Orbotech Reports Third Quarter 2017 Results

YAVNE, Israel, Nov. 1, 2017 /PRNewswire/ --

2017 third quarter highlights

· Revenues of $245.7 million

· Gross margin of 48.0%

· GAAP EPS of $0.75 (diluted); non-GAAP EPS of $0.91 (diluted)

2017 fourth quarter guidance

· Revenue range: $245 million to $255 million

· Gross margin of approximately 48.0% based on current expectations of product mix

ORBOTECH LTD. (NASDAQ: ORBK) (the "Company") today announced its consolidated financial results for the third quarter of 2017.

Commenting on the results, Asher Levy, Chief Executive Officer, said: "Our very strong third quarter financial performance reflects robust execution of our business plans, the wide acceptance of our new solutions and continued transformation of our technological innovation into improved revenues and profits. Each of our three divisions performed well and we are experiencing favorable business momentum across the board. These favorable industry conditions, in conjunction with our technological leadership, create new opportunities for Orbotech in areas such as advanced smartphones, automotive and flat panel displays, where our solutions enable the most advanced manufacturing technologies and, in turn, increase our total addressable market."

Revenues for the third quarter of 2017 totaled $245.7 million, compared with $205.0 million in the third quarter of 2016, and $210.7 million in the second quarter of 2017.

In the Company's Production Solutions for Electronics Industry segment:

· Revenues from the Company's printed circuit board ("PCB") business were $85.7 million (including $52.6 million in equipment sales) in the third quarter of 2017. This compares to PCB revenues of $69.0 million (including $38.0 million in equipment sales) in the third quarter of 2016.

· Revenues from the Company's flat panel display ("FPD") business were $76.0 million (including $64.5 million in equipment sales) in the third quarter of 2017. This compares to FPD revenues of $59.8 million (including $49.4 million in equipment sales) in the third quarter of 2016.

· Revenues from the Company's semiconductor device ("SD") business were $78.5 million (including $65.9 million in equipment sales) in the third quarter of 2017. This compares to SD revenues of $71.5 million (including $57.4 million in equipment sales) in the third quarter of 2016.

Revenues in the Company's other segments totaled $5.4 million in the third quarter of 2017, compared with $4.6 million in the third quarter of 2016.

Service revenues for the third quarter of 2017 were $59.2 million, compared with $58.0 million in the third quarter of 2016.

Gross profit and gross margin in the third quarter of 2017 were $118.0 million and 48.0%, respectively, compared with $96.2 million and 46.9%, respectively, in the third quarter of 2016.

GAAP net income and GAAP net income margin in the third quarter of 2017 were $36.6 million and 14.9% respectively, compared with $24.7 million, and 12.1% respectively in the third quarter of 2016.

GAAP earnings per share (diluted) for the third quarter of 2017 were $0.75, compared with $0.51, for the third quarter of 2016.

Adjusted EBITDA (as defined below) and adjusted EBITDA margin for the third quarter of 2017 were $57.6 million and 23.5%, respectively, compared with $43.8 million and 21.4%, respectively, in the third quarter of 2016.

Non-GAAP net income and non-GAAP net income margin for the third quarter of 2017 were $44.7 million and 18.2%, respectively, compared with $33.0 million and 16.1%, respectively, for the third quarter of 2016.

Non-GAAP earnings per share (diluted) for the third quarter of 2017 were $0.91, compared with $0.68 per share, for the third quarter of 2016.

A reconciliation of each of the Company's non-GAAP measures to the comparable GAAP measure (the "Reconciliation") is included at the end of this press release.

As of September 30, 2017, the Company had cash, cash equivalents, short term bank deposits and marketable securities of $247.0 million, and debt of $72.4 million. As of September 30, 2017, the actual number of ordinary shares outstanding was approximately 48.0 million.

Fourth quarter 2017 Guidance

The Company expects revenues for the fourth quarter of 2017 to be in the range of $245 million to $255 million; and gross margin for the fourth quarter of 2017 to be approximately 48.0%, based on current expectations of product mix.

Investor Day

The Company will host an Investor Day on Monday, November 6, 2017 at the W Hotel in New York City. The event will include the introduction of a new Orbotech financial model as well as presentations by business teams. Presentations will commence promptly at 9:00 a.m. EST and the event is expected to conclude at approximately 1:00 p.m. EST. To register for attendance, please contact Rami Rozen, Orbotech Director of Investor Relations, on rami.rozen@orbotech.com. A webcast of the presentation will be broadcast simultaneously through a link on the Investors section of the Orbotech Ltd. website. A replay of the webcast, as well as presentation materials, will remain available for 90 days.

Conference Call

An earnings conference call for the Company's third quarter 2017 results is scheduled for today, November 1, 2017, at 8:30 a.m. EDT. The dial-in number for the conference call is + 1-646-254-3362 or (US toll-free) 877-280-2296 and a replay will be available on telephone number +1-719-457-0820 or (US toll-free) 888-203-1112 until November 15, 2017. The pass code is 9707467 or Orbotech Q3. A live webcast of the conference call can also be heard by accessing the Company's website at: https://edge.media-server.com/m6/p/y9sehn6g. The webcast will remain available for 12 months at: http://investors.orbotech.com/phoenix.zhtml?c=71865&p=irol-audioarchives.

About Orbotech Ltd.

Orbotech Ltd. is a leading global supplier of yield-enhancing and process-enabling solutions for the manufacture of electronics products. Orbotech provides cutting-edge solutions for use in the manufacture of PCBs, FPDs and SDs, designed to enable the production of innovative, next generation electronic products and improve the cost effectiveness of existing and future electronics production processes. Orbotech's core business lies in enabling electronic device manufacturers to inspect and understand PCBs and FPDs to verify their quality ('reading'); pattern the desired electronic circuitry on the relevant substrate and perform three dimensional shaping of metalized circuits on multiple surfaces ('writing'); and utilize advanced vacuum deposition and etching processes in SD and semiconductor manufacturing ('connecting'). Orbotech refers to this 'reading', 'writing' and 'connecting' as enabling the 'Language of Electronics'. For further information, visit http://www.orbotech.com.

Cautionary Statement Regarding Forward-Looking Statements

Except for historical information, the matters discussed in this press release are forward-looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. These statements relate to, among other things, future prospects, developments and business strategies and involve certain risks and uncertainties. The words "anticipate," "believe," "could," "will," "plan," "expect" and "would" and similar terms and phrases, including references to assumptions, have been used in this press release to identify forward-looking statements. These forward-looking statements are made based on management's expectations and beliefs concerning future events affecting Orbotech and are subject to uncertainties and factors relating to Orbotech's operations and business environment, all of which are difficult to predict and many of which are beyond the Company's control. Many factors could cause the actual results to differ materially from those projected including, without limitation, cyclicality in the industries in which the Company operates, the Company's production capacity, timing and occurrence of product acceptance (the Company defines 'bookings' and 'backlog' as purchase arrangements with customers that are based on mutually agreed terms, which, in some cases for bookings and backlog, may still be subject to completion of written documentation and may be changed or cancelled by the customer, often without penalty), fluctuations in product mix, within and among divisions, worldwide economic conditions generally, especially in the industries in which the Company operates, the timing and strength of product and service offerings by the Company and its competitors, changes in business or pricing strategies, changes in the prevailing political and regulatory framework in which the relevant parties operate, including as a result of the 'Brexit' process and administration change in the United States, or in economic or technological trends or conditions, including currency fluctuations, inflation and consumer confidence, on a global, regional or national basis, the level of consumer demand for sophisticated devices such as smartphones, tablets and other electronic devices as well as automobiles, the Company's global operations and its ability to comply with varying legal, regulatory, exchange, tax and customs regimes, the timing and outcome of tax audits, including the ongoing audit of tax years 2012-2014 in Israel and related criminal investigation (see below), the Company's ability to achieve strategic initiatives, including related to its acquisition strategy, the Company's debt and corporate financing activities; the final timing and outcome, and impact of the criminal matter and ongoing investigation in Korea, including any impact on existing or future business opportunities in Korea and elsewhere, any civil actions related to the Korean matter brought by third parties, including the Company's customers, which may result in monetary judgments or settlements, expenses associated with the Korean matter, and ongoing or increased hostilities in Israel and the surrounding areas.

In May 2017, the Company received a best judgment tax assessment from the Israel Tax Authority (the "ITA") with respect to an audit of the Company for the fiscal years 2012-2014 (the "Assessment"), for an aggregate amount of tax against the Company, after offsetting all operating losses for tax purposes available through the end of 2014, of approximately NIS 207 million (currently approximately U.S. $58 million) which amount includes related interest and linkage differentials (as of date of the Assessment). All amounts related to the Assessment are given after application of the Company's accumulated losses. Approximately 80% of the amount of the Assessment, assuming that all accumulated losses are set off against the other matters included in the Assessment, relates to the following two matters: (1) the use of tax exempt profits derived from the Company's approved and benefitting enterprises under the Law for the Encouragement of Capital Investment, 1959, in particular in its investments in, or acquisitions of, foreign subsidiaries; and (2) the purchase of shares of the Company by its foreign subsidiaries during the audit period. The Company has not taken any reserves or provisions related to these two matters because it reasonably believes its positions are more likely than not correct as a legal matter. The Company intends vigorously to contest the ITA's position on both of these matters and does not anticipate establishing a provision related to these matters. The other significant item in the Assessment relates to the Company's transfer pricing. As of September 30, 2017, the Company's tax provisions with respect to the audit period cover at least a majority of the remaining 20% of the Assessment. However, because of the ongoing criminal investigation against the Company, certain of its employees and its tax consultant related to tax positions taken by the Company in the audit period as well as in prior periods, the Company has not conducted a comprehensive independent review of the work of its employees and tax consultant involved in evaluating and establishing its tax positions, including with respect to this and certain other matters that are the subject of the Assessment. The Company expects to begin this review process in connection with the preparation of its annual financial statements and annual report, however it cannot assure investors of the timing or outcome of such review.

If the Company's evaluation of its tax positions proves to be inaccurate, it may be required to increase its provisions or take a charge in future periods. The outcome of its review may also impact the Company's results of operations as a result of tax positions taken for subsequent fiscal years. The amount of the increase and/or the charge against earnings could be material with respect to the audit period and subsequent periods. In addition, the Company does not have any insight into the scope or time period of the criminal investigation or the timing of any prosecutorial action related to the investigation which may occur in the coming days, weeks, months or years. Although the Company cannot predict the timing of any prosecutorial action, the Company expects to be summoned to the prosecutor's office for a hearing, at which it will have the opportunity to present its positions, prior to any indictments of the Company and/or certain of its employees and/or payment of monetary amounts in lieu of such indictments. The Company has not conducted its own investigation into any matters that may be the subject of such investigation and will only do so once the criminal investigation has been completed. The Company intends vigorously to contest the Assessment in accordance with Israeli law as well as defend itself and its employees in the criminal matter, but it cannot assure investors as to the outcome or timing of completion of either process, including the amount of tax ultimately payable related to 2012-2014 and prior fiscal years, or any additional taxes, penalties, criminal sanctions, indictments, fines and other amounts or that may be imposed as a result of the Assessment and criminal investigation, which may be material in amount or in adverse impact on the Company's results of operations, financial position and reputation.

The foregoing information should be read in connection with the Company's Annual Report on Form 20-F for the year ended December 31, 2016, and subsequent SEC filings. The Company is subject to the foregoing and other risks detailed in those reports. The Company assumes no obligation to update the information in this press release to reflect new information, future events or otherwise, except as required by law.

Non-GAAP Financial Measures

Non-GAAP net income, non-GAAP net income margin, non-GAAP net income per share detailed in the Reconciliation exclude charges, income or losses, as applicable, related to one or more of the following: (i) equity-based compensation expenses; (ii) certain items associated with acquisitions, including amortization of intangibles assets and acquisition costs; (iii) certain items associated with sale or disposition of businesses; (iv) certain tax impact; (v) share in losses/ profits of equity method investee; and/or (vi) charges associated with the financing activities related to the retirement of the Company's credit Agreement entered into in 2014.

The Company uses the non-GAAP measures indicated in the Reconciliation to supplement the Company's financial results presented on a GAAP basis. These non-GAAP measures exclude equity based compensation expenses, amortization of intangible assets, share in losses/ profits of equity method investee, as well as certain financial and other expenses and items that are believed to be helpful in understanding and comparing past operating and financial performance with current results. Management uses all of the non-GAAP measures to evaluate the Company's operating and financial performance in light of business objectives and for planning purposes. These measures are not in accordance with GAAP and may differ from non-GAAP methods of accounting and reporting used by other companies. The Company believes that these measures enhance investors' ability to review the Company's business from the same perspective as the Company's management and facilitate comparisons with results for prior periods. In addition, these non-GAAP measures are among the primary factors management uses in planning for and forecasting future periods. However, the non-GAAP measures presented are subject to limitations as an analytical tool because they exclude certain recurring items (such as, equity-based compensation, financial expense and amortization of intangible assets) as described below and in the Reconciliation. The presentation of this additional non-GAAP information should not be considered in isolation or as a substitute for net income; net income attributable to Orbotech Ltd. or earnings per share prepared in accordance with GAAP, and should be read only in conjunction with the Company's consolidated financial statements prepared in accordance with GAAP. For a quantification of the adjustments made to comparable GAAP measures, please see the Reconciliation.

The effect of equity-based compensation expenses has been excluded from the non-GAAP measures. Although equity-based compensation is a key incentive offered to employees, and the Company believes such compensation contributed to the revenues earned during the periods presented and also believes it will contribute to the generation of future period revenues, the Company continues to evaluate its business performance excluding equity based compensation expenses. Equity-based compensation expenses will recur in future periods.

The effects of amortization of intangible assets have also been excluded from the measures. This item is inconsistent in amount and frequency and is significantly affected by the timing and size of acquisitions and dispositions. Investors should note that the use of intangible assets contributed to revenues earned during the periods presented and will contribute to future period revenues as well. Amortization of intangible assets will recur in future periods and the Company may be required to record impairment charges in the future. The Company believes that it is useful for investors to understand the effects of these items on total operating expenses.

The effects of a sale or disposition of a business have also been excluded from the non-GAAP measures. This item is inconsistent in amount and frequency. By excluding the item from the non-GAAP measures, management is better able to evaluate the Company's ability to utilize its existing businesses and estimate the long-term value that remaining businesses will generate for the Company. Furthermore, the Company believes that this adjustment correlates more closely with the sustainability of the Company's operating performance.

Adjusted EBITDA is also a non-GAAP financial measure. The Company defines adjusted EBITDA as net income attributable to Orbotech Ltd., further adjusted, in addition to the items described above, to exclude taxes on income, financial expenses (income) - net, amounts associated with non-controlling interests and depreciation. The Company presents adjusted EBITDA because it considers it to be an important supplemental measure and believes it is frequently used by securities analysts, investors and other interested parties in the evaluation of companies in Orbotech's industry. Adjusted EBITDA margin is a measurement of Orbotech's adjusted EBITDA as a percentage of its revenues. Although the Company believes its presentation of adjusted EBITDA is useful, its adjusted EBITDA measure may not be comparable to similarly named measures presented by other companies.

For more information about all of the foregoing items, see the Reconciliation, the Company's Annual Report on Form 20-F filed with the SEC for the year ended December 31, 2016, and its other SEC filings.

                                                                              ORBOTECH LTD.

                                                  CONDENSED CONSOLIDATED BALANCE SHEETS

                                                                     U. S. dollars  in  thousands

                                                                                     (Unaudited)

                                                                                                  September 30,            December 31,

                                                                                                                      2017                    2016
                                                                                                                      ----                    ----

    ASSETS


    CURRENT ASSETS:

        Cash and cash equivalents                                                                                 $237,754                $216,292

        Restricted cash                                                                                                                  12,487

        Marketable securities                                                                                          201

        Short-term bank deposits                                                                                       973                     789

        Accounts receivable - trade                                                                                385,481                 326,343

        Prepaid expenses and other current assets                                                                   52,750                  47,258

        Inventories                                                                                                164,049                 132,435

                  T o t a l  current assets                                                                        841,208                 735,604


    INVESTMENTS AND NON-CURRENT ASSETS:

        Marketable securities                                                                                        8,058                   7,012

        Funds in respect of employee rights upon retirement                                                         10,105                   8,375

        Deferred income taxes                                                                                       22,323                  19,840

        Equity method investee and other receivables                                                                 5,166                   9,113

                                                                                                                    45,652                  44,340


    PROPERTY, PLANT AND EQUIPMENT, net                                                                              67,848                  62,375


    OTHER INTANGIBLE ASSETS, net                                                                                    73,897                  84,210


    GOODWILL                                                                                                       176,804                 176,374


                  T o t a l  assets                                                                             $1,205,409              $1,102,903
                                                                                                                ==========              ==========



    LIABILITIES AND EQUITY


    CURRENT LIABILITIES:

       Current maturities of long-term loan                                                                        $16,364                 $16,364

        Accounts payable and accruals:

          Trade                                                                                                     82,883                  72,085

          Other                                                                                                    117,032                 114,692

        Deferred income                                                                                             33,512                  28,576

                  T o t a l  current liabilities                                                                   249,791                 231,717


    LONG-TERM LIABILITIES:

        Long-term loan, net                                                                                         56,001                  72,002

        Liability with respect to Applied Microstructure, Inc. ("AMST")                                              1,471                   1,471

        Liability for employee rights upon retirement                                                               24,357                  22,973

        Deferred income taxes                                                                                       12,425                  14,392

        Other tax liabilities                                                                                       10,771                   7,567

                  T o t a l  long-term liabilities                                                                 105,025                 118,405


                  T o t a l  liabilities                                                                           354,816                 350,122


    EQUITY:

        Share capital                                                                                                2,390                   2,381

        Additional paid-in capital                                                                                 429,296                 420,185

        Retained earnings                                                                                          516,663                 440,159

        Accumulated other comprehensive loss                                                                         (804)                (9,221)
                                                                                                                      ----                  ------

                                                                                                                   947,545                 853,504

        Less treasury shares, at cost                                                                             (99,539)               (99,539)
                                                                                                                   -------                 -------

                   T o t a l  Orbotech Ltd. equity                                                                 848,006                 753,965

        Non-controlling interest                                                                                     2,587                 (1,184)


                   T o t a l  equity                                                                               850,593                 752,781


             T o t a l  liabilities and equity                                                                  $1,205,409              $1,102,903
                                                                                                                ==========              ==========



                                                     CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

                                                              U.S. dollars in thousands (except per share data)

                                                                                            (Unaudited)


                                                                                                                Nine months ended             Three months ended

                                                                                                                September 30,               September 30,
                                                                                                                -------------               -------------

                                                                                                                    2017               2016                   2017         2016
                                                                                                                    ----               ----                   ----         ----


    Revenues                                                                                                    $643,976           $591,360               $245,664     $204,953

    Cost of revenues                                                                                             340,224            319,634                127,652      108,739
                                                                                                                 -------            -------                -------      -------

    Gross profit                                                                                                 303,752            271,726                118,012       96,214


    Operating expenses:

    Research and development, net                                                                                 90,662             80,049                 31,921       27,345

    Selling, general and administrative                                                                          103,019             92,357                 36,563       31,068

    Equity in earnings ofP.C.B. Solutions L.P ("Frontline")                                                      (3,235)           (2,311)                 (880)       (634)

    Amortization of intangible assets                                                                             18,635             20,750                  6,371        7,615

    Total operating expenses                                                                                     209,081            190,845                 73,975       65,394
                                                                                                                 -------            -------                 ------       ------


    Operating income                                                                                              94,671             80,881                 44,037       30,820

    Financial expenses - net                                                                                       4,890             15,318                  1,317        1,171


    Income before taxes on income                                                                                 89,781             65,563                 42,720       29,649

    Taxes on income                                                                                               14,256             11,599                  6,569        4,885

    Share in losses of equity method investee                                                                                  450                                 150


    Net income                                                                                                    75,525             53,514                 36,151       24,614

    Net loss attributable to non-controlling interests                                                             (979)             (293)                 (403)        (99)
                                                                                                                    ----               ----                   ----          ---


    Net income attributable to Orbotech Ltd.                                                                     $76,504            $53,807                $36,554      $24,713
                                                                                                                 =======            =======                =======      =======



    Basic earnings per share                                                                                       $1.60              $1.20                  $0.76        $0.52
                                                                                                                   =====              =====                  =====        =====


    Diluted earnings per share                                                                                     $1.57              $1.17                  $0.75        $0.51
                                                                                                                   =====              =====                  =====        =====


    Weighted average number of shares (in thousands)

    used in computation of:

    Basic earnings per share                                                                                      47,914             44,867                 47,995       47,397

    Diluted earnings per share                                                                                    48,812             45,813                 48,903       48,385

                                                                                               ORBOTECH LTD.

                                                        RECONCILIATION OF GAAP TO NON-GAAP RESULTS

                                                            U.S. dollars in thousands (except per share data)

                                                                                                    (Unaudited)



                                                                                                                Nine months ended             Three months ended

                                                                                                                   September 30,                September 30,
                                                                                                                   -------------                -------------

                                                                                                                      2017                2016                    2017         2016
                                                                                                                      ----                ----                    ----         ----



    Reported operating income on GAAP basis                                                                        $94,671             $80,881                 $44,037      $30,820

    Equity-based compensation expenses                                                                               6,982               4,319                   2,480        1,361

    Amortization of intangible assets                                                                               18,635              20,750                   6,371        7,615

    Non-GAAP operating income                                                                                     $120,288            $105,950                 $52,888      $39,796
                                                                                                                  ========            ========                 =======      =======


    Reported net income attributable to Orbotech Ltd. on GAAP basis                                                $76,504             $53,807                 $36,554      $24,713

    Equity-based compensation expenses                                                                               6,982               4,319                   2,480        1,361

    Amortization of intangible assets                                                                               18,635              20,750                   6,371        7,615

    Tax effect of non-GAAP adjustments                                                                             (2,244)            (2,410)                  (748)       (887)

    Share in losses of equity method investee                                                                                     450                                  150

    Charges associated with the retirement of the 2014 Credit Agreement                                                         6,228

    Non-GAAP net income                                                                                            $99,877             $83,144                 $44,657      $32,952
                                                                                                                   =======             =======                 =======      =======


    GAAP earnings per diluted share                                                                                  $1.57               $1.17                   $0.75        $0.51
                                                                                                                     =====               =====                   =====        =====


    Non-GAAP earnings per diluted share                                                                              $2.05               $1.81                   $0.91        $0.68
                                                                                                                     =====               =====                   =====        =====


    Shares used in earnings per diluted share computation - in thousands                                            48,812              45,813                  48,903       48,385

                                                                                        ORBOTECH LTD.

                                             RECONCILIATION OF GAAP NET INCOME TO ADJUSTED EBITDA

                                                                                     U.S. dollars in thousands

                                                                                              (Unaudited)



                                                                                                               Nine months ended         Three months ended

                                                                                                                  September 30,            September 30,
                                                                                                                  -------------            -------------

                                                                                                                     2017            2016                    2017    2016
                                                                                                                     ----            ----                    ----    ----



    Net income attributable to Orbotech Ltd. on GAAP basis                                                        $76,504         $53,807                 $36,554 $24,713

    Minority interest and equity losses                                                                             (979)            157                   (403)     51

    Taxes on income                                                                                                14,256          11,599                   6,569   4,885

    Financial expenses - net                                                                                        4,890          15,318                   1,317   1,171

    Depreciation and amortization                                                                                  32,749          32,997                  11,101  11,599

    Equity-based compensation expenses                                                                              6,982           4,319                   2,480   1,361

    ADJUSTED EBITDA                                                                                              $134,402        $118,197                 $57,618 $43,780
                                                                                                                 ========        ========                 ======= =======


                                                                                                                   ORBOTECH LTD.

                                                                         CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

                                                                                                          U.S. dollars in thousands

                                                                                                                                     (Unaudited)

                                                                                                                                                           Nine months ended                          Three months ended

                                                                                                                                                           September 30,                           September 30,
                                                                                                                                                           -------------                           -------------

                                                                                                                                                                2017                    2016                       2017                     2016
                                                                                                                                                                ----                    ----                       ----                     ----

    CASH FLOWS FROM OPERATING ACTIVITIES:


    Net income                                                                                                                                    $75,525                $53,514              $36,151                       $24,614

    Adjustment to reconcile net income to net cash

    provided by operating activities:

                                                                         Depreciation and amortization                                                        32,749                  32,997                     11,101                   11,599

                                                                         Compensation relating to equity awards granted to

                                                                         employees and others - net                                                            6,982                   4,319                      2,480                    1,361

                                                                          Increase in liability for employee rights upon retirement,
                                                                          net                                                                                    842                   1,531                        685                      652

                                                                         Long- term loans discount amortization                                                                       1,866

                                                                         Deferred financing costs amortization                                                   363                   5,585                        363                      125

                                                                         Deferred income taxes                                                               (6,788)                (2,774)                   (1,327)                 (1,096)

                                                                          Amortization of premium and accretion of discount on
                                                                          marketable

                                                                         Securities, net                                                                          37                     112                         36                       18

                                                                         Equity in earnings of Frontline, net of dividend received                             (363)                  1,105                         20                      266

                                                                         Other                                                                                   127                     631                      (290)                     243

                                                                         Decrease (increase) in accounts receivable:

                                                                         Trade                                                                              (59,138)               (35,315)                  (24,245)                (28,091)

                                                                         Other                                                                               (7,286)                    608                    (4,359)                   4,311

                                                                         Increase (decrease) in accounts payable and accruals:

                                                                         Trade                                                                                10,747                 (2,734)                   (1,611)                     938

                                                                         Deferred income                                                                       4,936                 (1,790)                     2,503                    (246)

                                                                         Other                                                                                16,690                   4,202                     18,177                   10,598

                                                                         Increase in inventories                                                            (29,811)                (4,571)                  (11,907)                 (3,456)

    Net cash provided by operating activities                                                                                                               45,612                  59,286                     27,777                   21,836


    CASH FLOWS FROM INVESTING ACTIVITIES:


    Purchase of property, plant and equipment                                                                                                             (19,850)               (17,387)                   (7,936)                 (5,272)

    Consideration received for the sale of the Thermal Products business                                                                                      12,000

    Withdrawal of (investment in) bank deposits                                                                                                              (184)                  5,714                      2,469                    (774)

    Purchase of marketable securities                                                                                                             (1,994)               (4,836)                                          (2,592)

    Redemption of marketable securities                                                                                                               804                  3,617                                             1,280

    Investment in equity method investee                                                                                                                     (1,000)

    Acquisition of the assets of AMST

    Decrease (increase) in funds in respect of employee

    rights upon retirement                                                                                                                                 (1,187)                    194                       (65)                      68

    Net cash used in investing activities*                                                                                                                (22,411)                (1,698)                   (5,532)                 (7,290)


    CASH FLOWS FROM FINANCING ACTIVITIES:

    Repayment of long- term loan                                                                                                                           (239,635)

    Repayment of bank loan                                                                                                                       (16,364)

    Bank loan, net of $2 million financing costs                                                                                                             108,031

    Issuance of shares, net                                                                                                                                   99,962

    Employee share options exercised                                                                                                                         2,138                   5,100                        901                    1,636

    Net cash provided by (used in) financing activities                                                                                                   (14,226)               (26,542)                       901                    1,636


    Net increase in cash, cash equivalents and restricted cash*                                                                                              8,975                  31,046                     23,146                   16,182

    Cash, cash equivalents and restricted cash at beginning of period*                                                                                     228,779                 175,719                    214,608                  190,583
                                                                                                                                                           -------                 -------                    -------                  -------


    CASH, CASH EQUIVALENTS AND RESTRICTED CASH AT END OF PERIOD*                                                                                 $237,754               $206,765             $237,754                      $206,765
                                                                                                                                                 ========               ========             ========                      ========


                                                                         * Reclassified

    Company Contact:               Tally Kaplan Porat
    Rami Rozen                     Director of Corporate Marketing
    Director of Investor Relations Orbotech Ltd
    Orbotech Ltd                   Tel: +972-8-942 3603
    Tel: +972-8-942 3582           Tally-Ka@orbotech.com
    Rami.rozen@orbotech.com

View original content:http://www.prnewswire.com/news-releases/orbotech-reports-third-quarter-2017-results-300547171.html

SOURCE Orbotech Ltd.