updated 2/3/2011 4:16:57 PM ET 2011-02-03T21:16:57

Bookings of $218.4 million were up 34% from Last Year's Fourth Quarter

Revenue of $186.1 million was up 20% from Last Year's Fourth Quarter

EPS was $0.52, More Than Three Times Last Year's Fourth Quarter

HILLSBORO, Ore., Feb. 3, 2011 (GLOBE NEWSWIRE) -- For the fourth quarter of 2010, FEI Company (Nasdaq:FEIC) reported the highest quarterly bookings, revenue and earnings in the company's history, with significant year-over-year and sequential quarterly growth. Bookings, revenue and operating income also set records for the full year in 2010.

For the fourth quarter, net bookings were $218.4 million, up 15% from the third quarter of 2010 and up 34% from the fourth quarter of 2009. The backlog at the end of the quarter was $471.9 million, an all-time high. The book-to-bill ratio for the quarter was 1.17 to 1.

Revenue of $186.1 million was up 22% compared to $153.0 million in the third quarter of 2010 and up 20% from $154.4 million in the fourth quarter of 2009. 

Net income was $21.3 million or $0.52 per diluted share, compared with $11.9 million or $0.30 per diluted share in the third quarter of 2010 and $6.6 million or $0.17 per diluted share in the fourth quarter of 2009. 

The gross margin in the fourth quarter was 45.0%, compared with 43.5% in the third quarter of 2010 and 38.4% in the fourth quarter of 2009. Operating income was 15.4% of sales in the quarter, compared with 11.5% in the third quarter of 2010 and 5.8% in the fourth quarter of 2009.

Gross cash, investments and restricted cash, net of debt, increased by $41.3 million in the quarter to $334.8 million at year-end.

"This quarter's record bookings mark our fifth straight quarter of bookings growth," said Don Kania, president and CEO of FEI, "as each of our market segments recorded sequential and year-over-year growth. Our record revenue was powered by particularly strong shipments to the Electronics market, which also contributed to the highest gross margin percentage in almost a decade. It was an excellent quarter for bookings, revenue, margins and earnings.

"Looking forward, our substantial backlog helps to provide good visibility for the first half of 2011," Kania continued.  "While margins may moderate somewhat from the fourth quarter level due to product mix, we expect continued operating improvements and a growth year for revenue and earnings."

For the full year 2010, bookings of $751.5 million were up 25% from 2009, and revenue of $634.2 million was up 10% from 2009. Net income was $53.5 million, 136% above 2009's net income. Diluted earnings per share were $1.34, more than double 2009's $0.60. Net cash increased by $65.4 million during the year.

Bookings and revenue comparisons for the company's market segments and other data are included in the supplementary information attached to this release, along with detailed statements of operations and balance sheets. 

Guidance for Q1 2011

Assuming a euro exchange rate of $1.40, FEI expects revenue in the first quarter of 2011 to be in the range of $180 million to $190 million. Bookings are expected to be in the range of $175 million to $195 million. GAAP earnings per share are expected to be in the range of $0.43 to $0.49.

Investor Conference Call -- 2:00 p.m. Pacific time, Thursday, February 3, 2011

Parties interested in listening to FEI's quarterly conference call may do so by dialing 1-800-762-8779 (U.S., toll-free) or 1-480-629-9771 (international and toll), with the conference title: FEI Fourth Quarter Earnings Call, Conference ID 4400158. 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: 4400158#. 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.

About FEI

FEI (Nasdaq:FEIC) is a leading diversified scientific instruments company. It is a premier provider of electron and ion-beam microscopes and tools for nanoscale applications globally and across many industries: industrial and academic materials research, life sciences, semiconductors, data storage, natural resources and more. With a history of over 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). FEI's imaging systems provide 3D characterization, analysis and modification/prototyping with resolutions down to the sub-Angstrom (one-tenth of a nanometer) level. FEI has approximately 1,800 employees and sales and service operations in more than 50 countries around the world. More information can be found at: www.fei.com.

The FEI Company logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=6379

Safe Harbor Statement

This news release contains forward-looking statements that include our guidance for the first quarter of 2011 and future periods. Such forward-looking statements may be identified by words and phrases that refer to future expectations, such as "believe", "guidance", "expect", "expects", "are expected", "will", "estimate", "assuming" and other similar words and phrases. Forward-looking statements in the release specifically relate to the expected shipment of our backlog; expectations for future bookings; expectations about foreign currency rates; expected tax rates; expectations for product sales and margins, and operating improvements. 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 Research & Industry, Electronics and Life Sciences market segments; our ability to manufacture product at expected volumes; supply chain limitations; bankruptcy or insolvency of customers or suppliers; cyclical changes in the data storage and semiconductor industries, which are the major components of Electronics market revenue; fluctuations in foreign exchange, interest and tax rates; 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; reduced profitability due to failure to achieve or sustain margin improvement in service or product manufacturing; the relative mix of higher-margin and lower-margin products; failure to achieve expected cost reductions and other improvements from restructuring plans; risks associated with shipping a high percentage of the company's quarterly revenue in the last month of the quarter; 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; 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; additional selling, general and administrative or research and development expenses; reduced governmental spending due to budget constraints; additional costs related to future merger and acquisition activity; and failure of the company to achieve anticipated benefits of acquisitions and collaborations, including failure to achieve financial goals and integrate future acquisitions successfully. 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.

FEI Company and Subsidiaries
Consolidated Balance Sheets
(In thousands)
(Unaudited)
       
ASSETS December 31,

2010
October 3,

2010
December 31,

2009
CURRENT ASSETS:      
Cash and cash equivalents  $ 277,617  $ 241,013  $ 124,199
Short-term investments in marketable securities 44,026 38,341 212,119
Short-term restricted cash 22,114 16,177 17,141
Receivables, net 183,254 179,570 152,601
Inventories, net 155,964 159,728 138,242
Deferred tax assets 11,505 14,928 2,734
Other current assets  23,126  40,055  39,470
       
Total current assets 717,606 689,812 686,506
       
Non-current investments in marketable securities 38,662 45,102 39,662
       
Long-term restricted cash 41,377 41,863 35,901
       
Non-current inventories 47,976 43,935 44,385
       
Property plant and equipment, net 80,681 79,382 81,893
       
Goodwill 44,800 44,816 44,615
       
Deferred tax assets 1,072 8,392 3,369
       
Other assets, net  12,248  13,189  17,638
       
TOTAL  $ 984,422  $ 966,491  $ 953,969
       
LIABILITIES AND SHAREHOLDERS' EQUITY      
       
CURRENT LIABILITIES:      
Accounts payable  $ 51,529  $ 50,779  $ 40,587
Accrued liabilities 51,209 42,778 36,434
Deferred revenue 81,445 76,302 65,805
Income taxes payable 3,715 5,349 1,321
Accrued restructuring, reorganization and relocation  4,884 5,583 32
Short-term line of credit  --   --  59,600
Other current liabilities   31,306  34,826  47,693
       
Total current liabilities 224,088 215,617 251,472
       
Convertible debt 89,012 89,012 100,000
       
Other liabilities 38,148 41,670 34,973
       
SHAREHOLDERS' EQUITY:      
Preferred stock - 500 shares authorized; none issued and outstanding  --   --   -- 
Common stock - 70,000 shares authorized; 38,280, 38,228, and 37,859 shares issued and outstanding at December 31, October 3, 2010, and December 31, 2009 509,145 508,081 485,557
Retained earnings 75,024 53,680 21,476
Accumulated other comprehensive income   49,005  58,431  60,491
       
Total shareholders' equity  633,174  620,192  567,524
       
TOTAL  $ 984,422  $ 966,491  $ 953,969
 
FEI Company and Subsidiaries
Consolidated Statements of Operations
(In thousands, except per share amounts)
(Unaudited)
           
  Thirteen Weeks Ended Year Ended
  December 31,

2010
October 3,

2010
December 31,

2009
December 31,

2010
December 31,

2009
           
NET SALES:          
Products  $ 145,548   $ 113,424   $ 118,417   $ 479,780   $ 439,703 
Service and components  40,522   39,581   36,032   154,442   137,641 
Total net sales  186,070   153,005   154,449   634,222   577,344 
           
COST OF SALES:          
Products  75,087   60,728   69,635   262,571   252,307 
Service and components  27,261   25,748   25,544   102,387   95,533 
Total cost of sales  102,348   86,476   95,179   364,958   347,840 
           
Gross profit  83,722   66,529   59,270   269,264   229,504 
           
OPERATING EXPENSES:          
Research and development   17,584   15,942   17,556   66,274   67,698 
Selling, general and administrative  36,851   32,435   31,901   136,465   126,728 
Restructuring, reorganization and relocation  562   536   826   11,067   3,456 
Total operating expenses  54,997   48,913   50,283   213,806   197,882 
           
OPERATING INCOME  28,725   17,616   8,987   55,458   31,622 
           
OTHER INCOME (EXPENSE):          
Interest income  468   440   581   2,632   2,880 
Interest expense  (958)  (1,025)  (1,143)  (4,504)  (5,441)
Other, net  (153)  (472)  (769)  (1,364)  (1,400)
Total other (expense), net  (643)  (1,057)  (1,331)  (3,236)  (3,961)
           
INCOME BEFORE TAXES  28,082   16,559   7,656   52,222   27,661 
           
INCOME TAX EXPENSE (BENEFIT)  6,738   4,639   1,070   (1,326)  5,017 
           
NET INCOME  $ 21,344   $ 11,920   $ 6,586   $ 53,548   $ 22,644 
           
BASIC NET INCOME PER SHARE DATA  $ 0.56   $ 0.31   $ 0.17   $ 1.41   $ 0.60 
           
DILUTED NET INCOME PER SHARE DATA  $ 0.52   $ 0.30   $ 0.17   $ 1.34   $ 0.60 
           
WEIGHTED AVERAGE SHARES OUTSTANDING:          
 Basic  38,209   38,186   37,767   38,083   37,537 
 Diluted  41,676   41,536   38,194   41,737   37,905 
 
FEI Company and Subsidiaries
Consolidated Statements of Operations
(Unaudited)
           
  Thirteen Weeks Ended (1) Year Ended
  December 31,

2010
October 3,

2010
December 31,

2009
December 31,

2010
December 31,

2009
           
NET SALES:          
Products 78.2% 74.1% 76.7% 75.6% 76.2%
Service and components 21.8% 25.9% 23.3% 24.4% 23.8%
Total net sales 100.0% 100.0% 100.0% 100.0% 100.0%
           
COST OF SALES:          
Products 40.4% 39.7% 45.1% 41.4% 43.7%
Service and components 14.7% 16.8% 16.5% 16.1% 16.5%
Total cost of sales 55.0% 56.5% 61.6% 57.5% 60.2%
           
Gross profit 45.0% 43.5% 38.4% 42.5% 39.8%
           
OPERATING EXPENSES:          
Research and development  9.5% 10.4% 11.4% 10.4% 11.7%
Selling, general and administrative 19.8% 21.2% 20.7% 21.5% 22.0%
Restructuring, reorganization and relocation 0.3% 0.4% 0.5% 1.7% 0.6%
Total operating expenses 29.6% 32.0% 32.6% 33.7% 34.3%
           
OPERATING INCOME 15.4% 11.5% 5.8% 8.7% 5.5%
           
OTHER INCOME (EXPENSE):          
Interest income 0.3% 0.3% 0.4% 0.4% 0.5%
Interest expense -0.5% -0.7% -0.7% -0.7% -0.9%
Other, net -0.1% -0.3% -0.5% -0.2% -0.2%
Total other (expense), net -0.3% -0.7% -0.9% -0.5% -0.7%
           
INCOME BEFORE TAXES 15.1% 10.8% 5.0% 8.2% 4.8%
           
INCOME TAX EXPENSE (BENEFIT) 3.6% 3.0% 0.7% -0.2% 0.9%
           
NET INCOME 11.5% 7.8% 4.3% 8.4% 3.9%
           
(1) Percentages may not add due to rounding.          
FEI COMPANY    
Supplemental Data Table     
($ in millions, except per share amounts)    
(Unaudited)    
           
  Q4 Ended Q3 Ended Q4 Ended YTD Ended YTD Ended
  31-Dec-2010 3-Oct-2010 31-Dec-2009 31-Dec-2010 31-Dec-2009
Income Statement Highlights          
Consolidated sales $186.1 $153.0 $154.4 $634.2 $577.3
Gross margin 45.0% 43.5% 38.4% 42.5% 39.8%
Stock compensation expense - TOTAL $2.5 $2.5 $2.6 $10.5 $10.6
Net income $21.3 $11.9 $6.6 $53.5 $22.6
Diluted net income per share  $0.52 $0.30 $0.17 $1.34 $0.60
Interest income add back included in the calculation of diluted EPS $0.5 $0.6 $0.0 $2.3 $0.0
Sales Highlights          
Sales by Market Segment          
Electronics $80.7 $44.0 $33.0 $222.8 $126.4
Research & Industry $47.3 $51.1 $56.3 $182.4 $231.5
Life Sciences $17.6 $18.3 $29.1 $74.6 $81.8
Service and Components $40.5 $39.6 $36.0 $154.4 $137.6
Sales by Geography           
USA & Canada $68.0 $43.7 $56.3 $204.0 $198.6
Europe $62.0 $54.1 $47.3 $207.4 $211.8
Asia-Pacific and Rest of World $56.1 $55.2 $50.8 $222.8 $166.9
Gross Margin by Market Segment          
Electronics 53.7% 50.2% 50.8% 50.2% 48.8%
Research & Industry 42.3% 43.3% 41.6% 41.0% 42.0%
Life Sciences 40.7% 46.2% 29.5% 41.0% 34.7%
Service and Components 32.7% 34.9% 29.1% 33.7% 30.6%
Bookings and Backlog          
Total $218.4 $190.1 $163.3 $751.5 $601.4
Book-to-bill ratio 1.17 1.24 1.06 1.18 1.04
Backlog - total $471.9 $439.6 $354.6 $471.9 $354.6
Backlog - Service and Components $81.3 $80.8 $68.0 $81.3 $68.0
Bookings by Market Segment          
Electronics $76.2 $59.6 $49.9 $263.8 $140.7
Research & Industry $77.6 $72.9 $58.2 $232.8 $235.4
Life Sciences $23.5 $18.4 $15.5 $87.1 $76.7
Service and Components $41.1 $39.2 $39.7 $167.8 $148.6
Bookings by Geography          
USA & Canada $80.9 $65.8 $45.6 $258.6 $203.3
Europe $59.5 $63.9 $63.0 $220.9 $229.7
Asia-Pacific and Rest of World $78.0 $60.4 $54.7 $272.0 $168.4
Balance Sheet Highlights           
Cash, equivalents, investments, restricted cash $423.8 $382.5 $429.0 $423.8 $429.0
Operating cash generated (used) $52.5 ($3.5) $42.7 $75.0 $68.1
Accounts receivable $183.3 $179.6 $152.6 $183.3 $152.6
Days sales outstanding (DSO) 90 107 90 90 90
Inventory turnover 2.6 2.4 2.6 2.6 2.6
Fixed asset investment  $3.6 $0.9 $4.1 $8.9 $13.4
Depreciation expense  $4.5 $4.3 $4.5 $17.4 $17.1
Working capital $493.5 $474.2 $435.0 $493.5 $435.0
Headcount (permanent and temporary) 1,813 1,810 1,781 1,813 1,781
Euro average rate 1.360 1.292 1.477 1.327 1.389
Euro ending rate 1.339 1.375 1.433 1.339 1.433
CONTACT: FEI Company
         Fletcher Chamberlin
         Treasurer & Communications Director
         (503) 726-7710
         fletcher.chamberlin@fei.com

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