Operating and Financial Review and Prospects.
General
The following discussion of our financial condition and results of operations should be read in conjunction with the
consolidated financial statements and the notes to those statements included therein, which have been prepared in accordance with accounting principles generally accepted in the United States, or U.S. GAAP.
Overview
We design, develop, manufacture and market automated solutions dedicated for enhancing production processes and yield
for the semiconductor fabrication market, principally based on core AOI technology.
We sell our systems worldwide. The vast majority of our sales are to manufacturers in the Asia Pacific region,
including China, South East Asia, Korea and Taiwan, due to, among other factors, the migration of the electronic manufacturers into this region.
In the first half of 2024, our sales to customers in the Asia Pacific region accounted for approximately 89% of our
total revenues.
In addition to revenues derived from the sale of systems and related products, we generate revenues from providing
maintenance and support services for our products. We generally provide a one-year warranty with our systems. Accordingly, service revenues are not earned during the warranty period.
Critical Accounting Policies
Critical accounting policies are those that are, in management’s view, most important to the portrayal of a company’s
financial condition and results of operations and most demanding judgment calls, often as a result of the need to make estimates about the effect of matters that are inherently uncertain and may change in subsequent periods. We believe our most
critical accounting policies relate to:
Revenue
Recognition. The Company’s contracts with its customers include performance obligations to provide its products or to service the installed products. A
product sale contract may include an extended warranty (that is, for longer than the twelve-month standard warranty) as well as installation, both of which are considered separate performance obligations.
The Company recognizes revenue from contracts for sales of products when the Company transfers control of the product
to the customer. This generally occurs upon shipment as pre-shipment calibration and testing processes ensure simplified and streamlined installation at the customer site. Revenues from the contract are recognized in an amount that reflects the
consideration the Company expects to be entitled to receive once the product is operating in accordance with its specifications and signed documentation of the arrangement, such as a signed contract or purchase order, has been received. Payment terms
with customers may vary, but are generally based on milestones within the delivery process such as shipping and installation. Payment terms do not include significant financing components.
The Company does not incur costs in obtaining a contract except for agents’ commissions, which are incurred upon the
recognition of revenues. Revenues are recognized over a period of less than a year and as such, there are no underlying sales commissions to be capitalized.
Service revenues consist mainly of contracts charged under time and material arrangements. Service revenues from
maintenance contracts are recognized ratably over the contract period.
Contracts with customers may include multiple performance obligations. For such arrangements, the Company allocates
revenue to each performance obligation based on its relative standalone selling price. The Company generally determines standalone selling prices based on the prices charged to customers.
The Company’s multiple performance obligations consist of product sales, installation services and non-standard
warranties. A fixed amount is deferred in respect of installation services for machines that have been recognized but not installed as of the balance sheet date. A non-standard warranty is one that is for a period longer than 12 months. Accordingly,
income from a non-standard warranty is deferred as unearned revenue and is recognized ratably as revenue commencing with and over the applicable warranty term.
The Company records contract liabilities when the customer has been billed in advance of the Company completing its
performance obligations. These amounts are recorded as deferred revenue in the Consolidated Balance Sheets.
Valuation of
Accounts Receivable. We review accounts receivable to determine which are doubtful of collection. In making this determination of the appropriate allowance for doubtful accounts, we consider information at hand regarding specific customers,
including aging of the receivable balance, evaluation of the security received from customers, our history of write-offs, relationships with our customers and the overall credit worthiness of our customers. Changes in the credit worthiness of our
customers, the general economic environment and other factors may impact the level of our future write-offs.
Valuation of
Inventory. Inventories consist of completed systems, partially completed systems and components, and are recorded at the lower of cost, determined by the moving – average basis, or market. We review inventory for obsolescence and excess
quantities to determine that items deemed obsolete or excess inventory are appropriately reserved. In making the determination, we consider forecasted future sales or service/maintenance of related products and the quantity of inventory at the
balance sheet date, assessed against each inventory item’s past usage rates and future expected usage rates. Changes in factors such as technology, customer demand, competing products and other matters could affect the level of our obsolete and
excess inventory in the future.
In the year 2024 we wrote-off inventory in the amount of approximately $1.5 million. The write-off amounts are
included in the line item called "Cost of products sold", in the consolidated statements of operations. The write-offs create a new cost basis and are a permanent reduction of inventory cost. The write-offs in in 2024 were made against excess and
slow-moving inventory. In the first half of 2023 there were no write-offs of inventory. Inventory that is not expected to be converted or consumed in the following 12 months is classified as non-current. As of June 30, 2024, a $9.6 million portion of
our inventory was classified as non-current. Management periodically evaluates our inventory composition, giving consideration to factors such as the probability and timing of anticipated usage and the physical condition of the items, and then
estimates a charge (reducing the inventory) to be provided for slow moving, technologically obsolete or damaged inventory. These estimates could vary significantly from actual requirements based upon future economic conditions, customer inventory
levels or competitive factors that were not foreseen or did not exist when the inventory write-offs were established.
Intangible assets.
Patent registration costs are capitalized at cost and amortized, beginning with the first year of utilization, over its expected life of ten years.
We review our long-lived assets for impairment whenever events or changes in circumstances indicate that the
carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to undiscounted future cash flows expected to be generated by the asset. If the carrying
amount of the long lived asset exceeds its estimated undiscounted future cash flows, an impairment charge is recognized as computed by subtracting the fair market value of the asset from its carrying value.
Provisions for
contingent liabilities. A contingency (provision) in accordance with ASC Topic 450-10-05, Contingencies, is an existing condition or situation involving uncertainty as to the range of possible loss to the entity. A provision for claims is
recognized if it is probable (likely to occur) that a liability has been incurred and the amount can be estimated reasonably. Provisions in general are highly judgmental, especially in cases of legal disputes. We assess the probability of an adverse
event and if the probability is evaluated to be probable, we are required to fully provide for the total amount of the estimated contingent liability. We continually evaluate our pending provisions to determine if accruals are required. It is often
difficult to accurately estimate the ultimate outcome of a contingent liability. Different variables can affect the timing and amount we provide for certain contingent liabilities. Our assessments are therefore subject to estimates made by us and our
legal counsel, adverse revision in our estimates of the potential liability could materially impact our financial condition, results of operations or liquidity.
Valuation of Long
Lived Assets. We apply ASC Subtopic 360-10, "Property, Plant and Equipment". This Statement requires that long-lived assets be reviewed
for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to
undiscounted future cash flows expected to be generated by the asset. If the carrying amount of the long lived asset exceeds its estimated undiscounted future cash flows, an impairment charge is recognized as computed by subtracting the fair market
value of the asset from its carrying value. We prepare future cash flows based on our best estimates including projections and financial statements, future plans and growth estimates.
Income Taxes.
We account for income taxes under ASC Subtopic 740-10 Income Taxes – Overall. Deferred tax assets or liabilities are recognized in respect of
temporary differences between the tax bases of assets and liabilities and their financial reporting amounts as well as in respect of tax losses and other deductions which may be deductible for tax purposes in future years, based on tax rates
applicable to the periods in which such deferred taxes will be realized. The rates applied are those enacted in law as of June 30, 2024. In assessing the realizability of deferred tax assets, we consider whether it is more likely than not that some
portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible and
during which the carry-forwards are available. Valuation allowances are established when necessary to reduce deferred tax assets to the amount considered more likely than not to be realized.
Our financial statements include deferred tax assets, net, which are calculated according to the above methodology.
If there is an unexpected critical deterioration in our operating results and forecasts, we would have to increase the valuation allowance with respect to those assets. We believe that it is more likely than not that those net deferred tax assets
included in our financial statements will be realized in subsequent years.
Stock Option and
Restricted Share Plans. We account for our employee stock-based compensation awards in accordance with ASC Topic 718, Compensation - Stock
Compensation. ASC Topic 718 requires that all employee stock‑based compensation is recognized as a cost in the financial statements and that for equity-classified awards such cost is measured at the grant date fair value of the award. We
estimate grant date fair value using the Black‑Scholes-Merton option‑pricing model. Forfeitures are recognized when they occur.
Leases. On January 1, 2019, we adopted Accounting Standards Update No. 2016-02, Leases (Topic 842) (ASU 2016-02) using the modified retrospective transition
approach by applying the new standard to all leases existing at the date of initial application. Results and disclosure requirements for reporting periods beginning after January 1, 2019 are presented under Topic 842.
The adoption did not impact our beginning retained earnings, or prior year consolidated statements of income and
statements of cash flows.
Under Topic 842, we determine if an arrangement is a lease at inception. ROU assets and lease liabilities are
recognized at commencement date based on the present value of remaining lease payments over the lease term. For this purpose, we consider only payments that are fixed and determinable at the time of commencement. As most of our leases do not provide
an implicit rate, we use its incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. Our incremental borrowing rate is a hypothetical rate based on its understanding of
what our credit rating would be (6.0% in 2024). Our lease terms may include options to extend or terminate the lease when it is reasonably certain that we will exercise such options. When determining the probability of exercising such options, we
consider contract-based, asset-based, entity-based, and market-based factors. Lease agreements may contain variable costs such as common area maintenance, insurance, real estate taxes or other costs. Variable lease costs are expensed as incurred on
the consolidated statements of income. Our lease agreements generally do not contain any residual value guarantees or restrictive covenants.
Operating lease ROU assets are presented as property, plant and equipment on the consolidated balance sheet. The
current portion of operating lease liabilities is included in other current liabilities and the long-term portion is presented within long-term liabilities on the consolidated balance sheet.
For operating leases, the ROU asset is subsequently measured throughout the lease term at the carrying amount of the
lease liability, plus initial direct costs, plus (minus) any prepaid (accrued) lease payments, less the unamortized balance of lease incentives received. Lease expense for lease payments is recognized on a straight-line basis over the lease term.
ROU assets for operating leases are periodically reduced by impairment losses. We use the long-lived assets
impairment guidance in ASC Subtopic 360-10, Property, Plant, and Equipment – Overall, to determine whether an ROU asset is impaired, and if so, the amount of the impairment loss to recognize.
Comparison of Period to Period Results of Operations
The following table presents consolidated statement of operations data for the periods indicated as a percentage of
total revenues from continuing operations:
| |
|
Six Months Ended June 30,
|
|
| |
|
2024
|
|
|
2023
|
|
|
Revenues
|
|
|
100.0
|
%
|
|
|
100.0
|
%
|
|
Cost of revenues
|
|
|
51.9
|
%
|
|
|
52.9
|
%
|
|
Gross profit
|
|
|
48.1
|
%
|
|
|
47.1
|
%
|
|
Operating expenses:
|
|
|
|
|
|
|
|
|
|
Research and development, net
|
|
|
9.1
|
%
|
|
|
10.7
|
%
|
|
Selling, general and administrative expenses
|
|
|
15.4
|
%
|
|
|
16.4
|
%
|
|
Total operating expenses
|
|
|
24.5
|
%
|
|
|
27.2
|
%
|
|
Operating income
|
|
|
23.6
|
%
|
|
|
19.9
|
%
|
|
Financial income, net
|
|
|
5.3
|
%
|
|
|
7.4
|
%
|
|
Income tax (expenses) benefit
|
|
|
(2.5
|
)%
|
|
|
(2.9
|
)%
|
|
Net income
|
|
|
26.4
|
%
|
|
|
24.5
|
%
|
Six months Ended June 30, 2024 compared to Six months ended June 30, 2023
Revenues. Revenues increased
by 36.5% to $199.6 million in 2024 from $146.2 million in 2023. The increase is mainly due to the sale of a higher number of tools due to increased demand in the semiconductor market.
Gross Profit. Gross profit
consists of revenues less cost of revenues, which includes the cost of components, production materials, labor, service related expenses, depreciation, factory and overhead expenses and provisions for warranties. These expenditures are partially
affected by sales volume. Our total gross profit increased to $96.0 million in 2024 from $68.8 million in 2023, an increase of $27.2 million, or 39%. Our gross margin increased to 48.1% in 2024, compared to a gross margin of 47.1% in 2023.
Research and Development Costs. Research
and development expenses consist primarily of salaries, materials consumption and costs associated with subcontracting certain development efforts. Total research and development expenses for 2024 increased to $18.1 million from $15.7 million in
2023 due to increased activity for improving capabilities and developing additional features and products.
Selling, General and Administrative
Expenses. Selling, general and administrative expenses consist primarily of expenses associated with salaries, commissions, promotion and travel, professional services and rent costs. Our selling, general and administrative expenses
increased in 2024 by 27.7% to $30.7 million from $24.0 million in 2023, mainly due to an increase in sales channels activity on increased revenues.
Financial Income (Expenses), Net. Financial
income/expenses consist of interest, revaluation and other bank fees. We had net financial income of $10.6 million in 2024, compared to net financial income of $10.9 million in 2023.
Provision for Income Taxes. Income
tax expense was $5.0 million in 2024 compared to expense of $4.2 million in 2023, mainly due to tax on increased income before taxes.
Net Income. We realized
net income of $52.8 million in 2024 compared to net income of $35.8 million in 2023, in light of the factors discussed above.
B. Liquidity and Capital Resources
Our cash and cash equivalent, short-term deposit and short-term marketable securities balances totalled
approximately $366.1 million on June 30, 2024 and $354.0 million on December 31, 2023. In addition, there was $87.8 million and $94.6 million, respectively, in long-term deposits and long-term marketable securities. Our cash is invested in
bank deposits spread among several banks, primarily in Israel whilst our investments in marketable securities consist of high-grade treasury, corporate and municipal bonds.
Our working capital was approximately $452.9 million at June 30, 2024 and $450.1 million at December
31, 2023. The increase is mainly attributed to the increase in short-term deposits and marketable securities, and inventory, offset by the decrease in cash and cash equivalents and trade accounts receivable and the increase in other
current liabilities.
Our capital expenditures during the first half of 2024 were approximately $5.1 million, mainly in
support of our operating activities.
Cash flow from operating activities
Net cash and cash equivalents provided by operating activities for the six months ended June 30,
2024, totalled $70.1 million. Net cash and cash equivalents provided by operating activities for the six months ended June 30, 2023 totalled $32.7 million.
During the first half of 2024, cash provided by operating activities was primarily attributable
to the positive net income, the decrease in trade accounts receivable and the increase in other current liabilities, offset by the increase in inventory.
Cash flow from investing activities
Cash flow used in investing activities in the first half of 2024 was $43.7 million, primarily
due to the purchase of short-term deposits and marketable securities, compared to $52.2 million provided in the first half of 2023.
Cash flow from financing activities
Cash flow used in financing activities the first half of 2024 was $60.0 million due to the
dividend paid, compared to zero in the first half of 2023.
Supplementary Financial Statements Information
|
6 Months Ended |
Jun. 30, 2024 |
|---|
| Supplemantary Financial Statements Information [Abstract] |
|
| Supplementary Financial Statements Information |
Note 4 - Supplementary Financial Statements Information
A. Cash and cash equivalents
The Company’s cash and cash equivalent balance at June 30, 2024 and December 31, 2023 is denominated in the following currencies:
| |
|
June 30,
|
|
|
December 31,
|
|
| |
|
|
|
|
|
|
| |
|
|
|
| |
|
|
|
|
|
|
|
US Dollars
|
|
|
73,637
|
|
|
|
113,190
|
|
|
New Israeli Shekels
|
|
|
4,065
|
|
|
|
2,795
|
|
|
Other currencies
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
Short-term deposits are bank deposits in US Dollars with an original maturity of more than three months and remaining term at the balance sheet date of no more than twelve months. As of June 30, 2024, the average annual interest rate was 6.11%.
B. Marketable Securities
Summary of marketable securities amortized cost, unrealized gains, unrealized losses, and fair value as of June 30, 2024 and December 31, 2023:
| |
|
|
|
| |
|
|
|
|
Marketable Securities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Matures within one year:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Corporate bonds
|
|
|
22,645
|
|
|
|
2
|
|
|
|
(32
|
)
|
|
|
22,615
|
|
|
Government bonds
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Matures after one year:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Corporate bonds
|
|
|
73,278
|
|
|
|
111
|
|
|
|
(380
|
)
|
|
|
73,009
|
|
|
Government bonds
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
| |
|
|
|
|
Marketable Securities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Matures within one year:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Corporate bonds
|
|
|
9,821
|
|
|
|
7
|
|
|
|
(9
|
)
|
|
|
9,819
|
|
|
Government bonds
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Matures after one year:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Corporate bonds
|
|
|
64,033
|
|
|
|
574
|
|
|
|
(3
|
)
|
|
|
64,604
|
|
|
Government bonds
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The amortized cost and estimated fair value of marketable securities classified by the maturity date listed on the security, regardless of the Consolidated Balance Sheet classification, is as follows at June 30, 2024 and December 31, 2023:
| |
|
|
|
| |
|
|
|
|
|
|
| |
|
|
|
| |
|
|
|
|
|
|
|
|
|
Due within one year
|
|
|
23,629
|
|
|
|
23,615
|
|
|
Due after one through five years
|
|
|
52,239
|
|
|
|
51,937
|
|
|
Due after five through ten years
|
|
|
|
|
|
|
|
|
|
Total marketable securities
|
|
|
|
|
|
|
|
|
| |
|
|
|
| |
|
|
|
|
|
|
| |
|
U.S. Dollars (in thousands)
|
|
|
Due within one year
|
|
|
18,804
|
|
|
|
18,816
|
|
|
Due after one through five years
|
|
|
72,210
|
|
|
|
72,908
|
|
|
Due after five through ten years
|
|
|
|
|
|
|
|
|
|
Total marketable securities
|
|
|
|
|
|
|
|
|
The following table summarizes the estimated fair value and gross unrealized holding losses of marketable securities, aggregated by investment instrument and period of time in an unrealized loss position, at June 30, 2024 and December 31, 2023.
| |
|
In Unrealized Loss Position For Less Than 12 Months
|
|
|
June 30, 2024
|
|
|
|
|
|
|
| |
|
|
|
| |
|
|
|
|
|
|
|
Corporate bonds
|
|
|
73,903
|
|
|
|
(412
|
)
|
|
Government bonds
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
| |
|
In Unrealized Loss Position For Less Than 12 Months
|
|
|
December 31, 2023
|
|
|
|
|
|
|
| |
|
|
|
| |
|
|
|
|
|
|
|
Corporate bonds
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
The level in the fair value hierarchy within which an asset or liability is classified is based on the lowest level input that is significant to the fair value measurement in its entirety.
The following table presents the Company’s assets and liabilities measured at fair value on a recurring basis as of June 30, 2024 and December 31, 2023, aggregated by the level in the fair-value hierarchy within which those measurements fall:
| |
|
June 30,
2024
|
|
|
Quoted Prices in Active Markets for Identical Assets (Level 1)
|
|
|
Significant Other Observable Inputs (Level 2)
|
|
|
Significant Unobservable Inputs
(Level 3)
|
|
| |
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
Description
|
|
|
|
|
|
|
|
|
| |
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Marketable securities (current assets)
|
|
|
23,615
|
|
|
|
1,000
|
|
|
|
22,615
|
|
|
|
-
|
|
|
Marketable securities (non-current assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
December 31,
|
|
|
Quoted Prices in
Active Markets
for Identical Assets
|
|
|
Significant Other
Observable Inputs
|
|
|
Significant
Unobservable
Inputs
|
|
| |
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
Description
|
|
|
|
|
|
|
|
|
| |
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Marketable securities (current assets)
|
|
|
18,816
|
|
|
|
6,988
|
|
|
|
11,828
|
|
|
|
-
|
|
|
Marketable securities (non-current assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The Company’s accounting policy is to recognize transfers between levels of the fair value hierarchy on the date of the event or change in circumstances that caused the transfer. In the periods ended June 30, 2024 and December 31, 2023, the Company invested in marketable securities.
Marketable securities are classified within Level 2 because these assets are valued using quoted market prices or alternative pricing sources and models utilizing market observable inputs.
C. Inventories
| |
|
June 30,
|
|
|
December 31,
|
|
| |
|
|
|
|
|
|
| |
|
|
|
| |
|
|
|
|
|
|
|
|
|
Components
|
|
|
60,438
|
|
|
|
55,598
|
|
|
Work in process
|
|
|
26,817
|
|
|
|
20,038
|
|
|
Finished products (including systems at customer locations not yet sold)
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
Inventories are presented in:
| |
|
June 30,
|
|
|
December 31,
|
|
| |
|
|
|
|
|
|
| |
|
|
|
| |
|
|
|
|
|
|
|
|
|
Current assets
|
|
|
99,215
|
|
|
|
85,905
|
|
|
Long-term assets
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
D. Other Current Assets
| |
|
June 30,
|
|
|
December 31,
|
|
| |
|
|
|
|
2023 |
|
| |
|
|
|
| |
|
|
|
|
|
|
|
Interest receivable
|
|
|
13,355
|
|
|
|
8,386
|
|
|
Due from Government institutions and income tax receivables
|
|
|
7,696
|
|
|
|
3,690
|
|
|
Prepaid expenses and vendor downpayments
|
|
|
4,996
|
|
|
|
5,164
|
|
|
Other
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
E. Property, Plant and Equipment, Net
| |
|
June 30,
|
|
|
December 31,
|
|
| |
|
|
|
|
|
|
| |
|
|
|
| |
|
|
|
|
|
|
|
Land
|
|
|
1,401
|
|
|
|
1,401
|
|
|
Building
|
|
|
21,733
|
|
|
|
20,730
|
|
|
Machinery and equipment
|
|
|
30,187
|
|
|
|
27,626
|
|
|
Office furniture and equipment
|
|
|
1,061
|
|
|
|
1,057
|
|
|
Computer equipment and software
|
|
|
6,386
|
|
|
|
6,542
|
|
|
Automobiles
|
|
|
431
|
|
|
|
429
|
|
|
Leasehold improvements
|
|
|
2,237
|
|
|
|
2,100
|
|
|
Right of use assets
|
|
|
|
|
|
|
|
|
| |
|
|
70,438
|
|
|
|
67,072
|
|
| |
|
|
|
|
|
|
|
|
|
Less - accumulated depreciation
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
F. Intangible Assets, Net
| |
|
June 30,
|
|
|
December 31,
|
|
| |
|
|
|
|
|
|
| |
|
|
|
|
Cost:
|
|
|
|
|
|
|
|
Patent registration costs
|
|
|
2,434
|
|
|
|
2,308
|
|
|
Acquired technology
|
|
|
12,200
|
|
|
|
12,200
|
|
|
Acquired trade names
|
|
|
2,700
|
|
|
|
2,700
|
|
|
Acquired customer relationship
|
|
|
|
|
|
|
|
|
| |
|
|
19,334
|
|
|
|
19,208
|
|
| |
|
|
|
|
|
|
|
|
|
Less accumulated amortization
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
Total intangible assets, net
|
|
|
|
|
|
|
|
|
G. Other Current Liabilities
| |
|
June 30,
|
|
|
December 31,
|
|
| |
|
2024 |
|
|
|
|
| |
|
|
|
| |
|
|
|
|
|
|
|
Commissions
|
|
|
12,617
|
|
|
|
13,588
|
|
|
Advances from customers and deferred revenues
|
|
|
26,585
|
|
|
|
14,701
|
|
|
Accrued employee compensation and related benefits
|
|
|
14,362
|
|
|
|
13,137
|
|
|
Accrued warranty costs (1)
|
|
|
3,713
|
|
|
|
3,397
|
|
|
Government institutions and income tax payable
|
|
|
7,633
|
|
|
|
5,316
|
|
|
Accrued expenses
|
|
|
3,133
|
|
|
|
2,661
|
|
|
Operating lease obligations
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
(1) Changes in the accrued warranty costs are as follows:
|
|
|
|
|
|
|
|
|
| |
|
June 30,
|
|
|
December 31,
|
|
| |
|
|
|
|
|
|
| |
|
|
|
| |
|
|
|
|
|
|
|
Beginning of period
|
|
|
3,397
|
|
|
|
3,161
|
|
|
Accruals
|
|
|
3,453
|
|
|
|
5,505
|
|
|
Usage
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
Balance at end of period
|
|
|
|
|
|
|
|
|
H. Convertible Notes
The Convertible Senior Notes consisted of the following:
| |
|
June 30,
|
|
|
December 31,
|
|
| |
|
|
|
|
|
|
| |
|
|
|
| |
|
|
|
|
Liability:
|
|
|
|
|
|
|
|
Principle:
|
|
|
200,000
|
|
|
|
200,000
|
|
|
Unamortized issuance costs
|
|
|
|
|
|
|
|
|
|
Net carrying amount
|
|
|
|
|
|
|
|
|
As of June 30, 2024, the debt issuance costs of the Notes will be amortized over the remaining term of approximately 2.5 years.
The annual effective interest rate of the Notes is 0.56%. In the six-months ended June 30, 2024, $547 was recorded as amortization of debt issuance costs (In the year ended December 31, 2023 - $1,094).
As of June 30, 2024, the estimated fair value of the Notes, which the Company has classified as Level 2 financial instruments, is $441,843 (December 31, 2023 - $258,941). The estimated fair value was determined based on the quoted bid price of the Notes in an over-the-counter market on the last trading day of the reporting period.
As of June 30, 2024, the principal amount exceeded the if-converted value of the Notes by $241,843 (December 31, 2023, the principal amount exceeded the if-converted value of the Notes by $58,941).
|
Supplementary Financial Statements Information (Tables)
|
6 Months Ended |
Jun. 30, 2024 |
|---|
| Cash and Cash Equivalents [Abstract] |
|
| Schedule of cash and cash equivalents |
| |
|
June 30,
|
|
|
December 31,
|
|
| |
|
|
|
|
|
|
| |
|
|
|
| |
|
|
|
|
|
|
|
US Dollars
|
|
|
73,637
|
|
|
|
113,190
|
|
|
New Israeli Shekels
|
|
|
4,065
|
|
|
|
2,795
|
|
|
Other currencies
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
| Schedule of marketable securities |
| |
|
|
|
| |
|
|
|
|
Marketable Securities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Matures within one year:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Corporate bonds
|
|
|
22,645
|
|
|
|
2
|
|
|
|
(32
|
)
|
|
|
22,615
|
|
|
Government bonds
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Matures after one year:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Corporate bonds
|
|
|
73,278
|
|
|
|
111
|
|
|
|
(380
|
)
|
|
|
73,009
|
|
|
Government bonds
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
| |
|
|
|
|
Marketable Securities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Matures within one year:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Corporate bonds
|
|
|
9,821
|
|
|
|
7
|
|
|
|
(9
|
)
|
|
|
9,819
|
|
|
Government bonds
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Matures after one year:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Corporate bonds
|
|
|
64,033
|
|
|
|
574
|
|
|
|
(3
|
)
|
|
|
64,604
|
|
|
Government bonds
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Schedule of amortized cost and estimated fair value of marketable securities classified by the maturity date listed on the security |
| |
|
|
|
| |
|
|
|
|
|
|
| |
|
|
|
| |
|
|
|
|
|
|
|
|
|
Due within one year
|
|
|
23,629
|
|
|
|
23,615
|
|
|
Due after one through five years
|
|
|
52,239
|
|
|
|
51,937
|
|
|
Due after five through ten years
|
|
|
|
|
|
|
|
|
|
Total marketable securities
|
|
|
|
|
|
|
|
|
| |
|
|
|
| |
|
|
|
|
|
|
| |
|
U.S. Dollars (in thousands)
|
|
|
Due within one year
|
|
|
18,804
|
|
|
|
18,816
|
|
|
Due after one through five years
|
|
|
72,210
|
|
|
|
72,908
|
|
|
Due after five through ten years
|
|
|
|
|
|
|
|
|
|
Total marketable securities
|
|
|
|
|
|
|
|
|
|
| Schedule of estimated fair value and gross unrealized holding losses of marketable securities, aggregated by investment instrument and period of time in an unrealized loss position |
| |
|
In Unrealized Loss Position For Less Than 12 Months
|
|
|
June 30, 2024
|
|
|
|
|
|
|
| |
|
|
|
| |
|
|
|
|
|
|
|
Corporate bonds
|
|
|
73,903
|
|
|
|
(412
|
)
|
|
Government bonds
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
| |
|
In Unrealized Loss Position For Less Than 12 Months
|
|
|
December 31, 2023
|
|
|
|
|
|
|
| |
|
|
|
| |
|
|
|
|
|
|
|
Corporate bonds
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
| Schedule of fair value, assets and liabilities measured on recurring basis |
| |
|
June 30,
2024
|
|
|
Quoted Prices in Active Markets for Identical Assets (Level 1)
|
|
|
Significant Other Observable Inputs (Level 2)
|
|
|
Significant Unobservable Inputs
(Level 3)
|
|
| |
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
Description
|
|
|
|
|
|
|
|
|
| |
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Marketable securities (current assets)
|
|
|
23,615
|
|
|
|
1,000
|
|
|
|
22,615
|
|
|
|
-
|
|
|
Marketable securities (non-current assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
December 31,
|
|
|
Quoted Prices in
Active Markets
for Identical Assets
|
|
|
Significant Other
Observable Inputs
|
|
|
Significant
Unobservable
Inputs
|
|
| |
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
Description
|
|
|
|
|
|
|
|
|
| |
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Marketable securities (current assets)
|
|
|
18,816
|
|
|
|
6,988
|
|
|
|
11,828
|
|
|
|
-
|
|
|
Marketable securities (non-current assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Schedule of inventories |
| |
|
June 30,
|
|
|
December 31,
|
|
| |
|
|
|
|
|
|
| |
|
|
|
| |
|
|
|
|
|
|
|
|
|
Components
|
|
|
60,438
|
|
|
|
55,598
|
|
|
Work in process
|
|
|
26,817
|
|
|
|
20,038
|
|
|
Finished products (including systems at customer locations not yet sold)
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
| |
|
June 30,
|
|
|
December 31,
|
|
| |
|
|
|
|
|
|
| |
|
|
|
| |
|
|
|
|
|
|
|
|
|
Current assets
|
|
|
99,215
|
|
|
|
85,905
|
|
|
Long-term assets
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
| Schedule of other current assets |
| |
|
June 30,
|
|
|
December 31,
|
|
| |
|
|
|
|
2023 |
|
| |
|
|
|
| |
|
|
|
|
|
|
|
Interest receivable
|
|
|
13,355
|
|
|
|
8,386
|
|
|
Due from Government institutions and income tax receivables
|
|
|
7,696
|
|
|
|
3,690
|
|
|
Prepaid expenses and vendor downpayments
|
|
|
4,996
|
|
|
|
5,164
|
|
|
Other
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
| Schedule of property, plant and equipment, net |
| |
|
June 30,
|
|
|
December 31,
|
|
| |
|
|
|
|
|
|
| |
|
|
|
| |
|
|
|
|
|
|
|
Land
|
|
|
1,401
|
|
|
|
1,401
|
|
|
Building
|
|
|
21,733
|
|
|
|
20,730
|
|
|
Machinery and equipment
|
|
|
30,187
|
|
|
|
27,626
|
|
|
Office furniture and equipment
|
|
|
1,061
|
|
|
|
1,057
|
|
|
Computer equipment and software
|
|
|
6,386
|
|
|
|
6,542
|
|
|
Automobiles
|
|
|
431
|
|
|
|
429
|
|
|
Leasehold improvements
|
|
|
2,237
|
|
|
|
2,100
|
|
|
Right of use assets
|
|
|
|
|
|
|
|
|
| |
|
|
70,438
|
|
|
|
67,072
|
|
| |
|
|
|
|
|
|
|
|
|
Less - accumulated depreciation
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
| Schedule of intangible assets, net |
| |
|
June 30,
|
|
|
December 31,
|
|
| |
|
|
|
|
|
|
| |
|
|
|
|
Cost:
|
|
|
|
|
|
|
|
Patent registration costs
|
|
|
2,434
|
|
|
|
2,308
|
|
|
Acquired technology
|
|
|
12,200
|
|
|
|
12,200
|
|
|
Acquired trade names
|
|
|
2,700
|
|
|
|
2,700
|
|
|
Acquired customer relationship
|
|
|
|
|
|
|
|
|
| |
|
|
19,334
|
|
|
|
19,208
|
|
| |
|
|
|
|
|
|
|
|
|
Less accumulated amortization
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
Total intangible assets, net
|
|
|
|
|
|
|
|
|
|
| Schedule of other current liabilities |
| |
|
June 30,
|
|
|
December 31,
|
|
| |
|
2024 |
|
|
|
|
| |
|
|
|
| |
|
|
|
|
|
|
|
Commissions
|
|
|
12,617
|
|
|
|
13,588
|
|
|
Advances from customers and deferred revenues
|
|
|
26,585
|
|
|
|
14,701
|
|
|
Accrued employee compensation and related benefits
|
|
|
14,362
|
|
|
|
13,137
|
|
|
Accrued warranty costs (1)
|
|
|
3,713
|
|
|
|
3,397
|
|
|
Government institutions and income tax payable
|
|
|
7,633
|
|
|
|
5,316
|
|
|
Accrued expenses
|
|
|
3,133
|
|
|
|
2,661
|
|
|
Operating lease obligations
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
(1) Changes in the accrued warranty costs are as follows:
|
|
|
|
|
|
|
|
|
|
| Schedule of accrued warranty costs |
| |
|
June 30,
|
|
|
December 31,
|
|
| |
|
|
|
|
|
|
| |
|
|
|
| |
|
|
|
|
|
|
|
Beginning of period
|
|
|
3,397
|
|
|
|
3,161
|
|
|
Accruals
|
|
|
3,453
|
|
|
|
5,505
|
|
|
Usage
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
Balance at end of period
|
|
|
|
|
|
|
|
|
|
| Scheduled of convertible senior notes |
| |
|
June 30,
|
|
|
December 31,
|
|
| |
|
|
|
|
|
|
| |
|
|
|
| |
|
|
|
|
Liability:
|
|
|
|
|
|
|
|
Principle:
|
|
|
200,000
|
|
|
|
200,000
|
|
|
Unamortized issuance costs
|
|
|
|
|
|
|
|
|
|
Net carrying amount
|
|
|
|
|
|
|
|
|
|