Newport Corporation Reports Second Quarter 2008 Results
Sales in the second quarter of 2008 totaled $117.7 million, an increase of6.1% compared with the $110.9 million recorded in the second quarter of 2007.Sales in the first half of 2008 totaled $232.9 million, an increase of 6.8%compared with the $218.2 million recorded in the first half of 2007. Neworders received in the second quarter of 2008 totaled $110.1 million, adecrease of approximately 1.6% compared with the $111.9 million recorded inthe second quarter of 2007. New orders received in the first half of 2008totaled $235.1 million, an increase of 5.8% compared with the $222.2 millionrecorded in the first half of 2007.
Robert J. Phillippy, president and chief executive officer, commented,"Despite weak overall macroeconomic conditions, we achieved our salesobjectives in the second quarter. In particular, we experienced strongyear-over-year increases in shipments of products to customers for industrialmanufacturing and photovoltaic applications. The strength in these areas wasoffset in part by lower sales to research customers and semiconductorequipment manufacturers."
Commenting on orders, Mr. Phillippy stated, "Our order level for thesecond quarter of 2008 was slightly below the comparable quarter of 2007 andwas below our expectations, due primarily to lower orders received fromcustomers in the life and health sciences (LHS) market. This decrease in LHSmarket orders was offset in part by higher orders from photovoltaic customers.Following two consecutive quarters of all-time record orders from LHScustomers, we believe that our lower orders from this market in the secondquarter primarily reflect the timing of our customers' needs. However, a fewof our original equipment manufacturer (OEM) customers in this market havereported a modest slowdown in demand for their medical laser systems forcosmetic procedures. On the other hand, we continue to be pleased by thetraction we are gaining in the photovoltaic market. Our new orders fromphotovoltaic customers in the second quarter exceeded $6.5 million, the secondhighest quarterly level ever recorded by Newport from this market after theall-time record level in the first quarter of this year. In the first half of2008, we have received new orders totaling approximately $22 million fromcustomers in the photovoltaic industry."
Based on generally accepted accounting principles (GAAP), Newport reporteda net loss in the second quarter of 2008 of $2.8 million, or $0.08 per dilutedshare, compared with net income of $8.0 million, or $0.20 per diluted share,in the second quarter of 2007. Included in the net loss is a non-cash,pre-tax charge of $7.1 million to write-off a note receivable and otheramounts relating to a business that had been classified as a discontinuedoperation and subsequently sold in 2005. The buyer of that business hasfailed to make certain principal, interest and rent payments due under itsagreements with Newport. The company has a secured interest in the assets ofthe business and has begun legal proceedings to recover the amounts owed.Pursuant to GAAP, the note receivable and other amounts have been fullywritten off in the second quarter, and in future periods, any cash received bythe company in satisfaction of these items will be recorded as other income inthe company's financial statements. Excluding this charge, the company wouldhave reported net income of $4.0 million, or $0.11 per diluted share, in thesecond quarter of 2008. For the first half of 2008, Newport reported netincome of $0.9 million, or $0.03 per diluted share, compared with $13.2million, or $0.33 per diluted share, in the first half of 2007. Excluding thewrite-off charge, Newport's net income for t
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