Newport Corporation Reports Fourth Quarter and Full Year 2013 Results

IRVINE, Calif., Feb. 12, 2014 /PRNewswire/ -- Newport Corporation (NASDAQ: NEWP) today reported financial results for its fourth quarter and full year ended December 28, 2013, and its outlook for the first quarter and full year of 2014.  The company noted the following regarding the fourth quarter results:

• Net sales of $154.2 million, an increase of 10.9% sequentially and 8.8% compared with the prior year period;
• New orders of $166.8 million, an increase of 15.5% sequentially and 24.6% compared with the prior year period;
• Net income attributable to Newport Corporation of $9.8 million, or $0.24 per diluted share, when measured according to generally accepted accounting principles (GAAP);
• Non-GAAP net income of $15.3 million, or $0.38 per diluted share, excluding integration-related expenses, restructuring and severance costs, the amortization of intangible assets, stock-based compensation expense, a loss on sale of assets and the tax impact of the excluded amounts; and
• Cash generated from operations of $23.8 million, of which $19.2 million was used to reduce indebtedness.

Commenting on the results, Robert J. Phillippy, Newport's President and Chief Executive Officer, stated, "We executed well in the fourth quarter and delivered strong financial results.  Sales exceeded the top end of our guidance range, and operating income, earnings per diluted share and cash from operations all reached their highest levels of the year.  We enter 2014 with increasing momentum in our business, and continue to focus on initiatives to deliver long-term growth while maintaining operational efficiency.  Fourth quarter orders of $166.8 million were the second highest level in our history.  We believe this performance reflects the improving market climate and the share gains we have achieved in a number of key applications, and we are confident that we are positioned well for sales and profit growth in 2014." 

Newport's sales and orders by end market were as follows:

In the fourth quarter of 2013, the company's sales and orders were higher sequentially and compared with the fourth quarter of 2012.  The increases were driven primarily by new design wins and increased activity levels with customers in the microelectronics end market.  The company's fourth quarter orders from this market included the $14 million collaborative development agreement announced previously.  Newport also recorded sequential and year-over-year increases in sales and orders in its industrial manufacturing end market, and year-over-year increases in sales and orders in its life and health sciences end market.  Fourth quarter sales to and orders from customers in the scientific research end market increased sequentially, consistent with historical seasonal patterns, though activity levels in this market as well as in the defense and security end market continued to be adversely impacted by government funding constraints.

Operating Income and Net Income

Newport reported operating income for the fourth quarter of 2013 of $14.8 million, or 9.6% of net sales, when calculated in accordance with GAAP.  On a non-GAAP basis, excluding integration-related expenses, restructuring and severance costs, the amortization of intangible assets, stock-based compensation expense and a loss on sale of assets, the company's operating income for the fourth quarter of 2013 was $23.1 million, or 15.0% of net sales.

On a GAAP basis, the company reported net income attributable to Newport Corporation for the fourth quarter of 2013 of $9.8 million, or $0.24 per diluted share.  On a non-GAAP basis, excluding the items referenced above and the tax impact of such excluded amounts, the company's net income for the fourth quarter of 2013 was $15.3 million, or $0.38 per diluted share. 

The company has provided a reconciliation of its gross profit, 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 operations and comprehensive income (loss) included in this release.  Management believes that the supplemental presentation of 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

In the fourth quarter of 2013, Newport generated $23.8 million in cash from operations, which was the highest level in any quarter of the year.  During the full year of 2013, Newport generated cash from operations of $63.9 million and reduced its total indebtedness by $95.2 million, or 52%.  As of December 28, 2013, the company had a total of $64.2 million in cash, restricted cash and marketable securities, and had total indebtedness of $88.5 million.

Financial Outlook

Commenting on Newport's outlook for 2014, Mr. Phillippy said, "We have gained momentum in recent quarters, and ended 2013 with our strongest financial performance of the year.  While this recovery has not yet occurred in all of our end markets, input from our customers gives us confidence that business conditions will continue to improve throughout 2014.  Based on this input, our record backlog and the new program wins we have captured, we are increasingly confident that we will achieve significant year-over-year sales and profit growth in 2014.  In the first quarter of 2014, we expect increases in sales and profit compared with the first quarter of 2013, but reductions on a sequential basis due to the normal seasonality in our scientific research market and the sale of our MRSI business, which represented $4.6 million in sales in the fourth quarter.  We expect our first quarter net sales to be in the range of $141 million to $147 million, which would reflect an increase of 6% to 11% over the first quarter of 2013.  In addition, we expect our non-GAAP operating income and non-GAAP earnings per share in the first quarter to increase significantly compared with the prior year first quarter, due primarily to the higher level 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, microelectronics, life and health sciences, industrial manufacturing and defense/security markets.  Newport's innovative solutions leverage its expertise in advanced technologies, including lasers, photonics and precision motion equipment, and optical components and sub-systems, 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.

To download Newport's investor relations app, which offers access to its SEC filings, press releases, videos, audiocasts and more, please visit Apple's App Store for the iPhone and iPad or Google Play for Android mobile devices.

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 12, 2014, 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 2013 and business outlook for the first quarter and full year 2014.  The call will be open to all interested investors through a live audio web broadcast via the Internet at www.newport.com/investors.  The call also will be available to investors and analysts by dialing (888) 562-3356 within the U.S. and Canada or (973) 582-2700 from abroad. 

The webcast will be archived on the Newport website and can be reached through the same link.  An archived webcast will also be available on Newport's investor relations app.  A telephonic playback of the conference call will be available by calling (855) 859-2056 within the U.S. and Canada and (404) 537-3406 from abroad.  Playback will be available beginning at 6:00 p.m. Eastern time on Wednesday, February 12, 2014, and continue through 11:59 p.m. Eastern time on Wednesday, February 19, 2014.  The replay passcode is 51369073.

SAFE HARBOR STATEMENT

This news release contains forward-looking statements, including without limitation statements regarding the company's expectation of momentum in its business and improved market conditions throughout the course of 2014, its belief that it is well positioned for strong sales and profit growth in 2014, and Newport's expected sales, non-GAAP operating income and non-GAAP earnings per diluted share levels in the first quarter of 2014.  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 and defense/security industries; Newport's ability to successfully penetrate and increase sales to its targeted end markets; 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.

Contact:
Charles F. Cargile, 949/863-3144
Newport Corporation, Irvine, CA
[email protected]
or
Rob Fink, 212/896-1206
KCSA Strategic Communications
[email protected]

SOURCE Newport Corporation

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