GSI Group Announces Financial Results For The Second Quarter Of 2015

- Second Quarter 2015 Adjusted Revenue of $96.5 million, 5% year-over-year growth

- Second Quarter 2015 Adjusted EBITDA of $16.3 million, 13% year-over-year growth

- Second Quarter 2015 GAAP Diluted Earnings per Share (“EPS”) of $0.56

- Second Quarter 2015 Adjusted Earnings per Share (“Adjusted EPS”) of $0.20

- Second Quarter 2015 Net Debt of $35 million

BEDFORD, Mass., Aug. 5, 2015 /PRNewswire/ -- 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 second quarter of 2015.

Second Quarter

“I am pleased with our strong second quarter results, which represent another quarter of attractive financial performance from the Company and build on our strong start to the year. In the second quarter, we delivered 5% Adjusted Revenue growth and 5% organic revenue growth, while Adjusted EBITDA increased by 13% and Adjusted EPS increased by 5%. We delivered these strong results despite the impact of the stronger U.S. dollar,” said John Roush, Chief Executive Officer.

During the second quarter of 2015, GSI generated GAAP revenue of $96.5 million, a decrease of 0.4% from $96.9 million in the second quarter of 2014. Adjusted Revenue in the second quarter of 2015 was $96.5 million, an increase of 5.3% from $91.6 million in the second quarter of 2014. The Laser Products and Precision Motion operating segments both delivered strong Adjusted Revenue growth, whereas Vision Technologies declined due to end-market dynamics.

“While some of our medical end-markets were slower in the quarter, we saw signs of strengthening, in applications such as patient monitoring, robotics, and Optical Coherence Tomography (“OCT”). Advanced industrial applications continued to remain strong, particularly in laser marking and coding, laser converting, and a handful of electronic circuitry applications,” added Mr. Roush.

In the second quarter of 2015, GAAP operating income from continuing operations was $10.3 million, compared to $6.5 million in the second quarter of 2014. Adjusted operating income from continuing operations was $13.8 million in the second quarter of 2015, compared to $11.7 million in the second quarter of 2014.

GAAP Diluted EPS from continuing operations was $0.56 in the second quarter of 2015, compared to $0.10 in the second quarter of 2014. Adjusted EPS was $0.20 in the second quarter of 2015, compared to $0.19 in the second quarter of 2014. The Adjusted EPS for the second quarter of 2015 includes approximately $0.03 negative impact related to foreign exchange losses.

Adjusted EBITDA was $16.3 million in the second quarter of 2015, compared to $14.5 million in the second quarter of 2014.

As of July 3, 2015, cash and cash equivalents was $81.1 million, while total debt was $116.3 million. The Company completed the second quarter of 2015 with approximately $35.2 million of Net Debt, as defined in the non-GAAP reconciliation below. Operating cash flow from continuing operations for the second quarter of 2015 was $8.5 million; and $14.6 million for the first six months of 2015.

Financial Outlook

For the third quarter of 2015, the Company expects Adjusted Revenue of between $92 million and $94 million, up 3% to 5% on an organic revenue basis. This compares to Adjusted Revenue for the third quarter of 2014 of $89 million.

For the full year 2015, the Company continues to expect Adjusted Revenue of approximately $370 million. This compares to Adjusted Revenue of $343 million in the full year 2014. The guidance represents anticipated year-over-year Adjusted Revenue growth of 6% to 8% and year-over-year organic revenue growth in the mid-single digit range.

For the third quarter of 2015, the Company expects Adjusted EBITDA to be approximately $14 million. In addition, the Company expects Adjusted EPS to be in the range of $0.18 to $0.20. For the full year 2015, the Company continues to expect Adjusted EBTIDA to be in the range of $60 million to $62 million. Additionally, the Company expects Adjusted EPS to be in the range of $0.85 to $0.89.

Conference Call Information

The Company will host a conference call on Wednesday, August 5, 2015 at 10:30 am EDT 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 38295691.

A playback of this conference call will be available beginning 2:30 p.m. EDT, Wednesday, August 5, 2015. The playback phone number is (855) 859-2056 or (404) 537-3406 and the code number is 38295691. The playback will remain available until 11:00 p.m. EDT, Wednesday, August 26, 2015.

A replay of the audio webcast will be available approximately four hours after the conclusion of the call on the Investor Relations section of the Company’s web site at www.gsig.com.

Use of Non-GAAP Financial Measures

The non-GAAP financial measures used in this press release are organic revenues, Adjusted Revenues, Adjusted Gross Profit, Adjusted Gross Profit Margin, Adjusted Income from Continuing Operations, Adjusted Operating Margin, Adjusted Income from Continuing Operations before Taxes, Adjusted Income from Continuing Operations, net of tax, Adjusted 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, a non-GAAP financial measure, 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, anticipated financial performance; business prospects; market conditions; and other statements that are not historical facts.