HILLSBORO, Ore., Feb. 3, 2010 (GLOBE NEWSWIRE) -- FEI Company (Nasdaq:FEIC) reported fourth quarter revenue that was the highest for any quarter in the company’s history. Fourth quarter bookings were also strong and the company ended the year with a record backlog. For the full year, operating income increased on a 4% decline in revenue.
For the fourth quarter, net bookings were $163.3 million. Bookings were 9% above third-quarter bookings of $149.7 million and 6% above last year’s fourth quarter total of $153.8 million. Net sales of $154.4 million were up 10% compared to the third quarter of 2009 and up 2% from the fourth quarter of 2008. The backlog at the end of the quarter was a record $354.6 million, of which approximately 90% is expected to ship in the next 12 months.
Net income for the fourth quarter of 2009 was $6.6 million, up 9% compared with $6.1 million in the third quarter of 2009 and down 10% compared with $7.3 million in last year’s fourth quarter. Diluted earnings per share in the latest quarter were $0.17, compared with $0.16 in the third quarter of 2009 and $0.20 in the fourth quarter of 2008. Operating income in the quarter was $9.0 million, compared with $7.9 million in the third quarter of 2009 and $11.2 million in last year’s fourth quarter. Restructuring expenses in the latest quarter reduced operating income by $0.8 million or $0.02 per diluted share. The tax rate for the latest quarter was 14.0%, compared with 14.5% in the third quarter and 27.6% in last year’s fourth quarter.
For all of 2009, bookings were $601.4 million, compared with $620.0 million in 2008. Revenue was $577.3 million, compared with $599.2 million in 2008. Operating income was $31.6 million, compared to $31.1 million in 2008. Net income was $22.6 million compared with $18.0 million, and earnings per share were $0.60, compared with $0.48 in the prior year.
For the year and the quarter the company continued to improve its balance sheet and liquidity. Total cash and investments, net of debt, increased to $269.4 million, up $36.3 million in the quarter and $65.1 million for the year. Shareholders’ equity increased to $567.5 million at the end of 2009 from $519.1 million at the end of the prior year. Net cash provided by operating activities was positive $45.5 million for the quarter and $78.2 million for the year.
“Bookings, revenue and cash flow were strong in the fourth quarter,” said Don Kania, president and CEO of FEI. “We again demonstrated the strength of our market and geographic diversity, with particular strength in Electronics, Life Sciences and Asia. For the full year, FEI showed resilience and improved operating results, with increased gross margins and operating income despite a small decline in revenue, combined with substantial cash generation. Gross margins were disappointing in the fourth quarter as we addressed some issues in our emerging Life Sciences business, but we remain on target with our plans to improve margins in 2010. We enter 2010 with good momentum, based on a record backlog, a recovery in Electronics and an array of recently introduced new products.”
Results for 2008 have been adjusted for the effect of the required adoption on January 1, 2009 of guidance within the FASB’s Accounting Standards Codification, Section 470-20, “Debt-Debt with Conversion and Other Options” -- formerly FSP No. APB 14-1, “Accounting for Convertible Debt Instruments That May Be Settled in Cash Upon Conversion (Including Partial Cash Conversion)”. The restatement reduced reported net income and diluted earnings per share for 2008 by $6.3 million and $0.13 per share. The restatement is related to the company’s zero percent convertible notes. Because the notes were paid off in June 2008, there was no restatement of the Statement of Operations after the second quarter of 2008.
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 2010
Assuming a euro/dollar exchange rate of $1.45, FEI expects net sales in the first quarter of 2010 to be in the range of $150 million to $156 million. Bookings are expected to be at least $145 million. GAAP earnings per share are expected to be in the range of $0.15 to $0.20, including estimated restructuring charges of $0.02 to $0.03 per share.
Investor Conference Call -- 2:00 p.m. Pacific time, Wednesday, February 3, 2010
Parties interested in listening to FEI's quarterly conference call may do so by dialing 1-800-762-8779 (domestic, toll-free) or 1-480-629-9771 (international) and asking for the FEI Fourth Quarter Earnings call, # 4199666. 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. A telephone replay of the call will also be accessible for one month by dialing 1-800-406-7325 (US) or 1-303-590-3030 (international) and entering the access code 4199666#.
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 across many industries: industrial and academic materials research, life sciences, semiconductors, data storage, natural resources and more. With a 60-year history 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’s NanoPorts in North America, Europe and Asia provide centers of technical excellence where its world-class community of customers and specialists collaborate. 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 2010 and future periods; the expected shipment of our backlog; expectations about operating expenses and restructuring expense; expectations for future bookings; expectations about gross margins; expectations about foreign currency rates; and product sales and performance, and performance of certain market segments. Factors that could affect these forward-looking statements include, but are not limited to, the global economic environment; the timing, size, execution and ultimate success of government stimulus programs; lower than expected customer orders and the potential weakness of the Research & Industry, Electronics and Life Sciences market segments; 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 and accounting rules regarding taxes; the ongoing determination of the effectiveness of foreign exchange hedge transactions; valuation of the auction rate securities we hold and classification of them on the balance sheet; 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; failure of customers to adopt new technologies; 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 to find acceptance with customers; delays in new product introduction and the inability to manufacture products in required volumes; inability to deploy products as expected or delays in shipping products due to technical problems or barriers; shipment delays due to supply chain problems; 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; 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) | |||||
| December 31, 2009 | October 4, 2009 | December 31, 2008 | |||
| ASSETS | |||||
| CURRENT ASSETS: | |||||
| Cash and cash equivalents | $124,199 | $147,202 | $146,521 | ||
| Short-term investments in marketable securities | 212,119 | 207,360 | 32,901 | ||
| Short-term restricted cash | 17,141 | 9,984 | 10,994 | ||
| Receivables, net | 152,601 | 163,045 | 139,733 | ||
| Inventories, net | 138,242 | 152,565 | 141,609 | ||
| Deferred tax assets | 2,734 | 2,718 | 2,884 | ||
| Other current assets | 39,470 | 46,970 | 32,926 | ||
| Total current assets | 686,506 | 729,844 | 507,568 | ||
| Non-current investments in marketable securities | 39,662 | 12,882 | 94,098 | ||
| Long-term restricted cash | 35,901 | 26,475 | 34,833 | ||
| Non-current inventories | 44,385 | 42,362 | 41,072 | ||
| Property plant and equipment, net | 81,893 | 81,018 | 76,991 | ||
| Goodwill | 44,615 | 44,626 | 40,964 | ||
| Deferred tax assets | 3,369 | 1,545 | 2,188 | ||
| Other assets, net | 17,638 | 15,879 | 34,458 | ||
| TOTAL | $953,969 | $954,631 | $832,172 | ||
| LIABILITIES AND SHAREHOLDERS’ EQUITY | |||||
| CURRENT LIABILITIES: | |||||
| Accounts payable | $40,587 | $38,310 | $34,964 | ||
| Accrued liabilities | 36,434 | 37,147 | 35,540 | ||
| Deferred revenue | 65,805 | 63,697 | 44,135 | ||
| Income taxes payable | 1,321 | 2,591 | 3,040 | ||
| Accrued restructuring, reorganization and relocation | 32 | 34 | 240 | ||
| Short-term line of credit | 59,600 | 70,800 | -- | ||
| Other current liabilities | 47,693 | 42,926 | 33,732 | ||
| Total current liabilities | 251,472 | 255,505 | 151,651 | ||
| Convertible debt | 100,000 | 100,000 | 115,000 | ||
| Other liabilities | 34,973 | 35,163 | 46,432 | ||
| SHAREHOLDERS’ EQUITY: | |||||
| Preferred stock - 500 shares authorized; none issued and outstanding | -- | -- | -- | ||
| Common stock - 70,000 shares authorized; 37,859, 37,674, and 37,286 shares issued and outstanding at December 31, 2009, October 4, 2009, and December 31, 2008 | 485,557 | 479,670 | 469,893 | ||
| Retained earnings (deficit) | 21,476 | 14,890 | (1,168) | ||
| Accumulated other comprehensive income | 60,491 | 69,403 | 50,364 | ||
| Total shareholders’ equity | 567,524 | 563,963 | 519,089 | ||
| TOTAL | $953,969 | $954,631 | $832,172 | ||
| FEI Company and Subsidiaries | |||||
| Consolidated Statements of Operations | |||||
| (In thousands, except per share amounts) | |||||
| (Unaudited) | |||||
| Thirteen Weeks Ended | Year Ended | ||||
| December 31, 2009 | October 4, 2009 | December 31, 2008 | December 31, 2009 | December 31, 2008 | |
| NET SALES: | |||||
| Products | $118,417 | $105,562 | $117,903 | $439,703 | $461,506 |
| Service and components | 36,032 | 35,237 | 33,823 | 137,641 | 137,673 |
| Total net sales | 154,449 | 140,799 | 151,726 | 577,344 | 599,179 |
| COST OF SALES: | |||||
| Products | 69,635 | 61,658 | 67,791 | 252,307 | 265,543 |
| Service and components | 25,544 | 23,760 | 23,941 | 95,533 | 99,095 |
| Total cost of sales | 95,179 | 85,418 | 91,732 | 347,840 | 364,638 |
| Gross profit | 59,270 | 55,381 | 59,994 | 229,504 | 234,541 |
| OPERATING EXPENSES: | |||||
| Research and development | 17,556 | 16,705 | 16,907 | 67,698 | 70,378 |
| Selling, general and administrative | 31,901 | 30,176 | 31,097 | 126,728 | 128,768 |
| Restructuring, reorganization and relocation | 826 | 601 | 820 | 3,456 | 4,267 |
| Total operating expenses | 50,283 | 47,482 | 48,824 | 197,882 | 203,413 |
| OPERATING INCOME | 8,987 | 7,899 | 11,170 | 31,622 | 31,128 |
| OTHER INCOME (EXPENSE): | |||||
| Interest income | 581 | 498 | 2,535 | 2,880 | 14,362 |
| Interest expense | (1,143) | (1,191) | (1,736) | (5,441) | (14,220) |
| Other, net | (769) | (116) | (1,818) | (1,400) | (4,670) |
| Total other (expense), net | (1,331) | (809) | (1,019) | (3,961) | (4,528) |
| INCOME BEFORE TAXES | 7,656 | 7,090 | 10,151 | 27,661 | 26,600 |
| INCOME TAX EXPENSE | 1,070 | 1,030 | 2,802 | 5,017 | 8,612 |
| NET INCOME | $6,586 | $6,060 | $7,349 | $22,644 | $17,988 |
| BASIC NET INCOME PER SHARE DATA: | $0.17 | $0.16 | $0.20 | $0.60 | $0.49 |
| DILUTED NET INCOME PER SHARE DATA: | $0.17 | $0.16 | $0.20 | $0.60 | $0.48 |
| WEIGHTED AVERAGE SHARES OUTSTANDING: | |||||
| Basic | 37,767 | 37,610 | 37,183 | 37,537 | 36,766 |
| Diluted | 38,194 | 38,067 | 37,446 | 37,905 | 37,158 |
| FEI Company and Subsidiaries | |||||||||||||||
| Consolidated Statements of Operations | |||||||||||||||
| (Unaudited) | |||||||||||||||
| Thirteen Weeks Ended (1) | Year-Ended (1) | ||||||||||||||
| December 31, 2009 | October 4, 2009 | December 31, 2008 | December 31, 2009 | December 31, 2008 | |||||||||||
| NET SALES: | |||||||||||||||
| Products | 76.7% | 75.0% | 77.7% | 76.2% | 77.0% | ||||||||||
| Service and components | 23.3% | 25.0% | 22.3% | 23.8% | 23.0% | ||||||||||
| Total net sales | 100.0% | 100.0% | 100.0% | 100.0% | 100.0% | ||||||||||
| COST OF SALES: | |||||||||||||||
| Products | 45.1% | 43.8% | 44.7% | 43.7% | 44.3% | ||||||||||
| Service and components | 16.5% | 16.9% | 15.8% | 16.5% | 16.5% | ||||||||||
| Total cost of sales | 61.6% | 60.7% | 60.5% | 60.2% | 60.9% | ||||||||||
| Gross profit | 38.4% | 39.3% | 39.5% | 39.8% | 39.1% | ||||||||||
| OPERATING EXPENSES: | |||||||||||||||
| Research and development | 11.4% | 11.9% | 11.1% | 11.7% | 11.7% | ||||||||||
| Selling, general and administrative | 20.7% | 21.4% | 20.5% | 22.0% | 21.5% | ||||||||||
| Restructuring, reorganization and relocation | 0.5% | 0.4% | 0.5% | 0.6% | 0.7% | ||||||||||
| Total operating expenses | 32.6% | 33.7% | 32.2% | 34.3% | 33.9% | ||||||||||
| OPERATING INCOME | 5.8% | 5.6% | 7.4% | 5.5% | 5.2% | ||||||||||
| OTHER INCOME (EXPENSE): | |||||||||||||||
| Interest income | 0.4% | 0.4% | 1.7% | 0.5% | 2.4% | ||||||||||
| Interest expense | -0.7% | -0.9% | -1.1% | -0.9% | -2.4% | ||||||||||
| Other, net | -0.5% | -0.1% | -1.2% | -0.2% | -0.8% | ||||||||||
| Total other (expense), net | -0.9% | -0.6% | -0.7% | -0.7% | -0.8% | ||||||||||
| INCOME BEFORE TAXES | 5.0% | 5.0% | 6.7% | 4.8% | 4.4% | ||||||||||
| INCOME TAX EXPENSE | 0.7% | 0.7% | 1.8% | 0.9% | 1.4% | ||||||||||
| NET INCOME | 4.3% | 4.3% | 4.8% | 3.9% | 3.0% | ||||||||||
| (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 | |||
| 31-Dec-2009 | 4-Oct-2009 | 31-Dec-2008 | |||
| Income Statement Highlights | |||||
| Consolidated sales | $154.4 | $140.8 | $151.7 | ||
| Gross margin | 38.4% | 39.3% | 39.5% | ||
| Stock compensation expense - TOTAL | $2.6 | $2.4 | $2.4 | ||
| Net income | $6.6 | $6.1 | $7.3 | ||
| Diluted net income per share | $0.17 | $0.16 | $0.20 | ||
| Interest income add back included in the calculation of diluted EPS | $0.0 | $0.0 | $0.0 | ||
| Sales by Market Segment | |||||
| Electronics | $33.0 | $31.7 | $32.4 | ||
| Research & Industry | $56.3 | $61.6 | $67.3 | ||
| Life Sciences | $29.1 | $12.3 | $18.2 | ||
| Service and Components | $36.0 | $35.2 | $33.8 | ||
| Sales by Geography | |||||
| USA & Canada | $56.3 | $46.4 | $55.0 | ||
| Europe | $47.3 | $55.1 | $56.7 | ||
| Asia-Pacific and Rest of World | $50.8 | $39.3 | $40.0 | ||
| Bookings | |||||
| Total | $163.3 | $149.7 | $153.8 | ||
| Book-to-bill ratio | 1.06 | 1.06 | 1.01 | ||
| Backlog - total | $354.6 | $345.7 | $330.5 | ||
| Backlog - Service and Components | $68.0 | $64.3 | $57.0 | ||
| Bookings by Market Segment | |||||
| Electronics | $49.9 | $22.5 | $22.2 | ||
| Research & Industry | $58.2 | $80.4 | $82.2 | ||
| Life Sciences | $15.5 | $11.4 | $17.3 | ||
| Service and Components | $39.7 | $35.4 | $32.1 | ||
| Balance Sheet Highlights | |||||
| Cash, equivalents, investments, restricted cash | $429.0 | $403.9 | $319.3 | ||
| Operating cash generated (used) | $45.5 | $20.0 | $25.1 | ||
| Accounts receivable | $152.6 | $163.0 | $139.7 | ||
| Days sales outstanding (DSO) | 90 | 106 | 84 | ||
| Inventory turnover | 2.6 | 2.3 | 2.5 | ||
| Fixed asset investment (during quarter) | $4.1 | $3.8 | $3.5 | ||
| Depreciation expense | $4.5 | $4.4 | $3.9 | ||
| Working capital | $435.0 | $474.3 | $355.9 | ||
| Headcount (permanent and temporary) | 1,781 | 1,779 | 1,803 | ||
| Euro quarterly average rate | 1.4770 | 1.4287 | 1.3207 | ||
| Euro ending rate | 1.4326 | 1.4579 | 1.3892 | ||
CONTACT: FEI Company
Fletcher Chamberlin, Treasurer & Communications Director
(503) 726-7710
fletcher.chamberlin@fei.com
