Irvine CA, October 24, 2002 -- Newport Corporation reported financial results for the three and nine months ended September 30, 2002, reflecting weakness in all of its end markets. Sales from continuing operations for the 2002 third quarter totaled $45.5 million, compared with $57.2 million in the third quarter of 2001.
The company reported a loss from continuing operations for the current year third quarter of $59.4 million, or $1.55 per share, compared with a loss from continuing operations of $21.2 million, or $0.58 per share, in the corresponding year-earlier period.
The 2002 third quarter results include a charge of $43.1 million, or $1.13 per share, related to increased inventory reserves and cost reduction initiatives announced in August 2002, as well as to expanded cost reduction measures finalized in September 2002 in response to the continuing market downturn. The results for the third quarter of 2002 also include a charge of $15.3 million, or $0.40 per share, required to establish a valuation reserve for previously recorded deferred tax assets. Results for the third quarter of 2001 included a pre-tax charge of $34.3 million for asset impairment and restructuring initiatives. Results for both periods account for the company's former metrology business and its Minnesota facility as discontinued operations reflecting the company's recently completed and planned divestitures.
Including the discontinued operations, the company incurred net losses of $68.6 million, or $1.79 per share, for the third quarter of 2002 and $25.5 million, or $0.70 per share, for the corresponding period of 2001.
Robert G. Deuster, president and chief executive officer, said, "Despite the turbulent market conditions, Newport remains strong. We have a healthy balance sheet, including almost $279 million in cash and cash equivalents, and we continue to be a recognized leader in every one of our key markets. Our leadership team is prepared to manage through these difficult times, and we are taking the tough actions necessary to streamline our cost structure to maximize our operating performance both during the current downturn and when industry conditions rebound."
Deuster added: "Due to the weak conditions we are experiencing in all of our end markets, we are in the process of reducing our cost structure beyond that which we announced in August. At that time, we indicated our intent to reduce headcount by 225 to 275 people. Based upon revisions to that plan, which were finalized in September 2002, we now anticipate the headcount reduction to be over 300. In addition, our plan originally called for downsizing our fiber optic operations in Santa Ana, California. We now intend to consolidate these operations into our main campus in Irvine, California. The actions are targeted for substantial completion in the fourth quarter of 2002 and will give us a much more efficient operating structure as we move into 2003. We estimate that these additional measures, combined with the actions identified in August 2002, will result in annualized savings of $13 million to $15 million."
For more information, visit www.newport.com/investors .
Laser Focus World