GSLI Gsi Lumonics Inc. (MM)

GSI Lumonics Announces 2004 Fourth Quarter and 2004 Year-End Financial Results BILLERICA, Mass., Feb. 22 /PRNewswire-FirstCall/ -- GSI Lumonics Inc., (NASDAQ:GSLINASDAQ:andNASDAQ:TSX:NASDAQ:GSI), a major supplier of precision motion components, lasers and laser systems, today announced financial results for the fourth quarter and for the twelve months ended December 31, 2004. (All data are expressed in U.S. GAAP and in U.S. dollars.) Fourth quarter results: * Sales were $80.0 million for the fourth quarter of 2004, compared to $54.9 million for the same period in 2003, an increase of 45.7%. * Net income was $8.6 million or $0.21 per diluted share for the fourth quarter, compared to $0.06 per diluted share for the same period last year. * Bookings were $63.6 for the quarter, a decrease of 2% from the same period in 2003 (which excluded the backlog acquired from Westwind), but down $3.6 million or 5% from last quarter. * Backlog was $61.3 million at the end of the fourth quarter, compared to $78.6 million for the same period in 2003, a decrease of 22% over the same period in 2003. * Gross margin for the quarter just ended was 38.9% of sales, as compared to 39.1% for the same period in 2003. * Cash flow from operations was $8.1 million for the fourth quarter as compared to $13.9 million in the same quarter in 2003. * Cash, cash equivalents and marketable short and long-term investments totaled $90.3 million as of December 31, 2004. Geographically, sales for the fourth quarter of 2004 were as follows: approximately 28% in the Americas, 53% in Asia-Pacific, including Japan, and 19% in Europe. For the same period in 2003, sales were distributed as follows: 47% in the Americas, 39% in Asia-Pacific, including Japan, and 14% in Europe. The shift toward Asia-Pacific and Japan is due in large part to sales of MicroE and Westwind products as well as increased demand for the Company's Laser Systems products in 2004. For the fiscal year 2004, sales rose 78% to $330.0 million from $185.6 million in 2003. The 2004 net income of $41.5 million or $0.98 per diluted share was an improvement of $43.7 million from the net loss of $2.2 million and $0.05 per diluted share in 2003. Increased revenues from the acquisition of MicroE Systems and Westwind, combined with strong market conditions for semiconductor and electronics equipment, were the primary factors to this performance improvement. Cash generated from operations was $35.4 million compared to $21.8 million the prior year. "We are pleased with the solid improvement in all three segments of our business compared with the prior year. We are especially pleased with the performance of our acquisitions, our growth in Asia-Pacific, and the performance of our Systems business which contributed strongly to the growth in both revenues and profitability," said Charles Winston, GSI Lumonics' President and CEO. "We are adopting a cautious outlook for 2005 with focus on cost controls and operational efficiency improvements as we anticipate lower sales in 2005 due to slowdown in the semiconductor, PCB and data storage sectors from the strong expansions this past year." The effective tax rate for fiscal 2004 was 8%, which is significantly below the Company's statutory rate of 35-40%. The Company will return to a normalized rate in the first quarter of 2005. As of December 31, 2004, headcount was 1,175 up from 1,067 at year-end 2003. This increase was mainly due to the acquisition of MicroE Systems during 2004. Business Segment Reporting In comparing the fourth quarter sales in 2004 with the same period in 2003: * The Components segment increase of $14.0 million primarily was generated from the acquisitions of Westwind Air Bearings and MicroE Systems. * Laser Systems' increase of $9.6 million is attributed mostly to memory repair sales. * The Laser group increase of $2.7 million was mainly from internal sales of Sigma Lasers. The Components segment reported operating income of $5.4 million for the fourth quarter 2004. This was an increase of $1.6 million from the same period last year. The increase in operating income resulted from acquisitions and more favorable margins from the MicroE product lines. Gross margin was 35.4% compared to 34.0% in the fourth quarter, 2003. The Laser Systems segment contributed an operating profit of $9.1 million for the fourth quarter 2003, as compared to $5.1 million in the same period last year. This improvement was generated by a combination of higher sales volume and margin improvements in the fourth quarter 2004, as compared to the same period in 2003. Gross margin was 42.9% as compared to 39.1% during the fourth quarter 2003. The Laser group had operating income of $0.5 million in the fourth quarter 2004 versus $1.0 million in the same period last year. This decrease is as a result of higher direct costs over the same quarter in 2003. In the fourth quarter of 2003, a one-time benefit of $1.2 million was recorded for sales of inventory that had previously been written down for which there was no similar benefit in the same period in 2004. Gross margin was 30.3% as compared to 44.2% during the fourth quarter 2003. Financial Condition At December 31, 2004, cash, cash equivalents and marketable short-term and long-term investments totaled $90.3 million, compared to $106.7 million at December 31, 2003. The Company continues to operate debt-free. Cash flow from operations was $8.1 million for the fourth quarter in 2004, driven by strong sales. In the fiscal year 2004, cash flow from operations was $35.4 million versus $21.8 million in the prior year. GSI LUMONICS INC. CONSOLIDATED BALANCE SHEETS (Unaudited) (U.S. GAAP and in thousands of U.S. dollars, except share amounts) December December 31, 2004 31, 2003 ASSETS Current Cash and cash equivalents $82,334 $64,035 Short-term investments 2,995 39,562 Accounts receivable, less allowance of $2,470 (December 31, 2003 - $4,465) 60,314 53,040 Income taxes receivable 2,287 8,071 Inventories 60,319 43,916 Deferred tax assets 13,094 5,507 Other current assets 10,311 8,048 Total current assets 231,654 222,179 Property, plant and equipment, net of accumulated depreciation of $26,604 (December 31, 2003 - $22,305) 50,220 52,982 Deferred tax assets 18,364 8,521 Other assets 2,906 2,297 Long-term investments 5,681 3,743 Intangible assets, net of amortization of $28,022 (December 31, 2003 - $21,924) 50,989 23,985 Goodwill 26,350 -- $386,164 $313,707 LIABILITIES AND STOCKHOLDERS' EQUITY Current Accounts payable $18,462 $18,218 Income taxes payable 4,045 3,232 Accrued compensation and benefits 13,160 7,424 Other accrued expenses 21,327 18,451 Total current liabilities 56,994 47,325 Deferred compensation 2,178 2,162 Deferred tax liability 11,521 1,879 Other liability 27 -- Accrued minimum pension liability 9,881 1,553 Total liabilities 80,601 52,919 Commitments and contingencies Stockholders' equity Common shares, no par value; Authorized shares: unlimited; Issued and outstanding: 41,449,270 (December 31, 2003 - 40,927,499) 308,669 305,512 Additional paid-in capital 3,289 2,800 Accumulated deficit (1,969) (43,440) Accumulated other comprehensive loss (4,426) (4,084) Total stockholders' equity 305,563 260,788 $386,164 $313,707 GSI LUMONICS INC. CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) (U.S. GAAP and in thousands of U.S. dollars, except share amounts) Three months ended Twelve months ended December December December December 31, 2004 31, 2003 31, 2004 31, 2003 Sales $79,951 $54,879 $330,012 $185,561 Cost of goods sold 48,868 33,425 196,573 117,084 Gross profit 31,083 21,454 133,439 68,477 Operating expenses: Research and development 6,652 3,867 23,975 13,822 Selling, general and administrative 13,617 12,790 57,256 49,025 Amortization of purchased intangibles 1,627 1,602 5,951 5,657 Acquired in-process research and development (40) -- 390 -- Restructuring 573 777 573 3,228 Other -- (10) -- 831 Total operating expenses 22,429 19,026 88,145 72,563 Income (loss) from operations 8,654 2,428 45,294 (4,086) Other income -- 39 104 103 Interest income 336 285 980 1,886 Interest expense (104) (73) (263) (202) Foreign exchange transaction gains (losses) (789) (178) (1,129) 451 Income (loss) before income taxes 8,097 2,501 44,986 (1,848) Income tax provision (benefit) (498) -- 3,515 (322) Net income (loss) $8,595 $2,501 $41,471 $(2,170) Net income (loss) per common share: Basic $0.21 $0.06 $1.01 $(0.05) Diluted $0.21 $0.06 $0.98 $(0.05) Weighted average common shares outstanding (000's) 41,281 40,899 41,124 40,837 Weighted average common shares outstanding for diluted net income (loss) per common share (000's) 41,854 41,629 42,125 40,837 GSI LUMONICS INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (U.S. GAAP and in thousands of U.S. dollars, except share amounts) Three months ended Twelve months ended December 31, December 31, December 31, December 31, 2004 2003 2004 2003 Cash flows from operating activities: Net income (loss) $8,595 $2,501 $41,471 $(2,170) Adjustments to reconcile net income (loss) to cash provided by (used in) operating activities: Loss (gain) on disposal of assets and investments -- (39) 15 382 Translation gain on liquidation of a subsidiary -- -- (119) -- Acquired in-process research and development (40) -- 390 -- Stock based compensation 22 208 (64) 208 Depreciation and amortization 3,856 2,975 13,618 10,439 Unrealized gain on derivatives 123 (179) 35 -- Deferred income taxes (2,709) 48 (15,385) 48 Changes in current assets and liabilities: Accounts receivable 4,920 (2,464) (992) (6,216) Inventories 1,149 1,734 (12,716) 8,271 Other current assets 258 (18) (1,014) (1,047) Accounts payable, accrued expenses, and taxes (receivable) payable (8,082) 9,127 10,158 11,912 Cash provided by operating activities 8,092 13,893 35,397 21,827 Cash flows from investing activities: Acquisitions of businesses, net of cash acquired 214 (35,346) (54,530) (44,298) Purchase of leased buildings -- -- -- (18,925) Sale of assets -- -- -- 847 Other additions to property, plant and equipment, net (1,024) (885) (2,410) (2,699) Proceeds from the sale and maturities of short-term and long-term investments 11,000 26,100 84,224 188,990 Purchases of short-term and long-term investments (2,066) (11,492) (49,492) (165,547) Increase in other assets (187) (381) (367) (23) Cash used in investing activities 7,937 (22,004) (22,575) (41,655) Cash flows from financing activities: Issue of share capital (net of issue costs) 1,263 292 3,232 799 Cash provided by financing activities 1,263 292 3,232 799 Effect of exchange rates on cash and cash equivalents 1,822 (2,195) 2,245 (569) Increase (decrease) in cash and cash equivalents 19,114 (10,014) 18,299 (19,598) Cash and cash equivalents, beginning of period 63,220 74,049 64,035 83,633 Cash and cash equivalents, end of period $82,334 $64,035 $82,334 $64,035 GSI LUMONICS INC. Consolidated Analysis By Segment (unaudited) (thousands of U.S. dollars) Three months ended Twelve months ended December 31, December 31, December 31, December 31, Sales: 2004 2003 2004 2003 Components $35,456 $21,504 $152,726 $73,762 Laser Group 12,048 9,300 47,383 33,412 Laser Systems 35,335 25,785 146,581 82,687 Intersegment sales elimination and other (2,888) (1,710) (16,678) (4,300) Total $79,951 $54,879 $330,012 $185,561 Gross profit %: Components 35.4% 34.0% 36.8% 38.1% Laser Group 30.3 44.2 30.4 36.7 Laser Systems 42.9 39.1 43.9 34.9 Intersegment sales elimination 10.0 4.0 8.5 17.6 Total 38.9% 39.1% 40.4% 36.9% Segment income (loss) from operations: Components $5,364 $3,748 $27,739 $15,665 Laser Group 548 954 2,341 1,071 Laser Systems 9,136 5,139 40,332 8,042 Total by segment 15,048 9,841 70,412 24,778 Unallocated amounts: Corporate expenses 4,234 5,044 18,204 19,148 Amortization of purchased intangibles 1,627 1,602 5,951 5,657 Acquired in-process research and development (40) -- 390 -- Restructuring 573 777 573 3,228 Other -- (10) -- 831 Income (loss) from operations $8,654 $2,428 $45,294 $(4,086) GSI LUMONICS INC. Consolidated Sales Analysis By Geographic Region (unaudited) (millions of U.S. dollars) Three months ended December 31, 2004 December 31, 2003 % of % of Sales Total Sales Total North America $21.9 27% $25.0 46% Latin and South America 0.3 1 0.3 1 Europe (EMEA) 15.1 19 7.9 14 Japan 31.4 39 11.1 20 Asia-Pacific, other 11.3 14 10.6 19 Total $80.0 100% $54.9 100% Twelve months ended December 31, 2004 December 31, 2003 % of % of Sales Total Sales Total North America $139.1 43% $93.4 50% Latin and South America 1.4 -- 1.1 1 Europe (EMEA) 53.2 16 27.4 15 Japan 76.0 23 36.1 19 Asia-Pacific, other 60.3 18 27.6 15 Total $330.0 100% $185.6 100% Contact: Ann Dempsey Investor Relations for GSI Lumonics +1-613-224-4868 ext. 2 DATASOURCE: GSI Lumonics Inc. CONTACT: Ann Dempsey, Investor Relations for GSI Lumonics, +1-613-224-4868, ext. 2 Company News On-Call: http://www.prnewswire.com/comp/107189.html

Copyright