FSI International reported sales
increased 8.6 percent to $55.8 million in its third quarter, ended
May 30, compared to $51.4 million in the same period last year.
The sales increase was not enough to put the Minneapolis-based semiconductor-equipment supplier back into the black, and now FSI said it plans
long-term, cost-cutting measures -- including layoffs -- to adjust
operations for lower revenues in the next fiscal year. In the third quarter, FSI had a net loss of $2.0 million, or $0.09 per
share, compared to a net loss of $2.7 million, or $0.12 per share,
in the same quarter last year.
In March, FSI said industry conditions would start to
improve in the summer, but that outlook is no longer the case,
according to Joel Elftmann, chairman and CEO of the company.
"We now expect that industry softness will continue well into
calendar 1999," he said. "Therefore we need to realign our
business based upon an expected lower sales level in fiscal
FSI said it now expects its fiscal 1999 sales to be 10 percent to 15 percent lower
than in fiscal 1998, which will end Aug. 29. Consequently, the
company announced cutbacks, including a plan to lay off workers
and reduce expenses by 10 percent to 15 percent in the next fiscal year.
"Rapid deterioration in industry conditions in late 1997 and early
1998, recent additional customer-requested delays, and ongoing
product and technology transitions require us to re-evaluate our
strategies," Elftmann said. "The realigning of our business will
result in a one-time charge in the fourth quarter of fiscal 1998."
FSI said it will be conducting strategy and financial reviews
during the next few weeks, and it expects to determine and
implement the specific cost-reduction measures with a one-time
charge by the end of July.
"We remain confident about the long-term prospects of the
microelectronics equipment industry," said Elftmann. "We have
good products and technology, and are positioned well for future
industry growth. We will continue to invest in critical research
and development programs."