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Market Overview

GSI Group Announces Financial Results for the Fourth Quarter and Full Year 2015


- Fourth Quarter 2015 Adjusted Earnings per Share ("EPS") of $0.29

- Full Year 2015 Adjusted Revenue of $368 million, 7.4% growth year over year

- Full Year 2015 GAAP Diluted Earnings per Share ("EPS") of $1.02

- Full Year 2015 Adjusted Earnings per Share ("Adjusted EPS") of $0.93

- Plan to rename company Novanta Inc. pending Shareholder Approval

BEDFORD, Mass., March 2, 2016 /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 fourth quarter and full year 2015.

Financial Highlights

Three Months Ended

Year Ended

(In millions, except per share amounts)

December 31,

December 31,

December 31,

December 31,















Operating income (loss) from continuing operations









Diluted EPS from continuing operations










Adjusted Revenue









Adjusted operating income from continuing operations









Adjusted EPS









Adjusted EBITDA









*Reconciliations of GAAP to non-GAAP financial measures, as well as definitions for the non-GAAP financial measures in this press release and the reasons for their use are presented below.


Fourth Quarter

During the fourth quarter of 2015, GSI generated GAAP revenue of $90.2 million, a decrease of (4%) from $94.0 million in the fourth quarter of 2014 due to the divestiture of JK Lasers.  Adjusted Revenue in the fourth quarter of 2015 was $90.2 million, an increase of 3% from $87.9 million in the fourth quarter of 2014. 

In the fourth quarter of 2015, GAAP operating income from continuing operations was $4.2 million, compared to a loss of ($34.2) million in the fourth quarter of 2014.  Adjusted operating income from continuing operations was $11.7 million in the fourth quarter of 2015, compared to $12.5 million in the fourth quarter of 2014.     

GAAP Diluted EPS from continuing operations was $0.18 in the fourth quarter of 2015, compared to a loss of ($0.82) in the fourth quarter of 2014. Adjusted EPS was $0.29 in the fourth quarter of 2015, compared to $0.24 in the fourth quarter of 2014.  The Company ended the fourth quarter of 2015 with 34.8 million weighted average diluted common shares outstanding.  Adjusted EBITDA was $14.4 million in the fourth quarter of 2015. 

Full Year

For the full year of 2015, GSI generated GAAP revenue of $373.6 million, an increase of 2% from $364.7 million for the full year 2014.  Adjusted Revenue for the full year 2015 was $368.0 million, an increase of 7% from $342.5 million for the full year 2014.  

"I am very pleased with our results in 2015.  We delivered on all of our major financial objectives, and made tremendous progress with our strategic goals.  Adjusted Revenue was up more than 7%, Adjusted EBITDA was up 8%, and Adjusted EPS was up 15%," said John Roush, Chief Executive Officer. "We acquired three strong technology businesses to enhance our product portfolio and competitive position, divested the non-core JK Lasers business for an attractive valuation, and exited the year with growth momentum in our medical applications, which served to stabilize our revenue base, offsetting the impact of slowing demand in some of our industrial markets."

For the full year 2015, GAAP operating income from continuing operations was $28.9 million, compared to a loss of ($16.8) million for 2014.  Adjusted operating income from continuing operations was $49.9 million for the full year 2015, compared to $44.7 million for 2014.  GAAP Diluted EPS from continuing operations was $1.02 for the full year 2015, compared to a loss of ($0.49) for 2014. Adjusted EPS was $0.93 for the full year 2015, compared to $0.81 for 2014.  Adjusted EBITDA was $61.1 million for the full year 2015, compared to $56.4 million for 2014. 

As of December 31, 2015, cash and cash equivalents were $60 million, while gross debt (excluding deferred borrowing costs of $1.7 million) was $97.5 million. The Company completed 2015 with approximately $37.5 million of Net Debt, as defined in the non-GAAP reconciliation below.  Operating cash flow from continuing operations for the full year 2015 was $33.4 million.  

Financial Outlook

"Our strategic shift into medical applications, cost reduction actions that started in the third quarter of 2015, our robust continuous improvement program, and investments in our new product development engine give us confidence that we can continue to drive profitable growth for the full year 2016, despite a fairly challenging industrial capital spending environment," said Robert Buckley, Chief Financial Officer.

For the full year 2016, the Company expects Adjusted Revenue to be up mid-single digits, in the range of $375 million to $390 million.  This compares to Adjusted Revenue of $368 million in the full year 2015. The Company also expects Adjusted EPS to be up 8% to 10%, compared to adjusted EPS of $0.93 delivered in the full year 2015.  In addition, the Company expects Adjusted EBITDA growth to be mid-single to high-single digits.

For the first quarter of 2016, the Company expects Adjusted Revenue to be relatively flat, in comparison to $89 million of Adjusted Revenue in the first quarter of 2015.  The Company expects Adjusted EPS to be in the range of $0.17 to $0.18, presuming no significant gains or losses from foreign exchange, and Adjusted EBITDA to be approximately $13 million, which is impacted by redundant costs associated with two production line moves occurring in the first half of 2016.  

GSI to Rename Company Novanta Inc.

The Company plans to seek shareholder approval to change its name to Novanta Inc. at its May 2016 annual shareholder meeting. 

"The Company has made a significant strategic transformation over the last few years.  We have now positioned ourselves as a leading provider of precision component and subsystem technologies to Original Equipment Manufacturers in the medical and advanced industrial markets, while shifting away from our legacy focus on the semiconductor capital equipment market," said John Roush, Chief Executive Officer.  "We are renaming the Company to emphasize our new direction and we intend to build a globally recognizable brand that reinforces our vision and strategy."     

"The name Novanta stands for The Innovation Advantage, as innovation and technical collaboration with customers are at the core of the Company's value proposition," added Mr. Roush.

If the name change to Novanta is formally approved by shareholders, the Company plans to change its NASDAQ ticker symbol from "GSIG" to "NOVT."  The timing of the ticker symbol change will be announced at a later date.  The Company's web domain will also change to

Conference Call Information

The Company will host a conference call on Wednesday, March 2, 2016 at 5:00 p.m. ET 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 19311554.

A playback of this conference call will be available beginning 8:00 p.m. ET, Wednesday, March 2, 2016. The playback phone number is (855) 859-2056 or (404) 537-3406 and the code number is 19311554. The playback will remain available until 11:00 p.m. ET, Thursday, March 24, 2016.

A replay of the audio webcast will be available approximately three hours after the conclusion of the call on the Investor Relations section of the Company's website at

Use of Non-GAAP Financial Measures

The non-GAAP financial measures used in this press release are organic revenues, Adjusted Revenue, Adjusted Gross Profit, Adjusted Gross Profit Margin, Adjusted Operating Income (Loss) from Continuing Operations, Adjusted Operating Margin, Adjusted Income from Continuing Operations before Income Taxes, Adjusted Income from Continuing Operations, net of tax, Adjusted Diluted 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 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, statements regarding growth momentum in our medical applications; our ability to generate profitable growth; plans to change the Company's name and ticker symbol; building a globally recognizable brand; anticipated financial performance; business prospects; market conditions; and other statements that are not historical facts. 

These forward-looking statements are neither promises nor guarantees, but involve risks and uncertainties that may cause actual results to differ materially from those contained in the forward-looking statements. Our actual results could differ materially from those anticipated in these forward-looking statements for many reasons, including, but not limited to, the following: economic and political conditions and the effects of these conditions on our customers' businesses and level of business activity; our significant dependence upon our customers' capital expenditures, which are subject to cyclical market fluctuations; our dependence upon our ability to respond to fluctuations in product demand; our ability to continually innovate and successfully commercialize our innovations; failure to introduce new products in a timely manner; customer order timing and other similar factors beyond our control; disruptions or breaches in security of our information technology systems; changes in interest rates, credit ratings or foreign currency exchange rates; risk associated with our operations in foreign countries; our increased use of outsourcing in foreign countries; our failure to comply with local import and export regulations in the jurisdictions in which we operate; our reliance on third party distribution channels; violations of our intellectual property rights and our ability to protect our intellectual property against infringement by third parties; risk of losing our competitive advantage; our failure to successfully integrate recent and future acquisitions into our business; our ability to make divestitures that provide business benefits; our ability to attract and retain key personnel; our restructuring and realignment activities and disruptions to our operations as a result of consolidation of our operations; product defects or problems integrating our products with other vendors' products; disruptions in the supply of certain key components or other goods from our suppliers; production difficulties and product delivery delays or disruptions; our compliance, or our failure to comply, with various federal, state and foreign regulations; changes in governmental regulation of our business or products; effects of conflict minerals regulations; our failure to comply with environmental regulations; our failure to implement new information technology systems and software successfully; our failure to realize the full value of our intangible assets; our exposure to the credit risk of some of our customers and in weakened markets; changes in tax laws, and fluctuations in our effective tax rates; being subject to U.S. federal income taxation even though we are a non-U.S. corporation; any need for additional capital to adequately respond to business challenges or opportunities and repay or refinance our existing indebtedness, which may not be available on acceptable terms or at all; volatility in the market price for our common shares; our ability to access cash and other assets of our subsidiaries; the influence over our business of certain significant shareholders; provisions of our articles of incorporation may delay or prevent a change in control; our significant existing indebtedness may limit our ability to engage in certain activities; and our failure to maintain appropriate internal controls in the future.

Other important risk factors that could affect the outcome of the events set forth in these statements and that could affect the Company's operating results and financial condition are discussed in Item 1A of our Annual Report on Form 10-K for the fiscal year ended December 31, 2015, our subsequent filings with the Securities and Exchange Commission ("SEC"), and in our future filings with the SEC. Such statements are based on the Company's beliefs and assumptions and on information currently available to the Company. The Company disclaims any obligation to update any forward-looking statements as a result of developments occurring after the date of this document except as required by law.

About GSI

GSI Group Inc. designs, develops, manufactures and sells precision photonics and motion control components and subsystems to Original Equipment Manufacturers ("OEM") in the medical and advanced industrial markets. The Company is a leader in highly engineered enabling technologies, including CO2 laser sources, laser scanning and beam delivery products, optical data collection and machine vision technologies, medical visualization and informatics solutions, and precision motion control products. The Company specializes in collaborating with OEM customers to adapt its component and subsystem technologies to deliver highly differentiated performance in their applications. GSI Group Inc.'s common shares are quoted on NASDAQ under the ticker symbol "GSIG".

More information about GSI is available on the Company's website at  For additional information, please contact GSI Group Inc. Investor Relations at (781) 266-5137 or

GSI Group Inc.          
Investor Relations Contact:
Robert J. Buckley
(781) 266-5137




 (In thousands of U.S. dollars or shares, except per share amounts)


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