"2010 was a record year for Orbotech. There is consumer demand for smartphones and tablet computers, and our products are a must in the process of manufacturing them," Orbotech Ltd. (Nasdaq: ORBK) CFO Erez Simha told "Globes" today, after the release of the company's fourth quarter results. Orbotech produces printed circuit and flat screen inspection equipment.
At the beginning of 2010, Orbotech estimated that it would have revenue of $426-434 million for the year. In fact, it reported revenue of $529.3 million, representing growth of 47.3% over 2009.
Despite the positive trend, Orbotech's share price marked time for most of the year, and when the third quarter results were released at the beginning of November, Simha said to "Globes", "It seems that the market does not appreciate what it is to be a key player in the what is the hottest field in the world today." Since then, the share price has climbed 52%, and today Simha says, "I think that the market has begun to digest the potential in our business."
Just before the global economic crisis broke out, Orbotech bought US company Photon Dynamics for $290 million in cash, and took on a $160 million bank loan to finance the acquisition. The acquisition pointed to flat screen as Orbotech's main activity, but the rapid growth in sales of smartphones and tablets , alongside large variation in revenue from sales of flat screen inspection machines, led to sales revenue from machines for printed circuit inspection outstripping that from flat screen machines. Sales of equipment to the PCB industry were $50.1 million in the fourth quarter of 2010, compared with $42.4 million in the third quarter of 2010, and $26.0 million in the fourth quarter of 2009. Sales of equipment to the FPD industry were $42.7 million, compared with $80.5 million in the third quarter of 2010, and $40.5 million in the fourth quarter of last year.
GAAP net profit for the fourth quarter of 2010 was $4.0 million, or $0.11 per share (diluted), compared with GAAP net profit of $16.1 million, or $0.45 per share (diluted) for the third quarter of 2010 and a GAAP net loss of $5.4 million, or $0.15 per share, in the fourth quarter of 2009.
GAAP net profit for the year 2010 was $34.1 million, or $0.95 per share (diluted), compared with a GAAP net loss of $19.9 million, or $0.58 per share, for 2009.
The company completed the quarter with cash, cash equivalents, short-term bank deposits and marketable securities of approximately $184.8 million and debt of $128 million.
In its guidance for 2011, the company said, "The company is reiterating its previously announced revenue and GAAP net margin guidance for 2011 of approximately $560 million and 10%, respectively; and is providing non-GAAP net margin guidance for 2011 of 12.5% of revenues. Business conditions remain strong and there is a fundamental shift in technology complexity driven primarily by the proliferation of high-end mobile devices. The company expects that revenues in the first half of 2011 will be in the range of $280-300 million. However, due to uncertainty about the timing of customer product acceptance of its FPD EVision AOI systems and delivery schedules with respect to our laser direct imaging systems, the company is not in a position to provide more detailed quarterly guidance, but believes its revenues will be weighted more towards the second quarter."
Orbotech president and CEO Rani Cohen said, During the year we increased our investments in the research and development of new products, including inspection and production solutions for both PCB and FPD manufacturers and a new product for the solar energy industry. Orbotech is entering 2011 with an outstanding product portfolio in all areas of our business and very solid orders for each of our leading products."
Orbotech announced that Simha had decided to leave to pursue other business opportunities, but that "he will remain at Orbotech for an interim period to facilitate an orderly transition." Chief Operating Officer Amichai Steimberg, who was CFO from 2000 to 2009, will temporarily fill the role.
Orbotech has a market cap of $515 million.
Published by Globes [online], Israel business news - www.globes-online.com - on February 16, 2011
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