I also had the chance to follow up with Mr. Sullivan, who is V.P. and Chief Financial Officer with Semitool.
I found him responsive and knowledgeable about
various aspects of their business, much better than typical Investor Relations people who dont do hands-
on work. Following is summary:
1. Re: finances
He confirmed cash is down to finance receivables and inventory including work in progress. He pointed out the very substantial increase in sales over past couple of yrs also indicating that most rapid sales growth has been in new products (actually quite explosive growth for Magnum tools and Equinox single wafer tools). In 1994 only some $20 million were in new products while this year they amount to $90 million. SMTL appears to have ample unused credit including an unused long-term credit line. They did use some $4 million in short-term credit. Confirmed other increases in current liabilities included payables, and also warranty accruals.
2. Backlog appears to be roughly what was indicated in
Sept 30 statement, which was $85.9 million, again attributable to introduction of new products.
3. Wet processing market is some $1.7 billion worldwide, with no single dominant player. Semitool's strategy has been to differentiate their equipment
to avoid head to head competition as much as possible.
4. Ray Thompson, founder has background in aerospace industry, worked for McDonnell Douglas in early '70s,
then obtained experience in other cos including one he
founded utilizing teflon-related technologies which are
important in semi equip field also. He built Semitool on his own without outside angels or private investors. (I can comment from own past experience this is the best kind of company, no other parties working at cross-purposes. Long term however one should follow what kind of succession program the company has, a topic for future discussion).
Could only scratch the surface so far but without info
to the contrary this co should do well as semi industry
turns around next year, after a maybe mild slowdown in
the first half of 97. |
