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FEI Reports Record First-Quarter Bookings, Revenue and EPS

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Bookings of $230.7 Million

Revenue of $221.2 Million and GAAP EPS of $0.65

HILLSBORO, Ore., April 30, 2013 (GLOBE NEWSWIRE) -- FEI Company (Nasdaq:FEIC) reported record revenue and earnings for any first quarter, along with bookings that were the highest for any quarter in the company's history. Revenue of $221.2 million was up 2% compared to $217.6 million in the first quarter of 2012 and down 4% seasonally from $230.9 million in the fourth quarter of 2012. Diluted earnings per share computed on the basis of accounting principles generally accepted in the United States ("GAAP") was $0.65, compared with $0.63 in the first quarter of 2012 and $0.72 in the fourth quarter of 2012. Net income for the quarter was $26.8 million, compared with $25.7 million in the first quarter of 2012 and $29.8 million in the fourth quarter of 2012.

The gross margin in the first quarter was 46.4%, compared with 45.1% in the first quarter of 2012 and 47.2% the fourth quarter of 2012.

Net bookings in the first quarter were $230.7 million, compared with net bookings of $221.8 million in the first quarter of 2012 and $230.5 million in the fourth quarter of 2012. Gross bookings were $238.3 million before a $7.6 million revaluation of the backlog for changes in foreign exchange rates. The book-to-bill ratio in the quarter was 1.04-to-1 and the backlog at the end of the quarter was $434.2 million.

"Bookings, revenue, EPS and operating cash flow all set first-quarter records," commented Don Kania, president and CEO. "Science Group revenue was up 15% from last year's first quarter, driven by strong demand outside the U.S. Industry Group revenue declined 11% from last year's first quarter and increased as expected from the fourth quarter, as the semiconductor equipment business improves. We expect continued sequential growth in 2013. Gross margin increased 130 basis points from the first quarter a year ago, despite the negative impact of a weaker Japanese Yen."

Total cash, investments and restricted cash at the end of the quarter was $441.6 million, an increase of $24.6 million from the end of the fourth quarter, and cash flow provided by operating activities was positive $34.8 million.

Outlook

For the second quarter of 2013, revenue is expected to be in the range of $222 million to $231 million, and bookings are expected to be at least $230 million. GAAP earnings per share are expected to be in the range of $0.62 to $0.71, including restructuring charges of $0.01. The effective tax rate is expected to be approximately 20%. Revenue for the full year 2013 is expected to be 5% to 9% greater than 2012 revenue.

Investor Conference Call -- 2:00 p.m. Pacific time, Tuesday, April 30, 2013

Parties interested in listening to FEI's quarterly conference call may do so by dialing 1-888-549-7750 (U.S., toll-free) or 1-480-629-9643 (international and toll), with the conference title: FEI First Quarter Earnings Call, Conference ID 4615206. A telephone replay of the call will be available at 1-800-406-7325 (U.S., toll-free) or 1-303-590-3030 (international and toll) with the passcode: 4615206#. The call can also be accessed via the web by going to FEI's Investor Relations page at www.fei.com, where the webcast will also be archived.

Safe Harbor Statement

This news release contains forward-looking statements that include statements regarding potential continued improvement in certain markets, as well as our guidance for revenue, earnings per share and bookings for the second quarter of 2013 and our revenue and general outlook for 2013. Forward-looking statements may also be identified by words and phrases that refer to future expectations, such as "guidance", "guiding", "toward", "plan", "expect", "expects", "are expected", "is expected", "will", "projecting" and other similar words and phrases. Factors that could affect these forward-looking statements include, but are not limited to, the global economic environment; lower than expected customer orders and potential weakness of the Science and Industry market segments; potential reduced governmental spending due to budget constraints and uncertainty around global sovereign debt, which could affect the Science market segment; potential disruption in the company's operations due to organization changes; risks associated with building and shipping a high percentage of the company's quarterly revenue in the last month of the quarter; risks associated with a high percentage of the company's revenue coming from "turns" business, when the order for a product is placed by the customer in the same quarter as the planned shipment; cyclical changes in the data storage and semiconductor industries, which are the major components of Industry market segment revenue; limitations in our manufacturing capacity for certain products; problems in obtaining necessary product components in sufficient volumes on a timely basis from our supply chain; the relative mix of higher-margin and lower-margin products; fluctuations in foreign exchange rates, which can affect margins or the competitive pricing of our products; additional costs related to future merger and acquisition activity; failure of the company to achieve anticipated benefits of acquisitions and collaborations, including failure to achieve financial goals and integrate acquisitions successfully; reduced profitability due to failure to achieve or sustain margin improvement in service or product manufacturing; potential customer requests to defer planned shipments; increased competition and new product offerings from competitors; lower average sales prices and reduced margins on some product sales due to increased competition; failure of the company's products and technology, including new products, to find acceptance with customers; inability to deploy products as expected or delays in shipping products due to technical problems or barriers; bankruptcy or insolvency of customers or suppliers; changes in tax rate and laws, accounting rules regarding taxes or agreements with tax authorities; the ongoing determination of the effectiveness of foreign exchange hedge transactions; potential shipment or supply chain disruptions due to natural disasters or terrorist attacks; changes to or potential additional restructurings and reorganizations not presently anticipated; reduced sales due to geopolitical risks; changes in trade policies and tariff regulations; changes in the regulatory environment in the nations where we do business; and additional selling, general and administrative or research and development expenses. Please also refer to our Form 10-K, Forms 10-Q, Forms 8-K and other filings with the U.S. Securities and Exchange Commission for additional information on these factors and other factors that could cause actual results to differ materially from the forward-looking statements. FEI assumes no duty to update forward-looking statements.

About FEI

FEI Company (Nasdaq:FEIC) is a leading supplier of scientific instruments for nanoscale applications and solutions in industry and science. With more than 60 years of technological innovation and leadership, FEI has set the performance standard in transmission electron microscopes (TEM), scanning electron microscopes (SEM) and DualBeams™, which combine a SEM with a focused ion beam (FIB). Headquartered in Hillsboro, Ore., USA, FEI has over 2,500 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)
March 31, December 31, April 1,
2013 2012 2012
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 271,675 $ 266,302 $ 252,277
Short-term investments in marketable securities 97,590 79,532 60,061
Short-term restricted cash 14,257 14,522 18,434
Receivables, net 215,833 211,160 216,704
Inventories, net 185,254 192,540 194,051
Deferred tax assets 11,760 12,245 17,344
Other current assets 31,004 29,332 31,578
Total current assets 827,373 805,633 790,449
Non-current investments in marketable securities 28,190 29,179 33,010
Long-term restricted cash 29,936 27,425 32,611
Non-current inventories 63,564 65,116 61,687
Property plant and equipment, net 103,743 109,872 96,711
Intangible assets, net 48,806 51,499 16,150
Goodwill 128,172 131,320 80,503
Deferred tax assets 829 5,092 1,618
Other assets, net 8,891 9,087 9,699
TOTAL $ 1,239,504 $ 1,234,223 $ 1,122,438
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $ 55,390 $ 54,847 $ 58,039
Accrued liabilities 50,275 59,273 50,489
Deferred revenue 83,699 74,736 75,359
Income taxes payable 1,952 1,343 10,802
Accrued restructuring, reorganization and relocation 2,796 2,692 2,265
Convertible debt 89,010 89,010
Other current liabilities 36,527 36,902 47,600
Total current liabilities 319,649 318,803 244,554
Convertible debt 89,011
Other liabilities 67,107 75,517 46,966
SHAREHOLDERS' EQUITY:
Preferred stock - 500 shares authorized; none issued and outstanding
Common stock - 70,000 shares authorized; 38,567, 38,478 and 37,935 shares issued and outstanding at March 31, 2013, December 31, 2012 and April 1, 2012 523,387 516,907 496,644
Retained earnings 308,130 284,440 204,328
Accumulated other comprehensive income 21,231 38,556 40,935
Total shareholders' equity 852,748 839,903 741,907
TOTAL $ 1,239,504 $ 1,234,223 $ 1,122,438
FEI Company and Subsidiaries
Consolidated Statements of Operations
(In thousands, except per share amounts)
(Unaudited)
Thirteen Weeks Ended
March 31, December 31, April 1,
2013 2012 2012
NET SALES:
Products $ 169,495 $ 177,149 $ 169,344
Service 51,694 53,797 48,211
Total net sales 221,189 230,946 217,555
COST OF SALES:
Products 85,183 87,560 87,338
Service 33,455 34,452 32,106
Total cost of sales 118,638 122,012 119,444
Gross margin 102,551 108,934 98,111
OPERATING EXPENSES:
Research and development 24,809 25,029 22,722
Selling, general and administrative 43,524 44,420 41,323
Restructuring, reorganization and relocation 695 2,859
Total operating expenses 69,028 72,308 64,045
OPERATING INCOME 33,523 36,626 34,066
OTHER EXPENSE, NET (1,505) (2,509) (2,063)
INCOME BEFORE TAXES 32,018 34,117 32,003
INCOME TAX EXPENSE 5,217 4,315 6,336
NET INCOME $ 26,801 $ 29,802 $ 25,667
BASIC NET INCOME PER SHARE DATA $ 0.70 $ 0.78 $ 0.68
DILUTED NET INCOME PER SHARE DATA $ 0.65 $ 0.72 $ 0.63
WEIGHTED AVERAGE SHARES OUTSTANDING:
Basic 38,522 38,295 37,886
Diluted 42,136 41,897 41,518
FEI Company and Subsidiaries
Consolidated Statements of Operations
(Unaudited)
Thirteen Weeks Ended (1)
March 31, December 31, April 1,
2013 2012 2012
NET SALES:
Products 76.6% 76.7% 77.8%
Service 23.4 23.3 22.2
Total net sales 100.0% 100.0% 100.0%
COST OF SALES:
Products 38.5% 37.9% 40.1%
Service 15.1 14.9 14.8
Total cost of sales 53.6% 52.8% 54.9%
GROSS MARGIN:
Products 49.7% 50.6% 48.4%
Service 35.3 36.0 33.4
Gross margin 46.4 47.2 45.1
OPERATING EXPENSES:
Research and development 11.2% 10.8% 10.4%
Selling, general and administrative 19.7 19.2 19.0
Restructuring, reorganization and relocation 0.3 1.2
Total operating expenses 31.2% 31.3% 29.4%
OPERATING INCOME 15.2% 15.9% 15.7%
OTHER EXPENSE, NET (0.7)% (1.1)% (0.9)%
INCOME BEFORE TAXES 14.5% 14.8% 14.7%
INCOME TAX EXPENSE 2.4% 1.9% 2.9%
NET INCOME 12.1% 12.9% 11.8%
(1) Percentages may not add due to rounding.
FEI COMPANY
Supplemental Data Table
($ in millions, except per share amounts)
(Unaudited)
Q1 Ended March 31, 2013 Q4 Ended December 31, 2012 Q1 Ended April 1, 2012
Income Statement Highlights
Consolidated sales $ 221.2 $ 230.9 $ 217.6
Gross margin 46.4% 47.2% 45.1%
Stock compensation expense $ 4.4 $ 4.1 $ 3.6
Net income $ 26.8 $ 29.8 $ 25.7
Diluted net income per share $ 0.65 $ 0.72 $ 0.63
Interest income add back included in the calculation of diluted EPS $ 0.5 $ 0.5 $ 0.5
Sales Highlights
Sales by Segment
Industry $ 99.1 $ 91.6 $ 111.7
Science 122.1 139.3 105.9
Sales by Geography
USA & Canada $ 68.7 $ 71.7 $ 69.1
Europe 65.7 70.3 63.0
Asia-Pacific and Rest of World 86.8 88.9 85.5
Gross Margin by Segment
Industry 51.0% 49.1% 50.7%
Science 42.6 45.9 39.2
Bookings and Backlog
Bookings - Total $ 230.7 $ 230.5 $ 221.8
Book-to-bill Ratio 1.04 1.00 1.02
Backlog - Total $ 434.2 $ 424.8 $ 434.9
Backlog - Service 102.0 96.9 93.8
Bookings by Segment
Industry $ 104.5 $ 93.0 $ 125.1
Science 126.2 137.5 96.7
Bookings by Geography
USA & Canada $ 55.5 $ 78.4 $ 63.2
Europe 64.0 83.7 54.7
Asia-Pacific and Rest of World 111.2 68.4 103.9
Balance Sheet Highlights
Cash, equivalents, investments, restricted cash $ 441.6 $ 417.0 $ 396.4
Operating cash generated (used) $ 34.8 $ 59.6 $ (32.2)
Accounts receivable $ 215.8 $ 211.2 $ 216.7
Days sales outstanding (DSO) 89 83 91
Inventory turnover 1.9 1.9 1.9
Fixed asset investment $ 5.0 $ 7.4 $ 6.2
Depreciation expense $ 5.8 $ 6.5 $ 5.2
Working capital $ 507.7 $ 486.8 $ 545.9
Headcount (permanent and temporary) 2,576 2,518 2,221
Euro average rate 1.322 1.295 1.315
Euro ending rate 1.282 1.321 1.335
Yen average rate 91.775 80.896 78.928
Yen ending rate 94.160 86.025 82.035

CONTACT: FEI Company Fletcher Chamberlin Communications Director (503) 726-7710 fletcher.chamberlin@fei.com

Source:FEI Company