Newport Corporation reports second quarter 2004 results

Fiber Optics Weekly Update, August 6, 2004

Newport Corporation reported financial results for its second quarter ended July 3, 2004, and provided guidance regarding its expected performance for the third quarter and second half of 2004, including the anticipated impact of the results of Spectra-Physics, which was acquired on July 16, 2004.

Sales for the second quarter of 2004 totaled $47.5 million, an increase of approximately 41 percent compared with the $33.8 million recorded in the second quarter of 2003, and an increase of approximately 12 percent compared with the first quarter of 2004.

The company reported income from continuing operations for the second quarter of $2.7 million, or $0.07 per diluted share, which includes approximately $1 million, or $0.03 per diluted share, related to product development services rendered to a customer in previous quarters as discussed below. These results compare with a loss from continuing operations of $2.1 million, or $0.05 per diluted share, in the second quarter of 2003, and income from continuing operations of $1.1 million, or $0.03 per diluted share, in the first quarter of 2004.

New orders received in the second quarter totaled $50.8 million, an increase of approximately 42 percent over the $35.7 million recorded in the second quarter of 2003 and an increase of approximately 15 percent compared with the $44.2 million in new orders received in the first quarter of 2004.

The company reported net income in the second quarter of $2.7 million, or $0.07 per diluted share, compared with a net loss of $2.4 million, or $0.06 per diluted share, for the second quarter of 2003. Results for each period of 2003 included the treatment of the company's former metrology business and its Minnesota operation as discontinued operations, reflecting the divestitures of those operations.

Newport's second quarter results benefited from a transition services agreement with the company's largest customer in the life and health sciences market. As part of the agreement, the customer made a payment for product development services rendered by Newport in previous quarters and agreed on a financial arrangement for the provision of additional products and services by Newport in the future. The agreement increased Newport's second quarter sales and profit by approximately $1 million, or approximately $0.03 per share. In conjunction with this agreement, the company received a new order from this customer for approximately $2 million.

Sales to customers in research, defense, fiber optic communications, and other end markets were $25.5 million in the second quarter, versus $18.1 million recorded in the second quarter of 2003 and $22.9 million in the first quarter of 2004. Sales to these markets for the first half of 2004 were $48.4 million, versus $37.8 million in the corresponding period of 2003.

For further information, visit www.newport.com