form_10q.htm

0001044590-08-000042.txt : 20080506 0001044590-08-000042.hdr.sgml : 20080506 20080506163155 ACCESSION NUMBER: 0001044590-08-000042 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 6 CONFORMED PERIOD OF REPORT: 20080505 FILED AS OF DATE: 20080506 DATE AS OF CHANGE: 20080506 FILER: COMPANY DATA: COMPANY CONFORMED NAME: Intermec, Inc. CENTRAL INDEX KEY: 0001044590 STANDARD INDUSTRIAL CLASSIFICATION: COMPUTER PERIPHERAL EQUIPMENT, NEC [3577] IRS NUMBER: 954647021 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-13279 FILM NUMBER: 08806766 BUSINESS ADDRESS: STREET 1: 6001 36TH AVENUE WEST CITY: EVERETT STATE: WA ZIP: 98203-1264 BUSINESS PHONE: 425-265-2400 MAIL ADDRESS: STREET 1: 6001 36TH AVENUE WEST CITY: EVERETT STATE: WA ZIP: 98203-1264 FORMER COMPANY: FORMER CONFORMED NAME: UNOVA INC DATE OF NAME CHANGE: 19970815 10-Q 1 form_10q.htm 10-Q - Q1 2008 form_10q.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

ý		QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
		SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 30, 2008

OR

o		TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
		SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission file number: 001-13279

Intermec, Inc.

(Exact name of registrant as specified in its charter)

Delaware		95-4647021
(State or other jurisdiction of		(I.R.S. Employer
incorporation or organization)		Identification No.)

6001 36th Avenue West, Everett, WA		98203-1264
(Address of principal executive offices)		(Zip Code)

(425) 265-2400

(Registrant’s telephone number, including area code)

[None]

(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes ý

No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act (Check one):.

Large accelerated filer ý				Accelerated filer 

Non-accelerated filer 				Smaller reporting company filer 
(Do not check if a smaller reporting company)

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes o

No ý

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

Class		Outstanding at April 27, 2008
Common Stock, $0.01 par value per share		61,553,416 shares

INTERMEC, INC.

TABLE OF CONTENTS

REPORT ON FORM 10-Q

FOR THE QUARTER ENDED March 30, 2008

		Page Number
PART I. FINANCIAL INFORMATION

ITEM 1.	Financial Statements

	Condensed Consolidated Statements of Operations (unaudited) Quarters Ended March 30, 2008, and April 1, 2007	1

	Condensed Consolidated Balance Sheets (unaudited) March 30, 2008, and December 31, 2007	2

	Condensed Consolidated Statements of Cash Flows (unaudited) Quarters Ended March 30, 2008, and April 1, 2007	3

	Notes to Condensed Consolidated Financial Statements (unaudited)	4 - 9

ITEM 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	10 - 13

ITEM 3.	Quantitative and Qualitative Disclosures about Market Risk	14

ITEM 4.	Controls and Procedures	14

PART II. OTHER INFORMATION

ITEM 1.	Legal Proceedings	14

ITEM 1A.	Risk Factors	14 - 16

ITEM 2.	Unregistered Sales of Equity Securities and Use of Proceeds	17

ITEM 6.	Exhibits	18

Signature

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

INTERMEC, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(thousands of dollars, except per share amounts)

(unaudited)

	Quarter Ended
	March 30, 2008			April 1, 2007
Revenues:
Product	$	179,574		$	141,512
Service		37,205			37,806
Total revenues		216,779			179,318

Costs and expenses:
Cost of product revenues		107,705			92,194
Cost of service revenues		21,706			22,583
Research and development		16,522			16,506
Selling, general and administrative		58,636			53,055
Total costs and expenses		204,569			184,338

Operating profit (loss)		12,210			(5,020	)
Interest income		1,675			2,553
Interest expense		(1,790	)		(2,295	)
Earnings (loss) before income taxes		12,095			(4,762	)
Provision (benefit) for income taxes		4,389			(330	)
Net earnings (loss)	$	7,706		$	(4,432	)

Basic earnings (loss) per share	$	0.13		$	(0.07	)

Diluted earnings (loss) per share	$	0.13		$	(0.07	)

Shares used in computing basic earnings (loss) per share		60,956			59,990

Shares used in computing diluted earnings (loss) per share		61,475			59,990

See accompanying notes to condensed consolidated financial statements.

INTERMEC, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(amounts in thousands of dollars)

(unaudited)

	March 30, 2008			December 31, 2007
ASSETS
Current assets:
Cash and cash equivalents	$	186,528		$	237,247
Short-term investments		1,137			28,230
Accounts receivable, net of allowance for doubtful accounts and sales returns of $11,700 and $12,854		166,033			191,487
Inventories		130,172			113,145
Net current deferred tax assets		61,532			61,532
Other current assets		13,752			14,690
Total current assets		559,154			646,331

Property, plant and equipment, net		48,490			47,732
Intangibles, net		3,906			4,138
Net deferred tax assets		146,873			150,154
Other assets		58,397			52,280
Total assets	$	816,820		$	900,635

LIABILITIES AND SHAREHOLDERS' INVESTMENT
Current liabilities:
Accounts payable and accrued expenses	$	141,416		$	141,667
Payroll and related expenses		24,900			32,170
Deferred revenue		54,948			49,020
Current debt		-			100,000
Total current liabilities		221,264			322,857

Long-term deferred revenue		19,114			20,109
Other long-term liabilities		74,946			73,558

Shareholders' investment:
Common stock (250,000 shares authorized, 61,490 and 61,192 shares issued and outstanding)		615			612
Additional paid-in-capital		685,099			679,241
Accumulated deficit		(189,917	)		(196,795	)
Accumulated other comprehensive income		5,699			1,053
Total shareholders' investment		501,496			484,111
Total liabilities and shareholders' investment	$	816,820		$	900,635

See accompanying notes to condensed consolidated financial statements.

INTERMEC, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(thousands of dollars)

(unaudited)

	Quarter Ended
	March 30,			April 1,
	2008			2007

Cash and cash equivalents at beginning of period	$	237,247		$	155,027

Cash flows from operating activities:
Net earnings (loss)		7,706			(4,432	)
Adjustments to reconcile net earnings (loss) to net cash provided by operating
activities:
Depreciation and amortization		3,742			3,093
Change in prepaid pension costs, net		706			(990	)
Deferred taxes		3,804			166
Stock-based compensation and other		2,056			1,654
Excess tax benefits from stock-based payment arrangements		(581	)		(649	)
Changes in operating assets and liabilities:
Accounts receivable		25,454			9,685
Inventories		(21,380	)		(13,301	)
Other current assets		938			152
Accounts payable and accrued expenses		(372	)		282
Payroll and related expenses		(7,270	)		(9,543	)
Other long-term liabilities		3,525			2,895
Other operating activities		(812	)		(891	)
Net cash provided by (used in) operating activities		17,516			(11,879	)

Cash flows from investing activities:
Capital expenditures		(3,803	)		(2,160	)
Purchases of investments		(760	)		(595	)
Sale of investments		27,755			837
Patent legal fees		(778	)		(535	)
Other investing activities		-			(42	)
Net cash provided by (used in) investing activities		22,414			(2,495	)

Cash flows from financing activities:
Repayment of debt		(100,000	)		-
Excess tax benefits from stock-based payment arrangements		581			649
Stock options exercised		2,345			1,389
Other financing activities		879			521
Net cash provided by (used in) financing activities		(96,195	)		2,559

Effect of exchange rate changes on cash and cash equivalents		5,546			749
Resulting decrease in cash and cash equivalents		(50,719	)		(11,066	)

Cash and cash equivalents at end of period	$	186,528		$	143,961

See accompanying notes to condensed consolidated financial statements.

INTERMEC, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

1. Basis of Presentation

Our interim financial periods are based on a thirteen-week internal accounting calendar. In our opinion, the accompanying balance sheets, interim statements of operations and statements of cash flows include all adjustments, consisting only of normal recurring items, necessary for their fair presentation in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”). The financial statements include the accounts of Intermec and our subsidiaries. Intercompany transactions and balances have been eliminated. Equity investments in which we exercise significant influence but do not exercise control and are not the primary beneficiary are accounted for using the equity method. Investments in which we are not able to exercise significant influence over the investee are accounted for under the cost method. Preparing our financial statements requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, expenses, and financial data included in the accompanying notes to the financial statements. Actual results and outcomes may differ from our estimates and assumptions.

Interim results are not necessarily indicative of results for a full year. The information included in this Form 10-Q should be read in conjunction with Management’s Discussion and Analysis of Financial Condition and Results of Operations and the Consolidated Financial Statements and notes thereto included in our Annual Report on Form 10-K, as amended, for the year-ended December 31, 2007 (the “Annual Report on Form 10-K for the year ended December 31, 2007”).

Reclassification and Correction of Error

Prior to the fourth quarter of 2007, we provided the effect of exchange rates on cash and cash equivalents as supplemental information within the Consolidated Statement of Cash Flows. We have determined that the effect of exchange rates on cash and cash equivalents should more appropriately be recorded as a reconciling item between beginning and ending cash and cash equivalents and accordingly have reclassified $0.7 million from “net cash provided by operating activities” within the Consolidated Statement of Cash Flows to “effect of exchange rate changes on cash and cash equivalents” for the quarter ended April 1, 2007 for comparability. Also, expenses incurred for research and development have been reclassified from selling, general and administrative expenses for the quarter ended April 1, 2007 for comparability.

Accounting Changes

In February 2007, the Financial Accounting Standards Board (“FASB”) issued Statement of Financial Accounting Standards (“SFAS”) No. 159, “The Fair Value Option for Financial Assets and Financial Liabilities, Including an Amendment of FASB Statement No. 115.” SFAS No. 159 permits entities to measure eligible financial assets, financial liabilities and firm commitments at fair value, on an instrument-by-instrument basis, that are otherwise not permitted to be accounted for at fair value under other generally accepted accounting principles. The fair value measurement election is irrevocable and subsequent changes in fair value must be recorded in earnings. We adopted SFAS No. 159 effective January 1, 2008 and elected to not adopt the fair value option for any financial assets or liabilities. The adoption did not have a material impact on our consolidated financial statements.

In September 2006, the FASB issued SFAS No. 157, “Fair Value Measurements.” This statement defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles, and expands disclosures about fair value measurements. This statement applies to all financial instruments that are being measured and reported on a fair value basis. As defined in this statement, fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. We adopted SFAS No. 157 effective January 1, 2008. The adoption of SFAS No. 157 did not have a material impact on our condensed consolidated financial statements. While SFAS 157 is effective in the first fiscal quarter of 2008, the FASB provided a one year deferral for the implementation with respect to other nonfinancial assets and liabilities. We have deferred implementation of SFAS No. 157 for our nonfinancial assets and liabilities.

SFAS No. 157 requires financial assets and liabilities to be classified and disclosed in one of the following three categories:

●	Level 1: Inputs based on quoted market prices for identical assets or liabilities in active markets.

●	Level 2: Observable market based inputs or unobservable inputs that are corroborated by market data.

●	Level 3: Unobservable inputs that are not corroborated by market data.

Our level 1 financial instrument values are based on quoted market prices in active markets for identical assets, which we use to value our certificates of deposit, money market funds and equity securities. Our level 2 financial instrument values are based on comparable sales, such as quoted market rates for similar contracts. We do not have any financial instruments that require valuation using level 3 inputs.

INTERMEC, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

1. Basis of Presentation (continued)

Our financial assets and liabilities subject to these fair value measurement provisions comprised the following (thousands of dollars):

								Balance as of
		Level 1		Level 2		Level 3		March 30, 2008
Money market funds	$	108,208	$	-	$	-	$	108,208
Certificates of deposit		7,674		-		-		7,674
Stock		377		-		-		377
Derivative instruments - assets		-		2,799		-		2,799
Total assets at fair value	$	116,259	$	2,799	$	-	$	119,058

								Balance as of
		Level 1		Level 2		Level 3		March 30, 2008
Derivative instruments - liabilites	$	-	$	(7,042)	$	-	$	(7,042)
Total liabilities at fair value	$	-	$	(7,042)	$	-	$	(7,042)

In September 2006, the FASB issued SFAS No. 158, “Employer’s Accounting for Defined Pension and Other Postretirement Plans—an amendment of FASB Statements No. 87, 88, 106 and 132(R)”. SFAS No. 158 has new provisions regarding the measurement date as well as certain disclosure requirements. Effective December 31, 2008, SFAS No. 158 will require us to measure plan assets and benefit obligations at fiscal year end. We currently perform this measurement at September 30 of each year. In addition, beginning in fourth quarter of 2007, SFAS No. 158 required that we eliminate the use of a three-month lag period when recognizing the impact of curtailments or settlements and instead, recognize these amounts in the period in which they occur. The provisions of SFAS No. 158 do not permit retrospective application. We expect to incur between $0.5 million and $1.0 million as an adjustment to retained earnings upon adoption of the remainder of this statement.

In September 2006, the Emerging Issues Task Force (“EITF”) issued EITF 06-4, “Accounting for Deferred Compensation and Postretirement Benefit Aspects of Endorsement Split-Dollar Life Insurance Arrangements” (“EITF 06-04”), which we adopted on January 1, 2008. The Task Force concluded that an employer should recognize a liability for future benefits in accordance with SFAS No. 106, “Employers' Accounting for Postretirement Benefits Other Than Pensions” or Accounting Principles Board Opinion 12 (“Opinion 12”), “Classification and Disclosure of Allowances Disclosure of Depreciable Assets and Depreciation Deferred Compensation Contracts Capital Changes Convertible Debt and Debt Issued with Stock Warrants Amortization of Debt Discount and Expense or Premium” based on the substantive agreement with the employee. Upon adoption of EITF 06-4, as of January 1, 2008, we increased accumulated deficit $0.9 million, recognized a $1.4 million long-term liability, and recorded a tax effect of $0.5 million within long-term deferred tax assets.

In December 2007, the FASB issued SFAS No. 141R, “Business Combinations,” which will be effective for all business acquisitions with an acquisition date on or after January 1, 2009. This statement generally requires an acquirer to recognize the assets acquired, the liabilities assumed, contingent purchase consideration, and any noncontrolling interest in the acquiree, at fair value on the date of acquisition. SFAS No. 141R also requires an acquirer to expense most transaction and restructuring costs as incurred, and not include such items in the cost of the acquired entity. We are currently evaluating the impact of the adoption of SFAS No. 141R on our consolidated financial statements.

2. Inventories

Inventories comprise the following (thousands of dollars):

	March 30, 2008		December 31, 2007

Raw materials	$	68,115	$	65,257
Work in process		373		1,318
Finished goods		61,684		46,569
Inventories	$	130,172	$	113,145

INTERMEC, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

3. Debt

We have an unsecured Revolving Credit Facility (the “Revolving Facility”) with a maximum amount available under the Revolving Facility of $50.0 million. Net of outstanding letters of credit and limitations on availability, we had borrowing capacity at March 30, 2008, of $46.9 million under the Revolving Facility. We made no borrowings under the Revolving Facility during 2008, and as of March 30, 2008, no borrowings were outstanding under this facility. As of March 30, 2008, we were in compliance with all financial covenants of the Revolving Facility. The Revolving Facility matures in October 2012.

During March 2008, we paid off our $100.0 million senior unsecured debt.

We also have letter-of-credit reimbursement agreements totaling $4.6 million at March 30, 2008, compared to $3.9 million at December 31, 2007.

4. Provision for Income Taxes

The tax provision for the quarter ended March 30, 2008 reflects an effective tax rate for continuing operations of 36.3% compared to a U.S. statutory rate of 35%. The tax provision for the quarter includes a 1.4% benefit related to settlement of a foreign tax dispute. The tax benefit for the quarter ended April 1, 2007 resulted from an operating loss and reflects an effective tax benefit from continuing operations of (6.9%) compared to a U.S. statutory rate of 35%. The tax benefit for the quarter ended April 1, 2007 was reduced primarily due to a reduction of foreign deferred tax assets as a result of recording a valuation allowance and the impact of changes in tax rates.

5. Shares Used in Computing Earnings (Loss) per Share

Basic earnings (loss) per share is calculated using the weighted average number of common shares outstanding and issuable for the applicable period. Diluted earnings (loss) per share is computed using basic weighted average shares plus the dilutive effect of unvested restricted stock and outstanding stock options using the “treasury stock” method.

	Quarter Ended
	March 30, 2008		April 1, 2007
Weighted average shares - basic		60,956,467		59,990,018
Dilutive effect of unvested restricted shares and stock options		518,473		-
Weighted average shares - diluted		61,474,940		59,990,018

Our employees and directors held options to purchase 1,523,065 shares of our common stock for the quarter ended March 30, 2008, that were not included in weighted average shares diluted because they were antidilutive to the diluted earnings per share computation. These options could become dilutive in future periods if the average market price of our common stock exceeds the exercise price of the outstanding options and we report net earnings. For the quarter ended April 1, 2007, diluted weighted average shares excludes 918,171 weighted average unvested stock options and restricted shares, because they would have been anti-dilutive, due to our reported net loss.

INTERMEC, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

6. Equity

For the quarter ended March 30, 2008, we granted 113,000 options to employees with a Black-Scholes value of $9.32 a share, which will vest annually in even quantities over the next five years. The Black-Scholes assumptions used for this calculation were as follows:

Fair value assumptions	March 30, 2008
Expected life in years		4.80
Annualized volatility		44.66	%
Annual rate of quarterly dividends		0.00	%
Discount rate - bond equivalent yield		2.94	%

Our accumulated other comprehensive income comprised the following (thousands of dollars):

	March 30, 2008			December 31, 2007
Currency translation adjustment, net	$	13,597		$	8,842
Unamortized benefit plan costs, net of tax benefit of $4,669 and $4,320, respectively		(7,895	)		(7,884	)
Unrealized gain (loss) on securities, net		(3	)		95
Accumulated other comprehensive income	$	5,699		$	1,053

Other comprehensive income for the quarters ended March 30, 2008 and April 1, 2007, was as follows (thousands of dollars):

	Quarter Ended
	March 30, 2008			April 1, 2007
Net income (loss)	$	7,706		$	(4,432	)
Other comprehensive income (loss):
Change in equity due to foreign currency translation adjustments		4,755			71
Unrealized (loss) gain on investment, net of tax		(98	)		7
Amortization of benefit plan costs, net of tax		(11	)		963
Other comprehensive income (loss)	$	12,352		$	(3,391	)

7. Segment Reporting

We design, develop, manufacture, integrate, sell, resell and service wired and wireless automated identification and data collection (“AIDC”) products, including radio frequency identification (“RFID”) products, mobile computing products, wired and wireless bar code printers and label media products. Our reportable segments comprise products and services. The product segment generates revenue from the design, development, manufacture, sale and resale of AIDC products, including RFID products and license fees. The service segment generates revenue from customer support, product maintenance and other services related to the products and systems integration.

The accounting policies of our two reportable segments are the same as those used to prepare our condensed consolidated financial statements. Performance and resource allocation are primarily measured by sales and standard gross profit. All other earnings, costs and expenses are aggregated and reported on a consolidated basis.

For the quarter ended March 30, 2008, one customer accounted for more than 10% of our revenues. Total sales to this customer were $26.6 million for the quarter ended March 30, 2008. For the quarter ended April 1, 2007, one customer accounted for more than 10% of our revenues. Total sales to this customer were $18.3 million for the quarter ended April 1, 2007.

INTERMEC, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

7. Segment Reporting (continued)

The following table sets forth our operations by reportable segment (millions of dollars):

	Quarter Ended
	March 30, 2008		April 1, 2007
Revenues:
Product	$	179.6	$	141.5
Service		37.2		37.8
Total	$	216.8	$	179.3

Gross profit:
Product	$	71.9	$	49.3
Service		15.5		15.2
Total	$	87.4	$	64.5

The following table sets forth our revenues by product lines (millions of dollars):

	Quarter Ended
	March 30, 2008		April 1, 2007
Revenues:
Systems and solutions	$	126.0	$	93.5
Printer and media		53.6		48.0
Service		37.2		37.8
Total	$	216.8	$	179.3

8. Commitments and Contingencies

Provisions for estimated expenses related to product warranties are made at the time products are sold. These estimates are established using historical information on the nature, frequency, and average cost of warranty claims. We actively study trends of warranty claims and take action to improve product quality and minimize warranty claims. The following table indicates the change in our warranty accrual included in current liabilities (thousands of dollars):

	Quarter Ended
	March 30, 2008			April 1, 2007
Beginning Balance	$	4,305		$	6,800
Payments		(791	)		(693	)
Increase in liability (new warranties issued)		764			261
Ending Balance	$	4,278		$	6,368

We have entered into a variety of agreements with third parties that include indemnification clauses, both in the ordinary course of business and in connection with our divestitures of certain product lines. These clauses require us to compensate these third parties for certain liabilities and damages incurred by them.

FASB Interpretation No. 45, “Guarantors’ Accounting and Disclosure Requirements for Guarantees, Including Indirect Guarantees of Indebtedness of Others,” requires that we estimate and record the fair value of guarantees as a liability. We do not believe that we have any significant exposure related to such guarantees and therefore have not recorded a liability as of March 30, 2008, or December 31, 2007. We have not made any significant indemnification payments as a result of these clauses.

We currently, and from time to time, are subject to claims and lawsuits arising in the ordinary course of business. Such claims and lawsuits may take the form of counter claims in lawsuits we bring to enforce our rights. The ultimate resolution of currently pending proceedings is not expected to have a material adverse effect on our business, financial condition, results of operations or liquidity.

INTERMEC, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

9. Pension and Other Postretirement Benefit Plans

The information in this note represents the net periodic pension and post-retirement benefit costs and related components in accordance with SFAS 132(R), “Employers’ Disclosures about Pensions and Other Postretirement Benefits (as amended).” The components of net pension and postretirement periodic benefit cost (credit) for the quarters ended March 30, 2008, and April 1, 2007, are as follows (thousands of dollars):

	U.S. Defined Benefit Plans						Non-U.S. Defined Benefit Plans						Other Postretirement Benefit Plans
Quarters Ended March 30, 2008, and April 1, 2007:	2008			2007			2008			2007			2008		2007
Service cost	$	366		$	452		$	-		$	-		$	-	$	-
Interest cost	2,705			2,678			666			644			44		44
Expected return on plan assets	(2,871		)	(2,611		)	(904		)	(836		)	-		-
Amortization and deferrals:
Transition asset	-			-			(42		)	(42		)	-		-
Actuarial loss	349			942			-			102			-		-
Prior service cost	144			145			-			-			-		-
Net pension and postretirement periodic benefit cost (income)	$	693		$	1,606		$	(280	)	$	(132	)	$	44	$	44

During the quarter ended March 30, 2008, we contributed approximately $2.5 million to our pension and other postretirement benefit plans, comprising $1.0 million in benefits paid pertaining to unfunded U.S. defined benefit plans, $0.9 million in matching contributions to our 401(k) plan, and $0.6 million in contributions to our foreign pension plans. Benefits paid pertaining to our other postretirement benefit plans were not material during the first quarter of 2008. We expect to contribute an additional $10.1 million to these plans during the remainder of 2008, of which $5.3 million relates to benefit payments on our unfunded U.S. defined benefit plans, $2.7 million in matching contributions to our 401(k) plan, $1.8 million in contributions to our foreign pension plans and $0.3 million in benefit payments pertaining to our other postretirement benefit plans.

In September 2006, the EITF issued EITF 06-4, “Accounting for Deferred Compensation and Postretirement Benefit Aspects of Endorsement Split-Dollar Life Insurance Arrangements,” which we adopted on January 1, 2008. The Task Force concluded that an employer should recognize a liability for future benefits in accordance with SFAS No. 106, “Employers' Accounting for Postretirement Benefits Other Than Pensions” or Opinion 12, “Classification and Disclosure of Allowances Disclosure of Depreciable Assets and Depreciation Deferred Compensation Contracts Capital Changes Convertible Debt and Debt Issued with Stock Warrants Amortization of Debt Discount and Expense or Premium” based on the substantive agreement with the employee.

We have endorsement split-dollar life insurance policy agreements, which we own and control, with a group of employees. Each of these agreements was entered into as a separate agreement between us and the employee, and we endorsed a portion of the death benefits to the employee’s beneficiary. Under the guidance of EITF 06-4 these agreements represent a post retirement plan, and we have accrued a liability for the present value of the future death benefit in accordance with FAS 106, for any endorsement split-dollar life insurance policies.

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Forward-Looking Statements and Risk Factors

Forward-looking statements contained in this filing are subject to the safe harbor created by the Private Securities Litigation Reform Act of 1995 (alternatively: Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934) and are dependent upon a variety of important factors that could cause actual results to differ materially from those reflected in such forward-looking statements.

Forward-looking statements include but are not limited to statements about: maintaining or improving our revenues, gross margins or profits of our continuing operations, for the current period or any future period; competing effectively with our current products and planned products, and introducing new products; effectively completing restructuring activities, including the closure of certain facilities and redeployment of related functions; maintaining or reducing expenses; maintaining or improving operational efficiency; increasing product development capacity; using our investment in research and development to generate future revenue; and the applicability of accounting policies used in our financial reporting. When used in this document and in documents it references, the words “anticipate,” “believe,” “will,” “intend,” “project” and “expect” and similar expressions as they relate to Intermec or our management are intended to identify such forward-looking statements. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, changed circumstances or any other reason after the date of this quarterly report.

Forward-looking statements involve and are dependent upon certain risks and uncertainties and are not guarantees of future performance. A number of factors can impact our business and determine whether we can or will achieve any forward-looking statement made in this report. Any one of these factors could cause our actual results to differ materially from those expressed or implied in a forward-looking statement. We outline these risk factors in reports that we file with the SEC, in press releases and on our website, www.intermec.com. You are encouraged to review the discussion below in Part I, “Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and Part II, “Item 1A. Risk Factors,” of this filing, as well as the Risk Factors set forth in Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2007, which discuss risk factors associated with our business.

Results of Operations

The following discussion compares our results of operations for the quarters ended March 30, 2008, and April 1, 2007. Results of operations and percentage of revenues were as follows (millions of dollars):

	Quarter Ended
	March 30, 2008						April 1, 2007
	Amounts			Percent of Revenues			Amounts			Percent of Revenues
Revenues	$	216.8					$	179.3
Costs and expenses:
Cost of revenues		129.4			59.7	%		114.7			64.0	%
Research and development		16.5			7.6	%		16.5			9.2	%
Selling, general and administrative		58.7			27.1	%		53.1			29.6	%
Total costs and expenses		204.6			94.4	%		184.3			102.8	%

Operating profit (loss)		12.2			5.6	%		(5.0	)		-2.8	%
Interest, net		(0.1	)		-0.1	%		0.3			0.1	%
Earnings (loss) before income taxes		12.1			5.6	%		(4.7	)		-2.7	%
Provision (benefit) for income taxes		4.4			2.0	%		(0.3	)		-0.2	%
Net earnings (loss)	$	7.7			3.6	%	$	(4.4	)		-2.5	%

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued)

Revenues

Revenues by category and as a percentage of total revenues from operations for the quarters ended March 30, 2008, and April 1, 2007, were as follows (millions of dollars):

	Quarter Ended
	March 30, 2008					April 1, 2007
	Amount		Percent of Revenues			Amount		Percent of Revenues			Change			Percentage Change
Revenues by category:
Systems and solutions	$	126.0		58.1	%	$	93.5		52.1	%	$	32.5			34.8	%
Printer and media		53.6		24.7	%		48.0		26.8	%		5.6			11.7	%
Service		37.2		17.2	%		37.8		21.1	%		(0.6	)		(1.6	)%
Total revenues	$	216.8		100.0	%	$	179.3		100.0	%	$	37.5			20.9	%

Revenues by geographic region and as a percentage of total revenues from operations for the quarters ended March 30, 2008, and April 1, 2007, were as follows (millions of dollars):

	Quarter Ended
	March 30, 2008					April 1, 2007
	Amount		Percent of Revenues			Amount		Percent of Revenues			Change			Percentage Change
Revenues by geographic region:
North America	$	114.1		52.6	%	$	91.1		50.8	%	$	23.0			25.2	%
Europe, Middle East and Africa
(EMEA)		78.0		36.0	%		62.9		35.1	%		15.1			24.0	%
All others		24.7		11.4	%		25.3		14.1	%		(0.6	)		(2.4	)%
Total revenues	$	216.8		100.0	%	$	179.3		100.0	%	$	37.5			20.9	%

The increase in quarterly revenue of $37.5 million, or 20.9%, was primarily attributable to a $38.1 million increase in product revenue, which was partially offset by a $0.6 million decrease in service revenue. The increase in product revenue was attributable to a $32.5 million increase in systems and solution products and a $5.6 million increase in printer and media products. Growth of $32.5 million, or 34.8%, by Systems and Solutions was attributed to ongoing strength in the CN3 and newly launched CN3e products within the terminal family. These deployments occurred in every region and within our targeted verticals of transportation and logistics, retail and industrial. Additionally, growth of $5.6 million, or 11.7%, in our printer and media business was driven by new orders for industrial printers as well as our portable printers. Growth came from North America, EMEA and the Asia Pacific regions.

Service revenues decreased $0.6 million, or 1.6%, over the corresponding prior-year period. This decrease was primarily attributable to a decrease in hardware sales during early 2007, which resulted in lower service contracts.

Geographically, revenues in North America and EMEA increased $23.0 million, or 25.2%, and $15.1 million, or 24.0%, respectively, over the corresponding prior-year period. The increases were primarily attributable to strong hardware demand in both regions, with new product introductions driving a majority of the growth. The changes in foreign currency conversion rates favorably impacted EMEA revenue by $7.0 million as compared to prior year period.

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued)

Gross Profit

Gross profit and gross margin by revenue category for the quarters ended March 30, 2008 and April 1, 2007, were as follows (millions of dollars):

	Quarter Ended
	March 30, 2008					April 1, 2007
	Gross Profit		Gross Margin			Gross Profit		Gross Margin
Product	$	71.9		40.0	%	$	49.3		34.9	%
Service		15.5		41.7	%		15.2		40.3	%
Total Gross Profit and Gross Margin	$	87.4		40.3	%	$	64.5		36.0	%

The total gross profit for the quarter ended March 30, 2008, increased $22.9 million, or 35.5%, compared to the corresponding prior-year period. The increase in total gross profit primarily resulted from a $22.6 million increase in product gross profit due to the product revenue growth and improvement in related gross margins.

Product gross margin for the quarter ended March 30, 2008, increased 5.1 percentage points as compared to the quarter ended April 1, 2007. The increase in product gross margin is primarily due to higher unit volume, higher absorption on higher volumes and favorable impact of foreign currency on revenue. Service gross margins increased 1.4 percentage points for the quarter ended March 30, 2008, over the corresponding prior-year period, due to improvements in the cost structure.

Research and Development

	Three months ended
	March 30, 2008		Change from prior year		April 1, 2007
Research and development expense	$	16.5	$	-	$	16.5

The total research and development expense was $16.5 million for the quarters ended March 30, 2008 and April 1, 2007.

Selling, General and Administrative

	Three months ended
	March 30, 2008		Change from prior year		April 1, 2007
Selling, general and administrative expense	$	58.7	$	5.6	$	53.1

The total selling, general and administrative (“SG&A”) expenses were $58.7 million and $53.1 million for the quarters ended March 30, 2008 and April 1, 2007, respectively. The increase in SG&A expense for the three months ended March 30, 2008 of $5.6 million, compared to the three month period ended April 1, 2007 was primarily related to sales expense, stock and incentive compensation, and audit expenses. Foreign currency conversion had a negative impact on certain operating expenses, primarily in EMEA.

Interest, Net

	Three months ended
	March 30, 2008		Change from prior year		April 1, 2007
Interest (expense) income, net	$	(0.1)	$	(0.4)	$	0.3

Net interest expense was $0.1 million for the quarter ended March 30, 2008, compared to net interest income of $0.3 million for the corresponding prior-year period. The $0.4 million decrease in net interest income reflects the reduction in average cash and cash equivalent balances.

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued)

Provision for (Benefit from) Income Taxes

	Three months ended
	March 30, 2008		Change from prior year		April 1, 2007
Provision for (Benefit from) income taxes	$	4.4	$	4.7	$	(0.3)

Liquidity and Capital Resources

Cash, cash equivalents and short-term investments as of March 30, 2008, totaled $187.7 million, compared to $265.5 million as of December 31, 2007. Operating activities for the first quarter of 2008 provided $17.5 million of cash flow, primarily resulting from customer receipts of $272.8, partially offset by inventory purchases of $197.6 and employee payments of $56.3 million. Investing activities for the first quarter of 2008, provided $22.4 million related primarily to the sale of investments totaling $27.8 million, which was partially offset by $3.8 million of net capital expenditures. Financing activities for the first quarter of 2008, used $96.2 million related primarily to the $100.0 million repayment of debt during the first quarter of 2008.

Net of outstanding letters of credit and limitations on minimum availability, we had borrowing capacity at March 30, 2008, of $46.9 million under the Revolving Facility. We made no borrowings under the Revolving Facility during the first quarter of 2008, and as of March 30, 2008, no borrowings were outstanding under the Revolving Facility. As of March 30, 2008, we were in compliance with the financial covenants of the Revolving Facility.

The key terms of the Revolving Facility are as follows:

●

Loans will bear interest at a variable rate equal to (at our option) (i) LIBOR plus the applicable margin, which ranges from 0.60% to 1.00%, or (ii) the Bank’s prime rate, less the applicable margin, which ranges from 0.25% to 1.00%. If an event of default occurs and is continuing, then the interest rate on all obligations under the Revolving Facility may be increased by 2.0% above the otherwise applicable rate, and the Bank may declare any outstanding obligations under the Revolving Facility to be immediately due and payable.

●	A fee ranging from 0.60% to 1.00% on the maximum amount available to be drawn under each letter of credit that is issued and outstanding under the Revolving Facility will be required. The fee on the unused portion of the Revolving Facility ranges from 0.125% to 0.20%.

●	Certain of our domestic subsidiaries have guaranteed the Revolving Facility.

●	The Revolving Facility contains various restrictions and covenants, including restrictions on our ability and the ability of our subsidiaries to consolidate or merge, make acquisitions, create liens, incur additional indebtedness or dispose of assets.

●	Financial covenants include a Maximum Leverage test and a Minimum Tangible Net Worth test, each as defined in the Revolving Facility.

During March 2008, we paid off our $100.0 million of ten-year senior unsecured debt.

Management believes that cash and cash equivalents on hand, combined with projected cash flow from operations and available borrowings under our Revolving Facility will be sufficient to fund our operations, research and development efforts, anticipated capital expenditures, liabilities, commitments, and other capital requirements, for at least the next twelve months.

Contractual Obligations

Our contractual commitments as of March 30, 2008, have not changed materially from those disclosed in Item 7 of our Annual Report on Form 10-K for the year ended December 31, 2007.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We are exposed to foreign exchange rate risk with respect to our foreign operations and from foreign currency transactions.

Due to our global operations, our cash flows and earnings are exposed to foreign exchange rate fluctuations. When appropriate, we may attempt to limit our exposure to changing foreign exchange rates by entering into short-term foreign currency exchange contracts. As of March 30, 2008, we held short-term contracts for the purpose of hedging foreign currency cash flows with an aggregate notional amount of $176.0 million.

Except as noted in the preceding paragraph, as of March 30, 2008, there have been no material changes in information provided in Item 7A of our Annual Report on Form 10-K for the year ended December 31, 2007, which contains a complete discussion of our material exposures to interest rate and foreign exchange rate risks.

ITEM 4. CONTROLS AND PROCEDURES

We maintain disclosure controls and procedures, which are designed to ensure that information required to be disclosed in the reports we file or submit under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms, and that such information is accumulated and communicated to management, including the Chief Executive Officer, or CEO, and Chief Financial Officer, or CFO, as appropriate to allow timely decisions regarding required disclosure.

Under the supervision and with the participation of management, including the CEO and CFO, an evaluation was performed on the effectiveness of the design and operation of our disclosure controls and procedures as of the end of the period covered by this quarterly report. Based on that evaluation, management, including the CEO and CFO, concluded that our disclosure controls and procedures were effective as of March 30, 2008.

An evaluation was also performed under the supervision and with the participation of management, including the CEO and CFO, of any change in our internal controls over financial reporting that occurred during the last fiscal quarter and that has materially affected, or is reasonably likely to materially affect, our internal controls over financial reporting. That evaluation did not identify any change in our internal controls over financial reporting that occurred during the latest fiscal quarter and that has materially affected, or is reasonably likely to materially affect, our internal controls over financial reporting.

PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

ITEM 4. ITEM 1A. RISK FACTORS

You are encouraged to review the discussion of Forward Looking Statements and Risk Factors appearing in this report at Part I, “Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

In addition to the other information set forth in this Report, you should carefully consider the factors discussed in Part I, “Item 1A. Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2007, which could materially affect our business, financial condition or operating results. The risks described in our Annual Report on Form 10-K for the year ended December 31, 2007, are not the only risks facing our Company. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition or operating results.

ITEM 1A. RISK FACTORS (continued)

The risk factor included in the Annual Report on Form 10-K for the year ended December 31, 2007 under the caption “Business combinations, private equity transactions and similar events are altering the structure of the AIDC industry and could intensify competition” is restated in its entirety as follows:

●

Business combinations, private equity transactions and similar events are altering the structure of the AIDC industry and, could intensify competition and create other risks for our business. Large, well-financed companies and private equity groups have been acquiring companies in the automatic identification and data capture (“AIDC”) industry. As examples, Motorola acquired Symbol Technologies, Inc.; Honeywell acquired Hand Held Products, Inc. and has agreed to acquire Metrologic Holdings Corporation, parent of Metrologic Instruments; and Zebra Technologies acquired WhereNet, Navis Holdings LLC and proveo AG. These acquisitions and other similar events have altered the structure of the AIDC industry and may spawn more transactions and additional structural changes. These events could intensify competition within the AIDC industry by expanding the presence of companies that have greater business and financial resources than the firms they acquired and by increasing the market share of some companies in our industry. Such increased competition could have material adverse impacts to our revenues, revenue growth and results of operations. There is no assurance that any of the strategies we employ to react to the structural changes and related increased competition in our industry will be successful.

A new risk factor is added, as follows:

●

To compete effectively in the AIDC industry, we may seek to acquire or make investments in other businesses, technologies, products or services, and our failure to do so successfully may adversely affect our competitive position or financial results. The industry trend toward business combinations and other factors may make it appropriate for us to acquire or make investments in other businesses, technologies, products or services. Our ability to do so could be hampered if we are unable to identify suitable acquisitions and investments or to agree on the terms of any such acquisition or investment. We may not be able to consummate any such transaction if we cannot obtain financing at a reasonable cost and lack sufficient resources to finance the transaction on our own. If we are not able to complete such transactions, our competitive position may suffer, which could have adverse impacts on our revenues, revenue growth and results of operations. We may also be required to write-off certain costs associated with a failed transaction in the period in which it fails, and those costs could have a material impact on our results of operations for that period.

A new risk factor is added, as follows:

●	Our business combinations or other transactions may not succeed in generating the intended benefits and therefore adversely affect shareholder value or our financial results. Integration of new businesses or technologies into our business may have any of the following adverse effects:

●	We may have difficulty transitioning customers and other business relationships to Intermec.

●	We may have problems unifying management of a combined Company.

●	We may lose key employees from our existing or acquired businesses.

●	We may experience intensified competition from other companies seeking to expand sales and market share during the integration period.

Furthermore, in order to complete such transactions, we may have to issue new equity securities with dilutive effects on existing shareholders or take on new debt, assume contingent liabilities or amortize assets or expenses in a manner that has a material adverse effect on our balance sheet or results of operations. We may also consume considerable management time and attention on the integration that would divert resources from the development and operation of our existing business. These and other potential problems could prevent us from realizing the benefits of such transactions and have a material adverse impact on our revenues, revenue growth, balance sheet and results of operations.

ITEM 1A. RISK FACTORS (continued)

The risk factor included in the Annual Report on Form 10-K for the year ended December 31, 2007 under the caption “Our business may be adversely affected if we do not continue to improve our business processes and systems and attract and retain skilled managers and employees” is restated in its entirety as follows:

●

Our business may be adversely affected if we do not continue to transform our supply chain, improve our business processes and systems and attract and retain skilled managers and employees. In order to increase sales and profits, we must continue to expand our operations into new product and geographic markets and deepen our penetration of the markets we currently serve, and do so in efficient and cost effective ways. To achieve our objectives, we need to continue to streamline our supply chain and our business processes and continue to improve our financial, information technology and enterprise resource planning systems. To accomplish this, there may be times when we must significantly restructure our business and recognize the anticipated costs of such restructurings. Such restructuring charges could have a material adverse impact on our results of operations. Competition for skilled employees is high in our industry, and we must remain competitive in terms of compensation and other employee benefits to retain key employees. If we are unsuccessful in hiring and retaining skilled managers and employees we will be unable to achieve the objectives of our restructuring programs or to maintain and expand our business.

The risk factor included in the Annual Report on Form 10-K for the year ended December 31, 2007 under the caption “Our use of third-party suppliers and distributors could have a material adverse effect on our business” is restated in its entirety as follows:

●

Our use of third-party suppliers and distributors could adversely affect our business and financial results. We use third party suppliers to produce products and components of our products. Products or components may be available only from a single source or limited sources, and we may be unable to find alternative sources of supply on a timely basis. We may also be impacted by the quality control of these third party suppliers or by their ability to meet our delivery deadlines. Failure of our third-party suppliers in any of these respects may negatively affect our revenue and customer relationships. Furthermore, these suppliers may have access to our intellectual property, which may increase the risk of infringement or misappropriation. In addition to offering our products directly, we also offer our products through third party distributors and may be impacted by changes affecting these distributors, including their ability to bring our products to market at the right times and in the right locations. Changes in our third-party suppliers or third party distribution channels could have a material adverse effect on our operations and financial results.

The risk factor included in the Annual Report on Form 10-K for the year ended December 31, 2007 under the caption “We face risks as a global company that could adversely affect our revenues, gross profit margins and results of operations” is restated in its entirety as follows:

●

We face risks as a global company that could adversely affect our revenues, gross profit margins and results of operations. Due to the global nature of our business, we face risks that companies operating in a single country or region do not have. U.S. and foreign government restrictions on the export or import of technology could prevent us from selling some or all of our products in one or more countries. Our sales could also be materially and adversely affected by burdensome laws, regulations, security requirements, tariffs, quotas, taxes, trade barriers or capital flow restrictions imposed by the U.S. or foreign governments. In addition, political and economic instability in a particular country or region could reduce demand for our products or impair or eliminate our ability to sell or deliver those products to customers in those countries or put our assets at risk. Any of the foregoing factors could adversely affect our ability continue or expand sales of our products in any market, and disruptions of our sales could materially and adversely impact our revenues, revenue growth, gross profit margins and results of operations.

A significant percentage of our products and components for those products are designed, manufactured, produced, delivered, serviced or supported in countries outside of the U.S. From time to time, we contract with companies outside of the U.S. to perform one or more of these activities, or portions of these activities. For operational, legal or other reasons, we may have to change the mix of domestic and international operations or move outsourced activities from one overseas vendor to another. In addition, U.S. or foreign government actions or economic or political instability and potentially weaker foreign intellectual property protections may disrupt or require changes in our international operations or international outsourcing arrangements. The process of implementing such changes and dealing with such disruptions is complex and can be expensive. There is no assurance that we will be able to accomplish these tasks in an efficient or cost-effective manner, if at all. If we encounter difficulties in making such transitions, our revenues, gross profit margins and results of operations could be materially and adversely affected.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

(c)	Issuer Purchases of Equity Securities

	Total Number of Shares Purchased		Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs		Maximum Number of Shares (or Approximate Dollar Value) that May Yet Be Purchased Under the Plans or Programs
January 1 to January 27, 2008		-		-		-		-
January 28 to February 24, 2008		435	$	22.50		-		-
February 25 to March 30, 2008		-		-		-		-
Total		435	$	22.50		-		-

The purchased shares indicated in the above table were surrendered to satisfy tax withholding obligations in connection with the vesting of restricted stock.

ITEM 6. EXHIBITS

10.1		Form of Performance Share Unit Agreement
31.1		Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, dated as of May 5, 2008
31.2		Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, dated as of May 5, 2008
32.1		Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, dated as of May 5, 2008
32.2		Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, dated as of May 5, 2008

SIGNATURE

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 thereunto duly authorized.

	Intermec, Inc.
	(Registrant)

		/s/ Lanny H. Michael
		Lanny H. Michael
		Chief Financial Officer

		May 5, 2008

EX-10.1 2 exhibit_10-1.htm PERFORMANC SHARE UNIT AGREEMENT exhibit_10-1.htm

Intermec, Inc.

2004 Long-Term Performance Share Program

Agreement for the Performance Period

January 1, [YEAR] through December 31, [YEAR]

This Performance Share Unit Agreement (the “Agreement”) is made as of [DATE] between Intermec, Inc., a Delaware corporation (the “Company”) and [FIRST MIDDLE LAST_NAME] (the “Participant”).

WHEREAS, the Intermec, Inc. 2004 Omnibus Incentive Compensation Plan (the “Plan”) was adopted by the Board of Directors of the Company on March 11, 2004, and was approved by the stockholders of the Company on May 6, 2004; and

WHEREAS, the Committee has adopted the 2004 Long-Term Performance Share Program (the “Program”) as a sub-plan of the Plan and authorized the Award represented by this Agreement;

NOW, THEREFORE, in consideration of the premises, the mutual covenants hereinafter set forth, and other good and valuable consideration, the Company and the Participant hereby agree as follows:

Article 1. Award

The Participant is hereby awarded, as a matter of separate inducement and agreement, and not in lieu of salary or other compensation for services, [NUMBER] Performance Share Units (the “Target Award”), on the terms and conditions hereinafter set forth. The number of Performance Share Units (“PSUs”) that the Participant may earn under this Agreement shall range from 0% to 200% of the Target Award (the “Awarded Shares”), as determined by the achievement of the performance measures set forth in Article 3 of this Agreement. The Awarded Shares shall be paid in shares of the common stock, par value $.01 per share, of the Company (the “Common Stock”) as set forth in Article 6 of this Agreement. The Participant shall have no obligation to pay the Company additional consideration for the Awarded Shares.

The Plan and the Program, copies of which have been made available to the Participant, are incorporated herein by reference and made part of this Agreement as if fully set forth herein. Capitalized terms used in this Agreement that are not defined herein shall have the meanings assigned to such terms in the Plan and the Program. This Agreement is subject to, and the Company and the Participant agree to be bound by, all of the terms and conditions of the Plan and the Program as the same exist at the time this Agreement became effective. The Plan and the Program shall control in the event there is any express conflict between the terms hereof and the Plan or the Program and with respect to such matters as are not expressly covered in this Agreement. The Company hereby reserves the right to alter, amend, modify, restate, suspend or terminate the Plan, the Program and this Agreement in accordance with Section 12 of the Plan, but no such subsequent amendment, modification, restatement, or termination of the Plan, the Program or this Agreement shall adversely affect in any material way the Participant’s rights under this Agreement without the Participant’s written consent. This Agreement shall be subject, without further action by the Company or the Participant, to such amendment, modification, or restatement.

Article 2. Performance Period

For all purposes of this Agreement, “Performance Period” means January 1, [YEAR 1] through December 31, [YEAR 3].

Article 3. Achievement of Performance Measures

The number of Awarded Shares to be earned under this Agreement shall be based upon the achievement of the following Performance Measures set by the Committee: The weighted percentage of achievement of (a) the average percentage of attainment of Revenue (calculated as net Revenue as reported under GAAP) (“Revenue”) over the Performance Period and (b) the average percentage of achievement of Diluted Earnings Per Share from continuing operations (calculated on a GAAP basis) (“Diluted EPS”) over the Performance Period. The achievement shall be determined in accordance with the following schedules, with ultimate payout of Awarded Shares to be weighted 70% as to the Revenue Performance Measure and 30% as to the Diluted EPS Performance Measure:

Revenue (30% Weight)

Fiscal Year		Target Revenue ($M)
[YEAR 1]		$
[YEAR 2]
[YEAR 3]

Performance Level	3-Year Average Revenue as % of Target	Payout as % of Target
Maximum	≥[1__]%	200%
	[1__]%	180%
	[1__]%	160%
	[1__]%	140%
	[1__]%	120%
Target	100%	100%
	[__]%	82%
	[__]%	64%
	[__]%	46%
	[__]%	28%
Threshold	[__]%	10%
	<[__]%	0%

Diluted EPS (70% Weight)

Fiscal Year		Target Diluted EPS
[YEAR 1]		$
[YEAR 2]
[YEAR 3]

Performance Level	3-Year Average Diluted EPS as a % of Target	Payout as a % of Target
Maximum	[1__]% or >	200%
	[1__]%	180%
	[1__]%	160%
	[1__]%	140%
	[1__]%	120%
Target	100%	100%
	[__]%	82%
	[__]%	64%
	[__]%	46%
	[__]%	28%
Threshold	[__]%	10%
	<[__]%	0%

The number of Awarded Shares earned for achievement above threshold levels but between the levels shown above will be calculated using interpolation.

In evaluating the achievement of each measure as of the end of each fiscal year in the performance period, the Committee will adjust the calculation of the Attainment Level to exclude restructuring or reorganization costs (as defined in accordance with U.S. GAAP) incurred in any fiscal year in the performance period to the extent that related savings from the program will occur in a future fiscal year, and will include these costs in the period in which, and to the extent that, cost savings are anticipated during the performance period.

Article 4. Termination Provisions

Except as provided below, a Participant shall be eligible for payment of Awarded Shares, as determined in Section 3, only if the Participant’s employment with the Company, a Subsidiary or Affiliate continues through the end of the Performance Period.

In the event of a Participant’s Disability or Retirement at age 65 or later during the Performance Period, a pro rata payment will be made for the number of full months worked during the Performance Period, based on achievement of the Performance Measures over the entire Performance Period. In the case of death, payment shall be calculated and paid as provided in the Program.

In the event of a Change of Control (as defined in the Plan), all outstanding Awards will automatically vest and be paid out in cash at the Target Award level or the actual performance level as of the Change of Control, whichever is higher. Notwithstanding any provision of this Agreement or the Plan to the contrary, in the event such Change of Control does not constitute a "change in control event" within the meaning of Section 409A of the Internal Revenue Code and the regulations thereunder, the cash payment of Awards described in the preceding sentence shall be made within 74 days following the close of the Performance Period.

Article 5. Rights as a Stockholder

During the Performance Period, the Participant shall have no rights of a stockholder with respect to the PSUs or the Awarded Shares. Notwithstanding the foregoing, the Participant shall be entitled to receive any dividend equivalents declared by the Board, as provided in the Program.

Article 6. Form and Timing of Payment

Except as set forth in Article 4, payment of Awarded Shares shall be made in the form of shares of Common Stock within seventy-four (74) calendar days following the close of the Performance Period.

Article 7. Nontransferability

PSUs may not be sold, transferred, pledged, assigned, or otherwise alienated or hypothecated, other than by will or by the laws of descent and distribution. The Participant’s rights under this Agreement shall be exercisable during the Participant’s lifetime only by the Participant or the Participant’s legal representative.

Article 8. Administration

It is expressly understood that the Committee is authorized to administer, construe, and make all determinations necessary or appropriate to the administration of the Plan, the Program and this Agreement, all of which shall be binding upon the Participant.

Article 9. Withholding Taxes

No later than the date as of which an amount first becomes includable in the gross income of the Participant for federal income tax purposes with respect to any Awarded Shares, the Participant shall pay to the Company, or make arrangements satisfactory to the Company regarding the payment of, any federal, state, local, or foreign taxes of any kind required by law to be withheld by the Company with respect to such amount. Unless otherwise determined by the Committee, withholding obligations (up to the minimum statutory amount required to be withheld by the Company) may be settled with shares of Common Stock, including the Awarded Shares that give rise to the withholding requirement or shares of Common Stock already owned by the Participant. The obligations of the Company under the Plan shall be conditional on such payment or arrangements, and the Company and its Subsidiaries and its Affiliates shall, to the extent permitted by law, have the right to deduct any such taxes from any payment otherwise due to the Participant. Participant, therefore, hereby unconditionally and irrevocably elects, notwithstanding anything to the contrary in this Article 9 or elsewhere in this Agreement, to satisfy any and all federal, state, local, and foreign taxes of any kind that may be withheld by the Company in connection with Participant’s Awarded Shares (the “Withholding Taxes”) by electing one of the following options; provided that in all cases, the Company shall have the right to receive not less than the minimum amount of the Withholding Taxes that the Company is required by law to withhold (the “Mandatory Withholding Taxes”); and further provided that an amount equal to the Mandatory Withholding Taxes in respect of any cash payment to Participant shall be withheld from any such cash payment:

OPTION 1:

Authorizing and directing the Company to deduct from the total number of shares of Common Stock issued and deliverable to Participant pursuant to this Agreement the number of shares having a value equal to the Mandatory Withholding Taxes.

OPTION 2:

Paying to the Company in cash an amount up to the Withholding Taxes but not less than the Mandatory Withholding Taxes.

OPTION 3:

Tendering to the Company the number of unrestricted shares of Common Stock owned by the Participant prior to the date on which Withholding Taxes are due and having a value equal to the Mandatory Withholding Taxes.

In the event that none of the payment options set forth above is specified, the Participant’s election shall be deemed to be Option 1, and the Company shall proceed accordingly. The Company may refuse to deliver the shares of Common Stock if the Participant fails to comply with his or her obligations in connection with the Withholding Taxes as described in this Article 9.

Regardless of any action the Company takes with respect to any or all Withholding Taxes, the Participant acknowledges that the ultimate liability for all Withholding Taxes legally due by the Participant is and remains the Participant’s responsibility and that the Company (i) make no representations or undertakings regarding the treatment of any Withholding Taxes in connection with any aspects of the PSUs, including the grant or vesting of the PSUs, the subsequent sale of shares of Common Stock received upon vesting of the PSUs, if any, and the receipt of any dividends or dividend equivalents; and (ii) do not commit to structure the terms of the Award of any aspect of the Award to reduce or eliminate the Participant’s liability for Withholding Taxes.

Article 10. Miscellaneous

A. The Participant understands and acknowledges that the Participant is one of a limited number of employees of the Company and its Subsidiaries and Affiliates who have been selected to receive grants of PSUs and that the Participant’s Award is considered Company confidential information. The Participant hereby covenants and agrees not to disclose the Award of PSUs pursuant to this Agreement to any other person except (i) the Participant’s immediate family and legal or financial advisors who agree to maintain the confidentiality of this Agreement, (ii) as required in connection with the administration of this Agreement and the Plan as it relates to this Award or under applicable law, and (iii) to the extent the terms of this Award have been publicly disclosed.

B. The grant of PSUs to the Participant in any year shall give the Participant neither any right to similar grants in future years nor any right to be retained in the employ of the Company or its Subsidiaries or Affiliates, such employment being terminable to the same extent as if the Program and this Agreement were not in effect. The right and power of the Company and its Subsidiaries and Affiliates to dismiss or discharge the Participant is specifically and unqualifiedly unimpaired by this Agreement.

C. Each notice relating to this Agreement shall be in writing and delivered in person or by mail to the Company at its office, 6001 36th Avenue West, Everett, WA 98203-1264, to the attention of the Company’s Secretary or at such other address as the Company may specify in writing to the Participant by a notice delivered in accordance with this paragraph. All notices to the Participant shall be delivered to the Participant at the Participant’s address specified below or at such other address as the Participant may specify in writing to the Secretary of the Company by a notice delivered in accordance with this paragraph.

D. This Agreement, including the provisions of the Plan and the Program incorporated by reference herein, comprises the whole Agreement between the parties hereto with respect to the subject matter hereof, and shall be governed by and construed in accordance with the laws of the State of Delaware, without reference to principles of conflicts of law. This Agreement shall become effective when it has been executed or accepted electronically by the Company and the Participant. For purposes of litigating any dispute that arises directly or indirectly from the relationship of the parties evidenced by this grant of the Agreement, the parties hereby submit to and consent to the exclusive jurisdiction of the State of Washington, U.S.A., and agree that such litigation shall be conducted only in the courts of Washington, U.S.A., or the federal courts for the United States for the Western District of Washington, and no other courts where this grant is made and/or to be performed.

E. This Agreement shall inure to the benefit of and be binding upon each successor of the Company and, to the extent specifically provided herein and in the Plan and the Program, shall inure to the benefit of and shall be binding upon the Participant’s heirs, legal representatives, and successors.

F. If any provision of this Agreement shall be invalid or unenforceable, such invalidity or unenforceability shall not affect the validity and enforceability of the remaining provisions of this Agreement.

G. This Agreement may be executed in separate counterparts, each of which when so executed and delivered will be an original, but all of which together will constitute one and the same instrument. In pleading or proving this Agreement, it will not be necessary to produce or account for more than one such counterpart.

H. The Company may, in its sole discretion, decide to deliver any documents related to the PSUs granted under, and participation in, the Program or future PSUs that may be granted under the Program by electronic means or to request the Participant’s consent to participate in the Program by electronic means. The Participant hereby consents to receive such documents by electronic delivery and, if requested, to agree to participate in the Program through an on-line or electronic system established and maintained by the Company or another third party designated by the Company.

IN WITNESS WHEREOF, this Agreement is executed by the Participant and by the Company through its duly authorized officer as of the day and year first above written.

	INTERMEC, INC.

	/s/ Patrick J. Byrne
	Patrick J. Byrne

	PARTICIPANT:
	(One of the boxes under Article 9 must be checked)

IMPORTANT
PLEASE ACCEPT ELECTRONICALLY OR
SIGN AND RETURN PROMPTLY


	[FIRST MIDDLE LAST_NAME]

EX-31.1 3 exhibit31_1.htm EXHIBIT 31.1 exhibit31_1.htm

Exhibit 31.1

CERTIFICATION

I, Patrick J. Byrne, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Intermec, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

May 5, 2008

/s/ Patrick J. Byrne
Patrick J. Byrne

Chief Executive Officer

EX-31.2 4 exhibit31_2.htm EXHIBIT 31.2 exhibit31_2.htm

Exhibit 31.2

CERTIFICATION

I, Lanny H. Michael, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Intermec, Inc.;

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

May 5, 2008

/s/ Lanny H. Michael
Lanny H. Michael

Chief Financial Officer

EX-32.1 5 exhibit32_1.htm EXHIBIT 32.1 exhibit32_1.htm

Exhibit 32.1

CERTIFICATION

PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

(SUBSECTIONS (a) AND (b) OF SECTION 1350,

CHAPTER 63 OF TITLE 18, UNITED STATES CODE)

In connection with the Quarterly Report on Form 10-Q of Intermec, Inc. (the “Company”) for the period ended March 30, 2008, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Patrick J. Byrne, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. 1350, that:

(1)	The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)	The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ Patrick J. Byrne
Patrick J. Byrne
Chief Executive Officer
May 5, 2008

EX-32.2 6 exhibit32_2.htm EXHIBIT 32.2 exhibit32_2.htm

Exhibit 32.2

CERTIFICATION

PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

(SUBSECTIONS (a) AND (b) OF SECTION 1350,

CHAPTER 63 OF TITLE 18, UNITED STATES CODE)

In connection with the Quarterly Report on Form 10-Q of Intermec, Inc. (the “Company”) for the period ended March 30, 2008, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Lanny H. Michael, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. 1350, that:

(1)	The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)	The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ Lanny H. Michael
Lanny H. Michael
Chief Financial Officer
May 5, 2008