IRVINE, Calif., May 6, 2015 /PRNewswire/ -- Newport Corporation (NASDAQ: NEWP) today reported financial results for its first quarter ended April 4, 2015, and its outlook for the second quarter and full year of 2015. The company noted the following regarding the first quarter results:
- Net sales of $156.7 million and new orders of $154.6 million;
- Net income of $8.7 million, or $0.21 per diluted share, when measured according to generally accepted accounting principles (GAAP);
- Non-GAAP net income of $14.6 million, or $0.36 per diluted share, excluding the amortization of intangible assets, stock-based compensation expense, acquisition-related, restructuring and severance costs, losses on disposals of assets and the tax impact of the excluded amounts; and
- Repurchases of approximately 300,000 shares of common stock for approximately $6.0 million during the quarter.
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. | ||||||||
April 4, | January 3, | March 29, | Prior | Prior Year | |||||
2015 | 2015 | 2014 | Quarter | Period | |||||
Sales by End Market | |||||||||
Scientific research | $ 35,365 | $ 34,780 | $ 31,881 | 1.7% | 10.9% | ||||
Microelectronics | 39,877 | 41,612 | 33,953 | -4.2% | 17.4% | ||||
Life and health sciences | 32,586 | 34,038 | 34,262 | -4.3% | -4.9% | ||||
Defense and security | 14,398 | 14,310 | 11,577 | 0.6% | 24.4% | ||||
Industrial manufacturing and other | 34,429 | 33,989 | 35,217 | 1.3% | -2.2% | ||||
Total | $ 156,655 | $ 158,729 | $ 146,890 | -1.3% | 6.6% | ||||
Orders by End Market | |||||||||
Scientific research | $ 34,534 | $ 40,772 | $ 28,255 | -15.3% | 22.2% | ||||
Microelectronics | 36,193 | 44,782 | 42,579 | -19.2% | -15.0% | ||||
Life and health sciences | 30,374 | 51,738 | 29,662 | -41.3% | 2.4% | ||||
Defense and security | 15,186 | 18,821 | 11,325 | -19.3% | 34.1% | ||||
Industrial manufacturing and other | 38,338 | 36,207 | 35,463 | 5.9% | 8.1% | ||||
Total | $ 154,625 | $ 192,320 | $ 147,284 | -19.6% | 5.0% |
Note: | Newport's fiscal quarter ended January 3, 2015 was comprised of 14 weeks, whereas its fiscal quarters ended April 4, 2015 and March 29, 2014 were each comprised of 13 weeks. |
Commenting on the results, Robert J. Phillippy, Newport's President and Chief Executive Officer, stated, "The Newport team is off to a strong start in 2015. Our first quarter sales and new orders increased 6.6% and 5.0%, respectively, compared with the prior year first quarter, despite the unfavorable impact of foreign exchange rates. More importantly, we continued to leverage this sales growth into higher profit levels. On a non-GAAP basis, our operating income of $21.9 million increased 22.1%, and our earnings per diluted share of $0.36 increased 24.1%, compared with the prior year first quarter. We believe that our strong performance is the direct result of effective execution in our business and the increasing contributions of our strategic growth initiatives."
Operating Income and Net Income
Newport reported operating income for the first quarter of 2015 of $13.6 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, acquisition-related, restructuring and severance costs and losses on disposals of assets, the company's operating income for the first quarter of 2015 was $21.9 million, or 13.9% of net sales.
On a GAAP basis, the company reported net income for the first quarter of 2015 of $8.7 million, or $0.21 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 first quarter of 2015 was $14.6 million, or $0.36 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 April 4, 2015, the company had a total of $32.7 million in cash, cash equivalents, restricted cash and marketable securities, total indebtedness of $81.6 million and $166.3 million of borrowing capacity available on its revolving credit facility. In the first quarter of 2015, Newport generated $5.1 million in cash from operations.
Mr. Phillippy stated, "Our prudent allocation of capital enables us to strengthen our operating and financial position while enhancing value for our shareholders through accretive acquisitions and share repurchases. During the first quarter, we paid $8.4 million, net of adjustments and cash received, to acquire FEMTOLASERS Produktions GmbH, a leading developer and manufacturer of advanced ultrafast lasers headquartered in Vienna, Austria, and we used approximately $6.0 million to repurchase Newport shares. Since the third quarter of 2014, we have used $16.3 million to repurchase approximately 870,000 shares at an average price of $18.73, representing more than 2% of Newport's outstanding shares." The company noted that approximately 3.0 million shares remain available for repurchase under the program previously authorized by the company's board of directors, and the company expects to continue to repurchase shares for the foreseeable future. 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 the company's credit facility.
Acquisitions
On February 11, 2015, Newport completed its acquisition of FEMTOLASERS, adding to the company's significant expertise and intellectual property position in advanced ultrafast laser systems. Newport expects FEMTOLASERS to contribute approximately $5 million to $8 million in sales during the remainder of 2015, and expects the acquisition to be accretive to the company's earnings in the next 12 months. Femtolasers' results were immaterial to Newport's first quarter 2015 income statement.
Financial Outlook
Commenting on Newport's full year outlook, Mr. Phillippy said, "We are encouraged by our first quarter performance, and expect to have record sales and non-GAAP net income again in 2015. Our business and the end markets we serve are well balanced, and although conditions in these markets vary, we are confident that Newport's overall trajectory is very positive. We will continue to efficiently allocate our capital to increase our earnings per share through accretive, strategic acquisitions, share buybacks and debt reductions."
Commenting specifically on the second quarter of 2015, Mr. Phillippy added, "In the second quarter, we expect our sales to increase year-over-year once again, despite the anticipated unfavorable impact of foreign exchange rates, to between $154 million and $161 million, and we expect to again achieve year-over-year increases in non-GAAP operating income and non-GAAP earnings per diluted share."
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.
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