Newport 10-Q 13 Aug 15 2015 Q2 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	6 Months Ended
	Jul. 04, 2015	Jul. 31, 2015
Document and Entity Information
Entity Registrant Name	NEWPORT CORP
Entity Central Index Key	225,263
Document Type	10-Q
Document Period End Date	Jul. 4, 2015
Amendment Flag	false
Current Fiscal Year End Date	--01-02
Entity Current Reporting Status	Yes
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding		39,580,534
Document Fiscal Year Focus	2,015
Document Fiscal Period Focus	Q2

Consolidated Statements of Inco

Consolidated Statements of Income and Comprehensive Income - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Jul. 04, 2015	Jun. 28, 2014	Jul. 04, 2015	Jun. 28, 2014
Consolidated Statements of Income and Comprehensive Income
Net sales	$ 147,977	$ 153,232	$ 304,632	$ 300,122
Cost of sales	84,058	83,344	170,432	164,775
Gross profit	63,919	69,888	134,200	135,347
Selling, general and administrative expenses	38,690	42,085	79,299	81,291
Research and development expense	15,158	14,318	30,113	28,456
Loss (gain) on sale or other disposal of assets, net			1,088	(411)
Operating income	10,071	13,485	23,700	26,011
Interest and other expense, net	(1,064)	(658)	(1,967)	(1,634)
Income before income taxes	9,007	12,827	21,733	24,377
Income tax provision	3,237	3,830	7,299	7,439
Net income	5,770	8,997	14,434	16,938
Net income attributable to non-controlling interests		45		100
Net income attributable to Newport Corporation	5,770	8,952	14,434	16,838
Net income	5,770	8,997	14,434	16,938
Other comprehensive income (loss):
Foreign currency translation gains (losses)	248	(825)	(5,963)	(364)
Unrecognized net pension (losses) gains, net of tax	(41)	59	429	102
Unrealized losses on investments and marketable securities, net of tax	(1)	(42)	(109)	(22)
Other comprehensive income (loss)	206	(808)	(5,643)	(284)
Comprehensive income	5,976	8,189	8,791	16,654
Comprehensive income attributable to non-controlling interests		46		115
Comprehensive income attributable to Newport Corporation	5,976	8,143	8,791	16,539
Comprehensive income	$ 5,976	$ 8,189	$ 8,791	$ 16,654
Net income per share attributable to Newport Corporation:
Basic (in dollars per share)	$ 0.15	$ 0.22	$ 0.36	$ 0.42
Diluted (in dollars per share)	$ 0.14	$ 0.22	$ 0.36	$ 0.42
Shares used in per share calculations:
Basic (in shares)	39,717	39,881	39,659	39,703
Diluted (in shares)	40,265	40,528	40,412	40,513

Consolidated Balance Sheets

Consolidated Balance Sheets - USD ($) $ in Thousands	Jul. 04, 2015	Jan. 03, 2015
Current assets:
Cash and cash equivalents	$ 39,717	$ 46,883
Restricted cash	1,259	1,704
Marketable securities	6	57
Accounts receivable, net of allowance for doubtful accounts of $1,199 and $1,242 as of July 4, 2015 and January 3, 2015, respectively	93,638	96,512
Inventories	125,208	112,440
Current deferred tax assets	20,764	20,734
Prepaid expenses and other current assets	20,087	14,948
Total current assets	300,679	293,278
Property and equipment, net	83,211	82,793
Goodwill	103,749	97,524
Long-term deferred tax assets	5,679	5,005
Intangible assets, net	70,271	70,811
Investments and other assets	28,956	30,516
Total assets	592,545	579,927
Current liabilities:
Short-term borrowings	4,084	3,772
Accounts payable	36,574	31,448
Accrued payroll and related expenses	33,227	34,607
Accrued expenses and other current liabilities	32,140	31,797
Total current liabilities	106,025	101,624
Long-term debt	76,256	71,000
Pension liabilities	29,351	28,554
Long-term deferred tax liabilities	14,274	14,272
Other long-term liabilities	$ 7,369	$ 7,773
Commitments and contingencies
Stockholders' equity:
Common stock, par value $0.1167 per share, 200,000,000 shares authorized; 39,580,190 and 39,603,662 shares issued and outstanding as of July 4, 2015 and January 3, 2015, respectively	$ 4,623	$ 4,626
Capital in excess of par value	462,353	468,575
Accumulated other comprehensive loss	(23,625)	(17,982)
Accumulated deficit	(84,081)	(98,515)
Total stockholders' equity	359,270	356,704
Total Liabilities and Stockholders' equity	$ 592,545	$ 579,927

Consolidated Balance Sheets (Pa

Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands	Jul. 04, 2015	Jan. 03, 2015
Consolidated Balance Sheets
Accounts receivable, allowance for doubtful accounts (in dollars)	$ 1,199	$ 1,242
Common stock, par value (in dollars per share)	$ 0.1167	$ 0.1167
Common stock, shares authorized	200,000,000	200,000,000
Common stock, shares issued	39,580,190	39,603,662
Common stock, shares outstanding	39,580,190	39,603,662

Consolidated Statements of Cash

Consolidated Statements of Cash Flows - USD ($) $ in Thousands	6 Months Ended
	Jul. 04, 2015	Jun. 28, 2014
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$ 14,434	$ 16,938
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	14,166	14,312
Gain on sale of assets		(411)
Provision for losses on inventories	3,706	2,439
Stock-based compensation expense	6,827	5,447
Provision for doubtful accounts	126	264
Loss on disposal of property and equipment	1,153	287
Deferred income taxes	(666)	(577)
Excess tax benefits from stock-based compensation	(1,848)	(2,625)
Increase (decrease) in cash, net of acquisition and divestiture, due to changes in:
Accounts receivable	3,108	(3,985)
Inventories	(15,349)	(13,277)
Prepaid expenses and other assets	(3,022)	(2,602)
Accounts payable	2,315	6,204
Accrued payroll and related expenses	(2,107)	8,241
Accrued expenses and other liabilities	2,328	3,946
Other long-term liabilities	471	(999)
Net cash provided by operating activities	25,642	33,602
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment	(10,135)	(11,895)
Restricted cash	384	582
Proceeds from divestiture of business		5,030
Acquisition of businesses, net of cash acquired	(7,865)
Refundable amounts related to acquisition of a business	(2,319)
Purchase of investments and marketable securities	(824)	(661)
Proceeds from the sale or maturity of investments and marketable securities	123	392
Net cash used in investing activities	(20,636)	(6,552)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from long-term debt	11,000
Repayment of long-term debt and obligations under capital leases	(6,008)	(15,496)
Proceeds from short-term borrowings	1,358	5,430
Repayment of short-term borrowings	(4,971)	(3,613)
Purchases of non-controlling interests		(1,863)
Proceeds from the issuance of common stock under employee plans	1,075	2,642
Tax withholding payment related to net share settlement of equity awards	(3,419)	(2,922)
Purchases of the Company's common stock	(12,149)
Excess tax benefits from stock-based compensation	1,848	2,625
Net cash used in financing activities	(11,266)	(13,197)
Impact of foreign exchange rate changes on cash balances	(906)	333
Net (decrease) increase in cash and cash equivalents	(7,166)	14,186
Cash and cash equivalents at beginning of period	46,883	53,710
Cash and cash equivalents at end of period	39,717	67,896
Supplemental disclosures of cash flow information:
Cash paid during the period for interest	969	1,032
Cash paid during the period for income taxes, net	6,310	3,935
Property and equipment accrued in accounts payable	$ 198	$ 708

BASIS OF PRESENTATION

BASIS OF PRESENTATION	6 Months Ended
	Jul. 04, 2015
BASIS OF PRESENTATION
BASIS OF PRESENTATION	NOTE 1 BASIS OF PRESENTATION The accompanying unaudited consolidated financial statements include the accounts of Newport Corporation and its subsidiaries (collectively referred to as the Company) and have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and with the instructions of Form 10-Q and Rule 10-01 of Regulation S-X. In the opinion of management, all adjustments (consisting of normal and recurring accruals) considered necessary for a fair presentation have been included. All intercompany transactions and balances have been eliminated in consolidation. The accompanying unaudited consolidated financial statements do not include certain footnotes and financial presentations normally required under generally accepted accounting principles (GAAP) and, therefore, should be read in conjunction with the consolidated financial statements and related notes contained in the Company’s Annual Report on Form 10-K for the year ended January 3, 2015. The results for the interim periods are not necessarily indicative of the results the Company will have for the full year ending January 2, 2016. The January 3, 2015 balances reported herein are derived from the audited consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended January 3, 2015.

RECENT ACCOUNTING PRONOUNCEMENT

RECENT ACCOUNTING PRONOUNCEMENTS	6 Months Ended
	Jul. 04, 2015
RECENT ACCOUNTING PRONOUNCEMENTS
RECENT ACCOUNTING PRONOUNCEMENTS	NOTE 2 RECENT ACCOUNTING PRONOUNCEMENTS In May 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2014-09, Revenue from Contracts with Customers , which created Topic 606. ASU No. 2014-09 establishes a core principle that a company should recognize revenue to depict the transfer of promised goods or services to a customer in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. In order to achieve that core principle, companies are required to apply the following steps: (1) identify the contract with the customer; (2) identify performance obligations in the contract; (3) determine the transaction price; (4) allocate the transaction price to the performance obligations in the contract; and (5) recognize revenue when (or as) the company satisfies a performance obligation. Upon adoption, ASU No. 2014-09 can be applied either (i) retrospectively to each prior reporting period or (ii) retrospectively with the cumulative effect of initial application recognized on the date of adoption. At the time of issuance, ASU No. 2014-09 was to become effective for interim and annual periods beginning after December 15, 2016, and early adoption was not permitted. However, i n July 2015, the FASB deferred the effective date of ASU No. 2014-09 by one year to annual reporting periods beginning after December 15, 2017. In addition, early adoption of the standard will be permitted, but not before the original effective date of December 15, 2016. The Company is currently evaluating the expected impact of ASU No. 2014-09 on its financial position and results of operations. In July 2015, the FASB issued ASU No. 2015-11, Simplifying the Measurement of Inventory . ASU No. 2015-11 clarifies that inventory should be held at the lower of cost or net realizable value. Net realizable value is defined as the estimated selling price, less the estimated costs to complete, dispose and transport such inventory. ASU No. 2015-11 will be effective for fiscal years and interim periods beginning after December 15, 2016. ASU No. 2015-11 is required to be applied prospectively and early adoption is permitted. The Company’s adoption of ASU No. 2015-11 is not expected to have a material impact on the Company’s financial position or results of operations.

ACQUISITION OF FEMTOLASERS

ACQUISITION OF FEMTOLASERS	6 Months Ended
	Jul. 04, 2015
ACQUISITION OF FEMTOLASERS
ACQUISITION OF FEMTOLASERS	NOTE 3 ACQUISITION OF FEMTOLASERS On February 11, 2015, the Company acquired all of the capital stock of FEMTOLASERS Produktions GmbH (FEMTOLASERS). The initial purchase price of €9.1 million was paid in cash at closing and is subject to a net asset adjustment. Based on the preliminary financial information provided by FEMTOLASERS, the Company estimated an initial net asset adjustment to the purchase price of approximately €1.6 million during the first quarter of 2015. Based on additional information obtained during the second quarter, the Company estimated a revised net asset adjustment of €2.1 million, resulting in a purchase price of €7.0 million (approximately $7.9 million). The final amount of this net asset adjustment is subject to agreement between the Company and the FEMTOLASERS selling shareholders, which the Company expects to finalize during the second half of 2015. Of the initial purchase price, €2.3 million was deposited at closing into escrow until thirty months after closing, to secure certain obligations of the FEMTOLASERS selling shareholders under the share purchase agreement, including the net asset adjustment. The Company incurred $0.4 million in transaction costs, which have been expensed as incurred and are included in selling, general and administrative expenses in the statements of income and comprehensive income. FEMTOLASERS expands the Company’s offering of ultrafast laser products and enhances its technology base in this area. The results of FEMTOLASERS have been included in the results of the Company’s Lasers Group as of the acquisition date.Immediately following the closing of the acquisition, the Company repaid €3.6 million (approximately $4.0 million) of FEMTOLASERS’ outstanding loans that were assumed as part of the acquisition. The consideration paid by the Company for the acquisition of FEMTOLASERS is allocated to the assets acquired, net of the liabilities assumed, based upon their estimated fair values as of the date of the acquisition. The excess of the purchase price over the estimated fair value of the assets acquired, net of the estimated fair value of the liabilities assumed, is recorded as goodwill. The Company had made an estimated allocation of the purchase price in the first quarter of 2015. Based on additional information obtained during the second quarter of 2015, the Company refined the values assigned to assets, liabilities and the amount of goodwill. The second quarter adjustments in the table below were not material and therefore, they were recorded in the second quarter rather than retroactively. As discussed above, the Company has not yet finalized the purchase price. Any changes during the measurement period may have a further impact on goodwill. (In thousands) Estimated Allocation at April 4, 2015 Second Quarter Adjustments Current Purchase Price Allocation Assets acquired and liabilities assumed: Cash $ $ — $ Accounts receivable ) Inventories Deferred tax assets Other assets ) Goodwill ) Developed technology — In-process research and development Other intangible assets — Accounts payable ) — ) Debt ) — ) Deferred tax liabilities ) ) ) Other liabilities ) ) ) $ $ ) $ The goodwill related to the acquisition of FEMTOLASERS has been allocated to the Company’s Lasers Group and will not be deductible for tax purposes. The actual net sales and net loss of FEMTOLASERS from February 11, 2015, the closing date of the acquisition, that were included in the Company’s consolidated statements of income and comprehensive income for the three and six months ended July 4, 2015, are set forth in the table below. Also set forth in the table below are the pro forma net sales and net income of the Company during the three and six months ended July 4, 2015 and June 28, 2014, including the results of FEMTOLASERS as though the acquisition had occurred at the beginning of 2014. This supplemental pro forma financial information is presented for information purposes only and is not necessarily indicative of the results of operations that would have been achieved if the acquisition had occurred as of the beginning of 2014. Three Months Ended Six Months Ended July 4, June 28, July 4, June 28, (Unaudited, in thousands) 2015 2014 2015 2014 Actual: Net sales $ $ — $ $ — Net loss attributable to Newport Corporation $ ) $ — $ ) $ — Supplemental pro forma information: Net sales $ $ $ $ Net income attributable to Newport Corporation $ $ $ $ For the purposes of determining pro forma net income, adjustments were made to actual net income of the Company for all periods presented in the table above. The pro forma net income assumes that amortization of acquired intangible assets began at the beginning of 2014 rather than on February 11, 2015. The result is a net increase in amortization expense of $0.1 million and $0.2 million for the three and six months ended June 28, 2014, respectively. Transaction costs totaling $0.4 million, which were incurred prior to the closing of the acquisition, are excluded from pro forma net income.

MARKETABLE SECURITIES

MARKETABLE SECURITIES	6 Months Ended
	Jul. 04, 2015
MARKETABLE SECURITIES
MARKETABLE SECURITIES	NOTE 4 MARKETABLE SECURITIES All marketable securities of the Company were classified as available for sale and were recorded at market value using the specific identification method, and unrealized gains and losses are reflected in accumulated other comprehensive loss in the accompanying consolidated balance sheets. The aggregate fair value of available for sale securities and the aggregate amount of unrealized gains and losses in available for sale securities at July 4, 2015 were as follows: Aggregate Aggregate Amount of Unrealized (In thousands) Fair Value Gains Losses Money market funds $ $ — $ — The aggregate fair value of available for sale securities and the aggregate amount of unrealized gains and losses in available for sale securities at January 3, 2015 were as follows: Aggregate Aggregate Amount of Unrealized (In thousands) Fair Value Gains Losses Money market funds $ $ — $ — Certificates of deposit — — $ $ — $ — Money market funds do not have a maturity date. There were no gross realized gains and losses for the three and six months ended July 4, 2015 or June 28, 2014.

FAIR VALUE MEASUREMENTS

FAIR VALUE MEASUREMENTS	6 Months Ended
	Jul. 04, 2015
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS	NOTE 5 FAIR VALUE MEASUREMENTS Accounting Standards Codification (ASC) 820-10, Fair Value Measurements, requires that for any assets and liabilities stated at fair value on a recurring basis in the Company’s financial statements, the fair value of such assets and liabilities be measured based on the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Level 1 asset and liability values are derived from quoted prices in active markets for identical assets and liabilities and Level 2 asset and liability values are derived from quoted prices in inactive markets or based on other observable inputs. The Company’s assets and liabilities measured at fair value on a recurring basis are categorized in the table below based upon their level within the fair value hierarchy as of July 4, 2015. Fair Value Measurements at Reporting Date Using (In thousands) Quoted Prices in Active Markets for Identical Assets Significant Other Observable Inputs Significant Unobservable Inputs Description July 4, 2015 (Level 1) (Level 2) (Level 3) Assets: Restricted Cash $ $ $ — $ — Marketable securities: Money market funds — — Derivative assets: Option contracts — — Funds in investments and other assets: Israeli pension funds — — Group insurance contracts — — — — $ $ $ $ — Liabilities: Derivative liabilities: Option contracts — — The Company’s assets and liabilities measured at fair value on a recurring basis are categorized in the table below based upon their level within the fair value hierarchy as of January 3, 2015. Fair Value Measurements at Reporting Date Using (In thousands) Quoted Prices in Active Markets for Identical Assets Significant Other Observable Inputs Significant Unobservable Inputs Description January 3, 2015 (Level 1) (Level 2) (Level 3) Assets: Restricted Cash $ $ $ — $ — Marketable securities: Money market funds — — Certificates of deposit — — — Derivative assets: Option contracts — — Funds in investments and other assets: Israeli pension funds — Group insurance contracts — — — — $ $ $ $ — Liabilities: Derivative liabilities: Option contracts $ $ — $ $ — The Company’s other financial instruments include short-term borrowings and long-term debt. The fair value of these financial instruments was estimated based on current rates for similar issues or on the current rates offered to the Company for debt of similar remaining maturities. The estimated fair values of these financial instruments were as follows: July 4, 2015 January 3, 2015 Carrying Carrying (In thousands) Amount Fair Value Amount Fair Value Short-term borrowings $ $ $ $ Long-term debt $ $ $ $

SUPPLEMENTAL BALANCE SHEET INFO

SUPPLEMENTAL BALANCE SHEET INFORMATION	6 Months Ended
	Jul. 04, 2015
SUPPLEMENTAL BALANCE SHEET INFORMATION
SUPPLEMENTAL BALANCE SHEET INFORMATION	NOTE 6 SUPPLEMENTAL BALANCE SHEET INFORMATION Inventories Inventories that are expected to be sold within one year are classified as current inventories and are included in inventories in the accompanying consolidated balance sheets. Such inventories were as follows: July 4, January 3, (In thousands) 2015 2015 Raw materials and purchased parts $ $ Work in process Finished goods Short-term inventories $ $ Inventories that are not expected to be sold within one year are classified as long-term inventories and are included in investments and other assets in the accompanying consolidated balance sheets. Such inventories were as follows: July 4, January 3, (In thousands) 2015 2015 Raw materials and purchased parts $ $ Finished goods Long-term inventories $ $ Accrued Warranty Obligations Unless otherwise stated in the Company’s product literature or in its agreements with customers, products sold by the Company’s Photonics and Optics Groups generally carry a one-year warranty from the original invoice date on all product materials and workmanship, other than filters and gratings products, which generally carry a 90-day warranty, and laser beam profilers and dental CAD/CAM scanners, which generally carry a two-year warranty. Products sold by the Photonics and Optics Groups to original equipment manufacturer (OEM) customers carry warranties generally ranging from 15 to 19 months. Products sold by the Company’s Lasers Group carry warranties that vary by product and product component, but generally range from 90 days to two years. In certain cases, such warranties for Lasers Group products are limited by either a set time period or a maximum amount of hourly usage of the product, whichever occurs first. Defective products will be either repaired or replaced, generally at the Company’s option, upon meeting certain criteria. The Company accrues a provision for the estimated costs that may be incurred for warranties relating to a product (based on historical experience) as a component of cost of sales. Short-term accrued warranty obligations, which expire within one year, are included in accrued expenses and other current liabilities and long-term warranty obligations are included in other long-term liabilities in the accompanying consolidated balance sheets. The activity in accrued warranty obligations was as follows: Six Months Ended July 4, June 28, (In thousands) 2015 2014 Balance at beginning of year $ $ Additions charged to cost of sales Warranty claims ) ) Balance at end of period $ $ Accrued Expenses and Other Current Liabilities Accrued expenses and other current liabilities were as follows: July 4, January 3, (In thousands) 2015 2015 Deferred revenue $ $ Deferred lease liability Accrued income taxes Short-term accrued warranty obligations Other $ $ Accumulated Other Comprehensive Loss Accumulated other comprehensive loss consisted of the following: July 4, January 3, (In thousands) 2015 2015 Cumulative foreign currency translation losses $ ) $ ) Unrecognized net pension losses, net of tax ) ) Unrealized gains on investments and marketable securities, net of tax $ ) $ )

GOODWILL AND INTANGIBLE ASSETS

GOODWILL AND INTANGIBLE ASSETS	6 Months Ended
	Jul. 04, 2015
GOODWILL AND INTANGIBLE ASSETS
GOODWILL AND INTANGIBLE ASSETS	N OTE 7 GOODWILL AND INTANGIBLE ASSETS The changes in the carrying amounts of goodwill were as follows: Photonics Lasers Optics (In thousands) Group Group Group Total Balance at January 3, 2015: Goodwill Accumulated impairment losses ) ) ) ) Goodwill allocated to acquisition — — Foreign currency impact — ) — ) Balance at July 4, 2015: Goodwill Accumulated impairment losses ) ) ) ) $ $ $ $ As of July 4, 2015, acquisition related intangible assets were as follows: Amortization Gross Accumulated Carrying (In thousands) Period Value Amortization Value Intangible assets subject to amortization: Developed technology 10-20 years $ $ ) $ Customer relationships up to 10 years ) In-process research and development 10 years ) Other 3 months-10 years ) ) Intangible assets not subject to amortization: Trademarks and trade names — Intangible assets $ $ ) $ As of July 4, 2015, the gross values and accumulated amortization shown in the table above for intangible assets subject to amortization exclude amounts related to the Company’s acquisition of Spectra-Physics, Inc. (and certain related entities), as the purchased intangible assets related to that acquisition have been fully amortized. As of January 3, 2015, acquisition related intangible assets were as follows: Amortization Gross Accumulated Carrying (In thousands) Period Value Amortization Value Intangible assets subject to amortization: Developed technology 10-20 years $ $ ) $ Customer relationships up to 10 years ) In-process research and development 10 years ) Other 3 months-10 years ) ) Intangible assets not subject to amortization: Trademarks and trade names — Intangible assets $ $ ) $ Amortization expense related to intangible assets totaled $2.1 million and $2.4 million for the three months ended July 4, 2015 and June 28, 2014, respectively, and $4.2 million and $4.9 million for the six months ended July 4, 2015 and June 28, 2014, respectively. Estimated aggregate amortization expense for future fiscal years is as follows: (In thousands) Estimated Aggregate Amortization Expense 2015 (remaining) $ 2016 2017 2018 2019 Thereafter $ The Company has excluded $7.3 million of estimated amortization expense related to certain in-process research and development from the table above, as it was uncertain as of July 4, 2015 when the technology will be completed and when the amortization will begin.

INTEREST AND OTHER EXPENSE, NET

INTEREST AND OTHER EXPENSE, NET	6 Months Ended
	Jul. 04, 2015
INTEREST AND OTHER EXPENSE, NET
INTEREST AND OTHER EXPENSE, NET	NOTE 8 INTEREST AND OTHER EXPENSE, NET Interest and other expense, net, was as follows: Three Months Ended Six Months Ended (In thousands) July 4, 2015 June 28, 2014 July 4, 2015 June 28, 2014 Interest expense $ ) $ ) $ ) $ ) Interest and dividend income Derivative gain, net Bank and portfolio asset management fees ) ) ) ) Other expense, net ) ) ) ) $ ) $ ) $ ) $ )

STOCK-BASED COMPENSATION

STOCK-BASED COMPENSATION	6 Months Ended
	Jul. 04, 2015
STOCK-BASED COMPENSATION
STOCK-BASED COMPENSATION	NOTE 9 STOCK-BASED COMPENSATION During the six months ended July 4, 2015, the Company granted 0.5 million restricted stock units and 0.5 million stock-settled stock appreciation rights with weighted average grant date fair values of $19.11 and $7.62, respectively. The total stock-based compensation expense included in the Company’s consolidated statements of income and comprehensive income was as follows: Three Months Ended Six Months Ended (In thousands) July 4, 2015 June 28, 2014 July 4, 2015 June 28, 2014 Cost of sales $ $ $ $ Selling, general and administrative expenses Research and development expense $ $ $ $ At July 4, 2015, the total compensation cost related to unvested stock-based awards granted to employees, officers and directors under the Company’s stock-based benefit plans that had not yet been recognized was $20.7 million, net of estimated forfeitures. This future compensation expense will be amortized over a weighted-average period of 2.1 years using the straight-line attribution method. The actual compensation expense that the Company will recognize in the future related to unvested stock-based awards outstanding at July 4, 2015 will be adjusted for actual forfeitures and will be adjusted based on the Company’s determination as to the extent to which performance conditions applicable to any stock-based awards have been or will be achieved. At July 4, 2015, the Company’s outstanding and exercisable stock options and stock appreciation rights, and the weighted average exercise price or base value, the weighted average remaining contractual life and the aggregate intrinsic value thereof, were as follows: Weighted Average Weighted Exercise Average Aggregate Number of Price or Remaining Intrinsic Shares Base Contractual Value (In thousands) Value Life (Years) (In thousands) Stock options outstanding and exercisable $ $ Stock appreciation rights outstanding $ $ Stock appreciation rights exercisable $ $

DEBT AND LINES OF CREDIT

DEBT AND LINES OF CREDIT	6 Months Ended
	Jul. 04, 2015
DEBT AND LINES OF CREDIT
DEBT AND LINES OF CREDIT	NOTE 10 DEBT AND LINES OF CREDIT Total short-term borrowings were as follows: July 4, January 3, (In thousands) 2015 2015 Japanese revolving lines of credit $ $ Japanese receivables financing facilities Israeli loans due October 2015 Total short-term borrowings $ $ Total long-term debt was as follows: July 4, January 3, (In thousands) 2015 2015 U.S. revolving line of credit expiring July 2018 $ $ Austrian loans due through March 2019 — $ $

NET INCOME PER SHARE

NET INCOME PER SHARE	6 Months Ended
	Jul. 04, 2015
NET INCOME PER SHARE
NET INCOME PER SHARE	NOTE 11 NET INCOME PER SHARE The following table sets forth the computation of basic and diluted net income per share: Three Months Ended Six Months Ended (In thousands, except per share data) July 4, 2015 June 28, 2014 July 4, 2015 June 28, 2014 Net income attributable to Newport Corporation $ $ $ $ Shares: Weighted average shares outstanding - basic Dilutive potential common shares, using treasury stock method Weighted average shares outstanding - diluted Net income per share attributable to Newport Corporation: Basic $ $ $ $ Diluted $ $ $ $ For the three and six months ended July 4, 2015, 1.0 million stock appreciation rights, and for the three and six months ended June 28, 2014, an aggregate of 0.7 million stock options and stock appreciation rights, were excluded from the computations of diluted net income per share, as their inclusion would have been antidilutive. For the three and six months ended July 4, 2015, 0.5 million performance-based restricted stock units, and for the three and six months ended June 28, 2014, 0.6 million performance-based restricted stock units, were excluded from the computations of diluted net income per share, as the performance criteria for their vesting had not been met as of the end of such periods.

INCOME TAXES

INCOME TAXES	6 Months Ended
	Jul. 04, 2015
INCOME TAXES
INCOME TAXES	NOTE 12 INCOME TAXES Income tax expense for each of the three and six months ended July 4, 2015 and June 28, 2014 consisted of a provision for federal, state and foreign taxes based on the annual estimated effective tax rate applicable to the Company, adjusted for items which are considered discrete to a particular period. The effective tax rates for the three and six months ended July 4, 2015 were 35.9% and 33.6%, respectively, and the effective tax rates for the three and six months ended June 28, 2014 were 29.9% and 30.5%, respectively. The effective tax rates for the three and six months ended July 4, 2015 were unfavorably impacted by increased losses in jurisdictions in which the Company has recorded a full valuation allowance and, therefore, no current tax benefit may be realized. The effective tax rate for the six months ended July 4, 2015 was also unfavorably impacted by the passage of Japanese Tax Reform on March 31, 2015, which lowered long-term corporate tax rates. This necessitated a corresponding write down of deferred tax assets applicable to the Company’s Japanese locations.

STOCKHOLDERS' EQUITY TRANSACTIO

STOCKHOLDERS' EQUITY TRANSACTIONS	6 Months Ended
	Jul. 04, 2015
STOCKHOLDERS' EQUITY TRANSACTIONS
STOCKHOLDERS' EQUITY TRANSACTIONS	NOTE 13 STOCKHOLDERS’ EQUITY TRANSACTIONS In May 2008, the Board of Directors of the Company approved a share repurchase program, authorizing the purchase of up to 4.0 million shares of the Company’s common stock. During the six months ended July 4, 2015, the Company repurchased 0.6 million shares for a total of $12.1 million under this program. As of July 4, 2015, 2.7 million shares remained available for purchase under the program. During the six months ended July 4, 2015, the Company cancelled 0.2 million shares of common stock underlying restricted stock units in payment by employees of taxes owed upon the vesting of restricted stock units issued to them under the Company’s stock incentive plans. The value of these restricted stock units totaled $3.4 million at the time they were cancelled.

DEFINED BENEFIT PENSION PLANS

DEFINED BENEFIT PENSION PLANS	6 Months Ended
	Jul. 04, 2015
DEFINED BENEFIT PENSION PLANS
DEFINED BENEFIT PENSION PLANS	NOTE 14 DEFINED BENEFIT PENSION PLANS The Company has defined benefit pension plans covering substantially all full-time employees in France, Germany, Israel and Japan. In addition, the Company has certain pension liabilities relating to former employees of the Company in the United Kingdom. The Company’s German plan is unfunded, as permitted under the plan and applicable laws. For financial reporting purposes, the calculation of net periodic pension costs is based upon a number of actuarial assumptions, including a discount rate for plan obligations, an assumed rate of return on pension plan assets and an assumed rate of compensation increase for employees covered by the plan. All of these assumptions are based upon management’s judgment, considering all known trends and uncertainties. Actual results that differ from these assumptions would impact future expense recognition and the cash funding requirements of the Company’s pension plans. Net periodic benefit costs for the plans in aggregate included the following components: Three Months Ended Six Months Ended (In thousands) July 4, 2015 June 28, 2014 July 4, 2015 June 28, 2014 Service cost $ $ $ $ Interest cost on benefit obligations Expected return on plan assets ) ) ) ) Amortization of net loss $ $ $ $

BUSINESS SEGMENT INFORMATION

BUSINESS SEGMENT INFORMATION	6 Months Ended
	Jul. 04, 2015
BUSINESS SEGMENT INFORMATION
BUSINESS SEGMENT INFORMATION	NOTE 15 BUSINESS SEGMENT INFORMATION The operating segments reported below are the segments of the Company for which separate financial information is available and for which operating results are evaluated regularly by the Chief Executive Officer, who is the chief operating decision maker, in deciding how to allocate resources and in assessing performance. The Company develops, manufactures and markets its products within three distinct business segments: its Photonics Group, its Lasers Group and its Optics Group. The Company measured income reported for each operating segment, which included only those costs that were directly attributable to the operations of that segment, and excluded unallocated operating expenses, such as corporate overhead and intangible asset amortization, certain gains and losses, interest and other expense, net, and income taxes. (In thousands) Photonics Lasers Optics Total Three months ended July 4, 2015: Sales to external customers $ $ $ $ Segment income $ $ $ $ Three months ended June 28, 2014: Sales to external customers $ $ $ $ Segment income $ $ $ $ Six months ended July 4, 2015: Sales to external customers $ $ $ $ Segment income $ $ $ $ Six months ended June 28, 2014: Sales to external customers $ $ $ $ Segment income $ $ $ $ The following table reconciles segment income to consolidated income before income taxes: Three Months Ended Six Months Ended (In thousands) July 4, 2015 June 28, 2014 July 4, 2015 June 28, 2014 Segment income $ $ $ $ Unallocated operating expenses ) ) ) ) (Loss) gain on disposal of assets — — ) Interest and other expense, net ) ) ) ) $ $ $ $

ACQUISITIONS OF FEMTOLASERS (Ta

ACQUISITIONS OF FEMTOLASERS (Tables)	6 Months Ended
	Jul. 04, 2015
ACQUISITION OF FEMTOLASERS
Summary of the purchase price, assets acquired and liabilities assumed	(In thousands) Estimated Allocation at April 4, 2015 Second Quarter Adjustments Current Purchase Price Allocation Assets acquired and liabilities assumed: Cash $ $ — $ Accounts receivable ) Inventories Deferred tax assets Other assets ) Goodwill ) Developed technology — In-process research and development Other intangible assets — Accounts payable ) — ) Debt ) — ) Deferred tax liabilities ) ) ) Other liabilities ) ) ) $ $ ) $
Summary of actual net sales and net income of acquiree and pro forma net sales and net income	Three Months Ended Six Months Ended July 4, June 28, July 4, June 28, (Unaudited, in thousands) 2015 2014 2015 2014 Actual: Net sales $ $ — $ $ — Net loss attributable to Newport Corporation $ ) $ — $ ) $ — Supplemental pro forma information: Net sales $ $ $ $ Net income attributable to Newport Corporation $ $ $ $

MARKETABLE SECURITIES (Tables)

MARKETABLE SECURITIES (Tables)	6 Months Ended
	Jul. 04, 2015
MARKETABLE SECURITIES
Schedule of aggregate fair value of available for sale securities and aggregate amount of unrealized gains and losses	The aggregate fair value of available for sale securities and the aggregate amount of unrealized gains and losses in available for sale securities at July 4, 2015 were as follows: Aggregate Aggregate Amount of Unrealized (In thousands) Fair Value Gains Losses Money market funds $ $ — $ — The aggregate fair value of available for sale securities and the aggregate amount of unrealized gains and losses in available for sale securities at January 3, 2015 were as follows: Aggregate Aggregate Amount of Unrealized (In thousands) Fair Value Gains Losses Money market funds $ $ — $ — Certificates of deposit — — $ $ — $ —

FAIR VALUE MEASUREMENTS (Tables

FAIR VALUE MEASUREMENTS (Tables)	6 Months Ended
	Jul. 04, 2015
FAIR VALUE MEASUREMENTS
Summary of the Company's assets and liabilities measured at fair value on a recurring basis	Fair Value Measurements at Reporting Date Using (In thousands) Quoted Prices in Active Markets for Identical Assets Significant Other Observable Inputs Significant Unobservable Inputs Description July 4, 2015 (Level 1) (Level 2) (Level 3) Assets: Restricted Cash $ $ $ — $ — Marketable securities: Money market funds — — Derivative assets: Option contracts — — Funds in investments and other assets: Israeli pension funds — — Group insurance contracts — — — — $ $ $ $ — Liabilities: Derivative liabilities: Option contracts — — Fair Value Measurements at Reporting Date Using (In thousands) Quoted Prices in Active Markets for Identical Assets Significant Other Observable Inputs Significant Unobservable Inputs Description January 3, 2015 (Level 1) (Level 2) (Level 3) Assets: Restricted Cash $ $ $ — $ — Marketable securities: Money market funds — — Certificates of deposit — — — Derivative assets: Option contracts — — Funds in investments and other assets: Israeli pension funds — Group insurance contracts — — — — $ $ $ $ — Liabilities: Derivative liabilities: Option contracts $ $ — $ $ —
Summary of carrying amount and estimated fair values of financial instruments	July 4, 2015 January 3, 2015 Carrying Carrying (In thousands) Amount Fair Value Amount Fair Value Short-term borrowings $ $ $ $ Long-term debt $ $ $ $

SUPPLEMENTAL BALANCE SHEET IN24

SUPPLEMENTAL BALANCE SHEET INFORMATION (Tables)	6 Months Ended
	Jul. 04, 2015
SUPPLEMENTAL BALANCE SHEET INFORMATION
Schedule of inventories	July 4, January 3, (In thousands) 2015 2015 Raw materials and purchased parts $ $ Work in process Finished goods Short-term inventories $ $
Schedule of long-term inventories	July 4, January 3, (In thousands) 2015 2015 Raw materials and purchased parts $ $ Finished goods Long-term inventories $ $
Schedule of activity in accrued warranty obligations	Six Months Ended July 4, June 28, (In thousands) 2015 2014 Balance at beginning of year $ $ Additions charged to cost of sales Warranty claims ) ) Balance at end of period $ $
Schedule of accrued expenses and other current liabilities	July 4, January 3, (In thousands) 2015 2015 Deferred revenue $ $ Deferred lease liability Accrued income taxes Short-term accrued warranty obligations Other $ $
Schedule of accumulated other comprehensive loss	July 4, January 3, (In thousands) 2015 2015 Cumulative foreign currency translation losses $ ) $ ) Unrecognized net pension losses, net of tax ) ) Unrealized gains on investments and marketable securities, net of tax $ ) $ )

GOODWILL AND INTANGIBLE ASSETS

GOODWILL AND INTANGIBLE ASSETS (Tables)	6 Months Ended
	Jul. 04, 2015
GOODWILL AND INTANGIBLE ASSETS
Schedule of changes in the carrying amount of goodwill	Photonics Lasers Optics (In thousands) Group Group Group Total Balance at January 3, 2015: Goodwill Accumulated impairment losses ) ) ) ) Goodwill allocated to acquisition — — Foreign currency impact — ) — ) Balance at July 4, 2015: Goodwill Accumulated impairment losses ) ) ) ) $ $ $ $
Schedule of intangible assets, excluding goodwill	As of July 4, 2015, acquisition related intangible assets were as follows: Amortization Gross Accumulated Carrying (In thousands) Period Value Amortization Value Intangible assets subject to amortization: Developed technology 10-20 years $ $ ) $ Customer relationships up to 10 years ) In-process research and development 10 years ) Other 3 months-10 years ) ) Intangible assets not subject to amortization: Trademarks and trade names — Intangible assets $ $ ) $ As of January 3, 2015, acquisition related intangible assets were as follows: Amortization Gross Accumulated Carrying (In thousands) Period Value Amortization Value Intangible assets subject to amortization: Developed technology 10-20 years $ $ ) $ Customer relationships up to 10 years ) In-process research and development 10 years ) Other 3 months-10 years ) ) Intangible assets not subject to amortization: Trademarks and trade names — Intangible assets $ $ ) $
Schedule of estimated aggregate amortization expense for future fiscal years	(In thousands) Estimated Aggregate Amortization Expense 2015 (remaining) $ 2016 2017 2018 2019 Thereafter $

INTEREST AND OTHER EXPENSE, N26

INTEREST AND OTHER EXPENSE, NET (Tables)	6 Months Ended
	Jul. 04, 2015
INTEREST AND OTHER EXPENSE, NET
Interest and other expense, net	Three Months Ended Six Months Ended (In thousands) July 4, 2015 June 28, 2014 July 4, 2015 June 28, 2014 Interest expense $ ) $ ) $ ) $ ) Interest and dividend income Derivative gain, net Bank and portfolio asset management fees ) ) ) ) Other expense, net ) ) ) ) $ ) $ ) $ ) $ )

STOCK-BASED COMPENSATION (Table

STOCK-BASED COMPENSATION (Tables)	6 Months Ended
	Jul. 04, 2015
STOCK-BASED COMPENSATION
Schedule of total stock-based compensation expense included in the Company's consolidated statements of income and comprehensive income	Three Months Ended Six Months Ended (In thousands) July 4, 2015 June 28, 2014 July 4, 2015 June 28, 2014 Cost of sales $ $ $ $ Selling, general and administrative expenses Research and development expense $ $ $ $
Schedule of stock options and Stock appreciation rights exercisable and outstanding	Weighted Average Weighted Exercise Average Aggregate Number of Price or Remaining Intrinsic Shares Base Contractual Value (In thousands) Value Life (Years) (In thousands) Stock options outstanding and exercisable $ $ Stock appreciation rights outstanding $ $ Stock appreciation rights exercisable $ $

DEBT AND LINES OF CREDIT (Table

DEBT AND LINES OF CREDIT (Tables)	6 Months Ended
	Jul. 04, 2015
DEBT AND LINES OF CREDIT
Schedule of short-term borrowings	July 4, January 3, (In thousands) 2015 2015 Japanese revolving lines of credit $ $ Japanese receivables financing facilities Israeli loans due October 2015 Total short-term borrowings $ $
Schedule of long-term debt	July 4, January 3, (In thousands) 2015 2015 U.S. revolving line of credit expiring July 2018 $ $ Austrian loans due through March 2019 — $ $

NET INCOME PER SHARE (Tables)

NET INCOME PER SHARE (Tables)	6 Months Ended
	Jul. 04, 2015
NET INCOME PER SHARE
Schedule of basic and diluted net income per share	Three Months Ended Six Months Ended (In thousands, except per share data) July 4, 2015 June 28, 2014 July 4, 2015 June 28, 2014 Net income attributable to Newport Corporation $ $ $ $ Shares: Weighted average shares outstanding - basic Dilutive potential common shares, using treasury stock method Weighted average shares outstanding - diluted Net income per share attributable to Newport Corporation: Basic $ $ $ $ Diluted $ $ $ $

DEFINED BENEFIT PENSION PLANS (

DEFINED BENEFIT PENSION PLANS (Tables)	6 Months Ended
	Jul. 04, 2015
DEFINED BENEFIT PENSION PLANS
Aggregate net periodic benefit costs for the plans	Three Months Ended Six Months Ended (In thousands) July 4, 2015 June 28, 2014 July 4, 2015 June 28, 2014 Service cost $ $ $ $ Interest cost on benefit obligations Expected return on plan assets ) ) ) ) Amortization of net loss $ $ $ $

BUSINESS SEGMENT INFORMATION (T

BUSINESS SEGMENT INFORMATION (Tables)	6 Months Ended
	Jul. 04, 2015
BUSINESS SEGMENT INFORMATION
Schedule of selected segment financial information	(In thousands) Photonics Lasers Optics Total Three months ended July 4, 2015: Sales to external customers $ $ $ $ Segment income $ $ $ $ Three months ended June 28, 2014: Sales to external customers $ $ $ $ Segment income $ $ $ $ Six months ended July 4, 2015: Sales to external customers $ $ $ $ Segment income $ $ $ $ Six months ended June 28, 2014: Sales to external customers $ $ $ $ Segment income $ $ $ $
Schedule of reconciliation of segment income to consolidated income before income taxes	Three Months Ended Six Months Ended (In thousands) July 4, 2015 June 28, 2014 July 4, 2015 June 28, 2014 Segment income $ $ $ $ Unallocated operating expenses ) ) ) ) (Loss) gain on disposal of assets — — ) Interest and other expense, net ) ) ) ) $ $ $ $

ACQUISITION OF FEMTOLASERS (Det

ACQUISITION OF FEMTOLASERS (Details) - FEMTOLASERS $ in Thousands, € in Millions	Feb. 11, 2015EUR (€)	Feb. 11, 2015USD ($)	Jul. 04, 2015EUR (€)	Jul. 04, 2015USD ($)	Apr. 04, 2015EUR (€)	Jun. 28, 2014USD ($)	Jul. 04, 2015EUR (€)	Jul. 04, 2015USD ($)	Jun. 28, 2014USD ($)	Feb. 11, 2015USD ($)
ACQUISITIONS AND FEMTOLASERS
Initial purchase price | €	€ 9.1
Initial net asset adjustment | €					€ 1.6
Revised net asset adjustment | €			€ 2.1
Adjusted purchase price							€ 7	$ 7,900
Purchase price deposited at closing into escrow account | €	€ 2.3
Time period for depositing into escrow from the date of closing	30 months	30 months
Repayment of outstanding loan	€ 3.6	$ 4,000
Purchase price, assets acquired and liabilities assumed
Cash				$ 78				78
Accounts receivable				1,968				1,968
Inventories				2,759				2,759
Deferred tax assets				1,019				1,019
Other assets				2,015				2,015
Goodwill				6,681				6,681
Accounts payable				(3,417)				(3,417)
Debt				(4,021)				(4,021)
Deferred tax liabilities				(1,019)				(1,019)
Other liabilities				(2,195)				(2,195)
Assets acquired and liabilities assumed, total				7,943				7,943
Supplemental pro forma financial information, Actual
Net sales				1,973				2,323
Net loss attributable to Newport Corporation				(1,359)				(1,819)
Supplemental pro forma information:
Net sales				147,977		$ 156,571		304,901	$ 305,678
Net income attributable to Newport Corporation				6,146		8,865		14,806	16,599
Pro forma increase (decrease) in amortization expense						100			$ 200
Transaction costs excluded from pro forma net income				400		$ 400
Initial Estimate
Purchase price, assets acquired and liabilities assumed
Cash										$ 78
Accounts receivable										2,007
Inventories										2,315
Deferred tax assets										596
Other assets										2,057
Goodwill										7,841
Accounts payable										(3,417)
Debt										(4,021)
Deferred tax liabilities										(1,005)
Other liabilities										(1,974)
Assets acquired and liabilities assumed, total										8,495
Adjustment
Purchase price, assets acquired and liabilities assumed
Accounts receivable				(39)				(39)
Inventories				444				444
Deferred tax assets				423				423
Other assets				(42)				(42)
Goodwill				(1,160)				(1,160)
Deferred tax liabilities				(14)				(14)
Other liabilities				(221)				(221)
Assets acquired and liabilities assumed, total				(552)				(552)
Developed technology
Purchase price, assets acquired and liabilities assumed
Intangible assets				1,811				1,811
Developed technology | Initial Estimate
Purchase price, assets acquired and liabilities assumed
Intangible assets										1,811
In-process research and development
Purchase price, assets acquired and liabilities assumed
Intangible assets				1,721				1,721
In-process research and development | Initial Estimate
Purchase price, assets acquired and liabilities assumed
Intangible assets										1,664
In-process research and development | Adjustment
Purchase price, assets acquired and liabilities assumed
Intangible assets				57				57
Other intangible assets
Purchase price, assets acquired and liabilities assumed
Intangible assets				$ 543				$ 543
Other intangible assets | Initial Estimate
Purchase price, assets acquired and liabilities assumed
Intangible assets										543
Selling, general and administrative expenses
ACQUISITIONS AND FEMTOLASERS
Transaction costs incurred										$ 400

MARKETABLE SECURITIES (Details)

MARKETABLE SECURITIES (Details) - USD ($) $ in Thousands	Jul. 04, 2015	Jan. 03, 2015
Aggregate fair value and aggregate amount of unrealized gains and losses
Available For Sale Securities, Current	$ 6	$ 57
Fair Value | Fair Value Measurements, Recurring basis
Aggregate fair value and aggregate amount of unrealized gains and losses
Available For Sale Securities, Current		57
Money market funds | Fair Value | Fair Value Measurements, Recurring basis
Aggregate fair value and aggregate amount of unrealized gains and losses
Available For Sale Securities, Current	$ 6	7
Certificates of deposit | Fair Value | Fair Value Measurements, Recurring basis
Aggregate fair value and aggregate amount of unrealized gains and losses
Available For Sale Securities, Current		$ 50

MARKETABLE SECURITIES (Details

MARKETABLE SECURITIES (Details 2) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jul. 04, 2015	Jun. 28, 2014	Jul. 04, 2015	Jun. 28, 2014
Gross realized gains and losses on sales of available for sale securities
Gross realized gains and (losses)	$ 0	$ 0	$ 0	$ 0

FAIR VALUE MEASUREMENTS (Detail

FAIR VALUE MEASUREMENTS (Details) - USD ($) $ in Thousands	Jul. 04, 2015	Jan. 03, 2015
Assets:
Restricted Cash	$ 1,259	$ 1,704
Available For Sale Securities, Current	6	57
Quoted Prices in Active Markets for Identical Assets (Level 1) | Fair Value Measurements, Recurring basis
Assets:
Restricted Cash	1,259	1,704
Available For Sale Securities, Current		7
Total assets	1,265	1,711
Quoted Prices in Active Markets for Identical Assets (Level 1) | Money market funds | Fair Value Measurements, Recurring basis
Assets:
Available For Sale Securities, Current	6	7
Significant Other Observable Inputs (Level 2) | Fair Value Measurements, Recurring basis
Assets:
Available For Sale Securities, Current		50
Funds in investments and other assets	18,062	17,230
Total assets	18,475	17,383
Significant Other Observable Inputs (Level 2) | Option contracts | Fair Value Measurements, Recurring basis
Liabilities:
Derivative liabilities	83	921
Significant Other Observable Inputs (Level 2) | Certificates of deposit | Fair Value Measurements, Recurring basis
Assets:
Available For Sale Securities, Current		50
Significant Other Observable Inputs (Level 2) | Option contracts | Fair Value Measurements, Recurring basis
Assets:
Derivative assets:	413	103
Significant Other Observable Inputs (Level 2) | Israeli pension funds | Fair Value Measurements, Recurring basis
Assets:
Funds in investments and other assets	12,183	11,090
Significant Other Observable Inputs (Level 2) | Group insurance contracts | Fair Value Measurements, Recurring basis
Assets:
Funds in investments and other assets	5,879	6,140
Fair Value | Fair Value Measurements, Recurring basis
Assets:
Restricted Cash	1,259	1,704
Available For Sale Securities, Current		57
Funds in investments and other assets	18,062	17,230
Total assets	19,740	19,094
Fair Value | Option contracts | Fair Value Measurements, Recurring basis
Liabilities:
Derivative liabilities	83	921
Fair Value | Money market funds | Fair Value Measurements, Recurring basis
Assets:
Available For Sale Securities, Current	6	7
Fair Value | Certificates of deposit | Fair Value Measurements, Recurring basis
Assets:
Available For Sale Securities, Current		50
Fair Value | Option contracts | Fair Value Measurements, Recurring basis
Assets:
Derivative assets:	413	103
Fair Value | Israeli pension funds | Fair Value Measurements, Recurring basis
Assets:
Funds in investments and other assets	12,183	11,090
Fair Value | Group insurance contracts | Fair Value Measurements, Recurring basis
Assets:
Funds in investments and other assets	$ 5,879	$ 6,140

FAIR VALUE MEASUREMENTS (Deta36

FAIR VALUE MEASUREMENTS (Details 2) - USD ($) $ in Thousands	Jul. 04, 2015	Jan. 03, 2015
Carrying Amount
Carrying amount and estimated fair values of financial instruments
Short-term borrowings	$ 4,084	$ 3,772
Long-term debt	76,256	71,000
Fair Value
Carrying amount and estimated fair values of financial instruments
Short-term borrowings	4,085	3,772
Long-term debt	$ 74,707	$ 69,761

SUPPLEMENTAL BALANCE SHEET IN37

SUPPLEMENTAL BALANCE SHEET INFORMATION (Details) - USD ($) $ in Thousands	Jul. 04, 2015	Jan. 03, 2015
Short-term inventories
Raw materials and purchased parts	$ 75,796	$ 68,989
Work in process	19,360	16,564
Finished goods	30,052	26,887
Short-term inventories	125,208	112,440
Long-term Inventories
Raw materials and purchased parts	2,271	3,208
Finished goods	2,971	3,856
Long-term inventories	$ 5,242	$ 7,064

SUPPLEMENTAL BALANCE SHEET IN38

SUPPLEMENTAL BALANCE SHEET INFORMATION (Details 2)	3 Months Ended
	Jul. 04, 2015
Photonics and Optics | All products other than filters, gratings, laser beam profilers, and dental CAD/CAM scanners
Warranty
Product warranty period	1 year
Photonics and Optics | Original equipment manufacturer | Minimum
Warranty
Product warranty period	15 months
Photonics and Optics | Original equipment manufacturer | Maximum
Warranty
Product warranty period	19 months
Optics | Filters and gratings products
Warranty
Product warranty period	90 days
Photonics | Laser beam profilers, and dental CAD/CAM scanners
Warranty
Product warranty period	2 years
Lasers | Minimum
Warranty
Product warranty period	90 days
Lasers | Maximum
Warranty
Product warranty period	2 years

SUPPLEMENTAL BALANCE SHEET IN39

SUPPLEMENTAL BALANCE SHEET INFORMATION (Details 3) - USD ($) $ in Thousands	6 Months Ended
	Jul. 04, 2015	Jun. 28, 2014	Jan. 03, 2015
Accrued Warranty Obligations
Balance at beginning of year	$ 3,556	$ 3,285
Additions charged to cost of sales	1,591	1,496
Warranty claims	(1,692)	(1,587)
Balance at end of period	3,455	$ 3,194
Accrued Expenses and Other Current Liabilities
Deferred revenue	13,681		$ 13,032
Deferred lease liability	4,852		5,094
Accrued income taxes	996		2,219
Short-term accrued warranty obligations	3,253		3,324
Other	9,358		8,128
Accrued expenses and other current liabilities, total	32,140		31,797
Accumulated Other Comprehensive Loss
Cumulative foreign currency translation losses	(20,519)		(14,556)
Unrecognized net pension losses, net of tax	(4,426)		(4,855)
Unrealized gains on investment and marketable securities, net of tax	1,320		1,429
Accumulated other comprehensive loss	$ (23,625)		$ (17,982)

GOODWILL AND INTANGIBLE ASSET40

GOODWILL AND INTANGIBLE ASSETS (Details) $ in Thousands	6 Months Ended
	Jul. 04, 2015USD ($)
Changes in the carrying amount of goodwill
Goodwill, gross at the beginning of the period	$ 269,883
Accumulated impairment losses at the beginning of the period	(172,359)
Goodwill, Beginning Balance	97,524
Goodwill acquired	6,681
Foreign currency impact	(456)
Goodwill, gross at the end of the period	276,108
Accumulated impairment losses at the end of the period	(172,359)
Goodwill, Ending Balance	103,749
Photonics
Changes in the carrying amount of goodwill
Goodwill, gross at the beginning of the period	98,808
Accumulated impairment losses at the beginning of the period	(47,458)
Goodwill, Beginning Balance	51,350
Goodwill, gross at the end of the period	98,808
Accumulated impairment losses at the end of the period	(47,458)
Goodwill, Ending Balance	51,350
Lasers
Changes in the carrying amount of goodwill
Goodwill, gross at the beginning of the period	129,761
Accumulated impairment losses at the beginning of the period	(104,562)
Goodwill, Beginning Balance	25,199
Goodwill acquired	6,681
Foreign currency impact	(456)
Goodwill, gross at the end of the period	135,986
Accumulated impairment losses at the end of the period	(104,562)
Goodwill, Ending Balance	31,424
Optics
Changes in the carrying amount of goodwill
Goodwill, gross at the beginning of the period	41,314
Accumulated impairment losses at the beginning of the period	(20,339)
Goodwill, Beginning Balance	20,975
Goodwill, gross at the end of the period	41,314
Accumulated impairment losses at the end of the period	(20,339)
Goodwill, Ending Balance	$ 20,975

GOODWILL AND INTANGIBLE ASSET41

GOODWILL AND INTANGIBLE ASSETS (Details 2)	6 Months Ended	12 Months Ended
	Jul. 04, 2015	Jan. 03, 2015
In-process research and development
Amortization Period
Intangible asset amortization period	10 years	10 years
Maximum | Developed technology
Amortization Period
Intangible asset amortization period	20 years	20 years
Maximum | Customer relationships
Amortization Period
Intangible asset amortization period	10 years	10 years
Maximum | Other intangible assets
Amortization Period
Intangible asset amortization period	10 years	10 years
Minimum | Developed technology
Amortization Period
Intangible asset amortization period	10 years	10 years
Minimum | Other intangible assets
Amortization Period
Intangible asset amortization period	3 months	3 months

GOODWILL AND INTANGIBLE ASSET42

GOODWILL AND INTANGIBLE ASSETS (Details 3) - USD ($) $ in Thousands	Jul. 04, 2015	Jan. 03, 2015
Intangible assets subject to amortization:
Intangible assets, gross	$ 85,829	$ 114,395
Accumulated amortization	(33,863)	(61,889)
Intangible assets, net	51,966	52,506
Developed technology
Intangible assets subject to amortization:
Intangible assets, gross	39,815	45,646
Accumulated amortization	(10,974)	(16,782)
Intangible assets, net	28,841	28,864
Customer relationships
Intangible assets subject to amortization:
Intangible assets, gross	28,677	47,827
Accumulated amortization	(19,806)	(37,312)
Intangible assets, net	8,871	10,515
In-process research and development
Intangible assets subject to amortization:
Intangible assets, gross	15,135	13,461
Accumulated amortization	(1,879)	(1,496)
Intangible assets, net	13,256	11,965
Other intangible assets
Intangible assets subject to amortization:
Intangible assets, gross	2,202	7,461
Accumulated amortization	(1,204)	(6,299)
Intangible assets, net	$ 998	$ 1,162

GOODWILL AND INTANGIBLE ASSET43

GOODWILL AND INTANGIBLE ASSETS (Details 4) - USD ($) $ in Thousands	Jul. 04, 2015	Jan. 03, 2015
Intangible assets subject to amortization:
Intangible assets, gross	$ 85,829	$ 114,395
Accumulated amortization	(33,863)	(61,889)
Intangible assets, net	51,966	52,506
Intangible assets not subject to amortization:
Trademarks and trade names	18,305	18,305
Intangible assets
Intangible assets, gross	104,134	132,700
Intangible assets, net	$ 70,271	$ 70,811

GOODWILL AND INTANGIBLE ASSET44

GOODWILL AND INTANGIBLE ASSETS (Details 5) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jul. 04, 2015	Jun. 28, 2014	Jul. 04, 2015	Jun. 28, 2014
GOODWILL AND INTANGIBLE ASSETS
Amortization expense related to intangible assets	$ 2.1	$ 2.4	$ 4.2	$ 4.9

GOODWILL AND INTANGIBLE ASSET45

GOODWILL AND INTANGIBLE ASSETS (Details 6) $ in Thousands	Jul. 04, 2015USD ($)
Estimated aggregate amortization expense
2015 (remaining)	$ 4,178
2,016	7,837
2,017	6,689
2,018	4,525
2,019	3,934
Thereafter	17,500
Total estimated future amortization expense	44,663
Future IPR&D expense excluded from estimated future expense	$ 7,300

INTEREST AND OTHER EXPENSE, N46

INTEREST AND OTHER EXPENSE, NET (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jul. 04, 2015	Jun. 28, 2014	Jul. 04, 2015	Jun. 28, 2014
INTEREST AND OTHER EXPENSE, NET
Interest expense	$ (573)	$ (595)	$ (1,138)	$ (1,256)
Interest and dividend income	27	69	68	123
Derivative gain, net	658	137	533	125
Bank and portfolio asset management fees	(339)	(266)	(693)	(526)
Other expense, net	(837)	(3)	(737)	(100)
Total	$ (1,064)	$ (658)	$ (1,967)	$ (1,634)

STOCK-BASED COMPENSATION (Detai

STOCK-BASED COMPENSATION (Details) - 6 months ended Jul. 04, 2015 - $ / shares shares in Millions	Total
Restricted Stock
Stock-based compensation
Granted (in shares)	0.5
Granted (in dollars per share)	$ 19.11
Stock appreciation rights
Stock-based compensation
Granted (in shares)	0.5
Granted (in dollars per share)	$ 7.62

STOCK-BASED COMPENSATION (Det48

STOCK-BASED COMPENSATION (Details 2) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jul. 04, 2015	Jun. 28, 2014	Jul. 04, 2015	Jun. 28, 2014
Total stock-based compensation expense included in the Company's consolidated statements of operations
Stock-based compensation expense	$ 2,743	$ 3,110	$ 6,827	$ 5,447
Cost of sales
Total stock-based compensation expense included in the Company's consolidated statements of operations
Stock-based compensation expense	285	279	681	491
Selling, general and administrative expenses
Total stock-based compensation expense included in the Company's consolidated statements of operations
Stock-based compensation expense	2,126	2,465	5,322	4,301
Research and development expense.
Total stock-based compensation expense included in the Company's consolidated statements of operations
Stock-based compensation expense	$ 332	$ 366	$ 824	$ 655

STOCK-BASED COMPENSATION (Det49

STOCK-BASED COMPENSATION (Details 3) - Jul. 04, 2015 - USD ($) $ in Millions	Total
Unrecognized total compensation cost
Unrecognized stock-based compensation expense related to non-vested stock-based awards	$ 20.7
Weighted-average period over which unrecognized stock-based compensation cost is expected to be recognized	2 years 1 month 6 days

STOCK-BASED COMPENSATION (Det50

STOCK-BASED COMPENSATION (Details 4) - Jul. 04, 2015 - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	Total
Stock Options
Stock-based compensation
Stock options outstanding (in shares)	34
Stock options outstanding, weighted average exercise price (in dollars per share)	$ 13.78
Stock options outstanding, remaining contractual term	6 months
Stock options outstanding, intrinsic value	$ 170
Stock options exercisable (in shares)	34
Stock options exercisable, weighted average exercise price (in dollars per share)	$ 13.78
Stock options exercisable, remaining contractual term	6 months
Stock options exercisable, intrinsic value	$ 170
Stock appreciation rights
Stock-based compensation
Stock appreciation rights outstanding (in shares)	2,370
Stock appreciation rights outstanding, weighted average base value (in dollars per share)	$ 15.62
Stock appreciation rights outstanding, remaining contractual term	4 years 8 months 12 days
Stock appreciation rights outstanding, intrinsic value	$ 7,661
Stock appreciation rights exercisable (in shares)	1,336
Stock appreciation rights exercisable, weighted-average base value (in dollars per share)	$ 13.89
Stock appreciation rights exercisable, remaining contractual term	3 years 6 months
Stock appreciation rights exercisable, intrinsic value	$ 6,532

DEBT AND LINES OF CREDIT (Detai

DEBT AND LINES OF CREDIT (Details) - USD ($) $ in Thousands	Jul. 04, 2015	Jan. 03, 2015
Short-term borrowings
Total short-term borrowings	$ 4,084	$ 3,772
Foreign line of credit | Revolving line of credit | Japanese revolving lines of credit
Short-term borrowings
Total short-term borrowings	3,081	3,163
Receivables financing | Japanese receivables financing facilities
Short-term borrowings
Total short-term borrowings	706	25
Loans | Israeli loans due October 2015
Short-term borrowings
Total short-term borrowings	$ 297	$ 584

DEBT AND LINES OF CREDIT (Det52

DEBT AND LINES OF CREDIT (Details 2) - USD ($) $ in Thousands	Jul. 04, 2015	Jan. 03, 2015
Long-term debt
Total long-term debt	$ 76,256	$ 71,000
Secured debt | Revolving line of credit | U.S. revolving line of credit expiring July 2018
Long-term debt
Total long-term debt	76,000	$ 71,000
Loans | Austrian loans due through March 2019
Long-term debt
Total long-term debt	$ 256

NET INCOME PER SHARE (Details)

NET INCOME PER SHARE (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Jul. 04, 2015	Jun. 28, 2014	Jul. 04, 2015	Jun. 28, 2014
NET INCOME PER SHARE
Net income attributable to Newport Corporation	$ 5,770	$ 8,952	$ 14,434	$ 16,838
Shares:
Weighted average shares outstanding - basic	39,717	39,881	39,659	39,703
Dilutive potential common shares, using treasury stock method	548	647	753	810
Weighted average shares outstanding - diluted	40,265	40,528	40,412	40,513
Net income per share attributable to Newport Corporation:
Basic (in dollars per share)	$ 0.15	$ 0.22	$ 0.36	$ 0.42
Diluted (in dollars per share)	$ 0.14	$ 0.22	$ 0.36	$ 0.42

NET INCOME PER SHARE (Details 2

NET INCOME PER SHARE (Details 2) - shares shares in Millions	3 Months Ended		6 Months Ended
	Jul. 04, 2015	Jun. 28, 2014	Jul. 04, 2015	Jun. 28, 2014
Stock options and stock appreciation rights
Net income per share
Antidilutive securities excluded from computation of earnings per share, amount	1	0.7	1	0.7
Performance-Based Restricted Stock Units
Net income per share
Antidilutive securities excluded from computation of earnings per share, amount	0.5	0.6	0.5	0.6

INCOME TAXES (Details)

INCOME TAXES (Details)	3 Months Ended		6 Months Ended
	Jul. 04, 2015	Jun. 28, 2014	Jul. 04, 2015	Jun. 28, 2014
INCOME TAXES
Effective rate	35.90%	29.90%	33.60%	30.50%

STOCKHOLDERS' EQUITY TRANSACT56

STOCKHOLDERS' EQUITY TRANSACTIONS (Details) - USD ($) $ in Thousands, shares in Millions	6 Months Ended
	Jul. 04, 2015	May. 31, 2008
STOCKHOLDERS' EQUITY TRANSACTIONS
Shares of common stock authorized to be repurchased		4
Purchases made under the program	0.6
Shares repurchased, value (in dollars)	$ 12,149
Remaining shares to be repurchased	2.7

STOCKHOLDERS' EQUITY TRANSACT57

STOCKHOLDERS' EQUITY TRANSACTIONS (Details 2) - Jul. 04, 2015 - Restricted stock units - USD ($) shares in Millions, $ in Millions	Total
Stock-based compensation
Cancelled (in shares)	0.2
Cancelled, value	$ 3.4

DEFINED BENEFIT PENSION PLANS58

DEFINED BENEFIT PENSION PLANS (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jul. 04, 2015	Jun. 28, 2014	Jul. 04, 2015	Jun. 28, 2014
Net periodic benefit costs
Service cost	$ 803	$ 1,047	$ 1,302	$ 1,260
Interest cost on benefit obligations	120	114	241	316
Expected return on plan assets	(44)	(71)	(87)	(141)
Amortization of net loss	91	45	182	90
Total	$ 970	$ 1,135	$ 1,638	$ 1,525

BUSINESS SEGMENT INFORMATION (D

BUSINESS SEGMENT INFORMATION (Details) $ in Thousands	3 Months Ended		6 Months Ended
	Jul. 04, 2015USD ($)segment	Jun. 28, 2014USD ($)	Jul. 04, 2015USD ($)	Jun. 28, 2014USD ($)
Segment Reporting Information, by Segment
Number of operating segments | segment	3
Sales to external customers	$ 147,977	$ 153,232	$ 304,632	$ 300,122
Segment income	10,071	13,485	23,700	26,011
Photonics
Segment Reporting Information, by Segment
Sales to external customers	61,701	63,466	125,939	122,936
Lasers
Segment Reporting Information, by Segment
Sales to external customers	44,496	47,113	94,355	93,587
Optics
Segment Reporting Information, by Segment
Sales to external customers	41,780	42,653	84,338	83,599
Operating segments
Segment Reporting Information, by Segment
Segment income	21,293	25,537	48,729	49,219
Operating segments | Photonics
Segment Reporting Information, by Segment
Segment income	15,277	14,400	32,429	27,946
Operating segments | Lasers
Segment Reporting Information, by Segment
Segment income	1,041	6,148	6,665	11,728
Operating segments | Optics
Segment Reporting Information, by Segment
Segment income	$ 4,975	$ 4,989	$ 9,635	$ 9,545

BUSINESS SEGMENT INFORMATION 60

BUSINESS SEGMENT INFORMATION (Details 2) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jul. 04, 2015	Jun. 28, 2014	Jul. 04, 2015	Jun. 28, 2014
Reconciliation of segment income to consolidated income before income taxes
Segment income	$ 10,071	$ 13,485	$ 23,700	$ 26,011
(Loss) gain on disposal of assets			(1,088)	411
Interest and other expense, net	(1,064)	(658)	(1,967)	(1,634)
Income before income taxes	9,007	12,827	21,733	24,377
Operating segments
Reconciliation of segment income to consolidated income before income taxes
Segment income	21,293	25,537	48,729	49,219
Unallocated amount to segment
Reconciliation of segment income to consolidated income before income taxes
Unallocated operating expenses	$ (11,222)	$ (12,052)	$ (23,941)	$ (23,619)