FORM 6-K
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
Report of Foreign Private Issuer
Pursuant to Rule 13a-16 or 15d-16 under the Securities Exchange Act of 1934
For the month of May 2011
Commission File Number 000-12790
ORBOTECH LTD.
(Translation of Registrant’s name into English)
SANHEDRIN BOULEVARD, NORTH INDUSTRIAL ZONE, YAVNE 81101, ISRAEL
(Address of principal executive offices)
Indicate by check mark whether the Registrant files or will file annual reports under cover of Form 20-F or Form 40-F:
Form 20-F x Form 40-F ¨
Indicate by check mark if the Registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): ¨
Indicate by check mark if the Registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): ¨
Attached hereto and incorporated by reference herein are the following documents:
| 1. | Press release issued by the Registrant on, and dated, May 12, 2011, and entitled “Orbotech Announces First Quarter 2011 Results and Updates Guidance”. |
| 2. | Registrant’s Condensed Consolidated Balance Sheets at March 31, 2011. |
| 3. | Registrant’s Condensed Consolidated Statements of Income for the Three Month Period ended March 31, 2011. |
| 4. | Registrant’s Condensed Consolidated Statements of Cash Flows for the Three Month Period ended March 31, 2011. |
| 5. | Registrant’s Reconciliation of GAAP to non-GAAP Results from Continuing Operations for the Three Month Period ended March 31, 2011. |
* * * * * *
The information on this Form 6-K, including the exhibits attached hereto, shall not be deemed ‘filed’ for purposes of Section 18 of the Securities Exchange Act of 1934 or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933 or the Exchange Act.
FOR IMMEDIATE RELEASE
ORBOTECH ANNOUNCES FIRST QUARTER 2011 RESULTS AND UPDATES GUIDANCE
| • | 2011 first quarter: |
| • | Revenues: $134.2 million, up 34% from last year |
| • | GAAP net income per share: $0.31 per share (diluted) |
| • | GAAP net income from continuing operations per share: $0.30 per share (diluted), up from $0.10 last year |
| • | Non-GAAP net income from continuing operations per share: $0.42 per share (diluted), up from $0.24 last year |
| • | Operating margin: 11.2%, up from 6.9% last year |
| • | Operating cash generated from continuing operations: $7.9 million. |
| • | 2011 second quarter and full year guidance: |
| • | Second quarter 2011 revenues: $150 - $160 million |
| • | 2011 revenues: approximately $560 - 580 million |
| • | 2011 GAAP net income margin: 10% of revenues, or $1.53 - $1.58 per share (diluted) |
| • | 2011 Non-GAAP net income margin: 12.5% of revenues, or $1.90 - $2.00 per share (diluted) |
YAVNE, ISRAEL — May 12, 2011 — ORBOTECH LTD. (NASDAQ/GSM SYMBOL: ORBK) today announced its consolidated financial results for the first quarter ended March 31, 2011.
Commenting on the strong quarter, Rani Cohen, President and Chief Executive Officer, said: “Our solid performance in the first quarter of 2011 reflects our position as a leading supplier of enabling and essential tools for the production of advanced and sophisticated electronic devices. During the quarter, we achieved several important new product milestones. We received acceptances of our new Generation 8 EVision FPD-AOI system. We also made initial deliveries of our Emerald-100 UV laser drilling solution for high-end PCBs and IC substrates, a system which is capable of achieving significantly higher drill speeds and superior accuracy than other currently available solutions. Additionally, we received the first order for our newly-developed product for the deposition of anti-reflective coating on crystalline silicon photovoltaic wafers for solar energy panels, and we expect to recognize revenue from this product early in 2012. We believe that this quarter is indicative of what we expect to be a successful year for the Company.”
Revenues for the first quarter of 2011 totaled $134.2 million, compared to $128.4 million in the fourth quarter, and $100.0 million in the first quarter, of 2010. GAAP net income for the first quarter of 2011 was $11.2 million, or $0.31 per share (diluted), compared to GAAP net income of $4.0 million, or $0.11 per share (diluted) for the fourth quarter of 2010 and GAAP net income of $1.6 million, or $0.05 per share (diluted), in the first quarter of 2010. GAAP net income from continuing operations for the first quarter of 2011 was $11.1 million, or $0.30 per share (diluted), compared to GAAP net income from continuing operations of $6.0 million, or $0.17 per share (diluted) for the fourth quarter of 2010 and GAAP net income from continuing operations of $3.6 million, or $0.10 per share (diluted), in the first quarter of 2010.
Non-GAAP net income from continuing operations for the first quarter of 2011 was $15.2 million, or $0.42 per share (diluted), compared to non-GAAP net income from continuing operations of $8.5 million, or $0.24 per share (diluted), in the first quarter of 2010. A reconciliation of each of the Company’s non-GAAP measures to the comparable GAAP measure is included at the end of this press release.
The strong trend in demand for tablets, smartphones and other electronic devices continued into the first quarter of 2011, leading to strong demand for the Company’s printed circuit board (“PCB”) inspection and production solutions, in particular its laser direct imaging tools. The Company believes that direct imaging systems will continue to be one of the main growth drivers in 2011, and expects to sell in excess of 170 such systems during the year, compared with the 107 systems sold in 2010.
1
Turning to the flat panel display (“FPD”) industry, while some manufacturers are considering the timing of their investments in new fabrication plants, others continue to pursue the build-up of new manufacturing plants in China. Elsewhere, FPD manufacturers are continuing their investments in facilities for small-to-mid size panels and in new technologies. The recent acceptances of the Company’s new Generation 8 EVision FPD-AOI system, together with its latest array checker and array saver systems, have positioned the Company to continue to provide best-in-class and optimum solutions for manufacturers of FPDs of all dimensions and technologies.
Sales of equipment to the PCB industry were $57.0 million in the first quarter of 2011, compared to $50.1 million in the fourth quarter of 2010, and $38.3 million in the first quarter of 2010. Sales of equipment to the FPD industry were $43.2 million, compared to $42.7 million in the fourth quarter of 2010, and $33.9 million in the first quarter of last year. Sales of character recognition products were $1.4 million in the first quarter of 2011, compared to $2.5 million in the fourth quarter of 2010, and $1.5 million recorded in the first quarter of 2010. In addition, service revenue for the first quarter of 2011 was $32.6 million, compared to $33.1 million in the fourth quarter of 2010, and $26.2 million in the first quarter of 2010.
The Company completed the quarter with cash, cash equivalents, short-term bank deposits and marketable securities of approximately $195.1 million and debt of $120 million, compared with cash, cash equivalents and marketable securities of approximately $184.8 million and debt of $128 million at the end of the fourth quarter of 2010. The Company generated cash of $7.9 million from continuing operations in the first quarter of 2011.
In April 2011, the Company entered into a conditional agreement for a management buyout of Orbotech Medical Denmark A/S. As a result of the Company’s earlier commitment to divest this entity by the end of 2011, which culminated in this agreement, and of the previously announced agreement for the sale of the assets of Orbotech Medical Solutions Ltd., both of these companies had been classified as discontinued operations. This is reflected in the financial data for the first quarter of 2011, as well as in certain financial data for previous fiscal years provided in the Company’s 2010 Annual Report and Financial Statements, which were re-cast accordingly. These transactions are not expected to impact the Company’s cash flow from operating activities in any material respect.
The Company is also pleased to announce the appointment of Mr. Doron Abramovitch to the position of Corporate Vice President and Chief Financial Officer, effective as of May 1, 2011. Commenting on this appointment, Rani Cohen said: “Doron brings to Orbotech extensive experience in both finance and operations and will be a very strong addition to the Company’s management team.”
To date, there has not been any impact on the Company’s business as a result of the recent events in Japan, although there may be in the future, and the Company will continue to monitor this closely.
An earnings conference call for the Company’s first quarter 2011 results is scheduled for Thursday, May 12, 2011, at 9:00 a.m. EST. The dial-in number for the conference call is 212-287-1850, and a replay will be available on telephone number 203-369-1832 until May 27 2011. The pass code is Q1. A live web cast of the conference call and a replay can also be heard by accessing the investor relations section on the Company’s website at www.orbotech.com.
About Orbotech Ltd.
Orbotech Ltd. (NASDAQ/GSM: ORBK) has been at the cutting edge of the electronics industry supply chain, as an innovator of enabling technologies used in the manufacture of the world’s most sophisticated consumer and industrial products, for over 30 years. The Company is a leading provider of yield-enhancing and production solutions, primarily for manufacturers of printed circuit boards and flat panel displays; and today, virtually every electronic device is produced using Orbotech technology. The Company also applies its core expertise and resources in other advanced technology areas, including character recognition for check and forms processing and solar photovoltaic manufacturing. Headquartered in Israel and operating from multiple locations internationally, Orbotech’s highly talented and inter-disciplinary professionals design, manufacture, sell and service the Company’s end-to-end portfolio of solutions for the benefit of customers the world over. For more information visit www.orbotech.com.
2
Cautionary Statement Regarding Forward-Looking Statements and Non-GAAP Financial Measures
Except for historical information, the matters discussed in this press release are forward-looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. These statements relate to, among other things, future prospects, developments and business strategies and involve certain risks and uncertainties. The words “anticipate,” “believe,” “could,” “will,” “plan,” “expect” and “would” and similar terms and phrases, including references to assumptions, have been used in this press release to identify forward-looking statements. These forward-looking statements are made based on management’s expectations and beliefs concerning future events affecting Orbotech and are subject to uncertainties and factors relating to its operations and business environment, all of which are difficult to predict and many of which are beyond the Company’s control. Many factors could cause the actual results to differ materially from those projected including, without limitation, cyclicality in the industries in which the Company operates, the Company’s production capacity, timing and occurrence of product acceptance, worldwide economic conditions generally, especially in the industries in which the Company operates, the timing and strength of product and service offerings by the Company and its competitors, 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, the level of consumer demand for sophisticated devices such as smartphones, tablets and other electronic devices, the impact of the recent events in Japan and other risks detailed in the Company’s SEC reports, including the Company’s Annual Report on Form 20-F for the year ended December 31, 2010. The Company assumes no obligation to update the information in this press release to reflect new information, future events or otherwise, except as required by law.
| COMPANY CONTACTS: | ||
| Adrian Auman | Michelle Harnish | |
| Corporate Vice President Investor Relations | Marketing Communications Manager | |
| and Special Projects | Orbotech, Inc. | |
| Orbotech Ltd. | +1-978-901-5120 | |
| +972-8-942-3560 |
3
ORBOTECH LTD.
CONDENSED CONSOLIDATED BALANCE SHEETS
AT MARCH 31, 2011
| March
31 2011 |
December
31 2010 |
|||||||
| U.S. dollars in thousands | ||||||||
| Assets |
||||||||
| CURRENT ASSETS: |
||||||||
| Cash and cash equivalents |
191,232 | 179,503 | ||||||
| Short-term bank deposits |
2,780 | 2,780 | ||||||
| Accounts receivable: |
||||||||
| Trade |
165,312 | 153,518 | ||||||
| Other |
30,964 | 29,919 | ||||||
| Deferred income taxes |
6,252 | 5,913 | ||||||
| Inventories |
114,188 | 112,812 | ||||||
| Assets of discontinued operations |
2,774 | 12,351 | ||||||
| Total current assets |
513,502 | 496,796 | ||||||
| INVESTMENTS AND NON-CURRENT ASSETS: |
||||||||
| Marketable securities |
1,052 | 2,549 | ||||||
| Funds in respect of employee rights upon retirement |
12,950 | 13,017 | ||||||
| Deferred income taxes |
11,060 | 12,679 | ||||||
| Other |
29 | 29 | ||||||
| 25,091 | 28,274 | |||||||
| PROPERTY, PLANT AND EQUIPMENT, net |
24,072 | 24,842 | ||||||
| GOODWILL |
12,034 | 12,034 | ||||||
| OTHER INTANGIBLE ASSETS, net |
63,324 | 66,395 | ||||||
| 638,023 | 628,341 | |||||||
| Liabilities and equity |
||||||||
| CURRENT LIABILITIES: |
||||||||
| Current maturities of long-term bank loan |
32,000 | 32,000 | ||||||
| Accounts payable and accruals: |
||||||||
| Trade |
32,262 | 26,535 | ||||||
| Other |
52,003 | 55,290 | ||||||
| Deferred income |
25,848 | 24,421 | ||||||
| Liabilities of discontinued operations |
3,115 | 2,172 | ||||||
| Total current liabilities |
145,228 | 140,418 | ||||||
| LONG-TERM LIABILITIES: |
||||||||
| Long-term bank loan |
88,000 | 96,000 | ||||||
| Liability for employee rights upon retirement |
27,138 | 27,501 | ||||||
| Deferred income taxes |
2,188 | 2,188 | ||||||
| Other tax liabilities |
12,572 | 12,679 | ||||||
| Total long-term liabilities |
129,898 | 138,368 | ||||||
| Total liabilities |
275,126 | 278,786 | ||||||
| EQUITY: |
||||||||
| Share capital |
1,768 | 1,758 | ||||||
| Additional paid-in capital |
177,054 | 174,940 | ||||||
| Retained earnings |
238,005 | 226,809 | ||||||
| Accumulated other comprehensive income |
1,476 | 1,454 | ||||||
| 418,303 | 404,961 | |||||||
| Less treasury shares, at cost |
(57,192 | ) | (57,192 | ) | ||||
| Total Orbotech Ltd. shareholders’ equity |
361,111 | 347,769 | ||||||
| Non-controlling interest |
1,786 | 1,786 | ||||||
| Total equity |
362,897 | 349,555 | ||||||
| 638,023 | 628,341 | |||||||
4
ORBOTECH LTD.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
FOR THE THREE MONTH PERIOD ENDED MARCH 31, 2011
| 3 months
ended March 31 |
12 months ended December 31 |
|||||||||||
| 2011 | 2010 | 2010 | ||||||||||
| U.S. dollars in thousands (except per share data) |
||||||||||||
| REVENUES |
134,211 | 99,987 | 529,355 | |||||||||
| COST OF REVENUES |
78,516 | 57,901 | 312,901 | |||||||||
| GROSS PROFIT |
55,695 | 42,086 | 216,454 | |||||||||
| RESEARCH AND DEVELOPMENT COSTS — net |
20,229 | 17,110 | 78,327 | |||||||||
| SELLING, GENERAL AND ADMINISTRATIVE EXPENSES |
17,354 | 14,509 | 66,264 | |||||||||
| AMORTIZATION OF INTANGIBLE ASSETS |
3,071 | 3,544 | 14,176 | |||||||||
| OPERATING INCOME |
15,041 | 6,923 | 57,687 | |||||||||
| FINANCIAL EXPENSES — net |
2,123 | 2,391 | 7,284 | |||||||||
| INCOME FROM CONTINUING OPERATIONS BEFORE TAXES ON INCOME |
12,918 | 4,532 | 50,403 | |||||||||
| TAXES ON INCOME |
1,830 | 998 | 7,397 | |||||||||
| NET INCOME FROM CONTINUING OPERATIONS |
11,088 | 3,534 | 43,006 | |||||||||
| INCOME (LOSS) FROM DISCONTINUED OPERATIONS, NET OF TAX |
108 | (1,940 | ) | (8,717 | ) | |||||||
| NET INCOME |
11,196 | 1,594 | 34,289 | |||||||||
| NET INCOME (LOSS) ATTRIBUTABLE TO THE NON-CONTROLLING INTEREST |
— | (17 | ) | 144 | ||||||||
| NET INCOME ATTRIBUTABLE TO ORBOTECH LTD. |
11,196 | 1,611 | 34,145 | |||||||||
| AMOUNTS ATTRIBUTABLE TO ORBOTECH LTD.: |
||||||||||||
| INCOME FROM CONTINUING OPERATIONS |
11,088 | 3,551 | 42,862 | |||||||||
| INCOME (LOSS) FROM DISCONTINUED OPERATIONS, NET OF TAX |
108 | (1,940 | ) | (8,717 | ) | |||||||
| NET INCOME ATTRIBUTABLE TO ORBOTECH LTD. |
11,196 | 1,611 | 34,145 | |||||||||
| EARNINGS PER SHARE: |
||||||||||||
| INCOME FROM CONTINUING OPERATIONS: |
||||||||||||
| BASIC |
$ | 0.31 | $ | 0.10 | $ | 1.23 | ||||||
| DILUTED |
$ | 0.30 | $ | 0.10 | $ | 1.20 | ||||||
| NET INCOME ATTRIBUTABLE TO ORBOTECH LTD.: |
||||||||||||
| BASIC |
$ | 0.32 | $ | 0.05 | $ | 0.98 | ||||||
| DILUTED |
$ | 0.31 | $ | 0.05 | $ | 0.95 | ||||||
| WEIGHTED AVERAGE NUMBER OF SHARES USED IN COMPUTATION OF EARNINGS PER SHARE — IN THOUSANDS: |
||||||||||||
| BASIC |
35,229 | 34,819 | 34,911 | |||||||||
| DILUTED |
36,458 | 35,641 | 35,778 | |||||||||
5
ORBOTECH LTD.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTH PERIOD ENDED MARCH 31, 2011
| 3 months ended March 31 |
12 months ended December 31 |
|||||||||||
| 2011 | 2010 | 2010 | ||||||||||
| U.S. dollars in thousands | ||||||||||||
| CASH FLOWS FROM OPERATING ACTIVITIES: |
||||||||||||
| Net income |
11,196 | 1,594 | 34,289 | |||||||||
| Adjustment to reconcile net income to net cash provided by (used in) operating activities: |
||||||||||||
| Loss (income) from discontinued operations |
(108 | ) | 1,940 | 8,717 | ||||||||
| Depreciation and amortization |
5,090 | 4,437 | 23,665 | |||||||||
| Compensation relating to equity awards granted to employees and others — net |
1,057 | 1,376 | 4,725 | |||||||||
| Increase (decrease) in liability for employee rights upon retirement |
(363 | ) | 606 | 2,589 | ||||||||
| Deferred income taxes |
1,280 | 1,524 | (3,866 | ) | ||||||||
| Loss (gain) from sales and write down of marketable securities |
157 | (46 | ) | 1,252 | ||||||||
| Other, including capital loss (gain) |
5 | (1,147 | ) | |||||||||
| Increase in accounts receivable: |
||||||||||||
| Trade |
(11,794 | ) | (8,096 | ) | (5,755 | ) | ||||||
| Other |
(1,084 | ) | (221 | ) | (4,673 | ) | ||||||
| Increase (decrease) in accounts payable and accruals: |
||||||||||||
| Trade |
5,727 | 6,766 | 1,434 | |||||||||
| Deferred income and other |
(1,931 | ) | (3,345 | ) | 15,870 | |||||||
| Increase in inventories |
(1,376 | ) | (3,981 | ) | (19,018 | ) | ||||||
| Net cash provided by operating activities—continuing operations |
7,851 | 2,559 | 58,082 | |||||||||
| Net cash provided by (used in) operating activities—discontinued operations |
864 | (1,002 | ) | (8,972 | ) | |||||||
| Net cash provided by operating activities |
8,715 | 1,557 | 49,110 | |||||||||
| CASH FLOWS FROM INVESTING ACTIVITIES: |
||||||||||||
| Purchase of property, plant and equipment |
(1,249 | ) | (720 | ) | (6,752 | ) | ||||||
| Placement of bank deposits |
|
(2,780 | ) | |||||||||
| Sales of marketable securities |
1,340 | 6,742 | ||||||||||
| Proceeds from disposal of property, plant and equipment |
|
20 | ||||||||||
| Decrease (increase) in funds in respect of employee rights upon retirement |
67 | (457 | ) | (617 | ) | |||||||
| Net cash provided by (used in) investing activities — continuing operations |
158 | (1,177 | ) | (3,387 | ) | |||||||
| Net cash provided by (used in) investing activities — discontinued operations |
9,155 | (5 | ) | (268 | ) | |||||||
| Net cash provided by (used in) investing activities |
9,313 | (1,182 | ) | (3,655 | ) | |||||||
| CASH FLOWS FROM FINANCING ACTIVITIES: |
||||||||||||
| Repayment of long-term bank loan |
(8,000 | ) | (8,000 | ) | (32,000 | ) | ||||||
| Employee stock options exercised |
1,067 | 902 | ||||||||||
| Acquisition of non-contolling interest |
|
(511 | ) | |||||||||
| Net cash used in financing activities |
(6,933 | ) | (8,000 | ) | (31,609 | ) | ||||||
| Currency translation adjustments on cash and cash equivalents |
26 | (178 | ) | (220 | ) | |||||||
| NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS |
11,121 | (7,803 | ) | 13,626 | ||||||||
| CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD |
180,859 | 167,233 | 167,233 | |||||||||
| CASH AND CASH EQUIVALENTS AT END OF PERIOD |
191,980 | 159,430 | 180,859 | |||||||||
| LESS — CASH AND CASH EQUIVALENTS OF DISCONTINUED OPERATIONS AT END OF PERIOD |
748 | 727 | 1,356 | |||||||||
| CASH AND CASH EQUIVALENTS OF CONTINUING OPERATIONS AT END OF PERIOD |
191,232 | 158,703 | 179,503 | |||||||||
6
ORBOTECH LTD.
RECONCILIATION OF GAAP TO NON-GAAP RESULTS FROM CONTINUING OPERATIONS
FOR THE THREE MONTH PERIOD ENDED MARCH 31, 2011
| 3 months ended March 31 |
12 months ended December 31 |
|||||||||||
| 2011 | 2010 | 2010 | ||||||||||
| U.S. dollars in thousands (except per share data) | ||||||||||||
| Reported net income attributable to Orbotech Ltd. on GAAP basis |
11,196 | 1,611 | 34,145 | |||||||||
| Non-operating income (expenses): |
||||||||||||
| Financial expenses — net |
(2,123 | ) | (2,391 | ) | (7,284 | ) | ||||||
| Taxes on income |
(1,830 | ) | (998 | ) | (7,397 | ) | ||||||
| Net loss (income) attributable to the non-controlling interest |
— | 17 | (144 | ) | ||||||||
| Income (loss) from discontinued operations* |
108 | (1,940 | ) | (8,717 | ) | |||||||
| (3,845 | ) | (5,312 | ) | (23,542 | ) | |||||||
| Reported operating income on GAAP basis |
15,041 | 6,923 | 57,687 | |||||||||
| Equity based compensation expenses |
1,057 | 1,376 | 4,725 | |||||||||
| Amortization of intangible assets |
3,071 | 3,544 | 14,176 | |||||||||
| Non-GAAP operating income |
19,169 | 11,843 | 76,588 | |||||||||
| Non-operating expenses |
(3,845 | ) | (5,312 | ) | (23,542 | ) | ||||||
| Income (loss) from discontinued operations* |
108 | (1,940 | ) | (8,717 | ) | |||||||
| Non-GAAP net income from continuing operations |
15,216 | 8,471 | 61,763 | |||||||||
| Non-GAAP earnings per diluted share |
$ | 0.42 | $ | 0.24 | $ | 1.73 | ||||||
| Shares used in earnings per diluted share calculation-in thousands |
36,458 | 35,641 | 35,778 | |||||||||
| * | The loss from discontinued operations, net of tax, was attributable to the re-classification during 2010 of OMS and OMD as discontinued operations. |
7
Non-GAAP net income, non-GAAP net income from continuing operations and non-GAAP net income from continuing operations per share detailed in the Reconciliation exclude charges, income or losses, as applicable, related to one or more of the following: (i) equity-based compensation expenses; (ii) certain items associated with acquisitions, including amortization and impairment of intangibles; and/or (iii) our discontinued operations. Management uses these non-GAAP measures to evaluate the Company’s operating and financial performance in light of business objectives and for planning purposes. These measures are not in accordance with GAAP and may differ from non-GAAP methods of accounting and reporting used by other companies. Orbotech believes that these measures enhance investors’ ability to review the Company’s business from the same perspective as the Company’s management and facilitate comparisons with results for prior periods. The presentation of this additional non-GAAP information should not be considered in isolation or as a substitute for net income , net income attributable to Orbotech Ltd. or earnings per share prepared in accordance with GAAP, and should be read only in conjunction with the Company’s consolidated financial statements prepared in accordance with GAAP. For a detailed explanation of the adjustments made to comparable GAAP measures, the reasons why management uses these measures, the usefulness of these measures and the material limitations on the usefulness of these measures please see the Reconciliation.
To supplement the Company’s financial results presented on a GAAP basis, the Company uses the non-GAAP measures indicated in the Reconciliation, which exclude equity based compensation expenses, amortization of intangible assets, in-process research and development charges and impairment and restructuring charges, as well as certain financial expenses and non-recurring income items that are believed to be helpful in understanding and comparing past operating and financial performance with current results. However, the non-GAAP measures presented are subject to limitations as an analytical tool because they do not include certain recurring items as described below and because they do not reflect certain cash expenditures that are required to operate the Company’s business, such as interest expense and taxes. Accordingly, these non-GAAP financial measures are not meant to be considered in isolation or as a substitute for comparable GAAP measures and should be read only in conjunction with the Company’s consolidated financial statements prepared in accordance with GAAP. Management regularly utilizes supplemental non-GAAP financial measures internally to understand, manage and evaluate the Company’s business and make operating decisions. These non-GAAP measures are among the primary factors management uses in planning for and forecasting future periods. Non-GAAP financial measures reflect adjustments based on the following items, as well as the related income tax effects.
The effect of equity-based compensation expenses has been excluded from the non-GAAP measures. Although equity-based compensation is a key incentive offered to employees, and the Company believes such compensation contributed to the revenues earned during the periods presented and also believes it will contribute to the generation of future period revenues, the Company continues to evaluate its business performance excluding equity based compensation expenses. Equity-based compensation expenses will recur in future periods.
The effects of amortization of intangible assets have also been excluded from the measures. This item is inconsistent in amount and frequency and is significantly affected by the timing and size of acquisitions. Investors should note that the use of intangible assets contributed to revenues earned during the periods presented and will contribute to future period revenues as well. Amortization of intangible assets will recur in future periods and the Company may be required to record additional impairment charges in the future. The Company believes that it is useful for investors to understand the effects of these items on total operating expenses. For more information about these items, see the Reconciliation and the Company’s Annual Report on Form 20-F filed with the SEC for the year ended December 31, 2010.
8
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| ORBOTECH LTD. (Registrant) | ||||
| By: | /s/ Amichai Steimberg | |||
| Amichai Steimberg Chief Operating Officer | ||||
| Date: | May 16, 2011 | |||