EX-99.1 2 er.htm EARNINGS RELEASE HTM er.htm

 
 
Intermec, Inc.
6001 36th Avenue West
Everett, WA  98203-1264
www.intermec.com
FOR IMMEDIATE RELEASE

Contact:

Kevin P. McCarty
Director of Investor Relations
Intermec, Inc.
425-265-2472
kevin.mccarty@intermec.com

 
INTERMEC ANNOUNCES THIRD QUARTER FISCAL YEAR 2007 RESULTS
 
·  
Q3’07 Revenues of $206M up 5 Percent over Q3’06
·  
Earnings from Continuing Operations result in Diluted EPS of $0.07

EVERETT, Wash. – November 1, 2007 – Intermec, Inc. (NYSE: IN) today announced financial results for its third quarter ended September 30, 2007.

Intermec reported 2007 third quarter revenues of $206.0 million and net earnings from continuing operations of $4.4 million, or $0.07 per diluted share, compared to 2006 third quarter revenues of $195.9 million and net earnings from continuing operations of $3.4 million, or $0.05 per diluted share. Including discontinued operations, net earnings for the third quarter of 2007 was $4.4 million, or $0.07 per diluted share compared to net earnings of $4.8 million, or $0.07 per diluted share in the prior year’s third quarter.

As previously announced on July 19, 2007, Intermec Inc.’s Board of Directors elected Patrick J. Byrne as President and CEO, and as a Director of Intermec, Inc.  Third quarter 2007 results include senior management transition costs of $3.1 million, or $0.03 per share.  The comparable quarter of 2006 included a pension curtailment gain which reduced selling, general and administrative expenses by $2.1 million, improving the diluted earnings per share by $0.02.

“We are encouraged by a significant increase in bookings and international sales coupled with continued strong CN3 demand and promising RFID momentum during the quarter,” said Patrick J. Byrne, President and CEO. “Our focus going forward is to accelerate the Company’s revenue growth and gross margin expansion.”

Third quarter 2007 revenues increased 5 percent compared to the prior year’s third quarter.  Geographically during the third quarter of 2007, North American revenues decreased 11 percent compared to the third quarter of 2006. Revenues in Europe, Mid-East and Africa (EMEA) increased 44 percent compared to the same prior-year period; while Asia Pacific (APAC) and Latin America, increased 47 percent and decreased 20 percent, respectively.

The Company’s effective tax rate for the third quarter of 2007 was 16.2 percent; this rate includes benefits in the quarter primarily as a result of certain changes in foreign and state tax laws and for deferred taxes related to tax amortizable goodwill. The Company’s effective tax rate for the comparable prior year’s quarter was 37.2 percent.

The Company’s cash equivalents and short-term investments increased $25 million in the quarter, primarily as a result of cash flows from operations. The cash equivalents and short-term investments position at the end of the third quarter totaled $214 million.

During the quarter, Intermec introduced a number of new products:

·  
The SR61ex is the first handheld cordless scanner to incorporate the company’s proprietary EX near-far area imaging technology.  With tightly integrated Bluetooth ™ wireless communication, a smooth data transmission to the host computer improves warehouse productivity by extending the operator’s scanning reach and flexibility.

·  
The CN3e has an enlarged keypad to support in-field data intensive applications requiring speed, accuracy and longevity. The CN3e is the first mid-size, rugged, mobile handheld to offer a fully integrated, independent GPS option, as well as Wi-Fi, WWAN, Bluetooth and GPS in a single rugged design.

·  
The multi-functional PM4i RFID printer is reliable, rugged and able to simultaneously encode and print labels that can be used worldwide, thus enabling the tag to be read via multiple frequencies, depending on regional standards.  The PM4i printer integrates into industrial manufacturing, warehouse, and logistics applications ensuring that all items are labeled and tracked via RFID for quick and accurate data collection throughout the supply chain.

·  
The EasyCoder PD42 printer features a monochrome, graphical display, allowing users to set up, configure and fine tune printing parameters without having to send commands through the host. The ability to use any Intermec printer language and emulate other printer protocols makes the EasyCoder PD42 both fully compatible with other Intermec equipment and a cost-effective “drop-in” printer replacement in almost any non-Intermec environment.

Fourth Quarter Outlook

Intermec also reported today its GAAP basis outlook for the fourth quarter 2007.

·  
Revenues for the period are expected within a range of $230 million to $238 million.

·  
Diluted EPS from continuing operations are expected within a range of $0.20 to $0.25.

 
 

Conference Call Information
 
Intermec will hold its conference call on November 1, 2007 at 5 p.m. ET (2 p.m. PT).  The call will be hosted by Intermec, Inc. President and Chief Executive Officer, Patrick J. Byrne, Chief Financial Officer and SVP, Lanny H. Michael and Director of Investor Relations, Kevin P. McCarty.
 
 
The dial-in numbers for participants is 1-(800) 857-8060 (US); 1-(210) 839-8066 (International);
 
 
Passcode: (“Intermec”). The call will be broadcast on the Internet via a link from the investor’s Web page at the Intermec website at www.intermec.com/InvestorRelations
 

 
###
 
About Intermec, Inc.

Intermec, Inc. (NYSE:IN) develops, manufactures and integrates technologies that identify, track and manage supply chain assets. Core technologies include RFID, mobile computing and data collection systems, bar code printers and label media. The Company’s products and services are used by customers in many industries worldwide to improve the productivity, quality and responsiveness of business operations. For more information about Intermec, visit www.intermec.com or call 800-347-2636.  Contact Intermec Investor Relations Director Kevin McCarty at kevin.mccarty@intermec.com, 425-265-2472.

(Forward-looking Statements)
Statements made in this release and related statements that express Intermec’s or our management’s intentions, hopes, indications, beliefs, expectations, forecasts or predictions of the future constitute forward-looking statements, as defined by the Private Securities Litigation Reform Act of 1995, and relate to matters that are not historical facts. They include, without limitation, statements regarding: potential increases in revenue or product volumes; our objectives for sales channel mix and target customer markets; our ability to develop, market and launch new or enhanced products and platforms as planned; customer acceptance of our products and technologies; our ability to improve business processes; our ability to improve gross margins or profits; our cost reduction plans; and our revenue, expense, earnings or financial outlook for the fourth quarter of 2007 or any future period.  They also include statements about our ability to compete effectively with our current products and newly launched products, reduce expenses, improve efficiency, realign resources, increase product development capacity, leverage our research and development investment to drive significant future revenue, and continue operational improvement and year-over-year growth, and about the applicability of accounting policies used in our financial reporting. Actual results may differ from those expressed or implied in our forward-looking statements. These statements represent beliefs and expectations only as of the date they were made. We may elect to update forward-looking statements but we expressly disclaim any obligation to do so, even if our beliefs and expectations change. Such forward-looking statements involve and are subject to certain risks and uncertainties. These include, but are not limited to, risks and uncertainties described more fully in  our reports filed or to be filed with the Securities and Exchange Commission including, but not limited to, our annual reports on Form 10-K and quarterly reports on Form 10-Q.

INTERMEC, INC.           
CONSOLIDATED STATEMENTS OF OPERATIONS           
(Unaudited, amounts in thousands except per share amounts)         
                           
       
Three Months Ended  
    
Nine Months Ended
       
September 30,
  
October 1,
    
September 30,
  
October 1,
       
2007
    
2006
    
2007
    
2006
                           
Revenues
                      
 
Product
$
            169,219
  
$
            156,951
  
$
            480,669
  
$
            515,741
 
Service
  
              36,787
    
              38,996
    
            115,178
    
            115,474
   
Total revenues
  
            206,006
    
            195,947
    
            595,847
    
            631,215
Costs and expenses
                      
 
Cost of product revenues
  
            105,536
    
              98,807
    
            306,454
    
            315,811
 
Cost of service revenues
  
              22,404
    
              21,026
    
              65,611
    
              65,311
 
Selling, general and administrative
  
              73,533
    
              70,573
    
            211,867
    
            226,862
 
Gain on intellectual property settlement
  
                          -
    
                          -
    
                          -
    
             (16,538)
 
Restructuring charge
  
                          -
    
                 1,758
    
                          -
    
                 4,000
   
Total costs and expenses
  
            201,473
    
            192,164
    
            583,932
    
            595,446
Operating profit from continuing operations
  
                 4,533
    
                 3,783
    
              11,915
    
              35,769
Gain on sale of investments
  
                          -
    
                          -
    
                          -
    
                 2,305
Interest income
  
                 2,910
    
                 4,178
    
                 7,930
    
              11,517
Interest expense
  
               (2,204)
    
               (2,473)
    
               (6,847)
    
               (6,902)
Earnings from continuing operations before taxes
                 5,239
    
                 5,488
    
              12,998
    
              42,689
 
Provision for income taxes
  
                    847
    
                 2,043
    
                 5,108
    
              12,878
Earnings from continuing operations
  
                 4,392
    
                 3,445
    
                 7,890
    
              29,811
 
Earnings (loss) from discontinued operations, net of tax
                          -
    
                 1,352
    
               (1,283)
    
                  (667)
Net earnings
$
                 4,392
  
$
                 4,797
  
$
                 6,607
  
$
              29,144
                           
Basic earnings (loss) per share
                      
 
Continuing operations
$
                   0.07
  
$
                   0.05
  
$
                   0.13
  
$
                   0.47
 
Discontinued operations
  
                        -
    
                   0.02
    
                 (0.02)
    
                 (0.01)
   
Net earnings per share
$
                   0.07
  
$
                   0.07
  
$
                   0.11
  
$
                   0.46
                           
Diluted earnings (loss) per share
                      
 
Continuing operations
$
                   0.07
  
$
                   0.05
  
$
                   0.13
  
$
                   0.46
 
Discontinued operations
  
                        -
    
                   0.02
    
                 (0.02)
    
                 (0.01)
   
Net earnings per share
$
                   0.07
  
$
                   0.07
  
$
                   0.11
  
$
                   0.45
                           
Shares used in computing earnings (loss) per share
                  
 
Basic
  
              60,484
    
              62,749
    
              60,242
    
              63,009
 
Diluted
  
              61,325
    
              64,061
    
              61,099
    
              64,428
 
INTERMEC, INC.      
CONSOLIDATED BALANCE SHEETS      
(Unaudited, amounts in thousands)      
                 
                 
         
September 30,
    
December 31,
         
2007
    
2006
ASSETS
            
                 
Current assets:
            
 
Cash and cash equivalents
  
$
                   185,305
  
$
                 155,027
 
Short-term investments
    
                    28,950
    
                   29,510
 
Accounts receivable, net of allowance for doubtful accounts
            
   
and sales returns of $10,946 and $7,796
    
                   168,950
    
                 158,369
 
Inventories
    
                    112,806
    
                  119,027
 
Net current deferred tax assets
    
                    49,875
    
                  49,623
 
Assets held for sale
    
                        8,217
    
                      8,661
 
Other current assets
    
                    25,763
    
                   28,913
   
Total current assets
    
                  579,866
    
                 549,130
                 
Property, plant and equipment, net
    
                    45,256
    
                  43,453
Intangibles, net
    
                        6,871
    
                     3,978
Net deferred tax assets
    
                   175,893
    
                 190,683
Other assets
    
                     23,321
    
                  23,096
Total assets
  
$
                   831,207
  
$
                 810,340
                 
LIABILITIES AND SHAREHOLDERS' INVESTMENT
            
Current liabilities:
            
 
Accounts payable and accrued expenses
    
                    116,652
    
                  113,207
 
Payroll and related expenses
    
                    24,602
    
                  32,008
 
Deferred revenue
    
                    50,508
    
                   45,021
 
Current portion of long-term debt
    
                   100,000
    
                              -
   
Total current liabilities
    
                   291,762
    
                 190,236
                 
Long-term deferred revenue
    
                    20,244
    
                    17,318
Long-term debt
    
                                -
    
                 100,000
Other long-term liabilities
    
                    77,778
    
                   85,184
                 
Shareholders' investment:
            
 
Common stock
    
                           610
    
                        598
 
Additional paid-in-capital
    
                  673,852
    
                657,468
 
Accumulated deficit
    
                 (213,240)
    
               (212,903)
 
Accumulated other comprehensive loss
    
                   (19,799)
    
                 (27,561)
   
Total shareholders' investment
    
                   441,423
    
                 417,602
Total liabilities and shareholders' investment
  
$
                   831,207
  
$
                 810,340
 
INTERMEC, INC.     
CONSOLIDATED STATEMENTS OF CASH FLOWS     
(Unaudited, amounts in thousands of dollars)     
                 
         
Nine Months Ended  
         
September 30, 2007
    
October 1, 2006
                 
Cash and cash equivalents at beginning of year
$
                       155,027
  
$
                       256,782
                 
Cash flows from operating activities of continuing operations:
          
 
Net earnings from continuing operations
  
                           7,890
    
                         29,811
 
Adjustments to reconcile net earnings to net cash
          
   
provided by (used in) operating activities:
          
     
Depreciation and amortization
  
                           9,601
    
                           7,818
     
Deferred taxes
  
                           3,598
    
                           7,085
     
Excess tax benefits from stock-based payment arrangements
                         (2,232)
    
                         (4,183)
     
Changes in working capital and other operating activities
  
                         12,074
    
                       (10,560)
   
Net cash provided by operating activities of continuing operations
                         30,931
    
                         29,971
                 
Cash flows from investing activities of continuing operations:
          
 
Capital expenditures
  
                       (10,136)
    
                       (17,276)
 
Purchases of investments
  
                         (1,465)
    
                       (19,695)
 
Sale of investments
  
                           1,407
    
                              565
 
Note receivable
  
                           1,351
    
                                   -
 
Other investing activities
  
                         (1,702)
    
                            (536)
   
Net cash used in investing activities of continuing operations
  
                       (10,545)
    
                       (36,942)
                 
Cash flows from financing activities of continuing operations:
          
 
Excess tax benefits from stock-based payment arrangements
  
                           2,232
    
                           4,183
 
Stock options exercised
  
                           5,654
    
                           5,819
 
Other financing activities
  
                           1,756
    
                       (47,761)
   
Net cash provided by (used in) financing activities of continuing operations
                           9,642
    
                       (37,759)
                 
Net cash provided by (used in) continuing operations
  
                         30,028
    
                       (44,730)
Net cash provided by operating activities of discontinued operations
  
                              250
    
                           6,562
Resulting increase (decrease) in cash and cash equivalents
  
                         30,278
    
                       (38,168)
                 
Cash and cash equivalents at end of period
$
                       185,305
  
$
                       218,614