-Sequential Orders Growth of 15%- - Cost Reduction Actions Provide
Positive Impact- -Accretive Contribution from New Focus(TM)
Acquisition- IRVINE, Calif., Oct. 28 /PRNewswire-FirstCall/ --
Newport Corporation (NASDAQ:NEWP) today reported financial results
for its third quarter and nine months ended October 3, 2009. The
company also provided an update on its cost reduction initiatives
and its integration of the New Focus(TM) business, which it
acquired on July 4, 2009. The company noted the following
highlights regarding its third quarter: -- Achieved $92.6 million
in new orders, representing a 15% sequential increase over the
$80.4 million in orders recorded in the second quarter of 2009; --
Recorded $88.3 million in net sales, representing a slight increase
sequentially over the $87.5 million recorded in the second quarter
of 2009; -- Achieved net income of $2.1 million, or $0.06 per
diluted share, on a non-GAAP basis, representing a sequential
increase over the $0.5 million, or $0.01 per diluted share,
reported on a non-GAAP basis in the second quarter of 2009; and --
Reported that its operational consolidation initiatives continue to
be on target for completion in the fourth quarter of 2009. These
include the integration of the New Focus business, the relocation
of its 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. Commenting on these highlights, Robert J.
Phillippy, Newport's President and Chief Executive Officer, stated,
"We are very encouraged by the increase in our third quarter
orders, which makes us cautiously optimistic about the prospect of
a recovery from the current economic downturn. In addition, our
third quarter performance demonstrates the significant progress we
have made in streamlining our expense base in the past year, as
well as the positive impact of our exchange transaction with
Oclaro. As expected, New Focus is proving to be an excellent
strategic fit with our profitable photonics business and provides
some great additions to our product portfolio." GAAP Net Loss When
calculated in accordance with GAAP, Newport reported a net loss in
the third quarter of 2009 of $3.5 million, or $0.10 per share,
compared with a net loss of $2.4 million, or $0.07 per share, in
the third quarter of 2008. For the first nine months of 2009, the
company reported a net loss of $17.5 million, or $0.48 per share,
compared with a net loss of $3.9 million, or $0.11 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 third
quarter of 2009 of $2.1 million, or $0.06 per diluted share,
compared with non-GAAP net income of $3.0 million, or $0.08 per
diluted share, in the third quarter of 2008. For the first nine
months of 2009, on a non-GAAP basis, Newport would have reported
net income of $2.5 million, or $0.07 per diluted share, compared
with non-GAAP net income of $11.0 million, or $0.30 per diluted
share, in the first nine months of 2008. A reconciliation between
the company's net income and net income per share calculated in
accordance with GAAP and on a non-GAAP basis is provided following
the statements of operations included in this release. Cash
Generation Newport reported that the company's cash, cash
equivalents and marketable securities totaled $150.0 million at the
end of the third quarter, an increase of $1.6 million during the
first nine months of 2009. This cash increase was achieved despite
paying $3.0 million in connection with the company's asset exchange
with Oclaro, Inc., incurring $3.8 million in cash expenses related
to profit improvement actions and using $2.1 million in cash for
acquisition, integration and divestiture related expenses. Cost
Reduction and Efficiency Improvement Initiatives Newport noted that
its previously announced cost reduction actions have reduced the
company's operating expense base significantly, and remain on
target for completion at the end of 2009. On a non-GAAP basis,
excluding expenses incurred in both periods related to the
previously announced cost reduction efforts and for acquisition,
integration and divestiture related activities, and certain other
expenses, all of which the company's management considers to be
outside of its core operating results, the company highlighted that
selling, general and administrative expenses would have declined by
$11.7 million, or 13.6%, in the first nine months of 2009 compared
with the same period of 2008. A reconciliation between the
company's selling, general and administrative expenses in
accordance with GAAP and on a non-GAAP basis is provided following
the statements of operations included in this release. In addition,
research and development expenses declined by $7.4 million, or
21.1%, in the first nine months of 2009 compared with the first
nine months of 2008. Integration of New Focus On July 4, 2009, the
company completed its acquisition of Oclaro's New Focus business,
and began integrating that business into Newport. The company noted
that the integration is proceeding as planned, and is expected to
be completed by the end of 2009. Sales and Orders Sales in the
third quarter of 2009 totaled $88.3 million, a decrease of 15.9%
compared with the $105.0 million recorded in the third quarter of
2008. Sales for the first nine months of 2009 totaled $265.4
million, a decrease of 21.5% compared with the $337.9 million
recorded in the comparable period of 2008. New orders received in
the third quarter of 2009 totaled $92.6 million, a decrease of
11.3% compared with the $104.4 million received in the third
quarter of 2008. New orders received in the first nine months of
2009 totaled $253.4 million, a decrease of 25.4% compared with the
$339.5 million received in the comparable period of 2008. The
company's sales and orders by end market were as follows: (In
thousands, except percentages, unaudited) Percent Change vs. Three
Months Ended Nine Months Ended Prior Period ------------------
----------------- -------------- October September October
September Third Nine 3, 27, 3, 27, Quarter Months 2009 2008(2) 2009
2008(2) 2009 2009 ---- ------ ---- ------ ---- ---- ------------
Sales by End Market ------------ Scientific research, aerospace and
defense/ security $34,088 $34,103 $103,365 $108,199 0.0% -4.5%
Microelectronics (1) 19,846 30,460 60,137 104,703 -34.8% -42.6%
Life and health sciences 21,293 22,899 65,411 67,201 -7.0% -2.7%
Industrial manufacturing and other 13,090 17,564 36,481 57,830
-25.5% -36.9% ------ ------ ------ ------ Total $88,317 $105,026
$265,394 $337,933 -15.9% -21.5% ======= ======== ======== ========
------------- Orders by End Market ------------- Scientific
research, aerospace and defense/ security $38,048 $37,517 $102,849
$109,929 1.4% -6.4% Microelectronics (1) 22,726 26,921 50,944
104,696 -15.6% -51.3% Life and health sciences 17,878 21,414 60,403
68,516 -16.5% -11.8% Industrial manufacturing and other 13,931
18,577 39,173 56,339 -25.0% -30.5% ------ ------ ------ ------
Total $92,583 $104,429 $253,369 $339,480 -11.3% -25.4% =======
======== ======== ======== 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: -- Overall, sales and
orders were lower in the third quarter of 2009 compared with the
third quarter of 2008, particularly in the Microelectronics market
and the Industrial Manufacturing and Other markets, reflecting the
continuing weak macroeconomic environment. -- Sales to and orders
from customers in the Scientific Research, Aerospace and
Defense/Security markets for the third quarter of 2009 were
essentially unchanged compared with the prior year third quarter,
due to lower sales in Newport's existing businesses, offset by the
addition of New Focus. However, orders from these markets increased
by 16.5% sequentially compared with the second quarter of 2009, due
primarily to increased research funding and to the addition of New
Focus. The company noted that some American Recovery and
Reinvestment Act (ARRA) funds are now beginning to reach customers
in these markets. -- The most significant year-over-year decline in
sales occurred in the company's Microelectronics market, where
sales were $10.6 million, or 34.8%, lower in the third quarter of
2009 than in the prior year third quarter, primarily reflecting the
continued cyclical downturn in the semiconductor equipment industry
and reduced demand for solar panel manufacturing equipment, offset
in part by the addition of New Focus. However, the company noted
that orders from Microelectronics customers increased by 51% in the
third quarter on a sequential basis compared with the second
quarter of 2009, due primarily to higher orders from semiconductor
equipment customers and to the addition of New Focus. Mr. Phillippy
concluded, "We expect the recent improvement in market activity to
continue in the near term, which, coupled with historical seasonal
strength, should enable us to grow our revenue sequentially in the
fourth quarter of 2009. While we are encouraged by the recent
increase in orders, the extent and duration of a macroeconomic
recovery remain uncertain. As such, we will continue to work
aggressively to ensure that our organization is streamlined and our
business is positioned well to optimize our operating performance
in the current business environment and provide meaningful profit
leverage as market conditions improve." 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,
October 28, 2009, at 5:00 p.m. Eastern time (2:00 p.m. Pacific
time) to review the company's results for the third quarter and
first nine months of 2009, provide an update on its integration of
the New Focus business and review the status of its cost reduction
initiatives. The call will be open to all interested investors
through a live audio web broadcast via the Internet at
http://www.newport.com/investors and http://www.earnings.com/. The
call also will be available to investors and analysts by dialing
(866) 321-6651 within the U.S. and Canada or (416) 642-5212 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 or (719) 457-0820 from abroad. Playback
will be available beginning at 7:00 p.m. Eastern time on Wednesday,
October 28, 2009, and continue through 7:00 p.m. Eastern time on
Wednesday, November 4, 2009. The replay passcode is 4482151. SAFE
HARBOR STATEMENT This news release contains forward-looking
statements, including without limitation statements regarding the
expected timing of completion of the company's operational
consolidation and other cost reduction initiatives, the expected
timing of completion of the company's integration of New Focus, the
expectation of American Recovery and Reinvestment Act funds
reaching research customers, and its expectations regarding
sequential revenue growth in the fourth quarter of 2009. 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. Newport
Corporation Consolidated Statements of Operations (Unaudited) Three
Months Ended Nine Months Ended (In thousands, ------------------
----------------- except per share October 3, September 27, October
3, September 27, amounts) 2009 2008 2009 2008 ---- ---- ---- ----
Net sales $88,317 $105,026 $265,394 $337,933 Cost of sales 53,097
65,424 163,764 204,923 ------ ------ ------- ------- Gross profit
35,220 39,602 101,630 133,010 Selling, general and administrative
expenses 27,942 28,205 82,140 88,088 Research and development
expense 9,339 11,340 27,704 35,125 Loss on disposal of diode laser
assets and related costs 285 - 4,355 - --- - ----- - Operating
income (loss) (2,346) 57 (12,569) 9,797 Recovery (write-down) of
note receivable and other amounts related to previously
discontinued operations, net 200 743 192 (6,317) Interest and other
expense, net (2,024) (2,100) (6,339) (5,261) ------ ------ ------
------ Loss before income taxes (4,170) (1,300) (18,716) (1,781)
Income tax (benefit) provision, net (652) 1,086 (1,237) 2,144 ----
----- ------ ----- Net loss $(3,518) $(2,386) $(17,479) $(3,925)
======= ======= ======== ======= Net loss per share: Basic $(0.10)
$(0.07) $(0.48) $(0.11) Diluted $(0.10) $(0.07) $(0.48) $(0.11)
Shares used in the computation of net loss per share: Basic 36,214
36,078 36,150 36,208 Diluted 36,214 36,078 36,150 36,208 Other
operating data: New orders received during the period $92,583
$104,429 $253,369 $339,480 Backlog at the end of period scheduled
to ship within 12 months $95,003 $118,709 Newport Corporation
Reconciliation of Non-GAAP Financial Measures (Unaudited) (In
thousands, except per share amounts) Three Months Ended Nine Months
Ended ------------------ ----------------- October 3, September 27,
October 3, September 27, 2009 2008 2009 2008 ---- ---- ---- ----
Selling, general and administrative expenses (SG&A): SG&A -
GAAP $27,942 $28,205 $82,140 $88,088 Expenses relating to cost
reduction actions (2,277) (1,556) (5,646) (1,556) Costs related to
acquisition, integration and divestiture activities (1,052) -
(1,473) - Duplicate rent related to new facility (525) - (613) -
Diode laser transfer pricing adjustments - - - (178) Other costs,
primarily legal fees associated with the recovery of assets related
to previously discontinued operations - (269) - (269) - ---- - ----
Total non-GAAP adjustments (3,854) (1,825) (7,732) (2,003) ------
------ ------ ------ Non-GAAP SG&A $24,088 $26,380 $74,408
$86,085 ======= ======= ======= ======= Net income (loss): Net loss
- GAAP $(3,518) $(2,386) $(17,479) $(3,925) Expenses relating to
cost reduction actions 2,516 2,167 6,508 2,167 Non-cash interest
expense on convertible subordinated notes 1,148 1,321 3,416 3,929
Costs related to acquisition, integration and divestiture
activities 1,437 - 1,859 - Write-down (recovery) of note receivable
and other amounts related to previously discontinued operations,
net (200) (743) (192) 6,317 Loss on disposal of diode laser assets
and related costs 285 - 4,355 - Operating loss from diode laser
operations - 2,278 4,290 2,456 Duplicate rent related to new
facility 525 - 613 - Other costs, primarily legal fees associated
with the recovery of assets related to previously discontinued
operations - 269 - 269 Income tax provision (benefit) on non-GAAP
adjustments (125) 102 (915) (199) ---- --- ---- ---- Total non-GAAP
adjustments, net of tax 5,586 5,394 19,934 14,939 ----- -----
------ ------ Non-GAAP net income $2,068 $3,008 $2,455 $11,014
====== ====== ====== ======= Net income (loss) per diluted share:
Net loss - GAAP $(0.10) $(0.07) $(0.48) $(0.11) Total non-GAAP
adjustments 0.16 0.15 0.55 0.41 ---- ---- ---- ---- Non-GAAP net
income per diluted share $0.06 $0.08 $0.07 $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) October 3, January 3, (In
thousands) 2009 2009 ---- ---- ASSETS Current assets: Cash and cash
equivalents $91,823 $74,874 Marketable securities 58,222 73,546
Accounts receivable, net 64,501 75,258 Notes receivable, net 2,345
6,610 Inventories, net 96,683 98,833 Deferred income taxes 13,060
13,456 Prepaid expenses and other current assets 14,892 10,740
------ ------ Total current assets 341,526 353,317 Property and
equipment, net 53,585 60,245 Goodwill 69,932 68,540 Deferred income
taxes 1,920 2,555 Intangible assets, net 29,359 26,696 Investments
and other assets 13,295 13,550 ------ ------ $509,617 $524,903
======== ======== LIABILITIES AND STOCKHOLDERS' EQUITY Current
liabilities: Short-term obligations $9,909 $14,089 Accounts payable
22,289 24,636 Accrued payroll and related expenses 19,088 21,827
Accrued expenses and other current liabilities 30,284 29,258 ------
------ Total current liabilities 81,570 89,810 Long-term debt
138,928 135,478 Obligations under capital leases, less current
portion 1,289 1,220 Accrued pension liabilities 11,216 10,652 Other
liabilities 22,309 22,546 Stockholders' equity 254,305 265,197
------- ------- $509,617 $524,903 ======== ======== DATASOURCE:
Newport Corporation CONTACT: Charles F. Cargile of Newport
Corporation, +1-949-863-3144, ; or Dan Peoples of Makinson Cowell
(US), +1-858-552-8146 Web Site: http://www.newport.com/investors
Copyright