ORBK Orbotech Ltd. - Ordinary Shares

ORBOTECH LTD. (NASDAQ/NM SYMBOL: ORBK) today announced its consolidated financial results for the third quarter and nine months ended September 30, 2005. Revenues for the third quarter of 2005 were $93.7 million, compared to $89.3 million recorded in the second quarter of 2005 and $82.7 million in the third quarter a year ago. Net income for the third quarter of 2005 was $11.1 million, or $0.33 per share (diluted), compared to net income of $9.5 million, or $0.29 per share (diluted), in the second quarter of 2005 and $9.4 million, or $0.29 per share (diluted), in the third quarter of 2004. Revenues for the first nine months of 2005 totaled $283.5 million, compared to $227.4 million recorded during the same period in 2004. Net income for the first nine months of 2005 was $31.2 million, or $0.94 per share (diluted), compared to net income of $23.0 million, or $0.70 per share (diluted), for the same period last year. Sales of equipment to the printed circuit board ("PCB") industry relating to bare PCBs were $37.3 million in the third quarter of 2005, compared to $35.0 million in the second quarter of 2005 and $33.0 million in the third quarter of 2004. Sales of equipment to the PCB industry relating to assembled PCBs were $9.1 million, compared to $5.4 million in the second quarter this year and $7.4 million in the third quarter of last year. Sales of flat panel display ("FPD") inspection equipment were $26.3 million, compared to $27.5 million in the second quarter of 2005 and $24.1 million in the third quarter of 2004. Sales of automatic check reading products were $1.6 million in the third quarter of 2005, compared to $2.0 million in the second quarter of 2005 and $1.1 million in the third quarter of 2004. In addition, service revenues for the third quarter were $19.3 million, unchanged from the second quarter of 2005 and increased from the $17.1 million recorded in the third quarter of 2004. The Company completed the quarter with cash, cash equivalents and marketable securities of approximately $201 million, compared with approximately $191 million at the end of the second quarter, due principally to positive operating cash flow for the quarter of approximately $9 million. Non-operating disbursements totaled approximately $1.5 million, comprised mainly of capital expenditures. The continued strong demand for the Company's Discovery PCB-AOI series and its Paragon solid state laser direct imaging systems was the principal factor in the increased revenues from bare PCB inspection equipment. Revenues from sales of the Company's assembled PCB products were favorably affected by the recent introduction of the Company's new Symbion series of post-paste and post-reflow inspection systems, both of which have been very well received by customers. During the third quarter the FPD industry experienced strong demand for flat panel displays intended for use in LCD televisions, and manufacturers are ramping up production lines on schedule. In addition, in order to meet increasing demand, FPD manufacturers are not only preparing for new plant capacity in 2006, but are expanding capacity at their existing facilities, as evidenced by bookings recorded by the Company during the third quarter. Commenting on the results, Yochai Richter, Chief Executive Officer, said: "We are pleased with our strong results for the quarter, which reflect our continued introduction of innovative products for the benefit of our customers. Their successes, in turn, help us maintain our position as a leading global supplier of yield-enhancement solutions for the PCB and FPD industries." An earnings conference call is scheduled for Monday, November 7, 2005, at 9:00 a.m. EST. The dial-in number for the conference call is 773-680-5843, and a replay will be available at 203-369-3240, until November 21, 2005. The pass code is Q3. A live web cast of the conference call can also be heard by accessing the investor relations section on the Company's website at www.orbotech.com. About Orbotech Ltd. 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. 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. -0- *T ORBOTECH LTD. CONDENSED CONSOLIDATED BALANCE SHEET AT SEPTEMBER 30, 2005 September 30 December 31 2005 2004 ------------ ----------- (Unaudited) (Audited) ------------ ----------- U.S. dollars in thousands ------------------------- Assets ------ CURRENT ASSETS: --------------- Cash and cash equivalents 158,034 127,331 Marketable securities 20,685 14,462 Short-term bank deposits 10,000 Accounts receivable: Trade 121,590 113,184 Other 22,626 19,849 Deferred income taxes 2,394 1,123 Inventories 67,410 71,525 ----------- --------- Total current assets 392,739 357,474 ----------- --------- INVESTMENTS AND NON-CURRENT ASSETS: ----------------------------------- Marketable securities 21,983 29,987 Other long-term Investments 8,519 8,332 Non-current trade receivables 225 652 Severance pay fund 15,221 14,740 Deferred income taxes 3,137 4,001 ----------- --------- 49,085 57,712 ----------- --------- PROPERTY, PLANT AND EQUIPMENT, net of ------------------------------------- accumulated depreciation and amortization 18,948 17,454 ----------- --------- GOODWILL AND OTHER INTANGIBLE ASSETS, net of -------------------------------------------- accumulated amortization 15,662 11,231 ----------- --------- ----------- --------- 476,434 443,871 =========== ========= Liabilities and shareholders' equity ------------------------------------ CURRENT LIABILITIES: -------------------- Accounts payable and accruals: Trade 33,148 35,261 Other 55,317 57,950 ----------- --------- Total current liabilities 88,465 93,211 ACCRUED SEVERANCE PAY 26,425 24,877 --------------------- ----------- --------- Total liabilities 114,890 118,088 ----------- --------- MINORITY INTEREST IN CONSOLIDATED SUBSIDIARY 560 503 -------------------------------------------- ----------- --------- SHAREHOLDERS' EQUITY: --------------------- Share capital 1,631 1,620 Additional paid-in capital 102,330 98,807 Deferred stock compensation (297) (455) Retained earnings 278,857 247,632 Accumulated other comprehensive income 787 ----------- --------- 383,308 347,604 Less treasury stock, at cost (22,324) (22,324) ----------- --------- Total shareholders' equity 360,984 325,280 ----------- --------- ----------- --------- 476,434 443,871 =========== ========= ORBOTECH LTD. CONDENSED CONSOLIDATED STATEMENTS OF INCOME FOR THE NINE MONTH AND THREE MONTH PERIODS ENDED SEPTEMBER 30, 2005 12 months 9 months ended 3 months ended ended September 30 September 30 December 31 ------------------ --------------- ------------ 2005 2004 2005 2004 2004 -------- -------- ------- ------- ------------ (Unaudited) (Unaudited) (Audited) ------------------ --------------- ------------ U.S. dollars in thousands (except per share data) ------------------------------------------------- REVENUES 283,470 227,400 93,682 82,691 315,168 -------- COST OF REVENUES 163,436 126,391 52,650 46,287 176,535 ---------------- -------- -------- ------- ------- -------- GROSS PROFIT 120,034 101,009 41,032 36,404 138,633 ------------ RESEARCH AND DEVELOPMENT COSTS - net 41,127 34,902 13,744 12,064 47,997 -------------------- SELLING, GENERAL AND ADMINISTRATIVE EXPENSES 43,991 38,781 15,018 13,495 52,951 -------------------- AMORTIZATION OF OTHER INTANGIBLE ASSETS --------------------- 1,905 1,731 595 577 2,308 -------- -------- ------- ------- -------- OPERATING INCOME 33,011 25,595 11,675 10,268 35,377 ---------------- FINANCIAL INCOME - net 2,450 862 945 277 1,252 ------------------ WRITE-DOWN OF LONG- TERM INVESTMENTS (2,945) ------------------- -------- -------- ------- ------- -------- INCOME BEFORE TAXES ON INCOME 35,461 26,457 12,620 10,545 33,684 ------------------- TAXES ON INCOME 4,240 3,493 1,537 1,288 4,346 --------------- INCOME FROM OPERATIONS OF THE COMPANY AND ITS SUBSIDIARIES AND -------- -------- ------- ------- -------- JOINT VENTURE 31,221 22,964 11,083 9,257 29,338 ------------------ MINORITY INTEREST IN (PROFITS) LOSSES OF CONSOLIDATED SUBSIDIARY (56) (35) 14 10 (48) -------------------- SHARE IN PROFITS OF AN ASSOCIATED COMPANY 60 100 40 127 196 ------------------- -------- -------- ------- ------- -------- NET INCOME 31,225 23,029 11,137 9,394 29,486 ---------- ======== ======== ======= ======= ======== EARNINGS PER SHARE: ------------------ BASIC $0.96 $0.72 $0.34 $0.29 $0.91 ----- ======== ======== ======= ======= ======== DILUTED $0.94 $0.70 $0.33 $0.29 $0.90 ------- ======== ======== ======= ======= ======== WEIGHTED AVERAGE NUMBER OF SHARES (IN THOUSANDS) USED IN COMPUTATION OF EARNINGS PER SHARE: -------------------- BASIC 32,583 32,183 32,583 32,183 32,251 ----- ======== ======== ======= ======= ======== DILUTED 33,357 32,978 33,576 32,528 32,924 ------ ======== ======== ======= ======= ======== *T