8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 8-K

Current Report
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): July 25, 2006 (July 25, 2006)

Trimble Navigation Limited

(Exact name of registrant as specified in its charter)

California

(State or other jurisdiction of incorporation)

0-18645

(Commission File Number)

94-2802192

(IRS Employer I.D. No.)

935 Stewart Drive, Sunnyvale, California

(Address of principal executive offices)

94085

(Zip Code)

Registrant’s telephone number, including area code: (408) 481-8000

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02 Results of Operations and Financial Condition.

          On July 25, 2006, the Company announced its financial results for the quarter ended June 30, 2006.  A copy of the press release dated July 25, 2006 relating to this announcement is furnished as Exhibit 99.1. 

Item 9.01 Financial Statements and Exhibits.

Ex. 99.1   Text of Company Press Release dated July 25, 2006.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Company has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	TRIMBLE NAVIGATION LIMITED
	a California corporation
Dated: July 25, 2006
	/s/ Irwin Kwatek
	Irwin Kwatek
	Vice President

EXHIBIT INDEX
Exhibit Number Description

Exhibit No.	Description
99.1	Text of Company Press Release dated July 25, 2006

EX-99.1

Exhibit 99.1

Trimble Reports Second Quarter 2006 Revenue Growth of 20 Percent

          SUNNYVALE, Calif., July 25 /PRNewswire-FirstCall/ -- Trimble (Nasdaq: TRMB) today announced results for its second quarter 2006, ended  June 30, 2006. Revenue for the second quarter of 2006 was $245.3 million, up 20 percent from revenue of $204.2 million in the second quarter of 2005. 

          Operating income for the second quarter of 2006 was $38.7 million, flat when compared to the second quarter of 2005. For year-over-year comparisons, it should be noted that second quarter 2006 operating income reflects the impact of stock-based compensation expense resulting from the adoption of FAS 123(R) of $3.3 million. Additionally, the net impact of transactions with the Caterpillar Trimble Control Technologies (CTCT) joint venture reduced operating results by $5.1 million; these transactions were included in non-operating results in 2005. In addition, expenses related to acquisitions, namely amortization of purchased intangibles and purchased in-process research and development expense increased by $2.6 million versus second quarter of 2005. Adjusting for the above factors, operating income in the second quarter of 2006 was up 27 percent compared to the second quarter of 2005.

          Net income for the second quarter of 2006 was $28.5 million, up 20 percent when compared to net income of $23.8 million in the second quarter of 2005. Earnings per share for the second quarter of 2006 were $0.49, up approximately 17 percent compared to earnings per share of $0.42 in the second quarter of 2005. Earnings per share in the second quarter of 2006 were negatively impacted by $0.04 due to the adoption of FAS 123(R) and by $0.06 due to acquisition-related expenses.

          Adjusting for the impact of FAS 123(R) and acquisition related expenses, non-GAAP net income for the second quarter of 2006 was $34.1 million, up 37 percent compared to non-GAAP net income of $24.9 million in the second quarter of fiscal 2005. Non-GAAP earnings per share for the second quarter of 2006 were $0.59 up approximately 34 percent from $0.44 per share in the second quarter of 2005. GAAP and non-GAAP earnings per share for the second quarter of 2006 were calculated on a diluted basis using approximately 58.1 million shares.  

          “Trimble’s growth reflects the strong performance of its core segments. We anticipate this momentum to carry us into the second half of the year,” said Steven W. Berglund, Trimble’s president and chief executive officer. “Our strategic initiatives in the construction and mobile work place are beginning to contribute to Trimble’s revenue and provide the foundation for continued growth.” 

          Trimble Results by Business Segment
          The impact of the adoption of FAS123(R) should be considered in all year-over-year segment comparisons as second quarter 2005 results did not include stock-based compensation expense.

          Engineering and Construction
          Revenue for Engineering and Construction (E&C) was $168.0 million for the second quarter of 2006, up approximately 19 percent compared to revenue of $141.1 million in the second quarter of 2005.   

          On a reported basis, operating margins in E&C were 23 percent in the second quarter of 2006, compared to 26 percent in the second quarter of 2005. Excluding the impact of FAS 123(R) adoption and the CTCT joint venture transactions, discussed above, E&C operating margins were up one point
year-over-year.

          E&C growth continues to be enabled by a steady market, strong sales of new products and aggressive marketing programs. 

          Field Solutions
          Revenue for Field Solutions (TFS) was $36.3 million in the second quarter of 2006, up 13 percent compared to $32.2 million in revenue in the second quarter of 2005. Both the agriculture and geographical information system businesses experienced double-digit growth in the quarter.  

          TFS operating margins for the second quarter of 2006 were 31 percent, compared to 25 percent in the second quarter of 2005 due to strong operating leverage. 

          Mobile Solutions
          Second quarter 2006 revenue for Mobile Solutions (TMS), was $14.9 million, up 133 percent from revenue of $6.4 million in the second quarter of 2005. Revenue growth resulted from strong growth in subscriptions and the impact of acquisitions.  

          TMS operating margins were 3 percent for the second quarter of 2006, compared to a negative 29 percent in the second quarter of 2005. Profitability continues to improve in this segment due to higher subscription revenue. 

          Advanced Devices
          Advanced Devices revenue was $26.1 million, up 7 percent from revenue of $24.5 million in the second quarter of 2005.  

          Advanced Devices operating margins were 9 percent, compared to 19 percent in the second quarter of 2005. This decline is primarily driven by expenses related to the introduction of the TrimTrac(R) GSM version and product mix. 

          Non-GAAP vs. GAAP Financials
          The Company provides non-GAAP financial measures called “non-GAAP net income” and “non-GAAP earnings per share” 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. In many cases, non-GAAP financial measures are used by analysts and investors to evaluate the Company. 

          The Company excludes the amortization of purchased intangibles, in-process research and development, restructuring charges, the amortization of acquisition-related inventory step-up charges, and the impact of stock-based compensation in computing non-GAAP measures because the chief executive officer excludes these items when budgeting and evaluating the business. These non-GAAP financial measures are not intended to supersede or replace the Company’s GAAP results. Please see the supplemental financial statements, attached to this press release, for a reconciliation of GAAP to non-GAAP results.  

          Forward Looking Guidance
          In the third quarter of 2006 the Company expects revenue to grow 17 to 19 percent compared to the third quarter of 2005, with revenue between $220 million and $225 million. At a 35 percent tax rate, with approximately 59 million shares outstanding, the Company expects third quarter 2006 GAAP earnings per share between $0.36 and $0.39.

          The above GAAP guidance includes stock-based compensation due to the adoption of FAS 123(R). On a post-tax basis, the Company expects stock-based compensation for the third quarter of 2006 to be approximately $.04 per share. 

          Using a 35 percent tax rate -- excluding the amortization of intangibles of $4.2 million and the impact of stock-based compensation expense of $3.3 million -- the Company expects non-GAAP earnings per share between $0.44 and $0.47 for the third quarter of 2006.   

          Investor Conference Call / Webcast Details
          The Company will hold a conference call on July 25, 2006 at 1:30 p.m. PDT to review its second quarter 2006 results. It will be broadcast live on the Web at www.trimble.com/investors.shtml. A replay of the call will be available for thirty days beginning at 8:00 p.m. PDT on July 25, 2006. The replay number is (800) 642-1687 (U.S.), or (706) 645-9291 (international), and the pass code is 1480042.   

          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, agriculture, machine guidance, asset and fleet management, wireless platforms, and telecommunications infrastructure. Founded in 1978 and headquartered in Sunnyvale, California, Trimble has more than 2,400 employees in more than 18 countries worldwide.

          Certain statements made in this press release are forward-looking statements within the meaning of 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, effective tax rate, stock-based compensation, amortization of purchased intangibles and earnings per share estimates for the third fiscal quarter of 2006 and the Company’s outlook for the remainder of the year. 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, 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. Fuel and other operating costs could remain high or increase, which could weaken sales into the agricultural market. In addition, the Company’s results may be adversely affected if the growth rates and profitability expectations for each of its four segments are not achieved, or its joint ventures and recent acquisitions do not achieve anticipated results, or if the Company is unable to market, manufacture and ship new products.  Any failure to achieve predicted results could negatively impact the Company’s revenues, gross margin and other financial results. Whether the Company achieves its guidance for the third fiscal quarter of 2006 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						Six Months Ended
	Jun-30, 2006			Jul-01, 2005			Jun-30, 2006			Jul-01, 2005
Revenue	$	245,326		$	204,225		$	471,180		$	399,608
Cost of sales		123,670			101,818			242,061			199,394
Gross margin		121,656			102,407			229,119			200,214
Gross margin (%)		49.6	%		50.1	%		48.6	%		50.1	%
Operating expenses
Research and development		27,607			20,865			52,053			42,693
Sales and marketing		35,747			28,704			68,453			59,075
General and administrative		16,205			11,924			31,966			24,756
Restructuring charges		—			—			—			278
In-process research and development		1,020			—			1,020			—
Amortization of purchased intangible assets		2,408			2,177			3,893			4,475
Total operating expenses		82,987			63,670			157,385			131,277
Operating income		38,669			38,737			71,734			68,937
Non-operating income (expense), net
Interest income (expense), net		598			(419	)		1,032			(1,030	)
Foreign currency transaction gain, net		334			163			927			6
Income (Expense) for affiliated operations, net		1,575			(2,499	)		3,191			(5,538	)
Other income, net		18			138			182			168
Total non-operating income (expense), net		2,525			(2,617	)		5,332			(6,394	)
Income  before taxes		41,194			36,120			77,066			62,543
Income tax provision		12,691			12,333			22,735			21,317
Net income	$	28,503		$	23,787		$	54,331		$	41,226
Earnings per share:
Basic	$	0.52		$	0.45		$	1.00		$	0.78
Diluted	$	0.49		$	0.42		$	0.94		$	0.73
Shares used in calculating earnings per share:
Basic		54,847			52,959			54,544			52,729
Diluted		58,128			57,057			57,761			56,780

NON-GAAP RECONCILIATION
(Dollars in thousands, except per share data)
(Unaudited)

	Three Months Ended					Six Months Ended
	Jun-30, 2006			Jul-01, 2005		Jun-30, 2006		Jul-01,  2005
GAAP income before taxes	$	41,194		$	36,120	$	77,066	$	62,543
Non-GAAP adjustments
Amortization of purchased intangibles		3,742	*(a)		2,177		6,082		4,475
In-process research and development		1,020			—		1,020		—
Amortization of acquisition- related inventory step-up		—			—		—		228
Restructuring charges		—			—		—		278
Stock-based compensation		3,259	*(b)		—		6,489		—
Total Non-GAAP adjustments		8,021			2,177		13,591		4,981
Non-GAAP income before taxes		49,215			38,297		90,657		67,524
Income tax provision		15,140			13,404		26,723		23,633
Non-GAAP net income	$	34,075		$	24,893	$	63,934	$	43,891
Diluted Non-GAAP earnings per share	$	0.59		$	0.44	$	1.11	$	0.77
Shares used in calculating diluted non-GAAP earnings per share		58,128			57,057		57,761		56,780

*(a)     Amortization of purchased intangibles, includes $2,408K recorded in operating expense and $1,334K recorded in cost of sales.
*(b)     Stock compensation expense by Segment and GAAP category (in $000’s):

Three Months Ended June 30, 2006
(‘000s)

	E&C		TFS		TMS		Advanced Devices		Corporate		Total
Cost of sales	$	110		25		17		16		141	$	309
Research & development	$	293		79		52		196		48	$	668
Sales & marketing	$	313		61		21		124		193	$	712
General & administrative	$	346		85		75		147		917	$	1,570
Total	$	1,062	$	250	$	165	$	483	$	1,299	$	3,259

Six Months Ended June 30, 2006
(‘000s)

	E&C		TFS		TMS		Advanced Devices		Corporate		Total
Cost of sales	$	207		49		26		33		281	$	596
Research & development	$	553		154		106		397		95	$	1,305
Sales & marketing	$	659		120		65		219		389	$	1,452
General & administrative	$	676		170		142		320		1828	$	3,136
Total	$	2,095	$	493	$	339	$	969	$	2,593	$	6,489

EBITDA RECONCILIATION
(Dollars in  thousands)
(Unaudited)

	Three Months Ended					Six Months Ended
	Jun-30, 2006			Jul-01,  2005		Jun-30, 2006			Jul-01, 2005
GAAP net income	$	28,503		$	23,787	$	54,331		$	41,226
Add back :
Interest (income) expense, net		(598	)		419		(1,032	)		1,030
Income tax provision		12,691			12,333		22,735			21,317
Depreciation expense		3,386			2,378		6,489			4,890
Amortization of intangibles		3,766			2,209		6,145			4,548
EBITDA	$	47,748		$	41,126	$	88,668		$	73,011

CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)

	Jun-30, 2006		Dec-30, 2005
Assets
Current assets:
Cash and cash equivalents		107,726		73,853
Accounts receivables, net		171,942		145,100
Other receivables		9,336		6,489
Inventories, net		113,925		107,851
Deferred income taxes		19,015		18,504
Other current assets		9,587		8,580
Total current assets		431,531		360,377
Property and equipment, net		47,278		42,664
Goodwill and other purchased intangible assets, net		370,946		313,456
Deferred income taxes		6,483		3,580
Other assets		24,166		23,011
Total non-current assets		448,873		382,711
Total assets	$	880,404	$	743,088
Liabilities and Shareholders’ Equity
Current liabilities:
Current portion of long-term loan		431		216
Accounts payable		47,984		45,206
Accrued compensation and benefits		38,152		36,083
Accrued liabilities		22,686		16,189
Deferred revenue		24,502		12,588
Accrued warranty expenses		7,475		7,466
Deferred income taxes		3,996		4,087
Income taxes payable		28,497		24,922
Total current liabilities		173,723		146,757
Non-current portion of long-term loan		459		433
Deferred income taxes		14,373		5,602
Other non-current liabilities		27,110		19,041
Total liabilities		215,665		171,833
Shareholders’ equity:
Common stock		413,619		384,196
Retained earnings		221,857		167,525
Accumulated other comprehensive income		29,263		19,534
Total shareholders’ equity		664,739		571,255
Total liabilities and shareholders’ equity	$	880,404	$	743,088

CONSOLIDATED STATEMENTS OF CASH FLOWS
(In  thousands)
(Unaudited)

	Six Months Ended
	Jun-30, 2006			Jul-01, 2005
Cash flow from operating activities:
Net Income	$	54,331		$	41,226
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation expense		6,489			4,890
Amortization expense		6,145			4,548
Provision for doubtful accounts		95			(678	)
Amortization of debt issuance cost		90			244
Deferred income taxes		4,804			3,846
Stock-based compensation		6,489			—
In-process research and development		1,020			—
Excess tax benefit for stock-based compensation		(4,770	)		—
Other		262			(48	)
Add decrease (increase) in assets:
Accounts receivables, net		(19,417	)		(26,986	)
Other receivables		(2,649	)		1,709
Inventories		(2,860	)		(4,061	)
Other current and non- current assets		(27,771	)		(1,452	)
Add increase (decrease) in liabilities:
Accounts payable		1,386			(1,997	)
Accrued compensation and benefits		1,185			158
Accrued liabilities		15,695			300
Deferred gain on joint venture		—			124
Deferred revenue		9,862			2,210
Income taxes payable		8,983			12,537
Net cash provided by operating activities		59,369			36,570
Cash flows from investing activities:
Acquisitions, net of cash acquired		(38,137	)		(20,233	)
Acquisition of property and equipment		(10,943	)		(7,734	)
Dividends received		—			515
Cost of capitalized patents		—			(89	)
Net cash used in investing activities		(49,080	)		(27,541	)
Cash flow from financing activities:
Issuance of common stock		17,162			15,453
Excess tax benefit for stock- based compensation		4,770			—
Proceeds from long-term debt and revolving credit lines		—			6,000
Payments on long-term debt and revolving credit lines		—			(44,250	)
Other		(777	)		307
Net cash provided (used) in financing activities		21,155			(22,490	)
Effect of exchange rate changes on cash and cash equivalents		2,429			(1,551	)
Net increase (decrease) in cash and cash equivalents		33,873			(15,012	)
Cash and cash equivalents - beginning of period		73,853			71,872
Cash and cash equivalents - end of period	$	107,726		$	56,860

	Q1’05 Actual			Q2’05 Actual			Q3’05 Actual			Q4’05 Actual
Income Statement Metrics
Total Revenue	$	195,383		$	204,225		$	188,483		$	186,821
Engineering & Construction		120,198			141,096			134,172			128,994
Trimble Field Solutions		45,425			32,187			24,882			25,349
Advanced Devices		22,359			24,505			22,215			22,049
Trimble Mobile Solutions		7,401			6,437			7,214			10,429
Gross Margin		50.1	%		50.1	%		51.6	%		49.4	%
Total Segment Income	$	39,663		$	47,916		$	40,492		$	32,589
Engineering & Construction		21,490			37,173			34,360			24,970
Trimble Field Solutions		15,577			8,044			3,962			4,944
Advanced Devices		3,232			4,578			2,916			2,486
Trimble Mobile Solutions		(636	)		(1,879	)		(746	)		189
Corporate and Other Charges	$	(9,463	)	$	(9,179	)	$	(7,464	)	$	(9,609	)
Non-operating income (expense)	$	(12,761	)	$	(14,951	)	$	(12,792	)	$	413
and income taxes
Net Income	$	17,439		$	23,786		$	20,236		$	23,393
GAAP operating margin%		15.5	%		19.0	%		17.5	%		12.3	%
Non-GAAP operating margin%		16.9	%		20.0	%		18.5	%		13.7	%
GAAP EPS	$	0.31		$	0.42		$	0.35		$	0.41
Fully-taxed (35%) Non-GAAP EPS	$	0.34		$	0.44		$	0.37		$	0.29
Balance Sheet Metrics
Cash & Cash Equivalents	$	50,193		$	56,860		$	87,293		$	73,853
Accounts Receivables, Net	$	154,540		$	150,590		$	146,792		$	145,100
Inventories, Net	$	91,309		$	89,853		$	93,940		$	107,851
Total Debt	$	28,836		$	661		$	659		$	649
Short Term Debt		12,500			—			—			—
Long Term Debt		16,336			661			659			649
Equity	$	490,188		$	513,817		$	543,394		$	571,255
Cashflow Metrics
Cash Flow from (used in) Operations	$	(1,192	)	$	37,762		$	33,541		$	22,769
Working Capital	$	197,372		$	208,410		$	232,985		$	213,620
Capital Expenditures	$	3,164		$	4,570		$	6,666		$	9,036
EBITDA	$	31,885		$	41,126		$	35,142		$	35,822
Amortization of Intangibles		2,339			2,209			910			1,561
Depreciation		2,512			2,378			3,000			2,781
Financial Ratios Days Sales Outstanding		62			60			60			66
Inventory Turns (trailing 12 months)		4.3			4.1			4.0			3.9
Current ratio		2.5			2.7			2.8			2.5
Debt to Equity		0.1			0.0			0.0			0.0
Other
Headcount		2,231			2,308			2,347			2,462

(a) Impact of moving joint venture transactions from non-operating to operating income - reduced gross margin by 2.5 points and operating  income by 2.2 points in Q2’06. In addition, operating margins were impacted by 1.3 points due to stock-based compensation expense. (For details, please refer to the Non-GAAP Reconciliation).

	FY’05 Actual			Q1’06 Actual			Q2’06 Actual
Income Statement Metrics
Total Revenue	$	774,912		$	225,854		$	245,326
Engineering & Construction		524,460			146,734			168,041
Trimble Field Solutions		127,843			43,043			36,320
Advanced Devices		91,128			23,470			26,114
Trimble Mobile Solutions		31,481			12,607			14,851
Gross Margin		50.3	%		47.6	%		49.6	% (a)
Total Segment Income	$	160,660		$	42,833		$	52,719
Engineering & Construction		117,993			26,378			38,803
Trimble Field Solutions		32,527			13,909			11,299
Advanced Devices		13,212			2,323			2,243
Trimble Mobile Solutions		(3,072	)		223			374
Corporate and Other Charges		(35,715	)	$	(9,768	)	$	(14,049	)
Non-operating income (expense)		(40,091	)	$	(7,237	)	$	(10,167	)
and income taxes
Net Income	$	84,854		$	25,828		$	28,503
GAAP operating margin%		16.1	%		14.6	%		15.8	% (a)
Non-GAAP operating margin%		17.2	%		17.1	%		19.0	%
GAAP EPS	$	1.49		$	0.45		$	0.49
Fully-taxed (35%) Non-GAAP EPS	$	1.43		$	0.52		$	0.59
Balance Sheet Metrics
Cash & Cash Equivalents				$	97,648		$	107,726
Accounts Receivables, Net				$	171,392		$	171,942
Inventories, Net				$	101,552		$	113,925
Total Debt				$	603		$	890
Short Term Debt					166			431
Long Term Debt					437			459
Equity				$	611,860		$	664,739
Cashflow Metrics
Cash Flow from (used in) Operations	$	92,880		$	18,298		$	41,071
Working Capital	$	249,302		$	257,808
Capital Expenditures	$	23,436		$	4,972		$	5,971
EBITDA	$	143,974		$	40,882		$	47,748
Amortization of Intangibles		7,019			2,380			3,766
Depreciation		10,671			3,104			3,386
Financial Ratios
Days Sales Outstanding					57			55
Inventory Turns (trailing 12 months)					4.0			4.0
Current ratio					2.6			2.5
Debt to Equity					0.0			0.0
Other
Headcount					2,543			2,627

(a) Impact of moving joint venture transactions from non-operating to  operating income - reduced gross margin by 2.5 points and operating  income by 2.2 points in Q2’06. In addition, operating margins were impacted by 1.3 points due to  stock-based compensation expense. (For details, please refer to the Non-GAAP Reconciliation).