SUNNYVALE, Calif., Oct. 27 /PRNewswire-FirstCall/ -- Trimble
(NASDAQ: TRMB) today announced revenue of $269.7 million for its
third quarter ended Oct. 2, 2009, down approximately 18 percent
from revenue of $328.1 million in the third quarter of 2008.
Operating income for the third quarter of 2009 was $20.2 million,
down approximately 63 percent from the third quarter of 2008.
Operating margin in the third quarter of 2009 was 7.5 percent, as
compared to an operating margin of 16.5 percent in the third
quarter of 2008. Amortization of intangibles was $13.6 million in
the third quarter of 2009, as compared to $11.1 million in the
third quarter of 2008. The impact of stock-based compensation
expense was $4.5 million, as compared to $3.8 million in the third
quarter of 2008. There was also $1.1 million in restructuring
expense, no acquisition-related inventory step-up charge, and $0.6
million in non-recurring acquisition costs in the third quarter of
2009. This compares to $0.5 million in restructuring expense, $0.4
million in acquisition-related inventory step-up, and no
non-recurring acquisition costs in the third quarter of 2008.
Excluding these items, non-GAAP operating income of $40.0 million
was down 43 percent, as compared to the third quarter of 2008.
Non-GAAP operating margin was 14.8 percent in the third quarter of
2009, as compared to 21.3 percent in the third quarter of 2008.
Third quarter 2009 net income was $15.6 million, down 60 percent,
as compared to the third quarter of 2008. Diluted earnings per
share for the third quarter of 2009 was $0.13, as compared to
diluted earnings per share of $0.31 in the third quarter of 2008.
Adjusting for the items noted above, non-GAAP net income of $30.2
million for the third quarter of 2009 was down 40 percent, as
compared to the third quarter of 2008. Non-GAAP earnings per share
for the third quarter of 2009 was $0.25, as compared to non-GAAP
earnings per share of $0.40 in the third quarter of 2008. Cash flow
from operations for the first nine months of 2009 was $139.1
million, as compared to $141.9 million in the first nine months of
2008. "During the third quarter we saw early signs of recovery in
some elements of the Engineering and Construction segment in the
U.S. Additionally, we had a number of large contractual wins in the
Mobile Solutions segment, where the pipeline generally remains
strong," said Steven W. Berglund, Trimble's president and chief
executive officer. "We did see a year to year fall in Field
Solutions revenue, reflecting the change in market sentiment within
the agriculture market," Berglund continued. "Although economic
conditions remain volatile and uncertain, we now believe we have
the capability to provide double digit revenue growth in 2010 with
significantly higher earnings growth." 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, non-recurring
acquisition costs, and the impact of stock-based compensation
expense. Engineering and Construction (E&C) Third quarter 2009
E&C revenue was $149.4 million, down approximately 22 percent
as compared to the third quarter of 2008, largely due to continued
recessionary conditions in Europe and North America. Operating
income in E&C for the third quarter 2009 was $21.1 million, or
14.1 percent of revenue, as compared to $41.6 million, or 21.7
percent of revenue, in the third quarter of 2008. In the third
quarter of 2009, non-GAAP operating income in E&C was $22.7
million, or 15.2 percent of revenue, as compared to $42.7 million,
or 22.3 percent of revenue, in the third quarter of 2008. The
decline in non-GAAP operating margin was primarily due to lower
revenue. Field Solutions Third quarter 2009 Field Solutions revenue
was $55.7 million, down 14 percent as compared to the third quarter
of 2008. The revenue decline was driven by lower agriculture
product sales. Operating income in Field Solutions for the third
quarter 2009 was $16.3 million, or 29.3 percent of revenue, as
compared to $22.1 million, or 34.3 percent of revenue, in the third
quarter of 2008. In the third quarter of 2009, non-GAAP operating
income in Field Solutions was $16.6 million, or 29.8 percent of
revenue, as compared to $22.3 million, or 34.6 percent of revenue,
in the third quarter of 2008. The decrease in non-GAAP operating
margin was due to lower revenue. Mobile Solutions Third quarter
2009 Mobile Solutions revenue was $39.6 million, down approximately
3 percent as compared to the third quarter of 2008. The decline in
revenue was primarily attributable to lower sales of ready mix
hardware. Operating income in Mobile Solutions for the third
quarter 2009 was $3.4 million, or 8.5 percent of revenue, as
compared to $3.6 million, or 8.8 percent of revenue, in the third
quarter of 2008. In the third quarter of 2009, non-GAAP operating
income in Mobile Solutions was $4.3 million, or 10.9 percent of
revenue, down from 11.2 percent of revenue in the third quarter of
2008. Advanced Devices Third quarter 2009 Advanced Devices revenue
was $25.1 million, down approximately 19 percent as compared to the
third quarter of 2008. The decline in third quarter revenue was due
to lower sales of embedded, timing and Applanix products. Operating
income in Advanced Devices for the third quarter 2009 was $4.5
million, or 17.9 percent of revenue, as compared to $6.8 million,
or 22.0 percent of revenue, in the third quarter of 2008. In the
third quarter of 2009, non-GAAP operating income in Advanced
Devices was $4.9 million, or 19.5 percent of revenue, as compared
to 23.1 percent of revenue in the third quarter of 2008. The
reduction in non-GAAP operating margin was due to product mix. 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
fourth quarter of 2009 Trimble expects revenue between $265 million
and $270 million, with GAAP earnings per share of $0.08 to $0.10
and non-GAAP earnings per share of $0.19 to $0.21. Non-GAAP
guidance for the fourth quarter of 2009 excludes the amortization
of intangibles of $14.8 million related to previous acquisitions
and the anticipated impact of stock-based compensation expense of
$5.0 million. Both GAAP and non-GAAP earnings per share assume a 30
percent to 32 percent tax rate and 123 million shares outstanding.
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
http://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
http://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.
DATASOURCE: Trimble CONTACT: Investors, Willa McManmon,
+1-408-481-7838, , or Media, LeaAnn McNabb, +1-408-481-7808, , both
of Trimble Web Site: http://www.trimble.com/
Copyright