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                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
                             ----------------------


                                    FORM 10-Q




              QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934

                   For the Quarterly Period Ended July 2, 2004

                                       OR
             TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934



                        Commission File Number 333-43089




                               THE GSI GROUP, INC.
             (Exact name of registrant as specified in its charter)


                             DELAWARE     37-0856587
                (State or other jurisdiction     (I.R.S. Employer
            of incorporation or organization)     Identification No.)

             1004 E. ILLINOIS STREET, ASSUMPTION, ILLINOIS     62510
             (Address of principal executive offices)     (Zip Code)



     Indicate  by  check  mark  whether the registrant (1) has filed all reports
required  to  be  filed by Section 13 or 15(d) of the Securities Exchange Act of
1934  during  the  preceding  12  months  (or  for  such shorter period that the
registrant  was required to file such reports), and (2) has been subject to such
filing  requirements  for  the  past  90  days.  Yes  [X]  No  [  ]

     Indicate by check mark whether the registrant is an accelerated filer:  Yes
[  ]  No  [X]

     Indicate  the  number  of  shares  outstanding  of each of the registrant's
classes  of  common stock, as of the latest practicable date.  Common stock, par
value  $0.01  per  share,  826,948  shares  outstanding  as  of August 10, 2004.

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                                        1
<PAGE>




                                TABLE OF CONTENTS
                                                                           PAGE
                                                                           ----
PART  I  -  FINANCIAL  INFORMATION
  Item  1.  Financial  Statements
                  Balance Sheets                                              3
                  Statements of Operations                                    4
                  Statements of Cash Flows                                    5
                  Notes to Financial Statements                               6

  Item 2.   Management's Discussion and Analysis of Financial Condition and
            Results  of  Operations                                          16
  Item  3.  Quantitative  and Qualitative Disclosure About Market Risk       19
  Item 4.   Controls and Procedures                                          19

PART  II  -  OTHER  INFORMATION
  Item 1.     Legal Proceedings                                              20
  Item 2.     Changes in Securities and Use of Proceeds                       *
  Item 3.     Defaults Upon Senior Securities                                 *
  Item 4.     Submission of Matters to a Vote of Security Holders             *
  Item 5.     Other Information                                               *
  Item 6.     Exhibits and Reports on Form 8-K                               20




*  No  response  to  this  item  is  included  herein  for the reason that it is
inapplicable.

                                        2
<PAGE>
                         PART I - FINANCIAL INFORMATION

                          ITEM 1 - FINANCIAL STATEMENTS
<TABLE>
<CAPTION>

                                  THE GSI GROUP, INC. AND SUBSIDIARIES
                                  CONDENSED CONSOLIDATED BALANCE SHEETS
                             (IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)

                                                 (UNAUDITED)

                                                                               JULY  2,    DECEMBER 31,
ASSETS                                                                           2004          2003
----------------------------------------------------------------------------  ----------  --------------
<S>                                                                           <C>         <C>
Current Assets:
  Cash and cash equivalents. . . . . . . . . . . . . . . . . . . . . . . . .  $   2,912   $       3,439
  Accounts receivable, net . . . . . . . . . . . . . . . . . . . . . . . . .     35,520          27,083
  Inventories, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . .     55,986          54,165
  Prepaids . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .      2,212           4,468
  Other. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .      3,012           2,882
                                                                              ----------  --------------
      Total current assets . . . . . . . . . . . . . . . . . . . . . . . . .     99,642          92,037
                                                                              ----------  --------------
Property, Plant and Equipment, net . . . . . . . . . . . . . . . . . . . . .     31,057          32,673
                                                                              ----------  --------------
Other Assets:
  Goodwill and other intangible assets, net. . . . . . . . . . . . . . . . .     11,780          12,243
  Deferred taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .      1,333           1,077
  Other. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .      2,675           2,881
                                                                              ----------  --------------
      Total other assets . . . . . . . . . . . . . . . . . . . . . . . . . .     15,788          16,201
                                                                              ----------  --------------
      Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  $ 146,487   $     140,911
                                                                              ==========  ==============

LIABILITIES AND  STOCKHOLDERS' DEFICIT
----------------------------------------------------------------------------
Current Liabilities:
  Accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  $  25,055   $      17,139
  Accrued interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . .      4,224           1,751
  Payroll and payroll related expenses . . . . . . . . . . . . . . . . . . .      1,699           3,071
  Accrued expenses and other liabilities . . . . . . . . . . . . . . . . . .     19,401           3,697
  Customer deposits. . . . . . . . . . . . . . . . . . . . . . . . . . . . .      6,540           8,875
  Current maturities of long-term debt . . . . . . . . . . . . . . . . . . .        830             148
                                                                              ----------  --------------
      Total current liabilities. . . . . . . . . . . . . . . . . . . . . . .     57,749          34,681
                                                                              ----------  --------------
Long-Term Debt, less current maturities. . . . . . . . . . . . . . . . . . .    128,407         129,563
                                                                              ----------  --------------
Commitments and Contingencies
Stockholders' Deficit:
  Common stock, $.01 par value, voting (authorized 6,900,000 shares; issued
    6,633,652 shares; outstanding 626,948 shares at July 2, 2004 and
    1,575,000 shares at December 31, 2003 ). . . . . . . . . . . . . . . . .         16              16
  Common stock, $.01 par value, nonvoting (authorized 1,100,000 shares;
    issued 1,059,316 shares; outstanding 200,000 shares) . . . . . . . . . .          2               2
  Paid-in capital. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .      3,006           3,006
  Accumulated other comprehensive loss (cumulative currency  translation
   adjustment) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    (13,571)        (11,929)
  Retained earnings. . . . . . . . . . . . . . . . . . . . . . . . . . . . .     12,437          12,531
  Treasury stock, at cost, voting (6,006,704 shares at July 2, 2004 and
    5,058,652 shares at December 31, 2003) . . . . . . . . . . . . . . . . .    (41,550)        (26,950)
  Treasury stock, at cost, nonvoting (859,316 shares). . . . . . . . . . . .         (9)             (9)
                                                                              ----------  --------------
      Total stockholders' deficit. . . . . . . . . . . . . . . . . . . . . .    (39,669)        (23,333)
                                                                              ----------  --------------
      Total liabilities and stockholders' deficit. . . . . . . . . . . . . .  $ 146,487   $     140,911
                                                                              ==========  ==============
</TABLE>


The accompanying notes to consolidated financial statements are an integral part
                              of these statements.

                                        3
<PAGE>
<TABLE>
<CAPTION>


                               THE GSI GROUP, INC. AND SUBSIDIARIES
                         CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                          (IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)
                                           (UNAUDITED)


                         THREE FISCAL MONTHS ENDED     SIX FISCAL MONTHS ENDED
                         -------------------------     -----------------------

                                                 JULY 2,     JUNE 27,      JULY 2,     JUNE 27,
                                                  2004         2003         2004         2003
                                               -----------  -----------  -----------  -----------
<S>                                            <C>          <C>          <C>          <C>
Sales                                          $   79,855   $   65,653   $  138,489   $  109,963

Cost of sales                                      66,235       52,632      113,339       87,762
                                               -----------  -----------  -----------  -----------

    Gross profit. . . . . . . . . . . . . . .      13,620       13,021       25,150       22,201

Selling, general and administrative expenses.       8,892        8,955       17,053       17,550
Amortization expense. . . . . . . . . . . . .         162          312          324          623
                                               -----------  -----------  -----------  -----------
  Total operating expenses. . . . . . . . . .       9,054        9,267       17,377       18,173
                                               -----------  -----------  -----------  -----------

Operating income. . . . . . . . . . . . . . .       4,566        3,754        7,773        4,028

Other expense:
  Interest expense. . . . . . . . . . . . . .      (3,438)      (3,161)      (6,514)      (6,175)
  Other, net. . . . . . . . . . . . . . . . .        (330)        (812)        (509)        (645)
                                               -----------  -----------  -----------  -----------

    Income (loss) before income tax expense .         798         (219)         750       (2,792)

Income tax expense. . . . . . . . . . . . . .         233           51          344          188
                                               -----------  -----------  -----------  -----------

    Net income (loss) . . . . . . . . . . . .  $      565   $     (270)  $      406   $   (2,980)
                                               -----------  -----------  -----------  -----------


Basic and diluted income (loss) per share . .  $     0.32   $    (0.15)  $     0.23   $    (1.68)
                                               -----------  -----------  -----------  -----------

Weighted average common shares outstanding. .   1,775,000    1,775,000    1,775,000    1,775,000
                                               ===========  ===========  ===========  ===========
</TABLE>




The accompanying notes to consolidated financial statements are an integral part
                              of these statements.

                                        4
<PAGE>
<TABLE>
<CAPTION>

                                   THE GSI GROUP, INC. AND SUBSIDIARIES
                              CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                              (IN THOUSANDS)
                                                (UNAUDITED)


                                                                      SIX FISCAL MONTHS ENDED
                                                                     -------------------------
                                                                              JULY 2,            JUNE 27,
                                                                               2004                2003
                                                                     -------------------------  ----------
<S>                                                                  <C>                        <C>
Cash Flows From Operating Activities:
  Depreciation and amortization expense . . . . . . . . . . . . . .                     2,645       3,323
  Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                       616      (9,181)
                                                                     -------------------------  ----------
          Net cash flows provided by (used in) operating activities                     3,261      (5,858)
                                                                     -------------------------  ----------


Cash Flows From Investing Activities:
  Capital expenditures. . . . . . . . . . . . . . . . . . . . . . .                    (1,682)       (961)
  Proceeds from sale of fixed assets. . . . . . . . . . . . . . . .                       434         683
  Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                        --         503
                                                                     -------------------------  ----------
          Net cash flows provided by (used in) investing activities                    (1,248)        225
                                                                     -------------------------  ----------

Cash Flows From Financing Activities:
    Proceeds from shareholder loan. . . . . . . . . . . . . . . . .                     1,645       1,141
    Payments on shareholder loan. . . . . . . . . . . . . . . . . .                      (963)       (936)
  Payments on long-term debt. . . . . . . . . . . . . . . . . . . .                        --      (1,375)
  Net (payments) borrowings under line of credit agreement. . . . .                    (3,081)      5,403
    Dividends . . . . . . . . . . . . . . . . . . . . . . . . . . .                      (500)       (959)
  Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                       418       1,304
                                                                     -------------------------  ----------
          Net cash flows provided by (used in) financing activities                    (2,481)      4,578
                                                                     -------------------------  ----------

Effect of Exchange Rate Changes on Cash . . . . . . . . . . . . . .                       (59)        142
                                                                     -------------------------  ----------

Decrease In Cash and Cash Equivalents . . . . . . . . . . . . . . .  $                   (527)  $    (913)
Cash and Cash Equivalents, beginning of period. . . . . . . . . . .                     3,439       2,936
                                                                     -------------------------  ----------
Cash and Cash Equivalents, end of period. . . . . . . . . . . . . .  $                  2,912   $   2,023
                                                                     =========================  ==========


SUPPLEMENTAL CASH FLOW INFORMATION:

Accrual for common stock purchase . . . . . . . . . . . . . . . . .  $                 14,600          --
                                                                     -------------------------  ----------
</TABLE>



The accompanying notes to consolidated financial statements are an integral part
                              of these statements.


                                        5
<PAGE>
                      THE GSI GROUP, INC. AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

1.     SUMMARY  OF  SIGNIFICANT  ACCOUNTING  POLICIES

          The  financial  statements  have  been prepared by The GSI Group, Inc.
(the  "Company"),  without  audit,  pursuant to the rules and regulations of the
Securities  and  Exchange  Commission.  Certain  information  and  footnote
disclosures  normally  included  in  financial statements prepared in accordance
with  accounting  principles  generally accepted in the United States of America
have  been condensed or omitted pursuant to such rules and regulations, although
the  Company  believes that the disclosures are adequate to make the information
not  misleading.  These  financial statements should be read in conjunction with
the  financial  statements and related notes contained in the Company's December
31,  2003 Form 10-K as filed with the Securities and Exchange Commission.  Other
than  as  indicated herein, there have been no significant changes from the data
presented  in  said  10-K.

     In  the  opinion  of  management,  the  financial  statements  contain  all
adjustments necessary to present fairly the financial position of the Company as
of  July  2, 2004 and the results of operations for the six months ended July 2,
2004  and  cash  flows for the six months ended July 2, 2004.  Those adjustments
consist  only  of  normal  recurring  adjustments.

     The  results  of operations for the six-month period ended July 2, 2004 are
not  necessarily  indicative  of  the  operating  results  for  the  full  year.


2.     COMPREHENSIVE  LOSS

          The  components of comprehensive loss for the periods presented are as
follows  (in  thousands):
<TABLE>
<CAPTION>


                                              July 2,    June 27,
                                               2004        2003
                                             ---------  ----------
<S>                                          <C>        <C>
Net income (loss) . . . . . . . . . . . . .  $    406   $  (2,980)
Cumulative currency translation adjustment.    (1,642)      2,340
  Comprehensive loss. . . . . . . . . . . .  $ (1,236)  $    (640)
                                             =========  ==========
</TABLE>



3.     DETAIL  OF  CERTAIN  ASSETS
<TABLE>
<CAPTION>


                               JULY  2,   DECEMBER 31,
                                 2004         2003
                               ---------  -------------
              (IN THOUSANDS)
<S>          <C>               <C>        <C>
Inventories
             Raw materials     $  19,262  $      13,940
             Work-in-process      12,262         18,443
             Finished goods       24,462         21,782
                               ---------  -------------
             Total             $  55,986  $      54,165
                               =========  =============
</TABLE>



4.   SUPPLEMENTAL  CASH  FLOW  INFORMATION

     The  Company  paid  approximately $6.1 million and $6.0 million in interest
during the six months ended July 2, 2004 and June 27, 2003.  The Company paid no
income  taxes  during  the  first  six  months  of  2004  and  2003.



                                        6
<PAGE>

5.     LONG-TERM  DEBT

     The  indenture  governing  the Company's senior subordinated notes contains
certain  restrictive  covenants.  The more significant of the covenants restrict
the  ability of the Company to dispose of assets, incur additional indebtedness,
pay  dividends  or make distributions and other payments affecting subsidiaries.
The  Company was in compliance with the covenants under the indenture as of July
2,  2004.

          The  Credit  Facility  with  Congress  Financial Corporation (Central)
requires  the  Company  to  maintain  a  senior debt to EBITDA ratio and a fixed
charge  coverage  ratio.  Borrowings  under  the  Credit Facility are secured by
substantially  all  of the assets of the Company, including the capital stock of
any  existing  or  future  subsidiaries,  except  the Brazilian subsidiary.  The
Company  had  $22.0  million  of  availability  on the line as of July 2, 2004.

     On July 9, 2004, Congress Financial Corporation and the Company amended the
existing credit facility (the "Credit Facility") to provide for term loans up to
a  maximum  of  $20.8  million,  as  well as to increase the Sloan Participation
Obligations  set forth therein from $2.5 million to $5.0 million.  Proceeds from
the  increased  term  loan  were used to purchase Voting Common Stock from Craig
Sloan  upon  his  retirement.  A  Capital Call Agreement was also signed on this
date  requiring  Mr.  Sloan to invest in the Company, if Excess Availability, as
defined  in  the  Credit  Facility,  falls below $5.0 million, in an amount that
causes  such  availability to be at least $10.0 million.  At July 12, 2004, such
availability  was  $21.0  million.

6.     COMMITMENTS  AND  CONTINGENCIES

     Sales  of  agricultural  equipment are seasonal, with farmers traditionally
purchasing  grain  storage  bins  and grain drying and handling equipment in the
summer and fall in conjunction with the harvesting season, and swine and poultry
producers  purchasing equipment during prime construction periods in the spring,
summer  and  fall.  The  Company's  sales  and net income have historically been
lower  during the first and fourth fiscal quarters as compared to the second and
third  quarters.

     The  Company  has  a  contract  with  the  Yemen  Company  for  Industrial
Development to manufacture and supervise the assembly of grain handling systems.
Other current assets include $1.0 million of retainage withheld until completion
of  the  project  and  the  meeting  of  certain  performance  criteria.

     The  Company  has a contract with BMA Consulting, Inc., which is owned by a
shareholder of the Company, to provide consulting services over the next 3 years
and  to  pay  $0.7  million  at  the  end  of  the  period.

7.   BUSINESS  SEGMENT

     The  Company  has  no  separately  reportable  segments  in accordance with
Statement  of  Financial Accounting Standard ("SFAS") No. 131, "Disclosure About
Segments  of  an Enterprise and Related Information."  Under the enterprise wide
disclosure  requirements  of SFAS 131, the Company reports sales by each product
line.  Amounts  for  the  first  six months of 2004 and 2003 are as shown in the
table  below  (in  thousands).
<TABLE>
<CAPTION>


                      JULY 2,   JUNE 27,
                        2004      2003
                      --------  ---------
<S>                   <C>       <C>
Grain product line .  $ 86,875  $  66,285
Swine product line .    21,424     19,045
Poultry product line    30,190     24,633
                      --------  ---------
     Sales . . . . .  $138,489  $ 109,963
                      ========  =========
</TABLE>


     For  the  first  six  months  of  2004 and 2003, sales in Brazil were $13.8
million  and  $7.3 million, respectively.  Long-lived assets in Brazil were $2.9
million  at  July  2,  2004.


                                        7
<PAGE>

8.     GUARANTOR  SUBSIDIARIES

     The  Company's  payment  obligation under the senior subordinated notes are
fully  and  unconditionally  guaranteed  on  a  joint and several basis by David
Manufacturing  Company,  GSI/Cumberland  de  Mexico  S. de R.L. de C.V., The GSI
Group  (Europe)  Ltd.,  The  GSI Group Poland Sp. z.o.o., The GSI Group (Africa)
(Pty)  Ltd.,  GSI  Group (Asia) Sdn. Bhd., Agromarau Industria e Comercio Ltda.,
The  GSI  Group (Shanghai) Ltd., and The GSI Group (Canada) Inc. (the "Guarantor
Subsidiaries").  The Guarantor Subsidiaries are direct wholly owned subsidiaries
of  the  Company.  The  obligations  of  the  Guarantor Subsidiaries under their
guarantees  are  subordinated  to  such  subsidiaries'  obligations  under their
guarantee  of  the  Credit  Facility.

     Presented  below is unaudited condensed consolidating financial information
for  The  GSI Group, Inc. ("Parent Company") and the Guarantor Subsidiaries.  In
the  Company's  opinion,  separate  financial  statements  and other disclosures
concerning  the  Guarantor Subsidiaries would not provide additional information
that  is  material  to  investors.

     Investments  in  subsidiaries are accounted for by the Parent Company using
the  equity  method  of  accounting.  Earnings  of  subsidiaries are, therefore,
reflected  in  the  Parent  Company's  investments  in  and  advances  to/from
subsidiaries'  accounts  and  earnings.  The  elimination  entries  eliminate
investments  in  subsidiaries  and  intercompany  balances  and  transactions.


                                        8
<PAGE>

8.   GUARANTOR  SUBSIDIARIES  (CONTINUED)
<TABLE>
<CAPTION>

                               SUPPLEMENTAL CONDENSED CONSOLIDATING BALANCE SHEET
                                                  JULY 2, 2004
                                                 (IN THOUSANDS)


                                                       Parent      Guarantor
                                                       Company    Subsidiaries    Eliminations    Consolidated
                                                      ---------  --------------  --------------  --------------
<S>                                                   <C>        <C>             <C>             <C>
ASSETS
Current assets:
   Cash and cash equivalents . . . . . . . . . . . .  $     31   $       2,881   $          --   $       2,912
   Accounts receivable, net. . . . . . . . . . . . .    30,229           9,210          (3,919)         35,520
   Inventories, net. . . . . . . . . . . . . . . . .    44,445          11,541              --          55,986
   Other current assets. . . . . . . . . . . . . . .     3,269           2,846            (891)          5,224
                                                      ---------  --------------  --------------  --------------

Total current assets . . . . . . . . . . . . . . . .    77,974          26,478          (4,810)         99,642

Property, plant and equipment, net . . . . . . . . .    26,353           4,704              --          31,057
Goodwill and other intangible assets, net. . . . . .     2,886           8,894              --          11,780
Investment in and advances to/from subsidiaries. . .    45,291          (6,902)        (38,389)             --
Deferred taxes . . . . . . . . . . . . . . . . . . .        --           1,333              --           1,333
Other long-term assets . . . . . . . . . . . . . . .     2,668               7              --           2,675
                                                      ---------  --------------  --------------  --------------

Total assets . . . . . . . . . . . . . . . . . . . .  $155,172   $      34,514   $     (43,199)  $     146,487
                                                      =========  ==============  ==============  ==============
LIABILITIES AND STOCKHOLDERS' EQUITY(DEFICIT)
Current liabilities:
   Current portion of long-term debt . . . . . . . .  $    830   $          --   $          --   $         830
   Accounts payable. . . . . . . . . . . . . . . . .    19,583           9,391          (3,919)         25,055
   Accrued liabilities . . . . . . . . . . . . . . .    29,963           2,792            (891)         31,864
                                                      ---------  --------------  --------------  --------------

Total current liabilities. . . . . . . . . . . . . .    50,376          12,183          (4,810)         57,749

Long-term debt . . . . . . . . . . . . . . . . . . .   130,894           5,767          (8,254)        128,407
                                                      ---------  --------------  --------------  --------------

Total liabilities. . . . . . . . . . . . . . . . . .   181,270          17,950         (13,064)        186,156

Stockholders' equity (deficit):
   Common stock. . . . . . . . . . . . . . . . . . .        18          22,424         (22,424)             18
   Additional paid-in capital. . . . . . . . . . . .     3,006             505            (505)          3,006
   Accumulated other comprehensive loss. . . . . . .        --         (13,571)             --         (13,571)
   Retained earnings . . . . . . . . . . . . . . . .    12,437           7,206          (7,206)         12,437
   Treasury stock, at cost . . . . . . . . . . . . .   (41,559)             --              --         (41,559)
                                                      ---------  --------------  --------------  --------------

Total stockholders' equity (deficit) . . . . . . . .   (26,098)         16,564         (30,135)        (39,669)
                                                      ---------  --------------  --------------  --------------

Total liabilities and stockholders' equity (deficit)  $155,172   $      34,514   $     (43,199)  $     146,487
                                                      =========  ==============  ==============  ==============
</TABLE>




                                        9
<PAGE>


8.     GUARANTOR  SUBSIDIARIES  (CONTINUED)
<TABLE>
<CAPTION>

                       SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS
                                  THREE FISCAL MONTHS ENDED JULY 2, 2004
                                              (IN THOUSANDS)


                                                 Parent      Guarantor
                                                 Company    Subsidiaries    Eliminations    Consolidated
                                                ---------  --------------  --------------  --------------
<S>                                             <C>        <C>             <C>             <C>
Sales. . . . . . . . . . . . . . . . . . . . .  $ 68,236   $      14,404   $      (2,785)  $      79,855
Cost of sales. . . . . . . . . . . . . . . . .    59,059           9,961          (2,785)         66,235
                                                ---------  --------------  --------------  --------------

Gross profit . . . . . . . . . . . . . . . . .     9,177           4,443              --          13,620

Selling, general and administrative expenses .     5,885           3,169              --           9,054
                                                ---------  --------------  --------------  --------------

Operating income . . . . . . . . . . . . . . .     3,292           1,274              --           4,566

Interest expense . . . . . . . . . . . . . . .    (3,431)             (7)             --          (3,438)
Other income (expense) . . . . . . . . . . . .      (511)            181              --            (330)
                                                ---------  --------------  --------------  --------------

(Loss) income before income taxes. . . . . . .      (650)          1,448              --             798
(Benefit) provision for income taxes . . . . .        (5)            238              --             233
                                                ---------  --------------  --------------  --------------
(Loss) income before equity in income of
Consolidated subsidiaries. . . . . . . . . . .      (645)          1,210              --             565
Equity in income of consolidated subsidiaries.     1,210              --          (1,210)             --
                                                ---------  --------------  --------------  --------------

Net income . . . . . . . . . . . . . . . . . .  $    565   $       1,210   $      (1,210)  $         565
                                                =========  ==============  ==============  ==============
</TABLE>




                                       10
<PAGE>

8.     GUARANTOR  SUBSIDIARIES  (CONTINUED)
<TABLE>
<CAPTION>

                       SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS
                                   SIX FISCAL MONTHS ENDED JULY 2, 2004
                                              (IN THOUSANDS)


                                                 Parent      Guarantor
                                                 Company    Subsidiaries    Eliminations    Consolidated
                                                ---------  --------------  --------------  --------------
<S>                                             <C>        <C>             <C>             <C>
Sales. . . . . . . . . . . . . . . . . . . . .  $116,770   $      27,129   $      (5,410)  $     138,489
Cost of sales. . . . . . . . . . . . . . . . .    99,560          19,177          (5,398)        113,339
                                                ---------  --------------  --------------  --------------

Gross profit . . . . . . . . . . . . . . . . .    17,210           7,952             (12)         25,150

Selling, general and administrative expenses .    11,405           5,972              --          17,377
                                                ---------  --------------  --------------  --------------

Operating income . . . . . . . . . . . . . . .     5,805           1,980             (12)          7,773

Interest expense . . . . . . . . . . . . . . .    (6,496)            (18)             --          (6,514)
Other income (expense) . . . . . . . . . . . .      (551)             42              --            (509)
                                                ---------  --------------  --------------  --------------

(Loss) income before income taxes. . . . . . .    (1,242)          2,004             (12)            750
(Benefit) provision for income taxes . . . . .        (5)            349              --             344
                                                ---------  --------------  --------------  --------------
(Loss) income before equity in income of
Consolidated subsidiaries. . . . . . . . . . .    (1,237)          1,655             (12)            406
Equity in income of consolidated subsidiaries.     1,655              --          (1,655)             --
                                                ---------  --------------  --------------  --------------

Net income . . . . . . . . . . . . . . . . . .  $    418   $       1,655   $      (1,667)  $         406
                                                =========  ==============  ==============  ==============
</TABLE>




                                       11
<PAGE>

8.     GUARANTOR  SUBSIDIARIES  (CONTINUED)
<TABLE>
<CAPTION>

                       SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS
                                 THREE FISCAL MONTHS ENDED JUNE 27, 2003
                                              (IN THOUSANDS)


                                                 Parent      Guarantor
                                                 Company    Subsidiaries    Eliminations    Consolidated
                                                ---------  --------------  --------------  --------------
<S>                                             <C>        <C>             <C>             <C>
Sales. . . . . . . . . . . . . . . . . . . . .  $ 56,375   $      11,169   $      (1,891)  $      65,653
Cost of sales. . . . . . . . . . . . . . . . .    45,466           9,010          (1,844)         52,632
                                                ---------  --------------  --------------  --------------

Gross profit . . . . . . . . . . . . . . . . .    10,909           2,159             (47)         13,021

Selling, general and administrative expenses .     6,347           2,920              --           9,267
                                                ---------  --------------  --------------  --------------

Operating income (loss). . . . . . . . . . . .     4,562            (761)            (47)          3,754

Interest expense . . . . . . . . . . . . . . .    (3,148)            (13)             --          (3,161)
Other expense. . . . . . . . . . . . . . . . .      (309)           (503)             --            (812)
                                                ---------  --------------  --------------  --------------

Income (loss) before income taxes. . . . . . .     1,105          (1,277)            (47)           (219)
Provision for income taxes . . . . . . . . . .         3              48              --              51
                                                ---------  --------------  --------------  --------------
Income (loss) before equity in income of
Consolidated subsidiaries. . . . . . . . . . .     1,102          (1,325)            (47)           (270)
Equity in income of consolidated subsidiaries.    (1,325)             --           1,325              --
                                                ---------  --------------  --------------  --------------

Net loss . . . . . . . . . . . . . . . . . . .  $   (223)  $      (1,325)  $       1,278   $        (270)
                                                =========  ==============  ==============  ==============
</TABLE>




                                       12
<PAGE>

8.     GUARANTOR  SUBSIDIARIES  (CONTINUED)
<TABLE>
<CAPTION>

                       SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS
                                  SIX FISCAL MONTHS ENDED JUNE 27, 2003
                                              (IN THOUSANDS)


                                                 Parent      Guarantor
                                                 Company    Subsidiaries    Eliminations    Consolidated
                                                ---------  --------------  --------------  --------------
<S>                                             <C>        <C>             <C>             <C>
Sales. . . . . . . . . . . . . . . . . . . . .  $ 95,549   $      20,376   $      (5,962)  $     109,963
Cost of sales. . . . . . . . . . . . . . . . .    77,801          15,828          (5,867)         87,762
                                                ---------  --------------  --------------  --------------

Gross profit . . . . . . . . . . . . . . . . .    17,748           4,548             (95)         22,201

Selling, general and administrative expenses .    12,283           5,890              --          18,173
                                                ---------  --------------  --------------  --------------

Operating income (loss). . . . . . . . . . . .     5,465          (1,342)            (95)          4,028

Interest expense . . . . . . . . . . . . . . .    (6,153)            (22)             --          (6,175)
Other expense. . . . . . . . . . . . . . . . .      (471)           (174)             --            (645)
                                                ---------  --------------  --------------  --------------

Loss before income taxes . . . . . . . . . . .    (1,159)         (1,538)            (95)         (2,792)
Provision for income taxes . . . . . . . . . .         3             185              --             188
                                                ---------  --------------  --------------  --------------
Loss before equity in income of
Consolidated subsidiaries. . . . . . . . . . .    (1,162)         (1,723)            (95)         (2,980)
Equity in income of consolidated subsidiaries.    (1,723)             --           1,723              --
                                                ---------  --------------  --------------  --------------

Net loss . . . . . . . . . . . . . . . . . . .  $ (2,885)  $      (1,723)  $       1,628   $      (2,980)
                                                =========  ==============  ==============  ==============
</TABLE>




                                       13
<PAGE>

8.     GUARANTOR  SUBSIDIARIES  (CONTINUED)
<TABLE>
<CAPTION>

                              SUPPLEMENTAL CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
                                         SIX FISCAL MONTHS ENDED JULY 2, 2004
                                                    (IN THOUSANDS)



                                                               Parent      Guarantor
                                                               Company    Subsidiaries   Eliminations    Consolidated
                                                              ---------  --------------  -------------  --------------
<S>                                                           <C>        <C>             <C>            <C>
Cash flows (used in) provided by operating activities. . . .  $    (32)  $       3,293   $          --  $       3,261
                                                              ---------  --------------  -------------  --------------

Cash flows from investing activities:
Capital expenditures and proceeds from sales of fixed assets    (1,003)           (245)             --         (1,248)
Other. . . . . . . . . . . . . . . . . . . . . . . . . . . .       570            (570)             --             --
                                                              ---------  --------------  -------------  --------------

Net cash used in investing activities. . . . . . . . . . . .      (433)           (815)             --         (1,248)
                                                              ---------  --------------  -------------  --------------

Cash flows from financing activities:
Net payments on debt . . . . . . . . . . . . . . . . . . . .      (688)         (1,711)             --         (2,399)
Other. . . . . . . . . . . . . . . . . . . . . . . . . . . .     1,079          (1,161)             --            (82)
                                                              ---------  --------------  -------------  --------------

Net cash provided by (used in) financing activities. . . . .       391          (2,872)             --         (2,481)
                                                              ---------  --------------  -------------  --------------

Effect of exchange rate changes on cash. . . . . . . . . . .        --             (59)             --            (59)
                                                              ---------  --------------  -------------  --------------

Change in cash and cash equivalents. . . . . . . . . . . . .       (74)           (453)             --           (527)

Cash and cash equivalents, beginning of period . . . . . . .       105           3,334              --          3,439
                                                              ---------  --------------  -------------  --------------

Cash and cash equivalents, end of period . . . . . . . . . .  $     31   $       2,881              --  $       2,912
                                                              =========  ==============  =============  ==============
</TABLE>




                                       14
<PAGE>

8.     GUARANTOR  SUBSIDIARIES  (CONTINUED)
<TABLE>
<CAPTION>

                              SUPPLEMENTAL CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
                                         SIX FISCAL MONTHS ENDED JUNE 27, 2003
                                                    (IN THOUSANDS)



                                                               Parent      Guarantor
                                                               Company    Subsidiaries   Eliminations    Consolidated
                                                              ---------  --------------  -------------  --------------
<S>                                                           <C>        <C>             <C>            <C>
Cash flows used in operating activities. . . . . . . . . . .  $ (5,732)  $        (126)  $          --  $      (5,858)
                                                              ---------  --------------  -------------  --------------

Cash flows from investing activities:
Capital expenditures and proceeds from sales of fixed assets       857          (1,135)             --           (278)
Other. . . . . . . . . . . . . . . . . . . . . . . . . . . .       887            (384)             --            503
                                                              ---------  --------------  -------------  --------------

Net cash provided by (used in) investing activities. . . . .     1,744          (1,519)             --            225
                                                              ---------  --------------  -------------  --------------

Cash flows from financing activities:
Net borrowings (payments) on debt. . . . . . . . . . . . . .     5,258          (1,025)             --          4,233
Other. . . . . . . . . . . . . . . . . . . . . . . . . . . .    (1,309)          1,654              --            345
                                                              ---------  --------------  -------------  --------------

Net cash provided by financing activities. . . . . . . . . .     3,949             629              --          4,578
                                                              ---------  --------------  -------------  --------------

Effect of exchange rate changes on cash. . . . . . . . . . .        --             142              --            142
                                                              ---------  --------------  -------------  --------------

Change in cash and cash equivalents. . . . . . . . . . . . .       (39)           (874)             --           (913)

Cash and cash equivalents, beginning of period . . . . . . .       205           2,731              --          2,936
                                                              ---------  --------------  -------------  --------------

Cash and cash equivalents, end of period . . . . . . . . . .  $    166   $       1,857              --  $       2,023
                                                              =========  ==============  =============  ==============
</TABLE>




                                       15
<PAGE>

ITEM  2.  MANAGEMENT'S  DISCUSSION  AND  ANALYSIS  OF  FINANCIAL  CONDITION  AND
        RESULTS  OF  OPERATIONS.

     The  following  discussion  of  the  financial  condition  and  results  of
operations  of  the  Company should be read in conjunction with the Consolidated
Financial  Statements  and  the  notes  included  in  Item  1  hereof.

GENERAL

     The  Company  is  a  leading  manufacturer  and  supplier  of  agricultural
equipment  and  services  worldwide.  The  Company's  grain,  swine  and poultry
products  are  used  by  producers  and purchasers of grain, and by producers of
swine  and  poultry. Fluctuations in grain and feed prices directly impact sales
of  the  Company's  grain equipment. Because the primary cost of producing swine
and  poultry  is the cost of the feed grain consumed by animals, fluctuations in
the  supply and cost of grain to users of the Company's products in the past has
impacted  sales  of  the  Company's  swine  and  poultry  equipment. The Company
believes,  however,  that its diversified product offerings mitigate some of the
effects  of  fluctuations  in  the  price  of  grain  since the demand for grain
storage,  drying  and  handling  equipment  tends  to increase during periods of
higher  grain prices, which somewhat offsets the reduction in demand during such
periods  for  the  Company's  products  by  producers  of  swine  and  poultry.

     Sales  of  agricultural  equipment are seasonal, with farmers traditionally
purchasing  grain  storage  bins  and grain drying and handling equipment in the
summer and fall in conjunction with the harvesting season, and swine and poultry
producers  purchasing equipment during prime construction periods in the spring,
summer  and fall.  The Company's net sales and net income have historically been
lower  during the first and fourth fiscal quarters as compared to the second and
third  quarters.

     Although  the Company's sales are primarily denominated in U.S. dollars and
are  not  generally  affected by currency fluctuations (except for the Company's
Brazilian  and  South  African operations), the production costs, profit margins
and competitive position of the Company are affected by the strength of the U.S.
dollar  relative  to  the  strength  of  the  currencies  in countries where its
products  are  sold.

     The Company's international sales have historically comprised a significant
portion  of  net  sales. In the first six months of 2004 and 2003, the Company's
international  sales  accounted  for  27%  and  26%  of net sales, respectively.
International  operations  generally  are  subject to various risks that are not
present  in  domestic  operations,  including  restrictions  on  dividends,
restrictions  on  repatriation of funds, unexpected changes in tariffs and other
trade  barriers,  difficulties  in  staffing  and  managing  foreign operations,
political  instability,  fluctuations  in  currency  exchange  rates,  reduced
protection  for  intellectual  property  rights  in  some  countries,  seasonal
reductions in business activity and potentially adverse tax consequences, any of
which  could  adversely  impact  the  Company's  international  operations.

     The  primary  raw materials used by the Company to manufacture its products
are  steel and polymers.  Fluctuations in the prices and availability of vendors
for  steel  and,  to a lesser extent, polymer materials can impact the Company's
cost  of  sales.   Recent  sharp increases in the price of steel have forced the
Company  to pass along price increases to its customers, which may affect future
demand.  In  addition,  the  Company may be unable to recover the full amount of
these  steel  price  increases  from  its  customers.

     On  July 1, 2004, Craig Sloan retired as the Chief Executive Officer of The
GSI  Group,  Inc.  (the  "Company").  On July 8, 2004, Mr. Sloan and the Company
entered  into  a  Severance,  Non-Compete and Consulting Agreement providing the
terms  and  conditions  of  Mr. Sloan's retirement and establishing a three-year
period (subject to extension) during which Mr. Sloan will act as a consultant to
the  Company. Pursuant to that agreement, the Company also repurchased a portion
of  Mr.  Sloan's common stock. Mr. Sloan is continuing to serve as a director of
the  Company  and  as  the non-executive Chairman of the Board. Upon Mr. Sloan's
retirement,  the  Board of Directors elected Russell C. Mello as Chief Executive
Officer  of  the  Company.

     The  Company  currently  operates  as  a  subchapter  S  corporation  and,
accordingly, is not subject to federal income taxation for the periods for which
financial  information  has  been  presented  herein.  Because  the  Company's
stockholders  are  subject  to tax liabilities based on their pro rata shares of
the  Company's income, the Company's policy is to make periodic distributions to
its  stockholders  in  amounts  equal  to  such  tax  liabilities.

                                       16
<PAGE>

RESULTS  OF  OPERATIONS

Three  Months  Ended  July2,  2004  Compared to Three Months Ended June 27, 2003

     Sales  increased  21.6%  or  $14.2  million  to $79.9 million in the second
quarter  of  2004 compared to $65.7 million in the second quarter of 2003.  This
increase  was  driven  by  increased demand for essentially all of the Company's
products.

     Gross  profit  increased  to $13.6 million in the second quarter of 2004 or
17.1%  of sales from $13.0 million or 19.8% of sales in the same period of 2003.
This  increase was primarily a result of increased sales.  The decrease in gross
profit  as a percent of sales was primarily the result of higher material costs.

     Operating  expenses  decreased  2.3% or $0.2 million to $9.1 million in the
second  quarter  of  2004  from  $9.3  million  in the same period of 2003. This
decrease  was  primarily  the  result  of  cost  cutting  measures.

     Operating  income  increased  to $4.6 million in the second quarter of 2004
from $3.8 million in the second quarter of 2003.  This increase was attributable
to  the  increase  in  gross  profit.

     Interest  expense  increased  $0.3 million in the second quarter of 2004 as
compared  to  the  second  quarter  of  2003  due  to  higher  borrowing  costs.

     Net income increased $0.8 million to $0.5 million for the second quarter of
2004  from  a  loss  of  $0.3  million  in  the  same  period  of  2003.

Six  Months  Ended  July  2,  2004  Compared  to  Six Months Ended June 27, 2003

     Sales  increased  25.9% or $28.5 million to $138.5 million in the first six
months of 2004 compared to $110.0 million in the first six months of 2003.  This
increase  was  driven  by  increased demand for essentially all of the Company's
products.

     Gross  profit increased to $25.2 million in the first six months of 2004 or
18.2%  of sales from $22.2 million or 20.2% of sales in the same period of 2003.
This  increase was a result of increased sales.  The decrease in gross profit as
a  percent  of  sales  was  primarily  the  result  of  higher  material  costs.

     Operating  expenses  decreased 4.4% or $0.8 million to $17.4 million in the
first  six  months  of  2004 from $18.2 million in the same period of 2003. This
decrease  was  primarily  the  result  of  cost  cutting  measures.

     Operating  income  increased substantially to $7.8 million in the first six
months of 2004 from $4.0 million in the first six months of 2003.  This increase
was  attributable  to  the  increase  in  gross  profit.

     Interest  expense increased $0.3 million in the first six months of 2004 as
compared  to  the  first  six  months  of  2003  due  to higher borrowing costs.

     Net  income increased $3.4 million to $0.4 million for the first six months
of  2004  from  a  loss  of  $3.0  million  in  the  same  period  of  2003.

LIQUIDITY  AND  CAPITAL  RESOURCES

     The  Company  has historically funded capital expenditures, working capital
requirements,  debt  service,  stockholder  dividends and stock repurchases from
cash flow from its operations, augmented by borrowings made under various credit
agreements  and  the  sale  of  the  Company's  10  % senior subordinated notes.

     As  of  July  2,  2004, the Company had $41.9 million of working capital, a
decrease  of  $15.5  million  from working capital as of December 31, 2003.  The
decrease  in  working capital was primarily due to increases in accrued expenses
(which  includes the accrual for the common stock purchase) and accounts payable
of  $24.7  million,  partially  offset  by  increases in accounts receivable and
inventory  of  $10.3  million.

                                       17
<PAGE>
     Operating  activities  provided  $3.3 million and used $5.9 million in cash
flow  in the first six months of 2004 and 2003, respectively.  This $9.2 million
increase  in  cash  flow  was primarily the result of an increase in net income,
inventory, other current assets, accounts payable, and accrued expenses of $10.1
million,  partially  offset  by  a  decrease  in  depreciation and amortization,
deferred taxes and accounts receivable of $0.8 million compared to the first six
months  of  2003.

     Investing  activities  used  $1.2 million and provided $0.2 million in cash
flow  in the first six months of 2004 and 2003, respectively.  The cash was used
primarily  for  machinery and equipment purchases.  The $1.4 million decrease in
cash used in investing activities was partially a result of higher proceeds from
the  sale  of  fixed  assets  in  2003  compared  to  2004.

     Financing  activities  used  $2.5 million and provided $4.6 million in cash
flow  in the first six months of 2004 and 2003, respectively.  The cash was used
primarily  for  payments  on  long-term  debt  in  2004.

     The  Company  believes  that  existing  cash, cash flow from operations and
available borrowings under the Credit Facility will be sufficient to support its
working  capital,  capital  expenditures  and  debt service requirements for the
foreseeable  future.

INFLATION

     The  Company  believes  that inflation has not had a material effect on its
results  of  operations  or  financial  condition  during  recent  periods.

CRITICAL  ACCOUNTING  POLICIES

     There  are  no  material  changes to the critical accounting policies since
December  31,  2003.

FORWARD-LOOKING  STATEMENTS

     Certain  statements  contained  in  this  report  are  "forward-looking
statements"  within the meaning of Section 27A of the Securities Act of 1933, as
amended,  and  Section  21E  of the Securities Exchange Act of 1934, as amended.
Forward-looking  statements  are statements other than historical information or
statements  of  current  condition.  Some  forward-looking  statements  may  be
identified  by the use of terms such as "believes," "anticipates," "intends," or
"expects."  Forward-looking  statements  are subject to risks, uncertainties and
other  factors  that could cause actual results to differ materially from future
results  expressed or implied by such statements, and such statements should not
be  regarded  as  a  representation  the  stated  objectives  will  be achieved.



                                       18
<PAGE>

ITEM  3.  QUANTITATIVE  AND  QUALITATIVE  DISCLOSURES  ABOUT  MARKET  RISK

     The  Company  is  subject to market risk associated with adverse changes in
interest  rates  and foreign currency exchange rates.  The Company does not hold
any  market  risk  sensitive instruments for trading purposes.  At July 2, 2004,
principal exposed to interest rate risk was limited to $29.8 million in variable
rate  debt.  The  Company  measures its interest rate risk by estimating the net
amount  by which potential future net earnings would be impacted by hypothetical
changes  in  market interest rates related to all interest rate sensitive assets
and liabilities.  A 1% change in interest rates would have a $0.3 million impact
on  the  Company's  results  of  operations.

     At  July  2,  2004,  approximately  14.5%  of  sales  were  derived  from
international  operations  with exposure to foreign currency exchange rate risk.
The  Company  mitigates  its  foreign currency exchange rate risk principally by
establishing  local  production  facilities  in  the  markets  it  serves and by
invoicing  customers  in  the  same currency as the source of the products.  The
Company  also  monitors  its  foreign  currency  exposure  in  each  country and
implements  strategies  to  respond  to  changing  economic  and  political
environments.  The  Company's  exposure  to  foreign currency exchange rate risk
relates primarily to the financial position and the results of operations of its
Brazilian  and  South  African  subsidiaries.  The  Company's  exposure  to such
exchange rate risk as it relates to the Company's financial position and results
of  operations  would  be  adversely  impacted  by  further  devaluation  of the
Brazilian  Real  per  U.S.  dollar  and  the South African Rand per U.S. dollar.
These  amounts  are  difficult to accurately estimate due to factors such as the
inherent  fluctuation  of inter-company account balances, balance sheet accounts
and  the  existing  economic  uncertainty  and future economic conditions in the
international  marketplace.


ITEM  4.  CONTROLS  AND  PROCEDURES

     Based  on an evaluation of the Company's disclosure controls and procedures
performed  by the Company's management the Company's Chief Executive Officer and
Vice-President  of  Finance  have  concluded  that  as  of the end of the period
covered  by  this  report,  the  Company has appropriate disclosure controls and
procedures to ensure that information required to be disclosed by the Company in
this  quarterly  report  has  been  recorded, processed, summarized and reported
within  the  time  periods  specified  in  the rules and forms of the Securities
Exchange  Commission.




                                       19
<PAGE>



                                     PART II
                                OTHER INFORMATION

ITEM  1.  LEGAL  PROCEEDINGS.

     There  are  no legal proceedings pending against the Company, which, in the
opinion  of  management,  would  have a material adverse affect on the Company's
business,  financial  position  or  results  of  operations.


ITEM  6.  EXHIBITS  AND  REPORTS  ON  FORM  8-K.

     (a)  EXHIBITS:

           A  list  of  the  exhibits  included as part of this Form 10-Q is set
forth in the Index to Exhibits that immediately precedes such exhibits, which is
incorporated  herein  by  reference.

(b)     REPORTS  ON  FORM  8-K:

          In a current report filed on Form 8-K dated July 16, 2004, the Company
reported information pursuant to "Item 5.  Other Events" and "Item 7.  Financial
Statements,  ProForma  Financial  Information  and  Exhibits".

                                       20
<PAGE>
                                   SIGNATURES

     PURSUANT  TO  THE  REQUIREMENTS OF THE SECURITIES EXCHANGE ACT OF 1934, THE
REGISTRANT  HAS  DULY  CAUSED  THIS  REPORT  TO  BE  SIGNED ON ITS BEHALF BY THE
UNDERSIGNED  THEREUNTO  DULY  AUTHORIZED.

                                   The  GSI  Group,  Inc.

                                   By:     /s/  Ann  Montgomery
                                           --------------------
                                         Vice  President  -  Finance  (Principal
Accounting  Officer)


                             DATE:  AUGUST 10, 2004


                                       21
<PAGE>

                                 CERTIFICATIONS


I,  Russell  C.  Mello,  certify  that:

1.  I  have  reviewed this quarterly report on Form 10-Q of The GSI Group, Inc.;

2.  Based  on my knowledge, this report does not contain any untrue statement of
a  material  fact  or  omit  to  state  a  material  fact  necessary to make the
statements  made, in light of the circumstances under which such statements were
made,  not  misleading  with  respect  to  the  period  covered  by this report;

3.  Based  on  my  knowledge,  the  financial  statements,  and  other financial
information included in this report, fairly present in all material respects the
financial  condition,  results of operations and cash flows of the registrant as
of,  and  for,  the  periods  presented  in  this  report;

4.  The  registrant's  other  certifying  officer  and  I  are  responsible  for
establishing  and  maintaining disclosure controls and procedures (as defined in
Exchange  Act  Rules  13a-15(e)  and  15d-15(e))  for  the  registrant and have:

a)  designed  such disclosure controls and procedures, or caused such disclosure
controls  and  procedures  to  be designed under our supervision, to ensure that
material  information  relating  to  the  registrant, including its consolidated
subsidiaries,  is made known to us by others within those entities, particularly
during  the  period  in  which  this  report  is  being  prepared;

b)  evaluated  the  effectiveness  of  the  registrant's disclosure controls and
procedures  and presented in this report our conclusions about the effectiveness
of  the  disclosure controls and procedures, as of the end of the period covered
by  this  report  based  on  such  evaluations;  and

c) disclosed in this report any change in the registrant's internal control over
financial  reporting  that  occurred  during the registrant's most recent fiscal
quarter (the registrant's fourth fiscal quarter in the case of an annual report)
that  has materially affected, or is reasonably likely to materially affect, the
registrant's  internal  control  over  financial  reporting;  and

5.  The registrant's other certifying officer and I have disclosed, based on our
most  recent  evaluation  of  internal  control over financial reporting, to the
registrant's auditors and the audit committee of registrant's board of directors
(or  persons  performing  the  equivalent  functions):

a)  all  significant  deficiencies  and  material  weaknesses  in  the design or
operation  of  internal  control  over  financial reporting which are reasonably
likely  to  adversely  affect  the  registrant's  ability  to  record,  process,
summarize  and  report  financial  information;  and

b)  any  fraud,  whether  or  not  material,  that  involves management or other
employees  who have a significant role in the registrant's internal control over
financial  reporting.


Date:  August  10,  2004

                                        /s/  Russell  C.  Mello
                                        -----------------------
                                         Chief  Executive  Officer






                                       22
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I,  Ann  Montgomery,  certify  that:

1.  I  have  reviewed this quarterly report on Form 10-Q of The GSI Group, Inc.;

2.  Based  on my knowledge, this report does not contain any untrue statement of
a  material  fact  or  omit  to  state  a  material  fact  necessary to make the
statements  made, in light of the circumstances under which such statements were
made,  not  misleading  with  respect  to  the  period  covered  by this report;

3.  Based  on  my  knowledge,  the  financial  statements,  and  other financial
information included in this report, fairly present in all material respects the
financial  condition,  results of operations and cash flows of the registrant as
of,  and  for,  the  periods  presented  in  this  report;

4.  The  registrant's  other  certifying  officer  and  I  are  responsible  for
establishing  and  maintaining disclosure controls and procedures (as defined in
Exchange  Act  Rules  13a-15(e)  and  15d-15(e))  for  the  registrant and have:

a)  designed  such disclosure controls and procedures, or caused such disclosure
controls  and  procedures  to  be designed under our supervision, to ensure that
material  information  relating  to  the  registrant, including its consolidated
subsidiaries,  is made known to us by others within those entities, particularly
during  the  period  in  which  this  report  is  being  prepared;

b)  evaluated  the  effectiveness  of  the  registrant's disclosure controls and
procedures  and presented in this report our conclusions about the effectiveness
of  the  disclosure controls and procedures, as of the end of the period covered
by  this  report  based  on  such  evaluation;  and

c) disclosed in this report any change in the registrant's internal control over
financial  reporting  that  occurred  during the registrant's most recent fiscal
quarter (the registrant's fourth fiscal quarter in the case of an annual report)
that  has materially affected, or is reasonably likely to materially affect, the
registrant's  internal  control  over  financial  reporting;  and

5.  The  registrant's  other  certifying officers and I have disclosed, based on
our  most recent evaluation of internal control over financial reporting, to the
registrant's auditors and the audit committee of registrant's board of directors
(or  persons  performing  the  equivalent  functions):

a)  all  significant  deficiencies  and  material  weaknesses  in  the design or
operation  of  internal  control  over  financial reporting which are reasonably
likely  to  adversely  affect  the  registrant's  ability  to  record,  process,
summarize  and  report  financial  information;  and

b)  any  fraud,  whether  or  not  material,  that  involves management or other
employees  who have a significant role in the registrant's internal control over
financial  reporting.

Date:  August  10,  2004

                                        /s/  Ann  Montgomery
                                        --------------------
                                         Vice  President  -  Finance  (Principal
                                          Accounting  Officer)


                                       23
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<TABLE>
<CAPTION>


                                                 INDEX TO EXHIBITS



EXHIBIT
  NO.    DOCUMENT DESCRIPTION
-------  ---------------------------------------------------------------------------------------------------------
<C>      <S>

   3.1*  Amended and Restated Articles of Incorporation of The GSI Group, Inc., as amended as of October 23, 1997.

   3.2*  By-Laws of The GSI Group, Inc, as amended.

 10.7**  Severance, Non-Compete and Consulting Agreement between The GSI Group, Inc., and John
         C. Sloan dated July 8, 2004.

   10.8  Indemnification Agreement dated July 7, 2004 between The GSI Group, Inc., and Ann
         Montgomery.

   10.9  Amendment to the October 31, 2003 Loan and Security Agreement, dated July 9, 2004,
         between The GSI Group, Inc., as borrower, and Congress Financial Corporation, as lender.

  10.10  Capital Call Agreement dated July 9, 2004, between Craig Sloan, as the capital call investor ;
         The GSI Group Inc., as borrower; and Congress Financial Corporation, as lender.

   99.1  Certification of Chief Executive Officer and Principal Accounting Officer.

</TABLE>


____________

*     Incorporated  by  reference  from  the Company's Registration Statement of
Form  S-4  (Reg.  No.  333-43089)  filed  with  the  Commission  pursuant to the
Securities  Act  of  1933,  as  amended.

**     Incorporated  by  reference  from  the  Company's Form 8-K filed with the
Commission  on July 16, 2004 pursuant to the Securities Act of 1934, as amended.

                                       24
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