GSI concluded its first big efficiency transformation in January 2009 when it completed an investment of $216 million in two new furnaces at Longman. These two new furnaces, which together represent about 50% of GSI total output, can command sales prices with an 18% gross margin compared to 10% for GSI’s legacy furnaces.

Thus GSI’s overall gross margin target model becomes 14% compared to 10% previously. It will take time and an improved business environment before GSI can ramp-up to maximum efficiency and achieve its full gross margin target model .

During Q1’09, GSI had sales of $323 million and, after stripping out one-time items, generated EPS of 3 cents. Of particular note in Q1’09 is that GSI had a gross margin of only 4.0%.