Forward Looking Guidance
For the second quarter of 2009 Trimble continues to see general uncertainty that limits the ability to provide precise guidance. Trimble is guiding second quarter 2009 revenue in the range of $300 million plus or minus five percent. At a point estimate of $300 million in revenue, Trimble expects second quarter 2009 GAAP earnings per share of $0.21 and non-GAAP earnings per share of $0.32. Non-GAAP guidance for the second quarter of 2009 excludes the amortization of intangibles of $13.3 million related to previous acquisitions and the anticipated impact of stock-based compensation expense of $4.1 million. Both GAAP and non-GAAP guidance use a 27 percent tax rate and assume 121 million shares outstanding.
Investor Conference Call / Webcast Details
Trimble will hold a conference call on April 28, 2009 at 1:30 p.m. PT to review its first quarter 2009 results. It will be broadcast live on the Web at http://investor.trimble.com. Investors without Internet access may dial into the call at (866) 638-7054 (U.S.) or (706) 679-7097 (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 95301212. 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, our ability to improve overall operating margins, revenue and earnings per share that Trimble expects to report in the second quarter 2009, changes in tax-rate, and estimated restructuring costs. 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 economic crisis and recessionary conditions in the U.S. and Europe show no signs of recovery 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. Whether the Company achieves growth 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
------------------
Apr-03, Mar-28,
2009 2008
---- ----
Revenue $288,954 $355,296
Cost of sales 144,996 180,920
------- -------
Gross margin 143,958 174,376
------- -------
Gross margin (%) 49.8% 49.1%
Operating expenses
Research and development 34,137 37,345
Sales and marketing 48,935 51,158
General and administrative 26,042 22,690
Restructuring 3,623 -
Amortization of purchased intangible assets 6,969 5,143
----- -----
Total operating expenses 119,706 116,336
------- -------
Operating income 24,252 58,040
Non-operating income (expense), net
Interest income 199 457
Interest expense (493) (762)
Foreign currency transaction gain, net 184 968
Income from joint ventures, net 168 2,015
Other expense, net (714) (940)
---- ----
Total non-operating income (expense), net (656) 1,738
---- -----
Income before taxes 23,596 59,778
Income tax provision 5,899 19,732
----- ------
Net income 17,697 40,046
Less: Net income (loss) attributable to
noncontrolling interests 232 (21)
--- ---
Net income attributable to Trimble $17,465 $40,067
======= =======
Earnings per share attributable to Trimble:
Basic $0.15 $0.33
----- -----
Diluted $0.14 $0.32
----- -----
Shares used in calculating earnings per share:
Basic 119,260 121,467
------- -------
Diluted 120,926 125,159
------- -------
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)
Apr-03, Jan-02,
2009 2009
---- ----
Assets
Current assets:
Cash and cash equivalents $146,827 $147,531
Accounts receivables, net 220,404 204,269
Other receivables 7,382 17,540
Inventories, net 165,413 160,893
Deferred income taxes 40,015 41,810
Other current assets 17,664 16,404
------ ------
Total current assets 597,705 588,447
Property and equipment, net 48,458 50,175
Goodwill 723,252 715,571
Other purchased intangible assets, net 222,752 228,901
Other non-current assets 49,944 51,922
------ ------
Total assets $1,642,111 $1,635,016
========== ==========
Liabilities
Current liabilities:
Current portion of long-term debt $196 $124
Accounts payable 62,131 49,611
Accrued compensation and benefits 43,353 41,291
Deferred revenue 61,876 55,241
Accrued warranty expense 14,207 13,332
Other accrued liabilities 45,534 63,719
------ ------
Total current liabilities 227,297 223,318
Non-current portion of long-term debt 151,436 151,464
Non-current deferred revenue 10,257 12,418
Deferred income taxes 38,112 42,207
Other non-current liabilities 58,763 61,553
------- -------
Total liabilities 485,865 490,960
------- -------
Commitments and contingencies
Equity
Shareholders' equity:
Common stock 693,653 684,831
Retained earnings 445,386 427,921
Accumulated other comprehensive income 13,243 27,649
------ ------
Total Trimble shareholders' equity 1,152,282 1,140,401
Noncontrolling interests 3,964 3,655
----- -----
Total equity 1,156,246 1,144,056
--------- ---------
Total liabilities and equity $1,642,111 $1,635,016
========== ==========
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
Three Months Ended
Apr-03, Mar-28,
2009 2008
Cash flow from operating activities:
Net Income $17,465 $40,067
Adjustments to reconcile net income to
net cash provided by
operating activities:
Depreciation expense 4,463 4,571
Amortization expense 12,298 10,848
Provision for doubtful accounts 2,212 38
Amortization of debt issuance cost 56 56
Deferred income taxes (1,606) (885)
Stock-based compensation 4,226 3,982
Noncontrolling interest in consolidated
subsidiaries 309 (33)
Equity gain from joint ventures (168) (2,015)
Excess tax benefit for stock-based
compensation (21) (1,992)
Provision for excess and obsolete
inventories 904 2,103
Other non-cash items (2,135) 235
Add decrease (increase) in assets:
Accounts receivables (18,712) (39,280)
Other receivables 5,486 516
Inventories (7,327) (3,437)
Other current and non-current assets 730 (191)
Add increase (decrease) in liabilities:
Accounts payable 12,682 3,760
Accrued compensation and benefits 2,391 (10,557)
Accrued liabilities 5,801 (1,648)
Deferred revenue 4,107 2,034
Income taxes payable - 12,547
- ------
Net cash provided by operating activities 43,161 20,719
------ ------
Cash flows from investing activities:
Acquisitions of businesses, net of
cash acquired (17,294) (39,593)
Acquisition of property and equipment (3,261) (3,711)
Acquisition of intangible assets (26,001) (179)
Other 14 136
-- ---
Net cash used in investing activities (46,542) (43,347)
------- -------
Cash flow from financing activities:
Issuance of common stock 4,602 8,483
Excess tax benefit for stock-based
compensation 21 1,992
Repurchase and retirement of common stock - (25,870)
Payments on long-term debt and revolving
credit lines - (312)
- ----
Net cash provided by (used in) financing
activities 4,623 (15,707)
----- -------
Effect of exchange rate changes on cash and cash
equivalents (1,946) 6,512
------ -----
Net decrease in cash and cash equivalents (704) (31,823)
Cash and cash equivalents - beginning of period 147,531 103,202
------- -------
Cash and cash equivalents - end of period $146,827 $71,379
======== =======
GAAP TO NON-GAAP RECONCILIATION
(Dollars in thousands, except per share data)
(Unaudited)
Three Months Ended
------------------
Apr-03, Mar-28,
2009 2008
---- ----
Dollar % of Dollar % of
Amount Revenue Amount Revenue
------ ------- ------ -------
GROSS MARGIN:
GAAP gross margin: $143,958 49.8% $174,376 49.1%
Restructuring ( A ) 865 0.3% - 0.0%
Amortization of
purchased intangibles ( B ) 5,285 1.8% 5,661 1.6%
Stock-based
compensation ( C ) 438 0.2% 493 0.1%
Amortization of
acquisition-related
inventory step-up ( D ) 223 0.1% 183 0.1%
--- --- --- ---
Non-GAAP gross margin: $150,769 52.2% $180,713 50.9%
-------- ---- -------- ----
OPERATING
EXPENSES:
GAAP operating expenses: $119,706 $116,336
Restructuring ( A ) (3,623) -
Amortization of
purchased intangibles ( B ) (6,969) (5,143)
Stock-based
compensation ( C ) (3,788) (3,489)
Merger and Acquisition
Costs ( E ) (465) -
---- -
Non-GAAP operating
expenses: $104,861 $107,704
-------- --------
OPERATING
INCOME:
GAAP operating income: $24,252 8.4% $58,040 16.3%
Restructuring ( A ) 4,488 1.5% - 0.0%
Amortization of
purchased intangibles ( B ) 12,254 4.2% 10,804 3.0%
Stock-based
compensation ( C ) 4,226 1.5% 3,982 1.1%
Amortization of
acquisition-related
inventory step-up ( D ) 223 0.1% 183 0.1%
Merger and Acquisition
Costs ( E ) 465 0.2% - 0.0%
--- --- - ---
Non-GAAP operating
income: $45,908 15.9% $73,009 20.5%
------- ---- ------- ----
NET INCOME:
GAAP net income: $17,465 $40,067
Restructuring ( A ) 4,488 -
Amortization of
purchased intangibles ( B ) 12,254 10,804
Stock-based
compensation ( C ) 4,226 3,982
Amortization of
acquisition-related
inventory step-up ( D ) 223 183
Merger and Acquisition
Costs ( E ) 465 -
Income tax effect on
non-GAAP adjustments ( F ) (5,414) (4,941)
------ ------
Non-GAAP net income: $33,707 $50,095
======= =======
DILUTED NET
INCOME PER
SHARE:
GAAP diluted net income per
share: $0.14 $0.32
Restructuring ( A ) 0.04 -
Amortization of
purchased intangibles ( B ) 0.10 0.09
Stock-based
compensation ( C ) 0.04 0.03
Amortization of
acquisition-related
inventory step-up ( D ) - -
Merger and Acquisition
Costs ( E ) - -
Income tax effect on
non-GAAP adjustments ( F ) (0.04) (0.04)
----- -----
Non-GAAP diluted net
income per share: $0.28 $0.40
===== =====
SHARES USED TO
COMPUTE DILUTED NET
INCOME PER SHARE:
GAAP and Non-GAAP shares
used to compute
net income per share: 120,926 125,159
======= =======
OPERATING
LEVERAGE:
Increase (decrease) in non-
GAAP operating income $(27,101)
Increase (decrease) in revenue $(66,342)
Operating leverage (increase in
non-GAAP operating
income as a % of increase
in revenue) N/A
The non-GAAP financial measures included in the table above are non-GAAP
gross margin, non-GAAP operating expenses, non-GAAP operating income, non-
GAAP net income and non-GAAP diluted net income per share, which adjust
for the following items: expenses related to acquisitions, stock-based
compensation expense and restructuring charges. Management uses these
non-GAAP measures to assess trends in its business and for budgeting
purposes, as many of these excluded items are non-cash. In addition, we
believe that the presentation of these non-GAAP financial measures is
useful to investors for the reasons associated with each of the adjusting
items as described below.
( A ) Restructuring. The amounts recorded are primarily for employee
compensation resulting from reductions in employee headcount in
connection with our company restructurings and we believe they are
not directly related to the operation of our business.
( B ) Amortization of purchased intangibles. The amounts recorded as
amortization of purchased intangibles arise from prior acquisitions
and are non-cash in nature. We exclude these expenses because we
believe they are not reflective of ongoing operating results in the
period incurred and are not directly related to the operation of our
business.
( C ) Stock-based compensation. We exclude these stock-based compensation
expenses because they are non-cash expenses that we believe are not
reflective of ongoing operation results. For the three months ended
April 3, 2009 and March 28, 2008, stock-based compensation was
allocated as follows:
Three Months
Ended
------------
Apr-03, Mar-28,
2009 2008
---- ----
Cost of sales $438 $493
Research and development 784 917
Sales and Marketing 1,004 1,030
General and administrative 2,000 1,542
----- -----
$4,226 $3,982
------ ------
( 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. 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 reflective of our ongoing operating results, and it is not used
by management to assess the core profitability of our business
operations.
( E ) Merger and acquisition costs: These charges consist of external and
incremental costs resulting directly from merger and acquisition
activities. Because these expenses are non-recurring and unique to
specific acquisitions, we believe they are not indicative of future
operating results and that investors benefit from an understanding
of our operating results without giving effect to them.
( 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 operating income.
NON-GAAP RECONCILIATION
REPORTING SEGMENTS
(Dollars in thousands)
(Unaudited)
Reporting Segments
------------------
Engineering
and Field Mobile Advanced
Construction Solutions Solutions Devices
------------ --------- --------- -------
THREE MONTHS ENDED
APRIL 3, 2009:
Revenue $127,651 $99,157 $38,288 $23,858
GAAP operating income
before corporate
allocations: $2,509 $42,203 $3,148 $4,312
Stock-based
compensation ( G ) 1,308 222 1,144 325
----- --- ----- ---
Non-GAAP operating
income before corporate
allocations: $3,817 $42,425 $4,292 $4,637
------ ------- ------ ------
Non-GAAP operating
margin (% of segment
external
net revenues) 3.0% 42.8% 11.2% 19.4%
THREE MONTHS ENDED MARCH
28, 2008:
Revenue $194,180 $88,037 $44,011 $29,068
GAAP operating income
before corporate
allocations: $36,954 $35,095 $2,453 $4,692
Stock-based
compensation ( G ) 971 198 1,408 327
--- --- ----- ---
Non-GAAP operating
income before corporate
allocations: $37,925 $35,293 $3,861 $5,019
------- ------- ------ ------
Non-GAAP operating
margin (% of segment
external
net revenues) 19.5% 40.1% 8.8% 17.3%
( G ) Stock-based Compensation. The amounts consist of expenses for
employee stock options and purchase rights under our employee stock
purchase plan determined in accordance with SFAS 123(R), which
became effective for us on January 1, 2006. We discuss our
operating results by segment with and with-out 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 $1,227K and $1,078K for
the three months ended April 3, 2009 and March 28, 2008,
respectively.
Web site: http://www.trimble.com/
