Orbotech Ltd. (Nasdaq: ORBK) saw revenue fall and its non-GAAP net profit fall, but predicts double-digit growth 2010. The automated optical inspection equipment for today published its consolidated financial report for the fourth quarter and full year of 2009.
Orbotech posted $99.4 million revenue for the fourth quarter, down 23% from $129.2 million for the corresponding quarter of 2008, but nevertheless beat the analysts' consensus of $98.1 million revenue. The company's revenue also rose compared with the $92.3 million for the third quarter.
GAAP-based net loss fell to $5.4 million ($0.15 per share) for the fourth quarter from $101.2 million for the corresponding quarter. Non-GAAP net profit fell 75% to $1.2 million ($0.03 per share) per share from $4.8 million in the corresponding quarter. The company missed the analysts' consensus of $0.12 earnings per share.
The fourth quarter GAAP net results included a one-time $87.8 million charge for goodwill for the company's panel display (FPD) business and $13.6 million charge for amortization of intangible assets and an R&D write-off resulting from the $290 million acquisition of Photon Dynamics Inc. in 2008.
Orbotech predicts 13-15% revenue growth in 2010 to $426-434 million, including $95 million revenue in the first quarter.
For the year as a whole, Orbotech's revenue fell 12% to $377.6 million from $429.5 million in 2008. GAAP-based net profit fell to $19.9 million ($0.58 per share) in 2009 from $135.3 million in 2008. Non-GAAP net profit fell to $3.4 million ($0.10 per share) in 2009 from $19.1 million in 2008.
Orbotech president and CEO Rani Cohen called 2009 "extremely challenging", but said that the company nonetheless achieved a cash flow from operations of $55 million in 2009. Looking ahead, he said, "We remain positive as to the short and long-term demand for our products."
Sales of equipment to the printed circuit board (PCB) industry rose 50% to $26 million in the fourth quarter from $17.3 million for the corresponding quarter, but sales of equipment to the FPD industry fell 47% to $40.5 million from $76.4 million over the same period.
Orbotech deputy CEO Amichai Steinberg said, "We expect 2010 will be better than 2009 in the FPD industry. However, we don’t know to manage the rate of entry of the machinery at manufacturers, so growth may not be linear. A weak quarter may be followed by a strong quarter."
Steinberg attributed the growth in PCB equipment sales to three causes. "First, the global market in general strengthened, and manufacturers' confidence boosted plant utilization rates. Second new products now on the market, such as smartphones, e-book, smart and TVs all require advanced PCB equipment. These products cannot be manufactured with old PCB equipment.
"In addition, during the fourth quarter, we launched several new machines, especially laser direct imaging equipment, which boosted our sales. These machines cost between $700,000 and $1 million, and we've signed a framework contract for the delivery of 25 Paragon machines during 2010, our largest ever contract in this sector."
Steinberg predicts that equipment sales to the PCB industry would top $30 million in 2010.
Orbotech says that FPD industry growth driven by higher demand from China and other emerging economies has resulted in LCD manufacturers solidifying their capital expenditure plans for the next phase of investment. The company received a large order for its new Generation 8 FPD equipment during the fourth quarter, with most of the delivery due in the first half of 2010.
Orbotech increased its cash and cash equivalents to $177.2 million at the end of 2009, and it had $160 million in debt. The company had 1,600 employees at the end of the year, including 650 in Israel. It recently cancelled a pay cut instituted in late 2008.
Orbotech's share closed at $8.85 on Nasdaq on Friday, giving a market cap of $308 million.
Published by Globes [online], Israel business news - www.globes-online.com - on February 22, 2010
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