Get Started for Free Contexxia identifies hard-to-find pieces of information in SEC filings. No more highlighters, no more redlining, no more poring over huge documents. FEI CO (914329) 10-Q published on Aug 04, 2016 at 4:24 pm
Reporting Period: Jul 02, 2016
On May 26, 2016, we entered into a definitive agreement to be acquired by Thermo Fisher Scientific Inc. (“Thermo Fisher”) for $107.50 in cash for each share of our common stock (the “Merger”). Completion of the Merger is subject to the satisfaction of various conditions, including approval of the Merger by our shareholders, the absence of certain legal impediments, the absence of a material adverse effect on our business, and the approval of antitrust authorities in China and other foreign jurisdictions. For more information about the Merger, please see the definitive proxy statement on Schedule 14A we filed with the Securities and Exchange Commission on July 27, 2016.
In April 2016, the FASB issued ASU No. 2016-10, Revenue from Contracts with Customers: Identifying Performance Obligations and Licensing. This ASU addresses certain implementation issues that have surfaced since the issuance of ASU No. 2014-09 in May 2014. The ASU provides guidance in identifying performance obligations and determining the appropriate accounting for licensing arrangements. The effective date and transition requirements for the amendments in this ASU are the same as the effective date and transition requirements in ASU 2014-09 (and any other topic amended by that update). We are evaluating the effect that this standard will have on our consolidated financial statements and related disclosures.
This Quarterly Report on Form 10-Q contains forward-looking statements, including statements regarding our pending acquisition by Thermo Fisher Scientific Inc., sources of revenue, our investments and expenditures, our effective tax rate, the location of our cash and cash equivalents, the level of profitability at which we expect to operate and the allocation of our resources and expenditures. Forward-looking statements may also be identified by words and phrases that refer to future expectations, such as “guidance”, “guiding”, “forecast”, “toward”, “plan”, “expect”, “are expected”, “is expected”, “believe”, “anticipate”, “estimate”, “will”, “projecting”, “look forward”, “continue to see”, “outlook” and other similar words and phrases. Such forward-looking statements are subject to risks, uncertainties and other factors that could cause our actual results, performance or achievements to differ materially from any future results, performance or achievements expressed or implied by the forward-looking statements. Factors that could affect such forward-looking statements include, but are not limited to, those discussed in the section titled “Risk Factors” and elsewhere in this Quarterly Report on Form 10-Q and from time to time in our other public filings. All forward-looking statements included in this Quarterly Report on Form 10-Q are based on information available to us as of the date of this report, and we assume no obligation to update these forward-looking statements.
The Industry Group gross margin decreased by 1.3 percentage points during both the thirteen and twenty-six week periods ended July 3, 2016 compared to the same periods of 2015, respectively. At consistent currency rates, Industry Group gross margin decreased by 0.5 and 0.9 percentage points during the thirteen and twenty-six week periods ended July 3, 2016, respectively. In the thirteen week period, the decrease was primarily due to lower margins on systems sold to our semiconductor customers and on service revenue from our installed base. This was partially offset by higher margins on sales from the business we acquired in December 2015. In the twenty-six period, the decrease was primarily due to lower margins from our acquired business as a result of purchase accounting adjustments and lower margins on service revenue from our installed base.
Completion of the Merger is subject to the satisfaction of various conditions, including approval of the Merger by our shareholders, the absence of certain legal impediments, the absence of a material adverse effect on our business, and the approval of antitrust authorities in China and other foreign jurisdictions. There is no assurance that all of the various conditions will be satisfied, or that the Merger will be completed on the proposed terms, within the expected timeframe, or at all. Furthermore, there are additional inherent risks in the Merger, including the risks detailed below.