EX-99.1 2 v112268_ex99-1.txt GSI Group Reports First Quarter Results BILLERICA, MA April 30, 2008: GSI Group Inc., (Nasdaq: GSIG), a supplier of precision technology and semiconductor systems, today announced financial results for the first quarter ended March 28, 2008. First quarter revenue was $71.7 million, compared to $86.5 million in the fourth quarter of 2007 and $74.2 million for the first quarter of 2007. Excluding restructuring charges, operating profit was $1.5 million in the first quarter versus $7.7 million in the fourth quarter and $6.1 million in the first quarter of 2007. GAAP net income for the quarter was $2.1 million, or $0.05 per diluted share, compared to the fourth quarter results of $4.7 million, or $0.11 per diluted share, and $3.2 million, or $0.08 per diluted share in the first quarter of 2007. First quarter bookings were $56.1 million, compared to $87.5 million in the fourth quarter of 2007 and $76.9 million in the first quarter of 2007. The book-to-bill ratio was 0.78. The backlog as of March 28, 2008 was $74.8 million, compared with $79.3 million in the first quarter of 2007. The backlog as of March 28, 2008 includes deferred revenue of $11.7 million. Dr. Sergio Edelstein, President and CEO commented, "I am pleased with the gains we have made in our Precision Technology segment. The semiconductor and printed circuit board markets softened during the first quarter and we are using this cyclical period to position ourselves for the next upturn and to gain greater operational efficiency. We remain focused on executing our strategy of market penetration, new product launches, building our presence in Asia and integrating our company to optimize efficiency." Gross margin was 38.1% in the first quarter, versus 38.0% in the fourth quarter 2007. Operating expenses, excluding restructuring charges were $25.9 million in the first quarter compared to $25.2 million in the fourth quarter. Stock based compensation was $0.8 million in the first quarter versus $0.7 million in the fourth quarter 2007. Cash and cash equivalents were $170.7 million, down $1.1 million from the fourth quarter. First quarter cash usage includes disbursements of $3.1 million in connection with the Company's previously announced stock buyback program. The Company anticipates the following for the second quarter of 2008: - Revenue to be in the range of $64.0 million to $68.0 million - Diluted earnings per share, including restructuring charges, at approximately breakeven. Dial In: May 1st at 8:30 a.m. ET GSI Group will host a conference call for investors at 8:30 a.m. Eastern on May 1st. Participants are invited to join by dialing (706) 634-5123 with an access code: 43049719. The replay will be available for two weeks by dialing (706) 645-9291 with the replay passcode: 43049719. The conference call also will be broadcast live over the Internet at www.gsig.com. 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 28, December 31, 2008 2007 ---------- ---------- ASSETS Current Assets Cash and cash equivalents ............................................. $ 170,652 $ 171,714 Accounts receivable, less allowance of $408 (December 31, 2007 -- $372) 72,629 73,527 Income taxes receivable ............................................... 13,129 12,241 Inventories ........................................................... 66,926 65,522 Deferred tax assets ................................................... 8,264 8,249 Other current assets .................................................. 6,926 7,394 ---------- ---------- Total current assets ............................................ 338,526 338,647 Property, plant and equipment, net of accumulated depreciation of $33,103 (December 31, 2007 -- $32,263) ................................ 33,439 30,817 Deferred tax assets ......................................................... 9,982 9,887 Other assets ................................................................ 1,051 713 Long-term investments ....................................................... 975 854 Intangible assets, net of amortization of $9,203 (December 31, 2007 -- $8,603) .......................................................... 12,349 12,817 Patents and acquired technology, net of amortization of $41,348 (December 31, 2007 -- $40,122) ........................................... 18,993 20,054 Goodwill .................................................................... 26,421 26,421 ---------- ---------- Total Assets ...................................... $ 441,736 $ 440,210 ========== ========== LIABILITIES AND STOCKHOLDERS' EQUITY Current Liabilities Accounts payable ...................................................... $ 14,505 $ 17,504 Income taxes payable .................................................. 1,018 1,411 Accrued compensation and benefits ..................................... 8,537 10,369 Deferred revenue ...................................................... 11,688 9,949 Deferred tax liabilities .............................................. 286 286 Other accrued expenses ................................................ 9,729 9,353 ---------- ---------- Total current liabilities ....................................... 45,763 48,872 Deferred tax liabilities .................................................... 7,645 7,589 Accrued long term restructuring ............................................. 1,019 938 Income taxes payable ........................................................ 3,253 3,537 Accrued pension liability ................................................... 4,681 4,481 Other long term liabilities ................................................. 1,106 676 ---------- ---------- Total liabilities ............................................... 63,467 66,093 Commitments and contingencies Stockholders' equity Common shares, no par value; Authorized shares: unlimited; Issued and outstanding: 41,855,293 (December 31, 2007--42,161,592) . 307,875 310,970 Additional paid-in capital ............................................ 9,043 8,245 Retained earnings ..................................................... 50,436 48,329 Accumulated other comprehensive income ................................ 10,915 6,573 ---------- ---------- Total stockholders' equity ...................................... 378,269 374,117 ---------- ---------- Total Liabilities and Stockholders' Equity ................ $ 441,736 $ 440,210 ========== ==========
GSI GROUP INC. CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) (U.S. GAAP and in thousands of U.S. dollars, except per share amounts)
Three Months Ended ----------------------------------- March 28, 2008 March 30, 2007 -------------- -------------- Sales ........................................................... $ 71,680 $ 74,204 Cost of goods sold .............................................. 44,353 44,769 -------------- -------------- Gross profit .................................................... 27,327 29,435 Operating expenses: Research and development and engineering .................. 7,875 7,657 Selling, general, administrative and other ................ 16,317 13,939 Amortization of purchased intangibles ..................... 1,679 1,729 Restructuring expense (benefit) ........................... (317) 2,353 -------------- -------------- Total operating expenses ............................ 25,554 25,678 -------------- -------------- Income from operations .......................................... 1,773 3,757 Other income (expense) .................................... 121 47 Interest income ........................................... 1,166 1,545 Interest expense .......................................... (18) (57) Foreign exchange transaction (losses) gains ............... 59 (371) -------------- -------------- Income before income taxes ...................................... 3,101 4,921 Income tax provision ............................................ 994 1,721 -------------- -------------- Net income ...................................................... $ 2,107 $ 3,200 ============== ============== Net income per common share: Basic ..................................................... $ 0.05 $ 0.08 Diluted ................................................... $ 0.05 $ 0.08 Weighted average common shares outstanding (000's) .............. 41,972 42,001 Weighted average common shares outstanding for diluted net income per common share (000's) ..................................... 42,204 42,252
GSI GROUP INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (U.S. GAAP and in thousands of U.S. dollars)
Three Months Ended ------------------------------------ March 28, 2008 March 30, 2007 -------------- -------------- Cash flows from operating activities: Net income for the year ............................................. $ 2,107 $ 3,200 Adjustments to reconcile net income to net cash provided by operating activities: Earnings from equity investment ............................... (106) (47) Depreciation and amortization ................................. 3,867 4,124 Unrealized loss on derivatives ................................ 14 53 Stock-based compensation ...................................... 790 329 Deferred income taxes ......................................... (53) 15 Changes in current assets and liabilities: Accounts receivable ........................................... 557 (5,107) Inventories ................................................... (870) 1,529 Other current assets .......................................... 290 6,010 Accounts payable, accruals and taxes receivable ............... (2,660) (2,173) -------------- -------------- Cash provided by operating activities ............................... 3,936 7,933 Cash flows (used in) from investing activities: Other additions to property, plant and equipment .............. (4,202) (1,842) Other disposals to property, plant and equipment .............. -- 54 Increase in other assets ...................................... (338) (2) Decrease in other liabilities ................................. 501 18 -------------- -------------- Cash (used in) from investing activities ............................ (4,039) (1,772) Cash flows from (used in) financing activities: Purchase of treasury stock .................................... (3,113) (474) Excess tax benefit of stock options ........................... -- 54 Issue of share capital (net of issue costs) ................... 18 3,233 -------------- -------------- Cash provided by (used in) financing activities ..................... (3,095) 2,813 Effect of exchange rates on cash and cash equivalents ............... 2,136 147 -------------- -------------- Increase (decrease) in cash and cash equivalents .................... (1,062) 9,121 Cash and cash equivalents, beginning of period ...................... 171,714 138,315 -------------- -------------- Cash and cash equivalents, end of period ............................ $ 170,652 $ 147,436 ============== ==============
GSI GROUP INC. Consolidated Analysis By Segment (unaudited) (thousands of U.S. dollars) Three Months Ended March 28, March 30, 2008 2007 ------------ ------------ Sales: Precision Technology Business .... $ 44,035 $ 43,625 Semiconductor Systems Business ... 28,767 31,857 Intersegment sales elimination (1) (1,122) (1,278) ------------ ------------ Total ............................ $ 71,680 $ 74,204 ============ ============ Gross profit %: Precision Technology Business .... 38.4% 35.9% Semiconductor Systems Business ... 36.0% 43.6% Intersegment sales elimination ... (6.2%) 8.2% Total ............................ 38.1% 39.7% (1) Sales of Precision Technology products to Semiconductor segment Consolidated Sales Analysis By Geographic Region (unaudited)
Three Months Ended ------------------------------------------------------------------- March 28, 2008 March 30, 2007 ------------------------------- ------------------------------- % of % of Sales Total Sales Total ------------ ------------ ------------ ------------ North America ......... $ 31.9 45% $ 24.1 32% Latin and South America 0.1 -- 0.2 -- Europe (EMEA) ......... 12.3 17 12.8 17 Japan ................. 12.8 18 13.8 19 Asia-Pacific, other ... 14.6 20 23.2 32 ------------ ------------ ------------ ------------ Total .............. $ 71.7 100% $ 74.2 100% ============ ============ ============ ============