Fei (FEIC) 8-K Results of Operations and Financial Condition

Exhibit 99.1

NEWS RELEASE

For more information contact:

FEI Company

Fletcher Chamberlin

Investor Relations

(503) 726-7710

fletcher.chamberlin@fei.com

FEI Company Finalizes Financial Statements and Files Form 10-K

HILLSBORO, Ore., February 29, 2008  — FEI Company (NASDAQ: FEIC) filed its Annual Report on Form 10-K with the U.S. Securities and Exchange Commission today.

The Form 10-K reports that the company’s annual revenue for 2007 was $592.5 million and its fourth quarter revenue was $150.2 million.  Both totals are $2.3 million lower than the preliminary results released by the company on February 4, 2008.  Net income was $57.9 million or $1.35 per diluted share for the year and $15.6 million or $0.36 per diluted share for the fourth quarter.  Those results are $1.6 million or $0.04 per share below the preliminary results.

The revised financial results reflect the company’s determination, during the completion of its financial statements, that $1.3 million of revenue related to a limited number of transactions involving multiple deliverables should be deferred and that service revenue should be adjusted downward by $1.0 million.  The company anticipates recognizing the $1.3 million in revenue from transactions involving multiple deliverables in 2008.

Balance sheets, statements of operations and supplemental information consistent with the Form 10-K filing are attached to this press release.

About FEI

FEI (Nasdaq: FEIC) is a global leader in providing innovative instruments for nanoscale imaging, analysis and prototyping.  FEI focuses on delivering solutions that provide groundbreaking results and accelerate research, development and manufacturing cycles for its customers in semiconductor and data storage, academic and industrial R&D and life sciences markets.  With R&D centers in North America and Europe, and sales and service operations in more than 50

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countries around the world, FEI’s Tools for Nanotech™ are bringing the nanoscale within the grasp of leading researchers and manufacturers.  More information can be found online at: www.fei.com.

Safe Harbor Statement

This news release contains forward-looking statements that include expectations for some revenue to be recognized in 2008 instead of 2007. Factors that could affect these forward-looking statements include, but are not limited to, delays in shipping products for technical performance, component supply or other reasons, as well as potential changes in shipment plans requested by customers from whom the company has purchase orders.  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.

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FEI Company and Subsidiaries

Consolidated Balance Sheets

(In thousands)

(Unaudited)

	December 31,		September 30,		December 31,
	2007		2007		2006
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	280,593	$	222,419	$	110,656
Short-term investments in marketable securities	152,041		198,362		234,202
Short-term restricted cash	20,984		12,973		20,172
Receivables	157,120		176,468		144,955
Inventories	138,762		137,243		97,470
Deferred tax assets	4,788		4,996		4,386
Other current assets	36,273		40,941		33,474
Total current assets	790,561		793,402		645,315
Non-current investments in marketable securities	12,758		12,708		34,900
Long-term restricted cash	24,621		9,298		6,131
Non-current service inventories	42,168		41,134		37,920
Property plant and equipment, net	74,700		68,083		60,394
Purchased technology, net	2,862		3,268		4,494
Goodwill	40,864		40,875		40,900
Deferred tax assets	2,641		9,479		542
Other assets, net	16,834		19,141		7,483
TOTAL	$	1,008,009	$	997,388	$	838,079
LIABILITIES AND SHAREHOLDERS’ EQUITY
CURRENT LIABILITIES:
Accounts payable	$	31,156	$	50,083	$	45,118
Accrued payroll liabilities	26,115		26,212		20,736
Accrued warranty reserves	6,585		6,902		5,716
Accrued agent commissions	9,119		6,871		6,175
Deferred revenue	60,681		61,564		48,992
Income taxes payable	3,106		6,987		9,203
Accrued restructuring, reorganization and relocation	580		598		2,439
Current portion of convertible debt	195,882		45,882		—
Other current liabilities	29,266		31,241		29,276
Total current liabilities	362,490		236,340		167,655
Convertible debt	115,000		265,000		310,882
Deferred tax liabilities	4,479		4,204		4,062
Other liabilities	38,646		35,119		5,572
SHAREHOLDERS’ EQUITY:
Preferred stock - 500 shares authorized; none issued and outstanding	—		—		—
Common stock - 70,000 shares authorized; 36,405, 36,252 and 34,052 shares issued and outstanding at December 31, 2007, September 30, 2007 and December 31, 2006	395,904		390,168		348,479
Retained earnings (accumulated deficit)	26,398		10,533		(36,041		)
Accumulated other comprehensive income	65,092		56,024		37,470
Total shareholders’ equity	487,394		456,725		349,908
TOTAL	$	1,008,009	$	997,388	$	838,079

FEI Company and Subsidiaries

Consolidated Statements of Operations

(In thousands, except per share amounts)

(Unaudited)

	Thirteen Weeks Ended											Year Ended
	December 31,				September 30,				December 31,			December 31,			December 31,
	2007				2007				2006			2007			2006
NET SALES:
Products	$		117,938		$		113,565		$	107,822		$	465,088		$	360,643
Service and components	32,270				32,223				32,462			127,422			118,848
Total net sales	150,208				145,788				140,284			592,510			479,491
COST OF SALES:
Products	65,995				61,249				58,499			252,546			197,742
Service and components	24,525				23,307				22,880			93,544			85,303
Total cost of sales	90,520				84,556				81,379			346,090			283,045
Gross profit	59,688				61,232				58,905			246,420			196,446
OPERATING EXPENSES:
Research and development	18,159				16,414				16,112			66,042			57,528
Selling, general and administrative	33,499				30,915				28,508			124,160			100,279
Amortization of purchased technology	450				444				438			1,777			2,034
Merger costs	—				—				—			—			484
Restructuring, reorganization and relocation	132				—				(27		)	(272		)	12,609
Asset impairment	—				—				—			—			465
Total operating expenses	52,240				47,773				45,031			191,707			173,399
OPERATING INCOME	7,448				13,459				13,874			54,713			23,047
OTHER INCOME (EXPENSE):
Interest income	6,498				5,902				4,154			22,372			13,150
Interest expense	(2,444			)	(2,218			)	(2,110		)	(8,735		)	(7,355		)
Gain on investment disposals and impairment, net	—				511				—			1,167			—
Other expense, net	(230			)	(1,034			)	(538		)	(3,492		)	(723		)
Total other income, net	3,824				3,161				1,506			11,312			5,072
INCOME FROM CONTINUING OPERATIONS BEFORE TAXES	11,272				16,620				15,380			66,025			28,119
INCOME TAX EXPENSE (BENEFIT)	(4,331			)	3,236				3,481			8,077			10,467
INCOME FROM CONTINUING OPERATIONS	15,603				13,384				11,899			57,948			17,652
DISCONTINUED OPERATIONS:
Gain (loss) from discontinued operations	—				—				(580		)	—			(947		)
Gain on disposal, net of income taxes	263				—				3,335			390			3,335
INCOME FROM DISCONTINUED OPERATIONS	263				—				2,755			390			2,388
NET INCOME	$	15,866			$	13,384			$	14,654		$	58,338		$	20,040
BASIC NET INCOME PER SHARE DATA:
From continuing operations	$		0.43		$		0.37		$	0.35		$	1.62		$	0.52
From discontinued operations	$		0.01		$		0.00		$	0.08		$	0.01		$	0.07
DILUTED NET INCOME PER SHARE DATA:
From continuing operations	$		0.36		$		0.31		$	0.30		$	1.35		$	0.47
From discontinued operations	$		0.01		$		0.00		$	0.06		$	0.01		$	0.06
WEIGHTED AVERAGE SHARES OUTSTANDING:
Basic	36,323				36,216				33,886			35,709			33,818
Diluted	46,477				46,419				44,079			46,254			39,752

FEI Company and Subsidiaries

Consolidated Statements of Operations

(Unaudited)

	Thirteen Weeks Ended (1)						Year Ended (1)
	December 31,		September 30,		December 31,		December 31,		December 31,
	2007		2007		2006		2007		2006
NET SALES:
Products	78.5	%	77.9	%	76.9	%	78.5	%	75.2	%
Service	21.5	%	22.1	%	23.1	%	21.5	%	24.8	%
Total net sales	100.0	%	100.0	%	100.0	%	100.0	%	100.0	%
COST OF SALES:
Products	43.9	%	42.0	%	41.7	%	42.6	%	41.2	%
Service	16.3	%	16.0	%	16.3	%	15.8	%	17.8	%
Total cost of sales	60.3	%	58.0	%	58.0	%	58.4	%	59.0	%
Gross profit	39.7	%	42.0	%	42.0	%	41.6	%	41.0	%
OPERATING EXPENSES:
Research and development	12.1	%	11.3	%	11.5	%	11.1	%	12.0	%
Selling, general and administrative	22.3	%	21.2	%	20.3	%	21.0	%	20.9	%
Amortization of purchased technology	0.3	%	0.3	%	0.3	%	0.3	%	0.4	%
Restructuring, reorganization and relocation	0.1	%	0.0	%	0.0	%	0.0	%	2.6	%
Asset impairment	0.0	%	0.0	%	0.0	%	0.0	%	0.1	%
Merger costs	0.0	%	0.0	%	0.0	%	0.0	%	0.0	%
Total operating expenses	34.8	%	32.8	%	32.1	%	32.4	%	36.2	%
OPERATING INCOME	5.0	%	9.2	%	9.9	%	9.2	%	4.8	%
OTHER INCOME (EXPENSE):
Interest income	4.3	%	4.0	%	3.0	%	3.8	%	2.7	%
Interest expense	-1.6	%	-1.5	%	-1.5	%	-1.5	%	-1.5	%
Gain on investment disposals and impairment, net	0.0	%	0.4	%	0.0	%	0.2	%	0.0	%
Other expense, net	-0.2	%	-0.7	%	-0.4	%	-0.6	%	-0.2	%
Total other expense, net	2.5	%	2.2	%	1.1	%	1.9	%	1.1	%
INCOME FROM CONTINUING OPERATIONS BEFORE TAXES	7.5	%	11.4	%	11.0	%	11.1	%	5.9	%
INCOME TAX EXPENSE (BENEFIT)	-2.9	%	2.2	%	2.5	%	1.4	%	2.2	%
INCOME FROM CONTINUING OPERATIONS	10.4	%	9.2	%	8.5	%	9.8	%	3.7	%
DISCONTINUED OPERATIONS:
Loss from discontinued operations	0.0	%	0.0	%	-0.4	%	0.0	%	-0.2	%
Gain on disposal, net of income taxes	0.2	%	0.0	%	2.4	%	0.1	%	0.7	%
INCOME FROM DISCONTINUED OPERATIONS	0.2	%	0.0	%	2.0	%	0.1	%	0.5	%
NET INCOME	10.6	%	9.2	%	10.4	%	9.8	%	4.2	%

(1) Percentages may not add due to rounding.

FEI COMPANY

Supplemental Data Table 1

($ in millions, except per share amounts)

(Unaudited)

	Q4 Ended			Q3 Ended			Q4 Ended
	12/31/2007			9/30/2007			12/31/2006
Income Statement Highlights
Consolidated sales	$	150.2		$	145.8		$	140.3
Gross margin	39.7		%	42.0		%	42.0		%
R&D spending	$	18.2		$	16.4		$	16.1
R&D (% of sales)	12.1		%	11.3		%	11.5		%
SG&A	$	33.5		$	30.9		$	28.5
SG&A (% of sales)	22.3		%	21.2		%	20.3		%
Stock compensation expense - COGS	$	0.4		$	0.2		$	0.2
Stock compensation expense - R&D	$	0.3		$	0.3		$	0.2
Stock compensation expense - SG&A	$	1.5		$	0.7		$	1.4
Net income from continuing operations	$	15.6		$	13.4		$	11.9
Net income from discontinued operations	$	0.3		$	0.0		$	2.8
Net income	$	15.9		$	13.4		$	14.7
Diluted earnings per share from continuing operations	$	0.36		$	0.31		$	0.30
Diluted earnings per share from discontinued operations	$	0.01		$	0.00		$	0.06
Interest income add back included in the calculation of diluted EPS	$	1.2		$	1.2		$	1.2
Sales by Market Segment
NanoElectronics	$	33.0		$	48.1		$	42.4
NanoResearch & Industry	$	67.8		$	51.6		$	55.3
NanoBiology	$	17.1		$	13.9		$	10.1
Service and Components	$	32.3		$	32.2		$	32.5
Sales by Geography
North America	$	63.2		$	46.5		$	49.9
Europe	$	63.8		$	61.5		$	52.2
Asia Pacific	$	23.2		$	37.8		$	38.2
Bookings
Total	$	156.3		$	153.3		$	171.7
Book-to-bill ratio	1.04			1.05			1.22
Backlog - total	$	310.8		$	305.7		$	305.9
Backlog - Service and Components	$	54.7		$	58.5		$	46.8
Bookings by Market Segment
NanoElectronics	$	39.6		$	28.8		$	49.7
NanoResearch & Industry	$	63.2		$	80.2		$	65.1
NanoBiology	$	24.0		$	11.2		$	23.9
Service and Components	$	29.5		$	33.1		$	33.0
Balance Sheet Highlights
Cash, equivalents, investments, restricted cash	$	491.0		$	455.8		$	406.1
Operating cash generated (used)	$	34.8		$	11.4		$	24.4
Accounts receivable	$	157.1		$	176.5		$	145.0
Days sales outstanding (DSO)	95			110			94
Inventory turnover	2.6			2.6			3.5
Inventories	$	138.8		$	137.2		$	97.5
Property, plant and equipment	$	74.7		$	68.1		$	60.4
Fixed asset investment (during quarter)	$	7.3		$	5.1		$	2.1
Depreciation expense	$	3.8		$	3.4		$	3.3
Current liabilities	$	362.5		$	236.3		$	167.7
Working capital	$	428.1		$	557.1		$	477.7
Shareholders’ equity	$	487.4		$	456.7		$	349.9
Headcount (permanent and temporary)	1,866			1,851			1,683