EX-99.1 3 j9975_ex99d1.htm EX-99.1

Exhibit 99.1

 

 

 

NEWS RELEASE

 

For Immediate Release

 

 

For more information contact:

 

 

 

 

 

FEI Company

 

FEI Company

Stephen Loughlin

 

Jay Lindquist

Vice President, Finance

 

Sr. Vice President, Corp. Mktg.

& Acting Chief Financial Officer

 

& Communications

503/640-7500

 

503/640-7500

 

 

 

FEI Company Reports First Quarter 2003 Revenues of $85.4 Million;

Bookings Total $82.8 Million for Book-to-Bill Ratio of 0.97

 

Company meets guidance, reports Q1 GAAP EPS of $ 0.06

including amortization of intangibles of $ 0.02 per share

 

 

HILLSBORO, Ore., April 28, 2003 /PRNewswire-FirstCall/ — FEI Company (NASDAQ: FEIC) today reported net sales of $85.4 million for its first quarter ended March 30, 2003, up from net sales of $84.5 million in the first quarter of last year, approximately even with net sales of $85.2 million last quarter, and within the company’s guidance for revenues in the mid-$80 million range. GAAP EPS was $0.06, within the $0.04-$0.07 range forecasted, including amortization of intangibles of $1.2 million or $0.02 per share.

 

“We continue to focus on executing our business in a challenging economic and market environment,” said Vahé A. Sarkissian, chairman, president and chief executive officer. “Results for the first quarter demonstrate our commitment to profitability. While we continue to find ways to be more efficient, we are investing in new products, customer support and operational improvements to sustain our leadership.”

 

 

Sequentially, revenues were up 13% in the MicroElectronics business segment, and down 3% in Electron Optics, 8% in Service and 17% in Components. Gross margins were flat quarter to quarter as the favorable revenue mix shift and cost improvements in manufacturing were offset by the effects of SAB 101.

 

Operating expenses were approximately level with the fourth quarter of 2002. Earlier cost reductions began to benefit the company, but were offset by $0.6 million of negative currency impact and approximately $0.4 million of increased insurance cost. The company began consolidating its operations from five buildings into a new campus in Hillsboro, Oregon. The improvements and the move are anticipated to be completed in the third quarter. The company also opened its new and expanded manufacturing facility in the Czech Republic. This new facility will enable growth for FEI’s products currently manufactured in Brno, as well as reduced manufacturing costs for products transferred from other locations.

 

Bookings during the quarter totaled $82.8 million, resulting in a book-to-bill ratio of 0.97. FEI’s order backlog totaled $121.5 million at March 30, 2003, compared to $124.1 million at the beginning of the quarter and $122.0 million at the end of the March quarter last year.

 

Earnings were $1.9 million, or $0.06 per share basic and diluted, compared with $5.9 million, or $0.18 per share basic and diluted in the first quarter of last year. Cash and investments decreased by $22.9 million, impacted by an increase in accounts receivable of $12.8 million, resulting from a high volume of shipments late in the quarter, along with a decrease in current liabilities of $11.8 million. The company also invested $8.1 million in capital expenditures for facilities consolidation and demonstration equipment. Net shareholders’ equity was $332.0 million at the end of the current quarter, compared with $326.9 million at the close of last quarter and $303.0 million at the end of the March quarter last year. The company’s convertible debt remained unchanged for the quarter at $175 million.

 

 

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“We believe that our continuing focus on a strong product portfolio, broad customer base in diverse markets, fiscal prudence, and strong balance sheet have differentiated our results and should bode well for FEI in the eventual upturn,” concluded Sarkissian.

 

Second Quarter 2003 Guidance

FEI currently expects second quarter 2003 revenues to be in the low- to mid-$80 million range with bookings of approximately $80 million. GAAP earnings are anticipated to be in the range of $0.04-$0.07 per share which will include amortization of purchased intangibles, expected to be $1.2 million, or about $0.02 per share basic and diluted. For reasons why the company’s actual results may differ from guidance please see the section entitled “Safe Harbor Statement” below.

 

Investor Conference Call — 11:30 a.m. EDT Tuesday, April 29, 2003

Parties interested in listening to FEI’s quarterly conference call may do so by dialing 1-888-428-4480 (domestic, toll-free) or +1-612-288-0318 and supplying the pass code: FEI Q1 Results. The call can also be accessed via the web by going to FEI’s Investor Relations/Presentations page at http://www.feicompany.com, where the webcast will also be archived. A telephone replay of the call will also be accessible by dialing 1-800-475-6701 (US) or +1-320-365-3844 (international) and entering the access code 680623 anytime through midnight Monday, May 5, 2003.

 

About FEI:

FEI is a nanotechnology company providing enabling 3D Structural Process Management(TM) solutions for NanoMetrology and NanoFabrication to the world’s technology leaders in the fields of semiconductors, data storage, structural biology and industry. Its range of DualBeam(TM) and single-column focused ion and electron beam products enables manufacturers and researchers to keep pace with technology shifts and develop next generation technologies and products. FEI’s products allow advanced three-dimensional metrology, device editing, trimming and structural analysis for management of sub-micron structures including those found in integrated circuits, high density magnetic storage devices, industrial materials, chemical compounds and biological

 

 

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structures. FEI solutions also deliver enhanced production yields, lower costs and faster time to market-critical benefits in highly competitive markets.

 

Headquartered in Hillsboro, Oregon, FEI has approximately 1,600 employees worldwide, with additional development and manufacturing operations located in Peabody, Massachusetts; Sunnyvale, California; Eindhoven, the Netherlands; and Brno, Czech Republic.

 

FEI Company news releases, SEC filings and the company’s Annual Report are available at no charge through the company’s web site at http://www.feicompany.com.

 

Safe Harbor Statement

This news release contains forward-looking statements that include our guidance for the second quarter of 2003, statements about product development and introduction, market diversity, operational efficiency, prospects for future growth, product revenues, future earnings and profitability. Factors that could affect these forward-looking statements include, but are not limited to, the continued downturn in the semiconductor manufacturing market; lower than expected customer orders; cancellation of customer orders; increased competition and new product offerings from competitors; failure of the company to introduce products as planned or achieve cost reductions as planned; failure of the company’s products and technology to find acceptance with customers; business conditions and growth in the general economy, both domestic and foreign; fluctuations in interest and exchange rates (including changes in relevant foreign currency exchange rates between time of sale and time of payment), changes in trade policies and tariff regulations, as well as adverse consequences of geo-political unrest in various parts of the world. Moreover, there is no certainty that economic conditions will improve in the near future. Please also refer to our Form 10-K, Forms 10-Q 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 material from the forward-looking statements.

 

 

4

 

FEI Company and Subsidiaries

Condensed Consolidated Statements of Operations

(In thousands, except share data)

(Unaudited)

 

 

 

Thirteen Weeks Ended

 

 

 

March 30,
2003

 

March 31,
2002

 

NET SALES

 

$

85,442

 

$

84,498

 

 

 

 

 

 

 

COST OF SALES

 

50,411

 

44,652

 

 

 

 

 

 

 

Gross profit

 

35,031

 

39,846

 

 

 

 

 

 

 

OPERATING EXPENSES:

 

 

 

 

 

Research and development

 

10,794

 

10,739

 

Selling, general and administrative

 

18,742

 

17,335

 

Restructuring, reorganization and relocation costs

 

—

 

—

 

Amortization of purchased intangibles

 

1,204

 

1,204

 

Total operating expenses

 

30,740

 

29,278

 

 

 

 

 

 

 

OPERATING INCOME

 

4,291

 

10,568

 

 

 

 

 

 

 

OTHER INCOME (EXPENSE):

 

 

 

 

 

Interest income

 

1,193

 

1,621

 

Interest expense

 

(2,449

)

(2,501

)

Other expense, net

 

(140

)

(354

)

Total other expense, net

 

(1,396

)

(1,234

)

 

 

 

 

 

 

INCOME BEFORE TAXES

 

2,895

 

9,334

 

 

 

 

 

 

 

INCOME TAX EXPENSE

 

1,013

 

3,407

 

 

 

 

 

 

 

NET INCOME

 

$

1,882

 

$

5,927

 

 

 

 

 

 

 

PER SHARE DATA:

 

 

 

 

 

Basic earnings per share

 

$

0.06

 

$

0.18

 

Diluted earnings per share

 

$

0.06

 

$

0.18

 

 

 

 

 

 

 

WEIGHTED AVERAGE SHARES OUTSTANDING:

 

 

 

 

 

Basic

 

32,745

 

32,126

 

Diluted

 

33,423

 

33,477

 

 

5

 

FEI Company and Subsidiaries

Condensed Consolidated Balance Sheets

(In thousands)

(Unaudited)

 

 

 

March 30,
2003

 

December 31,
2002

 

ASSETS

 

 

 

 

 

 

 

 

 

 

 

CURRENT ASSETS:

 

 

 

 

 

Cash and cash equivalents

 

$

152,784

 

$

167,423

 

Short-term investments

 

42,464

 

54,176

 

Receivables

 

101,912

 

89,111

 

Inventories

 

84,306

 

86,224

 

Deferred income taxes

 

18,100

 

18,934

 

Other

 

9,569

 

7,530

 

 

 

 

 

 

 

Total current assets

 

409,135

 

423,398

 

 

 

 

 

 

 

NON-CURRENT INVESTMENTS

 

55,455

 

52,031

 

 

 

 

 

 

 

PROPERTY PLANT AND EQUIPMENT

 

61,047

 

56,702

 

 

 

 

 

 

 

PURCHASED TECHNOLOGY, NET

 

24,659

 

25,863

 

 

 

 

 

 

 

GOODWILL, NET

 

32,854

 

32,859

 

 

 

 

 

 

 

OTHER ASSETS

 

49,218

 

47,095

 

 

 

 

 

 

 

TOTAL

 

$

632,368

 

$

637,948

 

 

 

 

 

 

 

LIABILITIES AND SHAREHOLDERS’ EQUITY

 

 

 

 

 

 

 

 

 

 

 

CURRENT LIABILITIES:

 

 

 

 

 

Accounts payable

 

$

36,197

 

$

35,179

 

Current accounts with Philips

 

4,395

 

5,629

 

Accrued payroll liabilities

 

7,297

 

8,522

 

Accrued warranty reserves

 

12,255

 

13,631

 

Deferred revenue

 

28,366

 

29,741

 

Income taxes payable

 

6,321

 

9,532

 

Accrued restructuring, reorganization and relocation costs

 

4,177

 

5,202

 

Other current liabilities

 

15,069

 

18,423

 

 

 

 

 

 

 

Total current liabilities

 

114,077

 

125,859

 

 

 

 

 

 

 

CONVERTIBLE DEBT

 

175,000

 

175,000

 

 

 

 

 

 

 

DEFERRED INCOME TAXES

 

8,755

 

7,561

 

 

 

 

 

 

 

OTHER LIABILITIES

 

2,584

 

2,603

 

 

 

 

 

 

 

SHAREHOLDERS’ EQUITY:

 

 

 

 

 

Preferred stock - 500 shares authorized; none issued and outstanding

 

—

 

—

 

Common stock - 45,000 shares authorized; 32,835 and 32,647 shares issued and outstanding at March 30, 2003 and December 31, 2002

 

327,006

 

325,203

 

Note receivable from shareholder

 

(1,116

)

(1,116

)

Accumulated earnings (deficit)

 

192

 

(1,690

)

Accumulated other comprehensive income

 

5,870

 

4,528

 

 

 

 

 

 

 

Total shareholders’ equity

 

331,952

 

326,925

 

 

 

 

 

 

 

TOTAL

 

$

632,368

 

$

637,948

 

 

6

 

FEI COMPANY

Supplemental Data

($ In Millions Except Per Share Amounts)

 

 

 

1Q Ended
3/30/2003

 

4Q Ended
12/31/2002

 

1Q Ended
3/31/2002

 

 

 

 

 

 

 

 

 

Income Statement Highlights

 

 

 

 

 

 

 

Consolidated sales

 

$

85.4

 

$

85.2

 

$

84.5

 

Gross margin

 

41.0

%

40.9

%

47.2

%

R & D spending

 

$

10.8

 

$

11.0

 

$

10.7

 

R & D (% of sales)

 

12.6

%

13.0

%

12.7

%

SG&A

 

$

18.7

 

$

18.3

 

$

17.3

 

SG&A (% of sales)

 

21.9

%

21.5

%

20.5

%

Net income (loss) - GAAP

 

$

1.9

 

$

(3.5

)

$

5.9

 

Diluted earnings (loss) per share - GAAP

 

$

0.06

 

$

(0.11

)

$

0.18

 

 

 

 

 

 

 

 

 

Sales by Business Segment

 

 

 

 

 

 

 

MicroElectronics

 

$

29.9

 

$

26.5

 

$

36.5

 

Electron Optics

 

$

35.4

 

$

36.6

 

$

30.2

 

Service

 

$

18.2

 

$

19.7

 

$

14.7

 

Components

 

$

1.9

 

$

2.3

 

$

3.1

 

 

 

 

 

 

 

 

 

Bookings

 

 

 

 

 

 

 

Total

 

$

82.8

 

$

89.9

 

$

70.5

 

Book to bill ratio

 

.97

 

1.06

 

.83

 

MicroElectronics

 

$

26.0

 

$

28.4

 

$

20.2

 

Electron Optics

 

$

27.8

 

$

40.8

 

$

26.3

 

Service

 

$

26.3

 

$

19.7

 

$

21.6

 

Components

 

$

2.7

 

$

1.0

 

$

2.4

 

Backlog - total

 

$

121.5

 

$

124.1

 

$

122.0

 

Backlog - Service

 

$

30.7

 

$

22.7

 

$

22.3

 

 

 

 

 

 

 

 

 

Balance Sheet Highlights

 

 

 

 

 

 

 

Cash, equivalents, investments

 

$

250.7

 

$

273.6

 

$

278.5

 

Operating cash generated

 

($16.6

)

$

22.0

 

$

(12.5

)

Accounts receivable

 

$

101.9

 

$

89.1

 

$

94.6

 

Days sales outstanding (DSO)

 

109

 

95

 

102

 

Inventory turnover

 

2.4

 

2.3

 

2.3

 

Inventories

 

$

84.3

 

$

86.2

 

$

77.3

 

Property, plant and equipment

 

$

61.0

 

$

56.7

 

$

34.5

 

Fixed asset investment (during quarter)

 

$

8.1

 

$

6.3

 

$

3.5

 

Depreciation expense recognized

 

$

2.7

 

$

4.0

 

$

2.9

 

Current liabilities

 

$

114.1

 

$

125.9

 

$

122.7

 

Shareholders’ equity

 

$

332.0

 

$

326.9

 

$

303.0

 

Headcount (permanent and temporary)

 

1,617

 

1,608

 

1,615

 

 

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