Newport Corporation Reports First Quarter 2013 Results PR Newswire IRVINE, Calif., May 1, 2013 IRVINE, Calif., May 1, 2013 /PRNewswire/ --Newport Corporation (NASDAQ: NEWP) today reported financial results for its first quarter ended March 30, 2013, and its outlook for the remainder of 2013. The company noted the following regarding the first quarter results: oNet sales of $132.6 million; oNet income attributable to Newport Corporation of $2.7 million, or $0.07 per share, when measured according to generally accepted accounting principles (GAAP); oNon-GAAP net income of $6.2 million, or $0.16 per diluted share, excluding the amortization of intangible assets, stock-based compensation expense, acquisition-related, restructuring and severance costs, and the tax impact of the excluded amounts; and oCash generated from operations of $7.5 million, and a reduction in debt of $12.1 million. Commenting on the results, Robert J. Phillippy, Newport's President and Chief Executive Officer, stated, "While conditions in the primary markets we serve were generally weak in the first quarter, we did see sequential growth in orders from customers in our life and health sciences, microelectronics, and industrial markets, which may reflect the early signs of improving conditions. We continue to implement our strategic plan, and have made progress on several of our long-term growth initiatives. We remain confident that these initiatives, together with effective execution, will position Newport to achieve significant growth in sales and profitability when macro-conditions improve." Sales and Orders Newport's sales and orders by end market were as follows: (In thousands, except Three Months Ended Percentage Percentage percentages, unaudited) Change vs. Change vs. March December March Prior Prior Year 30, 29, 31, 2013 2012 ¹ 2012 ¹ Quarter Period Sales by End Market Scientific $ $ $ research -7.3% -14.2% 30,893 33,319 36,024 Microelectronics 27,730 28,632 36,154 -3.2% -23.3% Life and health sciences 31,177 32,283 37,116 -3.4% -16.0% Defense and 15,411 18,312 17,377 -15.8% -11.3% security Industrial manufacturing 27,396 29,097 30,496 -5.8% -10.2% and other $ $ $ Total -6.4% -15.6% 132,607 141,643 157,167 Orders by End Market Scientific $ $ $ research -8.3% 7.6% 31,489 34,321 29,278 Microelectronics 28,186 26,153 42,168 7.8% -33.2% Life and health sciences 30,474 26,975 63,731 13.0% -52.2% Defense and 14,930 18,449 20,114 -19.1% -25.8% security Industrial manufacturing 28,506 27,974 30,813 1.9% -7.5% and other $ $ $ Total -0.2% -28.2% 133,585 133,872 186,104 Notes: ^1 Certain prior period amounts have been reclassified to conform to the current period presentation. On a sequential basis, sales declined 6.4% compared with the fourth quarter of 2012. New orders in the first quarter of 2013 were approximately equal to the fourth quarter 2012 level. The company noted that first quarter orders from customers in its life and health sciences, microelectronics, and industrial and other end markets all increased sequentially compared with the fourth quarter of 2012, and that the sequentially lower first quarter sales to and orders from customers in the scientific research and defense and security end markets were consistent with the continued uncertainty in government funding levels and the normal seasonal patterns in the research market. Operating Income and Net Income Newport reported operating income for the first quarter of 2013 of $4.4 million when calculated in accordance with GAAP. On a non-GAAP basis, excluding amortization of intangible assets, stock-based compensation expense, and acquisition-related, restructuring and severance costs, the company's operating income for the first quarter of 2013 was $11.2 million, or 8.4% of net sales. 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 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 more meaningful comparison of its financial results between periods. Cash, Cash Equivalents and Marketable Securities In the first quarter of 2013, Newport generated $7.5 million in cash from operations, and reduced its total indebtedness by $12.1 million. As of March 30, 2013, the company had $171.6 million in total indebtedness and $96.2 million in cash, restricted cash and marketable securities. Financial Outlook Commenting on Newport's outlook, Mr. Phillippy said, "Based on input from our customers, we expect conditions in several end markets to improve during the course of 2013, resulting in increased sales in the second half of the year. In the second quarter of 2013, we expect sales to be slightly higher than the first quarter level, based on our current backlog and the anticipated market improvement. As a result, we also expect slight sequential increases in our non-GAAP operating income and non-GAAP earnings per diluted share in the second quarter of 2013. In parallel, our long-term growth initiatives continue to gain momentum, and we are confident that these will enable us to accelerate our growth rate in future years. 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, defense and security, and industrial manufacturing 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 itsSECfilings, press releases, videos, audiocasts and more, please visitApple's App Storefor the iPhone and iPad orGoogle Playfor Android mobile devices. INVESTOR CONFERENCE CALL Robert J. Phillippy, President and Chief Executive Officer, and Charles F. Cargile, Senior Vice President and Chief Financial Officer, will host an investor conference call today, May 1, 2013, at 5:00 p.m. Eastern Time (2:00 p.m. Pacific Time) to review the company's results for the first quarter of 2013 and its business outlook for the remainder of 2013. 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 6:00 p.m. Eastern Time on Wednesday, May 1, 2013, and continue through 11:59 p.m. Eastern Time on Wednesday, May 8, 2013. The replay passcode is 34470662. SAFE HARBOR STATEMENT This news release contains forward-looking statements, including without limitation statements regarding the company's expectation that the sequential increases in sales and orders in certain of its end markets may indicate the early signs of improving conditions in those markets; its expectation of significant growth in sales and profitability when macro-conditions improve resulting from its focus on its long-term growth initiatives and its effective execution, its expectation of improved market conditions during the course of 2013 and increased sales in the second half of 2013, the company's expectation of slight sequential increases in sales, non-GAAP operating income and non-GAAP earnings per diluted share levels in the second quarter of 2013, and its expectation that the company's long-term growth initiatives will accelerate its growth rate in future years. 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 achieve expected benefits from the integration of acquired businesses and its other cost savings initiatives; the strength of business conditions in the industries Newport serves, particularly the semiconductor and defense and 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. Newport Corporation Consolidated Statements of Income and Comprehensive Income (Unaudited) Three Months Ended March 30, March 31, (In thousands, except per share 2013 2012 amounts) Net sales $ 132,607 $ 157,167 Cost of sales 77,475 89,098 Gross profit 55,132 68,069 Selling, general and administrative 37,608 44,060 expenses Research and development expense 13,101 13,799 Operating income 4,423 10,210 Interest and other expense, net (2,137) (2,187) Income before income taxes 2,286 8,023 Income tax provision (benefit) (448) 1,435 Net income 2,734 6,588 Net loss attributable to (12) (4) non-controlling interests Net income attributable to Newport $ 2,746 $ Corporation 6,592 Net income $ 2,734 $ 6,588 Other comprehensive income: Foreign currency translation gains (2,452) 1,629 (losses) Unrecognized net pension gains 190 (16) (losses) Unrealized gains (losses) on (98) 33 marketable securities Comprehensive income $ $ 374 8,234 Comprehensive loss attributable to $ $ non-controlling interests (61) (42) Comprehensive income attributable to 435 8,276 Newport Corporation Comprehensive income $ $ 374 8,234 Net income per share attributable to Newport Corporation: Basic $ $ 0.07 0.17 Diluted $ $ 0.07 0.17 Shares used in the computation of net income per share: Basic 38,601 37,731 Diluted 39,260 38,931 Other operating data: New orders received during the period $ 133,585 $ 186,104 Backlog at the end of period scheduled $ 149,716 $ 174,861 to ship within 12 months Newport Corporation Supplemental Non-GAAP Measures (Unaudited) Three Months Ended (In thousands, except per share March 30, March 31, amounts) 2013 2012 Net Sales $ 132,607 $ 157,167 Cost of sales: Cost of sales - GAAP $ $ 77,475 89,098 Amortization of intangible assets 895 180 Stock-based compensation expense 209 117 Acquisition-related, restructuring and 403 808 severance costs Non-GAAP cost of sales 75,968 87,993 Non-GAAP gross profit $ $ 56,639 69,174 Non-GAAP gross profit as a percentage 42.7% 44.0% of net sales Operating income: Operating income - GAAP $ $ 4,423 10,210 Amortization of intangible assets 2,586 5,177 Stock-based compensation 2,269 2,214 Acquisition-related, restructuring and 1,874 2,485 severance costs Gain on sale of assets - (166) Non-GAAP operating income $ $ 11,152 19,920 Non-GAAP operating income as a 8.4% 12.7% percentage of net sales Net income attributable to Newport Corporation: Net income - GAAP $ $ 2,746 6,592 Amortization of intangible assets 2,586 5,177 Stock-based compensation 2,269 2,214 Acquisition-related, restructuring and 1,874 2,485 severance costs Gain on sale of assets - (166) Release of valuation allowance against - (1,391) certain deferred tax assets Income tax provision on non-GAAP (3,315) (2,769) adjustments Non-GAAP net income $ $ 6,160 12,142 Net income per diluted share attributable to Newport Corporation: Net income - GAAP $ $ 0.07 0.17 Total non-GAAP adjustments 0.09 0.14 Non-GAAP net income per diluted share $ $ 0.16 0.31 Newport Corporation Consolidated Balance Sheets (Unaudited) March 30, December 29, (In thousands) 2013 2012 ASSETS Current assets: Cash and cash equivalents $ $ 88,767 83,846 Restricted cash 3,122 3,107 Marketable securities 9,205 8,498 Accounts receivable, net 89,722 89,445 Notes receivable, net 1,514 1,536 Inventories, net 108,262 108,728 Deferred income taxes 19,817 19,872 Prepaid expenses and other current 18,111 17,727 assets Total current assets 333,599 337,680 Property and equipment, net 81,962 82,843 Goodwill 79,388 79,586 Deferred income taxes 5,456 5,646 Intangible assets, net 74,651 77,446 Investments and other assets 35,322 37,760 $ 610,378 $ 620,961 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Short-term borrowings, net $ $ 32,985 35,468 Accounts payable 30,372 31,061 Accrued payroll and related expenses 26,466 29,096 Accrued expenses and other current 34,945 34,696 liabilities Total current liabilities 127,251 127,838 Long-term debt, net 136,170 150,758 Accrued pension liabilities 26,561 27,764 Other liabilities 22,925 23,783 Total stockholders' equity of 296,146 289,432 Newport Non-controlling interests 1,325 1,386 Total stockholders' equity 297,471 290,818 $ 610,378 $ 620,961 Contact: Charles F. Cargile, 949/863-3144 Newport Corporation, Irvine, CA email@example.com or Rob Fink, 212/896-1206 KCSA Strategic Communications firstname.lastname@example.org SOURCE Newport Corporation Website: http://www.newport.com
Newport Corporation Reports First Quarter 2013 Results
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