BILLERICA, Mass., Aug. 3 /PRNewswire-FirstCall/-- GSI Lumonics Inc.,
(Nasdaq: GSLI and TSX: GSI), a major supplier of precision components, lasers
and laser systems, today announced financial results for the second quarter
ended July 2, 2004. (All data are expressed in U.S. GAAP and in U.S.
dollars.)
Second Quarter Results
-- Sales were $84.5 million for the second quarter of 2004, compared to
$44.7 million for the same period in 2003; an 89% increase
-- Net income was $11.8 million in the quarter, or $0.28 per diluted
share, compared to a loss of $3.6 million, or a loss $0.09 per diluted
share, for the same period last year.
-- Bookings were $93.7 million for the quarter, an increase of 120% over
the same period in 2003 (59% of the increase is attributed to Westwind
and MicroE acquisitions). Included in bookings for the quarter is $8.5
million of backlog acquired from MicroE.
-- Backlog was $101.0 million at the end of the second quarter, compared
to $42.4 million for the same period in 2003. ($36.9 million of the
increase is attributable to Westwind and MicroE.)
-- Gross margin for the quarter was 42.0% of sales, compared to 35.0% for
the same period last year
-- Cash flow from operations was $12.6 million for the second quarter, as
compared to $1.0 million for the same quarter in 2003.
-- Cash, cash equivalents and marketable securities totaled $72.1 million
as of July 2, 2004.
Geographically, sales for the second quarter of 2004 were as follows:
approximately 50% in the Americas, 36% in Asia-Pacific, including Japan, and
14% in Europe.
Operating expenses for the second quarter of 2004 were $22.1 million
compared to $20.1 million for the same period last year. This increase is
mostly attributed to the Westwind and MicroE acquisitions. Also included in
operating expenses is an estimated charge of $0.4 million for in-process
research and development associated with the MicroE acquisition, based on a
preliminary purchase price allocation.
The expected annualized tax rate for the fiscal year 2004 is expected to
be 10%. The tax rate for the second quarter of 10.7%, an increase from 9% in
Q1, reflects an adjustment to year-to-year date tax expense to the expected
annualized rate for fiscal year 2004. This rate is significantly below our
statutory rate, (which is in the 35-40% range) and anticipates utilization of
deferred tax assets at U.S. operations that were reserved for in prior years.
"We are pleased to report our second quarter performance which continues
the improvements resulting from our strategic acquisitions, restructuring and
overall market recovery," stated Charles Winston, GSI Lumonics' President and
Chief Executive Officer.
Business Segment Reporting
Laser Systems
Revenues in the Laser Systems segment were $36.4 million in the second
quarter of 2004, compared to $19.1 million in the same period last year, led
by a continuing strong demand for wafer trim equipment and general market
recovery. Gross margins at 43.4 % as compared to 32.9 % over the same period
last year improved as a result of higher volumes, firmer pricing, cost
reductions, product mix and benefit of selling inventory that had been written
down in prior years. These factors combined to generate a $9.8 million
operating income for this segment, as compared to $0.6 million in the same
period last year.
Lasers
Revenues of $11.9 million were up $ 3.3 million over the same period last
year. Year-over-year improvement reflects increased revenues from the Spectron
acquisition, made in May 2003, and traditional laser products. Gross margins
were 31.4% as compared to 31.9% for last year. The Lasers segment reported an
operating income of $0.7 million versus $0.1 million for the same period last
year.
Components
The Components segment had revenues of $41.9 million, an increase of $24.2
million over the same period last year. This increase was primarily from the
Westwind and MicroE acquisitions. Gross margin was 39.7% compared to 39.5% in
the same period last year. Operating income for this segment was $9.5 million
versus $3.6 million in the same period last year.
Financial Condition
At July 2, 2004, cash, cash equivalents, and marketable investments
totaled $72.1 million, compared to $113.6 million at April 2, 2004 and $106.7
million at December 31, 2003. In the second quarter of 2004, the Company used
$54.7 million for the acquisition of MicroE. Amortization expense based on
current valuation estimates for MicroE was $0.4 million for the second quarter
of 2004 and will increase to $0.8 million in the third quarter of 2004,
reflecting a full quarter of MicroE amortization. The amortization for MicroE
, along with the in-process research and development charge is based on a
preliminary allocation of the purchase price and is subject to change. The
Company continues to operate debt-free. Inventory turns were 3.4 for the
quarter compared to 3.5 last quarter. Days sales outstanding in receivables
decreased from 78 last quarter to 64 at the end of the second quarter of 2004.
-------------------------------------------------
GSI Lumonics will host a conference call for investors on August 3, 2004
at 5:00 p.m. Eastern Time. To participate, call 800-901-5241 (within the US
and Canada) and 617-786-2963 (for international callers) no earlier than 4:50
p.m. Eastern Time and no later than 4:55 p.m. Eastern Time and identify
yourself to the operator with the participant code of 51932215. A replay of
the call will be available one hour after the call ends to midnight, August
18, 2004 by dialing 888-286-8010 (within the US and Canada) or 617-801-6888
(for international callers). The access code is 19983845.
The conference call also will be broadcast live over the Internet in
listen-only mode. For live webcasting, go to:
http://phx.corporate-ir.net/phoenix.zhtml?c=75037&p=IROL-
eventDetails&EventId=915294
at least 15 minutes prior to the call in order to register, download and
install any necessary software. The call will be archived on the above web
site until midnight, August 18, 2004.
GSI Lumonics supplies precision motion control components, lasers and
laser-based advanced manufacturing systems to the global medical,
semiconductor, electronics, and industrial markets. GSI Lumonics' common
shares are listed on NASDAQ (GSLI) and The Toronto Stock Exchange (GSI).
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 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 LUMONICS INC.
CONSOLIDATED BALANCE SHEETS (unaudited)
(U.S. GAAP and in thousands of U.S. dollars, except share amounts)
July 2, December 31,
2004 2003
ASSETS
Current
Cash and cash equivalents $53,192 $64,035
Short-term investments 17,954 39,562
Accounts receivable,
less allowance of $4,185
(December 31, 2003 - $4,465) 59,720 53,040
Income taxes receivable - 4,839
Inventories 57,194 43,916
Deferred tax assets 12,620 5,507
Other current assets 8,817 8,048
Total current assets 209,497 218,947
Property, plant and equipment,
net of accumulated depreciation
of $24,421 (December 31, 2003 - $22,305) 50,926 52,982
Deferred tax assets 8,013 8,521
Other assets 2,487 2,297
Long-term investments 1,644 3,743
Intangible assets,
net of amortization of $24,652
(December 31, 2003 - $21,924) 53,839 23,985
Goodwill 31,094 -
$357,500 $310,475
LIABILITIES AND STOCKHOLDERS' EQUITY
Current
Accounts payable $23,809 $18,218
Income taxes payable 829 -
Accrued compensation and benefits 10,170 7,424
Other accrued expenses 20,137 18,451
Total current liabilities 54,945 44,093
Deferred compensation 2,127 2,162
Deferred tax liability 13,735 1,879
Other liability 30 -
Accrued minimum pension liability 1,595 1,553
Total liabilities 72,432 49,687
Commitments and contingencies
Stockholders' equity
Common shares, no par value;
Authorized shares: unlimited;
Issued and outstanding:
41,191,885 (December 31, 2003 - 40,927,499) 307,149 305,512
Additional paid-in capital 2,919 2,800
Accumulated deficit (22,687) (43,440)
Accumulated other comprehensive loss (2,313) (4,084)
Total stockholders' equity 285,068 260,788
$357,500 $310,475
GSI LUMONICS INC.
CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited)
(U.S. GAAP and in thousands of U.S. dollars, except per share amounts)
Three months ended Six months ended
July 2, June 27, July 2, June 27,
2004 2003 2004 2003
Sales $84,537 $44,682 $159,390 $85,801
Cost of goods sold 49,019 29,043 94,132 55,422
Gross profit 35,518 15,639 65,258 30,379
Operating expenses:
Research and
development 6,002 3,523 10,761 6,832
Selling, general
and administrative 14,527 13,201 28,012 25,039
Amortization of
purchased intangibles 1,162 1,369 2,710 2,647
Acquired in-process
research and
development 430 - 430 -
Restructuring - 1,559 - 2,187
Other - 485 - 841
Total operating
expenses 22,121 20,137 41,913 37,546
Income (loss)
from operations 13,397 (4,498) 23,345 (7,167)
Other income (expense) - 64 (15) 64
Interest income 211 687 390 1,328
Interest expense (26) (95) (55) (150)
Foreign exchange
transaction gains
(losses) (347) 287 (606) 704
Income (loss)
before income taxes 13,235 (3,555) 23,059 (5,221)
Income tax provision 1,421 - 2,306 -
Net income (loss) $11,814 $(3,555) $20,753 $(5,221)
Net income (loss) per common share:
Basic $0.29 $(0.09) $0.51 $(0.13)
Diluted $0.28 $(0.09) $0.49 $(0.13)
Weighted average common
shares outstanding
(000's) 41,059 40,797 41,009 40,793
Weighted average common
shares outstanding
and dilutive potential
common shares (000's) 42,250 40,797 42,200 40,793
GSI LUMONICS INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited)
(U.S. GAAP and in thousands of U.S. dollars)
Three months ended Six months ended
July 2, June 27, July 2, June 27,
2004 2003 2004 2003
Cash flows from operating activities:
Net income (loss) $11,814 $(3,555) $20,753 $(5,221)
Adjustments to reconcile net income (loss) to cash provided by (used in)
operating activities:
Loss on disposal
of assets - 421 - 421
Loss on sale
of investments - - 15 -
Acquired in-process
research and
development 430 - 430 -
Stock-based
compensation 68 - 119 -
Depreciation and
amortization 2,855 2,386 6,601 4,928
Unrealized loss
(gain) on
derivatives - (491) - 13
Deferred income
taxes (3,120) - (5,690) -
Changes in current assets and liabilities:
Accounts receivable 7,161 (139) (1,998) (4,740)
Inventories (4,015) 1,781 (10,896) 4,614
Other current
assets (1,285) (1,771) (721) (693)
Accounts payable,
accrued expenses,
and taxes
(receivable)
payable (1,303) 2,367 10,480 815
Cash provided by
operating
activities 12,605 999 19,093 137
Cash flows from investing activities:
Acquisitions of
businesses (54,744) (9,553) (54,744) (9,553)
Purchase of
leased buildings - (18,925) - (18,925)
Sale of assets - 847 - 847
Additions to property,
plant and
equipment, net (589) (306) (866) (904)
Proceeds maturities
and sales of
short-term and
long-term
investments 15,485 101,184 63,105 142,328
Purchases of
short-term and
long-term
investments (12,945) (86,123) (39,436) (112,404)
(Increase) Decrease
in other assets (156) 107 (153) 149
Cash provided by
(used in) investing
activities (52,949) (12,769) (32,094) 1,538
Cash flows from financing activities:
Issue of share
capital 1,309 106 1,637 114
Cash provided by
financing activities 1,309 106 1,637 114
Effect of exchange
rates on cash and
cash equivalents 230 (64) 521 328
Increase (decrease)
in cash and cash
equivalents (38,805) (11,728) (10,843) 2,117
Cash and cash
equivalents,
beginning of period 91,997 97,478 64,035 83,633
Cash and cash
equivalents,
end of period $53,192 $85,750 $53,192 $85,750
GSI LUMONICS INC.
Consolidated Analysis By Segment (unaudited)
(thousands of U.S. dollars)
Three months ended Six months ended
Sales: July 2, 2004 June 27, 2003 July 2, 2004 June 27, 2003
Components $41,854 $17,610 $75,210 $34,265
Laser Group 11,924 8,654 23,624 15,642
Laser Systems 36,364 19,089 70,367 36,915
Intersegment
sales elimination (5,605) (671) (9,811) (1,021)
Total $84,537 $44,682 $159,390 $85,801
Gross profit %:
Components 39.7% 39.5% 37.1% 42.0%
Laser Group 31.4 31.9 29.8 32.1
Laser Systems 43.4 32.9 44.4 31.2
Intersegment
sales elimination 10.8 53.8 9.4 56.5
Total 42.0% 35.0% 40.9% 35.4%
Segment income (loss) from operations:
Components $9,456 $3,611 $15,204 $8,466
Laser Group 698 82 1,095 (389)
Laser Systems 9,812 575 19,346 174
Total by segment 19,966 4,268 35,645 8,251
Unallocated amounts:
Corporate expenses 4,977 5,353 9,160 9,743
Amortization of
purchased intangibles 1,162 1,369 2,710 2,647
Acquired in-process
research and
development 430 - 430 -
Restructuring and other - 2,044 - 3,028
Income (loss)
from operations $ 13,397 $ (4,498) $23,345 $ (7,167)
GSI LUMONICS INC.
Consolidated Sales Analysis By Geographic Region (unaudited)
(millions of U.S. dollars)
Three months ended
July 2, 2004 June 27, 2003
% of % of
Sales Total Sales Total
North America $41.8 49% $27.9 63%
Latin and South America 0.5 1 0.5 1
Europe (EMEA) 12.0 14 5.5 12
Japan 13.4 16 7.6 17
Asia-Pacific, other 16.8 20 3.2 7
Total $84.5 100% $44.7 100%
Six months ended
July 2, 2004 June 27, 2003
% of % of
Sales Total Sales Total
North America $80.6 51% $48.8 57%
Latin and South America 0.6 - 0.7 1
Europe (EMEA) 25.5 16 11.0 13
Japan 24.9 16 17.1 20
Asia-Pacific, other 27.8 17 8.2 9
Total $159.4 100% $85.8 100%
For more information contact:
Investor Relations, 613-224-4868, Ann Dempsey, (ext. 2#)
SOURCE GSI Lumonics Inc.
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CONTACT:
Ann Dempsey, Investor Relations, GSI Lumonics
Inc., +1-613-224-4868, ext. 2#
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