FEI Company ( FEIC) JP Morgan Healthcare Conference Call Transcript January 13, 2012 3:00 PM ET Executives Donald Kania – CEO Presentation Unidentified Analyst
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It's really cool when people want to show off, you see our people sitting in front of our mike, we have Tim Geithner sitting in front of an FEI microscope. It's just a way to show off that you are techie. And there is just an emotional connection there too and we’ll go into that. National Protein Institute, China, our Life Sciences business selling into China. China has been our fastest growing region; it now represents 12% of our business invested in that over the last few years.In the lower right, we have a Natural Resource business, I will talk about, we served at oil and gas segment and we did a test site in Papua New Guinea of all places. So, geographic diversity, market diversity, common technology leadership that’s FEI’s story. So growth, lots of ways to serve and I will talk about fundamentals of that strategy of growth is expanding our served available market. We think we can double that in the next three years. And at the same time, we have had a pretty good track record of improving our financial performance. We think we can continue to do that in the next few years. Just to give that kind of a snapshot of what the company looks like by market and by region. On the left is market, you can see Electronics semiconductor business about a third, what we call research and industries, so that includes our research customers around the world. I think college professors, lots of them; they buy a lot of our stuff. And industry, it includes our Natural Resource business, that's about a third of our business. Life Sciences, which is new and fast growing in FEI is about 11% and I’ll spend more time on that given the nature of this conference. And then, servicing components that’s our legacy business there we continue to get recurring revenues from that that’s about 20% of our business overall.
If you look on the right-hand side, give or take a quarter, we are a third to third to third, third North America, third Europe to third Asia; fastest growing segment is Asia by far. And if we look long-term and near-term in terms of business order performance, the left hand chart goes from 1999 to 2010. The right-hand chart by quarter from Q1 ‘09 to Q1 ‘11 had a pretty good track record of growth. It's also good to highlight, I think that during the great recession, the company still remained relatively robust. We did flatten out, but we didn't take a deep dive overall. Again our diversities I think came to play to keep this going well.On the far right, you see that little blip there on the order front that represents effective currency on the booked orders; I just wanted to highlight that. We do have large operations in Europe and a lot of our orders flow in from Europe, so the Euro-Dollar exchange rate is something that we pay a lot of attention to and focus on. But just to give a sense that in fact, what did was revalued the backlog at the end of each quarter, the currency shifts those orders, lose some value, but to the benefit of the company, a weak year out means we are a more profitable company overall. Read the rest of this transcript for free on seekingalpha.com