Orbotech Reports Revenues of $187.6 Million in Q1 2017

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Orbotech Ltd. today announced its consolidated financial results for the first quarter of 2017.

2017 first quarter highlights

• Revenues of $187.6 million
• Gross margin of 46.4%
• GAAP EPS of $0.31 (diluted); non-GAAP EPS of $0.46 (diluted)

2017 second quarter guidance

• Revenue range: $200 million to $210 million
• Gross margin of 46.0% based on current expectations of product mix

Commenting on the results, Asher Levy, Chief Executive Officer, said: “Our results for the first quarter of 2017 reflect a solid start to the year, and are marked by particularly strong execution in our PCB division - mainly from new product sales. We see the current growth opportunities in our existing served industries, such as advanced smartphones, automotive applications and flex OLED screens, as well as the plans for additional panel fabrication capacity by Chinese FPD manufacturers, as being strongly supportive of our growth for the remainder of 2017. As we have previously indicated, we anticipate that our 2017 results will be more backend loaded than previous years, and we expect to post revenue growth and ongoing profitability improvement during the year.” 

Revenues for the first quarter of 2017 totaled $187.6 million, compared with $190.4 million in the first quarter of 2016, and $215.0 million in the fourth quarter of 2016. 

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

• Revenues from the Company’s semiconductor device (“SD”) business were $52.5 million (including $41.5 million in equipment sales) in the first quarter of 2017. This compares to SD revenues of $72.5 million (including $62.4 million in equipment sales) in the first quarter of 2016.
• Revenues from the Company’s printed circuit board (“PCB”) business were $77.5 million (including $49.8 million in equipment sales) in the first quarter of 2017. This compares to PCB revenues of $68.0 million (including $39.9 million in equipment sales) in the first quarter of 2016.
• Revenues from the Company’s flat panel display (“FPD”) business were $53.4 million (including $43.0 million in equipment sales) in the first quarter of 2017. This compares to FPD revenues of $44.7 million (including $35.6 million in equipment sales) in the first quarter of 2016.

Revenues in the Company’s other segments totaled $4.2 million in the first quarter of 2017, compared with $5.3 million in the first quarter of 2016. 

Service revenues for the first quarter of 2017 were $50.9 million, compared with $49.5 million in the first quarter of 2016. 

Gross profit and gross margin in the first quarter of 2017 were $87.1 million and 46.4%, respectively, compared with $85.6 million and 45.0%, respectively, in the first quarter of 2016. 

GAAP net income and GAAP net income margin in the first quarter of 2017 were $14.9 million and 8.0% respectively, compared with $15.8 million, and 8.3% respectively in the first quarter of 2016. 

GAAP earnings per share (diluted) for the first quarter of 2017 were $0.31, compared with $0.36, for the first quarter of 2016. 

Adjusted EBITDA (as defined below) and adjusted EBITDA margin for the first quarter of 2017 were $32.5 million and 17.3%, respectively, compared with $35.3 million and 18.5%, respectively, in the first quarter of 2016. 

Non-GAAP net income and non-GAAP net income margin for the first quarter of 2017 were $22.3 million and 11.9%, respectively, compared with $23.2 million and 12.2%, respectively, for the first quarter of 2016. 

Non-GAAP earnings per share (diluted) for the first quarter of 2017 were $0.46, compared with $0.53 per share, for the first quarter of 2016. 

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

As of March 31, 2017, the Company had cash, cash equivalents (including restricted cash), short term bank deposits and marketable securities of $222.3 million, and debt of $88.5 million. During the first quarter of 2017, the Company utilized cash from operations of $9.2 million.  As of March 31, 2017, the actual number of ordinary shares outstanding was approximately 47.9 million. 

Second Quarter 2017 Guidance 

The Company expects revenues for the second quarter of 2017 to be in the range of $200 million to $210 million, and gross margin of 46.0% based on current expectations of product mix. 

About Orbotech Ltd. 

Orbotech Ltd. is a leading global supplier of yield-enhancing and process-enabling solutions for the manufacture of electronics products. The Company 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. The Company’s 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 more information, click here.