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SMT & Inspection | August 03, 2009

Orbotech post loss in Q2, but PCB equipment sales increase

Orbotech’s 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 net loss for the second quarter of 2009 was $1.2 million, compared to GAAP net loss of $7.9 million, for the first quarter of 2009 and GAAP net income of $5.3 million, 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, compared to GAAP net income of $9.0 million, in the first six months of 2008.

Non-GAAP net income for the second quarter of 2009 was $2.5 million, compared to non-GAAP net income of $7.4 million, in the second quarter of 2008. Non-GAAP net income for the first six months of 2009 was $1.1 million, compared to non-GAAP net income of $13.5 million, 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.

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.

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