FEI Reports Second Quarter 2016 Results

| Source: FEI Company FEI Company

HILLSBORO, Ore., Aug. 04, 2016 (GLOBE NEWSWIRE) -- FEI Company (Nasdaq:FEIC) today reported results for the second quarter of 2016.  Second quarter revenue of $259 million was up 16% compared with $224 million for the second quarter of 2015.  The company’s backlog of orders at the end of the second quarter of 2016 was $651 million compared with $541 million at the end of the second quarter of 2015.  Bookings for the second quarter of 2016 were $259 million, resulting in a book-to-bill ratio of 1.0-to-1.

Diluted earnings per share computed on the basis of accounting principles generally accepted in the United States (GAAP) were $0.60 for the second quarter of 2016, compared with $0.89 in the second quarter of 2015.  Net income for the quarter was $25 million compared with $37 million in the second quarter of 2015.  Included in second quarter results were transaction costs related to the pending merger with Thermo Fisher Scientific Inc. and purchase accounting adjustments and integration costs related to the December 2015 acquisition of DCG Systems, Inc.  These costs totaled $13 million, or $0.32 per share, net of taxes.

Gross margin for the second quarter was 48.8%, compared with 50.0% for the second quarter of 2015.  Operating margin was 12.5% for the second quarter of 2016 compared to 20.5% for the second quarter of 2015.

Outlook and Investor Conference Call

Given the pending merger with Thermo Fisher Scientific Inc., the company will no longer provide a forward outlook and will not host a quarterly investor conference call. 

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 3,000 employees and sales and service operations in more than 50 countries around the world. More information can be found at: www.fei.com.


FEI Company and Subsidiaries
Consolidated Balance Sheets
(In thousands)
(Unaudited)
 
  July 3,
 2016		 December 31,
 2015
Assets    
Current Assets:    
Cash and cash equivalents $317,345  $300,911 
Restricted cash 8,330  19,119 
Receivables, net 233,627  213,128 
Inventories, net 200,304  170,513 
Deferred tax assets —  10,566 
Other current assets 69,612  33,614 
Total current assets 829,218  747,851 
Long-term investments in marketable securities 9,221  8,677 
Long-term restricted cash 16,481  22,113 
Property plant and equipment, net 164,521  155,608 
Intangible assets, net 60,777  35,943 
Goodwill 257,281  145,607 
Deferred tax assets 18,125  6,719 
Long-term inventories 54,402  47,109 
Other assets, net 22,968  180,222 
Total Assets $1,432,994  $1,349,849 
Liabilities and Shareholders’ Equity    
Current Liabilities:    
Accounts payable $53,141  $58,708 
Accrued payroll liabilities 40,131  38,643 
Accrued warranty reserves 15,796  14,107 
Deferred revenue 115,076  101,155 
Income taxes payable 10,290  12,124 
Accrued restructuring and reorganization 432  655 
Other current liabilities 61,434  52,630 
Total current liabilities 296,300  278,022 
Long-term deferred revenue 46,397  44,745 
Other liabilities 47,404  37,006 
Shareholders’ Equity:    
Preferred stock - 500 shares authorized; none issued and outstanding —  — 
Common stock - 70,000 shares authorized; 41,016 and 40,855 shares issued and outstanding, no par value 547,901  533,062 
Retained earnings 560,757  538,053 
Accumulated other comprehensive loss (65,765) (81,039)
Total shareholders’ equity 1,042,893  990,076 
Total Liabilities and Shareholders’ Equity $1,432,994  $1,349,849 






FEI Company and Subsidiaries
Consolidated Statements of Operations
(In thousands, except per share amounts)
(Unaudited)
 
  Thirteen Weeks Ended Twenty-Six Weeks Ended
  July 3,
 2016		 June 28,
 2015		 July 3,
 2016		 June 28,
 2015
Net Sales:        
Products $191,161  $163,585  $353,439  $327,644 
Service 68,204  60,604  134,570  117,361 
Total net sales 259,365  224,189  488,009  445,005 
Cost of Sales:        
Products 93,645  78,825  176,310  160,326 
Service 39,275  33,259  77,982  67,303 
Total cost of sales 132,920  112,084  254,292  227,629 
Gross profit 126,445  112,105  233,717  217,376 
Operating Expenses:        
Research and development 29,968  23,128  57,613  46,450 
Selling, general and administrative 64,117  43,093  113,356  88,915 
Restructuring and reorganization —  (21) (102) (142)
Total operating expenses 94,085  66,200  170,867  135,223 
Operating Income 32,360  45,905  62,850  82,153 
Other Expense, Net (1,166) (590) (2,257) (1,557)
Income Before Income Taxes 31,194  45,315  60,593  80,596 
Income Tax Expense 6,254  7,983  12,751  15,252 
Net Income $24,940  $37,332  $47,842  $65,344 
 
Basic Net Income Per Share $0.61  $0.90  $1.17  $1.57 
Diluted Net Income Per Share $0.60  $0.89  $1.16  $1.55 
 
Weighted Average Shares Outstanding:        
Basic 40,922  41,629  40,890  41,711 
Diluted 41,389  42,044  41,304  42,142 






FEI Company and Subsidiaries
Consolidated Statements of Operations
(Unaudited)
 
  Thirteen Weeks Ended (1) Twenty-Six Weeks Ended (1)
  July 3,
 2016		 June 28,
 2015		 July 3,
 2016		 June 28,
 2015
Net Sales:        
Products 73.7% 73.0% 72.4% 73.6%
Service 26.3  27.0  27.6  26.4 
Total net sales 100.0% 100.0% 100.0% 100.0%
Cost of Sales:        
Products 36.1% 35.2% 36.1% 36.0%
Service 15.1  14.8  16.0  15.1 
Total cost of sales 51.2% 50.0% 52.1% 51.2%
Gross Margin:        
Products 51.0% 51.8% 50.1% 51.1%
Service 42.4  45.1  42.1  42.7 
Gross margin 48.8% 50.0% 47.9% 48.8%
Operating Expenses:        
Research and development 11.6% 10.3% 11.8% 10.4%
Selling, general and administrative 24.7  19.2  23.2  20.0 
Restructuring and reorganization —  —  —  — 
Total operating expenses 36.3% 29.5% 35.0% 30.4%
Operating Income 12.5% 20.5% 12.9% 18.5%
Other Expense, Net (0.4)% (0.3)% (0.5)% (0.3)%
Income Before Income Taxes 12.0% 20.2% 12.4% 18.1%
Income Tax Expense 2.4% 3.6% 2.6% 3.4%
Net Income 9.6% 16.7% 9.8% 14.7%
 

(1) Percentages may not add due to rounding.





FEI Company and Subsidiaries
Consolidated Summary of Cash Flows
(In thousands)
(Unaudited)
 
  Thirteen Weeks Ended Twenty-Six Weeks Ended
  July 3,
 2016		 June 28,
 2015		 July 3,
 2016		 June 28,
 2015
Net Income $24,940  $37,332  $47,842  $65,344 
  Depreciation 6,888  6,082  13,681  12,063 
  Amortization 4,002  2,825  7,657  5,715 
  Stock-based compensation 6,030  4,545  11,869  10,494 
  Other changes in working capital (40,502) 15,076  (51,550) (4,632)
Net cash provided by operating activities 1,358  65,860  29,499  88,984 
 
  Acquisition of property, plant and equipment (4,651) (2,677) (10,790) (7,869)
  Payments for acquisitions, net of cash acquired —  —  —  (5,377)
  Other investing activities 12,985  22,376  17,014  17,059 
Net cash provided by investing activities 8,334  19,699  6,224  3,813 
             
    Dividends paid on common stock (12,258) (10,427) (24,518) (20,877)
    Repurchases of common stock —  (21,928) (943) (30,224)
    Other financing activities 343  3,303  2,758  6,325 
Net cash used in financing activities (11,915) (29,052) (22,703) (44,776)
 
Effect of exchange rate changes (8,508) 8,431  3,414  (15,334)
(Decrease) increase in cash and cash equivalents (10,731) 64,938  $16,434  $32,687 
         
Cash and Cash Equivalents:        
    Beginning of period 328,076  268,256  300,911  300,507 
    End of period $317,345  $333,194  $317,345  $333,194 
         
Supplemental Cash Flow Information:        
    Cash paid for income taxes, net $12,519  $4,655  $29,197  $10,597 
    Increase in fixed assets related to transfers from inventories 5,013  3,176  7,407  4,077 
    Accrued purchases of plant and equipment 791  443  791  443 
    Dividends declared but not paid 12,305  12,479  12,305  12,479 
    Accrued repurchases of common stock —  1,271  —  1,271 






FEI Company and Subsidiaries
Supplemental Data Table
($ in millions, except per share amounts)
(Unaudited)
 
  Thirteen Weeks Ended Twenty-Six Weeks Ended
  July 3, 2016 June 28, 2015 July 3, 2016 June 28, 2015
Income Statement Highlights:        
Consolidated sales $259.4  $224.2  $488.0  $445.0 
Gross margin 48.8% 50.0% 47.9% 48.8%
Net income $24.9  $37.3  $47.8  $65.3 
Diluted net income per share $0.60  $0.89  $1.16  $1.55 
                 
Sales and Bookings Highlights:        
Sales by Segment        
Industry Group $123.2  $119.6  $245.1  $231.5 
Science Group 136.2  104.6  242.9  213.5 
Sales by Geography        
USA & Canada $79.8  $76.4  $155.1  $141.4 
Europe 68.0  56.8  129.1  111.3 
Asia-Pacific and Rest of World 111.6  91.0  203.8  192.3 
Gross Margin by Segment        
Industry Group 52.8% 54.1% 51.1% 52.4%
Science Group 45.1  45.3  44.6  45.0 
Bookings and Backlog        
Bookings - Total $258.9  $251.6  $531.0  $467.5 
Book-to-bill Ratio 1.00  1.12  1.09  1.05 
Backlog - Total $651.1  $541.2  $651.1  $541.2 
Backlog - Service 184.9  165.0  184.9  165.0 
Bookings by Segment        
Industry Group $122.2  $112.7  $233.8  $249.8 
Science Group 136.7  138.9  297.2  217.7 
Bookings by Geography        
USA & Canada $87.1  $91.3  $209.3  $143.7 
Europe 48.3  73.0  104.2  111.3 
Asia-Pacific and Rest of World 123.5  87.3  217.5  212.5 
         
Balance Sheet and Other Highlights:        
Cash, equivalents, investments, restricted cash $351.4  $512.7  $351.4  $512.7 
Days sales outstanding (DSO) 82  86  82  86 
Days in inventory 175  180  175  180 
Days in payables (DPO) 36  61  36  61 
Cash Cycle (DSO + Days in Inventory - DPO) 221  205  221  205 
Working capital $532.9  $537.7  $532.9  $537.7 
Headcount (permanent and temporary) 3,125  2,826  3,125  2,826 
Euro average rate 1.13  1.10  1.11  1.12 
Euro ending rate 1.11  1.12  1.11  1.12 
Yen average rate 108.10  121.01  112.11  119.97 
Yen ending rate 102.65  123.71  102.65  123.71 

 


            











    

        

        
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