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 thousands, except percentages, unaudited)       Three Months Ended                                  Percentage                 Percentage
                                                        ------------------

                                                                                                                                                Change vs.    Change vs.

                                                            September 27,             June 28,              September 28,                         Prior       Prior Year

                                                                                 2014                  2014                       2013              Quarter        Period
                                                                                 ----                  ----                       ----              -------        ------


    Sales by End Market
    -------------------


     Scientific research                                                   $32,228               $30,544                    $29,148                    5.5%         10.6%

     Microelectronics                                                       37,113                40,869                     34,699                   -9.2%          7.0%

     Life and health sciences                                              31,126                32,393                     29,220                   -3.9%          6.5%

     Defense and security                                                   13,103                14,481                     15,578                   -9.5%        -15.9%

     Industrial manufacturing and other                                    32,729                34,945                     30,392                   -6.3%          7.7%
                                                                           ------                ------                     ------

                                                  Total                     $146,299              $153,232                   $139,037                   -4.5%          5.2%
                                                                                               ========                   ========


    Orders by End Market
    --------------------


     Scientific research                                                   $30,652               $32,647                    $29,713                   -6.1%          3.2%

     Microelectronics                                                       33,739                35,396                     36,915                   -4.7%         -8.6%

     Life and health sciences                                              37,859                25,932                     30,665                   46.0%         23.5%

     Defense and security                                                   12,947                14,536                     15,172                  -10.9%        -14.7%

     Industrial manufacturing and other                                    32,140                40,523                     31,926                  -20.7%          0.7%
                                                                           ------                ------                     ------

                                                  Total                     $147,337              $149,034                   $144,391                   -1.1%          2.0%
                                                                                               ========                   ========

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.


                                                                                             Newport Corporation

                                                                          Consolidated Statements of Income and Comprehensive Income

                                                                                                 (Unaudited)



                                                                                        Three Months Ended                           Nine Months Ended
                                                                                        ------------------                           -----------------

                                                                                           September 27,                               September 28,            September 27,              September 28,

    (In thousands, except per share amounts)                                                                    2014                                       2013                       2014                       2013
                                                                                                                ----                                       ----                       ----                       ----


    Net sales                                                                                               $146,299                                   $139,037                   $446,421                   $405,878

    Cost of sales                                                                                             80,334                                     79,306                    245,109                    233,778
                                                                                                              ------                                     ------                    -------                    -------

    Gross profit                                                                                              65,965                                     59,731                    201,312                    172,100


    Selling, general and administrative expenses                                                              39,122                                     35,649                    120,413                    111,324

    Research and development expense                                                                          14,082                                     13,129                     42,538                     39,807

    Loss (gain) on sale of assets                                                                                  -                                     4,517                      (411)                     4,517
                                                                                                                 ---                                     -----                       ----                      -----

    Operating income                                                                                          12,761                                      6,436                     38,772                     16,452


    Loss on extinguishment of debt                                                                                 -                                   (3,355)                         -                   (3,355)

    Interest and other expense, net                                                                            (958)                                   (1,293)                   (2,592)                   (5,472)
                                                                                                                ----                                     ------                     ------                     ------

    Income before income taxes                                                                                11,803                                      1,788                     36,180                      7,625


    Income tax provision                                                                                       2,330                                      1,199                      9,769                      1,697
                                                                                                               -----                                      -----                      -----                      -----

    Net income                                                                                                 9,473                                        589                     26,411                      5,928

    Net income attributable to non-controlling interests                                                           3                                        152                        103                         83
                                                                                                                 ---                                        ---                        ---                        ---

    Net income attributable to Newport Corporation                                                            $9,470                                       $437                    $26,308                     $5,845
                                                                                                              ======                                       ====                    =======                     ======



    Net income                                                                                                $9,473                                       $589                    $26,411                     $5,928

    Other comprehensive income:

       Foreign currency translation gains (losses)                                                           (7,203)                                     2,995                    (7,567)                     1,320

       Unrecognized net pension gains (losses)                                                                   204                                       (67)                       306                        161

       Unrealized gains (losses) on marketable securities                                                      (155)                                        22                      (177)                     (126)
                                                                                                                ----                                        ---                       ----                       ----

    Comprehensive income                                                                                      $2,319                                     $3,539                    $18,973                     $7,283
                                                                                                              ======                                     ======                    =======                     ======


    Comprehensive income (loss) attributable to non-controlling interests                                       $(5)                                      $154                       $110                         $8

    Comprehensive income attributable to Newport Corporation                                                   2,324                                      3,385                     18,863                      7,275
                                                                                                               -----                                      -----                     ------                      -----

    Comprehensive income                                                                                      $2,319                                     $3,539                    $18,973                     $7,283
                                                                                                              ======                                     ======                    =======                     ======


    Net income per share attributable to Newport Corporation:

       Basic                                                                                                   $0.24                                      $0.01                      $0.66                      $0.15

       Diluted                                                                                                 $0.23                                      $0.01                      $0.65                      $0.15


    Shares used in the computation of net income per share:

       Basic                                                                                                  39,921                                     39,121                     39,776                     38,935

       Diluted                                                                                                40,612                                     39,657                     40,546                     39,426


    Other operating data:

       New orders received during the period                                                                $147,337                                   $144,391                   $443,655                   $425,617

       Backlog at the end of period scheduled to ship within 12 months                                                                                                        $181,189                   $170,611



                                                                           Newport Corporation

                                                                      Supplemental Non-GAAP Measures

                                                                               (Unaudited)




                                                                                                     Three Months Ended          Nine Months Ended
                                                                                                     ------------------          -----------------

    (In thousands, except percentages and per share amounts)                                            September 27,              September 28,            September 27,           September 28,

                                                                                                                            2014                       2013                    2014                     2013
                                                                                                                            ----                       ----                    ----                     ----

    Net sales                                                                                                           $146,299                   $139,037                $446,421                 $405,878


    Cost of sales:

    Cost of sales - GAAP                                                                                                 $80,334                    $79,306                $245,109                 $233,778

    Amortization of intangible assets                                                                                        806                        922                   2,730                    2,737

    Stock-based compensation expense                                                                                         271                        233                     762                      656

    Acquisition-related, restructuring and severance costs                                                                     -                       521                       -                     924
                                                                                                                             ---                       ---                     ---                     ---

    Non-GAAP cost of sales                                                                                                79,257                     77,630                 241,617                  229,461
                                                                                                                          ------                     ------                 -------                  -------

    Non-GAAP gross profit                                                                                                $67,042                    $61,407                $204,804                 $176,417
                                                                                                                         =======                    =======                ========                 ========


    Non-GAAP gross profit as a percentage of net sales                                                                     45.8%                     44.2%                  45.9%                   43.5%


    Operating income:

    Operating income - GAAP                                                                                              $12,761                     $6,436                 $38,772                  $16,452

    Amortization of intangible assets                                                                                      1,887                      2,550                   6,842                    7,751

    Stock-based compensation expense                                                                                       3,141                      2,445                   8,588                    6,590

    Acquisition-related, restructuring and severance costs                                                                 1,763                      2,365                   3,683                    6,926

    Loss (gain) on sale of assets                                                                                              -                     4,517                   (411)                   4,517
                                                                                                                             ---                     -----                    ----                    -----

    Non-GAAP operating income                                                                                            $19,552                    $18,313                 $57,474                  $42,236
                                                                                                                         =======                    =======                 =======                  =======


    Non-GAAP operating income as a percentage of net sales                                                                 13.4%                     13.2%                  12.9%                   10.4%


    Net income attributable to Newport Corporation:

    Net income - GAAP                                                                                                     $9,470                       $437                 $26,308                   $5,845

    Amortization of intangible assets                                                                                      1,887                      2,550                   6,842                    7,751

    Stock-based compensation expense                                                                                       3,141                      2,445                   8,588                    6,590

    Acquisition-related, restructuring and severance costs                                                                 1,763                      2,365                   3,683                    6,926

    Loss (gain) on sale of assets                                                                                              -                     4,517                   (411)                   4,517

    Loss on extinguishment of debt                                                                                             -                     3,355                       -                   3,355

    Tax benefit from extraterritorial income exclusion                                                                   (1,463)                         -                (1,463)                       -

    Income tax provision on non-GAAP adjustments                                                                         (1,217)                   (3,227)                (4,789)                 (8,624)
                                                                                                                          ------                     ------                  ------                   ------

    Non-GAAP net income                                                                                                  $13,581                    $12,442                 $38,758                  $26,360
                                                                                                                         =======                    =======                 =======                  =======



    Net income per diluted share attributable to Newport Corporation:

    Net income - GAAP                                                                                                      $0.23                      $0.01                   $0.65                    $0.15

    Total non-GAAP adjustments                                                                                              0.10                       0.30                    0.31                     0.52
                                                                                                                            ----                       ----                    ----                     ----

    Non-GAAP net income per diluted share                                                                                  $0.33                      $0.31                   $0.96                    $0.67
                                                                                                                           =====                      =====                   =====                    =====



                                                         Newport Corporation

                                                     Consolidated Balance Sheets

                                                             (Unaudited)



                                                                                 September 27,          December 28,

    (In thousands)                                                                                 2014                  2013
                                                                                                   ----                  ----


    ASSETS

    Current assets:

      Cash and cash equivalents                                                                 $68,980               $53,710

      Restricted cash                                                                             1,622                 2,305

      Marketable securities                                                                         300                 8,219

      Accounts receivable, net                                                                   98,722                96,388

      Inventories, net                                                                          112,653               103,383

      Deferred income taxes                                                                      22,381                22,437

      Prepaid expenses and other current assets                                                  16,228                14,769
                                                                                                 ------                ------

         Total current assets                                                                   320,886               301,211


    Property and equipment, net                                                                  82,836                80,516

    Goodwill                                                                                     78,303                78,801

    Deferred income taxes                                                                         4,236                 4,474

    Intangible assets, net                                                                       60,077                67,342

    Investments and other assets                                                                 29,664                32,885
                                                                                                 ------                ------

                                                                                               $576,002              $565,229
                                                                                               ========              ========


    LIABILITIES AND STOCKHOLDERS' EQUITY

    Current liabilities:

      Short-term borrowings                                                                      $2,180                $4,861

      Accounts payable                                                                           33,957                31,714

      Accrued payroll and related expenses                                                       33,371                31,015

      Accrued expenses and other current liabilities                                             34,038                35,341
                                                                                                 ------                ------

         Total current liabilities                                                              103,546               102,931


    Long-term debt                                                                               71,148                83,646

    Pension liabilities                                                                          26,509                27,093

    Deferred income taxes and other liabilities                                                  20,366                23,182


    Total stockholders' equity of Newport                                                       354,212               326,968

    Non-controlling interests                                                                       221                 1,409
                                                                                                    ---                 -----

    Total stockholders' equity                                                                  354,433               328,377
                                                                                                -------               -------

                                                                                               $576,002              $565,229
                                                                                               ========              ========

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

SOURCE Newport Corporation