Newport Corporation Reports Third Quarter 2014 Results

IRVINE, Calif., Oct. 29, 2014 /PRNewswire/ -- Newport Corporation (NASDAQ: NEWP) today reported financial results for its third quarter and nine months ended September 27, 2014, and its outlook for the fourth quarter of 2014.  The company noted the following regarding the third quarter results:

• Net sales of $146.3 million;
• New orders of $147.3 million;
• Net income attributable to Newport Corporation of $9.5 million, or $0.23 per diluted share, when measured according to generally accepted accounting principles (GAAP);
• Non-GAAP net income of $13.6 million, or $0.33 per diluted share, excluding the amortization of intangible assets, stock-based compensation expense, acquisition-related, restructuring and severance costs, a one-time tax benefit and the tax impact of the excluded amounts;
• Cash generated from operations of $5.4 million, and a net debt position of $2.4 million at the end of the quarter; and
• Repurchases of approximately 242,000 shares of common stock for approximately $4.5 million during the quarter.

Commenting on the results, Robert J. Phillippy, Newport's President and Chief Executive Officer, stated, "We grew our third quarter sales by 5.2% and our non-GAAP net income by 9.2% on a year-over-year basis.  In addition, we already have excellent momentum in the fourth quarter, as exemplified by some significant orders we have recorded in October.  Earlier this week, we received a $25.7 million order from an existing customer for ultrafast lasers used in surgical applications, which we expect to ship within the next 18 to 24 months.  We have also received several substantial new orders from a key semiconductor manufacturing equipment customer relating to the collaborative development program for next generation semiconductor equipment that was launched late last year.  These orders make us very confident that our book-to-bill ratio for the full year 2014 will be well in excess of 1.0, and that our backlog entering 2015 will be at the highest level in our history."

Sales and Orders

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

In the third quarter of 2014, the company's sales and orders increased 5.2% and 2.0%, respectively, compared with the prior year period.  Sales increased on a year-over-year basis in all of the company's end markets except for the defense and security end market, where market conditions continue to be challenging.  The year-over-year increase in orders was driven by increases in the company's life and health sciences, scientific research and industrial manufacturing and other end markets, offset by decreased orders from customers in its defense and security and microelectronics end markets. 

On a sequential basis, sales and orders decreased 4.5% and 1.1%, respectively.  Sales to the company's scientific research market increased sequentially, but this was more than offset by lower sales to the company's other end markets.  Orders from customers in the company's life and health sciences end market were higher sequentially, but this was more than offset by decreased orders from customers in the company's other end markets.  

Operating Income and Net Income

Newport reported operating income for the third quarter of 2014 of $12.8 million, or 8.7% of net sales, when calculated in accordance with GAAP.  On a non-GAAP basis, excluding the amortization of intangible assets, stock-based compensation expense and acquisition-related, restructuring and severance costs, the company's operating income for the third quarter of 2014 was $19.6 million, or 13.4% of net sales, a 6.8% increase over the $18.3 million reported in the prior year period.

On a GAAP basis, the company reported net income attributable to Newport Corporation for the third quarter of 2014 of $9.5 million, or $0.23 per diluted share.  On a non-GAAP basis, excluding the items referenced above, a one-time tax benefit and the tax impact of the excluded amounts, the company's third quarter net income was $13.6 million, a 9.2% increase over the $12.4 million reported in the third quarter of 2013.  Non-GAAP earnings per diluted share were $0.33 in the third quarter of 2014, compared with $0.31 in the prior year period. 

The company has provided a reconciliation of selected financial measures calculated in accordance with GAAP and on a non-GAAP basis following the statements of income and comprehensive income included in this release.  Management believes that the supplemental presentation of non-GAAP financial information provides insight into the company's core business results, as well as a useful resource for comparison of its financial results between periods. 

Share Repurchase Program

During the third quarter, the company repurchased approximately 242,000 shares of its common stock at an average price of $18.52 per share, for a total of approximately $4.5 million.  Newport's board of directors has authorized the repurchase of an additional 3.6 million shares, and the company expects to continue to repurchase shares for the foreseeable future, with the amount and timing of such repurchases dependent upon factors such as the company's share price level, its other capital requirements and the terms of the company's credit facility. 

Financial Outlook 

Commenting on Newport's outlook, Mr. Phillippy said, "In the fourth quarter, we expect our sales to be in the range of $150 million to $156 million, resulting in record sales for the full year of 2014.  We expect to generate a slight sequential increase in earnings and a significant sequential increase in cash from operations on this higher sales level.  Looking forward, we believe that our high level of backlog, together with the effective implementation of our strategic initiatives, will drive continued sales growth in 2015, and that the contribution of sales from the acquisition of V-Gen, which we closed at the beginning of the fourth quarter, will further enhance this growth."

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.

Learn more about Newport at www.newport.com and follow the company on Twitter, YouTube and Facebook.  Investors can also download Newport's investor relations app, which offers access to its SEC filings, press releases, videos, audiocasts and more, by visiting 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, October 29, 2014, at 5:00 p.m. Eastern time (2:00 p.m. Pacific time) to review the company's results for the third quarter of 2014 and its business outlook for the fourth quarter of 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 877-375-4189 within the U.S. and Canada or 973-935-2046 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 8:00 p.m. Eastern time on Wednesday, October 29, 2014, and continue through 11:59 p.m. Eastern time on Wednesday, November 5, 2014.  The replay passcode is 21906941.

SAFE HARBOR STATEMENT

This news release contains forward-looking statements, including without limitation statements regarding the expected timing of shipments under the $25.7 million order for surgical lasers; the company's expectation that its book-to-bill ratio will be well in excess of 1.0 for the full year of 2014; the company's expectation that its backlog will be at a record level at the end of 2014; the company's expectation of continuing to repurchase shares for the foreseeable future; the company's expected sales, earnings and cash from operations in the fourth quarter of 2014; and the company's expectation of continued sales growth in 2015, enhanced by the contribution of sales from the acquisition of V-Gen.  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 and security industries; Newport's ability to achieve expected benefits from the integration of acquired businesses; 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 end 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

Related Links

http://www.newport.com

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