Bookings Reach $87.5 Million
BILLERICA, Mass., Feb. 27 /PRNewswire-FirstCall/ -- GSI Group Inc.,
(Nasdaq: GSIG), a supplier of precision technology and semiconductor
systems, today announced financial results for the fourth quarter and year
ended December 31, 2007.
Fourth quarter revenue was $86.5 million, compared to $84.0 million in
the third quarter of 2007 and $79.5 million for the fourth quarter of 2006.
Excluding restructuring charges, operating profit was $7.7 million in the
fourth quarter versus $10.1 million in the third quarter and $5.6 million
in the fourth quarter of 2006. GAAP net income for the quarter was $4.7
million, or $0.11 per diluted share, compared to the third quarter results
of $7.8 million, or $0.18 per diluted share, and $4.7 million, or $0.11 per
diluted share in the fourth quarter of 2006.
Revenue for the full year ended December 31, 2007 was $317.8 million,
compared to $313.6 million in the same period of 2006. Excluding
restructuring charges, year-to-date operating profit totaled $29.3 million
in 2007 compared to $28.5 million in 2006. Full year GAAP net income was
$19.0 million, or $0.45 per diluted share, compared to full year GAAP net
income of $21.7 million, or $0.51 per diluted share in 2006.
Fourth quarter bookings were $87.5 million, compared to $75.1 million
in the third quarter of 2007 and $82.0 million in the fourth quarter of
2006. The book-to-bill ratio was 1.0.
The backlog as of December 31, 2007 was $90.2 million, compared with
$76.6 in the fourth quarter of 2006. The backlog as of December 31, 2007
includes deferred revenue of $9.9 million.
Dr. Sergio Edelstein, President and CEO commented, "I am pleased with
our order levels this quarter. Order patterns in our encoder and optics
product lines, as well as in our memory repair product line, remained
strong. This was partly as a result of a $10 million win at a major Asian
semiconductor manufacturer for our newest wafer repair systems and
continued strong demand in a few key precision technology markets."
Dr. Edelstein continued, "Our UK restructuring has been successfully
completed. The U.K. manufacturing facility is shipping the last amounts of
inventory built for the transition as our Suzhou, China facility is
increasing production."
"For our next step, in May, we will begin consolidating our three
Massachusetts manufacturing facilities onto a single, efficient facility.
In light of the anticipated weaker business outlook moving forward we will
be accelerating our efforts to improve operational efficiencies and
consolidate our manufacturing facilities. We remain focused on executing
our strategy of market penetration and new product launches, building our
presence in Asia and integrating our company to optimize efficiency."
Gross margin of 38.0% in the fourth quarter decreased from 41.3% in the
third quarter, primarily as a result of revenue deferrals and
product/customer mix. Operating expenses, excluding restructuring charges
were $25.2 million in the fourth quarter compared to $24.6 million in the
third quarter. Stock based compensation was $0.7 million in the fourth
quarter.
Cash and cash equivalents were $171.7 million, up $10.0 million from
the third quarter and up $33.4 million for the year. The increase in cash
includes a use of cash in connection with the Company's previously
announced stock buyback program of $5.4 million in the fourth quarter and
$7.8 million for the year. GSI is also announcing an extension of its
existing stock buyback plan. Authorization of an additional $25.0 million
in funding for stock repurchase has been approved.
The Company anticipates the following for the first quarter of 2008:
-- Revenue to be in the range of $66.0 million to $72.0 million
-- Diluted earnings per share, including restructuring charges, in the
range of $0.02 to $0.06, assuming a 35% effective tax rate.
Dial In: February 28th at 8:30 a.m. ET
GSI Group will host a conference call for investors at 8:30 a.m.
Eastern on February 28th. Participants are invited to join by dialing
706-634-5123 with an access code: 34195350. The replay will be available
for two weeks by dialing (706) 645-9291 with the replay passcode: 34195350.
The conference call also will be broadcast live over the Internet 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)
December 31, December 31,
2007 2006
ASSETS
Current
Cash and cash equivalents $171,714 $138,315
Accounts receivable, less allowance of
$372 (December 31, 2006-$911) 73,527 54,546
Income taxes receivable 12,241 5,755
Inventories 65,522 72,703
Deferred tax assets 8,249 7,925
Prepaid assets 4,919 10,171
Other current assets 2,475 1,388
Total current assets 338,647 290,803
Property, plant and equipment, net of
accumulated depreciation of $32,263
(December 31, 2006-$28,588) 30,817 33,511
Deferred tax assets 9,887 20,099
Other assets 713 710
Long-term investments 854 693
Intangible assets, net of amortization of $8,603
(December 31, 2006-$6,380) 12,817 14,965
Patents and acquired technology, net of
amortization of $40,122 (December 31, 2006-
$35,455) 20,054 24,203
Goodwill 26,421 26,421
Total Assets $440,210 $411,405
LIABILITIES AND STOCKHOLDERS' EQUITY
Current
Accounts payable $17,504 $14,002
Income taxes payable 1,411 -
Accrued compensation and benefits 10,369 13,455
Deferred Revenue 9,949 2,965
Deferred tax liability 286 -
Other accrued expenses 9,353 12,881
Total current liabilities 48,872 43,303
Deferred compensation 676 2,740
Deferred tax liabilities 7,589 12,342
Accrued long term restructuring 938 1,141
Accrued pension liability 4,481 8,806
Income Taxes Payable 3,537 -
Total liabilities 66,093 68,332
Commitments and contingencies
Stockholders' equity
Common shares, no par value; Authorized
shares: unlimited; Issued and outstanding:
42,161,592 (December 31, 2006-41,889,804) 310,970 310,635
Additional paid-in capital 8,245 5,314
Retained earnings 48,475 29,431
Cumulative effect of Adopting FIN No.48 -
Accounting for Uncertainty in Income Taxes (146) -
Accumulated other comprehensive loss 6,573 (2,307)
Total stockholders' equity 374,117 343,073
Total Liabilities and Stockholders' Equity $440,210 $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 Twelve Months Ended
Dec. 31, Dec. 31, Dec. 31, Dec. 31,
2007 2006 2007 2006
Sales $86,527 $79,458 $317,800 $313,609
Cost of goods sold 53,687 46,808 191,080 183,448
Gross profit 32,840 32,650 126,720 130,161
Operating expenses:
Research and development and
engineering 7,574 8,204 30,489 30,639
Selling, general and
administrative, and other 15,903 17,078 60,126 64,199
Amortization of purchased
intangibles 1,698 1,719 6,810 6,794
Restructuring 782 50 6,649 110
Total operating expenses 25,957 27,051 104,074 101,742
Income from operations 6,883 5,599 22,646 28,419
Interest income 1,717 1,289 6,637 4,626
Interest expense (21) - (128) (821)
Foreign exchange transaction
gains (losses) 205 (262) 454 (1,420)
Other income (expense) 39 - 152 -
Income before income taxes 8,823 6,626 29,761 30,804
Income tax provision 4,074 1,899 10,717 9,061
Net income $4,749 $4,727 $19,044 $21,743
Net income per common share:
Basic $0.11 $0.11 $0.45 $0.52
Diluted $0.11 $0.11 $0.45 $0.51
Weighted average common shares
outstanding (000's) 42,480 41,835 42,364 41,896
Weighted average common shares
outstanding for diluted net income
(loss) per common share (000's) 42,719 42,025 42,645 42,251
GSI GROUP INC.
Consolidated Analysis By Segment (unaudited)
(thousands of U.S. dollars)
Three Months Ended Twelve Months Ended
Dec. 31, Dec. 31, Dec. 31, Dec. 31,
2007 2006 2007 2006
Sales:
Precision Technology Business $49,183 $47,191 $188,349 $196,708
Semiconductor Systems Business 38,781 34,289 134,394 127,605
Intersegment sales elimination (1) (1,437) (2,022) (4,943) (10,704)
Total $86,527 $79,458 $317,800 $313,609
Gross profit %:
Precision Technology Business 36.8% 37.7% 37.6% 39.6%
Semiconductor Systems Business 38.6% 42.9% 41.4% 40.9%
Intersegment sales elimination - - - -
Total 38.0% 41.1% 39.9% 41.5%
(1) Sales of Precision Technology products to Semiconductor systems
segment
GSI GROUP INC.
Consolidated Sales Analysis By Geographic Region (unaudited)
(millions of U.S. dollars)
Three Months Ended
December 31, 2007 December 31, 2006
% of % of
Sales Total Sales Total
North America $22.4 26% $23.5 30%
Latin and South America 0.1 - 0.2 -
Europe (EMEA) 11.1 13 11.4 14
Japan 19.3 22 20.3 26
Asia-Pacific, other 33.6 39 24.1 30
Total $86.5 100% $79.5 100%
Twelve Months Ended
December 31, 2007 December 31, 2006
% of % of
Sales Total Sales Total
Revenues from external customers:
North America $90.1 28% $91.6 29%
Latin and South America 0.7 - 1.3 -
Europe 47.5 15 50.6 16
Japan 66.7 21 56.5 18
Asia-Pacific, other 112.8 36 113.6 37
Total $317.8 100% $313.6 100%
SOURCE GSI Group Inc.
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Related links:
http://www.gsig.com/
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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