- Free Writing Prospectus - Filing under Securities Act Rules 163/433 (FWP)
June 09 2010 - 6:03AM
Edgar (US Regulatory)
Free Writing Prospectus
Filed Pursuant to Rule 433
Registration Statement No. 333-165785
The issuer has filed a registration statement (including a prospectus) with the U.S. Securities and
Exchange Commission (SEC) for the offering to which this communication relates. The prospectus in
that registration statement is available on this site and may be printed. Before you invest, you
should read the prospectus in that registration statement and other documents the issuer has filed
with the SEC for more complete information about the issuer and this offering. You may get these
documents for free by visiting EDGAR on the SEC website at http://www.sec.gov. Alternatively, you
can obtain a copy of the prospectus by calling: Craig-Hallum Capital Group LLC at (612) 334-6300.
FSI International, Inc. Equity Follow-on Offering June 2010
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Notice to Investors The issuer has filed a registration statement (including a prospectus) with the
SEC for the offering to which this communication relates. Before you invest, you should read the
prospectus in that registration statement and other documents the issuer has filed with the SEC for
more complete information about the issuer and this offering. You may get these documents for free
by visiting EDGAR on the SEC Web site at www.sec.gov. Alternatively, the issuer, any underwriter or
any dealer participating in the offering will arrange to send you the prospectus if you request it
by calling (612) 334-6300.
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Safe Harbor Under the Private Litigation Securities Reform Acts Safe Harbor Provision, we
may, during this presentation, make forward looking statements which are based upon current
expectations and beliefs and involve numerous risks and uncertainties that could cause actual
events or results to differ materially from these forward looking statements. For a discussion of
risk factors see the Companys most recently filed SEC documents, such as its latest 10K, Annual
Report and 10Q. The company and management assume no obligation to update or supplement this
presentation, including forward-looking statements, that become untrue because of subsequent
events.
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Transaction Summary Issuer: FSI International, Inc. NASDAQ Ticker: FSII Shares Offered: 4.5 million
primary shares Shares Outstanding Post Offering
(1)
: 37 million shares Over-allotment
Option: 15% Use of Proceeds: Working capital & general corporate purposes Expected Pricing: June 8,
2010 (after market close) Sole Bookrunner: Craig-Hallum Capital Group Co-Manager: Dougherty &
Company (1) Common shares outstanding (does not include shares attributable to an exercise of the
underwriters over-allotment option)
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Todays Presenters Donald Mitchell 10 years as CEO of FSI Chairman & Chief Executive Officer Became
Chairman in January 2002 Prior to FSI, served as President of Air Products Electronic Chemicals
and President of Schumacher Benno Sand 28 years of experience with FSI Executive Vice President
Previously served in several executive financial management roles, including Executive Vice
President, Chief Administrative Officer, Chief Financial Officer and Assistant Secretary
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Company Overview Global supplier of surface conditioning equipment and technology to the worlds
leading integrated circuit (IC) and microelectronics manufacturers Offers a complete portfolio of
proven single wafer and batch products for immersion, spray, vapor and cryokinetic cleaning
applications Patented product portfolio serves logic, memory and foundry customers
Headquartered in Chaska, MN with 272 employees Current market capitalization of
$126million
(
1 ) LTM Revenue of $63 million (1) Based on closing stock price of $3.90
on June 4, 2010 Always Thinking. Better.
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Investment Highlights Multi-year platform investment initiative complete products now can
address 90%+ of the available surface conditioning market Positioned to participate in the
current industry expansion cycle Wafer fab equipment industry poised for growth Successfully
transitioned to a global market presence with Asian customer support infrastructure in place
Significant operating leverage potential due to 30% reduction in operating expenses first half
2010 compared to first half 2009 High-quality customer base in logic, foundry and memory
Gaining momentum with key product initiatives ORION System placed with logic, foundry and memory
customers Expanded the number of ZETA System applications Always Thinking. Better.
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Used Throughout Manufacturing Process Always Thinking. Better. 8
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Product Portfolio Batch SpraySingle Wafer DrySingle Wafer Wet CORE
ZETA
®
ANTARES
®
ORION
®
Spray Cleaning System / 200mm -
300mmCryoKinetic Cleaning System / 200mm 300mmSingle Wafer Cleaning System / 300mm Batch
ImmersionBatch SpraySingle Wafer Resist Processing CY LEGA
MAGELLAN
®
MERCURY
®
POLARIS
®
Immersion Cleaning System / 200mm -
300mmSpray Cleaning System /150mm 200mmMicrolithography Cluster / 150mm 300mm Always Thinking.
Better. 9
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Multiple Applications Within Product Portfolio Product portfolio addresses 90% of surface
conditioning market 2009 Surface Conditioning Market Segmentation
(1)
FSI
ProductApplications ORI ON
®
System ZETA
®
System ANTARES
®
System
MAGELLAN
®
System MERCURY
®
System (1) Gartner December 2009 Always
Thinking. Better. 10
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Addressable Markets ORION addresses high-growth, $1.5 billion market opportunity Segments
addressed by the (1) following FSI products: ANTARES
®
Cryokinetic System ZETA
®
and MERCURY
®
Spray Processing Systems ORION
®
Single Wafer Cleaning
Cluster MAGELLAN
®
Immersion System Calendar Year (1) Gartner March 2010 Always
Thinking. Better. 11
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Product Portfolio Positioned For Growth ZETA
®
ViPR System Provides high performance
resist and metal film strips at a low cost Higher productivity and lower cycle time compared to 2
step ash-wet strip $1.5 2.5 million ASP ANTARES
®
CryoKinetic Cleaning System Cleans
surfaces that are water or chemically sensitive and will not etch or alter film properties Higher
particle removal efficiencies than water jet scrub on many types of films $1.8 2.2 million ASP
ORION
®
Single Wafer System Unique closed chamber design with integrated spray
technology with energetic dispense A highly economical and capable single wafer high temp wet etch
and strip system $2.5 5.0 million ASP Always Thinking. Better.
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Momentum With Industry Leading Customers ZETA System Core product driving current revenue growth
Contributing to 60%+ first half revenue growth YoY Proven technology with 40% market
share
(1)
Strong momentum with installed customer base Expanding the number of
applications for which the ZETA System is being used More than 150 ZETA Systems installed in high
volume manufacturing worldwide ORION System Built upon proven technology and being validated by
industry leading customers 2 systems installed at major U.S. based logic semiconductor
manufacturer Recently delivered a system to a major foundry device manufacturer based in Asia
Major Asian memory producer continues to evaluate the system Key customers continue to shift to
single wafer cleaning systems Potential to be a leading product in $1.5 billion market (1) Gartner
April 2010 Always Thinking. Better. 13
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Memory Providing Growth Over Near Term FSI now poised to participate in anticipated memory led
capital spending increase 70Others (Opto, Power Discrete, Compound) Memory 60Logic (including Mixed
Signal) 50 Billions 40 in 30 $20 10 0 2006 2007 2008 2009 2010 2011 2012 Source: Gartner, Inc.
(December 2009) Always Thinking. Better.
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Extensive Customer Base Chaska USA Headquarters Edinburgh Brussels Dresden Portland Chaska
Grenoble Milan BundangSanJoseFishkill Tokyo PhoenixDallas Tel AvivOkayama Austin SEMICONDUCTOR
LTD.Shanghai Hsinchu Singapore Includes spares depot Always Thinking. Better. 15
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Global Market Presence FY 2005 YTD FY 2010 20% 40% 41%46% 39% 13% Total FSI Orders: United States
Europe Asia Always Thinking. Better.
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17 Source:Worldwide IC Sales ($ Billi ons) 0510152025 J-99 M-99 S-99 J-00 M-00 VLSI Industry Pulse
ProS-00
TM
J-01 M-01 S-01 May 2010J-02(3 month rolling average) M-02 S-02 J-03 M-03 S-03
J-04 M-04 S-04 J-05 M-05 S-05 J-063 mo. Avg. Units 3 mo. Avg. Sales M-06Device Manufacturers S-06
J-07 M-07 S-07 J-08 M-08 S-08 J-09 M-09Worldwide Demand for Semiconductors S-09 Always Thinking.
Better.J-10 0246810121416 Worldwide IC Units (Billions)
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Worldwide Factory Utilization Rates Semiconductor Manufacturers Forecast 100 Drives Capacity
Spending 90 tilization 80 Technology Spending Continues % U70 60 50 Jan-99 June Nov Apr Sep Feb Jul
Dec May Oct Mar Aug Jan-04 Jun Nov Apr Sep Feb Jul Dec May Oct Mar Aug Jan-09 Jun Nov Source: VLSI
Industry Pulse Pro
TM
May 2010 Always Thinking. Better. 18
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Financial Summary Always Thinking. Better. Copyright
©
2010 FSI International All Rights Reserved
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Financial Summary Always Thinking. Better. Copyright
©
2010 FSI International All Rights Reserved
Improved Cost Structure Operating Expenses ($s in thousands)Cost Reductions___$10,702 $3.2
million of cost reductions $7,530 Consolidation of U.S and European sales and service
organization Headcount reductions Down sized of Allen, Texas facility leased space Q2 09Q2
10 Completion of ORION platform Operating Income Breakeven Level
(1)
development ($s
in thousands) $20,000 $15,000 Q2 09Q2 10 Note: 1) Refers to level of quarterly revenue at which
operating income is equal to zero Always Thinking. Better. 20
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Improvement in Orders and Revenue GuidanceGuidance MidpointMidpoint OrdersRevenue $28,000 ($s in
thousands)($s in thousands) $29,000 $22,784 $18,925 $18,696 $15,424 $14,176 $14,617 $14,673
$12,224 $13,313 $11,304 $11,469 $8,640 Q1 09 Q2 09 Q3 09 Q4 09 Q1 10 Q2 10 Q3 10Q1
09 Q2 09 Q3 09 Q4 09 Q1 10 Q2 10 Q3 10 Revenue and order growth driven by an
increased demand for products and the introduction of the ORION platform Gross margin goal of
45-50 percent (44% FY2010 YTD) Q3 revised guidance: Orders of $28 $30 million (was $25 $27
million) Sales of $27 $29 million (was $23 $25 million) Earnings of $5.0 $6.0 million
(was $2.5 $3.0 million) Always Thinking. Better. 21
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Substantial Operating Leverage Operating Model at Various Revenue Levels ($s in thousands)
Quarterly Revenue Level
(1)
FSI InternationalQ2 08Q2 09Q2 10$15mm$25mm$35mm Revenue
$21,423 $8,640 $18,925 $15,000 $25,000 $35,000% of Q2 1079%132%185% % of prior peak qtrly
revenue
(2)
37%62%87% Gross Margin48% 14% 42% 45-46%46-48%48-50% Operating Margin2%
(110%)3% Breakeven10-12%12-16% Notes: 1) Represents range of estimated gross margin and operating
margin based on respective quarterly revenue levels 2) Prior peak quarterly revenue of $40.4
million in Q4 06. Always Thinking. Better. 22
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Strong Balance Sheet August February ($s in thousands)FY 2009FY 2010 Assets Cash, Cash
Equivalents$12,496$14,936 Marketable Securities and Restricted Cash Receivables, Net8,697 8,641
Inventory21,17122,761 Fixed Assets15,14714,222 Total Assets$63,685$66,652 Liabilities and Equity
Total Debt$0,000$0,000 Stockholders Equity$50,657$52,352 Always Thinking. Better. 23
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Investment Highlights Multi-year platform investment initiative complete products now can
address 90%+ of the available surface conditioning market Positioned to participate in the
current industry expansion cycle Wafer fab equipment industry poised for growth Successfully
transitioned to a global market presence with Asian customer support infrastructure in place
Significant operating leverage potential due to 30% reduction in operating expenses first half
2010 compared to first half 2009 High-quality customer base in logic, foundry and memory
Gaining momentum with key product initiatives ORION System placed with logic, foundry and memory
customers Expanded the number of ZETA System applications Always Thinking. Better. 24
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