Newport Corporation Reports Fourth Quarter and Full-Year 2009 Results
- Orders Grow 17% and Sales Grow 15% on a Sequential Basis -
IRVINE, Calif., Feb. 3 /PRNewswire-FirstCall/ -- Newport Corporation (Nasdaq: NEWP) today reported financial results for its fourth quarter and full year ended January 2, 2010. The company noted the following highlights regarding its fourth quarter:
- Achieved $108.3 million in new orders, representing a 17.0% sequential increase over the $92.6 million in orders recorded in the third quarter of 2009;
- Recorded $101.6 million in net sales, representing a 15.0% sequential increase over the $88.3 million recorded in the third quarter of 2009;
- Achieved net income of $4.8 million, or $0.13 per diluted share, on a non-GAAP basis; and
- Completed its operational consolidation initiatives in the fourth quarter of 2009. These included the integration of the New Focus™ business acquired in July 2009, the relocation of its U.S.-based Lasers Division operations to Santa Clara, California, the outsourcing of manufacturing activities and subsequent closure of its Ottawa, Canada facility, and the consolidation of its China-based manufacturing activities into a new and expanded facility in Wuxi, China.
GAAP Net Income (Loss)
When calculated in accordance with generally accepted accounting principles (GAAP), Newport reported net income in the fourth quarter of 2009 of $0.1 million, or $0.00 per diluted share, compared with a net loss of $144.8 million, or $4.02 per share, in the fourth quarter of 2008. For the full year of 2009, the company reported a net loss of $17.4 million, or $0.48 per share, compared with a net loss of $148.7 million, or $4.11 per share, in the comparable period of 2008.
Non-GAAP Net Income
On a non-GAAP basis, excluding certain income and expense items that the company's management considers to be outside of its core operating results, Newport would have reported net income in the fourth quarter of 2009 of $4.8 million, or $0.13 per diluted share, compared with a non-GAAP net loss of $0.2 million, or $0.00 per share, in the fourth quarter of 2008. For the full year of 2009, on a non-GAAP basis, Newport would have reported net income of $7.2 million, or $0.20 per diluted share, compared with non-GAAP net income of $11.0 million, or $0.30 per diluted share, in the full year of 2008. A reconciliation of the company's net income (loss) calculated in accordance with GAAP and on a non-GAAP basis is provided following the statements of operations included in this release.
Sales and Orders
Sales in the fourth quarter of 2009 totaled $101.6 million, a decrease of 5.4% compared with the $107.4 million recorded in the fourth quarter of 2008. Sales for the full year of 2009 totaled $367.0 million, a decrease of 17.6% compared with the $445.3 million recorded for the full year of 2008. New orders received in the fourth quarter of 2009 totaled $108.3 million, an increase of 8.8% compared with the $99.6 million received in the fourth quarter of 2008. New orders received for the full year of 2009 totaled $361.7 million, a decrease of 17.6% compared with the $439.1 million received in the comparable period of 2008.
The company's sales and orders by end market were as follows:
(In thousands, Percent
except percentages, Change vs.
unaudited) Three Months Ended Year Ended Prior Year
------------------ ---------- -----------
January January January January Fourth Full
2, 3, 2, 3, Quarter Year
2010 2009(2) 2010 2009(2) 2009 2009
---- ------ ---- ------ ---- ----
-------------------
Sales by End Market
-------------------
Scientific
research, aerospace
and defense/
security $39,517 $41,985 $143,453 $150,328 -5.9% -4.6%
Microelectronics (1) 24,613 25,705 84,661 130,250 -4.2% -35.0%
Life and health
sciences 21,963 22,244 87,506 90,128 -1.3% -2.9%
Industrial
manufacturing and
other 15,502 17,469 51,369 74,630 -11.3% -31.2%
------ ------ ------ ------
Total $101,595 $107,403 $366,989 $445,336 -5.4% -17.6%
======== ======== ======== ========
--------------------
Orders by End Market
--------------------
Scientific research,
aerospace and
defense/security $41,550 $42,570 $144,890 $152,669 -2.4% -5.1%
Microelectronics (1) 26,982 17,317 77,853 121,845 55.8% -36.1%
Life and health
sciences 23,017 26,150 83,430 95,347 -12.0% -12.5%
Industrial
manufacturing and
other 16,763 13,557 55,508 69,213 23.6% -19.8%
------ ------ ------ ------
Total $108,312 $99,594 $361,681 $439,074 8.8% -17.6%
======== ======= ======== ========
Notes:
1. Sales to and orders from semiconductor equipment and solar cell
manufacturing customers are included in the company’s Microelectronics
end market.
2. Certain prior period amounts have been reclassified to conform to the
current period presentation.
The company noted the following regarding its sales and orders results:
- Sequentially, sales increased 15.0% in the fourth quarter of 2009 compared with the third quarter of 2009, driven by increases in all of the company's end markets. Similarly, orders increased by 17.0% in the fourth quarter of 2009 versus the third quarter of 2009, due to higher orders from all of the company's end markets.
- Sales were lower in the fourth quarter of 2009 compared with the fourth quarter of 2008 across all of Newport's end markets, reflecting the macroeconomic decline experienced during 2009. However, total fourth quarter orders increased on a year-over-year basis, due primarily to a significant rebound in orders from customers in the company's Microelectronics end market.
- The company's book-to-bill ratio in the fourth quarter of 2009 was 1.07. This reflects the highest level achieved since the first quarter of 2008.
Cash Generation
During the fourth quarter of 2009, Newport generated approximately $11.5 million in cash from operations, even after using $2.8 million in cash to complete its operational consolidation efforts. As announced previously, the company used $18.7 million of cash during the quarter to retire $20.2 million of its convertible subordinated notes. Newport's total cash, cash equivalents and marketable securities totaled $141.9 million at the end of the fourth quarter of 2009.
Robert J. Phillippy, Newport's President and Chief Executive Officer, stated, "From both a strategic and operational perspective, 2009 was a year of many significant accomplishments for Newport. The completion of our initiatives to streamline our cost structure and integrate New Focus, coupled with the strong order momentum we have experienced in the second half of 2009, position us well for the coming year. We are pleased by our cash generation from operations, and by our improving non-GAAP earnings in the fourth quarter of 2009. We believe that we are very well positioned to leverage the sales growth anticipated in 2010 into solid profitability."
Mr. Phillippy added, "Historically, our sales have been seasonally slower in the first quarter of the year in some of the markets we serve, particularly the research market. In the first quarter of 2010, however, we expect that improving conditions in our target end markets, coupled with increased backlog resulting from prior period design wins, will offset some if not all of the normal seasonal softness. If this momentum in our key end markets continues, we expect our net sales for the full year 2010 to increase by more than 10% over 2009. In addition, we expect to be profitable on a GAAP basis in the first quarter of this year, and we expect our profitability to increase sequentially in each quarter of 2010."
ABOUT NEWPORT CORPORATION
Newport Corporation is a leading global supplier of advanced-technology products and systems to customers in the scientific research, microelectronics, aerospace and defense/security, life and health sciences and precision industrial manufacturing markets. Newport's innovative solutions leverage its expertise in 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, Chief Financial Officer and Treasurer, will host an investor conference call today, February 3, 2010, at 5:00 p.m. Eastern time (2:00 p.m. Pacific time) to review the company's results for the fourth quarter and full year of 2009 and its outlook for 2010. 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 888-713-4495 within the U.S. and Canada or 913-312-1471 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 on Wednesday, February 3, 2010, and continue through 8:00 p.m. Eastern time on Wednesday, February 10, 2010. 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 9910641.
SAFE HARBOR STATEMENT
This news release contains forward-looking statements, including without limitation statements regarding the company's general financial outlook for 2010, its expected revenue level in the first quarter of 2010, its expectations regarding revenue growth in the full year 2010 compared with 2009, its expected profitability in the first quarter of 2010 and sequentially increasing profitability in each quarter of 2010. 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 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; potential product returns; 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 Annual Report on Form 10-K for the year ended January 3, 2009. 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 Operations
(Unaudited)
Three Months Ended Year Ended
------------------ ----------
January January January January
(In thousands, except per share 2, 3, 2, 3,
amounts) 2010 2009 2010 2009
---- ---- ---- ----
Net sales $101,595 $107,403 $366,989 $445,336
Cost of sales 60,623 69,619 224,387 274,542
------ ------ ------- -------
Gross profit 40,972 37,784 142,602 170,794
Selling, general and
administrative expenses 30,037 30,430 112,177 118,518
Research and development expense 9,244 10,943 36,948 46,068
Loss (gain) on sale of assets
and related costs - (2,504) 4,355 (2,504)
Impairment charges 360 119,944 360 119,944
--- ------- --- -------
Operating income (loss) 1,331 (121,029) (11,238) (111,232)
Recovery (write-down) of note
receivable and other amounts
related to previously discontinued
operations, net (91) (723) 101 (7,040)
Write-down of minority interest
investment - (2,890) - (2,890)
Gain on extinguishment of debt 328 7,734 328 7,734
Interest and other expense, net (2,225) (1,490) (8,564) (6,751)
------ ------ ------ ------
Loss before income taxes (657) (118,398) (19,373) (120,179)
Income tax (benefit) provision, net (730) 26,401 (1,967) 28,545
---- ------ ------ ------
Net income (loss) $73 $(144,799) $(17,406) $(148,724)
=== ========= ======== =========
Net income (loss) per share:
Basic $0.00 $(4.02) $(0.48) $(4.11)
Diluted $0.00 $(4.02) $(0.48) $(4.11)
Shares used in the computation of
net income (loss) per share:
Basic 36,250 36,007 36,175 36,155
Diluted 37,490 36,007 36,175 36,155
Other operating data:
New orders received during the
period $108,312 $99,594 $361,681 $439,074
Backlog at the end of period
scheduled to ship within 12 months $102,111 $115,169
Newport Corporation
Reconciliation of Non-GAAP Financial Measures
(Unaudited)
(In thousands, except per share
amounts) Three Months Ended Year Ended
------------------ ----------
January January January January
2, 3, 2, 3,
2010 2009 2010 2009
---- ---- ---- ----
Selling, general and
administrative expenses (SG&A):
SG&A - GAAP $30,037 $30,430 $112,177 $118,518
Expenses relating to cost
reduction actions (2,685) (1,337) (8,331) (2,894)
Costs related to acquisition,
integration and divestiture
activities (1,074) - (2,556) -
Duplicate rent related to new
facility (525) - (1,138) -
Other costs, primarily legal fees
associated with the recovery of
assets related to previously
discontinued operations - (317) - (586)
- ---- - ----
Total non-GAAP adjustments (4,284) (1,654) (12,025) (3,480)
------ ------ ------- ------
Non-GAAP SG&A $25,753 $28,776 $100,152 $115,038
======= ======= ======== ========
Net income (loss):
Net income (loss) - GAAP $73 $(144,799) $(17,406) $(148,724)
Impairment of goodwill and
intangible assets 360 119,944 360 119,944
Re-establishment of deferred
tax asset valuation allowance - 19,848 - 19,848
Tax liability related to
indefinite-lived intangible
assets - 4,605 - 4,605
Write-down of minority interest
investment - 2,890 - 2,890
Expenses relating to cost
reduction actions 3,534 2,554 10,042 4,721
Non-cash interest expense on
convertible subordinated notes 1,158 1,253 4,574 5,182
Costs related to acquisition,
integration and divestiture
activities 1,074 - 2,933 -
Write-down (recovery) of note
receivable and other amounts
related to previously
discontinued operations, net 91 723 (101) 7,040
Operating loss from diode laser
operations - 1,809 4,290 4,377
Duplicate rent related to new
facility 525 - 1,138 -
Other costs, primarily legal fees
associated with the recovery of
assets related to previously
discontinued operations - 317 - 586
Loss (gain) on sale of assets
and related costs - (2,504) 4,355 (2,504)
Gain on extinguishment of debt (328) (7,734) (328) (7,734)
Income tax provision (benefit)
on non-GAAP adjustments (1,694) 940 (2,609) 741
------ --- ------ ---
Total non-GAAP adjustments, net
of tax 4,720 144,645 24,654 159,696
----- ------- ------ -------
Non-GAAP net income (loss) $4,793 $(154) $7,248 $10,972
====== ===== ====== =======
Net income (loss) per diluted share:
Net income (loss) - GAAP $- $(4.02) $(0.48) $(4.11)
Total non-GAAP adjustments 0.13 4.02 0.68 4.41
---- ---- ---- ----
Non-GAAP net income per diluted
share $0.13 $- $0.20 $0.30
===== == ===== =====
Management considers the items excluded from the GAAP measures as shown above to be outside of the company's core operating results. Specifically, management believes the non-GAAP information provides both management and investors with a more complete understanding of the company's underlying operational results and a more meaningful basis for comparison with the company's historical and expected financial results. The non-GAAP information is among the budgeting and planning tools that management uses for forecasting. The presentation of this additional information is not meant to be considered in isolation or as a substitute for the company's financial measures prepared in accordance with United States GAAP.
Newport Corporation
Consolidated Balance Sheets
(Unaudited)
January 2, January 3,
(In thousands) 2010 2009
---- ----
ASSETS
Current assets:
Cash and cash equivalents $87,727 $74,874
Marketable securities 54,196 73,546
Accounts receivable, net 72,553 75,258
Notes receivable, net 2,264 6,610
Inventories, net 89,908 98,833
Deferred income taxes 4,835 13,456
Prepaid expenses and other current assets 13,963 10,740
------ ------
Total current assets 325,446 353,317
Property and equipment, net 52,901 60,245
Goodwill 69,932 68,540
Deferred income taxes 4,437 2,555
Intangible assets, net 28,166 26,696
Investments and other assets 12,525 13,550
------ ------
$493,407 $524,903
======== ========
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Short-term obligations $11,056 $14,089
Accounts payable 24,312 24,636
Accrued payroll and related expenses 22,231 21,827
Accrued expenses and other current
liabilities 31,337 29,258
------ ------
Total current liabilities 88,936 89,810
Long-term debt 121,231 135,478
Obligations under capital leases, less
current portion 1,231 1,220
Accrued pension liabilities 10,215 10,652
Other liabilities 17,158 22,546
Stockholders’ equity 254,636 265,197
------- -------
$493,407 $524,903
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SOURCE Newport Corporation
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