(PRNewswire) — Trimble (Nasdaq: TRMB) today announced fourth quarter and fiscal 2010 financial results.  

Fourth Quarter 2010 Results

Fourth quarter 2010 revenue of $323.3 million was up 17 percent as compared to the fourth quarter of 2009.  

Operating income for the fourth quarter of 2010 was $19.3 million, up 52 percent as compared to the fourth quarter of 2009.  Operating margin in the fourth quarter of 2010 was 6.0 percent, as compared to an operating margin of 4.6 percent in the fourth quarter of 2009.  

Fourth quarter 2010 non-GAAP operating income of $46.4 million was up 37 percent as compared to the fourth quarter of 2009 and non-GAAP operating margin was 14.3 percent compared to 12.2 percent in the fourth quarter of 2009.  

Fourth quarter 2010 net income was $36.6 million, up 283 percent as compared to the fourth quarter of 2009.  Diluted earnings per share in the fourth quarter of 2010 were $0.29 as compared to diluted earnings per share of $0.08 in the fourth quarter of 2009.  

Non-GAAP net income of $57.1 million for the fourth quarter of 2010 was up 126 percent as compared to the fourth quarter of 2009.  Diluted non-GAAP earnings per share in the fourth quarter of 2010 were $0.46 as compared to diluted non-GAAP earnings per share of $0.21 in the fourth quarter of 2009.  It should be noted that in the fourth quarter of 2010 there was a non-GAAP tax benefit of 14 percent versus a tax rate of 27 percent in the fourth quarter of 2009.  The benefit was primarily driven by the geographical mix of profits and a catch up on research and development tax credits due to legislation passed in the fourth quarter of 2010.  

Fourth quarter 2010 non-GAAP results exclude:

• Restructuring expense of  $641 thousand as compared to $1.6 million in the fourth quarter of 2009;
• Amortization of intangibles of $15.5 million as compared to $13.7 million in the fourth quarter of 2009;
• Stock-based compensation expense of $7.0 million as compared to $5.3 million in the fourth quarter of 2009;
• Acquisition-related inventory step-up charge of $588 thousand as compared to no charge in the fourth quarter of 2009;
• Non-recurring acquisition-related cost of $3.5 million as compared to $826 thousand in the fourth quarter of 2009 and;
• Non-recurring income tax benefit for a valuation allowance release of $7.6 million as compared to no benefit in the fourth quarter of 2009.

Fiscal 2010 Results

Revenue for fiscal 2010 was $1.3 billion, up 15 percent as compared to fiscal 2009.

Operating income for fiscal 2010 was $127.6 million, up 49 percent as compared to fiscal 2009.  Operating margin in fiscal 2010 was 9.9 percent, as compared to an operating margin of 7.6 percent in fiscal 2009.

Fiscal 2010 non-GAAP operating income of $217.7 million was up 27 percent as compared to fiscal 2009 and non-GAAP operating margin was 16.8 percent as compared to 15.3 percent in fiscal 2009.  

Fiscal 2010 net income was $103.7 million, up 63 percent, as compared to fiscal 2009.  Diluted earnings per share in fiscal 2010 were $0.84, as compared to diluted earnings per share of $0.52 in fiscal 2009.

Fiscal 2010 non-GAAP net income of $199.5 million was up 58 percent, as compared to fiscal 2009. Diluted non-GAAP earnings per share in fiscal 2010 were $1.61 as compared to diluted non-GAAP earnings per share of $1.04 in 2009.  The non-GAAP tax rate for fiscal 2010 was 13 percent compared to 27 percent in fiscal 2009 due to the IRS settlement in the second quarter of 2010, which resulted in an ongoing lower tax rate, and the geographical mix of profits.

Fiscal 2010 non-GAAP results exclude:

• Restructuring expense of $2.0 million as compared to $10.8 million in fiscal 2009;
• Amortization of intangibles of $57.6 million as compared to $52.5 million in fiscal 2009;
• Stock-based compensation expense of $23.1 million as compared to $18.7 million in fiscal 2009;
• Acquisition-related inventory step-up charge of $728 thousand  as compared to $470 thousand in fiscal 2009;
• Non-recurring acquisition-related costs of $3.4 million as compared to $3.8 million in 2009 and;
• Non-recurring income tax charge of $27.5 million associated with the IRS settlement in the second quarter of 2010, partially offset by a tax benefit of $7.6 million associated with a valuation allowance release in the fourth quarter of 2010 as compared to no charge or benefit in 2009.

“We enter 2011 with confidence that we can demonstrate meaningful growth for the year,” said Steven W. Berglund, Trimble’s president and chief executive officer.  “Both the Engineering and Construction and Field Solutions segments are well positioned to generate growth.  In addition, we anticipate the Mobile Solutions segment, which did not meet our expectations in 2010, will also demonstrate growth and improving profitability during 2011.”

Trimble Results by Business Segment

Segment operating income is revenue less cost of goods sold and operating expenses, excluding general corporate expenses, restructuring expenses, amortization of intangibles, amortization of acquisition-related inventory step-up charges and non-recurring acquisition costs.  Non-GAAP segment operating income also excludes the impact of stock-based compensation expense.

Engineering and Construction (E&C)

Fourth quarter 2010 E&C revenue was $183.4 million, up 19 percent as compared to the fourth quarter of 2009, with growth driven by sales of products related to heavy and highway construction. 

Operating income in E&C for the fourth quarter 2010 was $21.6 million, or 11.8 percent of revenue, as compared to $15.5 million, or 10.0 percent of revenue, in the fourth quarter of 2009.  Non-GAAP operating income was $24.0 million, or 13.1 percent of revenue, as compared to $17.5 million, or 11.3 percent of revenue, in the fourth quarter of 2009.  The improvement in non-GAAP operating margin was due to operating leverage from increased revenue, partially offset by increased sales and marketing expenses primarily attributable to the Trimble Dimensions User Conference.

Fiscal 2010 E&C revenue was $719.1 million, up 24 percent as compared to fiscal 2009, with growth being across the product lines.  

Operating income in E&C for fiscal 2010 was $111.0 million, or 15.4 percent of revenue, as compared to $58.3 million, or 10.1 percent of revenue, in fiscal 2009.  Non-GAAP operating income was $118.9 million, or 16.5 percent of revenue, as compared to $64.6 million, or 11.2 percent of revenue, in fiscal 2009.  The improvement in non-GAAP operating margin was due to operating leverage from increased revenue.

Field Solutions

Fourth quarter 2010 Field Solutions revenue was $74.8 million, up 31 percent as compared to the fourth quarter of 2009 primarily due to strong sales of agricultural products.

Fourth quarter 2010 Field Solutions operating income was $27.1 million, or 36.1 percent of revenue, as compared to $15.9 million, or 27.8 percent of revenue, in the fourth quarter of 2009.  Non-GAAP operating income was $27.6 million, or 36.9 percent of revenue, as compared to $16.2 million, or 28.3 percent of revenue, in the fourth quarter of 2009. 

Fiscal 2010 Field Solutions revenue was $318.1 million, up 9 percent as compared to fiscal 2009.  Both agriculture and geographical information system (GIS) product sales grew. 

Operating income in Field Solutions in fiscal 2010 was $116.4 million, or 36.6 percent of revenue, as compared to $104.5 million, or 35.8 percent of revenue, in fiscal 2009.  Non-GAAP operating income was $118.4 million, or 37.2 percent of revenue, as compared to $105.6 million, or 36.2 percent of revenue, in fiscal 2009.  The increase in operating margin was due to operating leverage from increased revenue.

Mobile Solutions

Fourth quarter 2010 Mobile Solutions revenue was $40.4 million, up 6 percent as compared to the fourth quarter of 2009 due primarily to acquisitions. 

The operating loss in Mobile Solutions in the fourth quarter 2010 was $267 thousand, or negative 0.7 percent of revenue, as compared to operating income of $4.2 million, or 11.0 percent of revenue, in the fourth quarter of 2009.  Non-GAAP operating income was $931 thousand, or 2.3 percent of revenue, as compared to $5.2 million or 13.7 percent of revenue, in the fourth quarter of 2009.  The decline in non-GAAP margins was due to the mix of hardware and subscription services revenue and the loss of a large high-margin customer in the second quarter of 2010.

Fiscal 2010 Mobile Solutions revenue was $154.3 million, relatively flat as compared to fiscal 2009 due primarily to the loss of a large customer in the second quarter of 2010, offset by revenue from acquisitions and the addition of new subscribers. 

Fiscal 2010 operating income in Mobile Solutions was $1.9 million, or 1.2 percent of revenue, as compared to operating income of $14.3 million, or 9.3 percent of revenue, in fiscal 2009.  Non-GAAP operating income was $5.3 million, or 3.4 percent of revenue, as compared to $18.6 million or 12.0 percent of revenue, in fiscal 2009.  The decline in non-GAAP margins was due to the loss of a large, high-margin customer in the second quarter of 2010 and the mix of hardware and subscription services revenue.

Advanced Devices

Fourth quarter 2010 Advanced Devices revenue was $24.7 million, down 12 percent as compared to the fourth quarter of 2009 due to slower sales of embedded products. 

The operating income in Advanced Devices for the fourth quarter 2010 was $3.4 million, or 14.0 percent of revenue, as compared to $3.6 million, or 12.8 percent of revenue, in the fourth quarter of 2009.  Non-GAAP operating income in Advanced Devices was $4.0 million, or 16.3 percent of revenue, as compared to $4.1 million, or 14.7 percent of revenue, in the fourth quarter of 2009.  The improvements in operating income were primarily due to product mix.  

Fiscal 2010 Advanced Devices revenue was $102.5 million, up 1 percent as compared to fiscal 2009. 

The operating income in Advanced Devices in fiscal 2010 was $18.3 million, or 17.9 percent of revenue, as compared to $17.2 million, or 17.0 percent of revenue, in fiscal 2009.  Non-GAAP operating income in Advanced Devices was $20.3 million, or 19.8 percent of revenue, as compared to $18.8 million, or 18.6 percent of revenue, in fiscal 2009.  The decline in operating income was due to product mix.

Stock Repurchase Program

Trimble repurchased $73.8 million in stock at an average price of $28.67 during fiscal 2010.  

Use of Non-GAAP Financial Information

To help our readers understand our past financial performance and our future results, we supplement the financial results that we provide in accordance with generally accepted accounting principles, or GAAP, with non-GAAP financial measures. The specific non-GAAP measures which we use along with a reconciliation to the nearest comparable GAAP measures and the explanation for why management chose to exclude selected items and the additional purposes for which these non-GAAP measures are used can be found at the end of this release. The method we use to produce non-GAAP results is not computed according to GAAP and may differ from the methods used by other companies. Our non-GAAP results are not meant to be considered in isolation or as a substitute for comparable GAAP measures and should be read only in conjunction with our consolidated financial statements prepared in accordance with GAAP. Our management regularly uses our supplemental non-GAAP financial measures internally to understand, manage and evaluate our business, and to make operating decisions. These non-GAAP measures are among the primary factors management uses in planning for and forecasting future periods. We believe that these non-GAAP financial measures reflect an additional way of viewing aspects of our operations that, when viewed with our GAAP results, provide a more complete understanding of factors and trends affecting our business. Management generally compensates for the limitations in the use of non-GAAP financial measures by relying on comparable GAAP financial measures and providing investors with a reconciliation of the non-GAAP financial measure to the most directly comparable GAAP financial measure or measures. Investors are encouraged to review the reconciliation of our non-GAAP financial measures to the comparable GAAP results, which is attached to this earnings release.  Additional financial information about our use of non-GAAP results can be found on the investor relations page of our Web site at http://investor.trimble.com.

Forward Looking Guidance

For the first quarter of 2011 Trimble expects revenue between $370 million and $375 million with GAAP earnings per share of $0.32 to $0.34 and non-GAAP earnings per share of $0.47 to $0.49. Non-GAAP guidance for the first quarter of 2011 excludes the amortization of intangibles of $13.8 million related to previous acquisitions, the anticipated impact of stock-based compensation expense of $6.7 million. Both GAAP and non-GAAP earnings per share assume a 15 to 17 percent tax rate and 124.5 million shares outstanding. 

For fiscal 2011, Trimble expects revenue growth of approximately 20 percent, with non-GAAP operating leverage of approximately 25 percent and a full-year tax rate of 15 to 17 percent.

Investor Conference Call / Webcast Details

Trimble will hold a conference call on Feb. 3, 2011 at 1:30 p.m. PT to review its fourth quarter and fiscal 2010 results. It will be broadcast live on the Web at http://investor.trimble.com.  Investors without Internet access may dial into the call at (800) 528-9198 (U.S.) or (702) 928-6633 (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 39321697 . 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: 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 revenue, earnings per share and other financial projections that Trimble has guided for the first quarter and full year 2011 the expected tax-rate, the anticipated impact of stock-based compensation expense, the amortization of intangibles related to previous acquisitions.  The Company may suspend its stock repurchase plan at any time and for any reason without further notice.  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 economic conditions worsen 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 or obtain new customers for its mobile solutions segment.  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

SOURCE Trimble

Contact:

Trimble Media, LeaAnn McNabb of Trimble Phone: +1-408-481-7808 Email Contact Investors, Willa McManmon Phone: +1-408-481-7838 Email Contact Web: http://www.trimble.com