EX-99 2 ex991.txt EXHIBIT 99.1 Trimble First Quarter Results Exceed Guidance o Record revenues of $156.5 million versus guidance of $146.0 - $148.0 million; o GAAP EPS of $0.24 versus guidance of $0.17 - $0.18; o Non-GAAP EPS, which excludes acquisition-related items, were $0.27; o Full year revenue guidance increased to $615.0 - 625.0 million versus previous guidance of $580.0 - $590.0 million; o Full year GAAP EPS guidance increased to $0.98 - $1.04 versus previous guidance of $0.86 - $0.92. SUNNYVALE, Calif., Apr. 27, 2004 - Trimble (Nasdaq: TRMB) today announced results for its first fiscal quarter ended April 2, 2004. The Company reported first quarter revenues of approximately $156.5 million, versus approximately $127.3 million in the first quarter of 2003. GAAP net income and EPS for the first quarter of 2004 were approximately $12.8 million and $0.24, respectively, versus $5.4 million and $0.12 in the first quarter of 2003. Non-GAAP net income and EPS for the first quarter of 2004 were $14.7 million and $0.27, respectively, versus $7.5 million and $0.17 in the first quarter of 2003. The effective tax rate for GAAP and non-GAAP EPS for the quarter was 15 percent versus guidance of 12 percent. GAAP and non-GAAP EPS for the first quarter of 2004 were calculated on a diluted basis using approximately 54.2 million shares. All per share numbers and total share count have been adjusted for a 3-for-2 stock split that took effect on March 5, 2004. Use of Non-GAAP Financial Measures The Company provides non-GAAP financial measures called "non-GAAP net income" and "non-GAAP EPS" to supplement its consolidated financial statements presented in accordance with GAAP. These non-GAAP financial measures are intended to supplement the user's overall understanding of the Company's current financial performance and its prospects for the future. Specifically, the Company believes the non-GAAP results provide useful information to both management and investors by identifying certain expenses, gains or losses that, when excluded from the GAAP results, may provide additional understanding of the Company's core operating results or business performance. However, these non-GAAP financial measures are not intended to supercede or replace the Company's GAAP results. A detailed reconciliation of the GAAP results to the non-GAAP results is provided below in Table A: "Reconciliation of GAAP and Non-GAAP Net Income and EPS." Table A. Reconciliation of GAAP and Non-GAAP Net Income and EPS
Three Months Ended ------------------ April 2, April 4, 2004 2003 ---- ---- GAAP income before income taxes $ 15,105 $ 6,353 Non-GAAP adjustments : Amortization of purchased intangibles assets 1,984 1,795 Amortization of acquisition-related inventory step-up 185 - Restructuring charges - 390 --- Total Non-GAAP adjustments 2,169 2,185 ----- ----- Non-GAAP income before income taxes 17,274 8,538 Income taxes 2,591 1,000 ----- ----- Non-GAAP net income $ 14,683 $ 7,538 -------- ------- Diluted Non-GAAP earnings per share $ 0.27 $ 0.17 ======== ======= Shares used in calculating diluted non-GAAP earnings per share 54,215 45,138 ====== ======
"Trimble's strong revenue growth reflects generally improving market demand combined with the strength of our product portfolio and enhanced distribution capabilities," said Steven W. Berglund, president and CEO. "Our net income growth reflects the operating leverage that is inherent in our cost structure as we grow revenues. We continue to believe we are at the beginning of our growth cycle as many of our markets are still new or under-penetrated." First Fiscal Quarter Business Segment Highlights Engineering and Construction (E&C) E&C reported record quarterly revenues in the first quarter, growing approximately 20 percent over the first quarter of 2003. All product segments showed year-over-year growth, with machine control being particularly strong. Sales of Nikon products continued to be stronger than anticipated as the Trimble dealer channel has significantly increased the demand beyond levels seen in the past. While having a positive impact on Trimble's profits, these sales negatively impact gross margin as a percentage of revenue. Field Solutions (TFS) - Agriculture and Geographic Information Systems (GIS) TFS reported record quarterly revenues in the first quarter, growing approximately 19 percent over the first quarter of 2003. Strong demand for automatic and manual guidance products, combined with seasonality, drove record agriculture sales. GIS sales also showed strong year-over-year growth as the result of continued demand for the GeoExplorer(R) handheld GPS product line. Component Technologies (CT) First quarter revenues for CT increased by approximately 3 percent over the first quarter of 2003. Demand for wireless infrastructure products drove this year-over-year increase. Also, during the quarter, CT announced it would enter new markets with its TrimTrac(TM) locator, as well as through products targeted at the wireline telecommunications market. The Company has already built a backlog for TrimTrac and expects to begin to build a backlog for the wireline products later in the second quarter or early in the third quarter. Mobile Solutions (TMS) First quarter revenues for TMS increased by approximately 66 percent over the first quarter of 2003, while growing by approximately 50 percent sequentially. During the quarter, the total number of subscribers increased by 50 percent over the year-end figures due to strong additions from the construction asset management vertical market as well as from the Company's dealer channel. The Company closed its acquisition of TracerNet in early March. Guidance For the second quarter ending July 2, 2004, the Company expects revenues will be between $163.0 and $166.0 million. Within these revenue guidelines, gross margins are expected to be approximately 49 percent and operating expenses, including approximately $2.0 million of amortization of purchased intangibles, are expected to be approximately $59.5 million. Net interest expense is expected to be approximately $1.0 million, and other non-operating expense should be approximately $1.8 million. For income tax provision, the Company now believes the increased profits will move the effective tax rate to 15 percent quarterly and full-year basis in 2004 (previous expectations were for a 12 percent effective tax rate). Within these revenue and expense guidelines, Trimble expects GAAP EPS to be between $0.28 and $0.30, assuming 54.5 million shares outstanding. GAAP EPS includes approximately $2.0 million for amortization of purchased intangibles that should be excluded when calculating non-GAAP EPS. Guidance for the entire fiscal year 2004 is for revenues between $615.0 and $625.0 million, with GAAP EPS of $0.98 to $1.04, assuming a weighted average of 55.0 million shares outstanding for the year. GAAP EPS includes approximately $8.0 million for amortization of purchased intangibles and $0.5 million in potential restructuring charges that should be excluded when calculating non-GAAP EPS. Investor Conference Call / Webcast Details The Company will hold a conference call on Tuesday, April 27, 2004 at 8:00 AM Pacific Time to review its fourth quarter results. It will be broadcast live on the web at http://www.trimble.com/investors.html. A replay of the call will be available for 7 days beginning at 5:00 PM, Pacific Time. The replay number is (800) 642-1687, and the passcode is 6867018. About Trimble Trimble is a leading innovator of Global Positioning System (GPS) technology. In addition to providing advanced GPS components, Trimble augments GPS with other positioning technologies, as well as wireless communications and software, to create complete customer solutions. Trimble's worldwide presence and unique capabilities position the Company for growth in emerging applications including surveying, automobile navigation, machine guidance, asset tracking, wireless platforms, and telecommunications infrastructure. Founded in 1978 and headquartered in Sunnyvale, California, Trimble has more than 2,000 employees in more than 20 countries worldwide. For an interactive look at Company news and products, visit Trimble's Web site at http://www.trimble.com. Forward Looking Statement: Certain statements made in this press release are forward looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and are made pursuant to the safe harbor provisions of the Securities Litigation Reform Act of 1995. These statements include the revenue, gross margin, operating expenses, net interest expense, non-operating expense, income tax provision and earnings per share estimates for the quarter ending July 2, 2004 and for the fiscal year ending December 31, 2004. These forward-looking statements are subject to change, and actual results may materially differ from those set forth in this press release due to certain risks and uncertainties. For example, recent strong demand for the Company's products may not continue because of a decline in the overall health of the economy and international markets, which may result in reduced capital spending. In addition, the Company's results may be adversely affected if our joint ventures and recent acquisitions do not achieve anticipated results or our ability to market, manufacture and ship new products such as our TrimTrac locator or new wireline telecommunications products. Any failure to achieve predicted results could negatively impact the Company's revenues and gross margin. Whether the Company achieves its guidance for the second quarter of 2004 and the entire fiscal year 2004 will also depend on a number of other factors, including the risks detailed from time to time in reports filed with the SEC, including its quarterly reports on Form 10-Q and its annual report on Form 10-K. Undue reliance should not be placed on any forward-looking statement, contained herein. These statements reflect the Company's position as of the date of this release. The Company expressly disclaims any undertaking to release publicly any updates or revisions to any statements to reflect any change in the Company's expectations or any change of events, conditions, or circumstances on which any such statement is based. CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except per share data) (Unaudited) Three Months Ended ------------------ April 2, April 4, 2004 2003 ---- ---- Revenue $156,510 $127,325 Cost of revenue 80,750 65,570 ------ ------ Gross Margin 75,760 61,755 ------ ------ Gross Margin (%) 48.4% 48.5% Operating expenses: Research and development 18,848 16,040 Sales and marketing 26,304 23,997 General and administrative 10,386 8,635 Restructuring charges - 390 Amortization of purchased intangibles 1,984 1,795 ----- ----- Total operating expenses 57,522 50,857 ------ ------ Operating income 18,238 10,898 Non-operating income (expense), net: Interest expense, net (978) (3,375) Foreign exchange loss (gains), net (636) 92 Other income (expense), net 80 (47) Expenses for affiliated operations, net (1,599) (1,215) ------ ------ Total non-operating expense, net (3,133) (4,545) ------ ------ Income before income taxes 15,105 6,353 Income tax provision 2,265 1,000 ----- ----- Net income $ 12,840 $ 5,353 ======== ======== Earnings per share : Basic $ 0.25 $ 0.12 Diluted $ 0.24 $ 0.12 Shares used in calculating earnings per share : Basic 50,418 44,040 ====== ====== Diluted 54,215 45,138 ====== ====== SUPPLEMENTAL DATA (In thousands, except per share data) (Unaudited) Three Months Ended ------------------ April 2, April 4, 2004 2003 ---- ---- GAAP income before income taxes $ 15,105 $ 6,353 Non-GAAP adjustments : Amortization of purchased intangibles assets 1,984 1,795 Amortization of acquisition-related inventory step-up 185 - Restructuring charges - 390 --- Total Non-GAAP adjustments 2,169 2,185 ----- ----- Non-GAAP income before income taxes 17,274 8,538 Income taxes 2,591 1,000 ----- ----- Non-GAAP net income $ 14,683 $ 7,538 ======== ======= Diluted Non-GAAP earnings per share $ 0.27 $ 0.17 ======== ======= Shares used in calculating diluted non-GAAP earnings per share 54,215 45,138 ====== ====== CONSOLIDATED BALANCE SHEETS (In thousands) (Unaudited)
April 2, Jan 2, 2004 2004 ---- ---- Assets Current assets: Cash and cash equivalents $ 40,201 $ 45,416 Accounts and other receivables, net 124,051 103,350 Inventories, net 64,910 70,826 Deferred income taxes 4,380 4,380 Other current assets 7,887 5,659 ----- ----- Total current assets 241,429 229,631 Property and equipment, net 26,758 27,379 Goodwill and other purchased intangible assets, net 267,208 261,166 Deferred income taxes 4,185 4,173 Other assets 20,546 22,554 ------ ------ Total assets $ 560,126 $ 544,903 ========= ========= Liabilities and Shareholders' Equity Current liabilities: Current portion of long-term debt $ 12,795 $ 12,885 Accounts payable 36,208 26,019 Accrued compensation and benefits 23,749 25,950 Accrued liabilities 16,211 20,746 Deferred income taxes - 1,136 Income taxes payable 11,891 9,969 ------ ----- Total current liabilities 100,854 96,705 Non-current portion of long-term debt 71,850 77,601 Deferred gain on joint venture 9,694 9,845 Deferred income taxes 5,112 4,229 Other non-current liabilities 10,581 8,279 ------ ----- Total liabilities 198,091 196,659 ------- ------- Shareholders' equity: Common stock 307,512 303,015 Accumulated surplus 27,829 14,990 Accumulated other comprehensive income 26,694 30,239 ------ ------ Total shareholders' equity 362,035 348,244 ------- ------- Total liabilities and shareholders' equity $ 560,126 $ 544,903 ========= =========
CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands) (Unaudited)
Three Months Ended ------------------ April 2, April 4, 2004 2003 ---- ---- Cash flow from operating activities: Net Income $ 12,840 $ 5,353 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation expense 2,191 2,217 Amortization expense 2,035 1,977 Provision for doubtful accounts 390 449 Amortization of debt issuance cost 122 513 Deferred income taxes (93) 461 Other (113) 272 Add decrease (increase) in assets: Accounts receivables, net (17,096) (15,114) Inventories 6,561 (3,370) Other current and non-current assets (760) (1,359) Effect of foreign currency translation adjustment (403) 1,582 Add increase (decrease) in liabilities: Accounts payable 5,600 (158) Accrued compensation and benefits (1,675) 133 Accrued liabilities (1,588) 29 Deferred gain on joint venture (151) (221) Income taxes payable 825 685 --- --- Net cash provided by (used in) operating activities 8,685 (6,551) Cash flows from investing activities: Acquisitions, net of cash acquired (9,179) - Acquisition of property and equipment (2,544) (1,485) Proceeds from disposal of property and equipment 47 56 Cost of capitalized patents (26) (4) ---- --- Net cash used in investing activities (11,702) (1,433) Cash flow from financing activities: Issuance of common stock 4,211 540 Collections (Payments) of notes receivable 53 (188) Payments on long-term debt and revolving credit lines (5,823) (7,944) ------- ------- Net cash used in financing activities (1,559) (7,592) Effect of exchange rate changes on cash and cash equivalents (639) 426 Net decrease in cash and cash equivalents (5,215) (15,150) Cash and cash equivalents - beginning of period 45,416 28,679 ------ ------ Cash and cash equivalents - end of period $ 40,201 $ 13,529 ========== ======== Supplemental disclosures of cash flow information: Cash paid during the period for: Income taxes, net of refunds $ 269 (69) ========== ====
Q1'03 Q4'03 Q1'04 Actual Actual Actual ------ ------ ------ Income Statement Metrics Total Revenue $ 127,325 $ 135,877 $ 156,510 --------- --------- ---------- Engineering & Construction 85,663 91,991 102,482 Trimble Field Solutions 20,681 19,088 24,713 Component Technologies 15,866 15,277 16,415 Trimble Mobile Solutions 3,168 3,490 5,262 Portfolio Technologies 1,947 6,031 7,638 Gross Margin 48.5% 48.6% 48.4% ---- ---- ---- Total Segment Income $ 17,970 $ 19,947 $ 25,737 --------- --------- ---------- Engineering & Construction 12,240 14,804 16,498 Trimble Field Solutions 3,314 3,520 6,054 Component Technologies 3,855 3,522 3,926 Trimble Mobile Solutions (687) (1,622) (1,643) Portfolio Technologies (752) (277) 902 Corporate and Other Charges $ (7,073) $ (7,979) $ (7,499) Non-operating expense and income taxes $ (5,544) $ 3,123 $ (5,398) --------- --------- ---------- Net Income (loss) $ 5,353 $ 15,091 $ 12,840 ========= ========= ========== EBITDA $ 13,922 $ 13,639 $ 20,309 Amortization of Intangibles 1,977 2,006 2,035 Depreciation 2,217 2,217 2,191 GAAP EPS $ 0.12 $ 0.28 $ 0.24 Non-GAAP EPS $ 0.17 $ 0.19 $ 0.27 --------- -------- ---------- Balance Sheet and Liquidity Metrics Cash & Cash Equivalents $ 13,529 $ 45,416 $ 40,201 Accounts Receivables, Net $ 92,187 $ 96,245 $ 116,030 Inventories, Net $ 64,513 $ 70,826 $ 64,910 Total Debt $ 131,350 $ 90,486 $ 84,645 Short Term Debt 24,085 12,885 12,795 Long Term Debt 107,265 77,601 71,850 Equity $ 212,643 $ 348,244 $ 362,035 Working Capital $ 74,521 $ 132,926 $ 140,575 Capital Expenditures $ 1,485 $ 4,518 $ 2,544 Cash Flow from (used in ) Operations* $ (6,551) $ 23,302 $ 8,685 --------- --------- ---------- Financial Ratios Days Sales Outstanding 56 60 57 Days Sales in Inventory 90 93 73 Current ratio 1.7 2.4 2.4 Debt to Equity 0.6 0.3 0.2 --- --- --- Other Headcount 2,004 2,145 2,184 ----- ----- -----
---------- Notes: 1) Engineering & Construction consists of Construction Instruments (CI), Machine Control, Survey, Tripod Data Systems (TDS) and Mensi beginning Dec03. 2) Trimble Field Solutions consists of Geographic Information Systems (GIS) and Agriculture. 3) Portfolio Technologies consists of Military and Advanced Systems (MAS) and Applanix beginning Q303. ** EBITDA is defined as net income plus (i) extraordinary items and cumulative effect of accounting change, (ii) provision for income taxes, (iii) interest expense, (iv) depreciation and amortization. EBITDA RECONCILIATION (In thousands) (Unaudited) Three Months Ended ------------------ April 2, April 4, 2004 2003 ---- ---- GAAP net income $12,840 $ 5,353 Add back : Interest expenses, net 978 3,375 Income tax 2,265 1,000 Depreciation expense 2,191 2,217 Amortization of purchased intangibles 2,035 1,977 ----- ----- EBITDA $20,309 $13,922 ======= =======