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SMT & Inspection | February 22, 2010

Orbotech post loss in Q4

Revenues for the fourth quarter of 2009 totaled $99.4 million, compared to $92.3 million recorded in the third quarter of 2009 and $129.2 million in the fourth quarter a year ago.
GAAP net loss for the fourth quarter of 2009 was $5.4 million, compared to GAAP net loss of $5.5 million, for the third quarter of 2009 and GAAP net loss of $101.2 million, in the fourth quarter of 2008.

Revenues for the year ended December 31, 2009 totaled $377.6 million, compared to the $429.5 million recorded in 2008. GAAP net loss for the year ended December 31, 2009 was $19.9 million, compared to GAAP net loss of $135.3 million, for the year ended December 31, 2008.

Non-GAAP net income for the fourth quarter of 2009 was $1.2 million, compared to non-GAAP net income of $4.8 million, in the fourth quarter of 2008. Non-GAAP net income for the year ended December 31, 2009 was $3.4 million, compared to non-GAAP net income of $19.1 million, for the year ended December 31, 2008.

Sales of equipment to the printed circuit board ("PCB") industry in the fourth quarter of 2009 were $26.0 million, compared to $20.3 million in the third quarter of 2009 and $17.3 million in the fourth quarter of 2008. Sales of equipment to the FPD industry in the fourth quarter of 2009 were $40.5 million compared to $37.6 million in the third quarter of 2009 and $76.4 million in the fourth quarter of 2008.

Sales of character recognition products were $2.0 million in the fourth quarter of 2009, compared to $2.4 million in the third quarter of 2009, and $3.0 million recorded in the fourth quarter of 2008. Sales of medical imaging equipment were $2.1 million in the fourth quarter of 2009, compared to $4.1 million in the third quarter of 2009, and $3.7 million in the fourth quarter of 2008. In addition, service revenue for the fourth quarter of 2009 was $28.8 million, compared to $27.9 million in the third quarter of 2009, and $28.8 million in the fourth quarter of 2008. The impact of currency rates in the fourth quarter of 2009 was similar to that in the previous quarters of 2009.

During the fourth quarter of 2009, the Company's PCB manufacturing customers continued to report high plant utilization rates driven mainly by new product introductions incorporating advanced functionalities and technologies. This, in turn, led to increased demand for the Company's PCB equipment, in particular its highly sophisticated Direct Imaging systems which, given the improved industry fundamentals, are expected to experience continued strong demand into 2010.

In the fourth quarter of 2009, the Company signed a significant frame agreement with a PCB manufacturing customer for the sale of twenty-five Orbotech Paragon(TM) Laser Direct Imaging (LDI) systems and other PCB production equipment to be utilized in the customer's printed circuit board and integrated circuit carrier production facilities. Although there are no minimum purchase requirements under this frame agreement, delivery of most of these systems is expected to be completed by the end of 2010.

In light of the anticipated FPD industry growth driven by higher demand from China and other emerging economies, many LCD manufacturers have begun to solidify their capital expenditure plans for the next phase of investment. During the fourth quarter of 2009, the Company received a significant order for its new Generation 8 FPD equipment, most of which is expected to be delivered in the first half of 2010. These revenues are expected to be recorded during the second or third quarters of 2010. Additional investments in FPD fabrication plants are expected to begin in the latter part of 2010 and continue into 2011.

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