Newport Corporation Reports Second Quarter And First Half 2015 Results

IRVINE, Calif., Aug. 4, 2015 /PRNewswire/ -- Newport Corporation (NASDAQ: NEWP) today reported financial results for its second quarter and six months ended July 4, 2015, and its outlook for the third quarter and second half of 2015.  The company noted the following regarding the second quarter results:

• Net sales of $148.0 million and new orders of $151.9 million;
• Net income of $5.8 million, or $0.14 per diluted share, when measured according to generally accepted accounting principles (GAAP);
• Non-GAAP net income of $9.9 million, or $0.25 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;
• Cash generated from operations of $20.5 million; and
• Repurchases of approximately 324,000 shares of common stock during the quarter, for a total of approximately $6.2 million.

Robert Phillippy, President and Chief Executive Officer, commented:  "Our second quarter sales and earnings were below our expectations, and our near-term outlook has moderated in certain areas of our business.  Accordingly, we are implementing cost reduction actions in these areas to align our cost base with current business conditions."

Newport's sales and orders by end market were as follows:

Operating Income and Net Income

Newport reported operating income for the second quarter of 2015 of $10.1 million, or 6.8% 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 second quarter of 2015 was $15.9 million, or 10.8% of net sales.

On a GAAP basis, the company reported net income for the second quarter of 2015 of $5.8 million, or $0.14 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 second quarter of 2015 was $9.9 million, or $0.25 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 July 4, 2015, the company had a total of $41.0 million in cash, cash equivalents, restricted cash and marketable securities, total indebtedness of $80.3 million and $156.0 million of borrowing capacity available on its revolving credit facility.

Mr. Phillippy commented, "Our cash generation continues to be strong, with $20.5 million in cash from operations in the second quarter, and we used $6.2 million of this cash to repurchase an additional 324,000 shares during the quarter.  Share repurchases are an important part of our capital allocation strategy, and during the last four quarters we have used $22.5 million to repurchase a total of approximately 1.2 million shares.  We have 2.7 million shares remaining available for repurchase under the program previously authorized by our board of directors, 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 the company's share price level, its other capital requirements and the terms of its credit facility.

Cost Reduction Actions

The company announced that it plans to reduce personnel and other costs to improve its profitability in light of current business conditions.  These actions are designed to reduce the company's costs by approximately $12 million annually.

Mr. Phillippy stated, "Our revenue outlook has become more cautious in certain areas of our business, particularly our Lasers Group and the U.S. operations of our Optics Group, so we have initiated steps to streamline our cost structure.  The actions will be implemented over the next two quarters, and we expect them to positively impact our second half results, with the full benefit reflected in the first quarter of 2016.  These targeted cost reductions are focused on specific business areas where we have experienced market weakness, and programs that are not achieving their targets.  We plan to continue investing in a number of areas where our revenue and profit growth initiatives are achieving success."

The company also noted that the previously announced closure of its North Andover, Massachusetts facility remains on schedule.  The company expects that the closure will be completed by the end of 2015 and will result in approximately $2 million of cost savings in 2016.

Financial Outlook

Commenting on Newport's outlook, Mr. Phillippy said, "We expect conditions in the third quarter of 2015 to be similar to those we experienced in the second quarter, and as such, we expect our third quarter sales to be similar to the second quarter level.  We expect our sales to be higher sequentially in the fourth quarter of 2015, resulting in a year-over-year increase in sales for the full year.  For the third quarter of 2015, we expect our non-GAAP earnings per diluted share to be in the range of $0.27 to $0.31.  In addition, we expect our cost reduction actions to give us stronger profit leverage in the fourth quarter and beyond."

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.  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, August 4, 2015, at 5:00 p.m. Eastern time (2:00 p.m. Pacific time) to review the company's results for the second quarter and first half of 2015 and its business outlook for the third quarter and second half 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 also will 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 8:00 p.m. Eastern time on Tuesday, August 4, 2015, and continue through 11:59 p.m. Eastern time on Tuesday, August 11, 2015. The replay passcode is 13615921.

SAFE HARBOR STATEMENT

This news release contains forward-looking statements, including without limitation statements regarding the company's expectation of continuing to repurchase shares for the foreseeable future; the company's planned cost reduction actions and planned closure of its North Andover facility and the expected amounts and timing of the benefits anticipated to result from such actions; the company's expectation of similar business conditions and sales levels in the third quarter of 2015 compared with the second quarter of 2015; its expectation of achieving higher sales in the fourth quarter of 2015 versus the third quarter of 2015 and a year-over-year increase in sales for the full year of 2015; its expected range of non-GAAP earnings per diluted share in the third quarter of 2015; and the company's expectation of stronger profit leverage in the future resulting from its cost reduction actions.  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.

To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/newport-corporation-reports-second-quarter-and-first-half-2015-results-300123469.html

SOURCE Newport Corporation

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