Newport Corporation Retires $20.2 Million of Convertible Notes
16 Dezember 2009 - 10:40PM
PR Newswire (US)
Company Provides Update on New Focus Integration and Cost Reduction
Measures IRVINE, Calif., Dec. 16 /PRNewswire-FirstCall/ -- Newport
Corporation (NASDAQ:NEWP) today reported that it has used $18.7
million of cash to retire $20.2 million of its convertible
subordinated notes. As a result of this transaction, the company's
results for the fourth quarter of 2009 will be positively impacted
by a total of $0.5 million due to the gain on extinguishment of
debt and the lower interest expense for the period. In addition,
due to the reduction in the company's total debt, it expects to
incur lower interest expense in 2010 and beyond. Newport estimates
that this reduction will result in approximately $0.03 of
incremental earnings per diluted share in 2010. Newport had
previously retired $28.0 million of its convertible subordinated
notes in the fourth quarter of 2008, and after this additional
$20.2 million retirement, the company now has $126.8 million in
convertible notes outstanding. The notes mature on February 15,
2012, and bear interest at a rate of 2.5% per year. However, under
generally accepted accounting principles, the company is required
to record an additional 3.75% per year of non-cash interest expense
relating to the convertibility feature of the notes. The company
also announced that integration activities related to its
acquisition of New Focus(TM) from Oclaro, Inc. (NASDAQ:OCLR) in
July 2009 and other previously announced cost reduction actions are
now completed, including: -- Moving to a larger facility in Wuxi,
China's export processing zone; -- Relocating New Focus
manufacturing from Shenzhen, China, to Wuxi, China; -- Relocating
New Focus activities from an Oclaro facility in San Jose,
California, to other Newport facilities in California and Wuxi,
China; -- Relocating the U.S. operations of its Lasers Division
from Mountain View, California, to Santa Clara, California; and --
Outsourcing the manufacturing of laser products from its Ottawa,
Canada site, and closing that facility. Robert J. Phillippy,
President and Chief Executive Officer, said, "We have been very
focused in 2009 on streamlining our operations and improving our
competitive position during the worldwide downturn in macroeconomic
conditions. By aggressively managing our expense base, we have
continued to generate positive operating cash flow throughout this
economic downturn. We believe that using our surplus cash to retire
the convertible notes at a discount is a good financial decision
for Newport, as it increases our net cash position and will be
accretive to our earnings in 2010. Even after using the $18.7
million in cash, we expect to enter 2010 with over $130 million of
cash, cash equivalents and marketable securities." Mr. Phillippy
continued, "We are pleased that the integration and cost reduction
initiatives we have implemented during 2009 are now completed.
These actions have reduced our expense base significantly,
positioning us well to benefit from improved external market
conditions that we have begun to experience in the second half of
the year. If the current recovery from the depressed conditions
experienced in late 2008 and the first half of 2009 continues, we
believe we will achieve low double-digit revenue growth in 2010
compared with 2009 and will leverage that growth into significant
profit improvement." 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. SAFE HARBOR STATEMENT This news release
contains forward-looking statements, including without limitation
statements regarding the expected lower interest expense in 2010
and beyond, the expected accretion to its diluted earnings per
share resulting from the note repurchase, its expected cash and
marketable securities balance entering 2010, and its expectations
regarding revenue and profit growth in 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, Newport's ability to successfully integrate the New
Focus business, 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. DATASOURCE:
Newport Corporation CONTACT: Charles F. Cargile, +1-949-863-3144,
Newport Corporation, ; or Dan Peoples, +1-858-552-8146, Makinson
Cowell (US)
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