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FEI Reports Record Bookings, Revenue and Earnings for the Fourth Quarter and Full Year 2013

(February 05, 2014)


Q4 Revenue of $265.3 million; Q4 Bookings of $256.8 million

Q4 GAAP EPS of $0.97



HILLSBORO, Ore., Feb. 5, 2014 (GLOBE NEWSWIRE) -- FEI Company (Nasdaq:FEIC) reported record bookings, revenue, earnings and cash flow from operations for 2013 and for the fourth quarter. Fourth quarter revenue of $265.3 million was up 15% compared to $230.9 million in the fourth quarter of 2012 and up 21% from $218.5 million in the third quarter of 2013.



Net income for the fourth quarter was $41.3 million, up 38% from $29.8 million in the fourth quarter of 2012 and up 44% from $28.6 million in the third quarter of 2013. Diluted earnings per share for the fourth quarter were $0.97, compared with $0.72 in the fourth quarter of 2012 and $0.67 in the third quarter of 2013.


For the fourth quarter, net bookings were $256.8 million, an increase of 11% from net bookings of $230.5 million in the fourth quarter of 2012 and an increase of 2% from $251.0 million in the third quarter of 2013. The backlog at the end of the quarter was $473.5 million.




The gross margin in the fourth quarter was 47.0%, compared with 47.2% in the fourth quarter of 2012 and 47.9% the third quarter of 2013.



For the full year 2013, revenue was $927.5 million, an all-time record and compared with $891.7 million in 2012. Bookings were $976.2 million, also a record, compared with $885.7 million in 2012. Net income was $126.7 million or $3.01 per diluted share, compared with $114.9 million or $2.80 per diluted share for 2012. Gross margin for the year increased to 47.3% from 46.6% in 2012.



Total cash, investments and restricted cash at the end of the year was $591.2 million, an increase of $174.2 million from the end of 2012 and up $82.3 million from the end of the third quarter. Net cash provided by operating activities for the fourth quarter was $97.7 million, driven by increased earnings and significant improvement in days sales outstanding and inventory turnover.



"A solid fourth quarter completed another good year for FEI," commented Don Kania, president and CEO. "For the year, bookings were up 10% over 2012, revenue grew by 4% and net income was up 10%. Cash flow from operations was 2.8 times the 2012 total. Our continued investment in R&D yielded the largest flow of new products in the company's history. We invested in the business with the purchase of our Eindhoven facility, equipment and fit-out of our new leased facility in the Czech Republic and expansion of our sales and service operations in China, Brazil, Australia and the Middle East. We continued to execute our strategy of expanding our served available market with the development of new workflow solutions. 



"As we look to 2014," Kania continued, "we forecast first-half revenue to be around $500 million and full-year revenue growth to be in the 10% to 14% range compared with 2013, including the impact of the acquisition of Lithicon and the licensing agreement with the Australian National University (ANU), which we announced today."



Guidance for Q1-2014



For the first quarter of 2014, revenue is expected to be in the range of $228 million to $238 million, and bookings are expected to be above $250 million. GAAP earnings per share are expected to be in the range of $0.60 to $0.70, assuming a 19% effective tax rate.   Included in the GAAP earnings per share guidance are costs of $0.03 per share in expected restructuring charges, as well as a $0.03 cost for the impact of the acquisition of Lithicon and the ANU agreement announced today.



Investor Conference Call -- 2:00 p.m. Pacific time, Wednesday, February 5, 2014



Parties interested in listening to FEI's quarterly conference call may do so by dialing 1-877-941-0843 (U.S., toll-free) or 1-480-629-9818 (international and toll), with the conference title: FEI Fourth Quarter Earnings Call, Conference ID 4663371. 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: 4663371#. 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 guidance for revenue, earnings per share and bookings for the first quarter of 2014, revenue expectations for the first half and full year 2014, the impact of certain items on our results for these periods and assumptions about tax rates. Forward-looking statements may also be identified by words and phrases that refer to future expectations, such as "guidance", "guiding", "forecast", "toward", "plan", "expect", "expects", "are expected", "is expected", "will", "projecting", "look forward" 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 Science and Industry market segments; lower than expected customer orders for recently-introduced new products; potential disruption in manufacturing or unexpected additional costs due to the transition from older to newer products; potential reduced governmental spending due to budget constraints and uncertainty around U.S. or other countries' sovereign debt; potential disruption in the company's operations due to organization changes; risks associated with building and shipping a high percentage of the company's quarterly revenue in the last month of the quarter; cyclical changes in the data storage and semiconductor industries, which are the major components of Industry market segment revenue; continued weakness in the mining industry, which is also a component of Industry market segment revenue; 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; the relative mix of higher-margin and lower-margin products; risks associated with a high percentage of the company's revenue coming from "turns" business, when the order for a product is placed by the customer in the same quarter as the planned shipment; fluctuations in foreign exchange rates, which can affect margins or the competitive pricing of our products; additional costs related to future merger and acquisition activity; failure of the company to achieve anticipated benefits of acquisitions and collaborations, including failure to achieve financial goals and integrate acquisitions successfully; reduced profitability due to failure to achieve or sustain margin improvement in service or product manufacturing; potential 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, especially with regard to recently introduced TEM products; bankruptcy or insolvency of customers or suppliers; 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; potential shipment or supply chain disruptions due to natural disasters or terrorist attacks; changes to or potential additional restructurings and reorganizations not presently anticipated; changes in trade policies and tariff regulations; changes in the regulatory environment in the nations where we do business; and additional selling, general and administrative or research and development expenses. 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) designs, manufactures and supports a broad range of high-performance microscopy workflow solutions that provide images and answers at the micro-, nano- and picometer scales. Its innovation and leadership enable customers in industry and science to increase productivity and make breakthrough discoveries. Headquartered in Hillsboro, Ore., USA, FEI has over 2,600 employees and sales and service operations in more than 50 countries around the world. More information can be found at: www.fei.com.





































































































































































































































































 

Company and Subsidiaries

Consolidated Balance Sheets

(In thousands)

(Unaudited)

 

 

 

 

 

December 31,

September 29,

December 31,

 

2013

2013

2012

ASSETS

 

 

 

CURRENT ASSETS:

 

 

 

Cash and cash equivalents

$ 384,170

$ 335,502

$ 266,302

Short-term investments in marketable securities

108,191

98,009

79,532

Short-term restricted cash

18,798

15,328

14,522

Receivables, net

194,418

211,980

211,160

Inventories, net

181,725

195,658

192,540

Deferred tax assets

15,114

13,120

12,245

Other current assets

28,324

28,534

29,332

Total current assets

930,740

898,131

805,633

Non-current investments in marketable securities

47,278

24,414

29,179

Long-term restricted cash

32,718

35,668

27,425

Non-current inventories

62,104

64,270

65,116

Property plant and equipment, net

157,829

151,580

109,872

Intangible assets, net

47,197

48,279

51,499

Goodwill

136,152

135,184

131,320

Deferred tax assets

1,751

1,084

5,092

Other assets, net

10,315

9,778

9,087

TOTAL

$ 1,426,084

$ 1,368,388

$ 1,234,223

LIABILITIES AND SHAREHOLDERS' EQUITY

 

 

 

CURRENT LIABILITIES:

 

 

 

Accounts payable

$ 73,247

$ 75,944

$ 54,847

Accrued liabilities

65,527

56,812

59,273

Deferred revenue

91,563

86,406

74,736

Income taxes payable

4,579

3,545

1,343

Accrued restructuring, reorganization and relocation

50

366

2,692

Convertible debt



89,010

Other current liabilities

38,648

42,088

36,902

Total current liabilities

273,614

265,161

318,803

Other liabilities

74,902

73,831

75,517

SHAREHOLDERS' EQUITY:

 

 

 

Preferred stock - 500 shares authorized; none issued and outstanding




Common stock - 70,000 shares authorized; 42,136, 41,757 and 38,478 shares issued and outstanding at December 31, 2013, September 29, 2013 and December 31, 2012

637,482

626,541

516,907

Retained earnings

392,958

356,703

284,440

Accumulated other comprehensive income

47,128

46,152

38,556

Total shareholders' equity

1,077,568

1,029,396

839,903

TOTAL

$ 1,426,084

$ 1,368,388

$ 1,234,223




























































































































































































































































 

 

FEI Company and Subsidiaries

Consolidated Statements of Operations

(In thousands, except per share amounts)

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

Thirteen Weeks Ended

Fifty-Two Weeks Ended

 

December 31,

September 29,

December 31,

December 31,

December 31,

 

2013

2013

2012

2013

2012

NET SALES:

 

 

 

 

 

Products

$ 207,154

$ 162,452

 $ 177,149

$ 709,438

$ 691,496

Service

58,137

56,044

53,797

218,016

200,242

Total net sales

265,291

218,496

230,946

927,454

891,738

COST OF SALES:

 

 

 

 

 

Products

104,873

79,894

87,560

352,630

347,224

Service

35,826

33,857

34,452

136,039

128,884

Total cost of sales

140,699

113,751

122,012

488,669

476,108

Gross margin

124,592

104,745

108,934

438,785

415,630

OPERATING EXPENSES:

 

 

 

 

 

Research and development

26,328

25,397

25,029

101,947

94,965

Selling, general and administrative

48,051

45,346

44,420

179,560

169,719

Restructuring, reorganization and relocation



2,859

1,090

2,859

Total operating expenses

74,379

70,743

72,308

282,597

267,543

OPERATING INCOME

50,213

34,002

36,626

156,188

148,087

OTHER INCOME (EXPENSE), NET

(968)

(661)

(2,509)

(4,586)

(7,539)

INCOME BEFORE TAXES

49,245

33,341

34,117

151,602

140,548

INCOME TAX EXPENSE (BENEFIT)

7,972

4,735

4,315

24,929

25,628

NET INCOME

$ 41,273

$ 28,606

$ 29,802

$ 126,673

$ 114,920

BASIC NET INCOME PER SHARE DATA

$ 0.98

$ 0.69

$ 0.78

$ 3.13

$ 3.02

DILUTED NET INCOME PER SHARE DATA

0.97

0.67

0.72

3.01

2.80

WEIGHTED AVERAGE SHARES OUTSTANDING:

 

 

 

 

 

Basic

41,963

41,750

38,295

40,446

38,065

Diluted

42,591

42,455

41,897

42,395

41,728












































































































































































































































 

 

FEI Company and Subsidiaries

Consolidated Statements of Operations

(Unaudited)

 

 

 

 

 

 

 

Thirteen Weeks Ended (1)

Fifty-Two Weeks Ended (1)

 

December 31,

September 29,

December 31,

December 31,

December 31,

 

2013

2013

2012

2013

2012

NET SALES:

 

 

 

 

 

Products

78.1%

74.4%

76.7%

76.5%

77.5%

Service

21.9

25.6

23.3

23.5

22.5

Total net sales

100.0%

100.0%

100.0%

100.0%

100.0%

COST OF SALES:

 

 

 

 

 

Products

39.5%

36.6%

37.9%

38.0%

38.9%

Service

13.5

15.5

14.9

14.7

14.5

Total cost of sales

53.0%

52.1%

52.8%

52.7%

53.4%

GROSS MARGIN:

 

 

 

 

 

Products

49.4%

50.8%

50.6%

50.3%

49.8%

Service

38.4

39.6

36.0

37.6

35.6

Gross margin

47.0

47.9

47.2

47.3

46.6

OPERATING EXPENSES:

 

 

 

 

 

Research and development

9.9%

11.6%

10.8%

11.0%

10.6%

Selling, general and administrative

18.1

20.8

19.2

19.4

19.0

Restructuring, reorganization and relocation



1.2

0.1

0.3

Total operating expenses

28.0%

32.4%

31.3%

30.5%

30.0%

OPERATING INCOME

18.9%

15.6%

15.9%

16.8%

16.6%

OTHER INCOME (EXPENSE), NET

(0.4)%

(0.3)%

(1.1)%

(0.5)%

(0.8)%

INCOME BEFORE TAXES

18.6%

15.3%

14.8%

16.3%

15.8%

INCOME TAX EXPENSE (BENEFIT)

3.0%

2.2%

1.9%

2.7%

2.9%

NET INCOME

15.6%

13.1%

12.9%

13.7%

12.9%

 

 

 

 

 

 

(1)  Percentages may not add due to rounding.















































































































































































































































































































































































































 

 

FEI Company and Subsidiaries

Supplemental Data Table

(Dollars in millions, except per share amounts)

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

Q4 Ended December 31, 2013

Q3 Ended September 29, 2013

Q4 Ended December 31, 2012

Year Ended December 31, 2013

Year Ended December 31, 2012

Income Statement Highlights

 

 

 

 

 

Consolidated sales

$ 265.3

$ 218.5

$ 230.9

$ 927.5

$ 891.7

Gross margin

47.0%

47.9%

47.2%

47.3%

46.6%

Stock compensation expense

$ 5.0

$ 4.6

$ 4.1

$ 18.3

$ 14.2

Net income

$ 41.3

$ 28.6

$ 29.8

$ 126.7

$ 114.9

Diluted net income per share

$ 0.97

$ 0.67

$ 0.72

$ 3.01

$ 2.80

Interest expense add back included in the calculation of diluted EPS

$ —

$ —

$ 0.5

$ 0.8

$ 1.8

Sales Highlights

 

 

 

 

 

Sales by Market Segment

 

 

 

 

 

Industry

$ 121.3

$ 103.6

$ 91.6

$ 427.7

$ 433.4

Science

144.0

114.9

139.3

499.8

458.3

Sales by Geography

 

 

 

 

 

USA & Canada

$ 65.5

$ 65.2

$ 71.7

$ 260.6

$ 291.7

Europe

71.6

63.1

70.3

270.7

244.7

Asia-Pacific and Rest of World

128.2

90.2

88.9

396.2

355.3

Gross Margin by Market Segment

 

 

 

 

 

Industry

51.2%

54.2%

49.1%

52.1%

50.8%

Science

43.4

42.2

45.9

43.2

42.6

Bookings and Backlog

 

 

 

 

 

Bookings - Total

$ 256.8

$ 251.0

$ 230.5

$ 976.2

$ 885.7

Book-to-bill Ratio

0.97

1.15

1.00

1.05

0.99

Backlog - Total

$ 473.5

$ 482.0

$ 424.8

$ 473.5

$ 424.8

Backlog - Service

124.2

126.2

96.9

124.2

96.9

Bookings by Market Segment

 

 

 

 

 

Industry

$ 114.7

$ 98.8

$ 93.0

$ 424.9

$ 412.6

Science

142.1

152.2

137.5

551.3

473.1

Bookings by Geography

 

 

 

 

 

USA & Canada

$ 78.5

$ 63.7

$ 78.4

$ 276.7

$ 281.2

Europe

76.8

81.0

83.7

280.7

268.8

Asia-Pacific and Rest of World

101.5

106.3

68.4

418.8

335.7

Balance Sheet Highlights

 

 

 

 

 

Cash, equivalents, investments, restricted cash

$ 591.2

$ 508.9

$ 417.0

$ 591.2

$ 417.0

Operating cash generated (used)

$ 97.7

$ 48.7

$ 59.6

$ 237.9

$ 85.0

Accounts receivable

$ 194.4

$ 212.0

$ 211.2

$ 194.4

$ 211.2

Days sales outstanding (DSO)

67

89

83

67

83

Inventory turnover

2.2

1.8

1.9

2.2

1.9

Fixed asset investment

$ 9.8

$ 11.0

$ 7.4

$ 63.4

$ 23.7

Depreciation expense

$ 6.3

$ 6.0

$ 6.5

$ 23.7

$ 22.8

Working capital

$ 657.1

$ 633.0

$ 486.8

$ 657.1

$ 486.8

Headcount (permanent and temporary)

2,611

2,609

2,518

2,611

2,518

Euro average rate

1.361

1.325

1.295

1.327

1.287

Euro ending rate

1.376

1.350

1.321

1.376

1.321

Yen average rate

99.990

98.831

80.896

97.339

79.616

Yen ending rate

105.155

98.625

86.025

105.155

86.025

CONTACT: FEI Company
Fletcher Chamberlin
Investor Relations & Communications Director
(503) 726-7710
fletcher.chamberlin@fei.com



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