Orbotech Reports Revenues of $753M in 2015, Up 29%

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2015 fourth quarter highlights 

• Revenues of $188 million
• Gross margin of 45%; Non-GAAP EPS of $0.54 (diluted); GAAP EPS of $0.37 (diluted)
• Cash from operations of $35 million; term loan prepayment of $30 million

2015 full year highlights compared with 2014 full year

• Revenues of $753 million, up 29% compared with $583 million
• Gross margin of 45.2% compared with 43.4%
• Adjusted EBITDA margin of 19% compared with 15%
• Non-GAAP EPS of $2.09 (diluted), up 41% from  $1.48; GAAP EPS of $1.31 (diluted), up from $0.83 (diluted)

2016 first quarter guidance

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

ORBOTECH LTD. today announced its consolidated financial results for the fourth quarter and full year ended December 31, 2015.

Commenting on the results, Asher Levy, Chief Executive Officer, said: "We are very pleased to report a strong finish to a record year for Orbotech. As a company with a long history in cyclical, yet growing industries, enhancing the resilience and visibility of our business through diversification has been an important goal. Its achievement is clearly evident in our robust and consistent performance in 2015. We are entering into a 2016 marked by positive business indicators in all of the industries in which we operate. The Company is equipped with a strong product portfolio, comprising multiple new solutions introduced in 2015. We confidently expect to leverage our unique position as a critical provider of production solutions across three leading divisions, to continue introducing new solutions and capitalizing on the opportunities in the expanding global electronics industry."

Revenues for the fourth quarter of 2015 totaled $188.2 million, compared with $197.5 million in the fourth quarter of 2014 and $190.5 million in the third quarter of 2015.

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

• Revenues from the Company's semiconductor device ("SD") business were $70.1 million (including $57.5 million in equipment sales) in the fourth quarter of 2015. This compares to SD revenues of $57.3 million (including $43.0 million in equipment sales) in the fourth quarter of 2014. 
• Revenues from the Company's printed circuit board ("PCB") business were $67.9 million (including $38.3 million in equipment sales) in the fourth quarter of 2015.  This compares to PCB revenues of $68.7 million (including $39.5 million in equipment sales) in the fourth quarter of 2014.
• Revenues from the Company's flat panel display ("FPD") business were $45.5 million (including $35.9 million in equipment sales) in the fourth quarter of 2015.  This compares to FPD revenues of $66.4 million (including $57.5 million in equipment sales) in the fourth quarter of 2014.

Revenues in the Company's other segments totaled $4.8 million in the fourth quarter of 2015, compared with $5.1 million in the fourth quarter of 2014.

Service revenues for the fourth quarter of 2015 were $53.8 million, compared with $54.1 million in the fourth quarter of 2014.

Revenues for the full year of 2015 totaled $752.5 million, compared with $582.7 million for the full year of 2014.  Excluding the Company's SD business, which was acquired in August, 2014, 2015 revenues totaled $490.3 million, compared with $472.1 million in 2014.

Gross profit and gross margin in the fourth quarter of 2015 were $84.6 million and 45.0%, respectively, compared with $84.9 million and 43.0%, respectively, in the fourth quarter of 2014. Gross profit and gross margin in the full year of 2015 were $339.8 million and 45.2%, respectively, compared with $253.2 million and 43.4%, respectively, in the full year of 2014.

GAAP net income for the fourth quarter of 2015 was $16.0 million, or $0.37 per share (diluted), up from $13.1 million, or $0.31 per share (diluted), for the fourth quarter of 2014.  GAAP net income for the full year of 2015 was $56.8 million, or $1.31 per share (diluted), up from $35.4 million, or $0.83 per share (diluted), for the full year of 2014.  GAAP net income for the full year 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 fourth quarter of 2015 were $35.6 million and 18.9%, respectively, up from $30.1 million and 15.2%, respectively, in the fourth quarter of 2014.  Adjusted EBITDA and adjusted EBITDA margin for the full year of 2015 were $143.2 million and 19.0%, respectively, up from $88.4 million and 15.2%, respectively, in the full year of 2014.

Non-GAAP net income and non-GAAP net income margin for the fourth quarter of 2015 were $23.4 million and 12.4%, respectively, compared with $21.9 million and 11.1%, for the fourth quarter of 2014. Non-GAAP net income and non-GAAP net income margin for the full year of 2015 were $90.8 million and 12.1%, respectively, compared with $63.2 million and 10.8%, for the full year of 2014.

Non-GAAP earnings per share (diluted) for the fourth quarter of 2015 were $0.54, up from $0.51 per share (diluted), for the fourth quarter of 2014.  Non-GAAP earnings per share (diluted) for the full year of 2015 were $2.09, up 41% from $1.48 per share (diluted), for the full year of 2014.

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. The inclusion of the financial results of the Company's SD business from August 7, 2014 had a significant effect on the consolidated results of operations of the Company for 2014 and, as a result, comparisons between the Company's financial results for 2014 and those of later periods are of inherently limited value.

As of December 31, 2015, the Company had cash, cash equivalents (including restricted cash), short-term bank deposits and marketable securities of approximately $191.3 million, and debt of $239.6 million.  In the fourth quarter of 2015, the Company generated cash of $34.6 million from operations and repaid $30.7 million of its term loan.

First Quarter 2016 Guidance

The Company expects revenues for the first quarter of 2016 to be in the range of $184 million to $192 million, and gross margin of approximately 45%.

Investor Meeting Webcast

The company will present to investors on February 22, 2016 at 1:00 p.m. EST. A live webcast of this presentation, which will feature an overview of 2015 performance and a detailed discussion of the Semiconductor Device business and the opportunities in the industries in which it operates, will be available on the Company's website.

About Orbotech Ltd.

Orbotech Ltd. 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, click here.