ORBOTECH LTD.

RECONCILIATION OF GAAP NET INCOME TO ADJUSTED EBITDA

U.S. dollars in thousands  

 (Unaudited)

9 months ended

3 months ended

September 30

September 30

2015

2014

2015

2014

Net income attributable to Orbotech Ltd. on GAAP basis

$40,724

$22,258

$15,919

$7,379

Minority interest and equity losses 

597

366

221

42

Tax expenses

11,137

5,079

2,769

2,088

Financial expenses

18,406

3,814

6,138

3,880

Depreciation and amortization 

34,739

17,717

11,221

10,875

Gain from the sale of the Thermal activity

(628)

Equity- based compensation expenses

2,597

2,370

848

817

SPTS acquisition costs 

6,821

6,821

ADJUSTED EBITDA

$107,572

$58,425

$37,116

$31,902

ORBOTECH LTD.

RECONCILIATION OF GAAP NET INCOME TO CREDIT FACILITY EBITDA

U.S. dollars in thousands  

 (Unaudited)

12 months

September 30

2015

Net income attributable to Orbotech Ltd. on GAAP basis

$53,844

Minority interest and equity losses 

532

Tax expenses

9,477

Financial expenses

23,637

Depreciation and amortization 

47,355

Equity- based compensation expenses

3,419

Gain from the sale of the Thermal activity

(628)

Litigation expenses 

902

CREDIT FACILITY EBITDA ⁽¹⁾

$138,538

⁽¹⁾ Credit Facility EBITDA does not reflect any annualized expense reductions anticipated as a result of operational changes made as part of the SPTS Acquisition estimated by us in good faith as permitted by the Credit Agreement.  Because we are in the preliminary stages of assessing our operations after the SPTS Acquisition, this adjustment does not include any amount of cost savings, business optimization opportunities or synergies that we believe may be available.  Although we are carefully assessing the efficiency of our business, we may not identify or achieve any cost savings in the timeframe or amount we anticipate, if at all.  Accordingly, you should not place undue reliance on our ability to achieve cost savings or synergies.

ORBOTECH LTD.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

U.S. dollars in thousands

 (Unaudited)

9 months ended

3 months ended

September 30

September 30

2015

2014

2015

2014

CASH FLOWS FROM OPERATING ACTIVITIES:

Net income

40,906

22,309

15,940

7,319

Adjustment to reconcile net income to net cash 

provided by operating activities:

Depreciation and amortization

34,739

17,717

11,221

10,875

Compensation relating to equity awards granted to 

employees and others - net

2,597

2,370

848

817

Decrease (increase) in liability for employee rights upon retirement, net

155

(2,247)

362

(983)

Long- term loans discount amortization

572

118

175

118

Deferred financing costs amortization

1,531

304

493

304

Deferred income taxes

448

2,214

(355)

2,309

Amortization of premium and accretion of discount on marketable

Securities, net

131

572

32

68

Equity in earnings of Frontline, net of dividend received 

190

(104)

(412)

354

Other

704

1,320

90

879

Loss from sales of marketable securities 

339

339

Gain from the sale of the Thermal activity 

(628)

Increase in accounts receivable:

Trade

(31,787)

(7,797)

(37,345)

(14,826)

Other

(4,099)

(2,559)

(4,668)

(83)

Increase (decrease) in accounts payable and accruals:

Trade

(5,829)

12,182

7,058

13,122

Deferred income and other

(2,209)

(3,212)

7,343

5,569

Decrease (increase) in inventories

17,310

(15,530)

7,036

(7,848)

Net cash provided by operating activities 

54,731

27,996

7,818

18,333

CASH FLOWS FROM INVESTING ACTIVITIES:

Purchase of property, plant and equipment

(11,356)

(8,746)

(4,237)

(2,814)

Consideration received for the sale of the Thermal activity 

10,000

Withdraw of bank deposits

5,966

24,650

4,501

12,576

Purchase of marketable securities

(154)

(15,086)

(844)

Redemption of marketable securities

26,586

17,748

Acquisition of SPTS net of cash acquired 

(375,061)

(375,061)

Investment in equity method investee 

(1,500)

(250)

Proceeds from disposal of property, plant and equipment 

15

Increase (decrease) in restricted cash 

(75)

2,904

Increase (decrease) in funds in respect of employee

rights upon retirement

445

(67)

52

5

Net cash provided by (used in) investing activities

3,326

(347,959)

3,220

(348,390)

CASH FLOWS FROM FINANCING ACTIVITIES:

Long term loan, net of $8 millions financing costs

288,918

288,918

Repayment of long-term loan 

(28,932)

(8,182)

Short term bank loan

6,000

6,000

Employee stock options exercised

7,585

7,002

1,424

1,256

Acquisition of treasury shares 

(14,593)

(1,600)

Net cash provided by (used in) financing activities

(21,347)

287,327

(6,758)

294,574

Net increase (decrease) in cash and cash equivalents

36,710

(32,636)

4,280

(35,483)

Casn and cash equivalents at beginning of period

136,367

161,155

168,797

164,002

CASH AND CASH EQUIVALENTS AT END OF PERIOD

173,077

128,519

173,077

128,519