Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Oct. 03, 2015 | Oct. 30, 2015 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | NEWPORT CORP | |
Entity Central Index Key | 225,263 | |
Document Type | 10-Q | |
Document Period End Date | Oct. 3, 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 | 38,576,708 | |
Document Fiscal Year Focus | 2,015 | |
Document Fiscal Period Focus | Q3 |
Consolidated Statements of Inco
Consolidated Statements of Income and Comprehensive Income - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Oct. 03, 2015 | Sep. 27, 2014 | Oct. 03, 2015 | Sep. 27, 2014 | |
Consolidated Statements of Income and Comprehensive Income | ||||
Net sales | $ 147,560 | $ 146,299 | $ 452,192 | $ 446,421 |
Cost of sales | 85,133 | 80,334 | 255,565 | 245,109 |
Gross profit | 62,427 | 65,965 | 196,627 | 201,312 |
Selling, general and administrative expense | 37,730 | 39,122 | 117,029 | 120,413 |
Research and development expense | 14,232 | 14,082 | 44,345 | 42,538 |
Loss (gain) on sale or other disposal of assets, net | 1,088 | (411) | ||
Operating income | 10,465 | 12,761 | 34,165 | 38,772 |
Interest and other expense, net | (1,353) | (958) | (3,320) | (2,592) |
Income before income taxes | 9,112 | 11,803 | 30,845 | 36,180 |
Income tax provision | 2,009 | 2,330 | 9,308 | 9,769 |
Net income | 7,103 | 9,473 | 21,537 | 26,411 |
Net income attributable to non-controlling interests | 3 | 103 | ||
Net income attributable to Newport Corporation | 7,103 | 9,470 | 21,537 | 26,308 |
Net income | 7,103 | 9,473 | 21,537 | 26,411 |
Other comprehensive income (loss): | ||||
Foreign currency translation gains (losses) | 673 | (7,203) | (5,290) | (7,567) |
Unrecognized net pension gains, net of tax | 79 | 204 | 508 | 306 |
Unrealized losses on investments and marketable securities, net of tax | (13) | (155) | (122) | (177) |
Other comprehensive income (loss) | 739 | (7,154) | (4,904) | (7,438) |
Comprehensive income | 7,842 | 2,319 | 16,633 | 18,973 |
Comprehensive income (loss) attributable to non-controlling interests | (5) | 110 | ||
Comprehensive income attributable to Newport Corporation | 7,842 | 2,324 | 16,633 | 18,863 |
Comprehensive income | $ 7,842 | $ 2,319 | $ 16,633 | $ 18,973 |
Net income per share attributable to Newport Corporation: | ||||
Basic (in dollars per share) | $ 0.18 | $ 0.24 | $ 0.55 | $ 0.66 |
Diluted (in dollars per share) | $ 0.18 | $ 0.23 | $ 0.54 | $ 0.65 |
Shares used in per share calculations: | ||||
Basic (in shares) | 38,982 | 39,921 | 39,434 | 39,776 |
Diluted (in shares) | 39,374 | 40,612 | 40,066 | 40,546 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Oct. 03, 2015 | Jan. 03, 2015 |
Current assets: | ||
Cash and cash equivalents | $ 30,440 | $ 46,883 |
Restricted cash | 974 | 1,704 |
Marketable securities | 57 | |
Accounts receivable, net of allowance for doubtful accounts of $1,297 and $1,242 as of October 3, 2015 and January 3, 2015, respectively | 103,714 | 96,512 |
Inventories | 122,845 | 112,440 |
Current deferred tax assets | 20,606 | 20,734 |
Prepaid expenses and other current assets | 18,294 | 14,948 |
Total current assets | 296,873 | 293,278 |
Property and equipment, net | 84,362 | 82,793 |
Goodwill | 103,854 | 97,524 |
Long-term deferred tax assets | 6,049 | 5,005 |
Intangible assets, net | 68,228 | 70,811 |
Investments and other assets | 28,486 | 30,516 |
Total assets | 587,852 | 579,927 |
Current liabilities: | ||
Short-term borrowings | 3,579 | 3,772 |
Accounts payable | 31,281 | 31,448 |
Accrued payroll and related expenses | 31,890 | 34,607 |
Accrued expenses and other current liabilities | 30,785 | 31,797 |
Total current liabilities | 97,535 | 101,624 |
Long-term debt | 84,254 | 71,000 |
Pension liabilities | 29,432 | 28,554 |
Long-term deferred tax liabilities | 14,119 | 14,272 |
Other long-term liabilities | $ 6,881 | $ 7,773 |
Commitments and contingencies | ||
Stockholders' equity: | ||
Common stock, par value $0.1167 per share, 200,000,000 shares authorized; 38,576,708 and 39,603,662 shares issued and outstanding as of October 3, 2015 and January 3, 2015, respectively | $ 4,506 | $ 4,626 |
Capital in excess of par value | 450,989 | 468,575 |
Accumulated other comprehensive loss | (22,886) | (17,982) |
Accumulated deficit | (76,978) | (98,515) |
Total stockholders' equity | 355,631 | 356,704 |
Total Liabilities and Stockholders' equity | $ 587,852 | $ 579,927 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Oct. 03, 2015 | Jan. 03, 2015 |
Consolidated Balance Sheets | ||
Accounts receivable, allowance for doubtful accounts (in dollars) | $ 1,297 | $ 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 | 38,576,708 | 39,603,662 |
Common stock, shares outstanding | 38,576,708 | 39,603,662 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 9 Months Ended | |
Oct. 03, 2015 | Sep. 27, 2014 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net income | $ 21,537 | $ 26,411 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 21,363 | 22,271 |
Gain on sale of assets | (411) | |
Provision for losses on inventories | 6,115 | 4,429 |
Stock-based compensation expense | 10,058 | 8,588 |
Provision for doubtful accounts | 225 | 585 |
Loss on disposal of property and equipment | 1,158 | 370 |
Deferred income taxes | (897) | (929) |
Excess tax benefits from stock-based compensation | (2,596) | (4,403) |
Increase (decrease) in cash, net of acquisition and divestiture, due to changes in: | ||
Accounts receivable | (6,950) | (7,576) |
Inventories | (15,992) | (20,183) |
Prepaid expenses and other assets | (345) | 27 |
Accounts payable | (3,105) | 3,763 |
Accrued payroll and related expenses | (3,497) | 2,569 |
Accrued expenses and other liabilities | 816 | 4,447 |
Other long-term liabilities | 490 | (977) |
Net cash provided by operating activities | 28,380 | 38,981 |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Purchase of property and equipment | (15,511) | (17,993) |
Restricted cash | 661 | 600 |
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 | (1,139) | (1,414) |
Proceeds from the sale or maturity of investments and marketable securities | 281 | 8,509 |
Net cash used in investing activities | (25,892) | (5,268) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Proceeds from long-term debt | 28,000 | 4,000 |
Repayment of long-term debt and obligations under capital leases | (15,012) | (20,200) |
Proceeds from short-term borrowings | 1,916 | 5,766 |
Repayment of short-term borrowings | (6,123) | (5,635) |
Purchases of non-controlling interests | (1,863) | |
Proceeds from the issuance of common stock under employee plans | 1,353 | 4,156 |
Tax withholding payment related to net share settlement of equity awards | (3,419) | (2,940) |
Purchases of the Company's common stock | (27,893) | (4,480) |
Excess tax benefits from stock-based compensation | 2,596 | 4,403 |
Net cash used in financing activities | (18,582) | (16,793) |
Impact of foreign exchange rate changes on cash balances | (349) | (1,650) |
Net (decrease) increase in cash and cash equivalents | (16,443) | 15,270 |
Cash and cash equivalents at beginning of period | 46,883 | 53,710 |
Cash and cash equivalents at end of period | 30,440 | 68,980 |
Supplemental disclosures of cash flow information: | ||
Cash paid during the period for interest | 1,498 | 1,490 |
Cash paid during the period for income taxes, net | 7,003 | 4,065 |
Property and equipment accrued in accounts payable | $ 292 | $ 123 |
BASIS OF PRESENTATION
BASIS OF PRESENTATION | 9 Months Ended |
Oct. 03, 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 | 9 Months Ended |
Oct. 03, 2015 | |
RECENT ACCOUNTING PRONOUNCEMENTS | |
RECENT ACCOUNTING PRONOUNCEMENTS | NOTE 2 RECENT ACCOUNTING PRONOUNCEMENTS In September 2015, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2015-16, Simplifying the Accounting for Measurement Period Adjustments . ASU No. 2015-16 requires an acquirer in a business combination to recognize adjustments to the provisional amounts that are identified during the measurement period to be reported in the period in which the adjustment amounts are determined. In addition, the effect on earnings of changes in depreciation or amortization, or other income effects (if any) as a result of the change to the provisional amounts, calculated as if the accounting had been completed as of the acquisition date, must be recorded in the reporting period in which the adjustment amounts are determined. ASU No. 2015-16 will be effective for fiscal years and interim periods beginning after December 15, 2015, and is required to be applied prospectively. Early adoption is permitted for financial statements that have not been issued prior to the effective date of this update. The Company’s adoption of ASU No. 2015-16 is not expected to have a material impact on the Company’s financial position or results of operations. |
ACQUISITION OF FEMTOLASERS
ACQUISITION OF FEMTOLASERS | 9 Months Ended |
Oct. 03, 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. The Company has estimated a 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 currently under negotiation between the Company and the FEMTOLASERS selling shareholders. Of the initial purchase price, €2.3 million was deposited at closing into escrow until 30 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 expense 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. 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. October 3, 2015 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 income (loss) of FEMTOLASERS from February 11, 2015, the closing date of the acquisition, were included in the Company’s consolidated statements of income and comprehensive income for the three and nine months ended October 3, 2015, and 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 nine months ended October 3, 2015 and September 27, 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 Nine Months Ended October 3, September 27, October 3, September 27, (Unaudited, in thousands) 2015 2014 2015 2014 Actual: Net sales $ $ — $ $ — Net income (loss) attributable to Newport Corporation $ $ — $ ) $ — Supplemental pro forma information: Net sales $ $ $ $ Net income attributable to Newport Corporation $ $ $ $ Net income per share Basic $ $ $ $ Diluted $ $ $ $ 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 $0.4 million for the three and nine months ended September 27, 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. |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 9 Months Ended |
Oct. 03, 2015 | |
FAIR VALUE MEASUREMENTS | |
FAIR VALUE MEASUREMENTS | NOTE 4 FAIR VALUE MEASUREMENTS Accounting Standards Codification (ASC) 820-10, Fair Value Measurements, requires the fair value of any assets and liabilities stated at fair value on a recurring basis in the Company’s financial statements to be measured based on the price that would be received from selling such an asset or paid to transfer such 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 October 3, 2015. Fair Value Measurements at Reporting Date Using (In thousands) Description October 3, 2015 Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Assets: Restricted Cash $ $ $ — $ — 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) Description January 3, 2015 Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (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: October 3, 2015 January 3, 2015 Carrying Carrying (In thousands) Amount Fair Value Amount Fair Value Short-term borrowings $ $ $ $ Long-term debt $ $ $ $ |
SUPPLEMENTAL FINANCIAL INFORMAT
SUPPLEMENTAL FINANCIAL INFORMATION | 9 Months Ended |
Oct. 03, 2015 | |
SUPPLEMENTAL FINANCIAL INFORMATION | |
SUPPLEMENTAL FINANCIAL INFORMATION | NOTE 5 SUPPLEMENTAL FINANCIAL 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: October 3, 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: October 3, 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: Nine Months Ended October 3, September 27, (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: October 3, January 3, (In thousands) 2015 2015 Deferred revenue $ $ Deferred lease liability Short-term accrued warranty obligations Accrued third party commissions Accrued income taxes Other $ $ Accumulated Other Comprehensive Loss Accumulated other comprehensive loss consisted of the following: October 3, 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 | 9 Months Ended |
Oct. 03, 2015 | |
GOODWILL AND INTANGIBLE ASSETS | |
GOODWILL AND INTANGIBLE ASSETS | N OTE 6 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 October 3, 2015: Goodwill Accumulated impairment losses ) ) ) ) $ $ $ $ As of October 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 $ $ ) $ As of October 3, 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 $1.9 million for the three months ended October 3, 2015 and September 27, 2014, respectively, and $6.3 million and $6.8 million for the nine months ended October 3, 2015 and September 27, 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 $3.0 million of estimated amortization expense related to certain in-process research and development from the table above, as it was uncertain as of October 3, 2015 when the technology will be completed and when the amortization will begin. |
INTEREST AND OTHER EXPENSE, NET
INTEREST AND OTHER EXPENSE, NET | 9 Months Ended |
Oct. 03, 2015 | |
INTEREST AND OTHER EXPENSE, NET | |
INTEREST AND OTHER EXPENSE, NET | NOTE 7 INTEREST AND OTHER EXPENSE, NET Interest and other expense, net, was as follows: Three Months Ended Nine Months Ended October 3, September 27, October 3, September 27, (In thousands) 2015 2014 2015 2014 Interest expense $ ) $ ) $ ) $ ) Interest and dividend income Derivative (loss) gain, net ) ) ) Bank and portfolio asset management fees ) ) ) ) Other (expense) income, net ) ) $ ) $ ) $ ) $ ) |
STOCK-BASED COMPENSATION
STOCK-BASED COMPENSATION | 9 Months Ended |
Oct. 03, 2015 | |
STOCK-BASED COMPENSATION | |
STOCK-BASED COMPENSATION | NOTE 8 STOCK-BASED COMPENSATION During the nine months ended October 3, 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 $19.06 and $7.60, 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 Nine Months Ended October 3, September 27, October 3, September 27, (In thousands) 2015 2014 2015 2014 Cost of sales $ $ $ $ Selling, general and administrative expense Research and development expense $ $ $ $ At October 3, 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 $18.3 million, net of estimated forfeitures. This future compensation expense will be amortized over a weighted-average period of 1.9 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 October 3, 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 October 3, 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 | 9 Months Ended |
Oct. 03, 2015 | |
DEBT AND LINES OF CREDIT | |
DEBT AND LINES OF CREDIT | NOTE 9 DEBT AND LINES OF CREDIT Total short-term borrowings were as follows: October 3, 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: October 3, 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 | 9 Months Ended |
Oct. 03, 2015 | |
NET INCOME PER SHARE | |
NET INCOME PER SHARE | NOTE 10 NET INCOME PER SHARE The following table sets forth the computation of basic and diluted net income per share: Three Months Ended Nine Months Ended October 3, September 27, October 3, September 27, (In thousands, except per share data) 2015 2014 2015 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 nine months ended October 3, 2015, 1.5 million stock appreciation rights, and for the three and nine months ended September 27, 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 nine months ended October 3, 2015, 0.5 million performance-based restricted stock units, and for the three and nine months ended September 27, 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 | 9 Months Ended |
Oct. 03, 2015 | |
INCOME TAXES | |
INCOME TAXES | NOTE 11 INCOME TAXES Income tax expense for each of the three and nine months ended October 3, 2015 and September 27, 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 nine months ended October 3, 2015 were 22.0% and 30.2%, respectively, and the effective tax rates for the three and nine months ended September 27, 2014 were 19.7% and 27.0%, respectively. The effective tax rates for the three and nine months ended October 3, 2015 were lower than the U.S. statutory rate of 35% due primarily to the benefit of income recorded in foreign jurisdictions that have tax rates that are lower than U.S. tax rates and an increased utilization of foreign tax credits that were previously unrecognized, necessitated by the completion and filing of the 2014 U.S. federal consolidated return during the third quarter, which was recorded as a discrete item. The effective tax rate for the three months ended October 3, 2015 was also favorably impacted by profitable results recorded in jurisdictions where the Company maintains a full valuation allowance. The effective tax rate for the nine months ended October 3, 2015 was unfavorably impacted by the passage of Japanese tax reform legislation on March 31, 2015, which lowered long-term corporate tax rates, necessitating a corresponding reduction of deferred tax assets applicable to the Company’s Japanese locations. The effective tax rates for the three and nine months ended September 27, 2014 were lower than the rates for the three and nine months ended October 3, 2015, respectively, due primarily to the favorable impact of an extraterritorial income exclusion benefit and a reduction of the corresponding uncertain tax position, which was recorded as a discrete item during the third quarter of 2014. |
STOCKHOLDERS' EQUITY TRANSACTIO
STOCKHOLDERS' EQUITY TRANSACTIONS | 9 Months Ended |
Oct. 03, 2015 | |
STOCKHOLDERS' EQUITY TRANSACTIONS | |
STOCKHOLDERS' EQUITY TRANSACTIONS | NOTE 12 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 nine months ended October 3, 2015, the Company repurchased 1.7 million shares for a total of $27.9 million under this program. As of October 3, 2015, 1.7 million shares remained available for purchase under the program. During the nine months ended October 3, 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 | 9 Months Ended |
Oct. 03, 2015 | |
DEFINED BENEFIT PENSION PLANS | |
DEFINED BENEFIT PENSION PLANS | NOTE 13 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 Nine Months Ended October 3, September 27, October 3, September 27, (In thousands) 2015 2014 2015 2014 Service cost $ $ $ $ Interest cost on benefit obligations Expected return on plan assets ) ) ) ) Amortization of net loss $ $ $ $ |
BUSINESS SEGMENT INFORMATION
BUSINESS SEGMENT INFORMATION | 9 Months Ended |
Oct. 03, 2015 | |
BUSINESS SEGMENT INFORMATION | |
BUSINESS SEGMENT INFORMATION | NOTE 14 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 October 3, 2015: Sales to external customers $ $ $ $ Segment income $ $ $ $ Three months ended September 27, 2014: Sales to external customers $ $ $ $ Segment income $ $ $ $ Nine months ended October 3, 2015: Sales to external customers $ $ $ $ Segment income $ $ $ $ Nine months ended September 27, 2014: Sales to external customers $ $ $ $ Segment income $ $ $ $ The following table reconciles segment income to consolidated income before income taxes: Three Months Ended Nine Months Ended October 3, September 27, October 3, September 27, (In thousands) 2015 2014 2015 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) | 9 Months Ended |
Oct. 03, 2015 | |
ACQUISITION OF FEMTOLASERS | |
Summary of the purchase price, assets acquired and liabilities assumed | October 3, 2015 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 Nine Months Ended October 3, September 27, October 3, September 27, (Unaudited, in thousands) 2015 2014 2015 2014 Actual: Net sales $ $ — $ $ — Net income (loss) attributable to Newport Corporation $ $ — $ ) $ — Supplemental pro forma information: Net sales $ $ $ $ Net income attributable to Newport Corporation $ $ $ $ Net income per share Basic $ $ $ $ Diluted $ $ $ $ |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 9 Months Ended |
Oct. 03, 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) Description October 3, 2015 Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Assets: Restricted Cash $ $ $ — $ — 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) Description January 3, 2015 Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (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 | October 3, 2015 January 3, 2015 Carrying Carrying (In thousands) Amount Fair Value Amount Fair Value Short-term borrowings $ $ $ $ Long-term debt $ $ $ $ |
SUPPLEMENTAL FINANCIAL INFORM22
SUPPLEMENTAL FINANCIAL INFORMATION | 9 Months Ended |
Oct. 03, 2015 | |
SUPPLEMENTAL FINANCIAL INFORMATION | |
Schedule of inventories | October 3, January 3, (In thousands) 2015 2015 Raw materials and purchased parts $ $ Work in process Finished goods Short-term inventories $ $ |
Schedule of long-term inventories | October 3, January 3, (In thousands) 2015 2015 Raw materials and purchased parts $ $ Finished goods Long-term inventories $ $ |
Schedule of activity in accrued warranty obligations | Nine Months Ended October 3, September 27, (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 | October 3, January 3, (In thousands) 2015 2015 Deferred revenue $ $ Deferred lease liability Short-term accrued warranty obligations Accrued third party commissions Accrued income taxes Other $ $ |
Schedule of accumulated other comprehensive loss | October 3, 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) | 9 Months Ended |
Oct. 03, 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 October 3, 2015: Goodwill Accumulated impairment losses ) ) ) ) $ $ $ $ |
Schedule of intangible assets, excluding goodwill | As of October 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 $ $ ) $ 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, N24
INTEREST AND OTHER EXPENSE, NET (Tables) | 9 Months Ended |
Oct. 03, 2015 | |
INTEREST AND OTHER EXPENSE, NET | |
Interest and other expense, net | Three Months Ended Nine Months Ended October 3, September 27, October 3, September 27, (In thousands) 2015 2014 2015 2014 Interest expense $ ) $ ) $ ) $ ) Interest and dividend income Derivative (loss) gain, net ) ) ) Bank and portfolio asset management fees ) ) ) ) Other (expense) income, net ) ) $ ) $ ) $ ) $ ) |
STOCK-BASED COMPENSATION (Table
STOCK-BASED COMPENSATION (Tables) | 9 Months Ended |
Oct. 03, 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 Nine Months Ended October 3, September 27, October 3, September 27, (In thousands) 2015 2014 2015 2014 Cost of sales $ $ $ $ Selling, general and administrative expense 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) | 9 Months Ended |
Oct. 03, 2015 | |
DEBT AND LINES OF CREDIT | |
Schedule of short-term borrowings | October 3, 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 | October 3, 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) | 9 Months Ended |
Oct. 03, 2015 | |
NET INCOME PER SHARE | |
Schedule of basic and diluted net income per share | Three Months Ended Nine Months Ended October 3, September 27, October 3, September 27, (In thousands, except per share data) 2015 2014 2015 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) | 9 Months Ended |
Oct. 03, 2015 | |
DEFINED BENEFIT PENSION PLANS | |
Aggregate net periodic benefit costs for the plans | Three Months Ended Nine Months Ended October 3, September 27, October 3, September 27, (In thousands) 2015 2014 2015 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) | 9 Months Ended |
Oct. 03, 2015 | |
BUSINESS SEGMENT INFORMATION | |
Schedule of selected segment financial information | (In thousands) Photonics Lasers Optics Total Three months ended October 3, 2015: Sales to external customers $ $ $ $ Segment income $ $ $ $ Three months ended September 27, 2014: Sales to external customers $ $ $ $ Segment income $ $ $ $ Nine months ended October 3, 2015: Sales to external customers $ $ $ $ Segment income $ $ $ $ Nine months ended September 27, 2014: Sales to external customers $ $ $ $ Segment income $ $ $ $ |
Schedule of reconciliation of segment income to consolidated income before income taxes | Three Months Ended Nine Months Ended October 3, September 27, October 3, September 27, (In thousands) 2015 2014 2015 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 Millions, $ in Millions | Feb. 11, 2015EUR (€) | Feb. 11, 2015USD ($) | Oct. 03, 2015EUR (€) | Oct. 03, 2015USD ($) |
ACQUISITIONS OF FEMTOLASERS | ||||
Initial purchase price | € 9.1 | |||
Revised net asset adjustment | € 2.1 | |||
Adjusted purchase price | € 7 | $ 7.9 | ||
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 | ||
Selling, general and administrative expense | ||||
ACQUISITIONS OF FEMTOLASERS | ||||
Transaction costs incurred | $ | $ 0.4 |
ACQUISITION OF FEMTOLASERS (D31
ACQUISITION OF FEMTOLASERS (Details 2) - USD ($) $ in Thousands | Oct. 03, 2015 | Jan. 03, 2015 |
Purchase price, assets acquired and liabilities assumed | ||
Goodwill | $ 103,854 | $ 97,524 |
FEMTOLASERS | ||
Purchase price, assets acquired and liabilities assumed | ||
Cash | 78 | |
Accounts receivable | 1,968 | |
Inventories | 2,759 | |
Deferred tax assets | 1,019 | |
Other assets | 2,015 | |
Goodwill | 6,681 | |
Accounts payable | (3,417) | |
Debt | (4,021) | |
Deferred tax liabilities | (1,019) | |
Other liabilities | (2,195) | |
Assets acquired and liabilities assumed, total | 7,943 | |
FEMTOLASERS | Developed technology | ||
Purchase price, assets acquired and liabilities assumed | ||
Intangible assets | 1,811 | |
FEMTOLASERS | In-process research and development | ||
Purchase price, assets acquired and liabilities assumed | ||
Intangible assets | 1,721 | |
FEMTOLASERS | Other intangible assets | ||
Purchase price, assets acquired and liabilities assumed | ||
Intangible assets | $ 543 |
ACQUISITION OF FEMTOLASERS (D32
ACQUISITION OF FEMTOLASERS (Details 3) - FEMTOLASERS - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Oct. 03, 2015 | Sep. 27, 2014 | Oct. 03, 2015 | Sep. 27, 2014 | |
Actual: | ||||
Net sales | $ 2,166 | $ 4,489 | ||
Net income (loss) attributable to Newport Corporation | 339 | (1,480) | ||
Supplemental pro forma information: | ||||
Net sales | 147,560 | $ 148,057 | 452,461 | $ 453,786 |
Net income attributable to Newport Corporation | $ 7,121 | $ 9,025 | $ 21,926 | $ 25,624 |
Net income per share | ||||
Basic | $ 0.18 | $ 0.23 | $ 0.56 | $ 0.64 |
Diluted | $ 0.18 | $ 0.22 | $ 0.55 | $ 0.63 |
ACQUISITION OF FEMTOLASERS (D33
ACQUISITION OF FEMTOLASERS (Details 4) - FEMTOLASERS - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |
Sep. 27, 2014 | Oct. 03, 2015 | Sep. 27, 2014 | |
ACQUISITIONS OF FEMTOLASERS | |||
Pro forma increase (decrease) in amortization expense | $ 0.1 | $ 0.4 | |
Transaction costs excluded from pro forma net income | $ 0.4 |
FAIR VALUE MEASUREMENTS (Detail
FAIR VALUE MEASUREMENTS (Details) - USD ($) $ in Thousands | Oct. 03, 2015 | Jan. 03, 2015 |
Assets: | ||
Marketable securities | $ 57 | |
Fair Value Measurements, Recurring basis | ||
Assets: | ||
Restricted Cash | $ 974 | 1,704 |
Marketable securities | 57 | |
Funds in investments and other assets | 17,835 | 17,230 |
Total assets | 19,023 | 19,094 |
Option contracts | Fair Value Measurements, Recurring basis | ||
Liabilities: | ||
Derivative liabilities | 266 | 921 |
Money market funds | Fair Value Measurements, Recurring basis | ||
Assets: | ||
Marketable securities | 7 | |
Certificates of deposit | Fair Value Measurements, Recurring basis | ||
Assets: | ||
Marketable securities | 50 | |
Option contracts | Fair Value Measurements, Recurring basis | ||
Assets: | ||
Derivative assets | 214 | 103 |
Israeli pension funds | Fair Value Measurements, Recurring basis | ||
Assets: | ||
Funds in investments and other assets | 11,926 | 11,090 |
Group insurance contracts | Fair Value Measurements, Recurring basis | ||
Assets: | ||
Funds in investments and other assets | 5,909 | 6,140 |
Quoted Prices in Active Markets for Identical Assets (Level 1) | Fair Value Measurements, Recurring basis | ||
Assets: | ||
Restricted Cash | 974 | 1,704 |
Marketable securities | 7 | |
Total assets | 974 | 1,711 |
Quoted Prices in Active Markets for Identical Assets (Level 1) | Money market funds | Fair Value Measurements, Recurring basis | ||
Assets: | ||
Marketable securities | 7 | |
Significant Other Observable Inputs (Level 2) | Fair Value Measurements, Recurring basis | ||
Assets: | ||
Marketable securities | 50 | |
Funds in investments and other assets | 17,835 | 17,230 |
Total assets | 18,049 | 17,383 |
Significant Other Observable Inputs (Level 2) | Option contracts | Fair Value Measurements, Recurring basis | ||
Liabilities: | ||
Derivative liabilities | 266 | 921 |
Significant Other Observable Inputs (Level 2) | Certificates of deposit | Fair Value Measurements, Recurring basis | ||
Assets: | ||
Marketable securities | 50 | |
Significant Other Observable Inputs (Level 2) | Option contracts | Fair Value Measurements, Recurring basis | ||
Assets: | ||
Derivative assets | 214 | 103 |
Significant Other Observable Inputs (Level 2) | Israeli pension funds | Fair Value Measurements, Recurring basis | ||
Assets: | ||
Funds in investments and other assets | 11,926 | 11,090 |
Significant Other Observable Inputs (Level 2) | Group insurance contracts | Fair Value Measurements, Recurring basis | ||
Assets: | ||
Funds in investments and other assets | $ 5,909 | $ 6,140 |
FAIR VALUE MEASUREMENTS (Deta35
FAIR VALUE MEASUREMENTS (Details 2) - USD ($) $ in Thousands | Oct. 03, 2015 | Jan. 03, 2015 |
Carrying Amount | ||
Carrying amount and estimated fair values of financial instruments | ||
Short-term borrowings | $ 3,579 | $ 3,772 |
Long-term debt | 84,254 | 71,000 |
Fair Value | ||
Carrying amount and estimated fair values of financial instruments | ||
Short-term borrowings | 3,579 | 3,772 |
Long-term debt | $ 83,497 | $ 69,761 |
SUPPLEMENTAL FINANCIAL INFORM36
SUPPLEMENTAL FINANCIAL INFORMATION (Details) - USD ($) $ in Thousands | Oct. 03, 2015 | Jan. 03, 2015 |
Short-term inventories | ||
Raw materials and purchased parts | $ 75,111 | $ 68,989 |
Work in process | 18,747 | 16,564 |
Finished goods | 28,987 | 26,887 |
Short-term inventories | $ 122,845 | $ 112,440 |
SUPPLEMENTAL FINANCIAL INFORM37
SUPPLEMENTAL FINANCIAL INFORMATION (Details 2) - USD ($) $ in Thousands | Oct. 03, 2015 | Jan. 03, 2015 |
Long-term Inventories | ||
Raw materials and purchased parts | $ 2,138 | $ 3,208 |
Finished goods | 2,969 | 3,856 |
Long-term inventories | $ 5,107 | $ 7,064 |
SUPPLEMENTAL FINANCIAL INFORM38
SUPPLEMENTAL FINANCIAL INFORMATION (Details 3) | 9 Months Ended |
Oct. 03, 2015 | |
Photonics and Optics | All products other than filters, gratings, laser beam profilers, and dental CAD/CAM scanners | |
Accrued Warranty Obligations | |
Product warranty period | 1 year |
Photonics and Optics | Original equipment manufacturer | Minimum | |
Accrued Warranty Obligations | |
Product warranty period | 15 months |
Photonics and Optics | Original equipment manufacturer | Maximum | |
Accrued Warranty Obligations | |
Product warranty period | 19 months |
Optics | Filters and gratings products | |
Accrued Warranty Obligations | |
Product warranty period | 90 days |
Photonics | Laser beam profilers, and dental CAD/CAM scanners | |
Accrued Warranty Obligations | |
Product warranty period | 2 years |
Lasers | Minimum | |
Accrued Warranty Obligations | |
Product warranty period | 90 days |
Lasers | Maximum | |
Accrued Warranty Obligations | |
Product warranty period | 2 years |
SUPPLEMENTAL FINANCIAL INFORM39
SUPPLEMENTAL FINANCIAL INFORMATION (Details 4) - USD ($) $ in Thousands | 9 Months Ended | |
Oct. 03, 2015 | Sep. 27, 2014 | |
Accrued Warranty Obligations | ||
Balance at beginning of year | $ 3,556 | $ 3,285 |
Additions charged to cost of sales | 2,278 | 2,134 |
Warranty claims | (2,386) | (2,487) |
Balance at end of period | $ 3,448 | $ 2,932 |
SUPPLEMENTAL FINANCIAL INFORM40
SUPPLEMENTAL FINANCIAL INFORMATION (Details 5) - USD ($) $ in Thousands | Oct. 03, 2015 | Jan. 03, 2015 |
Accrued Expenses and Other Current Liabilities | ||
Deferred revenue | $ 12,246 | $ 13,032 |
Deferred lease liability | 4,743 | 5,094 |
Short-term accrued warranty obligations | 3,254 | 3,324 |
Accrued third party commissions | 1,551 | 1,395 |
Accrued income taxes | 1,445 | 2,219 |
Other | 7,546 | 6,733 |
Accrued expenses and other current liabilities, total | $ 30,785 | $ 31,797 |
SUPPLEMENTAL FINANCIAL INFORM41
SUPPLEMENTAL FINANCIAL INFORMATION (Details 6) - USD ($) $ in Thousands | Oct. 03, 2015 | Jan. 03, 2015 |
Accumulated Other Comprehensive Loss | ||
Cumulative foreign currency translation losses | $ (19,846) | $ (14,556) |
Unrecognized net pension losses, net of tax | (4,347) | (4,855) |
Unrealized gains on investments and marketable securities, net of tax | 1,307 | 1,429 |
Accumulated other comprehensive loss | $ (22,886) | $ (17,982) |
GOODWILL AND INTANGIBLE ASSET42
GOODWILL AND INTANGIBLE ASSETS (Details) - USD ($) $ in Thousands | Oct. 03, 2015 | Jan. 03, 2015 |
Goodwill | ||
Goodwill | $ 276,213 | $ 269,883 |
Accumulated impairment losses | (172,359) | (172,359) |
Goodwill, total | 103,854 | 97,524 |
Photonics | ||
Goodwill | ||
Goodwill | 98,808 | 98,808 |
Accumulated impairment losses | (47,458) | (47,458) |
Goodwill, total | 51,350 | 51,350 |
Lasers | ||
Goodwill | ||
Goodwill | 136,091 | 129,761 |
Accumulated impairment losses | (104,562) | (104,562) |
Goodwill, total | 31,529 | 25,199 |
Optics | ||
Goodwill | ||
Goodwill | 41,314 | 41,314 |
Accumulated impairment losses | (20,339) | (20,339) |
Goodwill, total | $ 20,975 | $ 20,975 |
GOODWILL AND INTANGIBLE ASSET43
GOODWILL AND INTANGIBLE ASSETS (Details 2) $ in Thousands | 9 Months Ended |
Oct. 03, 2015USD ($) | |
Changes in the carrying amount of goodwill: | |
Goodwill, Beginning Balance | $ 97,524 |
Goodwill allocated to acquisition | 6,681 |
Foreign currency impact | (351) |
Goodwill, Ending Balance | 103,854 |
Photonics | |
Changes in the carrying amount of goodwill: | |
Goodwill, Beginning Balance | 51,350 |
Goodwill, Ending Balance | 51,350 |
Lasers | |
Changes in the carrying amount of goodwill: | |
Goodwill, Beginning Balance | 25,199 |
Goodwill allocated to acquisition | 6,681 |
Foreign currency impact | (351) |
Goodwill, Ending Balance | 31,529 |
Optics | |
Changes in the carrying amount of goodwill: | |
Goodwill, Beginning Balance | 20,975 |
Goodwill, Ending Balance | $ 20,975 |
GOODWILL AND INTANGIBLE ASSET44
GOODWILL AND INTANGIBLE ASSETS (Details 3) | 9 Months Ended | 12 Months Ended |
Oct. 03, 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 ASSET45
GOODWILL AND INTANGIBLE ASSETS (Details 4) - USD ($) $ in Thousands | Oct. 03, 2015 | Jan. 03, 2015 |
Intangible assets subject to amortization: | ||
Intangible assets, gross | $ 85,946 | $ 114,395 |
Accumulated amortization | (36,023) | (61,889) |
Intangible assets, net | 49,923 | 52,506 |
Developed technology | ||
Intangible assets subject to amortization: | ||
Intangible assets, gross | 39,888 | 45,646 |
Accumulated amortization | (11,777) | (16,782) |
Intangible assets, net | 28,111 | 28,864 |
Customer relationships | ||
Intangible assets subject to amortization: | ||
Intangible assets, gross | 28,693 | 47,827 |
Accumulated amortization | (20,839) | (37,312) |
Intangible assets, net | 7,854 | 10,515 |
In-process research and development | ||
Intangible assets subject to amortization: | ||
Intangible assets, gross | 15,154 | 13,461 |
Accumulated amortization | (2,075) | (1,496) |
Intangible assets, net | 13,079 | 11,965 |
Other intangible assets | ||
Intangible assets subject to amortization: | ||
Intangible assets, gross | 2,211 | 7,461 |
Accumulated amortization | (1,332) | (6,299) |
Intangible assets, net | $ 879 | $ 1,162 |
GOODWILL AND INTANGIBLE ASSET46
GOODWILL AND INTANGIBLE ASSETS (Details 5) - USD ($) $ in Thousands | Oct. 03, 2015 | Jan. 03, 2015 |
Intangible assets subject to amortization: | ||
Intangible assets, gross | $ 85,946 | $ 114,395 |
Accumulated amortization | (36,023) | (61,889) |
Intangible assets, net | 49,923 | 52,506 |
Intangible assets not subject to amortization: | ||
Trademarks and trade names | 18,305 | 18,305 |
Intangible assets | ||
Intangible assets, gross | 104,251 | 132,700 |
Intangible assets, net | $ 68,228 | $ 70,811 |
GOODWILL AND INTANGIBLE ASSET47
GOODWILL AND INTANGIBLE ASSETS (Details 6) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Oct. 03, 2015 | Sep. 27, 2014 | Oct. 03, 2015 | Sep. 27, 2014 | |
GOODWILL AND INTANGIBLE ASSETS | ||||
Amortization expense related to intangible assets | $ 2.1 | $ 1.9 | $ 6.3 | $ 6.8 |
GOODWILL AND INTANGIBLE ASSET48
GOODWILL AND INTANGIBLE ASSETS (Details 7) $ in Thousands | Oct. 03, 2015USD ($) |
Estimated aggregate amortization expense | |
2015 (remaining) | $ 2,168 |
2,016 | 8,283 |
2,017 | 7,131 |
2,018 | 4,966 |
2,019 | 4,376 |
Thereafter | 20,015 |
Total estimated future amortization expense | $ 46,939 |
GOODWILL AND INTANGIBLE ASSET49
GOODWILL AND INTANGIBLE ASSETS (Details 8) $ in Millions | Oct. 03, 2015USD ($) |
GOODWILL AND INTANGIBLE ASSETS | |
Future IPR&D expense excluded from estimated future expense | $ 3 |
INTEREST AND OTHER EXPENSE, N50
INTEREST AND OTHER EXPENSE, NET (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Oct. 03, 2015 | Sep. 27, 2014 | Oct. 03, 2015 | Sep. 27, 2014 | |
INTEREST AND OTHER EXPENSE, NET | ||||
Interest expense | $ (611) | $ (522) | $ (1,749) | $ (1,779) |
Interest and dividend income | 18 | 129 | 86 | 252 |
Derivative (loss) gain, net | (430) | (372) | 103 | (248) |
Bank and portfolio asset management fees | (322) | (293) | (1,015) | (819) |
Other (expense) income, net | (8) | 100 | (745) | 2 |
Total | $ (1,353) | $ (958) | $ (3,320) | $ (2,592) |
STOCK-BASED COMPENSATION (Detai
STOCK-BASED COMPENSATION (Details) shares in Millions | 9 Months Ended |
Oct. 03, 2015$ / sharesshares | |
Restricted Stock | |
Stock-based compensation | |
Granted (in shares) | 0.5 |
Granted (in dollars per share) | $ / shares | $ 19.06 |
Stock appreciation rights | |
Stock-based compensation | |
Granted (in shares) | 0.5 |
Granted (in dollars per share) | $ / shares | $ 7.60 |
STOCK-BASED COMPENSATION (Det52
STOCK-BASED COMPENSATION (Details 2) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Oct. 03, 2015 | Sep. 27, 2014 | Oct. 03, 2015 | Sep. 27, 2014 | |
Total stock-based compensation expense included in the Company's consolidated statements of operations | ||||
Stock-based compensation expense | $ 3,231 | $ 3,141 | $ 10,058 | $ 8,588 |
Cost of sales | ||||
Total stock-based compensation expense included in the Company's consolidated statements of operations | ||||
Stock-based compensation expense | 367 | 271 | 1,048 | 762 |
Selling, general and administrative expense | ||||
Total stock-based compensation expense included in the Company's consolidated statements of operations | ||||
Stock-based compensation expense | 2,490 | 2,508 | 7,812 | 6,809 |
Research and development expense | ||||
Total stock-based compensation expense included in the Company's consolidated statements of operations | ||||
Stock-based compensation expense | $ 374 | $ 362 | $ 1,198 | $ 1,017 |
STOCK-BASED COMPENSATION (Det53
STOCK-BASED COMPENSATION (Details 3) $ in Millions | 9 Months Ended |
Oct. 03, 2015USD ($) | |
Unrecognized total compensation cost | |
Unrecognized stock-based compensation expense related to non-vested stock-based awards | $ 18.3 |
Weighted-average period over which unrecognized stock-based compensation cost is expected to be recognized | 1 year 10 months 24 days |
STOCK-BASED COMPENSATION (Det54
STOCK-BASED COMPENSATION (Details 4) $ / shares in Units, shares in Thousands, $ in Thousands | 9 Months Ended |
Oct. 03, 2015USD ($)$ / sharesshares | |
Stock Options | |
Stock-based compensation | |
Stock options outstanding (in shares) | 30 |
Stock options outstanding, weighted average exercise price (in dollars per share) | $ / shares | $ 13.86 |
Stock options outstanding, remaining contractual term | 3 months 18 days |
Stock options exercisable (in shares) | 30 |
Stock options exercisable, weighted average exercise price (in dollars per share) | $ / shares | $ 13.86 |
Stock options exercisable, remaining contractual term | 3 months 18 days |
Stock appreciation rights | |
Stock-based compensation | |
Stock appreciation rights outstanding (in shares) | 2,354 |
Stock appreciation rights outstanding, weighted average base value (in dollars per share) | $ / shares | $ 15.61 |
Stock appreciation rights outstanding, remaining contractual term | 4 years 4 months 24 days |
Stock appreciation rights outstanding, intrinsic value | $ | $ 2,197 |
Stock appreciation rights exercisable (in shares) | 1,328 |
Stock appreciation rights exercisable, weighted-average base value (in dollars per share) | $ / shares | $ 13.88 |
Stock appreciation rights exercisable, remaining contractual term | 3 years 2 months 12 days |
Stock appreciation rights exercisable, intrinsic value | $ | $ 2,187 |
DEBT AND LINES OF CREDIT (Detai
DEBT AND LINES OF CREDIT (Details) - USD ($) $ in Thousands | Oct. 03, 2015 | Jan. 03, 2015 |
Short-term borrowings | ||
Total short-term borrowings | $ 3,579 | $ 3,772 |
Foreign line of credit | Revolving line of credit | Japanese revolving lines of credit | ||
Short-term borrowings | ||
Total short-term borrowings | 3,117 | 3,163 |
Receivables financing | Japanese receivables financing facilities | ||
Short-term borrowings | ||
Total short-term borrowings | 312 | 25 |
Loans | Israeli loans due October 2015 | ||
Short-term borrowings | ||
Total short-term borrowings | $ 150 | $ 584 |
DEBT AND LINES OF CREDIT (Det56
DEBT AND LINES OF CREDIT (Details 2) - USD ($) $ in Thousands | Oct. 03, 2015 | Jan. 03, 2015 |
Long-term debt | ||
Total long-term debt | $ 84,254 | $ 71,000 |
Secured debt | Revolving line of credit | U.S. revolving line of credit expiring July 2018 | ||
Long-term debt | ||
Total long-term debt | 84,000 | $ 71,000 |
Loans | Austrian loans due through March 2019 | ||
Long-term debt | ||
Total long-term debt | $ 254 |
NET INCOME PER SHARE (Details)
NET INCOME PER SHARE (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Oct. 03, 2015 | Sep. 27, 2014 | Oct. 03, 2015 | Sep. 27, 2014 | |
NET INCOME PER SHARE | ||||
Net income attributable to Newport Corporation | $ 7,103 | $ 9,470 | $ 21,537 | $ 26,308 |
Shares: | ||||
Weighted average shares outstanding - basic | 38,982 | 39,921 | 39,434 | 39,776 |
Dilutive potential common shares, using treasury stock method | 392 | 691 | 632 | 770 |
Weighted average shares outstanding - diluted | 39,374 | 40,612 | 40,066 | 40,546 |
Net income per share attributable to Newport Corporation: | ||||
Basic (in dollars per share) | $ 0.18 | $ 0.24 | $ 0.55 | $ 0.66 |
Diluted (in dollars per share) | $ 0.18 | $ 0.23 | $ 0.54 | $ 0.65 |
NET INCOME PER SHARE (Details 2
NET INCOME PER SHARE (Details 2) - shares shares in Millions | 3 Months Ended | 9 Months Ended | ||
Oct. 03, 2015 | Sep. 27, 2014 | Oct. 03, 2015 | Sep. 27, 2014 | |
Stock options and stock appreciation rights | ||||
Net income per share | ||||
Antidilutive securities excluded from computation of earnings per share, amount | 1.5 | 0.7 | 1.5 | 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 | 9 Months Ended | ||
Oct. 03, 2015 | Sep. 27, 2014 | Oct. 03, 2015 | Sep. 27, 2014 | |
INCOME TAXES | ||||
Effective rate | 22.00% | 19.70% | 30.20% | 27.00% |
U.S. statutory rate | 35.00% | 35.00% |
STOCKHOLDERS' EQUITY TRANSACT60
STOCKHOLDERS' EQUITY TRANSACTIONS (Details) - USD ($) $ in Thousands, shares in Millions | 9 Months Ended | ||
Oct. 03, 2015 | Sep. 27, 2014 | May. 31, 2008 | |
STOCKHOLDERS' EQUITY TRANSACTIONS | |||
Shares of common stock authorized to be repurchased | 4 | ||
Purchases made under the program | 1.7 | ||
Shares repurchased, value (in dollars) | $ 27,893 | $ 4,480 | |
Remaining shares to be repurchased | 1.7 |
STOCKHOLDERS' EQUITY TRANSACT61
STOCKHOLDERS' EQUITY TRANSACTIONS (Details 2) - Restricted stock units shares in Millions, $ in Millions | 9 Months Ended |
Oct. 03, 2015USD ($)shares | |
Stock-based compensation | |
Cancelled (in shares) | 0.2 |
Cancelled, value | $ | $ 3.4 |
DEFINED BENEFIT PENSION PLANS62
DEFINED BENEFIT PENSION PLANS (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Oct. 03, 2015 | Sep. 27, 2014 | Oct. 03, 2015 | Sep. 27, 2014 | |
Net periodic benefit costs | ||||
Service cost | $ 547 | $ 482 | $ 1,849 | $ 1,740 |
Interest cost on benefit obligations | 120 | 198 | 362 | 514 |
Expected return on plan assets | (44) | (70) | (131) | (211) |
Amortization of net loss | 91 | 44 | 273 | 134 |
Total | $ 714 | $ 654 | $ 2,353 | $ 2,177 |
BUSINESS SEGMENT INFORMATION (D
BUSINESS SEGMENT INFORMATION (Details) | 3 Months Ended |
Oct. 03, 2015segment | |
BUSINESS SEGMENT INFORMATION | |
Number of operating segments | 3 |
BUSINESS SEGMENT INFORMATION 64
BUSINESS SEGMENT INFORMATION (Details 2) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Oct. 03, 2015 | Sep. 27, 2014 | Oct. 03, 2015 | Sep. 27, 2014 | |
Segment Reporting Information, by Segment | ||||
Sales to external customers | $ 147,560 | $ 146,299 | $ 452,192 | $ 446,421 |
Segment income | 10,465 | 12,761 | 34,165 | 38,772 |
Photonics | ||||
Segment Reporting Information, by Segment | ||||
Sales to external customers | 60,904 | 59,757 | 186,843 | 182,693 |
Lasers | ||||
Segment Reporting Information, by Segment | ||||
Sales to external customers | 48,247 | 44,228 | 142,602 | 137,815 |
Optics | ||||
Segment Reporting Information, by Segment | ||||
Sales to external customers | 38,409 | 42,314 | 122,747 | 125,913 |
Operating segments | ||||
Segment Reporting Information, by Segment | ||||
Segment income | 21,720 | 23,627 | 70,449 | 72,846 |
Operating segments | Photonics | ||||
Segment Reporting Information, by Segment | ||||
Segment income | 14,274 | 12,255 | 46,703 | 40,201 |
Operating segments | Lasers | ||||
Segment Reporting Information, by Segment | ||||
Segment income | 4,278 | 6,423 | 10,943 | 18,151 |
Operating segments | Optics | ||||
Segment Reporting Information, by Segment | ||||
Segment income | $ 3,168 | $ 4,949 | $ 12,803 | $ 14,494 |
BUSINESS SEGMENT INFORMATION 65
BUSINESS SEGMENT INFORMATION (Details 3) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Oct. 03, 2015 | Sep. 27, 2014 | Oct. 03, 2015 | Sep. 27, 2014 | |
Reconciliation of segment income to consolidated income before income taxes | ||||
Segment income | $ 10,465 | $ 12,761 | $ 34,165 | $ 38,772 |
(Loss) gain on disposal of assets | (1,088) | 411 | ||
Interest and other expense, net | (1,353) | (958) | (3,320) | (2,592) |
Income before income taxes | 9,112 | 11,803 | 30,845 | 36,180 |
Operating segments | ||||
Reconciliation of segment income to consolidated income before income taxes | ||||
Segment income | 21,720 | 23,627 | 70,449 | 72,846 |
Unallocated amount to segment | ||||
Reconciliation of segment income to consolidated income before income taxes | ||||
Unallocated operating expenses | $ (11,255) | $ (10,866) | $ (35,196) | $ (34,485) |