- First Quarter 2015 Revenue of $95 million, 20% year-over-year growth
- First Quarter 2015 Adjusted EBITDA of $14.3 million, 26% year-over-year growth
- First Quarter 2015 GAAP Earnings per Share ("EPS") of $0.10
- First Quarter 2015 Adjusted Earnings per Share ("Adjusted EPS") of $0.20
- Increases Revenue Guidance for Full Year 2015, Net of JK Lasers Divestiture
GSI Group Inc. (NASDAQ: GSIG) (the "Company", "we", "our", "GSI"), a
global leader and supplier of precision photonics and motion control
components and subsystems to the medical and advanced industrial
markets, today reported financial results for the first quarter of 2015.
Unless otherwise noted, all financial results in this press release are
GAAP measures from continuing operations. Adjusted EBITDA and Adjusted
EPS are both non-GAAP financial measures referenced throughout this
press release.
First Quarter
"We had a strong start to the new year, delivering better than expected
sales and income, primarily due to our medical end-markets, which began
to recover earlier than we had forecasted," said John Roush, Chief
Executive Officer. "In the first quarter, we delivered 20% reported
revenue growth, and 9% organic revenue growth, while Adjusted EBITDA
increased by 26% and Adjusted EPS by 43%. We executed well across the
Company in the quarter, and delivered strong results despite the impact
of the stronger dollar, as well as continued economic and regulatory
uncertainty. We are fully committed to our strategic focus on advanced
industrial and medical markets, and we expect to continue to deliver
attractive results in 2015 despite external challenges," added Mr. Roush.
During the first quarter of 2015, GSI generated revenue of $94.6
million, an increase of 19.6% from $79.1 million in the first quarter of
2014. All three of the Company's operating segments, Laser Products,
Medical Technologies, and Precision Motion, demonstrated revenue growth
compared to the first quarter of 2014.
In the first quarter of 2015, operating income from continuing
operations was $5.4 million, compared to $4.1 million in the first
quarter of 2014. Adjusted Operating Income from Continuing Operations, a
non-GAAP financial measure that includes the adjustments noted in the
reconciliation below, was $10.9 million in the first quarter of 2015,
compared to $8.1 million in the first quarter of 2014.
Diluted EPS from continuing operations was $0.10 in the first quarter of
2015, compared to $0.08 in the first quarter of 2014. Adjusted EPS, a
non-GAAP financial measure that includes the adjustments noted in the
reconciliation below, was $0.20 in the first quarter of 2015, compared
to $0.14 in the first quarter of 2014.
Adjusted EBITDA, a non-GAAP financial measure that includes the
adjustments noted in the reconciliation below, was $14.3 million in the
first quarter of 2015, compared to $11.3 million in the first quarter of
2014.
As of April 3, 2015, cash and cash equivalents was $47.5 million, while
total debt was $123.1 million. The Company completed the first quarter
of 2015 with approximately $75.6 million of Net Debt, as defined in the
non-GAAP reconciliation below. Operating cash flow from continuing
operations for the first quarter of 2015 was $6.0 million, compared
to $2.8 million in the first quarter of 2014.
Financial Outlook
"The period of significant divestitures and business realignment is
principally behind us. We are increasing our focus towards the long-term
strategic goals of the Company," said Robert Buckley, Chief Financial
Officer. "Over the year, we see significant opportunities to invest
organically and inorganically in our businesses to position them for
above average profitable growth and returns on capital."
On April 15, 2015, the Company divested the JK Lasers business. As a
result of the divestiture, the financial outlook for the second quarter
and full year has been updated to exclude the JK Lasers business.
For the second quarter of 2015, the Company expects Adjusted Revenue, a
non-GAAP financial measure, of between $93 million and $95 million. This
compares to Adjusted Revenue for the second quarter of 2014 of $92
million and Adjusted Revenue for the first quarter of 2015 of $89
million.
For the full year 2015, the Company expects Adjusted Revenue of
approximately $365 million to $370 million. This compares to Adjusted
Revenue of $343 millionin the full year 2014, which was adjusted
from $365 million to eliminate $22 million in sales from JK Lasers in
2014. The guidance represents anticipated year-over-year reported
revenue growth of 6% to 8% and year-over-year organic revenue growth in
the mid-single digit range. The Company expected JK Lasers to deliver
more than $25 million in revenue for the full year 2015.
For the second quarter of 2015, the Company expects Adjusted EBITDA to
be approximately $14 million. In addition, the Company expects Adjusted
EPS to be in the range of $0.18 to $0.20. For the full year 2015, the
Company expects Adjusted EBTIDA to be in the range of $60 million to $62
million. Additionally, the Company expects Adjusted EPS to be in the
range of $0.87 to $0.91.
The Company expects to complete the second quarter of 2015 with cash and
cash equivalents of approximately $80 million. With the close of JK
Lasers business divestiture, the Company expects to complete the second
quarter of 2015 with approximately $40 million of Net Debt.
Conference Call Information
The Company will host a conference call on Thursday, May 7,
2015 at 10:30 am EDT to discuss these results. John A. Roush, Chief
Executive Officer, and Robert Buckley, Chief Financial Officer, will
host the conference call.
To access the call, please dial (877) 482-5124 prior to the scheduled
conference call time. The conference ID number is 76939469.
A playback of this conference call will be available beginning 2:30 p.m.
EDT, Thursday, May 7, 2015. The playback phone number is (855) 859-2056
or (404) 537-3406 and the code number is 76939469. The playback will
remain available until 11:00 p.m. EDT, Thursday, May 28, 2015.
A replay of the audio webcast will be available approximately four hours
after the conclusion of the call on the Investor Relations section of
the Company's web site at www.gsig.com.
Use of Non-GAAP Financial Measures
The non-GAAP financial measures used in this press release are organic
revenue, Adjusted Revenue, Adjusted Gross Profit, Adjusted Gross Profit
Margin, Adjusted Operating Income from Continuing Operations, Adjusted
Operating Margin, Adjusted Income from Continuing Operations before
Taxes, Adjusted Income from Continuing Operations, net of tax, Adjusted
EPS from Continuing Operations, Adjusted EBITDA, and Net Debt.
The Company believes that the non-GAAP financial measures provide useful
and supplementary information to investors regarding the Company's
operating performance. It is management's belief that these non-GAAP
financial measures would be particularly useful to investors because of
the significant changes that have occurred outside of the Company's
day-to-day business in accordance with the execution of the Company's
strategy. This strategy includes streamlining the Company's existing
operations through site and functional consolidations, strategic
divestitures, expanding the Company's business through significant
internal investments, and broadening the Company's product and service
offerings through acquisition of innovative and complementary
technologies and solutions. The financial impact of certain elements of
these activities, particularly acquisitions, divestitures, and site and
functional restructurings, are often large relative to the Company's
overall financial performance, which can adversely affect the
comparability of its operating results and investors' ability to analyze
the business from period to period.
The Company's Adjusted EBITDA, a non-GAAP financial measure, is used by
management to evaluate operating performance, communicate financial
results to the Board of Directors, benchmark results against historical
performance and the performance of peers, and evaluate investment
opportunities including acquisitions and divestitures. In addition,
Adjusted EBITDA is used to determine bonus payments for senior
management and employees. Accordingly, the Company believes that this
non-GAAP measure provides greater transparency and insight into
management's method of analysis.
Non-GAAP financial measures should not be considered as substitutes for,
or superior to, measures of financial performance prepared in accordance
with GAAP. They are limited in value because they exclude charges that
have a material effect on the Company's reported results and, therefore,
should not be relied upon as the sole financial measures to evaluate the
Company's financial results. The non-GAAP financial measures are meant
to supplement, and to be viewed in conjunction with, GAAP financial
measures. Investors are encouraged to review the reconciliation of these
non-GAAP financial measures to their most directly comparable GAAP
financial measures as provided in the tables accompanying this press
release.
Safe Harbor and Forward-Looking Information
Certain statements in this release are "forward-looking statements"
within the meaning of the Private Securities Litigation Reform Act of
1995 and are based on current expectations and assumptions that are
subject to risks and uncertainties. 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 "expect," "intend," "anticipate," "estimate," "believe,"
"future," "could," "should," "plan," "aim," and other similar
expressions. These forward-looking statements include, but are not
limited to, expectations regarding our ability to deliver profitable
revenue growth or attractive results in 2015; anticipated financial
performance; business prospects; market conditions; and other statements
that are not historical facts.
These forward-looking statements are neither promises nor guarantees,
but involve risks and uncertainties that may cause actual results to
differ materially from those contained in the forward-looking
statements. Our actual results could differ materially from those
anticipated in these forward-looking statements for many reasons,
including, but not limited to, the following: economic and political
conditions and the effects of these conditions on our customers'
businesses and level of business activity; our significant dependence
upon our customers' capital expenditures, which are subject to cyclical
market fluctuations; our dependence upon our ability to respond to
fluctuations in product demand; our ability to continually innovate and
successfully commercialize our innovations; failure to introduce new
products in a timely manner; customer order timing and other similar
factors beyond our control; disruptions or breaches in security of our
information technology systems; changes in interest rates, credit
ratings or foreign currency exchange rates; risk associated with our
operations in foreign countries; our increased use of outsourcing in
foreign countries; our failure to comply with local import and export
regulations in the jurisdictions in which we operate; our exposure to
the credit risk of some of our customers and in weakened markets; our
reliance on third party distribution channels; violations of our
intellectual property rights and our ability to protect our intellectual
property against infringement by third parties; risk of losing our
competitive advantage; our failure to successfully integrate recent and
future acquisitions into our business; our ability to make divestitures
that provide business benefits; our ability to attract and retain key
personnel; our restructuring and realignment activities and disruptions
to our operations as a result of consolidation of our operations;
product defects or problems integrating our products with other vendors'
products; disruptions in the supply of certain key components or other
goods from our suppliers; production difficulties and product delivery
delays or disruptions; our compliance, or our failure to comply, with
various federal, state and foreign regulations; changes in governmental
regulation of our business or products; effects of conflict minerals
regulations; our failure to comply with environmental regulations; our
failure to implement new information technology systems and software
successfully; our failure to realize the full value of our intangible
assets; our ability to utilize our net operating loss carryforwards and
other tax attributes; changes in tax laws, and fluctuations in our
effective tax rates; being subject to U.S. federal income taxation even
though we are a non-U.S. corporation; any need for additional capital to
adequately respond to business challenges or opportunities and repay or
refinance our existing indebtedness, which may not be available on
acceptable terms or at all; volatility in the market price for our
common shares; our ability to access cash and other assets of our
subsidiaries; the influence over our business of certain significant
shareholders; provisions of our articles of incorporation may delay or
prevent a change in control; our significant existing indebtedness may
limit our ability to engage in certain activities; and our failure to
maintain appropriate internal controls in the future.
Other important risk factors that could affect the outcome of the
events set forth in these statements and that could affect the Company's
operating results and financial condition are discussed in Item 1A of
our Annual Report on Form 10-K for the fiscal year ended December 31,
2014, our subsequent filings with the Securities and Exchange Commission
("SEC"), and in our future filings with the SEC. Such statements are
based on the Company's beliefs and assumptions and on information
currently available to the Company. The Company disclaims any obligation
to update any forward-looking statements as a result of developments
occurring after the date of this document except as required by law.
About GSI
GSI Group Inc. designs, develops, manufactures and sells precision
photonics and motion control components and subsystems to Original
Equipment Manufacturers ("OEM") in the medical and advanced industrial
markets. The Company is a leader in highly engineered enabling
technologies, including CO2 laser sources, laser scanning and
beam delivery products, optical data collection and machine vision
technologies, medical visualization and informatics solutions, and
precision motion control products. The Company specializes in
collaborating with OEM customers to adapt its component and subsystem
technologies to deliver highly differentiated performance in their
applications. GSI Group Inc.'s common shares are quoted on NASDAQ under
the ticker symbol "GSIG".
More information about GSI is available on the Company's website at www.gsig.com.
For additional information, please contact GSI Group Inc. Investor
Relations at (781) 266-5137 or InvestorRelations@gsig.com.
|
GSI GROUP INC.
|
|
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
|
|
(In thousands of U.S. dollars or shares, except per share amounts)
|
|
(Unaudited)
|
|
|
|
|
|
Three Months Ended
|
|
|
|
April 3,
|
|
|
March 28,
|
|
|
|
2015
|
|
|
2014
|
|
Revenue
|
|
$
|
94,614
|
|
|
$
|
79,133
|
|
Cost of revenue
|
|
|
54,608
|
|
|
|
47,028
|
|
Gross profit
|
|
|
40,006
|
|
|
|
32,105
|
|
Operating expenses:
|
|
|
|
|
|
|
|
|
Research and development and engineering
|
|
|
8,215
|
|
|
|
5,857
|
|
Selling, general and administrative
|
|
|
22,068
|
|
|
|
19,618
|
|
Amortization of purchased intangible assets
|
|
|
1,889
|
|
|
|
1,744
|
|
Restructuring, acquisition and divestiture related costs
|
|
|
2,437
|
|
|
|
818
|
|
Total operating expenses
|
|
|
34,609
|
|
|
|
28,037
|
|
Operating income from continuing operations
|
|
|
5,397
|
|
|
|
4,068
|
|
Interest income (expense), net
|
|
|
(1,397)
|
|
|
|
(837)
|
|
Foreign exchange transaction gains (losses), net
|
|
|
517
|
|
|
|
(19)
|
|
Other income (expense), net
|
|
|
729
|
|
|
|
581
|
|
Income from continuing operations before income taxes
|
|
|
5,246
|
|
|
|
3,793
|
|
Income tax provision
|
|
|
1,800
|
|
|
|
937
|
|
Income from continuing operations
|
|
|
3,446
|
|
|
|
2,856
|
|
Loss from discontinued operations, net of tax
|
|
|
—
|
|
|
|
(1,866)
|
|
Consolidated net income
|
|
|
3,446
|
|
|
|
990
|
|
Less: Net income attributable to noncontrolling interest
|
|
|
—
|
|
|
|
(7)
|
|
Net income attributable to GSI Group Inc.
|
|
$
|
3,446
|
|
|
$
|
983
|
|
|
|
|
|
|
|
|
|
|
Earnings per common share from continuing operations:
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
0.10
|
|
|
$
|
0.08
|
|
Diluted
|
|
$
|
0.10
|
|
|
$
|
0.08
|
|
Loss per common share from discontinued operations:
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
—
|
|
|
$
|
(0.05)
|
|
Diluted
|
|
$
|
—
|
|
|
$
|
(0.05)
|
|
Earnings per common share attributable to GSI Group Inc.:
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
0.10
|
|
|
$
|
0.03
|
|
Diluted
|
|
$
|
0.10
|
|
|
$
|
0.03
|
|
|
|
|
|
|
|
|
|
|
Weighted average common shares outstanding—basic
|
|
|
34,506
|
|
|
|
34,227
|
|
Weighted average common shares outstanding—diluted
|
|
|
34,999
|
|
|
|
34,669
|
|
GSI GROUP INC.
|
|
CONDENSED CONSOLIDATED BALANCE SHEETS
|
|
(In thousands of U.S. dollars)
|
|
(Unaudited)
|
|
|
|
|
|
April 3,
|
|
|
December 31,
|
|
|
|
2015
|
|
|
2014
|
|
ASSETS
|
|
|
|
|
|
|
|
|
Current Assets
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
47,542
|
|
|
$
|
51,146
|
|
Accounts receivable, net
|
|
|
53,360
|
|
|
|
51,494
|
|
Inventories
|
|
|
60,682
|
|
|
|
62,943
|
|
Other current assets
|
|
|
17,866
|
|
|
|
17,113
|
|
Assets held for sale
|
|
|
13,582
|
|
|
|
631
|
|
Total current assets
|
|
|
193,032
|
|
|
|
183,327
|
|
Property, plant and equipment, net
|
|
|
37,590
|
|
|
|
40,088
|
|
Intangible assets, net
|
|
|
70,284
|
|
|
|
67,242
|
|
Goodwill
|
|
|
98,299
|
|
|
|
90,746
|
|
Other assets
|
|
|
15,863
|
|
|
|
17,516
|
|
Total assets
|
|
$
|
415,068
|
|
|
$
|
398,919
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY
|
|
|
|
|
|
|
|
|
Current Liabilities
|
|
|
|
|
|
|
|
|
Current portion of long-term debt
|
|
$
|
7,500
|
|
|
$
|
7,500
|
|
Accounts payable
|
|
|
27,126
|
|
|
|
25,592
|
|
Accrued expenses and other current liabilities
|
|
|
22,777
|
|
|
|
20,798
|
|
Liabilities held for sale
|
|
|
2,954
|
|
|
|
324
|
|
Total current liabilities
|
|
|
60,357
|
|
|
|
54,214
|
|
Long-term debt
|
|
|
115,625
|
|
|
|
107,500
|
|
Other long-term liabilities
|
|
|
27,806
|
|
|
|
25,951
|
|
Total liabilities
|
|
|
203,788
|
|
|
|
187,665
|
|
Stockholders' Equity:
|
|
|
|
|
|
|
|
|
Total GSI Group Inc. stockholders' equity
|
|
|
210,851
|
|
|
|
210,825
|
|
Noncontrolling interest
|
|
|
429
|
|
|
|
429
|
|
Total stockholders' equity
|
|
|
211,280
|
|
|
|
211,254
|
|
Total liabilities and stockholders' equity
|
|
$
|
415,068
|
|
|
$
|
398,919
|
|
GSI GROUP INC.
|
|
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
|
|
(In thousands of U.S. dollars)
|
|
(Unaudited)
|
|
|
|
|
|
Three Months Ended
|
|
|
|
April 3,
|
|
|
March 28,
|
|
|
|
2015
|
|
|
2014
|
|
Cash flows from operating activities:
|
|
|
|
|
|
|
|
|
Consolidated net income
|
|
$
|
3,446
|
|
|
$
|
990
|
|
Less: Loss from discontinued operations, net of tax
|
|
|
—
|
|
|
|
1,866
|
|
Income from continuing operations
|
|
|
3,446
|
|
|
|
2,856
|
|
Adjustments to reconcile income from continuing operations to
net cash provided by operating activities of continuing operations:
|
|
|
|
|
|
|
|
|
Depreciation and amortization
|
|
|
4,762
|
|
|
|
4,829
|
|
Share-based compensation
|
|
|
1,597
|
|
|
|
1,439
|
|
Deferred income taxes
|
|
|
(103)
|
|
|
|
(1,990)
|
|
Earnings from equity-method investment
|
|
|
(727)
|
|
|
|
(573)
|
|
Other
|
|
|
1,219
|
|
|
|
1,073
|
|
Changes in assets and liabilities which (used)/provided cash,
excluding
effects from businesses purchased or classified as discontinued
operations:
|
|
|
|
|
|
|
|
|
Accounts receivable
|
|
|
(5,096)
|
|
|
|
(4,919)
|
|
Inventories
|
|
|
(3,975)
|
|
|
|
1,449
|
|
Other operating assets and liabilities
|
|
|
4,919
|
|
|
|
(1,368)
|
|
Net cash provided by operating activities of continuing operations
|
|
|
6,042
|
|
|
|
2,796
|
|
Net cash used in operating activities of discontinued operations
|
|
|
—
|
|
|
|
(1,299)
|
|
Net cash provided by operating activities
|
|
|
6,042
|
|
|
|
1,497
|
|
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
Purchases of property, plant and equipment
|
|
|
(946)
|
|
|
|
(972)
|
|
Acquisition of businesses, net of cash acquired
|
|
|
(13,852)
|
|
|
|
(92,360)
|
|
Proceeds from the sale of property, plant and equipment
|
|
|
23
|
|
|
|
38
|
|
Net cash used in investing activities of continuing operations
|
|
|
(14,775)
|
|
|
|
(93,294)
|
|
Net cash used in investing activities of discontinued operations
|
|
|
—
|
|
|
|
(617)
|
|
Net cash used in investing activities
|
|
|
(14,775)
|
|
|
|
(93,911)
|
|
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
Borrowings under revolving credit facility
|
|
|
13,000
|
|
|
|
70,000
|
|
Repayments of long-term debt and revolving credit facility
|
|
|
(4,875)
|
|
|
|
(4,875)
|
|
Other financing activities
|
|
|
(1,394)
|
|
|
|
(1,934)
|
|
Net cash provided by financing activities of continuing operations
|
|
|
6,731
|
|
|
|
63,191
|
|
Net cash provided by financing activities of discontinued operations
|
|
|
—
|
|
|
|
—
|
|
Net cash provided by financing activities
|
|
|
6,731
|
|
|
|
63,191
|
|
Effect of exchange rates on cash and cash equivalents
|
|
|
(1,602)
|
|
|
|
(16)
|
|
Decrease in cash and cash equivalents
|
|
|
(3,604)
|
|
|
|
(29,239)
|
|
Cash and cash equivalents, beginning of period
|
|
|
51,146
|
|
|
|
60,980
|
|
Cash and cash equivalents, end of period
|
|
$
|
47,542
|
|
|
$
|
31,741
|
|
Reconciliation of GAAP to Non-GAAP Financial Measures
|
|
|
(In thousands of U.S. dollars)
|
|
|
(Unaudited)
|
|
|
|
|
|
Adjusted Gross Profit by Segment (Non-GAAP):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
Twelve Months
Ended
|
|
|
Three Months Ended
|
|
|
|
|
April 3,
|
|
|
December 31,
|
|
|
December 31,
|
|
|
September 26,
|
|
|
June 27,
|
|
|
March 28,
|
|
|
|
|
2015
|
|
|
2014
|
|
|
2014
|
|
|
2014
|
|
|
2014
|
|
|
2014
|
|
|
Laser Products
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit (GAAP)
|
|
$
|
19,375
|
|
|
$
|
74,224
|
|
|
$
|
19,787
|
|
|
$
|
20,269
|
|
|
$
|
17,155
|
|
|
$
|
17,013
|
|
|
Amortization of intangible assets
|
|
|
516
|
|
|
|
2,064
|
|
|
|
516
|
|
|
|
516
|
|
|
|
516
|
|
|
|
516
|
|
|
Acquisition fair value adjustments
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
Adjusted Gross Profit
|
|
$
|
19,891
|
|
|
$
|
76,288
|
|
|
$
|
20,303
|
|
|
$
|
20,785
|
|
|
$
|
17,671
|
|
|
$
|
17,529
|
|
|
Gross profit margin (GAAP)
|
|
|
43.1
|
%
|
|
|
41.8
|
%
|
|
|
42.8
|
%
|
|
|
44.2
|
%
|
|
|
39.1
|
%
|
|
|
40.6
|
%
|
|
Adjusted Gross Profit Margin
|
|
|
44.2
|
%
|
|
|
42.9
|
%
|
|
|
43.9
|
%
|
|
|
45.4
|
%
|
|
|
40.3
|
%
|
|
|
41.9
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Medical Technologies
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit (GAAP)
|
|
$
|
12,513
|
|
|
$
|
48,678
|
|
|
$
|
13,006
|
|
|
$
|
12,945
|
|
|
$
|
13,838
|
|
|
$
|
8,889
|
|
|
Amortization of intangible assets
|
|
|
547
|
|
|
|
3,287
|
|
|
|
900
|
|
|
|
900
|
|
|
|
900
|
|
|
|
587
|
|
|
Acquisition fair value adjustments
|
|
|
43
|
|
|
|
596
|
|
|
|
52
|
|
|
|
51
|
|
|
|
328
|
|
|
|
165
|
|
|
Adjusted Gross Profit
|
|
$
|
13,103
|
|
|
$
|
52,561
|
|
|
$
|
13,958
|
|
|
$
|
13,896
|
|
|
$
|
15,066
|
|
|
$
|
9,641
|
|
|
Gross profit margin (GAAP)
|
|
|
40.2
|
%
|
|
|
39.8
|
%
|
|
|
40.2
|
%
|
|
|
39.6
|
%
|
|
|
39.8
|
%
|
|
|
39.7
|
%
|
|
Adjusted Gross Profit Margin
|
|
|
42.1
|
%
|
|
|
43.0
|
%
|
|
|
43.1
|
%
|
|
|
42.5
|
%
|
|
|
43.2
|
%
|
|
|
43.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Precision Motion
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit (GAAP)
|
|
$
|
8,465
|
|
|
$
|
28,333
|
|
|
$
|
7,192
|
|
|
$
|
6,776
|
|
|
$
|
7,949
|
|
|
$
|
6,416
|
|
|
Amortization of intangible assets
|
|
|
56
|
|
|
|
792
|
|
|
|
198
|
|
|
|
198
|
|
|
|
198
|
|
|
|
198
|
|
|
Acquisition fair value adjustments
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
Adjusted Gross Profit
|
|
$
|
8,521
|
|
|
$
|
29,125
|
|
|
$
|
7,390
|
|
|
$
|
6,974
|
|
|
$
|
8,147
|
|
|
$
|
6,614
|
|
|
Gross profit margin (GAAP)
|
|
|
45.6
|
%
|
|
|
43.7
|
%
|
|
|
46.6
|
%
|
|
|
41.9
|
%
|
|
|
43.5
|
%
|
|
|
43.0
|
%
|
|
Adjusted Gross Profit Margin
|
|
|
45.9
|
%
|
|
|
45.0
|
%
|
|
|
47.9
|
%
|
|
|
43.1
|
%
|
|
|
44.6
|
%
|
|
|
44.4
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Corporate, Shared Services and Unallocated
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit (GAAP)
|
|
$
|
(347)
|
|
|
$
|
(1,068)
|
|
|
$
|
(257)
|
|
|
$
|
(307)
|
|
|
$
|
(291)
|
|
|
$
|
(213)
|
|
|
Amortization of intangible assets
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
Acquisition fair value adjustments
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
Adjusted Gross Profit
|
|
$
|
(347)
|
|
|
$
|
(1,068)
|
|
|
$
|
(257)
|
|
|
$
|
(307)
|
|
|
$
|
(291)
|
|
|
$
|
(213)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GSI Group Inc.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit (GAAP)
|
|
$
|
40,006
|
|
|
$
|
150,167
|
|
|
$
|
39,728
|
|
|
$
|
39,683
|
|
|
$
|
38,651
|
|
|
$
|
32,105
|
|
|
Amortization of intangible assets
|
|
|
1,119
|
|
|
|
6,143
|
|
|
|
1,614
|
|
|
|
1,614
|
|
|
|
1,614
|
|
|
|
1,301
|
|
|
Acquisition fair value adjustments
|
|
|
43
|
|
|
|
596
|
|
|
|
52
|
|
|
|
51
|
|
|
|
328
|
|
|
|
165
|
|
|
Adjusted Gross Profit
|
|
$
|
41,168
|
|
|
$
|
156,906
|
|
|
$
|
41,394
|
|
|
$
|
41,348
|
|
|
$
|
40,593
|
|
|
$
|
33,571
|
|
|
Gross profit margin (GAAP)
|
|
|
42.3
|
%
|
|
|
41.2
|
%
|
|
|
42.2
|
%
|
|
|
41.9
|
%
|
|
|
39.9
|
%
|
|
|
40.6
|
%
|
|
Adjusted Gross Profit Margin
|
|
|
43.5
|
%
|
|
|
43.0
|
%
|
|
|
44.0
|
%
|
|
|
43.7
|
%
|
|
|
41.9
|
%
|
|
|
42.4
|
%
|
|
Reconciliation of GAAP to Non-GAAP Financial Measures
|
|
(In thousands of U.S. dollars)
|
|
(Unaudited)
|
|
|
|
Adjusted EPS (Non-GAAP):
|
|
|
|
|
|
Three Months Ended April 3, 2015
|
|
|
|
Operating Income from
Continuing Operations
|
|
|
Operating
Margin
|
|
|
Income from
Continuing
Operations
before Income
Taxes
|
|
|
Income from
Continuing
Operations, Net
of Tax
|
|
|
Diluted EPS
from
Continuing
Operations
|
|
GAAP results
|
|
$
|
5,397
|
|
|
|
5.7
|
%
|
|
$
|
5,246
|
|
|
$
|
3,446
|
|
|
$
|
0.10
|
|
Non-GAAP Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amortization of intangible assets
|
|
|
3,008
|
|
|
|
3.2
|
%
|
|
|
3,008
|
|
|
|
2,018
|
|
|
|
0.06
|
|
Restructuring, divestiture and other costs
|
|
|
2,329
|
|
|
|
2.5
|
%
|
|
|
2,329
|
|
|
|
1,563
|
|
|
|
0.04
|
|
Acquisition related costs
|
|
|
127
|
|
|
|
0.1
|
%
|
|
|
127
|
|
|
|
85
|
|
|
|
0.00
|
|
Acquisition fair value adjustments
|
|
|
43
|
|
|
|
0.0
|
%
|
|
|
43
|
|
|
|
29
|
|
|
|
0.00
|
|
Non-recurring income tax expenses (benefits)
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(205)
|
|
|
|
0.00
|
|
Total non-GAAP adjustments
|
|
|
5,507
|
|
|
|
5.8
|
%
|
|
|
5,507
|
|
|
|
3,490
|
|
|
|
0.10
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted results (Non-GAAP)
|
|
$
|
10,904
|
|
|
|
11.5
|
%
|
|
$
|
10,753
|
|
|
$
|
6,936
|
|
|
$
|
0.20
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares outstanding - Diluted
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
34,999
|
|
|
|
|
|
|
|
Three Months Ended March 28, 2014
|
|
|
|
Operating Income from
Continuing Operations
|
|
|
Operating
Margin
|
|
|
Income from
Continuing
Operations
before Income
Taxes
|
|
|
Income from
Continuing
Operations, Net
of Tax
|
|
|
Diluted EPS
from
Continuing
Operations
|
|
GAAP results
|
|
$
|
4,068
|
|
|
|
5.1
|
%
|
|
$
|
3,793
|
|
|
$
|
2,856
|
|
|
$
|
0.08
|
|
Non-GAAP Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amortization of intangible assets
|
|
|
3,045
|
|
|
|
3.9
|
%
|
|
|
3,045
|
|
|
|
2,120
|
|
|
|
0.06
|
|
Restructuring costs and other
|
|
|
28
|
|
|
|
0.0
|
%
|
|
|
28
|
|
|
|
20
|
|
|
|
0.00
|
|
Acquisition related costs
|
|
|
790
|
|
|
|
1.0
|
%
|
|
|
790
|
|
|
|
550
|
|
|
|
0.02
|
|
Acquisition fair value adjustments
|
|
|
165
|
|
|
|
0.2
|
%
|
|
|
165
|
|
|
|
115
|
|
|
|
0.00
|
|
Non-recurring income tax expenses (benefits)
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(721)
|
|
|
|
(0.02)
|
|
Total non-GAAP adjustments
|
|
|
4,028
|
|
|
|
5.1
|
%
|
|
|
4,028
|
|
|
|
2,084
|
|
|
|
0.06
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted results (Non-GAAP)
|
|
$
|
8,096
|
|
|
|
10.2
|
%
|
|
$
|
7,821
|
|
|
$
|
4,940
|
|
|
$
|
0.14
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares outstanding - Diluted
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
34,669
|
|
Reconciliation of GAAP to Non-GAAP Financial Measures
|
|
(In thousands of U.S. dollars)
|
|
(Unaudited)
|
|
|
|
Adjusted EBITDA (Non-GAAP):
|
|
|
|
|
|
Three Months Ended
|
|
|
|
April 3,
|
|
|
March 28,
|
|
|
|
2015
|
|
|
2014
|
|
Net income attributable to GSI Group Inc. (GAAP)
|
|
$
|
3,446
|
|
|
$
|
983
|
|
Interest (income) expense, net
|
|
|
1,397
|
|
|
|
837
|
|
Income tax provision
|
|
|
1,800
|
|
|
|
937
|
|
Depreciation and amortization
|
|
|
4,762
|
|
|
|
4,829
|
|
Share-based compensation
|
|
|
1,597
|
|
|
|
1,439
|
|
Restructuring, acquisition, divestiture, and other costs
|
|
|
2,456
|
|
|
|
818
|
|
Acquisition fair value adjustments
|
|
|
43
|
|
|
|
165
|
|
Loss from discontinued operations, net of tax
|
|
|
—
|
|
|
|
1,866
|
|
Other, net
|
|
|
(1,246)
|
|
|
|
(562)
|
|
Adjusted EBITDA (Non-GAAP)
|
|
$
|
14,255
|
|
|
$
|
11,312
|
|
Net Debt (Non-GAAP):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
April 3, 2015
|
|
|
December 31, 2014
|
|
Total Debt (GAAP)
|
|
$
|
123,125
|
|
|
$
|
115,000
|
|
Less: Cash and cash equivalents
|
|
|
(47,542)
|
|
|
|
(51,146)
|
|
Net Debt (Non-GAAP)
|
|
$
|
75,583
|
|
|
$
|
63,854
|
|
Organic Revenue Growth (Non-GAAP):
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
|
April 3, 2015
|
|
|
Reported growth (GAAP)
|
|
|
19.6
|
%
|
|
Less: Change attributable to acquisitions
|
|
|
(16.2)
|
%
|
|
Plus: Change due to foreign currency
|
|
|
5.5
|
%
|
|
Organic growth (Non-GAAP)
|
|
|
8.9
|
%
|
Non-GAAP Measures
Adjusted Revenue
Adjusted Revenue excludes the JK Lasers business to only show the
results of ongoing operations of the Company. As the JK Lasers business
was sold in April 2015, the future results of the Company will no longer
include revenues from this business. We excluded JK Lasers sales from
Adjusted Revenue because divestiture activities can vary between
reporting periods and between us and our peers, which we believe make
comparisons of long-term performance trends difficult for management and
investors, and could result in overstating or understating to our
investors the performance of our operations. Additionally, we include
estimated revenue from contracts acquired with business acquisitions
that will not be fully recognized due to business combination rules.
Because GAAP accounting rules require the elimination of this revenue,
GAAP results alone do not fully capture all of our economic activities.
These non-GAAP adjustments are intended to reflect the full amount of
such revenue.
Organic Revenue Growth
We define the term "organic revenue" as revenue excluding the impact
from business acquisitions, divestitures, and the effect of foreign
currency translation. We use the related term "organic revenue growth"
to refer to the measure of comparing current period organic revenue with
the corresponding period of the prior year. We believe that this
non-GAAP measure, when taken together with our GAAP financial measures,
allows us and our investors to better measure our performance and
evaluate long-term performance trends. Organic revenue growth also
provides for easier comparisons of our performance with prior and future
periods and relative comparisons to our peers. We exclude the effect of
foreign currency translation from these measures because foreign
currency translation is subject to volatility and can obscure underlying
trends. We exclude the effect of acquisitions because acquisition
activities can vary dramatically between reporting periods and between
us and our peers, which we believe makes comparisons of long-term
performance trends difficult for management and investors, and could
result in overstating or understating to our investors the performance
of our operations.
Adjusted Gross Profit and Adjusted Gross Profit Margin
The calculation of Adjusted Gross Profit and Adjusted Gross Profit
Margin is displayed in the tables above. Adjusted Gross Profit and
Adjusted Gross Profit Margin excludes the amortization of acquired
intangible assets and revenue fair value adjustments from business
acquisitions because: (1) the amounts are non-cash; (2) the Company
cannot influence the timing and amount of future expense recognition;
and (3) excluding such expenses provides investors and management better
visibility into the components of operating expenses.
Adjusted Operating Income from Continuing Operations and Adjusted
Operating Margin
The calculation of Adjusted Operating Income from Continuing Operations
and Adjusted Operating Margin is displayed in the tables above. Adjusted
Operating Income from Continuing Operations and Adjusted Operating
Margin exclude the amortization of acquired intangible assets and
revenue fair value adjustments related to business acquisitions because:
(1) the amounts are non-cash; (2) the Company cannot influence the
timing and amount of future expense recognition; and (3) excluding such
expenses provides investors and management better visibility into the
components of operating expenses. The Company also excluded
restructuring, acquisition, divestiture and other costs from Adjusted
Operating Income from Continuing Operations and Adjusted Operating
Margin due to the significant changes that have occurred outside of the
Company's day-to-day business as a result of the execution of the
Company's strategy for the reasons described above in the introductory
paragraphs of the "Use of Non-GAAP Financial Measures".
Adjusted Income from Continuing Operations before Income Taxes
The calculation of Adjusted Income from Continuing Operations before
Income Taxes is displayed in the tables above. The calculation of
Adjusted Income from Continuing Operations before Income Taxes excludes
amortization of acquired intangible assets and revenue fair value
adjustments related to business acquisitions, restructuring,
acquisition, divestiture, and other costs for the reasons described for
Adjusted Operating Income from Continuing Operations and Adjusted
Operating Margin above.
Adjusted Income from Continuing Operations, Net of Tax
The calculation of Adjusted Income from Continuing Operations, net of
tax, is displayed in the tables above. Because pre-tax income is
included in determining income from continuing operations, net of tax,
the calculation of Adjusted Income from Continuing Operations, net of
tax, also excludes amortization of acquired intangible assets and
revenue fair value adjustments related to business acquisitions,
restructuring, acquisition, divestiture, and other costs for the reasons
described for Adjusted Operating Income from Continuing Operations and
Adjusted Operating Margin above. In addition, the Company excluded
significant non-recurring income tax expenses (benefits) related to
releases of valuation allowances, effects of changes in tax laws,
effects of acquisition related tax planning actions on our effective tax
rate, and the income tax effect of non-GAAP adjustments discussed above.
Adjusted Diluted EPS from Continuing Operations
The calculation of Adjusted Diluted EPS from Continuing Operations is
displayed in the tables above. Because income from continuing
operations, net of tax is included in the diluted EPS calculation, the
calculation of Adjusted Diluted EPS from Continuing Operations excludes
amortization of acquired intangible assets and revenue fair value
adjustments related to business acquisitions, restructuring,
acquisition, divestiture, and other costs, significant non-recurring
income tax expenses (benefits) related to releases to valuation
allowances, effects of changes in tax laws, effects of acquisition
related tax planning actions on our effective tax rate, and the income
tax effect of non-GAAP adjustments for the reasons described for
Adjusted Income from Continuing Operations, net of tax.
Adjusted EBITDA
The Company defines Adjusted EBITDA, a non-GAAP financial measure, as
the net income attributable to GSI Group Inc. before deducting interest
(income) expense, net, income taxes, depreciation, amortization,
non-cash share-based compensation, restructuring, acquisition,
divestiture and other costs, acquisition fair value adjustments, loss
from discontinued operations, net of tax, and other non-operating income
(expense) items, including foreign exchange gains (losses) and earnings
from an equity-method investment.
In evaluating Adjusted EBITDA, you should be aware that in the future
the Company may incur expenses that are the same as, or similar to, some
of the adjustments in this presentation. The presentation of Adjusted
EBITDA should not be construed as an inference that future results will
not be affected by unusual or non-recurring items.
Net Debt
The Company defines Net Debt, a non-GAAP financial measure, as its total
debt less its cash and cash equivalents. Management uses Net Debt to
monitor the Company's outstanding debt obligations that could not be
satisfied by its cash and cash equivalents on hand.
