Current Report
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
8-K
CURRENT
REPORT
Pursuant
to Section 13 OR 15(d) of The Securities Exchange Act of 1934
Date of
Report:
October 27,
2009
Trimble Navigation
Limited
(Exact
name of registrant as specified in its charter)
|
California
|
001-14845
|
94-2802192
|
|
(State
or other jurisdiction of
incorporation)
|
(Commission
File Number)
|
(IRS
Employer I.D. No.)
|
935 Stewart Drive,
Sunnyvale, California, 94085
(Address
of principal executive offices) (Zip Code)
Registrant’s
telephone number, including area code:
(408)
481-8000
Check the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions:
¨
Written communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
¨
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
¨
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act
(17 CFR 240.14d-2(b))
¨
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act
(17 CFR 240.13e-4(c))
Item
2.02 Results of Operations and Financial Condition.
On
October 27, 2009, Trimble Navigation Limited (“Trimble”) issued a press release
reporting its financial results for the quarter ended October 2,
2009. A copy of the press release is furnished as Exhibit 99.1 and is
incorporated herein by this reference.
The
information in this Current Report on Form 8-K, including the exhibit, is
furnished pursuant to Item 2.02 and shall not be deemed to be “filed” for
purposes of Section 18 of the Securities Exchange Act of 1934, as amended,
(“Exchange Act”), or otherwise subject to the liabilities of that
section. The information in this Current Report on Form 8-K shall not
be incorporated by reference into any filing under the Securities Act of 1933,
as amended, or the Exchange Act, whether made before or after the date of this
Current Report, regardless of any general incorporation language in such
filing.
Item
9.01 Financial Statements and Exhibits.
(d) Exhibits.
99.1 Press
Release dated October 27, 2009 relating to Trimble’s financial results for the
quarter ended October 2, 2009.
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has
duly caused this report to be signed on its behalf by the undersigned hereunto
duly authorized.
|
TRIMBLE
NAVIGATION LIMITED
|
|||
|
a
California corporation
|
|||
|
Dated:
October 27, 2009
|
By:
|
/s/
Rajat Bahri
|
|
|
Rajat
Bahri
|
|||
|
Chief
Financial
Officer
|
|||
EXHIBIT
INDEX
|
Exhibit
No.
|
Description
|
|
|
99.1
|
Press
Release dated October 27, 2009 relating to Trimble’s financial results for
the quarter ended October 2,
2009.
|
EXHIBIT
99.1
Trimble
Reports Third Quarter 2009 Revenue of $269.7 Million:
Non-GAAP
Earnings Per Share of $0.25
SUNNYVALE, Calif., Oct. 27,
2009
– 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 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)
|
Nine Months Ended
|
||||||||
|
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
|
Nine
Months Ended
|
|||||||||||||||||||||||||||||||||
|
Oct-2,
|
Sep-26,
|
Oct-2,
|
Sep-26,
|
|||||||||||||||||||||||||||||||
|
2009
|
2008
|
2009
|
2008
|
|||||||||||||||||||||||||||||||
|
Dollar
|
%
of
|
Dollar
|
%
of
|
%
of
|
%
of
|
|||||||||||||||||||||||||||||
|
Amount
|
Revenue
|
Amount
|
Revenue
|
Revenue
|
Revenue
|
|||||||||||||||||||||||||||||
|
GROSS
MARGIN:
|
||||||||||||||||||||||||||||||||||
|
GAAP
gross margin:
|
$ | 132,458 | 49.1 | % | $ | 165,623 | 50.5 | % | $ | 419,216 | 49.4 | % | $ | 527,098 | 49.7 | % | ||||||||||||||||||
|
Restructuring
|
(
A )
|
270 | 0.1 | % | 430 | 0.1 | % | 3,333 | 0.4 | % | 1,360 | 0.1 | % | |||||||||||||||||||||
|
Amortization
of purchased intangibles
|
(
B )
|
5,661 | 2.1 | % | 5,681 | 1.7 | % | 16,421 | 1.9 | % | 17,097 | 1.6 | % | |||||||||||||||||||||
|
Stock-based
compensation
|
(
C )
|
453 | 0.2 | % | 453 | 0.2 | % | 1,368 | 0.2 | % | 1,433 | 0.1 | % | |||||||||||||||||||||
|
Amortization
of acquisition-related inventory step-up
|
(
D )
|
- | 0.0 | % | 418 | 0.1 | % | 470 | 0.0 | % | 601 | 0.1 | % | |||||||||||||||||||||
|
Non-GAAP
gross margin:
|
$ | 138,842 | 51.5 | % | $ | 172,605 | 52.6 | % | $ | 440,808 | 51.9 | % | $ | 547,589 | 51.6 | % | ||||||||||||||||||
|
OPERATING
EXPENSES:
|
||||||||||||||||||||||||||||||||||
|
GAAP
operating expenses:
|
$ | 112,293 | $ | 111,567 | $ | 346,073 | $ | 352,078 | ||||||||||||||||||||||||||
|
Restructuring
|
(
A )
|
(872 | ) | (21 | ) | (5,797 | ) | (2,435 | ) | |||||||||||||||||||||||||
|
Amortization
of purchased intangibles
|
(
B )
|
(7,912 | ) | (5,462 | ) | (22,411 | ) | (15,768 | ) | |||||||||||||||||||||||||
|
Stock-based
compensation
|
(
C )
|
(4,088 | ) | (3,373 | ) | (11,953 | ) | (10,170 | ) | |||||||||||||||||||||||||
|
Non-recurring
acquisition costs
|
(
E )
|
(577 | ) | - | (3,382 | ) | - | |||||||||||||||||||||||||||
|
Non-GAAP
operating expenses:
|
$ | 98,844 | $ | 102,711 | $ | 302,530 | $ | 323,705 | ||||||||||||||||||||||||||
|
OPERATING
INCOME:
|
||||||||||||||||||||||||||||||||||
|
GAAP
operating income:
|
$ | 20,165 | 7.5 | % | $ | 54,056 | 16.5 | % | $ | 73,143 | 8.6 | % | $ | 175,020 | 16.5 | % | ||||||||||||||||||
|
Restructuring
|
(
A )
|
1,142 | 0.4 | % | 451 | 0.1 | % | 9,130 | 1.1 | % | 3,795 | 0.4 | % | |||||||||||||||||||||
|
Amortization
of purchased intangibles
|
(
B )
|
13,573 | 5.0 | % | 11,143 | 3.4 | % | 38,832 | 4.6 | % | 32,865 | 3.1 | % | |||||||||||||||||||||
|
Stock-based
compensation
|
(
C )
|
4,541 | 1.7 | % | 3,826 | 1.2 | % | 13,321 | 1.6 | % | 11,603 | 1.1 | % | |||||||||||||||||||||
|
Amortization
of acquisition-related inventory step-up
|
(
D )
|
- | 0.0 | % | 418 | 0.1 | % | 470 | 0.0 | % | 601 | 0.0 | % | |||||||||||||||||||||
|
Non-recurring
acquisition costs
|
(
E )
|
577 | 0.2 | % | - | 0.0 | % | 3,382 | 0.4 | % | - | 0.0 | % | |||||||||||||||||||||
|
Non-GAAP
operating income:
|
$ | 39,998 | 14.8 | % | $ | 69,894 | 21.3 | % | $ | 138,278 | 16.3 | % | $ | 223,884 | 21.1 | % | ||||||||||||||||||
|
NET
INCOME:
|
||||||||||||||||||||||||||||||||||
|
GAAP
net income attributable to Trimble Navigation Ltd.
|
$ | 15,577 | $ | 39,067 | $ | 53,899 | $ | 127,733 | ||||||||||||||||||||||||||
|
Restructuring
|
(
A )
|
1,142 | 451 | 9,130 | 3,795 | |||||||||||||||||||||||||||||
|
Amortization
of purchased intangibles
|
(
B )
|
13,573 | 11,143 | 38,832 | 32,865 | |||||||||||||||||||||||||||||
|
Stock-based
compensation
|
(
C )
|
4,541 | 3,826 | 13,321 | 11,603 | |||||||||||||||||||||||||||||
|
Amortization
of acquisition-related inventory step-up
|
(
D )
|
- | 418 | 470 | 601 | |||||||||||||||||||||||||||||
|
Non-recurring
acquisition costs
|
(
E )
|
577 | - | 2,996 | - | |||||||||||||||||||||||||||||
|
Income
tax effect on non-GAAP adjustments
|
(
F )
|
(5,256 | ) | (4,713 | ) | (17,411 | ) | (14,620 | ) | |||||||||||||||||||||||||
|
Non-GAAP
net income attributable to Trimble Navigation Ltd.
|
$ | 30,154 | $ | 50,192 | $ | 101,237 | $ | 161,977 | ||||||||||||||||||||||||||
|
DILUTED
NET INCOME PER SHARE:
|
||||||||||||||||||||||||||||||||||
|
GAAP
diluted net income per share attributable to Trimble Navigation
Ltd.
|
$ | 0.13 | $ | 0.31 | $ | 0.44 | $ | 1.02 | ||||||||||||||||||||||||||
|
Restructuring
|
(
A )
|
0.01 | 0.01 | 0.07 | 0.03 | |||||||||||||||||||||||||||||
|
Amortization
of purchased intangibles
|
(
B )
|
0.11 | 0.09 | 0.32 | 0.26 | |||||||||||||||||||||||||||||
|
Stock-based
compensation
|
(
C )
|
0.04 | 0.03 | 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 )
|
(0.04 | ) | (0.04 | ) | (0.14 | ) | (0.11 | ) | |||||||||||||||||||||||||
|
Non-GAAP
diluted net income per share attributable to Trimble Navigation
Ltd.
|
$ | 0.25 | $ | 0.40 | $ | 0.83 | $ | 1.30 | ||||||||||||||||||||||||||
|
OPERATING
LEVERAGE:
|
||||||||||||||||||||||||||||||||||
|
Increase
(decrease) in non-GAAP operating income
|
$ | (29,896 | ) | $ | (85,606 | ) | ||||||||||||||||||||||||||||
|
Increase
(decrease) in revenue
|
$ | (58,374 | ) | $ | (212,420 | ) | ||||||||||||||||||||||||||||
|
Operating
leverage (increase in non-GAAP operating
|
||||||||||||||||||||||||||||||||||
|
income
as a % of increase in revenue)
|
N/A | N/A | ||||||||||||||||||||||||||||||||
|
%
of Segment
|
%
of Segment
|
%
of Segment
|
%
of Segment
|
|||||||||||||||||||||||||||||||
|
|
Revenue
|
Revenue
|
Revenue
|
Revenue
|
||||||||||||||||||||||||||||||
|
SEGMENT
OPERATING INCOME:
|
||||||||||||||||||||||||||||||||||
|
Engineering
and Construction
|
||||||||||||||||||||||||||||||||||
|
GAAP
operating income before corporate allocations:
|
$ | 21,131 | 14.1 | % | $ | 41,560 | 21.7 | % | $ | 42,800 | 10.1 | % | $ | 123,675 | 20.6 | % | ||||||||||||||||||
|
Stock-based
compensation
|
(
G )
|
1,563 | 1.1 | % | 1,146 | 0.6 | % | 4,302 | 1.0 | % | 3,193 | 0.6 | % | |||||||||||||||||||||
|
Non-GAAP
operating income before corporate allocations:
|
$ | 22,694 | 15.2 | % | $ | 42,706 | 22.3 | % | $ | 47,102 | 11.1 | % | $ | 126,868 | 21.2 | % | ||||||||||||||||||
|
Field
Solutions
|
||||||||||||||||||||||||||||||||||
|
GAAP
operating income before corporate allocations:
|
$ | 16,286 | 29.3 | % | $ | 22,058 | 34.3 | % | $ | 88,637 | 37.8 | % | $ | 91,961 | 37.9 | % | ||||||||||||||||||
|
Stock-based
compensation
|
(
G )
|
293 | 0.5 | % | 203 | 0.3 | % | 775 | 0.3 | % | 600 | 0.3 | % | |||||||||||||||||||||
|
Non-GAAP
operating income before corporate allocations:
|
$ | 16,579 | 29.8 | % | $ | 22,261 | 34.6 | % | $ | 89,412 | 38.1 | % | $ | 92,561 | 38.2 | % | ||||||||||||||||||
|
Mobile
Solutions
|
||||||||||||||||||||||||||||||||||
|
GAAP
operating income before corporate allocations:
|
$ | 3,367 | 8.5 | % | $ | 3,602 | 8.8 | % | $ | 10,163 | 8.7 | % | $ | 7,997 | 6.3 | % | ||||||||||||||||||
|
Stock-based
compensation
|
(
G )
|
958 | 2.4 | % | 987 | 2.4 | % | 3,205 | 2.7 | % | 3,582 | 2.8 | % | |||||||||||||||||||||
|
Non-GAAP
operating income before corporate allocations:
|
$ | 4,325 | 10.9 | % | $ | 4,589 | 11.2 | % | $ | 13,368 | 11.4 | % | $ | 11,579 | 9.1 | % | ||||||||||||||||||
|
Advanced
Devices
|
||||||||||||||||||||||||||||||||||
|
GAAP
operating income before corporate allocations:
|
$ | 4,488 | 17.9 | % | $ | 6,835 | 22.0 | % | $ | 13,633 | 18.7 | % | $ | 18,105 | 19.6 | % | ||||||||||||||||||
|
Stock-based
compensation
|
(
G )
|
397 | 1.6 | % | 337 | 1.1 | % | 1,068 | 1.5 | % | 979 | 1.0 | % | |||||||||||||||||||||
|
Non-GAAP
operating income before corporate allocations:
|
$ | 4,885 | 19.5 | % | $ | 7,172 | 23.1 | % | $ | 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.
|