NOTE 14 - SELECTED STATEMENT OF OPERATIONS DATA:

Segment and geographical information:

(i)

Reportable segments:

The Company’s three reportable segments are: Production Solutions for the Electronics Industry, Solar Energy and Recognition Software. As defined under the accounting literature, the Company’s chief operating decision maker has been identified as the Chief Executive Officer, who reviews operating results to make decisions about allocating resources and assessing performance for the entire Company.

The Company’s material operating segments qualify for aggregation due to the similarities of their long-term economic characteristics, nature of products and services, class of customers and processes for procurement, manufacturing and distribution.

The Production Solutions for the Electronics Industry segment comprises the design, development, manufacture, marketing and servicing of cutting-edge solutions designed to enable the production of innovative, next generation electronic products and improve the cost effectiveness of existing and future electronics production processes. The Company’s products in this segment include capital equipment for inspection, repair, imaging, testing, etch and deposition for manufacturers of printed circuit boards, flat panel displays and semiconductors devices.

The Solar Energy segment includes the design, development, manufacture and marketing of solar photovoltaic energy systems that produce electricity directly from sunlight.

The Recognition Software segment includes the development and marketing of check processing and healthcare payments automation solutions to banks, financial and other payment processing institutions.

The measurement of revenues and assets of the reportable segments is based on the same accounting principles applied in these financial statements.

Segment income or loss reflects the income or loss from continuing operations of the segment and does not include financial expenses net equity losses or taxes on income since those items are not allocated to the segments. Segment assets do not include deferred tax assets and deferred issuance expenses or equity method investee balances (excluding investment in Frontline).

NOTE 14 - SELECTED STATEMENT OF OPERATIONS DATA (continued):

Financial data relating to reportable segments:

	Production solutions for the electronics industry		Solar energy			Recognition software		Total
	$ in thousands
Year ended December 31, 2015:
Revenues from unaffiliated customers:
Sales of products		515,550		13,894			7,926		537,370
Services rendered		207,131		1,683			6,333		215,147
Total revenues		722,681		15,577			14,259		752,517
Operating income (loss)	*92,988			(465	)		2,181		94,704
Assets (at end of year)		998,897		7,290			11,401		1,017,589
Expenditures for segment assets		19,293		—			55		19,348
Depreciation and amortization		45,129		—			153		45,282
Year ended December 31, 2014:
Revenues from unaffiliated customers:
Sales of products	385,341		11,162			7,460		403,963
Services rendered	172,297		719			5,767		178,783
Total revenues	557,638		11,881			13,227		582,746
Operating income (loss)	*47,507			(428	)	1,067		48,146
Assets (at end of year)	985,690		3,699			12,482		1,001,871
Expenditures for segment assets	12,330					170		12,500
Depreciation and amortization	30,162					171		30,333
Year ended December 31, 2013:
Revenues from unaffiliated customers:
Sales of products	286,506					7,521		294,027
Services rendered	140,280					5,688		145,968
Total revenues	426,786					13,209		439,995
Operating income (loss)	*50,954			(5,022	)	1,599		47,531
Assets (at end of year)	579,569		3,492			26,599		609,660
Expenditures for segment assets	12,928					50		12,978
Depreciation and amortization	12,953		136			172		13,261

Including share in net income of Frontline

Following is a reconciliation of the operating income of the reportable segments to the data included in the statements of operations:

	Year ended December 31
	2015		2014		2013
	$ in thousands
Operating income:
Total operating income of reportable segments		94,704		48,146		47,531
Financial expenses, net		23,585		9,046		1,191
Income before taxes on income		71,119		39,100		46,340

NOTE 14 - SELECTED STATEMENT OF OPERATIONS DATA (continued):

Following is a reconciliation of the assets of the reportable segments to the data included in the consolidated balance sheets:

	Year ended December 31
	2015		2014		2013
	$ in thousands
Total assets of reportable segments at end of year		1,017,589		1,001,871		609,660
Assets not allocated to segments		29,749		32,101		26,922
Consolidated assets at end of year		1,047,338		1,033,972		636,582

(ii)

Geographical information:

	Year ended December 31
	2015		2014		2013
	$ in thousands
Revenues - classified by geographical area (based on the location of customers):
China		223,120		202,836		177,304
Taiwan		170,297		98,405		74,807
North America		98,387		87,900		43,042
Korea		59,299		55,607		72,333
Europe		108,074		54,004		18,605
Japan		45,044		44,840		33,676
Other (*)		48,296		39,154		20,228
Total revenues		752,517		582,746		439,995

(*)

mainly in the Far East.

(iii)

Revenues by major product lines are as follows:

	Year ended December 31
	2015		2014		2013
	$ in thousands
Inspection		183,925		171,300		149,134
Direct Imaging		147,445		152,607		167,522
Test and Repair		106,418		82,034		77,335
PVD/CVD		162,627		78,529
Other		152,102		98,276		46,004
Total revenues		752,517		582,746		439,995

(iv)

Revenues by operating segments are as follows:

	Year ended December 31
	2015		2014		2013
	$ in thousands
PCB		255,501		286,225		295,228
FPD		204,946		160,759		131,558
SD		262,234		110,654
Other		29,836		25,108		13,209
Total revenues		752,517		582,746		439,995

NOTE 14 - SELECTED STATEMENT OF OPERATIONS DATA (continued):

(v)

Property plant and equipment net of accumulated depreciation and amortization by geographical location:

	Year ended December 31
	2015		2014		2013
	$ in thousands
United Kingdom		24,940		23,058
Israel		16,344		13,707		11,018
United States		4,241		4,865		3,354
Italy		4,375		4,470		4,578
Germany		5,466		5,770		5,455
Other		3,616		3,710		3,310
Total		58,982		55,580		27,715

Major customers

No customer accounted for more than 10% of the Company’s total revenues during the years ended December 31, 2015, 2014 and 2013.

Cost of revenues:

	Year ended December 31
	2015		2014		2013
	$ in thousands
1) Cost of products sold:
Materials and subcontractors		240,601		185,431		125,043
Labor costs		27,856		26,006		20,753
Overhead and other expenses		17,046		12,544		10,906
		285,503		223,981		156,702
2) Cost of services rendered:
Materials consumed		60,687		51,167		44,088
Labor costs		42,462		37,135		34,117
Overhead and other expenses		24,067		17,270		13,548
		127,216		105,572		91,753

Selling, general and administrative expenses

	Year ended December 31
	2015		2014		2013
	$ in thousands
Comprised as follows:
Selling		57,753		45,044		35,746
General and administrative		59,740		51,125		40,202
		117,493		96,169		75,948

NOTE 14 - SELECTED STATEMENT OF OPERATIONS DATA (continued):

Financial expenses – net

	Year ended December 31
	2015			2014			2013
	$ in thousands
Income:
Interest:
In respect of bank deposits and marketable securities		646			1,074			1,465
Other								39
		646			1,074			1,504
Expenses:
Interest:
Bank loan		—						1,227
Term loans		17,866			7,184
Costs relating to factoring of letters of credits and promissory notes		209			227			71
Net loss from sale of marketable securities		—			339
Marketable securities and bonds premium/discount amortization		136			316			554
Foreign currencies exchange (gain)/ loss- net		5,115			1,159			168
Bank charges and other		905			895			675
		24,231			10,120			2,695
		(23,585	)		(9,046	)		(1,191	)

Earnings per share

Following are data relating to the weighted average number of shares for the purpose of computing earnings per share:

	Year ended December 31
	2015		2014		2013
	$ in thousands
Weighted average number of shares issued and outstanding (net of treasury shares)-used in computation of basic earnings (loss) per share		42,412		41,703		42,571
Add - incremental shares from assumed exercise of options and RSUs		910		1,054	682
Weighted average number of shares used in computation of diluted earnings (loss) per share		43,322		42,757		43,253

Diluted earnings per share for the years ended December 31, 2015, 2014 and 2013 do not reflect ‘out-of-the-money’ options to purchase respective aggregate amounts of 13,015, 427,628 and 1,249,444 Ordinary Shares, respectively, due to their anti-dilutive effect.