FEI Reports Second Quarter 2016 Results

HILLSBORO, Ore., Aug. 04, 2016 (GLOBE NEWSWIRE) -- FEI Company (Nasdaq:FEIC) today reported results for the second quarter of 2016. Second quarter revenue of $259 million was up 16% compared with $224 million for the second quarter of 2015. The company’s backlog of orders at the end of the second quarter of 2016 was $651 million compared with $541 million at the end of the second quarter of 2015. Bookings for the second quarter of 2016 were $259 million, resulting in a book-to-bill ratio of 1.0-to-1.

Diluted earnings per share computed on the basis of accounting principles generally accepted in the United States (GAAP) were $0.60 for the second quarter of 2016, compared with $0.89 in the second quarter of 2015. Net income for the quarter was $25 million compared with $37 million in the second quarter of 2015. Included in second quarter results were transaction costs related to the pending merger with Thermo Fisher Scientific Inc. and purchase accounting adjustments and integration costs related to the December 2015 acquisition of DCG Systems, Inc. These costs totaled $13 million, or $0.32 per share, net of taxes.

Gross margin for the second quarter was 48.8%, compared with 50.0% for the second quarter of 2015. Operating margin was 12.5% for the second quarter of 2016 compared to 20.5% for the second quarter of 2015.

Outlook and Investor Conference Call

Given the pending merger with Thermo Fisher Scientific Inc., the company will no longer provide a forward outlook and will not host a quarterly investor conference call.

About FEI:

FEI Company (Nasdaq:FEIC) designs, manufactures and supports a broad range of high-performance microscopy workflow solutions that provide images and answers at the micro-, nano- and picometer scales. Its innovation and leadership enable customers in industry and science to increase productivity and make breakthrough discoveries. Headquartered in Hillsboro, Ore., USA, FEI has over 3,000 employees and sales and service operations in more than 50 countries around the world. More information can be found at: www.fei.com.


FEI Company and Subsidiaries
Consolidated Balance Sheets
(In thousands)
(Unaudited)
July 3,
2016
December 31,
2015
Assets
Current Assets:
Cash and cash equivalents $317,345 $300,911
Restricted cash 8,330 19,119
Receivables, net 233,627 213,128
Inventories, net 200,304 170,513
Deferred tax assets 10,566
Other current assets 69,612 33,614
Total current assets 829,218 747,851
Long-term investments in marketable securities 9,221 8,677
Long-term restricted cash 16,481 22,113
Property plant and equipment, net 164,521 155,608
Intangible assets, net 60,777 35,943
Goodwill 257,281 145,607
Deferred tax assets 18,125 6,719
Long-term inventories 54,402 47,109
Other assets, net 22,968 180,222
Total Assets $1,432,994 $1,349,849
Liabilities and ShareholdersEquity
Current Liabilities:
Accounts payable $53,141 $58,708
Accrued payroll liabilities 40,131 38,643
Accrued warranty reserves 15,796 14,107
Deferred revenue 115,076 101,155
Income taxes payable 10,290 12,124
Accrued restructuring and reorganization 432 655
Other current liabilities 61,434 52,630
Total current liabilities 296,300 278,022
Long-term deferred revenue 46,397 44,745
Other liabilities 47,404 37,006
Shareholders’ Equity:
Preferred stock - 500 shares authorized; none issued and outstanding
Common stock - 70,000 shares authorized; 41,016 and 40,855 shares issued and outstanding, no par value 547,901 533,062
Retained earnings 560,757 538,053
Accumulated other comprehensive loss (65,765) (81,039)
Total shareholders’ equity 1,042,893 990,076
Total Liabilities and Shareholders’ Equity $1,432,994 $1,349,849






FEI Company and Subsidiaries
Consolidated Statements of Operations
(In thousands, except per share amounts)
(Unaudited)
Thirteen Weeks Ended Twenty-Six Weeks Ended
July 3,
2016
June 28,
2015
July 3,
2016
June 28,
2015
Net Sales:
Products $191,161 $163,585 $353,439 $327,644
Service 68,204 60,604 134,570 117,361
Total net sales 259,365 224,189 488,009 445,005
Cost of Sales:
Products 93,645 78,825 176,310 160,326
Service 39,275 33,259 77,982 67,303
Total cost of sales 132,920 112,084 254,292 227,629
Gross profit 126,445 112,105 233,717 217,376
Operating Expenses:
Research and development 29,968 23,128 57,613 46,450
Selling, general and administrative 64,117 43,093 113,356 88,915
Restructuring and reorganization (21) (102) (142)
Total operating expenses 94,085 66,200 170,867 135,223
Operating Income 32,360 45,905 62,850 82,153
Other Expense, Net (1,166) (590) (2,257) (1,557)
Income Before Income Taxes 31,194 45,315 60,593 80,596
Income Tax Expense 6,254 7,983 12,751 15,252
Net Income $24,940 $37,332 $47,842 $65,344
Basic Net Income Per Share $0.61 $0.90 $1.17 $1.57
Diluted Net Income Per Share $0.60 $0.89 $1.16 $1.55
Weighted Average Shares Outstanding:
Basic 40,922 41,629 40,890 41,711
Diluted 41,389 42,044 41,304 42,142






FEI Company and Subsidiaries
Consolidated Statements of Operations
(Unaudited)
Thirteen Weeks Ended (1) Twenty-Six Weeks Ended (1)
July 3,
2016
June 28,
2015
July 3,
2016
June 28,
2015
Net Sales:
Products 73.7% 73.0% 72.4% 73.6%
Service 26.3 27.0 27.6 26.4
Total net sales 100.0% 100.0% 100.0% 100.0%
Cost of Sales:
Products 36.1% 35.2% 36.1% 36.0%
Service 15.1 14.8 16.0 15.1
Total cost of sales 51.2% 50.0% 52.1% 51.2%
Gross Margin:
Products 51.0% 51.8% 50.1% 51.1%
Service 42.4 45.1 42.1 42.7
Gross margin 48.8% 50.0% 47.9% 48.8%
Operating Expenses:
Research and development 11.6% 10.3% 11.8% 10.4%
Selling, general and administrative 24.7 19.2 23.2 20.0
Restructuring and reorganization
Total operating expenses 36.3% 29.5% 35.0% 30.4%
Operating Income 12.5% 20.5% 12.9% 18.5%
Other Expense, Net (0.4)% (0.3)% (0.5)% (0.3)%
Income Before Income Taxes 12.0% 20.2% 12.4% 18.1%
Income Tax Expense 2.4% 3.6% 2.6% 3.4%
Net Income 9.6% 16.7% 9.8% 14.7%

(1) Percentages may not add due to rounding.





FEI Company and Subsidiaries
Consolidated Summary of Cash Flows
(In thousands)
(Unaudited)
Thirteen Weeks Ended Twenty-Six Weeks Ended
July 3,
2016
June 28,
2015
July 3,
2016
June 28,
2015
Net Income $24,940 $37,332 $47,842 $65,344
Depreciation 6,888 6,082 13,681 12,063
Amortization 4,002 2,825 7,657 5,715
Stock-based compensation 6,030 4,545 11,869 10,494
Other changes in working capital (40,502) 15,076 (51,550) (4,632)
Net cash provided by operating activities 1,358 65,860 29,499 88,984
Acquisition of property, plant and equipment (4,651) (2,677) (10,790) (7,869)
Payments for acquisitions, net of cash acquired (5,377)
Other investing activities 12,985 22,376 17,014 17,059
Net cash provided by investing activities 8,334 19,699 6,224 3,813
Dividends paid on common stock (12,258) (10,427) (24,518) (20,877)
Repurchases of common stock (21,928) (943) (30,224)
Other financing activities 343 3,303 2,758 6,325
Net cash used in financing activities (11,915) (29,052) (22,703) (44,776)
Effect of exchange rate changes (8,508) 8,431 3,414 (15,334)
(Decrease) increase in cash and cash equivalents (10,731) 64,938 $16,434 $32,687
Cash and Cash Equivalents:
Beginning of period 328,076 268,256 300,911 300,507
End of period $317,345 $333,194 $317,345 $333,194
Supplemental Cash Flow Information:
Cash paid for income taxes, net $12,519 $4,655 $29,197 $10,597
Increase in fixed assets related to transfers from inventories 5,013 3,176 7,407 4,077
Accrued purchases of plant and equipment 791 443 791 443
Dividends declared but not paid 12,305 12,479 12,305 12,479
Accrued repurchases of common stock 1,271 1,271






FEI Company and Subsidiaries
Supplemental Data Table
($ in millions, except per share amounts)
(Unaudited)
Thirteen Weeks Ended Twenty-Six Weeks Ended
July 3, 2016 June 28, 2015 July 3, 2016 June 28, 2015
Income Statement Highlights:
Consolidated sales $259.4 $224.2 $488.0 $445.0
Gross margin 48.8% 50.0% 47.9% 48.8%
Net income $24.9 $37.3 $47.8 $65.3
Diluted net income per share $0.60 $0.89 $1.16 $1.55
Sales and Bookings Highlights:
Sales by Segment
Industry Group $123.2 $119.6 $245.1 $231.5
Science Group 136.2 104.6 242.9 213.5
Sales by Geography
USA & Canada $79.8 $76.4 $155.1 $141.4
Europe 68.0 56.8 129.1 111.3
Asia-Pacific and Rest of World 111.6 91.0 203.8 192.3
Gross Margin by Segment
Industry Group 52.8% 54.1% 51.1% 52.4%
Science Group 45.1 45.3 44.6 45.0
Bookings and Backlog
Bookings - Total $258.9 $251.6 $531.0 $467.5
Book-to-bill Ratio 1.00 1.12 1.09 1.05
Backlog - Total $651.1 $541.2 $651.1 $541.2
Backlog - Service 184.9 165.0 184.9 165.0
Bookings by Segment
Industry Group $122.2 $112.7 $233.8 $249.8
Science Group 136.7 138.9 297.2 217.7
Bookings by Geography
USA & Canada $87.1 $91.3 $209.3 $143.7
Europe 48.3 73.0 104.2 111.3
Asia-Pacific and Rest of World 123.5 87.3 217.5 212.5
Balance Sheet and Other Highlights:
Cash, equivalents, investments, restricted cash $351.4 $512.7 $351.4 $512.7
Days sales outstanding (DSO) 82 86 82 86
Days in inventory 175 180 175 180
Days in payables (DPO) 36 61 36 61
Cash Cycle (DSO + Days in Inventory - DPO) 221 205 221 205
Working capital $532.9 $537.7 $532.9 $537.7
Headcount (permanent and temporary) 3,125 2,826 3,125 2,826
Euro average rate 1.13 1.10 1.11 1.12
Euro ending rate 1.11 1.12 1.11 1.12
Yen average rate 108.10 121.01 112.11 119.97
Yen ending rate 102.65 123.71 102.65 123.71


For more information contact: FEI Company Jason Willey Sr. Director, Investor Relations and Corporate Development (503) 726-2533 jason.willey@fei.com

Source:FEI Company