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) Octob er 26, 2011

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:

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

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

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

¨ Pre-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 October 26, 2011, Newport Corporation (the “Registrant”) announced its financial results for the third quarter and nine months ended October 1, 2011, and its financial outlook for the fourth quarter and full year of 2011. 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 are described below. 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.

Net Income and Net Income Per Diluted Share

The Registrant has provided non-GAAP measures of net income and net income per diluted share for the three and nine months ended October 1, 2011 and October 2, 2010, which exclude a number of items that management considers to be outside of the Registrant’s core operating results. The items excluded from these non-GAAP measures are summarized below, and a table detailing the excluded items and reconciling such non-GAAP results with the Registrant’s GAAP results is included following the statements of income that are a part of the press release.

For the three months ended October 1, 2011, the non-GAAP measures have been adjusted to exclude (1) acquisition-related costs relating primarily to the Registrant’s acquisitions of Ophir Optronics Ltd. (“Ophir”) and High Q Technologies GmbH (“High Q”); (2) a commitment fee for an interim revolving line of credit that was not utilized; (3) severance payments; and (4) the income tax impact related to the foregoing excluded amounts. For the nine months ended October 1, 2011, the non-GAAP measures have been adjusted to exclude (1) the amounts excluded for the three-month period as described in the preceding sentence; (2) a gain recorded in the first quarter of 2011 resulting from a non-recurring currency translation adjustment; (3) additional acquisition-related costs; (4) a gain associated with the recovery of amounts related to a previously divested business; and (5) the income tax impact of the foregoing excluded amounts.

For the three months ended October 2, 2010, the non-GAAP measures have been adjusted to exclude a foreign currency translation loss and a gain on sale relating to the sale of a business by the Registrant, and the tax impact of such excluded amounts. For the nine months ended October 2, 2010, the non-GAAP measures have been adjusted to exclude such foreign currency translation loss and a net loss relating to the sale of a business by the Registrant, and the tax impact of such excluded amounts.

Expected Sales for 2011

The Registrant acquired High Q on July 29, 2011, and acquired Ophir on October 4, 2011. In the press release, the Registrant has provided supplemental information regarding the Registrant’s expected sales for 2011 on a non-GAAP basis, including the results of High Q and Ophir as though the acquisitions had occurred at the beginning of 2011. A table reconciling such expected non-GAAP sales to the Registrant’s expected GAAP sales for 2011 is included following the statements of income that are a part of the press release.

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 underlying operational results and performance trends and a more meaningful basis for comparison of the Registrant’s results with its historical and future financial

results. 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.

Item 9.01. Financial Statements and Exhibits.

(d) Exhibits.

Exhibit No.	Description
99.1	Press Release dated October 26, 2011 (furnished pursuant to Item 2.02 and not deemed filed).

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.

October 26, 2011	NEWPORT CORPORATION
	By:	/s/ Jeffrey B. Coyne
		Jeffrey B. Coyne
		Senior Vice President, General Counsel and
		Corporate Secretary

EXHIBIT INDEX

Exhibit No.	Description
99.1	Press Release dated October 26, 2011 (furnished pursuant to Item 2.02 and not deemed filed).

EX-99.1

Exhibit 99.1

Press Release

Contact:

Charles F. Cargile, 949/863-3144

Newport Corporation, Irvine, CA

investor@newport.com

or

Dan Peoples, 858/552-8146

Makinson Cowell (US)

NEWPORT CORPORATION REPORTS

THIRD QUARTER 2011 RESULTS

Irvine, California – October 26, 2011 – Newport Corporation (NASDAQ: NEWP) today reported financial results for its third quarter and nine months ended October 1, 2011. The company noted the following highlights regarding its third quarter results:

• $125.6 million in net sales;

• $118.6 million in new orders;

• Net income of $10.5 million, or $0.27 per diluted share, when calculated according to generally accepted accounting principles (GAAP);

• Net income of $11.7 million, or $0.30 per diluted share, when calculated on a non-GAAP basis excluding certain expenses related primarily to recent acquisition and financing activities; and

• Generated $30.0 million of net cash from operating activities.

Robert J. Phillippy, Newport’s President and Chief Executive Officer, stated, “We continued to deliver solid financial performance in the third quarter despite a reduction in sales to semiconductor equipment customers resulting from the slowdown in that industry. Our third quarter gross margin remained strong at 44.4%, which allowed us to maintain a year-to-date gross margin of 45.1%, in line with our target of 45%. In addition, we produced strong cash from operating activities again this quarter. This, together with the successful completion of our senior secured credit facility, enabled us to close our acquisition of Ophir Optronics on October 4, 2011, while retaining sufficient cash to repay our $126.8 million of convertible notes when they become due in February of 2012, and to continue to pursue our strategic agenda.”

Sales and Orders

Sales in the third quarter of 2011 were $125.6 million, an increase of 0.3% compared with the $125.2 million recorded in the third quarter of 2010. Sales for the first nine months of 2011 were $384.1 million, a 10.7% increase over the $346.9 million recorded in the first nine months of 2010. The company’s sales in the current year periods included $4.9 million of sales of High Q Technologies GmbH, which Newport acquired on July 29, 2011.

New orders received in the third quarter of 2011 were $118.6 million, a decrease of 8.4% compared with the $129.5 million received in the third quarter of 2010. Orders for the first nine months of 2011 were $392.0 million, an increase of 3.2% compared with the $379.7 million in orders received in the first nine months of 2010.

The company’s sales and orders by end market in the third quarter and first nine months of 2011 were as follows:

(In thousands, except percentages, unaudited)	Three Months Ended				Nine Months Ended				Percentage Change vs. Prior Year Period
									Third			Nine
	October 1,		October 2,		October 1,		October 2,		Quarter			Months
	2011		2010 ¹		2011		2010 ¹		2011			2011
Sales by End Market
Scientific research, aerospace and defense/security	$	41,976	$	38,272	$	123,228	$	118,059		9.7	%		4.4	%
Microelectronics		33,671		44,161		119,414		109,301		-23.8	%		9.3	%
Life and health sciences		30,749		24,122		81,840		68,272		27.5	%		19.9	%
Industrial manufacturing and other		19,202		18,632		59,659		51,305		3.1	%		16.3	%
Total	$	125,598	$	125,187	$	384,141	$	346,937		0.3	%		10.7	%
Orders by End Market
Scientific research, aerospace and defense/security	$	44,346	$	38,597	$	127,679	$	113,851		14.9	%		12.1	%
Microelectronics		29,326		43,703		127,852		134,782		-32.9	%		-5.1	%
Life and health sciences		26,572		27,516		78,774		77,605		-3.4	%		1.5	%
Industrial manufacturing and other		18,361		19,669		57,719		53,449		-6.7	%		8.0	%
Total	$	118,605	$	129,485	$	392,024	$	379,687		-8.4	%		3.2	%

Notes:

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

The company noted the following points regarding its third quarter sales and orders results:

• The company recorded sales increases compared with the third quarter of 2010 in all of its target end markets except Microelectronics. Sales to this market declined significantly compared with the prior year period, due primarily to a

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decline in sales to the company’s semiconductor equipment customers, which are experiencing reduced demand for their products due to an industry-wide slowdown. The company’s sales to Life and Health Sciences customers increased significantly year-over-year, driven primarily by the addition of sales of High Q Technologies.

• Orders were lower in the third quarter of 2011 compared with the third quarter of 2010. All-time record quarterly orders from customers in the company’s Scientific Research end market partially offset reductions in its other end markets, particularly the Microelectronics market.

Operating Income

Newport reported operating income of $14.2 million in the third quarter of 2011, compared with operating income of $15.8 million in the third quarter of 2010. The company noted that the decline was due primarily to operating expenses related to acquisitions and severance payments that were not incurred in the prior year period, and to higher operating expenses in the third quarter of 2011 related to its global expansion initiative.

Operating income for the first nine months of 2011 was $47.9 million, an increase of 39.0% over the $34.5 million recorded in the first nine months of 2010. The improvement was driven primarily by the higher gross profit in the current year period, which was due primarily to the higher sales level. The company noted that it generated this increase in operating income despite incurring $3.2 million of acquisition-related costs and severance payments that were not included in the comparable period of 2010.

Net Income

Newport reported net income in the third quarter of 2011 of $10.5 million, or $0.27 per diluted share, when calculated in accordance with GAAP, compared with net income of $12.6 million, or $0.34 per diluted share, in the third quarter of 2010. On a non-GAAP basis, excluding certain expenses related to acquisitions, a commitment fee for an interim revolving line of credit and severance payments, the company would have recorded net income in the third quarter of 2011 of $11.7 million, or $0.30 per diluted share. On a non-GAAP basis, excluding a foreign currency loss and a gain relating to the sale of a business, the company would have recorded net income in the third quarter of 2010 of $12.8 million, and its earnings per diluted share would have been unchanged.

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The company’s net income for the first nine months of 2011 calculated in accordance with GAAP was $45.2 million, or $1.17 per share, compared with $25.9 million, or $0.69 per diluted share, in the first nine months of 2010. On a non-GAAP basis, excluding a non-recurring currency translation adjustment, certain acquisition-related expenses, a divestiture related gain, a commitment fee for an interim revolving line of credit and severance payments, the company would have recorded net income in the first nine months of 2011 of $40.8 million, or $1.05 per diluted share. On a non-GAAP basis, excluding a foreign currency loss and a net loss relating to the sale of a business, the company would have recorded net income in the first nine months of 2010 of $26.9 million, or $0.72 per diluted share.

Management considers the expenses and gains excluded from the company’s non-GAAP financial information to be outside of its core business results, and believes that the supplemental presentation of such non-GAAP financial information helps to provide a more meaningful comparison of its financial results between periods. A reconciliation of the company’s net income and net income per diluted share calculated in accordance with GAAP, and on a non-GAAP basis as described above, is provided following the statements of income included in this release.

Recently Completed Acquisitions and Financing Activities

On October 4, 2011, the company completed its acquisition of Ophir Optronics Ltd., a global leader in precision infrared optics, photonics instrumentation and three-dimensional non-contact measurement equipment headquartered in Jerusalem, Israel. Ophir’s fourth quarter operating results from and after that date will be included in Newport’s consolidated financial results for the fourth quarter of 2011.

On the same date, the company also closed a $250 million senior secured credit facility to provide funding for the acquisition of Ophir, the future repayment of the $126.8 million of subordinated convertible notes due in February 2012, and for general corporate purposes. The company borrowed the $185 million term loan portion of the facility at closing, and has a $65 million revolving credit facility available for future capital needs.

Financial Outlook

Commenting on the company’s outlook, Mr. Phillippy said, “Our results for the third quarter and first nine months of 2011 demonstrate Newport’s solid operational and financial foundation. We are excited about taking the next step in our strategy with the addition of High Q and Ophir, which significantly expands our served market opportunities and global reach. We remain confident that both Ophir and High Q will be accretive to Newport’s financial results in the fourth quarter of 2011 and beyond.”

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Based on its current financial outlook, including the addition of High Q Technologies and Ophir Optronics, the company expects its sales in the fourth quarter of 2011 to be in the range of $160 million to $165 million, which would result in record sales of $544 million to $549 million for the full year of 2011. The company noted that if Ophir and High Q had been combined with Newport for all of 2011, Newport’s expected full year 2011 sales would have been in the range of $650 million to $655 million.

Mr. Phillippy concluded, “The addition of Ophir and High Q expands our business significantly, while reducing the proportion of our revenue that is subject to the cyclicality of the semiconductor equipment industry. Although market conditions in that industry have slowed, we are confident that the revenue from these acquisitions, combined with our organic growth initiatives, will more than offset the effects of this slowdown, enabling us to deliver year-over-year sales growth in 2012.”

A reconciliation of Newport’s pro forma expected sales for 2011 to Newport’s GAAP expected sales for the year is provided following the statements of income included in this release.

ABOUT NEWPORT CORPORATION

Newport Corporation is a leading global supplier of advanced-technology products and systems to customers in the scientific research, aerospace and defense/security, microelectronics, life and health sciences and precision industrial manufacturing markets. Newport’s innovative solutions leverage its expertise in photonics technologies, including lasers, photonics instrumentation, sub-micron positioning systems, vibration isolation, optical components and subsystems, precision automation and three-dimensional non-contact measurement equipment, 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.

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, October 26, 2011, at 5:00 p.m. Eastern time (2:00 p.m. Pacific time) to review the company’s results for

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the third quarter and first nine months of 2011 and its outlook for the fourth quarter and full year of 2011. The call will be open to all interested investors through a live audio web broadcast via the Internet at www.newport.com/investors and www.earnings.com. The call also will be available to investors and analysts by dialing 888-713-3592 within the U.S. and Canada or 913-312-1483 from abroad.

The webcast will be archived on both websites and can be reached through the same links. A telephonic playback of the conference call also will be available by calling 888-203-1112 within the U.S. and Canada and 719-457-0820 from abroad. Playback will be available beginning at 8:00 p.m. Eastern time today and continue through 8:00 p.m. Eastern time on Wednesday, November 2, 2011. The replay passcode is 1245687.

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SAFE HARBOR STATEMENT

This news release contains forward-looking statements, including without limitation statements regarding the availability of Newport’s revolving credit facility, the expected impact on Newport’s financial results of the High Q Technologies and Ophir Optronics acquisitions, including sales and earnings accretion, Newport’s expected sales in the fourth quarter and full year of 2011, and Newport’s expectation of year-over-year sales growth in 2012. 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 Ophir Optronics and High Q Technologies; the strength of business conditions in the industries Newport serves, particularly the semiconductor industry; Newport’s ability to successfully penetrate and increase sales to its targeted end markets, particularly the life and health sciences market; 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 Form 10-K for the year ended January 1, 2011 and in Ophir’s Annual Report filed with the Israeli Securities Authority for the year ended December 31, 2010. 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

(Unaudited)

	Three Months Ended						Nine Months Ended
	October 1,			October 2,			October 1,			October 2,
(In thousands, except per share amounts)	2011			2010			2011			2010
Net sales	$	125,598		$	125,187		$	384,141		$	346,937
Cost of sales		69,815			71,452			210,810			200,471
Gross profit		55,783			53,735			173,331			146,466
Selling, general and administrative expenses		30,417			28,030			93,629			83,247
Research and development expense		11,152			9,894			31,785			28,755
Operating income		14,214			15,811			47,917			34,464
Foreign currency translation gain (loss) from dissolution of subsidiary		—			(554	)		7,198			(554	)
Interest and other expense, net		(2,348	)		(2,414	)		(6,377	)		(6,256	)
Income before income taxes		11,866			12,843			48,738			27,654
Income tax provision		1,364			239			3,555			1,717
Net income	$	10,502		$	12,604		$	45,183		$	25,937
Net income per share:
Basic	$	0.28		$	0.34		$	1.21		$	0.71
Diluted	$	0.27		$	0.34		$	1.17		$	0.69
Shares used in the computation of net income per share:
Basic		37,543			36,722			37,342			36,594
Diluted		38,571			37,579			38,732			37,529
Other operating data:
New orders received during the period	$	118,605		$	129,485		$	392,024		$	379,687
Backlog at the end of period scheduled to ship within 12 months							$	152,377		$	131,955

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Newport Corporation

Supplemental Non-GAAP Measures

(Unaudited)

	Three Months Ended						Nine Months Ended
(In thousands, except per share amounts)	October 1, 2011			October 2, 2010			October 1, 2011			October 2, 2010
Net income:
Net income - GAAP	$	10,502		$	12,604		$	45,183		$	25,937
Foreign currency translation (gain) loss from dissolution of subsidiary		—			554			(7,198	)		554
Acquisition-related costs		759			—			3,098			—
Commitment fee for interim revolving line of credit		500			—			500			—
Severance costs		125			—			125			—
Loss (gain) related to sale of businesses		—			(357	)		(619	)		454
Income tax (provision) benefit on non-GAAP adjustments		(191	)		7			(287	)		(72	)
Non-GAAP net income	$	11,695		$	12,808		$	40,802		$	26,873
Net income per diluted share:
Net income - GAAP	$	0.27		$	0.34		$	1.17		$	0.69
Total non-GAAP adjustments		0.03			0.00			(0.12	)		0.03
Non-GAAP net income per diluted share	$	0.30		$	0.34		$	1.05		$	0.72

(In millions)	Range
Expected 2011 Sales:
Expected Newport sales for 2011 - GAAP	$	544	$	549
Estimated 2011 sales of Ophir prior to the closing date		91		91
2011 sales of High Q prior to the closing date		15		15
Expected Newport non-GAAP sales for 2011 including Ophir and High Q for the  full year of 2011	$	650	$	655

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Newport Corporation

Consolidated Balance Sheets

(Unaudited)

	October 1,		January 1,
(In thousands)	2011		2011
ASSETS
Current assets:
Cash and cash equivalents	$	209,362	$	90,992
Marketable securities		7,741		109,192
Accounts receivable, net		77,035		84,238
Notes receivable, net		1,606		3,313
Inventories, net		97,447		84,508
Deferred income taxes		9,795		9,424
Prepaid expenses and other current assets		12,214		10,362
Total current assets		415,200		392,029
Property and equipment, net		46,558		46,160
Goodwill		75,749		69,322
Deferred income taxes		2,139		3,493
Intangible assets, net		33,250		24,990
Investments and other assets		24,388		20,396
	$	597,284	$	556,390
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Short-term borrowings, net	$	133,937	$	12,468
Accounts payable		23,966		31,691
Accrued payroll and related expenses		25,292		30,804
Accrued expenses and other current liabilities		34,192		28,416
Total current liabilities		217,387		103,379
Long-term debt, net		6,923		122,042
Obligations under capital leases, less current portion		848		979
Accrued pension liabilities		14,142		13,279
Other liabilities		21,618		21,252
Stockholders’ equity		336,366		295,459
	$	597,284	$	556,390

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