NEWPORT CORP IRVINE, Calif., Nov. 4, 2015 /PRNewswire/ -- Newport Corporation (NASDAQ: NEWP) today reported financial results for its third quarter and nine months ended October 3, 2015, and its outlook for the fourth quarter of 2015. The company noted the following regarding the third quarter results:
-- Net sales of $147.6 million and new orders of $146.5 million;
-- Net income of $7.1 million, or $0.18 per diluted share, when measured
according to generally accepted accounting principles (GAAP);
-- Non-GAAP net income of $12.4 million, or $0.31 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
-- Repurchases of approximately 1.0 million shares of common stock during
the quarter, for a total expenditure of $15.7 million.
Robert Phillippy, President and Chief Executive Officer, commented: "Our third quarter sales and profit met our expectations, and we expect our financial performance to gain additional momentum in the fourth quarter of 2015 as we continue to focus on achieving new design wins, increasing share in our target markets and implementing our cost reduction initiatives."
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.
October 3, July 4, September 27, Prior Prior Year
2015 2015 2014 Quarter Period
---- ---- ---- ------- ------
Sales by End Market
-------------------
Scientific research $36,414 $33,421 $32,228 9.0% 13.0%
Microelectronics 34,945 38,948 37,113 -10.3% -5.8%
Life and health sciences 29,354 26,341 31,126 11.4% -5.7%
Defense and security 14,770 15,073 13,103 -2.0% 12.7%
Industrial manufacturing and other 32,077 34,194 32,729 -6.2% -2.0%
Total $147,560 $147,977 $146,299 -0.3% 0.9%
======== ========
Orders by End Market
--------------------
Scientific research $33,960 $37,285 $30,652 -8.9% 10.8%
Microelectronics 38,057 40,081 33,739 -5.0% 12.8%
Life and health sciences 27,525 26,061 37,859 5.6% -27.3%
Defense and security 15,076 17,477 12,947 -13.7% 16.4%
Industrial manufacturing and other 31,840 31,034 32,140 2.6% -0.9%
Total $146,458 $151,938 $147,337 -3.6% -0.6%
======== ========
Operating Income and Net Income
Newport reported operating income for the third quarter of 2015 of $10.5 million, or 7.1% 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 2015 was $17.5 million, or 11.9% of net sales.
On a GAAP basis, the company reported net income for the third quarter of 2015 of $7.1 million, or $0.18 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 third quarter of 2015 was $12.4 million, or $0.31 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 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.
Liquidity and Share Repurchase Program
As of October 3, 2015, the company had a total of $31.4 million in cash, cash equivalents and restricted cash, total indebtedness of $87.8 million and $140.3 million of borrowing capacity available on its revolving credit facility.
Mr. Phillippy commented, "We accelerated our share repurchase program during the third quarter, repurchasing approximately 1.0 million shares for a total of $15.7 million. During the last five quarters we have used $38.2 million to repurchase a total of approximately 2.2 million shares. Share repurchases are an important part of our capital allocation strategy, and we expect to continue to repurchase shares for the foreseeable future."
The company noted that the amount and timing of future repurchases will depend on factors such as trading limitations, the company's share price level, its other capital requirements and the terms of its credit facility.
Financial Outlook
Commenting on Newport's outlook, Mr. Phillippy said, "We expect our sales and earnings to increase sequentially in the fourth quarter of 2015. We expect our sales to be in the range of $150 million to $156 million, and our non-GAAP earnings per diluted share to be in the range of $0.33 to $0.37. We also expect to generate more than $20 million in cash from operations in the fourth quarter of 2015."
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.
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, November 4, 2015, at 11:30 a.m. Eastern time (8:30 a.m. Pacific time) to review the company's results for the third quarter of 2015 and its business outlook for the fourth quarter of 2015. 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 will also be available to investors and analysts by dialing (877) 407-8133 within the U.S. and Canada or (201) 689-8040 from abroad.
The webcast will be archived on the Newport investor relations website and a telephonic playback of the conference call will also be available by calling (877) 660-6853 within the U.S. and Canada and (201) 612-7415 from abroad. The telephonic playback will be available beginning at 4:00 p.m. Eastern time on Wednesday, November 4, 2015, and continue through 11:59 p.m. Eastern time on Wednesday, November 11, 2015. The replay passcode is 13623362.
SAFE HARBOR STATEMENT
This news release contains forward-looking statements, including without limitation statements regarding the company's expectation of improved financial performance in the fourth quarter of 2015; the company's expectation that it will continue to repurchase shares for the foreseeable future; and the company's expected sales, non-GAAP earnings per diluted share and cash from operations in the fourth quarter of 2015. 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 the expected benefits from the integration of acquired businesses and from its cost reduction actions; 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 Nine Months Ended
------------------ -----------------
October 3, September 27, October 3, September 27,
(In thousands, except per share amounts) 2015 2014 2015 2014
---- ---- ---- ----
Net sales $147,560 $146,299 $452,192 $446,421
Cost of sales 85,133 80,334 255,565 245,109
------ ------ ------- -------
Gross profit 62,427 65,965 196,627 201,312
Selling, general and administrative expense 37,730 39,122 117,029 120,413
Research and development expense 14,232 14,082 44,345 42,538
Loss (gain) on sale or other disposal of assets, net - - 1,088 (411)
--- --- ----- ----
Operating income 10,465 12,761 34,165 38,772
Interest and other expense, net (1,353) (958) (3,320) (2,592)
------ ---- ------ ------
Income before income taxes 9,112 11,803 30,845 36,180
Income tax provision 2,009 2,330 9,308 9,769
----- ----- ----- -----
Net income 7,103 9,473 21,537 26,411
Net income attributable to non-controlling interests - 3 - 103
Net income attributable to Newport Corporation $7,103 $9,470 $21,537 $26,308
====== ====== ======= =======
Net income $7,103 $9,473 $21,537 $26,411
Other comprehensive income (loss):
Foreign currency translation gains (losses) 673 (7,203) (5,290) (7,567)
Unrecognized net pension gains 79 204 508 306
Unrealized losses on investments and marketable securities (13) (155) (122) (177)
--- ---- ---- ----
Other comprehensive income (loss) 739 (7,154) (4,904) (7,438)
Comprehensive income $7,842 $2,319 $16,633 $18,973
====== ====== ======= =======
Comprehensive (loss) income attributable to non-controlling interests $ - $(5) $ - $110
Comprehensive income attributable to Newport Corporation 7,842 2,324 16,633 18,863
Comprehensive income $7,842 $2,319 $16,633 $18,973
====== ====== ======= =======
Net income per share attributable to Newport Corporation:
Basic $0.18 $0.24 $0.55 $0.66
Diluted $0.18 $0.23 $0.54 $0.65
Shares used in the computation of net income per share:
Basic 38,982 39,921 39,434 39,776
Diluted 39,374 40,612 40,066 40,546
Other operating data:
New orders received during the period $146,458 $147,337 $453,021 $443,655
Backlog at the end of period scheduled to ship within 12 months $168,418 $181,189
Newport Corporation
Supplemental Non-GAAP Measures
(Unaudited)
Three Months Ended Nine Months Ended
------------------ -----------------
(In thousands, except percentages and per share amounts) October 3, September 27, October 3, September 27,
2015 2014 2015 2014
---- ---- ---- ----
Net sales $147,560 $146,299 $452,192 $446,421
Cost of sales:
Cost of sales - GAAP $85,133 $80,334 $255,565 $245,109
Amortization of intangible assets 968 806 2,877 2,730
Stock-based compensation expense 367 271 1,048 762
--- --- ----- ---
Non-GAAP cost of sales 83,798 79,257 251,640 241,617
Non-GAAP gross profit $63,762 $67,042 $200,552 $204,804
======= ======= ======== ========
Non-GAAP gross profit as a percentage of net sales 43.2% 45.8% 44.4% 45.9%
Operating income:
Operating income - GAAP $10,465 $12,761 $34,165 $38,772
Amortization of intangible assets 2,128 1,887 6,361 6,842
Stock-based compensation expense 3,231 3,141 10,058 8,588
Acquisition-related, restructuring and severance costs 1,721 1,763 3,641 3,683
Loss (gain) on sale or other disposal of assets, net - - 1,088 (411)
Non-GAAP operating income $17,545 $19,552 $55,313 $57,474
======= ======= ======= =======
Non-GAAP operating income as a percentage of net sales 11.9% 13.4% 12.2% 12.9%
Net income attributable to Newport Corporation:
Net income - GAAP $7,103 $9,470 $21,537 $26,308
Amortization of intangible assets 2,128 1,887 6,361 6,842
Stock-based compensation expense 3,231 3,141 10,058 8,588
Acquisition-related, restructuring and severance costs 1,721 1,763 3,641 3,683
Loss (gain) on sale or other disposal of assets, net - - 1,088 (411)
Tax benefit from extraterritorial income exclusions - (1,463) - (1,463)
Income tax provision on non-GAAP adjustments (1,801) (1,217) (5,841) (4,789)
Non-GAAP net income $12,382 $13,581 $36,844 $38,758
======= ======= ======= =======
Net income per diluted share attributable to Newport Corporation:
Net income - GAAP $0.18 $0.23 $0.54 $0.65
Total non-GAAP adjustments 0.13 0.10 0.38 0.31
Non-GAAP net income per diluted share $0.31 $0.33 $0.92 $0.96
===== ===== ===== =====
Three Months Ending
Financial outlook - earnings per diluted share January 2, 2016
---------------
Earnings per diluted share - GAAP $0.19 - $0.23
Stock-based compensation expense 0.09
Amortization of intangible assets 0.05
Acquisition related, restructuring and severance costs 0.05
Income tax provision on non-GAAP adjustments (0.05)
Non-GAAP earnings per diluted share $0.33 - $0.37
=============
Newport Corporation
Consolidated Balance Sheets
(Unaudited)
October 3, January 3,
(In thousands) 2015 2015
---- ----
ASSETS
Current assets:
Cash and cash
equivalents $30,440 $46,883
Restricted cash 974 1,704
Marketable securities - 57
Accounts receivable,
net 103,714 96,512
Inventories, net 122,845 112,440
Current deferred tax
assets 20,606 20,734
Prepaid expenses and
other current assets 18,294 14,948
------ ------
Total current assets 296,873 293,278
Property and
equipment, net 84,362 82,793
Goodwill 103,854 97,524
Long-term deferred
tax assets 6,049 5,005
Intangible assets,
net 68,228 70,811
Investments and other
assets 28,486 30,516
Total assets $587,852 $579,927
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Short-term borrowings $3,579 $3,772
Accounts payable 31,281 31,448
Accrued payroll and
related expenses 31,890 34,607
Accrued expenses and
other current
liabilities 30,785 31,797
------ ------
Total current
liabilities 97,535 101,624
Long-term debt 84,254 71,000
Pension liabilities 29,432 28,554
Long-term deferred
tax liabilities 14,119 14,272
Other long-term
liabilities 6,881 7,773
Total stockholders'
equity 355,631 356,704
Total liabilities and
stockholders' equity $587,852 $579,927
======== ========
To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/newport-corporation-reports-third-quarter-2015-results-300172006.html
SOURCE Newport Corporation
