Yep but remember - YOU HAVE TO HAVE FAITH IN YOUR CONVICTIONS.
Tuesday March 6, 6:24 pm Eastern Time
Press Release
Newport Corp. Announces Kensington Contribution to 2000 Results -- Reports Higher Than Anticipated EPS Accretion
Updates 2001 Forecast
IRVINE, Calif.--(BUSINESS WIRE)--March 6, 2001--Newport Corp. (Nasdaq:NEWP - news) today presented financial results for its 2000 year, revised to incorporate the audited 2000 results of Kensington Laboratories Inc., which merged with Newport on Feb. 2, 2001, in a transaction that has been accounted for as a pooling of interests.
Newport previously announced its results for 2000 on Jan. 24, 2001, prior to the close of the Kensington transaction, and accordingly such reported results did not include Kensington's results.
For the year ended Dec. 31, 2000, Kensington contributed revenues of $31.1 million, bringing Newport's total revenues for the year to $284.0 million, up from the $252.9 million previously reported for Newport alone. Newport's revised net income rose by $8.5 million, or $0.15 per diluted share, to $36.3 million, or $1.01 per diluted share, versus the $0.86 reported for Newport alone prior to the revision. Prior to final audit of Kensington's 2000 results, Newport had estimated the Kensington transaction would be accretive to earnings per diluted share by approximately $0.10 for the full year 2000.
More information regarding the effect of the Kensington merger on Newport's 2000 Consolidated Income Statement will be available today on Newport's Web page at www.newport.com.
The company also announced that it now expects Kensington to be accretive to Newport's 2001 earnings by approximately $0.17 to $0.20 per diluted share. Previously, the company had estimated the accretion to 2001 earnings per diluted share to be approximately $0.15. Newport also reaffirmed its previously reported expectation of approximately $50 million in revenue for Kensington in 2001. Beginning with Newport's 2001 first-quarter results, slated to be released on April 18, 2001, Kensington's results will be fully incorporated and will not be reported separately.
``We are pleased to report better-than-expected revised results in conjunction with our merger with Kensington Laboratories,'' said Robert G. Deuster, Newport's chairman, president and chief executive officer.
``Kensington's results for the fourth quarter of 2000 were even better than we had anticipated during our due diligence. The final audit of Kensington's 2000 financial statements produced far fewer adjustments to conform Kensington's financial statements to GAAP reporting standards than we had originally anticipated, which increased its contribution to Newport's earnings.
``More importantly, looking ahead, we believe that Kensington's business will continue to be strong, despite the widely reported reductions in capital spending in the telecommunications and semiconductor capital equipment markets. Kensington's OEM customers in the semiconductor equipment manufacturing market continue to invest in the next-generation products in which Kensington specializes, specifically those designed for narrower line widths and 300-millimeter applications.''
Robert Phillippy, vice president and general manager of Newport's Industrial and Scientific Technologies Division (ISTD), added: ``We are moving quickly to integrate Kensington into Newport's ISTD operations and to realize the full benefit of its expertise in high-precision robotics and motion control. We continue to see demand from our customers for higher degrees of automation for their testing and manufacturing processes.
``In addition to the benefits we expect to achieve as we integrate our businesses supporting semiconductor capital equipment customers, we also anticipate enhancing our efficiency and profitability related to the manufacture of fiber optic products.''
Kensington, which has headquarters in Richmond, Calif., holds more than 20 patents covering advanced robotics and motion control technology. The company's technology has also been applied to fiber optic component assembly and automation through its use in Newport's photonics packaging solutions over the last five years, and is used in semiconductor capital equipment for high-precision positioning and handling of semiconductor wafers.
Business Outlook
The following statements are based on current expectations. These statements are forward-looking, and actual results may differ materially as a result of the factors more specifically referenced below.
The company updated the outlook for the 2001 first quarter, including the full effect of the Kensington merger in current and prior years. Sales for the first quarter of 2001 are expected to be in the range of $95 million to $100 million. This represents an 80-90% increase over the prior-year first quarter and is approximately equal to or slightly above the record fourth quarter of 2000.
Gross margin as a percent of sales for the first quarter of 2001 is expected to be in the 44-45% range; and selling, general and administrative expenses for the first quarter of 2001 are expected to total 18-19% of sales. The company plans to continue to invest 8-9% of sales in research and development activities. The result is that operating income in the first quarter of 2001 is expected to more than double versus the $8.1 million reported in the first quarter of 2000, as the company continues to leverage the sales increases.
Diluted earnings per share in the first quarter of 2001, before non-recurring charges, are expected to increase approximately 230-240% compared with the $0.15 reported for the corresponding period of year 2000. Non-recurring charges, which are related primarily to the Kensington transaction, are expected to be approximately $12 million to $14 million during the first quarter.
Commenting on the first quarter, Deuster said: ``We are reconfirming our outlook for the first quarter of 2001. Although we recognize that many of our customers are cautious in their outlook, we believe we are positioned to achieve our targets. We entered 2001 with strong backlog, primarily in the key markets we serve: fiber optic communications and semiconductor capital equipment. The strength of our backlog and our ability to meet customer demands will drive our performance in the first quarter.''
Commenting on the full year, Deuster stated, ``As previously indicated in January, we continue to have clearer visibility for the first half of 2001 than for the second half. In addition, several of our large customers have taken a more cautious tone in recent weeks.
``We believe our leadership position in the key markets that we serve gives us the ability to achieve strong year-over-year increases in sales. We expect to see full-year revenues for 2001 in the $400 million to $425 million range and earnings per diluted share, before non-recurring charges, of $1.45 to $1.60, compared with our record performance in 2000 of $1.01 per diluted share.
``We recognize that considerable uncertainty in both the broader telecommunications and semiconductor capital equipment markets exists today. Nevertheless, the need for productivity, yield and cost reduction solutions in fiber optic component manufacturing remains intact, and we expect that our customers will invest in these solutions for the long term, not just for capacity reasons.
``Likewise, in the semiconductor capital equipment market, demand for products supporting narrower line widths and 300-millimeter applications remains robust. As a result, we believe that we will be able to achieve our revenue and earnings goals for 2001.''
About Newport Corp.
Newport is a global leader in the design, manufacture and marketing of high precision components, instruments and integrated systems to the fiber optic communications, semiconductor equipment, scientific research and industrial metrology markets. The company's innovative products are designed to enhance productivity and capabilities of test and measurement and automated assembly for precision manufacturing, engineering and research applications. Customers include Fortune 500 corporations, technology companies and research laboratories in commercial, academic and government sectors worldwide.
This news release contains forward-looking statements, including specifically statements made by Robert G. Deuster and Robert Phillippy and statements in the ``Business Outlook'' section that are based on current expectations and involve risks and uncertainties. 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. As discussed in Newport's Annual Report on Form 10-K for the year ended Dec. 31, 1999, and in subsequent filings with the Securities and Exchange Commission, assumptions relating to the foregoing involve judgments with respect to, among other things, the ability of Newport to successfully integrate acquisitions with Newport's other operations; future economic, competitive and market conditions, including those in Europe and Asia and those related to Newport's strategic markets, particularly the fiber optics and semiconductor markets; whether the products offered by Newport 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. 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 the 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 such events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.
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