Good afternoon. My name is Mike and I will be your conference operator today. At this time, I would like to welcome everyone to the GSI Group 2013 First Quarter Earnings Conference Call. All lines have been placed on-mute to prevent any background noise. After the speakers’ remarks, there will be a question-and-answer session. (Operator Instructions) I would now like to turn the call over to the Chief Financial Officer of the GSI Group, Robert Buckley. You may begin your conference.

Thank you, Mike. Good afternoon and welcome to GSI Group’s first quarter 2013 earnings conference call. With me on the call is John Roush, Chief Executive Officer of GSI Group. If you've not received a copy of our earnings press release, you may get one from the Investor Relations section of our website at www.gsig.com. Please note this call is being webcast live and will be archived on our website. Before we begin the call, we need to remind everyone of the Safe Harbor for forward-looking statements that we’ve outlined in our earnings press release issued earlier this afternoon and also those in our SEC filings. We may make some comments today both in our prepared remarks and in our responses to questions that may include forward-looking statements. These involve inherent assumptions with known and unknown risks and other factors that could cause our future results to differ materially from our current expectations. Any forward-looking statements made today represent our views only as of today. We disclaim any obligation to update forward-looking statements in the future even if our estimates change. So you should not rely on any of today's forward-looking statements as representing our views as of any date after today. During this call, we will be referring to certain non-GAAP financial measures. A reconciliation of such non-GAAP financial measures to the most directly comparable GAAP measures is available as of an attachment to our earnings press release. To the extent that we use non-GAAP financial measures during this call that are not reconciled to GAAP measures in the earnings press release, we will provide reconciliations promptly on the Investor Relations section of our website. I am now pleased to introduce Chief Executive Officer of GSI Group, John Roush.

Thank you, Robert. Good afternoon everybody. Welcome to our call. We do appreciate your continued interest in the company. So today, we are pleased to announce our results for the first quarter of 2013. This is the first quarter where we’re now adding in the results of our NDS acquisition for most of the quarter as the deal closed on January, 15th. On a whole, we are happy with the results which in my view reflects solid performance across the company even given the mixed economic picture that we still face. Our revenue was $83.1 million and our adjusted EBITDA was $11.5 million; both figures were in the upper half of the guidance ranges we have previously provided. GAAP earnings per share from continuing operations were $0.04 which was impacted by the NDS purchase accounting, acquisition related fees as well as restructuring expenses related to our ongoing efforts to streamline and focus the company and Robert will cover the EPS results in more detail in his section. So during Q1, we saw an improving demand picture in a number of areas. Our reported revenue of course was up 28% year-over-year due to the inclusion of NDS which added $18 million to the revenue line. But if you look at the base GSI business excluding NDS, we had organic revenue growth of 1% versus Q1 of last year. We had total orders of $86.6 million resulting in a book-to-bill ratio of 1.04%. These outcomes are more favourable than what we saw on the base business in Q4 of last year. Obviously, the biggest news for us in the quarter was the acquisition of NDS; we now have the quarter under our belts with the team and we are very excited about the future prospects of the business. From a tactical standpoint,…

Thank you, John. During the first quarter of 2013, GSI generated revenue of $83.1 million, an increase of 27.5% from $65.2 million in the first quarter of 2012. The NDS acquisition accounted for roughly 28% revenue increase year-over-year while changes in foreign exchange rates adversely impacted revenue causing a 1.2% decrease in revenue. Excluding the impact of the NDS acquisition and changes in foreign exchange rates, the company's revenue increased nearly 1% compared to the first quarter of 2012. As a result of the NDS acquisition and restructuring activities, the company realigned its reporting segments resulting in two segments, Laser Products and Precision Technologies. The segment realignment resulted in laser scanning product line being moved to our Laser Products segment and NDS being added to our Precision Technologies segment. Sales of our Laser Products segment for the first quarter of 2013 increased 4.6% to $46.2 million compared to $44.2 million one year ago. Growth was primarily generated from our scanning solutions and fiber laser products as we continue to release new products in the market and further penetrate new customers. Sales were 1.3% adversely impacted by the fluctuations in foreign exchange rates. Sales of our Precision Technologies segment for the first quarter of 2013 increased 75.5% to $36.9 million from $21 million in 2012. The NDS acquisition contributed approximately $18 million in sales year-over-year. Changes in foreign exchange rates adversely impacted our sales by roughly 1% compared to the prior year. Excluding NDS and the impact of exchange rate fluctuations, revenue declined approximately 11%, which were largely attributed to a temporary market decline in the patient monitoring market impacting our medical printers business and volume declines in our optical encoders product line which was impacted by a decline in the data storage market. Turning to profitability, first quarter gross profit…

(Operator Instructions) Your first question comes from the line of Lee Jagoda with CJS Securities. Your line is open.

So you spoke a lot about growth in many of the product lines and with the addition of NDS as well. However, if I look at Q2 on a year-over-year basis, the guidance implies organic declines, so you can talk a little bit about the offsets?

Well, on excluding NDS Lee I would that Q2 is organic flat, I mean it's probably down a little bit on the face of it, but there is some effects that we put it in there, within around of flat, I don't see there is that much different. I mean I guess you go to the bottom, and the range you are going to get a little bit of a decline.

And again you talk about fiber lasers and scanning solutions growing very quickly as well as medical bouncing back, yet we are only looking at flat growth, so aside from scientific which I think you pretty articulate about it being down, what else is dragging you down?

Well, some of these areas where we are not seeing a lot of up and even maybe a little down, it would be in the CO2 laser business. I mean not big percentage, but it's a larger business, it's not trending up at the moment. You have in the JK laser business some of the legacy technologies, so we have the fiber going up but they have some legacy [land] pumps in other areas. Actually I think Robert mentioned in his remarks, but the printer business is down year-over-year. And then we think that the order rates are coming back and it will show some growth as you go through the year with this, and then another area is the encoder business, which kind of has two parts to it, it has the data storage part, which is a very specific application for the track writing for disc drive production, and then all the rest of the encoder business which serves a variety of applications some medical, some industrial, some microelectronics, and so if you would have bifurcate the encoder, data storages is down significantly and then the rest of it is actually up. So let me just -- it’s kind of a mix bag in there of different things going in different directions, but I think as you look into the second quarter there seem sequential growth, that is more indicative of demand and the profile of demand. There are some tougher comparisons as John mentioned as we get cycle over a difficult second quarter of last year.

And that especially the data storage, right, where there was a large project done in the data storage, the revenue model for the data storage encoders is basically upgrades when the production of capabilities are upgraded in the disk drive producer site, they will buy a lot of our products, okay. And then they use that for while and then they will upgrade again. So it tends to be very episodic in data storage and we had a bunch of business Q1, Q2 last year had just kind of almost zero this year.

Okay. And then you provided Q2 revenue and profitability guidance, but you didn't comment at all on the previously issued annual guidance, can you provide an update there?

We haven't anything at this point, I mean really usually our practice is we provide the full year guidance once at the beginning of the year, once midway through the year, they gave a better perspective than any between as the quarterly updates. So I wouldn’t say that the lack of update is indicative of anything.

Okay. And one more question, and I will hop back in the queue. Robert, can you just quantify the negative effect of discontinued ops had on cash flow in Q1?

Roughly a $1 million.

Your next question comes from the line of Stephen Stone from Sidoti. Stephen Stone - Sidoti & Company: I guess my first question here is on the NDS acquisitions, the growth categories you were talking about there is radiology, do you still see kind of growth for NDS through the year?

Well, I mean, I guess on a sequential basis, we do think that there -- you know the second half would be greater than the first half, I mean I'm not sure quarter to quarter to quarter all the way through the year it’s guaranteed. So there are two segments to the business, there's the core and larger businesses, the surgical minimally invasive part of it and then the second part is radiology. They actually have two different brand names, NDS really being the surgical brand name and Dome being the radiology brand name. So normally over the past few years the surgical business has been the higher grower than radiology, but you know this dual sourcing thing that came along is really hitting the surgical part of it more than, it doesn't affect radiology. So I think you can get kind of a temporary change in the growth profile. We also have some significant new products coming out in the second half in radiology that can give a lift there. So I think our growth rate this year in the two product lines within the NDS maybe different than what the overall trend has been. Stephen Stone - Sidoti & Company: Okay. And now that you've had more time of NDS, I guess under the umbrella here, any cost savings you can see combining the two businesses here?

There are and we are working on this, I mean recognizing this was not a cost based application -- acquisition rather, it wasn’t done specifically just so we can drive our cost. It was to kind of enter a new market and get a greater medical presence. But having said that, there are a number of sales channel opportunities where offices can be combined that’s where two companies are both had standalone offices. So we are doing a number of things there. We haven't kind of given an estimate of it, some of that's contained in our view of the EBITDA there.

Your next question comes from the line of Joe Bess from Roth Capital Partners.

John, thinking about the NDS acquisition and you kind of commented a little bit about it in your opening remarks, but can you dive in a little bit deeper where you potentially see some opportunities for share gains coming under the dual source issue as well as with some of the other customer issues that you have?

Look, we're not going to be labeled as one customer. First of all, the whole relationship is just under NDA and the customer takes it very seriously. So I mean I can’t really kind of go in to all kind of discussions about what we might do there. But suffice to say, we're getting to know that customer and they made a decision that they had been thinking about for a long period of time, awkwardly made it right at the beginning of our ownership period and we understand why they did it. We're disappointing in it, but we're now in a dialogue with the company and I think they better understand our strategy and our capability. There is the opportunity going forward to capture back some, probably not all but some of the shares that they took but also they expose them to other product lines and it's a pretty significant customers and they’ve looked at all the things we do in medical now and there are opportunities. I can’t really comment on what they are and which ones. None of them are going to happen within next three to six months, but I think it does present an opportunity for us and that there is two reasons why NDS is I think really important to us. One is just we're more important to the customers now. So we have more angles to have the conversations. In some cases we have customers where we're significantly penetrated with based GSI products and not penetrated with NDS. And so we're having those conversations to try to almost pull NDS into those relationships and then we have a slip of that which is the case of the one customer that dual source us where we can actually possibly bring GSI products along into that relationship. So you have this two way dialogue with the OEM customers about the two sets of offering and in all cases, we moved up on the radar screen of the customers. The other reason is just in the acquisition and partnership and collaboration around, we have much more sort of points of relevance now to various companies in terms of what would be a sensible acquisition. So we feel like our opportunity set is gone up. It's really just a measure of our relevance within the medical space. And I think that’s not necessary going to come to fruition again in the next three or six months. You never know, I think normally the gestation period is a little longer than that, but the OEM relationships and the acquisition and partnering, when you look one to two to three years out it's going to be an impact for us.

And then you guys gave some great color on your end markets, so I was hoping you can talk a little more about on geographic basis and then more specifically, what you guys are seeing at this time?

Well, it is Robert. It gets a little difficult to talk about our geographical sales because the challenge that as a component provider is we fell into a manufacturing facility and that manufacturing facility then sales a product into an end market. And so the difficulty is, is our end market, our geographical sales really relevant to the ban, I think the answer is in most cases, no. . :

I think what you are saying is mediocre GDP growth if any in US, in Japan and western Europe, those are the consumption economies and they are not pulling very hard on the worlds manufacturing sectors, and China is the biggest manufacturing sector and lot of our stuff goes in the China, our components into China but then they are bound for the US or Europe ultimately. Some of China’s manufacturing sector obviously is for the domestic Chinese economy, but when the growth has decelerated there from 10% or 11% to 7% or 8% that’s meaningful reduction so the factories there are not running as hard and we just haven’t seen the volumes. Quite of bit of that is the micro electronics sector, so that really does come back in a meaningful way, that could make a difference for us. We don't have a ton of that built into our view, we have a very modest kind of move forward quarter-to-quarter-to-quarter. Last year a lot of people were saying there is going to be big recovery and didn’t happen, so we are kind of almost taking the more cautious approach this year and saying we are just not going to believe it until it is in the order book. So now we have west wind, you know it is kind of in the order book. Q2 and Q3 the orders are there, but Q4 is not in the order book and some of the other product lines haven't seen quite the resurgence. So we are just taking that cautiously, but I don't know that you can then really take our sales into the region and really draw great conclusions from it, as Robert said.

Okay, great. And then Robert what is your guidance for free cash flow for the year as well as CapEx?

From the CapEx perspective, it’s probably in the $7 million to $8 million range. We have been underspending a little bit but roughly around that in the $7 million to $8 million range. And then I have then provided any sort of guidance on the cash flow for the full year. We have to work our way through that as we finish up the purchase accounting on NDS and then the effects of that and its implementing a new structure forward.

There are no further questions at this time. I will turn the call back over to the presenters.

Thank you, operator. So in conclusion I would say that on balance we are pleased with the Q1 results. The company is executing well on all of the design plays that we have called. None of them have been easy, but we are accomplishing our stated goals. The complexion of the company and the team has improved. We are moving in the direction of our ultimate strategic vision with several key milestones being accomplished this quarter. The financial results were solid in our view. They are not where we would ultimately want to see them but they are moving in the right direction and we are becoming a more predictable company as well. As I mentioned before the external landscape still creates some uncertainty for us but we see the beginning of an improving picture for the rest of the year. As a company we are better positioned to capture opportunities in an improving scenario. We are also better able to cope with any further headwinds we may encounter. We have a roadmap that is guiding our strategic priorities in our progress as a company and it’s becoming clear as we move forward. We have a strong leadership and team in place with significantly enhanced capabilities. Each and every member of the team is proud of what we've accomplished and committed to delivering on all of our goals and objectives for the company going forward. In closing, I would like to mention that we will be presenting at the CJS Securities Summer Investor Conference on July 9 in White Plains, New York. We hope to have the chance to meet with some of you at this event. In any case we look forward to joining all of you on our second quarter 2013 earnings call which will happen in August. Thank you very much for your continued interest in GSI and the call is now adjourned.

This concludes today’s conference call. You may now disconnect.