FSI
International (ticker: FSII,
exchange: NASDAQ) News Release
- 3/23/04
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FSI International, Inc. Announces Second Quarter and First Half Fiscal 2004 Financial Results
Total Second Quarter Orders Increased 70 Percent From First Quarter Level
MINNEAPOLIS (March. 23, 2004) -- FSI International, Inc. (Nasdaq:
FSII), a manufacturer of capital equipment for the microelectronics
industry, today reported financial results for the fiscal 2004
second quarter and first six months ended February 28, 2004.
Fiscal 2004 Second Quarter
Orders in the second quarter of fiscal 2004 were $31.9 million, representing
an increase of $13.1 million from the prior quarter. Second quarter orders included
$26 million in orders for the Company’s Surface Conditioning products.
Sales for the fiscal 2004 second quarter were $22.3 million, compared to $21.3
million for the same period in fiscal 2003. The Company’s net loss for
the second quarter of fiscal 2004 was $6.1 million or $0.20 per share (diluted),
compared to a net loss of $37.4 million or $1.27 per share (diluted) for the
second quarter of fiscal 2003.
In the second quarter of fiscal 2004, the Company accrued $3.4 million, or $0.11
per share (diluted), of patent litigation settlement costs; these costs were
included in selling, general and administrative expenses.
“Europe, Asia and the United States regions each represented approximately 30 percent of second quarter orders, as we are seeing the benefits of our direct
distribution model that was established just over a year ago,” said Don
Mitchell, FSI’s chairman and chief executive officer. “We now have
ongoing joint development agreements and product evaluation initiatives with
a number of customers in the Asia-Pacific region and expect orders from customers
in this region to remain strong going forward.”*
Fiscal 2004 First Half
Sales for the first half of fiscal 2004 were $44.8 million, compared to $47.2
million for the same period in fiscal 2003. The Company’s net
loss for the first half of fiscal 2004 was $7.1 million or $0.24
per share (diluted), compared to a net loss of $61.1 million
or $2.07 per share (diluted) for the first half of fiscal 2003.
Cash Position
The Company’s cash, restricted cash and marketable securities were $38.0
million at the end of the second quarter, representing a $5.7 million decrease
from the end of the first quarter of fiscal 2004. The change included the
use of $3.9 million of cash for operating activities and a $2.3 million reduction
in the carrying value of marketable securities associated with the Company’s
ownership of 1.5 million shares of Metron Technology common stock.
Balance Sheet
The Company continues to maintain a strong balance sheet with approximately
$134 million in assets, including the $38.0 million in cash, restricted cash,
cash equivalents and marketable securities. This includes $4.5 million of
marketable securities associated with the Company’s investment in Metron
Technology. At the end of the second quarter of fiscal 2004, the Company had
a current ratio of 2.6 to 1.0, no debt and a book value of $3.37 per share.
Outlook
Based on the current quote activity and the overall order opportunity level,
the Company expects third quarter orders to be between $35 and $40 million,
primarily for Surface Conditioning products.* Given the backlog and deferred
revenue levels at the end of the second quarter, the Company expects third
quarter fiscal 2004 revenues of $28 to $30 million.* Based upon the anticipated
gross margins and the operating expense run rate, the Company expects breakeven
or slightly better financial performance for the third quarter.*
In anticipation of the continued improvement in industry conditions in calendar
2004, the stronger order levels and the expected placement of additional MAGELLAN® immersion
and ANTARES® CryoKinetic evaluation systems, the Company expects to use
$3.0 to $4.0 million of cash for operating activities in the third quarter,
including the March 1, 2004, initial $2.5 million payment associated with
settling the Company’s patent infringement litigation with SCP Global
Technologies.*
Non-Cash Charges
As discussed below, the Company reported significant non-cash charges during
the second quarter and first half of fiscal 2003, including:
First quarter 2003 charges:
- $2.8 million or $0.09 per share early termination fee charge as the Company
transitioned from using Metron Technology for distribution of its products
in Europe and the Asia-Pacific regions to a direct model in these regions.
- $10.2 million or $0.35 per share impairment charge related to the Company’s
investment in Metron Technology.
Second quarter 2003 charges:
- $26.0 million or $0.88 per share asset write-down charge associated with
winding down the Microlithography Division (now referred to as the POLARIS® Systems and Service (“PSS”) business).
Conference Call Details
Investors will have the opportunity to listen to the conference call at 3:30
p.m. CST over the Internet. The webcast is being distributed over CCBN's Investor
Distribution Network to both institutional and individual investors. Individual
investors can listen to the call through CCBN's individual investor center
at www.fulldisclosure.com or by visiting any of the investor sites in CCBN's
Individual Investor Network. Institutional investors can access the call via
CCBN'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, 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.
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, the increased industry demand
for semiconductor equipment, expected orders, expected revenues,
financial performance and cash burn rate for the third quarter
of fiscal 2004. 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, the length and
extent of the current industry recovery; 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 transition to 300mm
products; the level of new orders; the timing and success of
current and future product and process development programs;
the success of the Company’s affiliated distributor in
Japan; 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 from time
to time in the Company’s SEC reports including, but not
limited to, the Company’s Annual Report on Form 10-K for
the 2003 fiscal year and the Company’s quarterly report
on Form 10-Q for the first quarter of fiscal 2004. The Company
assumes no duty to update the information in this press release.
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