ORBK Orbotech Ltd. - Ordinary Shares

ORBOTECH LTD. (NASDAQ:ORBK) today announced its consolidated financial results for the fourth quarter and full year ended December 31, 2005. Revenues for the fourth quarter of 2005 were $96.4 million, compared with $87.8 million in the fourth quarter a year ago. Net income for the fourth quarter of 2005 was $12.0 million, or $0.36 per share (diluted), compared with net income of $6.5 million, or $0.20 per share (diluted), in the fourth quarter of last year. The results for the fourth quarter of 2004 included a special charge of $2.9 million related to the Company's write-down of its venture capital investment in an Israeli company. Revenues for the year ended December 31, 2005 totaled $379.9 million, compared with the $315.2 million recorded in 2004. Net income for the year ended December 31, 2005 was $43.3 million, or $1.30 per share (diluted), compared with net income of $29.5 million, or $0.90 per share (diluted), for the year ended December 31, 2004. Sales of equipment to the PCB industry relating to bare PCBs in the fourth quarter of 2005 were $38.4 million, compared with $37.3 million in the third quarter of 2005 and $32.7 million in the fourth quarter of 2004. Sales of equipment to the PCB industry relating to assembled PCBs were $8.4 million, compared with $9.1 million in the third quarter of 2005 and $8.3 million in the fourth quarter of 2004. Sales of FPD inspection equipment in the fourth quarter of 2005 were $28.1 million, compared with $26.3 million in the third quarter of 2005 and $26.4 million in the fourth quarter of 2004. Sales of automatic check reading products in the fourth quarter of 2005 were $2.1 million, compared with $1.6 million in the third quarter of 2005 and $2.0 million in the fourth quarter of 2004. In addition, service revenue for the fourth quarter of 2005 was $19.3 million, unchanged from the third quarter of 2005 and up from the $18.4 million in the fourth quarter of 2004. The Company completed the quarter with cash equivalents and marketable securities of approximately $211 million, compared with approximately $201 million at the end of the third quarter, due principally to positive operating cash flow for the quarter of approximately $18.8 million. Non- operating disbursements totaled approximately $9.3 million, including $7.2 million for the purchase, in a privately negotiated transaction, of all 299,122 ordinary shares of the Company owned by Ormat Industries Ltd. The Company's results for the fourth quarter close out a year in which the Company posted record revenues, reflecting both the very positive worldwide business environment and the strong ability of the Company to capitalize on the resulting opportunities. PCB and FPD manufacturing customers have been reporting high utilization levels and strong demand for their products, particularly new and sophisticated electronic devices utilizing the latest technological enhancements. Demand for the Company's highly sophisticated and technologically advanced PCB-AOI products remains strong, as evidenced by the recent receipt of major orders from two large bare PCB manufacturers in the Far East for AOI and Direct Imaging equipment totaling approximately $20 million, to be delivered mainly during 2006. The Company's FPD business continues to experience growth as customers continue to invest in latest generation lines, in order to position themselves to meet the increasing demand for large screen LCD televisions. During the first quarter of 2006, the Company delivered its FPD-AOI systems to the first 8th generation fab, for use in the inspection of large panels for production of LCD televisions. FPD manufacturers have a growing need to receive critical, real-time data in monitoring their fabrication processes, and the Company's FPD products provide a comprehensive yield management system which enables the efficient and rapid ramp-up of production facilities. Commenting on the results, Yochai Richter, Chief Executive Officer, said: "We are pleased with our financial results for the quarter, and for 2005 as a whole, in which we posted record revenues. Our focused investments in research and development, and commitment to our worldwide customer support network, are an integral and consistent part of our corporate strategy. The Company enters 2006 with an excellent product portfolio, which reinforces our leadership position as the pre-eminent provider of yield management solutions to the growing industries that we serve." An earnings conference call is scheduled for Monday, February 13, 2006, at 9:00 a.m. EST. The dial-in number for the conference call is 773-681-5843, and a replay will be available at 203-369-3208, until February 27, 2006. The pass code is Q4. 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 DECEMBER 31, 2005 December December 31 31 2005 2004 --------- -------- U.S. dollars in thousands ------------------- Assets -------------------------------------------------- CURRENT ASSETS: -------------------------------------------------- Cash and cash equivalents 156,112 127,331 Marketable securities 24,165 14,462 Short-term bank deposits 10,000 Accounts receivable: Trade 126,101 113,184 Other 16,884 19,849 Deferred income taxes 3,856 1,123 Inventories 70,885 71,525 --------- -------- Total current assets 398,003 357,474 --------- -------- INVESTMENTS AND NON-CURRENT ASSETS: --------------------------------------------------- Marketable securities 31,096 29,987 Other long-term Investments 8,539 8,332 Non-current trade receivables 887 652 Severance pay fund 15,374 14,740 Deferred income taxes 1,264 4,001 --------- -------- 57,160 57,712 --------- -------- PROPERTY, PLANT AND EQUIPMENT, net of --------------------------------------------------- accumulated depreciation and amortization 19,149 17,454 --------- -------- GOODWILL AND OTHER INTANGIBLE ASSETS, net of --------------------------------------------------- accumulated amortization 14,930 11,231 --------- -------- --------- -------- 489,242 443,871 ========= ======== Liabilities and shareholders' equity --------------------------------------------------- CURRENT LIABILITIES: --------------------------------------------------- Accounts payable and accruals: Trade 35,781 35,261 Deferred service revenue 20,470 18,129 Other 39,360 39,821 --------- -------- Total current liabilities 95,611 93,211 ACCRUED SEVERANCE PAY 26,584 24,877 --------------------------------------------------- --------- -------- Total liabilities 122,195 118,088 --------- -------- MINORITY INTEREST IN CONSOLIDATED SUBSIDIARY 659 503 ------------------------------------------------------------ -------- SHAREHOLDERS' EQUITY: --------------------------------------------------- Share capital 1,635 1,620 Additional paid-in capital 104,813 98,807 Deferred stock compensation (1,484) (455) Retained earnings 290,889 247,632 Accumulated other comprehensive income 83 --------- -------- 395,936 347,604 Less treasury stock, at cost (29,548) (22,324) --------- -------- Total shareholders' equity 366,388 325,280 --------- -------- --------- -------- 489,242 443,871 ========= ======== ORBOTECH LTD. CONDENSED CONSOLIDATED STATEMENTS OF INCOME FOR THE TWELVE MONTH AND THREE MONTH PERIODS ENDED DECEMBER 31, 2005 12 months 3 months ended ended December 31 December 31 ------------------- ------------------- 2005 2004 2005 2004 --------- --------- --------- --------- U.S. dollars in thousands (except per share data) ---------------------------------------- REVENUES 379,923 315,168 96,453 87,768 ----------------------------- COST OF REVENUES 216,732 176,535 53,296 50,144 ----------------------------- --------- --------- --------- --------- GROSS PROFIT 163,191 138,633 43,157 37,624 ----------------------------- RESEARCH AND DEVELOPMENT COSTS - net 55,761 47,997 14,634 13,095 ----------------------------- SELLING, GENERAL AND ADMINISTRATIVE EXPENSES 59,389 52,951 15,398 14,170 ----------------------------- AMORTIZATION OF OTHER INTANGIBLE ASSETS 2,635 2,308 730 577 ----------------------------- --------- --------- --------- --------- OPERATING INCOME 45,406 35,377 12,395 9,782 ----------------------------- FINANCIAL INCOME - net 3,503 1,252 1,053 390 ----------------------------- WRITE-DOWN OF LONG-TERM INVESTMENTS (2,945) (2,945) ----------------------------- --------- --------- --------- --------- INCOME BEFORE TAXES ON INCOME 48,909 33,684 13,448 7,227 ----------------------------- TAXES ON INCOME 5,598 4,346 1,358 853 ----------------------------- INCOME FROM OPERATIONS OF THE COMPANY AND ITS SUBSIDIARIES --------- --------- --------- --------- AND JOINT VENTURE 43,311 29,338 12,090 6,374 ----------------------------- MINORITY INTEREST IN (PROFITS) LOSSES OF CONSOLIDATED SUBSIDIARY (156) (48) (99) (13) ----------------------------- SHARE IN PROFITS OF AN ASSOCIATED COMPANY 102 196 41 96 ----------------------------- --------- --------- --------- --------- NET INCOME 43,257 29,486 12,032 6,457 ----------------------------- ========= ========= ========= ========= EARNINGS PER SHARE: ----------------------------- BASIC $1.32 $0.91 $0.37 $0.20 ----------------------------- ========= ========= ========= ========= DILUTED $1.30 $0.90 $0.36 $0.20 ----------------------------- ========= ========= ========= ========= WEIGHTED AVERAGE NUMBER OF SHARES (IN THOUSANDS) USED IN COMPUTATION OF EARNINGS PER SHARE: ----------------------------- BASIC 32,657 32,251 32,613 32,251 ----------------------------- ========= ========= ========= ========= DILUTED 33,338 32,924 33,368 32,698 ----------------------------- ========= ========= ========= ========= *T