EX-99 2 c86274exv99.htm PRESS RELEASE exv99
 

EXHIBIT 99

     
FSI International
3455 Lyman Boulevard
Chaska, Minnesota USA 55318-3052 		  NEWS
     
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 Third Quarter and First Nine Months Fiscal 2004 Financial Results

Year-Over-Year Third Quarter Revenues Increase 87 Percent to $36 Million and the Company Achieved Profitability

     MINNEAPOLIS (June 22, 2004)—FSI International, Inc. (Nasdaq: FSII), a manufacturer of capital equipment for the microelectronics industry, today reported financial results for the fiscal 2004 third quarter and first nine months ended May 29, 2004.

     Sales for the fiscal 2004 third quarter were $36.3 million, compared to $19.4 million for the same period of fiscal 2003. The Company’s net income for the third quarter of fiscal 2004 was $4.0 million or $0.13 per share (diluted), compared to a net loss of $15.6 million or $0.53 per share (diluted) for the third quarter of fiscal 2003.

     Sales for the first nine months of fiscal 2004 were $81.1 million, compared to $66.7 million for the same period of fiscal 2003. The Company’s net loss for the first nine months of fiscal 2004 was $3.1 million or $0.10 per share (diluted), compared to a net loss of $76.7 million or $2.60 per share (diluted) for the same period of fiscal 2003.

     Surface Conditioning product sales of $29.1 million represented 80 percent of third quarter 2004 revenues, an increase of 91 percent or $13.9 million from the $15.2 million level in the comparable prior year period.

     The gross margin for the fiscal 2004 third quarter was $19.4 million or 53.5 percent of sales, including the $1.8 million benefit from the utilization of POLARIS® Systems and Services (“PSS”) inventory that was previously written down to zero. This compares with a gross margin of $6.9 million or 35.7 percent of sales in the fiscal 2003 third quarter.

     Selling, General and Administrative expenses were $10.0 million in the third quarter of fiscal 2004, compared to $11.7 million in the prior year comparable period. The decrease primarily related to organizational efficiencies from our March 2003 transition to direct distribution and the PSS business model.

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FSI International, Inc.
June 22, 2004
Page Two

     Engineering, Research and Development expenses in the third quarter of fiscal 2004 were $5.8 million, compared to $8.3 million in the third quarter of fiscal 2003. The reduction reflects cost savings associated with exiting the resist processing market and converting to the PSS business model.

     “The transition of FSI to a global surface conditioning technology-focused company is now nearly completed,” said Don Mitchell, chairman and chief executive officer. “With two consecutive quarters of strong surface conditioning product orders, we are starting to recognize the benefits of our investments the past few years.”

     “Third quarter orders of $32.3 million included orders for two MAGELLAN® Immersion Systems from Asian customers. Also during the quarter we received orders for our ANTARES® CryoKinetic Cleaning System from two semiconductor manufacturers for future 300mm production evaluation. With 58 percent of our year-to-date orders from foreign customers, we are realizing the benefit of our transition to a direct global distribution model,” concluded Mitchell.

Balance Sheet

     The Company continues to maintain a strong balance sheet with approximately $139.1 million in assets, including $35.2 million in cash, restricted cash, cash equivalents and marketable securities. At the end of the third quarter, the Company had a current ratio of 2.9 to 1.0, no debt and a book value of $3.52 per share.

Outlook

     Based on our current quote activity and the overall order opportunity level, the Company expects fourth quarter orders of $30 to $35 million, primarily for surface conditioning products.* Based on the backlog and deferred revenue levels at the end of the third quarter, the Company expects fourth quarter revenues of approximately $33 to $36 million.* Based upon the anticipated revenues, gross profit margin and current operating expense run rates, the Company expects an approximate net income in the $1.0 to $2.0 million range for the fourth quarter.*

Conference Call Details

     Investors will have the opportunity to listen to the conference call at 3:30 p.m. CT 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.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 more

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FSI International, Inc.
June 22, 2004
Page Three

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, expected orders, expected revenues, expected net income and financial performance for the fourth 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 second quarter of fiscal 2004. The Company assumes no duty to update the information in this press release.

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FSI INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF OPERATIONS
(in thousands, except per share data)
(unaudited)

                                   
      Third Quarter Ended     Nine Months Ended  
     
   
 
      May 29,     May 31,     May 29,     May 31,  
      2004     2003     2004     2003  
     
   
   
   
 
Sales
   $ 36,309     $ 19,445     $ 81,065     $ 66,658  
Cost of goods sold
     16,876       12,500       39,826       65,312  
 
   
   
   
 
Gross margin
     19,433       6,945       41,239       1,346  
Selling, general and administrative expenses
     10,007       11,740       30,200       29,112  
Research and development expenses
     5,830       8,298       16,874       25,310  
Transition agreement termination fee
     —       —       —       2,750  
Write-down of Microlithography fixed assets
     —       —       —       7,000  
 
   
   
   
 
Operating income (loss)
     3,596       (13,093 )     (5,835 )     (62,826 )
Interest and other income, (expense) net
     92       60       2,267       412  
Impairment of investment in affiliates
     —       —       —       (10,195 )
 
   
   
   
 
Income (loss) before income taxes
     3,688       (13,033 )     (3,568 )     (72,609 )
Income tax expense
     12       25       38       75  
 
   
   
   
 
Income (loss) before equity in earnings (loss) of affiliates
     3,676       (13,058 )     (3,606 )     (72,684 )
Equity in earnings (loss) of affiliates
     322       (2,590 )     512       (4,024 )
 
   
   
   
 
Net income (loss)
   $ 3,998     $ (15,648 )   $ (3,094 )   $ (76,708 )
 
   
   
   
 
Income (loss) per share:
                                
 
Basic
   $ 0.13     $ (0.53 )   $ (0.10 )   $ (2.60 )
 
Diluted
   $ 0.13     $ (0.53 )   $ (0.10 )   $ (2.60 )
Weighted average common shares:
                                
 
Basic
     29,778       29,562       29,749       29,519  
 
Diluted
     30,308       29,562       29,749       29,519  

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FSI INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
(in thousands)
(unaudited)

                     
        May 29,     Aug. 30,  
        2004     2003  
       
   
 
Assets
                
Current assets
                
 
Cash, restricted cash, cash equivalents and marketable securities
   $ 35,209     $ 43,759  
 
Receivables, net
     32,051       17,578  
 
Inventories
     23,305       19,461  
 
Other current assets
     4,967       4,844  
 
   
 
   
Total current assets
     95,532       85,642  
Property, plant and equipment, net
     31,123       34,868  
Investment in affiliates
     7,796       6,306  
Intangible assets, net
     2,623       4,322  
Other assets
     2,039       2,248  
 
   
 
   
Total assets
   $ 139,113     $ 133,386  
 
   
 
Liabilities and Stockholders’ Equity
                
Current liabilities
                
 
Trade accounts payable
     10,104       4,220  
 
Deferred profit*
     7,129       4,524  
 
Accrued expenses
     16,030       15,642  
 
   
 
   
Total current liabilities
     33,263       24,386  
Long-term accrued expenses
     750       —  
Total Stockholders’ Equity
     105,100       109,000  
 
   
 
Total liabilities and stockholders’ equity
   $ 139,113     $ 133,386  
 
   
 

*   Deferred profit reflects deferred revenue less manufacturing and other related costs.

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FSI INTERNATIONAL, INC. AND SUBSIDIARIES
MISCELLANEOUS FINANCIAL INFORMATION
(in thousands, except per share and total employee data)
(unaudited)

                 
    Nine Months Ended  
   
 
    May 29,     May 31,  
    2004     2003  
   
   
 
Sales by Area
                
United States
     58 %     76 %
International
     42 %     24 %
 
Cash Flow Statement
                
Capital expenditures
   $ 647     $ 3,411  
Depreciation
   $ 4,382     $ 7,338  
Amortization
   $ 1,699     $ 1,747  
 
Miscellaneous Data
                
Total employees, including contract
     511       527  
Book value per share
   $ 3.52     $ 3.52  
Shares outstanding
     29,873       29,562  

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