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Orbotech Posts Positive Sales for PCB Equipment in 2Q09
August 3, 2009 | OrbotechEstimated reading time: 5 minutes
Orbotech Ltd. has announced its consolidated financial results for the second quarter and six months ended June 30, 2009.
Revenues for the second quarter of 2009 totaled $94.0 million, compared to $91.9 million recorded in the first quarter of 2009 and $105.1 million in the second quarter a year ago. GAAP (U.S. generally accepted accounting principles) net loss for the second quarter of 2009 was $1.2 million, or $0.03 per share, compared to GAAP net loss of $7.9 million, or $0.23 per share for the first quarter of 2009 and GAAP net income of $5.3 million, or $0.16 per share (diluted), in the second quarter of 2008.
Revenues for the first six months of 2009 totaled $185.9 million, compared to $205.6 million recorded in the first half of 2008. GAAP net loss for the first six months of 2009 was $9.1 million, or $0.26 per share, compared to GAAP net income of $9.0 million, or $0.27 per share (diluted) in the first six months of 2008.
Non-GAAP net income for the second quarter of 2009 was $2.5 million, or $0.07 per share (diluted), compared to non-GAAP net income of $7.4 million, or $0.22 per share (diluted), in the second quarter of 2008. Non-GAAP net income for the first six months of 2009 was $1.1 million, or $0.03 per share (diluted), compared to non-GAAP net income of $13.5 million, or $0.40 per share (diluted), in the first six months of 2008. The Company's GAAP results for the second quarter of 2009 included $3.3 million of income from the Salvador transaction, which is explained in the detailed description of the non-GAAP adjustments in the accompanying reconciliation of GAAP to non-GAAP results (the Reconciliation).
Sales of equipment to the printed circuit board (PCB) industry were $16.8 million in the second quarter of 2009, compared to $10.6 million in the first quarter of 2009, and $34.5 million in the second quarter of 2008. Sales of equipment to the flat panel display (FPD) industry were $41.4 million, compared to $50.0 million in the first quarter of 2009, and $29.8 million in the second quarter of last year. Sales of character recognition products were $2.0 million in the second quarter of 2009, compared to $1.4 million in the first quarter of 2009, and $2.7 million recorded in the second quarter of 2008. Sales of medical imaging equipment were $6.2 million in the second quarter of 2009, compared to $3.7 million in the first quarter of 2009, and $4.4 million in the second quarter of 2008. In addition, service revenue for the second quarter of 2009 increased to $27.3 million from $25.5 million in the first quarter of 2009, and $26.2 million in the second quarter of 2008. The financial data, including revenue data, presented in respect of the second quarter of 2008 does not include results attributable to the business of Photon Dynamics, Inc. (PDI), which was acquired on October 2, 2008. The impact of currency rates in the second quarter of 2009 was similar to that in the first quarter of 2009.
The company completed the quarter with cash, cash equivalents and marketable securities of approximately $140 million, compared with approximately $119 million at the end of the first quarter of 2009, and $160 million in debt. The company's marketable securities included approximately $19 million of auction rate securities primarily tied to student loans.
During the second quarter of 2009, certain PCB manufacturers have reported increased fabrication plant utilization and this has had a positive effect on the company's sales of PCB equipment. As the company previously reported, beginning from the fourth quarter of 2008, it experienced a significant decline in new FPD equipment orders, which continued through the first half of 2009. However, more recently, FPD manufacturers are reporting close to full capacity utilization, as well as restarting planned expansions in fabrication facilities to meet increased demand for panels, particularly for use in LCD televisions and touch screen panels. The company expects the continued depletion of inventory buildup together with higher levels of demand for panels to lead to increased FPD order activity during the coming quarters. The positive indicators for mid-to-long term growth in the FPD industry remain unchanged.
Commenting on the results, Rani Cohen, President and Chief Executive Officer, said, "We are pleased with our financial results for the quarter. While the current global recession continues to impact upon capital equipment expenditures, our customers are beginning to report some signs of inventory depletion, and we stand ready to help them meet their production requirements with our expansive portfolio of products. With the operational integration of PDI now successfully completed, we are also poised to introduce improved FPD offerings for our customers in anticipation of the next wave of investments and capacity expansions in the LCD industry. Our continued ability during the quarter to align our organization to the current level of business has allowed us to generate cash while continuing to provide our customers with the best support and new and innovative solutions. This will also enable us to be ready for the ramp-up of PCB and FPD production once business conditions improve. We remain positive as to the short and long term demand for our principal products."
An earnings conference call for the company's second quarter 2009 results is scheduled for Monday, August 3, 2009, at 9:00 a.m. EDT. The dial-in number for the conference call is 210-795-2680, and a replay will be available on telephone number 203-369-0197 until August 17, 2009. The pass code is Q2. A live Webcast of the conference call and a replay can also be heard by accessing the investor relations section on the company's Web site at www.orbotech.com.
About Orbotech Ltd.
Orbotech is principally engaged in the design, development, manufacture, marketing and service of yield-enhancing and production solutions for specialized applications in the supply chain of the electronics industry. Orbotech's products include AOI, production and process control systems for PCBs and AOI, test and repair systems for FPDs. The company also markets computer-aided manufacturing and engineering (CAM) solutions for PCB production. In addition, through its subsidiary, Orbograph Ltd., the company develops and markets character recognition solutions to banks and other financial institutions, and has developed a proprietary technology for Web-based, location-independent data entry for check processing and forms processing; and, through its subsidiaries, Orbotech Medical Denmark A/S and Orbotech Medical Solutions Ltd., is engaged in the research and development, manufacture and sale of specialized products for application in medical nuclear imaging. 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 sophisticated 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 30 offices worldwide. Orbotech'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.