ORBK ($26-$25) P/E 9.8 In Line, Rev's fell 13%..
Thursday August 2, 4:54 am Eastern Time
Press Release
SOURCE: Orbotech Ltd.
ORBOTECH Announces Second Quarter 2001 Results
Revenues In Line With June 13 Announcement
YAVNE, Israel--(BUSINESS WIRE)--Aug. 2, 2001--ORBOTECH LTD. (NASDAQ/NM SYMBOL: ORBK - news) today announced its consolidated financial results for the second quarter and six months ended June 30, 2001.
Revenues for the second quarter of 2001 were $76.5 million, a decrease of 13% from $88.4 million recorded in the second quarter a year ago. Net income for the second quarter of 2001 was $6.1 million, or $0.19 per share (diluted), a decrease of 67% compared with net income for the second quarter last year of $18.7 million, or $0.57 per share (diluted).
Revenues for the first six months of 2001 were $181.3 million, an increase of 6% compared to $170.8 million in the same period in 2000. Net income for the first six months of 2001 was $27.1 million, or $0.84 per share (diluted), a decrease of 21% compared to net income of $35.3 million, or $1.07 per share (diluted) for the first six months of 2000.
Sales of equipment to the printed circuit board (PCB) industry relating to bare PCBs in the second quarter of 2001 were $33.5 million, compared with $49.0 million in the same period last year. Sales of flat panel display (FPD) inspection equipment were $15.5 million, compared with $14.2 million in the second quarter of 2000. Sales of equipment relating to assembled PCBs increased to $5.9 million from $5.5 million in the second quarter of 2000. Sales of inspection equipment for IC packaging substrates were $0.4 million.
The Company's results for the second quarter reflect the continuing significant weakness in the worldwide electronics industry, which has resulted in a reduction in manufacturing activity and additional underutilized capacity being experienced by many of the Company's customers, particularly manufacturers of printed circuit boards. The impact on sales to large volume PCB manufacturers, who are the Company's principal customers for its high volume, high throughput sophisticated inspection systems, has been greater than initially anticipated. These customers have reduced their capital expenditures due both to a decline in their own businesses and profitability and to the overall uncertainty as to the projected length and severity of the current global economic downturn.
The Company anticipates that market uncertainty will prevail for at least the remainder of the year and that its ability to foresee changes in the volume of orders for products will continue to be limited in the near term. Accordingly, the Company will reduce overall operating costs and tailor production schedules to incoming orders, without significantly affecting either its research and development program or the infrastructure which will be required for a rapid increase in production and customer support upon a turnaround in orders.
The major steps to be taken include: a reduction of about 10% in the Company's worldwide workforce; the rationalization of manufacturing and operations activities in Israel, Japan and Europe; a 10% reduction in management salaries; and generally lower discretionary spending. This will result in a one-time charge in the third quarter of approximately $4.0 million with attendant savings in subsequent periods.
These actions will not affect the Company's continuing investment in strategic areas, and the Company believes that its competitive position will remain strong and its financial structure sound. The Company presently has approximately $156 million in cash and cash equivalents with no outstanding indebtedness. Orbotech remains confident that it will emerge in even stronger condition from the current economic uncertainty.
Commenting on the results, Yochai Richter, President and Chief Executive Officer, said, ``Our revenues were in line with the indications we provided in the middle of June. The decline in revenue results from the significant cyclical downturn in the global electronics industry and in no way reflects upon either the quality or technical superiority of the Company's products or the high standard of its provision of service and support to customers.
``The actions announced today are designed to maintain the Company's strengths and, at the same time, provide a measure of protection to shareholders in the event of a prolonged downturn in the electronics industry.''
An earnings conference call is scheduled for Thursday, August 2, 2001, at 9:00 a.m. EST. The dial-in number for the conference call is 712-271-0005, and a replay will be available, on telephone 402-998-1470, until August 10, 2001. The pass code is Q2. A live web cast of the conference call can also be heard by accessing the investor relations section on the Company's website at 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 the Company's or competitors' new product and service offerings, the mix of product and service revenues, changes in the Company's or competitors' business or pricing strategies, changes in the prevailing political and regulatory framework in which the Company operates 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 www.orbotech.com.
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