FSI International Inc. (FSII) filed Quarterly Report for the period ended 2008-11-29.
FSI International Inc. is a leading global supplier of processing equipment used at key production steps to manufacture microelectronics. The company develops manufactures markets and supports products used in the technology areas of microlithography surface conditioning and spin-on dielectrics. FSI International's customers include microelectronicsmanufacturers located throughout North America Europe Japan and the Asia-Pacific region. FSI International Inc. has a market cap of $9.61 million; its shares were traded at around $0.49 with and P/S ratio of 0.12. FSI International Inc. had an annual average earning growth of 20.2% over the past 5 years.
Highlight of Business Operations:
Since we recorded the POLARIS® system product inventory reserves primarily as a result of the wind-down of our microlithography business in the second quarter of fiscal 2003, we have had sales of POLARIS System product inventory that had previously been written down to zero and reductions in inventory buyback requirements of approximately $10.8 million, have disposed of approximately $6.8 million of POLARIS system product inventory and have recorded additional reserves of $1.8 million. The original cost of POLARIS system product inventory available for sale or to be disposed of as of November 29, 2008 that has been written down to zero was approximately $8.7 million.
Sales revenues decreased to $12.2 million for the first quarter of fiscal 2009 as compared to $22.4 million for the first quarter of fiscal 2008. The decrease related primarily to industry and overall global economic conditions. The decreases occurred in all regions with the most significant decrease occurring in European sales where sales decreased 78% in the first quarter of fiscal 2009 from the first quarter of fiscal 2008. International sales were $9.3 million, representing 76% of total sales during the first quarter of fiscal 2009 and $19.1 million, representing 85% of total sales, during the first quarter of fiscal 2008.
As of November 29, 2008, we had investments in auction rate securities (ARS) reported at a fair value of $6.3 million after reflecting a $0.4 million other than temporary impairment against $6.7 million par value. The other than temporary impairment was recorded in other expense for fiscal 2008. We value the majority of our ARS using a mark-to-model approach that relies on discounted cash flows, market data and inputs derived from similar instruments. This model takes into account, among other variables, the base interest rate, credit spreads, downgrade risks and default/recovery risk, the estimated time required to work out the disruption in the traditional auction process and its effect on liquidity, and the effects of insurance and other credit enhancements.
Accounts receivable decreased $3.5 million from the end of fiscal 2008. The decrease in accounts receivable related primarily to the decrease in shipments to $9.6 million in the first quarter of fiscal 2009 as compared to $13.1 million in the fourth quarter of fiscal 2008. Accounts receivable will fluctuate quarter to quarter depending on individual customers timing of shipping dates and payment terms.
Capital expenditures were $5,000 in the first quarter of fiscal 2009, as compared to $23,000 in the first quarter of fiscal 2008. We expect capital expenditures to be less than $300,000 in the second quarter of fiscal 2009.* Depreciation and amortization for the second quarter of fiscal 2009 is expected to be between $0.9 and $1.0 million.*
As of November 29, 2008, our investment portfolio included ARS reported at a fair value of $6.3 million after reflecting a $0.4 million other than temporary impairment against $6.7 million par value. ARS are usually found in the form of municipal bonds, preferred stock, a pool of student loans or collateralized debt obligations. The interest rates of our ARS are reset every 28 days through an auction process and at the end of each reset period, investors can sell or continue to hold the securities at par.
More on FSII: