously announced 2012 earnings per share guidance; however, at this time it is reiterating its 2012 revenue guidance of approximately $430-$450 million, and providing gross margin guidance of approximately 43-44% for 2012. The Company anticipates that its operating expenses - excluding those in connection with the Korean matter discussed above - will be consistent with second quarter levels for each of the third and fourth quarters of 2012.
Orbotech Announces Second Quarter 2012 Results
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