Bedford, Mass. – As reported in GSI Group's 3Q11 report ended Sept. 30, the company generated revenue of $93.3 million, an increase of 2% from $91.5 million in the same period a year ago.
Net income for the 3Q11 was $8.8 million, up from $0.1 million in the 3Q10. Earnings per share (EPS) for the 3Q11 were $0.26, up from $0.00 in the 3Q10. Adjusted EBITDA, which includes the adjustments noted in the non-GAAP reconciliation, was $17.2 million in the 3Q11, an increase from $16.8 million in the 3Q10.
"Our businesses continue to show significant progress, and we were able to deliver solid results in Q3 despite difficult economic conditions, particularly in the microelectronics markets," said John Roush, CEO. "Despite this near-term drop in demand, we are pushing ahead with our strategic agenda in terms of both growth and productivity. We expect 2012 to be a year of continued revenue and profit growth for GSI, though we may see some demand weakness in the early part of the year in the microelectronics sector."
Exit from laser systems business lines
After conducting a strategic review of GSI’s laser systems business lines, which are sold under the Control Laser and Baublys brand names, GSI intends to exit these businesses. GSI is currently exploring its options for exiting these businesses and will provide a further update at the time of GSI’s year-end earnings release. In addition, GSI is placing its Semiconductor Systems business under strategic review. In aggregate, these three businesses are expected to contribute approximately $60 million to $65 million of revenue in 2011, with operating profitability well below GSI’s other business lines.
"While these business lines represent strong franchises within their respective areas of focus, we believe they need to achieve significantly greater scale to be successful in the long term," said Roush. "However, we believe our resources are better allocated to growing our core component and sub-system franchises. Thus, we feel the systems businesses will be better served by ownership outside GSI."
GSI’s Precision Motion and Technologies and Semiconductor Systems segments both reported declines in sales as a consequence of an industry-wide slowdown in the microelectronics markets.
At the end of the 2Q11, GSI outlined a growth focus that highlights three strategic priority areas: scanning solutions, fiber lasers and medical components. During the third quarter, meaningful progress was made in all three areas, including numerous customer design wins in scanning solutions and medical components that we expect to contribute significant revenue over the next several years. Additionally, GSI shipped its first 1 kilowatt (kW) fiber laser into the Chinese market. GSI has traditionally offered fiber lasers ranging from 50 watts to 500 watts.
2012 integration & realignment program (12x12)
In the fourth quarter, GSI will initiate a new 12-month program called 12x12. This program is targeting as much as $5 million in annualized cost savings with a goal of eliminating up to twelve (12) facilities. The facility reductions, which include manufacturing and R&D facilities as well as sales offices, will be achieved through a combination of site consolidations and divestitures. Further details of this program will be announced at the time of GSI’s year-end earnings release, including any related restructuring costs.
"The 12x12 Program represents a major step forward for GSI and is expected to provide significant benefits in terms of productivity and business simplification," said Robert Buckley, CFO. "In a sense, the program delivers on the original intent of the GSI-Excel transaction, which was completed over three years ago."
GSI Group is a supplier of laser-based solutions, precision motion control devices, optical controls, and associated precision technologies, and semiconductor systems to global industrial, electronics, medical, and scientific markets.