- Fourth Quarter 2015 Adjusted Earnings per Share ("EPS") of $0.29
- Full Year 2015 Adjusted Revenue of $368 million, 7.4% growth year over year
- Full Year 2015 GAAP Diluted Earnings per Share ("EPS") of $1.02
- Full Year 2015 Adjusted Earnings per Share ("Adjusted EPS") of $0.93
- Plan to rename company Novanta Inc. pending Shareholder Approval
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
fourth quarter and full year 2015.
Financial Highlights
|
|
Three Months Ended
|
|
Year Ended
|
(In millions, except per share amounts)
|
|
December 31,
|
|
December 31,
|
|
December 31,
|
|
December 31,
|
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
GAAP
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
$
|
90.2
|
|
$
|
94.0
|
|
$
|
373.6
|
|
$
|
364.7
|
Operating income (loss) from continuing operations
|
|
$
|
4.2
|
|
$
|
(34.2)
|
|
$
|
28.9
|
|
$
|
(16.8)
|
Diluted EPS from continuing operations
|
|
$
|
0.18
|
|
$
|
(0.82)
|
|
$
|
1.02
|
|
$
|
(0.49)
|
Non-GAAP*
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted Revenue
|
|
$
|
90.2
|
|
$
|
87.9
|
|
$
|
368.0
|
|
$
|
342.5
|
Adjusted operating income from continuing operations
|
|
$
|
11.7
|
|
$
|
12.5
|
|
$
|
49.9
|
|
$
|
44.7
|
Adjusted EPS
|
|
$
|
0.29
|
|
$
|
0.24
|
|
$
|
0.93
|
|
$
|
0.81
|
Adjusted EBITDA
|
|
$
|
14.4
|
|
$
|
15.3
|
|
$
|
61.1
|
|
$
|
56.4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
*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.
|
Fourth Quarter
During the fourth quarter of 2015, GSI generated GAAP revenue of $90.2
million, a decrease of (4%) from $94.0 million in the fourth quarter of
2014 due to the divestiture of JK Lasers. Adjusted Revenue in the fourth
quarter of 2015 was $90.2 million, an increase of 3% from $87.9
million in the fourth quarter of 2014.
In the fourth quarter of 2015, GAAP operating income from continuing
operations was $4.2 million, compared to a loss of ($34.2) million in
the fourth quarter of 2014. Adjusted operating income from continuing
operations was $11.7 million in the fourth quarter of 2015, compared
to $12.5 million in the fourth quarter of 2014.
GAAP Diluted EPS from continuing operations was $0.18 in the fourth
quarter of 2015, compared to a loss of ($0.82) in the fourth quarter of
2014. Adjusted EPS was $0.29 in the fourth quarter of 2015, compared
to $0.24 in the fourth quarter of 2014. The Company ended the fourth
quarter of 2015 with 34.8 million weighted average diluted common shares
outstanding. Adjusted EBITDA was $14.4 million in the fourth quarter of
2015.
Full Year
For the full year of 2015, GSI generated GAAP revenue of $373.6 million,
an increase of 2% from $364.7 million for the full year 2014. Adjusted
Revenue for the full year 2015 was $368.0 million, an increase of 7%
from $342.5 million for the full year 2014.
"I am very pleased with our results in 2015. We delivered on all of our
major financial objectives, and made tremendous progress with our
strategic goals. Adjusted Revenue was up more than 7%, Adjusted EBITDA
was up 8%, and Adjusted EPS was up 15%," said John Roush, Chief
Executive Officer. "We acquired three strong technology businesses to
enhance our product portfolio and competitive position, divested the
non-core JK Lasers business for an attractive valuation, and exited the
year with growth momentum in our medical applications, which served to
stabilize our revenue base, offsetting the impact of slowing demand in
some of our industrial markets."
For the full year 2015, GAAP operating income from continuing operations
was $28.9 million, compared to a loss of ($16.8) million for 2014.
Adjusted operating income from continuing operations was $49.9
million for the full year 2015, compared to $44.7 million for 2014. GAAP
Diluted EPS from continuing operations was $1.02 for the full year 2015,
compared to a loss of ($0.49) for 2014. Adjusted EPS was $0.93 for the
full year 2015, compared to $0.81 for 2014. Adjusted EBITDA was $61.1
million for the full year 2015, compared to $56.4 million for 2014.
As of December 31, 2015, cash and cash equivalents were $60 million,
while gross debt (excluding deferred borrowing costs of $1.7 million)
was $97.5 million. The Company completed 2015 with approximately $37.5
million of Net Debt, as defined in the non-GAAP reconciliation below.
Operating cash flow from continuing operations for the full year 2015
was $33.4 million.
Financial Outlook
"Our strategic shift into medical applications, cost reduction actions
that started in the third quarter of 2015, our robust continuous
improvement program, and investments in our new product development
engine give us confidence that we can continue to drive profitable
growth for the full year 2016, despite a fairly challenging industrial
capital spending environment," said Robert Buckley, Chief Financial
Officer.
For the full year 2016, the Company expects Adjusted Revenue to be up
mid-single digits, in the range of $375 million to $390 million. This
compares to Adjusted Revenue of $368 million in the full year 2015. The
Company also expects Adjusted EPS to be up 8% to 10%, compared to
adjusted EPS of $0.93 delivered in the full year 2015. In addition, the
Company expects Adjusted EBITDA growth to be mid-single to high-single
digits.
For the first quarter of 2016, the Company expects Adjusted Revenue to
be relatively flat, in comparison to $89 million of Adjusted Revenue in
the first quarter of 2015. The Company expects Adjusted EPS to be in the
range of $0.17 to $0.18, presuming no significant gains or losses from
foreign exchange, and Adjusted EBITDA to be approximately $13 million,
which is impacted by redundant costs associated with two production line
moves occurring in the first half of 2016.
GSI to Rename Company Novanta Inc.
The Company plans to seek shareholder approval to change its name to
Novanta Inc. at its May 2016 annual shareholder meeting.
"The Company has made a significant strategic transformation over the
last few years. We have now positioned ourselves as a leading provider
of precision component and subsystem technologies to Original Equipment
Manufacturers in the medical and advanced industrial markets, while
shifting away from our legacy focus on the semiconductor capital
equipment market," said John Roush, Chief Executive Officer. "We are
renaming the Company to emphasize our new direction and we intend to
build a globally recognizable brand that reinforces our vision and
strategy."
"The name Novanta stands for
The
Innovation Advantage
, as innovation and technical
collaboration with customers are at the core of the Company's value
proposition," added Mr. Roush.
If the name change to Novanta is formally approved by shareholders, the
Company plans to change its NASDAQ ticker symbol from "GSIG" to "NOVT."
The timing of the ticker symbol change will be announced at a later
date. The Company's web domain will also change to www.novanta.com.
Conference Call Information
The Company will host a conference call on Wednesday, March 2,
2016 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 19311554.
A playback of this conference call will be available beginning 8:00 p.m.
ET, Wednesday, March 2, 2016. The playback phone number is (855)
859-2056 or (404) 537-3406 and the code number is 19311554. The playback
will remain available until 11:00 p.m. ET, Thursday, March 24, 2016.
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 Operating Income (Loss) from Continuing Operations,
Adjusted Operating Margin, Adjusted Income from Continuing Operations
before Income Taxes, Adjusted Income from Continuing Operations, net of
tax, Adjusted Diluted 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 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 growth momentum in our medical
applications; our ability to generate profitable growth; plans to change
the Company's name and ticker symbol; building a globally recognizable
brand; 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 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 exposure to the credit risk of some of our customers and in
weakened markets; 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,
2015, 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 December 31,
|
|
|
Year Ended December 31,
|
|
|
2015
|
|
2014
|
|
|
2015
|
|
2014
|
Revenue
|
|
$
|
90,219
|
|
$
|
94,012
|
|
|
$
|
373,598
|
|
$
|
364,706
|
Cost of revenue
|
|
|
53,590
|
|
|
54,284
|
|
|
|
215,708
|
|
|
214,539
|
Gross profit
|
|
|
36,629
|
|
|
39,728
|
|
|
|
157,890
|
|
|
150,167
|
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Research and development and engineering
|
|
|
7,295
|
|
|
7,837
|
|
|
|
31,043
|
|
|
28,954
|
Selling, general and administrative
|
|
|
19,080
|
|
|
21,840
|
|
|
|
82,049
|
|
|
84,380
|
Amortization of purchased intangible assets
|
|
|
2,018
|
|
|
2,799
|
|
|
|
7,611
|
|
|
10,262
|
Restructuring, acquisition and divestiture related costs
|
|
|
4,022
|
|
|
(14)
|
|
|
|
8,254
|
|
|
1,935
|
Impairment of goodwill and intangible assets
|
|
|
—
|
|
|
41,442
|
|
|
|
—
|
|
|
41,442
|
Total operating expenses
|
|
|
32,415
|
|
|
73,904
|
|
|
|
128,957
|
|
|
166,973
|
Operating income (loss) from continuing operations
|
|
|
4,214
|
|
|
(34,176)
|
|
|
|
28,933
|
|
|
(16,806)
|
Interest income (expense), net
|
|
|
(1,162)
|
|
|
(1,431)
|
|
|
|
(5,180)
|
|
|
(5,096)
|
Foreign exchange transaction gains (losses), net
|
|
|
2,232
|
|
|
331
|
|
|
|
(23)
|
|
|
1,281
|
Other income (expense), net
|
|
|
655
|
|
|
973
|
|
|
|
2,663
|
|
|
2,706
|
Gain (loss) on disposal of business
|
|
|
(4)
|
|
|
—
|
|
|
|
19,629
|
|
|
—
|
Income (loss) from continuing operations before income taxes
|
|
|
5,935
|
|
|
(34,303)
|
|
|
|
46,022
|
|
|
(17,915)
|
Income tax provision (benefit)
|
|
|
(168)
|
|
|
(6,013)
|
|
|
|
10,394
|
|
|
(1,006)
|
Income (loss) from continuing operations
|
|
|
6,103
|
|
|
(28,290)
|
|
|
|
35,628
|
|
|
(16,909)
|
Loss from discontinued operations, net of tax
|
|
|
—
|
|
|
(790)
|
|
|
|
(13)
|
|
|
(5,607)
|
Loss on disposal of discontinued operations, net of tax
|
|
|
—
|
|
|
(1,405)
|
|
|
|
—
|
|
|
(1,726)
|
Consolidated net income (loss)
|
|
|
6,103
|
|
|
(30,485)
|
|
|
|
35,615
|
|
|
(24,242)
|
Less: Net income (loss) attributable to noncontrolling interest
|
|
|
—
|
|
|
—
|
|
|
|
—
|
|
|
(10)
|
Net income (loss) attributable to GSI Group Inc.
|
|
$
|
6,103
|
|
$
|
(30,485)
|
|
|
$
|
35,615
|
|
$
|
(24,252)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings (loss) per common share from continuing operations:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
0.18
|
|
$
|
(0.82)
|
|
|
$
|
1.03
|
|
$
|
(0.49)
|
Diluted
|
|
$
|
0.18
|
|
$
|
(0.82)
|
|
|
$
|
1.02
|
|
$
|
(0.49)
|
Loss per common share from discontinued operations:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
—
|
|
$
|
(0.06)
|
|
|
$
|
(0.00)
|
|
$
|
(0.21)
|
Diluted
|
|
$
|
—
|
|
$
|
(0.06)
|
|
|
$
|
(0.00)
|
|
$
|
(0.21)
|
Earnings (loss) per common share attributable to GSI Group Inc.:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
0.18
|
|
$
|
(0.88)
|
|
|
$
|
1.03
|
|
$
|
(0.70)
|
Diluted
|
|
$
|
0.18
|
|
$
|
(0.88)
|
|
|
$
|
1.02
|
|
$
|
(0.70)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average common shares outstanding—basic
|
|
|
34,581
|
|
|
34,405
|
|
|
|
34,579
|
|
|
34,352
|
Weighted average common shares outstanding—diluted
|
|
|
34,811
|
|
|
34,405
|
|
|
|
34,827
|
|
|
34,352
|
GSI GROUP INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands of U.S. dollars)
(Unaudited)
|
|
|
|
December 31,
|
|
December 31,
|
|
|
2015
|
|
2014
|
ASSETS
|
|
|
|
|
|
|
Current Assets
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
59,959
|
|
$
|
51,146
|
Accounts receivable, net
|
|
|
57,188
|
|
|
51,494
|
Inventories
|
|
|
59,566
|
|
|
62,943
|
Other current assets
|
|
|
8,499
|
|
|
16,958
|
Assets of discontinued operations
|
|
|
—
|
|
|
631
|
Total current assets
|
|
|
185,212
|
|
|
183,172
|
Property, plant and equipment, net
|
|
|
40,550
|
|
|
40,088
|
Intangible assets, net
|
|
|
66,269
|
|
|
67,242
|
Goodwill
|
|
|
103,456
|
|
|
90,746
|
Other assets
|
|
|
20,558
|
|
|
15,046
|
Total assets
|
|
$
|
416,045
|
|
$
|
396,294
|
LIABILITIES AND STOCKHOLDERS' EQUITY
|
|
|
|
|
|
|
Current Liabilities
|
|
|
|
|
|
|
Current portion of long-term debt
|
|
$
|
7,385
|
|
$
|
7,345
|
Accounts payable
|
|
|
24,401
|
|
|
25,592
|
Accrued expenses and other current liabilities
|
|
|
25,167
|
|
|
20,798
|
Liabilities of discontinued operations
|
|
|
—
|
|
|
324
|
Total current liabilities
|
|
|
56,953
|
|
|
54,059
|
Long-term debt
|
|
|
88,426
|
|
|
105,030
|
Other long-term liabilities
|
|
|
25,965
|
|
|
25,951
|
Total liabilities
|
|
|
171,344
|
|
|
185,040
|
Stockholders' Equity:
|
|
|
|
|
|
|
Total GSI Group Inc. stockholders' equity
|
|
|
244,701
|
|
|
210,825
|
Noncontrolling interest
|
|
|
—
|
|
|
429
|
Total stockholders' equity
|
|
|
244,701
|
|
|
211,254
|
Total liabilities and stockholders' equity
|
|
$
|
416,045
|
|
$
|
396,294
|
GSI GROUP INC.
CONDENSED CONSOLIDATED STATEMENTS OF
CASH FLOWS
(In thousands of U.S. dollars)
(Unaudited)
|
|
|
|
Three Months Ended December 31,
|
|
Year Ended December 31,
|
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
Cash flows from operating activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated net income (loss)
|
|
$
|
6,103
|
|
$
|
(30,485)
|
|
$
|
35,615
|
|
$
|
(24,242)
|
Less: Loss from discontinued operations, net of tax
|
|
|
—
|
|
|
2,195
|
|
|
13
|
|
|
7,333
|
Income (loss) from continuing operations
|
|
|
6,103
|
|
|
(28,290)
|
|
|
35,628
|
|
|
(16,909)
|
Adjustments to reconcile income (loss) from continuing operations to
net cash provided by operating activities of continuing operations:
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization
|
|
|
5,026
|
|
|
6,302
|
|
|
19,114
|
|
|
23,797
|
Share-based compensation
|
|
|
893
|
|
|
917
|
|
|
4,387
|
|
|
4,329
|
Impairment of goodwill and intangible assets
|
|
|
—
|
|
|
41,442
|
|
|
—
|
|
|
41,442
|
Loss (gain) on disposal of business
|
|
|
4
|
|
|
—
|
|
|
(19,629)
|
|
|
—
|
Deferred income taxes
|
|
|
(5,474)
|
|
|
(5,083)
|
|
|
(1,692)
|
|
|
(6,736)
|
Earnings from equity-method investment
|
|
|
(650)
|
|
|
(993)
|
|
|
(2,657)
|
|
|
(2,700)
|
Other non-cash items
|
|
|
1,996
|
|
|
671
|
|
|
4,707
|
|
|
3,797
|
Changes in assets and liabilities which provided (used) cash,
excluding effects from businesses purchased or classified as held
for sale:
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts receivable
|
|
|
(530)
|
|
|
4,361
|
|
|
(7,526)
|
|
|
3,526
|
Inventories
|
|
|
2,014
|
|
|
(1,107)
|
|
|
(3,338)
|
|
|
(991)
|
Other operating assets and liabilities
|
|
|
(1,429)
|
|
|
(8,645)
|
|
|
4,435
|
|
|
(5,565)
|
Net cash provided by operating activities of continuing operations
|
|
|
7,953
|
|
|
9,575
|
|
|
33,429
|
|
|
43,990
|
Net cash used in operating activities of discontinued operations
|
|
|
—
|
|
|
(940)
|
|
|
(13)
|
|
|
(1,701)
|
Net cash provided by operating activities
|
|
|
7,953
|
|
|
8,635
|
|
|
33,416
|
|
|
42,289
|
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
Purchases of property, plant and equipment
|
|
|
(1,441)
|
|
|
(1,632)
|
|
|
(5,552)
|
|
|
(5,415)
|
Acquisition of businesses, net of cash acquired and escrow recovery
|
|
|
(12,939)
|
|
|
—
|
|
|
(25,987)
|
|
|
(88,238)
|
Proceeds from the sale of business, net of transaction costs
|
|
|
—
|
|
|
—
|
|
|
29,570
|
|
|
—
|
Proceeds from the sale of property, plant and equipment
|
|
|
4
|
|
|
55
|
|
|
127
|
|
|
112
|
Net cash used in investing activities of continuing operations
|
|
|
(14,376)
|
|
|
(1,577)
|
|
|
(1,842)
|
|
|
(93,541)
|
Net cash provided by (used in) investing activities of discontinued
operations
|
|
|
209
|
|
|
(576)
|
|
|
209
|
|
|
3,768
|
Net cash used in investing activities
|
|
|
(14,167)
|
|
|
(2,153)
|
|
|
(1,633)
|
|
|
(89,773)
|
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
Borrowings under revolving credit facility
|
|
|
—
|
|
|
—
|
|
|
13,000
|
|
|
77,000
|
Repayments of long-term debt and revolving credit facility
|
|
|
(11,875)
|
|
|
(6,875)
|
|
|
(30,500)
|
|
|
(33,500)
|
Other financing activities
|
|
|
(1,216)
|
|
|
(435)
|
|
|
(4,035)
|
|
|
(3,219)
|
Net cash provided by (used in) financing activities of continuing
operations
|
|
|
(13,091)
|
|
|
(7,310)
|
|
|
(21,535)
|
|
|
40,281
|
Net cash provided by (used in) financing activities of discontinued
operations
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
Net cash provided by (used in ) financing activities
|
|
|
(13,091)
|
|
|
(7,310)
|
|
|
(21,535)
|
|
|
40,281
|
Effect of exchange rates on cash and cash equivalents
|
|
|
(825)
|
|
|
(1,575)
|
|
|
(1,435)
|
|
|
(2,631)
|
Increase (decrease) in cash and cash equivalents
|
|
|
(20,130)
|
|
|
(2,403)
|
|
|
8,813
|
|
|
(9,834)
|
Cash and cash equivalents, beginning of period
|
|
|
80,089
|
|
|
53,549
|
|
|
51,146
|
|
|
60,980
|
Cash and cash equivalents, end of period
|
|
$
|
59,959
|
|
$
|
51,146
|
|
$
|
59,959
|
|
$
|
51,146
|
Reconciliation of GAAP to Non-GAAP Financial Measures
(In
thousands of U.S. dollars)
(Unaudited)
|
|
Adjusted Revenue by Segment (Non-GAAP):
|
|
|
|
Three Months Ended December 31,
|
|
Year Ended December 31,
|
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
Laser Products
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue (GAAP)
|
|
$
|
39,856
|
|
$
|
46,232
|
|
$
|
168,331
|
|
$
|
177,726
|
JK Lasers divestiture
|
|
|
—
|
|
|
(6,132)
|
|
|
(5,731)
|
|
|
(22,425)
|
Acquisition fair value adjustments
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
Adjusted Revenue (Non-GAAP)
|
|
$
|
39,856
|
|
$
|
40,100
|
|
$
|
162,600
|
|
$
|
155,301
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Vision Technologies
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue (GAAP)
|
|
$
|
31,406
|
|
$
|
32,349
|
|
$
|
124,725
|
|
$
|
122,187
|
Acquisition fair value adjustments
|
|
|
28
|
|
|
49
|
|
|
143
|
|
|
220
|
Adjusted Revenue (Non-GAAP)
|
|
$
|
31,434
|
|
$
|
32,398
|
|
$
|
124,868
|
|
$
|
122,407
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Precision Motion
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue (GAAP)
|
|
$
|
18,957
|
|
$
|
15,431
|
|
$
|
80,542
|
|
$
|
64,793
|
Acquisition fair value adjustments
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
Adjusted Revenue (Non-GAAP)
|
|
$
|
18,957
|
|
$
|
15,431
|
|
$
|
80,542
|
|
$
|
64,793
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GSI Group Inc.
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue (GAAP)
|
|
$
|
90,219
|
|
$
|
94,012
|
|
$
|
373,598
|
|
$
|
364,706
|
JK Lasers divestiture
|
|
|
—
|
|
|
(6,132)
|
|
|
(5,731)
|
|
|
(22,425)
|
Acquisition fair value adjustments
|
|
|
28
|
|
|
49
|
|
|
143
|
|
|
220
|
Adjusted Revenue (Non-GAAP)
|
|
$
|
90,247
|
|
$
|
87,929
|
|
$
|
368,010
|
|
$
|
342,501
|
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 December 31,
|
|
|
Year Ended December 31,
|
|
|
|
2015
|
|
|
2014
|
|
|
2015
|
|
|
2014
|
|
Laser Products
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross Profit (GAAP)
|
|
$
|
16,426
|
|
|
$
|
19,787
|
|
|
$
|
73,602
|
|
|
$
|
74,224
|
|
JK Lasers divestiture
|
|
|
—
|
|
|
|
(1,863)
|
|
|
|
(1,587)
|
|
|
|
(6,478)
|
|
Amortization of intangible assets
|
|
|
585
|
|
|
|
516
|
|
|
|
2,133
|
|
|
|
2,064
|
|
Acquisition fair value adjustments
|
|
|
215
|
|
|
|
—
|
|
|
|
215
|
|
|
|
—
|
|
Adjusted Gross Profit (Non-GAAP)
|
|
$
|
17,226
|
|
|
$
|
18,440
|
|
|
$
|
74,363
|
|
|
$
|
69,810
|
|
Gross Profit Margin (GAAP)
|
|
|
41.2
|
%
|
|
|
42.8
|
%
|
|
|
43.7
|
%
|
|
|
41.8
|
%
|
Adjusted Gross Profit Margin (Non-GAAP)
|
|
|
43.2
|
%
|
|
|
46.0
|
%
|
|
|
45.7
|
%
|
|
|
45.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Vision Technologies
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross Profit (GAAP)
|
|
$
|
12,143
|
|
|
$
|
13,006
|
|
|
$
|
48,966
|
|
|
$
|
48,678
|
|
Amortization of intangible assets
|
|
|
547
|
|
|
|
900
|
|
|
|
2,188
|
|
|
|
3,287
|
|
Acquisition fair value adjustments
|
|
|
28
|
|
|
|
52
|
|
|
|
143
|
|
|
|
596
|
|
Adjusted Gross Profit (Non-GAAP)
|
|
$
|
12,718
|
|
|
$
|
13,958
|
|
|
$
|
51,297
|
|
|
$
|
52,561
|
|
Gross Profit Margin (GAAP)
|
|
|
38.7
|
%
|
|
|
40.2
|
%
|
|
|
39.3
|
%
|
|
|
39.8
|
%
|
Adjusted Gross Profit Margin (Non-GAAP)
|
|
|
40.5
|
%
|
|
|
43.1
|
%
|
|
|
41.1
|
%
|
|
|
43.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Precision Motion
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross Profit (GAAP)
|
|
$
|
8,400
|
|
|
$
|
7,192
|
|
|
$
|
36,709
|
|
|
$
|
28,333
|
|
Amortization of intangible assets
|
|
|
111
|
|
|
|
198
|
|
|
|
389
|
|
|
|
792
|
|
Acquisition fair value adjustments
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
Adjusted Gross Profit (Non-GAAP)
|
|
$
|
8,511
|
|
|
$
|
7,390
|
|
|
$
|
37,098
|
|
|
$
|
29,125
|
|
Gross Profit Margin (GAAP)
|
|
|
44.3
|
%
|
|
|
46.6
|
%
|
|
|
45.6
|
%
|
|
|
43.7
|
%
|
Adjusted Gross Profit Margin (Non-GAAP)
|
|
|
44.9
|
%
|
|
|
47.9
|
%
|
|
|
46.1
|
%
|
|
|
45.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unallocated Corporate and Shared Services
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross Profit (GAAP)
|
|
$
|
(340)
|
|
|
$
|
(257)
|
|
|
$
|
(1,387)
|
|
|
$
|
(1,068)
|
|
Amortization of intangible assets
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
Acquisition fair value adjustments
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
Adjusted Gross Profit (Non-GAAP)
|
|
$
|
(340)
|
|
|
$
|
(257)
|
|
|
$
|
(1,387)
|
|
|
$
|
(1,068)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GSI Group Inc.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross Profit (GAAP)
|
|
$
|
36,629
|
|
|
$
|
39,728
|
|
|
$
|
157,890
|
|
|
$
|
150,167
|
|
JK Lasers divestiture
|
|
|
—
|
|
|
|
(1,863)
|
|
|
|
(1,587)
|
|
|
|
(6,478)
|
|
Amortization of intangible assets
|
|
|
1,243
|
|
|
|
1,614
|
|
|
|
4,710
|
|
|
|
6,143
|
|
Acquisition fair value adjustments
|
|
|
243
|
|
|
|
52
|
|
|
|
358
|
|
|
|
596
|
|
Adjusted Gross Profit (Non-GAAP)
|
|
$
|
38,115
|
|
|
$
|
39,531
|
|
|
$
|
161,371
|
|
|
$
|
150,428
|
|
Gross Profit Margin (GAAP)
|
|
|
40.6
|
%
|
|
|
42.2
|
%
|
|
|
42.3
|
%
|
|
|
41.2
|
%
|
Adjusted Gross Profit Margin (Non-GAAP)
|
|
|
42.2
|
%
|
|
|
45.0
|
%
|
|
|
43.8
|
%
|
|
|
43.9
|
%
|
Reconciliation of GAAP to Non-GAAP Financial Measures
(In
thousands of U.S. dollars)
(Unaudited)
|
|
Adjusted Operating Income from Continuing Operations and
Adjusted EPS (Non-GAAP):
|
|
|
|
Three Months Ended December 31, 2015
|
|
|
Operating Income (Loss) from Continuing Operations
|
|
Operating Margin
|
|
|
Income (Loss) from Continuing Operations before
Income Taxes
|
|
Income (Loss) from Continuing Operations, Net of
Tax
|
|
Diluted EPS from Continuing Operations
|
GAAP results
|
|
$
|
4,214
|
|
|
4.7
|
%
|
|
$
|
5,935
|
|
$
|
6,103
|
|
$
|
0.18
|
Non-GAAP Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amortization of intangible assets
|
|
|
3,262
|
|
|
3.6
|
%
|
|
|
3,262
|
|
|
1,826
|
|
|
0.05
|
Restructuring, divestiture and other costs
|
|
|
2,653
|
|
|
2.9
|
%
|
|
|
2,653
|
|
|
1,486
|
|
|
0.05
|
Acquisition related costs
|
|
|
1,369
|
|
|
1.5
|
%
|
|
|
1,369
|
|
|
767
|
|
|
0.02
|
Acquisition fair value adjustments
|
|
|
243
|
|
|
0.3
|
%
|
|
|
243
|
|
|
136
|
|
|
0.00
|
Loss on JK Lasers sale
|
|
|
—
|
|
|
—
|
|
|
|
4
|
|
|
3
|
|
|
0.00
|
Unrealized foreign currency loss on JK Lasers sale
|
|
|
—
|
|
|
—
|
|
|
|
118
|
|
|
94
|
|
|
0.00
|
Non-recurring income tax expenses
|
|
|
—
|
|
|
—
|
|
|
|
—
|
|
|
(356)
|
|
|
(0.01)
|
Total non-GAAP adjustments
|
|
|
7,527
|
|
|
8.3
|
%
|
|
|
7,649
|
|
|
3,956
|
|
|
0.11
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP results
|
|
$
|
11,741
|
|
|
13.0
|
%
|
|
$
|
13,584
|
|
$
|
10,059
|
|
$
|
0.29
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares outstanding - Diluted
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
34,811
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended December 31, 2014
|
|
|
Operating Income (Loss) from Continuing Operations
|
|
Operating Margin
|
|
|
Income (Loss) from Continuing Operations before
Income Taxes
|
|
Income (Loss) from Continuing Operations, Net of Tax
|
|
Diluted EPS from Continuing Operations
|
GAAP results
|
|
$
|
(34,176)
|
|
|
(36.4)%
|
|
|
$
|
(34,303)
|
|
$
|
(28,290)
|
|
$
|
(0.82)
|
Non-GAAP Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amortization of intangible assets
|
|
|
4,413
|
|
|
4.7
|
%
|
|
|
4,413
|
|
|
3,365
|
|
|
0.10
|
Restructuring costs and other
|
|
|
1,092
|
|
|
1.2
|
%
|
|
|
1,092
|
|
|
832
|
|
|
0.02
|
Acquisition related costs
|
|
|
(354)
|
|
|
(0.4)%
|
|
|
|
(354)
|
|
|
(270)
|
|
|
(0.00)
|
Acquisition fair value adjustments
|
|
|
52
|
|
|
0.1
|
%
|
|
|
52
|
|
|
40
|
|
|
0.00
|
Impairment of goodwill and intangible assets
|
|
|
41,442
|
|
|
44.1
|
%
|
|
|
41,442
|
|
|
31,595
|
|
|
0.91
|
Non-recurring income tax expenses
|
|
|
—
|
|
|
—
|
|
|
|
—
|
|
|
1,081
|
|
|
0.03
|
Total non-GAAP adjustments
|
|
|
46,645
|
|
|
49.7
|
%
|
|
|
46,645
|
|
|
36,643
|
|
|
1.06
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP results
|
|
$
|
12,469
|
|
|
13.3
|
%
|
|
$
|
12,342
|
|
$
|
8,353
|
|
$
|
0.24
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares outstanding - Diluted
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
34,897
|
Reconciliation of GAAP to Non-GAAP Financial Measures
(In
thousands of U.S. dollars)
(Unaudited)
|
|
|
|
Twelve Months Ended December 31, 2015
|
|
|
Operating Income (Loss) from Continuing Operations
|
|
Operating Margin
|
|
|
Income (Loss) from Continuing Operations before
Income Taxes
|
|
Income (Loss) from Continuing Operations, Net of
Tax
|
|
Diluted EPS from Continuing Operations
|
GAAP results
|
|
$
|
28,933
|
|
|
7.7
|
%
|
|
$
|
46,022
|
|
$
|
35,628
|
|
$
|
1.02
|
Non-GAAP Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amortization of intangible assets
|
|
|
12,323
|
|
|
3.3
|
%
|
|
|
12,323
|
|
|
7,534
|
|
|
0.22
|
Restructuring, divestiture and other costs
|
|
|
6,970
|
|
|
1.9
|
%
|
|
|
6,970
|
|
|
4,237
|
|
|
0.12
|
Acquisition related costs
|
|
|
1,303
|
|
|
0.4
|
%
|
|
|
1,303
|
|
|
646
|
|
|
0.02
|
Acquisition fair value adjustments
|
|
|
358
|
|
|
0.1
|
%
|
|
|
358
|
|
|
209
|
|
|
0.00
|
Gain on JK Lasers sale
|
|
|
—
|
|
|
—
|
|
|
|
(19,629)
|
|
|
(15,666)
|
|
|
(0.45)
|
Unrealized foreign currency loss on JK Lasers sale
|
|
|
|
|
|
|
|
|
|
1,350
|
|
|
1,079
|
|
|
0.03
|
Non-recurring income tax expenses
|
|
|
—
|
|
|
—
|
|
|
|
—
|
|
|
(1,171)
|
|
|
(0.03)
|
Total non-GAAP adjustments
|
|
|
20,954
|
|
|
5.7
|
%
|
|
|
2,675
|
|
|
(3,132)
|
|
|
(0.09)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP results
|
|
$
|
49,887
|
|
|
13.4
|
%
|
|
$
|
48,697
|
|
$
|
32,496
|
|
$
|
0.93
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares outstanding - Diluted
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
34,827
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Twelve Months Ended December 31, 2014
|
|
|
Operating Income (Loss) from Continuing Operations
|
|
Operating Margin
|
|
|
Income (Loss) from Continuing Operations before
Income Taxes
|
|
Income (Loss) from Continuing Operations, Net of
Tax
|
|
Diluted EPS from Continuing Operations
|
GAAP results
|
|
$
|
(16,806)
|
|
|
(4.6)%
|
|
|
$
|
(17,915)
|
|
$
|
(16,909)
|
|
$
|
(0.49)
|
Non-GAAP Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amortization of intangible assets
|
|
|
16,405
|
|
|
4.5
|
%
|
|
|
16,405
|
|
|
11,628
|
|
|
0.34
|
Restructuring costs and other
|
|
|
1,570
|
|
|
0.4
|
%
|
|
|
1,570
|
|
|
1,153
|
|
|
0.03
|
Acquisition related costs
|
|
|
1,522
|
|
|
0.4
|
%
|
|
|
1,522
|
|
|
1,025
|
|
|
0.03
|
Acquisition fair value adjustments
|
|
|
596
|
|
|
0.2
|
%
|
|
|
596
|
|
|
417
|
|
|
0.01
|
Impairment of goodwill and intangible assets
|
|
|
41,442
|
|
|
11.4
|
%
|
|
|
41,442
|
|
|
31,595
|
|
|
0.91
|
Non-recurring income tax expenses
|
|
|
—
|
|
|
—
|
|
|
|
—
|
|
|
(871)
|
|
|
(0.02)
|
Total non-GAAP adjustments
|
|
|
61,535
|
|
|
16.9
|
%
|
|
|
61,535
|
|
|
44,947
|
|
|
1.30
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP results
|
|
$
|
44,729
|
|
|
12.3
|
%
|
|
$
|
43,620
|
|
$
|
28,038
|
|
$
|
0.81
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares outstanding - Diluted
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
34,769
|
Reconciliation of GAAP to Non-GAAP Financial Measures
(In
thousands of U.S. dollars)
(Unaudited)
|
|
Adjusted EBITDA (Non-GAAP):
|
|
|
|
Three Months Ended December 31,
|
|
Year Ended December 31,
|
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
Net income (loss) attributable to GSI Group Inc. (GAAP)
|
|
$
|
6,103
|
|
$
|
(30,485)
|
|
$
|
35,615
|
|
$
|
(24,252)
|
Interest (income) expense, net
|
|
|
1,162
|
|
|
1,431
|
|
|
5,180
|
|
|
5,096
|
Income tax provision (benefit)
|
|
|
(168)
|
|
|
(6,013)
|
|
|
10,394
|
|
|
(1,006)
|
Depreciation and amortization
|
|
|
5,026
|
|
|
6,302
|
|
|
19,114
|
|
|
23,797
|
Share-based compensation
|
|
|
893
|
|
|
917
|
|
|
4,387
|
|
|
4,329
|
Impairment of goodwill and intangible assets
|
|
|
—
|
|
|
41,442
|
|
|
—
|
|
|
41,442
|
Restructuring, acquisition, divestiture and other costs
|
|
|
4,022
|
|
|
738
|
|
|
8,273
|
|
|
3,091
|
Acquisition fair value adjustments
|
|
|
243
|
|
|
52
|
|
|
358
|
|
|
596
|
Loss from discontinued operations, net of tax
|
|
|
—
|
|
|
790
|
|
|
13
|
|
|
5,607
|
Loss on disposal of discontinued operations, net of tax
|
|
|
—
|
|
|
1,405
|
|
|
—
|
|
|
1,726
|
Loss (gain) on disposal of business
|
|
|
4
|
|
|
—
|
|
|
(19,629)
|
|
|
—
|
Other, net
|
|
|
(2,887)
|
|
|
(1,304)
|
|
|
(2,640)
|
|
|
(3,987)
|
Adjusted EBITDA (Non-GAAP)
|
|
$
|
14,398
|
|
$
|
15,275
|
|
$
|
61,065
|
|
$
|
56,439
|
Net Debt (Non-GAAP):
|
|
|
|
December 31, 2015
|
|
December 31, 2014
|
Total Debt (GAAP)
|
|
$
|
95,811
|
|
$
|
112,375
|
Plus: Deferred financing costs
|
|
|
1,689
|
|
|
2,625
|
Gross Debt
|
|
|
97,500
|
|
|
115,000
|
Less: cash and cash equivalents
|
|
|
(59,959)
|
|
|
(51,146)
|
Net Debt (Non-GAAP)
|
|
$
|
37,541
|
|
$
|
63,854
|
Organic Revenue Growth (Non-GAAP):
|
|
|
|
Three Months Ended
December 31, 2015
|
|
|
Year Ended
December 31, 2015
|
|
Reported revenue growth (GAAP)
|
|
|
(4.0)
|
%
|
|
|
2.4
|
%
|
Less: Change attributable to acquisitions and divestitures
|
|
|
(0.3)
|
%
|
|
|
2.8
|
%
|
Plus: Change due to foreign currency
|
|
|
2.5
|
%
|
|
|
4.0
|
%
|
Organic revenue growth (Non-GAAP)
|
|
|
(1.2)
|
%
|
|
|
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, divestitures, and product
line closures because these 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 on the U.S. dollar sales
proceeds held by our U.K. subsidiary 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 on the U.S. dollar sales proceeds held by our U.K.
subsidiary 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 on the U.S. dollar
sales proceeds held by our U.K. subsidiary, 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 as reported on the
consolidated balance sheet as of the end of the period plus unamortized
deferred financing costs and 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.