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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q/A

For the quarterly period ended October 4, 2009

OR

For the transition period from              to             

Commission File No. 000-22780

FEI COMPANY

(Exact name of registrant as specified in its charter)

Registrant’s telephone number, including area code: 503-726-7500

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  x    No  ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes  ¨    No  ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ¨    No  x

The number of shares of common stock outstanding as of November 4, 2009 was 37,683,865.

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EXPLANATORY NOTE

We are filing this Quarterly Report on Form 10-Q/A to amend our Quarterly Report on Form 10-Q filed on November 6, 2009. The amendment corrects information about Sales in Geographic Regions that appeared in Management’s Discussion and Analysis of Financial Condition and Results of Operations at page 29 of the original filing. Specifically, this amendment corrects errors in the classification of reported sales between Europe and the Asia-Pacific Region and Rest of World. The corrected information regarding Sales in Geographic Regions can be found at page 7 of this Form 10-Q/A. No other changes have been made to the Form 10-Q. This Form 10-Q/A speaks as of the original filing date of the Form 10-Q, does not reflect events that may have occurred subsequent to the original filing date, and does not modify or update any other disclosures made in the Form 10-Q in any way.

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FEI COMPANY

INDEX TO FORM 10-Q/A

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PART I – FINANCIAL INFORMATION

Forward Looking Statements

This Quarterly Report on Form 10-Q contains forward-looking statements that involve risks and uncertainties, as well as assumptions that, if they never materialize or prove incorrect, could cause our results to differ materially from those expressed or implied by such forward-looking statements. Such forward-looking statements include any expectations of earnings, revenues, gross margins, operating and non-operating expense, income tax expense, tax rates, net income, inventory turnover rates, cash resources, credit lines or other financial items, as well as backlog, order levels and activity of our company as a whole or our particular markets or segments; any statements of the plans, strategies and objectives of management for future operations, restructuring and outsourcing initiatives; factors that may affect our 2009 operating results; any statements concerning proposed new products, services, developments, changes to our restructuring reserves, our competitive position, hiring levels, sales and bookings or anticipated performance of products or services; any statements related to future capital expenditures and investments; any statements related to the needs or expected growth of our target markets; any statement related to our ability to recognize value from the auction rate securities we hold; any statements relating to the credit worthiness of our derivative counterparties and lenders; any statements regarding future economic conditions or performance; statements of belief; and any statement of assumptions underlying any of the foregoing; and statements made under the heading “Outlook for the Remainder of 2009.” You can identify these statements by the fact that they do not relate strictly to historical or current facts and use words such as “anticipate,” “estimate,” “expect,” “project,” “intend,” “plan,” “believe,” “appear” and other words and terms of similar meaning. From time to time, we also may provide oral or written forward-looking statements in other materials we release to the public. The risks, uncertainties and assumptions referred to above include, but are not limited to, those discussed here and the risks discussed 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. You are advised, however, to consult any further disclosures we make on related subjects in our Forms 10-K, 10-Q and 8-K filed with, or furnished to, the SEC. You also should read Item 1A. “Risk Factors” included in Part II of this report for factors that we believe could cause our actual results to differ materially from expected and historical results. Other factors also could adversely affect us.

Summary of Products and Segments

We are a leading supplier of instruments for nanoscale imaging, analysis and prototyping to enable research, development and manufacturing in a range of industrial, academic and research institutional applications. We report our revenue based on a market-focused organization: the Electronics market, the Research and Industry market, the Life Sciences market and the Service and Components market.

Our products include focused ion beam systems, or FIBs; scanning electron microscopes, or SEMs; transmission electron microscopes, or TEMs; and DualBeam systems, which combine a FIB and SEM on a single platform.

Our DualBeam systems include models that have wafer handling capability and are purchased by semiconductor and data storage manufacturers (“wafer-level DualBeam systems”) and models that have small stages and are sold to customers in several markets (“small-stage DualBeam systems”).

The Electronics market consists of customers in the semiconductor, data storage and related industries such as printers and light-emitting diodes (“LEDs”). For the semiconductor market, our growth is driven by shrinking line widths and process nodes of 65 nanometers and smaller, the use of multiple layers of new materials such as copper and low-k dielectrics and increasing device complexity. Our products are used primarily in laboratories to speed new product development and increase yields by enabling 3D wafer metrology, defect analysis, root cause failure analysis and circuit edit for modifying device structures. In

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the data storage market, our products offer 3D metrology for thin film head processing and root cause failure analysis. Factors affecting our business include the transition from longitudinal to perpendicular recording heads, rapidly increasing storage densities that require smaller recording heads, thinner geometries and materials that increase the complexity of device structures.

The Research and Industry market includes universities, public and private research laboratories and customers in a wide range of industries, including automobiles, aerospace, forensics, metals, mining and petrochemicals. Growth in these markets is driven by global corporate and government funding for research and development in materials science and by development of new products and processes based on innovations in materials at the nanoscale. Our solutions provide researchers and manufacturers with atomic-level resolution images and permit development, analysis and production of advanced products. Our products are also used in mineral concentration analysis, root cause failure analysis and quality control applications.

The Life Sciences market includes universities and research institutes engaged in biotech and life sciences applications, as well as pharmaceutical, biotech and medical device companies and hospitals. Our products’ ultra-high resolution imaging allows cell biologists and drug researchers to create detailed 3D reconstructions of complex biological structures. Our products are also used in particle analysis and a range of pathology and quality control applications.

Overview

Net sales increased to $140.8 million in the third quarter of 2009 compared to $140.3 million in the second quarter of 2009 and decreased compared to $141.8 million in the third quarter of 2008. Net sales for the third quarter of 2009 increased $4.0 million compared to the second quarter of 2009 as a result of the weakening of the U.S. dollar against foreign currencies, primarily the euro. Foreign currency movements reduced net sales in the third quarter of 2009 by $1.4 million when compared to the third quarter of 2008. The increase in the third quarter of 2009 compared to the second quarter of 2009 also resulted from increased sales in our Research and Industry and Service and Components market segments, partially offset by declines in Electronics and Life Sciences.

Orders received in a particular period that cannot be built and shipped to the customer in that period represent backlog. We only recognize backlog for purchase commitments for which the terms of the sale have been agreed upon, including price, configuration, options and payment terms. Product backlog consists of all open orders meeting these criteria. Service and Components backlog consists of open orders for service, unearned revenue on service contracts and open orders for spare parts. U.S. government backlog is limited to contracted amounts. In addition, some of the U.S. government backlog represents uncommitted funds. At October 4, 2009, our total backlog was $343.9 million, compared to $330.5 million at December 31, 2008. At October 4, 2009, our backlog consisted of product and service and components unfilled orders of $279.6 million and $64.3 million, respectively, compared to $273.5 million and $57.0 million, respectively, at December 31, 2008.

Of our total backlog at October 4, 2009, approximately 90% is expected to be shippable within 12 months and approximately 10% requires some incremental development. Customers may cancel or delay delivery on previously placed orders, although our standard terms and conditions include penalties for cancellations made close to the scheduled delivery date. As a result, the timing of the receipt of orders or the shipment of products could have a significant impact on our backlog at any date. Historically, cancellations have been minor. However, the global markets are in a period of extraordinary financial uncertainty and historic cancellation rates may increase in the future. During the first three quarters of 2009 and in all of 2008, we experienced cancellations or de-bookings of $4.3 million and $7.6 million, respectively. From time to time, we have experienced difficulty in shipping our product from backlog due to single-sourcing issues and problems in securing electronic components from a certain vendor. In addition, product shipments have been extended due to delays in completing certain application development, by our customers pushing out shipments because their facilities are not ready to install our systems and by our own manufacturing delays due to the technical complexity of our products and supply chain issues. In the last several quarters, the period between order placement and scheduled shipment

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has grown somewhat compared to prior years. A significant portion of our backlog is denominated in currencies other than the U.S. dollar and, therefore, our reported backlog fluctuates, to an extent, as a result of foreign currency exchange rate movements. For these reasons, the amount of backlog at any date is not necessarily indicative of revenue to be recognized in future periods.

Outlook for the Remainder of 2009

In the past, we have experienced an increase in revenues in the fourth quarter of each year and we are expecting a similar increase in revenues to happen in the fourth quarter of this year as well. Our total backlog of unfilled orders has increased by $15.2 million since the beginning of 2009. We experienced an increase in orders in the third quarter of 2009 in our Research and Industry segment and these orders are expected to positively affect sales in the fourth quarter of 2009. Between 10% and 15% of our third quarter 2009 bookings were based on funds from the American Recovery and Reinvestment Act (“ARRA” or stimulus), and we expect a generally similar level of bookings based on such funds in the fourth quarter of 2009. Most of those orders will ship in 2010. The Electronics and Life Sciences segments generally experience a more variable order pattern and bookings in both of these segments were relatively weak in the third quarter of 2009 compared to our Research an Industry segment. However, both the Electronics and Life Sciences segments are expected to improve in the fourth quarter of 2009, contributing to historical seasonal strength in our bookings in these segments.

We also expect a slight improvement in gross margins during the fourth quarter of 2009 due to higher shipment volume and more favorable pricing on shipments that are currently in backlog. Operating expenses, which declined significantly from the second to the third quarter of 2009, are expected to increase modestly in the fourth quarter of 2009 due to higher agent commissions and the impact of a stronger euro on our European-based expenses. Restructuring expense is also expected to increase in the fourth quarter of 2009 due to added severance expense.

The anticipated combination of higher revenue, slightly improved gross margins and modestly higher operating expenses is expected to result in higher operating income in the fourth quarter of 2009 compared to the third quarter of 2009. Non-operating expense, which can vary significantly depending on the volatility of foreign exchange rates and on the effectiveness of our hedging programs, is expected to be somewhat higher in the fourth quarter of 2009 compared to the third quarter of 2009. The tax rate in the third quarter of 2009 reflected the impact of effective settlements with tax authorities and, as a result, the tax rate is expected to increase in the fourth quarter of 2009 from the third quarter of 2009. Overall, we expect increased revenue and gross margins to more than offset increases in the tax rate and non-operating expenses, thereby resulting in modestly improved net income in the fourth quarter of 2009 as compared to the third quarter of 2009.

Critical Accounting Policies and the Use of Estimates

Preparation of our financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses. We believe the most complex and sensitive judgments, because of their significance to the Consolidated Financial Statements, result primarily from the need to make estimates about the effects of matters that are inherently uncertain.

Management’s Discussion and Analysis and Note 1 to the Consolidated Financial Statements in our 2008 Annual Report on Form 10-K describe the significant accounting estimates and policies used in preparation of the Consolidated Financial Statements. Actual results in these areas could differ from management’s estimates. Other than Note 22 to the Consolidated Financial Statements in this Form 10-Q and additional detail added regarding the valuation of excess and obsolete inventory as discussed below, during the first three quarters of 2009, there were no significant changes in our critical accounting policies or estimates from those reported in our Annual Report on Form 10-K for the year ended December 31, 2008, filed with the SEC on February 20, 2009, as updated by our Current Report on Form 8-K, filed with the SEC on October 8, 2009.

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Valuation of Excess and Obsolete Inventory

Inventory is stated at the lower of cost or market, with cost determined by standard cost methods, which approximate the first-in, first-out method. Inventory costs include material, labor and manufacturing overhead.

Manufacturing inventory is reviewed for obsolescence and excess quantities on a quarterly basis, based on estimated future use of quantities on hand, which is determined based on past usage, planned changes to products and known trends in markets and technology. Changes in support plans or technology could have a significant impact on obsolescence.

To support our world-wide service operations, we maintain service spare parts inventory, which consists of both consumable and repairable spare parts. Consumable service spare parts are used within our service business to replace worn or damaged parts in a system during a service call and are generally classified in current inventory as our stock of this inventory turns relatively quickly. However, if there has been no recent usage for a consumable service spare part, but the part is still necessary to support systems under service contracts, the part is considered to be non-current and included within non-current inventories within our consolidated balance sheet. Consumables are charged to cost of goods sold when issued during the service call.

We also maintain a substantial supply of repairable and reusable spare parts for possible use in future repairs and customer field service of our install base. We have classified this inventory as a long-term asset given these parts can be repaired and reused in the service business over many years. As these service parts age over the related product group’s post-production service life, we ratably reduce the net carrying value of our repairable spare part inventory on the consolidated balance sheet to account for the excess that builds over the service life. The post-production service life of our systems is generally seven years and, at the end of seven years, the carrying value for these parts in our consolidated balance sheet is reduced to zero. We also perform periodic monitoring of our installed base for premature end of service life events and expense, through cost of sales, the remaining net carrying value of any related spare parts inventory in the period incurred.

Provision for manufacturing inventory valuation adjustments totaled $0.5 million and $2.3 million, respectively, in the thirteen and thirty-nine week periods ended October 4, 2009 and $0.7 million and $1.2 million, respectively, in the comparable periods of 2008. Provision for service spare parts inventory valuation adjustments totaled $1.1 million and $3.6 million, respectively, in the thirteen and thirty-nine week periods ended October 4, 2009 and $1.2 million and $3.4 million, respectively, in the comparable periods of 2008.

Results of Operations

The following tables set forth our statement of operations data, both in absolute dollars and as a percentage of net sales (dollars in thousands).

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Net sales decreased $1.0 million, or 0.7%, to $140.8 million, in the thirteen weeks ended October 4, 2009 (the third quarter of 2009) compared to $141.8 million in the thirteen weeks ended September 28, 2008 (the third quarter of 2008). Net sales decreased $24.6 million, or 5.5%, to $422.9 million in the thirty-nine week period ended October 4, 2009 compared to $447.5 million in the thirty-nine week period ended September 28, 2008. These decreases primarily reflect decreases in Electronics and Life Sciences in the thirteen week period and in Electronics in the thirty nine week period, partially offset by increases in Research and Industry in both periods, as described more fully below.

As compared to 2008 exchange rates, currency movements decreased net sales by approximately $1.4 million and $17.2 million during the thirteen and thirty-nine week periods ended October 4, 2009 as approximately 34% and 33%, respectively, of our net sales were denominated in foreign currencies that declined in strength against the U.S. dollar during the periods. A significant portion of our revenue is denominated in foreign currencies, especially the euro. As the U.S. dollar strengthens against the euro, this generally has the effect of reducing net sales and backlog.

Net Sales by Segment

Net sales by market segment (in thousands) and as a percentage of net sales were as follows:

Electronics

The $3.7 million, or 10.4%, decrease and the $26.3 million, or 21.9%, decrease, respectively, in Electronics sales in the thirteen and thirty-nine week periods ended October 4, 2009 compared to the same periods of 2008 were primarily due to decreases in volume as a result of the cyclical downturn in the semiconductor industry. In addition, currency fluctuations increased Electronics sales by $0.2 million

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and decreased Electronics sales by $1.2 million, respectively, in the thirteen and thirty-nine week periods ended October 4, 2009 compared to the same periods of 2008. Currently, a majority of our Electronics revenue comes from the larger semiconductor and data storage companies that are working to develop next generation devices.

Research and Industry

The $13.8 million, or 28.9%, increase and the $3.8 million, or 2.2%, increase, respectively, in Research and Industry sales in the thirteen and thirty-nine week periods ended October 4, 2009 compared to the same periods of 2008 were due primarily to ongoing foreign and domestic government investment, including U.S. and international stimulus spending, in advanced materials research. In addition, we realized an increase in the average price per unit sold for our TEMs and SEMs due to shifts in product mix. We expect that federal stimulus funding will positively affect Research and Industry sales in future quarters. These factors were offset in the thirteen and thirty-nine week periods ended October 4, 2009 by a $1.0 million and a $9.6 million decrease, respectively, related to currency movements.

Life Sciences

The $11.2 million, or 47.7%, decrease and the $0.2 million, or 0.3%, increase, respectively, in Life Sciences sales in the thirteen and thirty-nine week periods ended October 4, 2009 compared to the same periods of 2008 were due primarily to the timing of individual shipments. While we expect long-term growth, Life Sciences is an emerging market with a relatively small number of high dollar unit sales and, accordingly, sales from this segment will be variable from quarter to quarter. Life Science sales were negatively affected in the thirteen and thirty-nine week periods ended October 4, 2009 by a $0.2 million and a $3.0 million decrease, respectively, related to currency movements.

Service and Components

The $0.1 million, or 0.3%, increase and the $2.2 million, or 2.2%, decrease, respectively, in Service and Components sales in the thirteen and thirty-nine week periods ended October 4, 2009 compared to the same periods of 2008 were due primarily to a $0.4 million and a $3.4 million decrease, respectively, related to currency movements and decreased sales of our components as a result of industry-wide reductions in semiconductor capital equipment spending. These factors were partially offset by an increase in service due to a larger install base. Some customers, however, have deferred renewing certain service contracts due to idle machinery as a result of over-capacity in the semiconductor industry.

Sales by Geographic Region

A significant portion of our revenue has been derived from customers outside of the United States, and we expect this to continue. The following tables show our net sales by geographic location (dollars in thousands):

U.S. and Canada

The $6.2 million, or 11.7%, decrease and the $18.8 million, or 11.7%, decrease, respectively, in sales to the U.S. and Canada in the thirteen and thirty-nine week periods ended October 4, 2009 compared to the same periods of 2008 were primarily due to lower Electronics sales due to the continued effects of the downturn in capital spending in the semiconductor industry.

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Europe

The $4.4 million, or 7.9%, increase in the thirteen week period ended July 5, 2009 as compared to the same period of 2008 was primarily due to a large sale to a Middle Eastern university customer offset by decreases in sales of TEM products within our Research and Industry segment. In addition, the impact of currency movements reduced sales in the thirteen week period by $8.9 million.

Our European region also includes Central America, South America, Africa (excluding South Africa), the Middle East, eastern Europe and Russia. The $6.5 million, or 13.4%, increase and the $20.1 million, or 13.9%, increase, respectively, in sales to Europe in the thirteen and thirty-nine week periods ended October 4, 2009 compared to the same periods of 2008 were primarily due to an overall increase in Research and Industry sales as a result of ongoing investment in advanced materials research and an improvement in product mix for our TEMs and SEMs. Additionally, in the thirty-nine week period, the increase was as a result of a large sale to a Middle Eastern university customer. Offsetting these increases were the negative impacts of currency movements of $2.9 million and $16.3 million during the thirteen and thirty-nine week periods, respectively.

Asia-Pacific Region and Rest of World

The $4.3 million, or 9.8%, decrease in sales to the Asia–Pacific Region and Rest of World in the thirteen week period ended July 5, 2009 compared to the same period of 2008 was primarily due to decreased sales from our Electronics segment as semiconductor capital spending declined, partially offset by an increase in China as a result of increased sales of TEM products to universities and research institutions.

The $1.3 million, or 3.2%, decrease and the $25.8 million, or 18.2%, decrease, respectively, in sales to the Asia-Pacific Region and Rest of World in the thirteen and thirty-nine week periods ended October 4, 2009 compared to the same periods of 2008 were primarily due to lower Electronics segment sales resulting from reduced semiconductor capital spending, partially offset by an increase in China related to higher activity in our Research and Industry and Life Sciences segments as a result of increased spending on laboratory tools, mainly within Chinese research institutions. In addition, the thirteen week period was positively affected by an increase in our Research and Industry segment sales as a result of stimulus spending in Japan.

Cost of Sales and Gross Margin

Our gross margin (gross profit as a percentage of net sales) by market segment was as follows:

Cost of sales includes manufacturing costs, such as materials, labor (both direct and indirect) and factory overhead, as well as all of the costs of our customer service function such as labor, materials, travel and overhead. We see five primary drivers affecting gross margin: product mix (including the effect of price competition), volume, cost reduction efforts, competitive pricing pressure and currency movements.

Cost of sales increased $0.3 million, or 0.4%, to $85.4 million in the thirteen week period ended October 4, 2009 compared to $85.1 million in the thirteen week period ended September 28, 2008 primarily due to a revenue mix shift from Electronics to Research and Industry, which products sales generally yield lower gross margins. Offsetting these increases was an approximately $4.6 million decrease in cost of sales due to favorable currency movements. For the thirty-nine week period ended October 4, 2009, cost of

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sales decreased $20.2 million, or 7.4%, to $252.7 million compared to $272.9 million for the same period in 2008 primarily due to approximately $26.4 million in currency movements. Offsetting the currency related cost of sales reductions was the impact of a revenue shift away from Electronics to Research and Industry and Life Sciences, which generally have lower margins.

Electronics

The decrease in Electronics gross margins in the thirteen week period ended October 4, 2009 compared to the same period of 2008 was due primarily to a shift in mix away from the higher-margin data storage and other wafer-level products in the 2009 period. We also sold fewer higher-margin small DualBeams in the third quarter of 2009 and experienced pricing pressures on certain products. Similarly, significant pricing pressure on certain transactions in the first quarter of 2008 lowered gross margins during the thirty-nine week period ended September 28, 2008.

Research and Industry

The increases in the Research and Industry gross margin in the thirteen and thirty-nine week periods ended October 4, 2009 compared to the same periods in 2008 resulted primarily from continued penetration of our high-end product offerings as well as cost improvements in our industry-specific SEM product offerings. Additionally, currency movements improved gross margins 2.5 percentage points and 3.6 percentage points, respectively.

Life Sciences

The decreases in the Life Sciences gross margins in the thirteen and thirty-nine week periods ended October 4, 2009 compared to the same periods of 2008 were primarily due to a shift in mix to fewer high-end TEMs, due to aggressive pricing of selected strategic early-stage products. These factors were partially offset by favorable currency movements in the corresponding 2009 periods and pricing pressures on our low-end TEMs in the first quarter of 2008, which we did not experience to the same extent in the comparable 2009 period.

Service and Components

The increases in the Service and Components gross margin in the thirteen and thirty-nine week periods ended October 4, 2009 compared to the same periods of 2008 were primarily due to favorable currency movements and improvements in part usage and cost control.

Research and Development Costs

Research and development (“R&D”) costs include labor, materials, overhead and payments to third parties for research and development of new products and new software or enhancements to existing products and software. These costs are presented net of subsidies received for such efforts. During the 2008 and 2007 periods, we received subsidies from European governments for technology developments specifically in the areas of semiconductor and life science equipment.

R&D costs decreased $0.5 million to $16.7 million (11.9% of net sales) in the thirteen week period ended October 4, 2009 compared to $17.2 million (12.1% of net sales) in the thirteen week period ended September 28, 2008 and decreased $3.4 million to $50.1 million (11.9% of net sales) in the thirty-nine week period ended October 4, 2009 compared to $53.5 million (12.0% of net sales) in the thirty-nine week period ended September 28, 2008.

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R&D costs are reported net of subsidies as follows (in thousands):

The decreases in R&D costs in the thirteen and thirty-nine week periods ended October 4, 2009 compared to the same periods of 2008 were primarily due to a decrease as a result of favorable currency movements of $0.8 million and a $4.2 million, respectively, offset by increased spending for R&D projects as we continue to invest in the development of new products.

We anticipate that we will continue to invest in R&D at a similar percentage of revenue for the foreseeable future. Accordingly, as revenues increase, we currently anticipate that R&D expenditures will also increase. Actual future spending, however, will depend on market conditions.

Selling, General and Administrative Costs

Selling, general and administrative (“SG&A”) costs include labor, travel, outside services and overhead incurred in our sales, marketing, management and administrative support functions. SG&A costs also include sales commissions paid to our employees as well as to our agents.

SG&A costs decreased $1.9 million to $30.2 million (21.4% of net sales) in the thirteen week period ended October 4, 2009 compared to $32.1 million (22.7% of net sales) in the comparable period of 2008 and decreased $2.8 million to $94.8 million (22.4% of net sales) in the thirty-nine week period ended October 4, 2009 compared to $97.7 million (21.8% of net sales) in the comparable period of 2008.

The decreases in SG&A costs were due primarily to a $0.5 million and a $3.7 million decrease, respectively, related to currency movements and a decrease in amortization of purchased intangibles of $0.4 million and $0.9 million, respectively. In addition, lower legal, accounting, consulting and travel and entertainment costs contributed to the decreases. Offsetting these decreases were an increase in labor and related costs.

Restructuring, Reorganization, Relocation and Severance

In the thirteen and thirty-nine week periods ended October 4, 2009, we incurred $0.6 million and $2.6 million, respectively, of costs related to our April 2008 restructuring plan related to improving the efficiency of our operations and improving the currency balance in our supply chain so that more of our costs are denominated in dollar or dollar-linked currencies. We incurred a total of $6.9 million of costs in 2008 and through the first three quarters of 2009 related to this plan and expect to incur approximately $0.6 million in the fourth quarter of 2009 related to the implementation of this plan. These actions are expected to reduce operating expenses, improve our factory utilization and help offset the effect of currency movements on our cost of goods sold. The main activities, approximate range of associated costs and expected timing are described in the table below. Presently, all of the costs described are expected to result in cash expenditures and we currently expect the approximate total cost of the restructuring to be approximately $7.5 million.

We anticipate that the actions related to our 2008 restructuring plan will reduce annualized manufacturing costs and operating expenses and increase cash flow by approximately $6.0 million in 2009 and $12.0 million annually thereafter. A portion of these expense reductions were realized in the first three quarters of 2009.

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A summary of the anticipated restructuring expenses is as follows:

The following table summarizes the charges, expenditures and write-offs and adjustments in the thirty-nine week period ended October 4, 2009 related to our restructuring, reorganization, relocation and severance accruals (in thousands):

The $1.2 million and $3.4 million, respectively, of restructuring, reorganization, relocation and severance expense in the thirteen and thirty-nine week periods ended September 28, 2008 also related to our April 2008 restructuring plan.

Other Income (Expense), Net

Other income (expense) items include interest income, interest expense, foreign currency gains and losses and other miscellaneous items.

Interest income represents interest earned on cash and cash equivalents and investments in marketable securities. Interest income was $0.5 million and $2.3 million in the thirteen and thirty-nine week periods ended October 4, 2009, respectively, compared to $2.7 million and $11.8 million, respectively, in the comparable periods of 2008. These decreases were primarily due to lower interest rates and a decrease in our invested balances, primarily due to the repayment of debt.

Interest expense for both the 2009 and 2008 periods included interest expense related to our 2.875% convertible notes. Interest expense in the thirty-nine week period ended September 28, 2008 also included some interest related to our 5.5% convertible notes, which were repaid in full in January 2008. Interest expense in the thirty-nine week period ended September 28, 2008 also included $6.3 million, respectively, of non-cash interest related to the effects of the adoption on January 1, 2009 of accounting guidance regarding debt instruments that may be settled in cash upon conversion. See Note 20 of the Condensed Notes to the Consolidated Financial Statements.

The amortization of capitalized note issuance costs related to our convertible note issuances is also included as a component of interest expense. Interest expense in the thirty-nine week period ended October 4, 2009 included a $0.3 million expense related to the write-off of note issuance costs in connection with the early redemption of a total of $15.0 million of our 2.875% convertible notes. Interest expense in the thirty-nine week period ended September 28, 2008 included $0.2 million of premiums and commissions paid on the repurchase of the remaining $45.9 million of our 5.5% convertible notes as well as the write-off of $0.1 million of related deferred note issuance costs and $0.4 million of premiums and commissions paid on the repurchase of $148.9 million principal amount of our $150 million zero coupon convertible notes as well as the write-off of $0.2 million of related deferred note issuance costs.

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Assuming no additional note repurchases, amortization of our remaining convertible note issuance costs will total approximately $0.1 million per quarter through the second quarter of 2013.

For the thirty-nine week period ended October 4, 2009, Other, net included a $2.0 million gain on the early redemption of our 2.875% notes. The thirteen and thirty-nine week periods ended October 4, 2009 included a $0.5 million and a $1.2 million charge, respectively, for cash flow hedge ineffectiveness, foreign currency gains and losses on transactions and realized and unrealized gains and losses on the changes in fair value of derivative contracts entered into to hedge these transactions.

For the 2008 periods, Other, net primarily consisted of foreign currency gains and losses on transaction and realized and unrealized gains and losses on the changes in fair value of derivative contracts entered into to hedge these transactions.

Income Tax Expense

Our effective income tax rate of 14.5% and 29.8% for the thirteen week periods ended October 4, 2009 and September 28, 2008, respectively, and 19.7% and 35.3% for the thirty-nine week periods October 4, 2009 and September 28, 2008, respectively reflect taxes accrued in foreign jurisdictions, reduced by tax benefits related to the release of valuation allowance recorded against deferred tax assets utilized to offset income earned in the U.S. Our tax expense for the thirty-nine weeks ended October 4, 2009 also reflects the release of certain tax liabilities due to the lapse of statutes of limitation and effective settlements with tax authorities in the first and third quarters of 2009.

Our effective income tax rate for the thirty-nine week period ended September 28, 2008 reflects higher tax expense due to the effects of the non-deductible, non-cash interest expense recorded upon adoption of provisions of ASC 470-20, “Debt with Conversion and Other Options,” regarding debt instruments that may be settled in cash upon conversion, offset by valuation allowance released against deferred tax assets utilized to offset income earned in the U.S. See Note 20 of the Condensed Notes to the Consolidated Financial Statements for more information regarding the adoption of the provisions of ASC 470-20.

During the thirteen week period ended April 5, 2009, we reclassified approximately $15.4 million of non-current tax liabilities to current in expectation that a settlement could be reached within the next 12 months. We still anticipate resolution of the tax positions within the next 12 months and, if resolved favorably, the reversal of the current tax liabilities could provide a tax benefit up to approximately $16.6 million, including accruals through October 4, 2009, in the thirteen week period we determine the positions are more likely than not to be sustained.

Our effective tax rate may differ from the U.S. federal statutory tax rate primarily as a result of the effects of state and foreign income taxes, research and experimentation tax credits earned in the U.S. and foreign jurisdictions, adjustments to our unrecognized tax benefits and our ability or inability to utilize various carry forward tax items. In addition, our effective income tax rate may be affected by changes in statutory tax rates and laws in the U.S. and foreign jurisdictions and other factors.

Liquidity and Capital Resources

Auction Rate Securities and UBS Credit Facility

On November 6, 2008, we accepted an offer by UBS AG (together with its affiliates, “UBS”) of certain auction rate securities rights (the “Put Right”). The Put Right permits us to cause UBS to repurchase, at par value, our ARS during the period beginning on June 30, 2010 and ending on July 2, 2012. The fair value of the ARS and the Put Right was approximately $99.6 million and $10.4 million, respectively, as of October 4, 2009, as discussed in more detail below. The par value of the ARS was $110.1 million at October 4, 2009. The Put Right was offered in connection with settlement agreements entered into by UBS with the U.S. SEC and other federal and state regulatory authorities.

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In addition, UBS offered us the ability to borrow no-net cost loans secured by the ARS. On March 25, 2009, we entered into an uncommitted secured demand revolving credit facility with UBS Bank USA, providing for a line of credit in an amount of up to $70.8 million, or approximately 75% of the market value of the ARS. The obligations under the UBS Credit Facility are secured by substantially all of our collateral accounts, money, investment property and other property maintained with UBS, including the ARS, subject to certain exceptions.

During the first quarter of 2009, we drew down $70.8 million, the full amount available under the UBS Credit Facility and, as of October 4, 2009, the full $70.8 million remained outstanding. The proceeds derived from any sales of the ARS we hold in accounts with UBS will be applied to repay any outstanding obligations under the UBS Credit Facility.

The UBS Credit Facility includes customary events of default that include, among other things, non-payment defaults, the failure to maintain sufficient collateral, covenant defaults, inaccuracy of representations and warranties, the failure to provide financial and other information in a timely manner, bankruptcy and insolvency defaults, cross-defaults to other indebtedness and judgment defaults. The occurrence of an event of default will result in the acceleration of the obligations under the UBS Credit Facility and any amounts due and not paid following an event of default will bear interest at a rate per annum equal to 2.00% above the applicable interest rate. As of October 4, 2009, we were in compliance with all of the terms of the UBS Credit Facility.

See Note 8 of the Condensed Notes to the Consolidated Financial Statements for additional information.

Other Credit Facilities and Letters of Credit

We have a $100.0 million secured revolving credit facility, including a $50.0 million subfacility for the issuance of letters of credit. We may, upon notice to JPMorgan Chase Bank, N.A., request to increase the revolving loan commitments by an aggregate amount of up to $50.0 million with new or additional commitments subject only to the consent of the lender(s) providing the new or additional commitments, for a total secured credit facility of up to $150.0 million. We also have a 50.0 million yen unsecured and uncommitted bank borrowing facility in Japan and various limited facilities in select foreign countries. We mitigate credit risk by transacting with highly rated counterparties. We have evaluated the credit and non-performance risks associated with our lenders and believe them to be insignificant. No amounts were outstanding under any of these facilities as of October 4, 2009.

As part of our contracts with certain customers, we are required to provide letters of credit or bank guarantees which these customers can draw against in the event we do not perform in accordance with our contractual obligations. At October 4, 2009, we had $37.1 million of these guarantees and letters of credit outstanding, of which approximately $36.5 million were secured by restricted cash deposits. Restricted cash balances securing bank guarantees that expire within 12 months of the balance sheet date are recorded as a current asset on our consolidated balance sheets. Restricted cash balances securing bank guarantees that expire beyond 12 months from the balance sheet date are recorded as long-term restricted cash on our consolidated balance sheet.

Sources of Liquidity and Capital Resources

Our sources of liquidity and capital resources as of October 4, 2009 consisted of $364.5 million of cash, cash equivalents, short-term restricted cash and short-term investments, $12.9 million in non-current investments, $26.5 million of long-term restricted cash, $100.0 million available under revolving credit facilities (including the UBS Credit Facility), as well as potential future cash flows from operations. Restricted cash relates to deposits to secure bank guarantees for customer prepayments that expire through 2013.

We believe that we have sufficient cash resources and available credit lines to meet our expected operational and capital needs for at least the next twelve months from October 4, 2009.

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In the thirty-nine week period ended October 4, 2009, cash and cash equivalents and short-term restricted cash decreased $0.3 million to $157.2 million as of October 4, 2009 from $157.5 million as of December 31, 2008 primarily as a result of $32.6 million provided by operations, $70.8 million of proceeds from our UBS line of credit and $3.5 million of proceeds from the exercise of employee stock options. These proceeds were partially offset by $13.1 million used for the repayment of $15.0 million face amount of our 2.875% convertible notes, $9.3 million used for the purchase of property, plant and equipment, the net purchase of $85.3 million of marketable securities, $4.1 million used for the purchase of certain assets of a division of an Australian software company and a $4.3 million unfavorable effect of exchange rate changes.

Accounts receivable increased $23.3 million to $163.0 million as of October 4, 2009 from $139.7 million as of December 31, 2008, primarily due to increased frequency of extended payment terms as a result of geographic sales mix and customer requests. The October 4, 2009 balance also included a $4.4 million increase related to changes in currency exchange rates. Our days sales outstanding, calculated on a quarterly basis, was 106 days at October 4, 2009 compared to 84 days at December 31, 2008.

Inventories increased $11.0 million to $152.6 million as of October 4, 2009 compared to $141.6 million as of December 31, 2008. The October 4, 2009 balance included a $6.6 million increase related to changes in currency exchange rates. Our annualized inventory turnover rate, calculated on a quarterly basis, was 2.3 times for the quarter ended October 4, 2009 and 2.2 times for the quarter ended September 28, 2008.

Other current assets increased $14.1 million to $47.0 million as of October 4, 2009 compared to $32.9 million as of December 31, 2008, primarily due to the transfer of our Put Right from other assets, net to other current assets, as well as normal seasonal increases in prepaid insurance and our receivable for subsidies for research and development projects. Other current assets at October 4, 2009 included $10.4 million for the value of the Put Right related to our ARS.

Expenditures for property, plant and equipment of $9.3 million in the thirty-nine week period ended October 4, 2009 primarily consisted of expenditures for machinery and equipment, including instruments used for demonstration as part of our marketing programs. We expect to continue to invest in capital equipment, demonstration systems and R&D equipment for applications development. We estimate our total capital expenditures in 2009 to be approximately $20 to $25 million, primarily for the development and introduction of new products, demonstration equipment and upgrades and incremental improvements to our enterprise resource planning (“ERP”) system.

Other assets, net decreased $18.6 million to $15.9 million as of October 4, 2009 compared to $34.5 million as of December 31, 2008, primarily due to the transfer of the Put Right to other current assets and a decrease in other intangible assets.

Other current liabilities increased $9.2 million to $42.9 million as of October 4, 2009 compared to $33.7 million as of December 31, 2008. The increase resulted primarily from a reclassification of $15.4 million of unrecognized tax benefits from long-term to current during the first quarter of 2009, partially offset by a decrease in our value added tax liability and our derivative liabilities.

Other liabilities decreased $11.8 million to $30.5 million as of October 4, 2009 compared to $42.3 million as of December 31, 2008. The decrease resulted primarily from the reclassification of $15.4 million of unrecognized tax benefits from long-term to current during the first quarter of 2009.

New Accounting Pronouncements

See Note 22 of the Condensed Notes to the Consolidated Financial Statements for a discussion of new accounting pronouncements.

Off-Balance Sheet Arrangements

We do not have any off-balance sheet arrangements that have or are reasonably likely to have a material current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.

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PART II – OTHER INFORMATION

The following exhibits are filed herewith and this list is intended to constitute the exhibit index:

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

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