Newport Corporation Reports First Quarter 2011 Results

IRVINE, Calif., April 27, 2011 /PRNewswire/ -- Newport Corporation (NASDAQ: NEWP) today reported financial results for its first quarter ended April 2, 2011.  The company noted the following highlights regarding its first quarter results:

• $128.4 million in net sales;
• $129.7 million in new orders;
• Net income of $20.8 million, or $0.53 per diluted share; and
• Gross margin of 45.1%.

Robert J. Phillippy, Newport's President and Chief Executive Officer, stated, "The Newport team delivered another excellent performance in the first quarter of 2011.  Our sales of $128.4 million and orders of $129.7 million were records for a first quarter.  We continued to demonstrate our very strong profit leverage on these robust sales, with exceptional gross margin, net income and earnings per diluted share.  Our first quarter gross margin of 45.1% achieved a longstanding company goal."

Sales and Orders

The company's sales and orders by end market in the first quarter of 2011 were as follows:

The company noted the following trends in its sales and orders results:

• Sales increased in the first quarter of 2011 compared with the first quarter of 2010 across all of Newport's end markets.  This growth was led by significantly higher sales both to semiconductor equipment customers, which are included in the company's Microelectronics end market, and to customers in the Life and Health Sciences end market.  
• Orders in the first quarter of 2011 were higher than the first quarter of 2010, resulting primarily from a significant increase in orders from customers in the company's Industrial Manufacturing and Other end markets and increases in orders from Life and Health Sciences and Scientific Research customers, offset in part by a decline in orders from customers in the Microelectronics end market.  The company noted that orders from Microelectronics customers in the first quarter of the prior year were an all-time record for Newport, reflecting the early stages of the strong recovery in the semiconductor manufacturing equipment industry.  The company continues to see robust activity in this market, with first quarter orders of $41.6 million, consistent with the order levels in the preceding three quarters, and a book-to-bill ratio of 1.0.  

Net Income

Newport reported net income of $20.8 million, or $0.53 per diluted share, in the first quarter of 2011 when calculated in accordance with generally accepted accounting principles (GAAP), compared with net income of $5.1 million, or $0.14 per diluted share, in the first quarter of 2010.  Included in this total was a gain of $7.2 million, or $0.18 per diluted share, resulting from a non-recurring currency translation adjustment.  Without this gain, the company would have recorded net income of $13.6 million, or $0.35 per diluted share.  A reconciliation between the company's net income and net income per diluted share calculated in accordance with GAAP and on a non-GAAP basis is provided following the statements of income included in this release.

The company's net income in the first quarter, excluding the currency translation gain, was more than double the level in the first quarter of 2010, due primarily to the company's higher sales and continued strong operational execution in the 2011 period.

Financial Outlook

Commenting on the company's financial outlook, Mr. Phillippy stated, "Our financial results for the first quarter of 2011 continued to reflect the solid foundation for growth we established in 2010.  Our backlog and orders momentum are very strong, and we have continued to demonstrate our ability to deliver significant profit leverage on increases in sales.  In the second quarter of 2011, we anticipate increasing our sales 12% to 15% over the $114.6 million recorded in the second quarter of 2010 and leveraging that revenue growth into operating income that is more than 50% higher than the year ago period.  In addition, based on our robust orders levels, strong and growing presence in our markets and effective operational execution, we expect continued revenue growth in the full year 2011.  We also expect to increase earnings per diluted share on a GAAP basis by more than 50% compared with the $1.09 recorded in 2010.  Excluding the non-recurring currency translation gain of $0.18 per diluted share discussed earlier in this release, we expect our 2011 non-GAAP earnings per diluted share to be more than 35% higher than the 2010 level."  

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 and precision automation, 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, April 27, 2011 at 5:00 p.m. Eastern time (2:00 p.m. Pacific time) to review the company's results for the first quarter of 2011 and its outlook for the remainder of 2011.  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 888-670-2246 within the U.S. and Canada or 913-312-1468 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 will be available beginning at 8:00 p.m. Eastern time today, April 27, 2011, and will continue through 8:00 p.m. Eastern time on Wednesday, May 4, 2011.  The replay can be accessed by calling 888-203-1112 within the U.S. and Canada and 719-457-0820 from abroad.  The replay passcode is 9307738.

SAFE HARBOR STATEMENT

This news release contains forward-looking statements, including without limitation statements regarding Newport's expected growth in sales and operating income in the second quarter of 2011, and its anticipated growth in revenue and earnings per diluted share in the full year of 2011.  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, and particularly the duration and extent of the strong current conditions in the semiconductor industry; Newport's ability to successfully penetrate and increase sales to its targeted end markets, particularly to photovoltaic customers and the life and health sciences market; the levels of private and governmental research funding worldwide; potential order cancellations and push-outs; Newport's ability to meet increasing demand with its current cost structure; 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 Form 10-K for the year ended January 1, 2011.  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.

SOURCE Newport Corporation