- Third Quarter 2015 Adjusted Revenue of $92.3 million, 4% year-over-year growth
- Third Quarter 2015 Adjusted EBITDA of $16.1 million, 5% year-over-year growth
- Third Quarter 2015 GAAP Diluted Earnings per Share ("EPS") of $0.19
- Third Quarter 2015 Adjusted Earnings per Share ("Adjusted EPS") of $0.24
- Third Quarter 2015 Net Debt of $29 million
GSI Group Inc. (NASDAQ: GSIG) (the "Company", "we", "our", "GSI"), a
global leader and supplier of laser, precision motion, and vision
technologies to original equipment manufacturers in the medical and
advanced industrial markets, today reported financial results for the
third quarter of 2015.
|
Financial Highlights
|
|
Three Months Ended
|
|
(In millions, except per share amounts)
|
|
October 2,
|
|
|
September 26,
|
|
|
|
2015
|
|
|
2014
|
|
GAAP
|
|
|
|
|
|
|
|
|
Revenue
|
|
$
|
92.3
|
|
|
$
|
94.7
|
|
Operating income from continuing operations
|
|
$
|
9.0
|
|
|
$
|
6.8
|
|
Diluted EPS from continuing operations
|
|
$
|
0.19
|
|
|
$
|
0.15
|
|
Non-GAAP*
|
|
|
|
|
|
|
|
|
Adjusted Revenue
|
|
$
|
92.3
|
|
|
$
|
88.8
|
|
Adjusted operating income from continuing operations
|
|
$
|
13.4
|
|
|
$
|
12.5
|
|
Adjusted EPS
|
|
$
|
0.24
|
|
|
$
|
0.23
|
|
Adjusted EBITDA
|
|
$
|
16.1
|
|
|
$
|
15.4
|
|
|
|
|
|
|
|
*Reconciliations of GAAP to non-GAAP financial measures, as well as
definitions for the non-GAAP financial measures in this press
release and the reasons for their use are presented below.
|
Third Quarter
"I am pleased with our strong financial results in the third quarter. We
had strong execution across the Company and exceeded our own
expectations for Adjusted EBITDA and cash flows provided by operating
activities of continuing operations, while delivering 4% Adjusted
Revenue growth in the face of a deteriorating capital spending
environment," said John Roush, Chief Executive Officer.
During the third quarter of 2015, GSI generated GAAP revenue of $92.3
million, a decrease of (3%) from $94.7 million in the third quarter of
2014 due to the divestiture of JK Lasers. Adjusted Revenue in the third
quarter of 2015 was $92.3 million, an increase of 4% from $88.8
million in the third quarter of 2014. The Laser Products and Precision
Motion operating segments both delivered strong Adjusted Revenue growth,
whereas Vision Technologies declined due to end-market dynamics.
"During the quarter, we had strong orders from medical applications,
which helped to mitigate the weakness we are now seeing in the advanced
industrial end markets," added John Roush.
In the third quarter of 2015, GAAP operating income from continuing
operations was $9.0 million, compared to $6.8 million in the third
quarter of 2014. Adjusted operating income from continuing operations
was $13.4 million in the third quarter of 2015, compared to $12.5
million in the third quarter of 2014.
GAAP Diluted EPS from continuing operations was $0.19 in the third
quarter of 2015, compared to $0.15 in the third quarter of 2014.
Adjusted EPS was $0.24 in the third quarter of 2015, compared
to $0.23 in the third quarter of 2014. The Company ended the quarter
with 35.1 million weighted average diluted common shares outstanding.
Adjusted EBITDA was $16.1 million in the third quarter of 2015, compared
to $15.4 million in the third quarter of 2014.
As of October 2, 2015, cash and cash equivalents were $80.1 million,
while total debt (excluding deferred borrowing costs of $1.9 million)
was $109.4 million. The Company completed the third quarter of 2015 with
approximately $29.3 million of Net Debt, as defined in the non-GAAP
reconciliation below. Operating cash flow from continuing operations for
the third quarter of 2015 was $10.9 million. During the third quarter of
2015, the Company repurchased 77 thousand shares in the open market for
an aggregate purchase price of $1.0 million at an average price
of $13.03 per share.
Financial Outlook
"We remain confident in our team's ability to generate profitable growth
and above average returns on capital, as is evident in our earnings
guidance for the remainder of the year," said Robert Buckley, Chief
Financial Officer. "While we continue to deliver on our financial
commitments despite lower-than-expected global economic growth, our
revenue guidance reflects caution in this capital spending environment."
For the full year 2015, the Company expects Adjusted Revenue of
approximately $365 million to $370 million. This compares to Adjusted
Revenue of $343 million in the full year 2014. The guidance represents
anticipated year-over-year Adjusted Revenue growth of 6% to 8% and
year-over-year organic revenue growth in the 3% to 5% range.
For the full year 2015, the Company expects Adjusted EBITDA to be
approximately $60 million to $61 million. Additionally, the Company
expects Adjusted EPS to be in the range of $0.82 to $0.86.
Conference Call Information
The Company will host a conference call on Wednesday, November 4,
2015 at 5:00 p.m. ET 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 38297417.
A playback of this conference call will be available beginning 8:00 p.m.
ET, Wednesday, November 4, 2015. The playback phone number is (855)
859-2056 or (404) 537-3406 and the code number is 38297417. The playback
will remain available until 11:00 p.m. ET, Wednesday, November 25, 2015.
A replay of the audio webcast will be available approximately three
hours after the conclusion of the call on the Investor Relations section
of the Company's website at www.gsig.com.
Use of Non-GAAP Financial Measures
The non-GAAP financial measures used in this press release are organic
revenues, Adjusted Revenue, Adjusted Gross Profit, Adjusted Gross Profit
Margin, Adjusted Income from Continuing Operations, Adjusted Operating
Margin, Adjusted Income from Continuing Operations before Income Taxes,
Adjusted Income from Continuing Operations, net of tax, Adjusted EPS
from Continuing Operations, Adjusted EBITDA, Net Debt and total debt
excluding deferred borrowing costs.
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 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, statements regarding our ability to generate profitable
growth and above average returns on capital; 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
|
|
|
|
October 2,
|
|
|
September 26,
|
|
|
|
2015
|
|
|
2014
|
|
Revenue
|
|
$
|
92,271
|
|
|
$
|
94,656
|
|
Cost of revenue
|
|
|
52,361
|
|
|
|
54,973
|
|
Gross profit
|
|
|
39,910
|
|
|
|
39,683
|
|
Operating expenses:
|
|
|
|
|
|
|
|
|
Research and development and engineering
|
|
|
7,693
|
|
|
|
7,735
|
|
Selling, general and administrative
|
|
|
19,979
|
|
|
|
21,512
|
|
Amortization of purchased intangible assets
|
|
|
1,852
|
|
|
|
2,843
|
|
Restructuring, acquisition and divestiture related costs
|
|
|
1,379
|
|
|
|
771
|
|
Total operating expenses
|
|
|
30,903
|
|
|
|
32,861
|
|
Operating income from continuing operations
|
|
|
9,007
|
|
|
|
6,822
|
|
Interest income (expense), net
|
|
|
(1,248)
|
|
|
|
(1,453)
|
|
Foreign exchange transaction gains (losses), net
|
|
|
383
|
|
|
|
1,030
|
|
Other income (expense), net
|
|
|
878
|
|
|
|
733
|
|
Income from continuing operations before income taxes
|
|
|
9,020
|
|
|
|
7,132
|
|
Income tax provision
|
|
|
2,452
|
|
|
|
2,013
|
|
Income from continuing operations
|
|
|
6,568
|
|
|
|
5,119
|
|
Loss from discontinued operations, net of tax
|
|
|
—
|
|
|
|
(273)
|
|
Loss on disposal of discontinued operations, net of tax
|
|
|
—
|
|
|
|
(321)
|
|
Consolidated net income
|
|
$
|
6,568
|
|
|
$
|
4,525
|
|
|
|
|
|
|
|
|
|
|
Earnings per common share from continuing operations:
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
0.19
|
|
|
$
|
0.15
|
|
Diluted
|
|
$
|
0.19
|
|
|
$
|
0.15
|
|
Loss per common share from discontinued operations:
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
—
|
|
|
$
|
(0.02)
|
|
Diluted
|
|
$
|
—
|
|
|
$
|
(0.02)
|
|
Earnings per common share:
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
0.19
|
|
|
$
|
0.13
|
|
Diluted
|
|
$
|
0.19
|
|
|
$
|
0.13
|
|
|
|
|
|
|
|
|
|
|
Weighted average common shares outstanding—basic
|
|
|
34,599
|
|
|
|
34,389
|
|
Weighted average common shares outstanding—diluted
|
|
|
35,055
|
|
|
|
34,793
|
|
GSI GROUP INC.
|
|
CONDENSED CONSOLIDATED BALANCE SHEETS
|
|
(In thousands of U.S. dollars)
|
|
(Unaudited)
|
|
|
|
|
|
October 2,
|
|
|
December 31,
|
|
|
|
2015
|
|
|
2014
|
|
ASSETS
|
|
|
|
|
|
|
|
|
Current Assets
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
80,089
|
|
|
$
|
51,146
|
|
Accounts receivable, net
|
|
|
56,050
|
|
|
|
51,494
|
|
Inventories
|
|
|
61,268
|
|
|
|
62,943
|
|
Other current assets
|
|
|
14,843
|
|
|
|
16,958
|
|
Assets of discontinued operations
|
|
|
—
|
|
|
|
631
|
|
Total current assets
|
|
|
212,250
|
|
|
|
183,172
|
|
Property, plant and equipment, net
|
|
|
37,596
|
|
|
|
40,088
|
|
Intangible assets, net
|
|
|
64,240
|
|
|
|
67,242
|
|
Goodwill
|
|
|
98,358
|
|
|
|
90,746
|
|
Other assets
|
|
|
13,456
|
|
|
|
15,046
|
|
Total assets
|
|
$
|
425,900
|
|
|
$
|
396,294
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY
|
|
|
|
|
|
|
|
|
Current Liabilities
|
|
|
|
|
|
|
|
|
Current portion of long-term debt
|
|
$
|
7,374
|
|
|
$
|
7,345
|
|
Accounts payable
|
|
|
27,507
|
|
|
|
25,592
|
|
Accrued expenses and other current liabilities
|
|
|
25,105
|
|
|
|
20,798
|
|
Liabilities of discontinued operations
|
|
|
—
|
|
|
|
324
|
|
Total current liabilities
|
|
|
59,986
|
|
|
|
54,059
|
|
Long-term debt
|
|
|
100,084
|
|
|
|
105,030
|
|
Other long-term liabilities
|
|
|
25,847
|
|
|
|
25,951
|
|
Total liabilities
|
|
|
185,917
|
|
|
|
185,040
|
|
Stockholders' Equity:
|
|
|
|
|
|
|
|
|
Total GSI Group Inc. stockholders' equity
|
|
|
239,983
|
|
|
|
210,825
|
|
Noncontrolling interest
|
|
|
—
|
|
|
|
429
|
|
Total stockholders' equity
|
|
|
239,983
|
|
|
|
211,254
|
|
Total liabilities and stockholders' equity
|
|
$
|
425,900
|
|
|
$
|
396,294
|
|
GSI GROUP INC.
|
|
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
|
|
(In thousands of U.S. dollars)
|
|
(Unaudited)
|
|
|
|
|
|
Three Months Ended
|
|
|
|
October 2,
|
|
|
September 26,
|
|
|
|
2015
|
|
|
2014
|
|
Cash flows from operating activities:
|
|
|
|
|
|
|
|
|
Consolidated net income
|
|
$
|
6,568
|
|
|
$
|
4,525
|
|
Less: Loss from discontinued operations, net of tax
|
|
|
—
|
|
|
|
594
|
|
Income from continuing operations
|
|
|
6,568
|
|
|
|
5,119
|
|
Adjustments to reconcile income from continuing operations to
net cash provided by operating activities of continuing operations:
|
|
|
|
|
|
|
|
|
Depreciation and amortization
|
|
|
4,703
|
|
|
|
6,344
|
|
Share-based compensation
|
|
|
961
|
|
|
|
978
|
|
Deferred income taxes
|
|
|
3,610
|
|
|
|
(403)
|
|
Earnings from equity investment
|
|
|
(886)
|
|
|
|
(718)
|
|
Other
|
|
|
1,080
|
|
|
|
948
|
|
Changes in assets and liabilities which (used)/provided cash,
excluding
effects from businesses purchased or classified as discontinued
operations:
|
|
|
|
|
|
|
|
|
Accounts receivable
|
|
|
(1,753)
|
|
|
|
(406)
|
|
Inventories
|
|
|
(1,511)
|
|
|
|
56
|
|
Other operating assets and liabilities
|
|
|
(1,864)
|
|
|
|
2,573
|
|
Net cash provided by operating activities of continuing operations
|
|
|
10,908
|
|
|
|
14,491
|
|
Net cash provided by (used in) operating activities of discontinued
operations
|
|
|
—
|
|
|
|
(882)
|
|
Net cash provided by operating activities
|
|
|
10,908
|
|
|
|
13,609
|
|
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
Purchases of property, plant and equipment
|
|
|
(1,978)
|
|
|
|
(1,194)
|
|
Escrow recovery related to business acquisition
|
|
|
—
|
|
|
|
5,418
|
|
Working capital settlement for sale of business
|
|
|
(1,053)
|
|
|
|
—
|
|
Other
|
|
|
7
|
|
|
|
5
|
|
Net cash provided by (used in) investing activities of continuing
operations
|
|
|
(3,024)
|
|
|
|
4,229
|
|
Net cash provided by investing activities of discontinued operations
|
|
|
—
|
|
|
|
5,242
|
|
Net cash provided by (used in) investing activities
|
|
|
(3,024)
|
|
|
|
9,471
|
|
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
Repayments of long-term debt and revolving credit facility
|
|
|
(6,875)
|
|
|
|
(12,875)
|
|
Repurchase of common stock
|
|
|
(997)
|
|
|
|
—
|
|
Other financing activities
|
|
|
(210)
|
|
|
|
(463)
|
|
Net cash used in financing activities of continuing operations
|
|
|
(8,082)
|
|
|
|
(13,338)
|
|
Net cash used in financing activities of discontinued operations
|
|
|
—
|
|
|
|
—
|
|
Net cash used in financing activities
|
|
|
(8,082)
|
|
|
|
(13,338)
|
|
Effect of exchange rates on cash and cash equivalents
|
|
|
(764)
|
|
|
|
(1,200)
|
|
Increase (decrease) in cash and cash equivalents
|
|
|
(962)
|
|
|
|
8,542
|
|
Cash and cash equivalents, beginning of period
|
|
|
81,051
|
|
|
|
45,007
|
|
Cash and cash equivalents, end of period
|
|
$
|
80,089
|
|
|
$
|
53,549
|
|
Reconciliation of GAAP to Non-GAAP Financial Measures
|
|
(In thousands of U.S. dollars)
|
|
(Unaudited)
|
|
|
|
Adjusted Revenue by Segment (Non-GAAP):
|
|
|
|
|
|
Three Months Ended
|
|
|
|
October 2,
|
|
|
September 26,
|
|
|
|
2015
|
|
|
2014
|
|
Laser Products
|
|
|
|
|
|
|
|
|
Revenue (GAAP)
|
|
$
|
41,330
|
|
|
$
|
45,806
|
|
JK Lasers divestiture
|
|
|
—
|
|
|
|
(5,908)
|
|
Acquisition fair value adjustments
|
|
|
—
|
|
|
|
—
|
|
Adjusted Revenue (Non-GAAP)
|
|
$
|
41,330
|
|
|
$
|
39,898
|
|
|
|
|
|
|
|
|
|
|
Vision Technologies
|
|
|
|
|
|
|
|
|
Revenue (GAAP)
|
|
$
|
30,992
|
|
|
$
|
32,680
|
|
Acquisition fair value adjustments
|
|
|
33
|
|
|
|
51
|
|
Adjusted Revenue (Non-GAAP)
|
|
$
|
31,025
|
|
|
$
|
32,731
|
|
|
|
|
|
|
|
|
|
|
Precision Motion
|
|
|
|
|
|
|
|
|
Revenue (GAAP)
|
|
$
|
19,949
|
|
|
$
|
16,170
|
|
Acquisition fair value adjustments
|
|
|
—
|
|
|
|
—
|
|
Adjusted Revenue (Non-GAAP)
|
|
$
|
19,949
|
|
|
$
|
16,170
|
|
|
|
|
|
|
|
|
|
|
GSI Group Inc.
|
|
|
|
|
|
|
|
|
Revenue (GAAP)
|
|
$
|
92,271
|
|
|
$
|
94,656
|
|
JK Lasers divestiture
|
|
|
—
|
|
|
|
(5,908)
|
|
Acquisition fair value adjustments
|
|
|
33
|
|
|
|
51
|
|
Adjusted Revenue (Non-GAAP)
|
|
$
|
92,304
|
|
|
$
|
88,799
|
|
|
|
Adjusted Gross Profit by Segment (Non-GAAP):
|
|
|
|
|
|
Three Months Ended
|
|
|
|
|
October 2,
|
|
|
September 26,
|
|
|
|
|
2015
|
|
|
2014
|
|
|
Laser Products
|
|
|
|
|
|
|
|
|
|
Gross Profit (GAAP)
|
|
$
|
18,851
|
|
|
$
|
20,269
|
|
|
JK Lasers divestiture
|
|
|
—
|
|
|
|
(1,856)
|
|
|
Amortization of intangible assets
|
|
|
516
|
|
|
|
516
|
|
|
Acquisition fair value adjustments
|
|
|
—
|
|
|
|
—
|
|
|
Adjusted Gross Profit (Non-GAAP)
|
|
$
|
19,367
|
|
|
$
|
18,929
|
|
|
Gross Profit Margin (GAAP)
|
|
|
45.6
|
%
|
|
|
44.2
|
%
|
|
Adjusted Gross Profit Margin (Non-GAAP)
|
|
|
46.9
|
%
|
|
|
47.4
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Vision Technologies
|
|
|
|
|
|
|
|
|
|
Gross Profit (GAAP)
|
|
$
|
12,152
|
|
|
$
|
12,945
|
|
|
Amortization of intangible assets
|
|
|
547
|
|
|
|
900
|
|
|
Acquisition fair value adjustments
|
|
|
33
|
|
|
|
51
|
|
|
Adjusted Gross Profit (Non-GAAP)
|
|
$
|
12,732
|
|
|
$
|
13,896
|
|
|
Gross Profit Margin (GAAP)
|
|
|
39.2
|
%
|
|
|
39.6
|
%
|
|
Adjusted Gross Profit Margin (Non-GAAP)
|
|
|
41.0
|
%
|
|
|
42.5
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Precision Motion
|
|
|
|
|
|
|
|
|
|
Gross Profit (GAAP)
|
|
$
|
9,233
|
|
|
$
|
6,776
|
|
|
Amortization of intangible assets
|
|
|
111
|
|
|
|
198
|
|
|
Acquisition fair value adjustments
|
|
|
—
|
|
|
|
—
|
|
|
Adjusted Gross Profit (Non-GAAP)
|
|
$
|
9,344
|
|
|
$
|
6,974
|
|
|
Gross Profit Margin (GAAP)
|
|
|
46.3
|
%
|
|
|
41.9
|
%
|
|
Adjusted Gross Profit Margin (Non-GAAP)
|
|
|
46.8
|
%
|
|
|
43.1
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Unallocated Corporate and Shared Services
|
|
|
|
|
|
|
|
|
|
Gross Profit (GAAP)
|
|
$
|
(326)
|
|
|
$
|
(307)
|
|
|
Amortization of intangible assets
|
|
|
—
|
|
|
|
—
|
|
|
Acquisition fair value adjustments
|
|
|
—
|
|
|
|
—
|
|
|
Adjusted Gross Profit (Non-GAAP)
|
|
$
|
(326)
|
|
|
$
|
(307)
|
|
|
|
|
|
|
|
|
|
|
|
|
GSI Group Inc.
|
|
|
|
|
|
|
|
|
|
Gross Profit (GAAP)
|
|
$
|
39,910
|
|
|
$
|
39,683
|
|
|
JK Lasers divestiture
|
|
|
—
|
|
|
|
(1,856)
|
|
|
Amortization of intangible assets
|
|
|
1,174
|
|
|
|
1,614
|
|
|
Acquisition fair value adjustments
|
|
|
33
|
|
|
|
51
|
|
|
Adjusted Gross Profit (Non-GAAP)
|
|
$
|
41,117
|
|
|
$
|
39,492
|
|
|
Gross Profit Margin (GAAP)
|
|
|
43.3
|
%
|
|
|
41.9
|
%
|
|
Adjusted Gross Profit Margin (Non-GAAP)
|
|
|
44.5
|
%
|
|
|
44.5
|
%
|
|
|
|
Adjusted Operating Income from Continuing Operations and
Adjusted EPS (Non-GAAP):
|
|
|
|
|
|
Three Months Ended October 2, 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
|
|
$
|
9,007
|
|
|
|
9.8
|
%
|
|
$
|
9,020
|
|
|
$
|
6,568
|
|
|
$
|
0.19
|
|
Non-GAAP Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amortization of intangible assets
|
|
|
3,027
|
|
|
|
3.3
|
%
|
|
|
3,027
|
|
|
|
1,490
|
|
|
|
0.04
|
|
Restructuring, divestiture and other costs
|
|
|
1,097
|
|
|
|
1.2
|
%
|
|
|
1,097
|
|
|
|
540
|
|
|
|
0.02
|
|
Acquisition related costs
|
|
|
282
|
|
|
|
0.3
|
%
|
|
|
282
|
|
|
|
139
|
|
|
|
0.00
|
|
Acquisition fair value adjustments
|
|
|
33
|
|
|
|
0.0
|
%
|
|
|
33
|
|
|
|
16
|
|
|
|
0.00
|
|
Gain on JK Lasers sale
|
|
|
—
|
|
|
|
—
|
|
|
|
5
|
|
|
|
4
|
|
|
|
0.00
|
|
Unrealized foreign currency loss on JK Lasers sale
|
|
|
—
|
|
|
|
—
|
|
|
|
(377)
|
|
|
|
(301)
|
|
|
|
(0.01)
|
|
Non-recurring income tax expenses (benefits)
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
61
|
|
|
|
0.00
|
|
Total non-GAAP adjustments
|
|
|
4,439
|
|
|
|
4.8
|
%
|
|
|
4,067
|
|
|
|
1,949
|
|
|
|
0.05
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted results (Non-GAAP)
|
|
$
|
13,446
|
|
|
|
14.6
|
%
|
|
$
|
13,087
|
|
|
$
|
8,517
|
|
|
$
|
0.24
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares outstanding - Diluted
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
35,055
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended September 26, 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
|
|
$
|
6,822
|
|
|
|
7.2
|
%
|
|
$
|
7,132
|
|
|
$
|
5,119
|
|
|
$
|
0.15
|
|
Non-GAAP Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amortization of intangible assets
|
|
|
4,457
|
|
|
|
4.7
|
%
|
|
|
4,457
|
|
|
|
3,021
|
|
|
|
0.09
|
|
Restructuring costs and other
|
|
|
638
|
|
|
|
0.7
|
%
|
|
|
638
|
|
|
|
432
|
|
|
|
0.01
|
|
Acquisition related costs
|
|
|
538
|
|
|
|
0.5
|
%
|
|
|
538
|
|
|
|
365
|
|
|
|
0.00
|
|
Acquisition fair value adjustments
|
|
|
51
|
|
|
|
0.1
|
%
|
|
|
51
|
|
|
|
34
|
|
|
|
0.00
|
|
Non-recurring income tax expenses (benefits)
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(840)
|
|
|
|
(0.02)
|
|
Total non-GAAP adjustments
|
|
|
5,684
|
|
|
|
6.0
|
%
|
|
|
5,684
|
|
|
|
3,012
|
|
|
|
0.08
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted results (Non-GAAP)
|
|
$
|
12,506
|
|
|
|
13.2
|
%
|
|
$
|
12,816
|
|
|
$
|
8,131
|
|
|
$
|
0.23
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares outstanding - Diluted
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
34,793
|
|
|
|
|
Adjusted EBITDA (Non-GAAP):
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
|
|
October 2,
|
|
|
September 26,
|
|
|
|
|
|
2015
|
|
|
2014
|
|
|
Consolidated net income (GAAP)
|
|
$
|
6,568
|
|
|
$
|
4,525
|
|
|
|
Interest (income) expense, net
|
|
|
1,248
|
|
|
|
1,453
|
|
|
|
Income tax provision
|
|
|
2,452
|
|
|
|
2,013
|
|
|
|
Depreciation and amortization
|
|
|
4,703
|
|
|
|
6,344
|
|
|
|
Share-based compensation
|
|
|
961
|
|
|
|
978
|
|
|
|
Restructuring, acquisition, divestiture related costs and other
|
|
|
1,379
|
|
|
|
1,176
|
|
|
|
Acquisition fair value adjustments
|
|
|
33
|
|
|
|
51
|
|
|
|
Loss from discontinued operations, net of tax
|
|
|
—
|
|
|
|
594
|
|
|
|
Other, net
|
|
|
(1,261)
|
|
|
|
(1,763)
|
|
|
|
Adjusted EBITDA (Non-GAAP)
|
|
$
|
16,083
|
|
|
$
|
15,371
|
|
|
|
|
|
|
|
Net Debt (Non-GAAP):
|
|
|
|
|
|
|
|
October 2, 2015
|
|
|
December 31, 2014
|
|
|
|
Total Debt (GAAP)
|
|
$
|
107,458
|
|
|
$
|
112,375
|
|
|
|
Plus: Deferred financing costs
|
|
|
1,917
|
|
|
|
2,625
|
|
|
|
Less: Cash and cash equivalents
|
|
|
(80,089)
|
|
|
|
(51,146)
|
|
|
|
Net Debt (Non-GAAP)
|
|
$
|
29,286
|
|
|
$
|
63,854
|
|
|
|
|
|
|
|
Organic Revenue Growth (Non-GAAP):
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
|
|
|
|
|
|
October 2, 2015
|
|
|
|
Reported decline (GAAP)
|
|
|
|
|
|
|
(2.5)
|
%
|
|
|
Less: Change attributable to acquisitions and divestitures
|
|
|
|
|
|
|
(2.3)
|
%
|
|
|
Plus: Change due to foreign currency
|
|
|
|
|
|
|
3.8
|
%
|
|
|
Organic growth (Non-GAAP)
|
|
|
|
|
|
|
3.6
|
%
|
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 revenue 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
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 and divestitures because
acquisition and divestiture 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 exclude the JK Lasers business to only show
the results of ongoing operations, as the JK Lasers business was sold
in April 2015. In addition, Adjusted Gross Profit and Adjusted Gross
Profit Margin excludes the amortization of acquired intangible assets
and revenue and inventory 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 and inventory 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 and divestiture related 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 and inventory
fair value adjustments related to business acquisitions, restructuring,
acquisition and divestiture related costs for the reasons described for
Adjusted Operating Income from Continuing Operations and Adjusted
Operating Margin above. In addition, the gain on sale of JK Lasers and
the related unrealized foreign exchange loss are excluded to only show
the results of our ongoing operations, as the JK Lasers business was
sold in April 2015.
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 and inventory fair value adjustments related to business
acquisitions, restructuring, acquisition and divestiture related costs,
the gain on sale of JK Lasers and the related unrealized foreign
exchange loss for the reasons described for Adjusted Income from
Continuing Operations before Income Taxes. In addition, the Company
excluded significant non-recurring income tax expenses (benefits)
related to releases of valuation allowances, benefits or expenses
associated with the completion of tax audits, 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 used in the diluted EPS calculation, the
calculation of Adjusted Diluted EPS from Continuing Operations excludes
amortization of acquired intangible assets and revenue and inventory
fair value adjustments related to business acquisitions, restructuring,
acquisition and divestiture related costs, the gain on sale of JK Lasers
and the related unrealized foreign exchange loss, significant
non-recurring income tax expenses (benefits) related to releases of
valuation allowances, benefits or expenses associated with the
completion of tax audits, 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
above for Adjusted Income from Continuing Operations, net of tax.
Adjusted EBITDA
The Company defines Adjusted EBITDA as the net income attributable to
GSI Group Inc. before deducting interest (income) expense, income taxes,
depreciation, amortization, non-cash share-based compensation,
restructuring, acquisition and divestiture related costs, acquisition
fair value adjustments, loss from discontinued operations, net of tax,
and other non-operating income (expense) items, including the gain on
the sale of JK Lasers, 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 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.
