- Company reaffirms prior Sales and Adjusted EBITDA guidance for 2014
- Company to report Fourth Quarter and Full Year 2014 financial results on March 4, 2015
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 equipment and advanced
industrial technology markets, today announced that it expects to record
a non-cash impairment charge in the range of $38 million to $43
million in the fourth quarter of 2014, related to its NDS Surgical
Imaging ("NDS") business. This non-cash accounting charge will not
impact the Company's liquidity, cash flows, compliance with its debt
covenants, or any future operations.
The Company determined that a write-down of the goodwill and intangible
assets related to NDS was required, following the Company's annual
budgeting and long-term strategic planning cycle, which established
lower expectations for sales and income for the business.
"While we are disappointed in the deterioration of the NDS financial
outlook, we continue to see meaningful strategic value and growth
opportunity in the business," said John Roush, Chief Executive Officer
of GSI Group Inc. "We are investing in new NDS products, as the business
plays a key role in our overall medical strategy. Our medical cross
selling initiative continues to surface attractive growth opportunities
across the Company. For the full year 2015, we expect the Company's
total sales from Medical customers, across all businesses, to be up
mid-to-low teens on a reported basis, and up mid-single digit on an
organic basis," added Mr. Roush.
As a result of the intangible asset impairment, the Company expects its
amortization expense in 2015 to be approximately $11 million, $3
million lower than originally anticipated as a consequence of this
charge.
The Company also re-affirmed that it expects its Sales and Adjusted
EBITDA for the full year of 2014 to be consistent with the guidance it
provided in its press release on November 5, 2014.
Investor Presentation
GSI Group Inc.'s Chief Executive Officer, John Roush will be presenting
at the CJS Securities 15th Annual Investor Conference in New York, and
the Needham & Company 17th Annual Growth Conference in New York. The
materials presented at the conference will also be available on the
Company's website, http://gsig.investorroom.com/presentations,
prior to the start of the presentations.
Fourth Quarter and Full Year 2014 Conference Call
GSI Group Inc. will release its fourth quarter and full year 2014
results on Wednesday, March 4, 2015. The Company will host the
conference call on Wednesday at 5:00 p.m. EST. John Roush, Chief
Executive Officer, and Robert Buckley, Chief Financial Officer, will
host the conference call and discuss these results.
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 the impact of the NDS impairment
charge on our liquidity, cash flows, compliance with debt covenants, and
future operations; future results and prospects of NDS; anticipated
amortization expense in 2015; growth opportunities created by our
medical cross selling initiative; expected sales from Medical customers
across our businesses; anticipated financial performance; 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; 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,
2013, 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 equipment and advanced
industrial technology markets. The Company's highly engineered enabling
technologies include 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. It specializes in collaborating with OEM customers to
adapt its component and subsystem technologies to deliver highly
differentiated performance in their customers' 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.