Orbotech's PCB Business Posts Revenue of $64.2M in Q3 2015

Estimated reading time: 4 minutes

2015 third quarter highlights compared with 2014 third quarter

• Revenues of $190.5 million, up 13.9% compared with $167.3 million
• Non-GAAP EPS of $0.55 (diluted), compared with $0.36 adjusted to acquiring SPTS on July 1st, 2014
• GAAP EPS of $0.37 (diluted), compared with $0.17 (diluted)

2015 fourth quarter guidance

• Revenue range: $184 million to $192 million
• Gross margin: approximately 45%.

ORBOTECH LTD. has announced its consolidated financial results for the third quarter and nine months ended September 30, 2015.

Commenting on the results, Asher Levy, Chief Executive Officer, said, “We are very pleased to report robust top-line growth and profitability. We continue to execute consistently on our business plan and make strong progress towards achieving our operating model goals. We remain committed to innovation, as evidenced by today’s announcement of the launch of two products designed for Printed Circuit Board Solder Mask production. The Company’s results for the third quarter and year-to-date clearly demonstrate the strength of our business model - which enjoys healthy diversification across businesses, industries, product lines and geographies. As we look forward into 2016, we are confident in our ability to continue to capitalize on the growth opportunities available to the Company.”

Revenues for the third quarter of 2015 totaled $190.5 million, up 13.9% from $167.3 million in the third quarter of 2014.

In the Company’s Production Solutions for Electronics Industry segment:

- Revenues from the Company’s semiconductor device (“SD”) business were $70.2 million, including $58.4 million in equipment sales, in the third quarter of 2015. This compares to SD business revenues of $53.3 million (including $45.6 million in equipment sales) in the third quarter of 2014. Revenues from the SD business on a standalone basis for the full third quarter of 2014 totaled $57.3 million.

- Revenues from the Company’s printed circuit board (“PCB”) business were $64.2 million, including $34.5 million in equipment sales, in the third quarter of 2015. This compares to PCB revenues of $71.7 million (including $41.4 million in equipment sales) in the third quarter of 2014.

- Revenues from the Company’s flat panel display (“FPD”) business were $48.5 million, including $38.6 million in equipment sales, in the third quarter of 2015. This compares to FPD revenues of $34.9 million (including $26.7 million in equipment sales) in the third quarter of 2014.

Revenues in the Company’s other segments were $7.6 million in the third quarter of 2015, compared with $7.4 million in the third quarter of 2014.

Service revenues for the third quarter of 2015 were $53.5 million, compared with $47.8 million in the third quarter of 2014.

Revenues for the first nine months of 2015 totaled $564.3 million, compared with $385.3 million in the first nine months of 2014 (excluding the Company’s SD business, revenues totaled $372.1 million, up 12.1% from $332.0 million the first nine months of 2014).

Gross profit and gross margin in the third quarter of 2015 were $86.3 million and 45.3%, respectively, compared with $74.0 million and 44.2%, respectively, in the third quarter of 2014. Gross profit and gross margin in the first nine months of 2015 were $255.2 million and 45.2%, respectively, compared with $168.3 million and 43.7%, respectively, in the first nine months of 2014.

GAAP net income for the third quarter of 2015 was $15.9 million, or $0.37 per share (diluted), up from $7.4 million, or $0.17 per share (diluted), for the third quarter of 2014. GAAP net income for the first nine months of 2015 was $40.7 million, or $0.94 per share (diluted), up from $22.3 million, or $0.52 per share (diluted), for the first nine months of 2014. GAAP net income for the first nine months of 2015 included a pre-tax gain of approximately $0.6 million related to the sale of the Company’s Thermal Products business.

Adjusted EBITDA (as defined below) and adjusted EBITDA margin for the third quarter of 2015 were $37.1 million and 19.5%, respectively, up from $32.0 million and 19.1%, respectively, in the third quarter of 2014. Adjusted EBITDA and adjusted EBITDA margin for the first nine months of 2015 were $107.6 million and 19.1%, respectively, up from $58.4 million and 15.2%, respectively, in the first nine months of 2014.

Non-GAAP net income and non-GAAP net income margin for the third quarter of 2015 were $23.7 million and 12.4%, respectively, compared with $22.6 million and 13.5%, for the third quarter of 2014. Non-GAAP net income in the third quarter of 2014 was positively affected in the amount of $7.3 million as a result of the timing of incurrence of expenses and the recognition of revenues as a result of the SPTS acquisition timing, as previously disclosed. Non-GAAP net income and non-GAAP net income margin for the first nine months of 2015 were $67.4 million and 11.9%, respectively, compared with $41.3 million and 10.7%, for the first nine months of 2014.

Non-GAAP earnings per share (diluted) for the third quarter of 2015 was $0.55, compared with $0.53 per share (diluted), for the third quarter of 2014. Non-GAAP earnings per share in the third quarter of 2014 were positively affected in the amount of $0.17, likewise due to the SPTS acquisition timing factors discussed above. Non-GAAP earnings per share (diluted) for the first nine months of 2015 was $1.56, compared with $0.97 per share (diluted), for the first nine months of 2014.

A reconciliation of each of the Company’s non-GAAP measures to the comparable GAAP measure is included at the end of this press release (the “Reconciliation”).

As of September 30, 2015, the Company had cash, cash equivalents (including restricted cash) short-term bank deposits and marketable securities of approximately $193.2 million, and debt of $270.3 million. In the third quarter of 2015, the Company generated cash of $7.8 million from operations and repaid $8.2 million of its term loan.

Fourth Quarter and 2015 Guidance

The Company expects revenues for the fourth quarter and full year of 2015 to be in the range of $184 million to $192 million and $748 million to $756 million, respectively, and gross margin for both the fourth quarter and full year of 2015 of approximately 45%.

About Orbotech Ltd.

Orbotech Ltd. (NASDAQ: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. For more information, visit http://www.orbotech.com/.