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Orbotech Announces Second Quarter 2012 Results

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, 2011.

   
ORBOTECH LTD.
CONDENSED CONSOLIDATED BALANCE SHEETS
AT JUNE 30, 2012
 

 June 30 

December 31

2012

2011

U.S. dollars in thousands

A s s e t s

 

CURRENT ASSETS:

Cash and cash equivalents 184,722 151,237
Short-term bank deposits 79,718 145,292
Marketable securities 2,204
Accounts receivable:
Trade 182,323 196,232
Other 27,617 26,163
Deferred income taxes 7,929 6,580
Inventories 109,200 105,109
   
T o t a l current assets 593,713   630,613  
 

INVESTMENTS AND NON-CURRENT ASSETS:

Marketable securities 12,450
Funds in respect of employee rights upon retirement 11,799 11,846
Deferred income taxes 8,795 8,999
Other long-term investments 2,361   2,426  
35,405   23,271  
 

PROPERTY, PLANT AND EQUIPMENT, net

24,844   26,664  
 

GOODWILL

12,444   12,444  
 

OTHER INTANGIBLE ASSETS, net

48,427   54,491  
   
714,833   747,483  
 
 

Liabilities and equity

 

CURRENT LIABILITIES:

Current maturities of long-term bank loan 32,000 32,000
Accounts payable and accruals:
Trade 29,725 32,357
Other

45,783

57,590
Deferred income 21,799 25,910
   
T o t a l current liabilities

129,307

147,857
 

LONG-TERM LIABILITIES:

Long-term bank loan 48,000 64,000
Liability for employee rights upon retirement 26,614 26,797
Deferred income taxes 1,705 1,759
Other tax liabilities 16,725   16,938  
T o t a l long-term liabilities 93,044 109,494
   
T o t a l liabilities

222,351

  257,351  
 

EQUITY:

Share capital 2,100 2,092
Additional paid-in capital 273,569 270,966
Retained earnings

274,997

274,148
Accumulated other comprehensive income (loss) (1,871 ) (1,460 )

548,795

545,746
Less treasury shares, at cost (57,192 ) (57,192 )
T o t a l Orbotech Ltd. shareholders' equity

491,603

488,554
Non-controlling interest 879   1,578  
T o t a l equity

492,482

  490,132  
   
714,833   747,483  
 
 
ORBOTECH LTD.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
FOR THE SIX AND THREE MONTH PERIODS ENDED JUNE 30, 2012
         
12 months

6 months ended

3 months ended

ended

June 30

June 30

December 31

2012

 

2011

2012

 

2011

2011

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

REVENUES

201,554 287,616 101,332 153,405 565,313
 

COST OF REVENUES

114,678 167,730 59,301 89,214 329,442
 

WRITE-DOWN OF INVENTORIES

6,743
         

GROSS PROFIT

86,876 119,886 42,031 64,191 229,128
 

RESEARCH AND DEVELOPMENT COSTS - net

36,124 41,250 18,048 21,021 84,180
 

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES

37,957 35,756 19,316 18,402 72,583
 

AMORTIZATION OF INTANGIBLE ASSETS

6,064 6,142 2,973 3,071 12,304
 

RESTRUCTURING CHARGES

1,918
         

OPERATING INCOME

4,813 36,738 1,694 21,697 60,061
 

FINANCIAL EXPENSES - net

3,439 3,896 2,334 1,773 6,551
         

INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE TAXES ON INCOME

1,374 32,842 (640 ) 19,924 53,510
 

TAXES ON INCOME

964 4,119 422 2,289 7,677
         
410 28,723 (1,062 ) 17,635 45,833
 

SHARE IN LOSSES OF ASSOCIATED COMPANY

65 20 179
         

NET INCOME (LOSS) FROM CONTINUING OPERATIONS

345 28,723 (1,082 ) 17,635 45,654
 

INCOME FROM DISCONTINUED OPERATIONS, NET OF TAX

1,363 1,255 1,363
         

NET INCOME (LOSS)

345 30,086 (1,082 ) 18,890 47,017
 

NET LOSS ATTRIBUTABLE TO THE NON-CONTROLLING INTEREST

(504 ) (292 ) (322 )
         

NET INCOME (LOSS) ATTRIBUTABLE TO ORBOTECH LTD.

849   30,086 (790 ) 18,890 47,339  
 

AMOUNTS ATTRIBUTABLE TO ORBOTECH LTD.:

INCOME (LOSS) FROM CONTINUING OPERATIONS

849 28,723 (790 ) 17,635 45,976
 

INCOME FROM DISCONTINUED OPERATIONS, NET OF TAX

1,363 1,255 1,363
         

NET INCOME (LOSS) ATTRIBUTABLE TO ORBOTECH LTD.

849   30,086 (790 ) 18,890 47,339  
 
 

EARNINGS PER SHARE:

INCOME (LOSS) FROM CONTINUING OPERATIONS:

BASIC

$0.02   $0.78 ($0.02 ) $0.46 $1.15  
 

DILUTED

$0.02   $0.76 ($0.02 ) $0.45 $1.13  
 

NET INCOME (LOSS) ATTRIBUTABLE TO ORBOTECH LTD.:

BASIC

$0.02   $0.82 ($0.02 ) $0.50 $1.19  
 

DILUTED

$0.02   $0.80 ($0.02 ) $0.48 $1.16  
 
 

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

 

BASIC

43,462   36,618 43,507   37,969 39,909  
 

DILUTED

44,044   37,731 43,507   38,967 40,816  
 
 
ORBOTECH LTD.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE SIX AND THREE MONTH PERIODS ENDED JUNE 30, 2012
         
 
12 months

6 months ended

3 months ended

ended

June 30

June 30

December 31

2012

2011

2012

2011

2011

U.S. dollars in thousands

CASH FLOWS FROM OPERATING ACTIVITIES:

 
Net income (loss) 345 30,086 (1,082 ) 18,890 47,017

 

Adjustment to reconcile net income to net cash provided by (used in) operating activities:

Income from discontinued operations (1,363 ) (1,255 ) (1,363 )
Depreciation and amortization 9,934 9,978 4,858 4,888 19,958

Compensation relating to equity awards granted to employees and others - net

1,806 2,137 896 1,080 3,728
Increase (decrease) in liability for employee rights upon retirement 94 462 (30 ) 825 (704 )
Non-cash expenses in respect of restructuring

601

 

 

Deferred income taxes (1,199 ) 1,297 (13 ) 17 2,584
Loss from sales and write down of marketable securities 395 238 395
Others

295

46

228

46 1,224
Decrease (increase) in accounts receivable:
Trade 13,909 (30,782 ) 16,107 (18,988 ) (42,714 )

Other

 

(1,398 ) (403 ) 826 681 2,698
Increase (decrease) in accounts payable and accruals:
Trade (2,632 ) 26,112 4,389 20,385 5,822
Deferred income and other (15,901 ) 2,245 (3,413 ) 4,176 6,105
Decrease (increase) in inventories (3,930 ) (9,921 ) (1,086 ) (8,545 ) 6,870  
Net cash provided by operating activities - continuing operations 1,924 30,289 21,680 22,438 51,620
Net cash used in operating activities - discontinued operations   (740 )   (1,604 ) (787 )
Net cash provided by operating activities 1,924   29,549   21,680   20,834   50,833  
 

CASH FLOWS FROM INVESTING ACTIVITIES:

 
Purchase of property, plant and equipment (3,459 ) (2,385 ) (1,929 ) (1,136 ) (7,554 )
Withdraw (placement) of bank deposits 65,574 (60,000 ) 13,694 (60,000 ) (142,325 )
Realization (purchase) of marketable securities (14,935 ) 1,967 627 1,967
Other investment (1,500 ) (1,500 ) (2,810 )
Proceeds from disposal of property, plant and equipment 35 35 35

Decrease (increase) in funds in respect of employee rights upon retirement

(230 ) (213 ) (66 ) (280 ) 331  
Net cash provided by (used in) investing activities - continuing operations 46,950 (62,096 ) 11,699 (62,254 ) (150,356 )
Net cash provided by investing activities - discontinued operations   9,155       9,155  
Net cash provided by (used in) investing activities 46,950   (52,941 ) 11,699   (62,254 ) (141,201 )
 

CASH FLOWS FROM FINANCING ACTIVITIES:

 
Repayment of long-term bank loan (16,000 ) (16,000 ) (8,000 ) (8,000 ) (32,000 )

Employee stock options exercised

611 1,430 141 363 2,063
Proceeds from issuance of shares, net   90,683     90,683   90,683  
Net cash provided by (used in) financing activities (15,389 ) 76,113   (7,859 ) 83,046   60,746  
         
Currency translation adjustments on cash and cash equivalents       (26 )  
         
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 33,485 52,721 25,520 41,600 (29,622 )
 
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 151,237 180,859 159,202 191,980 180,859
         
CASH AND CASH EQUIVALENTS AT END OF PERIOD 184,722 233,580 184,722 233,580 151,237

 

LESS - CASH AND CASH EQUIVALENTS OF DISCONTINUED OPERATIONS AT END OF PERIOD

58 58

 

         

CASH AND CASH EQUIVALENTS OF CONTINUING OPERATIONS AT END OF PERIOD

184,722   233,522   184,722   233,522   151,237  
 
 
ORBOTECH LTD.
RECONCILIATION OF GAAP TO NON-GAAP RESULTS FROM CONTINUING OPERATIONS
FOR THE SIX AND THREE MONTH PERIODS ENDED JUNE 30, 2012
         
 
12 months

6 months ended

3 months ended

ended
June 30 June 30 December 31

2012

2011

2012

2011

2011

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

Reported operating income on GAAP basis

4,813 36,738   1,694   21,697   60,061  
 
Equity based compensation expenses 1,750 2,137 869 1,080 3,728
Restructuring charges 1,918
Amortization of intangible assets 6,064 6,142   2,973   3,071   12,304  
Non-GAAP operating income 14,545 45,017   5,536   25,848   76,093  
 

Reported net income (loss) attributable to Orbotech Ltd. on GAAP basis

849 30,086   (790 ) 18,890   47,339  
 
Equity based compensation expenses 1,750 2,137 869 1,080 3,728
Amortization of intangible assets 6,064 6,142 2,973 3,071 12,304
Income from discontinued operations (1,363 ) (1,255 ) (1,363 )
Restructuring charges 1,918
Share in losses of associated company 65 20 179
         

Non-GAAP net income from continuing operations

10,646 37,002   3,072   21,786   62,187  
 
Non-GAAP earnings per diluted share $0.24 $0.98   $0.07   $0.56   $1.52  
 
Shares used in earnings per diluted share calculation-in thousands 44,044 37,731   44,131   38,967   40,816  




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