Earnings caution marks FSI acquisition of SSI

Electronic News, April 15, 1996

Minneapolis--FSI International completed its acquisition of Semiconductor Systems Inc. (SSI) last week cautiously, saying any further changes to either company's order roster could mean diminished earnings.

SSI's backlog as of Feb. 25 was $11 million, FSI said, but "(s)ince orders can be canceled or delayed by customers, the backlog is not necessarily indicative of the contribution Semiconductor Systems will make to combined sales in future periods.

"Certain of Semiconductor Systems' customers recently announced their intent to delay construction of or equipping semiconductor manufacturing facilities. As a result, the acquisition is estimated to be slightly dilutive ($.02 - $.03 per share) to FSI's combined financial results for 2Q96, after inclusion of the acquisition costs ($800,000, or $.03 per share) and tax benefit ($1.5 million, or $.06 per share)...Any order cancellations or additional delays by FSI's or Semiconductor Systems' customers could have an adverse effect on FSI's financial results for the 2Q96," the company said.

SSI's backlog as of Dec. 31, 1995 was $12 million. FSI did not want to give a more current backlog figure than the Feb. 25, $11 million figure, nor did the company want to speculate about its goals for its wafer track equipment business. An analyst in February predicted the company could outpace Silicon Valley Group to be number three in market share for the segment.

FSI had marked success with its 1995 acquisitions of FSI Metron Europe in January and Applied Chemical Solutions in March.

The merger agreement now completed entitles SSI shareholders to receive about 1,739,200 shares of FSI common stock and options for about 60,800 more shares in substitution of previously outstanding options for SSI common stock.

FSI also announced that it has in hand a repeat order, totaling about $12 million, for several Polaris 2000 cluster systems; the customer wasn't identified. Prices for the machines range from $800,000 to $1.6 million. Earlier this year, the company had three orders for the same systems which totaled about $18 million.