- Non-GAAP Operating Margin of 17.9 Percent

(PRNewswire) — Trimble (Nasdaq: TRMB) today announced revenue of $319.0 million for its first quarter ended April 2, 2010, up approximately 10 percent from revenue of $289.0 million in the first quarter of 2009.

Operating income for the first quarter of 2010 was $36.1 million, up approximately 49 percent as compared to the first quarter of 2009. Operating margin in the first quarter of 2010 was 11.3 percent, as compared to an operating margin of 8.4 percent in the first quarter of 2009.

Amortization of intangibles was $13.8 million in the first quarter of 2010, as compared to $12.3 million in the first quarter of 2009. The impact of stock-based compensation expense was $5.6 million, as compared to $4.2 million in the first quarter of 2009. There was also $0.7 million of restructuring expense, a $71 thousand acquisition-related inventory step-up charge, and $0.7 million of non-recurring acquisition costs in the first quarter of 2010.  This compares to a $4.5 million restructuring expense, a $0.2 million acquisition-related inventory step-up charge, and $0.5 million of non-recurring acquisition costs in the first quarter of 2009.

Excluding these items, first quarter 2010 non-GAAP operating income of $57.1 million was up 24 percent, as compared to the first quarter of 2009. Non-GAAP operating margin was 17.9 percent in the first quarter of 2010, as compared to 15.9 percent in the first quarter of 2009.    

First quarter 2010 net income was $27.9 million, up 60 percent, as compared to the first quarter of 2009. Diluted earnings per share for the first quarter of 2010 were $0.23, as compared to diluted earnings per share of $0.14 for the first quarter of 2009.

Adjusting for the items noted above, non-GAAP net income of $42.6 million for the first quarter of 2010 was up 26 percent, as compared to the first quarter of 2009. Non-GAAP earnings per share for the first quarter of 2010 were $0.34, as compared to non-GAAP earnings per share of $0.28 in the first quarter of 2009.  The tax rate for the first quarter of 2010 was 29 percent.

Cash flow from operations for the first quarter of 2010 was $55.0 million.

"First quarter results reflected growing momentum in our markets, led by the Engineering and Construction segment," said Steven W. Berglund, Trimble's president and chief executive officer.  "While the shape of the recovery in some economic sectors remains uncertain, our confidence is growing that we can deliver double digit revenue growth in 2010 with disproportionately higher earnings growth.  We also believe we have improved our strategic position during the economic downturn and can take full advantage of the recovery as it gains strength."

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, non-recurring acquisition costs, and the impact of stock-based compensation expense.

Engineering and Construction (E&C)

First quarter 2010 E&C revenue was $157.6 million, up approximately 23 percent as compared to the first quarter of 2009, due to stronger sales in most regions.  

Operating income in E&C for the first quarter 2010 was $18.8 million, or 11.9 percent of revenue, as compared to $2.5 million, or 2.0 percent of revenue, in the first quarter of 2009.  Non-GAAP operating income in the first quarter of 2010 was $20.5 million, or 13.0 percent of revenue, as compared to $3.8 million, or 3.0 percent of revenue, in the first quarter of 2009.  The improvement in non-GAAP operating margin was due to increased revenue and reductions in operating expenses.

Field Solutions

First quarter 2010 Field Solutions revenue was $95.9 million, down approximately 3 percent as compared to the first quarter of 2009.  

Operating income in Field Solutions for the first quarter 2010 was $39.3 million, or 41.0 percent of revenue, as compared to $42.2 million, or 42.6 percent of revenue, in the first quarter of 2009.  Non-GAAP operating income for the first quarter of 2010 was $39.8 million, or 41.5 percent of revenue, as compared to $42.4 million, or 42.8 percent of revenue, in the first quarter of 2009.  The decrease in non-GAAP operating margin was due to slightly lower revenue compared to the prior year.

Mobile Solutions

First quarter 2010 Mobile Solutions revenue was $38.0 million, approximately flat as compared to the first quarter of 2009.  

Operating income in Mobile Solutions for the first quarter 2010 was $1.9 million, or 5.0 percent of revenue, as compared to $3.1 million, or 8.2 percent of revenue, in the first quarter of 2009.  Non-GAAP operating income in Mobile Solutions for the first quarter of 2010 was $3.1 million, or 8.2 percent of revenue, as compared to $4.3 million or 11.2 percent of revenue, in the first quarter of 2009.  The decline in non-GAAP operating margin was due to product mix and a decline in sales of public safety products.

Advanced Devices

First quarter 2010 Advanced Devices revenue was $27.5 million, up approximately 15 percent as compared to the first quarter of 2009.  

Operating income in Advanced Devices for the first quarter 2010 was $5.6 million, or 20.4 percent of revenue, as compared to $4.3 million, or 18.1 percent of revenue, in the first quarter of 2009.  Non-GAAP operating income in Advanced Devices was $6.1 million, or 22.0 percent of revenue, as compared to $4.6 million, or 19.4 percent of revenue, in the first quarter of 2009.  The higher non-GAAP operating margin was due to increased revenue and product mix.

Stock Repurchase Program

In January of 2008, Trimble announced a stock repurchase program for up to $250 million.  To date, the company has used $125.9 million of the $250 million to repurchase stock.  After placing the program on hold in late 2008 due to the economic downturn, Trimble will resume the program in 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 .