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%