Revenue Tops $81 Million
BILLERICA, Mass., Oct. 24 /PRNewswire-FirstCall/ -- GSI Group Inc.,
(Nasdaq: GSIG), a supplier of precision technology and semiconductor
systems, today announced financial results for the third quarter ended
September 29, 2006.
Year-to-year revenue for the quarter rose 30% to $81.6 million,
compared to $62.6 million for the same period of 2005. GAAP net income for
the quarter rose 181% to $5.7 million, or $0.14 per diluted share, compared
to net income for the same period in 2005 of $2.0 million, or $0.05 per
diluted share. Excluding pre-tax stock-based compensation charges of $0.5
million related to the adoption of FAS 123R in 2006, net earnings for the
quarter were $0.15 per diluted share. The pre-tax stock-based compensation
charge for third quarter of 2005 was $0.1 million.
Revenue for the nine months ended September 29, 2006 rose 21% to $234.2
million, compared to $194.3 million for the same period in 2005. GAAP net
income year-to-date increased 223% to $17.0 million or $0.40 per diluted
share, compared to net income for the same period in 2005 of $5.3 million
or $0.13 per diluted share. Excluding the $0.5 million pre-tax stock-based
compensation charges related to the adoption of FAS 123R, year-to-date net
earnings were $0.41 per diluted share in 2006. The pre-tax stock-based
compensation charge for the nine months ended September 30, 2005 was $16.0
thousand.
Bookings for the third quarter were $65.1 million, compared with
bookings of $60.8 million in the third quarter of 2005 and $99.1 million in
the second quarter of 2006.
"We are pleased with the overall revenue level in the third quarter and
the strength across both of our principal business segments. We believe the
sequential decrease in bookings primarily reflects a combination of the
quarter-to-quarter variability due to order timing of individual customers,
and the unusually strong bookings in the second quarter," said Dr. Sergio
Edelstein, President and CEO.
Dr. Edelstein continued, "Signs of market strength continue. We believe
Precision Technology growth will be driven in large part by continuing
strength in the overall economy and by demand for products like those used
in printed circuit board drilling and medical applications."
He further commented, "In Semiconductor Systems, leading customers are
announcing increased capital spending budgets, and capital equipment
utilization rates remain above 90%. However, we are also tracking the
research of analysts who do not share such a positive semiconductor market
outlook, particularly for the second half of 2007."
The Company anticipates the following results for the fourth quarter of
2006:
* Revenue to be in the range of $68.0 million to $78.0 million
* Diluted per share earnings to be in the range of $0.04 to $0.10,
assuming a 30% tax rate.
Dial In: October 25th at 8:30 a.m. ET
GSI Group will host a conference call for investors at 8:30 a.m.
Eastern on October 25th. Participants are invited to join by dialing (706)
634-5123 with an access code: 9043749. The replay will be available for two
weeks by dialing (706) 645-9291 with the replay passcode: 9043749. 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 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)
September 29, December 31,
2006 2005
ASSETS
Current
Cash and cash equivalents $130,994 $69,286
Short-term investments - 26,757
Accounts receivable,
less allowance of $1,214
(December 31, 2005 -- $1,592) 56,152 55,348
Income taxes receivable 2,958 2,517
Inventories 73,077 63,475
Deferred tax assets 13,845 10,630
Other current assets 12,239 20,357
Total current assets 289,265 248,370
Property, plant and equipment,
net of accumulated depreciation
of $26,749 (December 31, 2005 -- $20,608) 33,907 32,220
Deferred tax assets 22,187 20,124
Other assets 717 699
Long-term investments 672 613
Intangible assets,
net of amortization of $5,774
(December 31, 2005 -- $4,035) 15,771 16,834
Patents and acquired technology,
net of amortization of $34,131
(December 31, 2005 -- $30,359) 25,229 28,163
Goodwill 26,421 26,421
$414,169 $373,444
LIABILITIES AND STOCKHOLDERS' EQUITY
Current
Accounts payable $19,721 $14,998
Income taxes payable 8,280 2,475
Accrued compensation and benefits 13,103 9,212
Other accrued expenses 14,565 14,625
Total current liabilities 55,669 41,310
Deferred compensation 2,684 2,576
Deferred tax liabilities 12,660 13,252
Accrued minimum pension liability 10,683 9,750
Total liabilities 81,696 66,888
Commitments and contingencies
Stockholders' equity
Common shares, no par value;
Authorized shares: unlimited;
Issued and outstanding: 41,815,442
(December 31, 2005 -- 41,628,171) 310,022 309,545
Additional paid-in capital 4,874 3,339
Retained earnings 24,706 7,688
Accumulated other comprehensive loss (7,129) (14,016)
Total stockholders' equity 332,473 306,556
$414,169 $373,444
GSI GROUP INC.
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
(U.S. GAAP and in thousands of U.S. dollars, except share amounts)
Three Months Ended Nine Months Ended
September 29, September 30, September 29, September 30,
2006 2005 2006 2005
Sales $81,627 $62,600 $234,151 $194,291
Cost of goods sold 48,057 37,909 136,640 118,970
Gross profit 33,570 24,691 97,511 75,321
Operating expenses:
Research and
development and
engineering 7,594 6,141 22,435 18,968
Selling, general
and administrative
and other 16,736 14,053 47,183 44,733
Amortization of
purchased
intangibles 1,734 1,632 5,075 5,033
Total operating
expenses 26,064 21,826 74,693 68,734
Income from
operations 7,506 2,865 22,818 6,587
Interest and other
income, net 1,194 463 2,521 1,188
Foreign exchange
transaction gains
(losses) (589) (352) (1,158) 591
Income before
income taxes 8,111 2,976 24,181 8,366
Income tax provision 2,380 934 7,163 3,089
Net income $5,731 $2,042 $17,018 $5,277
Net income per
common share:
Basic $0.14 $0.05 $0.41 $0.13
Diluted $0.14 $0.05 $0.40 $0.13
Weighted average
common shares
outstanding (000's) 41,185 41,598 41,912 41,526
Weighted average
common shares
outstanding for
diluted net income
per common share
(000's) 42,011 41,965 42,279 41,821
GSI GROUP INC.
Consolidated Analysis By Segment (unaudited)
(thousands of U.S. dollars)
Three Months Ended Nine Months Ended
September 29, September 30, September 29, September 30,
2006 2005 2006 2005
Sales:
Precision Technology
Group $52,100 $46,513 $149,517 $136,336
Semiconductor Systems
Group 32,975 17,898 93,316 63,612
Intersegment sales
elimination (3,448) (1,811) (8,682) (5,657)
Total $81,627 $62,600 $234,151 $194,291
Gross profit %:
Precision Technology
Group 40.6% 39.5% 40.2% 38.1%
Semiconductor Systems
Group 38.1% 35.1% 40.2% 36.7%
Intersegment sales
elimination 4.1% 1.3% 1.9% -
Total 41.1% 39.4% 41.6% 38.8%
GSI GROUP INC.
Consolidated Sales Analysis By Geographic Region (unaudited)
(millions of U.S. dollars)
Three Months Ended
September 29, 2006 September 30, 2005
% of % of
Sales Total Sales Total
North America $24.8 30% $24.0 38%
Latin and South America 0.3 - 0.3 -
Europe (EMEA) 12.9 16 11.6 19
Japan 16.8 21 11.0 18
Asia-Pacific, other 26.9 33 15.7 25
Total $81.7 100% $62.6 100%
Nine Months Ended
September 29, 2006 September 30, 2005
% of % of
Sales Total Sales Total
North America $68.1 30% $77.9 40%
Latin and South
America 1.1 - 1.1 1
Europe (EMEA) 39.2 17 33.9 17
Japan 36.2 15 33.7 17
Asia-Pacific,
other 89.6 38 47.7 25
Total $234.2 100% $194.3 100%
GSI GROUP INC.
Impact of the Adoption of SFAS 123R on Net Income and EPS (Unaudited)
(thousands of U.S. dollars, except share amounts)
Three Months Ended Nine Months Ended
September 29, September 29,
2006 2006
Net income, as reported $5,731 $17,018
Add back:
Stock based compensation,
recorded under SFAS 123R 473 534
Proforma net income 6,204 17,552
Net income per
common share --
basic, as reported $0.14 $0.41
Add back:
Stock based compensation 0.01 0.01
Proforma net income per
common share -- basic $0.15 $0.42
Net income per
common share --
diluted, as reported $0.14 $0.40
Add back:
Stock based compensation 0.01 0.01
Proforma net income per
common share -- diluted $0.15 $0.41
SOURCE GSI Group Inc.
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http://www.prnewswire.com/comp/107189.html / (GSIG)
CONTACT:
Ray Ruddy, Investor Relations for GSI Group
Inc., +1-978-439-5511, ext. 6170
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