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Filed by CFM Technologies, Inc.
Pursuant to Rule 425 under
the Securities Act of 1933
and deemed filed pursuant to
Rule 14a-12 of the Securities
Exchange Act of 1934
Subject Company: CFM Technologies, Inc.
Commission File No.: 000-27498
Moderator:
Thank you, operator, and thank you, everyone for joining us this afternoon. CFM
Technologies issued its Third fiscal quarter press release after the close of
the market today, and full text is available on the various databases. If you
have not received a copy, please call us at 212-850-5752.
Joining us on the call today are Roger Carolin, President and Chief Executive
Officer and Jeff Randall, Chief Financial Officer.
I'd like to remind everyone that some of the comments made today or some answers
in response to your questions may contain forward-looking statements. Such
statements may involve uncertainties and risks as described in the press release
issued today and other documents filed with the SEC.
Also, the Company is a party to many agreements with its customers that restrict
the identification of those customers with any specific order, shipment,
application or process advancement. Consequently, the Company may not always be
able to provide complete answers to questions pertaining to this type of
information. We appreciate your understanding in this regard.
In addition, SEC regulations require that I provide the following information
with regard to the pending merger transaction with Mattson Technology Inc.
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CFM TECHNOLOGIES, INC.("CFM") AND MATTSON TECHNOLOGY, INC. ("MATTSON") PLAN TO
FILE A JOINT PROXY STATEMENT/PROSPECTUS AND OTHER RELEVANT DOCUMENTS WITH THE
U.S. SECURITIES AND EXCHANGE COMMISSION ("SEC") IN CONNECTION WITH THE PLANNED
MERGER OF CFM AND MATTSON. BOTH MATTSON AND CFM EXPECT TO MAIL A PROXY
STATEMENT/PROSPECTUS TO THEIR RESPECTIVE STOCKHOLDERS CONTAINING INFORMATION
ABOUT THE TRANSACTION. INVESTORS ARE URGED TO READ THE PROXY
STATEMENT/PROSPECTUS AND ANY OTHER RELEVANT DOCUMENTS FILED WITH THE SEC
CAREFULLY WHEN THEY ARE AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT
INFORMATION ABOUT MATTSON, CFM, THE STEAG BUSINESS BEING COMBINED WITH MATTSON,
AND THE PROPOSED MERGER. INVESTORS SHOULD READ THE PROXY STATEMENT/PROSPECTUS
AND OTHER RELEVANT DOCUMENTS BEFORE MAKING ANY VOTING OR INVESTMENT DECISIONS.
INVESTORS AND SECURITY HOLDERS WILL BE ABLE TO OBTAIN FREE COPIES OF THESE
DOCUMENTS THROUGH THE WEB SITE MAINTAINED BY THE SEC AT HTTP://WWW.SEC.GOV.
COPIES OF DOCUMENTS FILED WITH THE SEC BY MATTSON MAY BE OBTAINED FREE OF CHARGE
BY CONTACTING PETER BROWN OF MATTSON AT (800) MATTSON. COPIES OF DOCUMENTS FILED
WITH THE SEC BY CFM MAY BE OBTAINED FREE OF CHARGE FROM CFM THROUGH JEFF RANDALL
AT (215) 280-8509.
IN ADDITION, MATTSON AND CFM FILE ANNUAL, QUARTERLY AND SPECIAL REPORTS, PROXY
STATEMENTS AND OTHER INFORMATION WITH THE SEC. YOU MAY READ AND COPY ANY
REPORTS, STATEMENTS AND OTHER INFORMATION FILED BY MATTSON AND CFM AT THE SEC
PUBLIC REFERENCE ROOMS AT 450 FIFTH STREET, NW, WASHINGTON, D.C. 20549 OR AT THE
SEC'S OTHER PUBLIC REFERENCE ROOMS IN NEW YORK, NEW YORK AND CHICAGO, ILLINOIS.
PLEASE CALL THE SEC AT 1-800-SEC-0330 FOR FURTHER INFORMATION ON PUBLIC
REFERENCE ROOMS. MATTSON'S AND CFM'S FILINGS WITH THE SEC ARE ALSO AVAILABLE TO
THE PUBLIC FROM COMMERCIAL DOCUMENT RETREIVAL SERVICES AND AT THE WEB SITE
MAINTAINED BY THE SEC AT HTTP://WWW.SEC.GOV. CFM, ITS DIRECTORS, AND CERTAIN
EXECUTIVE OFFICERS AND MEMBERS OF MANAGEMENT AND EMPLOYEES MAY BE DEEMED TO BE
SOLICITING PROXIES FROM MATTSON'S AND CFM'S STOCKHOLDERS IN FAVOR OF THE
ADOPTION OF THE DEFINITIVE AGREEMENTS AND THE PROPOSED MERGER. INFORMATION
REGARDING THE IDENTITY OF THESE PERSONS AND THEIR INTEREST IN THE SOLICITATION
IS SET FORTH IN A SCHEDULE 14A FILED ON JULY 17, 2000 UNDER RULE 425 OF THE
REGULATIONS PROMULGATED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND
AVAILABLE FREE OF CHARGE AS SET FORTH ABOVE.
I will now turn the call over to Roger Carolin. Roger?
ROGER CAROLIN:
Thanks, Elric. Good afternoon and welcome to CFM's conference call for the third
fiscal quarter ended July 31, 2000.
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As you are all aware on June 28th we entered into a definitive agreement to
merge with Mattson Technology. Mattson Technology also announced that it would
acquire part of STEAG Electronic Systems AG's Semiconductor Equipment Division
in a related transaction. We are very excited about being a part of Mattson
Technology together with Steag. We have been striving to broaden CFM's product
offerings and increase our market presence in order to maximize the adoption of
our technology. This agreement enables us to meet those goals by joining with a
world-class supplier of conventional wet processing technology and by becoming
part of a larger, successful industry leader.
I'd like to briefly review the quarter. Jeff Randall, our CFO, will follow with
details of our financial results, and then I'll provide some updates on our
ongoing merger plans with Mattson Technology and our integration efforts with
STEAG Electronic Systems' Semiconductor Equipment Division. Then we will open
the call to your questions.
Net sales for the third quarter of fiscal 2000 increased 35% to $13.0 million,
up from $9.6 million in the year-ago period and 8% over fiscal second quarter
2000 net sales of $12.1 million.
During the quarter, we received customer orders totaling $14.0 million. This was
an increase of over 64% from the previous quarter. Orders from the U.S.
accounted for 80% of total orders, with the balance coming from Asia at 18% and
Europe at 2%. Bookings included orders from one new customer.
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Now for some additional financial highlights, I'd like to turn the call over to
Jeff Randall. Jeff?
JEFF RANDALL:
Thanks, Roger.
The Company reported a net loss for the third fiscal quarter of $3.6 million, or
($0.46) per diluted share, compared to a net loss of $2.3 million, or $(0.29)
per diluted share, in the third quarter of fiscal 1999. The fiscal 1999 net loss
was reduced by a tax benefit of $0.15 per diluted share. No tax benefit was
taken in fiscal 2000. The net loss in the second quarter of fiscal 2000 was
$16.5 million or ($2.09) per diluted share which net loss included a valuation
allowance against deferred tax assets in the amount of $12.6 million or ($1.60)
per diluted share.
Gross margin this quarter was 36.1% As we have said in the past, we expect gross
margins will gradually improve as we begin to see more substantial production
volumes.
RD&E spending was slightly higher at $2.5 million and is expected to remain
essentially flat in the coming quarters. Selling, general and administrative
expenses for the third quarter of 2000 were slightly lower at $5.7 million
compared to the prior quarter's $6.0 million. However, they are higher than the
$4.8 million recorded in the year ago period. The increase year over year can be
attributed to higher patent litigation cost. The sequential reduction was due to
lower commission payments as most shipments were to the US where the Company
sells direct.
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Going forward, we expect to see patent litigation costs continue to rise at
least through the July quarter in 2001 as we prepare for jury trials in two of
the matters now pending. We anticipate a significant reduction, but not an
elimination of these costs following these trials.
Capital spending for the fiscal second quarter, net of retirements, was
approximately $682,000. Depreciation for the quarter was $722,000.
I just wanted take a minute to address some of the financial terms of the merger
agreement. Shareholders of CFM will own approximately 12 percent of the
resulting company. The agreement provides for the exchange of 0.5223 Mattson
common shares for each share of CFM common stock. The transaction is expected to
be accounted for as a purchase.
There are a number of regulatory filings and reviews which must be completed
prior to a vote by the shareholders of both Mattson and CFM and closing. These
include the Hart, Scott, Rodino anti-trust review in the US and the German
Cartel Board review in Germany. Both of these filings have been made and
feedback is anticipated shortly. Additionally, a joint registration statement
and proxy will be filed with the SEC by both Mattson and CFM. This filing is
expected to occur next month. After this registration statement has been
reviewed by the staff at the SEC and becomes effective, we will mail the proxy
and registration statement to our shareholders and schedule the Special
Shareholder's meeting approximately 30 days thereafter. Closing will be
scheduled shortly following approval of the transaction by the respective
shareholder groups.
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Additionally, I have been asked by Brian McDonald, Mattson's CFO, to manage the
overall financial integration process to allow for smooth preparation and
consolidation of plans and actual results for all of the business units in the
combined entity, worldwide. Work on this has been underway for almost one month
and we are nearing completion on the most difficult issues related to conforming
procedures and agreeing on the consolidation data elements. The quality and
experience of the financial personnel at each entity and site are quite good and
I do not anticipate any difficulty in a quick, smooth completion of this aspect
of the merger integration. Similar work has been underway in each of the other
major functional areas, in some cases since before the announcement of the
merger in June. An Integration Planning Office headed by a senior Mattson
executive was formed in May and has been active in coordinating the efforts of
each of the functional groups in completing their pre-closing planning efforts.
Everyone is very aware of the difficulty of successful merger integration and
the need for speed in execution and clarity of purpose. I am quite pleased with
the level of cooperation, among all the parties.
Back to you, Roger.
ROGER CAROLIN:
I'll now take a few minutes to discuss the market, some of the developments that
we believe should have a positive impact going forward, and the strategies,
plans and progress we've made so far toward the integration of our businesses.
We are experiencing a significant volume of sales discussions, quotations and
proposals. Some of our traditional and largest customers are starting to report
that they are becoming
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capacity constrained. These customers are starting to become more active in
their purchases of new equipment, and this anticipated purchase activity should
increase our opportunities going forward.
As we stated in our last conference call, we see several factors that have the
potential to improve our results.
Purchase activity relating to 300mm equipment continues to increase. As we have
discussed previously, due to our successful involvement at SEMICONDUCTOR300, the
Infineon Technologies/Motorola 300mm joint venture, CFM is well positioned to
benefit as 300 mm gains more ground industry-wide.
Our newly developed aqueous based copper cleaning capability is another area
were we believe that there is good potential for future sales. Our solution
offers significant improvements in process performance and cost-of-ownership
compared to environmentally less friendly solvent-based processes.
Again, it will take some time for sales to ramp up on this new solution, but its
introduction coincides with the emergence of copper as an important industry
trend.
We have also continued our longstanding emphasis on customer satisfaction. In
July, VLSI Research announced its annual "10 Best" customer satisfaction awards,
and CFM was a winner for the second year in a row in the category of companies
under $300 million in
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annual sales. In fact, we moved up from 10th place last year to 6th place in
2000. We continue to believe that a consistent focus on customer satisfaction is
a critical factor for long term success in our business.
We have also been working hard to provide our customers with a strong portfolio
of solutions that meet the semiconductor industry's immediate and emerging
needs. As total demand for integrated circuits and semiconductor devices rises
further and capacity continues to be absorbed, we believe that our prospects
should likewise continue to improve.
As I have commented in the past, we perceive that customer aversion to risk has
had a limiting effect on the rate of our market penetration. For some time, we
considered a merger as one potential means of mitigating this issue. We entered
into the agreement with Mattson to strengthen our ability to compete
successfully in an environment in which customers increasingly prefer to deal
with a smaller number of large suppliers with broader product portfolios.
As Brad Mattson commented when we announced the merger, winning no longer is
dependent on just having the best technology. The industry has matured to the
point where critical mass is also a critical success factor. This transaction
will create the fourth largest global wet processing company in the world. As a
company that ranks among the world's top 15 semiconductor equipment suppliers,
with annual revenue in excess of $500 million, the new Mattson should be in a
position to build strong market positions in multiple product categories and
deliver increased value to shareholders.
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Now I'd like to discuss some of our integration strategies and goals
The literature and history regarding merger integrations consistently show that
speed is the single most important factor for success. Consequently, our goal is
to create a single, integrated team as quickly as possible upon closing of the
transaction while minimizing any disruption to ongoing business operations.
During this pre-closing period while governmental and shareholder approvals are
being obtained, we have been working on a wide range of planning activities.
Primary among these is the determination of the overall divisional
organizational structure and the assignments of key executives to senior
positions. This work is now completed. We have also been working to develop an
integrated product strategy and R&D plan to make sure that we are using the
combined product portfolio as effectively as possible to maximize our
competitive advantage and to avoid costly duplication of R&D efforts.
In addition, much planning work is being done in the areas of sales and
service so that we can quickly transition to a fully integrated organization
once the transaction closes. This is important in order to minimize any impact
on customer satisfaction and take early advantage of cost synergies. This sales
and service planning work is being done at both the wet process division level
and in conjunction with the rest of the overall new Mattson organization.
As you can see, we are diligently working to optimize the impact of this
merger, and I have been very positively impressed with the willingness and
ability of people from the three companies to come together quickly and work
together productively on these
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activities. With a strong investment of time and effort in advance planning, we
believe that we can be in position to "hit the ground running" once the
transaction is closed.
Now I'd like to open the call to questions.
