2014

Newport Corporation Reports First Quarter 2012 Results -- Record Levels of New Orders and Backlog --

IRVINE, Calif., May 2, 2012 /PRNewswire/ -- Newport Corporation (NASDAQ: NEWP) today reported financial results for its first quarter ended March 31, 2012, and its outlook for the second quarter and full year of 2012.  The company noted the following highlights:

  • Record new orders of $186.1 million, an increase of 43.5% compared with the $129.7 million recorded in the first quarter of 2011, including $70.7 million of incremental orders from Newport's recent acquisitions;
  • First quarter sales of $157.2 million, an increase of 22.4% compared with the $128.4 million recorded in the first quarter of 2011, including $39.3 million of incremental sales from Newport's recent acquisitions;
  • Backlog scheduled to ship in the next 12 months of $174.9 million, including $41.5 million of backlog from Newport's recent acquisitions; and
  • Successful completion of the acquisition of ILX Lightwave.

Robert J. Phillippy, Newport's President and Chief Executive Officer, stated, "We are off to a good start in 2012, with solid financial results and demonstrable progress toward our strategic objectives."

Orders and Sales

Newport's sales and orders by end market were as follows:










(In thousands, except percentages, unaudited)

Three Months Ended










Percentage





March 31,

April 2,


Change vs.





2012

2011(1)


Prior Period









Sales by End Market














Scientific research, aerospace and defense/security

$ 53,372

$ 41,382


29.0%

Microelectronics




35,566

41,597


-14.5%

Life and health sciences



36,713

26,207


40.1%

Industrial manufacturing and other

31,516

19,225


63.9%


Total



$ 157,167

$ 128,411


22.4%









Orders by End Market














Scientific research, aerospace and defense/security

$ 49,172

$ 41,670


18.0%

Microelectronics




44,799

41,611


7.7%

Life and health sciences



63,215

26,120


142.0%

Industrial manufacturing and other

28,918

20,321


42.3%


Total



$ 186,104

$ 129,722


43.5%









Notes:

(1) Certain prior period amounts have been reclassified to conform to the current period presentation.

 

The company recorded higher sales and orders in the first quarter of 2012 compared with the prior year period in its scientific research, aerospace and defense/security, life and health sciences and industrial manufacturing and other end markets, due to the addition of the sales and orders of Ophir Optronics, High Q Laser and ILX Lightwave.  As reported previously, Newport's orders from life and health sciences customers in the first quarter of 2012 included a $37.7 million order for ultrafast lasers used in surgical procedures that began shipping in the first quarter and are expected to continue to ship through the end of 2013.

Sales to customers in the microelectronics market, which were not impacted significantly by any of the recent acquisitions, declined in the first quarter of 2012 compared with the prior year period, due primarily to the impact of the lower orders received from semiconductor equipment customers in the second half of 2011.  Although sales to customers in the microelectronics market remained at lower levels, the company's orders from customers in this market rebounded sharply in the first quarter from the fourth quarter level.  Orders of $44.8 million increased 45.8% sequentially and 7.7% year-over-year, and the book-to-bill ratio for the quarter in this end market was 1.26.  

Operating Income and Net Income

Newport reported operating income for the first quarter of 2012 of $10.2 million, or 6.5% of net sales, when calculated in accordance with generally accepted accounting principles (GAAP).  On a non-GAAP basis, excluding acquisition-related expenses, the amortization of intangible assets, stock based compensation expense, restructuring and severance costs, and a gain on the sale of assets, the company would have recorded operating income for the first quarter of 2012 of $19.9 million, or 12.7% of net sales.

The company reported net income for the first quarter of 2012 of $6.6 million, or $0.17 per diluted share, when calculated in accordance with GAAP.  On a non-GAAP basis, excluding the items referenced above, net of the tax impact of such excluded amounts, and excluding the reversal of a valuation allowance on certain deferred tax assets, the company would have recorded net income for the first quarter of 2012 of $12.1 million, or $0.31 per diluted share. 

The company has provided a reconciliation of its operating income, net income and net income per diluted share calculated in accordance with GAAP and on a non-GAAP basis following the statements of income included in this release.  Management believes that the supplemental presentation of such non-GAAP financial information helps to provide insight into the company's core business results, as well as a more meaningful comparison of its financial results between periods. 

Cash, Cash Equivalents and Marketable Securities

Newport ended the first quarter of 2012 with $51.4 million in cash, cash equivalents and marketable securities, a decrease of $21.5 million compared with the fourth quarter of 2011.  The company noted that in the first quarter of 2012 it used $21.6 million in cash to repay its remaining convertible notes and reduce other indebtedness, used an additional $9.3 million in cash to complete the acquisition of ILX Lightwave, and used $6.2 million for payments under the company's 2011 incentive compensation plans. 

Financial Outlook

Commenting on the company's outlook, Mr. Phillippy said, "Newport has a strong financial foundation, and in each of the last three quarters we have made strategic acquisitions that we expect to continue to accelerate our growth and enhance profitability.  During the first quarter of 2012, we booked all-time record orders and we entered the second quarter with record backlog scheduled to ship in the next 12 months of $174.9 million."

The company noted that it expects its end market demand in the second quarter of 2012 to be similar to the first quarter levels.  As a result, it now expects its second quarter sales and non-GAAP net income and earnings per diluted share, excluding certain special charges and gains, to be similar to the levels achieved in the first quarter. 

The company expects its sales in the second half of 2012 to increase approximately 7% to 12% over the first half level.  As a result, Newport now expects its sales for the full year of 2012 to be in the range of $650 million to $665 million, with non-GAAP operating income, excluding certain special charges and gains, in the range of 13.0% to 14.5% of net sales. 

ABOUT NEWPORT CORPORATION 

Newport Corporation is a leading global supplier of advanced-technology products and systems to customers in the scientific research, aerospace and defense/security, microelectronics, life and health sciences and precision industrial manufacturing markets.  Newport's innovative solutions leverage its expertise in photonics technologies, including lasers, photonics instrumentation, sub-micron positioning systems, vibration isolation, optical components and subsystems, precision automation and three-dimensional non-contact measurement equipment, to enhance the capabilities and productivity of its customers' manufacturing, engineering and research applications.  Newport is part of the Standard & Poor's SmallCap 600 Index and the Russell 2000 Index.

INVESTOR CONFERENCE CALL

Robert J. Phillippy, President and Chief Executive Officer, and Charles F. Cargile, Senior Vice President and Chief Financial Officer, will host an investor conference call today, May 2, 2012, at 5:00 p.m. Eastern Time (2:00 p.m. Pacific Time) to review the company's results for the first quarter of 2012 and its outlook for the second quarter and full year of 2012.  The call will be open to all interested investors through a live audio web broadcast via the Internet at www.newport.com/investors and www.earnings.com.  The call also will be available to investors and analysts by dialing 800-289-0458 within the U.S. and Canada or 913-312-6665 from abroad.

The webcast will be archived on both websites and can be reached through the same links.  A telephonic playback of the conference call also will be available by calling 888-203-1112 within the U.S. and Canada and 719-457-0820 from abroad.  Playback will be available beginning at 8:00 p.m. Eastern Time today and continue through 8:00 p.m. Eastern Time on Wednesday, May 9, 2012.  The replay passcode is 6814790.


SAFE HARBOR STATEMENT

This news release contains forward-looking statements, including without limitation statements regarding the company's expected shipment of its backlog, the expected timing of shipment of the $37.7 million order for ultrafast lasers, Newport's expectation of accelerated growth and enhanced profitability resulting from its recent acquisitions, Newport's expected sales, non-GAAP net income and non-GAAP earnings per diluted share in the second quarter of 2012, and Newport's expected sales growth in the second half of 2012 and expected sales and non-GAAP operating margin for the full year of 2012.  Without limiting the generality of the foregoing, words such as "may," "will," "expect," "believe," "anticipate," "intend," "could," "estimate" or "continue" or the negative or other variations thereof or comparable terminology are intended to identify forward-looking statements. In addition, any statements that refer to expectations, projections or other characterizations of future events or circumstances are forward-looking statements.  Assumptions relating to the foregoing involve judgments and risks with respect to, among other things, Newport's ability to achieve expected benefits from the integration of Ophir Optronics, High Q Laser and ILX Lightwave; the strength of business conditions in the industries Newport serves, particularly the semiconductor industry; Newport's ability to successfully penetrate and increase sales to its targeted end markets, particularly the life and health sciences market; the levels of private and governmental research funding worldwide; potential order cancellations and push-outs; future economic, competitive and market conditions, including those in Europe and Asia and those related to its strategic markets; whether its products will continue to achieve customer acceptance; and future business decisions, all of which are difficult or impossible to predict accurately and many of which are beyond the control of Newport.  Certain of these judgments and risks are discussed in more detail in Newport's periodic reports filed with the Securities and Exchange Commission.  Although Newport believes that the assumptions underlying the forward-looking statements are reasonable, any of the assumptions could prove inaccurate and, therefore, there can be no assurance that the results contemplated in forward-looking statements will be realized.  In light of the significant uncertainties inherent in the forward-looking information included herein, the inclusion of such information should not be regarded as a representation by Newport or any other person that Newport's objectives or plans will be achieved.  Newport undertakes no obligation to revise the forward-looking statements contained herein to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.

 







Newport Corporation

Consolidated Statements of Income

(Unaudited)














Three Months Ended



March 31,


April 2,



(In thousands, except per share amounts)

2012


2011









Net sales

$ 157,167


$ 128,411



Cost of sales

89,098


70,535



Gross profit

68,069


57,876









Selling, general and administrative expenses

44,060


30,473



Research and development expense

13,799


10,437



Operating income

10,210


16,966









Foreign currency translation gain from dissolution of subsidiary

-


7,198



Interest and other expense, net

(2,187)


(2,405)



Income before income taxes

8,023


21,759









Income tax provision

1,435


1,000



Net income

6,588


20,759



Net loss attributable to non-controlling interests

(4)


-



Net income attributable to Newport Corporation

$ 6,592


$ 20,759















Net income

$ 6,588


$ 20,759



Other comprehensive income:






Foreign currency translation gains (losses)

1,629


(4,037)



Unrecognized net pension losses

(16)


(134)



Unrealized gains on marketable securities

33


138



Comprehensive income

$ 8,234


$ 16,726









Comprehensive loss attributable to non-controlling interests

$ (42)


$ -



Comprehensive income attributable to Newport Corporation

8,276


16,726



Comprehensive income

$ 8,234


$ 16,726









Net income per share attributable to Newport Corporation:






Basic

$ 0.17


$ 0.56



Diluted

$ 0.17


$ 0.53









Shares used in the computation of net income per share:






Basic

37,731


37,005



Diluted

38,931


38,837









Other operating data:






New orders received during the period

$ 186,104


$ 129,722



Backlog at the end of period scheduled to ship within 12 months

$ 174,861


$ 127,457






















Newport Corporation

Supplemental Non-GAAP Measures

(Unaudited)
























Three Months Ended


(In thousands, except per share amounts)


March 31,
2012


April 2,
2011










Net Sales


$ 157,167


$128,411










Operating income:







Operating income - GAAP


$ 10,210


$ 16,966



Amortization of intangible assets


5,177


756



Stock-based compensation


2,214


2,019



Acquisition-related costs


1,906


244



Restructuring and severance costs


579


136



Gain on sale of assets


(166)


-



Non-GAAP operating income


$ 19,920


$ 20,121










Non-GAAP operating income as a percentage of net sales


12.7%


15.7%










Net income attributable to Newport Corporation:







Net income - GAAP


$ 6,592


$ 20,759



Foreign currency translation gain from dissolution of subsidiary


-


(7,198)



Amortization of intangible assets


5,177


756



Stock-based compensation


2,214


2,019



Acquisition-related costs


1,906


244



Restructuring and severance costs


579


136



Gain on sale of assets


(166)


-



Release of valuation allowance against certain deferred tax assets


(1,391)


-



Income tax provision on non-GAAP adjustments


(2,769)


(323)



Non-GAAP net income


$ 12,142


$ 16,393










Net income per diluted share attributable to Newport Corporation:







Net income - GAAP


$ 0.17


$ 0.53



Total non-GAAP adjustments


0.14


(0.11)



Non-GAAP net income per diluted share


$ 0.31


$ 0.42










 






Newport Corporation


Consolidated Balance Sheets


(Unaudited)













March 31,


December 31,


(In thousands)

2012


2011







ASSETS





Current assets:





Cash and cash equivalents

$ 45,270


$ 55,701


Restricted cash

925


12,367


Marketable securities

5,180


4,787


Accounts receivable, net

100,093


97,690


Notes receivable, net

2,175


2,091


Inventories, net

113,035


112,968


Deferred income taxes

31,960


30,339


Prepaid expenses and other current assets

16,826


15,374


Total current assets

315,464


331,317







Property and equipment, net

88,708


89,873


Goodwill

147,198


143,259


Deferred income taxes

9,302


9,289


Intangible assets, net

150,647


150,572


Investments and other assets

39,545


39,759



$ 750,864


$ 764,069







LIABILITIES AND STOCKHOLDERS' EQUITY





Current liabilities:





Short-term borrowings, net

$ 35,402


$ 45,149


Accounts payable

31,721


30,856


Accrued payroll and related expenses

31,391


36,914


Accrued expenses and other current liabilities

41,155


39,800


Total current liabilities

139,669


152,719







Long-term debt, net

166,229


178,043


Accrued pension liabilities

24,731


24,444


Other liabilities

38,643


36,586







Total stockholders' equity of Newport Corporation

379,659


370,258


Non-controlling interests

1,933


2,019


Total stockholders' equity

381,592


372,277



$ 750,864


$ 764,069







 

 

 

SOURCE Newport Corporation



RELATED LINKS
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