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Posted: July 29, 2008
FEI Company Reports Record Revenues
(Nanowerk News) FEI Company reported revenue at record levels for the fifth time in the last six quarters, as continued growth in the company’s Research & Industry and Life Sciences markets offset a cyclical decline in its Electronics market. Operating and net income were affected by the company’s previously-announced restructuring program.
Net sales for the quarter ended June 29, 2008 of $154.0 million were up 2% compared to the first quarter of 2008 and up 4% compared to the second quarter of 2007. Bookings in the quarter totaled $140.4 million, compared with $150.5 million in the first quarter of 2008 and $136.2 million for the second quarter of 2007. Bookings in the latest quarter were the highest for a second quarter in the company’s history. The backlog at the end of the quarter was $296.0 million, of which over 90% is expected to ship in the next four quarters.
Operating income for the second quarter of 2008 was $4.9 million, compared with $8.8 million in the first quarter of 2008 and $15.0 million in last year’s second quarter. Restructuring expenses in the latest quarter reduced operating income by $2.3 million or $0.05 per diluted share. Net income for the second quarter of 2008 was $4.9 million, compared with $8.2 million in the first quarter of 2008 and $14.0 million in last year’s second quarter. Diluted earnings per share in the latest quarter were $0.12, compared with $0.20 in the first quarter of 2008 and $0.33 in the second quarter of 2007. The gross profit margin was 38.1% in the second quarter of 2008, compared with 39.1% in the first quarter of 2008.
“The strength of our market and geographic diversity was again demonstrated in the second quarter,” said Don Kania, president and CEO of FEI, “despite the negative impact of a weak dollar and a difficult semiconductor capital equipment market.
“We expect our second-half bookings to be above first-half levels,” continued Kania, “based on our flow of exciting new products, expanding global demand for nanotechnology tools, and technology spending from our semiconductor customers. In addition to continued growth in 2009, we expect the benefits of our restructuring program to grow as the year progresses, including a lower cost structure, better currency balance and more efficient factory utilization.”
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 Q3 2008 and Outlook for Q4 2008
FEI currently expects net sales for the seasonally slow third quarter of 2008 to be in the range of $144 million to $150 million. Bookings are expected to be above $150 million, and GAAP earnings per share are expected to be in the range of $0.04 to $0.09, assuming a 30% tax rate and restructuring charges estimated at $0.04. Earnings are expected to be negatively impacted compared with the second quarter due to the strong euro relative to the U.S. dollar, lower interest income on invested cash balances, and a higher tax rate due to restructuring costs.
On June 16, 2008, the company used existing cash balances to repay $148.9 million of zero-coupon convertible bonds. The convertible debt repayment reduced the weighted average total of outstanding shares used to calculate diluted earnings per share to 41.5 million shares in the second quarter and will reduce the total further to approximately 37.2 million shares in the third quarter.
The preliminary outlook for the fourth quarter is for increased revenue, gross margins and net income compared with the third quarter guidance.
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™ are bringing the nanoscale within the grasp of leading researchers and manufacturers. More information can be found online at: www.fei.com.