UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM
6-K
Report of
Foreign Private Issuer
Pursuant to Rule
13a-16
or
15d-16
under the Securities Exchange Act of 1934
For the month of August 2017
Commission File Number
000-12790
ORBOTECH LTD.
(Translation of Registrants name into English)
7 SANHEDRIN
BOULEVARD, NORTH INDUSTRIAL ZONE, YAVNE 8110101, ISRAEL
(Address of principal executive offices)
Indicate by check mark whether the Registrant files or will file annual reports under cover of Form
20-F
or Form
40-F:
Form
20-F ☒ Form
40-F ☐
Indicate by check mark if the Registrant is submitting the Form
6-K
in paper as permitted by
Regulation
S-T
Rule 101(b)(1): ☐
Indicate by check mark if the Registrant is
submitting the Form
6-K
in paper as permitted by Regulation
S-T
Rule 101(b)(7): ☐
Attached hereto and incorporated by reference herein are the following documents:
1.
|
Press release issued by the Registrant on, and dated, August 2, 2017, and entitled Orbotech Reports Second Quarter 2017 Results.
|
2.
|
Registrants Condensed Consolidated Balance Sheets.
|
3.
|
Registrants Condensed Consolidated Statements of Operations.
|
4.
|
Registrants Reconciliation of GAAP to
Non-GAAP
Results.
|
5.
|
Registrants Reconciliation of GAAP Net Income to Adjusted EBITDA.
|
6.
|
Registrants Condensed Consolidated Statements of Cash Flows.
|
* * *
* * *
Except as set forth below, the information on
this Form
6-K,
including the exhibits attached hereto, shall not be deemed filed for purposes of Section 18 of the Securities Exchange Act of 1934 or otherwise subject to the liabilities of
that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933 or the Securities Exchange Act of 1934.
This report on Form
6-K
is incorporated by reference into the Registration Statements on Form
S-8
(Registration
No. 33-25782,
Registration
No. 33-78196,
Registration
No. 333-05440,
Registration
No. 333-06542,
Registration
No. 333-08404,
Registration
No. 333-09342,
Registration
No. 333-11124,
Registration
No. 333-12692,
Registration
No. 333-127979,
Registration
No. 333-154394,
Registration
No. 333-169146
and Registration
No. 333-207878)
of Orbotech Ltd. previously filed with the Securities and Exchange Commission.
ORBOTECH REPORTS SECOND QUARTER 2017 RESULTS
2017 second quarter highlights
|
Revenues of $210.7
million
|
|
GAAP EPS of $0.51 (diluted);
non-GAAP
EPS of $0.67 (diluted)
|
|
Record quarterly bookings
|
2017 second half guidance
|
Revenue range: $460 million to $480 million, split about evenly between the third and the fourth quarters of 2017
|
|
Gross margin range
47.0%-47.5%
based on current expectations of product mix
|
YAVNE, ISRAEL, August
2, 2017 | ORBOTECH LTD. (NASDAQ: ORBK) (the
Company
) today announced its consolidated financial
results for the second quarter of 2017.
Commenting on the results, Asher Levy, Chief Executive Officer, said: We are very pleased to report robust
financial results for the second quarter of 2017. Each of our operating divisions performed strongly and we achieved overall record quarterly bookings. While these results certainly echo the current favorable industry conditions, they are also the
fruit of the Companys steady and selective investment in research and development over the long-term, and reflect the technological leadership which our solutions offer in the highly competitive industries that we serve. New and emerging
growth opportunities in areas such as advanced smartphones, automotive and flat panel displays, mean that our total addressable market continues to expand. Our strong backlog and order book reinforce our belief that we will meet our execution plans
for 2017.
Revenues for the second quarter of 2017 totaled $210.7 million, compared with $196.0 million in the second quarter of 2016, and
$187.6 million in the first quarter of 2017.
In the Companys Production Solutions for Electronics Industry segment:
|
|
|
Revenues from the Companys printed circuit board (
PCB
) business were $82.5 million (including $51.1 million in equipment sales) in the second quarter of 2017. This compares to PCB
revenues of $72.6 million (including $43.8 million in equipment sales) in the second quarter of 2016.
|
|
|
|
Revenues from the Companys flat panel display (
FPD
) business were $69.7 million (including $58.6 million in equipment sales) in the second quarter of 2017. This compares to FPD
revenues of $49.9 million (including $39.8 million in equipment sales) in the second quarter of 2016.
|
|
|
|
Revenues from the Companys semiconductor device (
SD
) business were $54.9 million (including $44.1 million in equipment sales) in the second quarter of 2017. This compares to SD
revenues of $67.5 million (including $53.6 million in equipment sales) in the second quarter of 2016.
|
Revenues in the
Companys other segments totaled $3.6 million in the second quarter of 2017, compared with $6.0 million in the second quarter of 2016.
Service revenues for the second quarter of 2017 were $55.3 million, compared with $55.0 million in the second quarter of 2016.
Gross profit and gross margin in the second quarter of 2017 were $98.6 million and 46.8%, respectively, compared with $89.9 million and 45.9%,
respectively, in the second quarter of 2016.
GAAP net income and GAAP net income margin in the second quarter of 2017 were $25.0 million and 11.9%
respectively, compared with $13.3 million, and 6.8% respectively in the second quarter of 2016.
GAAP earnings per share (diluted) for the second
quarter of 2017 were $0.51, compared with $0.30, for the second quarter of 2016.
Adjusted EBITDA (as defined below) and adjusted EBITDA margin for the
second quarter of 2017 were $44.3 million and 21.0%, respectively, compared with $39.1 million and 20.0%, respectively, in the second quarter of 2016.
Non-GAAP
net income and
non-GAAP
net income margin for the second quarter of
2017 were $32.9 million and 15.6%, respectively, compared with $27.0 million and 13.8%, respectively, for the second quarter of 2016.
Non-GAAP
earnings per share (diluted) for the second quarter of 2017 were $0.67, compared with $0.60 per share, for the second quarter of 2016.
A reconciliation of each of the Companys
non-GAAP
measures to the comparable GAAP measure (the
Reconciliation
) is included at the end of this press release.
As of June 30, 2017, the Company had cash, cash equivalents, short
term bank deposits and marketable securities of $226.3 million, and debt of $72.3 million. During the second quarter of 2017, the Company generated cash from operations of $27.1 million. As of June 30, 2017, the actual number of
ordinary shares outstanding was approximately 47.9 million.
Second half 2017 Guidance
The Company expects revenues for the second half of 2017 to be in the range of $460 million to $480 million, split about evenly between the third and
the fourth quarters of 2017. The Company expects gross margin for the second half of 2017 to be in the range of
47.0%-47.5%,
based on current expectations of product mix.
Conference Call
An earnings conference call for the
Companys second quarter 2017 results is scheduled for today, August 2, 2017, at 8:30 a.m. EDT. The
dial-in
number for the conference call is +
1-212-444-0481
or (US toll-free)
877-280-2342
and a replay will be available on
telephone number
+1-347-366-9565
or (US toll-free)
866-932-5017
until August 16, 2017. The pass code is 7122808 or Orbotech Q2. A live webcast of the conference call can also be heard by accessing the Companys
website at: https://edge.media-server.com/m6/p/t7znkw2r. The webcast will remain available for 12 months at: http://investors.orbotech.com/phoenix.zhtml?c=71865&p=irol-audioarchives.
About Orbotech Ltd.
Orbotech Ltd. is a leading global
supplier of yield-enhancing and process-enabling solutions for the manufacture of electronics products. Orbotech provides cutting-edge solutions for use in the manufacture of PCBs, FPDs and SDs, designed to enable the production of innovative, next
generation electronic products and improve the cost effectiveness of existing and future electronics production processes. Orbotechs core business lies in enabling electronic device manufacturers to inspect and understand PCBs and FPDs to
verify their quality (reading); pattern the desired electronic circuitry on the relevant substrate and perform three dimensional shaping of metalized circuits on multiple surfaces (writing); and utilize advanced vacuum
deposition and etching processes in SD and semiconductor manufacturing (connecting). Orbotech refers to this reading, writing and connecting as enabling the Language of Electronics. For
further information, visit http://www.orbotech.com.
Cautionary Statement Regarding Forward-Looking Statements
Except for historical information, the matters discussed in this press release are 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. The words anticipate, believe,
could, will, plan, expect and would and similar terms and phrases, including references to assumptions, have been used in this press release to identify forward-looking statements. These
forward-looking statements are made based on managements expectations and beliefs concerning future events affecting Orbotech and are subject to uncertainties and factors relating to Orbotechs operations and business environment, all of
which are difficult to predict and many of which are beyond the Companys 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 Companys 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, within and among divisions, 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, including as a result of the Brexit process and administration change in the United States, 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
Companys global operations and its ability to comply with varying legal, regulatory, exchange, tax and customs regimes, the timing and outcome of tax audits, including the ongoing audit of tax years 2012-2014 in Israel (see below), the
Companys ability to achieve strategic initiatives, including related to its acquisition strategy, the Companys debt and corporate financing activities; the final timing and outcome, 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 Companys customers, which may result in
monetary judgments or settlements, expenses associated with the Korean matter, and ongoing or increased hostilities in Israel and the surrounding areas.
In addition, in May 2017 the Company received a $58 million assessment from the Israel Tax Authority with respect to the ongoing tax audit in Israel. The
Company believes that it has provided adequately for any reasonably foreseeable outcomes related to the tax audit; however, future results may include unfavorable material adjustments to estimated tax liabilities in the period when the assessment is
resolved or the audit is closed. In addition, the Israel Tax Authority is investigating the Companys tax positions. Given that the process is in its preliminary stages, the Company cannot assure the outcome or timing of completion of the
assessment process or investigation, including the amount of tax ultimately payable, and additional penalties, criminal sanctions, fines and other amounts that may be imposed as a result of the assessment and investigation, which may be material in
amount or in adverse impact on the Companys results of operations, financial position and reputation. The outcome may also impact the Companys results of operations as a result of tax positions taken for subsequent fiscal years.
Furthermore, during the second quarter of 2017, the Company elected to implement certain provisions of the Israeli Law for the Encouragement of Capital
Investments related to preferred enterprises in Israel. Although the Company is unable to predict the precise impact of this tax election, it believes the tax election will be beneficial over the long term and it does not expect that the tax
election will result in a material increase in its effective tax rate for 2017.
The foregoing information should be read in connection with the
Companys Annual Report on Form
20-F
for the year ended December 31, 2016, and subsequent SEC filings. The Company is subject to the foregoing and other risks detailed in those reports. 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.
ORBOTECH LTD.
CONDENSED CONSOLIDATED BALANCE SHEETS
U. S. dollars in thousands
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
June 30,
2017
|
|
|
December 31,
2016
|
|
ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
CURRENT ASSETS:
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
214,608
|
|
|
$
|
216,292
|
|
Restricted cash
|
|
|
|
|
|
|
12,487
|
|
Marketable securities
|
|
|
204
|
|
|
|
|
|
Short-term bank deposits
|
|
|
3,442
|
|
|
|
789
|
|
Accounts receivable - trade
|
|
|
361,237
|
|
|
|
326,343
|
|
Prepaid expenses and other current assets
|
|
|
48,316
|
|
|
|
47,258
|
|
Inventories
|
|
|
152,142
|
|
|
|
132,435
|
|
|
|
|
|
|
|
|
|
|
Total current assets
|
|
|
779,949
|
|
|
|
735,604
|
|
|
|
|
|
|
|
|
|
|
|
|
|
INVESTMENTS AND
NON-CURRENT
ASSETS:
|
|
|
|
|
|
|
|
|
Marketable securities
|
|
|
8,064
|
|
|
|
7,012
|
|
Funds in respect of employee rights upon retirement
|
|
|
10,121
|
|
|
|
8,375
|
|
Deferred income taxes
|
|
|
21,740
|
|
|
|
19,840
|
|
Equity method investee and other receivables
|
|
|
5,191
|
|
|
|
9,113
|
|
|
|
|
|
|
|
|
|
|
|
|
|
45,116
|
|
|
|
44,340
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PROPERTY, PLANT AND EQUIPMENT, net
|
|
|
65,092
|
|
|
|
62,375
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OTHER INTANGIBLE ASSETS, net
|
|
|
80,263
|
|
|
|
84,210
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GOODWILL
|
|
|
176,804
|
|
|
|
176,374
|
|
|
|
|
|
|
|
|
|
|
Total assets
|
|
$
|
1,147,224
|
|
|
$
|
1,102,903
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND
EQUITY
|
|
|
|
|
|
|
|
|
CURRENT LIABILITIES:
|
|
|
|
|
|
|
|
|
Current maturities of long-term loan
|
|
$
|
16,364
|
|
|
$
|
16,364
|
|
Accounts payable and accruals:
|
|
|
|
|
|
|
|
|
Trade
|
|
|
84,494
|
|
|
|
72,085
|
|
Other
|
|
|
102,719
|
|
|
|
114,692
|
|
Deferred income
|
|
|
31,009
|
|
|
|
28,576
|
|
|
|
|
|
|
|
|
|
|
Total current liabilities
|
|
|
234,586
|
|
|
|
231,717
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LONG-TERM LIABILITIES:
|
|
|
|
|
|
|
|
|
Long-term loan, net
|
|
|
55,886
|
|
|
|
72,002
|
|
Liability with respect to Applied Microstructure, Inc. (AMST)
|
|
|
1,471
|
|
|
|
1,471
|
|
Liability for employee rights upon retirement
|
|
|
23,753
|
|
|
|
22,973
|
|
Deferred income taxes
|
|
|
13,169
|
|
|
|
14,392
|
|
Other tax liabilities
|
|
|
9,226
|
|
|
|
7,567
|
|
|
|
|
|
|
|
|
|
|
Total long-term liabilities
|
|
|
103,505
|
|
|
|
118,405
|
|
|
|
|
|
|
|
|
|
|
Total liabilities
|
|
|
338,091
|
|
|
|
350,122
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EQUITY:
|
|
|
|
|
|
|
|
|
Share capital
|
|
|
2,386
|
|
|
|
2,381
|
|
Additional
paid-in
capital
|
|
|
425,919
|
|
|
|
420,185
|
|
Retained earnings
|
|
|
480,109
|
|
|
|
440,159
|
|
Accumulated other comprehensive loss
|
|
|
(2,732
|
)
|
|
|
(9,221
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
905,682
|
|
|
|
853,504
|
|
Less treasury shares, at cost
|
|
|
(99,539
|
)
|
|
|
(99,539
|
)
|
|
|
|
|
|
|
|
|
|
Total Orbotech Ltd. equity
|
|
|
806,143
|
|
|
|
753,965
|
|
Non-controlling
interest
|
|
|
2,990
|
|
|
|
(1,184
|
)
|
|
|
|
|
|
|
|
|
|
Total equity
|
|
|
809,133
|
|
|
|
752,781
|
|
|
|
|
|
|
|
|
|
|
Total liabilities and equity
|
|
$
|
1,147,224
|
|
|
$
|
1,102,903
|
|
|
|
|
|
|
|
|
|
|
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
U.S. dollars in thousands (except per share data)
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six months ended
June 30,
|
|
|
Three months ended
June 30,
|
|
|
|
2017
|
|
|
2016
|
|
|
2017
|
|
|
2016
|
|
Revenues
|
|
$
|
398,312
|
|
|
$
|
386,407
|
|
|
$
|
210,663
|
|
|
$
|
195,980
|
|
Cost of revenues
|
|
|
212,572
|
|
|
|
210,895
|
|
|
|
112,048
|
|
|
|
106,071
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit
|
|
|
185,740
|
|
|
|
175,512
|
|
|
|
98,615
|
|
|
|
89,909
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Research and development, net
|
|
|
58,741
|
|
|
|
52,704
|
|
|
|
30,066
|
|
|
|
26,135
|
|
Selling, general and administrative
|
|
|
66,456
|
|
|
|
61,289
|
|
|
|
32,503
|
|
|
|
31,266
|
|
Equity in earnings of Frontline
|
|
|
(2,355
|
)
|
|
|
(1,677
|
)
|
|
|
(1,305
|
)
|
|
|
(1,041
|
)
|
Amortization of intangible assets
|
|
|
12,264
|
|
|
|
13,135
|
|
|
|
6,371
|
|
|
|
6,840
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total operating expenses
|
|
|
135,106
|
|
|
|
125,451
|
|
|
|
67,635
|
|
|
|
63,200
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
|
|
|
50,634
|
|
|
|
50,061
|
|
|
|
30,980
|
|
|
|
26,709
|
|
Financial expenses - net
|
|
|
3,573
|
|
|
|
14,147
|
|
|
|
1,567
|
|
|
|
9,483
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before taxes on income
|
|
|
47,061
|
|
|
|
35,914
|
|
|
|
29,413
|
|
|
|
17,226
|
|
Taxes on income
|
|
|
7,687
|
|
|
|
6,714
|
|
|
|
4,819
|
|
|
|
3,869
|
|
Share in losses of equity method investee
|
|
|
|
|
|
|
300
|
|
|
|
|
|
|
|
150
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
|
39,374
|
|
|
|
28,900
|
|
|
|
24,594
|
|
|
|
13,207
|
|
Net loss attributable to
non-controlling
interests
|
|
|
(576
|
)
|
|
|
(194
|
)
|
|
|
(436
|
)
|
|
|
(133
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income attributable to Orbotech Ltd.
|
|
$
|
39,950
|
|
|
$
|
29,094
|
|
|
$
|
25,030
|
|
|
$
|
13,340
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic earnings per share
|
|
$
|
0.83
|
|
|
$
|
0.67
|
|
|
$
|
0.52
|
|
|
$
|
0.30
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings per share
|
|
$
|
0.82
|
|
|
$
|
0.65
|
|
|
$
|
0.51
|
|
|
$
|
0.30
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average number (in thousands) of shares used in computation of:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic earnings per share
|
|
|
47,909
|
|
|
|
43,603
|
|
|
|
47,907
|
|
|
|
44,019
|
|
Diluted earnings per share
|
|
|
48,806
|
|
|
|
44,527
|
|
|
|
48,868
|
|
|
|
44,992
|
|
ORBOTECH LTD.
RECONCILIATION OF GAAP TO
NON-GAAP
RESULTS
U.S. dollars in thousands (except per share data)
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six months ended
June 30,
|
|
|
Three months ended
June 30,
|
|
|
|
2017
|
|
|
2016
|
|
|
2017
|
|
|
2016
|
|
Reported operating income on GAAP basis
|
|
$
|
50,634
|
|
|
$
|
50,061
|
|
|
$
|
30,980
|
|
|
$
|
26,709
|
|
Equity-based compensation expenses
|
|
|
4,502
|
|
|
|
2,958
|
|
|
|
2,284
|
|
|
|
1,278
|
|
Amortization of intangible assets
|
|
|
12,264
|
|
|
|
13,135
|
|
|
|
6,371
|
|
|
|
6,840
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP
operating income
|
|
$
|
67,400
|
|
|
$
|
66,154
|
|
|
$
|
39,635
|
|
|
$
|
34,827
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reported net income attributable to Orbotech Ltd. on GAAP basis
|
|
$
|
39,950
|
|
|
$
|
29,094
|
|
|
$
|
25,030
|
|
|
$
|
13,340
|
|
Equity-based compensation expenses
|
|
|
4,502
|
|
|
|
2,958
|
|
|
|
2,284
|
|
|
|
1,278
|
|
Amortization of intangible assets
|
|
|
12,264
|
|
|
|
13,135
|
|
|
|
6,371
|
|
|
|
6,840
|
|
Tax effect of
non-GAAP
adjustments
|
|
|
(1,496
|
)
|
|
|
(1,523
|
)
|
|
|
(748
|
)
|
|
|
(794
|
)
|
Share in losses of equity method investee
|
|
|
|
|
|
|
300
|
|
|
|
|
|
|
|
150
|
|
Charges associated with the retirement of the 2014 Credit Agreement
|
|
|
|
|
|
|
6,228
|
|
|
|
|
|
|
|
6,228
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP
net income
|
|
$
|
55,220
|
|
|
$
|
50,192
|
|
|
$
|
32,937
|
|
|
$
|
27,042
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP earnings per diluted share
|
|
$
|
0.82
|
|
|
$
|
0.65
|
|
|
$
|
0.51
|
|
|
$
|
0.30
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP
earnings per diluted share
|
|
$
|
1.13
|
|
|
$
|
1.13
|
|
|
$
|
0.67
|
|
|
$
|
0.60
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares used in earnings per diluted share computation - in thousands
|
|
|
48,806
|
|
|
|
44,527
|
|
|
|
48,868
|
|
|
|
44,992
|
|
ORBOTECH LTD.
RECONCILIATION OF GAAP NET INCOME TO ADJUSTED EBITDA
U.S. dollars in thousands
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six months ended
June 30,
|
|
|
Three months ended
June 30,
|
|
|
|
2017
|
|
|
2016
|
|
|
2017
|
|
|
2016
|
|
Net income attributable to Orbotech Ltd. on GAAP basis
|
|
$
|
39,950
|
|
|
$
|
29,094
|
|
|
$
|
25,030
|
|
|
$
|
13,340
|
|
Minority interest and equity losses
|
|
|
(576
|
)
|
|
|
106
|
|
|
|
(436
|
)
|
|
|
17
|
|
Taxes on income
|
|
|
7,687
|
|
|
|
6,714
|
|
|
|
4,819
|
|
|
|
3,869
|
|
Financial expenses - net
|
|
|
3,573
|
|
|
|
14,147
|
|
|
|
1,567
|
|
|
|
9,483
|
|
Depreciation and amortization
|
|
|
21,648
|
|
|
|
21,398
|
|
|
|
10,997
|
|
|
|
11,147
|
|
Equity-based compensation expenses
|
|
|
4,502
|
|
|
|
2,958
|
|
|
|
2,284
|
|
|
|
1,278
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ADJUSTED EBITDA
|
|
$
|
76,784
|
|
|
$
|
74,417
|
|
|
$
|
44,261
|
|
|
$
|
39,134
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ORBOTECH LTD.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
U.S. dollars in thousands
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six months ended
June 30,
|
|
|
Three months ended
June 30,
|
|
|
|
2017
|
|
|
2016
|
|
|
2017
|
|
|
2016
|
|
CASH FLOWS FROM OPERATING ACTIVITIES:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
$
|
39,374
|
|
|
$
|
28,900
|
|
|
$
|
24,594
|
|
|
$
|
13,207
|
|
Adjustment to reconcile net income to net cash provided by operating activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization
|
|
|
21,648
|
|
|
|
21,398
|
|
|
|
10,997
|
|
|
|
11,147
|
|
Compensation relating to equity awards granted to employees and others - net
|
|
|
4,502
|
|
|
|
2,958
|
|
|
|
2,284
|
|
|
|
1,278
|
|
Increase in liability for employee rights upon retirement, net
|
|
|
157
|
|
|
|
879
|
|
|
|
287
|
|
|
|
632
|
|
Long-term loans discount amortization
|
|
|
|
|
|
|
1,866
|
|
|
|
|
|
|
|
1,566
|
|
Deferred financing costs amortization
|
|
|
|
|
|
|
5,460
|
|
|
|
(132
|
)
|
|
|
4,662
|
|
Deferred income taxes
|
|
|
(5,461
|
)
|
|
|
(1,678
|
)
|
|
|
(5,783
|
)
|
|
|
(464
|
)
|
Amortization of premium and accretion of discount on marketable Securities, net
|
|
|
1
|
|
|
|
94
|
|
|
|
334
|
|
|
|
28
|
|
Equity in earnings of Frontline, net of dividend received
|
|
|
(383
|
)
|
|
|
839
|
|
|
|
(409
|
)
|
|
|
650
|
|
Other
|
|
|
417
|
|
|
|
388
|
|
|
|
327
|
|
|
|
238
|
|
Increase in accounts receivable:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Trade
|
|
|
(34,893
|
)
|
|
|
(7,224
|
)
|
|
|
(7,452
|
)
|
|
|
(2,899
|
)
|
Other
|
|
|
(2,927
|
)
|
|
|
(3,703
|
)
|
|
|
(8,396
|
)
|
|
|
(986
|
)
|
Increase (decrease) in accounts payable and accruals:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Trade
|
|
|
12,358
|
|
|
|
(3,672
|
)
|
|
|
13,504
|
|
|
|
(5,310
|
)
|
Deferred income
|
|
|
2,433
|
|
|
|
(1,544
|
)
|
|
|
1,217
|
|
|
|
(2,394
|
)
|
Other
|
|
|
(1,487
|
)
|
|
|
(6,396
|
)
|
|
|
5,425
|
|
|
|
(652
|
)
|
Decrease (increase) in inventories
|
|
|
(17,904
|
)
|
|
|
(1,115
|
)
|
|
|
(9,722
|
)
|
|
|
1,015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by operating activities
|
|
|
17,835
|
|
|
|
37,450
|
|
|
|
27,075
|
|
|
|
21,718
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CASH FLOWS FROM INVESTING ACTIVITIES:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Purchase of property, plant and equipment
|
|
|
(11,914
|
)
|
|
|
(12,115
|
)
|
|
|
(6,935
|
)
|
|
|
(6,358
|
)
|
Consideration received for the sale of the Thermal product business
|
|
|
|
|
|
|
12,000
|
|
|
|
|
|
|
|
12,000
|
|
Withdraw of (investment in) bank deposits
|
|
|
(2,653
|
)
|
|
|
6,488
|
|
|
|
(2,641
|
)
|
|
|
(19
|
)
|
Purchase of marketable securities
|
|
|
(1,994
|
)
|
|
|
(2,244
|
)
|
|
|
(702
|
)
|
|
|
(976
|
)
|
Redemption of marketable securities
|
|
|
804
|
|
|
|
2,337
|
|
|
|
|
|
|
|
1,180
|
|
Investment in equity method investee
|
|
|
|
|
|
|
(1,000
|
)
|
|
|
|
|
|
|
|
|
Decrease (increase) in funds in respect of employee rights upon retirement
|
|
|
(1,122
|
)
|
|
|
126
|
|
|
|
(65
|
)
|
|
|
66
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by (used in) investing activities*
|
|
|
(16,879
|
)
|
|
|
5,592
|
|
|
|
(10,343
|
)
|
|
|
5,893
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CASH FLOWS FROM FINANCING ACTIVITIES:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Repayment of long-term loan
|
|
|
|
|
|
|
(239,635
|
)
|
|
|
|
|
|
|
(214,028
|
)
|
Repayment of bank loan
|
|
|
(16,364
|
)
|
|
|
|
|
|
|
(16,364
|
)
|
|
|
|
|
Bank loan, net of $2 million financing costs
|
|
|
|
|
|
|
108,031
|
|
|
|
|
|
|
|
108,031
|
|
Issuance of shares, net
|
|
|
|
|
|
|
99,962
|
|
|
|
|
|
|
|
99,962
|
|
Employee share options exercised
|
|
|
1,237
|
|
|
|
3,464
|
|
|
|
570
|
|
|
|
1,389
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash used in financing activities
|
|
|
(15,127
|
)
|
|
|
(28,178
|
)
|
|
|
(15,794
|
)
|
|
|
(4,646
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net increase (decrease) in cash, cash equivalents and restricted cash*
|
|
|
(14,171
|
)
|
|
|
14,864
|
|
|
|
938
|
|
|
|
22,965
|
|
Cash, cash equivalents and restricted cash at beginning of period*
|
|
|
228,779
|
|
|
|
175,719
|
|
|
|
213,670
|
|
|
|
167,618
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CASH, CASH EQUIVALENTS AND RESTRICTED CASH AT END OF PERIOD*
|
|
$
|
214,608
|
|
|
$
|
190,583
|
|
|
$
|
214,608
|
|
|
$
|
190,583
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP
Financial Measures
Non-GAAP
net income,
non-GAAP
net income margin,
non-GAAP
net income per share detailed in the Reconciliation exclude charges, income or losses, as applicable, related to one or more of the following: (i) equity-based compensation expenses;
(ii) certain items associated with acquisitions, including amortization of intangibles and acquisition costs; (iii) certain items associated with sale or disposition of businesses; (iv) tax impact; (v) share in losses of equity
method investee and amounts associated with
non-controlling
interests company; and/or (vi) charges associated with the financing activities related to the retirement of the Companys credit Agreement
entered into in 2014.
The Company uses the
non-GAAP
measures indicated in the Reconciliation to supplement the
Companys financial results presented on a GAAP basis. These
non-GAAP
measures exclude equity based compensation expenses, amortization of intangible assets, share in losses/profits of associated
companies, as well as certain financial and other expenses and items that are believed to be helpful in understanding and comparing past operating and financial performance with current results. Management uses all of the
non-GAAP
measures to evaluate the Companys operating and financial performance in light of business objectives and for planning purposes. These measures are not in accordance with GAAP and may differ from
non-GAAP
methods of accounting and reporting used by other companies. Orbotech believes that these measures enhance investors ability to review the Companys business from the same perspective as the
Companys management and facilitate comparisons with results for prior periods. In addition, these
non-GAAP
measures are among the primary factors management uses in planning for and forecasting future
periods. However, the
non-GAAP
measures presented are subject to limitations as an analytical tool because they exclude certain recurring items (such as, equity compensation, financial expense and amortization
of intangible assets) as described below and in the Reconciliation. The presentation of this additional
non-GAAP
information should not be considered in isolation or as a substitute for net income; net income
attributable to Orbotech Ltd. or earnings per share prepared in accordance with GAAP, and should be read only in conjunction with the Companys consolidated financial statements prepared in accordance with GAAP. For a quantification of the
adjustments made to comparable GAAP measures, please see the Reconciliation.
The effect of equity-based compensation expenses has been excluded from the
non-GAAP
measures. Although equity-based compensation is a key incentive offered to employees, and the Company believes such compensation contributed to the revenues earned during the periods presented and also
believes it will contribute to the generation of future period revenues, the Company continues to evaluate its business performance excluding equity based compensation expenses. Equity-based compensation expenses will recur in future periods.
The effects of amortization of intangible assets have also been excluded from the measures. This item is inconsistent in amount and frequency and is
significantly affected by the timing and size of acquisitions and dispositions. Investors should note that the use of intangible assets contributed to revenues earned during the periods presented and will contribute to future period revenues as
well. Amortization of intangible assets will recur in future periods and the Company may be required to record impairment charges in the future. The Company believes that it is useful for investors to understand the effects of these items on total
operating expenses.
The effects of a sale or disposition of a business have also been excluded from the
non-GAAP
measures. This item is inconsistent in amount and frequency. By excluding the item from the
non-GAAP
measures, management is better able to evaluate the Companys ability to utilize its existing
businesses and estimate the long-term value that remaining businesses will generate for the Company. Furthermore, the Company believes that this adjustment correlates more closely with the sustainability of the Companys operating performance.
Adjusted EBITDA is also a
non-GAAP
financial measure. The Company defines adjusted EBITDA as net income
attributable to Orbotech Ltd., further adjusted, in addition to the items described above, to exclude taxes on income, financial expenses (income) net and depreciation. The Company presents adjusted EBITDA because it considers it to be an
important supplemental measure and believes it is frequently used by securities analysts, investors and other interested parties in the evaluation of companies in Orbotechs industry. Adjusted EBITDA margin is a measurement of Orbotechs
adjusted EBITDA as a percentage of its revenues. Although the Company believes its presentation of adjusted EBITDA is useful, its adjusted EBITDA measure may not be comparable to similarly named measures presented by other companies.
For more information about all of the foregoing items, see the Reconciliation, the Companys Annual Report on Form
20-F
filed with the SEC for the year ended December 31, 2016, and its other SEC filings.
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Company Contact
:
Rami Rozen
Director of Investor Relations
Orbotech Ltd
Tel:
+972-8-942
3582
Rami.rozen@orbotech.com
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Tally Kaplan Porat
Director of Corporate Marketing
Orbotech Ltd
Tel:
+972-8-942
3603
Tally-Ka@orbotech.com
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by
the undersigned, thereunto duly authorized.
ORBOTECH LTD.
(Registrant)
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By:
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/s/ Ran Bareket
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Ran Bareket
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Corporate Vice President and
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Chief Financial Officer
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Date:
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August 3, 2017
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