2016 third quarter highlights
- Record revenues of $205 million
- Gross margin of 46.9%
- GAAP EPS of $0.51 (diluted); non-GAAP EPS of $0.68 (diluted)
2016 fourth quarter and full year guidance
- Quarterly revenue range: $214 million to $224 million; full year revenue range: $805 million to $815 million.
- Quarterly gross margin of approximately 47%.
ORBOTECH LTD. (NASDAQ: ORBK) (the "Company") today announced its consolidated financial results for the quarter ended September 30, 2016.
Commenting on the results, Asher Levy, Chief Executive Officer, said: "The positive business momentum we are experiencing, combined with systematic implementation of our business model, enabled the Company to post record quarterly revenues - crossing the $200 million threshold for the first time - as well as improved gross margin and adjusted EBITDA levels, achieved by leveraging our operating infrastructure. We are pleased to report record FPD division bookings of approximately $100 million during the third quarter, reflecting strong demand for our flex OLED and Gen. 10.5 solutions. Sales of new products launched during the first half of 2016, continued to ramp up in the third quarter and contributed to our growth and profitability. In significant part, these sales also reflect Orbotech's disciplined, consistent and methodical execution on its strategy and working plans, and are the fruit of ongoing, intensive dialogue and collaboration with key customers and leading brands of electronic products, which is an important element in maintaining technological innovation."
Revenues for the third quarter of 2016 totaled $205.0 million, compared with $190.5 million in the third quarter of 2015, and $196.0 million in the second quarter of 2016.
In the Company's Production Solutions for Electronics Industry segment:
- Revenues from the Company's semiconductor device ("SD") business were $71.5 million (including $57.4 million in equipment sales) in the third quarter of 2016. This compares to SD revenues of $70.2 million (including $58.4 million in equipment sales) in the third quarter of 2015.
- Revenues from the Company's printed circuit board ("PCB") business were $69.0 million (including $38.0 million in equipment sales) in the third quarter of 2016. This compares to PCB revenues of $64.2 million (including $34.5 million in equipment sales) in the third quarter of 2015.
- Revenues from the Company's flat panel display ("FPD") business were $59.8 million (including $49.4 million in equipment sales) in the third quarter of 2016. This compares to FPD revenues of $48.5 million (including $38.6 million in equipment sales) in the third quarter of 2015.
Revenues in the Company's other segments totaled $4.6 million in the third quarter of 2016, compared with $7.6 million in the third quarter of 2015.
Service revenues for the third quarter of 2016 were $58.0 million, compared with $53.5 million in the third quarter of 2015.
Gross profit and gross margin in the third quarter of 2016 were $96.2 million and 46.9%, respectively, compared with $86.3 million and 45.3%, respectively, in the third quarter of 2015.
GAAP net income and GAAP net income margin in the third quarter of 2016 were $24.7 million and 12.1% respectively, compared with $15.9 million, and 8.4% respectively in the third quarter of 2015.
GAAP earnings per share (diluted) for the third quarter of 2016 were $0.51 per share, compared with $0.37 per share (diluted), for the third quarter of 2015.
Adjusted EBITDA (as defined below) and adjusted EBITDA margin for the third quarter of 2016 were $43.8 million and 21.4%, respectively, compared with $37.1 million and 19.5%, respectively, in the third quarter of 2015.
Non-GAAP net income and non-GAAP net income margin for the third quarter of 2016 were $33.0 million and 16.1%, respectively, compared with $23.7 million and 12.4%, respectively, for the third quarter of 2015.
Non-GAAP earnings per share (diluted) for the third quarter of 2016 were $0.68, compared with $0.55 per share, for the third quarter of 2015.
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 September 30, 2016, the Company had cash, cash equivalents (including restricted cash), short-term bank deposits and marketable securities of $217.8 million, and debt of $110 million. During the third quarter of 2016, the Company generated cash from operations of $21.8 million. As of September 30, 2016, the actual number of ordinary shares outstanding was approximately 47.5 million.
Fourth Quarter 2016 and Full Year Guidance
The Company expects revenues for the fourth quarter of 2016 to be in the range of $214 million to $224 million, and gross margin to be approximately 47%. The Company expects revenues for 2016 to be in the range of $805 million to $815 million.
Conference Call
An earnings conference call for the Company's third quarter 2016 results is scheduled for today, November 2, 2016, at 9:00 a.m. EDT. The dial-in number for the conference call is +1-646-254-3388 or (US toll-free) 877-280-1254 and a replay will be available on telephone number +1-347-366-9565 or (US toll-free) 866-932-5017 until November 17, 2016. The pass code is 3631129 or Orbotech Q3. A live webcast of the conference call can also be heard by accessing the Company's website at: http://edge.media-server.com/m/p/nttep6t6. The webcast will remain available for 12 months at: http://investors.orbotech.com/phoenix.zhtml?c=71865&p=irol-audioarchives.
About Orbotech Ltd.
