Exhibit 99.1
NEWS RELEASE
For more information contact:
FEI Company
Fletcher Chamberlin
Treasurer & Communications Director
(503) 726-7710
fletcher.chamberlin@fei.com
FEI Reports Record Revenue and Bookings for the Third Quarter of 2012
Diluted EPS of $0.71 Increases 13% from a Year Ago
HILLSBORO, Ore., October 30, 2012 - FEI Company (NASDAQ: FEIC) reported record revenue and bookings for the third quarter ended September 30, 2012, and earnings were the highest for any third quarter in the company's history.
Third quarter revenue of $221.8 million was up 8% compared to $205.3 million in the third quarter of 2011 and up from $221.5 million in the second quarter of 2012.
The gross margin in the third quarter was 47.0%, compared with 44.4% in the third quarter of 2011 and 47.2% in the second quarter of 2012.
GAAP net income was $29.2 million, compared with $26.2 million in the third quarter of 2011 and $30.3 million in the second quarter of 2012. Earnings per share in this quarter were $0.71 per diluted share, compared with $0.63 per diluted share in the third quarter of 2011 and $0.74 per diluted share in the second quarter of 2012.
Net bookings were $223.3 million for the third quarter of 2012, up 20% from $186.4 million in the third quarter of 2011 and up 6% from $210.1 million in the second quarter of 2012. The book-to-bill ratio for the quarter was 1.01 to 1, and the backlog at the end of the quarter was $425.2 million.
Total cash, investments and restricted cash at the end of the quarter were $359.8 million, compared with $419.8 million at the end of the second quarter of 2012. During the third quarter, the company invested $63.2 million in two acquisitions, reached a patent cross-license agreement for $15.0 million and paid its first ever quarterly dividend of $3.0 million. Operating cash flow was positive $16.2 million for the quarter.
“We had another good quarter, with revenue growth in spite of a normally weak seasonal period and an uncertain economic environment,” commented Don Kania, president and CEO. “Margins were as expected and earnings were ahead of our guidance. Bookings growth compared with both last year's third quarter and this year's second quarter was driven by our electronics and natural resources businesses. Bookings growth was also strong in Europe compared with both prior periods. We are looking forward to a seasonally strong fourth quarter for bookings, revenue and earnings.”
Guidance for Q4 2012
For the fourth quarter of 2012, revenue is expected to be in the range of $223 million to $233 million, and bookings are expected to be another record of at least $225 million. GAAP earnings per share are expected to be in the range of $0.64 to $0.72, which includes restructuring costs estimated at $0.04, assuming a 20% effective tax rate.
Investor Conference Call -- 2:00 p.m. Pacific time, Tuesday, October 30, 2012
Parties interested in listening to FEI's quarterly conference call may do so by dialing 1-877-941-6010 (U.S., toll-free) or 1-480-629-9643 (international and toll), with the conference title: FEI Third Quarter Earnings Call, Conference ID 4570620. 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: 4570620#. 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 our guidance for revenue, earnings per share and bookings for the fourth quarter of 2012. Forward-looking statements may also be identified by words and phrases that refer to future expectations, such as “guidance”, “guiding” , “expect”, “expects”, “expected”, “will”, “projecting”, “estimate”, 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 Materials Science, Electronics and Life Sciences market segments; potential reduced governmental spending due to budget constraints, the potential “fiscal cliff” and uncertainty around global sovereign debt; 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; bankruptcy or insolvency of customers or suppliers; cyclical changes in the semiconductor industry (which is the major component 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; risks associated with building and 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 develop or 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; 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 recent and 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.
About FEI
FEI Company (Nasdaq: FEIC) is a leading supplier of scientific instruments for nanoscale applications across many industries: materials science, life sciences, semiconductors, data storage, natural resources and more. 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 2,300 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)
|
| | | | | | | | | | | |
| | September 30,
2012 | | July 1,
2012 | | December 31,
2011 |
| ASSETS | | | | | |
| CURRENT ASSETS: | | | | | |
| Cash and cash equivalents | $ | 261,892 |
| | $ | 324,245 |
| | $ | 320,361 |
|
| Short-term investments in marketable securities | 37,914 |
| | 35,990 |
| | 16,213 |
|
| Short-term restricted cash | 5,993 |
| | 10,672 |
| | 22,564 |
|
| Receivables, net | 221,814 |
| | 212,261 |
| | 185,955 |
|
| Inventories, net | 196,504 |
| | 193,297 |
| | 182,010 |
|
| Deferred tax assets | 16,696 |
| | 19,965 |
| | 18,899 |
|
| Other current assets | 34,593 |
| | 39,797 |
| | 27,964 |
|
| Total current assets | 775,406 |
| | 836,227 |
| | 773,966 |
|
| Non-current investments in marketable securities | 31,840 |
| | 24,059 |
| | 53,341 |
|
| Long-term restricted cash | 22,165 |
| | 24,876 |
| | 43,669 |
|
| Non-current inventories | 66,366 |
| | 64,029 |
| | 57,575 |
|
| Property plant and equipment, net | 99,774 |
| | 97,367 |
| | 85,082 |
|
| Intangible assets, net | 52,416 |
| | 15,347 |
| | 6,938 |
|
| Goodwill | 129,667 |
| | 79,743 |
| | 58,053 |
|
| Deferred tax assets | 4,573 |
| | 658 |
| | 934 |
|
| Other assets, net | 9,185 |
| | 10,042 |
| | 10,351 |
|
| TOTAL | $ | 1,191,392 |
| | $ | 1,152,348 |
| | $ | 1,089,909 |
|
| LIABILITIES AND SHAREHOLDERS’ EQUITY | | | | | |
| CURRENT LIABILITIES: | | | | | |
| Accounts payable | $ | 57,945 |
| | $ | 61,553 |
| | $ | 52,470 |
|
| Accrued liabilities | 58,855 |
| | 53,969 |
| | 67,386 |
|
| Deferred revenue | 69,722 |
| | 73,042 |
| | 72,730 |
|
| Income taxes payable | 8,355 |
| | 17,756 |
| | 11,260 |
|
| Accrued restructuring, reorganization and relocation | — |
| | — |
| | 2,213 |
|
| Convertible debt | 89,010 |
| | 89,011 |
| | — |
|
| Other current liabilities | 53,402 |
| | 57,787 |
| | 48,623 |
|
| Total current liabilities | 337,289 |
| | 353,118 |
| | 254,682 |
|
| Convertible debt | — |
| | — |
| | 89,011 |
|
| Other liabilities | 58,713 |
| | 48,643 |
| | 49,402 |
|
| SHAREHOLDERS’ EQUITY: | | | | | |
| Preferred stock - 500 shares authorized; none issued and outstanding | — |
| | — |
| | — |
|
| Common stock - 70,000 shares authorized; 38,107, 38,075 and 37,866 shares issued and outstanding at September 30, 2012, July 1, 2012 and December 31, 2011 | 507,912 |
| | 503,799 |
| | 493,698 |
|
| Retained earnings | 257,684 |
| | 231,575 |
| | 178,661 |
|
| Accumulated other comprehensive income | 29,794 |
| | 15,213 |
| | 24,455 |
|
| Total shareholders’ equity | 795,390 |
| | 750,587 |
| | 696,814 |
|
| TOTAL | $ | 1,191,392 |
| | $ | 1,152,348 |
| | $ | 1,089,909 |
|
FEI Company and Subsidiaries
Consolidated Statements of Operations
(In thousands, except per share amounts)
(Unaudited)
|
| | | | | | | | | | | | | | | | | | | |
| | Thirteen Weeks Ended | | Thirty-Nine Weeks Ended |
| | September 30,
2012 | | July 1,
2012 | | October 2,
2011 | | September 30,
2012 | | October 2,
2011 |
| NET SALES: | | | | | | | | | |
| Products | $ | 172,359 |
| | $ | 172,644 |
| | $ | 161,255 |
| | $ | 514,347 |
| | $ | 486,183 |
|
| Service and components | 49,426 |
| | 48,808 |
| | 44,080 |
| | 146,445 |
| | 127,253 |
|
| Total net sales | 221,785 |
| | 221,452 |
| | 205,335 |
| | 660,792 |
| | 613,436 |
|
| COST OF SALES: | | | | | | | | | |
| Products | 86,333 |
| | 85,993 |
| | 85,228 |
| | 259,664 |
| | 255,079 |
|
| Service and components | 31,296 |
| | 31,030 |
| | 28,882 |
| | 94,432 |
| | 85,533 |
|
| Total cost of sales | 117,629 |
| | 117,023 |
| | 114,110 |
| | 354,096 |
| | 340,612 |
|
| Gross margin | 104,156 |
| | 104,429 |
| | 91,225 |
| | 306,696 |
| | 272,824 |
|
| OPERATING EXPENSES: | | | | | | | | | |
| Research and development | 23,908 |
| | 23,306 |
| | 19,212 |
| | 69,936 |
| | 56,771 |
|
| Selling, general and administrative | 41,931 |
| | 42,045 |
| | 37,051 |
| | 125,299 |
| | 111,607 |
|
| Restructuring, reorganization and relocation | — |
| | — |
| | 47 |
| | — |
| | 1,115 |
|
| Total operating expenses | 65,839 |
| | 65,351 |
| | 56,310 |
| | 195,235 |
| | 169,493 |
|
| OPERATING INCOME | 38,317 |
| | 39,078 |
| | 34,915 |
| | 111,461 |
| | 103,331 |
|
| OTHER INCOME (EXPENSE), NET | (1,712 | ) | | (1,255 | ) | | (601 | ) | | (5,030 | ) | | (1,716 | ) |
| INCOME BEFORE TAXES | 36,605 |
| | 37,823 |
| | 34,314 |
| | 106,431 |
| | 101,615 |
|
| INCOME TAX EXPENSE (BENEFIT) | 7,447 |
| | 7,530 |
| | 8,137 |
| | 21,313 |
| | 27,066 |
|
| NET INCOME | $ | 29,158 |
| | $ | 30,293 |
| | $ | 26,177 |
| | $ | 85,118 |
| | $ | 74,549 |
|
| BASIC NET INCOME PER SHARE DATA | $ | 0.76 |
| | $ | 0.80 |
| | $ | 0.68 |
| | $ | 2.24 |
| | $ | 1.93 |
|
| DILUTED NET INCOME PER SHARE DATA | 0.71 |
| | 0.74 |
| | 0.63 |
| | 2.08 |
| | 1.80 |
|
| WEIGHTED AVERAGE SHARES OUTSTANDING: | | | | | | | | | |
| Basic | 38,082 |
| | 37,993 |
| | 38,421 |
| | 37,987 |
| | 38,628 |
|
| Diluted | 41,771 |
| | 41,614 |
| | 42,030 |
| | 41,644 |
| | 42,284 |
|
FEI Company and Subsidiaries
Consolidated Statements of Operations
(Unaudited)
|
| | | | | | | | | | | | | | |
| | Thirteen Weeks Ended (1) | | Twenty-Six Weeks Ended (1) |
| | September 30,
2012 | | July 1,
2012 | | October 2,
2011 | | September 30,
2012 | | October 2,
2011 |
| NET SALES: | | | | | | | | | |
| Products | 77.7 | % | | 78.0 | % | | 78.5 | % | | 77.8 | % | | 79.3 | % |
| Service and components | 22.3 |
| | 22.0 |
| | 21.5 |
| | 22.2 |
| | 20.7 |
|
| Total net sales | 100.0 | % | | 100.0 | % | | 100.0 | % | | 100.0 | % | | 100.0 | % |
| COST OF SALES: | | | | | | | | | |
| Products | 38.9 | % | | 38.8 | % | | 41.5 | % | | 39.3 | % | | 41.6 | % |
| Service and components | 14.1 |
| | 14.0 |
| | 14.1 |
| | 14.3 |
| | 13.9 |
|
| Total cost of sales | 53.0 | % | | 52.8 | % | | 55.6 | % | | 53.6 | % | | 55.5 | % |
| GROSS MARGIN: | | | | | | | | | |
| Products | 49.9 | % | | 50.2 | % | | 47.1 | % | | 49.5 | % | | 47.5 | % |
| Service and components | 36.7 |
| | 36.4 |
| | 34.5 |
| | 35.5 |
| | 32.8 |
|
| Gross margin | 47.0 |
| | 47.2 |
| | 44.4 |
| | 46.4 |
| | 44.5 |
|
| OPERATING EXPENSES: | | | | | | | | | |
| Research and development | 10.8 | % | | 10.5 | % | | 9.4 | % | | 10.6 | % | | 9.3 | % |
| Selling, general and administrative | 18.9 |
| | 19.0 |
| | 18.0 |
| | 19.0 |
| | 18.2 |
|
| Restructuring, reorganization and relocation | — |
| | — |
| | — |
| | — |
| | 0.2 |
|
| Total operating expenses | 29.7 | % | | 29.5 | % | | 27.4 | % | | 29.5 | % | | 27.6 | % |
| OPERATING INCOME | 17.3 | % | | 17.6 | % | | 17.0 | % | | 16.9 | % | | 16.8 | % |
| OTHER INCOME (EXPENSE), NET | (0.8 | )% | | (0.6 | )% | | (0.3 | )% | | (0.8 | )% | | (0.3 | )% |
| INCOME BEFORE TAXES | 16.5 | % | | 17.1 | % | | 16.7 | % | | 16.1 | % | | 16.6 | % |
| INCOME TAX EXPENSE (BENEFIT) | 3.4 | % | | 3.4 | % | | 4.0 | % | | 3.2 | % | | 4.4 | % |
| NET INCOME | 13.1 | % | | 13.7 | % | | 12.7 | % | | 12.9 | % | | 12.2 | % |
| |
(1) | Percentages may not add due to rounding. |
FEI Company and Subsidiaries
Supplemental Data Table
(Dollars in millions, except per share amounts)
(Unaudited)
|
| | | | | | | | | | | | | | | | |
| | Q3 Ended September 30, 2012 | Q2 Ended July 1, 2012 | Q3 Ended October 2, 2011 | | 39 Weeks Ended September 30, 2012 | 39 Weeks Ended October 2, 2011 |
| Income Statement Highlights | | | | | | |
| Consolidated sales | $ | 221.8 |
| $ | 221.5 |
| $ | 205.3 |
| | $ | 660.8 |
| $ | 613.4 |
|
| Gross margin | 47.0 | % | 47.2 | % | 44.4 | % | | 46.4 | % | 44.5 | % |
| Stock compensation expense | $ | 3.4 |
| $ | 3.1 |
| $ | 2.2 |
| | $ | 10.1 |
| $ | 7.8 |
|
| Net income | $ | 29.2 |
| $ | 30.3 |
| $ | 26.2 |
| | $ | 85.1 |
| $ | 74.5 |
|
| Diluted net income per share | $ | 0.71 |
| $ | 0.74 |
| $ | 0.63 |
| | $ | 2.08 |
| $ | 1.80 |
|
| Interest expense add back included in the calculation of diluted EPS | $ | 0.5 |
| $ | 0.5 |
| $ | 0.5 |
| | $ | 1.4 |
| $ | 1.4 |
|
| Sales Highlights | | | | | | |
| Sales by Market Segment | | | | | | |
| Electronics | $ | 76.9 |
| $ | 81.5 |
| $ | 56.6 |
| | $ | 236.3 |
| $ | 204.9 |
|
| Materials Science | 72.3 |
| 68.5 |
| 74.4 |
| | 214.0 |
| 200.2 |
|
| Life Sciences | 23.2 |
| 22.7 |
| 30.2 |
| | 64.1 |
| 81.0 |
|
| Service and Components | 49.4 |
| 48.8 |
| 44.1 |
| | 146.4 |
| 127.3 |
|
| Sales by Geography | | | | | | |
| USA & Canada | $ | 75.6 |
| $ | 75.4 |
| $ | 60.4 |
| | $ | 220.1 |
| $ | 198.2 |
|
| Europe | 64.4 |
| 47.0 |
| 74.5 |
| | 174.4 |
| 191.8 |
|
| Asia-Pacific and Rest of World | 81.8 |
| 99.1 |
| 70.4 |
| | 266.3 |
| 223.4 |
|
| Gross Margin by Market Segment | | | | | | |
| Electronics | 55.3 | % | 54.6 | % | 54.3 | % | | 54.5 | % | 52.5 | % |
| Materials Science | 47.2 |
| 46.5 |
| 40.9 |
| | 46.4 |
| 42.9 |
|
| Life Sciences | 40.4 |
| 45.7 |
| 49.1 |
| | 41.6 |
| 46.3 |
|
| Service and Components | 36.7 |
| 36.4 |
| 34.5 |
| | 35.5 |
| 32.8 |
|
| Bookings and Backlog | | | | | | |
| Bookings - Total | $ | 223.3 |
| $ | 210.1 |
| $ | 186.4 |
| | $ | 655.2 |
| $ | 581.7 |
|
| Book-to-bill Ratio | 1.01 |
| 0.95 |
| 0.91 |
| | 0.99 |
| 0.95 |
|
| Backlog - Total | $ | 425.2 |
| $ | 423.6 |
| $ | 440.1 |
| | $ | 425.2 |
| $ | 440.1 |
|
| Backlog - Service and Components | 94.7 |
| 95.8 |
| 91.9 |
| | 94.7 |
| 91.9 |
|
| Bookings by Market Segment | | | | | | |
| Electronics | $ | 70.3 |
| $ | 51.5 |
| $ | 40.3 |
| | $ | 208.8 |
| $ | 180.9 |
|
| Materials Science | 89.2 |
| 78.0 |
| 75.8 |
| | 232.3 |
| 195.4 |
|
| Life Sciences | 15.5 |
| 29.9 |
| 25.7 |
| | 60.5 |
| 67.5 |
|
| Service and Components | 48.3 |
| 50.7 |
| 44.6 |
| | 153.6 |
| 137.9 |
|
| Bookings by Geography | | | | | | |
| USA & Canada | $ | 63.1 |
| $ | 76.5 |
| $ | 73.0 |
| | $ | 202.8 |
| $ | 168.2 |
|
| Europe | 82.1 |
| 48.3 |
| 46.5 |
| | 185.1 |
| 188.0 |
|
| Asia-Pacific and Rest of World | 78.1 |
| 85.3 |
| 66.9 |
| | 267.3 |
| 225.5 |
|
| Balance Sheet Highlights | | | | | | |
| Cash, equivalents, investments, restricted cash | $ | 359.8 |
| $ | 419.8 |
| $ | 435.7 |
| | $ | 359.8 |
| $ | 435.7 |
|
| Operating cash generated (used) | $ | 16.2 |
| $ | 41.3 |
| $ | 33.9 |
| | $ | 25.3 |
| $ | 52.8 |
|
| Accounts receivable | $ | 221.8 |
| $ | 212.3 |
| $ | 200.7 |
| | $ | 221.8 |
| $ | 200.7 |
|
| Days sales outstanding (DSO) | 91 |
| 87 |
| 89 |
| | 91 |
| 89 |
|
| Inventory turnover | 1.8 |
| 1.8 |
| 1.8 |
| | 1.8 |
| 1.8 |
|
| Fixed asset investment | $ | 3.1 |
| $ | 5.4 |
| $ | 3.3 |
| | $ | 14.7 |
| $ | 9.1 |
|
| Depreciation expense | $ | 5.8 |
| $ | 5.3 |
| $ | 4.8 |
| | $ | 16.3 |
| $ | 14.0 |
|
| Working capital | $ | 438.1 |
| $ | 483.1 |
| $ | 536.1 |
| | $ | 438.1 |
| $ | 536.1 |
|
| Headcount (permanent and temporary) | 2,399 |
| 2,312 |
| 2,016 |
| | 2,399 |
| 2,016 |
|
| Euro average rate | 1.250 |
| 1.289 |
| 1.416 |
| | 1.285 |
| 1.407 |
|
| Euro ending rate | 1.293 |
| 1.264 |
| 1.343 |
| | 1.293 |
| 1.343 |
|
