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Strategies & Market Trends : Technical analysis for shorts & longs -- Ignore unavailable to you. Want to Upgrade?

To: Johnny Canuck who wrote (41044)	4/14/2004 5:31:08 AM
From: Johnny Canuck	Read Replies (1) \| Respond to of 70601

From GSLI 10K: 2003 Compared to 2002 Sales by Segment. The following table sets forth sales in millions of dollars by our business segments for 2003 and 2002. 2003 2002 Increase Sales Sales (Decrease) --------- --------- ------------ Components $ 73.8 $ 70.5 $ 3.3 Lasers 33.4 23.7 9.7 Laser Systems 82.7 65.9 16.8 Other and intra-segment eliminations (4.3 ) (1.0 ) (3.3 ) ----- ----- ------ Total $ 185.6 $ 159.1 $ 26.5 ----- ----- ------ Sales for 2003 increased by $26.5 million or 17% compared to 2002. The increase in sales is primarily a result of the gradual economic recovery we have begun to see in the latter part of 2003. Sales in all our business segments showed improvement over the prior year, after the impact of acquisitions. While we have seen increased order demand across the board and we are cautiously optimistic, visibility for future sales projections is still limited. Sales in the Components segment increased in 2003 by $3.3 million, or 5%, compared to 2002. The sales increase was primarily as a result of sales generated from the acquisitions. The Encoder product line acquired from DRC in May 2003 contributed $4.9 million to the sales increase and the Westwind acquisition contributed $2.5 million in sales since its acquisition date in December 2003. The precision optics product line also saw increases in sales in 2003 due to customers increased spending in the defense market. These increases were offset by declines in sales from the printer product line because of delayed introduction of new products caused by our customers' decision to delay their new programs. Laser imaging sales declined as anticipated in the end of life for this mature product, which will continue to decline in the future. Sales in the Lasers segment increased by $9.7 million, or 41%, above 2002 results. $5.1 million of this increase is attributable to sales generated by the Spectron product lines since the acquisition in May 2003. The remainder of the increase of approximately $4.6 million is primarily due to stronger sales from the JK series of products. The sales of Laser Systems improved markedly with a $16.8 million, or 25%, increase from 2002. Steady improvement in worldwide semiconductor sales, and DRAMs in particular, are the underlying drivers for the sales improvement. Our major product lines (memory repair, wafer trim, circuit trim, and wafermark) all experienced improved sales in 2003 as compared to 2002. Memory repair accounted for approximately 70% of the increase in the Laser Systems total sales increase. Sales by Region. We distribute our systems and services via our global sales and service network and through third-party distributors and agents. Our sales territories are divided into the following regions: the United States; Canada; Latin and South America; Europe, consisting of Europe, the Middle East and Africa; Japan; and Asia-Pacific, consisting of ASEAN countries, China and other Asia-Pacific countries. Sales are attributed to these geographic areas on the basis of the bill-to customer location. Not infrequently, equipment is sold to large international companies, which may be headquartered in Asia-Pacific, but the sales of our systems are billed and shipped to locations in the United States. These sales are therefore reflected in United Table of Contents States totals in the table below. The following table shows sales in millions of dollars to each geographic region for 2003, 2002 and 2001. 2003 2002 2001 ---------------------------- ---------------------------- ---------------------------- Sales % of Total Sales % of Total Sales % of Total --------- --------------- --------- --------------- --------- --------------- United States $ 91.8 49 % $ 94.7 59 % $ 119.3 48 % Canada 1.6 1 1.9 1 11.4 5 Latin and South America 1.1 1 1.2 1 0.9 — Europe 27.4 15 25.8 16 50.7 20 Japan 36.1 19 23.5 15 41.0 17 Asia-Pacific, other 27.6 15 12.0 8 24.6 10 ----- ------ ----- ------ ----- ------ Total $ 185.6 100 % $ 159.1 100 % $ 247.9 100 % ----- ------ ----- ------ ----- ------ In 2003, we saw increased sales activity from Asia Pacific and Japan led primarily by the increase in demand for our Laser Systems products. We anticipate this trend will continue. We also had greater penetration into the Asian and Japanese markets with our JK series of products in our Lasers segment. Although the European economy remains lackluster, our year over year percentage decreased only slightly, as we were helped by the acquisition of the Spectron product line, which has a strong installed based in Europe. North America continues to be the most active sales region for our Components segment. With the acquisition of Westwind into our Components segment, the mix may change in the future, because the PCB market for Westwind air-bearing spindles is heavily dominated by Asia. Backlog. We define backlog as unconditional purchase orders or other contractual agreements for products for which customers have requested delivery within the next twelve months. Backlog was $74.6 million at December 31, 2003, compared $41.8 million at December 31, 2002 and $50.2 million at December 31, 2001. Gross Profit. Gross profit was 36.9% in 2003 compared to 30.9% in 2002. This is a 6.0 percentage points increase in the gross profit percentage. There are numerous factors that can influence gross profit percentage including product mix, pricing, volume, third-party costs for raw materials and outsourced manufacturing, warranty costs and charges related to excess and obsolete inventory, at any particular time. The primary reasons for the higher gross profit percentage in 2003 are a decrease in net inventory provision, a lower warranty expense, and a decrease in fixed manufacturing overhead as a percentage of revenue. Additionally, there were numerous smaller changes in costs of goods sold that helped to improve the gross margin.