Authors: Jonathan Sheets, Bobby Fitpatrick

1. FEBRUARY 2 ND , 2012
JONATHAN SHEETS
BOBBY FITZPATRICK

2. TABLE OF CONTENTS
• The Trade
• Company Overview
• A look at the technology
• Advocates
• Growth Thoughts
• Company Strategy
• Financials
• Misc. Stats
• Comparables
• Technicals
• Questions

3. THE TRADE
FEIC is a market leader in a profitable business. It has strong
financials, increasing fund ownership, favorable analyst
recommendations, high earnings growth opportunity, exciting
acquisitions, upholding recent breakouts, and has a very strong
performance already in 2012. The main catalyst is the
commercialization of the QEMSCAN earth scanning mobile
site, poised to lead shale gas and other resource exploration.
Buy $1,600 of FEIC
• Buy ½ Before earnings Feb. 8th
• Buy ½ After earnings
Trailing stop at 15%
• Will look to re-enter at end of a correction.
Disclosure: Bobby Fitzpatrick currently owns $30 call
options. Jonathan Sheets looks to buy 2013 LEAPs
within two months.

4. COMPANY OVERVIEW
“We make really fancy microscopes that see atoms basically.
We can see and manipulate the atomic scale and we apply
that to a lot of different markets.” - CEO Donald Kania
• Mkt Cap $1.5 Billion
• Imaging leaders in
natural resources,
nanotech, academic
research, and life
sciences.
• All over the world
geographically

9. “LIVING LAB” FOR STRUCTURAL
BIOLOGY RESEARCH
Research and Development agreement with National Inst. Of
Health, National Cancer Institute (NCI), and Digestive and Kidney
Diseases (NIDDKD).
World Experts working together
Integration of cryo-EM (FEI’s microscopes) with NMR and XRD

10. GROWTH IN CELLULAR
BIOLOGY RESEARCH
TILL Acquisition 11/14/11
• optical microscope company for further entry and superiority
in cellular biology
• “Google Earth bio mapping”

11. INSTITUTE AT OREGON
HEALTH SCIENCES
UNIVERSITY
FEIC is apart of Founding Members
Understanding the spatial and temporal dynamics of life that are
relative to cancer and the science of cancer
Cancer Market - $47.7 Billion

13. FUTURE GROWTH
GOALS
Dualbeam technology for geological surveying poises FEIC
to grow at 2.7x shale gas production growth

15. GROWTH IN NATURAL
RESOURCES

18. RESEARCH GROWTH
All over the world, Alaska to Zimbabwe
US and Europe not planning on much growth
China relentless in buying products
• China outspent the United States on FEI product 4/6 last quarters.
“Being American I think it’s going to be a bad idea, but
being the Head of FEI, it’s a wonderful thing… “ – CEO

19. GENERAL FINANCIAL
NUMBERS
RS = 96 P/E = 20 Beta = 1.40
• 3% increase in fund sponsorship in last quarter (62% of stock is
owned by institutions)
• 20% increase in fund sponsorship in the last year
• 2% is owned by management
• Rallies occur on increasing volume and declines on decreasing
volume approx. 80% of the time in the last 4 quarters
• 14% debt/equity ratio
• 3 Year EPS growth = 55%
• Sales up 34% last quarter (9% 3 yr growth rate)
• ROE = 8.2% (high for a medical tech, especially with high R&D
expenses)
• Government subsidized (from NIH)

20. EARNINGS AND SALES
STATS (CLOSER LOOK)
• 174% EPS growth and 20% Sales growth in 4th Q 2010
• 200% EPS growth and 32% Sales growth in 1st Q 2011
• 182% EPS growth and 45% Sales growth in 2nd Q 2011
• 103% EPS growth and 34% Sales growth in 3rd Q 2011

21. ANALYSTS
Bank Analysts
• Estimate revisions to the upside the last 3 quarters
• 7/8 Buys $46-50… will look to revise with current numbers
Internet Analysts
• Zack’s Strong Buy List
• Investors Business Daily 99/100 Composite Rating

22. INDUSTRY
COMPETITORS
FEIC is 1 out of 35 in group in EPS
FEIC is 3 out of 35 in Relative Strength
Industry ranked 23/197 for:
• EPS, Sales, EPS Growth, Sales Growth

23. COMPS Fiscal EV EPS P/E P/E P/E FY1 EV/ EV/ EV/ Total
Period FY1 FY1 NTM DAT Sales EBIT EBITDA Debt/EV
E
18.5 16.9 1.80 11.00
FEI Co. 09/2011 1,437.7 2.44 19.70x 12/2011 9.51x 0.59x 6.19%
7x 2x x x
380.9
Average 4,578.3 2.27 14.95x 55.30x 15.05x 1.91x 8.41x 1.77x 16.32%
3x
Median 2,555.8 2.27 13.61x 16.65x 14.09x 1.14x 8.16x 6.08x 0.76x 12.18%
Hitachi High-Technologies 14.9 14.9 12.2 03/20 0.3
09/2011 2,774.5 1.48 8.16x 6.05x 0.00x 0.00%
Corp. 4x 4x 7x 12 4x
532. 14.0 03/20 0.6 4,840. 15.96
Jeol Ltd. 09/2011 623.2 0.01 - 12.88x 81.26%
50x 9x 12 1x 58x x
5.20 5.40 13.9 12/20 0.4
Veeco Instruments Inc. 09/2011 537.6 4.71 1.82x 1.76x 0.01x 0.50%
x x 4x 11 9x
Dainippon Screen 6.86 13.2 13.4 03/20 0.6
09/2011 2,355.9 0.63 7.39x 6.08x 2.32x 38.43%
Manufacturing Co. Ltd. x 8x 7x 12 8x
10.6 12.4 11.8 06/20 2.2
KLA-Tencor Corp. 09/2011 7,265.5 4.14 6.16x 5.73x 0.59x 10.27%
1x 9x 4x 12 1x

24. COMPS
Average 4,578.3 2.27 14.95x 55.30x 15.05x 1.91x
380.9
8.41x 1.77x 16.32%
3x
Median 2,555.8 2.27 13.61x 16.65x 14.09x 1.14x 8.16x 6.08x 0.76x 12.18%
Fiscal EV EPS P/E P/E P/E FY1 EV/ EV/ EV/ Total Total
Period FY1 FY1 NTM DATE Sales EBIT EBITDA Debt/ Debt/EV
EBITDA
FEI Co. 09/2011 1,437.7 2.44 19.70x 18.57x 16.92x 12/2011 1.80x 11.00x 9.51x 0.59x 6.19%
Tokyo
Electron 09/2011 6,929.5 3.14 12.27x 18.28x 18.06x 03/2012 0.80x 5.83x 4.77x 0.00x 0.00%
Ltd.
Applied
Materials 10/2011 11,972.3 0.75 8.67x 16.65x 14.56x 10/2012 1.14x 5.17x 4.67x 0.76x 16.26%
Inc.
Rudolph
Technolo 09/2011 215.7 0.71 11.55x 14.41x 13.92x 12/2012 1.09x 6.69x 5.76x 1.23x 21.30%
gies Inc.
IPG
Photonics 09/2011 2,435.4 2.42 23.22x 22.29x 19.56x 12/2011 5.39x 14.64x 11.80x 0.12x 1.05%
Corp.
Mesa
Laborator 09/2011 147.6 2.27 21.65x 19.93x 18.56x 03/2012 4.12x 13.15x 11.07x 0.30x 2.71%
ies Inc.

25. COMPS
Average 4,578.3 2.27 14.95x 55.30x 15.05x 1.91x 380.93x 8.41x 1.77x 16.32%
Median 2,555.8 2.27 13.61x 16.65x 14.09x 1.14x 8.16x 6.08x 0.76x 12.18%
Fiscal EV EPS P/E P/E P/E FY1 EV/ EV/ EV/ Total Total
Period FY1 FY1 NTM DATE Sales EBIT EBITDA Debt/ Debt/EV
EBITDA
FEI
09/2011 1,437.7 2.44 19.70x 18.57x 16.92x 12/2011 1.80x 11.00x 9.51x 0.59x 6.19%
Co.
Agilent
Technol 14,012.
10/2011 3.17 15.51x 13.94x 13.60x 10/2012 2.12x 13.05x 10.56x 1.65x 15.59%
ogies 6
Inc.
Waters
09/2011 7,692.3 5.24 19.46x 16.86x 16.69x 12/2012 4.24x 15.46x 13.74x 1.74x 12.63%
Corp.
Bruker
09/2011 2,555.8 0.82 29.42x 17.86x 15.10x 12/2011 1.60x 13.97x 11.31x 1.38x 12.18%
Corp.

26. 2009 FCF was used because of the large cash flow
investment in Dualbeam Helios technology for
DCF geological surveying in 2010 and first 3 quarters of
2011
FEI COMPANY
Company Name
Most Recent Fiscal Year End 12/31/2008
Date of Valuation 2/2/2012
Cost of Common Equity 10.00%
Fiscal Year of Forecast 12/31/2009 12/31/2010 12/31/2011 12/31/2012 12/31/2013 12/31/2014 12/31/2015
Valuation to Common Equity
Free Cash Flow to Common Equity 81,006 5,374 (13,279) (16,180) 50,027 172,087 162,746
Present Value of FCF 73,641 4,441 (9,976) (11,051) 31,063 97,139 83,515
Present Value Beyond 20 Years 698,188
Present Value of First 20 Years 1,018,167
Forecast Equity Value Before Time Adj. 1,716,355
Forecasted Value as of Valuation Date 2,358,844
Less Value of Contingent Equity Claims 0
Value Attributable to Common Equity 2,358,844
Common Shares Outstanding at BS Date 37,309
Equivalent Shares at Valuation Date 37,309
Forecast Price/Share $63.22

27. TECHNICALS

28. QUESTIONS?
We have answers.