FEI Restructures to Focus on Markets and Lowers Guidance

Hillsboro, OR -FEI Company announced it is realigning its sales, marketing and R&D organizations to focus on three markets: NanoElectronics; NanoResearch and NanoBiology. NanoElectronics will focus on semiconductor industry products and applications, NanoResearch will target research and industrial applications and NanoBiology would focus on drug discovery, therapeutic and diagnostics. “We believe that our focus around markets in our operating divisions will allow us to create more value-driven solutions, linking our products, services and technologies more effectively with customer needs. Consolidation of our product divisions into three market groups should also increase efficiency and reduce costs. We expect the steps announced today will reduce our quarterly breakeven revenue run rate to less than $100 million,” stated FEI CEO Vahe Sarkissian. Citing weakness in the semiconductor market, FEI revised its second quarter revenue guidance from $114-$120 million to $109-$111 million. FEI estimates breakeven earnings per share for the second quarter, down from guidance of 5-9 cents. Bookings guidance of $120 million for the second quarter has been revised to $107-$110 milllion, including the revaluation of backlog. The company also announced a $15 million restructuring charge to be taken in the second half of 2005 in connection with the reorganization that will be taken in the second half of 2005.

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