|Newport Corporation Reports Second Quarter And First Half 2012 Results|
|- Strong Earnings and Cash Generation -|
- Company Implementing Plan to Achieve $15 Million in Annualized Cost Savings -
IRVINE, Calif., Aug. 1, 2012 /PRNewswire/ -- Newport Corporation (NASDAQ: NEWP) today reported financial results for its second quarter and six months ended June 30, 2012, and its outlook for the third quarter of 2012. The company noted the following highlights regarding the second quarter:
- Net sales of $153.7 million;
- Net income attributable to Newport Corporation of $9.2 million, or $0.24 per diluted share, when measured according to generally accepted accounting principles (GAAP);
- Net income attributable to Newport Corporation of $11.6 million, or $0.30 per diluted share, when measured on a non-GAAP basis, excluding certain expenses related to recent acquisitions, restructuring and severance costs, the amortization of intangible assets, stock-based compensation expense, and a gain resulting from the sale of a minority-owned investment, net of the tax impact of such excluded amounts;
- Cash from operations of $15.1 million, of which $11.1 million was used to reduce indebtedness; and
- The company is implementing a plan to achieve annualized cost savings of $15 million per year through integration synergies and other cost reductions.
Commenting on the results, Robert J. Phillippy, Newport's President and Chief Executive Officer, stated, "In the second quarter of 2012, we increased our operating income and cash from operations sequentially over the first quarter despite a slight decline in sales. We also had a very productive quarter in securing new business and launching new products, with several design wins with OEM customers and our introduction of the industry's first production ready, high-precision 450mm wafer handling solution for next generation semiconductor manufacturing."
Sales and Orders
Newport's sales and orders by end market were as follows:
1 Certain prior period amounts have been reclassified to conform to the current period presentation.
In the second quarter of 2012, sales and orders increased 18.1% and 3.2%, respectively, compared with the second quarter of 2011, as weakness in some of the company's end markets was more than offset by the contributions from the three acquisitions completed by the company in the last year. These acquisitions added $34.7 million in sales and $26.8 million in new orders in the second quarter of 2012.
On a sequential basis, sales and orders declined from the first quarter levels. Sales declined 2.2% compared with the first quarter of 2012, as stronger sales to customers in Newport's microelectronics and industrial markets partially offset the effect of weakness in the company's other target end markets, which have been negatively impacted by uncertainty regarding government funding levels. New orders declined 20.3% compared with the first quarter of 2012, due to lower orders from life and health sciences customers, offset in part by higher orders from customers in all of the company's other target end markets. The company noted that first quarter orders from life and health sciences customers included a $37.7 million order for ultrafast lasers that did not repeat in the second quarter.
Operating Income and Net Income
Newport reported operating income for the second quarter of 2012 of $11.3 million, or 7.4% of net sales, when calculated in accordance with generally accepted accounting principles (GAAP). On a non-GAAP basis, excluding acquisition-related expenses, restructuring and severance costs, the amortization of intangible assets and stock-based compensation expense, the company's operating income for the second quarter of 2012 was $20.2 million, or 13.1% of net sales.
The company reported net income attributable to Newport Corporation for the second quarter of 2012 of $9.2 million, or $0.24 per diluted share, when calculated in accordance with GAAP. On a non-GAAP basis, excluding the items referenced above and a gain on the sale of assets, net of the tax impact of such excluded amounts, net income attributable to Newport Corporation for the second quarter of 2012 was $11.6 million, or $0.30 per diluted share.
The company has provided a reconciliation of its 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 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
Newport ended the second quarter of 2012 with $57.4 million in cash, cash equivalents and marketable securities, an increase of $6.1 million compared with the first quarter of 2012. In the first six months of 2012, Newport has reduced its total indebtedness by $32.6 million.
Cost Savings Plan
The company noted that it is implementing a broad-based initiative designed to achieve annualized cost savings of $15 million per year. This initiative includes actions currently underway to maximize operating efficiencies through the integration of its recent acquisitions, as well as other cost reduction steps across most of Newport's businesses. The early results of this cost reduction plan contributed to the $2.2 million sequential reduction in selling, general and administrative expenses in the second quarter compared with the first quarter level.
Mr. Phillippy continued, "We expect these actions to maximize the benefits of our recent acquisitions, enhance our cash generation and ensure continued growth in profitability. In parallel, we will continue to drive future growth by investing in technology and product development to build upon our industry leading portfolio."
The company noted that it expects its end market demand in the third quarter of 2012 to be similar to the second quarter level. As a result, Newport now expects its sales in the third quarter of 2012 to be similar to or slightly lower than the amount recorded in the second quarter of 2012. As a result of the profit improvement actions in process, the company expects its third quarter 2012 operating income and earnings per diluted share, on a non-GAAP basis, to be slightly higher than the second quarter levels.
Mr. Phillippy concluded, "Our outlook for the remainder of 2012 is more cautious than it was earlier in the year due to the general weakness in economic conditions and, specifically, uncertainty related to government funding. We are taking actions to enhance our profitability and cash generation, while continuing to invest in opportunities to drive future growth. By taking these actions, including capturing integration savings, we will fortify our business in the near term and position ourselves well for enhanced growth and greater profit leverage once global macroeconomic conditions improve."
ABOUT NEWPORT CORPORATION
Newport Corporation is a leading global supplier of advanced-technology products and systems to customers in the scientific research, aerospace and defense/security, microelectronics, life and health sciences and precision industrial manufacturing markets. Newport's innovative solutions leverage its expertise in photonics technologies, including lasers, photonics instrumentation, sub-micron positioning systems, vibration isolation, optical components and subsystems, precision automation and three-dimensional non-contact measurement equipment, 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 and Chief Financial Officer, will host an investor conference call today, August 1, 2012, at 5:00 p.m. Eastern time (2:00 p.m. Pacific time) to review the company's results for the second quarter of 2012 and its outlook for the third quarter of 2012. The call will be open to all interested investors through a live audio web broadcast via the Internet at www.newport.com/investors and http://www.fulldisclosure.com/. The call also will be available to investors and analysts by dialing 877-856-1965 within the U.S. and Canada or 719-325-4790 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 and 719-457-0820 from abroad. Playback will be available beginning at 8:00 p.m. Eastern time today and continue through 8:00 p.m. Eastern time on Wednesday, August 8, 2012. The replay passcode is 2543312.
SAFE HARBOR STATEMENT
This news release contains forward-looking statements, including without limitation statements regarding the expected cost savings and other impacts of the company's cost reduction initiatives, its expectation of future sales growth resulting from its investments in technology and product development, and Newport's expected end market demand, sales, non-GAAP operating income and non-GAAP earnings per diluted share in the third quarter of 2012. 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 Ophir Optronics, High Q Laser and ILX Lightwave and its other cost savings initiatives; 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 the life and health sciences market; 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.
SOURCE Newport Corporation
Charles F. Cargile, Newport Corporation, +1-949-863-3144, email@example.com; Dan Peoples, Makinson Cowell (US), +1-858-552-8146