EX-99.1 2 v073587_ex99-1.txt GSI Group Reports First Quarter Results BILLERICA, Mass., May 3 /PRNewswire-FirstCall/ -- GSI Group Inc., (Nasdaq: GSIG), a supplier of precision technology and semiconductor systems, today announced financial results for the first quarter 2007. Revenue for the quarter ended March 30, 2007 was $74.2 million, compared to revenue of $76.1 million for the same period of 2006. Net income for the quarter was $3.2 million, or $0.08 per diluted share, compared to net income for the same period in 2006 of $5.1 million, or $0.12 per diluted share. First quarter operating profits of $3.8 million included proceeds of a legal settlement and restructuring charges related to transfer of production from U.K. manufacturing facilities to our China operation. Together these resulted in a net reduction in operating profits of $0.4 million. First Quarter Highlights: -- Bookings were $76.9 million and the book to bill ratio was 1.0, the second consecutive quarter with a book to bill ratio of 1.0 or above. -- Semiconductor bookings were driven by strength in Wafer Repair Systems due in part to the previously announced first-time purchase by Inotera of GSI's new green-laser based, M550 wide-field memory repair systems. -- Semiconductor Systems revenue was $31.9 million versus $31.3 million in the first quarter of 2006. -- Precision Technology bookings were driven by strength in Optical Scanning products and Encoders, up 50% and 143% respectively, from the first quarter of 2006. -- Precision Technology revenue was $43.6 million versus $47.0 million in the first quarter of 2006, primarily as a result of timing of shipments and softness in the medical printer and printed circuit board drill product lines. -- Cash and cash equivalents increased to $147.4 million in the first quarter of 2007 from $138.3 million at the end of 2006. Dr. Sergio Edelstein, President and CEO commented, "We are pleased with our gains in the key markets we have previously identified for growth - Optical Scanning products, Encoders and Wafer Repair systems. Our strong bookings reflect both continued market strength and progress with our new product introductions. We also remain optimistic about overall industry demand." The Company anticipates the following for the second quarter of 2007: -- Revenue to be in the range of $72.0 million to $74.0 million. The Company anticipates $12-15 million of deferred revenue in the second quarter associated with equipment shipments that will materialize as revenue in the third quarter upon customer acceptance. -- Diluted earnings per share, including restructuring charges, in the range of $0.07 to $0.09 cents. -- Restructuring costs are expected to be in the range of $1.7-$1.9 million. Dial In: May 4th at 8:30 a.m. ET GSI Group will host a conference call for investors at 8:30 a.m. Eastern on May 4th. Participants are invited to join by dialing (706) 634-5123 with an access code: 5340631. The replay will be available for two weeks by dialing (706) 645-9291 with the replay passcode: 5340631. The conference call also will be broadcast live over the Internet at http://www.gsig.com. Upcoming Analyst Day GSI will be hosting its annual analyst day on June 5, 2007 at the Hilton Boston Logan Airport Hotel. It will be held from 8:00am - noon. Attendees should register at http://www.gsig.com/investors. About GSI Group Inc. GSI Group Inc. supplies precision technology to the global medical, electronics, and industrial markets and semiconductor systems. GSI Group Inc.'s common shares are listed on Nasdaq (GSIG). Certain statements in this news release may constitute forward-looking statements within the meaning of the United States Private Securities Litigation Reform Act of 1995, Section 27A of the United States Securities Act of 1933 and Section 21E of the United States Securities Exchange Act of 1934. These forward-looking statements may relate to anticipated financial performance, management's plans and objectives for future operations, business prospects, outcome of regulatory proceedings, market conditions, tax issues and other matters. All statements contained in this news release that do not relate to matters of historical fact should be considered forward-looking statements, and are generally identified by words such as "anticipate," "believe," "estimate," "expect," "intend," "plan," "objective" and other similar expressions. Readers should not place undue reliance on the forward- looking statements contained in this news release. Such statements are based on management's beliefs and assumptions and on information currently available to management and are subject to risks, uncertainties and changes in condition, significance, value and effect. Other risks include the fact that the Company's sales have been and are expected to continue to be dependent upon customer capital equipment expenditures, which are, in turn, affected by business cycles in the markets served by those customers. Other factors include volatility in the semiconductor industry, the risk of order delays and cancellations, the risk of delays by customers in introducing their new products and market acceptance of products incorporating subsystems supplied by the Company, risks of currency fluctuations, risks to the Company of delays in its new products, our ability to continue to reduce costs and capital expenditures, our ability to focus R&D investment and integrate acquisitions, changes in applicable accounting standards, tax regulations or other external regulatory rules and standards, and other risks detailed in reports and documents filed by the Company with the United States Securities and Exchange Commission and with securities regulatory authorities in Canada. Such risks, uncertainties and changes in condition, significance, value and effect, many of which are beyond the Company's control, could cause the Company's actual results and other future events to differ materially from those anticipated. The Company does not, however, assume any obligation to update these forward- looking statements to reflect actual results, changes in assumptions or changes in other factors affecting such forward-looking statements. For more information contact: Investor Relations, 978-439-5511, Ray Ruddy, (ext. 6170) GSI GROUP INC. CONSOLIDATED BALANCE SHEETS (Unaudited) (U.S. GAAP and in thousands of U.S. dollars, except share amounts) March 30, December 31, 2007 2006 ASSETS Current Cash and cash equivalents $ 147,436 $ 138,315 Accounts receivable, less allowance of $722 (December 31, 2006 - $911) 59,653 54,546 Income taxes receivable 6,856 5,755 Inventories 71,174 72,703 Deferred tax assets 7,927 7,925 Other current assets 5,495 11,559 Total current assets 298,541 290,803 Property, plant and equipment, net of accumulated depreciation of $30,371 (December 31, 2006 - $28,588) 33,408 33,511 Deferred tax assets 20,136 20,099 Other assets 713 710 Long-term investments 744 693 Intangible assets, net of amortization of $6,939 (December 31, 2006 - $6,380) 14,442 14,965 Patents and acquired technology, net of amortization of $36,660 (December 31, 2006 - $35,455) 23,044 24,203 Goodwill 26,421 26,421 Total Assets $ 417,449 $ 411,405 LIABILITIES AND STOCKHOLDERS' EQUITY Current Accounts payable $ 17,092 $ 14,002 Accrued compensation and benefits 10,461 13,455 Other accrued expenses 15,621 15,846 Total current liabilities 43,174 43,303 Deferred compensation 668 2,740 Deferred tax liabilities 12,357 12,342 Accrued long term restructuring 1,159 1,141 Income tax payable 1,420 -- Accrued pension liability 8,847 8,806 Total liabilities 67,625 68,332 Commitments and contingencies Stockholders' equity Common shares, no par value; Authorized shares: unlimited; Issued and outstanding: 42,235,689 (December 31, 2006 - 41,889,804) 313,395 310,635 Additional paid-in capital 5,696 5,314 Retained earnings 32,339 29,431 Cumulated effect of adopting FIN 48 - Accounting for Uncertainty in Income Taxes 146 Accumulated other comprehensive loss (1,752) (2,307) Total stockholders' equity 349,824 343,073 $ 417,449 $ 411,405 GSI GROUP INC. CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) (U.S. GAAP and in thousands of U.S. dollars, except share amounts) Three Months Ended March 30, March 31, 2007 2006 Sales $ 74,204 $ 76,123 Cost of goods sold 44,769 44,470 Gross profit 29,435 31,653 Operating expenses: Research and development and engineering 7,657 7,454 Selling, general and administrative and other 14,039 15,004 Amortization of purchased intangibles 1,729 1,827 Restructuring 2,414 -- Other (161) (96) Total operating expenses 25,678 24,189 Income from operations 3,757 7,464 Interest and other income, net 1,535 774 Foreign exchange transaction gains (losses) (371) (709) Income before income taxes 4,921 7,529 Income tax provision 1,721 2,425 Net income $ 3,200 $ 5,104 Net income per common share: Basic $ 0.08 $ 0.12 Diluted $ 0.08 $ 0.12 Weighted average common shares outstanding (000's) 42,001 41,868 Weighted average common shares outstanding for diluted net income per common share (000's) 42,252 42,524 GSI GROUP INC. Consolidated Analysis By Segment (unaudited) (thousands of U.S. dollars) Three Months Ended March 30, March 31, 2007 2006 Sales: Precision Technology $ 43,625 $ 46,978 Semiconductor Systems 31,857 31,329 Intersegment sales elimination (1,278) (2,184) Total $ 74,204 $ 76,123 Gross profit %: Precision Technology 35.9% 39.6% Semiconductor Systems 43.6% 41.4% Intersegment sales elimination 8.2% (4.5%) Total 39.7% 41.6% GSI GROUP INC. Consolidated Sales Analysis By Geographic Region (unaudited) (millions of U.S. dollars) Three Months Ended March 30, 2007 March 31, 2006 Sales % of Sales % of Total Total North America $24.1 32% $21.1 28% Latin and South America 0.2 -- 0.3 -- Europe (EMEA) 12.8 17 12.0 16 Japan 13.8 19 10.7 14 Asia-Pacific, other 23.3 32 32.0 42 Total $74.2 100% $76.1 100%