Newport Corporation Reports Fourth Quarter and Full Year 2013 Results - WLOX.com - The News for South Mississippi

Newport Corporation Reports Fourth Quarter and Full Year 2013 Results

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SOURCE Newport Corporation

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 thousands, except percentages, unaudited)

Three Months Ended


Percentage  

Percentage  









Change vs.

Change vs.





December 28,

September 28,

December 29,


Prior 

Prior Year





2013

2013

2012 1 


Quarter

Period











Sales by End Market



















 Scientific research  




$           33,077

$           29,148

$           33,319


13.5%

-0.7%

 Microelectronics 




39,639

34,699

28,632


14.2%

38.4%

 Life and health sciences 



32,902

29,220

32,283


12.6%

1.9%

 Defense and security 




13,875

15,578

18,269


-10.9%

-24.1%

 Industrial manufacturing and other  


34,683

30,392

29,140


14.1%

19.0%


 Total 



$         154,176

$         139,037

$         141,643


10.9%

8.8%











Orders by End Market



















 Scientific research  




$           34,729

$           29,713

$           34,321


16.9%

1.2%

 Microelectronics 




53,504

36,915

26,153


44.9%

104.6%

 Life and health sciences 



29,951

30,665

26,975


-2.3%

11.0%

 Defense and security 




14,111

15,172

18,403


-7.0%

-23.3%

 Industrial manufacturing and other  


34,476

31,926

28,020


8.0%

23.0%


 Total 



$         166,771

$         144,391

$         133,872


15.5%

24.6%


Notes:   

1 Certain prior period amounts have been reclassified to conform to the current period presentation.


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.









Newport Corporation

Consolidated Statements of Income and Comprehensive Income

(Unaudited)


















Three Months Ended


Year Ended


December 28,


December 29,


December 28,


December 29,

(In thousands, except per share amounts)

2013


2012


2013


2012









Net sales

$         154,176


$         141,643


$         560,054


$         595,346

Cost of sales

88,563


78,815


322,341


334,758

Gross profit

65,613


62,828


237,713


260,588









Selling, general and administrative expenses

37,859


35,914


149,183


159,181

Research and development expense

12,717


12,395


52,524


52,714

Impairment charge

-


130,853


-


130,853

Loss on sale of assets

208


-


4,725


-

Operating income 

14,829


(116,334)


31,281


(82,160)









Gain on sale of investment

-


-


-


6,248

Loss on extinguishment of debt

-


-


(3,355)


-

Interest and other expense, net

(1,018)


(1,462)


(6,490)


(8,559)

Income before income taxes

13,811


(117,796)


21,436


(84,471)









Income tax provision (benefit)

4,001


(4,665)


5,698


5,479

Net income (loss)  

9,810


(113,131)


15,738


(89,950)

Net income (loss) attributable to non-controlling interests

54


(326)


137


(527)

Net income (loss) attributable to Newport Corporation

$             9,756


$        (112,805)


$           15,601


$          (89,423)

















Net income (loss)

$             9,810


$        (113,131)


$           15,738


$          (89,950)

Other comprehensive income (loss):








Foreign currency translation gains 

839


1,668


2,159


1,169

Unrecognized net pension gains (losses)

688


(2,339)


849


(2,243)

Unrealized gains on marketable securities

334


168


208


48

Comprehensive income (loss)

$           11,671


$        (113,634)


$           18,954


$          (90,976)









Comprehensive income (loss) attributable to non-controlling interests

$                  15


$               (384)


$                  23


$               (593)

Comprehensive income (loss) attributable to Newport Corporation

11,656


(113,250)


18,931


(90,383)

Comprehensive income (loss)  

$           11,671


$        (113,634)


$           18,954


$          (90,976)









Net income (loss) per share attributable to Newport Corporation:









Basic

$               0.25


$              (2.94)


$               0.40


$              (2.35)

Diluted

$               0.24


$              (2.94)


$               0.39


$              (2.35)









Shares used in the computation of net income (loss) per share:








Basic

39,232


38,316


39,010


38,133

Diluted

39,934


38,316


39,558


38,133









Other operating data:








New orders received during the period

$         166,771


$         133,872


$         592,389


$         612,035

Backlog at the end of period scheduled to ship within 12 months





$         189,919


$         154,216









 










Newport Corporation




Supplemental Non-GAAP Measures




(Unaudited)

































Three Months Ended


Year Ended

(In thousands, except per share amounts)


December 28,
2013


December 29,
2012


December 28,
2013


December 29,
2012










Net sales


$ 154,176


$ 141,643


$ 560,054


$ 595,346










Cost of sales:









Cost of sales - GAAP


$ 88,563


$ 78,815


$ 322,341


$ 334,758

Amortization of intangible assets


961


890


3,698


2,321

Stock-based compensation expense


252


203


938


693

Integration-related, restructuring and severance costs


447


-


1,371


808

Non-GAAP cost of sales


86,903


77,722


316,334


330,936

Non-GAAP gross profit


$ 67,273


$ 63,921


$ 243,720


$ 264,410










Non-GAAP gross profit as a percentage of net sales


43.6%


45.1%


43.5%


44.4%










Operating income (loss):









Operating income (loss) - GAAP


$ 14,829


$ (116,334)


$ 31,281


$ (82,160)

Impairment charge


-


130,853


-


130,853

Amortization of intangible assets


2,653


2,878


10,404


17,701

Stock-based compensation expense


2,583


2,104


9,173


8,369

Integration-related, restructuring and severance costs


2,780


2,073


9,712


8,261

Loss (gain) on sale of assets


208


-


4,725


(166)

Non-GAAP operating income


$ 23,053


$ 21,574


$ 65,295


$ 82,858










Non-GAAP operating income as a percentage of net sales


15.0%


15.2%


11.7%


13.9%










Net income (loss) attributable to Newport Corporation:









Net income (loss) - GAAP


$ 9,756


$ (112,805)


$ 15,601


$ (89,423)

Impairment charge


-


130,853


-


130,853

Amortization of intangible assets


2,653


2,878


10,404


17,701

Stock-based compensation expense


2,583


2,104


9,173


8,369

Integration-related, restructuring and severance costs


2,780


2,073


9,712


8,261

Loss (gain) on sale of assets


208


-


4,725


(6,414)

Loss on extinguishment of debt


-


-


3,355


-

Release of valuation allowance against certain deferred tax assets


-


-


-


(1,815)

Income tax provision on non-GAAP adjustments


(2,640)


(10,848)


(11,264)


(15,842)

Non-GAAP net income


$ 15,340


$ 14,255


$ 41,706


$ 51,690



















Net income (loss) per diluted share attributable to Newport Corporation:









Net income (loss) - GAAP


$ 0.24


$ (2.94)


$ 0.39


$ (2.35)

Total non-GAAP adjustments


0.14


3.31


0.66


3.68

Non-GAAP net income per diluted share


$ 0.38


$ 0.37


$ 1.05


$ 1.33



















Dilutive shares used in computation of non-GAAP net income


39,934


38,764


39,558


38,810










 





Newport Corporation

Consolidated Balance Sheets

(Unaudited)










December 28,


December 29,

(In thousands)

2013


2012





ASSETS




Current assets:




Cash and cash equivalents

$             53,710


$             88,767

Restricted cash

2,305


3,107

Marketable securities

8,219


8,498

Accounts receivable, net 

96,388


89,445

Inventories, net

103,383


108,728

Deferred income taxes

22,437


19,872

Prepaid expenses and other current assets

14,769


19,263

Total current assets

301,211


337,680





Property and equipment, net

80,516


82,843

Goodwill

78,801


79,586

Deferred income taxes

4,474


5,646

Intangible assets, net

67,342


77,446

Investments and other assets

32,885


37,760


$           565,229


$           620,961





LIABILITIES AND STOCKHOLDERS' EQUITY




Current liabilities:




Short-term borrowings, net

$               4,861


$             32,985

Accounts payable

31,714


31,061

Accrued payroll and related expenses

31,015


29,096

Accrued expenses and other current liabilities


35,341


34,696

Total current liabilities

102,931


127,838





Long-term debt, net 

83,646


150,758

Accrued pension liabilities

27,093


27,764

Other liabilities

23,182


23,783





Total stockholders' equity of Newport 

326,968


289,432

Non-controlling interests

1,409


1,386

Total stockholders' equity 

328,377


290,818


$           565,229


$           620,961





Contact:
Charles F. Cargile, 949/863-3144
Newport Corporation, Irvine, CA
investor@newport.com
or
Rob Fink, 212/896-1206
KCSA Strategic Communications
newport@kcsa.com

©2012 PR Newswire. All Rights Reserved.

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