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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Fei Company (MM) | NASDAQ:FEIC | NASDAQ | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 106.89 | 106.55 | 107.23 | 0 | 01:00:00 |
|
x
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
o
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
Oregon
|
|
93-0621989
|
(State or other jurisdiction of incorporation or organization)
|
|
(I.R.S. Employer Identification No.)
|
|
|
|
5350 NE Dawson Creek Drive, Hillsboro, Oregon
|
|
97124-5793
|
(Address of principal executive offices)
|
|
(Zip Code)
|
Large accelerated filer
|
x
|
|
Accelerated filer
|
o
|
|
|
|
|
|
Non-accelerated filer
|
o
|
(Do not check if a smaller reporting company)
|
Smaller reporting company
|
o
|
|
|
Page
|
|
|
|
|
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||
|
|
|
Item 1.
|
|
|
|
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|
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||
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Item 2.
|
||
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Item 3.
|
||
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Item 4.
|
||
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Item 1.
|
||
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Item 1A.
|
||
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Item 2.
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||
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Item 6.
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||
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Item 1.
|
Financial Statements
|
|
June 29,
2014 |
|
December 31,
2013 |
||||
Assets
|
|
|
|
||||
Current Assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
272,372
|
|
|
$
|
384,170
|
|
Short-term investments in marketable securities
|
125,945
|
|
|
108,191
|
|
||
Short-term restricted cash
|
19,176
|
|
|
18,798
|
|
||
Receivables, net of allowances for doubtful accounts of $2,974 and $2,969
|
225,174
|
|
|
194,418
|
|
||
Inventories
|
195,712
|
|
|
181,725
|
|
||
Deferred tax assets
|
10,670
|
|
|
15,114
|
|
||
Other current assets
|
35,913
|
|
|
28,324
|
|
||
Total current assets
|
884,962
|
|
|
930,740
|
|
||
Non-current investments in marketable securities
|
57,643
|
|
|
47,278
|
|
||
Long-term restricted cash
|
35,075
|
|
|
32,718
|
|
||
Property, plant and equipment, net of accumulated depreciation of $135,750 and $125,405
|
171,937
|
|
|
157,829
|
|
||
Intangible assets, net of accumulated amortization of $24,826 and $19,385
|
65,121
|
|
|
47,197
|
|
||
Goodwill
|
184,994
|
|
|
136,152
|
|
||
Deferred tax assets
|
7,528
|
|
|
1,751
|
|
||
Non-current inventories
|
57,326
|
|
|
62,104
|
|
||
Other assets, net
|
13,668
|
|
|
10,315
|
|
||
Total Assets
|
$
|
1,478,254
|
|
|
$
|
1,426,084
|
|
Liabilities and Shareholders’ Equity
|
|
|
|
||||
Current Liabilities:
|
|
|
|
||||
Accounts payable
|
$
|
87,975
|
|
|
$
|
73,247
|
|
Accrued payroll liabilities
|
41,123
|
|
|
45,146
|
|
||
Accrued warranty reserves
|
12,620
|
|
|
12,705
|
|
||
Short-term deferred revenue
|
91,033
|
|
|
91,563
|
|
||
Income taxes payable
|
8,651
|
|
|
4,579
|
|
||
Accrued restructuring, reorganization, relocation and severance
|
1,398
|
|
|
50
|
|
||
Other current liabilities
|
52,331
|
|
|
46,324
|
|
||
Total current liabilities
|
295,131
|
|
|
273,614
|
|
||
Long-term deferred revenue
|
35,710
|
|
|
30,744
|
|
||
Deferred tax liabilities
|
11,521
|
|
|
8,931
|
|
||
Other liabilities
|
36,472
|
|
|
35,227
|
|
||
Commitments and contingencies
|
|
|
|
||||
Shareholders’ Equity:
|
|
|
|
||||
Preferred stock - 500 shares authorized; none issued and outstanding
|
—
|
|
|
—
|
|
||
Common stock - 70,000 shares authorized; 41,959 and 42,136 shares issued and outstanding, no par value
|
626,814
|
|
|
637,482
|
|
||
Retained earnings
|
427,307
|
|
|
392,958
|
|
||
Accumulated other comprehensive income
|
45,299
|
|
|
47,128
|
|
||
Total Shareholders’ Equity
|
1,099,420
|
|
|
1,077,568
|
|
||
Total Liabilities and Shareholders’ Equity
|
$
|
1,478,254
|
|
|
$
|
1,426,084
|
|
|
Thirteen Weeks Ended
|
|
Twenty-Six Weeks Ended
|
||||||||||||
|
June 29,
2014 |
|
June 30,
2013 |
|
June 29,
2014 |
|
June 30,
2013 |
||||||||
Net sales:
|
|
|
|
|
|
|
|
||||||||
Products
|
$
|
179,030
|
|
|
$
|
170,337
|
|
|
$
|
348,328
|
|
|
$
|
339,832
|
|
Service
|
57,925
|
|
|
52,141
|
|
|
114,892
|
|
|
103,835
|
|
||||
Total net sales
|
236,955
|
|
|
222,478
|
|
|
463,220
|
|
|
443,667
|
|
||||
Cost of sales:
|
|
|
|
|
|
|
|
||||||||
Products
|
92,077
|
|
|
82,680
|
|
|
178,673
|
|
|
167,863
|
|
||||
Service
|
35,027
|
|
|
32,901
|
|
|
68,371
|
|
|
66,356
|
|
||||
Total cost of sales
|
127,104
|
|
|
115,581
|
|
|
247,044
|
|
|
234,219
|
|
||||
Gross profit
|
109,851
|
|
|
106,897
|
|
|
216,176
|
|
|
209,448
|
|
||||
Operating expenses:
|
|
|
|
|
|
|
|
||||||||
Research and development
|
26,221
|
|
|
25,413
|
|
|
51,866
|
|
|
50,222
|
|
||||
Selling, general and administrative
|
50,587
|
|
|
42,639
|
|
|
99,050
|
|
|
86,163
|
|
||||
Restructuring, reorganization, relocation and severance
|
2,228
|
|
|
395
|
|
|
3,559
|
|
|
1,090
|
|
||||
Total operating expenses
|
79,036
|
|
|
68,447
|
|
|
154,475
|
|
|
137,475
|
|
||||
Operating income
|
30,815
|
|
|
38,450
|
|
|
61,701
|
|
|
71,973
|
|
||||
Other expense:
|
|
|
|
|
|
|
|
||||||||
Interest income
|
221
|
|
|
137
|
|
|
373
|
|
|
253
|
|
||||
Interest expense
|
(173
|
)
|
|
(669
|
)
|
|
(272
|
)
|
|
(1,485
|
)
|
||||
Other, net
|
(854
|
)
|
|
(920
|
)
|
|
(1,177
|
)
|
|
(1,725
|
)
|
||||
Total other expense, net
|
(806
|
)
|
|
(1,452
|
)
|
|
(1,076
|
)
|
|
(2,957
|
)
|
||||
Income before income taxes
|
30,009
|
|
|
36,998
|
|
|
60,625
|
|
|
69,016
|
|
||||
Income tax expense
|
5,061
|
|
|
7,005
|
|
|
10,599
|
|
|
12,222
|
|
||||
Net income
|
$
|
24,948
|
|
|
$
|
29,993
|
|
|
$
|
50,026
|
|
|
$
|
56,794
|
|
Basic net income per share
|
$
|
0.59
|
|
|
$
|
0.76
|
|
|
$
|
1.19
|
|
|
$
|
1.46
|
|
Diluted net income per share
|
$
|
0.59
|
|
|
$
|
0.72
|
|
|
$
|
1.17
|
|
|
$
|
1.36
|
|
Cash dividends declared per share
|
$
|
0.25
|
|
|
$
|
0.12
|
|
|
$
|
0.37
|
|
|
$
|
0.20
|
|
Shares used in per share calculations:
|
|
|
|
|
|
|
|
||||||||
Basic
|
42,080
|
|
|
39,496
|
|
|
42,135
|
|
|
39,012
|
|
||||
Diluted
|
42,627
|
|
|
42,281
|
|
|
42,701
|
|
|
42,227
|
|
|
Thirteen Weeks Ended
|
|
Twenty-Six Weeks Ended
|
||||||||||||
|
June 29,
2014 |
|
June 30,
2013 |
|
June 29,
2014 |
|
June 30,
2013 |
||||||||
Net income
|
$
|
24,948
|
|
|
$
|
29,993
|
|
|
$
|
50,026
|
|
|
$
|
56,794
|
|
Other comprehensive income, net of taxes:
|
|
|
|
|
|
|
|
||||||||
Change in cumulative translation adjustment
|
(1,863
|
)
|
|
6,361
|
|
|
(1,756
|
)
|
|
(9,353
|
)
|
||||
Change in unrealized gain on available-for-sale securities
|
39
|
|
|
(10
|
)
|
|
40
|
|
|
(3
|
)
|
||||
Change in minimum pension liability
|
17
|
|
|
(56
|
)
|
|
33
|
|
|
(71
|
)
|
||||
Changes due to cash flow hedging instruments:
|
|
|
|
|
|
|
|
||||||||
Net (loss) gain on hedge instruments
|
(1,022
|
)
|
|
70
|
|
|
(1,775
|
)
|
|
(1,855
|
)
|
||||
Reclassification to net income of previously deferred losses related to hedge derivatives instruments
|
1,096
|
|
|
304
|
|
|
1,629
|
|
|
626
|
|
||||
Comprehensive income
|
$
|
23,215
|
|
|
$
|
36,662
|
|
|
$
|
48,197
|
|
|
$
|
46,138
|
|
|
Twenty-Six Weeks Ended
|
||||||
|
June 29,
2014 |
|
June 30,
2013 |
||||
Cash flows from operating activities:
|
|
|
|
||||
Net income
|
$
|
50,026
|
|
|
$
|
56,794
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
||||
Depreciation
|
14,640
|
|
|
11,451
|
|
||
Amortization
|
6,864
|
|
|
5,248
|
|
||
Stock-based compensation
|
10,961
|
|
|
8,712
|
|
||
Asset impairments, write-offs of intangible assets and other
|
282
|
|
|
16
|
|
||
Income taxes (receivable) payable, net
|
(1,691
|
)
|
|
8,188
|
|
||
Deferred income taxes
|
(2,411
|
)
|
|
(4,389
|
)
|
||
Decrease (increase), net of acquisitions, in:
|
|
|
|
||||
Receivables
|
(28,932
|
)
|
|
8,517
|
|
||
Inventories
|
(18,243
|
)
|
|
(5,171
|
)
|
||
Other assets
|
710
|
|
|
1,348
|
|
||
Increase (decrease), net of acquisitions, in:
|
|
|
|
||||
Accounts payable
|
10,411
|
|
|
6,356
|
|
||
Accrued payroll liabilities
|
(4,574
|
)
|
|
(4,759
|
)
|
||
Accrued warranty reserves
|
(88
|
)
|
|
258
|
|
||
Deferred revenue
|
(785
|
)
|
|
8,188
|
|
||
Accrued restructuring, reorganization, relocation and severance
|
1,354
|
|
|
(1,601
|
)
|
||
Other liabilities
|
5,900
|
|
|
(7,628
|
)
|
||
Net cash provided by operating activities
|
44,424
|
|
|
91,528
|
|
||
Cash flows from investing activities:
|
|
|
|
||||
Increase in restricted cash
|
(3,154
|
)
|
|
(6,561
|
)
|
||
Acquisition of property, plant and equipment
|
(23,322
|
)
|
|
(42,566
|
)
|
||
Payments for acquisitions, net of cash acquired
|
(65,049
|
)
|
|
—
|
|
||
Purchase of investments in marketable securities
|
(133,213
|
)
|
|
(73,397
|
)
|
||
Redemption of investments in marketable securities
|
105,267
|
|
|
69,915
|
|
||
Other
|
(499
|
)
|
|
(1,304
|
)
|
||
Net cash used in investing activities
|
(119,970
|
)
|
|
(53,913
|
)
|
||
Cash flows from financing activities:
|
|
|
|
||||
Redemption of 2.875% convertible notes
|
—
|
|
|
(73
|
)
|
||
Dividends paid on common stock
|
(10,129
|
)
|
|
(6,164
|
)
|
||
Withholding taxes paid on issuance of vested restricted stock units
|
(1,331
|
)
|
|
(439
|
)
|
||
Proceeds from exercise of stock options and employee stock purchases
|
7,880
|
|
|
6,816
|
|
||
Excess tax benefit for share based payment arrangements
|
2,011
|
|
|
1,069
|
|
||
Repurchases of common stock
|
(30,479
|
)
|
|
—
|
|
||
Net cash (used in) provided by financing activities
|
(32,048
|
)
|
|
1,209
|
|
||
Effect of exchange rate changes
|
(4,204
|
)
|
|
(1,056
|
)
|
||
(Decrease) increase in cash and cash equivalents
|
(111,798
|
)
|
|
37,768
|
|
||
Cash and cash equivalents:
|
|
|
|
||||
Beginning of period
|
384,170
|
|
|
266,302
|
|
||
End of period
|
$
|
272,372
|
|
|
$
|
304,070
|
|
Supplemental Cash Flow Information:
|
|
|
|
||||
Cash paid for income taxes, net
|
$
|
9,883
|
|
|
$
|
6,204
|
|
Cash paid for interest
|
196
|
|
|
1,439
|
|
||
Increase in fixed assets related to transfers with inventories
|
2,657
|
|
|
5,873
|
|
||
Dividends declared but not paid
|
10,564
|
|
|
4,996
|
|
||
Conversion of 2.875% convertible notes
|
—
|
|
|
88,937
|
|
||
Accrued purchases of plant and equipment
|
4,619
|
|
|
—
|
|
NOTE 1.
|
ORGANIZATION AND BASIS OF PRESENTATION
|
•
|
the timing of revenue recognition;
|
•
|
valuations of excess and obsolete inventory;
|
•
|
the lives and recoverability of equipment and other long-lived assets such as goodwill;
|
•
|
the valuations of intangible assets;
|
•
|
restructuring, reorganization, relocation and severance costs;
|
•
|
tax valuation allowances and unrecognized tax benefits;
|
•
|
stock-based compensation; and
|
•
|
accounting for derivatives.
|
NOTE 2.
|
EARNINGS PER SHARE
|
|
Thirteen Weeks Ended
|
|
Thirteen Weeks Ended
|
||||||||||||||||||
|
June 29, 2014
|
|
June 30, 2013
|
||||||||||||||||||
|
Net
Income
|
|
Shares
|
|
Per Share
Amount
|
|
Net
Income
|
|
Shares
|
|
Per Share
Amount
|
||||||||||
Basic EPS
|
$
|
24,948
|
|
|
42,080
|
|
|
$
|
0.59
|
|
|
$
|
29,993
|
|
|
39,496
|
|
|
$
|
0.76
|
|
Dilutive effect of 2.875% convertible debt
|
—
|
|
|
—
|
|
|
—
|
|
|
325
|
|
|
2,164
|
|
|
(0.03
|
)
|
||||
Dilutive effect of stock options, restricted stock units, and shares issuable to Philips
|
—
|
|
|
547
|
|
|
—
|
|
|
—
|
|
|
621
|
|
|
(0.01
|
)
|
||||
Diluted EPS
|
$
|
24,948
|
|
|
42,627
|
|
|
$
|
0.59
|
|
|
$
|
30,318
|
|
|
42,281
|
|
|
$
|
0.72
|
|
|
Twenty-Six Weeks Ended
|
|
Twenty-Six Weeks Ended
|
||||||||||||||||||
|
June 29, 2014
|
|
June 30, 2013
|
||||||||||||||||||
|
Net
Income
|
|
Shares
|
|
Per Share
Amount
|
|
Net
Income
|
|
Shares
|
|
Per Share
Amount
|
||||||||||
Basic EPS
|
$
|
50,026
|
|
|
42,135
|
|
|
$
|
1.19
|
|
|
$
|
56,794
|
|
|
39,012
|
|
|
$
|
1.46
|
|
Dilutive effect of 2.875% convertible debt
|
—
|
|
|
—
|
|
|
—
|
|
|
780
|
|
|
2,595
|
|
|
(0.08
|
)
|
||||
Dilutive effect of stock options, restricted stock units, and shares issuable to Philips
|
—
|
|
|
566
|
|
|
(0.02
|
)
|
|
—
|
|
|
620
|
|
|
(0.02
|
)
|
||||
Diluted EPS
|
$
|
50,026
|
|
|
42,701
|
|
|
$
|
1.17
|
|
|
$
|
57,574
|
|
|
42,227
|
|
|
$
|
1.36
|
|
|
Thirteen Weeks Ended
|
|
Twenty-Six Weeks Ended
|
||||||||
|
June 29,
2014 |
|
June 30,
2013 |
|
June 29,
2014 |
|
June 30,
2013 |
||||
Stock options
|
244
|
|
|
226
|
|
|
190
|
|
|
219
|
|
Restricted stock units
|
12
|
|
|
1
|
|
|
6
|
|
|
1
|
|
NOTE 3.
|
STOCK-BASED COMPENSATION
|
|
June 29,
2014 |
|
Shares available for grant
|
1,877,083
|
|
Shares of common stock reserved for issuance
|
3,595,338
|
|
|
June 29, 2014
|
||||||
|
Options
Outstanding
|
|
Options
Exercisable
|
||||
Number
|
868,143
|
|
|
175,414
|
|
||
Weighted average exercise price
|
$
|
60.16
|
|
|
$
|
38.64
|
|
Aggregate intrinsic value
|
$ 27.0 million
|
|
|
$ 9.2 million
|
|
||
Weighted average remaining contractual term
|
5.3 years
|
|
|
3.9 years
|
|
|
June 29, 2014
|
||||||
|
RSUs Nonvested
|
|
RSUs Expected
to Vest
|
||||
Number
|
850,114
|
|
|
748,279
|
|
||
Weighted average grant date per share fair value
|
$
|
63.36
|
|
|
$
|
62.30
|
|
Aggregate intrinsic value
|
$ 77.6 million
|
|
|
$ 68.3 million
|
|
||
Weighted average remaining term to vest
|
1.5 years
|
|
|
1.5 years
|
|
|
Thirteen Weeks Ended
|
|
Twenty-Six Weeks Ended
|
||||||||||||
|
June 29,
2014 |
|
June 30,
2013 |
|
June 29,
2014 |
|
June 30,
2013 |
||||||||
Cost of sales
|
$
|
857
|
|
|
$
|
616
|
|
|
$
|
1,583
|
|
|
$
|
1,211
|
|
Research and development
|
713
|
|
|
545
|
|
|
1,330
|
|
|
1,076
|
|
||||
Selling, general and administrative
|
4,253
|
|
|
3,187
|
|
|
8,048
|
|
|
6,425
|
|
||||
Total stock-based compensation
|
$
|
5,823
|
|
|
$
|
4,348
|
|
|
$
|
10,961
|
|
|
$
|
8,712
|
|
NOTE 4.
|
CREDIT FACILITIES AND RESTRICTED CASH
|
|
June 29,
2014 |
||
Guarantees and letters of credit outstanding
|
$
|
54,391
|
|
Amount secured by restricted cash deposits:
|
|
||
Current
|
$
|
19,176
|
|
Long-term
|
35,075
|
|
|
Total secured by restricted cash
|
$
|
54,251
|
|
NOTE 5.
|
INVENTORIES
|
|
June 29,
2014 |
|
December 31,
2013 |
||||
Raw materials and assembled parts
|
$
|
59,407
|
|
|
$
|
61,235
|
|
Service inventories, estimated current requirements
|
14,046
|
|
|
15,197
|
|
||
Work-in-process
|
88,237
|
|
|
75,883
|
|
||
Finished goods
|
34,022
|
|
|
29,410
|
|
||
Total current inventories
|
$
|
195,712
|
|
|
$
|
181,725
|
|
Non-current inventories
|
$
|
57,326
|
|
|
$
|
62,104
|
|
NOTE 6.
|
GOODWILL AND OTHER INTANGIBLE ASSETS
|
|
Twenty-Six Weeks Ended
|
||||||
|
June 29,
2014 |
|
June 30,
2013 |
||||
Balance, beginning of period
|
$
|
136,152
|
|
|
$
|
131,320
|
|
Goodwill additions
|
46,880
|
|
|
—
|
|
||
Goodwill adjustments
|
1,962
|
|
|
(2,198
|
)
|
||
Balance, end of period
|
$
|
184,994
|
|
|
$
|
129,122
|
|
|
June 29,
2014 |
|
December 31,
2013 |
||||
Patents, trademarks and other
|
$
|
25,936
|
|
|
$
|
24,327
|
|
Accumulated amortization
|
(11,340
|
)
|
|
(9,296
|
)
|
||
Net patents, trademarks and other
|
14,596
|
|
|
15,031
|
|
||
Customer relationships
|
24,052
|
|
|
21,650
|
|
||
Accumulated amortization
|
(4,967
|
)
|
|
(3,547
|
)
|
||
Net customer relationships
|
19,085
|
|
|
18,103
|
|
||
Developed technology
|
37,514
|
|
|
18,161
|
|
||
Accumulated amortization
|
(6,074
|
)
|
|
(4,098
|
)
|
||
Net developed technology
|
31,440
|
|
|
14,063
|
|
||
Note issuance costs
|
2,445
|
|
|
2,445
|
|
||
Accumulated amortization
|
(2,445
|
)
|
|
(2,445
|
)
|
||
Net note issuance costs
|
—
|
|
|
—
|
|
||
Total intangible assets included in other long-term assets
|
$
|
65,121
|
|
|
$
|
47,197
|
|
|
Twenty-Six Weeks Ended
|
||||||
|
June 29,
2014 |
|
June 30,
2013 |
||||
Patents, trademarks and other
|
$
|
2,119
|
|
|
$
|
1,777
|
|
Customer relationships
|
1,421
|
|
|
1,073
|
|
||
Developed technology
|
1,976
|
|
|
1,102
|
|
||
Note issuance costs
|
—
|
|
|
146
|
|
||
Total amortization expense
|
$
|
5,516
|
|
|
$
|
4,098
|
|
|
Patents,
Trademarks
and Other
|
|
Customer Relationships
|
|
Developed Technology
|
|
Total
|
||||||||
Remainder of 2014
|
$
|
1,864
|
|
|
$
|
1,447
|
|
|
$
|
2,112
|
|
|
$
|
5,423
|
|
2015
|
3,704
|
|
|
2,894
|
|
|
4,224
|
|
|
10,822
|
|
||||
2016
|
2,826
|
|
|
2,894
|
|
|
4,224
|
|
|
9,944
|
|
||||
2017
|
2,271
|
|
|
2,546
|
|
|
3,946
|
|
|
8,763
|
|
||||
2018
|
1,656
|
|
|
2,461
|
|
|
3,729
|
|
|
7,846
|
|
||||
Thereafter
|
2,275
|
|
|
6,843
|
|
|
13,205
|
|
|
22,323
|
|
||||
Total future amortization expense
|
$
|
14,596
|
|
|
$
|
19,085
|
|
|
$
|
31,440
|
|
|
$
|
65,121
|
|
NOTE 7.
|
WARRANTY RESERVES
|
|
Twenty-Six Weeks Ended
|
||||||
|
June 29,
2014 |
|
June 30,
2013 |
||||
Balance, beginning of period
|
$
|
12,705
|
|
|
$
|
12,049
|
|
Reductions for warranty costs incurred
|
(6,430
|
)
|
|
(6,580
|
)
|
||
Warranties issued
|
6,347
|
|
|
6,804
|
|
||
Translation and changes in estimates
|
(2
|
)
|
|
(127
|
)
|
||
Balance, end of period
|
$
|
12,620
|
|
|
$
|
12,146
|
|
NOTE 8.
|
INCOME TAXES
|
|
June 29,
2014 |
|
December 31,
2013 |
||||
Deferred tax assets – current
|
$
|
10,670
|
|
|
$
|
15,114
|
|
Deferred tax assets – non-current
|
7,528
|
|
|
1,751
|
|
||
Deferred tax liabilities – current
|
(54
|
)
|
|
(9
|
)
|
||
Deferred tax liabilities – non-current
|
(11,521
|
)
|
|
(8,931
|
)
|
||
Net deferred tax assets
|
$
|
6,623
|
|
|
$
|
7,925
|
|
Valuation allowance
|
$
|
4,511
|
|
|
$
|
2,723
|
|
Jurisdiction
|
|
Open Tax Years
|
U.S.
|
|
2010 and forward
|
The Netherlands
|
|
2011 and forward
|
Czech Republic
|
|
2011 and forward
|
NOTE 9.
|
RELATED-PARTY ACTIVITY
|
•
|
one of the members of our Board of Directors serves on the Board of Directors of Applied Materials, Inc. and Lattice Semiconductor Corporation;
|
•
|
our Chief Financial Officer is on the Board of Directors of Cascade Microtech, Inc.;
|
•
|
one of the members of our Board of Directors serves on the Supervisory Board of TMC BV; and
|
•
|
our Chief Executive Officer is on the Board of Trustees for the Oregon Health and Science University Foundation.
|
|
Thirteen Weeks Ended
|
|
Twenty-Six Weeks Ended
|
||||||||||||
Sales to Related Parties
|
June 29,
2014 |
|
June 30,
2013 |
|
June 29,
2014 |
|
June 30,
2013 |
||||||||
Product sales:
|
|
|
|
|
|
|
|
||||||||
Applied Materials, Inc.
|
$
|
1,383
|
|
|
$
|
99
|
|
|
$
|
2,342
|
|
|
$
|
3,591
|
|
Lattice Semiconductor Corporation
|
—
|
|
|
4
|
|
|
—
|
|
|
4
|
|
||||
Cascade Microtech, Inc.
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Oregon Health and Science University
|
119
|
|
|
126
|
|
|
249
|
|
|
255
|
|
||||
Total product sales to related parties
|
1,502
|
|
|
229
|
|
|
2,591
|
|
|
3,850
|
|
||||
Service sales:
|
|
|
|
|
|
|
|
||||||||
Applied Materials, Inc.
|
187
|
|
|
197
|
|
|
355
|
|
|
330
|
|
||||
Lattice Semiconductor Corporation
|
3
|
|
|
3
|
|
|
6
|
|
|
6
|
|
||||
Cascade Microtech, Inc.
|
8
|
|
|
8
|
|
|
16
|
|
|
16
|
|
||||
Oregon Health and Science University
|
93
|
|
|
7
|
|
|
175
|
|
|
16
|
|
||||
Total service sales to related parties
|
291
|
|
|
215
|
|
|
552
|
|
|
368
|
|
||||
Total sales to related parties
|
$
|
1,793
|
|
|
$
|
444
|
|
|
$
|
3,143
|
|
|
$
|
4,218
|
|
Purchases from Related Parties
|
|
|
|
|
|
|
|
||||||||
TMC BV
|
$
|
882
|
|
|
$
|
23
|
|
|
$
|
1,290
|
|
|
$
|
48
|
|
Oregon Health and Science University
|
39
|
|
|
175
|
|
|
78
|
|
|
175
|
|
||||
Total purchases from related parties
|
$
|
921
|
|
|
$
|
198
|
|
|
$
|
1,368
|
|
|
$
|
223
|
|
|
June 29,
2014 |
||
Applied Materials, Inc.
|
$
|
1,755
|
|
Cascade Microtech, Inc.
|
8
|
|
|
TMC BV
|
(657
|
)
|
|
Oregon Health and Science University
|
(34
|
)
|
|
Due from related parties, net
|
$
|
1,072
|
|
NOTE 10.
|
COMMITMENTS AND CONTINGENCIES
|
NOTE 11.
|
SEGMENT INFORMATION
|
|
Thirteen Weeks Ended
|
|
Twenty-Six Weeks Ended
|
||||||||||||
|
June 29,
2014 |
|
June 30,
2013 |
|
June 29,
2014 |
|
June 30,
2013 |
||||||||
Sales to External Customers:
|
|
|
|
|
|
|
|
||||||||
Industry Group
|
$
|
127,225
|
|
|
$
|
103,702
|
|
|
$
|
233,664
|
|
|
$
|
202,766
|
|
Science Group
|
109,730
|
|
|
118,776
|
|
|
229,556
|
|
|
240,901
|
|
||||
Total
|
$
|
236,955
|
|
|
$
|
222,478
|
|
|
$
|
463,220
|
|
|
$
|
443,667
|
|
Gross Profit:
|
|
|
|
|
|
|
|
||||||||
Industry Group
|
$
|
64,088
|
|
|
$
|
53,788
|
|
|
$
|
120,221
|
|
|
$
|
104,302
|
|
Science Group
|
45,763
|
|
|
53,109
|
|
|
95,955
|
|
|
105,146
|
|
||||
Total
|
$
|
109,851
|
|
|
$
|
106,897
|
|
|
$
|
216,176
|
|
|
$
|
209,448
|
|
|
June 29,
2014 |
|
December 31,
2013 |
||||
Goodwill:
|
|
|
|
||||
Industry Group
|
$
|
100,814
|
|
|
$
|
51,532
|
|
Science Group
|
84,180
|
|
|
84,620
|
|
||
Total
|
$
|
184,994
|
|
|
$
|
136,152
|
|
Total Assets:
|
|
|
|
||||
Industry Group
|
$
|
419,289
|
|
|
$
|
297,987
|
|
Science Group
|
355,961
|
|
|
365,571
|
|
||
Corporate and Eliminations
|
703,004
|
|
|
762,526
|
|
||
Total
|
$
|
1,478,254
|
|
|
$
|
1,426,084
|
|
NOTE 12.
|
RESTRUCTURING, REORGANIZATION, RELOCATION AND SEVERANCE
|
Twenty-Six Weeks Ended June 29, 2014
|
Second Quarter 2014 Realignment
|
|
First Quarter 2014 Restructuring
|
|
Group Structure Reorganization
|
|
Total
|
||||||||
Beginning accrued liability
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
50
|
|
|
$
|
50
|
|
Charged to expense, net
|
2,228
|
|
|
1,331
|
|
|
—
|
|
|
3,559
|
|
||||
Expenditures
|
(880
|
)
|
|
(1,331
|
)
|
|
—
|
|
|
(2,211
|
)
|
||||
Ending accrued liability
|
$
|
1,348
|
|
|
$
|
—
|
|
|
$
|
50
|
|
|
$
|
1,398
|
|
Twenty-Six Weeks Ended June 30, 2013
|
Group Structure Organization
|
|
Total
|
||||
Beginning accrued liability
|
$
|
2,692
|
|
|
$
|
2,692
|
|
Charged to expense, net
|
1,090
|
|
|
1,090
|
|
||
Expenditures
|
(2,744
|
)
|
|
(2,744
|
)
|
||
Write-offs and adjustments
|
16
|
|
|
16
|
|
||
Ending accrued liability
|
$
|
1,054
|
|
|
$
|
1,054
|
|
NOTE 13.
|
FAIR VALUE MEASUREMENTS OF ASSETS AND LIABILITIES
|
•
|
Level 1 – quoted prices in active markets for identical securities as of the reporting date;
|
•
|
Level 2 – other significant directly or indirectly observable inputs, including quoted prices for similar securities, interest rates, prepayment speeds and credit risk; and
|
•
|
Level 3 – significant inputs that are generally less observable than objective sources, including our own assumptions in determining fair value.
|
June 29, 2014
|
Level 1
|
Level 2
|
Level 3
|
Total
|
||||||||
Available for sale marketable securities:
|
|
|
|
|
||||||||
U.S. Government-backed securities
|
$
|
15,063
|
|
$
|
—
|
|
$
|
—
|
|
$
|
15,063
|
|
Agency bonds
|
—
|
|
37,481
|
|
—
|
|
37,481
|
|
||||
Commercial paper
|
—
|
|
45,824
|
|
—
|
|
45,824
|
|
||||
Certificates of deposit
|
—
|
|
13,663
|
|
—
|
|
13,663
|
|
||||
Municipal bonds
|
—
|
|
49,929
|
|
—
|
|
49,929
|
|
||||
Corporate bonds
|
—
|
|
14,948
|
|
—
|
|
14,948
|
|
||||
Trading securities:
|
|
|
|
|
||||||||
Equity securities – mutual funds
|
6,680
|
|
—
|
|
—
|
|
6,680
|
|
||||
Derivative contracts, net
|
—
|
|
(2,932
|
)
|
—
|
|
(2,932
|
)
|
||||
Total
|
$
|
21,743
|
|
$
|
158,913
|
|
$
|
—
|
|
$
|
180,656
|
|
December 31, 2013
|
Level 1
|
Level 2
|
Level 3
|
Total
|
||||||||
Available for sale marketable securities:
|
|
|
|
|
||||||||
U.S. treasury notes
|
$
|
10,128
|
|
$
|
—
|
|
$
|
—
|
|
$
|
10,128
|
|
Agency bonds
|
—
|
|
37,961
|
|
—
|
|
37,961
|
|
||||
Commercial paper
|
—
|
|
39,987
|
|
—
|
|
39,987
|
|
||||
Certificates of deposit
|
—
|
|
7,786
|
|
—
|
|
7,786
|
|
||||
Municipal bonds
|
—
|
|
49,319
|
|
—
|
|
49,319
|
|
||||
Corporate bonds
|
—
|
|
5,001
|
|
—
|
|
5,001
|
|
||||
Trading securities:
|
|
|
|
|
||||||||
Equity securities – mutual funds
|
5,287
|
|
—
|
|
—
|
|
5,287
|
|
||||
Derivative contracts, net
|
—
|
|
(1,113
|
)
|
—
|
|
(1,113
|
)
|
||||
Total
|
$
|
15,415
|
|
$
|
138,941
|
|
$
|
—
|
|
$
|
154,356
|
|
NOTE 14.
|
DERIVATIVE INSTRUMENTS
|
|
June 29,
2014 |
|
December 31,
2013 |
||||
Cash flow hedges
|
$
|
161,000
|
|
|
$
|
208,446
|
|
Balance sheet hedges
|
200,433
|
|
|
172,947
|
|
||
Total outstanding derivative contracts
|
$
|
361,433
|
|
|
$
|
381,393
|
|
|
Thirteen Weeks Ended
|
|
Twenty-Six Weeks Ended
|
||||||||||||
|
June 29,
2014 |
|
June 30,
2013 |
|
June 29,
2014 |
|
June 30,
2013 |
||||||||
Foreign currency loss, inclusive of the impact of derivatives
|
$
|
(723
|
)
|
|
$
|
(927
|
)
|
|
$
|
(953
|
)
|
|
$
|
(1,526
|
)
|
|
Offsetting of Derivative Assets
|
|
Offsetting of Derivative Liabilities
|
||||||||||||||||
June 29, 2014
|
Gross Amounts of Recognized Assets
|
Gross Amounts Offset in the Balance Sheet
|
Net Amounts Presented in Other Current Assets
|
|
Gross Amounts of Recognized Liabilities
|
Gross Amounts Offset in the Balance Sheet
|
Net Amounts Presented in Other Current Liabilities
|
||||||||||||
Foreign exchange contracts designated as hedging instruments
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
|
$
|
2,528
|
|
$
|
(985
|
)
|
$
|
1,543
|
|
Foreign exchange contracts not designated as hedging instruments
|
373
|
|
(107
|
)
|
266
|
|
|
2,073
|
|
(418
|
)
|
1,655
|
|
||||||
Total
|
$
|
373
|
|
$
|
(107
|
)
|
$
|
266
|
|
|
$
|
4,601
|
|
$
|
(1,403
|
)
|
$
|
3,198
|
|
|
Offsetting of Derivative Assets
|
|
Offsetting of Derivative Liabilities
|
||||||||||||||||
December 31, 2013
|
Gross Amounts of Recognized Assets
|
Gross Amounts Offset in the Balance Sheet
|
Net Amounts Presented in Other Current Assets
|
|
Gross Amounts of Recognized Liabilities
|
Gross Amounts Offset in the Balance Sheet
|
Net Amounts Presented in Other Current Liabilities
|
||||||||||||
Foreign exchange contracts designated as hedging instruments
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
|
$
|
4,362
|
|
$
|
(3,042
|
)
|
$
|
1,320
|
|
Foreign exchange contracts not designated as hedging instruments
|
2,171
|
|
(698
|
)
|
1,473
|
|
|
2,916
|
|
(1,650
|
)
|
1,266
|
|
||||||
Total
|
$
|
2,171
|
|
$
|
(698
|
)
|
$
|
1,473
|
|
|
$
|
7,278
|
|
$
|
(4,692
|
)
|
$
|
2,586
|
|
|
Thirteen Weeks Ended
|
|
Twenty-Six Weeks Ended
|
||||||||||||
Foreign Exchange Contracts in Cash Flow Hedging Relationships
|
June 29,
2014 |
|
June 30,
2013 |
|
June 29,
2014 |
|
June 30,
2013 |
||||||||
Amount of gain/(loss):
|
|
|
|
|
|
|
|
||||||||
Recognized in AOCI (effective portion)
|
$
|
(2,057
|
)
|
|
$
|
(1,131
|
)
|
|
$
|
(4,259
|
)
|
|
$
|
(2,930
|
)
|
Reclassified from AOCI into revenue (effective portion)
|
9
|
|
|
—
|
|
|
46
|
|
|
—
|
|
||||
Reclassified from AOCI into cost of sales (effective portion)
|
(1,096
|
)
|
|
(283
|
)
|
|
(1,666
|
)
|
|
(580
|
)
|
||||
Recognized in other, net (ineffective portion and amount excluded from effectiveness testing)
|
(9
|
)
|
|
(21
|
)
|
|
(9
|
)
|
|
(46
|
)
|
||||
Foreign Exchange Contracts Not in Cash Flow Hedging Relationships
|
|
|
|
|
|
|
|
||||||||
Amount of gain/(loss):
|
|
|
|
|
|
|
|
||||||||
Recognized in other, net
|
$
|
(636
|
)
|
|
$
|
2,324
|
|
|
$
|
(3,745
|
)
|
|
$
|
3,091
|
|
NOTE 15.
|
CHANGES IN ACCUMULATED OTHER COMPREHENSIVE INCOME BY COMPONENT
|
|
Thirteen Weeks Ended June 29, 2014
|
||||||||||||||||||
|
Foreign Currency Items
|
|
Unrealized Gains and Losses on Available-for-Sale Securities
|
|
Defined Benefit Pension Items
|
|
Gains and Losses on Cash Flow Hedges
|
|
Total
|
||||||||||
Beginning Balance
|
$
|
48,972
|
|
|
$
|
(10
|
)
|
|
$
|
(536
|
)
|
|
$
|
(1,394
|
)
|
|
$
|
47,032
|
|
Other comprehensive income before reclassifications
|
(1,863
|
)
|
|
39
|
|
|
17
|
|
|
(1,022
|
)
|
|
(2,829
|
)
|
|||||
Amounts reclassified from AOCI to:
|
|
|
|
|
|
|
|
|
|
||||||||||
Revenue
|
—
|
|
|
—
|
|
|
—
|
|
|
(9
|
)
|
|
(9
|
)
|
|||||
Cost of goods sold
|
—
|
|
|
—
|
|
|
—
|
|
|
1,096
|
|
|
1,096
|
|
|||||
Other income (expense)
|
—
|
|
|
—
|
|
|
—
|
|
|
9
|
|
|
9
|
|
|||||
Total reclassifications out of AOCI
|
—
|
|
|
—
|
|
|
—
|
|
|
1,096
|
|
|
1,096
|
|
|||||
Net current period other comprehensive income
|
(1,863
|
)
|
|
39
|
|
|
17
|
|
|
74
|
|
|
(1,733
|
)
|
|||||
Ending balance
|
$
|
47,109
|
|
|
$
|
29
|
|
|
$
|
(519
|
)
|
|
$
|
(1,320
|
)
|
|
$
|
45,299
|
|
|
Twenty-Six Weeks Ended June 29, 2014
|
||||||||||||||||||
|
Foreign Currency Items
|
|
Unrealized Gains and Losses on Available-for-Sale Securities
|
|
Defined Benefit Pension Items
|
|
Gains and Losses on Cash Flow Hedges
|
|
Total
|
||||||||||
Beginning Balance
|
$
|
48,865
|
|
|
$
|
(11
|
)
|
|
$
|
(552
|
)
|
|
$
|
(1,174
|
)
|
|
$
|
47,128
|
|
Other comprehensive income before reclassifications
|
(1,756
|
)
|
|
40
|
|
|
33
|
|
|
(1,775
|
)
|
|
(3,458
|
)
|
|||||
Amounts reclassified from AOCI to:
|
|
|
|
|
|
|
|
|
|
||||||||||
Revenue
|
—
|
|
|
—
|
|
|
—
|
|
|
(46
|
)
|
|
(46
|
)
|
|||||
Cost of goods sold
|
—
|
|
|
—
|
|
|
—
|
|
|
1,666
|
|
|
1,666
|
|
|||||
Other income (expense)
|
—
|
|
|
—
|
|
|
—
|
|
|
9
|
|
|
9
|
|
|||||
Total reclassifications out of AOCI
|
—
|
|
|
—
|
|
|
—
|
|
|
1,629
|
|
|
1,629
|
|
|||||
Net current period other comprehensive income
|
(1,756
|
)
|
|
40
|
|
|
33
|
|
|
(146
|
)
|
|
(1,829
|
)
|
|||||
Ending balance
|
$
|
47,109
|
|
|
$
|
29
|
|
|
$
|
(519
|
)
|
|
$
|
(1,320
|
)
|
|
$
|
45,299
|
|
|
Thirteen Weeks Ended June 30, 2013
|
||||||||||||||||||
|
Foreign Currency Items
|
|
Unrealized Gains and Losses on Available-for-Sale Securities
|
|
Defined Benefit Pension Items
|
|
Gains and Losses on Cash Flow Hedges
|
|
Total
|
||||||||||
Beginning Balance
|
$
|
23,176
|
|
|
$
|
11
|
|
|
$
|
(834
|
)
|
|
$
|
(1,122
|
)
|
|
$
|
21,231
|
|
Other comprehensive income before reclassifications
|
6,361
|
|
|
(10
|
)
|
|
(56
|
)
|
|
70
|
|
|
6,365
|
|
|||||
Amounts reclassified from AOCI to:
|
|
|
|
|
|
|
|
|
|
||||||||||
Cost of goods sold
|
—
|
|
|
—
|
|
|
—
|
|
|
283
|
|
|
283
|
|
|||||
Other income (expense)
|
—
|
|
|
—
|
|
|
—
|
|
|
21
|
|
|
21
|
|
|||||
Total reclassifications out of AOCI
|
—
|
|
|
—
|
|
|
—
|
|
|
304
|
|
|
304
|
|
|||||
Net current period other comprehensive income
|
6,361
|
|
|
(10
|
)
|
|
(56
|
)
|
|
374
|
|
|
6,669
|
|
|||||
Ending balance
|
$
|
29,537
|
|
|
$
|
1
|
|
|
$
|
(890
|
)
|
|
$
|
(748
|
)
|
|
$
|
27,900
|
|
|
Twenty-Six Weeks Ended June 30, 2013
|
||||||||||||||||||
|
Foreign Currency Items
|
|
Unrealized Gains and Losses on Available-for-Sale Securities
|
|
Defined Benefit Pension Items
|
|
Gains and Losses on Cash Flow Hedges
|
|
Total
|
||||||||||
Beginning Balance
|
$
|
38,890
|
|
|
$
|
4
|
|
|
$
|
(819
|
)
|
|
$
|
481
|
|
|
$
|
38,556
|
|
Other comprehensive income before reclassifications
|
(9,353
|
)
|
|
(3
|
)
|
|
(71
|
)
|
|
(1,855
|
)
|
|
(11,282
|
)
|
|||||
Amounts reclassified from AOCI to:
|
|
|
|
|
|
|
|
|
|
||||||||||
Cost of goods sold
|
—
|
|
|
—
|
|
|
—
|
|
|
580
|
|
|
580
|
|
|||||
Other income (expense)
|
—
|
|
|
—
|
|
|
—
|
|
|
46
|
|
|
46
|
|
|||||
Total reclassifications out of AOCI
|
—
|
|
|
—
|
|
|
—
|
|
|
626
|
|
|
626
|
|
|||||
Net current period other comprehensive income
|
(9,353
|
)
|
|
(3
|
)
|
|
(71
|
)
|
|
(1,229
|
)
|
|
(10,656
|
)
|
|||||
Ending balance
|
$
|
29,537
|
|
|
$
|
1
|
|
|
$
|
(890
|
)
|
|
$
|
(748
|
)
|
|
$
|
27,900
|
|
NOTE 16.
|
FACTORING OF ACCOUNTS RECEIVABLE
|
Item 2.
|
Management’s Discussion and Analysis of Financial Condition and Results of Operations
|
|
Thirteen Weeks Ended
|
|
Thirteen Weeks Ended
|
||||||||||
|
June 29, 2014
|
|
June 30, 2013
|
||||||||||
Net sales
|
$
|
236,955
|
|
|
100.0
|
%
|
|
$
|
222,478
|
|
|
100.0
|
%
|
Cost of sales
|
127,104
|
|
|
53.6
|
|
|
115,581
|
|
|
52.0
|
|
||
Gross profit
|
109,851
|
|
|
46.4
|
|
|
106,897
|
|
|
48.0
|
|
||
Research and development
|
26,221
|
|
|
11.1
|
|
|
25,413
|
|
|
11.4
|
|
||
Selling, general and administrative
|
50,587
|
|
|
21.3
|
|
|
42,639
|
|
|
19.2
|
|
||
Restructuring, reorganization, relocation and severance
|
2,228
|
|
|
0.9
|
|
|
395
|
|
|
0.2
|
|
||
Operating income
|
30,815
|
|
|
13.0
|
|
|
38,450
|
|
|
17.3
|
|
||
Other expense, net
|
(806
|
)
|
|
(0.3
|
)
|
|
(1,452
|
)
|
|
(0.7
|
)
|
||
Income before income taxes
|
30,009
|
|
|
12.7
|
|
|
36,998
|
|
|
16.6
|
|
||
Income tax expense
|
5,061
|
|
|
2.1
|
|
|
7,005
|
|
|
3.1
|
|
||
Net income
|
$
|
24,948
|
|
|
10.5
|
%
|
|
$
|
29,993
|
|
|
13.5
|
%
|
|
Twenty-Six Weeks Ended
|
|
Twenty-Six Weeks Ended
|
||||||||||
|
June 29, 2014
|
|
June 30, 2013
|
||||||||||
Net sales
|
$
|
463,220
|
|
|
100.0
|
%
|
|
$
|
443,667
|
|
|
100.0
|
%
|
Cost of sales
|
247,044
|
|
|
53.3
|
|
|
234,219
|
|
|
52.8
|
|
||
Gross profit
|
216,176
|
|
|
46.7
|
|
|
209,448
|
|
|
47.2
|
|
||
Research and development
|
51,866
|
|
|
11.2
|
|
|
50,222
|
|
|
11.3
|
|
||
Selling, general and administrative
|
99,050
|
|
|
21.4
|
|
|
86,163
|
|
|
19.4
|
|
||
Restructuring, reorganization, relocation and severance
|
3,559
|
|
|
0.8
|
|
|
1,090
|
|
|
0.2
|
|
||
Operating income
|
61,701
|
|
|
13.3
|
|
|
71,973
|
|
|
16.2
|
|
||
Other expense, net
|
(1,076
|
)
|
|
(0.2
|
)
|
|
(2,957
|
)
|
|
(0.7
|
)
|
||
Income before income taxes
|
60,625
|
|
|
13.1
|
|
|
69,016
|
|
|
15.6
|
|
||
Income tax expense
|
10,599
|
|
|
2.3
|
|
|
12,222
|
|
|
2.8
|
|
||
Net income
|
$
|
50,026
|
|
|
10.8
|
%
|
|
$
|
56,794
|
|
|
12.8
|
%
|
(1)
|
Percentages may not add due to rounding.
|
|
Thirteen Weeks Ended
|
||||||||||||
|
June 29, 2014
|
|
June 30, 2013
|
||||||||||
Industry Group
|
$
|
127,225
|
|
|
53.7
|
%
|
|
$
|
103,702
|
|
|
46.6
|
%
|
Science Group
|
109,730
|
|
|
46.3
|
|
|
118,776
|
|
|
53.4
|
|
||
Consolidated net sales
|
$
|
236,955
|
|
|
100.0
|
%
|
|
$
|
222,478
|
|
|
100.0
|
%
|
|
Twenty-Six Weeks Ended
|
||||||||||||
|
June 29, 2014
|
|
June 30, 2013
|
||||||||||
Industry Group
|
$
|
233,664
|
|
|
50.4
|
%
|
|
$
|
202,766
|
|
|
45.7
|
%
|
Science Group
|
229,556
|
|
|
49.6
|
|
|
240,901
|
|
|
54.3
|
|
||
Consolidated net sales
|
$
|
463,220
|
|
|
100.0
|
%
|
|
$
|
443,667
|
|
|
100.0
|
%
|
|
Thirteen Weeks Ended
|
||||||||||||
|
June 29, 2014
|
|
June 30, 2013
|
||||||||||
U.S. and Canada
|
$
|
80,463
|
|
|
34.0
|
%
|
|
$
|
61,413
|
|
|
27.6
|
%
|
Europe
|
63,561
|
|
|
26.8
|
|
|
70,538
|
|
|
31.7
|
|
||
Asia-Pacific Region and Rest of World
|
92,931
|
|
|
39.2
|
|
|
90,527
|
|
|
40.7
|
|
||
Consolidated net sales
|
$
|
236,955
|
|
|
100.0
|
%
|
|
$
|
222,478
|
|
|
100.0
|
%
|
|
Twenty-Six Weeks Ended
|
||||||||||||
|
June 29, 2014
|
|
June 30, 2013
|
||||||||||
U.S. and Canada
|
$
|
152,729
|
|
|
33.0
|
%
|
|
$
|
130,122
|
|
|
29.3
|
%
|
Europe
|
130,603
|
|
|
28.2
|
|
|
136,211
|
|
|
30.7
|
|
||
Asia-Pacific Region and Rest of World
|
179,888
|
|
|
38.8
|
|
|
177,334
|
|
|
40.0
|
|
||
Consolidated net sales
|
$
|
463,220
|
|
|
100.0
|
%
|
|
$
|
443,667
|
|
|
100.0
|
%
|
|
Thirteen Weeks Ended
|
|
Twenty-Six Weeks Ended
|
||||||||
|
June 29, 2014
|
|
June 30, 2013
|
|
June 29, 2014
|
|
June 30, 2013
|
||||
Industry Group
|
50.4
|
%
|
|
51.9
|
%
|
|
51.5
|
%
|
|
51.4
|
%
|
Science Group
|
41.7
|
|
|
44.7
|
|
|
41.8
|
|
|
43.6
|
|
Overall
|
46.4
|
|
|
48.0
|
|
|
46.7
|
|
|
47.2
|
|
|
Thirteen Weeks Ended
|
|
Twenty-Six Weeks Ended
|
||||||||||||
|
June 29,
2014 |
|
June 30,
2013 |
|
June 29,
2014 |
|
June 30,
2013 |
||||||||
Gross spending
|
$
|
27,588
|
|
|
$
|
26,924
|
|
|
$
|
54,171
|
|
|
$
|
53,055
|
|
Less subsidies
|
(1,367
|
)
|
|
(1,511
|
)
|
|
(2,305
|
)
|
|
(2,833
|
)
|
||||
Net expense
|
$
|
26,221
|
|
|
$
|
25,413
|
|
|
$
|
51,866
|
|
|
$
|
50,222
|
|
|
June 29,
2014 |
||
Guarantees and letters of credit outstanding
|
$
|
54,391
|
|
Amount secured by restricted cash deposits:
|
|
||
Current
|
$
|
19,176
|
|
Long-term
|
35,075
|
|
|
Total secured by restricted cash
|
$
|
54,251
|
|
Item 3.
|
Quantitative and Qualitative Disclosures About Market Risk
|
Item 4.
|
Controls and Procedures
|
Item 1.
|
Legal Proceedings
|
•
|
price;
|
•
|
product quality;
|
•
|
breadth of product line;
|
•
|
system performance;
|
•
|
ease of use;
|
•
|
type and breadth of product applications;
|
•
|
cost of ownership;
|
•
|
global technical service and support;
|
•
|
success in developing or otherwise introducing new products; and
|
•
|
foreign currency fluctuations.
|
•
|
longer sales cycles;
|
•
|
multiple, conflicting and changing governmental laws and regulations;
|
•
|
protectionist laws and business practices that favor local companies;
|
•
|
price and currency exchange rates and controls;
|
•
|
taxes and tariffs;
|
•
|
export restrictions;
|
•
|
business practices that we are prohibited from engaging in by the Foreign Corrupt Practices Act and other anti-corruption laws and regulations;
|
•
|
difficulties in collecting accounts receivable;
|
•
|
travel and transportation difficulties resulting from actual or perceived health or other risks;
|
•
|
changes in the regulatory environment in countries where we do business, which could lead to delays in the importation of products into those countries;
|
•
|
the implementation and administration of the Control of Electronic Information Products (often referred to as China RoHS) regulations could lead to delays in the importation of products into China;
|
•
|
European Union Regulation of Hazardous Substances (RoHS) which could create problems in manufacture and delivery of certain products in Europe;
|
•
|
political and economic instability (e.g. unrest in Mexico, Egypt, the Middle East and Eastern Europe);
|
•
|
risk of failure of internal controls and failure to detect unauthorized transactions; and
|
•
|
potential labor unrest.
|
•
|
unanticipated additional costs connected to such moves;
|
•
|
higher than expected employee attrition;
|
•
|
delay or failure in being able to build the transferred product at the new facility;
|
•
|
unanticipated additional labor and materials costs related to the move;
|
•
|
logistical issues arising from the move; and
|
•
|
product quality falling short of the product standard when manufactured at the prior location.
|
•
|
our gross margins vary significantly between products. Any substantial change in product mix could change our gross margin;
|
•
|
sales to our Industry Group customers are volatile and contribute, on average, a higher proportion of our gross margin. Any significant downturn affecting these customers would have a negative impact on our gross margin;
|
•
|
pricing and acceptance of higher-margin new products;
|
•
|
realization of the manufacturing efficiencies from our new facilities;
|
•
|
realization of material cost savings through migration of the supply chain to lower cost suppliers and re-engineering of existing products; and
|
•
|
continued improvement in gross margins from our installed base.
|
•
|
customers can stop purchasing our products at any time without penalty;
|
•
|
customers may cancel orders that they previously placed;
|
•
|
customers may purchase products from our competitors;
|
•
|
we are exposed to competitive pricing pressure on each order; and
|
•
|
customers are not required to make minimum purchases.
|
•
|
the efforts of our sales force and our independent sales representatives;
|
•
|
changes in the composition of our sales force, including the departure of senior sales personnel;
|
•
|
the history of previous sales to a customer;
|
•
|
the complexity of the customer’s manufacturing processes;
|
•
|
the introduction, or announced introduction, of new products by our competitors;
|
•
|
the economic environment;
|
•
|
the internal technical capabilities and sophistication of the customer; and
|
•
|
the capital expenditure budget cycle of the customer.
|
•
|
selection and development of product offerings;
|
•
|
timely and efficient completion of product design and development;
|
•
|
timely and efficient implementation of manufacturing processes;
|
•
|
effective sales, service and marketing functions; and
|
•
|
product performance.
|
•
|
the effects of a mix of profits or losses earned by us and our subsidiaries in numerous foreign tax jurisdictions with a broad range of income tax rates;
|
•
|
our ability to utilize recorded deferred tax assets;
|
•
|
changes in uncertain tax positions, interest or penalties resulting from tax audits; and
|
•
|
changes in tax rates and laws or the interpretation of such laws.
|
Item 2.
|
Unregistered Sales of Equity Securities and Use of Proceeds
|
|
Total Number of Shares Purchased
|
Average Price Paid per Share
|
Total Number of Shares Purchased as Part of Publicly Announced Plans
|
Maximum Number of Shares that May Yet Be Purchased Under the Plans
|
|||||
Period:
|
|
|
|
|
|||||
March 31 - April 27, 2014
|
—
|
|
$
|
—
|
|
—
|
|
2,119,800
|
|
April 28 - May 25, 2014
|
373,938
|
|
81.51
|
|
373,938
|
|
1,745,862
|
|
|
May 26 - June 29, 2014
|
—
|
|
—
|
|
—
|
|
1,745,862
|
|
|
Total second quarter
|
373,938
|
|
$
|
81.51
|
|
373,938
|
|
1,745,862
|
|
Item 6.
|
Exhibits
|
3.1
|
|
Third Amended and Restated Articles of Incorporation.
(1)
|
|
|
|
3.2
|
|
Articles of Amendment to the Third Amended and Restated Articles of Incorporation.
(2)
|
|
|
|
3.3
|
|
Amended and Restated Bylaws, as amended on November 14, 2012.
(3)
|
|
|
|
10.1
|
|
Third Amendment to Credit Agreement.
(5)
|
|
|
|
10.2
|
|
1995 Stock Incentive Plan, as amended.
(4)(6)
|
|
|
|
10.3
|
|
Employee Share Purchase Plan, as amended.
(4)(6)
|
|
|
|
31.1
|
|
Certification of Chief Executive Officer pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of The Sarbanes-Oxley Act of 2002.
|
|
|
|
31.2
|
|
Certification of Chief Financial Officer pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of The Sarbanes-Oxley Act of 2002.
|
|
|
|
32.1
|
|
Certification of Chief Executive Officer pursuant to Rule 13a-14(b) or Rule 15d-14(b) of the Securities Exchange Act of 1934 and 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of The Sarbanes-Oxley Act of 2002.
|
|
|
|
32.2
|
|
Certification of Chief Financial Officer pursuant to Rule 13a-14(b) or Rule 15d-14(b) of the Securities Exchange Act of 1934 and 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of The Sarbanes-Oxley Act of 2002.
|
|
|
|
101.INS
|
|
XBRL Instance Document.
|
|
|
|
101.SCH
|
|
XBRL Taxonomy Extension Schema Document.
|
|
|
|
101.CAL
|
|
XBRL Taxonomy Extension Calculation Linkbase Document.
|
|
|
|
101.DEF
|
|
XBRL Taxonomy Extension Definition Linkbase Document.
|
|
|
|
101.LAB
|
|
XBRL Taxonomy Extension Label Linkbase Document.
|
|
|
|
101.PRE
|
|
XBRL Taxonomy Extension Presentation Linkbase Document.
|
(1)
|
Incorporated by reference to our Quarterly Report on Form 10-Q for the quarter ended September 28, 2003.
|
(2)
|
Incorporated by reference to our Current Report on Form 8-K filed with the Securities and Exchange Commission on July 27, 2005.
|
(3)
|
Incorporated by reference to our Current Report on Form 8-K filed with the Securities and Exchange Commission on November 15, 2012.
|
(4)
|
Incorporated by reference to our Current Report on Form 8-K filed with the Securities and Exchange Commission on May 8, 2014.
|
(5)
|
Incorporated by reference to our Current Report on Form 8-K filed with the Securities and Exchange Commission on July 3, 2014.
|
(6)
|
These exhibits relate to management contracts or compensatory plans or arrangements.
|
|
|
FEI COMPANY
|
|
|
|
|
|
Dated:
|
August 1, 2014
|
/s/ DON R. KANIA
|
|
|
|
Don R. Kania
|
|
|
|
President and Chief Executive Officer
|
|
|
|
(Principal Executive Officer)
|
|
|
|
|
|
Dated:
|
August 1, 2014
|
/s/ RAYMOND A. LINK
|
|
|
|
Raymond A. Link
|
|
|
|
Executive Vice President and
|
|
|
|
Chief Financial Officer
|
|
|
|
(Principal Financial Officer)
|
|
1 Year Fei Company (MM) Chart |
1 Month Fei Company (MM) Chart |
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