CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In millions, except per share data)
(Unaudited)

First Quarter of

2021

2020

Revenue:

Product

$

539.4

$

463.8

Service

162.3

162.4

Subscription

184.8

166.1

Total revenue

886.5

792.3

Cost of sales:

Product

255.7

210.1

Service

59.6

63.6

Subscription

55.8

54.1

Amortization of purchased intangible assets

22.1

23.5

Total cost of sales

393.2

351.3

Gross margin

493.3

441.0

Gross margin (%)

55.6

%

55.7

%

Operating expense:

Research and development

129.4

118.2

Sales and marketing

122.4

131.7

General and administrative

85.4

73.0

Restructuring charges

1.5

2.9

Amortization of purchased intangible assets

13.7

16.9

Total operating expense

352.4

342.7

Operating income

140.9

98.3

Non-operating expense, net:

Interest expense, net

(16.9)

(20.5)

Income from equity method investments, net

11.8

9.4

Other income (expense), net

1.6

(7.8)

Total non-operating expense, net

(3.5)

(18.9)

Income before taxes

137.4

79.4

Income tax provision

22.8

17.5

Net income

114.6

61.9

Net gain attributable to noncontrolling interests

0.1

—

Net income attributable to Trimble Inc.

$

114.5

$

61.9

Earnings per share attributable to Trimble Inc.:

Basic

$

0.46

$

0.25

Diluted

$

0.45

$

0.25

Shares used in calculating earnings per share:

Basic

251.1

249.9

Diluted

254.3

251.7

CONDENSED CONSOLIDATED BALANCE SHEETS
(In millions)
(Unaudited)

First Quarter of

Fiscal Year End

As of

2021

2020

Assets

Current assets:

Cash and cash equivalents

$

264.6

$

237.7

Accounts receivable, net

576.6

620.5

Inventories

298.7

301.7

Other current assets

120.1

121.5

Total current assets

1,260.0

1,281.4

Property and equipment, net

251.6

251.8

Operating lease right-of-use assets

121.1

128.9

Goodwill

3,848.0

3,876.5

Other purchased intangible assets, net

543.0

580.1

Deferred income tax assets

502.7

510.2

Other non-current assets

254.1

248.0

Total assets

$

6,780.5

$

6,876.9

Liabilities and Stockholders' Equity

Current liabilities:

Short-term debt

$

97.5

$

255.8

Accounts payable

157.9

143.2

Accrued compensation and benefits

145.2

166.8

Deferred revenue

561.4

560.5

Other current liabilities

189.6

185.0

Total current liabilities

1,151.6

1,311.3

Long-term debt

1,291.9

1,291.4

Deferred revenue, non-current

57.5

53.3

Deferred income tax liabilities

292.2

300.3

Income taxes payable

61.8

62.2

Operating lease liabilities

101.9

109.2

Other non-current liabilities

150.0

150.6

Total liabilities

3,106.9

3,278.3

Stockholders' equity:

Common stock

0.3

0.3

Additional paid-in-capital

1,841.5

1,801.7

Retained earnings

1,961.8

1,893.4

Accumulated other comprehensive loss

(130.0)

(98.5)

Total Trimble Inc. stockholders' equity

3,673.6

3,596.9

Noncontrolling interests

—

1.7

Total stockholders' equity

3,673.6

3,598.6

Total liabilities and stockholders' equity

$

6,780.5

$

6,876.9

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In millions)
(Unaudited)

First Quarter of

2021

2020

Cash flow from operating activities:

Net income

$

114.6

$

61.9

Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation expense

10.3

9.8

Amortization expense

35.8

40.4

Provision for credit losses

(0.8)

6.4

Deferred income taxes

0.4

4.8

Stock-based compensation

27.2

10.7

Income from equity method investments, net of dividends

(3.8)

(5.6)

Other, net

0.8

8.5

(Increase) decrease in assets:

Accounts receivable, net

40.0

47.9

Inventories

(0.9)

(20.4)

Other current and non-current assets

2.8

16.8

Increase (decrease) in liabilities:

Accounts payable

14.5

(12.8)

Accrued compensation and benefits

(25.0)

(12.6)

Deferred revenue

9.2

15.6

Other current and non-current liabilities

3.1

(15.7)

Net cash provided by operating activities

228.2

155.7

Cash flow from investing activities:

Acquisitions of businesses, net of cash acquired

(1.2)

(198.0)

Purchases of property and equipment

(10.6)

(16.7)

Other, net

2.6

0.3

Net cash used in investing activities

(9.2)

(214.4)

Cash flow from financing activities:

Issuance of common stock, net of tax withholdings

8.0

12.7

Repurchases of common stock

(40.0)

(50.0)

Proceeds from debt and revolving credit lines

180.8

657.5

Payments on debt and revolving credit lines

(335.7)

(520.2)

Other, net

—

(0.4)

Net cash (used in) provided by financing activities

(186.9)

99.6

Effect of exchange rate changes on cash and cash equivalents

(5.2)

(13.3)

Net increase in cash and cash equivalents

26.9

27.6

Cash and cash equivalents - beginning of period

237.7

189.2

Cash and cash equivalents - end of period

$

264.6

$

216.8

REPORTING SEGMENTS
GAAP TO NON-GAAP RECONCILIATION
(In millions)
(Unaudited)

Reporting Segments

Buildings and Infrastructure

Geospatial

Resources and Utilities

Transportation

FIRST QUARTER OF FISCAL 2021 :

Revenue

$

343.0

$

181.7

$

205.2

$

156.6

Acquired deferred revenue adjustment

(A)

0.1

—

—

0.1

Non-GAAP revenue

$

343.1

$

181.7

$

205.2

$

156.7

Operating income before corporate allocations

$

97.4

$

48.7

$

80.1

$

8.4

Acquired deferred revenue adjustment

(A)

0.1

—

—

0.1

Amortization of acquired capitalized commissions

(B)

(1.1)

—

—

(0.1)

Non-GAAP operating income before allocations

$

96.4

$

48.7

$

80.1

$

8.4

Operating margin (% of segment external net revenue)

28.4

%

26.8

%

39.0

%

5.4

%

Non-GAAP Operating margin (% of segment Non-GAAP external net revenue)

28.1

%

26.8

%

39.0

%

5.4

%

FIRST QUARTER OF FISCAL 2020 :

Revenue

$

296.8

$

146.2

$

179.0

$

170.3

Acquired deferred revenue adjustment

(A)

0.1

—

1.3

0.3

Non-GAAP revenue

$

296.9

$

146.2

$

180.3

$

170.6

Operating income before corporate allocations

$

62.1

$

30.5

$

65.6

$

16.7

Acquired deferred revenue adjustment

(A)

0.1

—

1.3

0.3

Amortization of acquired capitalized commissions

(B)

(1.4)

—

—

(0.1)

Non-GAAP operating income before allocations

$

60.8

$

30.5

$

66.9

$

16.9

Operating margin (% of segment external net revenue)

20.9

%

20.9

%

36.6

%

9.8

%

Non-GAAP Operating margin (% of segment Non-GAAP external net revenue)

20.5

%

20.9

%

37.1

%

9.9

%

GAAP TO NON-GAAP RECONCILIATION
(Dollars in millions, except per share data)
(Unaudited)

First Quarter of

2021

2020

Dollar Amount

% of Revenue

Dollar Amount

% of Revenue

REVENUE:

GAAP revenue:

$

886.5

$

792.3

Acquired deferred revenue adjustment

(A)

0.2

1.7

Non-GAAP revenue:

$

886.7

$

794.0

GROSS MARGIN:

GAAP gross margin:

$

493.3

55.6

%

$

441.0

55.7

%

Acquired deferred revenue adjustment

(A)

0.2

1.7

Amortization of purchased intangible assets

(C)

22.1

23.5

Acquisition / divestiture items

(D)

—

1.7

Stock-based compensation / deferred compensation

(E)

2.0

0.7

Restructuring and other exit costs

(F)

—

0.3

Non-GAAP gross margin:

$

517.6

58.4

%

$

468.9

59.1

%

OPERATING EXPENSES:

GAAP operating expenses:

$

352.4

39.8

%

$

342.7

43.3

%

Amortization of acquired capitalized commissions

(B)

1.2

1.5

Amortization of purchased intangible assets

(C)

(13.7)

(16.9)

Acquisition / divestiture items

(D)

(3.5)

(9.1)

Stock-based compensation / deferred compensation

(E)

(26.7)

(3.8)

Restructuring and other exit costs

(F)

(1.5)

(2.9)

COVID-19 expenses

(G)

0.2

(3.8)

Non-GAAP operating expenses:

$

308.4

34.8

%

$

307.7

38.8

%

OPERATING INCOME:

GAAP operating income:

$

140.9

15.9

%

$

98.3

12.4

%

Acquired deferred revenue adjustment

(A)

0.2

1.7

Amortization of acquired capitalized commissions

(B)

(1.2)

(1.5)

Amortization of purchased intangible assets

(C)

35.8

40.4

Acquisition / divestiture items

(D)

3.5

10.8

Stock-based compensation / deferred compensation

(E)

28.7

4.5

Restructuring and other exit costs

(F)

1.5

3.2

COVID-19 expenses

(G)

(0.2)

3.8

Non-GAAP operating income:

$

209.2

23.6

%

$

161.2

20.3

%

NON-OPERATING EXPENSE, NET:

GAAP non-operating expense, net:

$

(3.5)

$

(18.9)

Acquisition / divestiture items

(D)

(2.1)

—

Deferred compensation

(E)

(1.5)

6.2

Non-GAAP non-operating expense, net:

$

(7.1)

$

(12.7)

GAAP and Non-GAAP Tax Rate %

GAAP and Non-GAAP Tax Rate %

(J)

(J)

INCOME TAX PROVISION:

GAAP income tax provision:

$

22.8

16.6

%

$

17.5

22.0

%

Non-GAAP items tax effected

(H)

10.7

15.2

Difference in GAAP and Non-GAAP tax rate

(I)

1.5

(6.7)

Non-GAAP income tax provision:

$

35.0

17.3

%

$

26.0

17.5

%

NET INCOME:

GAAP net income attributable to Trimble Inc.:

$

114.5

$

61.9

Acquired deferred revenue adjustment

(A)

0.2

1.7

Amortization of acquired capitalized commissions

(B)

(1.2)

(1.5)

Amortization of purchased intangible assets

(C)

35.8

40.4

Acquisition / divestiture items

(D)

1.4

10.8

Stock-based compensation / deferred compensation

(E)

27.2

10.7

Restructuring and other exit costs

(F)

1.5

3.2

COVID-19 expenses

(G)

(0.2)

3.8

Non-GAAP tax adjustments

(H) - (I)

(12.2)

(8.5)

Non-GAAP net income attributable to Trimble Inc.:

$

167.0

$

122.5

DILUTED NET INCOME PER SHARE:

GAAP diluted net income per share attributable to Trimble Inc.:

$

0.45

$

0.25

Acquired deferred revenue adjustment

(A)

—

0.01

Amortization of acquired capitalized commissions

(B)

—

(0.01)

Amortization of purchased intangible assets

(C)

0.14

0.16

Acquisition / divestiture items

(D)

—

0.04

Stock-based compensation / deferred compensation

(E)

0.11

0.04

Restructuring and other exit costs

(F)

0.01

0.01

COVID-19 expenses

(G)

—

0.02

Non-GAAP tax adjustments

(H) - (I)

(0.05)

(0.03)

Non-GAAP diluted net income per share attributable to Trimble Inc.:

$

0.66

$

0.49

ADJUSTED EBITDA:

GAAP net income attributable to Trimble Inc.:

$

114.5

$

61.9

Non-operating expense, net, income tax provision, and net gain attributable to noncontrolling interests

26.4

36.4

GAAP operating income:

140.9

98.3

Acquired deferred revenue adjustment

(A)

0.2

1.7

Amortization of acquired capitalized commissions

(B)

(1.2)

(1.5)

Amortization of purchased intangible assets

(C)

35.8

40.4

Acquisition / divestiture items

(D)

3.5

10.8

Stock-based compensation / deferred compensation

(E)

28.7

4.5

Restructuring and other exit costs

(F)

1.5

3.2

COVID-19 expenses

(G)

(0.2)

3.8

Non-GAAP operating income:

209.2

161.2

Depreciation expense

10.3

9.8

Income from equity method investments, net

11.8

9.4

Adjusted EBITDA:

$

231.3

$

180.4

Fiscal Year 2021

Low End

High End

FORECASTED DILUTED NET INCOME PER SHARE:

Forecasted GAAP diluted net income per share attributable to Trimble Inc.:

$

1.49

$

1.68

Acquired deferred revenue adjustment

(A)

—

—

Amortization of acquired capitalized commissions

(B)

(0.02)

(0.02)

Amortization of purchased intangible assets

(C)

0.54

0.54

Acquisition / divestiture items

(D)

(0.03)

(0.03)

Stock-based compensation / deferred compensation

(E)

0.43

0.43

Restructuring and other exit costs

(F)

0.03

0.03

Non-GAAP tax adjustments

(H) - (I)

(0.14)

(0.13)

Forecasted non-GAAP diluted net income per share attributable to Trimble Inc.:

$

2.30

$

2.50

(A) 

Acquired deferred revenue adjustment.  Purchase accounting generally requires us to write-down acquired deferred revenue to fair value. Our GAAP revenue includes the fair value impact from purchase accounting for post-contract support and subscriptions contracts assumed in connection with our acquisitions.  The non-GAAP adjustment to our revenue is intended to reflect the full amount of such revenue.  We believe this adjustment is useful to investors as a measure of the ongoing performance of our business and facilitates analysis of revenue growth and business trends.

(B) 

Amortization of acquired capitalized commissions.  Purchase accounting generally requires us to eliminate capitalized sales commissions balances as of the acquisition date.  Our GAAP sales and marketing expenses generally do not reflect the amortization of these capitalized sales commissions balances. The non-GAAP adjustment to increase our sales and marketing expenses is intended to reflect the full amount of amortization related to such balances as though the acquired companies operated independently in the periods presented.  We believe this adjustment to sales and marketing expenses is useful to investors as a measure of the ongoing performance of our business.  

(C) 

Amortization of purchased intangible assets.  Included in our GAAP presentation of cost of sales and operating expenses is amortization of purchased intangible assets. We believe that by excluding the amortization of purchased intangible assets, which primarily represents technology and/or customer relationships already developed, this provides an alternative way for investors to compare our operations pre-acquisition to those post-acquisition and to those of our competitors that have pursued internal growth strategies.  However, we note that companies that grow internally will incur costs to develop intangible assets that will be expensed in the period incurred, which may make a direct comparison more difficult.

(D) 

Acquisition / divestiture items.  Included in our GAAP presentation of cost of sales and operating expenses, acquisition costs consist of external and incremental costs resulting directly from merger and acquisition and strategic investment activities such as legal, due diligence, integration, and other closing costs including the acceleration of acquisition stock options and adjustments to the fair value of earn-out liabilities.  Included in our GAAP presentation of non-operating expense, net, acquisition/divestiture items includes unusual acquisition, investment, and/or divestiture gains/losses. Although we do numerous acquisitions, the costs that have been excluded from the non-GAAP measures are costs specific to particular acquisitions.  These are one-time costs that vary significantly in amount and timing and are not indicative of our core operating performance.

(E) 

Stock-based compensation / deferred compensation.  Included in our GAAP presentation of cost of sales and operating expenses are stock-based compensation consists of expenses for employee stock options and awards and purchase rights under our employee stock purchase plan.  Additionally, included in our GAAP presentation of cost of sales and operating expenses are income or expense associated with movement in our non-qualified deferred compensation plan liabilities.  Changes in non-qualified deferred compensation plan assets, included in non-operating expense, net, offset the income or expense in the plan liabilities.  We exclude them from our non-GAAP measures because some investors may view it as not reflective of our core operating performance as they are a non-cash item. 

(F) 

Restructuring and other exit costs.  Included in our GAAP presentation of cost of sales and operating expenses, restructuring and other exit costs are recorded for termination benefits related to reductions in employee headcount, including executive severance agreements, the closure or exit of facilities, and cancellation of certain contracts.  We exclude restructuring and other exit costs from our non-GAAP measures because we believe they do not reflect expected future operating expenses, they are not indicative of our core operating performance, and they are not meaningful in comparison to our past operating performance.  Furthermore, these costs can vary significantly, thus exclusion from our non-GAAP results is useful to investors because it allows for period-over-period comparability. 

(G) 

COVID-19 expenses.  Included in our GAAP presentation of operating expenses, COVID-19 expenses consist of costs incurred as a direct impact from the COVID-19 virus pandemic, such as cancellation fees of trade shows due to public safety issues, additional costs for disinfecting facilities, and personal protective equipment.  We exclude COVID-19 expenses from our non-GAAP measures because we believe they are one-time costs that vary significantly in amount and timing and are not indicative of our core operating performance.

(H) 

Non-GAAP items tax effected.  This amount adjusts the provision for income taxes to reflect the effect of the non-GAAP items (A) - (G) on non-GAAP net income.  We believe this information is useful to investors because it provides for consistent treatment of the excluded items in this non-GAAP presentation. 

(I) 

Difference in GAAP and Non-GAAP tax rate.  This amount represents the difference between the GAAP and non-GAAP tax rates applied to the non-GAAP operating income plus the non-GAAP non-operating expense, net. The non-GAAP tax rate excludes charges and benefits such as net deferred tax impacts resulting from a non-U.S. intercompany transfer of intellectual property and significant one-time reserve releases upon statute of limitations expirations.  We believe that investors benefit from excluding this amount from our non-GAAP income tax provision because it facilitates a comparison of the non-GAAP tax provision in the current and prior periods. 

(J) 

GAAP and non-GAAP tax rate percentages.  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.  We believe that investors benefit from a presentation of non-GAAP tax rate percentage as a way of facilitating a comparison to non-GAAP tax rates in prior periods.