EXHIBIT 99.1
Trimble Third Quarter Results Exceed Guidance
o Record revenues of $139.6 million versus guidance of $129.0 - $132.0
million;
o GAAP EPS of $0.29 versus guidance of $0.19 - $0.23;
o GAAP EPS were reduced by $0.05 per share for amortization of purchased
intangibles and $0.02 per share for restructuring activities;
SUNNYVALE, Calif., October 28, 2003 - Trimble (Nasdaq: TRMB) today announced
results for its third fiscal quarter ended October 3, 2003. The Company reported
third quarter revenues of approximately $139.6 million, versus approximately
$114.7 million in the third quarter of 2002.
GAAP EPS for the third quarter of 2003 were $0.29, versus $0.09 in the third
quarter of 2002. GAAP EPS for the third quarter of 2003 included approximately
$0.05 per share for amortization of purchased intangibles and approximately
$0.02 per share for restructuring activities, while GAAP EPS for the third
quarter of 2002 were reduced by approximately $0.06 per share for amortization
of purchased intangibles. GAAP EPS for the third quarter of 2003 were calculated
on a diluted basis using approximately 34.6 million shares.
The net accounts receivables balance for the third quarter of 2003 decreased
sequentially to $97.4 million from $109.7 million in the second quarter of 2003,
while days sales outstanding improved to 59 days from 69 days during the same
time period. This contributed to positive operating cash flow of $19.4 million
for the quarter.
"During the third quarter we continued to validate our position as a market
leader in our core businesses, while moving forward on emerging opportunities
that will provide for additional growth over the next several years," said
Steven W. Berglund, president and CEO of Trimble. "We also continued to show
organic growth in most of our key businesses, while at the same time integrating
the Applanix acquisition and the products from the Nikon joint venture.
Additionally, we made progress in the implementation of our regional fulfillment
centers, which led to a sequential decline in days sales outstanding and
inventory days and provided a significant increase in operating cash flow."
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Third Fiscal Quarter Business Segment Highlights
Engineering and Construction (E&C)
Total third quarter E&C revenues increased by 14 percent over the third quarter
of 2002. Sales of survey instruments and Tripod Data Systems data collection
software and rugged handheld computing products remained strong, leading to the
double-digit sales growth for the business over the third quarter of 2002. Sales
of construction laser products grew during the quarter, reflecting a broader
product portfolio and distribution.
Field Solutions (TFS) - Agriculture and Geographic Information Systems (GIS)
TFS revenues for the third quarter increased by approximately 52 percent over
the third quarter of 2002. Strong demand for GeoExplorer(R) CE series GPS
handhelds fueled GIS sales, with particular strength coming from utilities and
the federal government ahead of its fiscal year-end. Agriculture product sales
also grew significantly during the quarter, with high-end guidance products
continuing to gain momentum on new tractor platforms, and in new geographies and
crop types.
Trimble deferred approximately $2.4 million of revenue from the third quarter of
2002 into the fourth quarter of 2002 due to the delayed release of the
GeoExplorer CE Series GPS handheld.
Component Technologies (CT)
Third quarter revenues for CT increased by approximately 11 percent over the
third quarter of 2002. Continued strong demand for wireless infrastructure
products led to a favorable product mix. This favorable product mix, combined
with increased volumes in automotive and embedded products, and cost reductions
related to the transfer of the business' manufacturing operations from
California to China during the second half of 2002, led to the second
consecutive quarter of record operating margins.
Mobile Solutions (TMS)
TMS achieved a 40 percent sequential increase in subscriber count, despite sales
softness due to seasonality in the ready mix market and failures of purchased
components in the field. TMS sales and marketing efforts during the quarter were
diluted as a result, which led to a sequential decline in revenues. These
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component issues have been addressed and sales and marketing efforts have
returned to normal.
Guidance
The fourth quarter is typically a seasonally soft period for most of Trimble's
businesses. Year over year fourth quarter comparisons may be difficult due to
the previously stated deferral of GIS revenue, exceptionally strong timing
revenues, and a 14-week quarter in fourth quarter of 2002.
For the fourth quarter ending January 2, 2004, the Company expects revenues will
be between $128.0 and $130.0 million. Gross margins are expected to be
approximately 50 percent. Operating expenses, including approximately $2.5
million of amortization of intangibles and restructuring charges are expected to
be approximately $54.0 million. Net interest expense is expected to be
approximately $1.1 million, and other non-operating expense should be
approximately $1.8 million. The income tax provision should be approximately
$1.4 million. Within these revenue guidelines, Trimble expects GAAP EPS to be
between $0.16 and $0.19. GAAP EPS guidance was calculated assuming 34.7 million
shares outstanding.
For the full-year ending January 2, 2004, Trimble expects revenue to be between
$533.0 and $535.0 million, a 14 - 15 percent increase over 2002. GAAP EPS should
be between $0.87 and $0.90, a 142 - 150 percent increase over 2002.
For fiscal year 2004, the Company is issuing preliminary guidance for revenues
between $570.0 and $580.0 million, with GAAP EPS of $1.30 to $1.40. The Company
will update this guidance when it reports fourth quarter 2003 earnings in early
February.
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Investor Conference Call / Webcast Details
The Company will hold a conference call on Tuesday, October 28, 2003 at 2:00 PM
Pacific Time to review its third 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 3167012.
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 and year ending January 2, 2004 and for the
fiscal year 2004 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 Nikon-Trimble joint
venture and Applanix acquisition may not achieve anticipated results. Any
failure to achieve predicted results could negatively impact the Company's
revenues and gross margin. Whether the Company achieves its guidance for the
fourth quarter of 2003 and 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.
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<caption>
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
(Unaudited)
Three Months Ended Nine Months Ended
------------------ -----------------
Oct 3, Sep 27, Oct 3, Sep 27,
2003 2002 2003 2002
---- ---- ---- ----
<s> <c> <c> <c> <c>
Revenue $ 139,569 $ 114,748 $ 405,026 $ 342,033
Cost of revenue 70,457 57,167 203,064 169,168
------ ------ ------- -------
Gross Margin 69,112 57,581 201,962 172,865
------ ------ ------- -------
Gross Margin (%) 49.5% 50.2% 49.9% 50.5%
Operating expenses:
Research and development 17,346 15,235 50,463 45,259
Sales and marketing 25,015 21,338 73,572 65,362
General and administrative 10,306 10,812 28,837 31,484
Restructuring charges 627 154 1,733 646
Amortization of purchased intangibles 1,870 1,832 5,390 6,134
----- ----- ----- -----
Total operating expenses 55,164 49,371 159,995 148,885
------ ------ ------- -------
Operating income from continuing operations 13,948 8,210 41,967 23,980
Non-operating income (expense), net:
Interest expense, net (1,059) (3,538) (10,448) (10,896)
Foreign exchange gain / (loss), net 166 (354) 649 (1,123)
Other income, net 265 156 126 334
Expenses for affiliated operations, net (1,984) (1,516) (5,100) (2,726)
Total non-operating expense, net (2,612) (5,252) (14,773) (14,411)
------ ------ -------- --------
Income from continuing operations before
income taxes 11,336 2,958 27,194 9,569
Income tax provision 1,400 250 3,800 3,250
----- --- ----- -----
Net income $ 9,936 $ 2,708 $ 23,394 $ 6,319
======= ======= ======== =======
Earnings per share :
Basic $ 0.30 $ 0.09 $ 0.75 $ 0.22
Diluted $ 0.29 $ 0.09 $ 0.72 $ 0.22
Shares used in calculating earnings per share :
Basic 32,788 28,819 31,192 28,372
====== ====== ====== ======
Diluted 34,562 29,211 32,617 28,907
====== ====== ====== ======
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<caption>
CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)
Oct 3, Jan 3,
2003 2003
---- ----
Assets
<s> <c> <c>
Current assets:
$ 43,409 $ 28,679
Cash and cash equivalents
Accounts and other receivables, net 103,065 79,645
Inventories, net 72,699 61,144
Other current assets 8,215 8,477
----- -----
Total current assets 227,388 177,945
Property and equipment, net 24,347 22,037
Goodwill and other purchased intangible assets, net 250,975 229,171
Deferred income taxes 420 417
Other assets 22,391 12,086
Total assets $ 525,521 $ 441,656
=========== ===========
Liabilities and Shareholders' Equity
Current liabilities:
Bank and other short-term borrowings $ - $ 6,556
Current portion of long-term debt 12,767 24,104
Accounts payable 25,961 30,669
Accrued compensation and benefits 22,388 17,728
Accrued liabilities 20,955 27,394
Deferred income tax 1,636 -
Income taxes payable 7,831 6,450
----- -----
Total current liabilities 91,538 112,901
Non-current portion of long-term debt 95,230 107,865
Deferred gain on joint venture 10,237 10,792
Deferred income tax 2,944 2,561
Other non-current liabilities 7,329 6,186
----- -----
Total liabilities 207,278 240,305
------- -------
Shareholders' equity:
Common stock 299,387 225,872
Accumulated deficit (101) (23,495)
Accumulated other comprehensive income/(loss) 18,957 (1,026)
Total shareholders' equity 318,243 201,351
------- -------
Total liabilities and shareholders' equity $ 525,521 $ 441,656
=========== ===========
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<caption>
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
Three Months Ended Nine Months Ended
------------------ -----------------
Oct 3, Sep 27, Oct 3, Sep 27,
2003 2002 2003 2002
---- ---- ---- ----
<s> <c> <c> <c> <c>
Cash flow from operating activities:
Net Income 9,936 2,708 23,394 6,319
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation expense 2,187 2,219 6,647 7,804
Amortization expense 1,972 2,078 5,880 6,775
Provision for doubtful accounts 145 2,048 295 3,590
Amortization of deferred gain - (265) - (1,061)
Amortization of debt issuance cost 116 - 3,389 -
Deferred income taxes 292 (313) 1,880 731
Other 127 1,385 2,002 2,277
Add decrease (increase) in assets:
Accounts receivables, net 14,527 2,869 (18,023) (11,132)
Inventories 2,905 (3,089) (7,890) (3,873)
Other current and non-current assets 291 (1,156) (2,586) (2,395)
Effect of foreign currency translation adjustment 617 (251) 5,749 506
Add increase (decrease) in liabilities:
Accounts payable (12,090) 1,614 (6,040) 3,886
Accrued compensation and benefits (839) 1,356 3,900 3,813
Accrued liabilities (1,999) (991) (4,365) (3,743)
Deferred gain - short term - (331) - (7)
Deferred gain on joint venture (140) - (555) 11,000
Income taxes payable 1,326 (997) 2,063 574
----- ---- ----- ---
Net cash provided by (used in) operating activities 19,373 8,884 15,740 25,064
Cash flows from investing activities:
Acquisitions, net of cash acquired (2,665) 3,875 (8,118) 1,717
Acquisition of property and equipment (2,883) (1,261) (6,383) (5,474)
Proceeds from disposal of property and equipment 129 - 157 -
Cost of capitalized patents (639) - (652) (48)
---- ---- ---
Net cash provided by (used in) investing activities (6,058) 2,614 (14,996) (3,805)
Cash flow from financing activities:
Issuance of common stock 2,629 40 47,015 19,302
Collections(Payments) of notes receivable (150) 75 495 (590)
Payments on long-term debt and revolving credit lines (3,210) (8,997) (33,524) (40,697)
------ ------ ------- -------
Net cash provided by (used in) financing activities (731) (8,882) 13,986 (21,985)
Net increase (decrease) in cash and cash equivalents 12,584 2,616 14,730 (726)
Cash and cash equivalents - beginning of period 30,825 27,736 28,679 31,078
------ ------ ------ ------
Cash and cash equivalents - end of period $ 43,409 $30,352 $43,409 $30,352
======== ======= ======= =======
Supplemental disclosures of cash flow information:
Cash paid during the period for:
Interest $ 1,140 $ 869 $ 9,133 $11,163
======== ======= ======= =======
Income taxes, net of refunds $ 292 $ 173 $ 582 $ 1,906
======== ======= ======= =======
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<caption>
Financial Dashboard
-------------------
Q3'02 Q2'03 Q3'03
Actual Actual Actual
------ ------ ------
<s> <c> <c> <c>
Income Statement Metrics
- ------------------------
Total Revenue $ 114,748 $ 138,132 $ 139,569
--------- ---------- ----------
Engineering & Construction 82,037 95,797 93,607
Trimble Field Solutions 13,252 19,950 20,160
Component Technologies 14,607 16,820 16,230
Trimble Mobile Solutions 2,244 3,651 2,672
Portfolio Technologies 2,608 1,914 6,900
Gross Margin 50.2% 51.5% 49.5%
---- ---- ----
Total Segment Income $ 14,508 $ 24,325 $ 21,344
--------- ---------- ----------
Engineering & Construction 14,590 18,623 14,997
Trimble Field Solutions 707 3,555 4,111
Component Technologies 2,524 4,558 4,625
Trimble Mobile Solutions (3,139) (2,025) (2,118)
Portfolio Technologies (174) (386) (271)
Corporate and Other Charges $ (6,298) $ (7,204) $ (7,396)
Non-operating expense and income taxes $ (5,502) $ (9,016) $ (4,012)
-------- ---------- ---------
Net Income (loss) $ 2,708 $ 8,105 $ 9,936
======== ========== ==========
EBITDA $ 10,548 $ 16,452 $ 16,452
Amortization of Intangibles 1,832 1,725 1,870
Depreciation 2,220 2,243 2,187
GAAP EPS $ 0.09 $ 0.25 $ 0.29
--------- ---------- ----------
Balance Sheet and Liquidity Metrics
Cash & Cash Equivalents $ 30,352 $ 30,825 $ 43,409
Accounts Receivables, Net $ 79,215 $ 109,657 $ 97,446
Inventories, Net $ 57,368 $ 71,108 $ 72,699
Total Debt $ 149,868 $ 110,737 $ 107,997
Short Term Debt 62,336 12,623 12,767
Long Term Debt 87,532 98,114 95,230
Equity $ 187,323 $ 283,573 $ 318,243
Working Capital $ 34,114 $ 120,967 $ 135,850
Capital Expenditures $ 1,261 $ 2,015 $ 2,883
Cash Flow from (used in ) Operations* $ 8,884 $ 2,095 $ 19,373
Financial Ratios
Days Sales Outstanding 52 69 59
Days Sales in Inventory 92 97 94
Current ratio 1.2 2.2 2.5
Debt to Equity 0.8 0.3 0.2
- -----------------------------------------------------------------------
Other
Headcount 2,067 2,039 2,096
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- ----------
Notes:
1) Engineering & Construction consists of Construction Instruments (CI), Machine
Control, Survey and Tripod Data Systems (TDS).
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.
* Cash Flow from Operations includes impact of exchange rate changes on cash.
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