ORBK Orbotech Ltd. - Ordinary Shares

ORBOTECH LTD. (NASDAQ/GSM SYMBOL: ORBK) today announced its consolidated financial results for the first quarter ended March 31, 2008. Revenues for the first quarter of 2008 totaled $100.5 million, compared to $103.6 million recorded in the fourth quarter of 2007 and the $86.1 million recorded in the first quarter a year ago. Net income for the first quarter of 2008 was $3.7 million, or $0.11 per share (diluted), compared to a net loss of $1.1 million, or $0.03 per share (diluted), in the fourth quarter of 2007, and net income of $5.6 million, or $0.17 per share (diluted), in the first quarter of 2007. Sales of equipment to the printed circuit board (�PCB�) industry relating to bare PCBs were $36.5 million in the first quarter of 2008, compared to $50.0 million in the fourth quarter, and $35.5 million in the first quarter, of 2007. Sales of flat panel display (�FPD�) inspection equipment were $20.4 million, compared to $10.6 million in the fourth quarter, and $19.1 million in the first quarter, of last year. Sales of equipment to the PCB industry relating to assembled PCBs were $8.1 million, compared to $8.3 million in the fourth quarter, and $6.8 million in the first quarter, of last year. Sales of automatic check reading products were $2.0 million, compared to $3.6 million in the fourth quarter, and $2.4 million in the first quarter, of 2007. Sales of medical imaging equipment in the first quarter of 2008 were $7.3 million, compared to $6.1 million in the fourth quarter of 2007 (the Company acquired this business in August 2007). In addition, service revenue for the first quarter of 2008 was $25.5 million, compared to $25.0 million in the fourth quarter, and $22.2 million in the first quarter, of 2007. The Company completed the quarter with cash, cash equivalents and marketable securities of approximately $202 million, compared with approximately $206 million at the end of 2007. Non-operating disbursements totaled approximately $2.7 million, comprised mainly of capital expenditures. The Company�s marketable securities currently include approximately $33 million of auction rate securities which are tied to student loans and which have experienced a lack of liquidity during the last three months. However, $5.5 million of these securities were recently tendered at par and will be redeemed later this month. The Company believes that there is no credit risk as to the remaining $27.5 million. The weakness in the United States dollar vis-�-vis the Sheqel adversely impacted net income during the first quarter of 2008 by approximately four cents per share compared with the fourth quarter of 2007. If the Sheqel-Dollar exchange rate remains at current levels, it is expected to result in a similar adverse impact on net income in the second quarter of 2008. The Company believes that the decline in revenues from its PCB business during the first quarter resulted from the currently prevailing global economic uncertainty, particularly in North America, and this may continue to impact PCB revenues in the near term. Nevertheless, the long-term success of Orbotech�s Discovery PCB-AOI system has reinforced the Company�s overall leadership position in the PCB industry. The increase in revenues from sales of FPD products reflects an initial increase in capital investments by LCD manufacturers, resulting from a strengthening demand for panels, a trend which is expected to continue throughout 2008 and into 2009. The Company had another strong quarter in bookings and finished the quarter with a record backlog. Commenting on the results, Rani Cohen, Chief Executive Officer, said: �Our financial results for the quarter, particularly in our PCB business, reflect the challenging global economic environment. On the other hand, we continue to benefit from the strength in the LCD industry, which has led to large orders from LCD manufacturers. Given the ongoing weakness of the dollar, we are continuing to monitor our expenses very closely in order to maintain and improve margins. We remain optimistic as to the long-term demand for our principal products, and are confident that our consistent emphasis on research and development, together with our recent acquisitions, continue to lay a sound foundation for the Company�s future growth.� An earnings conference call is scheduled for Monday, May 12, 2008, at 9:00 a.m. EDT. The dial-in number for the conference call is 210-234-0003, and a replay will be available on telephone number 203-369-0531 until May 26, 2008. 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. About Orbotech Ltd. Orbotech is principally engaged in the design, development, manufacture, marketing and service of yield-enhancing and production solutions for specialized applications in the supply chain of the electronics industry. The Company�s products include automated optical inspection (�AOI�) and process control systems for bare and assembled printed circuit boards (�PCB�s) and for flat panel displays (�FPD�s), and imaging solutions for PCB production. The Company also markets computer-aided manufacturing and engineering (�CAM�) solutions for PCB production. In addition, through its subsidiary, Orbograph Ltd., the Company develops and markets automatic check reading solutions to banks and other financial institutions, and has developed a proprietary technology for web-based, location-independent data entry for check processing and forms processing; and, through its subsidiaries, 3 - D Danish Diagnostic Development A/S and Orbotech Medical Solutions Ltd., is engaged in the research and development, manufacture and sale of specialized products for application in medical nuclear imaging. 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. ORBOTECH LTD.CONDENSED CONSOLIDATED BALANCE SHEETAT MARCH 31, 2008 � � March 31 December 31 2 0 0 8 2 0 0 7 U. S. dollars in thousands Assets � CURRENT ASSETS: Cash and cash equivalents 135,762 120,913 Marketable securities 46,610 52,713 Accounts receivable: Trade 159,637 151,173 Other 23,909 22,964 Deferred income taxes 4,657 4,317 Inventories 86,351 � 77,570 � Total current assets 456,926 � 429,650 � � INVESTMENTS AND NON-CURRENT ASSETS: Marketable securities 19,888 32,410 Other long-term Investment 530 780 Non-current trade receivables 234 231 Severance pay fund 15,045 14,099 Deferred income taxes 647 843 � � 36,344 � 48,363 � � PROPERTY, PLANT AND EQUIPMENT, net of accumulated depreciation and amortization 28,654 � 28,142 � � GOODWILL AND OTHER INTANGIBLE ASSETS, net of accumulated amortization 68,822 � 67,016 � � � 590,746 � 573,171 � � � Liabilities and shareholders' equity � CURRENT LIABILITIES: Accounts payable and accruals: Trade 41,670 34,405 Deferred income 14,767 15,445 Other 37,308 � 37,194 � Total current liabilities 93,745 87,044 � ACCRUED SEVERANCE PAY 30,160 28,610 DEFERRED TAX LIABILITY 17,006 � 16,565 � Total liabilities 140,911 � 132,219 � � MINORITY INTEREST IN CONSOLIDATED SUBSIDIARY 1,368 � 1,330 � � SHAREHOLDERS' EQUITY: Share capital 1,703 1,699 Additional paid-in capital 147,724 144,991 Retained earnings 350,113 346,447 Accumulated other comprehensive income 6,119 � 3,677 � 505,659 496,814 Less treasury stock, at cost (57,192 ) (57,192 ) Total shareholders' equity 448,467 � 439,622 � � � 590,746 � 573,171 � ORBOTECH LTD.CONDENSED CONSOLIDATED STATEMENTS OF INCOMEFOR THE THREE MONTH PERIOD ENDED MARCH 31, 2008 � � � � 12 months 3 months�ended ended March 31 December 31 2008 2007 2007 U.S. dollars in thousands (except per share data) � REVENUES 100,484 86,105 360,662 � COST OF REVENUES: COST 59,621 49,883 210,616 WRITE DOWN OF INVENTORY 4,821 � � � GROSS PROFIT 40,863 36,222 145,225 � RESEARCH AND DEVELOPMENT COSTS - net 19,154 15,575 67,923 � SELLING, GENERAL AND ADMINISTRATIVE EXPENSES 17,868 16,395 66,989 � AMORTIZATION OF OTHER INTANGIBLE ASSETS 1,139 145 4,728 � RESTRUCTURING CHARGES 510 � IMPAIRMENT OF GOODWILL AND INTELLECTUAL PROPERTY 4,739 � � � OPERATING INCOME 2,702 4,107 336 � FINANCIAL INCOME - net 1,574 2,691 9,110 � WRITE-DOWN OF LONG-TERM INVESTMENTS (5,000) � � � INCOME BEFORE TAXES ON INCOME 4,276 6,798 4,446 � TAXES ON INCOME 571 963 2,280 � � � � � INCOME FROM OPERATIONS OF THE COMPANY AND ITS SUBSIDIARIES AND JOINT VENTURE 3,705 5,835 2,166 � MINORITY INTEREST IN PROFITS OF CONSOLIDATED SUBSIDIARY (39) (42) (416) � SHARE IN LOSSES OF AN ASSOCIATED COMPANY (223) (266) � � � NET INCOME 3,666 5,570 1,484 � � EARNINGS PER SHARE: BASIC $0.11 $0.17 $0.04 � DILUTED $0.11 $0.17 $0.04 � � WEIGHTED AVERAGE NUMBER OF SHARES (IN THOUSANDS) USED IN COMPUTATION OF EARNINGS PER SHARE: BASIC 33,256 33,171 33,091 � DILUTED 33,256 33,331 33,190