8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C.  20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported)

May 1, 2013

NEWPORT CORPORATION

(Exact name of registrant as specified in its charter)

Nevada	000-01649	94-0849175
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)

1791 Deere Avenue, Irvine, California	92606
(Address of principal executive offices)	(Zip Code)

(949) 863-3144

(Registrant’s telephone number, including area code)

Not Applicable

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

oWritten communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

oSoliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

oPre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

oPre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02.  Results of Operations and Financial Condition.

On May 1, 2013, Newport Corporation (the “Registrant”) announced its financial results for the first quarter ended March 30, 2013, and its financial outlook for the remainder of 2013.  The press release issued by the Registrant in connection with the announcement is attached to this report as Exhibit 99.1.

This information shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference into any filing by the Registrant under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, except as may be set forth by specific reference in such a filing.

Use of Non-GAAP Financial Measures

In the press release attached to this report as Exhibit 99.1, the Registrant has supplemented certain of its financial measures prepared in accordance with accounting principles generally accepted in the United States (GAAP) with non-GAAP financial measures.  These non-GAAP financial measures and the reasons for their inclusion, as well as the limitations on the usefulness of such information to an investor, are described below.

The Registrant has provided non-GAAP measures of (1) gross profit, (2) operating income, (3) net income attributable to Newport Corporation, and (4) net income per diluted share attributable to Newport Corporation, for the three months ended March 30, 2013 and March 31, 2012, which exclude a number of items that management considers to be outside of the Registrant’s core operating results.  A table detailing the items excluded from the non-GAAP measures and reconciling such non-GAAP results with the Registrant’s GAAP results is included following the consolidated statements of income and comprehensive income that are a part of the press release.  In the press release, the Registrant has also provided qualitative guidance concerning its expected non-GAAP operating income and non-GAAP earnings per diluted share for its second fiscal quarter of 2013.  As of May 1, 2013, the Registrant is unable to quantify the expected impact of the items expected to be excluded from its non-GAAP results for such period.

The Registrant has provided these non-GAAP results and guidance with the intent of providing both management and investors with a more complete understanding of the Registrant’s core operating results and performance trends, and a more meaningful basis for comparison of the Registrant’s results with its historical and future financial results, as well as with the results of other companies that may report non-GAAP measures that exclude similar items.  The Registrant believes that the items excluded from these non-GAAP measures generally do not reflect the ongoing operating performance of the Registrant’s business.  In addition, these adjusted non-GAAP measures are among the primary indicators that management uses as a basis for its planning and forecasting and may also be used by management for other purposes including its evaluation of performance to determine the achievement of goals under the Registrant’s incentive plans.

However, the presentation of this additional information is not meant to be considered in isolation or as a substitute for the Registrant’s financial measures prepared in accordance with GAAP.  These non-GAAP measures exclude items that may have a material impact on the Registrant’s operating results calculated in accordance with GAAP, which impact is included in the Registrant’s GAAP financial statements.  Although the Registrant believes it is useful for investors to view the Registrant’s core operating results in the absence of the excluded items, certain of these excluded items represent actual expenses that impact the cash available to the Registrant for other uses.  To gain a comprehensive understanding of all impacts on the Registrant’s income from any and all events, management also relies upon the Registrant’s GAAP financial statements, and investors should as well.  Further, the Registrant notes that non-GAAP measures may be defined and calculated differently among companies, or from period to period by the same company, which may limit the usefulness of the non-GAAP information to an investor.

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The Registrant expects to incur stock-based compensation expense, amortization of intangible assets, and acquisition-related costs in future periods, and may also incur other items, such as significant gains or losses from contingencies.  Additionally, the Registrant may be impacted by significant tax matters in future periods.  The Registrant may present non-GAAP financial measures for such future periods that exclude any or all of the foregoing items, if it believes that doing so is consistent with the goal of providing useful information to investors and management.

Item 9.01.  Financial Statements and Exhibits.

(d)  Exhibits.

Exhibit No.	Description
99.1	Press Release dated May 1, 2013 (furnished pursuant to Item 2.02 and not deemed filed).

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

May 1, 2013	NEWPORT CORPORATION
	By:	/s/ Jeffrey B. Coyne
		Jeffrey B. Coyne
		Senior Vice President, General Counsel and
		Corporate Secretary

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EXHIBIT INDEX

Exhibit No.	Description
99.1	Press Release dated May 1, 2013 (furnished pursuant to Item 2.02 and not deemed filed).

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EX-99.1

Exhibit 99.1

Press Release

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 REPORTS

FIRST QUARTER 2013 RESULTS

Irvine, California — May 1, 2013 — Newport Corporation (NASDAQ: NEWP) today reported financial results for its first quarter ended March 30, 2013, and its outlook for the remainder of 2013.  The company noted the following regarding the first quarter results:

·Net sales of $132.6 million;

·Net income attributable to Newport Corporation of $2.7 million, or $0.07 per share, when measured according to generally accepted accounting principles (GAAP);

·Non-GAAP net income of $6.2 million, or $0.16 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; and

·Cash generated from operations of $7.5 million, and a reduction in debt of $12.1 million.

Commenting on the results, Robert J. Phillippy, Newport’s President and Chief Executive Officer, stated, “While conditions in the primary markets we serve were generally weak in the first quarter, we did see sequential growth in orders from customers in our life and health sciences, microelectronics, and industrial markets, which may reflect the early signs of improving conditions.  We continue to implement our strategic plan, and have made progress on several of our long-term growth initiatives.  We remain confident that these initiatives, together with effective execution, will position Newport to achieve significant growth in sales and profitability when macro-conditions improve.”

Sales and Orders

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

							Percentage		Percentage
	Three Months Ended						Change vs.		Change vs.
	March 30,		December 29,		March 31,		Prior		Prior Year
(In thousands, except percentages, unaudited)	2013		2012 (1)		2012 (1)		Quarter		Period
Sales by End Market
Scientific research	$	30,893	$	33,319	$	36,024	-7.3	%	-14.2	%
Microelectronics	27,730		28,632		36,154		-3.2	%	-23.3	%
Life and health sciences	31,177		32,283		37,116		-3.4	%	-16.0	%
Defense and security	15,411		18,312		17,377		-15.8	%	-11.3	%
Industrial manufacturing and other	27,396		29,097		30,496		-5.8	%	-10.2	%
Total	$	132,607	$	141,643	$	157,167	-6.4	%	-15.6	%
Orders by End Market
Scientific research	$	31,489	$	34,321	$	29,278	-8.3	%	7.6	%
Microelectronics	28,186		26,153		42,168		7.8	%	-33.2	%
Life and health sciences	30,474		26,975		63,731		13.0	%	-52.2	%
Defense and security	14,930		18,449		20,114		-19.1	%	-25.8	%
Industrial manufacturing and other	28,506		27,974		30,813		1.9	%	-7.5	%
Total	$	133,585	$	133,872	$	186,104	-0.2	%	-28.2	%

Notes:

(1)Certain prior period amounts have been reclassified to conform to the current period presentation.

On a sequential basis, sales declined 6.4% compared with the fourth quarter of 2012.  New orders in the first quarter of 2013 were approximately equal to the fourth quarter 2012 level.  The company noted that first quarter orders from customers in its life and health sciences, microelectronics, and industrial and other end markets all increased sequentially compared with the fourth quarter of 2012, and that the sequentially lower first quarter sales to and orders from customers in the scientific research and defense and security end markets were consistent with the continued uncertainty in government funding levels and the normal seasonal patterns in the research market.

Operating Income and Net Income

Newport reported operating income for the first quarter of 2013 of $4.4 million when calculated in accordance with GAAP.  On a non-GAAP basis, excluding amortization of intangible assets, stock-based compensation expense, and acquisition-related, restructuring and severance costs, the company’s operating income for the first quarter of 2013 was $11.2 million, or 8.4% of net sales.

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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 more meaningful comparison of its financial results between periods.

Cash, Cash Equivalents and Marketable Securities

In the first quarter of 2013, Newport generated $7.5 million in cash from operations, and reduced its total indebtedness by $12.1 million.  As of March 30, 2013, the company had $171.6 million in total indebtedness and $96.2 million in cash, restricted cash and marketable securities.

Financial Outlook

Commenting on Newport’s outlook, Mr. Phillippy said, “Based on input from our customers, we expect conditions in several end markets to improve during the course of 2013, resulting in increased sales in the second half of the year.  In the second quarter of 2013, we expect sales to be slightly higher than the first quarter level, based on our current backlog and the anticipated market improvement.  As a result, we also expect slight sequential increases in our non-GAAP operating income and non-GAAP earnings per diluted share in the second quarter of 2013.  In parallel, our long-term growth initiatives continue to gain momentum, and we are confident that these will enable us to accelerate our growth rate in future years.

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, defense and security, 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.

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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, May 1, 2013, at 5:00 p.m. Eastern time (2:00 p.m. Pacific time) to review the company’s results for the first quarter of 2013 and its business outlook for the remainder of 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 877-375-4189 within the U.S. and Canada or 973-935-2046 from abroad.

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, May 1, 2013, and continue through 11:59 p.m. Eastern time on Wednesday, May 8, 2013.  The replay passcode is 34470662.

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SAFE HARBOR STATEMENT

This news release contains forward-looking statements, including without limitation statements regarding the company’s expectation that the sequential increases in sales and orders in certain of its end markets may indicate the early signs of improving conditions in those markets; its expectation of significant growth in sales and profitability when macro-conditions improve resulting from its focus on its long-term growth initiatives and its effective execution, its expectation of improved market conditions during the course of 2013 and increased sales in the second half of 2013, the company’s expectation of slight sequential increases in sales, non-GAAP operating income and non-GAAP earnings per diluted share levels in the second quarter of 2013, and its expectation that the company’s long-term growth initiatives will accelerate its growth rate in future years.  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 and 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.

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Newport Corporation

Consolidated Statements of Income and Comprehensive Income

(Unaudited)

	Three Months Ended
	March 30,			March 31,
(In thousands, except per share amounts)	2013			2012
Net sales	$	132,607		$	157,167
Cost of sales	77,475			89,098
Gross profit	55,132			68,069
Selling, general and administrative expenses	37,608			44,060
Research and development expense	13,101			13,799
Operating income	4,423			10,210
Interest and other expense, net	(2,137		)	(2,187		)
Income before income taxes	2,286			8,023
Income tax provision (benefit)	(448		)	1,435
Net income	2,734			6,588
Net loss attributable to non-controlling interests	(12		)	(4		)
Net income attributable to Newport Corporation	$	2,746		$	6,592
Net income	$	2,734		$	6,588
Other comprehensive income:
Foreign currency translation gains (losses)	(2,452		)	1,629
Unrecognized net pension gains (losses)	190			(16		)
Unrealized gains (losses) on marketable securities	(98		)	33
Comprehensive income	$	374		$	8,234
Comprehensive loss attributable to non-controlling interests	$	(61	)	$	(42	)
Comprehensive income attributable to Newport Corporation	435			8,276
Comprehensive income	$	374		$	8,234
Net income per share attributable to Newport Corporation:
Basic	$	0.07		$	0.17
Diluted	$	0.07		$	0.17
Shares used in the computation of net income per share:
Basic	38,601			37,731
Diluted	39,260			38,931
Other operating data:
New orders received during the period	$	133,585		$	186,104
Backlog at the end of period scheduled to ship within 12 months	$	149,716		$	174,861

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Newport Corporation

Supplemental Non-GAAP Measures

(Unaudited)

	Three Months Ended
(In thousands, except per share amounts)	March 30, 2013			March 31, 2012
Net Sales	$	132,607		$	157,167
Cost of sales:
Cost of sales - GAAP	$	77,475		$	89,098
Amortization of intangible assets	895			180
Stock-based compensation expense	209			117
Acquisition-related, restructuring and severance costs	403			808
Non-GAAP cost of sales	75,968			87,993
Non-GAAP gross profit	$	56,639		$	69,174
Non-GAAP gross profit as a percentage of net sales	42.7		%	44.0		%
Operating income:
Operating income - GAAP	$	4,423		$	10,210
Amortization of intangible assets	2,586			5,177
Stock-based compensation	2,269			2,214
Acquisition-related, restructuring and severance costs	1,874			2,485
Gain on sale of assets	—			(166		)
Non-GAAP operating income	$	11,152		$	19,920
Non-GAAP operating income as a percentage of net sales	8.4		%	12.7		%
Net income attributable to Newport Corporation:
Net income - GAAP	$	2,746		$	6,592
Amortization of intangible assets	2,586			5,177
Stock-based compensation	2,269			2,214
Acquisition-related, restructuring and severance costs	1,874			2,485
Gain on sale of assets	—			(166		)
Release of valuation allowance against certain deferred tax assets	—			(1,391		)
Income tax provision on non-GAAP adjustments	(3,315		)	(2,769		)
Non-GAAP net income	$	6,160		$	12,142
Net income per diluted share attributable to Newport Corporation:
Net income - GAAP	$	0.07		$	0.17
Total non-GAAP adjustments	0.09			0.14
Non-GAAP net income per diluted share	$	0.16		$	0.31

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Newport Corporation

Consolidated Balance Sheets

(Unaudited)

	March 30,		December 29,
(In thousands)	2013		2012
ASSETS
Current assets:
Cash and cash equivalents	$	83,846	$	88,767
Restricted cash	3,122		3,107
Marketable securities	9,205		8,498
Accounts receivable, net	89,722		89,445
Notes receivable, net	1,514		1,536
Inventories, net	108,262		108,728
Deferred income taxes	19,817		19,872
Prepaid expenses and other current assets	18,111		17,727
Total current assets	333,599		337,680
Property and equipment, net	81,962		82,843
Goodwill	79,388		79,586
Deferred income taxes	5,456		5,646
Intangible assets, net	74,651		77,446
Investments and other assets	35,322		37,760
	$	610,378	$	620,961
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Short-term borrowings, net	$	35,468	$	32,985
Accounts payable	30,372		31,061
Accrued payroll and related expenses	26,466		29,096
Accrued expenses and other current liabilities	34,945		34,696
Total current liabilities	127,251		127,838
Long-term debt, net	136,170		150,758
Accrued pension liabilities	26,561		27,764
Other liabilities	22,925		23,783
Total stockholders’ equity of Newport	296,146		289,432
Non-controlling interests	1,325		1,386
Total stockholders’ equity	297,471		290,818
	$	610,378	$	620,961

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