Orbotech Reports Second Quarter 2017 Results

(PRNewswire) —

2017 second quarter highlights

  • Revenues of $210.7 million
  • Gross margin of 46.8%
  • GAAP EPS of $0.51 (diluted); non-GAAP EPS of $0.67 (diluted)
  • Record quarterly bookings

2017 second half guidance

  • Revenue range: $460 million to $480 million, split about evenly between the third and the fourth quarters of 2017
  • Gross margin range 47.0%-47.5% based on current expectations of product mix

ORBOTECH LTD. (NASDAQ: ORBK) (the "Company") today announced its consolidated financial results for the second quarter of 2017.

Commenting on the results, Asher Levy, Chief Executive Officer, said: "We are very pleased to report robust financial results for the second quarter of 2017.  Each of our operating divisions performed strongly and we achieved overall record quarterly bookings.  While these results certainly echo the current favorable industry conditions, they are also the fruit of the Company's steady and selective investment in research and development over the long-term, and reflect the technological leadership which our solutions offer in the highly competitive industries that we serve.  New and emerging growth opportunities in areas such as advanced smartphones, automotive and flat panel displays, mean that our total addressable market continues to expand.  Our strong backlog and order book reinforce our belief that we will meet our execution plans for 2017."

Revenues for the second quarter of 2017 totaled $210.7 million, compared with $196.0 million in the second quarter of 2016, and $187.6 million in the first quarter of 2017.

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

  • Revenues from the Company's printed circuit board ("PCB") business were $82.5 million (including $51.1 million in equipment sales) in the second quarter of 2017.  This compares to PCB revenues of $72.6 million (including $43.8 million in equipment sales) in the second quarter of 2016.
  • Revenues from the Company's flat panel display ("FPD") business were $69.7 million (including $58.6 million in equipment sales) in the second quarter of 2017.  This compares to FPD revenues of $49.9 million (including $39.8 million in equipment sales) in the second quarter of 2016.
  • Revenues from the Company's semiconductor device ("SD") business were $54.9 million (including $44.1 million in equipment sales) in the second quarter of 2017.  This compares to SD revenues of $67.5 million (including $53.6 million in equipment sales) in the second quarter of 2016.

Revenues in the Company's other segments totaled $3.6 million in the second quarter of 2017, compared with $6.0 million in the second quarter of 2016.

Service revenues for the second quarter of 2017 were $55.3 million, compared with $55.0 million in the second quarter of 2016.

Gross profit and gross margin in the second quarter of 2017 were $98.6 million and 46.8%, respectively, compared with $89.9 million and 45.9%, respectively, in the second quarter of 2016.

GAAP net income and GAAP net income margin in the second quarter of 2017 were $25.0 million and 11.9% respectively, compared with $13.3 million, and 6.8% respectively in the second quarter of 2016.

GAAP earnings per share (diluted) for the second quarter of 2017 were $0.51, compared with $0.30, for the second quarter of 2016.

Adjusted EBITDA (as defined below) and adjusted EBITDA margin for the second quarter of 2017 were $44.3 million and 21.0%, respectively, compared with $39.1 million and 20.0%, respectively, in the second quarter of 2016.

Non-GAAP net income and non-GAAP net income margin for the second quarter of 2017 were $32.9 million and 15.6%, respectively, compared with $27.0 million and 13.8%, respectively, for the second quarter of 2016.

Non-GAAP earnings per share (diluted) for the second quarter of 2017 were $0.67, compared with $0.60 per share, for the second 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 June 30, 2017, the Company had cash, cash equivalents, short term bank deposits and marketable securities of $226.3 million, and debt of $72.3 million.  During the second quarter of 2017, the Company generated cash from operations of $27.1 million.  As of June 30, 2017, the actual number of ordinary shares outstanding was approximately 47.9 million.

Second half 2017 Guidance

The Company expects revenues for the second half of 2017 to be in the range of $460 million to $480 million, split about evenly between the third and the fourth quarters of 2017.  The Company expects gross margin for the second half of 2017 to be in the range of 47.0%-47.5%, based on current expectations of product mix.

Conference Call

An earnings conference call for the Company's second quarter 2017 results is scheduled for today, August 2, 2017, at 8:30 a.m. EDT.  The dial-in number for the conference call is + 1-212-444-0481 or (US toll-free) 877-280-2342 and a replay will be available on telephone number +1-347-366-9565 or (US toll-free) 866-932-5017 until August 16, 2017.  The pass code is 7122808 or Orbotech Q2.  A live webcast of the conference call can also be heard by accessing the Company's website at: https://edge.media-server.com/m6/p/t7znkw2r.  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.  Orbotech'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 further information, visit http://www.orbotech.com .

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