Company Reports Bookings of $89.5 Million, 1.2 Book-to-Bill Ratio and $98
Million Backlog
BILLERICA, Mass., July 25 /PRNewswire-FirstCall/ -- GSI Group Inc.,
(Nasdaq: GSIG), a leading provider of precision technology and
semiconductor systems, today announced financial results for the second
quarter ended June 29, 2007.
Second quarter revenue was $73.1 million, compared to first quarter
revenue of $74.2 million and $76.4 million for the second quarter of 2006.
Excluding restructuring charges, operating profit was $5.3 million in the
second quarter versus $6.0 million in the first quarter and $8.0 million in
the second quarter of 2006. GAAP net income for the quarter was $3.3
million, or $0.08 per diluted share, compared to the first quarter results
of $3.2 million, or $0.08 per diluted share, and $6.2 million, or $0.15 per
diluted share in the second quarter of 2006.
First half 2007 revenue was $147.3 million, compared to $152.5 million
in 2006. Excluding restructuring charges, operating profit totaled $11.3
million in the first half of 2007 compared to $15.2 million in the first
half of 2006. Year to date GAAP net income was $6.5 million, or $0.15 per
diluted share, compared to year to date GAAP net income of $11.3 million,
or $0.27 per diluted share in the prior year.
Second quarter bookings were $89.5 million, up 16% compared with $76.9
million in the first quarter. The book to bill ratio was 1.2, the third
consecutive quarter with a book to bill ratio of 1.0 or above. Deferred
revenue at June 29, 2007 totaled $15.3 million. The backlog at June 29,
2007 was $98.1 million, up from $79.3 million in the prior quarter.
Precision Technology segment bookings grew 12% from the first quarter
due to strength in encoders and printed circuit board spindles.
Semiconductor Systems segment bookings grew 21% from the first quarter
due to record Wafer Mark orders and strong Wafer Repair bookings. Second
quarter order activity in this segment was the second highest level in the
last twelve quarters.
Dr. Sergio Edelstein, President and CEO commented, "We are pleased with
both orders and results this quarter. Company-wide bookings grew
significantly and we are entering the third quarter with a healthy backlog.
We completed an accretive acquisition. Our Precision Technology bookings
strengthened, particularly in the encoder business, and Semiconductor
Systems made steady progress in new customer wins and orders."
Gross margin of 41% in the second quarter increased from 40% in the
first quarter largely due to favorable margins and higher revenue in the
encoder, printed circuit board spindle and wafer mark product lines.
Operating expenses, excluding a one time benefit of a legal settlement
in the first quarter and restructuring charges, declined $1.0 million
sequentially, from $25.3 million in the first quarter to $24.3 million in
the second quarter.
Income tax expense for the second quarter was $2.1 million, an
effective tax rate of 39%. The increase in the effective tax rate was
primarily due to losses, including restructuring charges, in the U.K.,
which were not tax affected due to the Company's current tax loss
carryforward position in the U.K.
Cash and short term investments were $152.3 million, up $4.9 million
from the first quarter, including $3.0 million used for the purchase of the
Thales Beryllium Optronics Business.
The Company anticipates the following for the third quarter of 2007:
- Revenue to be in the range of $77.0 million to $82.0 million
- Diluted earnings per share, including restructuring charges, in the
range of $0.09 to $0.13
- Restructuring costs in the range of $1.7-$1.9 million as previously
projected
Dial In: July 26th at 8:30 a.m. ET
GSI Group will host a conference call for investors at 8:30 a.m.
eastern on July 26th. Participants are invited to join by dialing (706)
634-5123 with an access code: 6482156. The replay will be available for two
weeks by dialing (706) 645-9291 with the replay passcode: 6482156. 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)
June 29, December 31,
2007 2006
ASSETS
Current
Cash and cash equivalents $152,293 $138,315
Accounts receivable, less allowance
of $624 (December 31, 2006 - $911) 72,522 54,546
Income taxes receivable 4,691 5,755
Inventories 73,891 72,703
Deferred tax assets 8,001 7,925
Other current assets 6,171 11,559
Total current assets 317,569 290,803
Property, plant and equipment, net of
accumulated depreciation of $32,747
(December 31, 2006 - $28,588) 33,939 33,511
Deferred tax assets 20,566 20,099
Other assets 673 710
Long-term investments 803 693
Intangible assets, net of amortization
of $7,528 (December 31, 2006 - $6,380) 13,982 14,965
Patents and acquired technology,
net of amortization of $37,885
(December 31, 2006 - $35,455) 22,356 24,203
Goodwill 26,421 26,421
$436,309 $411,405
LIABILITIES AND STOCKHOLDERS' EQUITY
Current
Accounts payable $16,184 $14,002
Accrued compensation and benefits 10,635 13,455
Deferred revenue 15,317 2,965
Other accrued expenses 10,915 12,881
Total current liabilities 53,051 43,303
Deferred compensation 650 2,740
Deferred tax liabilities 12,412 12,342
Accrued long term restructuring 997 1,141
Income taxes payable 1,787 -
Accrued pension liability 8,936 8,806
Total liabilities 77,833 68,332
Commitments and contingencies
Stockholders' equity
Common shares, no par value;
Authorized shares: unlimited;
Issued and outstanding: 42,597,401
(December 31, 2005 - 41,889,804) 316,204 310,635
Additional paid-in capital 6,593 5,314
Retained earnings 35,673 29,431
Cumulative effect of adopting FIN No. 48 -
Accounting for Uncertainty in Income Taxes 146
Accumulated other comprehensive loss (140) (2,307)
Total stockholders' equity 358,476 343,073
$436,309 $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 Six Months Ended
June 29, June 30, June 29, June 30,
2007 2006 2007 2006
Sales $73,117 $76,401 $147,321 $152,524
Cost of goods sold 43,362 44,009 88,131 88,583
Gross profit 29,755 32,392 59,190 63,941
Operating expenses:
Research and development
and engineering 7,729 7,400 15,386 14,841
Selling, general and
administrative and other 15,027 15,753 29,066 30,575
Amortization of
purchased intangibles 1,690 1,513 3,419 3,341
Restructuring and other 1,474 (129) 3,728 (135)
Total operating expenses 25,920 24,537 51,599 48,622
Income from operations 3,835 7,855 7,591 15,319
Interest and other income, net 1,690 547 3,227 1,320
Foreign exchange transaction
gains (losses) (62) 140 (434) (569)
Income before income taxes 5,463 8,542 10,384 16,070
Income tax provision 2,140 2,358 3,861 4,783
Net income $3,323 $6,184 $6,523 $11,287
Net income per common share:
Basic $0.08 $0.15 $0.15 $0.27
Diluted $0.08 $0.15 $0.15 $0.27
Weighted average common shares
outstanding (000's) 42,427 42,100 42,204 42,008
42,678 42,304 42,409 42,400
GSI GROUP INC.
Consolidated Analysis By Segment (unaudited)
(thousands of U.S. dollars)
Three Months Ended Six Months Ended
June 29, June 30, June 29, June 30,
2007 2006 2007 2006
Sales:
Precision Technology $46,921 $50,439 $90,545 $97,417
Semiconductor Systems 27,110 29,012 58,968 60,341
Intersegment sales elimination (914) (3,050) (2,192) (5,234)
Total $73,117 $76,401 $147,321 $152,524
Gross profit %:
Precision Technology 38.4% 40.8% 37.2% 40.0%
Semiconductor Systems 42.6% 41.2% 43.1% 41.3%
Intersegment sales elimination (23.7%) (4.0%) (5.1%) (0.5%)
Total 40.7% 42.4% 40.2% 41.9%
GSI GROUP INC.
Consolidated Sales Analysis By Geographic Region (unaudited)
(millions of U.S. dollars)
Three Months Ended
June 29, 2007 June 30, 2006
% of % of
Sales Total Sales Total
(In millions) (In millions)
North America $19.2 26% $22.1 29%
Latin and South America 0.1 - 0.5 1
Europe (EMEA) 12.6 17 14.3 18
Japan 15.7 22 8.8 12
Asia-Pacific, other 25.5 35 30.7 40
Total $73.1 100% $76.4 100%
Six Months Ended
June 29, 2007 June 30, 2006
% of % of
Sales Total Sales Total
(In millions) (In millions)
North America $43.3 29% $43.2 28%
Latin and South America 0.3 - 0.8 1
Europe (EMEA) 25.4 17 26.3 17
Japan 29.5 20 19.5 13
Asia-Pacific, other 48.8 34 62.7 41
Total $147.3 100% $152.5 100%
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,
+1-978-439-5511, ext. 6170
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