FTRMB
| |||||||||
CONDENSED CONSOLIDATED STATEMENTS OF INCOME | |||||||||
(In thousands, except per share data) | |||||||||
(Unaudited) | |||||||||
|
|
|
|
|
|
|
|
| |
|
| Three Months Ended |
| Twelve Months Ended | |||||
|
| ||||||||
|
| Dec-31, |
| Jan-1, |
| Dec-31, |
| Jan-1, | |
|
| 2010 |
| 2010 |
| 2010 |
| 2010 | |
|
|
|
|
|
|
|
|
| |
Revenue |
| $ 323,349 |
| $ 277,529 |
| $ 1,293,937 |
| $ 1,126,259 | |
Cost of sales |
| 160,019 |
| 146,877 |
| 648,436 |
| 576,391 | |
Gross margin |
| 163,330 |
| 130,652 |
| 645,501 |
| 549,868 | |
Gross margin (%) |
| 50.5% |
| 47.1% |
| 49.9% |
| 48.8% | |
|
|
|
|
|
|
|
|
| |
Operating expenses |
|
|
|
|
|
|
|
| |
Research and development |
| 40,750 |
| 35,795 |
| 150,089 |
| 136,639 | |
Sales and marketing |
| 61,609 |
| 48,739 |
| 215,127 |
| 189,859 | |
General and administrative |
| 32,878 |
| 24,929 |
| 118,352 |
| 100,830 | |
Restructuring |
| 348 |
| 588 |
| 1,592 |
| 6,385 | |
Amortization of purchased intangible assets |
| 8,489 |
| 7,924 |
| 32,739 |
| 30,335 | |
Total operating expenses |
| 144,074 |
| 117,975 |
| 517,899 |
| 464,048 | |
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
| |
Operating income |
| 19,256 |
| 12,677 |
| 127,602 |
| 85,820 | |
|
|
|
|
|
|
|
|
| |
Non-operating income, net |
|
|
|
|
|
|
|
| |
Interest income |
| 219 |
| 237 |
| 1,083 |
| 783 | |
Interest expense |
| (367) |
| (404) |
| (1,752) |
| (1,812) | |
Foreign currency transaction gain (loss), net |
| 210 |
| (297) |
| (836) |
| 463 | |
Income from equity method investments, net |
| 2,770 |
| 309 |
| 11,795 |
| 730 | |
Other income, net |
| 173 |
| 161 |
| 3,195 |
| 1,637 | |
Total non-operating income, net |
| 3,005 |
| 6 |
| 13,485 |
| 1,801 | |
|
|
|
|
|
|
|
|
| |
Income before taxes |
| 22,261 |
| 12,683 |
| 141,087 |
| 87,621 | |
|
|
|
|
|
|
|
|
| |
Income tax provision (benefit) |
| (13,587) |
| 3,414 |
| 37,474 |
| 23,658 | |
Net income |
| 35,848 |
| 9,269 |
| 103,613 |
| 63,963 | |
Less: Net income (loss) attributable to noncontrolling interests |
| (716) |
| (278) |
| (47) |
| 517 | |
Net income attributable to Trimble Navigation Ltd. |
| $ 36,564 |
| $ 9,547 |
| $ 103,660 |
| $ 63,446 | |
|
|
|
|
|
|
|
|
| |
Earnings per share attributable to Trimble Navigation Ltd. |
|
|
|
|
|
|
|
| |
Basic |
| $ 0.30 |
| $ 0.08 |
| $ 0.86 |
| $ 0.53 | |
Diluted |
| $ 0.29 |
| $ 0.08 |
| $ 0.84 |
| $ 0.52 | |
|
|
|
|
|
|
|
|
| |
Shares used in calculating earnings per share: |
|
|
|
|
|
|
|
| |
Basic |
| 120,522 |
| 120,395 |
| 120,352 |
| 119,814 | |
Diluted |
| 124,395 |
| 123,155 |
| 123,798 |
| 122,208 | |
| |||||||||
| |||||
CONDENSED CONSOLIDATED BALANCE SHEETS | |||||
(In thousands) | |||||
(Unaudited) | |||||
| |||||
|
| ||||
|
| Dec-31, |
| Jan-1 | |
|
| 2010 |
| 2010 | |
Assets |
|
|
|
| |
|
|
|
|
| |
Current assets: |
|
|
|
| |
Cash and cash equivalents |
| $ 220,788 |
| $ 273,848 | |
Accounts receivables, net |
| 222,820 |
| 202,293 | |
Other receivables |
| 21,069 |
| 11,856 | |
Inventories, net |
| 192,852 |
| 144,012 | |
Deferred income taxes |
| 36,924 |
| 39,686 | |
Other current assets |
| 19,917 |
| 18,383 | |
Total current assets |
| 714,370 |
| 690,078 | |
|
|
|
|
| |
Property and equipment, net |
| 50,692 |
| 44,635 | |
Goodwill |
| 828,737 |
| 764,193 | |
Other purchased intangible assets, net |
| 204,948 |
| 202,782 | |
Other non-current assets |
| 68,145 |
| 51,589 | |
|
|
|
|
| |
Total assets |
| $ 1,866,892 |
| $ 1,753,277 | |
|
|
|
|
| |
Liabilities |
|
|
|
| |
|
|
|
|
| |
Current liabilities: |
|
|
|
| |
Current portion of long-term debt |
| $ 1,993 |
| $ 445 | |
Accounts payable |
| 72,349 |
| 53,775 | |
Accrued compensation and benefits |
| 60,976 |
| 43,272 | |
Deferred revenue |
| 73,888 |
| 68,968 | |
Accrued warranty expense |
| 12,868 |
| 14,744 | |
Other accrued liabilities |
| 29,741 |
| 42,041 | |
Total current liabilities |
| 251,815 |
| 223,245 | |
|
|
|
|
| |
Non-current portion of long-term debt |
| 151,160 |
| 151,038 | |
Non-current deferred revenue |
| 10,777 |
| 15,599 | |
Deferred income taxes |
| 24,598 |
| 38,857 | |
Other non-current liabilities |
| 42,843 |
| 59,983 | |
Total liabilities |
| 481,193 |
| 488,722 | |
|
|
|
|
| |
Commitments and contingencies |
|
|
|
| |
|
|
|
|
| |
Equity |
|
|
|
| |
|
|
|
|
| |
Shareholders' equity: |
|
|
|
| |
Common stock |
| 781,779 |
| 720,248 | |
Retained earnings |
| 536,350 |
| 491,367 | |
Accumulated other comprehensive income | 48,027 |
| 48,297 | ||
Total Trimble Navigation Ltd. shareholders' equity | 1,366,156 |
| 1,259,912 | ||
Noncontrolling interests |
| 19,543 |
| 4,643 | |
Total equity |
| 1,385,699 |
| 1,264,555 | |
|
|
|
|
| |
Total liabilities and equity |
| $ 1,866,892 |
| $ 1,753,277 | |
| |||||
| |||||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | |||||
(In thousands) | |||||
(Unaudited) | |||||
| Twelve Months Ended | ||||
|
| Dec-31, |
| Jan-1, | |
|
| 2010 |
| 2010 | |
|
|
|
|
| |
Cash flow from operating activities: |
|
|
|
| |
Net Income |
| $ 103,613 |
| $ 63,963 | |
|
|
|
|
| |
Adjustments to reconcile net income to net cash provided by |
|
|
|
| |
operating activities: |
|
|
|
| |
Depreciation expense |
| 18,198 |
| 18,795 | |
Amortization expense |
| 57,639 |
| 52,672 | |
Provision for doubtful accounts |
| 2,320 |
| 4,139 | |
Amortization of debt issuance cost |
| 226 |
| 226 | |
Deferred income taxes |
| (14,918) |
| (7,473) | |
Stock-based compensation |
| 23,125 |
| 18,659 | |
Income from equity method investments |
| (11,795) |
| (429) | |
Excess tax benefit for stock-based compensation |
| (9,639) |
| (1,453) | |
Provision for excess and obsolete inventories |
| 4,752 |
| 3,530 | |
Other non-cash items |
| (4,836) |
| (3,036) | |
|
|
|
|
| |
Add decrease (increase) in assets: |
|
|
|
| |
Accounts receivables |
| (7,376) |
| (3,935) | |
Other receivables |
| 2,518 |
| 3,516 | |
Inventories |
| (45,549) |
| 13,292 | |
Other current and non-current assets |
| 2,257 |
| (620) | |
|
|
|
|
| |
Add increase (decrease) in liabilities: |
|
|
|
| |
Accounts payable |
| 13,577 |
| 2,631 | |
Accrued compensation and benefits |
| 15,928 |
| 245 | |
Accrued liabilities |
| (24,833) |
| 4,433 | |
Deferred revenue |
| (1,177) |
| 25,476 | |
Net cash provided by operating activities |
| 124,030 |
| 194,631 | |
|
|
|
|
| |
Cash flow from investing activities: |
|
|
|
| |
Acquisitions of businesses, net of cash acquired |
| (136,419) |
| (52,018) | |
Acquisition of property and equipment |
| (23,133) |
| (12,706) | |
Acquisitions of intangible assets |
| (2,063) |
| (26,839) | |
Purchases of equity method investments |
| (8,192) |
| - | |
Proceeds received from noncontrolling interest holder |
| 7,470 |
|
| |
Net purchases of short term investments |
| - |
| 5,000 | |
Dividends received |
| 5,858 |
| 2,896 | |
Other |
| 105 |
| (259) | |
Net cash used in investing activities |
| (156,374) |
| (83,926) | |
|
|
|
|
| |
Cash flow from financing activities: |
|
|
|
| |
Issuance of common stock, net |
| 44,549 |
| 14,855 | |
Repurchase and retirement of common stock |
| (73,853) |
| - | |
Excess tax benefit for stock-based compensation |
| 9,639 |
| 1,453 | |
Payments on long-term debt and revolving credit lines |
| (499) |
| (183) | |
Net cash provided by (used in) financing activities |
| (20,164) |
| 16,125 | |
|
|
|
|
| |
Effect of exchange rate changes on cash and cash equivalents |
| (552) |
| 4,487 | |
|
|
|
|
| |
Net increase (decrease) in cash and cash equivalents |
| (53,060) |
| 131,317 | |
Cash and cash equivalents - beginning of period |
| 273,848 |
| 142,531 | |
|
|
|
|
| |
Cash and cash equivalents - end of period |
| $ 220,788 |
| $ 273,848 | |
| |||||
| ||||||||||||
REPORTING SEGMENTS | ||||||||||||
(Dollars in thousands) | ||||||||||||
(Unaudited) | ||||||||||||
| ||||||||||||
| ||||||||||||
|
|
|
|
| Reporting Segments | |||||||
|
|
|
|
| Engineering |
|
|
|
|
|
| |
|
|
|
|
| and |
| Field |
| Mobile |
| Advanced | |
|
|
|
|
| Construction |
| Solutions |
| Solutions |
| Devices | |
|
|
|
|
|
|
|
|
|
|
|
| |
THREE MONTHS ENDED DECEMBER 31, 2010: |
|
|
|
|
|
|
|
| ||||
| Revenue |
|
| $ 183,396 |
| $ 74,837 |
| $ 40,415 |
| $ 24,701 | ||
|
|
|
|
|
|
|
|
|
|
|
| |
| Operating income (loss) before corporate allocations: |
| $ 21,648 |
| $ 27,053 |
| $ (267) |
| $ 3,446 | |||
|
| Operating margin (% of segment external net revenues) |
| 11.8% |
| 36.1% |
| (0.7%) |
| 14.0% | ||
|
|
|
|
|
|
|
|
|
|
|
| |
THREE MONTHS ENDED JANUARY 1, 2010: |
|
|
|
|
|
|
|
| ||||
| Revenue |
|
| $ 154,304 |
| $ 57,154 |
| $ 37,956 |
| $ 28,115 | ||
|
|
|
|
|
|
|
|
|
|
|
| |
| Operating income before corporate allocations: |
| $ 15,482 |
| $ 15,861 |
| $ 4,178 |
| $ 3,594 | |||
|
| Operating margin (% of segment external net revenues) |
| 10.0% |
| 27.8% |
| 11.0% |
| 12.8% | ||
|
|
|
|
|
|
|
|
|
|
|
| |
TWELVE MONTHS ENDED DECEMBER 31, 2010: |
|
|
|
|
|
|
|
| ||||
| Revenue |
|
| $ 719,053 |
| $ 318,136 |
| $ 154,254 |
| $ 102,494 | ||
|
|
|
|
|
|
|
|
|
|
|
| |
| Operating income before corporate allocations: |
| $ 110,965 |
| $ 116,373 |
| $ 1,873 |
| $ 18,325 | |||
|
| Operating margin (% of segment external net revenues) |
| 15.4% |
| 36.6% |
| 1.2% |
| 17.9% | ||
|
|
|
|
|
|
|
|
|
|
|
| |
TWELVE MONTHS ENDED JANUARY 1, 2010: |
|
|
|
|
|
|
|
| ||||
| Revenue |
|
| $ 578,579 |
| $ 291,752 |
| $ 154,881 |
| $ 101,047 | ||
|
|
|
|
|
|
|
|
|
|
|
| |
| Operating income before corporate allocations: |
| $ 58,282 |
| $ 104,498 |
| $ 14,341 |
| $ 17,227 | |||
|
| Operating margin (% of segment external net revenues) |
| 10.1% |
| 35.8% |
| 9.3% |
| 17.0% | ||
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
| |
| ||||||||||||
GAAP TO NON-GAAP RECONCILIATION | |||||||||||||||||
(Dollars in thousands, except per share data) | |||||||||||||||||
(Unaudited) | |||||||||||||||||
| |||||||||||||||||
|
|
|
|
| Three Months Ended |
| Twelve Months Ended |
| |||||||||
|
|
|
|
| Dec-31, |
| Jan-1, |
| Dec-31, |
| Jan-1, |
| |||||
|
|
|
|
| 2010 |
| 2010 |
| 2010 |
| 2010 |
| |||||
|
|
|
|
| Dollar | % of |
| Dollar | % of |
| Dollar | % of |
| Dollar | % of |
| |
|
|
|
|
| Amount | Revenue |
| Amount | Revenue |
| Amount | Revenue |
| Amount | Revenue |
| |
GROSS MARGIN: |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
| GAAP gross margin: |
|
| $ 163,330 | 50.5% |
| $ 130,652 | 47.1% |
| $ 645,501 | 49.9% |
| $ 549,868 | 48.8% |
| ||
|
| Restructuring | ( A ) |
| 293 | 0.1% |
| 1,036 | 0.3% |
| 443 | 0.0% |
| 4,369 | 0.4% |
| |
|
| Amortization of purchased intangibles | ( B ) |
| 6,985 | 2.2% |
| 5,780 | 2.1% |
| 24,900 | 1.9% |
| 22,201 | 2.0% |
| |
|
| Stock-based compensation | ( C ) |
| 344 | 0.1% |
| 486 | 0.2% |
| 1,816 | 0.1% |
| 1,854 | 0.2% |
| |
|
| Amortization of acquisition-related inventory step-up | ( D ) |
| 588 | 0.2% |
| - | 0.0% |
| 728 | 0.1% |
| 470 | 0.0% |
| |
| Non-GAAP gross margin: |
|
| $ 171,540 | 53.1% |
| $ 137,954 | 49.7% |
| $ 673,388 | 52.0% |
| $ 578,762 | 51.4% |
| ||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
OPERATING EXPENSES: |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
| GAAP operating expenses: |
|
| $ 144,074 | 44.6% |
| $ 117,975 | 42.5% |
| $ 517,899 | 40.0% |
| $ 464,048 | 41.2% |
| ||
|
| Restructuring | ( A ) |
| (348) | -0.1% |
| (588) | -0.2% |
| (1,592) | -0.1% |
| (6,385) | -0.6% |
| |
|
| Amortization of purchased intangibles | ( B ) |
| (8,489) | -2.6% |
| (7,924) | -2.9% |
| (32,739) | -2.5% |
| (30,335) | -2.7% |
| |
|
| Stock-based compensation | ( C ) |
| (6,616) | -2.1% |
| (4,852) | -1.7% |
| (21,309) | -1.7% |
| (16,805) | -1.5% |
| |
|
| Non-recurring acquisition costs | ( E ) |
| (3,466) | -1.1% |
| (440) | -0.2% |
| (6,537) | -0.5% |
| (3,822) | -0.3% |
| |
| Non-GAAP operating expenses: |
|
| $ 125,155 | 38.7% |
| $ 104,171 | 37.5% |
| $ 455,722 | 35.2% |
| $ 406,701 | 36.1% |
| ||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
OPERATING INCOME: |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
| GAAP operating income: |
|
| $ 19,256 | 6.0% |
| $ 12,677 | 4.6% |
| $ 127,602 | 9.9% |
| $ 85,820 | 7.6% |
| ||
|
| Restructuring | ( A ) |
| 641 | 0.2% |
| 1,624 | 0.6% |
| 2,035 | 0.2% |
| 10,754 | 1.0% |
| |
|
| Amortization of purchased intangibles | ( B ) |
| 15,474 | 4.8% |
| 13,704 | 4.9% |
| 57,639 | 4.4% |
| 52,536 | 4.7% |
| |
|
| Stock-based compensation | ( C ) |
| 6,960 | 2.1% |
| 5,338 | 1.9% |
| 23,125 | 1.8% |
| 18,659 | 1.7% |
| |
|
| Amortization of acquisition-related inventory step-up | ( D ) |
| 588 | 0.2% |
| - | 0.0% |
| 728 | 0.0% |
| 470 | 0.0% |
| |
|
| Non-recurring acquisition costs | ( E ) |
| 3,466 | 1.0% |
| 440 | 0.2% |
| 6,537 | 0.5% |
| 3,822 | 0.3% |
| |
| Non-GAAP operating income: |
|
| $ 46,385 | 14.3% |
| $ 33,783 | 12.2% |
| $ 217,666 | 16.8% |
| $ 172,061 | 15.3% |
| ||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
NON-OPERATING INCOME, NET: |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
| GAAP non-operating income, net: |
|
| $ 3,005 |
|
| $ 6 |
|
| $ 13,485 |
|
| $ 1,801 |
|
| ||
|
| Non-recurring acquisition (gains) costs | ( E ) |
| 35 |
|
| 386 |
|
| (3,177) |
|
| - |
|
| |
| Non-GAAP non-operating income, net: |
|
| $ 3,040 |
|
| $ 392 |
|
| $ 10,308 |
|
| $ 1,801 |
|
| ||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
| GAAP and |
|
| GAAP and |
|
| GAAP and |
|
| GAAP and |
| |
|
|
|
|
|
| Non-GAAP |
|
| Non-GAAP |
|
| Non-GAAP |
|
| Non-GAAP |
| |
|
|
|
|
|
| Tax Rate % | ( F ) |
| Tax Rate % | ( F ) |
| Tax Rate % | ( F ) |
| Tax Rate % | ( F ) | |
INCOME TAX PROVISION (BENEFIT): |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
| GAAP income tax provision (benefit): |
|
| $ (13,587) | -61% |
| $ 3,414 | 27% |
| $ 37,474 | 27% |
| $ 23,658 | 27% |
| ||
|
| IRS settlement | ( G ) |
| - |
|
| - |
|
| (27,540) |
|
| - |
|
| |
|
| Valuation allowance release | ( H ) |
| 7,628 |
|
| - |
|
| 7,628 |
|
| - |
|
| |
|
| Non-GAAP items tax effected | ( I ) |
| (1,014) |
|
| 5,785 |
|
| 10,935 |
|
| 23,196 |
|
| |
| Non-GAAP income tax provision (benefit): |
|
| $ (6,973) | -14% |
| $ 9,199 | 27% |
| $ 28,497 | 13% |
| $ 46,854 | 27% |
| ||
|
|
|
|
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NET INCOME: |
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| |||
| GAAP net income attributable to Trimble Navigation Ltd. |
|
| $ 36,564 |
|
| $ 9,547 |
|
| $ 103,660 |
|
| $ 63,446 |
|
| ||
|
| Restructuring | ( A ) |
| 641 |
|
| 1,624 |
|
| 2,035 |
|
| 10,754 |
|
| |
|
| Amortization of purchased intangibles | ( B ) |
| 15,474 |
|
| 13,704 |
|
| 57,639 |
|
| 52,536 |
|
| |
|
| Stock-based compensation | ( C ) |
| 6,960 |
|
| 5,338 |
|
| 23,125 |
|
| 18,659 |
|
| |
|
| Amortization of acquisition-related inventory step-up | ( D ) |
| 588 |
|
| - |
|
| 728 |
|
| 470 |
|
| |
|
| Non-recurring acquisition costs | ( E ) |
| 3,501 |
|
| 826 |
|
| 3,360 |
|
| 3,822 |
|
| |
|
| Non-GAAP tax adjustments | ( G ), ( H ), ( I ) |
| (6,614) |
|
| (5,785) |
|
| 8,977 |
|
| (23,196) |
|
| |
|
| Non-GAAP tax rate impact on noncontrolling interest | ( J ) |
| 9 |
|
| - |
|
| 9 |
|
| - |
|
| |
| Non-GAAP net income attributable to Trimble Navigation Ltd. |
|
| $ 57,123 |
|
| $ 25,254 |
|
| $ 199,533 |
|
| $ 126,491 |
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DILUTED NET INCOME PER SHARE: |
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| |||
| GAAP diluted net income per share attributable to Trimble Navigation Ltd. |
| $ 0.29 |
|
| $ 0.08 |
|
| $ 0.84 |
|
| $ 0.52 |
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| |||
|
| Restructuring | ( A ) |
| 0.01 |
|
| 0.01 |
|
| 0.02 |
|
| 0.09 |
|
| |
|
| Amortization of purchased intangibles | ( B ) |
| 0.12 |
|
| 0.11 |
|
| 0.46 |
|
| 0.43 |
|
| |
|
| Stock-based compensation | ( C ) |
| 0.06 |
|
| 0.05 |
|
| 0.19 |
|
| 0.15 |
|
| |
|
| Amortization of acquisition-related inventory step-up | ( D ) |
| - |
|
| - |
|
| - |
|
| 0.01 |
|
| |
|
| Non-recurring acquisition costs | ( E ) |
| 0.03 |
|
| 0.01 |
|
| 0.03 |
|
| 0.03 |
|
| |
|
| Non-GAAP tax adjustments | ( G ), ( H ), ( I ) |
| (0.05) |
|
| (0.05) |
|
| 0.07 |
|
| (0.19) |
|
| |
|
| Non-GAAP tax rate impact on noncontrolling interest | ( J ) |
| - |
|
| - |
|
| - |
|
| - |
|
| |
| Non-GAAP diluted net income per share attributable to Trimble Navigation Ltd. |
| $ 0.46 |
|
| $ 0.21 |
|
| $ 1.61 |
|
| $ 1.04 |
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OPERATING LEVERAGE: |
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| |||
| Increase in non-GAAP operating income |
|
| $ 12,602 |
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|
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| $ 45,605 |
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| ||
| Increase in revenue |
|
| $ 45,820 |
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|
|
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| $ 167,678 |
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| Operating leverage (increase in non-GAAP operating |
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| ||
| income as a % of increase in revenue) |
|
| 27.5% |
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|
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| 27.2% |
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GAAP TO NON-GAAP RECONCILIATION (CONTINUED) | ||||||||||||||||
(Dollars in thousands, except per share data) | ||||||||||||||||
(Unaudited) | ||||||||||||||||
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| Three Months Ended |
| Twelve Months Ended | |||||||||
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| Dec-31, |
| Jan-1, |
| Dec-31, |
| Jan-1, | |||||
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| 2010 |
| 2010 |
| 2010 |
| 2010 | |||||
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| % of Segment |
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| % of Segment |
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| % of Segment |
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| % of Segment | |
SEGMENT OPERATING INCOME: |
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| Revenue |
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| Revenue |
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| Revenue |
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| Revenue | |||
| Engineering and Construction |
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| GAAP operating income before corporate allocations: |
|
| $ 21,648 | 11.8% |
| $15,482 | 10.0% |
| $110,965 | 15.4% |
| $ 58,282 | 10.1% | |
|
| Stock-based compensation | ( K) |
| 2,391 | 1.3% |
| 2,010 | 1.3% |
| 7,886 | 1.1% |
| 6,312 | 1.1% | |
|
| Non-GAAP operating income before corporate allocations: |
|
| $ 24,039 | 13.1% |
| $17,492 | 11.3% |
| $118,851 | 16.5% |
| $ 64,594 | 11.2% | |
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| Field Solutions |
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| GAAP operating income before corporate allocations: |
|
| $ 27,053 | 36.1% |
| $15,861 | 27.8% |
| $116,373 | 36.6% |
| $ 104,498 | 35.8% | |
|
| Stock-based compensation | ( K) |
| 582 | 0.8% |
| 311 | 0.5% |
| 1,978 | 0.6% |
| 1,086 | 0.4% | |
|
| Non-GAAP operating income before corporate allocations: |
|
| $ 27,635 | 36.9% |
| $16,172 | 28.3% |
| $118,351 | 37.2% |
| $ 105,584 | 36.2% | |
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| Mobile Solutions |
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| GAAP operating income (loss) before corporate allocations: |
|
| $ (267) | -0.7% |
| $ 4,178 | 11.0% |
| $ 1,873 | 1.2% |
| $ 14,341 | 9.3% | |
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| Stock-based compensation | ( K) |
| 1,198 | 3.0% |
| 1,011 | 2.7% |
| 3,444 | 2.2% |
| 4,216 | 2.7% | |
|
| Non-GAAP operating income before corporate allocations: |
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| $ 931 | 2.3% |
| $ 5,189 | 13.7% |
| $ 5,317 | 3.4% |
| $ 18,557 | 12.0% | |
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| Advanced Devices |
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| GAAP operating income before corporate allocations: |
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| $ 3,446 | 14.0% |
| $ 3,594 | 12.8% |
| $ 18,325 | 17.9% |
| $ 17,227 | 17.0% | |
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| Stock-based compensation | ( K) |
| 584 | 2.3% |
| 527 | 1.9% |
| 1,934 | 1.9% |
| 1,595 | 1.6% | |
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| Non-GAAP operating income before corporate allocations: |
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| $ 4,030 | 16.3% |
| $ 4,121 | 14.7% |
| $ 20,259 | 19.8% |
| $ 18,822 | 18.6% | |
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FOOTNOTES TO GAAP TO NON-GAAP RECONCILIATION | ||||||||||||
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(Unaudited) | ||||||||||||
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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 non-operating income, net, non-GAAP income tax provision (benefit), 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, non-recurring acquisition costs, and non-recurring tax charges/benefits of which $27.6 million is associated with the IRS settlement and $7.6 million is associated with a valuation allowance release benefit. The Company does not believe that these these items are indicative of its core operating performance. | ||||||||||||
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( 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 it is not indicative of our core operating performance. | |||||||||||
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( 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. | |||||||||||
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( 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. 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 twelve months ended December 31, 2010 and January 1, 2010, stock-based compensation was allocated as follows: | |||||||||||
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| Three Months Ended |
| Twelve Months Ended | |||||
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| Dec-31, |
| Jan-1, |
| Dec-31, |
| Jan-1, | |
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| (Dollars in thousands) |
|
| 2010 |
| 2010 |
| 2010 |
| 2010 | |
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| Cost of sales |
|
| $ 344 |
| $ 486 |
| $ 1,816 |
| $ 1,854 | |
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| Research and development |
|
| 1,092 |
| 972 |
| 3,991 |
| 3,476 | |
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| Sales and Marketing |
|
| 1,598 |
| 1,246 |
| 5,611 |
| 4,446 | |
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| General and administrative |
|
| 3,926 |
| 2,634 |
| 11,707 |
| 8,883 | |
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| $ 6,960 |
| $ 5,338 |
| $ 23,125 |
| $ 18,659 | |
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( 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. | |||||||||||
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( 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 identifiable net assets acquired exceeding the consideration transferred), adjustments to the fair value of earnout liabilities and payments made or received to settle earnout and holdback disputes. We exclude these items because they are non-recurring and unique to specific acquisitions and are not indicative of our core operating performance. | |||||||||||
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( F ) | GAAP and non-GAAP tax rate %. These percentages are defined as GAAP income tax provision as a percentage of GAAP income before taxes and non-GAAP income tax provision as a percentage of non-GAAP income before taxes. | |||||||||||
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( G ) | IRS settlement. This amount represents a one time charge of $27.5 million in the second quarter of 2010 resulting from the IRS audit settlement. We excluded this because it is non-recurring and is not indicative of our core operating performance. | |||||||||||
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( H ) | Valuation allowance release. This amount represents a one time benefit of $7.6 million in the fourth quarter of 2010 resulting from a valuation allowance release. We excluded this because it is non-recurring and is not indicative of our core operating performance. | |||||||||||
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( I ) | Non-GAAP items tax effected. This amount adjusts the provision for income taxes to reflect the effect of the non-GAAP items (A) - (E) on non-GAAP net income. | |||||||||||
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( J ) | Non-GAAP tax rate impact on noncontrolling interests. This amount adjusts the provision for income taxes included in noncontrolling interest to reflect the non-GAAP tax rate. | |||||||||||
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( K ) | Stock-based compensation . The amounts consist of expenses for employee stock options and awards and purchase rights under our employee stock purchase plan. 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. Stock-based compensation not allocated to the reportable segments was approximately $2.2 million and $1.5 million for the three months ended December 31, 2010 and January 1, 2010, respectively and $7.9 million and $5.5 million for the twelve months ended December 31, 2010 and January 1, 2010, respectively. | |||||||||||