Supplementary Information

(Unaudited)

The Company’s interim financial statements are prepared on a quarterly basis ending on the Friday closest to the end of the calendar quarter, with the exception of the fourth quarter which always ends on December 31.

On April 15, 2015, the Company completed the sale of certain assets and liabilities of the JK Lasers business for $29.6 million in cash, net of the final working capital adjustments and transaction costs, and recorded a pre-tax gain on sale of $19.6 million.

In December 2014, the Company determined that an impairment test of the NDS goodwill and intangible assets was required, resulting in an impairment charge of $41.4 million in operating expenses.

On March 14, 2014, the Company acquired JADAK and started to include the operating results of JADAK in the consolidated financial statements as of the acquisition date. In July 2014, the Company completed the sale of certain assets and liabilities of the Scientific Lasers business for $6.5 million in cash, net of working capital adjustments, and recorded a $1.7 million loss on sale.

The following tables reflect the Company’s unaudited condensed consolidated statements of operations (in thousands except per share data):

	Three Months Ended
	December 31,			October 2,		July 3,			April 3,
	2015			2015		2015			2015
Revenue	$	90,219		$	92,271	$	96,494		$	94,614
Cost of revenue		53,590			52,361		55,149			54,608
Gross profit		36,629			39,910		41,345			40,006
Operating expenses:
Research and development and engineering		7,295			7,693		7,840			8,215
Selling, general and administrative		19,080			19,979		20,922			22,068
Amortization of purchased intangible assets		2,018			1,852		1,852			1,889
Restructuring, acquisition and divestiture related costs		4,022			1,379		416			2,437
Total operating expenses		32,415			30,903		31,030			34,609
Operating income from continuing operations		4,214			9,007		10,315			5,397
Interest income (expense), foreign exchange transaction gains (losses), other income (expense), net and gain on disposal of business		1,721			13		15,506			(151	)
Income from continuing operations before income taxes		5,935			9,020		25,821			5,246
Income tax provision (benefit)		(168	)		2,452		6,310			1,800
Income from continuing operations		6,103			6,568		19,511			3,446
Loss from discontinued operations, net of tax		—			—		(13	)		—
Consolidated net income	$	6,103		$	6,568	$	19,498		$	3,446
Earnings per common share from continuing operations:
Basic	$	0.18		$	0.19	$	0.56		$	0.10
Diluted	$	0.18		$	0.19	$	0.56		$	0.10
Loss per common share from discontinued operations:
Basic	$	—		$	—	$	(0.00	)	$	—
Diluted	$	—		$	—	$	(0.00	)	$	—
Earnings per common share attributable to GSI Group Inc.
Basic	$	0.18		$	0.19	$	0.56		$	0.10
Diluted	$	0.18		$	0.19	$	0.56		$	0.10

	Three Months Ended
	December 31,			September 26,			June 27,			March 28,
	2014			2014			2014			2014
Revenue	$	94,012		$	94,656		$	96,905		$	79,133
Cost of revenue		54,284			54,973			58,254			47,028
Gross profit		39,728			39,683			38,651			32,105
Operating expenses:
Research and development and engineering		7,837			7,735			7,525			5,857
Selling, general and administrative		21,840			21,512			21,410			19,618
Amortization of purchased intangible assets		2,799			2,843			2,876			1,744
Restructuring, acquisition and divestiture related costs		(14	)		771			360			818
Impairment of goodwill and intangible assets		41,442			—			—			—
Total operating expenses		73,904			32,861			32,171			28,037
Operating income (loss) from continuing operations		(34,176	)		6,822			6,480			4,068
Interest income (expense), foreign exchange transaction gains (losses) and other income (expense), net		(127	)		310			(1,017	)		(275	)
Income (loss) from continuing operations before income taxes		(34,303	)		7,132			5,463			3,793
Income tax provision (benefit)		(6,013	)		2,013			2,057			937
Income (loss) from continuing operations		(28,290	)		5,119			3,406			2,856
Loss from discontinued operations, net of tax		(790	)		(273	)		(2,678	)		(1,866	)
Loss on disposal of discontinued operations, net of tax		(1,405	)		(321	)		—			—
Consolidated net income (loss)		(30,485	)		4,525			728			990
Less: Net income attributable to noncontrolling interest		—			—			(3	)		(7	)
Net income (loss) attributable to GSI Group Inc.	$	(30,485	)	$	4,525		$	725		$	983
Earnings (loss) per common share from continuing operations:
Basic	$	(0.82	)	$	0.15		$	0.10		$	0.08
Diluted	$	(0.82	)	$	0.15		$	0.10		$	0.08
Loss per common share from discontinued operations:
Basic	$	(0.06	)	$	(0.02	)	$	(0.08	)	$	(0.05	)
Diluted	$	(0.06	)	$	(0.02	)	$	(0.08	)	$	(0.05	)
Earnings (loss) per common share attributable to GSI Group Inc.
Basic	$	(0.88	)	$	0.13		$	0.02		$	0.03
Diluted	$	(0.88	)	$	0.13		$	0.02		$	0.03