MINNEAPOLIS (Oct. 16, 2007) -- FSI International, Inc. (Nasdaq: FSII), a manufacturer of capital equipment for the microelectronics industry, today reported financial results for the fiscal 2007 fourth quarter and the fiscal year ended August 25, 2007.
Fiscal 2007 Fourth Quarter and Full Year Results
Sales for the fiscal 2007 fourth quarter were $19.9 million, as compared to $40.4 million for the same period of fiscal 2006. The Company’s net loss for the fourth quarter of fiscal 2007 was $6.5 million, or $0.21 per share, as compared to net income of $3.2 million, or $0.10 per share, in the fourth quarter of fiscal 2006.
Fiscal year 2007 sales increased to $116.2 million, as compared to $113.2 million for fiscal 2006. The Company’s fiscal 2007 net loss was $14.6 million, or $0.48 per share, compared to a net loss of $7.3 million, or $0.24 per share, for fiscal year 2006.
The Company recorded a $4.1 million, or $0.13 per share, asset impairment charge in fiscal 2007 associated with the Company’s investment in m.FSI LTD, a Japanese joint venture. The Company recorded a $500,000, or $0.02 per share, impairment charge related to an investment in fiscal 2006.
Fiscal 2007 Highlights
“While deteriorating industry conditions during the year impacted our overall order level and financial performance for fiscal 2007, progress was made on the strategies we rolled out at the beginning of the year,” said Don Mitchell, FSI chairman and chief executive officer. “From a commercial perspective, we established ‘Tool Of Record’ status at several new customers and enhanced the applications capabilities of our flagship products. Operationally, we restructured our ownership in and contractual relationship with m.FSI and deployed initiatives focused on lowering our break-even revenue level while preserving our cash.”*
In the fourth quarter of fiscal 2007, the Company implemented a program emphasizing the importance of revenue growth, gross margin improvement, cost reduction and cash preservation. The goals of the program were to lower FSI’s breakeven revenue level while positioning the Company to leverage financial performance when quarterly revenues improve. As a result, the Company reduced its headcount from 494 at the end of the third quarter to 429 employees at the end of fiscal 2007.
“Our accomplishments in fiscal 2007 and our recent cost reductions have placed us in a stronger position to gain marketshare and improve our overall financial performance in fiscal 2008,” concluded Mitchell.*
Backlog and Deferred Revenue
The Company ended fiscal 2007 with $21.0 million in backlog and deferred revenue, as compared to $44.9 million at the end of fiscal 2006. Customers can cancel or delay orders or delay product acceptance; therefore orders, backlog and deferred revenue are not necessarily indicative of shipments or revenues in future periods.*
Balance Sheet Strength
Cash, cash equivalents, restricted cash and marketable securities at year end were $24.5 million at the end of fiscal 2007 as compared to $26.9 million at the end of fiscal 2006. The Company used $100,000 of cash for operations in the fourth quarter of fiscal 2007 and used $4.1 million of cash for operations during fiscal 2007. Cash proceeds, net, from restructuring the Company’s ownership in m.FSI were $3.2 million in fiscal 2007. As of August 25, 2007, the Company had $59 million in working capital, a current ratio of 3.9 to 1 and a book value of $2.64 share.
Outlook
The Company expects first quarter fiscal 2008 orders to be between $17 to $21 million, as compared to $21 million in the fourth quarter of fiscal 2007.* This assumes the receipt of several follow-on orders that are anticipated late in the quarter.*
Considering the backlog and deferred revenue levels at the end of fiscal 2007, the Company expects first quarter fiscal 2008 revenues to range from $22 to $25 million as compared to $19.9 million in the fourth quarter of fiscal 2007.* A portion of the expected revenue is subject to either receiving purchase orders or obtaining timely acceptance from the Company’s customers.*
Based upon anticipated gross profit margins associated with deferred revenue, the expected manufacturing capacity utilization rate, the product sales mix and the current quarterly operating expense run rate, the Company expects a net loss in the $1.5 to $2.0 million range for the first quarter of fiscal 2008.*
Fiscal 2008 first quarter capital expenditures are expected to be less than $300,000 with depreciation and amortization expected to be between $1.1 million and $1.2 million.* If the Company achieves its expectations, it anticipates using $1.0 to $2.0 million of cash in operations during the first quarter of fiscal 2008.*
Conference Call Details
Investors will have the opportunity to listen to the conference call at 3:30 p.m. CT today over the Internet. The webcast is being distributed through the Thomson 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.
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 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. FSI maintains a web site 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 orders, expected revenues, expected profit, expected capital expenditures, expected depreciation and amortization, expected cash usage, and other expected financial performance for the first quarter of fiscal 2008. 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 timing and success of current and future product and process development programs; the success of the Company’s direct distribution organization; legal proceedings; and the potential impairment of long-lived assets; 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.