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
Sales % of Sales % of
Total 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
Sales % of Sales % of
Total 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%
SOURCE GSI Group Inc.
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Related links:
http://www.gsig.com
Company News On-Call:
http://www.prnewswire.com/comp/107189.html
CONTACT:
Ray Ruddy, Investor Relations of GSI Group
Inc., +1-978-439-5511 ext. 6170
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