Trimble Reports Second Quarter 2009 Revenue of $290.1 Million and Non-GAAP Earnings Per Share of $0.31
TRIMBLE
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 six months ended July
3, 2009 and June 27, 2008, stock-based compensation was allocated
as follows:
Three Months Six Months
Ended Ended
------------ ----------
Jul-3, Jun-27, Jul-3, Jun-27,
2009 2008 2009 2008
---- ---- ---- ----
Cost of sales $477 $487 $915 $980
Research and development 854 916 1,638 1,833
Sales and Marketing 1,062 931 2,066 1,961
General and administrative 2,161 1,461 4,161 3,003
----- ----- ----- -----
$4,554 $3,795 $8,780 $7,777
------ ------ ------ ------
( 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 amount 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 $1,414K and $1,018K for the
three months ended July 3, 2009 and June 27, 2008, respectively and
$2,641K and $2,096K for the six months ended July 3, 2009 and June
27, 2008, respectively.