GSI Group Inc. Announces NASDAQ Delisting and Reports Progress on Revenue Recognition Review and Preliminary Third Quarter 2009
November 04 2009 - 6:33PM
PR Newswire (US)
BEDFORD, Mass., Nov. 4 /PRNewswire-FirstCall/ -- GSI Group Inc.
(the "Company") (NASDAQ:GSIG), a supplier of precision technology
and semiconductor systems, today announced that it received
notification from the Nasdaq Hearings Panel that the Panel has
determined to delist the Company's shares from the Nasdaq Stock
Market and will suspend trading in the Company's shares effective
at the open of business on November 5, 2009. The Panel's
determination was made in connection with the Company's
non-compliance with the filing requirements set forth in Listing
Rule 5250(c)(1) due to the delayed filing of certain of its
periodic reports. As provided under applicable Nasdaq rules, the
Company intends to request a review of the Panel's determination by
the Nasdaq Listing and Hearing Review Council. The request for
review will not operate as a stay of the Panel's determination to
delist the Company's securities. In addition, in accordance with
Nasdaq rules, both the Listing Council and the Board of Directors
of The Nasdaq Stock Market LLC may call the Panel's decision for
review. Under the applicable Nasdaq rules, the Listing Council
cannot grant an exception to the Company beyond November 2, 2009
(which is 360 days from the due date of the first late periodic
report). The Listing Council may, in its discretion, recommend that
the Nasdaq Board consider the matter further. However, there can be
no assurances that the Company's request for review will be
successful, that either the Listing Council or the Nasdaq Board
will call the decision for review, or that the Company's common
stock will not be delisted. The Company anticipates that its common
stock will be quoted on the Pink OTC Markets Inc. automatically and
immediately after Nasdaq suspends trading. The trading symbol of
the Company's common stock will continue to be "GSIG." As
previously disclosed, the Company previously requested and was
granted a hearing before the Panel. The Panel determined to grant
the Company's request for continued listing on Nasdaq conditioned
on the Company (i) reporting to the Panel on or before August 31,
2009 the status of its public disclosure about the range of
adjustments the Company expects to make to revenue transactions in
its Precision Technology Segment for 2004 through 2008 and (ii)
filing its delayed periodic reports and any required restatements
on or before November 2, 2009. On August 31, 2009, the Company
issued a press release announcing, among other matters, estimated
upper bounds of the revenue adjustments in its Precision Technology
Segment during fiscal years 2004 through 2008. While the Company
continues to work diligently to complete the preparation and filing
of its delayed periodic reports, in addition to its restated
financial statements for fiscal years 2006, 2007 and 2008, the
Company was not able to meet the November 2, 2009 deadline. The
Company has substantially completed its review of revenue
transactions in its Precision Technology Segment. However, the
Company requires additional time to finalize its financial
statements. As previously disclosed, the evaluation and assessment
of potential adjustments to revenue transactions with multiple
element arrangements in the Company's Precision Technology Segment
during fiscal years 2004 through 2008 entailed the compilation,
review, and analysis of a database of approximately 84,000 purchase
orders comprising approximately 300,000 lines of data from nine
different enterprise reporting systems. The Company's review
further consisted of analyzing each line item of every purchase
order submitted during this period, which required the Company to
perform several iterations of the analysis on several subsets of
the data such that the Company estimates it analyzed over 500,000
lines of data in total. Gathering the data for analysis proved to
be more challenging, and required more time, than originally
planned. The reviewed data resided on nine different enterprise
wide reporting systems located in nine offices in five countries on
three continents: China, Japan, Germany, the United Kingdom, and
the United States. The Company intends to complete the preparation
and filing of its financial statements and regain compliance as
expeditiously as possible. Today, the Company also reported
bookings for the third quarter of 2009 and cash position as of
October 31, 2009: -- Bookings: Consolidated bookings for the third
quarter ended October 2, 2009 were approximately $60 million
compared with bookings of approximately $52 million for the
comparable period in 2008. Consolidated bookings for the third
quarter of 2008 included bookings of the Company's general optics
business, which was divested during the fourth quarter of 2008, and
included bookings of Excel Technology, Inc. from the date that
company was acquired, August 20, 2008. Bookings of the Company's
Semiconductor Systems Segment for the third quarter ended October
2, 2009 declined approximately 40% compared with the same period in
2008, as the semiconductor industry has been undergoing one of the
most severe downturns on record. -- Cash: As of October 31, 2009,
the Company had cash and cash equivalents of approximately $57
million, including approximately $3 million of net cash proceeds
received from the sale of a building the Company owned in Rugby,
England. In addition to the cash and cash equivalents, at October
31, 2009, the Company owned approximately $14 million of auction
rate securities at fair value. Subsequent to October 31, 2009, the
Company sold a portion of its auction rate securities for net cash
proceeds of approximately $3 million. 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," "plan," and
other similar expressions. These forward-looking statements include
statements regarding the completion of the restatement of the
Company's financial results for fiscal years 2006, 2007 and 2008,
the Company's ability to file its quarterly reports on Form 10-Q
and annual report on Form 10-K, statements related to the continued
listing of the Company's shares on Nasdaq, statements related to
the Company's request for review of the Panel determination,
statements related to the possibility that the Nasdaq Listing and
Hearings Review Council or the Board of Directors of The Nasdaq
Stock Market LLC may review the Panel determination, statements
related to the listing of the Company's shares on the Pink Sheets,
the Company's estimates regarding bookings and cash position, and
other statements that are not historical facts. These forward
looking statements involve a number of risks, uncertainties,
assumptions and other factors that could affect future results and
cause actual results and events to differ materially from
historical and expected results and those expressed or implied in
the forward looking statements, including, but not limited to, the
following: the Company's ability to complete and file its delayed
periodic reports with the SEC; the outcome of the Company's
financial restatements and review of financial results; the
Company's ability to meet the requirements for continued listing of
its shares on Nasdaq; the risks of existing and future litigation
and governmental or other regulatory inquiry or proceedings arising
out of or related to the Company's revenue recognition practices;
risks related to the impact of delisting on the Company, including
the impact on the price of the Company's common stock and the
potential loss of confidence by customers, suppliers, employees and
the loss of institutional investor interest in the Company; the
highly unpredictable nature of the semiconductor and electronics
materials processing industry; deteriorating market conditions; the
effect of the current financial and economic crises on credit
markets, financial institutions, customers, suppliers and
consumers; the Company's ability to reduce operating expenses and
achieve anticipated cost reductions and savings; the Company's
ability to grow and increase profitability; the impact of bookings
on current and future sales levels; future liquidity and valuation
of auction rate securities; changes in accounting standards;
failures of the Company to properly identify the timing of when
revenue should be recognized; the Company's ability to quickly
increase manufacturing capacity and promptly respond to fluctuating
product demands; the Company's need to invest in research and
development; the Company's ability to develop and deliver new
competitive technology and enhancements and customer acceptance
thereof; failure to identify and manage weaknesses in internal
controls; the effects of competition; risks related to
consolidation of operations and the integration of operations and
employees of acquired businesses, including Excel; and the
Company's inability to recognize synergies of acquired businesses,
including Excel. 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 the Company's Annual Report on Form 10-K for the year
ended December 31, 2007 and in the Company's subsequent filings
with the SEC made prior to or after the date hereof. Such
statements are based on the Company's management's beliefs and
assumptions and on information currently available to the Company's
management. The Company disclaims any obligation to update any
forward-looking statements as a result of developments occurring
after the date of this document. For more information contact: GSI
Group Inc., Investor Relations Telephone: 781-266-5137 Email: About
GSI Group Inc. GSI Group Inc. supplies precision technology to the
global medical, electronics, and industrial markets and
semiconductor systems. DATASOURCE: GSI Group Inc. CONTACT: GSI
Group Inc., Investor Relations, +1-781-266-5137, Web Site:
http://www.gsig.com/
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