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Orbotech Announces Fourth Quarter And Full Year Results For 2012

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 DECEMBER 31, 2012
         
December 31 December 31

2012

2011

U.S. dollars in thousands

Assets
 

CURRENT ASSETS:
Cash and cash equivalents 260,761 151,237
Short-term bank deposits 3,014 145,292
Marketable securities 2,238
Accounts receivable:
Trade 164,498 196,232
Other 29,908 26,163
Deferred income taxes 7,862 6,580
Inventories 93,854 105,109
   

Total current assets
562,135   630,613  
 

INVESTMENTS AND NON-CURRENT ASSETS:
Marketable securities 12,788
Funds in respect of employee rights upon retirement 11,280 11,846
Deferred income taxes 13,634 8,999
Other long-term investments 1,880   2,426  
39,582   23,271  
 

PROPERTY, PLANT AND EQUIPMENT, net
24,715   26,664  
 

GOODWILL
12,444   12,444  
 

OTHER INTANGIBLE ASSETS, net
14,442   54,491  
   
653,318   747,483  
 
 

Liabilities and equity
 

CURRENT LIABILITIES:
Current maturities of long-term bank loan 64,000 32,000
Accounts payable and accruals:
Trade 27,587 32,357
Other 51,895 57,590
Deferred income 17,388 25,910
   

Total current liabilities
160,870 147,857
 

LONG-TERM LIABILITIES:
Long-term bank loan 64,000
Liability for employee rights upon retirement 26,221 26,797
Deferred income taxes 2,236 1,759
Other tax liabilities 16,478   16,938  

Total long-term liabilities
44,935 109,494
   

Total liabilities
205,805   257,351  
 

EQUITY:
Share capital 2,102 2,092
Additional paid-in capital 274,856 270,966
Retained earnings 228,569 274,148
Accumulated other comprehensive income (loss) 628   (1,460 )
506,155 545,746
Less treasury shares, at cost (59,151 ) (57,192 )

Total Orbotech Ltd. shareholders' equity
447,004 488,554
Non-controlling interest 509   1,578  

Total equity
447,513   490,132  
   
653,318   747,483  
 
ORBOTECH LTD.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
FOR THE YEAR AND THREE MONTHS ENDED DECEMBER 31, 2012
                 
 

12 months ended

3 months ended
December 3 1 December 3 1
2 0 1 2     2 0 1 1 2 0 1 2     2 0 1 1
      U.S. dollars in thousands (except per share data)
 

REVENUES
400,731 565,313 100,301 133,333
 

COST OF REVENUES
235,223 329,442 60,977 78,037
 

WRITE- DOWN OF INVENTORIES
14,255 6,743

 
6,743
       

GROSS PROFIT
151,253 229,128 39,324 48,553
 

RESEARCH AND DEVELOPMENT COSTS - net
71,815 84,180 17,752 21,598
 

SELLING, GENERAL AND ADMINISTRATIVE  EXPENSES
75,142 72,583 17,982 18,894
 

AMORTIZATION OF INTANGIBLE ASSETS
9,907 12,304 991 3,091
 

RESTRUCTURING CHARGES
5,063 3,145
 

IMPAIRMENT OF INTANGIBLE ASSETS
30,142 162
       

OPERATING INCOME (LOSS)
(40,816 ) 60,061 (708 ) 4,970
 

FINANCIAL EXPENSES (INCOME)- net
5,100 6,551 (146 ) 845
       

INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE TAXES ON INCOME
(45,916 ) 53,510 (562 ) 4,125
 

TAXES ON INCOME
456 7,677 234 1,855
       
(46,372 ) 45,833 (796 ) 2,270
 

SHARE IN LOSSES OF ASSOCIATED COMPANY
165 179 50 70
       

NET INCOME (LOSS) FROM CONTINUING OPERATIONS
(46,537 ) 45,654 (846 ) 2,200
 

INCOME FROM DISCONTINUED OPERATIONS, NET OF TAX

 
1,363
       

NET INCOME (LOSS)
(46,537 ) 47,017 (846 ) 2,200
 

NET LOSS ATTRIBUTABLE TO  NON-CONTROLLING INTERESTS
(958 ) (322 ) (112 ) (347 )
       

NET INCOME (LOSS) ATTRIBUTABLE TO ORBOTECH LTD.
(45,579 )   47,339   (734 )   2,547  
 

AMOUNTS ATTRIBUTABLE TO ORBOTECH LTD.:

INCOME (LOSS) FROM CONTINUING OPERATIONS
(45,579 ) 45,976 (734 ) 2,547
 

INCOME FROM DISCONTINUED OPERATIONS, NET OF TAX

 
1,363
       

NET INCOME (LOSS) ATTRIBUTABLE TO ORBOTECH LTD.
(45,579 )   47,339   (734 )   2,547  
 
 

EARNINGS PER SHARE:

INCOME (LOSS) FROM CONTINUING OPERATIONS:

BASIC
($1.05 ) $ 1.15   ($0.02 ) $ 0.06  
 

DILUTED
($1.05 ) $ 1.13   ($0.02 ) $ 0.06  
 

NET INCOME (LOSS) ATTRIBUTABLE TO ORBOTECH LTD.:

BASIC
($1.05 ) $ 1.19   ($0.02 ) $ 0.06  
 

DILUTED
($1.05 ) $ 1.16   ($0.02 ) $ 0.06  
 
 

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

BASIC
43,501     39,909   43,537     43,261  
 

DILUTED
43,501     40,816   43,537     43,966  
 
ORBOTECH LTD.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEAR AND THREE MONTHS ENDED DECEMBER 31, 2012
               
 
 

12 months ended

3 months ended

December 31

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

CASH FLOWS FROM OPERATING ACTIVITIES:
 
Net income (loss) (46,537 ) 47,017 (846 ) 2,200

Adjustment to reconcile net income to net cash  provided by operating activities:
Income from discontinued operations (1,363 )
Depreciation and amortization 17,964 19,958 3,240 4,885
Impairment of Intangible assets 30,142

 
162

 

Compensation relating to equity awards granted to   employees and others
3,070 3,728 784 813

Decrease in liability for employee rights upon retirement
(576 ) (704 ) (1,296 ) (650 )
Deferred income taxes (5,440 ) 2,584 (1,770 ) 249
Non-cash expenses in respect of restructuring 601

 
Loss from sales and write down of marketable securities 395

Amortization of premium and accretion of discount on marketable   Securities, net
588 151
Other, including capital loss (gain) 1,455 1,224 315 155
Decrease (increase) in accounts receivable:
Trade 31,734 (42,714 ) 14,936 771
Other (2,743 ) 2,698 (883 ) 1,577
Increase (decrease) in accounts payable and accruals:
Trade (4,770 ) 5,822 (7,147 ) (7,449 )
Deferred income and other (14,484 ) 6,105 676 352

Decrease in inventories
11,925   6,870   4,351   14,986  
Net cash provided by operating activities - continuing operations 22,929 51,620 12,673 17,889
Net cash used in operating activities - discontinued operations   (787 )   (47 )
Net cash provided by operating activities 22,929   50,833   12,673   17,842  
 

CASH FLOWS FROM INVESTING ACTIVITIES:
 
Purchase of property, plant and equipment (9,611 ) (7,554 ) (3,053 ) (2,366 )
Withdraw (placement) of bank deposits 142,278 (142,325 ) 26,694 (15,025 )
Redemption (purchase) of marketable securities (15,614 ) 1,967 (242 )
Other investment (2,810 ) (500 )
Proceeds from disposal of property, plant and equipment 3,036 35 3,038

Decrease (increase) in funds in respect of employee   rights upon retirement
(254 ) 331   (64 ) 344  
Net cash provided by (used in) investing activities - continuing operations 119,835 (150,356 ) 26,373 (17,547 )
Net cash provided by investing activities - discontinued operations   9,155      
Net cash provided by (used in) investing activities 119,835   (141,201 ) 26,373   (17,547 )
 

CASH FLOWS FROM FINANCING ACTIVITIES:
 
Repayment of long-term bank loan (32,000 ) (32,000 ) (8,000 ) (8,000 )
Employee stock options exercised 719 2,063 57 414
Issuance of shares, net 90,683
Acquisition of treasury shares (1,959 )   (1,959 )  
Net cash provided by (used in) financing activities (33,240 ) 60,746   (9,902 ) (7,586 )
 
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 109,524 (29,622 ) 29,144 (7,291 )
 
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 151,237 180,859 231,617 158,528
       
CASH AND CASH EQUIVALENTS AT END OF PERIOD 260,761   151,237   260,761   151,237  
 
ORBOTECH LTD.
RECONCILIATION OF GAAP TO NON-GAAP RESULTS FROM CONTINUING OPERATIONS
FOR THE YEAR AND THREE MONTHS ENDED DECEMBER 31, 2012
                 
 
 

12 months ended

3 months ended
December 3 1 December 3 1
2 0 1 2 2 0 1 1 2 0 1 2 2 0 1 1
      U.S. dollars in thousands (except per share data)
 
 

Reported operating income (loss) on GAAP basis
  (40,816 )   60,061     (708 )   4,970
 
Equity based compensation expenses 3,070 3,728 784 813
Restructuring charges, net of tax credit 4,593 2,675
Impairment of Intangible assets 30,142 162
Amortization of intangible assets   9,907     12,304     991     3,091
Non-GAAP operating income   6,896     76,093     3,904     8,874
 

Reported net income (loss) attributable to Orbotech Ltd. on GAAP basis
  (45,579 )   47,339     (734 )   2,547
 
Equity based compensation expenses 3,070 3,728 784 813
Amortization of intangible assets 9,907 12,304 991 3,091
Income from discontinued operations (1,363 )
Restructuring charges, net of tax credit 4,593 2,675
Impairment of Intangible assets 30,142 162
Share in losses of associated company 165 179 50 70
       

Non-GAAP net income from continuing operations
  2,298     62,187     3,928     6,521
 
Non-GAAP earnings per diluted share $ 0.05   $ 1.52   $ 0.09   $ 0.15
 
Shares used in earnings per diluted share calculation-in thousands   44,071     40,816     44,107     43,966

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