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 November 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, November 1, 2017, and entitled Orbotech Reports Third 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 THIRD QUARTER 2017 RESULTS
2017 third quarter highlights
|
Revenues of $245.7
million
|
|
GAAP EPS of $0.75 (diluted); non-GAAP EPS of $0.91 (diluted)
|
2017 fourth quarter guidance
|
Revenue range: $245
million to $255
million
|
|
Gross margin of approximately 48.0% based on current expectations of product mix
|
YAVNE, ISRAEL,
November 1, 2017 | ORBOTECH LTD. (NASDAQ: ORBK) (the
Company
) today announced its consolidated financial results for the third quarter of 2017.
Commenting on the results, Asher Levy, Chief Executive Officer, said: Our very strong third quarter financial performance reflects robust execution of
our business plans, the wide acceptance of our new solutions and continued transformation of our technological innovation into improved revenues and profits. Each of our three divisions performed well and we are experiencing favorable business
momentum across the board. These favorable industry conditions, in conjunction with our technological leadership, create new opportunities for Orbotech in areas such as advanced smartphones, automotive and flat panel displays, where our solutions
enable the most advanced manufacturing technologies and, in turn, increase our total addressable market.
Revenues for the third quarter of 2017
totaled $245.7 million, compared with $205.0 million in the third quarter of 2016, and $210.7 million in the second quarter of 2017.
In the
Companys Production Solutions for Electronics Industry segment:
|
|
|
Revenues from the Companys printed circuit board (
PCB
) business were $85.7 million (including $52.6 million in equipment sales) in the third quarter of 2017. This compares to PCB
revenues of $69.0 million (including $38.0 million in equipment sales) in the third quarter of 2016.
|
|
|
|
Revenues from the Companys flat panel display (
FPD
) business were $76.0 million (including $64.5 million in equipment sales) in the third quarter of 2017. This compares to FPD revenues
of $59.8 million (including $49.4 million in equipment sales) in the third quarter of 2016.
|
|
|
|
Revenues from the Companys semiconductor device (
SD
) business were $78.5 million (including $65.9 million in equipment sales) in the third quarter of 2017. This compares to SD revenues
of $71.5 million (including $57.4 million in equipment sales) in the third quarter of 2016.
|
Revenues in the Companys other
segments totaled $5.4 million in the third quarter of 2017, compared with $4.6 million in the third quarter of 2016.
Service revenues for the
third quarter of 2017 were $59.2 million, compared with $58.0 million in the third quarter of 2016.
Gross profit and gross margin in the third
quarter of 2017 were $118.0 million and 48.0%, respectively, compared with $96.2 million and 46.9%, respectively, in the third quarter of 2016.
GAAP net income and GAAP net income margin in the third quarter of 2017 were $36.6 million and 14.9% respectively, compared with $24.7 million, and
12.1% respectively in the third quarter of 2016.
GAAP earnings per share (diluted) for the third quarter of 2017 were $0.75, compared with $0.51, for the
third quarter of 2016.
Adjusted EBITDA (as defined below) and adjusted EBITDA margin for the third quarter of 2017 were $57.6 million and 23.5%,
respectively, compared with $43.8 million and 21.4%, respectively, in the third quarter of 2016.
Non-GAAP
net
income and
non-GAAP
net income margin for the third quarter of 2017 were $44.7 million and 18.2%, respectively, compared with $33.0 million and 16.1%, respectively, for the third quarter of 2016.
Non-GAAP
earnings per share (diluted) for the third quarter of 2017 were $0.91, compared with $0.68 per share, for
the third 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 September 30, 2017, the Company had cash, cash equivalents, short term bank deposits and marketable
securities of $247.0 million, and debt of $72.4 million. As of September 30, 2017, the actual number of ordinary shares outstanding was approximately 48.0 million.
Fourth quarter 2017 Guidance
The Company expects revenues
for the fourth quarter of 2017 to be in the range of $245 million to $255 million; and gross margin for the fourth quarter of 2017 to be approximately 48.0%, based on current expectations of product mix.
Investor Day
The Company will host an Investor Day on
Monday, November 6, 2017 at the W Hotel in New York City. The event will include the introduction of a new Orbotech financial model as well as presentations by business teams. Presentations will commence promptly at 9:00 a.m. EST and the event
is expected to conclude at approximately 1:00 p.m. EST. To register for attendance, please contact Rami Rozen, Orbotech Director of Investor Relations, on rami.rozen@orbotech.com. A webcast of the presentation will be broadcast simultaneously
through a link on the Investors section of the Orbotech Ltd. website. A replay of the webcast, as well as presentation materials, will remain available for 90 days.
Conference Call
An earnings conference call for the
Companys third quarter 2017 results is scheduled for today, November 1, 2017, at 8:30 a.m. EDT. The
dial-in
number for the conference call is +
1-646-254-3362
or (US toll-free)
877-280-2296
and a replay will be available on
telephone number
+1-719-457-0820
or (US toll-free)
888-203-1112
until November 15, 2017. The pass code is 9707467 or Orbotech Q3. A live webcast of the conference call can also be heard by accessing the
Companys website at: https://edge.media-server.com/m6/p/y9sehn6g. 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 and related criminal
investigation (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 May 2017, the Company received a best judgment tax assessment from the Israel Tax Authority (the
ITA
) with respect to an audit of the Company for the fiscal years 2012-2014 (the
Assessment
), for an aggregate amount of tax against the Company, after offsetting all operating losses for tax purposes available
through the end of 2014, of approximately NIS 207 million (currently approximately U.S. $58 million) which amount includes related interest and linkage differentials (as of date of the Assessment). All amounts related to the Assessment are
given after application of the Companys accumulated losses. Approximately 80% of the amount of the Assessment, assuming that all accumulated losses are set off against the other matters included in the Assessment, relates to the following two
matters: (1) the use of tax exempt profits derived from the Companys approved and benefitting enterprises under the Law for the Encouragement of Capital Investment, 1959, in particular in its investments in, or acquisitions of, foreign
subsidiaries; and (2) the purchase of shares of the Company by its foreign subsidiaries during the audit period. The Company has not taken any reserves or provisions related to these two matters because it reasonably believes its positions are
more likely than not correct as a legal matter. The Company intends vigorously to contest the ITAs position on both of these matters and does not anticipate establishing a provision related to these matters. The other significant item in the
Assessment relates to the Companys transfer pricing. As of September 30, 2017, the Companys tax provisions with respect to the audit period cover at least a majority of the remaining 20% of the Assessment. However, because of the
ongoing criminal investigation against the Company, certain of its employees and its tax consultant related to tax positions taken by the Company in the audit period as well as in prior periods, the Company has not conducted a comprehensive
independent review of the work of its employees and tax consultant involved in evaluating and establishing its tax positions, including with respect to this and certain other matters that are the subject of the Assessment. The Company expects to
begin this review process in connection with the preparation of its annual financial statements and annual report, however it cannot assure investors of the timing or outcome of such review.
If the Companys evaluation of its tax positions proves to be inaccurate, it may be required to increase its provisions or take a charge in future
periods. The outcome of its review may also impact the Companys results of operations as a result of tax positions taken for subsequent fiscal years. The amount of the increase and/or the charge against earnings could be material with respect
to the audit period and subsequent periods. In addition, the Company does not have any insight into the scope or time period of the criminal investigation or the timing of any prosecutorial action related to the investigation which may occur in the
coming days, weeks, months or years. Although the Company cannot predict the timing of any prosecutorial action, the Company expects to be summoned to the prosecutors office for a hearing, at which it will have the opportunity to present its
positions, prior to any indictments of the Company and/or certain of its employees and/or payment of monetary amounts in lieu of such indictments. The Company has not conducted its own investigation into any matters that may be the subject of such
investigation and will only do so once the criminal investigation has been completed. The Company intends vigorously to contest the Assessment in accordance with Israeli law as well as defend itself and its employees in the criminal matter, but it
cannot assure investors as to the outcome or timing of completion of either process, including the amount of tax ultimately payable related to 2012-2014 and prior fiscal years, or any additional taxes, penalties, criminal sanctions, indictments,
fines and other amounts or that may be imposed as a result of the Assessment and criminal investigation, which may be material in amount or in adverse impact on the Companys results of operations, financial position and reputation.
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)
|
|
|
|
|
|
|
|
|
|
|
September 30,
2017
|
|
|
December 31,
2016
|
|
ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
CURRENT ASSETS:
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
237,754
|
|
|
$
|
216,292
|
|
Restricted cash
|
|
|
|
|
|
|
12,487
|
|
Marketable securities
|
|
|
201
|
|
|
|
|
|
Short-term bank deposits
|
|
|
973
|
|
|
|
789
|
|
Accounts receivable - trade
|
|
|
385,481
|
|
|
|
326,343
|
|
Prepaid expenses and other current assets
|
|
|
52,750
|
|
|
|
47,258
|
|
Inventories
|
|
|
164,049
|
|
|
|
132,435
|
|
|
|
|
|
|
|
|
|
|
Total current assets
|
|
|
841,208
|
|
|
|
735,604
|
|
|
|
|
|
|
|
|
|
|
|
|
|
INVESTMENTS AND
NON-CURRENT
ASSETS:
|
|
|
|
|
|
|
|
|
Marketable securities
|
|
|
8,058
|
|
|
|
7,012
|
|
Funds in respect of employee rights upon retirement
|
|
|
10,105
|
|
|
|
8,375
|
|
Deferred income taxes
|
|
|
22,323
|
|
|
|
19,840
|
|
Equity method investee and other receivables
|
|
|
5,166
|
|
|
|
9,113
|
|
|
|
|
|
|
|
|
|
|
|
|
|
45,652
|
|
|
|
44,340
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PROPERTY, PLANT AND EQUIPMENT, net
|
|
|
67,848
|
|
|
|
62,375
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OTHER INTANGIBLE ASSETS, net
|
|
|
73,897
|
|
|
|
84,210
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GOODWILL
|
|
|
176,804
|
|
|
|
176,374
|
|
|
|
|
|
|
|
|
|
|
Total assets
|
|
$
|
1,205,409
|
|
|
$
|
1,102,903
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND
EQUITY
|
|
|
|
|
|
|
|
|
CURRENT LIABILITIES:
|
|
|
|
|
|
|
|
|
Current maturities of long-term loan
|
|
$
|
16,364
|
|
|
$
|
16,364
|
|
Accounts payable and accruals:
|
|
|
|
|
|
|
|
|
Trade
|
|
|
82,883
|
|
|
|
72,085
|
|
Other
|
|
|
117,032
|
|
|
|
114,692
|
|
Deferred income
|
|
|
33,512
|
|
|
|
28,576
|
|
|
|
|
|
|
|
|
|
|
Total current liabilities
|
|
|
249,791
|
|
|
|
231,717
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LONG-TERM LIABILITIES:
|
|
|
|
|
|
|
|
|
Long-term loan, net
|
|
|
56,001
|
|
|
|
72,002
|
|
Liability with respect to Applied Microstructure, Inc. (AMST)
|
|
|
1,471
|
|
|
|
1,471
|
|
Liability for employee rights upon retirement
|
|
|
24,357
|
|
|
|
22,973
|
|
Deferred income taxes
|
|
|
12,425
|
|
|
|
14,392
|
|
Other tax liabilities
|
|
|
10,771
|
|
|
|
7,567
|
|
|
|
|
|
|
|
|
|
|
Total long-term liabilities
|
|
|
105,025
|
|
|
|
118,405
|
|
|
|
|
|
|
|
|
|
|
Total liabilities
|
|
|
354,816
|
|
|
|
350,122
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EQUITY:
|
|
|
|
|
|
|
|
|
Share capital
|
|
|
2,390
|
|
|
|
2,381
|
|
Additional
paid-in
capital
|
|
|
429,296
|
|
|
|
420,185
|
|
Retained earnings
|
|
|
516,663
|
|
|
|
440,159
|
|
Accumulated other comprehensive loss
|
|
|
(804
|
)
|
|
|
(9,221
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
947,545
|
|
|
|
853,504
|
|
Less treasury shares, at cost
|
|
|
(99,539
|
)
|
|
|
(99,539
|
)
|
|
|
|
|
|
|
|
|
|
Total Orbotech Ltd. equity
|
|
|
848,006
|
|
|
|
753,965
|
|
Non-controlling
interest
|
|
|
2,587
|
|
|
|
(1,184
|
)
|
|
|
|
|
|
|
|
|
|
Total equity
|
|
|
850,593
|
|
|
|
752,781
|
|
|
|
|
|
|
|
|
|
|
Total liabilities and equity
|
|
$
|
1,205,409
|
|
|
$
|
1,102,903
|
|
|
|
|
|
|
|
|
|
|
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
U.S. dollars in thousands (except per share data)
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine months ended
September 30,
|
|
|
Three months ended
September 30,
|
|
|
|
2017
|
|
|
2016
|
|
|
2017
|
|
|
2016
|
|
Revenues
|
|
$
|
643,976
|
|
|
$
|
591,360
|
|
|
$
|
245,664
|
|
|
$
|
204,953
|
|
Cost of revenues
|
|
|
340,224
|
|
|
|
319,634
|
|
|
|
127,652
|
|
|
|
108,739
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit
|
|
|
303,752
|
|
|
|
271,726
|
|
|
|
118,012
|
|
|
|
96,214
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Research and development, net
|
|
|
90,662
|
|
|
|
80,049
|
|
|
|
31,921
|
|
|
|
27,345
|
|
Selling, general and administrative
|
|
|
103,019
|
|
|
|
92,357
|
|
|
|
36,563
|
|
|
|
31,068
|
|
Equity in earnings of P.C.B. Solutions L.P (Frontline)
|
|
|
(3,235
|
)
|
|
|
(2,311
|
)
|
|
|
(880
|
)
|
|
|
(634
|
)
|
Amortization of intangible assets
|
|
|
18,635
|
|
|
|
20,750
|
|
|
|
6,371
|
|
|
|
7,615
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total operating expenses
|
|
|
209,081
|
|
|
|
190,845
|
|
|
|
73,975
|
|
|
|
65,394
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
|
|
|
94,671
|
|
|
|
80,881
|
|
|
|
44,037
|
|
|
|
30,820
|
|
Financial expenses - net
|
|
|
4,890
|
|
|
|
15,318
|
|
|
|
1,317
|
|
|
|
1,171
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before taxes on income
|
|
|
89,781
|
|
|
|
65,563
|
|
|
|
42,720
|
|
|
|
29,649
|
|
Taxes on income
|
|
|
14,256
|
|
|
|
11,599
|
|
|
|
6,569
|
|
|
|
4,885
|
|
Share in losses of equity method investee
|
|
|
|
|
|
|
450
|
|
|
|
|
|
|
|
150
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
|
75,525
|
|
|
|
53,514
|
|
|
|
36,151
|
|
|
|
24,614
|
|
Net loss attributable to
non-controlling
interests
|
|
|
(979
|
)
|
|
|
(293
|
)
|
|
|
(403
|
)
|
|
|
(99
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income attributable to Orbotech Ltd.
|
|
$
|
76,504
|
|
|
$
|
53,807
|
|
|
$
|
36,554
|
|
|
$
|
24,713
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic earnings per share
|
|
$
|
1.60
|
|
|
$
|
1.20
|
|
|
$
|
0.76
|
|
|
$
|
0.52
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings per share
|
|
$
|
1.57
|
|
|
$
|
1.17
|
|
|
$
|
0.75
|
|
|
$
|
0.51
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average number of shares (in thousands) used in computation of:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic earnings per share
|
|
|
47,914
|
|
|
|
44,867
|
|
|
|
47,995
|
|
|
|
47,397
|
|
Diluted earnings per share
|
|
|
48,812
|
|
|
|
45,813
|
|
|
|
48,903
|
|
|
|
48,385
|
|
ORBOTECH LTD.
RECONCILIATION OF GAAP TO
NON-GAAP
RESULTS
U.S. dollars in thousands (except per share data)
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine months ended
September 30,
|
|
|
Three months ended
September 30,
|
|
|
|
2017
|
|
|
2016
|
|
|
2017
|
|
|
2016
|
|
Reported operating income on GAAP basis
|
|
$
|
94,671
|
|
|
$
|
80,881
|
|
|
$
|
44,037
|
|
|
$
|
30,820
|
|
Equity-based compensation expenses
|
|
|
6,982
|
|
|
|
4,319
|
|
|
|
2,480
|
|
|
|
1,361
|
|
Amortization of intangible assets
|
|
|
18,635
|
|
|
|
20,750
|
|
|
|
6,371
|
|
|
|
7,615
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP
operating income
|
|
$
|
120,288
|
|
|
$
|
105,950
|
|
|
$
|
52,888
|
|
|
$
|
39,796
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reported net income attributable to Orbotech Ltd. on GAAP basis
|
|
$
|
76,504
|
|
|
$
|
53,807
|
|
|
$
|
36,554
|
|
|
$
|
24,713
|
|
Equity-based compensation expenses
|
|
|
6,982
|
|
|
|
4,319
|
|
|
|
2,480
|
|
|
|
1,361
|
|
Amortization of intangible assets
|
|
|
18,635
|
|
|
|
20,750
|
|
|
|
6,371
|
|
|
|
7,615
|
|
Tax effect of
non-GAAP
adjustments
|
|
|
(2,244
|
)
|
|
|
(2,410
|
)
|
|
|
(748
|
)
|
|
|
(887
|
)
|
Share in losses of equity method investee
|
|
|
|
|
|
|
450
|
|
|
|
|
|
|
|
150
|
|
Charges associated with the retirement of the 2014 Credit Agreement
|
|
|
|
|
|
|
6,228
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP
net income
|
|
$
|
99,877
|
|
|
$
|
83,144
|
|
|
$
|
44,657
|
|
|
$
|
32,952
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP earnings per diluted share
|
|
$
|
1.57
|
|
|
$
|
1.17
|
|
|
$
|
0.75
|
|
|
$
|
0.51
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP
earnings per diluted share
|
|
$
|
2.05
|
|
|
$
|
1.81
|
|
|
$
|
0.91
|
|
|
$
|
0.68
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares used in earnings per diluted share computation - in thousands
|
|
|
48,812
|
|
|
|
45,813
|
|
|
|
48,903
|
|
|
|
48,385
|
|
ORBOTECH LTD.
RECONCILIATION OF GAAP NET INCOME TO ADJUSTED EBITDA
U.S. dollars in thousands
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine months ended
September 30,
|
|
|
Three months ended
September 30,
|
|
|
|
2017
|
|
|
2016
|
|
|
2017
|
|
|
2016
|
|
Net income attributable to Orbotech Ltd. on GAAP basis
|
|
$
|
76,504
|
|
|
$
|
53,807
|
|
|
$
|
36,554
|
|
|
$
|
24,713
|
|
Minority interest and equity losses
|
|
|
(979
|
)
|
|
|
157
|
|
|
|
(403
|
)
|
|
|
51
|
|
Taxes on income
|
|
|
14,256
|
|
|
|
11,599
|
|
|
|
6,569
|
|
|
|
4,885
|
|
Financial expenses - net
|
|
|
4,890
|
|
|
|
15,318
|
|
|
|
1,317
|
|
|
|
1,171
|
|
Depreciation and amortization
|
|
|
32,749
|
|
|
|
32,997
|
|
|
|
11,101
|
|
|
|
11,599
|
|
Equity-based compensation expenses
|
|
|
6,982
|
|
|
|
4,319
|
|
|
|
2,480
|
|
|
|
1,361
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ADJUSTED EBITDA
|
|
$
|
134,402
|
|
|
$
|
118,197
|
|
|
$
|
57,618
|
|
|
$
|
43,780
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ORBOTECH LTD.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
U.S. dollars in thousands
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine months ended
September 30,
|
|
|
Three months ended
September 30,
|
|
|
|
2017
|
|
|
2016
|
|
|
2017
|
|
|
2016
|
|
CASH FLOWS FROM OPERATING ACTIVITIES:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
$
|
75,525
|
|
|
$
|
53,514
|
|
|
$
|
36,151
|
|
|
$
|
24,614
|
|
Adjustment to reconcile net income to net cash provided by operating activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization
|
|
|
32,749
|
|
|
|
32,997
|
|
|
|
11,101
|
|
|
|
11,599
|
|
Compensation relating to equity awards granted to employees and others - net
|
|
|
6,982
|
|
|
|
4,319
|
|
|
|
2,480
|
|
|
|
1,361
|
|
Increase in liability for employee rights upon retirement, net
|
|
|
842
|
|
|
|
1,531
|
|
|
|
685
|
|
|
|
652
|
|
Long-term loans discount amortization
|
|
|
|
|
|
|
1,866
|
|
|
|
|
|
|
|
|
|
Deferred financing costs amortization
|
|
|
363
|
|
|
|
5,585
|
|
|
|
363
|
|
|
|
125
|
|
Deferred income taxes
|
|
|
(6,788
|
)
|
|
|
(2,774
|
)
|
|
|
(1,327
|
)
|
|
|
(1,096
|
)
|
Amortization of premium and accretion of discount on marketable Securities, net
|
|
|
37
|
|
|
|
112
|
|
|
|
36
|
|
|
|
18
|
|
Equity in earnings of Frontline, net of dividend received
|
|
|
(363
|
)
|
|
|
1,105
|
|
|
|
20
|
|
|
|
266
|
|
Other
|
|
|
127
|
|
|
|
631
|
|
|
|
(290
|
)
|
|
|
243
|
|
Decrease (increase) in accounts receivable:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Trade
|
|
|
(59,138
|
)
|
|
|
(35,315
|
)
|
|
|
(24,245
|
)
|
|
|
(28,091
|
)
|
Other
|
|
|
(7,286
|
)
|
|
|
608
|
|
|
|
(4,359
|
)
|
|
|
4,311
|
|
Increase (decrease) in accounts payable and accruals:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Trade
|
|
|
10,747
|
|
|
|
(2,734
|
)
|
|
|
(1,611
|
)
|
|
|
938
|
|
Deferred income
|
|
|
4,936
|
|
|
|
(1,790
|
)
|
|
|
2,503
|
|
|
|
(246
|
)
|
Other
|
|
|
16,690
|
|
|
|
4,202
|
|
|
|
18,177
|
|
|
|
10,598
|
|
Increase in inventories
|
|
|
(29,811
|
)
|
|
|
(4,571
|
)
|
|
|
(11,907
|
)
|
|
|
(3,456
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by operating activities
|
|
|
45,612
|
|
|
|
59,286
|
|
|
|
27,777
|
|
|
|
21,836
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CASH FLOWS FROM INVESTING ACTIVITIES:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Purchase of property, plant and equipment
|
|
|
(19,850
|
)
|
|
|
(17,387
|
)
|
|
|
(7,936
|
)
|
|
|
(5,272
|
)
|
Consideration received for the sale of the Thermal Products business
|
|
|
|
|
|
|
12,000
|
|
|
|
|
|
|
|
|
|
Withdrawal of (investment in) bank deposits
|
|
|
(184
|
)
|
|
|
5,714
|
|
|
|
2,469
|
|
|
|
(774
|
)
|
Purchase of marketable securities
|
|
|
(1,994
|
)
|
|
|
(4,836
|
)
|
|
|
|
|
|
|
(2,592
|
)
|
Redemption of marketable securities
|
|
|
804
|
|
|
|
3,617
|
|
|
|
|
|
|
|
1,280
|
|
Investment in equity method investee
|
|
|
|
|
|
|
(1,000
|
)
|
|
|
|
|
|
|
|
|
Acquisition of the assets of AMST
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Decrease (increase) in funds in respect of employee rights upon retirement
|
|
|
(1,187
|
)
|
|
|
194
|
|
|
|
(65
|
)
|
|
|
68
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash used in investing activities*
|
|
|
(22,411
|
)
|
|
|
(1,698
|
)
|
|
|
(5,532
|
)
|
|
|
(7,290
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CASH FLOWS FROM FINANCING ACTIVITIES:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Repayment of long-term loan
|
|
|
|
|
|
|
(239,635
|
)
|
|
|
|
|
|
|
|
|
Repayment of bank loan
|
|
|
(16,364
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
Bank loan, net of $2 million financing costs
|
|
|
|
|
|
|
108,031
|
|
|
|
|
|
|
|
|
|
Issuance of shares, net
|
|
|
|
|
|
|
99,962
|
|
|
|
|
|
|
|
|
|
Employee share options exercised
|
|
|
2,138
|
|
|
|
5,100
|
|
|
|
901
|
|
|
|
1,636
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by (used in) financing activities
|
|
|
(14,226
|
)
|
|
|
(26,542
|
)
|
|
|
901
|
|
|
|
1,636
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net increase in cash, cash equivalents and restricted cash*
|
|
|
8,975
|
|
|
|
31,046
|
|
|
|
23,146
|
|
|
|
16,182
|
|
Cash, cash equivalents and restricted cash at beginning of period*
|
|
|
228,779
|
|
|
|
175,719
|
|
|
|
214,608
|
|
|
|
190,583
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CASH, CASH EQUIVALENTS AND RESTRICTED CASH AT END OF PERIOD*
|
|
$
|
237,754
|
|
|
$
|
206,765
|
|
|
$
|
237,754
|
|
|
$
|
206,765
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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 assets and acquisition costs; (iii) certain items associated with sale or disposition of businesses; (iv) certain tax impact; (v) share in
losses/ profits of equity method investee; 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 equity method investee, 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. The Company 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-based 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, amounts associated with
non-controlling
interests
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/ Asher Levy
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Asher Levy
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Chief Executive Officer
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Date:
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November 2, 2017
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