<PAGE>
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
April 17, 1996 (April 4, 1996)
--------------------------------
Date of Report (Date of earliest event reported)
FSI INTERNATIONAL, INC.
-----------------------
(Exact name of registrant as specified in its charter)
Minnesota 0-17276 41-1223238
- ------------------------ ------------------------ -------------------
(State of Incorporation) (Commission file number) (I.R.S. Employer
Identification No.)
322 Lake Hazeltine Drive, Chaska, Minnesota 55318
- ------------------------------------------- --------------
(Address of principal executive offices) (Zip Code)
Telephone Number: (612) 448-5440
---------------------------------
(Registrant's telephone number, including area code)
================================================================================
<PAGE>
FORM 8-K
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
- ------- -------------------------------------
On April 4, 1996, Semiconductor Systems, Inc., a California
corporation ("Semiconductor Systems"), merged with Spectre Acquisition Corp., a
Minnesota corporation and a wholly owned subsidiary of the Registrant, with
Semiconductor Systems as the surviving corporation. Following the acquisition,
the Registrant intends to continue the acquired company's business of designing,
manufacturing, marketing and supporting equipment used in the semiconductor,
flat panel display, then film head and multi-chip module industries.
In connection with the acquisition, which will be accounted for as a
pooling of interests, the Registrant issued a total of 1,739,218 shares of its
common stock. An aggregate of 310,000 of such shares were deposited in escrow
to provide a fund for satisfying any indemnification obligations to the
Registrant pursuant to the terms of the Agreement and Plan of Reorganization
dated February 5, 1996. In addition, the Registrant issued options covering, in
the aggregate, 60,782 shares of the Registrant's common stock in substitution of
previously outstanding options to acquire shares of the acquired company's
common stock.
Additional information regarding the terms of the acquisition are
included in the Agreement and Plan of Reorganization and the Press Release
included herein as exhibits.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
- ------- ---------------------------------
The following information follows or is attached hereto as an exhibit:
(a) The following financial statements of Semiconductors Systems,
Inc. for the periods indicated and the Report of Independent
Accountants listed below are included in the Registrant's
Registration Statement on Form S-4 (File No. 333-01509) and are
hereby incorporated by reference.
Financial Statements of Semiconductor Systems, Inc.:
Report of Independent Accountants
Balance Sheets as of December 31, 1994 and 1995
Statements of Operations for the years ended
December 31, 1993, 1994 and 1995
Statements of Cash Flows for the years ended
December 31, 1994 and 1995
Statements of Shareholders' Equity for the years ended
December 31, 1993, 1994 and 1995
Notes to Financial Statements
<PAGE>
(b) Pro Forma Combined Financial Information of FSI
------------------------------------------------
International, Inc. and Semiconductor Systems, Inc.
---------------------------------------------------
Description of the Pro Forma
Combined Financial Information
Unaudited Pro Forma Combined Statements of
Operations for the quarters and six months ended
February 24, 1996 and February 25, 1995 and for
the fiscal years ended August 26, 1995, August 27,
1994 and August 28, 1993
Unaudited Pro Forma Combined Balance Sheet as of
February 24, 1996
Notes to Unaudited Pro Forma Combined Financial
Information
(c) Exhibits
--------
5.1 Agreement and Plan of Reorganization
dated February 5, 1996 by and among
FSI International, Inc., Spectre Acquisition
Corp. and Semiconductor Systems, Inc.
(and selected exhibits). Incorporated by
reference to exhibits 2.1, 2.1(a) and 2.1(b)
to the Registrant's Registration Statement on
Form S-4 (File No. 333-01509).
The Registrant hereby agrees to furnish
supplementarily a copy of any omitted schedule
or exhibit to the Commission upon request.
5.2 Shareholders Agreement dated February 5, 1996
by and among FSI International, Inc. and the
Shareholders of Semiconductor Systems, Inc.
Incorporated by reference to exhibit 2.2 to the
Registrant's Registration Statement on Form S-4
(File No. 333-01509).
23 Consent of Price Waterhouse LLP.
99 Press Release of FSI International, Inc.
dated April 8, 1996.
<PAGE>
Unaudited Pro Forma Combined Financial Information
As of February 24, 1996 and for the quarters and six months ended
February 24, 1996 and February 25, 1995 and for the
fiscal years in the three-year period ended August 26, 1995
FSI International, Inc. (FSI) and Semiconductor Systems, Inc.
(Semiconductor Systems)
The following unaudited pro forma combined financial information presents the
pro forma effect of the acquisition of Semiconductor Systems by FSI on FSI's
historical financial position and results of operations using the pooling-of-
interests method of accounting. Semiconductor Systems' fiscal year ends December
31. In presenting the pooling-of-interests combination on a pro forma basis,
Semiconductor Systems' financial statements for the twelve months ended August
26, 1995 were combined with FSI's financial statements for the same period and
Semiconductor Systems' financial statements for the years ended December 31,
1994 and 1993 were combined with FSI's for the years ended August 27, 1994 and
August 28, 1993, respectively. Semiconductor Systems' unaudited results for the
four months ended December 31, 1994 included sales of $10,500,000 and pro forma
net income of $653,000. An adjustment will be made to stockholders' equity in
the combined historical financial statements to eliminate the effect of
including Semiconductor Systems' net income for the four months ended December
31, 1994 in the statements of operations for both fiscal years ended August 26,
1995 and August 27, 1994. The pro forma statements of operations for the
quarters and six months ended February 24, 1996 and February 25, 1995 and the
balance sheet as of February 24, 1996 of FSI have been combined with
Semiconductor Systems' statements of operations for the quarters and six months
ended February 25, 1996 and February 26, 1995, respectively, and the balance
sheet as of February 25, 1996. The pro forma combined financial information
should be read in conjunction with the historical financial information of FSI
and Semiconductor Systems included in FSI's Registration Statement on Form S-4
(File No. 333-01509) and are hereby incorporated by reference. The pro forma
combined financial information has been prepared and included as required by the
rules and regulations of the Securities and Exchange Commission and does not
purport to be indicative of the results that actually would have been obtained
if the acquisition had been effected on the dates indicated or of the results
which may be obtained in the future.
<PAGE>
FSI INTERNATIONAL, INC.
AND SEMICONDUCTOR SYSTEMS, INC.
UNAUDITED PRO FORMA
COMBINED STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
Historical
------------------------------
FSI Semiconductor
International Systems, Pro Forma
Inc. Inc. Combined
Quarter Ended Quarter Ended Quarter Ended
February 24, February 25, Pro Forma February 24,
1996 1996 Adjustments 1996
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Sales $65,850,414 $9,582,000 $75,432,414
Cost of goods sold 35,998,578 6,444,700 42,443,278
- ----------------------------------------------------------------------------------------------------------------
Gross profit 29,851,836 3,137,300 32,989,136
Selling, general and administrative expenses 12,707,871 1,527,500 14,235,371
Research and development expenses 8,417,117 1,055,900 9,473,017
- ----------------------------------------------------------------------------------------------------------------
Operating income 8,726,848 553,900 9,280,748
Interest expense (549) (110,800) (111,349)
Interest income 1,274,785 0 1,274,785
Other income (expense), net (14,019) 4,100 (9,919)
- ----------------------------------------------------------------------------------------------------------------
Income before income taxes 9,987,065 447,200 10,434,265
Income tax expense 3,620,402 3,800 $ 175,000 (d) 3,799,202
- ----------------------------------------------------------------------------------------------------------------
Income before minority interest
in earnings of affiliates 6,366,663 443,400 (175,000)(d) 6,635,063
Minority interest (116,334) 0 (116,334)
Equity in earnings of affiliates 1,894,577 0 1,894,577
- ----------------------------------------------------------------------------------------------------------------
Net income $ 8,144,906 $ 443,400 $ (175,000)(d) $ 8,413,306
- ----------------------------------------------------------------------------------------------------------------
Net income per common share $.38 $.05 $.36
- ----------------------------------------------------------------------------------------------------------------
Weighted average common shares and (8,165,016)(a)
common share equivalents 21,371,529 8,165,016 1,775,081 (a) 23,146,610
- ----------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
FSI INTERNATIONAL, INC.
AND SEMICONDUCTOR SYSTEMS, INC.
UNAUDITED PRO FORMA
COMBINED STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
Historical
-----------------------------
FSI Semiconductor
International Systems, Pro Forma
Inc. Inc. Combined
Quarter Ended Quarter Ended Quarter Ended
February 25, February 26, Pro Forma February 25,
1995 1995 Adjustments 1995
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Sales $42,727,029 $ 6,236,000 $48,963,029
Cost of goods sold 24,369,618 3,462,000 27,831,618
- --------------------------------------------------------------------------------------------------------------------
Gross profit 18,357,411 2,774,000 21,131,411
Selling, general and administrative expenses 7,469,359 1,484,000 8,953,359
Research and development expenses 6,040,099 797,000 6,837,099
- --------------------------------------------------------------------------------------------------------------------
Operating income 4,847,953 493,000 5,340,953
Interest expense (7,427) (12,000) (19,427)
Interest income 119,822 0 119,822
Other income (expense), net 59,853 24,000 83,853
- --------------------------------------------------------------------------------------------------------------------
Income before income taxes 5,020,201 505,000 5,525,201
Income tax expense 1,253,472 (8,000) $ 210,000(d) 1,455,472
- --------------------------------------------------------------------------------------------------------------------
Income before minority interest
in earnings of affiliates 3,766,729 513,000 (210,000)(d) 4,069,729
Minority interest 0 0 0
Equity in earnings of affiliates 322,500 0 322,500
- --------------------------------------------------------------------------------------------------------------------
Net income $ 4,089,229 $ 513,000 $ (210,000)(d) $ 4,392,229
- --------------------------------------------------------------------------------------------------------------------
Net income per common share $.28 $.06 $.27
- --------------------------------------------------------------------------------------------------------------------
Weighted average common shares and (8,062,643)(a)
common share equivalents 14,722,977 8,062,643 1,752,825(a) 16,475,802
- --------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
FSI INTERNATIONAL, INC.
AND SEMICONDUCTOR SYSTEMS, INC.
UNAUDITED PRO FORMA
COMBINED STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
Historical
-------------------------------
FSI Semiconductor
International Systems, Pro Forma
Inc. Inc. Combined
Six Months Six Months Six Months
Ended Ended Ended
February 24, February 25, Pro Forma February 24,
1996 1996 Adjustments 1996
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Sales $127,998,139 $ 17,778,000 $145,776,139
Cost of goods sold 71,125,946 11,860,700 82,986,646
- -------------------------------------------------------------------------------------------------------------
Gross profit 56,872,193 5,917,300 62,789,493
Selling, general and administrative expenses 24,021,672 2,967,500 26,989,172
Research and development expenses 15,950,025 2,054,900 18,004,925
- -------------------------------------------------------------------------------------------------------------
Operating income 16,900,496 894,900 17,795,396
Interest expense (9,664) (224,800) (234,464)
Interest income 2,696,857 7,000 2,703,857
Other income (expense), net (30,671) (42,900) (73,571)
- -------------------------------------------------------------------------------------------------------------
Income before income taxes 19,557,018 634,200 20,191,218
Income tax expense 7,040,467 9,800 $ 246,000 (d) 7,296,267
- -------------------------------------------------------------------------------------------------------------
Income before minority interest
in earnings of affiliates 12,516,551 624,400 (246,000) (d) 12,894,951
Minority interest (278,164) 0 (278,164)
Equity in earnings of affiliates 3,450,676 0 3,450,676
- -------------------------------------------------------------------------------------------------------------
Net income $15,689,063 $ 624,400 $ (246,000) (d) $ 16,067,463
- -------------------------------------------------------------------------------------------------------------
Net income per common share $.73 $.08 $.69
- -------------------------------------------------------------------------------------------------------------
Weighted average common shares and (8,124,894) (a)
common share equivalents 21,454,127 8,124,894 1,766,358 (a) 23,220,485
- -------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
FSI INTERNATIONAL, INC.
AND SEMICONDUCTOR SYSTEMS, INC.
UNAUDITED PRO FORMA
COMBINED STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
Historical
-----------------------------
FSI Semiconductor
International Systems, Pro Forma
Inc. Inc. Combined
Six Months Six Months Six Months
Ended Ended Ended
February 25, February 26, Pro Forma February 25,
1995 1995 Adjustments 1995
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Sales $72,911,798 $13,442,000 $86,353,798
Cost of goods sold 40,632,943 7,821,000 48,453,943
- --------------------------------------------------------------------------------------------------------------------
Gross profit 32,278,855 5,621,000 37,899,855
Selling, general and administrative expenses 13,798,384 2,923,000 16,721,384
Research and development expenses 10,913,359 1,620,000 12,533,359
- --------------------------------------------------------------------------------------------------------------------
Operating income 7,567,112 1,078,000 8,645,112
Interest expense (13,032) (17,000) (30,032)
Interest income 250,051 23,000 273,051
Other income (expense), net 56,294 24,000 80,294
- --------------------------------------------------------------------------------------------------------------------
Income before income taxes 7,860,425 1,108,000 8,968,425
Income tax (benefit) expense 2,043,667 (5,000) $ 450,000 (d) 2,488,667
- --------------------------------------------------------------------------------------------------------------------
Income before minority interest
in earnings of affiliates 5,816,758 1,113,000 (450,000) (d) 6,479,758
Minority interest 0 0 0
Equity in earnings of affiliates 1,322,900 0 1,322,900
- --------------------------------------------------------------------------------------------------------------------
Net income $ 7,139,658 $ 1,113,000 $ (450,000) (d) $ 7,802,658
- --------------------------------------------------------------------------------------------------------------------
Net income per common share $.49 $.14 $.48
- --------------------------------------------------------------------------------------------------------------------
Weighted average common shares and (8,062,643) (a)
common share equivalents 14,570,038 8,062,643 1,752,825 (a) 16,322,863
- --------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
FSI INTERNATIONAL, INC.
AND SEMICONDUCTOR SYSTEMS, INC.
UNAUDITED PRO FORMA
COMBINED STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
Historical
-----------------------------
FSI Semiconductor
International Systems, Pro Forma
Inc. Inc. Combined
August 26, August 27, Pro Forma August 26,
1995 1995 Adjustments 1995
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Sales $190,403,364 $28,057,000 $218,460,364
Cost of goods sold 112,002,351 16,651,000 128,653,351
- ------------------------------------------------------------------------------------------------------------------
Gross profit 78,401,013 11,406,000 89,807,013
Selling, general and administrative expenses 33,908,913 6,090,000 39,998,913
Research and development expenses 24,864,705 3,172,000 28,036,705
- ------------------------------------------------------------------------------------------------------------------
Operating income 19,627,395 2,144,000 21,771,395
Interest expense (27,745) (136,000) (163,745)
Interest income 2,067,619 80,000 2,147,619
Other income (expense), net 133,079 0 133,079
- ------------------------------------------------------------------------------------------------------------------
Income before income taxes 21,800,348 2,088,000 23,888,348
Income tax expense 5,926,000 16,000 $ 825,000 (d) 6,767,000
- ------------------------------------------------------------------------------------------------------------------
Income before minority interest
in earnings of affiliates 15,874,348 2,072,000 (825,000) (d) 17,121,348
Minority interest (155,562) 0 (155,562)
Equity in earnings of affiliates 3,566,900 0 3,566,900
- ------------------------------------------------------------------------------------------------------------------
Net income $ 19,285,686 $ 2,072,000 $ (825,000) (d) 20,532,686
- ------------------------------------------------------------------------------------------------------------------
Net income per common share $1.13 $.26 $1.09
- ------------------------------------------------------------------------------------------------------------------
Weighted average common shares and (8,072,332) (a)
common share equivalents 17,070,549 8,072,332 1,754,931 (a) 18,825,480
- ------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
FSI INTERNATIONAL, INC.
AND SEMICONDUCTOR SYSTEMS, INC.
UNAUDITED PRO FORMA
COMBINED STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
Historical
----------------------------
FSI Semiconductor
International Systems, Pro Forma
Inc. Inc. Combined
August 27, December 31, Pro Forma August 27,
1994 1994 Adjustments 1994
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Sales $96,437,653 $28,229,000 $124,666,653
Cost of goods sold 55,788,375 16,123,000 71,911,375
- -------------------------------------------------------------------------------------------------------------------
Gross profit 40,649,278 12,106,000 52,755,278
Selling, general and administrative expenses 19,552,376 4,963,000 24,515,376
Research and development expenses 15,742,894 3,013,000 18,755,894
- -------------------------------------------------------------------------------------------------------------------
Operating income 5,354,008 4,130,000 9,484,008
Interest expense (417,521) (53,000) (470,521)
Interest income 318,211 81,000 399,211
Other income (expense), net (154,314) 0 (154,314)
- -------------------------------------------------------------------------------------------------------------------
Income before income taxes 5,100,384 4,158,000 9,258,384
Income tax expense 1,254,000 37,000 $ 1,472,000 (d) 2,763,000
- -------------------------------------------------------------------------------------------------------------------
Income before minority interest
in earnings of affiliates 3,846,384 4,121,000 (1,472,000) (d) 6,495,384
Minority interest 0 0 0
Equity in earnings of affiliates 1,799,750 0 1,799,750
- -------------------------------------------------------------------------------------------------------------------
Net income $ 5,646,134 $ 4,121,000 $(1,472,000) (d) $8,295,134
- -------------------------------------------------------------------------------------------------------------------
Net income per common share $.43 $.51 $.55
- -------------------------------------------------------------------------------------------------------------------
Weighted average common shares and (8,050,848) (a)
common share equivalents 13,222,408 8,050,848 1,750,260 (a) 14,972,668
- -------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
FSI INTERNATIONAL, INC.
AND SEMICONDUCTOR SYSTEMS, INC.
UNAUDITED PRO FORMA
COMBINED STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
Historical
------------------------------
FSI Semiconductor
International Systems, Pro Forma
Inc. Inc. Combined
August 28, December 31, Pro Forma August 28,
1993 1993 Adjustments 1993
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Sales $78,432,284 $25,673,000 $104,105,284
Cost of goods sold 49,464,226 12,665,000 62,129,226
- ---------------------------------------------------------------------------------------------------------------
Gross profit 28,968,058 13,008,000 41,976,058
Selling, general and administrative expenses 14,496,165 3,832,000 18,328,165
Research and development expenses 11,760,306 2,632,000 14,392,306
- ---------------------------------------------------------------------------------------------------------------
Operating income 2,711,587 6,544,000 9,255,587
Interest expense (556,984) (21,000) (577,984)
Interest income 74,308 143,000 217,308
Other income (expense), net (188,217) 0 (188,217)
- ---------------------------------------------------------------------------------------------------------------
Income before income taxes 2,040,694 6,666,000 8,706,694
Income tax expense 360,000 176,000 $ 2,350,000 (d) 2,886,000
- ---------------------------------------------------------------------------------------------------------------
Income before minority interest
in earnings of affiliates 1,680,694 6,490,000 (2,350,000) (d) 5,820,694
Minority interest 0 0 0
Equity in earnings of affiliates 1,277,261 0 1,277,261
- ---------------------------------------------------------------------------------------------------------------
Net income $ 2,957,955 $ 6,490,000 $(2,350,000) (d) 7,097,955
- ---------------------------------------------------------------------------------------------------------------
Net income per common share $.28 $.80 $.58
- ---------------------------------------------------------------------------------------------------------------
Weighted average common shares and (8,127,123) (a)
common share equivalents 10,557,646 8,127,123 1,766,843 (a) 12,324,489
- ---------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
FSI INTERNATIONAL, INC.
AND SEMICONDUCTOR SYSTEMS, INC.
UNAUDITED PRO FORMA
COMBINED BALANCE SHEET
<TABLE>
<CAPTION>
Historical
----------------------------
FSI Semiconductor
International Systems, Pro Forma
Inc. Inc. Combined
February 24, February 25, Pro Forma February 24,
Assets 1996 1996 Adjustments 1996
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Current assets:
Cash and cash equivalents $ 56,416,364 $(1,378,200) $ 55,038,164
Marketable securities 38,027,611 0 38,027,611
Trade accounts receivable, net 48,739,111 5,669,200 54,408,311
Trade accounts receivable from
affiliates 15,823,191 0 15,823,191
Inventories 37,730,699 12,740,100 50,470,799
Deferred income tax benefit 5,828,018 0 $ 1,500,000 (c) 7,328,018
Other current assets 3,486,573 155,800 3,642,373
- ----------------------------------------------------------------------------------------------------------
Total current assets 206,051,567 17,186,900 1,500,000 224,738,467
- ----------------------------------------------------------------------------------------------------------
Property, plant and equipment, net 29,829,805 1,383,300 31,213,105
Investment in affiliates 12,264,046 0 12,264,046
Deferred income tax benefit - long-term 595,085 0 595,085
Deposits and other assets 4,179,270 682,500 4,861,770
- ----------------------------------------------------------------------------------------------------------
$252,919,773 $19,252,700 $ 1,500,000 $273,672,473
- ----------------------------------------------------------------------------------------------------------
Liabilities and Stockholders' Equity
- ----------------------------------------------------------------------------------------------------------
Current liabilities:
Notes payable to bank (line of credit) $ 0 $ 4,769,300 $ 4,769,300
Current maturities of long-term debt 11,365 206,200 217,565
Trade accounts payable 21,405,129 2,625,200 24,030,329
Accrued expenses 23,887,793 2,711,900 26,599,693
Customer deposits 2,016,742 0 2,016,742
Deferred revenue 6,980,582 0 6,980,582
- ----------------------------------------------------------------------------------------------------------
Total current liabilities 54,301,611 10,312,600 64,614,211
- ----------------------------------------------------------------------------------------------------------
Long-term debt, less current maturities 55,485 351,300 406,785
Other long-term liabilities 18,520 0 18,520
Minority interest 936,984 0 936,984
Stockholders' equity:
Common stock 148,110,246 8,000 $ 8,580,800 (b) 158,199,046
1,500,000 (c)
Retained earnings (deficit) 48,260,965 8,580,800 (8,580,800) (b) 48,260,965
Cumulative translation adjustment 1,235,962 0 1,235,962
- ----------------------------------------------------------------------------------------------------------
Total stockholders' equity 197,607,173 8,588,800 1,500,000 207,695,973
- ----------------------------------------------------------------------------------------------------------
$252,919,773 $19,252,700 $ 1,500,000 $273,672,473
- ----------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
FSI INTERNATIONAL, INC. AND SUBSIDIARIES
Notes to Unaudited Pro Forma Combined Financial Information
THE FOLLOWING PRO FORMA ITEMS ARE REFLECTED IN THE ACCOMPANYING UNAUDITED PRO
FORMA COMBINED BALANCE SHEET AND STATEMENTS OF OPERATIONS.
(a) Pro forma net income per common and common equivalent share was
computed by dividing pro forma net income by the pro forma combined
weighted average number of common and common equivalent shares
outstanding. The pro forma adjustment for combined weighted average
number of common and common equivalent shares was based upon the
weighted average number of common and common equivalent shares of
Semiconductor Systems multiplied by the exchange ratio.
(b) Adjustment to transfer the undistributed earnings of Semiconductor
Systems to common stock from retained earnings. Semiconductor Systems
was an S Corporation and under a pooling of interests business
combination, the combined enterprise should report the undistributed
earnings of the S Corporation as additional capital.
(c) Adjustment to recognize the effect of recording net deferred tax
assets related to existing temporary differences of Semiconductor
Systems as if it had been a C Corporation versus an S Corporation. The
net deferred tax assets and corresponding tax benefit will be recorded
in the historical financial statements in the third quarter of fiscal
1996.
(d) Adjustment to recognize the effect of the income tax expense for
Semiconductor Systems as if it had been a C Corporation versus an
S Corporation.
In connection with the merger, approximately $800,000 of merger costs and
expenses will be incurred and will be charged to expense in the third quarter of
fiscal 1996. The merger expenses will consist of legal, accounting and
investment banking fees. These expenses have not been included in the Pro Forma
Combined Financial Information.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this Report to be signed on its behalf by the
undersigned, hereunto duly authorized.
FSI INTERNATIONAL, INC.
-----------------------
(Registrant)
Dated: April 17, 1996 By: /s/Benno Sand
---------------------------------------
Benno Sand, Executive Vice President
and Chief Financial Officer
on behalf of the Registrant and as
Principal Financial Officer
<PAGE>
INDEX TO EXHIBITS
Exhibit No.
- -----------
5.1 Agreement and Plan of Reorganization dated February 5, 1996 by
and among FSI International, Inc., Spectre Acquisition Corp. and
Semiconductor Systems, Inc. (and selected exhibits) Incorporated
by reference to exhibits 2.1, 2.1(a) and 2.1(b) to the
Registrant's Registration Statement on Form S-4 (File No.
333-01509).
5.2 Shareholders Agreement dated February 5, 1996 by and among FSI
International, Inc. and the Shareholders of Semiconductor
Systems, Inc. Incorporated by reference to exhibit 2.2 to the
Registrant's Registration Statement on Form S-4 (File No.
333-01509).
23 Consent of Price Waterhouse LLP.
99 Press Release of FSI International, Inc. dated April 8, 1996.
<PAGE>
Exhibit 23
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Prospectus
constituting part of the Registration Statement on Form S-4 (No. 333-01509) of
FSI International, Inc. of our report dated February 23, 1996 relating to the
consolidated financial statements of Semiconductor Systems, Inc. which appears
in the Current Report on Form 8-K of FSI International, Inc. dated April 17,
1996.
PRICE WATERHOUSE LLP
San Jose, California
April 12, 1996
<PAGE>
FROM: FOR:
Padilla Speer Beardsley Inc. FSI International, Inc.
224 Franklin Avenue West 322 Lake Hazeltine Drive
Minneapolis, Minnesota 55404 Chaska, Minnesota 55318
(Nasdaq: FSII)
Marian Briggs 612/871-8877 Benno Sand 612/448-8936
FOR IMMEDIATE RELEASE
- ---------------------
FSI INTERNATIONAL, INC. ANNOUNCES COMPLETION OF THE ACQUISITION OF SEMICONDUCTOR
SYSTEMS, INC.
MINNEAPOLIS, April 8, 1996 -- FSI International, Inc. (Nasdaq: FSII),
a manufacturer of capital equipment for the semiconductor industry, today
announced that it has consummated its previously announced agreement to acquire
Semiconductor Systems, Inc. Under the agreement, Semiconductor Systems
shareholders are entitled to receive, in the aggregate, approximately 1,739,200
shares of FSI common stock. In addition, FSI has issued options covering, in
the aggregate, approximately 60,800 shares of FSI common stock, in substitution
of previously outstanding options to acquire Semiconductor Systems common stock.
Joel Elftmann, FSI's chairman, president and chief executive officer,
said, "The acquisition of Semiconductor Systems, with its people, technology and
expertise, positions FSI's Microlithography Division to provide a broader range
of products to existing and future customers, including resist processing
equipment used in conjunction with thin film head and flat panel display
manufacturing."
Semiconductor Systems' products include the ORBITRAK(R) Semiconductor
Processing System, APEX Flat Panel Display Processing System and Scorpio
Processing System. The Orbitrak system is recognized as a precision, small
footprint, lithography processing system, while the Scorpio System is primarily
used in the manufacturing of thin film heads and multi-chip modules. The
company also manufactures two track products: the System 500 and 150 Lithography
Processing Systems. Semiconductor Systems' operations are located in Fremont,
California.
Semiconductor Systems' backlog was approximately $11 million as of
February 25, 1996. Since 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.
(more)
<PAGE>
April 8, 1996
Page 2
Although the acquisition of Semiconductor Systems did not occur until
after the end of FSI's fiscal 1996 second quarter, on a pro forma basis,
assuming the acquisition occurred immediately prior to the beginning of the
respective periods, the financial results of the combined operations would have
been as follows:
. For the second fiscal quarter, sales would have been $75.4 million,
compared with $49.0 million in the year-earlier period. The company's
net income would have been $8.4 million or $.36 per share, versus net
income of $4.4 million, or $.27 per share, last year.
. For the first half of fiscal 1996, sales would have been $145.8 million,
up 68.8 percent from $86.4 million last year. The company's fiscal 1996
first half net income would have been $16.1 million, or $.69 per share,
compared to $7.8 million, or $.48 per share, in the earlier period.
In the fiscal 1996 third quarter, the company expects to record an $800,000
charge to earnings, or approximately $.03 per share, relating to Semiconductor
Systems' acquisition costs. In addition, the Company expects to recognize a
$1.5 million tax benefit, or approximately $.06 per share, to reflect the effect
of recording net deferred tax assets of Semiconductor Systems as if it had been
a C corporation versus an S corporation.
Certain of Semiconductor Systems' customers recently announced their intent
to delay construction of or equipping semiconductor manufacturing facilities.
As a result, the acquisition is estimated to be slightly dilutive ($.02 - $.03
per share) to FSI's combined financial results for the second half of fiscal
1996, after inclusion of the acquisition costs and tax benefit discussed above.
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 second
half of fiscal 1996.
Except for the historical information contained herein, the matters
discussed in this release are forward-looking statements that involve risks and
uncertainties. In addition to the factors discussed above, other factors that
could cause actual results to differ materially from those described in the
forward-looking statements include: volatility in the demand and price for
semiconductors; the risk of push-outs of delivery dates for equipment orders;
the risk of order cancellations; the risk of delays in introducing new products
and the market's acceptance of such
(more)
<PAGE>
April 8, 1996
Page 3
products; the successful integration of the personnel, products and operation of
Semiconductor Systems with those of FSI; and other risk factors described in the
company's most recently filed SEC documents, such as its Form 10-K filed
November 22, 1995, Form 10-Q filed January 8, 1996, and Form S-4 filed March 6,
1996.
FSI International, Inc. is a leader in producing automated surface
conditioning equipment for processing silicon wafers. The company develops,
manufactures, markets and services photoresist processing cluster tools, spray
processing systems, vapor phase processing systems, and chemical management
systems for use in the fabrication of advanced semiconductor integrated
circuits. FSI's customers include semiconductor manufacturers located
throughout North America, Europe, Japan and the Far East.
(more)
<PAGE>
FSI INTERNATIONAL, INC.
PRO FORMA STATEMENTS OF OPERATIONS
(in thousands, except per share data)
<TABLE>
<CAPTION>
Second Quarter Ended Six Months Ended
--------------------- -------------------
Feb. 24, Feb. 25, Feb. 24, Feb. 25,
1996 1995 1996 1995
---------- --------- --------- --------
(unaudited) (unaudited)
<S> <C> <C> <C> <C>
Income Statement Data:
Sales $75,432 $48,963 $145,776 $86,353
Gross profit 32,989 21,131 62,789 37,899
Selling, general & administrative 14,235 8,953 26,989 16,721
expenses
Research & development expenses 9,473 6,837 18,005 12,533
Operating income 9,281 5,341 17,795 8,645
Interest expense 112 20 235 30
Interest income 1,275 120 2,704 273
Other (expense) income (10) 84 (74) 80
Income before income taxes 10,434 5,525 20,190 8,968
Income taxes 3,799 1,455 7,296 2,488
Minority interest 116 -- 278 --
Equity in earnings of affiliates 1,894 322 3,451 1,322
Net income $ 8,413 $ 4,392 $ 16,067 $ 7,802
Net income per common share $.36 $.27 $.69 $.48
Weighted average common shares 23,147 16,476 23,235 16,323
</TABLE>
Note: The above unaudited pro forma combined financial information presents the
pro forma effect of the acquisition of Semiconductor Systems, Inc. by FSI
on FSI's historical results of operations using the pooling-of-interest
method of accounting. The pro forma combined statements of operations for
the fiscal quarters and six-month periods ended February 24, 1996 and
February 25, 1995 are presented as though the acquisition had occurred
immediately prior to the beginning of the respective periods using FSI's
consolidated statements of operations for the quarters and six months
ended February 24, 1996 and February 25, 1995 and Semiconductor Systems'
statements of operations for the quarter and six months ended February
25, 1996 and February 26, 1995. Pro forma data includes adjustments for
the effect of recognizing income tax expense for Semiconductor Systems as
if it had been a C Corporation versus an S Corporation. The above pro
forma information is not necessarily indicative of the operating results
that would have occurred if the acquisition had occurred on the dates
indicated or the results which may be obtained in the future.
# # #
