GSI posts strong medical and precision motors earnings, but drop in scientific laser sales
20 March 2014Tweet
GSI Group has recorded revenue for 2013 of $341.6 million. Excluding a boost from the acquisition of NDS Surgical Imaging, the company's revenue in 2013 increased approximately 1.5 per cent compared to 2012.
The acquisition of NDS added $68.4 million to the company’s earnings, which equated to an increase of 25.8 per cent in total revenue compared to 2012.
During the fourth quarter of 2013, GSI generated revenues of $87.7 million, which, excluding the impact of the NDS acquisition and changes in foreign exchange rates, was an increase of approximately 4.3 per cent compared to the fourth quarter of 2012.
‘In the latter part of 2013, we began to realise increased benefit from our strategic transformation of GSI. We saw increased revenue growth, increased profitability, and stronger cash flows,’ said John Roush, CEO. ‘We have a more attractive and resilient mix of businesses, significantly upgraded management talent across the company, and a strong balance sheet, all of which position us well for 2014 and beyond.’
GSI's laser-based revenue experienced year-over-year sales growth of 3 per cent in the fourth quarter of 2013, despite a 25 per cent reduction in sales to customers in the scientific market. In the fourth quarter, the majority of the segment's growth was driven by strong demand and greater market penetration of the laser scanning solutions products and stronger market demand of sealed CO2 laser products.
The laser scanners products, sold under the Cambridge Technology brand, experienced increased orders in marking, OCT retinal scanning, via hole drilling, and 3D printing applications. The sealed CO2 laser products, sold under the Synrad brand, experienced increased orders in the coding, marking, and engraving of organic materials markets.
The company's medical technologies sales more than tripled in the fourth quarter of 2013, as a result of the NDS acquisition. In Q4 of 2013, sales of visualisation solutions, sold under the NDS and Dome brand names, were substantially above third quarter levels, as OEMs and hospital customers increased their order rates.
In the fourth quarter of 2013, sales of GSI’s precision motors increased 19 per cent year over year. The majority of the segments' growth was driven by a recovery in customer capital spending in the manufacturing sector and new programme wins in advanced industrial markets, such as industrial automation and turbo generation applications.
In February 2014, the company acquired Jadak, a New York-based provider of optical data collection and machine vision technologies to medical device OEMs, for $93.5 million in cash.
In addition, in January 2014, the company signed a letter of intent to sell the company's scientific lasers business line, sold under the Continuum brand name, for $7.5 million in cash. GSI expects that the scientific laser business will qualify as ‘held for sale’ and will also be reported as a discontinued operation in the first quarter of 2014. In 2013, the scientific laser business reported sales of $25 million and was approximately neutral to the company's adjusted EBITDA.
For the full year 2014, GSI expects revenue from continuing operations of between $360 million to $370 million, representing year-over-year revenue growth of 14 per cent to 17 per cent on a reported basis. GSI expects the Jadak acquisition to add approximately $40 million in revenue.
For the first quarter of 2014, GSI expects revenue from continuing operations of between $75 million and $77 million, representing year-over-year organic growth of 1 per cent to 3 per cent.