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Abstract:
FEI Company (Nasdaq: FEIC) reported increases in revenue, earnings and cash for the first quarter of 2007. Net sales and earnings were the highest for any quarter in the company's history, and quarterly bookings were the second-highest and the largest first-quarter total ever.
FEI Company Reports Record Sales and Earnings for the First Quarter of 2007
HILLSBORO, OR | Posted on April 30th, 2007 Net sales for the quarter ended April 1, 2007 of $148.0 million were up
5% compared to the fourth quarter of 2006 and up 32% compared to the first
quarter of 2006. Bookings in the quarter totaled $152.6 million, compared
with $171.7 million in the fourth quarter of 2006 and $149.0 million in the
first quarter of 2006. The book-to-bill ratio for the quarter was 1.03 to
1.00, and the backlog at the end of the quarter was $310.5 million, of
which approximately 90% is expected to ship by the end of the first quarter
of 2008.
Income from continuing operations for the first quarter of 2007 was
$14.9 million, compared with income from continuing operations of $11.9
million in the fourth quarter of 2006 and a net loss of $5.2 million from
continuing operations in last year's first quarter. Diluted earnings per
share from continuing operations in the latest quarter were $0.36, compared
with diluted earnings per share of $0.30 from continuing operations in the
fourth quarter of 2006 and a loss per share of $0.15 from continuing
operations in the first quarter of 2006. The gross profit margin improved
to 43.1% in the first quarter of 2007, compared with 42.0% in the fourth
quarter and 40.8% in the prior year's first quarter. The tax rate from
continuing operations for the first quarter of 2007 was 25.4%, compared
with 22.6% in the fourth quarter and 37.2% for the full year 2006.
Including the impact of the discontinued operations, net income in the
first quarter of 2007 was $15.1 million or $0.36 per diluted share. For the
first quarter of 2007, the company reported an after-tax gain of $127,000
related to the sale of Knights Technology Inc., a small wholly-owned
software subsidiary which was sold in the fourth quarter of 2006. The
financial statements for all reporting periods have been recast to reflect
the results of Knights Technology as a discontinued operation. In addition,
in the first quarter of 2006, the company recorded severance,
restructuring, asset impairment and merger costs that reduced pretax income
by a total of $12.5 million.
"The year has started out on track," said Don Kania, president and CEO
of FEI, "as we continued to demonstrate progress in several strategic areas
-- ramping revenue, improving gross margins and building our presence in
Asia. Bookings continued to be solid and within our expected range, and we
increased shipments to bring the book-to-bill ratio closer to 1 to 1. Our
gross margin improved to 43.1%, reflecting increased volume and improved
revenue mix. Bookings from Asia including Japan increased 59% from last
year's first quarter and 45% from the fourth quarter. The company also
increased its total cash and investment position during the quarter by
$19.7 million, due to continued profitability and employee stock option
exercise proceeds."
Bookings and revenue comparisons for the company's three market
segments and other data are included in the supplementary information
attached to this release, along with detailed statements of operations and
balance sheets.
The company's balance sheet remained strong. Total cash and investments
at the end of the quarter were $425.7 million, and convertible debt at the
end of the quarter remained unchanged at $310.9 million.
Second Quarter Guidance
FEI currently expects net sales for the second quarter of 2007 to be in
the range of $145 million to $152 million. Bookings are expected to be in
line with revenue and earnings per share are expected to be in the range of
$0.32 to $0.37 per share.
Investor Conference Call -- 2:00 p.m. PDT Monday, April 30, 2007
Parties interested in listening to FEI's quarterly conference call may
do so by dialing 1-800-219-6110 (domestic, toll-free) or 1-303-205-0033
(international) and asking for the FEI Q1 Earnings call. The call can also
be accessed via the web by going to FEI's Investor Relations page at
http://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
1-800-405-2236 (US) or 1-303-590-3000 (international) and entering the
access code 11088415#.
####
About FEI Company
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 countries around the world, FEI's
Tools for Nanotech(TM) are bringing the nanoscale within the grasp of
leading researchers and manufacturers. More information can be found online
at: http://www.fei.com .
Safe Harbor Statement
This news release contains forward-looking statements that include our
guidance for the second quarter of 2007 and the expected timing of
shipments from our backlog. Factors that could affect these forward-looking
statements include, but are not limited to, the strength of the
NanoResearch and Industry, NanoElectronics and NanoBiology segments;
cyclical changes in the data storage and semiconductor industries, which
are the major components of the NanoElectronics market; fluctuations in
foreign exchange, interest and tax rates; our continued ability to maintain
deferral accounting of hedge transactions; reduced profitability due to
failure to achieve or sustain margin improvement, improved product mix,
higher volume or cost reductions; lower than expected customer orders;
cancellation of customer orders; 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 shipping products for technical
performance, component supply or other reasons; unfavorable business
conditions and lack of growth in the general economy, both domestic and
foreign; potential 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; inability to overcome technological
barriers; 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 current or future acquisitions, including failure to achieve
financial goals and integrate the 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)
April 1, December 31,
ASSETS 2007 2006
CURRENT ASSETS:
Cash and cash equivalents $165,335 $110,656
Short-term investments in
marketable securities 237,534 234,202
Short-term restricted cash 11,056 20,172
Receivables 163,325 144,955
Inventories 107,803 97,470
Deferred tax assets 4,414 4,386
Other current assets 39,279 33,474
Total current assets 728,746 645,315
Non-current investments in marketable securities 7,466 34,900
Long-term restricted cash 4,344 6,131
Non-current service inventories 38,448 37,920
Property plant and equipment, net 61,225 60,394
Purchased technology, net 4,068 4,494
Goodwill 40,897 40,900
Deferred tax assets 9,898 542
Other assets, net 8,065 7,483
TOTAL $903,157 $838,079
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $52,172 $45,118
Accrued payroll liabilities 18,309 20,736
Accrued warranty reserves 6,481 5,716
Accrued agent commissions 6,145 6,175
Deferred revenue 58,245 48,992
Income taxes payable 1,260 9,203
Accrued restructuring, reorganization
and relocation 639 2,439
Other current liabilities 27,267 29,276
Total current liabilities 170,518 167,655
Convertible debt 310,882 310,882
Deferred tax liabilities 4,312 4,062
Other liabilities 24,254 5,572
SHAREHOLDERS' EQUITY:
Preferred stock - 500 shares authorized;
none issued and outstanding -- --
Common stock - 70,000 shares authorized;
35,311 and 34,052 shares issued and
outstanding at April 1, 2007 and
December 31, 2006 371,126 348,479
Accumulated deficit (16,882) (36,041)
Accumulated other comprehensive income 38,947 37,470
Total shareholders' equity 393,191 349,908
TOTAL $903,157 $838,079
FEI Company and Subsidiaries
Consolidated Statements of Operations
(In thousands, except per share amounts)
(Unaudited)
Thirteen Weeks Ended
April 1, December 31, April 2,
2007 2006 2006
NET SALES:
Products $116,429 $107,822 $85,122
Service and components 31,530 32,462 27,144
Total net sales 147,959 140,284 112,266
COST OF SALES:
Products 62,163 58,499 45,666
Service and components 22,053 22,880 20,850
Total cost of sales 84,216 81,379 66,516
Gross profit 63,743 58,905 45,750
OPERATING EXPENSES:
Research and development 15,491 16,112 13,359
Selling, general and
administrative 29,574 28,508 23,352
Amortization of purchased
technology 440 438 541
CEO severance -- -- 9,324
Restructuring, reorganization
and relocation (572) (27) 2,239
Asset impairment -- -- 465
Merger costs -- -- 452
Total operating expenses 44,933 45,031 49,732
OPERATING INCOME (LOSS) 18,810 13,874 (3,982)
OTHER INCOME (EXPENSE):
Interest income 4,288 4,154 2,244
Interest expense (1,976) (2,110) (1,658)
Gain (loss) on investment
disposals and impairment, net 159 -- --
Other expense, net (1,274) (538) (383)
Total other income
(expense), net 1,197 1,506 203
INCOME (LOSS) FROM CONTINUING
OPERATIONS BEFORE TAXES 20,007 15,380 (3,779)
INCOME TAX EXPENSE 5,077 3,481 1,397
INCOME (LOSS) FROM
CONTINUING OPERATIONS 14,930 11,899 (5,176)
DISCONTINUED OPERATIONS:
(Loss) income from discontinued
operations, net of income taxes -- (580) (45)
Gain (loss) on disposal,
net of income taxes 127 3,335 --
INCOME (LOSS) FROM
DISCONTINUED OPERATIONS 127 2,755 (45)
NET INCOME (LOSS) $15,057 $14,654 $(5,221)
BASIC NET INCOME (LOSS)
PER SHARE DATA:
From continuing operations $0.43 $0.35 $(0.15)
From discontinued operations $0.01 $0.08 $(0.00)
DILUTED NET INCOME (LOSS)
PER SHARE DATA:
From continuing operations $0.36 $0.30 $(0.15)
From discontinued operations $0.00 $0.06 $(0.00)
WEIGHTED AVERAGE SHARES
OUTSTANDING:
Basic 34,556 33,886 33,867
Diluted 45,307 44,079 33,867
FEI Company and Subsidiaries
Consolidated Statements of Operations
(Unaudited)
Thirteen Weeks Ended (1)
April 1, December 31, April 2,
2007 2006 2006
NET SALES:
Products 78.7% 76.9% 75.8%
Service 21.3% 23.1% 24.2%
Total net sales 100.0% 100.0% 100.0%
COST OF SALES:
Products 42.0% 41.7% 40.7%
Service 14.9% 16.3% 18.6%
Total cost of sales 56.9% 58.0% 59.2%
Gross profit 43.1% 42.0% 40.8%
OPERATING EXPENSES:
Research and development 10.5% 11.5% 11.9%
Selling, general and
administrative 20.0% 20.3% 20.8%
Amortization of purchased
technology 0.3% 0.3% 0.5%
CEO severance 0.0% 0.0% 8.3%
Restructuring, reorganization
and relocation -0.4% -0.0% 2.0%
Asset impairment 0.0% 0.0% 0.4%
Merger costs 0.0% 0.0% 0.4%
Total operating expenses 30.4% 32.1% 44.3%
OPERATING INCOME (LOSS) 12.7% 9.9% -3.5%
OTHER INCOME (EXPENSE):
Interest income 2.9% 3.0% 2.0%
Interest expense -1.3% -1.5% -1.5%
Gain (loss) on investment
disposals and impairment, net 0.1% 0.0% 0.0%
Other expense, net -0.9% -0.4% -0.3%
Total other expense, net 0.8% 1.1% 0.2%
INCOME (LOSS) FROM CONTINUING
OPERATIONS BEFORE TAXES 13.5% 11.0% -3.4%
INCOME TAX EXPENSE 3.4% 2.5% 1.2%
INCOME (LOSS) FROM
CONTINUING OPERATIONS 10.1% 8.5% -4.6%
DISCONTINUED OPERATIONS:
Income (loss) from discontinued
operations, net of income taxes 0.0% -0.4% -0.0%
Gain (loss) on disposal,
net of income taxes 0.1% 2.4% 0.0%
INCOME (LOSS) FROM
DISCONTINUED OPERATIONS 0.1% 2.0% -0.0%
NET INCOME (LOSS) 10.2% 10.4% -4.7%
(1) Percentages may not add due to rounding.
FEI COMPANY
Supplemental Data Table 1
($ in millions, except per share amounts)
(Unaudited)
Q1 Ended Q4 Ended Q1 Ended
4/1/2007 12/31/2006 4/2/2006
Income Statement Highlights
Consolidated sales $148.0 $140.3 $112.3
Gross margin 43.1% 42.0% 40.8%
R&D spending $15.5 $16.1 $13.4
R&D (% of sales) 10.5% 11.5% 11.9%
SG&A $29.6 $28.5 $23.4
SG&A (% of sales) 20.0% 20.3% 20.8%
Stock compensation
expense - COGS $0.1 $0.2 $0.1
Stock compensation
expense - R&D $0.2 $0.2 $0.2
Stock compensation
expense - SG&A $1.6 $1.4 $1.0
Stock compensation
expense - Restructuring
(CEO Severance) $0.0 $0.0 $7.0
Net income (loss) from
continuing operations $14.9 $11.9 ($5.2)
Net income (loss) from
discontinued operations $0.1 $2.8 ($0.0)
Net income (loss) $15.1 $14.7 ($5.2)
Diluted earnings (loss) per
share from continuing
operations $0.36 $0.30 ($0.15)
Diluted earnings (loss) per
share from discontinued
operations $0.00 $0.06 ($0.00)
Sales by Market Segment
NanoElectronics $56.5 $42.4 $39.7
NanoResearch & Industry $49.2 $55.3 $35.3
NanoBiology $10.7 $10.1 $10.1
Service and Components $31.6 $32.5 $27.2
Sales by Geography
North America $61.7 $49.9 $42.8
Europe $40.0 $52.2 $38.7
Asia Pacific $46.3 $38.2 $30.8
Bookings
Total $152.6 $171.7 $149.0
Book to bill ratio 1.03 1.22 1.33
Backlog - total $310.5 $305.9 $220.7
Backlog - Service and Components $56.6 $46.8 $44.4
Bookings by Market Segment
NanoElectronics $56.0 $49.7 $40.0
NanoResearch & Industry $46.1 $65.1 $56.2
NanoBiology $9.1 $23.9 $19.7
Service and Components $41.4 $33.0 $33.1
Balance Sheet Highlights
Cash, equivalents, investments,
restricted cash $425.7 $406.1 $254.7
Operating cash generated (used) $1.2 $24.4 ($2.7)
Accounts receivable $163.3 $145.0 $110.7
Days sales outstanding (DSO) 101 94 90
Inventory turnover 3.3 3.5 3.2
Inventories $107.8 $97.5 $81.5
Property, plant and equipment $61.2 $60.4 $58.5
Fixed asset investment
(during quarter) $3.0 $2.1 $1.2
Depreciation expense $3.3 $3.3 $3.4
Current liabilities $170.5 $167.7 $130.2
Working capital $558.2 $477.7 $319.2
Shareholders' equity $393.2 $349.9 $302.5
Headcount (permanent
and temporary) 1,729 1,683 1,646
For more information, please click here
Contacts:
Fletcher Chamberlin
Treasurer
Investor Relations Director
FEI Company
5350 NE Dawson Creek Drive
Hillsboro, OR 97124-5793
Phone: (503) 726-7710
Copyright © PR Newswire Association LLC.
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