EX-99.1 2 gs7588ex991.txt EXHIBIT 99.1 Exhibit 99.1 GSI GROUP REPORTS THIRD QUARTER RESULTS REVENUE TOPS $81 MILLION BILLERICA, Mass., Oct. 24 /PRNewswire-FirstCall/ -- GSI Group Inc., (Nasdaq: GSIG), a supplier of precision technology and semiconductor systems, today announced financial results for the third quarter ended September 29, 2006. Year-to-year revenue for the quarter rose 30% to $81.6 million, compared to $62.6 million for the same period of 2005. GAAP net income for the quarter rose 181% to $5.7 million, or $0.14 per diluted share, compared to net income for the same period in 2005 of $2.0 million, or $0.05 per diluted share. Excluding pre-tax stock-based compensation charges of $0.5 million related to the adoption of FAS 123R in 2006, net earnings for the quarter were $0.15 per diluted share. The pre-tax stock-based compensation charge for third quarter of 2005 was $0.1 million. Revenue for the nine months ended September 29, 2006 rose 21% to $234.2 million, compared to $194.3 million for the same period in 2005. GAAP net income year-to-date increased 223% to $17.0 million or $0.40 per diluted share, compared to net income for the same period in 2005 of $5.3 million or $0.13 per diluted share. Excluding the $0.5 million pre-tax stock-based compensation charges related to the adoption of FAS 123R, year-to-date net earnings were $0.41 per diluted share in 2006. The pre-tax stock-based compensation charge for the nine months ended September 30, 2005 was $16.0 thousand. Bookings for the third quarter were $65.1 million, compared with bookings of $60.8 million in the third quarter of 2005 and $99.1 million in the second quarter of 2006. "We are pleased with the overall revenue level in the third quarter and the strength across both of our principal business segments. We believe the sequential decrease in bookings primarily reflects a combination of the quarter-to-quarter variability due to order timing of individual customers, and the unusually strong bookings in the second quarter," said Dr. Sergio Edelstein, President and CEO. Dr. Edelstein continued, "Signs of market strength continue. We believe Precision Technology growth will be driven in large part by continuing strength in the overall economy and by demand for products like those used in printed circuit board drilling and medical applications." He further commented, "In Semiconductor Systems, leading customers are announcing increased capital spending budgets, and capital equipment utilization rates remain above 90%. However, we are also tracking the research of analysts who do not share such a positive semiconductor market outlook, particularly for the second half of 2007." The Company anticipates the following results for the fourth quarter of 2006: * Revenue to be in the range of $68.0 million to $78.0 million * Diluted per share earnings to be in the range of $0.04 to $0.10, assuming a 30% tax rate. Dial In: October 25th at 8:30 a.m. ET GSI Group will host a conference call for investors at 8:30 a.m. Eastern on October 25th. Participants are invited to join by dialing (706) 634-5123 with an access code: 9043749. The replay will be available for two weeks by dialing (706) 645-9291 with the replay passcode: 9043749. 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 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)
September 29, December 31, 2006 2005 ------------- ------------- ASSETS Current Cash and cash equivalents $ 130,994 $ 69,286 Short-term investments - 26,757 Accounts receivable, less allowance of $1,214 (December 31, 2005 -- $1,592) 56,152 55,348 Income taxes receivable 2,958 2,517 Inventories 73,077 63,475 Deferred tax assets 13,845 10,630 Other current assets 12,239 20,357 Total current assets 289,265 248,370 Property, plant and equipment, net of accumulated depreciation of $26,749 (December 31, 2005 -- $20,608) 33,907 32,220 Deferred tax assets 22,187 20,124 Other assets 717 699 Long-term investments 672 613 Intangible assets, net of amortization of $5,774 (December 31, 2005 -- $4,035) 15,771 16,834 Patents and acquired technology, net of amortization of $34,131 (December 31, 2005 -- $30,359) 25,229 28,163 Goodwill 26,421 26,421 $ 414,169 $ 373,444 LIABILITIES AND STOCKHOLDERS' EQUITY Current Accounts payable $ 19,721 $ 14,998 Income taxes payable 8,280 2,475 Accrued compensation and benefits 13,103 9,212 Other accrued expenses 14,565 14,625 Total current liabilities 55,669 41,310 Deferred compensation 2,684 2,576 Deferred tax liabilities 12,660 13,252 Accrued minimum pension liability 10,683 9,750 Total liabilities 81,696 66,888 Commitments and contingencies Stockholders' equity Common shares, no par value; Authorized shares: unlimited; Issued and outstanding: 41,815,442 (December 31, 2005 -- 41,628,171) 310,022 309,545 Additional paid-in capital 4,874 3,339 Retained earnings 24,706 7,688 Accumulated other comprehensive loss (7,129) (14,016) Total stockholders' equity 332,473 306,556 $ 414,169 $ 373,444
GSI GROUP INC. CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) (U.S. GAAP and in thousands of U.S. dollars, except share amounts)
Three Months Ended Nine Months Ended ------------------------------ ------------------------------ September 29, September 30, September 29, September 30, 2006 2005 2006 2005 ------------- ------------- ------------- ------------- Sales $ 81,627 $ 62,600 $ 234,151 $ 194,291 Cost of goods sold 48,057 37,909 136,640 118,970 Gross profit 33,570 24,691 97,511 75,321 Operating expenses: Research and development and engineering 7,594 6,141 22,435 18,968 Selling, general and administrative and other 16,736 14,053 47,183 44,733 Amortization of purchased intangibles 1,734 1,632 5,075 5,033 Total operating expenses 26,064 21,826 74,693 68,734 Income from operations 7,506 2,865 22,818 6,587 Interest and other income, net 1,194 463 2,521 1,188 Foreign exchange transaction gains (losses) (589) (352) (1,158) 591 Income before income taxes 8,111 2,976 24,181 8,366 Income tax provision 2,380 934 7,163 3,089 Net income $ 5,731 $ 2,042 $ 17,018 $ 5,277 Net income per common share: Basic $ 0.14 $ 0.05 $ 0.41 $ 0.13 Diluted $ 0.14 $ 0.05 $ 0.40 $ 0.13 Weighted average common shares outstanding (000's) 41,185 41,598 41,912 41,526 Weighted average common shares outstanding for diluted net income per common share (000's) 42,011 41,965 42,279 41,821
GSI GROUP INC. Consolidated Analysis By Segment (unaudited) (thousands of U.S. dollars)
Three Months Ended Nine Months Ended ------------------------------ ------------------------------ September 29, September 30, September 29, September 30, 2006 2005 2006 2005 ------------- ------------- ------------- ------------- Sales: Precision Technology Group $ 52,100 $ 46,513 $ 149,517 $ 136,336 Semiconductor Systems Group 32,975 17,898 93,316 63,612 Intersegment sales elimination (3,448) (1,811) (8,682) (5,657) Total $ 81,627 $ 62,600 $ 234,151 $ 194,291 Gross profit %: Precision Technology Group 40.6% 39.5% 40.2% 38.1% Semiconductor Systems Group 38.1% 35.1% 40.2% 36.7% Intersegment sales elimination 4.1% 1.3% 1.9% - Total 41.1% 39.4% 41.6% 38.8%
GSI GROUP INC. Consolidated Sales Analysis By Geographic Region (unaudited) (millions of U.S. dollars)
Three Months Ended ---------------------------------------------------------------- September 29, 2006 September 30, 2005 ------------------------------ ------------------------------ % of % of Sales Total Sales Total ------------- ------------- ------------- ------------- North America $ 24.8 30% $ 24.0 38% Latin and South America 0.3 - 0.3 - Europe (EMEA) 12.9 16 11.6 19 Japan 16.8 21 11.0 18 Asia-Pacific, other 26.9 33 15.7 25 Total $ 81.7 100% $ 62.6 100%
Nine Months Ended ---------------------------------------------------------------- September 29, 2006 September 30, 2005 ------------------------------ ------------------------------ % of % of Sales Total Sales Total ------------- ------------- ------------- ------------- North America $ 68.1 30% $ 77.9 40% Latin and South America 1.1 - 1.1 1 Europe (EMEA) 39.2 17 33.9 17 Japan 36.2 15 33.7 17 Asia-Pacific, other 89.6 38 47.7 25 Total $ 234.2 100% $ 194.3 100%
GSI GROUP INC. Impact of the Adoption of SFAS 123R on Net Income and EPS (Unaudited) (thousands of U.S. dollars, except share amounts) Three Months Nine Months Ended Ended September 29, September 29, 2006 2006 ------------- ------------- Net income, as reported $ 5,731 $ 17,018 Add back: Stock based compensation, recorded under SFAS 123R 473 534 Proforma net income 6,204 17,552 Net income per common share -- basic, as reported $ 0.14 $ 0.41 Add back: Stock based compensation 0.01 0.01 Proforma net income per common share -- basic $ 0.15 $ 0.42 Net income per common share -- diluted, as reported $ 0.14 $ 0.40 Add back: Stock based compensation 0.01 0.01 Proforma net income per common share -- diluted $ 0.15 $ 0.41 SOURCE GSI Group Inc. -0- 10/24/2006 /CONTACT: Ray Ruddy, Investor Relations for GSI Group Inc., +1-978-439-5511, ext. 6170/ /Company News On-Call: http://www.prnewswire.com/comp/107189.html / (GSIG)