SMT, PCB Electronics Industry News

Orbotech Announces First Quarter 2002 Results

May 06, 2002

Hoover's Online

Yavne, Israel

ORBOTECH LTD. (NASDAQ/NM SYMBOL: ORBK) today announced its consolidated financial results for the first quarter ended March 31, 2002.

Revenues for the first quarter of 2002 totaled $51.1 million, compared to the $104.9 million recorded in the first quarter a year ago. Net loss for the first quarter of 2002, excluding a previously announced restructuring charge of $1.0 million, net of taxes, was $1.7 million, or $0.05 per share (diluted), compared with net income of $21.0 million, or $0.65 per share (diluted), in the first quarter of 2001. Including the restructuring charge, the reported net loss for the first quarter of 2002 was $2.7 million, or $0.09 per share (diluted).

The Company has elected to change the basis upon which it prepares its financial statements from Israeli GAAP to U.S. GAAP, as of the first quarter of 2002. Accordingly, the Company's financial statements for the first quarter of 2002 reflect the application of Financial Accounting Standards ("FAS") 142, which revises the accounting treatment for goodwill and other intangible assets. As a result of FAS 142, the net loss for the first quarter of 2002 was reduced by $0.04 per share (diluted).

Sales of equipment to the printed circuit board ("PCB") industry relating to bare PCBs were $17.0 million in the first quarter of 2002, compared to $23.5 million in the fourth quarter, and $57.2 million in the first quarter, of 2001. Sales of flat panel display ("FPD") inspection equipment were $11.2 million, compared to $12.9 million in the fourth quarter, and $19.1 million in the first quarter, of last year. Sales of equipment to the PCB industry relating to assembled PCBs were $5.0 million, compared to $3.2 million in the fourth quarter, and $6.6 million in the first quarter, of last year. In addition, service revenue for the first quarter decreased to $16.0 million from $17.0 million in the fourth quarter of 2001 and from $19.5 million in the first quarter of 2001.

The Company completed the quarter with cash equivalents and short-term and long-term cash investments of approximately $158 million, compared with approximately $166 million at year end. Non-operating disbursements totaled approximately $4 million, comprised mainly of the previously announced investments in three private Israeli technology companies.

The Company's results for the first quarter reflect the continuing effects of the depressed economic activity and capacity underutilization throughout the global electronics industry. The Company's ability to foresee future trends in the flow of orders for its systems remains limited, and it believes that existing conditions will continue to prevail in the near future. The Company remains optimistic that in the long term the demand for its products will recover, and is confident that its emphasis on research and development, as well as its strong financial condition, will continue to provide a sound base for future growth.

Commenting on the results, Yochai Richter, President and Chief Executive Officer, said, "We were able to meet expectations despite continuing, very challenging, market conditions. While the Company's investments continue to strengthen and expand its global presence in both the PCB and FPD industries, we are also creating a leaner and more competitive organization which we believe will lead to a strong recovery in profitability when business turns around."

An earnings conference call is scheduled for Monday, May 6, 2002, at 9:00 a.m. EST. The dial-in number for the conference call is 630-395-0017, and a replay will be available, on telephone number 402-220-0359, until May 16, 2002. The pass code is Q1. A live web cast of the conference call and replay can also be heard by accessing the investor relations section on the Company's website at http://www.orbotech.com.

Except for historical information, the matters discussed in this press release are forward-looking statements that are subject to certain risks and uncertainties which could cause the actual results to differ materially from those projected, including industry trends, the timing and strength of product and service offerings, changes in business or pricing strategies, changes in the prevailing political and regulatory framework in which the relevant parties operate or in economic or technological trends or conditions, including currency fluctuations, inflation and consumer confidence, on a global, regional or national basis and other risks detailed from time to time in the Company's SEC reports. The Company assumes no obligation to update the information in this press release.

Orbotech designs, develops, manufactures, markets and services production support solutions for the supply chain of the electronics industry, principally for printed circuit boards (PCBs) and flat panel displays (FPDs). The Company is a world leader in automated optical inspection (AOI) systems for bare PCBs and for FPDs, and in imaging solutions for PCB production, and is a leading provider of AOI systems for assembled PCBs. The Company's innovative AOI, imaging and computer-aided manufacturing (CAM) technologies enable customers to achieve the increased yields and throughput essential to remaining at the forefront of electronics production. Of Orbotech's employees, more than one quarter are scientists and engineers, who integrate their multi-disciplinary knowledge, talents and skills to develop and provide hi-tech solutions and technologies designed to meet customers' long-term needs. Orbotech maintains its headquarters and its primary research, development and manufacturing facilities in Israel, and more than 50 offices worldwide. The Company's extensive network of marketing, sales and customer support teams throughout North America, Europe, the Pacific Rim, China and Japan deliver its knowledge and expertise directly to customers the world over. For more information visit http://www.orbotech.com.

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ORBOTECH LTD.

CONDENSED CONSOLIDATED BALANCE SHEET

AT MARCH 31, 2002

March 31 December 31

2002 2001

----------- -----------

(Unaudited) (Audited)

----------- -----------

U.S. dollars in thousands

(except per share data)

-------------------------------------

Assets

CURRENT ASSETS:

Cash and

cash equivalents 110,304 99,899

Short-term investments 28,286 40,828

Accounts receivable:

Trade 75,561 82,619

Other 20,252 20,120

Inventories 77,715 80,062

--------- ---------

Total current assets 312,118 323,528

--------- ---------

INVESTMENTS AND

NON-CURRENT RECEIVABLES:

Long-term investments 19,584 25,151

Investments in companies 3,628 333

Non-current trade receivables 765 604

Severance pay fund 10,675 10,828

Deferred income taxes 1,786 2,209

-------- --------

36,438 39,125

-------- --------

PROPERTY, PLANT AND EQUIPMENT, net of

accumulated depreciation

and amortization 24,320 25,244

-------- --------

GOODWILL AND OTHER INTANGIBLE ASSETS,

net of accumulated amortization 18,119 18,746

-------- --------

390,995 406,643

======== ========

Liabilities and shareholders' equity

CURRENT LIABILITIES:

Current maturity of

long-term liability 2,793 2,835

Accounts payable and accruals:

Trade 12,629 13,776

Other 40,505 50,890

--------- ----------

Total current liabilities 55,927 67,501

ACCRUED SEVERANCE PAY 18,321 18,835

LONG-TERM LIABILITY TO

THE GOVERNMENT OF ISRAEL,

net of current maturity 11,174 11,338

------- -----------

Total liabilities 85,422 97,674

--------- ----------

SHAREHOLDERS' EQUITY:

Share capital 1,607 1,603

Additional paid-in capital 95,131 93,942

Deferred stock compensation (1,568) (1,350)

Retained earnings 234,154 236,894

Accumulated other

comprehensive income (1,427) 204

--------- ----------

327,897 331,293

Less treasury stock, at cost (22,324) (22,324)

--------- ----------

Total shareholders' equity 305,573 308,969

--------- ----------

390,995 406,643

========= ==========

These financial statements, including comparative figures, are prepared in accordance with U.S. GAAP, and certain figures have been reclassified to conform therewith.

ORBOTECH LTD.

CONDENSED CONSOLIDATED STATEMENTS OF INCOME (LOSS)

FOR THE THREE MONTH PERIOD ENDED MARCH 31, 2002

12 months

3 months ended ended

March 31 December 31

---------------- ------------

2002 2001 2001

------ ------ ------------

(Unaudited) (Audited)

---------------- ------------

U.S. dollars in thousands (except per share data)

--------------------------------------------------

REVENUES 51,130 104,866 301,904

------- ------- -------

COST OF REVENUES:

COST 30,203 51,133 162,293

WRITE-DOWN OF INVENTORIES 7,013

------- ------ -------

30,203 51,133 169,306

------- ------ --------

GROSS PROFIT 20,927 53,733 132,598

RESEARCH AND

DEVELOPMENT COSTS - net 10,844 13,036 50,047

SELLING, GENERAL AND

ADMINISTRATIVE EXPENSES 12,012 16,902 58,612

AMORTIZATION OF GOODWILL

AND OTHER INTANGIBLE ASSETS 627 1,706 7,291

RESTRUCTURING COSTS 1,186 6,149

SETTLEMENT WITH THE GOVERNMENT

OF ISRAEL IN RESPECT OF R&D

GRANTS RECEIVED 14,173

-------- ------ -------

OPERATING INCOME (LOSS) (3,742) 22,089 (3,674)

FINANCIAL INCOME - net 595 1,850 4,702

OTHER INCOME (EXPENSE) - net (3) 36 28

-------- ------ -------

INCOME (LOSS) BEFORE

TAXES ON INCOME (3,150) 23,975 1,056

TAXES ON INCOME (410) 3,008 (975)

-------- ------ -------

NET INCOME (LOSS)

FOR THE PERIOD (2,740) 20,967 2,031

======== ====== ========

EARNINGS (LOSS) PER SHARE:

BASIC ($0.09) $0.67 $0.06

========= ===== =======

DILUTED ($0.09) $0.65 $0.06

======== ====== =======

WEIGHTED AVERAGE NUMBER OF

SHARES (IN THOUSANDS)

USED IN COMPUTATION OF

EARNINGS PER SHARE:

BASIC 31,876 31,421 31,819

======= ====== ========

DILUTED 31,876 32,393 32,871

======= ====== ========

These financial statements, including comparative figures, are prepared in accordance with U.S. GAAP, and certain figures have been reclassified to conform therewith.

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