Newport Corporation Reports Fourth Quarter And Full Year 2015 Results

Feb 23, 2016, 07:10 ET from Newport Corporation

IRVINE, Calif., Feb. 23, 2016 /PRNewswire/ -- Newport Corporation (NASDAQ: NEWP) today reported financial results for its fourth quarter and year ended January 2, 2016. 

Newport announced that it has entered into an agreement with MKS Instruments, Inc. (Nasdaq: MKSI), pursuant to which MKS has agreed to acquire Newport for $23.00 per share in cash, in a transaction valued at approximately $980 million. In anticipation of this transaction, Newport will not be conducting conference calls to discuss its results for the fourth quarter or any subsequent periods, and will not be issuing financial guidance for future periods. For more information regarding this transaction, please refer to the press release issued by MKS and Newport today.

The company noted the following regarding the results for the fourth quarter and full year of 2015:

  • Net sales of $150.5 million for the fourth quarter and $602.7 million for the full year;
  • New orders of $152.7 million for the fourth quarter and $605.7 million for the full year;
  • Net income of $9.6 million, or $0.24 per diluted share, for the fourth quarter, and $31.1 million, or $0.78 per diluted share, for the full year, when measured according to generally accepted accounting principles (GAAP);
  • Non-GAAP net income of $15.5 million, or $0.39 per diluted share, for the fourth quarter, and $52.3 million, or $1.31 per diluted share, for the full year, excluding the amortization of intangible assets, stock-based compensation expense, acquisition-related, restructuring and severance costs, a loss on disposal of assets, and the tax impact of the excluded amounts; and
  • Cash generated from operations of $23.3 million for the fourth quarter and $51.7 million for the full year.

Robert Phillippy, President and Chief Executive Officer, commented: "The Newport team delivered a strong fourth quarter, with cash generated from operations and earnings per diluted share both at the highest levels of the year.  This performance demonstrates the effectiveness of our business model and the results of our actions to streamline our operations."     

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

(In thousands, except percentages, unaudited)

Three Months Ended

Percentage 

Percentage 

Change vs.

Change vs.

January 2,

October 3,

January 3,

Prior

Prior Year

2016

2015

2015

Quarter

Period

Sales by End Market

 Scientific research  

$           39,226

$           36,414

$           34,780

7.7%

12.8%

 Microelectronics 

36,387

34,945

41,612

4.1%

-12.6%

 Life and health sciences 

28,245

29,354

34,038

-3.8%

-17.0%

 Defense and security 

14,511

14,770

14,310

-1.8%

1.4%

 Industrial manufacturing and other  

32,130

32,077

33,989

0.2%

-5.5%

 Total 

$         150,499

$         147,560

$         158,729

2.0%

-5.2%

Orders by End Market

 Scientific research  

$           37,756

$           33,960

$           40,772

11.2%

-7.4%

 Microelectronics 

42,730

38,057

44,782

12.3%

-4.6%

 Life and health sciences 

25,135

27,525

51,738

-8.7%

-51.4%

 Defense and security 

15,203

15,076

18,821

0.8%

-19.2%

 Industrial manufacturing and other  

31,865

31,840

36,207

0.1%

-12.0%

 Total 

$         152,689

$         146,458

$         192,320

4.3%

-20.6%

Operating Income and Net Income

Newport reported operating income for the fourth quarter of 2015 of $13.2 million, or 8.8% of net sales, when calculated in accordance with GAAP. On a non-GAAP basis, excluding the amortization of intangible assets, stock-based compensation expense and acquisition-related, restructuring and severance costs, the company's operating income for the fourth quarter of 2015 was $21.0 million, or 13.9% of net sales. For the full year of 2015, the company reported operating income of $47.4 million, or 7.9% of sales, when calculated in accordance with GAAP. On a non-GAAP basis, excluding the items referenced above and a loss on disposal of assets, operating income for the full year of 2015 was $76.3 million, or 12.7% of sales. 

On a GAAP basis, the company reported net income for the fourth quarter of 2015 of $9.6 million, or $0.24 per diluted share. On a non-GAAP basis, excluding the items referenced above and the tax impact of such excluded amounts, the company's net income for the fourth quarter of 2015 was $15.5 million, or $0.39 per diluted share. For the full year of 2015, on a GAAP basis, net income was $31.1 million, or $0.78 per diluted share. On a non-GAAP basis, excluding the items referenced above and the tax impact of such excluded amounts, net income for the full year was $52.3 million, or $1.31 per diluted share. 

The company has provided a reconciliation of its gross profit, 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 and comprehensive income included in this release. Management believes that the supplemental presentation of non-GAAP financial information provides insight into the company's core business results, as well as a useful resource for comparison of its financial results between periods. 

Cash, Cash Equivalents and Marketable Securities and Indebtedness

As of January 2, 2016, the company had $42.4 million of cash, cash equivalents and restricted cash and a total indebtedness of $77.4 million. The company noted that it did not repurchase any shares of its common stock during the fourth quarter of 2015, and that, in anticipation of the pending acquisition transaction, the company has terminated its share repurchase program.

ABOUT NEWPORT CORPORATION 

Newport Corporation is a leading global supplier of advanced-technology products and systems to customers in the scientific research, microelectronics, life and health sciences, industrial manufacturing and defense/security markets. Newport's innovative solutions leverage its expertise in advanced technologies, including lasers, photonics and precision motion equipment, and optical components and sub-systems, 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. Learn more about Newport at www.newport.com and follow the company on Twitter, YouTube and Facebook

SAFE HARBOR STATEMENT

This news release contains forward-looking statements that involve risks and uncertainties.  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, the strength of business conditions in the industries Newport serves, particularly the semiconductor and defense and security industries; Newport's ability to achieve the expected benefits from the integration of acquired businesses and from its cost reduction actions; Newport's ability to successfully penetrate and increase sales to its targeted end markets; 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 and Comprehensive Income

(Unaudited)

Three Months Ended

Year Ended

January 2, 

January 3,

January 2, 

January 3,

(In thousands, except per share amounts)

2016

2015

2016

2015

Net sales

$         150,499

$         158,729

$         602,691

$         605,150

Cost of sales

84,606

89,285

340,171

334,394

Gross profit

65,893

69,444

262,520

270,756

Selling, general and administrative expenses

38,502

38,233

155,531

158,646

Research and development expense

14,167

15,894

58,512

58,432

Loss on sale or other disposal of assets, net

-

2,324

1,088

1,913

Operating income 

13,224

12,993

47,389

51,765

Interest expense

(565)

(580)

(2,314)

(2,358)

Other expense, net

(438)

(913)

(2,009)

(1,727)

Income before income taxes

12,221

11,500

43,066

47,680

Income tax provision

2,637

2,741

11,945

12,510

Net income   

9,584

8,759

31,121

35,170

Net income attributable to non-controlling interests

-

9

-

112

Net income attributable to Newport Corporation

$             9,584

$             8,750

$           31,121

$           35,058

Net income 

$             9,584

$             8,759

$           31,121

$           35,170

Other comprehensive loss:

Foreign currency translation losses   

(2,412)

(4,693)

(7,702)

(12,260)

Unrecognized net pension gains (losses)

201

(2,762)

709

(2,456)

Unrealized losses on investments and marketable securities

403

530

281

353

Other comprehensive loss

(1,808)

(6,925)

(6,712)

(14,363)

Comprehensive income 

$             7,776

$             1,834

$           24,409

$           20,807

Comprehensive income attributable to non-controlling interests

$                   -

$                    2

$                   -

$                112

Comprehensive income attributable to Newport Corporation

7,776

1,832

24,409

20,695

Comprehensive income   

$             7,776

$             1,834

$           24,409

$           20,807

Net income per share attributable to Newport Corporation:

Basic

$               0.25

$               0.22

$               0.79

$               0.88

Diluted

$               0.24

$               0.22

$               0.78

$               0.87

Shares used in the computation of net income per share:

Basic

38,584

39,679

39,221

39,750

Diluted

39,122

40,480

39,830

40,528

Other operating data:

New orders received during the period

$         152,689

$         192,320

$         605,710

$         635,975

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

$         162,866

$         169,334

 

 

Newport Corporation

Supplemental Non-GAAP Measures

(Unaudited)

Three Months Ended

Year Ended

(In thousands, except percentages and per share amounts)

January 2, 

January 3,

January 2, 

January 3,

2016

2015

2016

2015

Net sales

$          150,499

$         158,729

$          602,691

$         605,150

Cost of sales:

Cost of sales - GAAP

$            84,606

$           89,285

$          340,171

$         334,394

Amortization of intangible assets

1,074

926

3,951

3,656

Stock-based compensation expense

367

336

1,415

1,098

Acquisition-related, restructuring and severance costs 

-

501

-

501

Non-GAAP cost of sales

83,165

87,522

334,805

329,139

Non-GAAP gross profit

$            67,334

$           71,207

$          267,886

$         276,011

Non-GAAP gross profit as a percentage of net sales

44.7%

44.9%

44.4%

45.6%

Operating income:

Operating income - GAAP

$            13,224

$           12,993

$            47,389

$           51,765

Amortization of intangible assets

2,162

2,075

8,523

8,917

Stock-based compensation expense

3,176

3,463

13,234

12,051

Acquisition-related, restructuring and severance costs 

2,425

685

6,066

4,368

Loss on sale or other disposal of assets, net

-

2,324

1,088

1,913

Non-GAAP operating income

$            20,987

$           21,540

$            76,300

$           79,014

Non-GAAP operating income as a percentage of net sales

13.9%

13.6%

12.7%

13.1%

Net income attributable to Newport Corporation:

Net income - GAAP

$              9,584

$             8,750

$            31,121

$           35,058

Amortization of intangible assets

2,162

2,075

8,523

8,917

Stock-based compensation expense

3,176

3,463

13,234

12,051

Acquisition-related, restructuring and severance costs 

2,425

685

6,066

4,368

Loss on sale or other disposal of assets, net

-

2,324

1,088

1,913

Tax benefit from extraterritorial income exclusions

-

-

-

(1,463)

Income tax provision on non-GAAP adjustments

(1,894)

(1,852)

(7,735)

(6,641)

Non-GAAP net income 

$            15,453

$           15,445

$            52,297

$           54,203

Net income per diluted share attributable to Newport Corporation:

Net income - GAAP

$                0.24

$               0.22

$                0.78

$               0.87

Total non-GAAP adjustments

0.15

0.16

0.53

0.47

Non-GAAP net income per diluted share

$                0.39

$               0.38

$                1.31

$               1.34

 

 

Newport Corporation

Consolidated Balance Sheets

(Unaudited)

January 2,

January 3,

(In thousands)

2016

2015

ASSETS

Current assets:

Cash and cash equivalents

$             41,678

$             46,883

Restricted cash

721

1,704

Marketable securities

-

57

Accounts receivable, net 

107,196

96,512

Inventories, net

113,505

112,440

Current deferred tax assets

-

20,734

Prepaid expenses and other current assets

16,914

14,948

Total current assets

280,014

293,278

Property and equipment, net

83,446

82,793

Goodwill

103,760

97,524

Long-term deferred tax assets

13,914

5,005

Intangible assets, net

65,820

70,811

Investments and other assets

29,689

30,516

Total assets

$           576,643

$           579,927

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:

Short-term borrowings

$               3,121

$               3,772

Accounts payable

29,994

31,448

Accrued payroll and related expenses

32,765

34,607

Accrued expenses and other current liabilities

31,726

31,797

Total current liabilities

97,606

101,624

Long-term debt

74,247

71,000

Pension liabilities

27,843

28,554

Long-term deferred tax liabilities

2,627

14,272

Other long-term liabilities

6,807

7,773

Total stockholders' equity 

367,513

356,704

Total liabilities and stockholders' equity 

$           576,643

$           579,927

 

SOURCE Newport Corporation



RELATED LINKS

http://www.newport.com