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 $15.6 million; its shares were traded at around $0.499 with and P/S ratio of 0.1. FSI International Inc. had an annual average earning growth of 20.2% over the past 5 years. Highlight of Business Operations: Sales revenue decreased to $15.4 million for the third quarter of fiscal 2009 as compared to $20.3 million for the third quarter of fiscal 2008. The decrease in sales revenue related to a decrease in shipments from $20.5 million in the third quarter of fiscal 2008 to $13.0 million in the third quarter of fiscal 2009 associated with industry conditions. Sales revenue decreased to $36.3 million for the first nine months of fiscal 2009 as compared to $64.2 million for the first nine months of fiscal 2008. The decrease in sales revenue related to a decrease in shipments from $64.8 million in the first nine months of fiscal 2008 to $35.3 million in the first nine months of fiscal 2009 associated with industry conditions.
Selling, general and administrative expenses decreased to $3.9 million for the third quarter of fiscal 2009 as compared to $7.4 million for the third quarter of fiscal 2008. Selling, general and administrative expenses were $15.6 million for the first nine months of fiscal 2009 as compared to $21.0 million for the same period in fiscal 2008. The decreases in selling, general and administrative expenses for fiscal 2009 periods related primarily to the cost reduction initiatives associated with reductions in headcount and salary reductions taken in fiscal 2009 and improved service technician utilization rates. The decreases were net of $1.2 million of severance expense recorded in the first nine months of fiscal 2009. See Note 8 of the Notes to Condensed Consolidated Financial Statements for a discussion of these actions.
Cash and cash equivalents, restricted cash and marketable securities were approximately $10.4 million as of May 30, 2009, a decrease of $12.5 million from the end of fiscal 2008. The decrease was primarily due to $11.6 million of cash used in operations attributable to losses, the timing of shipments and to fund severance costs. This decrease was net of $2.4 million of proceeds from the surrender of certain of our life insurance investments.
The ARS we hold are marketable securities with long-term stated maturities for which the interest rates are reset through a Dutch auction every 28 days. The auctions have historically provided a liquid market for these securities as investors historically could readily sell their investments at auction. Due to the liquidity issues experienced in global credit and capital markets, the ARS held by us have experienced multiple failed auctions, beginning on February 19, 2008, as the amount of securities submitted for sale has exceeded the amount of purchase orders. During fiscal 2008, $0.8 million of ARS were partially redeemed. An additional $3.0 million were redeemed in the first nine months of fiscal 2009. In the third quarter of fiscal 2009, we redeemed $0.7 million par value of ARS for $0.7 million and recorded a gain of $36,000.
Capital expenditures were approximately $158,000 in the first nine months of fiscal 2009 and $1.5 million in the first nine months of fiscal 2008. We expect total capital expenditures to be less than $150,000 in the fourth quarter of fiscal 2009.* Depreciation and amortization for the fourth quarter of fiscal 2009 is expected to be between approximately $0.8 million to $0.9 million.*
In light of our current financial condition, we have recognized the need to reduce our use of cash and have implemented a number of cost reduction steps, as discussed in Note 8 of the Notes to Condensed Consolidated Financial Statements. Our cost reduction actions in fiscal 2009 are expected to lower our annual operating expenses by $11 to $12 million, which is expected to reduce our cash flow breakeven revenue level to approximately $12 to $14 million per quarter, depending on the gross margins and the timing of shipments and accounts receivable collections.* In addition, we plan to manage cash flows by reducing capital expenditures to less than $300,000 in fiscal 2009 and to aggressively improve our working capital levels in the second half of fiscal 2009.* For the fourth quarter of fiscal 2009, we anticipate using less than $1.0 million of net cash for operations.* Management believes that these actions will allow us to have sufficient cash to fund our operations through at least fiscal 2010.*
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