Orbotech Reports Fourth Quarter and Full Year 2016 Results

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(PRNewswire) —

2016 fourth quarter highlights

Record revenues of $215 million
Gross margin of 46.8%
GAAP net income margin of 11.9%; adjusted EBITDA margin of 23.2%
Cash flow from operations of $49 million
GAAP EPS of $0.53 (diluted); non-GAAP EPS of $0.70 (diluted)
GAAP and non-GAAP EPS include the negative impact of $4.8 million related to currency translation and hedging loss

2016 full year highlights compared with 2015 full year

Revenues of $806 million, up 7% compared with $753 million
Gross margin of 46.2%, compared with 45.2%
GAAP net income margin of 9.9%, compared with 7.5%; adjusted EBITDA margin of 20.8%, compared with 19.0%
Cash flow from operations of $108 million, compared with $89 million
GAAP EPS of $1.71 (diluted), up 31% from $1.31 (diluted); Non-GAAP EPS of $2.52 (diluted), up 21% from $2.09 (diluted)
GAAP and non-GAAP EPS include the negative impact of $6.0 million related to currency translation and hedging loss

2017 first quarter guidance

Quarterly revenue range: $180 million to $190 million
Quarterly gross margin range of 45.5% - 46.0%

ORBOTECH LTD. (NASDAQ: ORBK) (the "Company") today announced its consolidated financial results for the fourth quarter and full year ended December 31, 2016.

Commenting on the results, Asher Levy, Chief Executive Officer, said: "Our fourth quarter results marked a strong finish to a very successful year for Orbotech. In 2016, we posted record revenues on both annual and quarterly bases, as well as year over year growth and improved profitability in each of our three principal operating divisions. We generated significant cash from operations, enhanced our balance sheet, strengthened our competitive position in all major business areas and continued to implement our growth strategy. As we enter 2017, we feel encouraged by positive industry trends, such as growth in flexible OLED manufacturing, increased electronic content in smartphones and automobiles and progress in advanced packaging and MEMS. We expect significant revenue contribution from new products launched during 2016. These solutions, together with our ongoing research and development efforts, are not only an important ingredient of our future growth, but should increase our total addressable market and create new opportunities for the Company, while at the same time strengthening our position as an enabler of critical technologies for the manufacture of future electronic products and devices. We expect our results in 2017 to be more backend loaded compared to previous years, due to timing of deliveries, and that the estimated revenues in the first quarter will be the lowest during 2017. Overall, we expect favorable industry trends, as well as our technological leadership and longstanding relationships with key designers and manufacturers, to lead to revenue growth and ongoing profitability improvement during 2017."

Revenues for the fourth quarter of 2016 totaled $215.0 million, compared with $188.2 million in the fourth quarter of 2015, and $205.0 million in the third quarter of 2016.

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

- Revenues from the Company's semiconductor device ("SD") business were $62.1 million (including $48.4 million in equipment sales) in the fourth quarter of 2016. This compares to SD revenues of $70.1 million (including $57.5 million in equipment sales) in the fourth quarter of 2015.

- Revenues from the Company's printed circuit board ("PCB") business were $77.2 million (including $48.6 million in equipment sales) in the fourth quarter of 2016. This compares to PCB revenues of $67.9 million (including $38.3 million in equipment sales) in the fourth quarter of 2015.

- Revenues from the Company's flat panel display ("FPD") business were $71.6 million (including $60.2 million in equipment sales) in the fourth quarter of 2016. This compares to FPD revenues of $45.4 million (including $35.9 million in equipment sales) in the fourth quarter of 2015.

Revenues in the Company's other segments totaled $4.2 million in the fourth quarter of 2016, compared with $4.8 million in the fourth quarter of 2015.

Service revenues for the fourth quarter of 2016 were $55.6 million, compared with $53.8 million in the fourth quarter of 2015.

Revenues for the full year of 2016 totaled $806.4 million, compared with $752.5 million for the full year of 2015.

Gross profit and gross margin in the fourth quarter of 2016 were $100.7 million and 46.8%, respectively, compared with $84.6 million and 45.0%, respectively, in the fourth quarter of 2015. Gross profit and gross margin in the full year of 2016 were $372.4 million and 46.2%, respectively, compared with $339.8 million and 45.2%, respectively, in the full year of 2015.

GAAP net income and GAAP net income margin in the fourth quarter of 2016 were $25.6 million and 11.9%, respectively, compared with $16.0 million and 8.5%, respectively, in the fourth quarter of 2015. GAAP net income and GAAP net income margin for the full year of 2016 were $79.4 million and 9.9%, respectively, compared with $56.8 million and 7.5% in the full year of 2015.

GAAP earnings per share (diluted) for the fourth quarter of 2016 were $0.53, compared with $0.37, for the fourth quarter of 2015. GAAP earnings per share (diluted) for the full year of 2016 were $1.71 compared with $1.31 in the full year of 2015.

Adjusted EBITDA (as defined below) and adjusted EBITDA margin for the fourth quarter of 2016 were $49.9 million and 23.2%, respectively, compared with $35.6 million and 18.9%, respectively, in the fourth quarter of 2015. Adjusted EBITDA and adjusted EBITDA margin for the full year of 2016 were $168.1 million and 20.8%, respectively, compared with $143.2 million and 19.0% for the full year of 2015.

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