YAVNE, Israel, June 13, 2016 /PRNewswire/ -- ORBOTECH LTD.
(the "Company" or "Orbotech") (NASDAQ/GSM SYMBOL:
ORBK) announced today that it has successfully repositioned its
debt structure through a series of transactions.
On June 9, 2016 the Company
conducted a public share offering of 3,850,000 ordinary
shares. On June 13, 2016 the
Company entered into a new term and revolving debt agreement in the
UK in the amounts of $110 million and
$15 million, respectively. The
net proceeds from the offering (approximately $100 million) combined with the proceeds of the
UK term debt agreement will be used to retire the entire
outstanding balance of the Company's 2014 Credit Agreement in the
amount of $202 million. The
revolving debt facility is available for working capital purposes
in the Company's semiconductor device business, if needed.
All of these transactions are expected to close by the end of the
second calendar quarter; accordingly, the Company expects to record
a one-time charge in the second quarter of approximately
$6.2 million associated with the
retirement of the 2014 Credit Agreement.
"We are very pleased to have successfully executed this series
of financing transactions which, we believe, will immediately
increase shareholder value. The significant reduction in
interest expense, net of the shares issued, is expected to be
accretive to earnings per share on both pro forma and prospective
bases," stated Ran Bareket, the Company's Chief Financial
Officer. "The reduction in both interest expense and leverage
on our balance sheet is considerable. In addition, the new
debt agreement is secured only by the assets of the Company's SPTS
subsidiaries, whereas our previous Credit Agreement was secured by
Company assets worldwide. As a result, we have substantially
improved the strength of our balance sheet, seized upon current
favorable conditions in the capital markets and enhanced operating
flexibility for future growth opportunities."
The terms of the new UK debt agreement were filed separately on
Form 6-K with the Securities and Exchange Commission on
June 13, 2016.
About Orbotech Ltd.
Orbotech Ltd. (NASDAQ/GSM: ORBK) is a global innovator of
enabling technologies used in the manufacture of the world's most
sophisticated consumer and industrial products throughout the
electronics and adjacent industries. The Company is a leading
provider of yield enhancement and production solutions for
electronics reading, writing and connecting, used by manufacturers
of printed circuit boards, flat panel displays, advanced packaging,
micro-electro-mechanical systems and other electronic components.
Virtually every electronic device in the world is produced using
Orbotech systems.
Forward-Looking Statements
This press release includes or incorporates by reference certain
statements that constitute forward-looking statements within the
meaning of the U.S. Private Securities Litigation Reform Act of
1995. These statements relate to, among other things, future
prospects, developments and business strategies and involve certain
risks and uncertainties, and are identified by words such as
"anticipate," "believe," "could," "will," "plan," "expect" and
"would" and similar terms and phrases, including references to
assumptions. These forward-looking statements are made based on
management's expectations and beliefs concerning future events
affecting Orbotech and are subject to uncertainties and factors
relating to Orbotech's operations and business environment, all of
which are difficult to predict and many of which are beyond the
Company's control. Many factors could cause the actual results to
differ materially from those projected including, without
limitation, cyclicality in the industries in which the Company
operates, the Company's production capacity, timing and occurrence
of product acceptance (the Company defines "bookings" and "backlog"
as purchase arrangements with customers that are based on mutually
agreed terms, which, in some cases for bookings and backlog, may
still be subject to completion of written documentation and may be
changed or cancelled by the customer, often without penalty),
fluctuations in product mix, worldwide economic conditions
generally, especially in the industries in which the Company
operates, the timing and strength of product and service offerings
by the Company and its competitors, 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, the level of consumer demand for
sophisticated devices such as smartphones, tablets and other
electronic devices as well as automobiles, the Company's global
operations and its ability to comply with varying legal,
regulatory, exchange, tax and customs regimes, the Company's
ability to achieve strategic initiatives, including related to its
acquisition strategy, the Company's debt and corporate financing
activities, the final timing and outcome (each, expected in
mid-to-late 2016), and impact of the criminal matter and ongoing
investigation in Korea, including any impact on existing or future
business opportunities in Korea and elsewhere, any civil actions
related to the Korean matter brought by third parties, including
the Company's customers, which may result in monetary judgments or
settlements, expenses associated with the Korean matter, ongoing or
increased hostilities in Israel
and the surrounding areas, and other risks detailed in the
Company's SEC reports, including the Company's Annual Report on
Form 20-F for the year ended December 31, 2015, and subsequent
SEC filings. As a result of all of the foregoing, the forward
looking events discussed in this press release might not occur and
our actual results may differ materially from those anticipated in
the forward looking statements. Accordingly, you should not unduly
rely on any forward looking statements. The Company assumes no
obligation to update the information in this press release to
reflect new information, future events or otherwise, except as
required by law. New factors emerge from time to time, and it is
not possible for us to predict all of these factors. Further, we
cannot assess the impact of each such factor on our business or the
extent to which any factor, or combination of factors, may cause
actual results to be materially different from those contained in
any forward looking statement.
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SOURCE Orbotech Ltd.