EX-99.1 2 a5143369ex991.txt EXHIBIT 99.1 Exhibit 99.1 Intermec Announces First Quarter 2006 Results EVERETT, Wash.--(BUSINESS WIRE)--May 8, 2006--Intermec, Inc. (NYSE:IN): -- Q1 Revenues of $227M, including IP settlement -- Q1 Diluted EPS from Continuing Operations of $0.23 -- Cash Equivalents and Short-Term Investments increase $45.7M during the quarter to $302.5M Intermec, Inc. (NYSE:IN) today announced financial results for its first quarter of fiscal year 2006. Intermec reported 2006 first quarter revenues of $226.8 million and net earnings from continuing operations of $15.1 million, or $0.23 per diluted share, compared to 2005 first quarter revenues of $196.5 million and earnings of $5.4 million, or $0.09 per diluted share. First quarter 2006 product and service revenue was $203.8 million compared to first quarter 2005 product and service revenue of $196.5 or a 3.7 percent increase over the prior-year quarter. The 2006 first quarter includes Intellectual Property (IP) settlement revenue and operating profit of $23.0 million and $16.5 million, respectively, contributing $0.16 per share to EPS. A restructuring charge in the 2006 first quarter relating to the planned closure of it design centers in Goteborg and Lund, Sweden negatively impacted operating profit by $1.1 million, or ($0.01) per share. The Company's 2006 first quarter includes $1.9 million of stock compensation expense recorded under the provisions of FAS 123(R), which negatively impacts EPS by ($0.02) per share. The tax provision for the 2006 first quarter was reduced by $2.2 million due to the favorable conclusion of a Canadian tax audit. The effective tax rate for the current-quarter was 21 percent, compared to 32 percent in the prior-year quarter. The Company's cash equivalents and short-term investments position at the end of the first quarter was $302.5 million, an increase of $45.7 million during the first quarter. The increase in cash equivalents and short-term investments primarily reflects cash flows from operating activities and the Company's (IP) settlement. Geographically during the first quarter, North American revenues increased 19 percent over the comparable prior-year period. This increase represents the second largest North American quarterly growth rate in the Company's history. Revenues in Europe, Mid-East and Africa (EMEA) decreased 17 percent; and the rest of the world, consisting of Asia Pacific and Latin America, increased 19 percent and decreased 22 percent, respectively. By product line during the first quarter, Systems and Solutions revenue increased 7 percent and Printer and Media revenues decreased 10 percent over the comparable prior-year period. Service revenue increased 9 percent over the comparable prior-year period. "The strong performance in our North American market was offset by a general weakness in Europe aggravated by a strong dollar versus the prior-year and impending product regulatory changes," said Larry D. Brady, Chairman and CEO. "Nonetheless, the competitive position of our core System and Solutions product line remains a continued source of strength." In March 2006, Intermec announced its planned closure of its design centers in Goteborg and Lund, Sweden. The activities currently assigned to the design centers in Sweden will be reassigned to other parts of Intermec or moved to third-party vendors to improve efficiencies and benefit from reduced cost. In addition to the expected cost savings, the Company anticipates that this realignment of resources will result in a significant increase in new product development capacity. Estimated restructuring costs of $6 million include employee severance, facility closure and other exit costs. The Company recorded a restructuring charge of $1.1 million in the first quarter of 2006, and anticipates the majority of the remaining restructuring costs will be recognized over the remainder of 2006. Intermec estimates that the savings from these restructuring activities will begin in the fourth quarter of 2006, and reach an estimated annual pre-tax savings of $8 million in the first quarter of 2007. Some portion of these expected savings may be re-invested in other research and development activities. Other Business Highlights -- Received board authorization to repurchase up to $100 million of outstanding common stock in open market purchases or privately negotiated transactions. -- For the second year in a row, was named Cisco's Solutions Technology Integrator Partner of the Year. -- With partners Cisco, Red Prairie and Cascade, introduced the Forklift of the Future, an advanced forklift system that incorporates RFID and wireless technology into a forklift's very infrastructure. The concept turns a forklift into a vital communications hub and opens the door to many types of more efficient RFID implementations. -- Announced that with its acquisition of PSC, Datalogic has become a member of Intermec's RFID Rapid Start intellectual property licensing program. 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 Statement) Certain forward-looking statements in this release (as defined by Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934) relate to matters that are not historical facts. They include, but are not limited to, statements about the Company's ability to continue to improve profit of its business segments, compete effectively with its current product lines, effectively complete the closure of certain facilities and redeploy related function, reduce expenses, improve efficiency, realign resources, increase product development capacity, leverage its research and development investment to drive significant future revenue, and the ability to continue operational improvement and year over year growth. Such forward-looking statements involve and are subject to certain risks and uncertainties. These include, but are not limited to, other risks and uncertainties described more fully in the Company's filings with the Securities and Exchange Commission including, but not limited to, its annual report 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) Quarter Ended ----------------------- April 2, April 3, 2006 2005 ---------- ---------- Revenues Product $ 166,350 $ 161,943 Service 37,481 34,552 Intellectual Property Settlements 23,000 - ---------- ---------- Total Revenues 226,831 196,495 Costs and Expenses Cost of product revenues 100,614 92,747 Cost of service revenues 22,861 20,886 Cost of intellectual property settlements 6,462 - Selling, general and administrative 77,793 72,771 Restructuring charge 1,107 - ---------- ----------- Total Costs and Expenses 208,837 186,404 ---------- ---------- Operating Profit From Continuing Operations 17,994 10,091 Interest income (expense), net 1,144 (2,126) ---------- ---------- Earnings From Continuing Operations Before Taxes 19,138 7,965 Provision for income taxes 4,069 2,553 ---------- ---------- Earnings From Continuing Operations 15,069 5,412 Loss from discontinued operations, net of tax (1,078) (1,932) ---------- ---------- Net Earnings $ 13,991 $ 3,480 ========== ========== Basic Earnings per Share Continuing operations 0.24 $ 0.09 Loss from Discontinued operations (0.02) (0.03) ---------- ---------- Net earnings per share $ 0.22 $ 0.06 ========== ========== Diluted Earnings per Share Continuing operations $ 0.23 $ 0.09 Loss from Discontinued operations (0.01) (0.03) ---------- ---------- Net earnings per share $ 0.22 $ 0.06 ========== ========== Shares Used in Computing Earnings (Loss) per Share Basic 63,025 61,093 Diluted 64,603 62,813 INTERMEC, INC. CONSOLIDATED BALANCE SHEETS (Unaudited, amounts in thousands) April 2, December 31, 2006 2005 ---------- ----------- Assets Current Assets: Cash and cash equivalents $ 282,788 $ 256,782 Short-term investments 19,695 - Accounts receivable, net 158,209 180,985 Inventories 88,954 82,088 Net deferred tax assets 49,677 100,656 Assets held for sale 8,050 8,517 Other current assets 22,795 29,468 ---------- ----------- Total Current Assets 630,168 658,496 Property, Plant and Equipment, Net 33,401 30,820 Other Intangibles, Net 6,771 6,871 Net Deferred Tax Assets 186,313 137,578 Other Assets 66,408 68,955 ---------- ----------- Total Assets $ 923,061 $ 902,720 ========== =========== Liabilities and Shareholders' Investment Current Liabilities: Accounts payable and accrued expenses $ 142,834 $ 148,731 Payroll and related expenses 26,101 31,011 Deferred revenue 44,708 38,369 ---------- ----------- Total Current Liabilities 213,643 218,111 Deferred Revenue 20,583 20,095 Long-term Debt 100,000 100,000 Other Long-term Liabilities 88,884 88,711 Shareholders' Investment: Common stock 631 627 Additional paid-in capital 745,285 736,224 Accumulated deficit (230,912) (244,903) Accumulated other comprehensive income (loss) (15,053) (16,145) ---------- ----------- Total Shareholders' Investment 499,951 475,803 ---------- ----------- Total Liabilities and Shareholders' Investment $ 923,061 $ 902,720 ========== =========== CONTACT: Intermec, Inc. Kevin P. McCarty, 425-265-2472 kevin.mccarty@intermec.com