Delaware | 001-14845 | 94-2802192 | ||
(State or other jurisdiction of incorporation) | (Commission File Number) | (IRS Employer I.D. No.) |
Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
Common Stock, $0.001 par value per share | TRMB | NASDAQ Global Select Market |
TRIMBLE INC. | |||
a Delaware corporation | |||
Dated: July 31, 2019 | By: | /s/ Robert G. Painter | |
Robert G. Painter | |||
Chief Financial Officer |
• | Results in line with guidance |
• | Record annualized recurring revenue of $1.1 billion |
• | Twelve month operating cash flow up 23 percent |
• | Non-GAAP revenue |
• | Non-GAAP recurring revenue |
• | Non-GAAP operating income |
• | Non-GAAP operating margin |
• | Non-GAAP net income |
• | Non-GAAP diluted earnings per share |
• | Non-GAAP tax rate |
Second Quarter of | First Two Quarters of | ||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
Revenue: | |||||||||||||||
Product | $ | 521.1 | $ | 531.0 | $ | 1,009.5 | $ | 1,028.8 | |||||||
Service | 174.6 | 136.1 | 333.8 | 264.9 | |||||||||||
Subscription | 159.1 | 118.4 | 313.1 | 234.0 | |||||||||||
Total revenue | 854.8 | 785.5 | 1,656.4 | 1,527.7 | |||||||||||
Cost of sales: | |||||||||||||||
Product | 257.0 | 250.2 | 487.7 | 485.6 | |||||||||||
Service | 69.3 | 59.6 | 133.3 | 119.2 | |||||||||||
Subscription | 44.1 | 29.1 | 88.5 | 57.0 | |||||||||||
Amortization of purchased intangible assets | 23.8 | 23.9 | 48.0 | 47.0 | |||||||||||
Total cost of sales | 394.2 | 362.8 | 757.5 | 708.8 | |||||||||||
Gross margin | 460.6 | 422.7 | 898.9 | 818.9 | |||||||||||
Gross margin (%) | 53.9 | % | 53.8 | % | 54.3 | % | 53.6 | % | |||||||
Operating expense: | |||||||||||||||
Research and development | 119.6 | 110.1 | 237.8 | 219.4 | |||||||||||
Sales and marketing | 128.8 | 112.8 | 256.2 | 234.9 | |||||||||||
General and administrative | 79.9 | 89.4 | 162.7 | 171.0 | |||||||||||
Restructuring charges | 2.9 | 2.2 | 6.4 | 3.8 | |||||||||||
Amortization of purchased intangible assets | 19.7 | 18.7 | 39.8 | 36.1 | |||||||||||
Total operating expense | 350.9 | 333.2 | 702.9 | 665.2 | |||||||||||
Operating income | 109.7 | 89.5 | 196.0 | 153.7 | |||||||||||
Non-operating income (expense), net: | |||||||||||||||
Interest expense, net | (20.6 | ) | (18.6 | ) | (42.5 | ) | (28.1 | ) | |||||||
Foreign currency transaction gain (loss), net | (1.0 | ) | (3.0 | ) | (1.9 | ) | 0.7 | ||||||||
Income from equity method investments, net | 12.9 | 9.5 | 21.7 | 14.4 | |||||||||||
Other income, net | 14.4 | 1.8 | 17.3 | 5.2 | |||||||||||
Total non-operating income (expense), net | 5.7 | (10.3 | ) | (5.4 | ) | (7.8 | ) | ||||||||
Income before taxes | 115.4 | 79.2 | 190.6 | 145.9 | |||||||||||
Income tax provision | 20.8 | 15.1 | 33.6 | 23.1 | |||||||||||
Net income | 94.6 | 64.1 | 157.0 | 122.8 | |||||||||||
Net gain attributable to noncontrolling interests | — | — | 0.1 | 0.2 | |||||||||||
Net income attributable to Trimble Inc. | $ | 94.6 | $ | 64.1 | $ | 156.9 | $ | 122.6 | |||||||
Earnings per share attributable to Trimble Inc.: | |||||||||||||||
Basic | $ | 0.38 | $ | 0.26 | $ | 0.62 | $ | 0.49 | |||||||
Diluted | $ | 0.37 | $ | 0.25 | $ | 0.62 | $ | 0.49 | |||||||
Shares used in calculating diluted earnings per share: | |||||||||||||||
Basic | 251.7 | 249.5 | 251.6 | 249.1 | |||||||||||
Diluted | 254.0 | 252.2 | 254.0 | 252.7 |
Second Quarter of | Fiscal Year End | ||||||
As of | 2019 | 2018 | |||||
Assets | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 199.6 | $ | 172.5 | |||
Accounts receivable, net | 516.8 | 512.6 | |||||
Other receivables | 30.0 | 33.2 | |||||
Inventories | 287.9 | 298.0 | |||||
Other current assets | 87.1 | 72.8 | |||||
Total current assets | 1,121.4 | 1,089.1 | |||||
Property and equipment, net | 214.1 | 212.9 | |||||
Operating lease right-of-use assets | 133.6 | — | |||||
Goodwill | 3,541.9 | 3,540.0 | |||||
Other purchased intangible assets, net | 654.5 | 744.3 | |||||
Deferred costs, non-current | 41.1 | 41.3 | |||||
Other non-current assets | 169.5 | 148.8 | |||||
Total assets | $ | 5,876.1 | $ | 5,776.4 | |||
Liabilities and Stockholders' Equity | |||||||
Current liabilities: | |||||||
Short-term debt | $ | 229.3 | $ | 256.2 | |||
Accounts payable | 148.4 | 147.6 | |||||
Accrued compensation and benefits | 140.8 | 169.2 | |||||
Deferred revenue | 408.1 | 348.4 | |||||
Accrued warranty expense | 14.9 | 15.3 | |||||
Other current liabilities | 133.7 | 118.5 | |||||
Total current liabilities | 1,075.2 | 1,055.2 | |||||
Long-term debt | 1,513.6 | 1,712.3 | |||||
Deferred revenue, non-current | 44.3 | 38.8 | |||||
Deferred income tax liabilities | 78.7 | 73.8 | |||||
Income taxes payable | 73.3 | 71.3 | |||||
Operating lease liabilities | 109.1 | — | |||||
Other non-current liabilities | 156.6 | 150.2 | |||||
Total liabilities | 3,050.8 | 3,101.6 | |||||
Stockholders' equity: | |||||||
Common stock | 0.3 | 0.3 | |||||
Additional paid-in-capital | 1,649.7 | 1,591.9 | |||||
Retained earnings | 1,354.4 | 1,268.3 | |||||
Accumulated other comprehensive loss | (180.4 | ) | (186.1 | ) | |||
Total Trimble Inc. stockholders' equity | 2,824.0 | 2,674.4 | |||||
Noncontrolling interests | 1.3 | 0.4 | |||||
Total stockholders' equity | 2,825.3 | 2,674.8 | |||||
Total liabilities and stockholders' equity | $ | 5,876.1 | $ | 5,776.4 |
First Two Quarters of | |||||||
2019 | 2018 | ||||||
Cash flow from operating activities: | |||||||
Net income | $ | 157.0 | $ | 122.8 | |||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||
Depreciation expense | 20.3 | 17.2 | |||||
Amortization expense | 87.8 | 83.1 | |||||
Deferred income taxes | 4.7 | (17.0 | ) | ||||
Stock-based compensation | 33.5 | 34.3 | |||||
Income from equity method investments, net of dividends | (11.5 | ) | (1.5 | ) | |||
Other, net | (0.3 | ) | 8.2 | ||||
(Increase) decrease in assets: | |||||||
Accounts receivable, net | (7.7 | ) | (6.0 | ) | |||
Inventories | 7.4 | (21.8 | ) | ||||
Other current and non-current assets | 1.5 | (5.3 | ) | ||||
Increase (decrease) in liabilities: | |||||||
Accounts payable | 3.8 | 9.6 | |||||
Accrued compensation and benefits | (28.5 | ) | (6.6 | ) | |||
Deferred revenue | 64.9 | 71.1 | |||||
Other current and non-current liabilities | (7.4 | ) | (20.3 | ) | |||
Net cash provided by operating activities | 325.5 | 267.8 | |||||
Cash flow from investing activities: | |||||||
Acquisitions of businesses, net of cash acquired | 4.6 | (532.9 | ) | ||||
Acquisitions of property and equipment | (38.5 | ) | (36.0 | ) | |||
Purchases of short-term investments | — | (24.0 | ) | ||||
Proceeds from maturities of short-term investments | — | 6.2 | |||||
Proceeds from sales of short-term investments | — | 196.8 | |||||
Other, net | 14.1 | 5.1 | |||||
Net cash used in investing activities | (19.8 | ) | (384.8 | ) | |||
Cash flow from financing activities: | |||||||
Issuance of common stock, net of tax withholdings | 13.4 | 21.7 | |||||
Repurchases of common stock | (59.0 | ) | (53.0 | ) | |||
Proceeds from debt and revolving credit lines | 530.2 | 1,527.8 | |||||
Payments on debt and revolving credit lines | (756.6 | ) | (1,157.1 | ) | |||
Other, net | (7.3 | ) | (1.8 | ) | |||
Net cash provided by (used in) financing activities | (279.3 | ) | 337.6 | ||||
Effect of exchange rate changes on cash and cash equivalents | 0.7 | (8.1 | ) | ||||
Net increase in cash and cash equivalents | 27.1 | 212.5 | |||||
Cash and cash equivalents - beginning of period | 172.5 | 358.5 | |||||
Cash and cash equivalents - end of period | $ | 199.6 | $ | 571.0 |
Reporting Segments | ||||||||||||||||
Buildings and Infrastructure | Geospatial | Resources and Utilities | Transportation | |||||||||||||
SECOND QUARTER OF FISCAL 2019 : | ||||||||||||||||
Revenue | $ | 339.0 | $ | 164.4 | $ | 152.6 | $ | 198.8 | ||||||||
Acquired deferred revenue adjustment | (A) | 0.9 | — | 0.1 | — | |||||||||||
Non-GAAP revenue | $ | 339.9 | $ | 164.4 | $ | 152.7 | $ | 198.8 | ||||||||
Operating income before corporate allocations | $ | 85.3 | $ | 31.1 | $ | 45.4 | $ | 32.9 | ||||||||
Acquired deferred revenue adjustment | (A) | 0.9 | — | 0.1 | — | |||||||||||
Amortization of acquired capitalized commissions | (F) | (1.6 | ) | — | — | — | ||||||||||
Non-GAAP operating income before allocations | $ | 84.6 | $ | 31.1 | $ | 45.5 | $ | 32.9 | ||||||||
Operating margin (% of segment external net revenue) | 25.2 | % | 18.9 | % | 29.8 | % | 16.5 | % | ||||||||
Non-GAAP Operating margin (% of segment Non-GAAP external net revenue) | 24.9 | % | 18.9 | % | 29.8 | % | 16.5 | % | ||||||||
SECOND QUARTER OF FISCAL 2018 : | ||||||||||||||||
Revenue | $ | 274.3 | $ | 184.4 | $ | 145.0 | $ | 181.8 | ||||||||
Acquired deferred revenue adjustment | (A) | 3.4 | — | 0.3 | 0.1 | |||||||||||
Non-GAAP revenue | $ | 277.7 | $ | 184.4 | $ | 145.3 | $ | 181.9 | ||||||||
Operating income before corporate allocations | $ | 67.4 | $ | 41.6 | $ | 42.3 | $ | 31.1 | ||||||||
Acquired deferred revenue adjustment | (A) | 3.4 | — | 0.3 | 0.1 | |||||||||||
Amortization of acquired capitalized commissions | (F) | (0.5 | ) | — | (0.1 | ) | — | |||||||||
Non-GAAP operating income before allocations | $ | 70.3 | $ | 41.6 | $ | 42.5 | $ | 31.2 | ||||||||
Operating margin (% of segment external net revenue) | 24.6 | % | 22.6 | % | 29.2 | % | 17.1 | % | ||||||||
Non-GAAP Operating margin (% of segment Non-GAAP external net revenue) | 25.3 | % | 22.6 | % | 29.2 | % | 17.2 | % |
Reporting Segments | ||||||||||||||||
Buildings and Infrastructure | Geospatial | Resources and Utilities | Transportation | |||||||||||||
FIRST TWO QUARTERS OF 2019 : | ||||||||||||||||
Revenue | $ | 631.0 | $ | 325.6 | $ | 311.9 | $ | 387.9 | ||||||||
Acquired deferred revenue adjustment | (A) | 3.6 | — | 0.3 | — | |||||||||||
Non-GAAP revenue | $ | 634.6 | $ | 325.6 | $ | 312.2 | $ | 387.9 | ||||||||
Operating income before corporate allocations | $ | 146.7 | $ | 60.5 | $ | 96.4 | $ | 64.1 | ||||||||
Acquired deferred revenue adjustment | (A) | 3.6 | — | 0.3 | — | |||||||||||
Amortization of acquired capitalized commissions | (F) | (3.2 | ) | — | (0.1 | ) | — | |||||||||
Non-GAAP operating income before allocations | $ | 147.1 | $ | 60.5 | $ | 96.6 | $ | 64.1 | ||||||||
Operating margin (% of segment external net revenue) | 23.2 | % | 18.6 | % | 30.9 | % | 16.5 | % | ||||||||
Non-GAAP Operating margin (% of segment Non-GAAP external net revenue) | 23.2 | % | 18.6 | % | 30.9 | % | 16.5 | % | ||||||||
FIRST TWO QUARTERS OF 2018 : | ||||||||||||||||
Revenue | $ | 499.0 | $ | 358.9 | $ | 304.2 | $ | 365.6 | ||||||||
Acquired deferred revenue adjustment | (A) | 5.9 | — | 0.6 | 0.2 | |||||||||||
Non-GAAP revenue | $ | 504.9 | $ | 358.9 | $ | 304.8 | $ | 365.8 | ||||||||
Operating income before corporate allocations | $ | 110.9 | $ | 78.9 | $ | 94.0 | $ | 61.5 | ||||||||
Acquired deferred revenue adjustment | (A) | 5.9 | — | 0.6 | 0.2 | |||||||||||
Amortization of acquired capitalized commissions | (F) | (0.9 | ) | — | (0.2 | ) | — | |||||||||
Non-GAAP operating income before allocations | $ | 115.9 | $ | 78.9 | $ | 94.4 | $ | 61.7 | ||||||||
Operating margin (% of segment external net revenue) | 22.2 | % | 22.0 | % | 30.9 | % | 16.8 | % | ||||||||
Non-GAAP Operating margin (% of segment Non-GAAP external net revenue) | 23.0 | % | 22.0 | % | 31.0 | % | 16.9 | % |
Second Quarter of | First Two Quarters of | ||||||||||||||||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||||||||||||||||
Dollar Amount | % of Revenue | Dollar Amount | % of Revenue | Dollar Amount | % of Revenue | Dollar Amount | % of Revenue | ||||||||||||||||||||||
REVENUE: | |||||||||||||||||||||||||||||
GAAP revenue: | $ | 854.8 | $ | 785.5 | $ | 1,656.4 | $ | 1,527.7 | |||||||||||||||||||||
Acquired deferred revenue adjustment | (A) | 1.0 | 3.8 | 3.9 | 6.7 | ||||||||||||||||||||||||
Non-GAAP revenue: | $ | 855.8 | $ | 789.3 | $ | 1,660.3 | $ | 1,534.4 | |||||||||||||||||||||
GROSS MARGIN: | |||||||||||||||||||||||||||||
GAAP gross margin: | $ | 460.6 | 53.9 | % | $ | 422.7 | 53.8 | % | $ | 898.9 | 54.3 | % | $ | 818.9 | 53.6 | % | |||||||||||||
Acquired deferred revenue adjustment | (A) | 1.0 | 3.8 | 3.9 | 6.7 | ||||||||||||||||||||||||
Restructuring charges | (B) | — | 0.6 | 0.2 | 0.4 | ||||||||||||||||||||||||
Amortization of purchased intangible assets | (C) | 23.8 | 23.9 | 48.0 | 47.0 | ||||||||||||||||||||||||
Stock-based compensation | (D) | 1.4 | 1.1 | 2.7 | 2.2 | ||||||||||||||||||||||||
Acquisition / divestiture items | (E) | — | — | — | 2.0 | ||||||||||||||||||||||||
Non-GAAP gross margin: | $ | 486.8 | 56.9 | % | $ | 452.1 | 57.3 | % | $ | 953.7 | 57.4 | % | $ | 877.2 | 57.2 | % | |||||||||||||
OPERATING EXPENSES: | |||||||||||||||||||||||||||||
GAAP operating expenses: | $ | 350.9 | 41.1 | % | $ | 333.2 | 42.4 | % | $ | 702.9 | 42.4 | % | $ | 665.2 | 43.5 | % | |||||||||||||
Restructuring charges | (B) | (2.9 | ) | (2.2 | ) | (6.4 | ) | (3.8 | ) | ||||||||||||||||||||
Amortization of purchased intangible assets | (C) | (19.7 | ) | (18.7 | ) | (39.8 | ) | (36.1 | ) | ||||||||||||||||||||
Stock-based compensation | (D) | (15.8 | ) | (15.8 | ) | (30.8 | ) | (32.1 | ) | ||||||||||||||||||||
Acquisition / divestiture items | (E) | (2.0 | ) | (8.1 | ) | (3.1 | ) | (22.1 | ) | ||||||||||||||||||||
Amortization of acquired capitalized commissions | (F) | 1.6 | 0.6 | 3.3 | 1.1 | ||||||||||||||||||||||||
Non-GAAP operating expenses: | $ | 312.1 | 36.5 | % | $ | 289.0 | 36.6 | % | $ | 626.1 | 37.7 | % | $ | 572.2 | 37.3 | % | |||||||||||||
OPERATING INCOME: | |||||||||||||||||||||||||||||
GAAP operating income: | $ | 109.7 | 12.8 | % | $ | 89.5 | 11.4 | % | $ | 196.0 | 11.8 | % | $ | 153.7 | 10.1 | % | |||||||||||||
Acquired deferred revenue adjustment | (A) | 1.0 | 3.8 | 3.9 | 6.7 | ||||||||||||||||||||||||
Restructuring charges | (B) | 2.9 | 2.8 | 6.6 | 4.2 | ||||||||||||||||||||||||
Amortization of purchased intangible assets | (C) | 43.5 | 42.6 | 87.8 | 83.1 | ||||||||||||||||||||||||
Stock-based compensation | (D) | 17.2 | 16.9 | 33.5 | 34.3 | ||||||||||||||||||||||||
Acquisition / divestiture items | (E) | 2.0 | 8.1 | 3.1 | 24.1 | ||||||||||||||||||||||||
Amortization of acquired capitalized commissions | (F) | (1.6 | ) | (0.6 | ) | (3.3 | ) | (1.1 | ) | ||||||||||||||||||||
Non-GAAP operating income: | $ | 174.7 | 20.4 | % | $ | 163.1 | 20.7 | % | $ | 327.6 | 19.7 | % | $ | 305.0 | 19.9 | % | |||||||||||||
NON-OPERATING INCOME (EXPENSE), NET: | |||||||||||||||||||||||||||||
GAAP non-operating income (expense), net: | $ | 5.7 | $ | (10.3 | ) | $ | (5.4 | ) | $ | (7.8 | ) | ||||||||||||||||||
Acquisition / divestiture items | (E) | (13.1 | ) | 0.7 | (12.8 | ) | (2.1 | ) | |||||||||||||||||||||
Debt issuance costs | (G) | — | 6.7 | — | 6.7 | ||||||||||||||||||||||||
Non-GAAP non-operating expense, net: | $ | (7.4 | ) | $ | (2.9 | ) | $ | (18.2 | ) | $ | (3.2 | ) | |||||||||||||||||
GAAP and Non-GAAP Tax Rate % | GAAP and Non-GAAP Tax Rate % | GAAP and Non-GAAP Tax Rate % | GAAP and Non-GAAP Tax Rate % | ||||||||||||||||||||||||||
(J) | (J) | (J) | (J) | ||||||||||||||||||||||||||
INCOME TAX PROVISION: | |||||||||||||||||||||||||||||
GAAP income tax provision: | $ | 20.8 | 18 | % | $ | 15.1 | 19 | % | $ | 33.6 | 18 | % | $ | 23.1 | 16 | % | |||||||||||||
Non-GAAP items tax effected | (H) | 9.3 | 15.4 | 20.7 | 24.4 | ||||||||||||||||||||||||
Difference in GAAP and Non-GAAP tax rate | (I) | 3.4 | — | 7.6 | 9.9 | ||||||||||||||||||||||||
Non-GAAP income tax provision: | $ | 33.5 | 20 | % | $ | 30.5 | 19 | % | $ | 61.9 | 20 | % | $ | 57.4 | 19 | % | |||||||||||||
NET INCOME: | |||||||||||||||||||||||||||||
GAAP net income attributable to Trimble Inc.: | $ | 94.6 | $ | 64.1 | $ | 156.9 | $ | 122.6 | |||||||||||||||||||||
Acquired deferred revenue adjustment | (A) | 1.0 | 3.8 | 3.9 | 6.7 | ||||||||||||||||||||||||
Restructuring charges | (B) | 2.9 | 2.8 | 6.6 | 4.2 | ||||||||||||||||||||||||
Amortization of purchased intangible assets | (C) | 43.5 | 42.6 | 87.8 | 83.1 | ||||||||||||||||||||||||
Stock-based compensation | (D) | 17.2 | 16.9 | 33.5 | 34.3 | ||||||||||||||||||||||||
Acquisition / divestiture items | (E) | (11.1 | ) | 8.8 | (9.7 | ) | 22.0 | ||||||||||||||||||||||
Amortization of acquired capitalized commissions | (F) | (1.6 | ) | (0.6 | ) | (3.3 | ) | (1.1 | ) | ||||||||||||||||||||
Debt issuance costs | (G) | — | 6.7 | — | 6.7 | ||||||||||||||||||||||||
Non-GAAP tax adjustments | (H)+(I) | (12.7 | ) | (15.4 | ) | (28.3 | ) | (34.3 | ) | ||||||||||||||||||||
Non-GAAP net income attributable to Trimble Inc.: | $ | 133.8 | $ | 129.7 | $ | 247.4 | $ | 244.2 | |||||||||||||||||||||
DILUTED NET INCOME PER SHARE: | |||||||||||||||||||||||||||||
GAAP diluted net income per share attributable to Trimble Inc.: | $ | 0.37 | $ | 0.25 | $ | 0.62 | $ | 0.49 | |||||||||||||||||||||
Acquired deferred revenue adjustment | (A) | — | 0.01 | 0.01 | 0.03 | ||||||||||||||||||||||||
Restructuring charges | (B) | 0.01 | 0.01 | 0.03 | 0.02 | ||||||||||||||||||||||||
Amortization of purchased intangible assets | (C) | 0.17 | 0.17 | 0.34 | 0.33 | ||||||||||||||||||||||||
Stock-based compensation | (D) | 0.07 | 0.07 | 0.13 | 0.13 | ||||||||||||||||||||||||
Acquisition / divestiture items | (E) | (0.04 | ) | 0.03 | (0.04 | ) | 0.09 | ||||||||||||||||||||||
Amortization of acquired capitalized commissions | (F) | — | — | (0.01 | ) | — | |||||||||||||||||||||||
Debt issuance costs | (G) | — | 0.03 | — | 0.02 | ||||||||||||||||||||||||
Non-GAAP tax adjustments | (H)+(I) | (0.05 | ) | (0.06 | ) | (0.11 | ) | (0.14 | ) | ||||||||||||||||||||
Non-GAAP diluted net income per share attributable to Trimble Inc.: | $ | 0.53 | $ | 0.51 | $ | 0.97 | $ | 0.97 | |||||||||||||||||||||
Third Quarter of 2019 | Fiscal Year 2019 | ||||||||||||||||||||||||||||
Low End | High End | Low End | High End | ||||||||||||||||||||||||||
FORECASTED DILUTED NET INCOME PER SHARE: | |||||||||||||||||||||||||||||
Forecasted GAAP diluted net income per share attributable to Trimble Inc.: | $ | 0.24 | $ | 0.28 | $ | 1.10 | $ | 1.18 | |||||||||||||||||||||
Acquired deferred revenue adjustment | (A) | — | — | 0.02 | 0.02 | ||||||||||||||||||||||||
Restructuring charges | (B) | 0.01 | 0.01 | 0.05 | 0.05 | ||||||||||||||||||||||||
Amortization of purchased intangible assets | (C) | 0.16 | 0.16 | 0.66 | 0.66 | ||||||||||||||||||||||||
Stock-based compensation | (D) | 0.08 | 0.08 | 0.31 | 0.31 | ||||||||||||||||||||||||
Acquisition / divestiture items | (E) | 0.01 | 0.01 | 0.04 | 0.04 | ||||||||||||||||||||||||
Amortization of acquired capitalized commissions | (F) | (0.01 | ) | (0.01 | ) | (0.03 | ) | (0.03 | ) | ||||||||||||||||||||
Non-GAAP tax adjustments | (H)+(I) | (0.04 | ) | (0.04 | ) | (0.24 | ) | (0.24 | ) | ||||||||||||||||||||
Forecasted non-GAAP diluted net income per share attributable to Trimble Inc.: | $ | 0.45 | $ | 0.49 | $ | 1.91 | $ | 1.99 |
(A) | Acquired deferred revenue adjustment. Purchase accounting generally requires us to write-down acquired deferred revenue to fair value. Our GAAP revenue includes the fair value impact from purchase accounting for post-contract support and subscriptions contracts assumed in connection with our acquisitions. The non-GAAP adjustment to our revenue is intended to reflect the full amount of such revenue. We believe this adjustment is useful to investors as a measure of the ongoing performance of our business and facilitates analysis of revenue growth and business trends. |
(B) | Restructuring charges. Included in our GAAP presentation of cost of sales and operating expenses, restructuring charges recorded are primarily for employee compensation resulting from reductions in employee headcount in connection with our company restructurings. We exclude restructuring charges from our non-GAAP measures because we believe they do not reflect expected future operating expenses, they are not indicative of our core operating performance, and they are not meaningful in comparisons to our past operating performance. We have incurred restructuring expense in each of the periods presented. However the amount incurred can vary significantly based on whether a restructuring has occurred in the period and the timing of headcount reductions. |
(C) | Amortization of purchased intangible assets. Included in our GAAP presentation of gross margin and operating expenses is amortization of purchased intangible assets. U.S. GAAP accounting requires that intangible assets are recorded at fair value and amortized over their useful lives. Consequently, the timing and size of our acquisitions will cause our operating results to vary from period to period, making a comparison to past performance difficult for investors. This accounting treatment may cause differences when comparing our results to companies that grow internally because the fair value assigned to the intangible assets acquired through acquisition may significantly exceed the equivalent expenses that a company may incur for similar efforts when performed internally. Furthermore, the useful life that we use to amortize our intangible assets over may be substantially different from the time period that an internal growth company incurs and recognizes such expenses. We believe that by excluding the amortization of purchased |
(D) | Stock-based compensation. Included in our GAAP presentation of cost of sales and operating expenses, stock-based compensation consists of expenses for employee stock options and awards and purchase rights under our employee stock purchase plan. We exclude stock-based compensation expense from our non-GAAP measures because some investors may view it as not reflective of our core operating performance as it is a non-cash expense. For the second quarter and first two quarters of fiscal years 2019 and 2018, stock-based compensation was allocated as follows: |
Second Quarter of | First Two Quarters of | ||||||||||||||
(Dollars in millions) | 2019 | 2018 | 2019 | 2018 | |||||||||||
Cost of sales | $ | 1.4 | $ | 1.1 | $ | 2.7 | $ | 2.2 | |||||||
Research and development | 4.0 | 3.2 | 7.5 | 6.3 | |||||||||||
Sales and marketing | 3.1 | 2.4 | 5.8 | 4.7 | |||||||||||
General and administrative | 8.7 | 10.2 | 17.5 | 21.1 | |||||||||||
Total stock-based compensation expense | $ | 17.2 | $ | 16.9 | $ | 33.5 | $ | 34.3 |
(E) | Acquisition / divestiture items. Included in our GAAP presentation of cost of sales and operating expenses, acquisition costs consist of external and incremental costs resulting directly from merger and acquisition and strategic investment activities such as legal, due diligence, integration, and other closing costs including the acceleration of acquisition stock options and adjustments to the fair value of earn-out liabilities. Included in our GAAP presentation of non-operating income (expense), net, acquisition/divestiture items includes unusual acquisition, investment, and/or divestiture gains/losses. Although we do numerous acquisitions, the costs that have been excluded from the non-GAAP measures are costs specific to particular acquisitions. These are one-time costs that vary significantly in amount and timing and are not indicative of our core operating performance. |
(F) | Amortization of acquired capitalized commissions. Purchase accounting generally requires us to eliminate capitalized sales commissions balances as of the acquisition date. Our GAAP sales and marketing expenses generally do not reflect the amortization of these capitalized sales commissions balances. The non-GAAP adjustment to increase our sales and marketing expenses is intended to reflect the full amount of amortization related to such balances as though the acquired companies operated independently in the periods presented. We believe this adjustment to sales and marketing expenses is useful to investors as a measure of the ongoing performance of our business. |
(G) | Debt issuance costs. Included in our non-operating income (loss), net this amount represents incurred costs in connection with a bridge facility we put in place for the Viewpoint acquisition, costs associated with the issuance of new credit facilities and our senior notes issued in 2018 that were not capitalized as debt issuance costs and a write-off of debt issuance costs for terminated and/or modified credit facilities. We excluded the debt issuance cost write-off from our non-GAAP measures. We believe that investors benefit from excluding this item from our non-operating income to facilitate an evaluation of our non-operating income trends. |
(H) | Non-GAAP items tax effected. This amount adjusts the provision for income taxes to reflect the effect of the non-GAAP items (A) - (G) on non-GAAP net income. We believe this information is useful to investors because it provides for consistent treatment of the excluded items in this non-GAAP presentation. |
(I) | Difference in GAAP and Non-GAAP tax rate. This amount represents the difference between the GAAP and Non-GAAP tax rates applied to the Non-GAAP operating income plus the Non-GAAP non-operating income (expense), net. We believe that investors benefit from excluding this amount from our non-GAAP income tax provision because it facilitates a comparison of the non-GAAP tax provision in the current and prior periods. |
(J) | GAAP and non-GAAP tax rate percentages. These percentages are defined as GAAP income tax provision as a percentage of GAAP income before taxes and non-GAAP income tax provision as a percentage of non-GAAP income before taxes. We believe that investors benefit from a presentation of non-GAAP tax rate percentage as a way of facilitating a comparison to non-GAAP tax rates in prior periods. |