Newport achieved a new quarterly record for orders of $143.7 million. Our sales of $130.1 million were the second highest we have ever achieved in a quarter. Also, we continue to build on our track record of achieving our target financial model, with gross margins of 45.9%, an excellent bottom line earnings. Our cash generation in the quarter was another important highlight, as we increased our cash balance by $17.8 million. These results demonstrate the appeal of our industry-leading brands and differentiated product portfolio and our ability to leverage increasing sales into higher profitability and excellent cash generation.Now I'd like to take a few minutes to provide an overview of second quarter activity in each of our target end markets. Orders from our scientific research, aerospace and defense/security customers were $41.7 million, representing growth of 14.4% over the second quarter of 2010. While the funding environment for research in the U.S. continues to be a highly visible topic, our slight decline in U.S. research market orders was more than offset by year-over-year growth in orders from customers in the Asia Pacific region. I'm also pleased to report that our research market orders grew by 16% year-over-year in Japan, as that country works to recover from the recent natural disaster. From a product line perspective, we experienced robust order activity in our lasers, precision motion and opto-mechanical component product lines. Orders from microelectronics market customers were $56.9 million, representing a record for the company and a 30.8% increase over the very strong second quarter of 2010. A major driver of this result was a $14.8 million laser order from one of our large semiconductor OEM customers that will ship over a 3-year period. Even without this order, our orders from customers in this market would have exceeded $40 million for the sixth consecutive quarter. Recent reports have suggested that the semiconductor equipment market may soften in the second half of this year, and updated forecasts from our OEM customers are in line with this sentiment.
For several reasons, we are confident that we are well prepared to weather any softening in this industry. First, over the last 3 years we have transitioned significant fixed costs to variable costs in our operations to ensure they are streamlined and flexible. Second, semiconductor manufacturers typically continue with technology buys during industry down cycles, and we have significant content designed into a number of next-generation tools of Tier 1 semiconductor equipment OEM customers. In fact, we have historically gained share during slower periods in this market. And with several new product entries quickly gaining traction with our customers, we expect to do this again during the next down cycle. In addition, the balance in our end markets insulates us to some degree from the impact of semiconductor cycles. This balance, together with our pending acquisitions, positions us well to be able to continue to grow even during cyclical downturns in the semiconductor equipment market.Orders from life and health sciences customers were $26.1 million, a decline of 1.2% compared with the second quarter of 2010. It's important to note that the prior year period made for difficult comparison, as it represented the first of 2 quarters in which we received initial production orders for a few new bioinstrumentation OEM programs that have been under development for the prior 2 years. We remain very bullish on our near- and long-term prospects in this market, given our increasing base of OEM engagements and the recent release of some innovative new products targeted at bioimaging applications. One important highlight in this area is the introduction in May of our new InSight DeepSee tunable ultrafast laser at the LASER World Of Photonics trade show in Munich. InSight DeepSee enables the start of a new era in bioimaging, by providing from a single unit, an unprecedented continuous tuning range of 620 nanometers, nearly double that of existing ultrafast lasers. This enables scientists to view high-resolution 3D images at dramatically greater depths inside live tissue, with a highly automated user-friendly life source. This represents a major advancement to current state-of-the-art systems, and we are seeing a high level of interest and inquiries regarding this new product. Over the long term, we expect our sales to life and health sciences customers to grow faster than the overall bioinstrumentation market, which has most recently been forecast to grow 5% to 7% in 2011. Read the rest of this transcript for free on seekingalpha.com