Investor Conference Call / Webcast Details
Trimble will hold a conference call on Oct. 27, 2009 at 1:30 p.m. PT to review its third quarter 2009 results. It will be broadcast live on the Web at investor.trimble.com Investors without Internet access may dial into the call at (800) 528-9198 (U.S.) or (706) 634-6089 (international). A replay of the call will be available for seven days at (800) 642-1687 (U.S.) or (706) 645-9291 (international) and the pass code is 35065165. The replay will also be available on the Web at the address above.
About Trimble
Trimble applies technology to make field and mobile workers in businesses and government significantly more productive. Solutions are focused on applications requiring position or location--including surveying, construction, agriculture, fleet and asset management, public safety and mapping. In addition to utilizing positioning technologies, such as GPS, lasers and optics, Trimble solutions may include software content specific to the needs of the user. Wireless technologies are utilized to deliver the solution to the user and to ensure a tight coupling of the field and the back office. Founded in 1978, Trimble is headquartered in Sunnyvale, Calif.
For more information visit Trimble's Web site at www.trimble.com.
Safe Harbor
Certain statements made in this press release are forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, and are made pursuant to the safe harbor provisions of the Securities Litigation Reform Act of 1995. These statements include expectations for future financial market and economic conditions, the ability to deliver the operating margins, revenue, and earnings per share that Trimble has guided for fourth quarter 2009, changes in tax-rate, estimated restructuring costs, the anticipated impact of stock-based compensation expense and the amortization of intangibles related to previous acquisitions and when we can return to year-over-year revenue growth. These forward-looking statements are subject to change, and actual results may materially differ from those set forth in this press release due to certain risks and uncertainties. If the current global recessionary conditions in the U.S. and Europe worsen or do not improve it may negatively impact our customers' purchasing decisions worldwide, including in emerging markets. In addition, the Company's results may be adversely affected if the Company is unable to market, manufacture, and ship new products. Any weakening of our accounts receivable or write-off of goodwill could also impair our financial results. Any failure to achieve predicted results could negatively impact the Company's revenues, cash flow from operations, and other financial results. The Company's financial results will also depend on a number of other factors, including the risks detailed from time to time in reports filed with the SEC, including its quarterly reports on Form 10-Q and its annual report on Form 10- K. Undue reliance should not be placed on any forward-looking statement contained herein, especially in light of greater uncertainty than normal in the economy in general. These statements reflect the Company's position as of the date of this release. The Company expressly disclaims any undertaking to release publicly any updates or revisions to any statements to reflect any change in the Company's expectations or any change of events, conditions, or circumstances on which any such statement is based.
FTRMB
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share data)
(Unaudited)
Three Months Ended Nine Months Ended
------------------ -----------------
Oct-2, Sep-26, Oct-2, Sep-26,
2009 2008 2009 2008
---- ---- ---- ----
Revenue $269,713 $328,087 $848,730 $1,061,150
Cost of sales 137,255 162,464 429,514 534,052
------- ------- ------- -------
Gross margin 132,458 165,623 419,216 527,098
------- ------- ------- -------
Gross margin (%) 49.1% 50.5% 49.4% 49.7%
Operating expenses
Research and development 33,250 35,348 100,844 112,097
Sales and marketing 47,022 48,664 141,120 151,727
General and administrative 23,237 22,072 75,901 70,051
Restructuring 872 21 5,797 2,435
Amortization of purchased
intangible assets 7,912 5,462 22,411 15,768
----- ----- ------ ------
Total operating expenses 112,293 111,567 346,073 352,078
------- ------- ------- -------
Operating income 20,165 54,056 73,143 175,020
Non-operating income, net
Interest income 124 404 546 1,369
Interest expense (450) (214) (1,408) (1,389)
Foreign currency transaction
gain, net 792 117 760 2,338
Income (loss) from joint
ventures, net (151) 2,163 369 6,796
Other income (expense), net 1,081 (907) 1,528 (1,661)
----- ---- ----- ------
Total non-operating income,
net 1,396 1,563 1,795 7,453
----- ----- ----- -----
Income before taxes 21,561 55,619 74,938 182,473
Income tax provision 5,714 16,552 20,244 54,740
----- ------ ------ ------
Net income 15,847 39,067 54,694 127,733
Less: Net income attributable
to noncontrolling interests 270 - 795 -
--- - --- -
Net income attributable
to Trimble Navigation Ltd. $15,577 $39,067 $53,899 $127,733
======= ======= ======= ========
Earnings per share
attributable to
Trimble Navigation Ltd.
Basic $0.13 $0.32 $0.45 $1.05
----- ----- ----- -----
Diluted $0.13 $0.31 $0.44 $1.02
----- ----- ----- -----
Shares used in calculating
earnings per share:
Basic 120,047 120,603 119,620 121,171
------- ------- ------- -------
Diluted 122,854 124,423 121,893 125,071
------- ------- ------- -------
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)
Oct-2, Jan-2,
2009 2009
---- ----
Assets
Current assets:
Cash and cash equivalents $222,099 $147,531
Accounts receivables, net 202,453 204,269
Other receivables 10,350 17,540
Inventories, net 160,420 160,893
Deferred income taxes 41,720 41,810
Other current assets 19,854 16,404
------ ------
Total current assets 656,896 588,447
Property and equipment, net 46,903 50,175
Goodwill 765,484 715,571
Other purchased intangible assets, net 216,619 228,901
Other non-current assets 45,739 51,922
------ ------
Total assets $1,731,641 $1,635,016
========== ==========
Liabilities
Current liabilities:
Current portion of long-term debt $49 $124
Accounts payable 50,256 49,611
Accrued compensation and benefits 45,526 41,291
Deferred revenue 69,946 55,241
Accrued warranty expense 14,081 13,332
Other accrued liabilities 36,099 63,719
------ ------
Total current liabilities 215,957 223,318
Non-current portion of long-term debt 151,455 151,464
Non-current deferred revenue 8,034 12,418
Deferred income taxes 39,830 42,207
Other non-current liabilities 64,754 61,553
------ ------
Total liabilities 480,030 490,960
------- -------
Commitments and contingencies
Equity
Shareholders' equity:
Common stock 713,593 684,831
Retained earnings 481,820 427,921
Accumulated other comprehensive income 51,454 27,649
------ ------
Total Trimble Navigation Ltd.
shareholders' equity 1,246,867 1,140,401
Noncontrolling interests 4,744 3,655
----- -----
Total equity 1,251,611 1,144,056
Total liabilities and equity $1,731,641 $1,635,016
========== ==========
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
Oct-2, Sep-26,
2009 2008
---- ----
Cash flow from operating activities:
Net Income $54,694 $127,733
Adjustments to reconcile net income
to net cash provided by
operating activities:
Depreciation expense 13,941 14,287
Amortization expense 38,968 32,999
Provision for doubtful accounts 2,933 597
Amortization of debt issuance cost 169 169
Deferred income taxes (9,268) (14,235)
Stock-based compensation 13,321 11,603
Equity gain from joint ventures (369) (6,796)
Gain on bargain purchase (386) -
Excess tax benefit for stock-based
compensation (1,304) (5,847)
Provision for excess and obsolete
inventories 2,943 2,672
Other non-cash items (2,542) 179
Add decrease (increase) in assets:
Accounts receivables 2,613 (16,230)
Other receivables 6,288 1,598
Inventories 1,300 (16,165)
Other current and non-current assets 1,915 (201)
Add increase (decrease) in liabilities:
Accounts payable (1,068) (1,859)
Accrued compensation and benefits 2,273 (7,426)
Accrued liabilities 1,947 725
Deferred revenue 10,753 2,862
Income taxes payable - 15,280
- ------
Net cash provided by operating activities 139,121 141,945
------- -------
Cash flow from investing activities:
Acquisitions of businesses, net of cash
acquired (50,824) (69,310)
Acquisition of property and equipment (9,541) (11,293)
Acquisitions of intangible assets (26,839) (349)
Dividends received 2,896 3,148
Other (379) 195
---- ---
Net cash used in investing activities (84,687) (77,609)
------- -------
Cash flow from financing activities:
Issuance of common stock 13,673 22,119
Excess tax benefit for stock-based
compensation 1,304 5,847
Repurchase and retirement of common stock - (115,851)
Proceeds from long-term debt and revolving
credit lines 51,000
Payments on long-term debt and revolving
credit lines (168) (60,316)
---- -------
Net cash provided by (used in) financing activities 14,809 (97,201)
------ -------
Effect of exchange rate changes on cash and cash
equivalents 5,325 142
----- ---
Net decrease in cash and cash equivalents 74,568 (32,723)
Cash and cash equivalents - beginning of period 147,531 103,202
------- -------
Cash and cash equivalents - end of period $222,099 $70,479
======== =======
REPORTING SEGMENTS
(Dollars in thousands)
(Unaudited)
Reporting Segments
------------------
Engineering
and Field Mobile Advanced
Construction Solutions Solutions Devices
------------ --------- --------- -------
THREE MONTHS ENDED
OCTOBER 2, 2009:
Revenue $149,384 $55,654 $39,572 $25,103
Operating income before
corporate allocations: $21,131 $16,286 $3,367 $4,488
Operating margin (%
of segment
external net
revenues) 14.1% 29.3% 8.5% 17.9%
THREE MONTHS ENDED
SEPTEMBER 26, 2008:
Revenue $191,858 $64,354 $40,822 $31,053
Operating income before
corporate allocations: $41,560 $22,058 $3,602 $6,835
Operating margin (%
of segment
external net
revenues) 21.7% 34.3% 8.8% 22.0%
NINE MONTHS ENDED
OCTOBER 2, 2009:
Revenue $424,275 $234,598 $116,925 $72,932
Operating income before
corporate allocations: $42,800 $88,637 $10,163 $13,633
Operating margin (%
of segment
external net
revenues) 10.1% 37.8% 8.7% 18.7%
NINE MONTHS ENDED
SEPTEMBER 26, 2008:
Revenue $599,057 $242,461 $127,118 $92,514
Operating income before
corporate allocations: $123,675 $91,961 $7,997 $18,105
Operating margin (%
of segment
external net
revenues) 20.6% 37.9% 6.3% 19.6%
GAAP TO NON-GAAP RECONCILIATION
(Dollars in thousands, except per share data)
(Unaudited)
Three Months Ended
------------------
Oct-2, Sep-26,
2009 2008
---- ----
Dollar % of Dollar % of
Amount Revenue Amount Revenue
------ ------- ------ -------
GROSS MARGIN:
GAAP gross margin: $132,458 49.1% $165,623 50.5%
Restructuring ( A ) 270 0.1% 430 0.1%
Amortization of
purchased
intangibles ( B ) 5,661 2.1% 5,681 1.7%
Stock-based
compensation ( C ) 453 0.2% 453 0.2%
Amortization of
acquisition-related
inventory step-up ( D ) - 0.0% 418 0.1%
- --- --- ---
Non-GAAP gross margin: $138,842 51.5% $172,605 52.6%
-------- ---- -------- ----
OPERATING EXPENSES:
GAAP operating expenses: $112,293 $111,567
Restructuring ( A ) (872) (21)
Amortization of
purchased
intangibles ( B ) (7,912) (5,462)
Stock-based
compensation ( C ) (4,088) (3,373)
Non-recurring
acquisition costs ( E ) (577) -
---- -
Non-GAAP operating expenses: $98,844 $102,711
------- --------
OPERATING INCOME:
GAAP operating income: $20,165 7.5% $54,056 16.5%
Restructuring ( A ) 1,142 0.4% 451 0.1%
Amortization of
purchased
intangibles ( B ) 13,573 5.0% 11,143 3.4%
Stock-based
compensation ( C ) 4,541 1.7% 3,826 1.2%
Amortization of
acquisition-related
inventory step-up ( D ) - 0.0% 418 0.1%
Non-recurring
acquisition costs ( E ) 577 0.2% - 0.0%
--- --- - ---
Non-GAAP operating income: $39,998 14.8% $69,894 21.3%
------- ---- ------- ----
NET INCOME:
GAAP net income attributable
to Trimble Navigation Ltd. $15,577 $39,067
Restructuring ( A ) 1,142 451
Amortization of
purchased
intangibles ( B ) 13,573 11,143
Stock-based
compensation ( C ) 4,541 3,826
Amortization of
acquisition-related
inventory step-up ( D ) - 418
Non-recurring
acquisition costs ( E ) 577 -
Income tax effect on
non-GAAP adjustments ( F ) (5,256) (4,713)
------ ------
Non-GAAP net income
attributable to Trimble
Navigation Ltd. $30,154 $50,192
------- -------
DILUTED NET INCOME PER SHARE:
GAAP diluted net income per
share attributable to
Trimble Navigation Ltd. $0.13 $0.31
Restructuring ( A ) 0.01 0.01
Amortization of
purchased
intangibles ( B ) 0.11 0.09
Stock-based
compensation ( C ) 0.04 0.03
Amortization of
acquisition-related
inventory step-up ( D ) - -
Non-recurring
acquisition costs ( E ) - -
Income tax effect on
non-GAAP adjustments ( F ) (0.04) (0.04)
----- -----
Non-GAAP diluted net income
per share attributable to
Trimble Navigation Ltd. $0.25 $0.40
----- -----
OPERATING LEVERAGE:
Increase (decrease) in non-
GAAP operating income $(29,896)
Increase (decrease) in
revenue $(58,374)
Operating leverage (increase
in non-GAAP operating
income as a % of increase
in revenue) N/A
% of Segment % of Segment
SEGMENT OPERATING INCOME: Revenue Revenue
------- -------
Engineering and Construction
GAAP operating income
before corporate
allocations: $21,131 14.1% $41,560 21.7%
Stock-based
compensation ( G ) 1,563 1.1% 1,146 0.6%
----- --- ----- ---
Non-GAAP operating income
before corporate
allocations: $22,694 15.2% $42,706 22.3%
------- ---- ------- ----
Field Solutions
GAAP operating income
before corporate
allocations: $16,286 29.3% $22,058 34.3%
Stock-based
compensation ( G ) 293 0.5% 203 0.3%
--- --- --- ---
Non-GAAP operating income
before corporate
allocations: $16,579 29.8% $22,261 34.6%
------- ---- ------- ----
Mobile Solutions
GAAP operating income
before corporate
allocations: $3,367 8.5% $3,602 8.8%
Stock-based
compensation ( G ) 958 2.4% 987 2.4%
--- --- --- ---
Non-GAAP operating income
before corporate
allocations: $4,325 10.9% $4,589 11.2%
------ ---- ------ ----
Advanced Devices
GAAP operating income
before corporate
allocations: $4,488 17.9% $6,835 22.0%
Stock-based
compensation ( G ) 397 1.6% 337 1.1%
--- --- --- ---
Non-GAAP operating income
before corporate
allocations: $4,885 19.5% $7,172 23.1%
------ ---- ------ ----
Nine Months Ended
-----------------
Oct-2, Sep-26,
2009 2008
---- ----
% of % of
Revenue Revenue
------- -------
GROSS MARGIN:
GAAP gross margin: $419,216 49.4% $527,098 49.7%
Restructuring ( A ) 3,333 0.4% 1,360 0.1%
Amortization of
purchased
intangibles ( B ) 16,421 1.9% 17,097 1.6%
Stock-based
compensation ( C ) 1,368 0.2% 1,433 0.1%
Amortization of
acquisition-related
inventory step-up ( D ) 470 0.0% 601 0.1%
--- --- --- ---
Non-GAAP gross margin: $440,808 51.9% $547,589 51.6%
-------- ---- -------- ----
OPERATING EXPENSES:
GAAP operating expenses: $346,073 $352,078
Restructuring ( A ) (5,797) (2,435)
Amortization of
purchased
intangibles ( B ) (22,411) (15,768)
Stock-based
compensation ( C ) (11,953) (10,170)
Non-recurring
acquisition costs ( E ) (3,382) -
------ -
Non-GAAP operating expenses: $302,530 $323,705
-------- --------
OPERATING INCOME:
GAAP operating income: $73,143 8.6% $175,020 16.5%
Restructuring ( A ) 9,130 1.1% 3,795 0.4%
Amortization of
purchased
intangibles ( B ) 38,832 4.6% 32,865 3.1%
Stock-based
compensation ( C ) 13,321 1.6% 11,603 1.1%
Amortization of
acquisition-related
inventory step-up ( D ) 470 0.0% 601 0.0%
Non-recurring
acquisition costs ( E ) 3,382 0.4% - 0.0%
----- --- - ---
Non-GAAP operating income: $138,278 16.3% $223,884 21.1%
-------- ---- -------- ----
NET INCOME:
GAAP net income
attributable to
Trimble Navigation
Ltd. $53,899 $127,733
Restructuring ( A ) 9,130 3,795
Amortization of
purchased
intangibles ( B ) 38,832 32,865
Stock-based
compensation ( C ) 13,321 11,603
Amortization of
acquisition-related
inventory step-up ( D ) 470 601
Non-recurring
acquisition costs ( E ) 2,996 -
Income tax effect on
non-GAAP adjustments ( F ) (17,411) (14,620)
------- -------
Non-GAAP net income
attributable to Trimble
Navigation Ltd. $101,237 $161,977
-------- --------
DILUTED NET INCOME PER SHARE:
GAAP diluted net income per
share attributable to
Trimble Navigation Ltd. $0.44 $1.02
Restructuring ( A ) 0.07 0.03
Amortization of
purchased
intangibles ( B ) 0.32 0.26
Stock-based
compensation ( C ) 0.11 0.09
Amortization of
acquisition-related
inventory step-up ( D ) - 0.01
Non-recurring
acquisition costs ( E ) 0.03 -
Income tax effect on
non-GAAP adjustments ( F ) (0.14) (0.11)
----- -----
Non-GAAP diluted net income
per share attributable to
Trimble Navigation Ltd. $0.83 $1.30
----- -----
OPERATING LEVERAGE:
Increase (decrease) in non-
GAAP operating income $(85,606)
Increase (decrease) in
revenue $(212,420)
Operating leverage (increase
in non-GAAP operating
income as a % of increase
in revenue) N/A
% of Segment % of Segment
SEGMENT OPERATING INCOME: Revenue Revenue
------- -------
Engineering and Construction
GAAP operating income
before corporate
allocations: $42,800 10.1% $123,675 20.6%
Stock-based
compensation ( G ) 4,302 1.0% 3,193 0.6%
----- --- ----- ---
Non-GAAP operating income
before corporate
allocations: $47,102 11.1% $126,868 21.2%
------- ---- -------- ----
Field Solutions
GAAP operating income
before corporate
allocations: $88,637 37.8% $91,961 37.9%
Stock-based
compensation ( G ) 775 0.3% 600 0.3%
--- --- --- ---
Non-GAAP operating income
before corporate
allocations: $89,412 38.1% $92,561 38.2%
------- ---- ------- ----
Mobile Solutions
GAAP operating income
before corporate
allocations: $10,163 8.7% $7,997 6.3%
Stock-based
compensation ( G ) 3,205 2.7% 3,582 2.8%
----- --- ----- ---
Non-GAAP operating income
before corporate
allocations: $13,368 11.4% $11,579 9.1%
------- ---- ------- ---
Advanced Devices
GAAP operating income
before corporate
allocations: $13,633 18.7% $18,105 19.6%
Stock-based
compensation ( G ) 1,068 1.5% 979 1.0%
----- --- --- ---
Non-GAAP operating income
before corporate
allocations: $14,701 20.2% $19,084 20.6%
------- ---- ------- ----
FOOTNOTES TO GAAP TO NON-GAAP RECONCILIATION
(Dollars in thousands)
(Unaudited)
The non-GAAP financial measures included in the previous table are non-
GAAP gross margin, non-GAAP operating expenses, non-GAAP operating income,
non-GAAP net income, non-GAAP diluted net income per share and operating
leverage, and non-GAAP segment operating income before corporate
allocations. These non-GAAP measures can be used to evaluate the
Company's historical and prospective financial performance, as well as
its performance relative to competitors. The Company believes some of
its investors track the Company's "core operating performance" as a means
of evaluating the Company's performance in the ordinary, ongoing, and
customary course of its operations. Management also believes that
looking at its core operating performance provides a supplemental way to
provide consistency in period to period comparisons. Accordingly,
management excludes from non-GAAP those items relating to restructuring,
amortization of purchased intangibles, stock based compensation,
amortization of acquisition-related inventory step-up and non-recurring
acquisition costs, which the Company believes are not indicative of its
core operating performance.
( A ) Restructuring. Included in our GAAP presentation of cost of sales
and operating expenses, restructuring costs recorded are primarily
for employee compensation resulting from reductions in employee
headcount in connection with our company restructurings. We
exclude restructuring from our non-GAAP measures because we
believe they are not indicative of our core operating performance.
( B ) Amortization of purchased intangibles. Included in our GAAP
presentation of cost of sales and operating expenses, amortization
of purchased intangibles recorded arise from prior acquisitions and
are non-cash in nature. We exclude these expenses from our
non-GAAP measures because we believe they are not indicative of
our core operating performance.
( C ) Stock-based compensation. Included in our GAAP presentation of
cost of sales and operating expenses, stock-based compensation
consists of expenses for employee stock options and awards and
purchase rights under our employee stock purchase plan determined
in accordance with SFAS 123(R). We exclude stock-based
compensation expense from our non-GAAP measures because some
investors may view it as not reflective of our core operating
performance as it is a non-cash expense. For the three months
and nine months ended October 2, 2009 and September 26, 2008,
stock-based compensation was allocated as follows:
Three Months Ended Nine Months Ended
------------------ -----------------
Oct-2, Sep-26, Oct-2, Sep-26,
2009 2008 2009 2008
---- ---- ---- ----
Cost of sales $453 $453 $1,368 $1,433
Research and development 866 796 2,504 2,629
Sales and Marketing 1,134 937 3,200 2,898
General and administrative 2,088 1,640 6,249 4,643
----- ----- ----- -----
$4,541 $3,826 $13,321 $11,603
------ ------ ------- -------
( D ) Amortization of acquisition-related inventory step-up. The
purchase accounting entries associated with our business
acquisitions require us to record inventory at its fair value,
which is sometimes greater than the previous book value of the
inventory. Included in our GAAP presentation of cost of sales,
the increase in inventory value is amortized to cost of sales over
the period that the related product is sold. We exclude inventory
step-up amortization from our non-GAAP measures because we do not
believe it is indicative of our core operating performance.
( E ) Non-recurring acquisition costs. Included in our GAAP
presentation of operating expenses and non-operating income, net,
non-recurring acquisition costs consist of external and
incremental costs resulting directly from merger and acquisition
activities such as legal, due diligence and integration costs.
Also included are unusual acquisition related items such as a gain
on bargain purchase (resulting from the fair value of
indentifiable net assets acquired exceeding the consideration
transferred) and payments made to settle earnout disputes. We
exclude these items because they are non-recurring and unique to
specific acquisitions and are not indicative of our core operating
performance.
( F ) Income tax effect on non-GAAP adjustments. This amounts adjusts
the provision for income taxes to reflect the effect of the
non-GAAP adjustments on non-GAAP net income.
( G ) Stock-based Compensation. The amounts consist of expenses for
employee stock options and awards and purchase rights under our
employee stock purchase plan determined in accordance with SFAS
123(R). As referred to above we exclude stock-based compensation
here because investors may view it as not reflective of our core
operating performance. However, management does include
stock-based compensation for budgeting and incentive plans as
well as for reviewing internal financial reporting. We discuss our
operating results by segment with and without stock-based
compensation expense, as we believe it is useful to investors to
understand the impact of the application of SFAS 123(R) to our
results of operations. Stock-based compensation not allocated to
the reportable segments was approximately $1,330K and $1,153K for
the three months ended October 2, 2009 and September 26, 2008,
respectively and $3,971K and $3,249K for the nine months ended
October 2, 2009 and September 26, 2008, respectively.
Web site: http://www.trimble.com/
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