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» Newport Corporation Q3 2009 Earnings Call Transcript
While we are quite proud of these orders and sales results, perhaps the most compelling highlights of the quarter are earnings and cash generation. We achieved earnings of $0.22 per diluted share and generated $18.8 million in cash from operating activities during the quarter. Both of these numbers clearly demonstrate the strength of our business and our ability to gain, improving leverage on sales increases and leverage this into significant increases in profitability. This is particularly exciting because we now expect all time record sales for the full year of 2010, an increase of more than 25% over 2009. We expect the sales growth to drive very strong profitability for the year. I will discuss our financial outlook in more detail in a few minutes. But first I’d like to provide an overview of the conditions and trends in our target markets and characterize our orders in that context.Orders from microelectronic customers were $43.4 million, up 191% from the second quarter of 2009 and only $4 million off the all time record orders level of Q1 of this year. Most forecasts now suggest that the semiconductor equipment industry will remain strong throughout 2010 and much of 2011. As we have communicated previously we are closely aligned with several key customers that are tier manufactures in this industry. And in communications with these customers, they have reinforced their expectation of robust market conditions for the balance of 2010 and continuing in to 2011. Second quarter orders from customers in our research market were $36.4 million, an 11.4% increase over the second quarter of 2009, and only 2.4 million lower than the strong orders in Q1 of 2010. We continue to benefit from orders funded by the American recovery and reinvestment act in the U.S. We currently expect these funds to be available for the next few quarters but to begin winding down in late 2010. The global stimulus related funding picture is mixed, with spending already completed in some countries and plan to subside during the second half of this year and others. As communicated previously, these funding sources are being partially offset by reduced funding from local governments, corporate research budgets and philanthropic sources.
Orders from life and health sciences customers were $26.4 million; an increase of 37.1% over the second quarter of 2009 and 11.5% sequentially. We are now receiving production orders from bio-instrumentation customers for a few collaborative development programs that have been ongoing for the past 18 to 24 months. We also continue to enjoy robust order levels for our industry leading products for multi-Fulton imaging applications including multi lasers, vibration control work stations and optical systems. Current forecast for the bio-instrumentation industry are generally bullish for the foreseeable future, while opportunities in bio-imaging applications will be somewhat correlated to research funding.Orders from industrial manufacturing customers of $19.4 million grew 71.6% over the second quarter of 2009 and 31.7% sequentially. Included in this number were several large OEM orders for optical and precision positioning components. This is a particularly encouraging result as it speaks not only to our success but the overall health of the [photonics] industry. Recall that this market includes a wide range of customers and applications, including sales of enabling components to other [photonics] industry companies. The conclusion form this brief review of each of our markets is that we are clearly operating within a business environment that has improved significantly in recent quarters led by robust activity levels in the semiconductor equipment industry. With our strong position in multiple end markets, we have capitalized on these improved conditions to produce significant revenue growth. This combined with effective execution in our business operations and our more streamlined operating cost structure has enabled us to generate meaningful earnings leverage. Read the rest of this transcript for free on seekingalpha.com