GSI Group Inc. Announces NASDAQ Delisting and Reports Progress on Revenue Recognition Review and Preliminary Q3 2009 Bookings and Cash Balance
BEDFORD, Mass., Nov. 4 -- GSI Group Inc. (the "Company") (NASDAQ:GSIG) , a supplier of precision technology and semiconductor systems, today announced that it received notification from the Nasdaq Hearings Panel that the Panel has determined to delist the Company's shares from the Nasdaq Stock Market and will suspend trading in the Company's shares effective at the open of business on November 5, 2009. The Panel's determination was made in connection with the Company's non-compliance with the filing requirements set forth in Listing Rule 5250(c)(1) due to the delayed filing of certain of its periodic reports.
As provided under applicable Nasdaq rules, the Company intends to request a review of the Panel's determination by the Nasdaq Listing and Hearing Review Council. The request for review will not operate as a stay of the Panel's determination to delist the Company's securities. In addition, in accordance with Nasdaq rules, both the Listing Council and the Board of Directors of The Nasdaq Stock Market LLC may call the Panel's decision for review. Under the applicable Nasdaq rules, the Listing Council cannot grant an exception to the Company beyond November 2, 2009 (which is 360 days from the due date of the first late periodic report). The Listing Council may, in its discretion, recommend that the Nasdaq Board consider the matter further. However, there can be no assurances that the Company's request for review will be successful, that either the Listing Council or the Nasdaq Board will call the decision for review, or that the Company's common stock will not be delisted.
The Company anticipates that its common stock will be quoted on the Pink OTC Markets Inc. automatically and immediately after Nasdaq suspends trading. The trading symbol of the Company's common stock will continue to be "GSIG."
As previously disclosed, the Company previously requested and was granted a hearing before the Panel. The Panel determined to grant the Company's request for continued listing on Nasdaq conditioned on the Company (i) reporting to the Panel on or before August 31, 2009 the status of its public disclosure about the range of adjustments the Company expects to make to revenue transactions in its Precision Technology Segment for 2004 through 2008 and (ii) filing its delayed periodic reports and any required restatements on or before November 2, 2009. On August 31, 2009, the Company issued a press release announcing, among other matters, estimated upper bounds of the revenue adjustments in its Precision Technology Segment during fiscal years 2004 through 2008. While the Company continues to work diligently to complete the preparation and filing of its delayed periodic reports, in addition to its restated financial statements for fiscal years 2006, 2007 and 2008, the Company was not able to meet the November 2, 2009 deadline.
The Company has substantially completed its review of revenue transactions in its Precision Technology Segment. However, the Company requires additional time to finalize its financial statements. As previously disclosed, the evaluation and assessment of potential adjustments to revenue transactions with multiple element arrangements in the Company's Precision Technology Segment during fiscal years 2004 through 2008 entailed the compilation, review, and analysis of a database of approximately 84,000 purchase orders comprising approximately 300,000 lines of data from nine different enterprise reporting systems. The Company's review further consisted of analyzing each line item of every purchase order submitted during this period, which required the Company to perform several iterations of the analysis on several subsets of the data such that the Company estimates it analyzed over 500,000 lines of data in total. Gathering the data for analysis proved to be more challenging, and required more time, than originally planned. The reviewed data resided on nine different enterprise wide reporting systems located in nine offices in five countries on three continents: China, Japan, Germany, the United Kingdom, and the United States. The Company intends to complete the preparation and filing of its financial statements and regain compliance as expeditiously as possible.
Today, the Company also reported bookings for the third quarter of 2009 and cash position as of October 31, 2009:
Bookings:
Consolidated bookings for the third quarter ended October 2, 2009 were approximately $60 million compared with bookings of approximately $52 million for the comparable period in 2008. Consolidated bookings for the third quarter of 2008 included bookings of the Company's general optics business, which was divested during the fourth quarter of 2008, and included bookings of Excel Technology, Inc. from the date that company was acquired, August 20, 2008. Bookings of the Company's Semiconductor Systems Segment for the third quarter ended October 2, 2009 declined approximately 40% compared with the same period in 2008, as the semiconductor industry has been undergoing one of the most severe downturns on record.
Cash:
As of October 31, 2009, the Company had cash and cash equivalents of approximately $57 million, including approximately $3 million of net cash proceeds received from the sale of a building the Company owned in Rugby, England. In addition to the cash and cash equivalents, at October 31, 2009, the Company owned approximately $14 million of auction rate securities at fair value. Subsequent to October 31, 2009, the Company sold a portion of its auction rate securities for net cash proceeds of approximately $3 million.