FSII: CEO Comments on Q1 Results, Q2 Outlook and New Order for ORION(R)
Submitted By Knobias ClipReport
FSII: CEO Comments on Q1 Results, Q2 Outlook and New Order for ORION(R)
By Fain Hughes, fhughes@knobias.com
FSI International, Inc. (FSII) reported financial results last week for its fiscal 2009 first quarter ended November 29, 2008.
Sales for the first quarter of fiscal 2009 were $12.2 million, as compared to $22.4 million for the same period of fiscal 2008. The Company’s net loss for the first quarter of fiscal 2009 was $5.3 million, or $0.17 per share, compared to net loss of $2.1 million, or $0.07 per share for the first quarter last year. Orders for the first quarter of fiscal 2009 of $11.3 million were below the $13 to $15 million guidance the Company provided.
Don Mitchell, FSI Chairman and CEO, commented in a conference call last Tuesday, “Our Q1 orders and revenues were below the guidance range , reflecting the further deterioration of industry conditions and customer caution as they assess their capacity requirements for next year. However, our Q1 results did reflect the benefit to-date from the cost reduction programs that we initiated in September 2008.”
Fiscal 2009 second quarter orders are expected to be between $11.0 and $14.0 million. Based upon the anticipated gross profit margin and the benefit from current and prior quarter cost reductions, the Company expects to report between a $4.0 and $5.5 million loss for the second quarter.
Mr. Mitchell explained, “Given the industry uncertainty, we expect to report a loss next quarter. Although there is limited visibility, leading analysts at DataQuest recently revised their outlook for demiconductor demand forecasts for 2008 and 2009. They now predict that demand for semiconductors will decrease 4.4% in calendar 2008 from the $274 billion calendar 2007 level. The decline is being driven primarily by lower memory device demand. In fact, quarterly memory system orders have declined 82% from the calendar 2007 first quarter run rate. The same analysts are forecasting a 16.3% decrease in demand for semiconductors in calendar 2009, as consumer and corporate demand for micro-electronics remains weak. Device manufacturers are not currently discussing capacity increases. The only investments currently being considered are for future technology nodes or productivity improvements. They are cautious about placing new orders, and several are asking equipment manufacturers to provide evaluation systems or extended payment terms as they deal with the current credit crunch.”
The Company also announced last Tuesday the receipt of an order for its new ORION(R) single wafer cleaning platform from a major semiconductor manufacturer. The order represents acceptance of the evaluation tool shipped to this customer in May 2008 for its back-end-of-line (BEOL) 32nm development program.
Mr. Mitchell noted, “This order validates the critical capabilities of the ORION for 32nm applications. It also demonstrates this customer’s conviction that those capabilities add sufficient value that even in a deep industry down-cycle, manufacturers are willing to invest in innovative technology, not only to prepare for the future, but also to realize current gains. With its success, we anticipate follow-on orders from this customer and its alliance partners.”
He concluded, “Going forward, we are focusing our investments, though at a reduced rate, on our strategic product development programs. Should it become obvious that weak economic and industry conditions persist and our revenue remains significantly below breakeven, we will manage our costs to a lower level. During our 35-year history, we have managed through difficult industry conditions and are prepared to take the necessary actions to position ourselves when conditions improve.”
