Trimble Reports Fiscal 2008 Revenue Growth of 9 Percent and Non-GAAP Earnings Per Share Growth of 23 Percent: Prepares For Challenging Year
Posted on: Tuesday, 3 February 2009, 15:05 CST
SUNNYVALE, Calif., Feb. 3 /PRNewswire-FirstCall/ -- Trimble (Nasdaq: TRMB)
today announced revenue of $268.1 million for its fourth quarter ended Jan. 2,
2009, down approximately 14 percent from revenue of $312.8 million in the
fourth quarter of 2007. For fiscal 2008, Trimble had revenue of $1.33 billion
dollars, up approximately 9 percent over fiscal 2007.
Operating income for the fourth quarter of 2008 was $10.4 million, down
approximately 73 percent from the fourth quarter of 2007. Operating margins in
the fourth quarter of 2008 were 3.9 percent, compared to operating margins of
12.6 percent in the fourth quarter of 2007. Amortization of intangibles was
$12.0 million in the fourth quarter of 2008 compared to $10.1 million in the
fourth quarter of 2008. The impact of stock-based compensation expense was
$4.6 million compared to $4.1 million in the fourth quarter of 2007. There was
an $846 thousand restructuring expense and an $813 thousand inventory step-up
charge related to acquisitions in the fourth quarter of 2008. Excluding these
impacts, non-GAAP operating income of $28.7 million was down 46 percent
compared to the fourth quarter of 2007. Non-GAAP operating margins were 10.7
percent in the fourth quarter of 2008, down from 17.1 percent in the fourth
quarter of 2007.
For fiscal 2008, operating income was $185.5 million, up approximately
four percent from fiscal 2007. Fiscal 2008 operating margins were 14.0
percent, compared to operating margins of 14.6 percent in fiscal 2007. In
fiscal 2008, amortization of intangibles was $44.9 million compared to $38.6
million in fiscal 2007. The impact of stock-based compensation expense was
$16.2 million compared to $15.0 million in fiscal 2007. In 2008, there was
$4.6 million in restructuring expense and $1.4 million in inventory step-up
charges related to acquisitions compared to $3.0 million in restructuring
expense and no inventory step-up charges related to acquisitions in fiscal
2007. During 2008 there was no in-process research and development compared to
$2.1 million in 2007. Excluding these impacts, fiscal 2008 non-GAAP operating
income of $252.6 million was up approximately 7 percent compared to fiscal
2007. Non-GAAP operating margins were 19.0 percent in fiscal 2008, the same as
fiscal 2007.
Fourth quarter 2008 net income was $13.7 million, down 48 percent compared
to the fourth quarter of 2007. Diluted earnings per share for the fourth
quarter of 2008 were $0.11 compared to diluted earnings per share of $0.21 in
the fourth quarter of 2007.
Fiscal 2008 net income was $141.5 million, up 21 percent compared to
fiscal 2007. Diluted earnings per share for fiscal 2008 were $1.14, up from
diluted earnings per share of $0.94 in the fiscal 2007.
The tax rate for 2008 was 26 percent as compared to 36 percent in 2007 due
primarily to a reduction in the tax rate driven by the global supply chain
project.
Adjusting for the items noted above, non-GAAP net income of $28.9 million
for the fourth quarter of 2008 was down 18 percent compared to the fourth
quarter of 2007. Non-GAAP earnings per share for the fourth quarter of 2008
were $0.24, down 14 percent from non-GAAP earnings per share of $0.28 in the
fourth quarter of 2007. Non-GAAP net income of $190.9 million for fiscal 2008
was up 23 percent compared to the fourth quarter of 2007. Non-GAAP earnings
per share for fiscal 2008 were $1.54, up 23 percent from fiscal 2007.
"In our October call we described an abrupt drop in demand in our
Engineering and Construction segment in mid-September. This trend worsened
during the fourth quarter," said Steven W. Berglund, Trimble's president and
chief executive officer. "During this time of market volatility we will
continue to take efforts to maintain our financial model, utilize this period
of uncertainty as an opportunity to improve our strategic position, support
those businesses with growth potential in the current environment, and adapt
quickly to changing circumstances. For example, actions we have already taken
will result in a reduction in the Trimble workforce of approximately ten
percent, excluding acquisitions."
"Our visibility into 2009 is extremely limited. We currently expect the
first quarter to reflect the confusion of the fourth quarter. We hope to see
a transition to more rational business decision making in the second quarter
with the second half of the year in a difficult recession, but one in which we
can begin to market our ROI message," Berglund continued. "Our focus will be
on managing through the recession as flexibly and opportunistically as we can
while anticipating the inflection point when we can return to our historical
growth trend."
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 inventory step-up charge, in-
process research and development and the impact of stock-based compensation
expense.
Engineering and Construction
Fourth quarter 2008 E&C revenue was $142.6 million, down approximately 24
percent when compared to the fourth quarter of 2007. For 2008, E&C revenue
was $741.7 million, down less than one percent compared to 2007. During 2008,
the E&C segment experienced declining demand due primarily to recessionary
conditions in the U.S. and Europe.
Operating income in E&C for the fourth quarter 2008 was $2.3 million, or
1.6 percent of revenue, compared to $36.8 million, or 19.7 percent of revenue,
in the fourth quarter of 2007. For 2008 operating income in E&C was $126.0
million, or 17.0 percent of revenue, compared to $174.2 million or 23.4
percent of revenue, in 2007.
In the fourth quarter of 2008, non-GAAP operating income in E&C was $3.9
million, or 2.7 percent of revenue, compared to $37.9 million, or 20.3 percent
of revenue, in the fourth quarter of 2007. For fiscal 2008, non-GAAP operating
income was $130.7 million, or 17.6 percent of revenue, compared to $177.8
million, or 23.9 percent of revenue, in 2007. The decline in operating
margins was primarily due to the revenue decline and product mix.
Field Solutions
Fourth quarter 2008 Field Solutions revenue was $58.2 million, up 17.4
percent when compared to the fourth quarter of 2007. Fiscal 2008 revenue in
Field Solutions was $300.7 million, up 50 percent from 2007. Strong sales of
agriculture products drove Field Solutions growth in the quarter and for the
year.
Operating income in Field Solutions for the fourth quarter 2008 was $17.5
million, or 30.1 percent of revenue, compared to $14.0 million, or 28.2
percent of revenue, in the fourth quarter of 2007. For 2008 operating income
was $109.5 million, or 36.4 percent of revenue, compared to $60.9 million, or
30.4 percent of revenue, in 2007.
In the fourth quarter of 2008, non-GAAP operating income in Field
Solutions was $17.7 million, or 30.5 percent of revenue, compared to 28.6
percent of revenue in the fourth quarter of 2007. For fiscal 2008, non-GAAP
operating income in Field Solutions was $110.3 million, or 36.7 percent of
revenue, up from 30.8 percent of revenue in fiscal 2007. Growth in Field
Solutions' margin was driven by operating leverage resulting from increased
revenue, as well as improvements in product costs.
Mobile Solutions
Fourth quarter 2008 Mobile Solutions revenue was $40.0 million, down
approximately 16 percent when compared to the fourth quarter of 2007. Fiscal
2008 Mobile Solutions revenue was $167.1 million, up six percent compared to
2007. The fourth quarter of 2007 benefitted from the completion of
deliverables for two large contracts.
Operating income in Mobile Solutions for the fourth quarter 2008 was $3.3
million, or 8.3 percent of revenue, compared to 12.0 percent of revenue in the
fourth quarter of 2007. For 2008 operating income in Mobile Solutions was
$11.3 million, or 6.8 percent of revenue, compared to 7.9 percent of revenue
in 2007.
In the fourth quarter of 2008, non-GAAP operating income in Mobile
Solutions was $4.5 million, or 11.2 percent of revenue, down from 14.8 percent
of revenue in the fourth quarter of 2007. For fiscal 2008, non-GAAP operating
income in Mobile Solutions was $16.1 million, or 9.6 percent of revenue
compared to 11.1 percent of revenue in fiscal 2007. As mentioned above,
margins in the fourth quarter of 2007 benefitted from of the completion of
deliverables for two large contracts.
Advanced Devices
Fourth quarter 2008 Advanced Devices revenue was $27.2 million, down
approximately 5 percent when compared to the fourth quarter of 2007. Fiscal
2008 Advanced Devices revenue was $119.7 million down approximately one
percent compared to 2007. The decline in fourth quarter revenue was due
mainly to slower sales of component technology products which are sold to
OEMs.
Operating income in Advanced Devices for the fourth quarter 2008 was $6.3
million, or 23.3 percent of revenue, compared to $3.7 million, or 12.7 percent
of revenue, in the fourth quarter of 2007. For 2008 operating income in
Advanced Devices was $24.4 million, or 20.4 percent of revenue, compared to
$17.3 million, or 14.3 percent of revenue, in 2007.
In the fourth quarter of 2008, non-GAAP operating income in Advanced
Devices was $6.7 million, or 24.7 percent of revenue, compared to 14.0 percent
of revenue in the fourth quarter of 2007. For fiscal 2008, non-GAAP operating
income in Advanced Devices was $25.8 million, or 21.6 percent of revenue
compared to 15.4 percent of revenue in fiscal 2007. For both the quarter and
the full year margin improvement was the result of increased licensing revenue
and product mix.
Stock Repurchase Program
As part of its stock repurchase program, in the fourth quarter of 2008,
Trimble repurchased 536,000 shares of Trimble stock at an average price of
$18.69.
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://www.investor.trimble.com.
Forward Looking Guidance
Trimble assumes that fourth quarter market uncertainty will continue into
the first quarter of 2009. The Company currently estimates first quarter 2009
revenue of $300 million. However, given the volatility of current market
conditions we believe this revenue estimate could vary plus or minus five
percent. Using a $300 million dollar revenue estimate, first quarter 2009
GAAP earnings per share are projected to be $0.12 and non-GAAP earnings per
share are projected to be $0.27. Non-GAAP guidance for the first quarter of
2009 excludes the amortization of intangibles of $14.2 million related to
previous acquisitions, the anticipated impact of stock-based compensation
expense of $4.2 million and $5.5 million in restructuring charges. Both GAAP
and non-GAAP guidance use a 28 percent tax rate and assume 122 million shares
outstanding.
Investor Conference Call / Webcast Details
Trimble will hold a conference call on February 3, 2009 at 1:30 p.m. PT to
review its fourth quarter and fiscal year 2008 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
80512820. 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, engineering
and construction market spending, revenue and earnings per share that Trimble
expects to report in the first quarter 2009, changes in tax-rate, our
estimated restructuring costs and the impact of cost-reduction efforts on
financial results in fiscal 2009. 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 Twelve Months Ended
Jan-02, Dec-28, Jan-02, Dec-28,
2009 2007 2009 2007
Revenue $268,084 $312,783 $1,329,234 $1,222,270
Cost of sales 146,046 157,117 680,098 609,365
Gross margin 122,038 155,666 649,136 612,905
Gross margin (%) 45.5% 49.8% 48.8% 50.1%
Operating expenses
Research and development 36,168 34,731 148,265 131,468
Sales and marketing 44,563 51,528 196,290 186,495
General and administrative 23,972 25,390 94,023 92,572
Restructuring 287 - 2,722 3,025
Amortization of purchased
intangible assets 6,608 4,754 22,376 18,966
In-process research and
development - - - 2,112
Total operating
expenses 111,598 116,403 463,676 434,638
Operating income 10,440 39,263 185,460 178,267
Non-operating income
(expense), net
Interest income 675 896 2,044 3,502
Interest expense (1,371) (1,127) (2,760) (6,602)
Foreign currency
transaction gain (loss),
net (829) (819) 1,509 (1,351)
Income from joint
ventures, net 1,185 1,932 7,981 8,377
Minority interests in
consolidated subsidiaries 519 6 540 6
Other income (expense),
net (1,130) 384 (2,812) 1,557
Total non-operating
income (expense), net (951) 1,272 6,502 5,489
Income before taxes 9,489 40,535 191,962 183,756
Income tax provision (benefit) (4,250) 14,244 50,490 66,382
Net income $13,739 $26,291 $141,472 $117,374
Earnings per share :
Basic $0.12 $0.22 $1.17 $0.98
Diluted $0.11 $0.21 $1.14 $0.94
Shares used in calculating
earnings per share :
Basic 119,342 121,428 120,714 119,280
Diluted 121,728 126,532 124,235 124,410
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)
Jan-02, Dec-28,
2009 2007
Assets
Current assets:
Cash and cash equivalents $147,531 $103,202
Accounts receivables, net 204,269 239,884
Other receivables 17,540 10,201
Inventories, net 160,893 143,018
Deferred income taxes 41,810 44,333
Other current assets 16,404 15,661
Total current assets 588,447 556,299
Property and equipment, net 50,175 51,444
Goodwill 715,571 675,850
Other purchased intangible assets,
net 228,901 197,777
Other non-current assets 51,922 57,989
Total assets $1,635,016 $1,539,359
Liabilities and Shareholders' Equity
Current liabilities:
Current portion of long-term debt $124 $126
Accounts payable 49,611 67,589
Accrued compensation and benefits 41,291 55,133
Deferred revenue 55,241 49,416
Accrued warranty expense 13,332 10,806
Income taxes payable - 14,802
Other accrued liabilities 63,719 51,980
Total current liabilities 223,318 249,852
Non-current portion of long-term debt 151,464 60,564
Non-current deferred revenue 12,418 15,872
Deferred income taxes 42,207 47,917
Other non-current liabilities 61,553 56,128
Total liabilities 490,960 430,333
Minority interests in consolidated
subsidiaries 3,655 -
Commitments and contingencies
Shareholders' equity:
Common stock 684,831 660,749
Retained earnings 427,921 388,557
Accumulated other comprehensive
income 27,649 59,720
Total shareholders' equity 1,140,401 1,109,026
Total liabilities and
shareholders' equity $1,635,016 $1,539,359
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
Twelve Months Ended
Jan-02, Dec-28,
2009 2007
Cash flow from operating activities:
Net Income $141,472 $117,374
Adjustments to reconcile net
income to net cash provided by
operating activities:
Depreciation expense 19,047 17,212
Amortization expense 45,066 38,744
Provision for doubtful
accounts 2,709 1,410
Amortization of debt
issuance cost 169 218
Deferred income taxes (17,356) 6,368
Non-cash restructuring
expense - 1,725
Stock-based compensation 16,166 15,016
In-process research and
development - 2,112
Equity gain from joint
ventures (7,981) (8,377)
Excess tax benefit for
stock-based compensation (5,970) (12,409)
Provision for excess and
obsolete inventories 4,426 4,352
Other non-cash items (348) 651
Add decrease (increase) in
assets:
Accounts receivables 33,414 (35,696)
Other receivables (7,422) 4,825
Inventories (16,461) (18,678)
Other current and non-
current assets 779 7,650
Add increase (decrease) in
liabilities:
Accounts payable (20,898) (3,521)
Accrued compensation and
benefits (12,487) 1,691
Accrued liabilities 3,183 (4,635)
Deferred revenue (1,320) 32,400
Income taxes payable (114) 18,553
Net cash provided by operating
activities 176,074 186,985
Cash flows from investing
activities:
Acquisitions of businesses, net
of cash acquired (115,137) (295,848)
Acquisition of property and
equipment (16,196) (13,187)
Purchases of debt and equity
securities - (5,576)
Dividends received 10,648 2,888
Capital infusion from minority
investor 4,200 -
Other (5,211) 331
Net cash used in investing
activities (121,696) (311,392)
Cash flow from financing activities:
Issuance of common stock 22,802 31,864
Excess tax benefit for stock-
based compensation 5,970 12,409
Repurchase and retirement of
common stock (125,888) -
Proceeds from long-term debt
and revolving credit lines 151,000 250,000
Payments on long-term debt and
revolving credit lines (60,314) (190,457)
Other (11) -
Net cash provided by (used in)
financing activities (6,441) 103,816
Effect of exchange rate changes on
cash and cash equivalents (3,608) (5,828)
Net increase(decrease) in cash and
cash equivalents 44,329 (26,419)
Cash and cash equivalents -
beginning of period 103,202 129,621
Cash and cash equivalents - end of
period $147,531 $103,202
NON-GAAP RECONCILIATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Dollars in thousands, except per share data)
(Unaudited)
Three Months Ended Twelve Months Ended
Jan-02, Dec-28, Jan-02, Dec-28,
2009 2007 2009 2007
REVENUE: $268,084 $312,783 $1,329,234 $1,222,270
GROSS MARGIN:
GAAP gross margin: $122,038 $155,666 $649,136 $612,905
Restructuring (A) 559 - 1,919 -
Amortization of
purchased
intangibles (B) 5,418 5,330 22,515 19,619
Stock-based
compensation (D) 487 493 1,920 1,733
Amortization of
acquisition-
related inventory
step-up (E) 813 - 1,414 -
Non-GAAP gross margin: $129,315 $161,489 $676,904 $634,257
Non-GAAP gross margin
(% of revenue) 48.2% 51.6% 50.9% 51.9%
OPERATING EXPENSES:
GAAP operating
expenses: $111,598 $116,403 $463,676 $434,638
Restructuring
(A) (287) - (2,722) (3,025)
Amortization of
purchased
intangibles (B) (6,608) (4,754) (22,376) (18,966)
In-process
research and
development (C) - - - (2,112)
Stock-based
compensation (D) (4,076) (3,574) (14,246) (13,283)
Non-GAAP operating
expenses: $100,627 $108,075 $424,332 $397,252
OPERATING INCOME:
GAAP operating income: $10,440 $39,263 $185,460 $178,267
Restructuring
(A) 846 - 4,641 3,025
Amortization of
purchased
intangibles (B) 12,026 10,084 44,891 38,585
In-process
research and
development (C) - - - 2,112
Stock-based
compensation (D) 4,563 4,067 16,166 15,016
Amortization of
acquisition-
related inventory
step-up (E) 813 - 1,414 -
Non-GAAP operating
income: $28,688 $53,414 $252,572 $237,005
Non-GAAP operating
margin (% of revenue) 10.7% 17.1% 19.0% 19.4%
NET INCOME:
GAAP net income: $13,739 $26,291 $141,472 $117,374
Restructuring
(A) 846 - 4,641 3,025
Amortization of
purchased
intangibles (B) 12,026 10,084 44,891 38,585
In-process
research and
development (C) - - - 2,112
Stock-based
compensation (D) 4,563 4,067 16,166 15,016
Amortization of
acquisition-
related inventory
step-up (E) 813 - 1,414 -
Income tax effect
on non-GAAP
adjustments (F) (3,029) (4,973) (17,649) (21,035)
Non-GAAP net income: $28,958 $35,469 $190,935 $155,077
DILUTED NET INCOME PER
SHARE:
GAAP diluted net income
per share: $0.11 $0.21 $1.14 $0.94
Non-GAAP diluted net
income per share: $0.24 $0.28 $1.54 $1.25
SHARES USED TO COMPUTE
DILUTED NET
INCOME PER SHARE:
GAAP and Non-GAAP
shares used to compute
net income per share: 121,728 126,532 124,235 124,410
OPERATING LEVERAGE:
Increase (decrease) in
non-GAAP operating
income $(24,726) $15,567
Increase (decrease) in
revenue $(44,699) $106,964
Operating leverage
(increase in non-GAAP
operating
income as a % of
increase in revenue) N/A 14.6%
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 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) In-process research and development. The amounts recorded as in-
process research and development 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 not directly related to the operation of our
business.
(D) 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 and nine
months ended September 26, 2008 and September 28, 2007, stock-based
compensation was allocated as follows:
Three Months Twelve Months
Ended Ended
Jan-02, Dec-28, Jan-02, Dec-28,
2009 2007 2009 2007
Cost of sales $487 $493 $1,920 $1,733
Research and development 860 954 3,489 3,573
Sales and Marketing 1,095 1,091 3,993 3,891
General and administrative 2,121 1,529 6,764 5,819
$4,563 $4,067 $16,166 $15,016
(E) 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.
(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 Field Mobile Advanced
and Solutions Solutions Devices
Construction
THREE MONTHS ENDED JANUARY 2,
2009:
Revenue $142,613 $58,245 $39,995 $27,231
GAAP operating income before
corporate allocations: $2,339 $17,528 $3,331 $6,340
Stock-based compensation (G) 1,533 221 1,167 399
Non-GAAP operating income before
corporate allocations: $3,872 $17,749 $4,498 $6,739
Non-GAAP operating margin (% of
segment external net revenues) 2.7% 30.5% 11.2% 24.7%
THREE MONTHS ENDED DECEMBER 28,
2007:
Revenue $186,699 $49,616 $47,685 $28,783
GAAP operating income before
corporate allocations: $36,818 $13,976 $5,739 $3,656
Stock-based compensation (G) 1,073 232 1,306 368
Non-GAAP operating income before
corporate allocations: $37,891 $14,208 $7,045 $4,024
Non-GAAP operating margin (% of
segment external net revenues) 20.3% 28.6% 14.8% 14.0%
TWELVE MONTHS ENDED JANUARY 2,
2009:
Revenue $741,670 $300,706 $167,113 $119,745
GAAP operating income before
corporate allocations: $126,014 $109,489 $11,328 $24,445
Stock-based compensation (G) 4,726 821 4,749 1,378
Non-GAAP operating income before
corporate allocations: $130,740 $110,310 $16,077 $25,823
Non-GAAP operating margin (% of
segment external net revenues) 17.6% 36.7% 9.6% 21.6%
TWELVE MONTHS ENDED DECEMBER 28,
2007:
Revenue $743,291 $200,614 $157,673 $120,692
GAAP operating income before
corporate allocations: $174,177 $60,933 $12,517 $17,276
Stock-based compensation (G) 3,614 763 4,976 1,369
Non-GAAP operating income before
corporate allocations: $177,791 $61,696 $17,493 $18,645
Non-GAAP operating margin (% of
segment external net revenues) 23.9% 30.8% 11.1% 15.4%
(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 $1,243K and $1,088K for
the three months ended January 2, 2009 and December 28, 2007,
respectively and $4,492K and $4,294K for the twelve months ended
January 2, 2009 and December 28, 2007, respectively.
SOURCE Trimble
Source: PR Newswire
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