Newport Corporation Reports First Quarter 2012 Results

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:

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.

SOURCE Newport Corporation