EX-99.1 2 a5394069ex99_1.txt EXHIBIT 99.1 Exhibit 99.1 Intermec Announces First Quarter Fiscal Year 2007 Results EVERETT, Wash.--(BUSINESS WIRE)--May 3, 2007--Intermec, Inc. (NYSE:IN) today announced financial results for its first quarter ended April 1, 2007. Intermec reported 2007 first quarter revenues of $179.3 million and a loss of ($4.4) million, or ($0.07) per share, compared to 2006 first quarter revenues of $203.8 million and earnings from continuing operations of $15.1 million, or $0.23 per diluted share. The first quarter of 2006 included a gain on an intellectual property settlement, which positively impacted operating profit from continuing operations by $16.5 million, or $0.16 per diluted share. The Company's tax benefit for the first quarter of 2007 was negatively impacted by ($0.02) per share due to an unfavorable change in foreign deferred tax assets. Conversely, the first quarter of 2006 tax provision was favorably impacted by the conclusion of a Canadian tax audit. Geographically during the first quarter of 2007, North American revenues decreased 29 percent over the first quarter of 2006. Revenues in Europe, Mid-East and Africa (EMEA) increased 16 percent over the same prior-year period; and the rest of the world, consisting of Asia Pacific and Latin America, increased 19 percent. During the first quarter of 2007, Systems and Solutions revenue decreased 20 percent and Printer and Media revenues decreased 4 percent over the first quarter of 2006. Service revenue increased 1 percent over the comparable prior-year period. Restructuring and other cost reduction activities initiated in 2006 have been substantially completed. Lower operating expenses for the first quarter of 2007 was in-line with earlier guidance, reflecting a decrease of approximately $8.2 million or 11 percent over the prior-year period. The Company's cash equivalents and short-term investments position at the end of the first quarter was $173.2 million. The decrease in cash equivalents and short-term investments of $11.3 million during the first quarter was primarily due to increased inventory levels. "During the first quarter of this year, we saw a marked difference in the performance by region," said Larry Brady, Chairman and CEO. "This difference was driven in part by the earlier availability of our next generation mobile computer, the CN3, in international markets. Worldwide bookings for the CN3 continue to provide an indication of increasing traction in enterprise bookings." Other First Quarter Business Highlights During the quarter, Intermec introduced a number of new products: -- New radio configurations of the CN3, the Company's rugged mobile computer. The CDMA radio configuration, more widely used in the U.S., was introduced in February and the integrated GPS configuration was introduced in March. -- The IF30 is a cost-effective, high-performance fixed reader that reliably reads and writes UHF RFID tags in "RF noisy" environments. The IF30's receive sensitivity enables large populations of tags to be interrogated at high speeds, which is critical to many use cases involving dock doors, portals and conveyors. -- The portable PB40 direct-thermal receipt printer is geared for markets from warehousing, pre-sales and route sales to home delivery and field service. Intermec also introduced the PB41 printer, the ultimate print solution for store delivery, route accounting, field service, logistics, home delivery and pre-sales. Second Quarter Outlook Intermec also reported today its GAAP basis outlook for the second quarter 2007. -- Revenues for the period are expected within a range of $195 million to $205 million. -- Diluted EPS from continuing operations are expected within a range of $0.05 plus or minus $0.04. Conference Call Information Intermec will hold a conference call on May 3, 2007 at 5 p.m. ET (2 p.m. PT). The call will be hosted by Intermec, Inc. Chairman and CEO, Larry D. Brady, SVP, 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-(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 sales or product volumes, potential easing of price competition or price erosion, and our ability to launch new products as planned, improve gross margins or profits of our business segments, our cost reduction and restructuring plans, our revenue, expense or financial outlook for the second 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 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 (Thousands of dollars, except per share amounts) (Unaudited) Quarter Ended ------------------- April 1, April 2, 2007 2006 --------- --------- Revenues: Product $141,512 $166,350 Service 37,806 37,481 --------- --------- Total revenues 179,318 203,831 Costs and expenses: Cost of product revenues 92,194 100,614 Cost of service revenues 22,583 22,861 Selling, general and administrative 69,561 77,793 Gain on intellectual property settlement - (16,538) Restructuring charge - 1,107 --------- --------- Total costs and expenses 184,338 185,837 --------- --------- Operating profit (loss) from continuing operations (5,020) 17,994 Interest income 2,553 3,360 Interest expense (2,295) (2,216) --------- --------- Earnings (loss) from continuing operations before income taxes (4,762) 19,138 Provision (benefit) for income taxes (330) 4,069 --------- --------- Earnings (loss) before discontinued operations (4,432) 15,069 Loss from discontinued operations, net of tax - (1,078) --------- --------- Net earnings (loss) $(4,432) $13,991 ========= ========= Basic earnings (loss) per share Continuing operations $(0.07) $0.24 Discontinued operations - (0.02) --------- --------- Net earnings (loss) per share $(0.07) $0.22 ========= ========= Diluted earnings (loss) per share Continuing operations $(0.07) $0.23 Discontinued operations - (0.01) --------- --------- Net earnings (loss) per share $(0.07) $0.22 ========= ========= Shares used in computing basic earnings (loss) per share 59,990 63,025 Shares used in computing diluted earnings (loss) per share 59,990 64,603 INTERMEC, INC. CONSOLIDATED BALANCE SHEETS (Unaudited, amounts in thousands of dollars) April 1, December 2007 31, 2006 ------------------- ASSETS Current assets: Cash and cash equivalents $143,961 $155,027 Short-term investments 29,268 29,510 Accounts receivable, net of allowance for doubtful accounts and sales returns of $7,158 and $7,796 149,537 158,369 Inventories 132,442 119,027 Net current deferred tax assets 49,875 49,623 Assets held for sale 8,598 8,661 Other current assets 27,582 28,913 --------- --------- Total current assets 541,263 549,130 Property, plant and equipment, net 43,501 43,453 Intangibles, net 4,413 3,978 Net deferred tax assets 178,354 190,683 Other assets 23,977 23,096 --------- --------- Total assets $791,508 $810,340 ========= ========= LIABILITIES AND SHAREHOLDERS' INVESTMENT Current liabilities: Accounts payable and accrued expenses $112,847 $113,207 Payroll and related expenses 22,522 32,008 Deferred revenue 50,491 45,021 Current portion of long-term debt 100,000 - --------- --------- Total current liabilities 285,860 190,236 Long-term deferred revenue 16,290 17,318 Long-term debt - 100,000 Other long-term liabilities 77,855 85,184 Shareholders' investment: Common stock 601 598 Additional paid-in-capital 661,701 657,468 Accumulated deficit (224,279) (212,903) Accumulated other comprehensive loss (26,520) (27,561) --------- --------- Total shareholders' investment 411,503 417,602 --------- --------- Total liabilities and shareholders' investment $791,508 $810,340 ========= ========= INTERMEC, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited, amounts in thousands of dollars) Quarter Ended ------------------- April 1, April 2, 2007 2006 --------- --------- Cash and cash equivalents at beginning of year $155,027 $256,782 --------- --------- Cash flows from operating activities of continuing operations: Net earnings (loss) from continuing operations (4,432) 15,069 Adjustments to reconcile net earnings (loss) to net cash provided by (used in) operating activities: Depreciation and amortization 3,093 2,588 Deferred taxes 210 2,792 Excess tax benefits from stock-based payment arrangements (233) (2,183) Changes in working capital and other operating activities (9,352) 26,104 --------- --------- Net cash provided by (used in) operating activities of continuing operations (10,714) 44,370 Cash flows from investing activities of continuing operations: Capital expenditures (2,160) (4,268) Purchases of investments (595) (19,695) Sale of investments 837 - Other investing activities (577) 73 --------- --------- Net cash used in investing activities of continuing operations (2,495) (23,890) Cash flows from financing activities of continuing operations: Excess tax benefits from stock-based payment arrangements 233 2,183 Stock options exercised 1,389 3,113 Other financing activities 521 881 --------- --------- Net cash provided by financing activities of continuing operations 2,143 6,177 Net cash provided by (used in) continuing operations (11,066) 26,657 Net cash used in operating activities of discontinued operations - (651) --------- --------- Resulting increase (decrease) in cash and cash equivalents (11,066) 26,006 --------- --------- Cash and cash equivalents at end of period $143,961 $282,788 ========= ========= CONTACT: Intermec, Inc. Kevin P. McCarty, Director of Investor Relations 425-265-2472 kevin.mccarty@intermec.com