FSI International, Inc. (Nasdaq: FSII), a manufacturer of capital equipment for the microelectronics industry, today reported financial results for the third quarter of fiscal 2009 and for the first nine months ended May 30, 2009.
Fiscal 2009 Third Quarter and First Nine Months
Sales for the third quarter of fiscal 2009 were $15.4 million, including the ORION® system revenue that was deferred at the end of the second quarter, compared to $20.3 million for the same period in fiscal 2008. The Company’s net loss for the third quarter of fiscal 2009 was $2.8 million, or $0.09 per share, compared to a net loss of $1.4 million, or $0.05 per share, for the third quarter of fiscal 2008.
Sales for the first nine months of fiscal 2009 were $36.3 million, compared to $64.2 million for the same period of fiscal 2008. The Company’s net loss for the first nine months of fiscal 2009 was $17.6 million, or $0.57 per share, as compared to a net loss of $4.6 million, or $0.15 per share for the first nine months of fiscal 2008.
In the first nine months of fiscal 2009, we recorded approximately $4.0 million, or $0.13 per share, of severance costs associated with the March 2009 restructuring and headcount and cost reduction initiatives and an increase in the Company's inventory obsolescence reserves. There were no severance or significant obsolescence costs recorded in the first nine months of fiscal 2008.
Improved Financial Performance Model
“In March 2009, we implemented a further reduction in management salaries, established two shutdown weeks, reduced our headcount and enacted other cost reduction initiatives,” said Don Mitchell, FSI chairman and chief executive officer. "Since the start of fiscal 2009, the Company has implemented headcount and other cost reductions that are expected to reduce the Company’s annual operating cost by approximately $11 to $12 million. With these actions we believe our quarterly breakeven revenue level has been lowered to between $14 and $17 million," continued Mitchell.*
"Our third quarter cash used in operating activities was held to $394,000,” stated Mitchell. “As a result of the cost reduction initiatives implemented in fiscal 2009, the Company’s quarterly operating cash flow neutral revenue level is believed to be in the $12 to $14 million range, depending on the gross margin rate and shipment/accounts receivable collection timing," continued Mitchell.*
The Company intends to manage its operations with a goal to end fiscal 2009 with greater than $10 million in cash, restricted cash, cash equivalents and marketable securities.* As industry conditions improve, FSI remains focused on aligning its cost structure to support the anticipated revenue run rate while funding the programs that provide the most significant opportunity for near-term revenue and future marketshare gains.
Balance Sheet
As of the end of the fiscal 2009 third quarter, the Company had approximately $66.5 million in assets, including $10.4 million in cash, restricted cash, cash equivalents and marketable securities. The Company had a current ratio of 2.9 to 1.0 and a book value of $1.62 per share at the end of the fiscal 2009 third quarter.
Outlook
The Company expects fourth quarter orders of $12 to $15 million as compared to $13.3 million in the third quarter of fiscal 2009.* Based on backlog and deferred revenue levels at the end of the third quarter and expected fourth quarter orders, the Company expects fourth quarter fiscal 2009 revenues to be approximately $12 to $15 million as compared to $15.4 million in the third quarter of fiscal 2009.*
Based upon anticipated gross profit margins and the operating expense run rate, the Company expects a net loss of approximately $1.0 to $2.0 million for the fourth quarter.* The Company expects to again use less than $1.0 million of net cash in operating activities in the fourth quarter, after using $394,000 in the third quarter, as we manage accounts receivable and inventory.*
Conference Call Details
FSI investors have the opportunity to listen to management’s discussion of its financial results on a conference call at 3:30 p.m. CT today. The Company invites all those interested to join the call by calling 888.950.7568 and entering access code 1955509. The webcast is also being distributed through the Thomson ONE StreetEvents Network to both institutional and individual investors. Individual investors can listen to the call at www.earnings.com, Thomson/CCBN’s individual investor portal, powered by StreetEvents. Institutional investors can access the call via Thomson’s password-protected event management site, StreetEvents (www.streetevents.com). For those who cannot listen to the live broadcast, a replay will be available shortly after the call by calling 866.419.5469.
About FSI
FSI International, Inc. is a global supplier of surface conditioning equipment, technology and support services for microelectronics manufacturing. Using the Company’s broad portfolio of cleaning products, which include batch and single-wafer platforms for Immersion, Spray, Vapor and CryoKinetic technologies, customers are able to achieve their process performance flexibility and productivity goals. The Company’s support services programs provide product and process enhancements to extend the life of installed FSI equipment, enabling worldwide customers to realize a higher return on their capital investment. For more information, visit FSI’s website at http://www.fsi-intl.com.
“Safe Harbor” Statement Under the Private Securities Litigation Reform Act of 1995
This press release contains certain “forward-looking” statements (*), including, but not limited to, expected annual cost savings, expected breakeven revenue level, expected operating cash flow revenue level, expected year end cash, expected orders, expected revenues, expected financial results, expected cash usage, other expected financial performance for the fourth quarter of fiscal 2009. Except for the historical information contained herein, the matters discussed in this news release are forward-looking statements involving risks and uncertainties, both known and unknown, that could cause actual results to differ materially from those in such forward-looking statements. Such risks and uncertainties include, but are not limited to, changes in industry conditions; order delays or cancellations; general economic conditions; changes in customer capacity requirements and demand for microelectronics; the extent of demand for the Company’s products and its ability to meet demand; global trade policies; worldwide economic and political stability; the Company’s successful execution of internal performance plans; the cyclical nature of the Company’s business; volatility of the market for certain products; performance issues with key suppliers and subcontractors; the level of new orders; the financial condition of the Company’s customers and their ability to pay; the timing and success of current and future product and process development programs; the success of the Company’s direct distribution organization; legal proceedings; the potential impairment of long-lived assets; and the potential adverse financial impacts resulting from declines in the fair value and liquidity of investments the Company presently holds; as well as other factors listed herein or from time to time in the Company’s SEC reports, including our latest 10-K annual report and our 10-Q quarterly reports. The Company assumes no duty to update the information in this press release.
FSI INTERNATIONAL, INC. AND SUBSIDIARIES | ||||||||||||||||
CONSOLIDATED STATEMENT OF OPERATIONS | ||||||||||||||||
(in thousands, except per share data) | ||||||||||||||||
(unaudited) | ||||||||||||||||
| Third Quarter Ended | Nine Months Ended | |||||||||||||||
May 30, | May 31, | May 30, | May 31, | |||||||||||||
| Sales | $ | 15,424 | $ | 20,331 | $ | 36,308 | $ | 64,193 | ||||||||
| Cost of goods | 11,111 | 9,852 | 26,161 | 34,902 | ||||||||||||
| Gross margin | 4,313 | 10,479 | 10,147 | 29,291 | ||||||||||||
Selling, general and | 3,907 | 7,418 | 15,635 | 21,040 | ||||||||||||
Research and development | 3,075 | 4,693 | 12,099 | 13,783 | ||||||||||||
| Operating loss | (2,669 | ) | (1,632 | ) | (17,587 | ) | (5,532 | ) | ||||||||
Interest and other (expense) | (69 | ) | 130 | 133 | 817 | |||||||||||
| Loss before income taxes | (2,738 | ) | (1,502 | ) | (17,454 | ) | (4,715 | ) | ||||||||
| Income tax expense (benefit) | 70 | (98 | ) | 98 | (163 | ) | ||||||||||
| Net loss | $ | (2,808 | ) | $ | (1,404 | ) | $ | (17,552 | ) | $ | (4,552 | ) | ||||
| Loss per share - basic | $ | (0.09 | ) | $ | (0.05 | ) | $ | (0.57 | ) | $ | (0.15 | ) | ||||
| Loss per share - diluted | $ | (0.09 | ) | $ | (0.05 | ) | $ | (0.57 | ) | $ | (0.15 | ) | ||||
Weighted average common shares | ||||||||||||||||
| Basic | 31,160 | 30,656 | 31,016 | 30,605 | ||||||||||||
| Diluted | 31,160 | 30,656 | 31,016 | 30,605 | ||||||||||||
FSI INTERNATIONAL, INC. AND SUBSIDIARIES | ||||||
CONSOLIDATED BALANCE SHEET | ||||||
(in thousands) | ||||||
(unaudited) | ||||||
May 30, | Aug. 30, | |||||
| Assets | ||||||
| Current assets | ||||||
Cash, restricted cash, cash equivalents | $ | 5,924 | $ | 15,913 | ||
| Receivables, net | 10,819 | 9,614 | ||||
| Inventories | 22,655 | 27,169 | ||||
| Other current assets | 5,409 | 8,152 | ||||
| Total current assets | 44,807 | 60,848 | ||||
| Property, plant and equipment, net | 15,750 | 18,266 | ||||
| Marketable securities | 4,458 | 6,447 | ||||
| Restricted cash | - | 500 | ||||
| Investment | 460 | 460 | ||||
| Intangible assets, net | - | 61 | ||||
| Other assets | 1,071 | 1,071 | ||||
| Total assets | $ | 66,546 | $ | 87,653 | ||
| Liabilities and Stockholders’ Equity | ||||||
| Current liabilities | ||||||
| Trade accounts payable | $ | 3,061 | $ | 4,305 | ||
| Current portion of long-term debt | 159 | 841 | ||||
| Deferred profit* | 3,660 | 3,867 | ||||
| Customer deposits | 25 | 7 | ||||
| Accrued expenses | 8,630 | 10,392 | ||||
| Total current liabilities | 15,535 | 19,412 | ||||
| Long-term liabilities | 639 | 583 | ||||
| Total stockholders’ equity | 50,372 | 67,658 | ||||
| Total liabilities and stockholders’ equity | $ | 66,546 | $ | 87,653 | ||
*Deferred profit reflects deferred revenue less manufacturing | ||||||
FSI INTERNATIONAL, INC. AND SUBSIDIARIES | ||||||
MISCELLANEOUS FINANCIAL INFORMATION | ||||||
(in thousands, except percentages, per share and total employee data) | ||||||
(unaudited) | ||||||
| Nine Months Ended | ||||||
May 30, | May 31, | |||||
| Sales by Area | ||||||
| United States | 30% | 24% | ||||
| International | 70% | 76% | ||||
| Cash Flow Statement | ||||||
| Capital expenditures | $ | 158 | $ | 1,463 | ||
| Depreciation | 2,625 | 2,841 | ||||
| Amortization | 61 | 327 | ||||
| Miscellaneous Data | ||||||
| Total employees, including contract | 274 | 417 | ||||
| Book value per share | $ | 1.62 | $ | 2.49 | ||
| Shares outstanding | 31,160 | 30,656 | ||||
Contacts:
FSI International, Inc.
Benno Sand, 952-448-8936
Investor and
Financial Media
