ORBK Orbotech Ltd. - Ordinary Shares

ORBOTECH LTD. (NASDAQ/NM SYMBOL: ORBK) today announced its consolidated financial results for the first quarter ended March 31, 2005. Revenues for the first quarter of 2005 totaled $100.5 million, compared to the $67.2 million recorded in the first quarter a year ago. Net income for the first quarter of 2005 was $10.6 million, or $0.32 per share (diluted), compared with net income of $5.1 million, or $0.15 per share (diluted), in the first quarter of 2004. Sales of equipment to the printed circuit board ("PCB") industry relating to bare PCBs were $30.1 million in the first quarter of 2005, compared to $32.7 million in the fourth quarter, and $23.2 million in the first quarter, of 2004. Sales of flat panel display ("FPD") inspection equipment were $43.2 million, compared to $26.4 million in the fourth quarter, and $18.7 million in the first quarter, of last year. Sales of equipment to the PCB industry relating to assembled PCBs were $6.2 million, compared to $8.3 million in the fourth quarter, and $6.6 million in the first quarter, of last year. Sales of automatic check reading products were $2.3 million, compared to $2.0 million in the fourth quarter, and $1.9 million in the first quarter, of 2004. In addition, service revenue for the first quarter of 2005 increased to $18.7 million from $18.4 million in the fourth quarter of 2004, and $16.8 million in the first quarter, of that year. The Company completed the quarter with cash equivalents and short-term and long-term cash investments of approximately $177 million, compared with approximately $182 million at the end of 2004. Non-operating disbursements totaled approximately $5.0 million, comprised of $3.5 million which was paid as part of the acquisition of the assets of Imarad Imaging Systems Ltd. ("Imarad") and $1.5 in capital expenditures. The Company experienced continued strong demand for its leading bare PCB products, the Discovery PCB-AOI series and the Paragon direct imaging system, both of which were introduced in the fourth quarter of last year. During the first quarter the Company's assembled PCB business felt the effects of increased competition leading to pricing pressures. As previously disclosed in its public statements and filings, the record FPD revenues during the first quarter of 2005 arose partly from the recognition of initial revenues from the Company's new, seventh generation in-line FPD-AOI systems delivered commencing in the second half of 2004 to Samsung Electronics Co. Ltd.; FPD-related revenues for the second quarter will be substantially lower than those recorded in the first quarter. The Company is today also announcing the receipt of a new order from LG Phillips LCD Co., Ltd. for in-line and off-line FPD-AOI systems to be used at its new TFT-LCD fabrication facility for the production of LCD televisions. In addition, the Company has once again been selected by Samsung to supply in-line FPD-AOI systems to be used at its second phase, Gen-7 TFT-LCD fabrication facility for the production of LCD televisions. These systems are scheduled for delivery in the second half of 2005 and the early part of 2006. During the quarter the Company announced that its wholly-owned subsidiary, Orbotech Medical Solutions Ltd., had acquired all the assets of Imarad, a privately held Israeli company which developed and manufactured high-performance, solid state gamma radiation detectors based on proprietary Cadmium Zinc Telluride crystal-growth technology, for $7 million. This transaction represents an important step in the implementation of the Company's strategy of diversification into new growth areas for imaging technologies. Commenting on the results, Yochai Richter, Chief Executive Officer, said: "Our first quarter operating results were in line with our expectations. With yield-management playing an increasingly important role in advanced technologies and improved profitability, our products and solutions enable our customers to achieve manufacturing successes in ramping up their current and future production lines." An earnings conference call is scheduled for Monday, May 9, 2005, at 9:00 a.m. EST. The dial-in number for the conference call is 517-308-9005, and a replay will be available, on telephone number 203-369-0881, until May 23, 2005. The pass code is Q1. 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. Except for historical information, the matters discussed in this press release are forward-looking statements that are subject to certain risks and uncertainties which could cause the actual results to differ materially from those projected, including industry trends, the timing and strength of product and service offerings, 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 and other risks detailed from time to time in the Company's SEC reports. The Company assumes no obligation to update the information in this press release. Orbotech is a world leader in providing yield-enhancing, production support solutions for specialized applications in the supply chain of the electronics industry, principally for printed circuit boards (PCBs) and flat panel displays (FPDs). The Company designs, develops, manufactures, markets and services automated optical inspection (AOI) systems for bare and assembled PCBs and for FPDs, and imaging solutions for PCB production. The Company's innovative AOI, imaging and computer-aided manufacturing (CAM) technologies enable customers to achieve the increased yields and throughput essential to remaining at the forefront of electronics production. Through its subsidiary, Orbograph Ltd., the Company also develops and markets automatic check reading software to banks and other financial institutions. Of Orbotech's employees, more than one quarter are scientists and engineers, who integrate their multi-disciplinary knowledge, talents and skills to develop and provide sophisticated solutions and technologies designed to meet customers' long-term needs. Orbotech maintains its headquarters and its primary research, development and manufacturing facilities in Israel, and more than 30 offices worldwide. The Company's extensive network of marketing, sales and customer support teams throughout North America, Europe, the Pacific Rim, China and Japan deliver its knowledge and expertise directly to customers the world over. For more information visit www.orbotech.com. -0- *T ORBOTECH LTD. CONDENSED CONSOLIDATED BALANCE SHEET AT MARCH 31, 2005 March 31 December 31 2 0 0 5 2 0 0 4 ---------- --------- (Unaudited) (Audited) ---------- --------- U. S. dollars in thousands -------------------------- Assets ------ CURRENT ASSETS: --------------- Cash and cash equivalents 119,537 127,331 Marketable securities 20,276 14,462 Short-term bank deposits 10,000 10,000 Accounts receivable: Trade 109,461 113,184 Other 17,991 19,849 Deferred income taxes 2,470 1,123 Inventories 75,092 71,525 ------- ------- Total current assets 354,827 357,474 ------- ------- INVESTMENTS AND NON-CURRENT ASSETS: ---------------------------------- Marketable securities 27,650 29,987 Other long-term Investments 8,365 8,332 Non-current trade receivables 371 652 Severance pay fund 14,875 14,740 Deferred income taxes 3,200 4,001 ------- ------- 54,461 57,712 ------- ------- PROPERTY, PLANT AND EQUIPMENT, net of ----------------------------- accumulated depreciation and amortization 18,329 17,454 ------- ------- GOODWILL AND OTHER INTANGIBLE ASSETS, net of ------------------------------------ accumulated amortization 16,904 11,231 ------- ------- ------- ------- 444,521 443,871 ======= ======= Liabilities and shareholders' equity -------------------------------------- CURRENT LIABILITIES: -------------------- Accounts payable and accruals: Trade 26,646 35,261 Other 54,584 57,950 ------- ------- Total current liabilities 81,230 93,211 ACCRUED SEVERANCE PAY 25,687 24,877 --------------------- ------- ------- Total liabilities 106,917 118,088 ------- ------- MINORITY INTEREST IN CONSOLIDATED SUBSIDIARY 538 503 -------------------------------------------- ------- ------- SHAREHOLDERS' EQUITY: --------------------- Share capital 1,624 1,620 Additional paid-in capital 99,855 98,807 Deferred stock compensation (397) (455) Retained earnings 258,218 247,632 Accumulated other comprehensive income 90 ------- ------- 359,390 347,604 Less treasury stock, at cost (22,324) (22,324) ------- ------- Total shareholders' equity 337,066 325,280 ------- ------- ------- ------- 444,521 443,871 ======= ======= ORBOTECH LTD. CONDENSED CONSOLIDATED STATEMENTS OF INCOME FOR THE THREE MONTH PERIOD ENDED MARCH 31, 2005 12 months 3 months ended ended March 31 December 31 -------------- ----------- 2005 2004 2004 ---- ---- ---- (Unaudited) (Audited) --------- ------- U.S. dollars in thousands (except per share data) ------------------------------ REVENUES 100,455 67,200 315,168 -------- COST OF REVENUES 60,560 37,501 176,535 ---------------- ---------- -------- --------- GROSS PROFIT 39,895 29,699 138,633 ------------ RESEARCH AND DEVELOPMENT COSTS - net 13,565 11,149 47,997 ------------------------------ SELLING, GENERAL AND ADMINISTRATIVE ----------------------------------- EXPENSES 14,393 12,340 52,951 -------- AMORTIZATION OF OTHER INTANGIBLE -------------------------------- ASSETS 577 577 2,308 ------ ----------- -------- --------- OPERATING INCOME 11,360 5,633 35,377 ---------------- FINANCIAL INCOME - net 523 304 1,252 ---------------- WRITE-DOWN OF LONG-TERM INVESTMENTS (2,945) ----------------------------------- ----------- -------- --------- INCOME BEFORE TAXES ON INCOME 11,883 5,937 33,684 ----------------------------- TAXES ON INCOME 1,229 752 4,346 --------------- INCOME FROM OPERATIONS OF THE COMPANY ------------------------------------- AND ITS SUBSIDIARIES AND JOINT ------------------------------ ----------- -------- --------- VENTURE 10,654 5,185 29,338 ------- MINORITY INTEREST IN PROFITS OF ------------------------------ CONSOLIDATED SUBSIDIARY (34) (28) (48) ----------------------- SHARE IN PROFITS (LOSSES) OF AN ------------------------------- ASSOCIATED COMPANY (34) (87) 196 ------------------ ----------- -------- --------- NET INCOME 10,586 5,070 29,486 ---------- =========== ======== ========= EARNINGS PER SHARE: ------------------- BASIC $0.33 $0.16 $0.91 ----- =========== ======== ========= DILUTED $0.32 $0.15 $0.90 ------- =========== ======== ========= WEIGHTED AVERAGE NUMBER OF SHARES (IN ------------------------------------- THOUSANDS) USED IN COMPUTATION OF -------------------------------- EARNINGS PER SHARE: ------------------- BASIC 32,367 32,155 32,251 ----- =========== ======== ========= DILUTED 33,100 33,210 32,924 ------- =========== ======== ========= *T