GSI Group Reports Additional Progress on Revenue Recognition Review and Nasdaq Hearing



    BEDFORD, Mass., June 30 /CNW/ -- GSI Group Inc. (Nasdaq:   GSIG, the
"Company") today announced that the Company's evaluation of sales transactions
of its Semiconductor Systems Segment during fiscal years 2004 through 2008 is
nearing completion, and reported approximate ranges of  restated revenues for
that segment during each of those five fiscal years.

    Based on preliminary results of its evaluation, the Company anticipates
that the following Semiconductor Systems revenues will be moved from the
indicated periods to later periods:


    
                                        Approximate Amount
                                         of Semiconductor
                                        Systems Revenues to
                                         be Moved to Later
              Period                          Periods
    

    
    Year Ended December 31, 2004          $15 to 17 million
    Year Ended December 31, 2005          $20 to 22 million
    Year Ended December 31, 2006          $50 to 52 million
    Year Ended December 31, 2007          $54 to 56 million
    Year Ended December 31, 2008          $16 to 18 million

    
    The revenues to be moved represent errors in the timing of revenue
recognized from multiple element transactions. Substantially all amounts due
from customers associated with these transactions have been paid and the
Company's cash position has not been materially impacted by the correction of
the accounting errors. The Company is currently completing the determination
of the appropriate periods in which the revenues should be recognized based
upon delivery of the final element in the sales arrangement. The actual amount
of revenues that will move to later periods may differ from the amounts shown
above.

    The Company also announced today that it is currently reviewing the
timing of revenue recognized in connection with multiple element arrangements
in its Precision Technology Segment from 2004 through 2008 to determine if
adjustments need to be made to those periods. Substantially all amounts due
from customers associated with the transactions being reviewed have been paid.

    On May 19, 2009, the Company announced that the Company's Audit Committee
of the Board of Directors (the "Audit Committee"), with the assistance of its
independent legal counsel and forensic accounting firm, had concluded its
previously announced review of sales transactions in the Company's
Semiconductor Systems Segment and other sales transactions that contain
arrangements with multiple deliverables, for fiscal years 2006, 2007 and 2008.
 At that time, the Company also announced that it was evaluating the results
of the Audit Committee's review, and that it was also reviewing sales
transactions of its Semiconductor Systems Segment made during fiscal years
2004 and 2005 to determine if adjustments need to be made to those periods.

    The Company also announced today that on June 11, 2009, it appeared
before the Nasdaq Listing Qualifications Panel (the "Panel") and appealed the
staff determination notice (the "Delisting Notice") it recently received from
The Nasdaq Stock Market ("Nasdaq").

    The Company requested that the Panel stay the delisting of the Company's
common stock to allow the Company additional time to file its Quarterly Report
on Form 10-Q for the three month period ended September 26, 2008 and its
Quarterly Report on Form 10-Q for the three month period ended April 3, 2009
(the "Quarterly Reports") and its Annual Report on Form 10-K for the year
ended December 31, 2008 (the "Annual Report").

    The Company expects that Nasdaq will make a determination within
approximately thirty days after the date of the hearing.  No such
determination has yet been communicated to the Company.

    On May 19, 2009, the Company announced that it had been granted a hearing
before the Panel on June 11, 2009 to appeal the Delisting Notice it had
received from Nasdaq stating that the Company's common stock is subject to
delisting since the Company is not in compliance with the filing requirements
for continued listing as set forth in Nasdaq's listing rules.
    

    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," "plan," and other similar expressions. These
forward-looking statements include, but are not limited to, statements related
to: ranges of Semiconductor Systems revenue for 2004-2008; the prior review of
the Semiconductor Systems segment by the Company's Audit Committee and the
results of that review; completion of the restatement of the Company's
financial results for fiscal years 2006, 2007 and 2008; the delisting
proceedings with Nasdaq, the Company's efforts to obtain a stay thereof and
the Company's expectations regarding receipt of a determination from Nasdaq;
and other statements that are not historical facts. These forward looking
statements contain estimates and involve a number of risks, uncertainties,
assumptions and other factors that could affect future results and cause
actual results and events to differ materially from historical and expected
results and those expressed or implied in the forward looking statements,
including, but not limited to, the following: the highly unpredictable nature
of the semiconductor and electronics materials processing industry;
deteriorating market conditions; the effect of the current financial and
economic crises on credit markets, financial institutions, customers,
suppliers and consumers; the Company's ability to manage its significant
indebtedness in light of current economic and business conditions; the
potential results of any restructuring of outstanding indebtedness including
the issuance of a substantial amount of equity securities in exchange for a
portion of such indebtedness and the dilutive impact of such issuance, the
renegotiation of the terms of indebtedness that remains outstanding or the
incurrence of additional material obligations as part of any such
restructuring; the Company's ability to reduce operating expenses and achieve
anticipated cost reductions and savings; the Company's ability to grow and
increase profitability; future liquidity and valuation of auction rate
securities; changes in accounting standards; failures of the Company to
properly identify the timing of when revenue should be recognized; the
Company's ability to quickly increase manufacturing capacity and promptly
respond to fluctuating product demands; the Company's need to invest in
research and development; the Company's ability to develop and deliver new
competitive technology and enhancements and customer acceptance thereof;
failure to identify and manage weaknesses in internal controls; the effects of
competition; risks related to consolidation of operations and the integration
of operations and employees of acquired businesses, including Excel; the
Company's inability to recognize synergies of acquired businesses, including
Excel; the completion and outcome of the Company's financial restatements and
review of financial results; the Company's ability to complete and file its
delayed periodic reports with the SEC on a timely basis; the Company's ability
to meet the requirements for continued listing of the Company's shares on
Nasdaq; and the risks of existing and future litigation and governmental or
other regulatory inquiry or proceedings arising out of or related to the
Company's revenue recognition practices. 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 the Company's Annual Report on Form 10-K for the year ended
December 31, 2007 and in the Company's subsequent filings with the SEC made
prior to or after the date hereof. Such statements are based on the Company's
management's beliefs and assumptions and on information currently available to
the Company's management. The Company disclaims any obligation to update any
forward-looking statements as a result of developments occurring after the
date of this document. The unaudited financial information presented in this
press release is subject to change based on, among other factors, the
completion of the work attendant to the restatement of the Company's financial
statements and the completion of its delayed periodic reports herein
discussed. The information included in this press release is not intended as
and should not be viewed as a substitute for full financial statements.


    
    For more information contact:
    GSI Group Inc. Investor Relations
    Telephone: 781-266-5137
    Email: InvestorRelations@gsig.com




    




For further information:

For further information: GSI Group Inc. Investor Relations,
+1-781-266-5137, InvestorRelations@gsig.com Web Site: http://www.gsig.com

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