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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, DC 20549
 
 FORM 10-Q
  þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the quarterly period ended April 4, 2009
 OR
 o
    
    TRANSITION REPORT PURSUANT TO SECTION
13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
 For the transition period from  to
 Commission File Number: 000-01649
 
 NEWPORT CORPORATION
 (Exact name of registrant as specified in its charter)
 Nevada(State or other jurisdiction of 
incorporation or organization)
    
    94-0849175(IRS Employer Identification No.)
 1791 Deere Avenue, Irvine, California 92606  (Address of principal executive offices) (Zip Code)
 (949) 863-3144  (Registrants telephone number, including area code)
 Not Applicable  (Former name, former address and former fiscal year, if changed since last report)
 
  þ o
  o o
  Large accelerated filer o
Accelerated filer þ
Non-accelerated filer o(Do not check if a smaller reporting company)
Smaller reporting company o  o þ




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##### 



NEWPORT CORPORATION
 FORM 10-Q
 INDEX
 PageNumberPART I. FINANCIAL INFORMATIONItem 1.
    
    Financial Statements (unaudited):Consolidated Statements of Operations for the Three Months Ended
April 4, 2009 and March 29, 2008
    
    
    3Consolidated Balance Sheets as of April 4, 2009 and January 3, 2009
    
    
    4Consolidated Statements of Cash Flows for the Three Months Ended
April 4, 2009 and March 29, 2008
    
    
    5Notes to Consolidated Financial Statements
    
    
    6Item 2.
    
    Managements Discussion and Analysis of Financial Condition and Results
of Operations
    
    
    16Item 3.
    
    Quantitative and Qualitative Disclosures About Market Risk
    
    
    23Item 4.
    
    Controls and Procedures
    
    
    24PART II. OTHER INFORMATIONItem 1A.
    
    Risk Factors
    
    
    24Item 6.
    
    Exhibits
    
    
    24SIGNATURES
    
    
    25
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PART I  FINANCIAL INFORMATION
 
 Item 1. Financial Statements
 
 NEWPORT CORPORATION
Consolidated Statements of Operations
(In thousands, except per share data)
(Unaudited)
 Three Months EndedApril 4,
    
    
    March 29,2009
    
    
    2008Net sales
    
    $
    89,536
    
    
    $
    115,243Cost of sales
    
    
    55,229
    
    
    
    69,132Gross profit
    
    
    34,307
    
    
    
    46,111Selling, general and administrative expenses
    
    
    27,487
    
    
    
    29,791Research and development expense
    
    
    9,355
    
    
    
    11,444Operating income (loss)
    
    
    (2,535
    )
    
    
    4,876Interest and other expense, net
    
    
    (2,119
    )
    
    
    (1,719
    )Income (loss) before income taxes
    
    
    (4,654
    )
    
    
    3,157Income tax provision
    
    
    164
    
    
    
    668Net income (loss)
    
    $
    (4,818
    )
    
    $
    2,489Net income (loss) per share:Basic
    
    $
    (0.13
    )
    
    $
    0.07Diluted
    
    $
    (0.13
    )
    
    $
    0.07Shares used in per share calculations:Basic
    
    
    36,066
    
    
    
    36,539Diluted
    
    
    36,066
    
    
    
    36,594
  3




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NEWPORT CORPORATION
Consolidated Balance Sheets
(In thousands, except share and per share data)
(Unaudited)
 April 4,
    
    
    January 3,2009
    
    
    2009ASSETSCurrent assets:Cash and cash equivalents
    
    $
    75,932
    
    
    $
    74,874Marketable securities
    
    
    65,809
    
    
    
    73,546Accounts receivable, net of allowance for doubtful accounts of $1,581 and
$1,642 as of April 4, 2009 and January 3, 2009, respectively
    
    
    64,441
    
    
    
    75,258Notes receivable, net
    
    
    3,606
    
    
    
    6,610Inventories, net
    
    
    102,591
    
    
    
    98,833Deferred income taxes
    
    
    12,824
    
    
    
    13,456Prepaid expenses and other current assets
    
    
    10,332
    
    
    
    10,740Total current assets
    
    
    335,535
    
    
    
    353,317Property and equipment, net
    
    
    58,036
    
    
    
    60,245Goodwill
    
    
    68,540
    
    
    
    68,540Deferred income taxes
    
    
    2,707
    
    
    
    2,555Intangible assets, net
    
    
    26,029
    
    
    
    26,696Investments and other assets
    
    
    13,007
    
    
    
    13,550$
    503,854
    
    
    $
    524,903LIABILITIES AND STOCKHOLDERS EQUITYCurrent liabilities:Short-term obligations
    
    $
    9,591
    
    
    $
    14,089Accounts payable
    
    
    22,905
    
    
    
    24,636Accrued payroll and related expenses
    
    
    15,865
    
    
    
    21,827Accrued expenses and other current liabilities
    
    
    25,915
    
    
    
    29,258Total current liabilities
    
    
    74,276
    
    
    
    89,810Long-term debt
    
    
    136,291
    
    
    
    135,478Obligations under capital leases, less current portion
    
    
    1,150
    
    
    
    1,220Accrued pension liabilities
    
    
    10,188
    
    
    
    10,652Other liabilities
    
    
    22,558
    
    
    
    22,546Commitments and contingenciesStockholders equity:Common stock, par value $0.1167 per share, 200,000,000 shares authorized;
36,160,268 and 36,048,634 shares issued and outstanding as of
April 4, 2009 and January 3, 2009, respectively
    
    
    4,220
    
    
    
    4,207Capital in excess of par value
    
    
    407,695
    
    
    
    407,047Accumulated other comprehensive income
    
    
    4,642
    
    
    
    6,291Accumulated deficit
    
    
    (157,166
    )
    
    
    (152,348
    )Total stockholders equity
    
    
    259,391
    
    
    
    265,197$
    503,854
    
    
    $
    524,903
  4




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NEWPORT CORPORATION
Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)
 Three Months EndedApril 4,
    
    
    March 29,2009
    
    
    2008CASH FLOWS FROM OPERATING ACTIVITIES:Net income (loss)
    
    $
    (4,818
    )
    
    $
    2,489Adjustments to reconcile net income (loss) to net cash provided
by operating activities:Depreciation and amortization
    
    
    5,331
    
    
    
    5,067Amortization of discount on convertible subordinated notes
    
    
    1,129
    
    
    
    1,299Provision for losses on inventories
    
    
    1,833
    
    
    
    1,557Stock-based compensation expense
    
    
    449
    
    
    
    757Provision for doubtful accounts, net
    
    
    69
    
    
    
    151Deferred income taxes, net
    
    
    (568
    )
    
    
    65Increase (decrease) in cash due to changes in:Accounts and notes receivable
    
    
    11,758
    
    
    
    (3,669
    )Inventories
    
    
    (7,462
    )
    
    
    (4,133
    )Prepaid expenses and other assets
    
    
    151
    
    
    
    (2,400
    )Accounts payable
    
    
    (1,062
    )
    
    
    449Accrued payroll and related expenses
    
    
    (5,767
    )
    
    
    (652
    )Accrued expenses and other liabilities
    
    
    (3,135
    )
    
    
    412Other long-term liabilities
    
    
    216
    
    
    
    (70
    )Net cash (used in) provided by operating activities
    
    
    (1,876
    )
    
    
    1,322CASH FLOWS FROM INVESTING ACTIVITIES:Purchase of property and equipment
    
    
    (1,224
    )
    
    
    (5,481
    )Purchase of marketable securities
    
    
    (5,082
    )
    
    
    (14,232
    )Proceeds from the sale of marketable securities
    
    
    12,826
    
    
    
    8,369Net cash (used in) provided by investing activities
    
    
    6,520
    
    
    
    (11,344
    )CASH FLOWS FROM FINANCING ACTIVITIES:Repayment of long-term debt and obligations under capital leases
    
    
    (30
    )
    
    
    (15
    )Short-term borrowings, net of repayments
    
    
    (3,179
    )
    
    
    2,929Proceeds from the issuance of common stock under employee plans
    
    
    212
    
    
    
    910Purchases of common stock and restricted stock units
    
    
    
    
    
    
    (11,450
    )Net cash used in financing activities
    
    
    (2,997
    )
    
    
    (7,626
    )Impact of foreign exchange rate changes on cash balances
    
    
    (589
    )
    
    
    1,439Net increase (decrease) in cash and cash equivalents
    
    
    1,058
    
    
    
    (16,209
    )Cash and cash equivalents at beginning of period
    
    
    74,874
    
    
    
    88,737Cash and cash equivalents at end of period
    
    $
    75,932
    
    
    $
    72,528Supplemental disclosures of cash flow information:Cash paid during the period for:Interest
    
    $
    1,937
    
    
    $
    2,321Income taxes, net
    
    $
    1,056
    
    
    $
    264
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NEWPORT CORPORATION
Notes to Consolidated Financial Statements
April 4, 2009
 NOTE 1 BASIS OF PRESENTATION
   Accounting for Convertible Debt Instruments That May Be Settled in Cash upon Conversion (Including
Partial Cash Settlement)
 NOTE 2 RECENT ACCOUNTING PRONOUNCEMENTS
 Determining Fair Value When the Volume and Level of Activity for the Asset or
Liability Have Significantly Decreased and Identifying Transactions That Are Not Orderly Interim Disclosures about Fair Value of
Financial Instruments Disclosures about Fair Value of Financial
Instruments Recognition and Presentation of
Other-Than-Temporary Impairments Accounting for Certain Investments in Debt and Equity
Securities The Meaning of Other-Than-Temporary Impairment and Its
Application to Certain Investments
 Miscellaneous Accounting  Other Than
Temporary Impairment of Certain Investments in Equity Securities
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NEWPORT CORPORATION
Notes to Consolidated Financial Statements
April 4, 2009
 Accounting for Assets Acquired and Liabilities
Assumed in a Business Combination That Arise from Contingencies Business Combinations Accounting for Contingencies Reasonable
Estimation of the Amount of a Loss
 NOTE 3 MARKETABLE SECURITIES AND FAIR VALUE MEASUREMENTS
 accumulated other comprehensive income
 Aggregate Amount ofAggregate
    
    
    Unrealized(In thousands)
    
    Fair Value
    
    
    Gains
    
    
    LossesU.S. government and agency debt securities
    
    $
    19,328
    
    
    
    430
    
    
    
    (4
    )Corporate debt securities
    
    
    22,867
    
    
    
    85
    
    
    
    (334
    )Equity securities
    
    
    15,235
    
    
    
    161
    
    
    
    Asset-backed securities
    
    
    8,379
    
    
    
    70
    
    
    
    (564
    )$
    65,809
    
    
    $
    746
    
    
    $
    (902
    )
  Aggregate Amount ofAggregate
    
    
    Unrealized(In thousands)
    
    Fair Value
    
    
    Gains
    
    
    LossesU.S. government and agency debt securities
    
    $
    21,516
    
    
    $
    419
    
    
    $
    (4
    )Corporate debt securities
    
    
    18,819
    
    
    
    26
    
    
    
    (588
    )Equity securities
    
    
    22,054
    
    
    
    154
    
    
    
    Asset-backed securities
    
    
    10,504
    
    
    
    
    
    
    
    (938
    )Certificates of deposit
    
    
    653
    
    
    
    1
    
    
    
    $
    73,546
    
    
    $
    600
    
    
    $
    (1,530
    )
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NEWPORT CORPORATION
Notes to Consolidated Financial Statements
April 4, 2009
  April 4,(In thousands)
    
    20090  1 Year
    
    $
    37,9371  2 Years
    
    
    12,6092  3 Years
    
    
    2,2713  5 Years
    
    
    5,5615  10 Years
    
    
    1,522More than 10 years
    
    
    5,909$
    65,809
   Fair Value Measurements at Reporting Date UsingQuoted Prices inActive Markets for
    
    
    Significant Other
    
    
    Significant(In thousands)
    
    
    
    
    
    Identical Assets
    
    
    Observable Inputs
    
    
    Unobservable InputsDescription
    
    April 4, 2009
    
    
    (Level 1)
    
    
    (Level 2)
    
    
    (Level 3)Assets:Marketable securities
    
    $
    65,809
    
    
    $
    65,809
    
    
    $
    
    
    
    $
    Pension assets not owned by plan
    
    
    8,469
    
    
    
    8,469
    
    
    
    
    
    
    
    $
    74,278
    
    
    $
    74,278
    
    
    $
    
    
    
    $
    
 NOTE 4 SUPPLEMENTAL BALANCE SHEET INFORMATION
 Inventories
  April 4,
    
    
    January 3,(In thousands)
    
    2009
    
    
    2009Raw materials and purchased parts
    
    $
    88,466
    
    
    $
    84,472Work in process
    
    
    8,198
    
    
    
    7,624Finished goods
    
    
    33,212
    
    
    
    33,422129,876
    
    
    
    125,518Allowance for excess and obsolete inventory
    
    
    (27,285
    )
    
    
    (26,685
    )$
    102,591
    
    
    $
    98,833
 Accrued Warranty Obligations
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NEWPORT CORPORATION
Notes to Consolidated Financial Statements
April 4, 2009
 accrued expenses and other current liabilities
  Three Months EndedApril 4,
    
    
    March 29,(In thousands)
    
    2009
    
    
    2008Balance at beginning of year
    
    $
    5,978
    
    
    $
    5,847Additions charged to cost of sales
    
    
    1,411
    
    
    
    1,926Warranty claims
    
    
    (1,951
    )
    
    
    (1,265
    )Balance at end of period
    
    $
    5,438
    
    
    $
    6,508
 Accrued Expenses and Other Current Liabilities
  April 4,
    
    
    January 3,(In thousands)
    
    2009
    
    
    2009Deferred revenue
    
    $
    11,443
    
    
    $
    11,813Accrued warranty obligations
    
    
    5,438
    
    
    
    5,978Other
    
    
    9,034
    
    
    
    11,467$
    25,915
    
    
    $
    29,258
 Accumulated Other Comprehensive Income
  April 4,
    
    
    January 3,(In thousands)
    
    2009
    
    
    2009Cumulative foreign currency translation gains
    
    $
    4,536
    
    
    $
    6,884Unrecognized net pension gains
    
    
    50
    
    
    
    58Unrealized gains (losses) on marketable securities
    
    
    56
    
    
    
    (651
    )$
    4,642
    
    
    $
    6,291
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NEWPORT CORPORATION
Notes to Consolidated Financial Statements
April 4, 2009
 NOTE 5 INTANGIBLE ASSETS
  April 4,
    
    
    January 3,(In thousands)
    
    2009
    
    
    2009Intangible assets subject to amortization:Developed technology, net of accumulated amortization of $3,390 and
$3,210 as of April 4, 2009 and January 3, 2009, respectively
    
    $
    3,810
    
    
    $
    3,990Customer relationships, net of accumulated amortization of $9,181 and
$8,694 as of April 4, 2009 and January 3, 2009, respectively
    
    
    10,319
    
    
    
    10,80614,129
    
    
    
    14,796Intangible assets not subject to amortization:Trademarks and trade names
    
    
    11,900
    
    
    
    11,900Intangible assets, net
    
    $
    26,029
    
    
    $
    26,696
   EstimatedAggregateAmortization(In thousands)
    
    Expense2009 (remaining)
    
    $
    2,0032010
    
    
    2,6702011
    
    
    2,6702012
    
    
    2,6702013
    
    
    2,670Thereafter
    
    
    1,446$
    14,129
 NOTE 6 INTEREST AND OTHER EXPENSE, NET
  Three Months EndedApril 4,
    
    
    March 29,(In thousands)
    
    2009
    
    
    2008Interest and dividend income
    
    $
    615
    
    
    $
    1,081Interest expense
    
    
    (2,356
    )
    
    
    (2,723
    )Bank and portfolio asset management fees
    
    
    (147
    )
    
    
    (141
    )Other income (expense), net
    
    
    (231
    )
    
    
    64$
    (2,119
    )
    
    $
    (1,719
    )
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NEWPORT CORPORATION
Notes to Consolidated Financial Statements
April 4, 2009
 NOTE 7 STOCK-BASED COMPENSATION
   Three Months EndedApril 4,
    
    
    March 29,(In thousands)
    
    2009
    
    
    2008Cost of sales
    
    $
    26
    
    
    $
    45Selling, general and administrative expenses
    
    
    378
    
    
    
    650Research and development expense
    
    
    45
    
    
    
    62$
    449
    
    
    $
    757
   NOTE 8 DEBT AND LINES OF CREDIT
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NEWPORT CORPORATION
Notes to Consolidated Financial Statements
April 4, 2009
  Three MonthsEndedMarch 29,(In thousands)
    
    2008Additional non-cash interest expense
    
    $
    1,299Reduction in amortization of debt issuance costs
    
    
    (63
    )Retrospective change in net income
    
    $
    1,236Change to basic earnings per share
    
    $
    (0.03
    )Change to diluted earnings per share
    
    $
    (0.03
    )
 long-term debt investments and other assets
  Three Months EndedApril 4,
    
    
    March 29,(In thousands)
    
    2009
    
    
    2008Contractual interest
    
    $
    919
    
    
    $
    1,094Amortization of debt discount
    
    
    1,129
    
    
    
    1,299Interest cost on convertible subordinated notes
    
    $
    2,048
    
    
    $
    2,393
 long-term debt
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NEWPORT CORPORATION
Notes to Consolidated Financial Statements
April 4, 2009
  short-term obligations short-term obligations Accounting for Transfers and Servicing of Financial
Assets and Extinguishments of Liabilitiesa replacement of FASB Statement No. 125
  April 4,
    
    
    January 3,(In thousands)
    
    2009
    
    
    2009Japanese private placement bonds due June 2011, interest at 1.55% semi-annually
    
    $
    2,990
    
    
    $
    3,307Convertible notes due February 2012, interest at 2.5% semi-annually
    
    
    133,301
    
    
    
    132,171Total long-term debt
    
    $
    136,291
    
    
    $
    135,478
 NOTE 9 NET INCOME (LOSS) PER SHARE
  Three Months EndedApril 4,
    
    
    March 29,(In thousands)
    
    2009
    
    
    2008Net income (loss)
    
    $
    (4,818
    )
    
    $
    2,489Shares:Weighted average shares outstanding  basic
    
    
    36,066
    
    
    
    36,539Dilutive potential common shares, using treasury
stock method
    
    
    
    
    
    
    55Weighted average shares outstanding  diluted
    
    
    36,066
    
    
    
    36,594Net income (loss) per share:Basic
    
    $
    (0.13
    )
    
    $
    0.07Diluted
    
    $
    (0.13
    )
    
    $
    0.07
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NEWPORT CORPORATION
Notes to Consolidated Financial Statements
April 4, 2009
   NOTE 10 INCOME TAXES
 Accounting for Income Taxes,
  NOTE 11 COMPREHENSIVE INCOME (LOSS)
  Three Months EndedApril 4,
    
    
    March 29,(In thousands)
    
    2009
    
    
    2008Net income (loss)
    
    $
    (4,818
    )
    
    $
    2,489Foreign currency translation gains (losses)
    
    
    (2,348
    )
    
    
    6,816Unrecognized net pension gains (losses)
    
    
    (8
    )
    
    
    27Unrealized gains (losses) on marketable securities
    
    
    707
    
    
    
    (501
    )$
    (6,467
    )
    
    $
    8,831
 NOTE 12 STOCKHOLDERS EQUITY TRANSACTIONS
  NOTE 13 DEFINED BENEFIT PENSION PLANS
  14




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NEWPORT CORPORATION
Notes to Consolidated Financial Statements
April 4, 2009
   Three Months EndedApril 4,
    
    
    March 29,(In thousands)
    
    2009
    
    
    2008Service cost
    
    $
    145
    
    
    $
    146Interest cost on benefit obligations
    
    
    149
    
    
    
    173Expected return on plan assets
    
    
    (29
    )
    
    
    (42
    )Amortization of actuarial net loss
    
    
    (7
    )
    
    
    $
    258
    
    
    $
    277
 NOTE 14 BUSINESS SEGMENT INFORMATION
   Photonics andPrecision(In thousands)
    
    Lasers
    
    Technologies
    
    TotalThree months ended April 4, 2009:Sales to external customers
    
    $
    37,225
    
    
    $
    52,311
    
    
    $
    89,536Segment income (loss)
    
    $
    (1,462
    )
    
    $
    6,977
    
    
    $
    5,515Three months ended March 29, 2008:Sales to external customers
    
    $
    47,783
    
    
    $
    67,460
    
    
    $
    115,243Segment income (loss)
    
    $
    (1,267
    )
    
    $
    12,375
    
    
    $
    11,108
  Three Months EndedApril 4,
    
    
    March 29,(In thousands)
    
    2009
    
    
    2008Segment income
    
    $
    5,515
    
    
    $
    11,108Unallocated operating expenses
    
    
    (8,050
    )
    
    
    (6,232
    )Interest and other expense, net
    
    
    (2,119
    )
    
    
    (1,719
    )$
    (4,654
    )
    
    $
    3,157
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Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
 This Managements Discussion and Analysis of Financial Condition and Results of Operations should
be read in conjunction with our unaudited consolidated financial statements and related notes
included elsewhere in this Quarterly Report on Form 10-Q and in conjunction with our Annual Report
on Form 10-K for the year ended January 3, 2009. This discussion contains descriptions of our
expectations regarding future trends affecting our business. These forward-looking statements and
other forward-looking statements made elsewhere in this report are made in reliance upon safe
harbor provisions in Section 27A of the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934. Words such as may, will, expect, believe, anticipate, intend,
could, estimate, or continue or the negative or other variations thereof or comparable
terminology are intended to identify forward-looking statements. In addition, any statements that
refer to projections of our future financial performance or condition, trends in our business, or
other characterizations of future events or circumstances are forward-looking statements. Our
actual results could differ materially from those anticipated in these forward-looking statements
as a result of several factors, including, but not limited to those factors set forth and discussed
elsewhere in this Quarterly Report on Form 10-Q and in Item 1 (Business) and Item 1A (Risk Factors)
of Part I, and Item 7 (Managements Discussion and Analysis of Financial Condition and Results of
Operations) of Part II, of our Annual Report on Form 10-K for the year ended January 3, 2009. In
light of the significant uncertainties inherent in the forward-looking information included in this
report, the inclusion of this information should not be regarded as a representation by us or any
other person that our objectives or plans will be achieved and readers are cautioned not to place
undue reliance on such forward-looking information. We undertake no obligation to update or revise
these forward-looking statements, whether as a result of new information, future events or
otherwise.
 Overview
   Critical Accounting Policies and Estimates
  16




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##### Table of Contents



Adoption of Financial Accounting Standards Board (FASB) Staff Position (FSP) APB 14-1
 Accounting for Convertible Debt
Instruments That May Be Settled in Cash upon Conversion (Including Partial Cash Settlement),
 Three MonthsEndedMarch 29,(In thousands)
    
    2008Additional non-cash interest expense
    
    $
    1,299Reduction in amortization of debt issuance costs
    
    
    (63
    )Retrospective change in net income
    
    $
    1,236Change to basic earnings per share
    
    $
    (0.03
    )Change to diluted earnings per share
    
    $
    (0.03
    )
 Stock-Based Compensation
   Three Months EndedApril 4,
    
    
    March 29,(In thousands)
    
    2009
    
    
    2008Cost of sales
    
    $
    26
    
    
    $
    45Selling, general and administrative expenses
    
    
    378
    
    
    
    650Research and development expense
    
    
    45
    
    
    
    62$
    449
    
    
    $
    757
 17




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##### Table of Contents



Results of Operations for the Three Months Ended April 4, 2009 and March 29, 2008
  Percentage of Net SalesThree Months EndedApril 4,
    
    March 29,2009
    
    2008Net sales
    
    
    100.0
    %
    
    
    100.0
    %Cost of sales
    
    
    61.7
    
    
    
    60.0Gross profit
    
    
    38.3
    
    
    
    40.0Selling, general and administrative expenses
    
    
    30.7
    
    
    
    25.9Research and development expense
    
    
    10.4
    
    
    
    9.9Operating (loss) income
    
    
    (2.8
    )
    
    
    4.2Interest and other expense, net
    
    
    (2.4
    )
    
    
    (1.5
    )Income (loss) before income taxes
    
    
    (5.2
    )
    
    
    2.7Income tax provision
    
    
    0.2
    
    
    
    0.6Net income (loss)
    
    
    (5.4
    )%
    
    
    2.1
    %
  Net Sales
     18




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##### Table of Contents



Three Months Ended
    
    
    
    
    
    
    PercentageApril 4,
    
    
    March 29,
    
    
    Increase
    
    
    Increase(In thousands)
    
    2009
    
    
    2008
    
    
    (Decrease)
    
    
    (Decrease)United States
    
    $
    36,990
    
    
    $
    52,469
    
    
    $
    (15,479
    )
    
    
    (29.5)
    %Europe
    
    
    23,433
    
    
    
    28,090
    
    
    
    (4,657
    )
    
    
    (16.6
    )Pacific Rim
    
    
    23,035
    
    
    
    29,373
    
    
    
    (6,338
    )
    
    
    (21.6
    )Other
    
    
    6,078
    
    
    
    5,311
    
    
    
    767
    
    
    
    14.4$
    89,536
    
    
    $
    115,243
    
    
    $
    (25,707
    )
    
    
    (22.3)
    %
  Gross Margin
  Selling, General and Administrative (SG&A) Expenses
   Research and Development (R&D) Expense
   19




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##### Table of Contents



Interest and Other Expense, Net
  Income Taxes
  Interim Financial Reporting
 Accounting for Income Taxes
  Liquidity and Capital Resources
   20




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##### Table of Contents



long-term debt
   short-term
obligations short-term obligations .
     21




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##### Table of Contents



Recent Accounting Pronouncements
 Determining Fair Value When the Volume and Level of Activity for the Asset or
Liability Have Significantly Decreased and Identifying Transactions That Are Not Orderly Interim Disclosures about Fair Value of
Financial Instruments Disclosures about Fair Value of Financial
Instruments Recognition and
Presentation of Other-Than-Temporary Impairments Accounting for Certain Investments in Debt and
Equity Securities The Meaning of Other-Than-Temporary Impairment
and Its Application to Certain Investments
 Miscellaneous Accounting  Other Than
Temporary Impairment of Certain Investments in Equity Securities
 Accounting for Assets Acquired and Liabilities
Assumed in a Business Combination That Arise from Contingencies. Business Combinations, Accounting for Contingencies, Reasonable
Estimation of the Amount of a Loss,
 22




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##### Table of Contents



Item 3. Quantitative and Qualitative Disclosures About Market Risk
  Foreign Currency Risk
     Interest Rate Risk
  23




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##### Table of Contents



Item 4. Controls and Procedures
 (a)
    
    Evaluation of Disclosure Controls and ProceduresOur Chief Executive Officer and our Chief Financial Officer, after evaluating our
disclosure controls and procedures (as defined in Securities Exchange Act of 1934 (the
Exchange Act) Rules 13a-15(e) and 15d-15(e)) as of the end of the period covered by this
Quarterly Report on Form 10-Q (the Evaluation Date), have concluded that as of the
Evaluation Date, our disclosure controls and procedures are effective to ensure that
information we are required to disclose in reports that we file or submit under the Exchange
Act is recorded, processed, summarized and reported within the time periods specified in
Securities and Exchange Commission rules and forms, and to ensure that information required
to be disclosed by us in such reports is accumulated and communicated to our management,
including our chief executive officer and chief financial officer where appropriate, to
allow timely decisions regarding required disclosure.(b)
    
    Changes in Internal Control Over Financial ReportingThere was no change in our internal control over financial reporting that occurred during
the period covered by this Quarterly Report on Form 10-Q that has materially affected, or is
reasonably likely to materially affect, our internal control over financial reporting. We
continue to enhance our internal control over financial reporting, primarily by evaluating
and enhancing our process and control documentation, in connection with our ongoing efforts
to meet the requirements of Section 404 of the Sarbanes-Oxley Act of 2002. We discuss with
and disclose these matters to the Audit Committee of our Board of Directors and our
independent registered public accounting firm.
 
 PART II  OTHER INFORMATION
 
 Item 1A. Risk Factors
  
 Item 6. Exhibits
 ExhibitNumber
    
    Description of Exhibit10.1
    
    Form of Restricted Stock Unit Award Agreement (as revised March 2009) to be
used under the Registrants 2006 Performance-Based Stock Incentive Plan.10.2
    
    Form of Stock Appreciation Right Award Agreement to be used under the
Registrants 2006 Performance-Based Stock Incentive Plan.31.1
    
    Certification pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Securities
Exchange Act of 1934 (the Exchange Act).31.2
    
    Certification pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Exchange Act.32.1
    
    Certification pursuant to Rule 13a-14(b) or Rule 15d-14(b) of the Exchange Act
and 18 U.S.C. Section 1350.32.2
    
    Certification pursuant to Rule 13a-14(b) or Rule 15d-14(b) of the Exchange Act
and 18 U.S.C. Section 1350.
 24




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##### Table of Contents



SIGNATURES
  Dated:  May 14, 2009
    NEWPORT CORPORATIONBy:
    /s/ Charles F. CargileCharles F. Cargile,Senior Vice President, Chief Financial Officer
and Treasurer (Principal Financial Officer and
Duly Authorized Officer) 25




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##### Table of Contents



EXHIBIT INDEX
 ExhibitNumber
    
    Description of Exhibit10.1
    
    Form of Restricted Stock Unit Award Agreement (as revised March 2009) to be
used under the Registrants 2006 Performance-Based Stock Incentive Plan.10.2
    
    Form of Stock Appreciation Right Award Agreement to be used under the
Registrants 2006 Performance-Based Stock Incentive Plan.31.1
    
    Certification pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Securities
Exchange Act of 1934 (the Exchange Act).31.2
    
    Certification pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Exchange Act.32.1
    
    Certification pursuant to Rule 13a-14(b) or Rule 15d-14(b) of the Exchange Act
and 18 U.S.C. Section 1350.32.2
    
    Certification pursuant to Rule 13a-14(b) or Rule 15d-14(b) of the Exchange Act
and 18 U.S.C. Section 1350.
 26