EX-99 3 c73665exv99.txt EX-99 PRESS RELEASE EXHIBIT 99 FSI International [FSI LOGO(R)] NEWS 3455 Lyman Boulevard Chaska, Minnesota USA 55318-3052 For additional information contact: Benno Sand-Investor and Financial Media (952) 448-8936 Laurie Walker-Trade Media (952) 448-8066 FOR IMMEDIATE RELEASE FSI INTERNATIONAL, INC. ANNOUNCES FIRST QUARTER FISCAL 2003 FINANCIAL RESULTS First Quarter Results Include $13.0 Million of Non-Cash Early Termination Fee and Impairment Charges MINNEAPOLIS (Dec. 17, 2002)--FSI International, Inc. (Nasdaq: FSII), a manufacturer of capital equipment for the microelectronics industry, today reported financial results for the fiscal 2003 first quarter ended November 30, 2002. Sales for the fiscal 2003 first quarter were $25.9 million, compared to $42.6 million for the same period of fiscal 2002. The Company's net loss for the first quarter of fiscal 2003 was $23.7 million or $0.80 per share (diluted), compared to a net loss of $4.7 million or $0.18 per share (diluted) for the fiscal 2002 first quarter. Prior to recording the early termination fee and impairment charges of $13.0 million, the Company's first quarter fiscal 2003 loss was $10.7 million or $0.36 per share (diluted). On October 9, 2002, the Company entered into a Transition Agreement with Metron Technology ("Metron") related to the early termination of its distribution agreements with Metron for Europe and the Asia-Pacific region, effective March 1, 2003 ("Closing Date"). Under the terms of the Transition Agreement, FSI will assume direct sales, service and applications support and logistics responsibilities for its surface conditioning and microlithography products in Europe and the Asia-Pacific region, while Metron will continue to be the representative for FSI products in Israel. Early Termination Fee Under the terms of the Transition Agreement, the Company agreed to pay Metron on the Closing Date an early termination fee of approximately $2.8 million or $0.09 per share. FSI intends to surrender approximately 1.154 million Metron common shares now owned in payment - more - FSI International, Inc. December 17, 2002 Page Two of this early termination fee. As a result, the Company recorded a non-cash charge of approximately $2.8 million to selling, general and administrative expenses in the first quarter of fiscal 2003. Impairment Charges In the first quarter, the Company recognized $10.2 million or $0.35 per share in non-cash impairment charges related to its investment in Metron common stock. The impairment charge was recorded to other expense. Prior to October 9, 2002, the Company was carrying its investment in 2.690 million shares of Metron on its balance sheet at $6.17 per share. The 1.154 million shares that will be used to pay the $2.8 million early termination fee were valued at $2.38 per share. Therefore, the Company revalued its entire investment in Metron at $2.38 per share. FSI will own 1.536 million shares of Metron after the closing of the transaction. Cash Usage The Company used $9.1 million in cash to fund operating and investing activities during the first quarter of fiscal 2003. In addition, a $3 million interest bearing advance was made to Metron under the terms of the Transition Agreement. "This level of quarterly cash burn is too high," stated Don Mitchell, FSI's chairman and chief executive officer. "With no significant improvement in industry conditions anticipated for the next few quarters, we will need to implement cost reduction actions to lower our breakeven sales level and reduce our cash usage." The Company is currently evaluating cost reduction opportunities, including pursuing a strategic partner or partners for its Microlithography business.* The Company expects to provide additional details regarding this initiative in January 2003.* Balance Sheet The Company continues to maintain a strong balance sheet with over $188 million in assets, including $52 million in cash, restricted cash, cash equivalents and marketable securities. At the end of the first quarter, the Company had a current ratio of 3.8 to 1.0, no debt and a book value of $5.30 per share. - more - FSI International, Inc. December 17, 2002 Page Three Outlook Based on the backlog and deferred revenue levels at the end of the first quarter, the Company expects second quarter fiscal 2003 revenues of $20 to $25 million and shipments of approximately $25 to $29 million.* Based upon the anticipated improved gross profit margin and slightly higher operating expense run rate, primarily related to establishing a direct sales and support organization in Europe and the Asia-Pacific region, the Company expects a loss in the $10 to $12 million range for the second quarter.* Fiscal 2003 capital expenditures are expected to be $5 to $6 million, with depreciation and amortization expected to be $13 to $14 million.* 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 web cast 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.companyboardroom.com or by visiting any of the investor sites in CCBN's Individual Investor Network such as America Online's Personal Finance Channel, Fidelity Investments(R) (Fidelity.com) and others. 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., a global supplier of wafer cleaning and resist processing equipment and technology, delivers economic and technical advantages for current and emerging microelectronics manufacturing challenges. Using the company's broad portfolio of products, which include immersion, spray, vapor and CryoKinetic systems for wafer cleaning, and resist processing systems for wafer coating and developing, customers are able to efficiently achieve their goals. FSI's customers include microelectronics manufacturers located throughout North America, Europe, Japan and the Asia-Pacific region. FSI maintains a Web site at www.fsi-intl.com. - more - FSI International, Inc. December 17, 2002 Page Four "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, anticipated shipments, revenues, gross margins, operating expense level and losses for the second quarter of fiscal 2003, expected capital expenditures for fiscal 2003 and cost reduction opportunities including pursuing Microlithography strategic partners. 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 downturn; additional order delays or cancellations; savings from our cost-cutting measures may be less than anticipated; we may incur unexpected additional costs as part of our cost cutting measures; general economic conditions; changes in customer capacity requirements and demand for microelectronics; the extent of demand for our products and our 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 distributors; 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 2002 fiscal year. The Company assumes no duty to update the information in this press release. - more - FSI INTERNATIONAL, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, except per share data)
First Quarter Ended ----------------------- Nov. 30, Nov. 24, 2002 2001 -------- -------- (unaudited) Sales $ 25,932 $ 42,627 Cost of goods sold 19,118 29,362 -------- -------- Gross profit 6,814 13,265 Selling, general and administrative expenses 11,506 10,842 Research and development expenses 8,297 8,258 -------- -------- Operating loss (12,989) (5,835) Interest and other income, (expense) net (10,035) 359 -------- -------- Loss before income taxes (23,024) (5,476) Income tax expense 25 -- -------- -------- Loss before equity in earnings (losses) (losses) of affiliates (23,049) (5,476) Equity in earnings (losses) of affiliates (603) 733 -------- -------- Net loss $(23,652) $ (4,743) ======== ======== Loss per share - basic and diluted $ (0.80) $ (0.18) ======== ======== Weighted average common shares Basic 29,463 26,079 Diluted 29,463 26,079
- more - FSI INTERNATIONAL, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (in thousands)
November 30, August 31, 2002 2002 ------------- ------------- (unaudited) Assets Current assets: Cash, cash equivalents and marketable securities $ 51,790 $ 63,868 Receivables, net 19,757 19,428 Inventories 41,011 44,693 Other current assets 7,877 4,731 ------------- ------------- Total current assets 120,435 132,720 Property, plant and equipment, net 47,206 47,350 Investment in affiliates 12,129 22,723 Intangible assets 6,039 6,636 Other assets 2,333 2,341 ------------- ------------- Total assets $ 188,142 $ 211,770 ============= ============= Liabilities and Stockholders' Equity Current liabilities: Trade accounts payable 6,153 9,146 Deferred profit* 4,943 4,115 Accrued expenses 20,860 18,877 ------------- ------------- Total current liabilities 31,956 32,138 Total stockholders' equity 156,186 179,632 ------------- ------------- Total liabilities and stockholders' equity $ 188,142 $ 211,770 ============= =============
* Deferred profit includes deferred revenue and related costs. - more - FSI INTERNATIONAL, INC. AND SUBSIDIARIES MISCELLANEOUS FINANCIAL INFORMATION (in thousands, except per share and employee data) (unaudited)
First Quarter Ended ------------------------------ Nov. 30, Nov. 24, 2002 2001 ------------- ------------- SALES BY AREA United States 78% 85% International 22% 15% CASH FLOW STATEMENT Capital expenditures $ 2,418 $ 490 Depreciation $ 2,562 $ 2,789 MISCELLANEOUS DATA Total employees, including contract 642 689 Book value per share $ 5.30 $ 6.90 Shares outstanding 29,463 26,094
# # #