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Company Tech News as it Breaks
Newport Corporation Reports Fourth Quarter And Year End 2012 Results
Submitted by admin on 2/20/2013 @ 1:05 PM
Companies mentioned in this article:
Newport Corporation
IRVINE, Calif., Feb. 20, 2013 /PRNewswire/ -- Newport Corporation (NASDAQ: NEWP) today reported financial results for its fourth quarter and full year ended December 29, 2012, and its outlook for 2013. The company noted the following regarding the fourth quarter results:
-- Net sales of $141.6 million;
-- Net loss attributable to Newport Corporation of $112.8 million, or $2.94
per share, when measured according to generally accepted accounting
principles (GAAP);
-- Non-GAAP net income of $14.3 million, or $0.37 per diluted share,
excluding the impairment of assets related to Ophir, acquisition
expenses, restructuring and severance costs, the amortization of
intangible assets, stock-based compensation expense, and the tax impact
of excluded amounts; and
-- Cash generated from operations of $27.1 million, which contributed to an
increase in cash and marketable securities of $23.5 million in the
fourth quarter, to $100.4 million.
Commenting on the results, Robert J. Phillippy, Newport's President and Chief Executive Officer, stated, "The fourth quarter was another demonstration of solid operational execution by the Newport team. Our non-GAAP operating income, non-GAAP earnings per share and cash from operations all reached their highest levels of the year, despite a slight sequential reduction in revenue. We continue to implement our strategic plan, with specific focus on long-term growth initiatives and effective operational execution, to position Newport to achieve significant growth in sales and profitability in the future."
Sales and Orders
Newport's sales and orders by end market were as follows:
(In thousands, except percentages, unaudited) Three Months Ended Year Ended Percentage Change
vs. Prior Year
Period
------------------ ---------- -----------------
Fourth Year
December 29, December 31, December 29, December 31, Quarter Ended
2012 2011 (1) 2012 2011 (1) 2012 2012
---- ------- ---- ------- ---- ----
Sales by End Market
-------------------
Scientific research and defense/security $51,630 $60,826 $202,548 $183,702 -15.1% 10.3%
Microelectronics 28,632 35,778 138,773 157,786 -20.0% -12.0%
Life and health sciences 32,283 37,985 132,268 120,037 -15.0% 10.2%
Industrial manufacturing and other 29,098 26,324 121,757 83,529 10.5% 45.8%
Total $141,643 $160,913 $595,346 $545,054 -12.0% 9.2%
======== ========
Orders by End Market
--------------------
Scientific research and defense/security $52,771 $55,787 $203,379 $183,526 -5.4% 10.8%
Microelectronics 26,153 31,701 142,900 163,536 -17.5% -12.6%
Life and health sciences 26,975 37,258 143,275 113,869 -27.6% 25.8%
Industrial manufacturing and other 27,973 26,226 122,481 82,065 6.7% 49.2%
Total $133,872 $150,972 $612,035 $542,996 -11.3% 12.7%
======== ========
Notes:
(1 )Certain prior period amounts have been reclassified to conform to the current period presentation.
In the fourth quarter of 2012, the company's sales and orders decreased 12.0% and 11.3%, respectively, compared with the fourth quarter of 2011, due to weakness in most of its end markets. However, the company noted that sales to and orders from customers in its industrial manufacturing and other end markets increased 10.5% and 6.7%, respectively, compared with the prior year period.
On a sequential basis, sales declined slightly compared with the third quarter of 2012, due to weaker demand in the microelectronics and industrial manufacturing markets, offset by higher sales to customers in the scientific research and life and health sciences markets. New orders in the fourth quarter of 2012 declined 6.9% compared with the third quarter level, due primarily to lower demand from customers in the microelectronics and life and health sciences end markets, offset in part by higher demand from customers in the scientific research and industrial manufacturing end markets.
Operating Income (Loss) and Net Income (Loss)
Newport reported an operating loss for the fourth quarter of 2012 of $116.3 million when calculated in accordance with GAAP. This operating loss was due to a $130.9 million non-cash charge relating to the impairment of goodwill, intangible and other assets associated with the acquisition of Ophir. On a non-GAAP basis, excluding the impairment charge related to Ophir, acquisition-related expenses, restructuring and severance costs, amortization of intangible assets and stock-based compensation expense, the company's operating income for the fourth quarter of 2012 was $21.6 million, or 15.2% of net sales.
On a GAAP basis, the company reported a net loss attributable to Newport Corporation for the fourth quarter of 2012 of $112.8 million, or $2.94 per share. On a non-GAAP basis, excluding the items referenced above and the tax impact of such excluded amounts, net income for the fourth quarter of 2012 was $14.3 million, or $0.37 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 on page 7 of 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 more meaningful comparison of its financial results between periods.
Cash, Cash Equivalents and Marketable Securities
In the fourth quarter of 2012, Newport generated $27.1 million in cash from operations, which was the highest level in any quarter of the year. During the full year of 2012, Newport generated cash from operations of $81.4 million and reduced its total indebtedness by $39.5 million, or 18%. As of December 29, 2012, the company had a total of $100.4 million in cash and marketable securities.
Financial Outlook
Commenting on Newport's outlook for 2013, Mr. Phillippy said, "Over the past year we have integrated our recent acquisitions, improved operational efficiencies and increased our cash generation despite very challenging market conditions. Based on the input we have received from our customers, we expect market conditions to improve during the course of 2013 and our sales to increase in the second half of the year. However, we have not yet seen a meaningful increase in order activity, and based on our current backlog we expect our net sales in the first quarter of 2013 to be slightly lower on a sequential basis. Additionally, we expect our non-GAAP operating income and non-GAAP earnings per diluted share to decline sequentially in the first quarter, due to an increase in our operating expenses resulting from the seasonal nature of some expenses and continued investment to fund our growth initiatives. We expect the benefit of these investments, coupled with improved market conditions, to position us well to deliver solid financial results in 2013 and beyond."
ABOUT NEWPORT CORPORATION
Newport Corporation is a leading global supplier of advanced-technology products and systems to customers in the scientific research and defense/security, microelectronics, life and health sciences and industrial manufacturing 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 and Chief Financial Officer, will host an investor conference call today, February 20, 2013, at 5:00 p.m. Eastern time (2:00 p.m. Pacific time) to review the company's results for the fourth quarter of 2012 and business outlook for 2013. 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 877-889-9587 within the U.S. and Canada or 973-935-2046 from abroad. The passcode to enter the conference call is 94827664.
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 20, 2013, and continue through 11:59 p.m. Eastern time on Wednesday, February 27, 2013. The replay passcode is 94827664.
SAFE HARBOR STATEMENT
This news release contains forward-looking statements, including without limitation statements regarding the company's expectation of significant future growth in sales and profitability resulting from its focus on its long-term growth initiatives and its effective operational execution, its expectation of improved market conditions during the course of 2013, Newport's expected sales, operating expenses, non-GAAP operating income and non-GAAP earnings per diluted share levels in the first quarter of 2013, and the company's expectation of increased sales in the second half of 2013 and solid financial results in 2013 and beyond. 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 acquired businesses and its other cost savings initiatives; 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.
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
Newport Corporation
Consolidated Statements of Income and Comprehensive Income
(Unaudited)
Three Months Ended Year Ended
------------------ ----------
December 29, December 31, December 29, December 31,
(In thousands, except per share amounts) 2012 2011 2012 2011
---- ---- ---- ----
Net sales $141,643 $160,913 $595,346 $545,054
Cost of sales 78,815 94,515 334,758 305,325
------ ------ ------- -------
Gross profit 62,828 66,398 260,588 239,729
Selling, general and administrative expenses 35,914 47,007 159,181 140,636
Research and development expense 12,395 13,485 52,714 45,270
Impairment charge 130,853 - 130,853 -
------- --- ------- ---
Operating income (loss) (116,334) 5,906 (82,160) 53,823
Foreign currency translation gain from dissolution of subsidiary - - - 7,198
Recovery of note receivable and other amounts related to
previously discontinued operations, net - - - 619
Gain on sale of investments - - 6,248 -
Loss on extinguishment of debt - (582) - (582)
Interest and other expense, net (1,462) (3,554) (8,559) (10,550)
------ ------ ------ -------
Income (loss) before income taxes (117,796) 1,770 (84,471) 50,508
Income tax provision (benefit) (4,665) (32,709) 5,479 (29,154)
------ ------- ----- -------
Net income (loss) (113,131) 34,479 (89,950) 79,662
Net loss attributable to non-controlling interests (326) (46) (527) (46)
Net income (loss) attributable to Newport Corporation $(112,805) $34,525 $(89,423) $79,708
========= ======= ======== =======
Net income (loss) $(113,131) $34,479 $(89,950) $79,662
Other comprehensive income (loss):
Foreign currency translation gains (losses) 1,668 (1,573) 1,169 (10,222)
Unrecognized net pension gains (losses) (2,339) 7 (2,243) 551
Unrealized gains (losses) on marketable securities 168 (84) 48 (365)
--- --- --- ----
Comprehensive income (loss) $(113,634) $32,829 $(90,976) $69,626
========= ======= ======== =======
Comprehensive loss attributable to non-controlling interests $(384) $(57) $(593) $(57)
Comprehensive income (loss) attributable to Newport Corporation (113,250) 32,886 (90,383) 69,683
Comprehensive income (loss) $(113,634) $32,829 $(90,976) $69,626
========= ======= ======== =======
Net income (loss) per share attributable to Newport Corporation:
Basic $(2.94) $0.92 $(2.35) $2.13
Diluted $(2.94) $0.90 $(2.35) $2.06
Shares used in the computation of net income (loss) per share:
Basic 38,316 37,602 38,133 37,407
Diluted 38,316 38,495 38,133 38,673
Other operating data:
New orders received during the period $133,872 $150,972 $612,035 $542,996
Backlog at the end of period scheduled to ship within 12 months $154,216 $168,697
Newport Corporation
Supplemental Non-GAAP Measures
(Unaudited)
Three Months Ended Year Ended
------------------ ----------
(In thousands, except per share
amounts) December 29, December 31, December 29, December 31,
2012 2011 2012 2011
---- ---- ---- ----
Net Sales $141,643 $160,913 $595,346 $545,054
Cost of sales:
Cost of sales - GAAP $78,815 $94,515 $334,758 $305,325
Amortization of intangible
assets 890 180 2,321 720
Stock-based compensation
expense 203 134 693 488
Acquisition-related costs - 3,844 808 3,844
--- ----- --- -----
Non-GAAP cost of sales 77,722 90,357 330,936 300,273
Non-GAAP gross profit $63,921 $70,556 $264,410 $244,781
======= ======= ======== ========
Non-GAAP gross profit as a
percentage of net sales 45.1% 43.8% 44.4% 44.9%
Operating income (loss):
Operating income (loss) - GAAP $(116,334) $5,906 $(82,160) $53,823
Impairment charge 130,853 - 130,853 -
Amortization of intangible
assets 2,878 4,955 17,701 7,753
Stock-based compensation 2,104 1,522 8,369 6,201
Acquisition-related costs 785 7,857 5,127 10,955
Restructuring and severance
costs 1,288 1,175 3,134 2,174
Gain on sale of assets - - (166) -
Non-GAAP operating income $21,574 $21,415 $82,858 $80,906
======= ======= ======= =======
Non-GAAP operating income as a
percentage of net sales 15.2% 13.3% 13.9% 14.8%
Net income (loss) attributable
to Newport Corporation:
Net income (loss) - GAAP $(112,805) $34,525 $(89,423) $79,708
Impairment charge 130,853 - 130,853 -
Foreign currency translation
gain from dissolution of
subsidiary - - - (7,198)
Amortization of intangible
assets 2,878 4,955 17,701 7,753
Stock-based compensation 2,104 1,522 8,369 6,201
Acquisition-related costs 785 7,857 5,127 10,955
Restructuring and severance
costs 1,288 1,175 3,134 2,174
Gain on sale of assets - - (6,414) (619)
Loss on extinguishment of debt - 582 - 582
Commitment fee for interim
revolving line of credit - - - 500
Release of valuation allowance
against certain deferred tax
assets - (34,052) (1,815) (34,052)
Income tax provision on non-
GAAP adjustments (10,848) (1,162) (15,842) (2,224)
Non-GAAP net income $14,255 $15,402 $51,690 $63,780
======= ======= ======= =======
Net income (loss) per diluted share attributable to Newport Corporation:
Net income (loss) - GAAP $(2.94) $0.90 $(2.35) $2.06
Total non-GAAP adjustments 3.31 (0.50) 3.68 (0.41)
Non-GAAP net income per
diluted share $0.37 $0.40 $1.33 $1.65
===== ===== ===== =====
Dilutive shares used in
computation of non-GAAP net
income 38,764 38,495 38,810 38,673
Newport Corporation
Consolidated Balance Sheets
(Unaudited)
December 29, December 31,
(In thousands) 2012 2011
---- ----
ASSETS
Current assets:
Cash and cash
equivalents $88,767 $55,701
Restricted cash 3,107 12,367
Marketable
securities 8,498 4,787
Accounts
receivable, net 89,445 97,690
Notes receivable,
net 1,536 2,091
Inventories, net 108,728 112,968
Deferred income
taxes 19,872 30,339
Prepaid expenses
and other current
assets 17,727 15,374
------ ------
Total current
assets 337,680 331,317
Property and
equipment, net 82,843 89,873
Goodwill 79,586 143,259
Deferred income
taxes 5,646 9,289
Intangible assets,
net 77,446 150,572
Investments and
other assets 37,760 39,759
$620,961 $764,069
======== ========
LIABILITIES AND
STOCKHOLDERS'
EQUITY
Current
liabilities:
Short-term
borrowings, net $32,985 $45,149
Accounts payable 31,061 30,856
Accrued payroll
and related
expenses 29,096 36,914
Accrued expenses
and other current
liabilities 34,696 39,800
------ ------
Total current
liabilities 127,838 152,719
Long-term debt,
net 150,758 178,043
Accrued pension
liabilities 27,764 24,444
Other liabilities 23,783 36,586
Total
stockholders'
equity of Newport 289,432 370,258
Non-controlling
interests 1,386 2,019
----- -----
Total
stockholders'
equity 290,818 372,277
$620,961 $764,069
======== ========
SOURCE Newport Corporation