EX-99.1 2 gg4898ex991.txt EXHIBIT 99.1 Exhibit 99.1 GSI GROUP REPORTS FOURTH QUARTER RESULTS COMPANY REPORTS QUALIFICATIONS AT NEW ACCOUNTS AND BOOKINGS OF $91.1 MILLION BILLERICA, Mass., Feb. 21 /PRNewswire-FirstCall/ -- GSI Group Inc., (Nasdaq: GSIG), a supplier of precision motion components, lasers and laser systems, today announced financial results for the fourth quarter ended December 31, 2005. Revenue for the fourth quarter of 2005 was $66.5 million, as compared to $80.0 million for the fourth quarter of 2004. Net income was $4.4 million or $0.10 per diluted share for the fourth quarter of 2005 as compared to $8.6 million, or $0.21 per diluted share for the fourth quarter of 2004. These results compare to revenue of $62.6 million and net income of $2.0 million or $0.05 per diluted share in the third quarter of 2005. Revenue for the total year of 2005 was $260.8 million, as compared to $330.0 million for the total year 2004. Net income for the total year 2005 was $9.7 million or $0.23 per diluted share as compared to net income of $41.5 million or $0.98 per diluted share for the total year of 2004. "In the fourth quarter, we saw both a recovery in capital spending in our semiconductor market and a market share gain, particularly with existing customers. Last year we also earned qualification at two new semiconductor manufacturers and just recently became qualified at another significant account. These successful qualifications will make a portion of the market available to us, which was previously un-served by GSI," said Charles Winston, CEO of GSI Group. Winston continued, "Growing demand from the printed circuit board market, combined with an unanticipated order in the fourth quarter from the previously dormant mixed signal market are also positive signs for our business in the coming quarters." Fourth Quarter Business Highlights: * Bookings of $91.1 million increased $30.3 million from the third quarter 2005. * Two business segments reported strong increases in sequential bookings levels with the Systems Segment up 116% and Precision Motion up 23%. * The new M350 Wafer Trim system was introduced to increase throughput and accuracy. * Total Company gross margin rates increased to 42.9%, as compared to 39.4% in the third quarter 2005. * Cash, cash equivalents and marketable short-term investments increased $2.5 million to $96.0 million, from $93.5 million in the third quarter. Cash received in January 2006 from the sale of an unused Minnesota facility brings current cash levels above $100.0 million. Business Outlook: The Company anticipates the following results for the first quarter of 2006: * Revenue to be in the range of $70.0 million to $75.0 million. * Gross margin rates to be approximately 41%, plus or minus 1 point depending on product mix. * Diluted per share earnings to be in the range of $0.09 to $0.11. Dial In: February 22nd at 8:30am EDT GSI Group will host a conference call for investors at 8:30 a.m. Eastern Time on February 22nd. To participate, call 913-981-4902. A replay of the call will be available by dialing 719-457-0820. Access code: 7844127. The conference call also will be broadcast live over the Internet in listen-only mode at http://www.gsig.com. About GSI Group Inc. GSI Group Inc. supplies precision motion control products, lasers and laser-based advanced manufacturing systems to the global medical, semiconductor, electronics, and industrial markets. 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, similar 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. GSI-G 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)
December 31, December 31, 2005 2004 ------------ ------------ ASSETS Current Cash and cash equivalents $ 69,286 $ 82,334 Short-term investments 26,757 2,995 Accounts receivable, less allowance of $1,592 (December 31, 2004 - $2,470) 55,348 60,314 Income taxes receivable 2,517 2,287 Inventories 63,475 60,319 Deferred tax assets 10,630 13,094 Other current assets 20,357 10,311 Total current assets 248,370 231,654 Net property, plant and equipment and other long-term assets; including net intangible assets and goodwill 125,074 154,510 $ 373,444 $ 386,164 LIABILITIES AND STOCKHOLDERS' EQUITY Current Accounts payable $ 14,998 $ 18,462 Income taxes payable 2,475 4,045 Accrued compensation and benefits 9,212 13,160 Other accrued expenses 14,625 21,327 Total current liabilities 41,310 56,994 Deferred compensation 2,576 2,178 Deferred tax liabilities 13,252 11,521 Other liability - 27 Accrued minimum pension liability 9,750 9,881 Total liabilities 66,888 80,601 Commitments and contingencies Stockholders' equity Common shares, no par value; Authorized shares: unlimited; Issued and outstanding: 41,628,171 (December 31, 2004 - 41,449,270) 309,545 308,669 Additional paid-in capital 3,339 3,289 Retained earnings (accumulated deficit) 7,688 (1,969) Accumulated other comprehensive loss (14,016) (4,426) Total stockholders' equity 306,556 305,563 $ 373,444 $ 386,164
GSI GROUP INC. CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) (U.S. GAAP and in thousands of U.S. dollars, except share amounts)
Three Months Ended Twelve Months Ended ---------------------------- ---------------------------- December 31, December 31, December 31, December 31, 2005 2004 2005 2004 ------------ ------------ ------------ ------------ Sales $ 66,493 $ 79,951 $ 260,784 $ 330,012 Cost of goods sold 37,944 48,868 156,914 196,573 Gross profit 28,549 31,083 103,870 133,439 Operating expenses: Research and development and engineering 6,703 6,652 25,671 23,975 Selling, general and administrative 14,958 13,617 59,995 57,256 Amortization of purchased intangibles 1,623 1,627 6,656 5,951 Acquired in-process research and development - (40) - 390 Restructuring 457 573 457 573 Other (50) - (355) - Total operating expenses 23,691 22,429 92,424 88,145 Income from operations 4,858 8,654 11,446 45,294 Other income (expense) (147) - (139) 104 Interest income 641 336 1,942 980 Interest expense (169) (104) (291) (263) Foreign exchange transaction gains (losses) 315 (789) 906 (1,129) Income before income taxes 5,498 8,097 13,864 44,986 Income tax provision (benefit) 1,118 (498) 4,207 3,515 Net income $ 4,380 $ 8,595 $ 9,657 $ 41,471 Net income per common share: Basic $ 0.11 $ 0.21 $ 0.23 $ 1.01 Diluted $ 0.10 $ 0.21 $ 0.23 $ 0.98 Weighted average common shares outstanding (000's) 41,618 41,281 41,548 41,124 Weighted average common shares outstanding for diluted net income per common share (000's) 41,968 41,854 41,856 42,125
GSI GROUP INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited) (U.S. GAAP and in thousands of U.S. dollars)
Three months ended Twelve months ended ---------------------------- ---------------------------- December 31, December 31, December 31, December 31, 2005 2004 2005 2004 ------------ ------------ ------------ ------------ Cash flows from operating activities: Net income $ 4,380 $ 8,595 $ 9,657 $ 41,471 Adjustments to reconcile net income to net cash provided by (used in) operating activities: Loss on sale of assets and investments 173 - 370 15 Translation gain on liquidation of a subsidiary - - - (119) Unrealized loss (gain) on derivatives - 123 (36) 35 Acquired in-process research and development - (40) - 390 Stock-based compensation 36 22 52 (64) Depreciation and amortization 3,351 3,856 13,716 13,618 Deferred income taxes 383 (2,709) (2,465) (15,385) Changes in current assets and liabilities: Accounts receivable (4,347) 4,920 1,892 (992) Inventories (982) 1,149 (5,753) (12,716) Other current assets 2,405 258 (2,027) (1,014) Accounts payable, accrued expenses, and taxes (receivable) payable (1,241) (8,082) (10,542) 10,158 Cash provided by operating activities 4,158 8,092 4,864 35,397 Cash (used in) provided by investing activities (18,199) 7,937 (14,969) (22,575) Cash provided by financing activities 88 1,263 850 3,232 Effect of exchange rates on cash and cash equivalents (931) 1,822 (3,793) 2,245 (Decrease) increase in cash and cash equivalents (14,884) 19,114 (13,048) 18,299 Cash and cash equivalents, beginning of period 84,170 63,220 82,334 64,035 Cash and cash equivalents, end of period $ 69,286 $ 82,334 $ 69,286 $ 82,334
GSI GROUP INC. Consolidated Analysis By Segment (unaudited) (thousands of U.S. dollars)
Three Months Ended Twelve Months Ended ---------------------------- ---------------------------- December 31, December 31, December 31, December 31, 2005 2004 2005 2004 ------------ ------------ ------------ ------------ Sales: Precision Motion Group $ 35,274 $ 35,456 $ 139,914 $ 152,726 Laser Group 7,870 11,801 39,566 46,692 Laser Systems Group 24,589 35,786 88,201 148,161 Intersegment sales elimination (1,240) (3,092) (6,897) (17,567) Total $ 66,493 $ 79,951 $ 260,784 $ 330,012 Gross profit %: Precision Motion Group 40.5% 35.4% 40.2% 36.8% Laser Group 31.4% 29.6% 31.7% 29.7% Laser Systems Group 47.4% 42.8% 39.6% 43.7% Intersegment sales elimination (11.8)% 9.4% (2.1)% 8.1% Total 42.9% 38.9% 39.8% 40.4% Segment income from operations: Precision Motion Group $ 5,165 $ 3,870 $ 18,814 $ 23,035 Laser Group (947) 287 (747) 1,517 Laser Systems Group 4,981 9,289 10,462 40,846 Total by segment 9,199 13,446 28,529 65,398 Unallocated amounts: Corporate expenses 3,819 4,233 16,511 18,204 Amortization of purchased intangibles not allocated to a segment 26 26 106 937 Acquired in-process research and development - (40) - 390 Restructuring 457 573 457 573 Other 39 - 9 - Income from operations $ 4,858 $ 8,654 $ 11,446 $ 45,294
GSI GROUP INC. Consolidated Sales Analysis By Geographic Region (unaudited) (millions of U.S. dollars)
Three months ended ------------------------------------------------------------ December 31, 2005 December 31, 2004 ---------------------------- ---------------------------- % of % of Sales Total Sales Total ------------ ------------- ------------ ------------- North America $ 26.9 41% $ 21.9 28% Latin and South America 0.3 - 0.3 - Europe (EMEA) 10.8 16 15.1 19 Japan 11.0 17 31.4 39 Asia-Pacific, other 17.5 26 11.2 14 Total $ 66.5 100% $ 79.9 100%
Twelve months ended ------------------------------------------------------------ December 31, 2005 December 31, 2004 ---------------------------- ---------------------------- % of % of Sales Total Sales Total ------------ ------------- ------------ ------------- North America $ 104.8 40% $ 139.1 43% Latin and South America 1.4 1 1.4 - Europe (EMEA) 44.7 17 53.2 16 Japan 44.7 17 76.0 23 Asia-Pacific, other 65.2 25 60.3 18 Total $ 260.8 100% $ 330.0 100%
Ray Ruddy, Investor Relations of GSI Group Inc., +1-978-439-5511 ext. 6170