04 May 2010
Newport's president and chief executive officer Robert Phillippy has told investors that the company produced "solid profitability" in the first quarter of 2010. In an upbeat conference call, Phillippy said that his expectations for 2010 had increased and that sales for fiscal 2010 are expected to be approximately 15–20% higher than the 2009 level.
Highlights for Q1 2010 included net sales of $107.2m, a 5.5% sequential increase over the $101.6m recorded in Q4 of 2009 and a 19.7% increase year-on-year, as well as new orders totalling $124.6m, up 55.0% year-on-year and the highest quarterly level since 2008, and a net income of $5.1m.
"Our first quarter performance was a clear demonstration of the increasing strength of our company and the momentum in our markets," said Phillippy. "We expect our sales in the second quarter of 2010 to be similar to the strong first quarter level."
One significant factor was a rebound in the company's microelectronics end market. "Orders from microelectronics customers were $47.2m, a sequential increase of 75% and an increase of 268.1% from the deep trough of Q1 2009," commented Phillippy. "This is an all-time record orders performance for our microelectronics market."
The company's research market also saw an increase in Q1 2010. First quarter orders from customers in the research market were $38.8m, an increase of 20.4% year-on-year. According to Phillippy, this is the highest level in Newport's history for any first quarter. He also noted that, with the integration of New Focus being completed, Newport had enhanced its position as the source of the broadest and deepest offering of photonics products and technologies for the scientific community.
Looking from an operations perspective, Phillippy pointed out that Newport's manufacturing activity in Wuxi, China, continues to increase. "Our Wuxi team has now grown to 126 people," he said. "We shipped approximately $7m in revenue value during the first quarter. We remain on track to ship products having $30m in revenue value from Wuxi in 2010. In addition, our growing local presence in China is helping us to build stronger customer relationships in this important region."
Concluding with an outlook for the rest of the year, Phillippy was upbeat and optimistic. "We have seen meaningful improvements in all our key end markets, which we expect to continue throughout most, if not all, of 2010," he said. "We expect Q2 revenue to be similar or perhaps slightly higher than the Q1 level. Although it's difficult to predict the level and duration of the current upswing, particularly in the cyclical microelectronics market, we now expect revenue growth for the full year 2010 of 15–20% compared with 2009. With our improving revenues and streamlined cost structure, we expect to continue to produce significant profit growth in 2010."