Gsi Lumonics (NASDAQ:GSLI)
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GSI Lumonics Announces Fourth Quarter and Fiscal 2003 Financial Results
BILLERICA, Mass., Feb. 26 /PRNewswire-FirstCall/ -- GSI Lumonics Inc., , a
major supplier of precision components, lasers and laser systems, today
announced financial results for the fourth quarter and for the twelve months
ended December 31, 2003. (All data are expressed in U.S. GAAP and in U.S.
dollars.)
Fourth Quarter Results
* Sales were $54.9 million for the fourth quarter of 2003, compared to
$45.1 million for the same period in 2002; an increase of 21.7%
* Net income was $2.5 million, or $0.06 per diluted share for the fourth
quarter, compared with a loss of $4.6 million, or $0.11 per diluted
share, for the same period last year.
* Bookings were $56.3 million (excluding Westwind) for the quarter, an
increase of 72% over the same period in 2002
* Backlog was $74.6 million at the end of the fourth quarter, compared to
$41.8 million for the same period in 2002. The Westwind acquisition
contributed $23.1 million to the backlog at the end of December, 2003.
* Gross margin for the quarter just ended 2003 was 39.1% of sales,
compared to 29.7% for the same period in 2002.
* Cash flow from operations was $13.9 million for the fourth quarter, as
compared to $9.6 million for the same quarter in 2002.
* Cash and investments totaled $107.3 million as of December 31, 2003.
The December 2003 acquisition of Westwind Air Bearings Ltd., a manufacturer of
high precision rotary motion components, contributed $2.5 million of revenue for
the fourth quarter. "The Westwind acquisition is expected to be accretive to
earnings in the first quarter of 2004," said Charles Winston, President and CEO.
"Its significant presence in PCB manufacturing has been beneficial as the
electronics industry is growing."
Geographically, sales for the fourth quarter of 2003 were as follows:
approximately 47% in the Americas, 39% in Asia-Pacific, including Japan, and 14%
in Europe. For the same period in2002, sales were distributed as follows: 50%
in the Americas, 34% in Asia-Pacific, including Japan, and 16% in Europe.
"We are experiencing improved demand in all three segments of our business in
this most recent quarter," said Mr. Winston. "There appears to be a gradual
economic recovery driven initially by the consumer electronic markets, and more
recently joined by the business sector stimulating demand for manufacturing
equipment which requires our components, lasers and systems. We are maintaining
a cautiously optimistic approach to the recovery as we continue to focus on cost
controls and operational efficiency improvements."
For the fiscal year 2003, sales rose 16.7% to $185.6 million from $159.1 million
in 2002. The 2003 net loss of $2.2 million, or $0.05 per diluted share was an
improvement of $25.5 million over the loss of $27.7 million, or $0.68 per
diluted share for 2002. Increased revenues, combined with operating expense
reductions of $13.9 million were the primary factors to this performance
improvement.
Operating expenses for the fourth quarter 2003 included $0.7 million for a
pension plan underfunding (the plan was frozen in 2003) and $0.7 million
reported as restructuring costs for excess facilities in Munich, Germany. The
Company expensed $0.4 million related to the resolution of a legal matter.
As of December 31, 2003, headcount was 1,067, up from 793 at year-end 2002.
This increase was mainly due to the acquisitions of Spectron laser product
lines, DRC's Encoder division and Westwind Air Bearings.
Business Segment Reporting
In comparing the fourth quarter sales in 2003 with the same period in 2002:
* Laser Systems' increase of $5.1 million is attributed mostly to trim and
test equipment.
* The Laser group increase of $2.7 million was from JK series product and
the acquired Spectron products.
* The Components segment increase of $3.6 million was generated from the
Westwind and DRC acquisitions.
The Laser Systems segment contributed an operating profit of $5.1 million for
the fourth quarter 2003, as compared to a loss of $2.4 million in the same
period last year. This improvement was generated by a combination of higher
sales volume, margin improvements and lower operating expensesin the fourth
quarter 2003, as compared to the same period in 2002. Operating expenses were
$1.5 million lower in the Laser Systems segment in the fourth quarter 2003
compared to the same quarter in 2002.
The Laser group had operating income of $1.0 million in the fourth quarter 2003
versus a loss of $0.5 million in the same period last year, driven primarily by
increased sales volume and margin improvement.
The Components segment reported operating income of $3.7 million for the fourth
quarter 2003. This was a decrease of $0.2 million from the same period last
year. The decrease in operating income was caused by higher material and
operating costs.
Financial Condition
At December 31, 2003, cash, cash equivalents, short-term investments and other
investments totaled $107.3 million, compared to $150.0 million at December 31,
2002. The Company continues to operate debt-free. During the fourth quarter
2003, the acquisition of Westwind Air Bearings was completed requiring a net
cash outlay of $34.9 million. Cash flow from operations was $13.9 million for
the fourth quarter in 2003, driven by tax refunds and increased payables and
accruals. These were partially offset by growth in receivables. In the fiscal
year 2003, cash flow from operations was $22.0 million versus $11.7 million in
the prior year.
-------------------------------------------------
GSI Lumonics will host a conference call for investors on Thursday, February 26,
2004, at 5:00 p.m. Eastern Time. To participate, call 800-901- 5226 (within the
US and Canada) and 617-786-4513 (for international callers) no earlier than 4:50
p.m. Eastern Time and no later than 4:55 p.m. Eastern Time and identify yourself
to the operator with the participant code of 42351320. A replay of the call
will be available one hour after the call ends to midnight, March 8, 2004 by
dialing 888-286-8010 (within the US and Canada) or 617-801-6888 (for
international callers). The access code is 83226597.
The conference call also will be broadcast live over the Internet in listen-only
mode. For live webcasting, go to:
http://www.firstcallevents.com/service/ajwz399482981gf12.html at least 15
minutes prior to the call in order to register, download and install any
necessary software. The call will be archived on the above web site until
midnight, March 8, 2004.
GSI supplies precision motion control components, lasers and laser-based
advanced manufacturing systems to the global medical, semiconductor,
electronics, and industrial markets. GSI Lumonics' common shares are listed on
Nasdaq (GSLI) and The Toronto Stock Exchange (LSI).
Certain statements in this news release may constitute forward-looking
statements within the meaning of the United States Private Securities Litigation
Reform Act of 1995, Section 27A of the United States Securities Act of 1933 and
Section 21E of the United States Securities Exchange Act of 1934. These
forward-looking statements may relate to anticipated financial performance,
management's plans and objectivesfor future operations, business prospects,
outcome of regulatory proceedings, market conditions, tax issues and other
matters. 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 "anticipate," "believe," "estimate,"
"expect," "intend," "plan," "objective" and other similar expressions. Readers
should not place undue reliance on the forward- looking statements contained in
this news release. Such statements are based on management's beliefs and
assumptions and on information currently available to management and are subject
to risks, uncertainties and changes in condition, significance, value and
effect. Otherrisks include the fact that the Company's sales have been and are
expected to continue to be dependent upon customer capital equipment
expenditures, which are, in turn, affected by business cycles in the markets
served by those customers. Other factors include volatility in the
semiconductor industry, the risk of order delays and cancellations, the risk of
delays by customers in introducing their new products and market acceptance of
products incorporating subsystems supplied by the Company, similarrisks to the
Company of delays in its new products, our ability to continue to reduce costs
and capital expenditures, our ability to focus R&D investment and other risks
detailed in reports and documents filed by the Company with the United States
Securities and Exchange Commission and with securities regulatory authorities in
Canada. Such risks, uncertainties and changes in condition, significance, value
and effect, many of which are beyond the Company's control, could cause the
Company's actual results and other future events to differ materially from those
anticipated. The Company does not, however, assume any obligation to update
these forward- looking statements to reflect actual results, changes in
assumptions or changes in other factors affecting such forward-looking
statements.
For more information contact: Investor Relations, 613-224-4868, Ann Dempsey,
(ext. 5632)
GSI LUMONICS INC.
CONSOLIDATED BALANCE SHEETS (unaudited)
(U.S. GAAP and in thousands of U.S. dollars, except share amounts)
December 31, December 31,
2003 2002
ASSETS
Current
Cash and cash equivalents $64,035 $83,633
Short-term investments 39,562 28,999
Accounts receivable, less allowance
of $4,465 (December 31, 2002 - $2,681) 53,040 33,793
Income taxes receivable 4,839 8,431
Inventories 43,916 39,671
Deferred tax assets 5,507 9,763
Other current assets 8,048 4,448
Total current assets 218,947 208,738
Property, plant and equipment, net of
accumulated depreciation of $22,305
(December 31, 2002 - $21,453) 52,982 26,675
Deferred tax assets 6,642 7,443
Other assets 2,297 3,360
Long-term investments 3,743 37,405
Intangible assets, net of amortization of
$21,924 (December 31, 2002 - $16,217) 23,985 13,467
$308,596 $297,088
LIABILITIES AND STOCKHOLDERS' EQUITY
Current
Accounts payable $18,218 $9,235
Accrued compensation and benefits 7,424 6,523
Other accrued expenses 18,451 20,845
Total current liabilities 44,093 36,603
Deferred compensation 2,162 2,129
Accrued minimum pension liability 1,553 3,875
Total liabilities 47,808 42,607
Commitments and contingencies
Stockholders' equity
Common shares, no par value; Authorized
shares: unlimited; Issued and
outstanding: 40,927,499
(December 31, 2002 - 40,785,922) 305,512 304,713
Additional paid-in capital 2,800 2,592
Accumulated deficit (43,440) (41,270)
Accumulated other comprehensive loss (4,084) (11,554)
Total stockholders' equity 260,788 254,481
$308,596 $297,088
GSI LUMONICS INC.
CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited)
(U.S. GAAP and in thousands of U.S. dollars, except per share amounts)
Three months ended Twelve months ended
December 31, December 31, December 31, December 31,
2003 2002 2003 2002
Sales $54,879 $45,099 $185,561 $159,070
Cost of goods sold 33,425 31,691 117,084 109,876
Gross profit 21,454 13,408 68,477 49,194
Operating expenses:
Research and
development 3,441 4,335 13,895 19,724
Selling, general and
administrative 13,216 12,585 48,952 56,203
Amortization of
purchased intangibles 1,602 1,300 5,657 5,135
Restructuring 777 2,297 3,228 6,448
Other (10) 228 831 (1,021)
Total operating
expenses 19,026 20,745 72,563 86,489
Income (loss) from
operations 2,428 (7,337) (4,086) (37,295)
Other income (expense) 39 (424) 103 (628)
Interest income 285 1,037 1,886 2,744
Interest expense (73) (161) (202) (701)
Foreign exchange
transaction gains
(losses) (178) (550) 451 (825)
Income (loss) before
income taxes 2,501 (7,435) (1,848)(36,705)
Income tax expense
(benefit) - (2,858) 322 (8,981)
Net income (loss) $2,501 $(4,577) $(2,170) $(27,724)
Net income (loss)
per common share:
Basic $0.06 $(0.11) $(0.05) $(0.68)
Diluted $0.06 $(0.11) $(0.05) $(0.68)
Weighted average common
shares outstanding
(000's) 40,899 40,729 40,837 40,663
Weighted average common
shares outstanding
and dilutive potential
common shares (000's) 41,629 40,729 40,837 40,663
GSI LUMONICS INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited)
(U.S. GAAP and in thousands of U.S. dollars)
Three months ended Twelve months ended
December 31, December 31, December 31, December 31,
2003 2002 2003 2002
Cash flows from operating activities:
Net income (loss) $2,501 $(4,577) $(2,170) $(27,724)
Adjustments to
reconcile net loss to
cash provided by
(used in) operating
activities:
Loss (gain) on disposal
of assets (39) - 382 62
Reduction of long-lived
assets - 1,380 - 2,510
Depreciation and
amortization 2,975 2,593 10,439 10,919
Stock based compensation 208 - 208 -
Realized loss (gain)
on derivatives (179) - - -
Deferred income taxes 1,502 3,388 1,502 4,267
Changes in current
assets and liabilities:
Accounts receivable (2,464) 3,578 (6,216) 9,356
Inventories 1,734 12,595 8,271 19,632
Other current assets (18) 235 (1,047) 840
Accounts payable,
accrued expenses, and
taxes (receivable)
payable 7,673 (9,614) 10,458 (8,145)
Cash provided by
operating activities 13,893 9,578 21,827 11,717
Cash flows from investing activities:
Acquisitions of
businesses (35,346) - (44,298) -
Purchase of leased
buildings - - (18,925) -
Sale of assets - - 847 -
Other additions to
property, plant and
equipment, net (885) (521) (2,699) (2,952)
Maturities of
short-term and
long-term investments 26,100 21,323 188,990 110,014
Purchases of short-term
and long-term
investments (11,492) (7,221) (165,547) (132,877)
(Increase) Decrease
in other assets (381) (171) (23) 1,979
Cash provided by
(used in) investing
activities (22,004) 13,410 (41,655) (23,836)
Cash flows from financing activities:
Payments of bank
indebtedness - (9,984) - (6,441)
Repayment of long-term
debt - - - (3,000)
Issue of share capital 292 407 799 1,209
Cash provided by (used in)
financing activities 292 (9,577) 799 (8,232)
Effect of exchange rates
on cash and cash
equivalents (2,195) 958 (569) 1,025
Increase (decrease)
in cash and cash
equivalents (10,014) 14,369 (19,598) (19,326)
Cash and cash
equivalents,
beginningof period 74,049 69,264 83,633 102,959
Cash and cash
equivalents, end of
period $64,035 $83,633 $64,035 $83,633
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,
2003 2002 2003 2002
Sales:
Components $21,504 $17,912 $73,762 $70,436
Laser Group 9,300 6,612 33,412 23,748
Laser Systems 25,785 20,769 82,687 65,906
Intersegment sales
elimination (1,710) (194) (4,300) (1,020)
Total $54,879 $45,099 $185,561 $159,070
Segment income (loss)
from operations:
Components $3,748 $3,894 $15,665 $16,763
Laser Group 954 (489) 1,071 (5,010)
Laser Systems 5,139 (2,381) 8,042 (18,732)
Total by segment 9,841 1,024 24,778 (6,979)
Unallocated amounts:
Corporate expenses 5,044 4,536 19,148 19,754
Amortization of
purchased intangibles 1,602 1,300 5,657 5,135
Restructuring 777 2,297 3,228 6,448
Other (10) 228 831 (1,021)
Income (loss) from
operations $2,428 $(7,337) $(4,086) $(37,295)
GSI LUMONICS INC.
Consolidated Sales Analysis By Geographic Region (unaudited)
(millions of U.S. dollars)
Revenues are attributed to geographic areas on the basis of the bill to customer
location. Not infrequently, equipment is sold to large international companies,
which may be headquartered in Asia-Pacific, but the sales of our systems are
billed and shipped to locations in the United States. These sales are therefore
reflected in United States totals in the table below.
Three months ended
December 31, 2003 December 31, 2002
(in millions) Sales % of Total Sales % of Total
North America $25.0 46% $22.0 49%
Latin and South America 0.4 1 0.6 1
Europe 7.9 14 7.4 16
Japan 11.1 20 12.4 28
Asia-Pacific, other 10.5 19 2.7 6
Total $54.9 100% $45.1 100%
Twelve months ended
December 31, 2003 December 31, 2002
(in millions) Sales % of Total Sales % of Total
North America $93.4 50% $96.6 60%
Latin and South America 1.1 1 1.2 1
Europe 27.4 15 25.8 16
Japan 36.1 19 23.5 15
Asia-Pacific, other 27.6 15 12.0 8
Total $185.6 100% $159.1 100%
DATASOURCE: GSILumonics Inc.
CONTACT: Ann Dempsey, Investor Relations of GSI Lumonics Inc.,
+1-613-224-4868, ext. 5632
Company News On-Call: http://www.prnewswire.com/comp/107189.html