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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
Date of Report (Date of earliest event reported): July 31, 1999
FSI INTERNATIONAL, INC.
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(Exact name of registrant as specified in its charter)
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<S> <C> <C>
MINNESOTA 0-17276 41-1223238
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(State or other jurisdiction of (Commission File Number) (I.R.S. Employer
incorporation) Identification No.
322 LAKE HAZELTINE DRIVE, CHASKA, MINNESOTA 55318
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(Address of principal executive offices) (Zip Code)
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Registrant's telephone number, including area code (612) 448-5440
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Item 2. Acquisition or Disposition of Assets.
On July 31, 1999, FSI International, Inc. (the "Company") completed the
sale of its Chemical Management Division ("CMD") to The BOC Group, Inc., a
Delaware corporation ("BOC") for approximately $38 million ((pound)23 million),
subject to post-closing adjustments based upon changes in net working capital
from April 3, 1999 through closing. The Company had entered into a formal asset
purchase agreement for the sale of CMD to BOC on June 9, 1999.
CMD, which includes operations in Chaska, Minn., Hollister, Calif.,
Newhaven, England, and Kyungui-do, Korea, designs and manufactures chemical
management systems that generate, blend and dispense high purity chemicals, and
blend and deliver slurries, to points of use in manufacturing facilities, as
well as related controls and support products. See the Company's Annual Report
on Form 10-K for the fiscal year ended August 29, 1998 for a general discussion
of the business and operations of CMD.
It is anticipated the pre-tax gain on the sale of CMD will be approximately
$25.0 million. See the Company's pro forma financial information as of and for
the nine months ended May 29, 1999 and for the fiscal year ended August 29,
1998.
The foregoing description of the asset purchase agreement is not complete
and is qualified in its entirety by reference to the asset purchase agreement,
which is attached hereto as an exhibit and incorporated by reference.
Item 7. Financial Statements and Exhibits.
(a) Financial statements of business acquired.
Not applicable.
(b) Pro forma financial information.
Unaudited pro forma financial information for FSI International, Inc. and
subsidiaries as of and for the nine months ended May 29, 1999 and for the fiscal
year ended August 29, 1998.
(c) Exhibits.
2. Asset Purchase Agreement dated as of June 9, 1999 between FSI
International, Inc. and The BOC Group, Inc. (incorporated by
reference to Exhibit 2 to the Current Report on Form 8-K of FSI
International, Inc. (File No. 0-17276), filed with the
Securities and Exchange Commission on June 23, 1999.)
99. Press Release dated August 2, 1999.
2
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SIGNATURE
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, thereunto duly authorized.
FSI INTERNATIONAL, INC.
Date: August 12, 1999 By: /s/ Patricia M. Hollister
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Its: Chief Financial Officer and Corporate
Controller
3
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UNAUDITED PRO FORMA FINANCIAL INFORMATION
AS OF AND FOR THE NINE MONTHS ENDED MAY 29, 1999 AND FOR
THE FISCAL YEAR ENDED AUGUST 29, 1998
FSI INTERNATIONAL, INC. AND SUBSIDIARIES
The following unaudited pro forma financial information presents the pro
forma effect of the divestiture of CMD on the Company's historical financial
position and results of operations. The pro forma 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 divestiture had been effected on
the date indicated or of the results that may be obtained in the future.
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FSI INTERNATIONAL, INC. AND SUBSIDIARIES
UNAUDITED PRO FORMA
BALANCE SHEET
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FSI
International, Pro Forma
Inc. Adjustments Pro Forma
May 29, 1999 For Divestiture May 29, 1999
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CURRENT ASSETS:
CASH, CASH EQUIVALENTS AND MARKETABLE
SECURITIES $79,778,165 $79,778,165
TRADE ACCOUNTS RECEIVABLE, NET 23,611,534 23,611,534
TRADE ACCOUNTS RECEIVABLE FROM
AFFILIATES 4,528,488 4,528,488
INVENTORIES 36,232,266 36,232,266
DEFERRED INCOME TAX BENEFIT 10,101,953 10,101,953
OTHER CURRENT ASSETS 5,105,116 5,105,116
NET ASSETS OF DISCONTINUED OPERATIONS 13,104,433 (13,104,433) (a) --
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TOTAL CURRENT ASSETS 172,461,955 159,357,522
PROPERTY, PLANT AND EQUIPMENT, NET 64,336,608 64,336,608
INVESTMENTS IN AFFILIATES 13,615,129 13,615,129
DEPOSITS AND OTHER ASSETS 4,382,518 4,382,518
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254,796,210 241,691,777
============ ============
CURRENT LIABILITIES:
CURRENT MATURITIES OF LONG-TERM DEBT 59,696 59,696
TRADE ACCOUNTS PAYABLE 18,891,291 18,891,291
ACCRUED EXPENSES 18,375,713 18,375,713
CUSTOMER DEPOSITS 834,789 834,789
DEFERRED REVENUE 3,439,156 3,439,156
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TOTAL CURRENT LIABILITIES 41,600,645 41,600,645
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LONG-TERM DEBT, LESS CURRENT MATURITIES 42,015,060 42,015,060
STOCKHOLDERS' EQUITY:
OTHER STOCKHOLDERS' EQUITY 164,967,661 164,967,661
RETAINED EARNINGS (DEFICIT) 7,509,882 (13,104,433) (a) (5,594,551)
CUMULATIVE TRANSLATION ADJUSTMENT (1,297,038) (1,297,038)
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TOTAL STOCKHOLDERS' EQUITY 171,180,505 158,076,072
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$254,796,210 $241,691,777
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FSI INTERNATIONAL, INC. AND SUBSIDIARIES
UNAUDITED PRO FORMA
STATEMENT OF OPERATIONS
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FSI
International,
Inc. Pro Forma Pro Forma
Year ended Adjustments Year ended
August 29, 1998 For Divestiture August 29, 1998
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SALES $161,695,114 $161,695,114
COST OF GOODS SOLD 109,987,687 109,987,687
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GROSS PROFIT 51,707,427 51,707,427
SELLING, GENERAL AND ADMINISTRATIVE
EXPENSES 52,102,864 52,102,864
RESEARCH AND DEVELOPMENT EXPENSES 36,102,507 36,102,507
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OPERATING LOSS (36,497,944) (36,497,944)
INTEREST EXPENSE (3,189,390) (3,189,390)
INTEREST INCOME 4,774,458 4,774,458
OTHER EXPENSE, NET (412,439) (412,439)
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LOSS BEFORE INCOME TAXES (35,325,315) (35,325,315)
INCOME TAX (BENEFIT) EXPENSE (13,986,713) (13,986,713)
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LOSS BEFORE EQUITY IN
EARNINGS OF AFFILIATES (21,338,602) (21,338,602)
EQUITY IN EARNINGS OF AFFILIATES 674,274 674,274
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NET LOSS FROM CONTINUING OPERATIONS $(20,664,328) $(20,664,328)
DISCONTINUED OPERATIONS:
LOSS FROM OPERATIONS (1,287,763) 1,287,763 (a) --
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NET LOSS $(21,952,091) $(20,664,328)
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NET LOSS PER COMMON SHARE - BASIC
CONTINUING OPERATIONS $(0.91) $(0.91)
DISCONTINUED OPERATIONS (0.05) (0.00)
NET LOSS (0.96) (0.91)
NET LOSS PER COMMON SHARE - DILUTED
CONTINUING OPERATIONS $(0.91) $(0.91)
DISCONTINUED OPERATIONS (0.05) (0.00)
NET LOSS (0.96) (0.91)
WEIGHTED AVERAGE COMMON SHARES 22,801,415 22,801,415
WEIGHTED AVERAGE COMMON SHARES AND 22,801,415
POTENTIAL COMMON SHARES 22,801,415
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FSI INTERNATIONAL, INC. AND SUBSIDIARIES
UNAUDITED PRO FORMA
STATEMENT OF OPERATIONS
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FSI
International
Inc. Pro Forma Pro Forma
Nine Months ended Adjustments Nine Months ended
May 29, 1999 For Divestiture May 29, 1999
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Sales $80,836,840 $80,836,840
Cost of goods sold 56,965,694 56,965,694
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Gross profit 23,871,146 23,871,146
Selling, general and administrative
expenses 26,148,497 26,148,497
Research and development expenses 22,078,711 22,078,711
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Operating loss (24,356,062) (24,356,062)
Interest expense (2,219,426) (2,219,426)
Interest income 3,653,531 3,653,531
Other expense, net 217,189 217,189
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Loss before income taxes (22,704,768) (22,704,768)
Income tax (benefit) expense 6,608,850 6,608,850
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Loss before equity in earnings of
Affiliates (29,313,618) (29,313,618)
Equity in earnings of affiliates (1,956,827) (1,956,827)
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Net loss from continuing operations (31,270,445) (31,270,445)
Discontinued operations:
Loss from operations (3,769,040) 3,769,040 (a) --
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Net loss $(35,039,485) $(31,270,445)
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Net loss per common share - Basic $(1.35) $(1.35)
Continuing operations (0.16) (0.00)
Discontinued operations (1.51) (1.35)
Net Loss
Net loss per common share - Diluted $(1.35) $(1.35)
Continuing operations (0.16) (0.00)
Discontinued operations (1.51) (1.35)
Net loss
Weighted average common shares 23,156,150 23,156,150
Weighted average common shares
and potential common shares 23,156,150 23,156,150
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NOTES TO UNAUDITED PRO FORMA
FINANCIAL STATEMENTS
FSI INTERNATIONAL, INC. AND SUBSIDIARIES
AS OF AND FOR THE NINE MONTHS ENDED MAY 29, 1999 AND FOR
THE FISCAL YEAR ENDED AUGUST 29, 1998
The unaudited pro forma financial information reflects the divestiture of CMD as
discontinued operations. On June 9, 1999, FSI entered into an agreement to sell
CMD to the BOC Group, Inc. for approximately $38 million (subject to an
adjustment for changes in net working capital from April 3, 1999 through
closing). The transaction closed on July 31, 1999.
The Company is anticipating a pre-tax gain in the fourth quarter of fiscal year
1999 of approximately $25.0 million with related taxes of $9.5 million. The pro
forma financial information does not reflect the anticipated gain or cash
proceeds from this transaction.
(a) To reflect the impact of the divestiture of CMD.
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EXHIBIT INDEX
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No. Exhibit Page
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2. Asset Purchase Agreement dated as of June 9, 1999 between FSI Incorporated by
International, Inc. and The BOC Group, Inc. Reference
99. Press Release dated August 2, 1999. Filed
Electronically
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[ FSI Letterhead ]
For additional information contact: Laurie Walker-Trade Media (612) 448-8066
Benno Sand-Investor and Financial Media
(612) 448-8936
FOR IMMEDIATE RELEASE
FSI INTERNATIONAL COMPLETES THE SALE OF ITS CHEMICAL MANAGEMENT DIVISION
MINNEAPOLIS (Aug. 2, 1999) -- FSI International announced today that it has
completed the sale of its Chemical Management Division (CMD) for approximately
$38 million ((pound)23 million), subject to certain post-closing adjustments.
The company had entered into a formal agreement for the sale of the division on
June 9. It is anticipated the pre-tax gain on the sale of the division will be
approximately $25.0 million. FSI expects to use the net proceeds from the
transaction for working capital and to fund future investments in complementary
businesses, products or technologies.
The CMD Division, which includes operations in Chaska, Minn., Hollister,
Calif., Newhaven, England, and Kyungui-do, Korea, was sold to The BOC Group, a
U.K.-based global company. CMD will become part of BOC Edwards, a BOC business
unit that supplies a broad range of products for the semiconductor industry,
including bulk and process gases, vacuum and abatement systems, slurry systems,
gas cabinets, nitrogen generators and design and site management services.
"The divestiture of CMD allows FSI to move forward with its strategy to
focus on microlithography and surface conditioning process technology products,
programs and services," stated Joel Elftmann, FSI chairman and chief executive
officer.
To support this strategy, the Company's Microlithography Division recently
introduced its entry into the emerging low-k, spin-on dielectric segment of the
semiconductor equipment market with the new CALYPSOTM system. In addition, the
Company recently announced its intent to expand into immersion cleaning,
utilizing the technology received from the pending acquisition of YieldUP
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FSI International Inc.
August 2, 1999
Page 2
International. This will provide the Surface Conditioning Division with
the capability to deliver total cleaning solutions to customers.
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 technology
areas of surface conditioning, microlithography and the spin-on dielectric
market. FSI International's customers include microelectronics manufactures
located throughout North America, Europe, Japan and the Asia-Pacific region.
Additional information on FSI International can be obtained by accessing
its homepage at http://www.fsi-intl.com.
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