BILLERICA, Mass., Feb. 22 /PRNewswire-FirstCall/ -- GSI Lumonics Inc.,
(Nasdaq: GSLI and TSX: GSI), a major supplier of precision motion components,
lasers and laser systems, today announced financial results for the fourth
quarter and for the twelve months ended December 31, 2004. (All data are
expressed in U.S. GAAP and in U.S. dollars.)
Fourth quarter results:
* Sales were $80.0 million for the fourth quarter of 2004, compared to
$54.9 million for the same period in 2003, an increase of 45.7%.
* Net income was $8.6 million or $0.21 per diluted share for the fourth
quarter, compared to $0.06 per diluted share for the same period last
year.
* Bookings were $63.6 for the quarter, a decrease of 2% from the same
period in 2003 (which excluded the backlog acquired from Westwind), but
down $3.6 million or 5% from last quarter.
* Backlog was $61.3 million at the end of the fourth quarter, compared to
$78.6 million for the same period in 2003, a decrease of 22% over the
same period in 2003.
* Gross margin for the quarter just ended was 38.9% of sales, as compared
to 39.1% for the same period in 2003.
* Cash flow from operations was $8.1 million for the fourth quarter as
compared to $13.9 million in the same quarter in 2003.
* Cash, cash equivalents and marketable short and long-term investments
totaled $90.3 million as of December 31, 2004.
Geographically, sales for the fourth quarter of 2004 were as follows:
approximately 28% in the Americas, 53% in Asia-Pacific, including Japan, and
19% in Europe. For the same period in 2003, sales were distributed as follows:
47% in the Americas, 39% in Asia-Pacific, including Japan, and 14% in Europe.
The shift toward Asia-Pacific and Japan is due in large part to sales of
MicroE and Westwind products as well as increased demand for the Company's
Laser Systems products in 2004.
For the fiscal year 2004, sales rose 78% to $330.0 million from $185.6
million in 2003. The 2004 net income of $41.5 million or $0.98 per diluted
share was an improvement of $43.7 million from the net loss of $2.2 million
and $0.05 per diluted share in 2003. Increased revenues from the acquisition
of MicroE Systems and Westwind, combined with strong market conditions for
semiconductor and electronics equipment, were the primary factors to this
performance improvement. Cash generated from operations was $35.4 million
compared to $21.8 million the prior year.
"We are pleased with the solid improvement in all three segments of our
business compared with the prior year. We are especially pleased with the
performance of our acquisitions, our growth in Asia-Pacific, and the
performance of our Systems business which contributed strongly to the growth
in both revenues and profitability," said Charles Winston, GSI Lumonics'
President and CEO. "We are adopting a cautious outlook for 2005 with focus on
cost controls and operational efficiency improvements as we anticipate lower
sales in 2005 due to slowdown in the semiconductor, PCB and data storage
sectors from the strong expansions this past year."
The effective tax rate for fiscal 2004 was 8%, which is significantly
below the Company's statutory rate of 35-40%. The Company will return to a
normalized rate in the first quarter of 2005.
As of December 31, 2004, headcount was 1,175 up from 1,067 at year-end
2003. This increase was mainly due to the acquisition of MicroE Systems during
2004.
Business Segment Reporting
In comparing the fourth quarter sales in 2004 with the same period in
2003:
* The Components segment increase of $14.0 million primarily was
generated from the acquisitions of Westwind Air Bearings and MicroE
Systems.
* Laser Systems' increase of $9.6 million is attributed mostly to memory
repair sales.
* The Laser group increase of $2.7 million was mainly from internal sales
of Sigma Lasers.
The Components segment reported operating income of $5.4 million for the
fourth quarter 2004. This was an increase of $1.6 million from the same period
last year. The increase in operating income resulted from acquisitions and
more favorable margins from the MicroE product lines. Gross margin was 35.4%
compared to 34.0% in the fourth quarter, 2003.
The Laser Systems segment contributed an operating profit of $9.1 million
for the fourth quarter 2003, as compared to $5.1 million in the same period
last year. This improvement was generated by a combination of higher sales
volume and margin improvements in the fourth quarter 2004, as compared to the
same period in 2003. Gross margin was 42.9% as compared to 39.1% during the
fourth quarter 2003.
The Laser group had operating income of $0.5 million in the fourth quarter
2004 versus $1.0 million in the same period last year. This decrease is as a
result of higher direct costs over the same quarter in 2003. In the fourth
quarter of 2003, a one-time benefit of $1.2 million was recorded for sales of
inventory that had previously been written down for which there was no similar
benefit in the same period in 2004. Gross margin was 30.3% as compared to
44.2% during the fourth quarter 2003.
Financial Condition
At December 31, 2004, cash, cash equivalents and marketable short-term and
long-term investments totaled $90.3 million, compared to $106.7 million at
December 31, 2003. The Company continues to operate debt-free. Cash flow from
operations was $8.1 million for the fourth quarter in 2004, driven by strong
sales. In the fiscal year 2004, cash flow from operations was $35.4 million
versus $21.8 million in the prior year.
GSI LUMONICS INC.
CONSOLIDATED BALANCE SHEETS (Unaudited)
(U.S. GAAP and in thousands of U.S. dollars, except share amounts)
December December
31, 2004 31, 2003
ASSETS
Current
Cash and cash equivalents $82,334 $64,035
Short-term investments 2,995 39,562
Accounts receivable, less allowance
of $2,470 (December 31, 2003 - $4,465) 60,314 53,040
Income taxes receivable 2,287 8,071
Inventories 60,319 43,916
Deferred tax assets 13,094 5,507
Other current assets 10,311 8,048
Total current assets 231,654 222,179
Property, plant and equipment, net of
accumulated depreciation of $26,604
(December 31, 2003 - $22,305) 50,220 52,982
Deferred tax assets 18,364 8,521
Other assets 2,906 2,297
Long-term investments 5,681 3,743
Intangible assets, net of amortization
of $28,022 (December 31, 2003 - $21,924) 50,989 23,985
Goodwill 26,350 --
$386,164 $313,707
LIABILITIES AND STOCKHOLDERS' EQUITY
Current
Accounts payable $18,462 $18,218
Income taxes payable 4,045 3,232
Accrued compensation and benefits 13,160 7,424
Other accrued expenses 21,327 18,451
Total current liabilities 56,994 47,325
Deferred compensation 2,178 2,162
Deferred tax liability 11,521 1,879
Other liability 27 --
Accrued minimum pension liability 9,881 1,553
Total liabilities 80,601 52,919
Commitments and contingencies
Stockholders' equity
Common shares, no par value;
Authorized shares: unlimited;
Issued and outstanding: 41,449,270
(December 31, 2003 - 40,927,499) 308,669 305,512
Additional paid-in capital 3,289 2,800
Accumulated deficit (1,969) (43,440)
Accumulated other comprehensive loss (4,426) (4,084)
Total stockholders' equity 305,563 260,788
$386,164 $313,707
GSI LUMONICS 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 December December December
31, 2004 31, 2003 31, 2004 31, 2003
Sales $79,951 $54,879 $330,012 $185,561
Cost of goods sold 48,868 33,425 196,573 117,084
Gross profit 31,083 21,454 133,439 68,477
Operating expenses:
Research and
development 6,652 3,867 23,975 13,822
Selling, general
and administrative 13,617 12,790 57,256 49,025
Amortization of
purchased intangibles 1,627 1,602 5,951 5,657
Acquired in-process
research and
development (40) -- 390 --
Restructuring 573 777 573 3,228
Other -- (10) -- 831
Total operating
expenses 22,429 19,026 88,145 72,563
Income (loss) from
operations 8,654 2,428 45,294 (4,086)
Other income -- 39 104 103
Interest income 336 285 980 1,886
Interest expense (104) (73) (263) (202)
Foreign exchange
transaction gains
(losses) (789) (178) (1,129) 451
Income (loss) before
income taxes 8,097 2,501 44,986 (1,848)
Income tax provision
(benefit) (498) -- 3,515 (322)
Net income (loss) $8,595 $2,501 $41,471 $(2,170)
Net income (loss) per common share:
Basic $0.21 $0.06 $1.01 $(0.05)
Diluted $0.21 $0.06 $0.98 $(0.05)
Weighted average common shares
outstanding (000's) 41,281 40,899 41,124 40,837
Weighted average common shares
outstanding for diluted net
income (loss) per common
share (000's) 41,854 41,629 42,125 40,837
GSI LUMONICS INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS (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,
2004 2003 2004 2003
Cash flows from operating activities:
Net income (loss) $8,595 $2,501 $41,471 $(2,170)
Adjustments to reconcile
net income (loss) to cash
provided by (used in)
operating activities:
Loss (gain) on disposal
of assets and
investments -- (39) 15 382
Translation gain on
liquidation of a
subsidiary -- -- (119) --
Acquired in-process research
and development (40) -- 390 --
Stock based compensation 22 208 (64) 208
Depreciation and
amortization 3,856 2,975 13,618 10,439
Unrealized gain
on derivatives 123 (179) 35 --
Deferred income taxes (2,709) 48 (15,385) 48
Changes in current assets and liabilities:
Accounts receivable 4,920 (2,464) (992) (6,216)
Inventories 1,149 1,734 (12,716) 8,271
Other current assets 258 (18) (1,014) (1,047)
Accounts payable, accrued expenses,
and taxes (receivable)
payable (8,082) 9,127 10,158 11,912
Cash provided by
operating activities 8,092 13,893 35,397 21,827
Cash flows from investing activities:
Acquisitions of businesses,
net of cash acquired 214 (35,346) (54,530) (44,298)
Purchase of leased
buildings -- -- -- (18,925)
Sale of assets -- -- -- 847
Other additions to property,
plant and equipment,
net (1,024) (885) (2,410) (2,699)
Proceeds from the sale
and maturities of
short-term and long-term
investments 11,000 26,100 84,224 188,990
Purchases of short-term
and long-term
investments (2,066) (11,492) (49,492) (165,547)
Increase in other assets (187) (381) (367) (23)
Cash used in investing
activities 7,937 (22,004) (22,575) (41,655)
Cash flows from financing activities:
Issue of share capital
(net of issue costs) 1,263 292 3,232 799
Cash provided by
financing activities 1,263 292 3,232 799
Effect of exchange rates on cash
and cash equivalents 1,822 (2,195) 2,245 (569)
Increase (decrease) in cash
and cash equivalents 19,114 (10,014) 18,299 (19,598)
Cash and cash equivalents,
beginning of period 63,220 74,049 64,035 83,633
Cash and cash equivalents,
end of period $82,334 $64,035 $82,334 $64,035
GSI LUMONICS 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,
Sales: 2004 2003 2004 2003
Components $35,456 $21,504 $152,726 $73,762
Laser Group 12,048 9,300 47,383 33,412
Laser Systems 35,335 25,785 146,581 82,687
Intersegment sales
elimination and other (2,888) (1,710) (16,678) (4,300)
Total $79,951 $54,879 $330,012 $185,561
Gross profit %:
Components 35.4% 34.0% 36.8% 38.1%
Laser Group 30.3 44.2 30.4 36.7
Laser Systems 42.9 39.1 43.9 34.9
Intersegment sales
elimination 10.0 4.0 8.5 17.6
Total 38.9% 39.1% 40.4% 36.9%
Segment income (loss) from operations:
Components $5,364 $3,748 $27,739 $15,665
Laser Group 548 954 2,341 1,071
Laser Systems 9,136 5,139 40,332 8,042
Total by segment 15,048 9,841 70,412 24,778
Unallocated amounts:
Corporate expenses 4,234 5,044 18,204 19,148
Amortization of
purchased intangibles 1,627 1,602 5,951 5,657
Acquired in-process
research and development (40) -- 390 --
Restructuring 573 777 573 3,228
Other -- (10) -- 831
Income (loss) from
operations $8,654 $2,428 $45,294 $(4,086)
GSI LUMONICS INC.
Consolidated Sales Analysis By Geographic Region (unaudited)
(millions of U.S. dollars)
Three months ended
December 31, 2004 December 31, 2003
% of % of
Sales Total Sales Total
North America $21.9 27% $25.0 46%
Latin and South America 0.3 1 0.3 1
Europe (EMEA) 15.1 19 7.9 14
Japan 31.4 39 11.1 20
Asia-Pacific, other 11.3 14 10.6 19
Total $80.0 100% $54.9 100%
Twelve months ended
December 31, 2004 December 31, 2003
% of % of
Sales Total Sales Total
North America $139.1 43% $93.4 50%
Latin and South America 1.4 -- 1.1 1
Europe (EMEA) 53.2 16 27.4 15
Japan 76.0 23 36.1 19
Asia-Pacific, other 60.3 18 27.6 15
Total $330.0 100% $185.6 100%
Contact:
Ann Dempsey
Investor Relations for GSI Lumonics
+1-613-224-4868 ext. 2
SOURCE GSI Lumonics Inc.
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CONTACT:
Ann Dempsey, Investor Relations for GSI
Lumonics, +1-613-224-4868, ext. 2
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