GSI Lumonics Reports First Quarter 2001 Financial Results

Apr 25, 2001, 01:00 ET from GSI Lumonics Inc.

    KANATA, Ontario, April 25 /PRNewswire/ -- GSI Lumonics Inc.,
 (Nasdaq:   GSLI; Toronto: LSI) today announced results for the first quarter
 ended March 30, 2001.  (All data is expressed following U.S. GAAP and in U.S.
 dollars.)
     Net income for the first quarter of fiscal and calendar year 2001 was $4.8
 million (12 cents per share basic and diluted) which equaled net income of
 $4.8 million for the first quarter of 2000 (14 cents per share basic and 13
 cents diluted).
     Sales in the first quarter of 2001 were $87.7 million compared to $87.9
 million in the first quarter of 2000 and $95.5 million in the prior, fourth
 quarter of 2000.  On a pro forma basis, net of discontinued and divested
 product lines, sales were $86.9, $75.2 and $93.5 million, respectively.  Sales
 of systems to the Semiconductor and Electronics markets totaled approximately
 $47 million in the quarter just ended compared to $38 million in the first
 quarter of last year and $43 million in the fourth quarter of last year.
 During the first quarter of 2001, the Company negotiated the sale of its
 Laserdyne product line and associated custom industrial systems business,
 which closed at the beginning of April.  During the first quarter of 2001,
 revenue shipments of those products were about half of their normal run rate
 of approximately 6% of total consolidated sales, while bookings ran close to
 their normal run rate.
     The booking of new orders during the first quarter of 2001, however,
 reflected a slowdown in demand for systems for Semiconductor and Electronics
 processing applications and in demand for optical components, particularly for
 Telecommunications.  The Company booked approximately $83 million in new
 orders during the quarter just ended, which included $20 million in blanket
 orders for OEM assemblies used in Medical applications.  This compares to
 bookings of $93 million (of which OEM medical assemblies were $10 million) in
 the first quarter of last year and a record $112 million in the prior quarter
 ended December 2000.  Bookings of systems for Semiconductor and Electronics
 were $30 million compared to $40 million in the first quarter of last year and
 $62 million in the fourth quarter of last year.  Sales of precision optics
 (from the newly-formed WavePrecision subsidiary) were flat at about $7 million
 compared to the fourth quarter of last year, but bookings of new orders
 declined to $2.4 million, net of order cancellations.
     Order backlog at March 30, 2001 was $115 million compared to $87 million
 at March 31, 2000 and $119 million at  December 31, 2000.  The backlog at the
 end of the current quarter included approximately $10 million in Precision
 Optics.  The backlog also included about $7 million in Laserdyne and
 associated custom industrial systems ($4.9 million at December 31, 2000)
 which were divested at the beginning of April 2001.
     For the first quarter of 2001, geographically, approximately 50% of sales
 were in North America, 26% in Asia-Pacific, including Japan, and 24% in
 Europe.
     Gross margins were 37%, below expectations primarily due to low margins
 and production activity at the Company's two facilities involved in industrial
 laser sources and systems, and certain other lower-margin products currently
 under evaluation.  Operating expenses benefited from a reversal of $1.4
 million in over-accrual in prior years related to litigation.
     Commenting on the quarter, Charles Winston, President and Chief Executive
 Officer of GSI Lumonics, said "Given the current difficult capital equipment
 markets in which we participate combined with typical softness we historically
 experience in the first calendar quarter, shipments and new bookings were
 encouraging.  However, the mix of bookings in the first quarter indicate the
 Company will not be immune to the issues experienced by our peers in the
 industries we mutually serve."  He noted that "GSI Lumonics enters this period
 of uncertainty with a strong cash position combined with the opportunity in a
 less hectic business environment to improve operational efficiencies including
 full implementation of demand response manufacturing."
 
     Financial Condition
     At March 30, 2001, cash, cash equivalents and short-term investments were
 $108 million compared with $134 million at the end of the fourth quarter last
 year, the difference being the payment of taxes on the gain on the sale of the
 Company's Life Science business to Packard BioScience Company at the beginning
 of the fourth quarter of last year.  Bank debt and the current portion of
 long-term debt at the end of the first quarter 2001 totaled $14.4 million.  In
 addition, the Company owns approximately 4.5 million shares of unregistered
 Packard BioScience Company common stock.  As evidenced by the recently
 announced sale of the Laserdyne/Custom systems business, the Company continues
 to strengthen its balance sheet by focusing on its core business.  The Company
 expects to pay $15.2 million in April in settlement of litigation pursuant to
 the  decision of the Federal Appeals Court as previously announced on April
 19, 2001.
 
     Outlook and Commentary
     Normally, GSI Lumonics experiences seasonality in both sales and bookings,
 with softness in the first quarter, strength in the spring, slowdown in the
 summer months, followed by a strong fourth quarter.  Given the change in
 booking patterns experienced in the first quarter and net of the recently
 completed divestiture, we estimate that consolidated quarterly sales will
 settle at about $75 million per quarter.  Gross margins are expected to
 improve to the low 40% range by year end primarily due to improved operational
 efficiencies and change to a more favorable product mix.  Technology buys are
 expected to form the base for sales in the semiconductor market as the
 industry continues to move to 300 mm wafers, copper links, smaller line widths
 and low-K dielectric, as well as SOI (silicon on insulator) and other new
 technologies which would benefit using GSI Lumonics' processing systems.  One
 piece of encouraging supporting data is that the Company experienced record
 bookings of nearly $15 million in the first quarter for its WaferMark product
 line.  In addition, analog semiconductor sales are generally less volatile
 than logic and microprocessor sales, which bodes well for our laser trim/test
 process systems.   SG&A expenses should moderate throughout the year, with
 investment in R&D expected to approach $35 million for the year.
     Overall, based upon the assumptions above, which are subject to change
 based upon changing market and operating conditions, basic earnings per share
 for 2001 would be in the range of $0.40 per share.
     GSI Lumonics Inc. supplies advanced laser systems, components and services
 to semiconductor, electronics and other markets, and precision optics for
 telecommunications networks. GSI Lumonics' common shares are listed on Nasdaq
 (GSLI) and The Toronto Stock Exchange (LSI). The Company's web site address is
 www.gsilumonics.com.
     A conference call is scheduled for 5:00PM EST, today, Wednesday, April
 25th.  To participate, call 1-800-379-5831 no later than 4:55PM EST and
 identify yourself to the operator.  A replay of the call will be available one
 hour after the call ends through May 2, 2001 at 800-633-8284 or 858-812-6440
 for international callers, access code 18548935.  This call is also being
 broadcast live over the internet in listen-only mode.  For live webcasting, go
 to www.videonewswire.com/GSI/042501 at least 15 minutes prior to the call in
 order to register, download, and install any necessary software.
 
      For more information:
      Fran Crecco
      GSI Lumonics Inc.
      978-439-5511  (ext: 6104)
 
     To the extent this news release discusses financial projections,
 information or expectations about GSI Lumonics Inc., products or markets, or
 otherwise makes statements about the future, such statements are forward
 looking and are subject to a number of risks and uncertainties that could
 cause actual results to differ materially from the statements made. The
 factors include the fact that the Company's sales have been and are expected
 to continue to be dependent upon customer capital equipment expenditures,
 which are, in turn, affected by business cycles in the markets served by those
 customers. Other factors include volatility in the semiconductor industry, the
 risk of order delays and cancellations, the risk of delays by customers in
 introducing their new products and market acceptance of products incorporating
 subsystems supplied by the Company, similar risks to the Company of delays in
 its new products and their risks detailed in the Company's Annual Reports on
 Form 10-K and Quarterly Reports on Form 10-Q.
 
 
                               GSI LUMONICS INC.
                    CONSOLIDATED BALANCE SHEETS (unaudited)
       (U.S. GAAP and in thousands of U.S. dollars, except share amounts)
 
                                                    March 30,     December 31,
                                                       2001          2000
     ASSETS
     Current
     Cash and cash equivalents                        $80,021       $113,858
     Short-term investments                            28,133         20,020
     Accounts receivable, less allowance
      of $2,658 (December 31, 2000 - $2,758)           73,629         83,398
     Due from related party                             1,256          1,828
     Inventories                                       81,274         77,906
     Deferred tax assets                               24,703         25,615
     Other current assets                               5,169          5,465
     Total current assets                             294,185        328,090
 
     Property, plant and equipment,
      net of accumulated depreciation
      of $24,258 (December 31, 2000 - $23,961)         34,015         33,368
     Deferred tax assets                                7,149          6,253
     Other assets                                      37,509         37,398
     Intangible assets, net of amortization
      of $12,640 (December 31, 2000 - $11,363)         24,709         26,075
                                                     $397,567       $431,184
 
     LIABILITIES AND STOCKHOLDERS' EQUITY
     Current
     Bank indebtedness                                $10,676        $11,414
     Accounts payable                                  23,619         30,030
     Accrued compensation and benefits                 10,813         12,797
     Income taxes payable                               3,314         32,489
     Other accrued expenses                            49,537         46,561
     Current portion of long-term debt                  3,762          3,821
     Total current liabilities                        101,721        137,112
 
     Long-term debt due after one year                  2,654          2,697
     Deferred compensation                              2,156          2,108
     Total liabilities                                106,531        141,917
 
     Stockholders' equity
     Capital stock, no par value;
      Issued common shares of 40,262,011
      (December 31, 2000 - 40,162,608)                302,155        301,667
     Additional paid-in capital                           959            759
     Retained earnings                                  5,931          1,152
     Accumulated other comprehensive income          (18,009)       (14,311)
     Total stockholders' equity                       291,036        289,267
                                                     $397,567       $431,184
 
     The accompanying notes are an integral part of these financial statements
 
 
                               GSI LUMONICS INC.
               CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited)
       (U.S. GAAP and in thousands of U.S. dollars, except share amounts)
 
                                                        Three months ended
                                                     March 30,      March 31,
                                                       2001           2000
 
     Sales                                            $87,707        $87,900
 
     Cost of goods sold                                55,172         50,931
 
     Gross profit                                      32,535         36,969
 
     Operating expenses:
     Research and development                           6,974          8,513
     Selling, general and administrative               19,035         20,287
     Amortization of technology and other intangibles   1,333          1,225
     Other                                            (1,400)        (2,670)
     Income from operations                             6,593          9,614
 
     Interest income, net                               1,149             82
     Foreign exchange transaction losses                (216)        (2,386)
     Income before income taxes                         7,526          7,310
 
     Income tax provision                               2,747          2,539
     Net income                                        $4,779         $4,771
 
     Net income per common share:
     Basic                                              $0.12          $0.14
     Diluted                                            $0.12          $0.13
 
     Weighted average common shares
      outstanding (000's)                              40,217         34,544
     Weighted average common shares outstanding
      and dilutive potential common shares (000's)     40,961         36,645
 
     The accompanying notes are an integral part of these financial statements
 
 
                               GSI LUMONICS INC.
               CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited)
                  (U.S. GAAP and in thousands of U.S. dollars)
 
                                                        Three months ended
                                                     March 30,      March 31,
                                                       2001           2000
 
     Cash flows from operating activities:
     Net income                                        $4,779         $4,771
     Adjustments to reconcile net income
      to net cash used in operating activities:
     Compensation expense                                 200              -
     Depreciation and amortization                      3,354          3,263
     Deferred compensation                                 48            223
     Deferred income taxes                              (928)          1,574
     Changes in current assets and liabilities:
     Accounts receivable                                9,124        (1,958)
     Inventories                                      (5,121)       (12,869)
     Other current assets                                 147        (1,885)
     Accounts payable, accrued expenses,
      and taxes payable                              (31,794)        (2,460)
     Cash used in operating activities               (20,191)        (9,341)
 
     Cash flows from investing activities:
     Additions to property, plant and equipment, net  (3,633)        (1,915)
     Maturity of short-term investments                20,020          7,342
     Purchase of short-term investments              (28,133)              -
     (Increase) decrease in other assets              (3,464)            431
     Cash provided by (used in) investing activities (15,210)          5,858
 
     Cash flows from financing activities:
     Payments of bank indebtedness                      (738)           (55)
     Issue of share capital (net of issue costs)          488          3,283
     Cash provided by (used in) financing activities    (250)          3,228
     Effect of exchange rates on cash
      and cash equivalents                              1,814          (503)
     Decrease in cash and cash equivalents           (33,837)          (758)
     Cash and cash equivalents, beginning of period   113,858         25,272
     Cash and cash equivalents, end of period         $80,021        $24,514
 
     Supplemental disclosure of cash flow information:
     Cash paid during the period for:
     Interest                                            $155           $155
     Income taxes                                     $31,027         $1,200
 
     The accompanying notes are an integral part of these financial statements
 
 
                               GSI Lumonics Inc.
       Consolidated Sales Analysis By Market Sector and Geographic Region
                           [millions of U.S. dollars]
 
                              Three months ended          Three months ended
 
     (unaudited)                March 30, 2001               March 31, 2000
 
                                            % of                       % of
 
     Market Sector:           Sales         Total        Sales         Total
 
     Semiconductor            $26.5           30%        $13.3           15%
     Electronics               20.8           24%         24.3           28%
     Medical                    8.2            9%         11.0           12%
     Components                 7.8            9%          7.5            9%
     Precision Optics           6.5            7%          2.3            3%
     Other                      4.2            5%         17.2           19%
     Parts & Service           13.7           16%         12.3           14%
 
     Total                    $87.7          100%         87.9          100%
 
 
     Geographic Region:
 
     USA                      $36.4           41%        $42.6           49%
     Canada                     6.8            8%          3.9            4%
     Europe                    20.8           24%         23.2           27%
     Japan                     14.0           16%         10.8           12%
     Asia-Pacific, other        9.1           10%          7.3            8%
     Latin and South America    0.6            1%          0.1            0%
 
     Total                    $87.7          100%         87.9          100%
 
 
                     MAKE YOUR OPINION COUNT -  Click Here
                http://tbutton.prnewswire.com/prn/11690X53703416
 
 

SOURCE GSI Lumonics Inc.
    KANATA, Ontario, April 25 /PRNewswire/ -- GSI Lumonics Inc.,
 (Nasdaq:   GSLI; Toronto: LSI) today announced results for the first quarter
 ended March 30, 2001.  (All data is expressed following U.S. GAAP and in U.S.
 dollars.)
     Net income for the first quarter of fiscal and calendar year 2001 was $4.8
 million (12 cents per share basic and diluted) which equaled net income of
 $4.8 million for the first quarter of 2000 (14 cents per share basic and 13
 cents diluted).
     Sales in the first quarter of 2001 were $87.7 million compared to $87.9
 million in the first quarter of 2000 and $95.5 million in the prior, fourth
 quarter of 2000.  On a pro forma basis, net of discontinued and divested
 product lines, sales were $86.9, $75.2 and $93.5 million, respectively.  Sales
 of systems to the Semiconductor and Electronics markets totaled approximately
 $47 million in the quarter just ended compared to $38 million in the first
 quarter of last year and $43 million in the fourth quarter of last year.
 During the first quarter of 2001, the Company negotiated the sale of its
 Laserdyne product line and associated custom industrial systems business,
 which closed at the beginning of April.  During the first quarter of 2001,
 revenue shipments of those products were about half of their normal run rate
 of approximately 6% of total consolidated sales, while bookings ran close to
 their normal run rate.
     The booking of new orders during the first quarter of 2001, however,
 reflected a slowdown in demand for systems for Semiconductor and Electronics
 processing applications and in demand for optical components, particularly for
 Telecommunications.  The Company booked approximately $83 million in new
 orders during the quarter just ended, which included $20 million in blanket
 orders for OEM assemblies used in Medical applications.  This compares to
 bookings of $93 million (of which OEM medical assemblies were $10 million) in
 the first quarter of last year and a record $112 million in the prior quarter
 ended December 2000.  Bookings of systems for Semiconductor and Electronics
 were $30 million compared to $40 million in the first quarter of last year and
 $62 million in the fourth quarter of last year.  Sales of precision optics
 (from the newly-formed WavePrecision subsidiary) were flat at about $7 million
 compared to the fourth quarter of last year, but bookings of new orders
 declined to $2.4 million, net of order cancellations.
     Order backlog at March 30, 2001 was $115 million compared to $87 million
 at March 31, 2000 and $119 million at  December 31, 2000.  The backlog at the
 end of the current quarter included approximately $10 million in Precision
 Optics.  The backlog also included about $7 million in Laserdyne and
 associated custom industrial systems ($4.9 million at December 31, 2000)
 which were divested at the beginning of April 2001.
     For the first quarter of 2001, geographically, approximately 50% of sales
 were in North America, 26% in Asia-Pacific, including Japan, and 24% in
 Europe.
     Gross margins were 37%, below expectations primarily due to low margins
 and production activity at the Company's two facilities involved in industrial
 laser sources and systems, and certain other lower-margin products currently
 under evaluation.  Operating expenses benefited from a reversal of $1.4
 million in over-accrual in prior years related to litigation.
     Commenting on the quarter, Charles Winston, President and Chief Executive
 Officer of GSI Lumonics, said "Given the current difficult capital equipment
 markets in which we participate combined with typical softness we historically
 experience in the first calendar quarter, shipments and new bookings were
 encouraging.  However, the mix of bookings in the first quarter indicate the
 Company will not be immune to the issues experienced by our peers in the
 industries we mutually serve."  He noted that "GSI Lumonics enters this period
 of uncertainty with a strong cash position combined with the opportunity in a
 less hectic business environment to improve operational efficiencies including
 full implementation of demand response manufacturing."
 
     Financial Condition
     At March 30, 2001, cash, cash equivalents and short-term investments were
 $108 million compared with $134 million at the end of the fourth quarter last
 year, the difference being the payment of taxes on the gain on the sale of the
 Company's Life Science business to Packard BioScience Company at the beginning
 of the fourth quarter of last year.  Bank debt and the current portion of
 long-term debt at the end of the first quarter 2001 totaled $14.4 million.  In
 addition, the Company owns approximately 4.5 million shares of unregistered
 Packard BioScience Company common stock.  As evidenced by the recently
 announced sale of the Laserdyne/Custom systems business, the Company continues
 to strengthen its balance sheet by focusing on its core business.  The Company
 expects to pay $15.2 million in April in settlement of litigation pursuant to
 the  decision of the Federal Appeals Court as previously announced on April
 19, 2001.
 
     Outlook and Commentary
     Normally, GSI Lumonics experiences seasonality in both sales and bookings,
 with softness in the first quarter, strength in the spring, slowdown in the
 summer months, followed by a strong fourth quarter.  Given the change in
 booking patterns experienced in the first quarter and net of the recently
 completed divestiture, we estimate that consolidated quarterly sales will
 settle at about $75 million per quarter.  Gross margins are expected to
 improve to the low 40% range by year end primarily due to improved operational
 efficiencies and change to a more favorable product mix.  Technology buys are
 expected to form the base for sales in the semiconductor market as the
 industry continues to move to 300 mm wafers, copper links, smaller line widths
 and low-K dielectric, as well as SOI (silicon on insulator) and other new
 technologies which would benefit using GSI Lumonics' processing systems.  One
 piece of encouraging supporting data is that the Company experienced record
 bookings of nearly $15 million in the first quarter for its WaferMark product
 line.  In addition, analog semiconductor sales are generally less volatile
 than logic and microprocessor sales, which bodes well for our laser trim/test
 process systems.   SG&A expenses should moderate throughout the year, with
 investment in R&D expected to approach $35 million for the year.
     Overall, based upon the assumptions above, which are subject to change
 based upon changing market and operating conditions, basic earnings per share
 for 2001 would be in the range of $0.40 per share.
     GSI Lumonics Inc. supplies advanced laser systems, components and services
 to semiconductor, electronics and other markets, and precision optics for
 telecommunications networks. GSI Lumonics' common shares are listed on Nasdaq
 (GSLI) and The Toronto Stock Exchange (LSI). The Company's web site address is
 www.gsilumonics.com.
     A conference call is scheduled for 5:00PM EST, today, Wednesday, April
 25th.  To participate, call 1-800-379-5831 no later than 4:55PM EST and
 identify yourself to the operator.  A replay of the call will be available one
 hour after the call ends through May 2, 2001 at 800-633-8284 or 858-812-6440
 for international callers, access code 18548935.  This call is also being
 broadcast live over the internet in listen-only mode.  For live webcasting, go
 to www.videonewswire.com/GSI/042501 at least 15 minutes prior to the call in
 order to register, download, and install any necessary software.
 
      For more information:
      Fran Crecco
      GSI Lumonics Inc.
      978-439-5511  (ext: 6104)
 
     To the extent this news release discusses financial projections,
 information or expectations about GSI Lumonics Inc., products or markets, or
 otherwise makes statements about the future, such statements are forward
 looking and are subject to a number of risks and uncertainties that could
 cause actual results to differ materially from the statements made. The
 factors include the fact that the Company's sales have been and are expected
 to continue to be dependent upon customer capital equipment expenditures,
 which are, in turn, affected by business cycles in the markets served by those
 customers. Other factors include volatility in the semiconductor industry, the
 risk of order delays and cancellations, the risk of delays by customers in
 introducing their new products and market acceptance of products incorporating
 subsystems supplied by the Company, similar risks to the Company of delays in
 its new products and their risks detailed in the Company's Annual Reports on
 Form 10-K and Quarterly Reports on Form 10-Q.
 
 
                               GSI LUMONICS INC.
                    CONSOLIDATED BALANCE SHEETS (unaudited)
       (U.S. GAAP and in thousands of U.S. dollars, except share amounts)
 
                                                    March 30,     December 31,
                                                       2001          2000
     ASSETS
     Current
     Cash and cash equivalents                        $80,021       $113,858
     Short-term investments                            28,133         20,020
     Accounts receivable, less allowance
      of $2,658 (December 31, 2000 - $2,758)           73,629         83,398
     Due from related party                             1,256          1,828
     Inventories                                       81,274         77,906
     Deferred tax assets                               24,703         25,615
     Other current assets                               5,169          5,465
     Total current assets                             294,185        328,090
 
     Property, plant and equipment,
      net of accumulated depreciation
      of $24,258 (December 31, 2000 - $23,961)         34,015         33,368
     Deferred tax assets                                7,149          6,253
     Other assets                                      37,509         37,398
     Intangible assets, net of amortization
      of $12,640 (December 31, 2000 - $11,363)         24,709         26,075
                                                     $397,567       $431,184
 
     LIABILITIES AND STOCKHOLDERS' EQUITY
     Current
     Bank indebtedness                                $10,676        $11,414
     Accounts payable                                  23,619         30,030
     Accrued compensation and benefits                 10,813         12,797
     Income taxes payable                               3,314         32,489
     Other accrued expenses                            49,537         46,561
     Current portion of long-term debt                  3,762          3,821
     Total current liabilities                        101,721        137,112
 
     Long-term debt due after one year                  2,654          2,697
     Deferred compensation                              2,156          2,108
     Total liabilities                                106,531        141,917
 
     Stockholders' equity
     Capital stock, no par value;
      Issued common shares of 40,262,011
      (December 31, 2000 - 40,162,608)                302,155        301,667
     Additional paid-in capital                           959            759
     Retained earnings                                  5,931          1,152
     Accumulated other comprehensive income          (18,009)       (14,311)
     Total stockholders' equity                       291,036        289,267
                                                     $397,567       $431,184
 
     The accompanying notes are an integral part of these financial statements
 
 
                               GSI LUMONICS INC.
               CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited)
       (U.S. GAAP and in thousands of U.S. dollars, except share amounts)
 
                                                        Three months ended
                                                     March 30,      March 31,
                                                       2001           2000
 
     Sales                                            $87,707        $87,900
 
     Cost of goods sold                                55,172         50,931
 
     Gross profit                                      32,535         36,969
 
     Operating expenses:
     Research and development                           6,974          8,513
     Selling, general and administrative               19,035         20,287
     Amortization of technology and other intangibles   1,333          1,225
     Other                                            (1,400)        (2,670)
     Income from operations                             6,593          9,614
 
     Interest income, net                               1,149             82
     Foreign exchange transaction losses                (216)        (2,386)
     Income before income taxes                         7,526          7,310
 
     Income tax provision                               2,747          2,539
     Net income                                        $4,779         $4,771
 
     Net income per common share:
     Basic                                              $0.12          $0.14
     Diluted                                            $0.12          $0.13
 
     Weighted average common shares
      outstanding (000's)                              40,217         34,544
     Weighted average common shares outstanding
      and dilutive potential common shares (000's)     40,961         36,645
 
     The accompanying notes are an integral part of these financial statements
 
 
                               GSI LUMONICS INC.
               CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited)
                  (U.S. GAAP and in thousands of U.S. dollars)
 
                                                        Three months ended
                                                     March 30,      March 31,
                                                       2001           2000
 
     Cash flows from operating activities:
     Net income                                        $4,779         $4,771
     Adjustments to reconcile net income
      to net cash used in operating activities:
     Compensation expense                                 200              -
     Depreciation and amortization                      3,354          3,263
     Deferred compensation                                 48            223
     Deferred income taxes                              (928)          1,574
     Changes in current assets and liabilities:
     Accounts receivable                                9,124        (1,958)
     Inventories                                      (5,121)       (12,869)
     Other current assets                                 147        (1,885)
     Accounts payable, accrued expenses,
      and taxes payable                              (31,794)        (2,460)
     Cash used in operating activities               (20,191)        (9,341)
 
     Cash flows from investing activities:
     Additions to property, plant and equipment, net  (3,633)        (1,915)
     Maturity of short-term investments                20,020          7,342
     Purchase of short-term investments              (28,133)              -
     (Increase) decrease in other assets              (3,464)            431
     Cash provided by (used in) investing activities (15,210)          5,858
 
     Cash flows from financing activities:
     Payments of bank indebtedness                      (738)           (55)
     Issue of share capital (net of issue costs)          488          3,283
     Cash provided by (used in) financing activities    (250)          3,228
     Effect of exchange rates on cash
      and cash equivalents                              1,814          (503)
     Decrease in cash and cash equivalents           (33,837)          (758)
     Cash and cash equivalents, beginning of period   113,858         25,272
     Cash and cash equivalents, end of period         $80,021        $24,514
 
     Supplemental disclosure of cash flow information:
     Cash paid during the period for:
     Interest                                            $155           $155
     Income taxes                                     $31,027         $1,200
 
     The accompanying notes are an integral part of these financial statements
 
 
                               GSI Lumonics Inc.
       Consolidated Sales Analysis By Market Sector and Geographic Region
                           [millions of U.S. dollars]
 
                              Three months ended          Three months ended
 
     (unaudited)                March 30, 2001               March 31, 2000
 
                                            % of                       % of
 
     Market Sector:           Sales         Total        Sales         Total
 
     Semiconductor            $26.5           30%        $13.3           15%
     Electronics               20.8           24%         24.3           28%
     Medical                    8.2            9%         11.0           12%
     Components                 7.8            9%          7.5            9%
     Precision Optics           6.5            7%          2.3            3%
     Other                      4.2            5%         17.2           19%
     Parts & Service           13.7           16%         12.3           14%
 
     Total                    $87.7          100%         87.9          100%
 
 
     Geographic Region:
 
     USA                      $36.4           41%        $42.6           49%
     Canada                     6.8            8%          3.9            4%
     Europe                    20.8           24%         23.2           27%
     Japan                     14.0           16%         10.8           12%
     Asia-Pacific, other        9.1           10%          7.3            8%
     Latin and South America    0.6            1%          0.1            0%
 
     Total                    $87.7          100%         87.9          100%
 
 
                     MAKE YOUR OPINION COUNT -  Click Here
                http://tbutton.prnewswire.com/prn/11690X53703416
 
 SOURCE  GSI Lumonics Inc.