For the 2000 year the company anticipates growth from its fiber optic and photonics division, vision metrology division and its participation in the semiconductor equipment market segment, each of which is anticipated to grow 30 to 50 percent over 1999 results. A portion of the expected growth in the semiconductor equipment market segment is related to an acquisition completed in October 1999. Gross margin percentage in the first quarter of 2000 is expected be approximately flat with the fourth quarter. Newport's gross margin for 2000 is anticipated to be comparable to the 43.5 percent margin for 1999, plus or minus a point. In the short term, Newport's gross margin percentage varies primarily with revenue levels and product mix.
Expenses are dependent in part on the level of revenue.
The higher spending is driven primarily by the full year impact of acquisitions completed in 1999, as well as increased investment in product development for the fiber optic and photonics division and the vision metrology division. The tax rate for 2000 is expected to be approximately 28 percent. The higher anticipated capital spending is the result primarily of expenditures related to facilities expansion for the fiber optic and photonics division and consolidation of optics manufacturing into the company's Garden Grove facility. The statements by Robert G. Deuster and the above statements contained in this business outlook are forward-looking statements that involve a number of risks and uncertainties. In light of the significant uncertainties inherent in the forward-looking information included herein, the inclusion of such information should not be regarded as a representation by Newport or any other person that Newport's objectives or plans will be achieved.