BILLERICA, Mass., Feb. 5 /PRNewswire-FirstCall/ -- GSI Group Inc.
(Nasdaq: GSIG) today announced an expansion of its China manufacturing
operations and restructuring of its UK manufacturing operations, as part of
its overall plan to expand its presence in the growing Asian markets and
increase profitability.
The Precision Technology Segment will be moving additional laser and
high speed air bearing spindle manufacturing from two UK facilities to
GSI's China facility. GSI currently manufactures certain lasers and
selected high speed air bearing spindle components in Suzhou, China. GSI
will reduce manufacturing capacity at its UK facilities, streamline
operations, and discontinue production of selected low volume legacy
product lines after consultation with customers. The manufacturing transfer
and related restructuring is expected to be completed by the end of 2007.
"This reorganization is a proactive move, taken at a time when the
company is in a solid financial position, with a strong balance sheet,
healthy backlog, and expected fourth quarter 2006 bookings of $81.7
million," said Chief Executive Officer, Dr. Sergio Edelstein.
Dr. Edelstein added, "Having proven our manufacturing capabilities in
Suzhou, China, we are looking to leverage our success by increasing
production and product diversity in the facility. Our UK based operations
will continue to serve as a key source of new product development
initiatives and manufacturing for selected product lines."
GSI expects to record restructuring charges during 2007 in the range of
$4.5 to $5.0 million and potential inventory write offs related to product
consolidation activities of $2.0 to $2.5 million The restructuring charges
are projected to include approximately $2.4 million in termination
benefits, $1.4 million in capital asset write offs, $0.5 million in costs
associated with the manufacturing transition to Suzhou and $0.4 million in
impairment charges related to facility consolidations. Once completed, the
plan is expected to generate annualized pre-tax benefits in the range of
$5.0 to $6.0 million.
More details will be forthcoming after the Company reports its fourth
quarter 2006 earnings on February 27th, 2007 after market. That will be
followed by the regularly scheduled earnings call on February 28th, 2007
pre market.
GSI supplies precision motion control components, lasers and
laser-based advanced manufacturing systems to the global medical,
semiconductor, electronics, and industrial markets. GSI's common shares are
listed on Nasdaq (GSIG). For more information on GSI, please visit
http://www.gsig.com.
Safe Harbor Statement under the Private Securities Litigation Reform
Act of 1995
This press release contains certain statements that are not historical
facts, including, most importantly, information concerning possible or
assumed future results of operations of the Company and statements preceded
by, followed by or that include the words "may," believes," "expects,"
"anticipates," or the negation thereof, or similar expressions, which
constitute "forward-looking statements" within the meaning of the Private
Securities Litigation Reform Act of 1995 (the "Reform Act"). All statements
which address operating performance, events or developments that are
expected or anticipated to occur in the future, including statements
expressing general optimism or pessimism about future operating results,
are forward-looking statements within the meaning of the Reform Act. Such
forward-looking statements involve risks, uncertainties and other factors
which may cause the actual performance or achievements of the Company to be
materially different from any future results, performances or achievements
expressed or implied by such forward-looking statements. For those
statements, the Company claims the protection of the safe harbor for
forward-looking statements contained in the Reform Act. Several important
factors could affect the future results of the Company and could cause
those results to differ materially from those expressed in the
forward-looking statements contained herein. The factors that could cause
actual results to differ materially include, but are not limited to,
unexpected increases in aggregate severance and/or retention paid to
employees, unanticipated inventory or capital asset costs, our ability to
cost-effectively manage all manufacturing operations at our facility in
China, unexpected contract termination costs, our failure to achieve
expected savings, and other risks detailed in the Company's Securities and
Exchange Commission filings (available at http://www.sec.gov and
http://gsig.com ), all of which are difficult or impossible to predict
accurately, and many of which are beyond the direct control of the Company.
The Company will not undertake and specifically declines any obligation to
publicly release the result of any revisions which may be made to any
forward-looking statements to reflect events or circumstances after the
date of such statements or to reflect the occurrence of anticipated or
unanticipated events.
For more information, please contact:
Ray Ruddy
GSIG Director of Investor Relations
(978) 439-5511, ext. 6170
SOURCE GSI Group Inc.
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Related links:
http://www.gsig.com/
http://www.prnewswire.com/comp/107189.html /
CONTACT:
Ray Ruddy, Director of Investor Relations of
GSI Group Inc., +1-978-439-5511 ext. 6170
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