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Constituent Review
J. Andrew Braswell, Equity Analyst Newbridge Institutional Research Data as of 3-30-07		Quote/News
		Nanotech Tools

Review
1/9/07- FEIC announced that the California NanoSystems Institute (CNSI) had purchased three microscopy systems. The systems include a 300-kV Titan™ S/TEM, a second 300-kV Titan optimized for high-resolution structural biology applications, and a 200-kV Tecnai™ TF20 for high-throughput electron tomographic studies.

2/6/07- Reported results for Q4 after the close. Revenue for the quarter was $140.3M (+41% Y/Y), while bookings were $171.7M (+50% Y/Y), for a book/bill of 1.22 and an ending backlog of $305.9M. Net income from continuing ops was $11.9M, or $0.30 per share, up Y/Y from a net loss from continuing ops of $30.9M. The company also had income from discontinued ops of $2.8M, or $0.06 per share, from a gain on the sale of the Knights Technology unit. FEIC ended the period with $406M in cash.

Guidance for Q1/07 is for revenue of $137M-$144M and bookings of approximately $150M. EPS is projected at $0.27-$0.32 assuming a 26% tax rate. Consensus expectations for Q1 are currently revenue of $135.2 and EPS of $0.25.

2/21/06- Announced the release of the Quanta™ 3D FEG, a new offering in its DualBeam™ line, which combines ion and electron microscopy for 3D imaging.

03/26/07- Said that it had collaborated with JKTech, an Australia-based mining technology company, to provide a solution to enhance minerals processing. The combined system features FEIC’s Quanta™ SEM and JKTech’s Mineral Liberation Analyzer [MLA] software.

Commentary
Having ranked in the upper tier of NNIX constituents with a 38% return in 2006, FEIC spiked another 37% in Q1, outpacing the second-best performer for the period more than two-to-one. The stock made a huge gap up in reaction to the Q4 earnings release and continued to build on those gains through period end. Despite concerns that the run of strong demand from data storage customers is nearing an end, order growth is still running ahead of revenue growth and guidance continues to run ahead of consensus expectations. FEIC remains one of our favorite long-term plays, but near-term expectations should be tempered due to the strong run of the last year.