Over $15 Million of New Orders Received in the Quarter for Solar Cell Manufacturing Applications

IRVINE, Calif., April 30 /PRNewswire-FirstCall/ -- Newport Corporation(Nasdaq: NEWP) today reported its financial results for the first quarterended March 29, 2008, and provided guidance regarding its expected financialperformance in the second quarter of 2008.

Sales in the first quarter of 2008 totaled $115.2 million, an increase of7.4% over the $107.3 million recorded in the first quarter of 2007. Neworders received in the first quarter of 2008 totaled $125.0 million, anincrease of 13.3% over the $110.3 million recorded in the prior year period.The new orders recorded in the first quarter of 2008 represent the secondhighest quarterly level of new orders in the company's history behind the$130.2 million recorded in the fourth quarter of 2007.

Newport reported net income in the first quarter of 2008 of $3.7 million,or $0.10 per diluted share, compared with $5.3 million, or $0.13 per dilutedshare, in the first quarter of 2007.

Robert J. Phillippy, president and chief executive officer, said, 'Ourfirst quarter earnings and revenue were both at or above the high end of theguidance ranges we provided in our year-end earnings release on January 30,2008. More importantly, our new orders represented the highest level we haveever booked in a first quarter of our fiscal year. In particular, we continueto be excited by the opportunities we are seeing for our products supportingsolar cell (photovoltaic) manufacturing applications. In the first quarter of2008, we recorded over $15 million in orders from photovoltaic customers.This exceeds the total orders we received from customers in this market forall of 2007. We expect to see our participation in this market continue toexpand throughout 2008 and beyond.'

The company noted that its sales to and orders from photovoltaic customersare included in its microelectronics end market. The significant increase inorders from these customers more than offset the weakness in new orders fromsemiconductor capital equipment customers, which are also included in themicroelectronics end market. In total, orders from customers in themicroelectronics market in the first quarter of 2008 were $40.5 million,compared with $30.6 million in the first quarter of 2007.

Newport also reported that it is on track to open its photovoltaicapplications laboratory and demonstration facility in Stahnsdorf, Germany bythe end of the second quarter of 2008. This applications laboratory will serveas a showcase for Newport's portfolio of capabilities to enhance solar cellmanufacturing and testing, and will demonstrate the performance of thecompany's products in applications including solar cell scribing, edgeisolation and test.

Mr. Phillippy added, 'We are also pleased with our progress in the life &health sciences market. Orders from customers in this market in the firstquarter of 2008 were up 17.4% over the first quarter of 2007, and were thehighest quarterly level of orders from this market in Newport's history. Webelieve that our customers in this segment are increasingly recognizing thevalue of our ability to provide solutions that enhance the performance oftheir bioinstrumentation and medical equipment applications.'

The company also noted that its Lasers Division continues to make goodprogress on its operational and profitability improvement initiatives. Thedivision's first quarter financial results were slightly better thanexpectations, and the division remains on track to complete these initiativesby the fourth quarter of 2008.

The company's gross profit for the first quarter of 2008 was $46.1million, or 40.0% of net sales, compared with $46.6 million, or 43.5% of netsales, in the first quarter of 2007. The decrease in gross margin in thefirst quarter of 2008 compared with the prior year period was due primarily tothe shipment of a greater proportion of lower-margin products during thecurrent year quarter.

Selling, general and administrative (SG&A) expenses for the first quarterof 2008 were $29.8 million, or 25.9% of net sales, compared with $30.0million, or 28.0% of net sales, in the first quarter of 2007. The companynoted that it was able to hold SG&A expenses relatively flat compared with theprior year while increasing revenues, demonstrating the company's ability toreduce its SG&A spending as a percentage of sales as its revenue levelsincrease.

Research and development (R&D) expense for the first quarter of 2008 was$11.4 million, or 9.9% of net sales, compared with $10.6 million, or 9.9% ofnet sales, in the first quarter of 2007.

The company's cash, cash equivalents and marketable securities totaled$134.5 million at the end of the first quarter of 2008. During the firstquarter of 2008, the company repurchased approximately 1.1 million shares ofits common stock for approximately $11.4 million under its share repurchaseprogram. Over the last five quarters, the company has repurchasedapproximately 6.4 million shares of its stock. As of March 29, 2008, thecompany had approximately 36.6 million diluted shares outstanding.

SECOND QUARTER 2008 BUSINESS OUTLOOK

The following statements reflect the current expectations of the company'smanagement based on available information and refer to expected results fromcontinuing operations. These statements are forward-looking and actualresults may differ materially as a result of the factors more specificallyreferenced below under the caption 'SAFE HARBOR STATEMENT.'

Sales for the second quarter of 2008 are expected to be approximatelyequal to the first quarter level. Due to the high level of new orders bookedin the last two quarters, the company enters the second quarter of 2008 withthe highest level of backlog scheduled for shipment within twelve months inits history. However, many of these orders are scheduled for delivery in thenext nine to twelve months.