FSI's earnings and sales increase in 2Q but canceled orders may hurt next half

Electronic News, March 25, 1996

Minneapolis--FSI International Inc. reported 2Q96 net income nearly doubled to $8.1 million, or 38 cents per share, from $4.1 million, or 28 cents per share, in the year-ago quarter. Sales for the quarter ended Feb. 24, 1996, grew 54 percent to $65.9 million from $42.7 million.

Year-to-date net rose to $15.7 million, or 73 cents per share, from $7.1 million, or 49 cents, in the year-ago period. The latest per-share amounts reflect a greater number of shares outstanding, mostly from stock offers. Sales grew 76 percent to $128.0 million from $72.9 million.

Despite the strong results, CEO Joel Elftmann warned: "Certain semiconductor device manufacturers have recently announced their intent to delay the construction, facilitization or equipping of new manufacturing facilities...With our record backlog and anticipated new orders, we expect to report sequential revenue and net income before minority interest and equity in earnings of affiliates growth in the second half of FY96, as compared to the first half; however, possible order cancellations or delays by our customers could have an adverse effect on our financial results for the second half of 1996."

2Q96 operating margins grew to 13.3 percent of sales versus 11.4 percent in 2Q95 and 13.2 percent in the just-prior quarter.

Mr. Elftmann continued, "We are also pleased with the performance of the company's affiliates: Metron Technology, B.V. and m-FSI, Ltd., in Japan." Equity in earnings of affiliates totaled $1.9 million in 2Q96 versus $322,000 in the year-earlier period. Metron distributes FSI's and other products to semiconductor manufacturers in Europe and the Far East, while m-FSI Ltd. distributes products in Japan.

The company, which makes automated surface conditioning equipment for processing silicon wafers, expects sequentially lower equity from earnings of affiliates in the second half of FY96 versus the first half, "which could result in sequentially lower net income in the second half of FY96."