Bedford, MA--GSI Group Inc. (NASDAQ: GSIG) or GSI, a supplier of laser-based solutions, precision motion, and optical technologies to global industrial, electronics, medical, and scientific markets, reported financial results for the third quarter (Q3) of 2012. "During the third quarter of 2012, GSI delivered solid profitability in a weak market for capital equipment. We delivered approximately $70 million in revenue and approximately $11 million in Adjusted EBITDA, within our previously communicated guidance range despite the difficult economic environment," said John Roush, GSI CEO. The reported results from continuing operations exclude the operating results of the GSI Semiconductor Systems and Laser Systems business lines, which were classified as discontinued operations beginning in Q2 2012.
During Q3 2012, GSI generated revenue of $69.5 million, a decrease of 11.7% from $78.7 million in Q3 2011. The impact of foreign exchange represented approximately 2 percentage points of the 11.7% decrease in revenue in Q3 2012, compared to Q3 2011.
In Q3 2012, income from operations was $3.8 million, or 5.5% of revenue, compared to $10.8 million, or 13.8% of revenue, during the same period last year. Income from operations includes restructuring charges of $2.7 million, or 3.9% of revenue, related to GSI's 2011 and 2012 restructuring programs.
"During the quarter, we continued to make strong progress on our strategic priorities, including the 12x12 Program, key additions to our leadership team and completing the divestiture of our Laser Systems business line," said Roush. "While we are disappointed at the continued slowdown in the market, and the current lack of visibility of the timing of a market recovery, we are confident we are on the right path to strategically positioning the Company for consistent, profitable growth."
The Company says it continued to realize significant progress with its growth platforms in the quarter, as demonstrated by the sales performance of certain product lines. The Company's fiber laser product line more than quadrupled in sales since last year's comparable period, following the launch of its kilowatt class product offerings earlier this year. The Company’s laser scanning solutions product line also saw significant growth, with sales increasing 23% versus last year's comparable period. In addition, the Company made strong progress in cultivating potential acquisitions, following the completion of a comprehensive consulting study of the medical components market.
On October 29, 2012, GSI completed the sale of the Laser Systems portion of its discontinued operations to Han's Laser Technology for a cash consideration of $7.0 million, subject to working capital adjustments. The Laser Systems businesses are sold under the brand names Control Laser and Baublys. The Laser Systems facility in Orlando, FL, which has an estimated market value of approximately $6.0 million, was retained by GSI and it is currently marketing this building for sale as a separate transaction.
"We are very pleased to announce the completion of our divestiture of the Laser Systems business line," added Roush. "This is another step in our ongoing transformation of GSI to focus on precision components in higher growth markets, with an emphasis on medical applications," added Roush.
GSI continued to make progress in other areas of the 2011 restructuring program that began in Q4 2011, with a goal of eliminating up to 12 facilities. During Q3 2012, it completed the closure of its optics production facility in California, substantially completed the consolidation of its German operations, and began executing on the consolidation of its laser scanners business into the Company's corporate headquarters in Bedford, MA. The largest remaining actions associated with this program are related to the move of the laser scanners business line into the Bedford facility and the sale of the Company's Semiconductor Systems business. Efforts to sell the Semiconductor Systems business are ongoing, and GSI expects to complete the process by the end of Q2 2013.
For Q4 2012, GSI expects revenue from its continuing operations of $65 to $67 million.
SOURCE: GSI Group; www.gsig.com/investors/news_releases/2012/pr_20121107.html