Revenue of $205.3 million, up 34% from Q3-2010
GAAP Diluted EPS of $0.63, vs. $0.30 in Q3-2010
HILLSBORO, Ore., Oct. 27, 2011 (GLOBE NEWSWIRE) -- For the third quarter of 2011, FEI Company (Nasdaq:FEIC) reported record earnings for the fourth consecutive quarter. Revenue was the highest of any third quarter and the second-highest quarterly total ever.
Revenue of $205.3 million was up 34% compared to $153.0 million in the third quarter of 2010 and down 3% on a normal seasonal basis from $211.1 million in the second quarter of 2011.
Net income was $26.2 million or $0.63 per diluted share, compared with $11.9 million or $0.30 per diluted share in the third quarter of 2010 and $26.1 million or $0.62 per diluted share in the second quarter of 2011.
The gross margin in the third quarter was 44.4%, compared with 43.5% in the third quarter of 2010 and 45.3% in the second quarter of 2011. Operating income was 17.0% of sales in the quarter, compared with 11.5% in the third quarter of 2010 and 17.3% in the second quarter of 2011.
For the third quarter of 2011, gross bookings were $201.1 million. Net bookings were $186.4 million after reduction of the ending backlog due to currency movements. Net bookings were $190.1 million in the third quarter of 2010 and $204.5 million the second quarter of 2011. The backlog at the end of the quarter was $440.1 million. The book-to-bill ratio for the quarter was 0.91 to 1.
Total cash, investments and restricted cash at the end of the quarter was $435.7 million, a decrease of $35.6 million from the end of the second quarter, as the company repurchased $50.0 million of its common stock in the open market during the quarter. Total cash, investments and restricted cash has increased $11.9 million since the end of 2010.
"We had another very good quarter, with earnings again at the highest level in our history," said Don Kania, president and CEO of FEI. "Bookings remained strong with double-digit sequential growth in the Life Sciences and Research and Industry business units, offsetting weakness in Electronics. For the fourth quarter, we expect sequential revenue growth which should yield annual growth of approximately 30% for 2011 over 2010."
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 Q4 2011
FEI expects revenue in the fourth quarter of 2011 to be in the range of $205 million to $215 million. Bookings are expected to be around $200 million, assuming a euro/dollar rate of $1.40. Assuming a tax rate of 24%, GAAP earnings per share are expected to be in the range of $0.60 to $0.65.
Investor Conference Call -- 2:00 p.m. Pacific time, Thursday, October 27, 2011
Parties interested in listening to FEI's quarterly conference call may do so by dialing 1-877-941-2333 (U.S., toll-free) or 1-480-629-9724 (international and toll), with the conference title: FEI Third Quarter Earnings Call, Conference ID 4481618. 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: 4481618#. 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 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 2,000 employees and sales and service operations in more than 50 countries around the world. More information can be found at: www.fei.com.
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 2011 and, expected annual revenue growth for 2011. Forward-looking statements may also be identified by words and phrases that refer to future expectations, such as "guidance", "guiding" , "expect", "expects", "are 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 Research & Industry, Electronics and Life Sciences market segments; potential reduced governmental spending due to budget constraints and current 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 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; 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 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 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) | |||
| October 2, 2011 | July 3, 2011 | December 31, 2010 | |
| ASSETS | |||
| CURRENT ASSETS: | |||
| Cash and cash equivalents | $ 288,995 | $ 305,923 | $ 277,617 |
| Short-term investments in marketable securities | 38,720 | 18,855 | 44,026 |
| Short-term restricted cash | 26,326 | 28,615 | 22,114 |
| Receivables, net | 200,739 | 207,075 | 183,254 |
| Inventories, net | 191,646 | 202,769 | 155,964 |
| Deferred tax assets | 15,175 | 10,431 | 11,505 |
| Other current assets | 31,435 | 35,890 | 23,126 |
| Total current assets | 793,036 | 809,558 | 717,606 |
| Non-current investments in marketable securities | 40,217 | 76,135 | 38,662 |
| Long-term restricted cash | 41,486 | 41,815 | 41,377 |
| Non-current inventories | 53,246 | 51,072 | 47,976 |
| Property plant and equipment, net | 79,524 | 82,039 | 80,681 |
| Goodwill | 44,802 | 44,849 | 44,800 |
| Deferred tax assets | 5,111 | 770 | 1,072 |
| Other assets, net | 14,571 | 14,570 | 12,248 |
| TOTAL | $ 1,071,993 | $ 1,120,808 | $ 984,422 |
| LIABILITIES AND SHAREHOLDERS' EQUITY | |||
| CURRENT LIABILITIES: | |||
| Accounts payable | $ 55,920 | $ 61,348 | $ 51,529 |
| Accrued liabilities | 61,267 | 60,163 | 51,209 |
| Deferred revenue | 74,983 | 84,549 | 81,445 |
| Income taxes payable | 26,145 | 14,078 | 3,715 |
| Accrued restructuring, reorganization and relocation | 470 | 2,613 | 4,884 |
| Other current liabilities | 38,127 | 29,400 | 31,306 |
| Total current liabilities | 256,912 | 252,151 | 224,088 |
| Convertible debt | 89,012 | 89,012 | 89,012 |
| Other liabilities | 45,544 | 44,902 | 38,148 |
| SHAREHOLDERS' EQUITY: | |||
| Preferred stock - 500 shares authorized; none issued and outstanding | — | — | — |
| Common stock - 70,000 shares authorized; 37,570, 39,150, and 38,280 shares issued and outstanding at October 2, 2011, July 3, 2011 and December 31, 2010 | 485,746 | 534,161 | 509,145 |
| Retained earnings | 149,573 | 123,396 | 75,024 |
| Accumulated other comprehensive income | 45,206 | 77,186 | 49,005 |
| Total shareholders' equity | 680,525 | 734,743 | 633,174 |
| TOTAL | $ 1,071,993 | $ 1,120,808 | $ 984,422 |
| FEI Company and Subsidiaries | |||||
| Consolidated Statements of Operations | |||||
| (In thousands, except per share amounts) | |||||
| (Unaudited) | |||||
| Thirteen Weeks Ended | Thirty-Nine Weeks Ended | ||||
| October 2, 2011 | July 3, 2011 | October 3, 2010 | October 2, 2011 | October 3, 2010 | |
| NET SALES: | |||||
| Products | $ 161,255 | $ 168,896 | $ 113,424 | $ 486,183 | $ 334,232 |
| Service and components | 44,080 | 42,245 | 39,581 | 127,253 | 113,920 |
| Total net sales | 205,335 | 211,141 | 153,005 | 613,436 | 448,152 |
| COST OF SALES: | |||||
| Products | 85,228 | 86,256 | 60,728 | 255,079 | 187,484 |
| Service and components | 28,882 | 29,190 | 25,748 | 85,533 | 75,126 |
| Total cost of sales | 114,110 | 115,446 | 86,476 | 340,612 | 262,610 |
| Gross margin | 91,225 | 95,695 | 66,529 | 272,824 | 185,542 |
| OPERATING EXPENSES: | |||||
| Research and development | 19,212 | 19,619 | 15,942 | 56,771 | 48,690 |
| Selling, general and administrative | 37,051 | 38,774 | 32,435 | 111,607 | 99,614 |
| Restructuring, reorganization and relocation | 47 | 783 | 536 | 1,115 | 10,505 |
| Total operating expenses | 56,310 | 59,176 | 48,913 | 169,493 | 158,809 |
| OPERATING INCOME | 34,915 | 36,519 | 17,616 | 103,331 | 26,733 |
| OTHER INCOME (EXPENSE), NET | (601) | (893) | (1,057) | (1,716) | (2,593) |
| INCOME BEFORE TAXES | 34,314 | 35,626 | 16,559 | 101,615 | 24,140 |
| INCOME TAX EXPENSE (BENEFIT) | 8,137 | 9,566 | 4,639 | 27,066 | (8,064) |
| NET INCOME | $ 26,177 | $ 26,060 | $ 11,920 | $ 74,549 | $ 32,204 |
| BASIC NET INCOME PER SHARE DATA | $ 0.68 | $ 0.67 | $ 0.31 | $ 1.93 | $ 0.85 |
| DILUTED NET INCOME PER SHARE DATA | $ 0.63 | $ 0.62 | $ 0.30 | $ 1.80 | $ 0.82 |
| WEIGHTED AVERAGE SHARES OUTSTANDING: | |||||
| Basic | 38,421 | 38,883 | 38,186 | 38,628 | 38,041 |
| Diluted | 42,030 | 42,566 | 41,536 | 42,284 | 41,698 |
| FEI Company and Subsidiaries | |||||
| Consolidated Statements of Operations | |||||
| (Unaudited) | |||||
| Thirteen Weeks Ended (1) | Thirty-Nine Weeks Ended (1) | ||||
| October 2, 2011 | July 3, 2011 | October 3, 2010 | October 2, 2011 | October 3, 2010 | |
| NET SALES: | |||||
| Products | 78.5% | 80.0% | 74.1% | 79.3% | 74.6% |
| Service and components | 21.5 | 20.0 | 25.9 | 20.7 | 25.4 |
| Total net sales | 100.0% | 100.0% | 100.0% | 100.0% | 100.0% |
| COST OF SALES: | |||||
| Products | 41.5% | 40.9% | 39.7% | 41.6% | 41.8% |
| Service and components | 14.1 | 13.8 | 16.8 | 13.9 | 16.8 |
| Total cost of sales | 55.6% | 54.7% | 56.5% | 55.5% | 58.6% |
| GROSS MARGIN: | |||||
| Products | 47.1% | 48.9% | 46.5% | 47.5% | 43.9% |
| Service and components | 34.5 | 30.9 | 34.9 | 32.8 | 34.1 |
| Gross margin | 44.4 | 45.3 | 43.5 | 44.5 | 41.4 |
| OPERATING EXPENSES: | |||||
| Research and development | 9.4% | 9.3% | 10.4% | 9.3% | 10.9% |
| Selling, general and administrative | 18.0 | 18.4 | 21.2 | 18.2 | 22.2 |
| Restructuring, reorganization and relocation | — | 0.4 | 0.4 | 0.2 | 2.3 |
| Total operating expenses | 27.4% | 28.0% | 32.0% | 27.6% | 35.4% |
| OPERATING INCOME | 17.0% | 17.3% | 11.5% | 16.8% | 6.0% |
| OTHER INCOME (EXPENSE), NET | (0.3)% | (0.4)% | (0.7)% | (0.3)% | (0.6)% |
| INCOME BEFORE TAXES | 16.7% | 16.9% | 10.8% | 16.6% | 5.4% |
| INCOME TAX EXPENSE (BENEFIT) | 4.0% | 4.5% | 3.0% | 4.4% | (1.8)% |
| NET INCOME | 12.7% | 12.3% | 7.8% | 12.2% | 7.2% |
| (1) Percentages may not add due to rounding. | |||||
| FEI COMPANY | |||
| Supplemental Data Table | |||
| ($ in millions, except per share amounts) | |||
| (Unaudited) | |||
| Q3 Ended | Q2 Ended | Q3 Ended | |
| 2-Oct-2011 | 3-July-2011 | 3-Oct-2010 | |
| Income Statement Highlights | |||
| Consolidated sales | $ 205.3 | $ 211.1 | $ 153.0 |
| Gross margin | 44.4% | 45.3% | 43.5% |
| Stock compensation expense | $ 2.2 | $ 2.8 | $ 2.5 |
| Net income | $ 26.2 | $ 26.1 | $ 11.9 |
| Diluted net income per share | $ 0.63 | $ 0.62 | $ 0.30 |
| Interest income add back included in the calculation of diluted EPS | $ 0.5 | $ 0.5 | $ 0.6 |
| Sales Highlights | |||
| Sales by Market Segment | |||
| Electronics | $ 56.6 | $ 87.0 | $ 44.0 |
| Research & Industry | 74.4 | 55.1 | 51.1 |
| Life Sciences | 30.2 | 26.8 | 18.3 |
| Service and Components | 44.1 | 42.2 | 39.6 |
| Sales by Geography | |||
| USA & Canada | $ 60.4 | $ 74.2 | $ 43.7 |
| Europe | 74.5 | 59.2 | 54.1 |
| Asia-Pacific and Rest of World | 70.4 | 77.7 | 55.2 |
| Gross Margin by Market Segment | |||
| Electronics | 54.3% | 51.9% | 50.2% |
| Research & Industry | 40.9 | 44.9 | 43.3 |
| Life Sciences | 49.1 | 47.7 | 46.2 |
| Service and Components | 34.5 | 30.9 | 34.9 |
| Bookings and Backlog | |||
| Bookings - Total | $ 186.4 | $ 204.5 | $ 190.1 |
| Book-to-bill Ratio | 0.91 | 0.97 | 1.24 |
| Backlog - Total | $ 440.1 | $ 459.1 | $ 439.6 |
| Backlog - Service and Components | 91.9 | 91.4 | 80.8 |
| Bookings by Market Segment | |||
| Electronics | $ 40.3 | $ 76.1 | $ 59.6 |
| Research & Industry | 75.8 | 64.5 | 72.9 |
| Life Sciences | 25.7 | 18.7 | 18.4 |
| Service and Components | 44.6 | 45.2 | 39.2 |
| Bookings by Geography | |||
| USA & Canada | $ 73.0 | $ 46.7 | $ 65.8 |
| Europe | 46.5 | 76.0 | 63.9 |
| Asia-Pacific and Rest of World | 66.9 | 81.8 | 60.4 |
| Balance Sheet Highlights | |||
| Cash, equivalents, investments, restricted cash | $ 435.7 | $ 471.3 | $ 382.5 |
| Operating cash generated (used) | $ 33.9 | $ 9.2 | $ (3.5) |
| Accounts receivable | $ 200.7 | $ 207.1 | $ 179.6 |
| Days sales outstanding (DSO) | 89 | 89 | 107 |
| Inventory turnover | 2.3 | 2.4 | 2.4 |
| Fixed asset investment | $ 3.3 | $ 3.9 | $ 0.9 |
| Depreciation expense | $ 4.8 | $ 4.7 | $ 4.3 |
| Working capital | $ 536.1 | $ 557.4 | $ 474.2 |
| Headcount (permanent and temporary) | 2,016 | 1,957 | 1,810 |
| Euro average rate | 1.416 | 1.439 | 1.292 |
| Euro ending rate | 1.343 | 1.449 | 1.375 |