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/