EX-99.2 2 a5338433ex992.txt EXHIBIT 99.2 Exhibit 99.2 Intermec Announces Fourth Quarter and Full Year 2006 Results -- Q4 and FY 2006 Revenues of $218.8M and $873.0M, from Continuing Operations -- Q4 and FY 2006 Diluted EPS of $0.08 and $0.55, from Continuing Operations -- Company completes its previously announced $100 million stock repurchase program EVERETT, Wash.--(BUSINESS WIRE)--Feb. 20, 2007--In BW5595 issued Feb. 20, 2007: Throughout the release, basic and diluted earnings per share from continuing operations and discontinued operations for the fourth quarter 2006 should be $0.08 (sted $0.09), and ($0.03) (sted ($0.04)) per share, respectively. Note: Earnings from continuing operations of $5.2 million and loss from discontinued operations of ($2.3) million remain as previously reported. Also, net earnings of $2.9 million and related basic and diluted earnings per share of $0.05 remain as previously reported for the fourth quarter. The corrected release reads: INTERMEC ANNOUNCES FOURTH QUARTER AND FULL YEAR 2006 RESULTS -- Q4 and FY 2006 Revenues of $218.8M and $873.0M, from Continuing Operations -- Q4 and FY 2006 Diluted EPS of $0.08 and $0.55, from Continuing Operations -- Company completes its previously announced $100 million stock repurchase program Intermec, Inc. (NYSE:IN) today announced financial results for its fourth quarter and fiscal year which ended December 31, 2006. Intermec reported 2006 fourth quarter revenues of $218.8 million and earnings from continuing operations of $5.2 million, or $0.08 per diluted share, compared to 2005 fourth quarter revenues of $241.7 million and earnings from continuing operations of $12.1 million, or $0.19 per diluted share. The results for the fourth quarter include a pre-tax restructuring charge which reduced operating profit by ($7.4) million, or ($0.07) per diluted share. This includes a restructuring charge relating to the comprehensive plan announced in mid-November 2006 to reduce costs, streamline global operations and improve profitability, and a restructuring charge relating to the closure of the Company's design centers in Goteborg and Lund, Sweden, announced in the first quarter 2006. The Company's 2006 fourth quarter includes ($1.0) million of incremental stock compensation expense recorded under the provisions of FAS 123(R), which reduced EPS by ($0.01) per diluted share. The company realized a net tax benefit for the current quarter compared to an effective tax rate of 25 percent in the prior-year quarter. Fiscal year 2006 revenues were $873.0 million and earnings from continuing operations were $35.0 million, or $0.55 per diluted share, compared to 2005 revenues of $875.5 million and earnings from continuing operations of $40.6 million, or $0.64 per diluted share. Revenues and earnings from continuing operations before income taxes for fiscal year 2006 included a settlement for an intellectual property (IP) dispute regarding its smart battery patents in the amounts of $23.0 million and $16.5 million, respectively. The results for 2006 included a pre-tax gain of $2.3 million, or $0.02 per diluted share, from the gain on investment in Savi Technology completed in June of 2006. The Company adopted amendments to its US pension and certain employee plans, effecting a "freeze" to benefit accruals for most participants as of June 30, 2006. These changes resulted in a net curtailment gain which increased operating profit from continuing operations by $2.1 million or $0.02 per diluted share in the third quarter of 2006. The Company's 2006 results also included a restructuring charge of ($11.4) million or ($0.11) per diluted share, relating to the comprehensive plan announced in mid-November 2006 and the closure of the Company's design centers in Goteborg and Lund, Sweden, announced in the first quarter 2006. The 2006 results included ($4.8) million of incremental stock compensation expense recorded under the provisions of FAS 123(R), which impacted EPS by ($0.05) per diluted share. Including discontinued operations, net earnings for fiscal year 2006 were $32.0 million or $0.50 per diluted share compared to net earnings of $61.8 million or $0.98 per diluted share in the prior fiscal year. Geographically during the fourth quarter, North American revenues decreased 21 percent over the comparable prior-year period. Revenues in Europe, Mid-East and Africa (EMEA) were flat over the prior year period; and the rest of the world, consisting of Asia Pacific and Latin America, increased 28 percent. During the fourth quarter, Systems and Solutions revenue decreased 13 percent and Printer and Media revenues decreased 6 percent over the comparable prior-year period. Service revenue decreased 3 percent over the comparable prior-year period. Geographically for fiscal year 2006, North American revenues decreased 4 percent over the comparable prior-year period. Revenues in Europe, Mid-East and Africa (EMEA) decreased 7 percent; and the rest of the world, consisting of Asia Pacific and Latin America, increased 13 percent. For the full fiscal year 2006, Systems and Solutions revenue decreased 4 percent and Printer and Media revenues decreased 4 percent over the comparable prior-year period. Service revenue increased 2 percent over the comparable prior-year period. During the fourth quarter, the Company repurchased stock with an aggregate value of approximately $50 million at an average share price of $23.95. This completed the stock repurchase program authorized by the board of directors in 2006, for up to $100 million in which the Company repurchased a total of approximately 3.8 million shares. The Company's cash equivalents and short-term investments position at the end of the fourth quarter was $184.5 million. The decrease in cash equivalents and short term investments of $53.2 million during the fourth quarter was primarily due to the stock repurchases and capital expenditure outlays. "During the fourth quarter, Europe rebounded from the third quarter decline as anticipated following the product redesign required by European Regulations on Hazardous Substances", said Larry Brady, Chairman & CEO. "North America remains sluggish awaiting the full introduction of a slate of new products and the corresponding build in enterprise roll-outs. The rest of the world continues to post strong sales growth." Other Fourth Quarter Business Highlights During the quarter, Intermec introduced a number of new products: -- The SR61 a rugged handheld wireless scanner offers a choice of all Intermec scanning options: standard range area imager, MEMS laser scanning or linear scanning. This wireless scanner allows companies to standardize on a single form factor and choose the scanning technology that best suits their application needs, from low-light environments to highly dense or difficult to read barcodes. -- Intermec introduced a compact, reusable, ruggedized rigid RFID tag capable of withstanding temperature extremes and hazardous exposures common in manufacturing and material handling operations. Innovative antenna design provides superior performance on a range of materials, including metal, wood and plastic. -- Intermec and Cascade introduce a Mobile RFID Forklift Adaptable Load Backrest for Rugged, Industrial Warehouse Use. This ground-breaking system allows forklift drivers to remain in their vehicles and use RFID and other data collection technologies to gather complete real-time inventory data efficiently and safely. First Quarter Outlook -- Intermec also reported today its GAAP basis revenue outlook for the first quarter 2007. Revenues for the period are expected to be within a range of $177 million to $197 million. -- For the first quarter of 2007, EPS from continuing operations are expected to be $0.01 per diluted share, plus or minus $0.04. The first quarter of 2006 reported EPS from continuing operations of $0.23. By comparison, the first quarter of 2006 included an Intellectual Property Settlement which positively impacted operating profit from continuing operations by $16.5 million, or $0.16 per share. In addition, the tax provision for the first quarter of 2006 was favorably impacted by $0.05 per share primarily due to the conclusion of a foreign tax audit. Conference Call Information Intermec will hold a conference call on February 20, 2007 at 9 a.m. ET (6 a.m. PT). The call will be hosted by Intermec, Inc. Chairman and CEO, Larry D. Brady, President and COO, Steven J. Winter, SVP and CFO, Lanny H. Michael and Director of Investor Relations, Kevin P. McCarty. The dial-in numbers for participants is 1-(888) 791-2132 (US); 1-(210) 234-0026 (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 Statement) Statements made in this release and related statements that express Intermec's or our management's intentions, hopes, beliefs, expectations 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, the statements regarding our cost reduction and restructuring plans, our financial outlook for the first quarter of 2007 or any future period, and the applicability of accounting policies used in our financial reporting. They also include statements about our ability to improve profit of our business segments, compete effectively with our current products and newly launched products, effectively complete the closure of certain facilities and redeploy related functions, 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. 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 Twelve Months Ended ------------------------- ------------------------- December 31, December 31, December 31, December 31, 2006 2005 2006 2005 Revenues: Product $176,676 $198,369 $715,417 $720,959 Service 42,078 43,345 157,552 154,523 ------------ ------------ ------------ ------------ Total Revenues 218,754 241,714 872,969 875,482 Costs and expenses: Cost of product revenues 114,380 118,952 436,653 420,707 Cost of service revenues 22,927 24,846 88,238 91,899 Selling, general and administrative 73,128 81,634 299,990 304,325 Restructuring Charge 7,355 - 11,355 - ------------ ------------ ------------ ------------ Total costs and expenses 217,790 225,432 836,236 816,931 ------------ ------------ ------------ ------------ Operating profit from continuing operations 964 16,282 36,733 58,551 Gain on sale of investments - - 2,305 - Interest income (expense), net 1,923 (115) 6,538 (4,026) ------------ ------------ ------------ ------------ Earnings from continuing operations before income taxes 2,887 16,167 45,576 54,525 Provision (benefit) for income taxes (2,303) 4,057 10,575 13,880 ------------ ------------ ------------ ------------ Earnings before discontinued operations 5,190 12,110 35,001 40,645 Earnings (loss) from discontinued operations, net of tax (2,331) 32,430 (2,998) 21,147 Net earnings $ 2,859 $ 44,540 $ 32,003 $ 61,792 ============ ============ ============ ============ Basic earnings (loss) per share Continuing operations $ 0.08 $ 0.19 $ 0.56 $ 0.66 Discontinued operations (0.03) 0.52 (0.05) 0.34 ------------ ------------ ------------ ------------ Net earnings per share $ 0.05 $ 0.71 $ 0.51 $ 1.00 ============ ============ ============ ============ Diluted earnings (loss) per share Continuing operations $ 0.08 $ 0.19 $ 0.55 $ 0.64 Discontinued operations (0.03) 0.50 (0.05) 0.34 ------------ ------------ ------------ ------------ Net earnings per share $ 0.05 $ 0.69 $ 0.50 $ 0.98 ============ ============ ============ ============ Shares used in computing basic earnings (loss) per share 61,110 62,629 62,535 61,785 Shares used in computing diluted earnings (loss) per share 62,121 64,204 63,830 63,350 INTERMEC, INC. CONSOLIDATED BALANCE SHEET (Unaudited, amounts in thousands) December 31, December 31, 2006 2005 ------------ ------------ ASSETS Current assets: Cash and cash equivalents $ 155,027 $ 256,782 Short-term investments 29,510 - Accounts receivable, net of allowance for doubtful accounts and sales returns of $7,796 and $8,157 158,369 180,985 Inventories 119,027 82,088 Net current deferred tax assets 42,357 100,656 Assets held for sale 8,477 8,517 Other current assets 19,204 29,468 ------------ ------------ Total Current Assets 531,971 658,496 Property, plant and equipment, net of accumulated depreciation of $100,751 and $99,032 43,453 30,820 Intangibles, net 3,978 6,871 Net deferred tax assets 198,133 137,578 Other assets 29,700 68,955 ------------ ------------ Total assets $ 807,235 $ 902,720 ============ ============ LIABILITIES AND SHAREHOLDERS' INVESTMENT Current Liabilities: Accounts payable and accrued expenses 112,205 148,731 Payroll and related expenses 32,008 31,011 Deferred revenue 45,021 38,369 ------------ ------------ Total current liabilities 189,234 218,111 Long-term deferred revenue 17,318 20,095 Long-term debt 100,000 100,000 Other long-term liabilities 83,079 88,711 Shareholders' investment: Common stock 598 627 Additional paid-in capital 657,468 736,224 Accumulated deficit (212,901) (244,903) Accumulated other comprehensive loss (27,561) (16,145) ------------ ------------ Total shareholders' investment 417,604 475,803 ------------ ------------ Total liabilities and shareholders' investment $ 807,235 $ 902,720 ============ ============ INTERMEC, INC. CONSOLIDATED STATEMENT OF CASH FLOWS (Unaudited, amounts in thousands) Year Ended December 31, ----------------------- 2006 2005 ------------ ---------- Cash and Cash Equivalents at Beginning of Year $ 256,782 $ 217,899 ------------ ---------- Cash Flows from Operating Activities of Continuing Operations: Net earnings from continuing operations 35,001 40,645 Adjustments to reconcile net earnings to net cash provided by (used in) operating activities: Depreciation and amortization 10,939 9,865 Deferred taxes (830) 11,615 Changes in working capital and other operating activities (16,691) (4,342) ------------ ---------- Net Cash Provided by Operating Activities of Continuing Operations 28,419 57,783 Cash Flows from Investing Activities of Continuing Operations: Capital expenditures (22,365) (10,136) Purchases of investments (29,665) - Other investing activities 508 11,716 ------------ ---------- Net Cash (Used In) Provided By Investing Activities of Continuing Operations (51,522) 1,580 Cash Flows from Financing Activities of Continuing Operations: Repayment of long-term obligations - (108,500) Cash restricted for repayment of debt - 50,000 Stock options exercised 8,073 18,014 Stock repurchase (99,948) - Other financing activities 7,513 2,148 ------------ ---------- Net Cash Used In Financing Activities of Continuing Operations (84,362) (38,338) Net Cash (Used In) Provided by Continuing Operations (107,465) 21,025 Net Cash Used In Operating Activities of Discontinued Operations - (52,558) Net Cash Provided by Investing Activities of Discontinued Operations 5,710 70,416 ------------ ---------- Resulting (Decrease) Increase in Cash and Cash Equivalents (101,755) 38,883 ------------ ---------- Cash and Cash Equivalents at End of Year $ 155,027 $ 256,782 ============ ========== CONTACT: Intermec, Inc. Kevin P. McCarty, Director of Investor Relations 425-265-2472 kevin.mccarty@intermec.com