Orbotech (ORBK) Issues Q417, Q118 Guidance Above the Street

Orbotech LTD. (NASDAQ: ORBK) announced preliminary fourth quarter and fiscal year 2017 results and is updating its full year 2018 guidance with a specific revenue outlook for the first half of 2018.

Preliminary Fourth Quarter and Full Year 2017 Highlights:

• Revenue is expected to be approximately $256 million for the fourth quarter, and $900 million for the full year, of 2017 (*** consensus is $250.2 million and $894.14 million)
• Gross margin is expected to be in the range of 47%-47.5% in the fourth quarter and for the full year of 2017. Gross margin is slightly lower than the Company anticipated in November 2017, due to strong demand that accelerated the volume of orders late in 2017 coupled with expedited shipments to meet customer demand in a tightening supply chain environment.
• Operating expenses in the fourth quarter of 2017 are expected to increase by 8%-10% compared to the previous quarter, due primarily to the acceleration of research and development projects and other variable expenses to support a higher level of growth expected in 2018. The increase in operating expenses is reducing proportionately the fourth quarter and full year net income, Adjusted EBITDA margin and GAAP and non-GAAP EPS guidance provided in November.

2018 Guidance:

• 12-14% revenue growth for full year 2018 reflecting the Company's view that its expected CAGR will be spread more evenly throughout the years of the Company's financial model.
• Revenues for the first half of 2018 are expected to be approximately $500 million, with approximately $235 million - $250 million in the first quarter. (*** Q1 consensus is $223.5 milion)
• Gross margin for the first half of 2018 is expected to be in the range of 47.5%-48.0% and the quarterly operating expenses in the first half of 2018 are expected to be similar to those in the fourth quarter of 2017, based upon the Company's current expectations of product mix.

Commenting on this announcement, Mr. Asher Levy, Chief Executive Officer, stated: "As we highlighted at our Investor Day in November 2017, Orbotech offers unique solutions to the manufacturing processes for the world's most advanced consumer and industrial electronic products." He continued: "Orbotech is part of a select group of companies that is, literally, shaping the future of electronics, and we benefit from the adoption of new technologies in the industries we serve. The innovativeness of our solutions and the recent introductions of new products and technologies is resulting in stronger revenue momentum and improved visibility as we enter 2018. We are proud of our growth and improving profitability year over year and believe the margin goals announced at our Investor Day remain solidly within our grasp."

Needham Growth Conference

The foregoing results are being provided in advance of Mr. Levy, Mr. Amichai Steimberg, President and Chief Operating Officer, and Mr. Alon Rozner, Chief Financial Officer, presenting at the 2018 Needham Growth Conference on January 17, 2018 at the Lotte New York Palace. The presentation is scheduled for 4:50 P.M., Eastern Time, on January 17, 2018, and will be webcast on the Investor events page of the Orbotech Ltd. website. A replay of the webcast will remain available for 90 days.

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