EXHIBIT 99.1
Trimble Announces Record Quarterly Results
o Record revenues of $179.5 million versus guidance of $163.0 - $166.0
million;
o GAAP EPS of $0.36 versus guidance of $0.28 - $0.30;
o Non-GAAP EPS (35 percent tax rate) of $0.32 versus First Call mean estimate
of $0.26;
o Full-year revenue guidance increased to $660.0 - 667.0 million versus
previous guidance of $615.0 - $625.0 million;
o Full-year GAAP EPS guidance increased to $1.05 - $1.09 versus previous
guidance of $0.98 - $1.04;
SUNNYVALE, Calif., July 27, 2004 - Trimble (Nasdaq: TRMB) today announced
results for its second fiscal quarter ended July 2, 2004. The Company reported
second quarter revenues of approximately $179.5 million, a 30 percent increase
over the approximately $138.1 million reported in the second quarter of 2003.
The second quarter is typically the Company's strongest due to seasonality in
the Engineering and Construction (E&C) market.
GAAP Net Income and EPS
GAAP net income for the second quarter of 2004 was approximately $19.5 million,
a 140 percent increase over the $8.1 million reported in the second quarter of
2003. GAAP EPS for the second quarter of 2004 were $0.36, a 125 percent increase
over the $0.16 reported in the second quarter of 2003. The Company used an 18.3
percent effective tax rate when calculating GAAP net income and EPS for the
second quarter of 2004 versus previous guidance of 15 percent. The Company
attributed this increase in tax rate to a stronger profit outlook for the entire
fiscal year 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
<page>
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.
Addendum to use of Non-GAAP Financial Measures - effective for the quarter ended
July 2, 2004
Beginning with the second quarter ended July 2, 2004, the Company began to
report its non-GAAP net income and EPS at a fully-taxed rate of 35 percent.
Prior to this change, the Company's reported non-GAAP net income and EPS were
taxed using the same effective rate as was used to calculate GAAP net income and
EPS. Using this rate (18.3 percent for the quarter ended July 2, 2004) non-GAAP
EPS for the quarter would have been $0.40. Going forward, the Company intends to
only report its non-GAAP net income and EPS at a fully-taxed rate of 35 percent.
A detailed reconciliation of the GAAP results to the non-GAAP results for the
quarter ended July 2, 2004 is provided in the accompanying financial statements
under: "Reconciliation of GAAP and Non-GAAP Net Income and EPS (35 percent tax
rate)." For the purpose of comparison with prior results, the Company has also
put a quarterly reconciliation dating back to the first quarter of 2002 of GAAP
to non-GAAP (35 percent tax rate) on its website at the following link:
http://www.trimble.com/investors.html.
Non-GAAP net income (fully-taxed at 35 percent) for the second quarter of 2004
was $17.2 million, a 71 percent increase over $10.1 million for the second
quarter of 2003. Non-GAAP EPS for the second quarter of 2004 were $0.32, a 60
percent increase over $0.20 for the second quarter of 2003. GAAP and non-GAAP
EPS for the second quarter of 2004 were calculated on a diluted basis using
approximately 54.6 million shares.
"We continued to see strength across all business segments this quarter," said
Steven W. Berglund, Trimble president and CEO. "Demand was generally robust and
our competitive position enabled us to take advantage of the improved
environment. Our results in construction machine control and agricultural
guidance were particularly strong. In addition, our business development efforts
continue to produce results. For example, we began initial shipments of our
<page>
TrimTrac locator product during the quarter. The procurement environment for
components remained a challenge, but we have addressed the problem and do not
expect it to have a significant effect on future results."
Second Fiscal Quarter Business Segment Highlights
Engineering and Construction
E&C reported record quarterly revenues for the second consecutive quarter,
growing by more than 22 percent versus the second quarter of 2003. All product
segments within E&C performed well and showed double-digit year-over-year
growth. Sales of construction machine control products were particularly strong
and were driven by seasonal buying in a robust construction market.
Field Solutions (TFS) - Agriculture and Geographic Information Systems (GIS)
TFS also reported record quarterly revenues for the second consecutive quarter,
growing by more than 50 percent over the second quarter of 2003. In the
agricultural market, continued strong demand for automated and manual guidance
products, combined with a robust agriculture environment drove strong sales. In
addition, Trimble began shipping its first automated guidance products to CNH
Global (NYSE: CNH) for dealer installation during the quarter.
Also contributing to the record quarter for TFS, were record sales of GIS
products. These sales were driven by continued acceptance of the Company's
GeoExplorer(R) series of rugged GPS handheld products, expanded distribution in
the U.S. and Europe and state and local government spending in the U.S.
Component Technologies (CT)
Second quarter revenues for CT increased by approximately 11 percent over the
second quarter of 2003. Demand for GPS boards used in security and vehicle
navigation products drove the year-over-year increase. The Company began
<page>
shipping its new TrimTrac(TM) locator and expects to deliver on its growing
six-figure unit backlog over the next several quarters.
Mobile Solutions (TMS)
Second quarter revenues for TMS increased by approximately 43 percent over the
second quarter of 2003. During the quarter, the total number of subscribers
increased by more than 50 percent over the first quarter of 2004 due to strong
additions from the Company's dealer channel as well as continued growth in the
construction materials supply vertical.
The Company also added two new enterprise accounts over the past several months.
In the telecommunications market, the Company won a contract with an
enterprise-size customer in July to outfit one division of its national service
fleet. Additionally, in the construction materials market, the Company began a
multi-quarter installation with one of the 10 largest ready mix fleet operators
in the U.S.
Guidance
For the third quarter ending October 1, 2004, the Company expects revenues will
be between $165.0 and $168.0 million. Within these revenue guidelines, GAAP
operating margins are expected to be around 12 percent. Net interest expense is
expected to be approximately $0.9 million, and other non-operating expense
should be approximately $1.8 million. For GAAP income tax provision, the Company
now believes the increased profits will move the effective tax rate to 17
percent on a quarterly and full-year basis in 2004. Within these revenue and
expense guidelines, Trimble expects GAAP EPS to be between $0.25 and $0.27,
assuming 55.2 million shares outstanding. GAAP EPS includes approximately $2.0
million for amortization of purchased intangibles that should be excluded when
calculating non-GAAP EPS. As mentioned previously in this release, quarterly and
full-year non-GAAP EPS will now be taxed at a 35 percent rate going forward.
Guidance for the entire fiscal year 2004 is for revenues between $660.0 and
$667.0 million, with GAAP EPS of $1.05 to $1.09, assuming a weighted average of
<page>
55.0 million shares outstanding for the year. GAAP EPS includes approximately
$8.3 million for amortization of purchased intangibles and $0.4 million in
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, July 27, 2004 at 8:00 AM
Pacific Time to review its second 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 8530348.
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 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 October 1,
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
<page>
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, gross margin and other financial
results. Whether the Company achieves its guidance for the third 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)
<table>
<caption>
Three Months Ended Six Months Ended
------------------ ----------------
July 2, July 4, July 2, July 4,
2004 2003 2004 2003
---- ---- ---- ----
<s> <c> <c> <c> <c>
Revenue $179,451 $138,132 $335,961 $265,457
Cost of revenue 91,132 67,037 171,882 132,607
------ ------ ------- -------
Gross Margin 88,319 71,095 164,079 132,850
------ ------ ------- -------
Gross Margin (%) 49.2% 51.5% 48.8% 50.0%
Operating expenses:
Research and development 19,937 17,077 38,785 33,117
Sales and marketing 27,358 24,560 53,662 48,557
General and administrative 11,952 9,896 22,338 18,531
Restructuring charges 327 716 327 1,106
Amortization of purchased intangibles 2,075 1,725 4,059 3,520
----- ----- ----- -----
Total operating expenses 61,649 53,974 119,171 104,831
------ ------ ------- -------
Operating income 26,670 17,121 44,908 28,019
Non-operating income (expense), net:
Interest expense, net (878) (6,014) (1,856) (9,389)
Foreign exchange gain (loss), net 507 391 (129) 483
Other income (expense), net (3) (92) 77 (139)
Expenses for affiliated operations, net (2,453) (1,901) (4,052) (3,116)
------ ------ ------ ------
Total non-operating expense, net (2,827) (7,616) (5,960) (12,161)
------ ------ ------ -------
Income before income taxes 23,843 9,505 38,948 15,858
Income tax provision 4,356 1,400 6,621 2,400
----- ----- ----- -----
Net income $19,487 $ 8,105 $32,327 $ 13,458
======= ======= ======= ========
Earnings per share :
Basic $ 0.38 $ 0.17 $ 0.64 $ 0.29
Diluted $ 0.36 $ 0.16 $ 0.59 $ 0.28
Shares used in calculating earnings per share :
Basic 50,817 47,211 50,617 45,626
====== ====== ====== ======
Diluted 54,627 49,619 54,424 47,346
====== ====== ====== ======
</table>
Fully taxed Non-GAAP Reconciliation
(In thousands, except per share data)
(Unaudited)
<table>
<caption>
Three Months Ended Six Months Ended
------------------ ----------------
July 2, July 4, July 2, July 4,
2004 2003 2004 2003
---- ---- ---- ----
<s> <c> <c> <c> <c>
GAAP income before income taxes $23,843 $ 9,505 $38,948 $15,858
Non-GAAP adjustments :
Amortization of purchased intangibles assets 2,075 1,725 4,059 3,520
Amortization of acquisition-related inventory step-up 290 - 475 -
Restructuring charges 327 716 327 1,106
Debt issuance charges 2,224 2,224
Warrants charges 1,332 1,332
----- -----
Total Non-GAAP adjustments 2,692 5,997 4,861 8,182
----- ----- ----- -----
Non-GAAP income before income taxes 26,535 15,502 43,809 24,040
Income tax provision - Fully taxed at 35% 9,287 5,426 15,333 8,414
-- ----- ----- ------ -----
Fully-taxed Non-GAAP net income $17,248 $ 10,076 $28,476 $15,626
======= ======== ======= =======
Diluted Fully-taxed Non-GAAP EPS $ 0.32 $ 0.20 $ 0.52 $ 0.33
======= ======== ======= =======
Shares used in calculating diluted non-GAAP earnings per share 54,627 49,619 54,424 47,346
======= ======== ======= =======
</table>
CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)
<table>
<caption>
July 2, Jan 2,
2004 2004
---- ----
Assets
<s> <c> <c>
Current assets:
Cash and cash equivalents $ 54,657 $ 45,416
Accounts and other receivables, net 131,581 103,350
Inventories, net 69,836 70,826
Deferred income taxes 4,372 4,380
Other current assets 8,457 8,885
----- -----
Total current assets 268,903 232,857
Property and equipment, net 27,794 27,379
Goodwill and other purchased intangible assets, net 264,184 261,166
Deferred income taxes 4,156 4,173
Other assets 23,203 19,328
------ ------
Total assets $ 588,240 $ 544,903
========== ==========
Liabilities and Shareholders' Equity
Current liabilities:
Current portion of long-term debt $ 12,745 $ 12,885
Accounts payable 44,028 26,019
Accrued compensation and benefits 26,466 25,950
Accrued liabilities 17,014 20,746
Deferred income taxes 309 1,136
Income taxes payable 13,407 9,969
------ -----
Total current liabilities 113,969 96,705
Non-current portion of long-term debt 64,717 77,601
Deferred gain on joint venture 9,694 9,845
Deferred income taxes 4,959 4,229
Other non-current liabilities 10,361 8,279
------ -----
Total liabilities 203,700 196,659
------- -------
Shareholders' equity:
Common stock 313,048 303,015
Accumulated surplus 47,317 14,990
Accumulated other comprehensive income 24,175 30,239
------ ------
Total shareholders' equity 384,540 348,244
------- -------
Total liabilities and shareholders' equity $ 588,240 $ 544,903
========== ==========
</table>
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
<table>
<caption>
Three Months Ended
------------------
July 2, July 4,
2004 2003
---- ----
<s> <c> <c>
Cash flow from operating activities:
Net Income $ 19,487 $ 8,105
Adjustments to reconcile net income to net cash provided by operating
activities:
Depreciation expense 1,981 2,243
Amortization expense 2,115 1,931
Provision for doubtful accounts 1,162 (299)
Amortization of debt issuance cost 121 2,760
Deferred income taxes 219 1,127
Other (347) 1,603
Add decrease (increase) in assets:
Accounts receivables, net (14,419) (17,436)
Inventories (5,646) (7,425)
Other current and non-current assets (585) (1,518)
Effect of foreign currency translation adjustment 1,624 2,456
Add increase (decrease) in liabilities:
Accounts payable 9,864 6,208
Accrued compensation and benefits 2,863 4,606
Accrued liabilities 227 (3,200)
Deferred gain on joint venture - (194)
Income taxes payable 2,678 52
----- --
Net cash provided by operating activities 21,344 1,019
Cash flows from investing activities:
Acquisitions, net of cash acquired (1,659) (4,648)
Acquisition of property and equipment (3,524) (2,015)
Proceeds from disposal of property and equipment 494 (28)
Cost of capitalized patents - (9)
--
Net cash used in investing activities
(4,689) (6,700)
Cash flow from financing activities:
Issuance of common stock 5,287 43,846
Collections (Payments) of notes receivable 12 833
Payments on long-term debt and revolving credit lines (7,162) (22,370)
------ -------
Net cash provided by (used) in financing activities (1,863) 22,309
Effect of exchange rate changes on cash and cash equivalents (336) 668
Net decrease in cash and cash equivalents 14,456 17,296
Cash and cash equivalents - beginning of period 40,201 13,529
------ ------
Cash and cash equivalents - end of period $ 54,657 $ 30,825
======== ========
Supplemental disclosures of cash flow information:
Cash paid during the period for:
Income taxes, net of refunds $ 1,749 $ 359
======== ========
</table>
<table>
<caption>
Q2'03 % of Q1'04 % of Q2'04 % of YTD'04 % of
Actual Rev Actual Rev Actual Rev Actual Rev
------ --- ------ --- ------ --- ------ ---
<s> <c> <c> <c> <c> <c> <c> <c> <c>
Income Statement Metrics
Total Revenue $ 138,132 $ 156,509 $ 179,451 $ 335,960
--------- --------- --------- ---------
Engineering & Construction 95,797 102,481 117,236 219,717
Trimble Field Solutions 19,950 24,713 30,831 55,544
Component Technologies 16,820 16,415 18,616 35,031
Trimble Mobile Solutions 3,651 5,262 5,225 10,487
Portfolio Technologies 1,914 7,638 7,543 15,181
Gross Margin 51.5% 48.4% 49.2% 48.8%
---- ---- ----- -----
Total Segment Income $ 24,325 18% $ 25,737 16% $ 34,895 19% $ 60,632 18%
--------- --- ---------- --- --------- --- --------- ---
Engineering & Construction 18,623 19% 16,498 16% 22,836 19% 39,334 18%
Trimble Field Solutions 3,555 18% 6,054 24% 9,026 29% 15,080 27%
Component Technologies 4,558 27% 3,926 24% 4,051 22% 7,977 23%
Trimble Mobile Solutions (2,025) -55% (1,643) -31% (1,754) -34% (3,397) -32%
Portfolio Technologies (386) -20% 902 12% 736 10% 1,638 11%
Corporate and Other Charges $ (7,204) $ (7,499) $ (8,225) $(15,724)
Non-operating expense and income
taxes $ (9,016) $ (5,398) $ (7,183) $(12,581)
--------- ---------- --------- ---------
Net Income (loss) $ 8,105 $ 12,840 $ 19,487 $ 32,327
========= ========== ========= =========
GAAP operating margin% 12.4% 11.7% 14.9% 13.4%
Non-GAAP operating margin% 14.2% 13.0% 16.4% 14.8%
GAAP EPS $ 0.16 $ 0.24 $ 0.36 $ 0.59
Fully-taxed (35%) Non-GAAP EPS $ 0.20 $ 0.21 $ 0.32 $ 0.52
--------- ---------- ------- ---------
Balance Sheet Metrics
Cash & Cash Equivalents $ 30,825 $ 40,201 $ 54,657
Accounts Receivables, Net $ 109,657 $ 116,030 $ 127,835
Inventories, Net $ 71,108 $ 64,910 $ 69,836
Total Debt $ 110,737 $ 84,645 $ 77,462
Short Term Debt 12,623 12,795 12,745
Long Term Debt 98,114 71,850 64,717
Equity $ 283,573 $ 362,035 $ 384,540
--------- ---------- ---------
Cashflow Metrics
Cash Flow from (used in ) Operations* $ 1,019 $ 8,685 $ 21,344 $ 30,029
Working Capital $ 120,967 $ 140,575 $ 154,934
Capital Expenditures $ 2,015 $ 2,544 $ 3,524 $ 6,068
Cash Interest $ 7,117 $ 826 $ 777 $ 1,603
EBITDA $ 19,723 $ 20,309 $ 28,818 $ 49,127
Amortization of Intangibles 1,961 2,035 2,116 4,151
Depreciation 2,243 2,191 1,981 4,172
----- ----- ----- -----
Financial Ratios
Days Sales Outstanding 69 57 58
Days Sales in Inventory 97 73 70
Current ratio 2.2 2.4 2.4
Debt to Equity 0.4 0.2 0.2
--- --- ---
Other
Headcount 2,039 2,184 2,155
----- ----- -----
</table>
EBITDA RECONCILIATION
(In thousands)
(Unaudited)
<table>
<caption>
Three Months Ended Six Months Ended
------------------ ----------------
July 2, July 4, July 2, July 4,
2004 2003 2004 2003
---- ---- ---- ----
<s> <c> <c> <c> <c>
GAAP net income $ 19,487 $ 8,105 $ 32,327 $ 13,458
Add back :
Interest expenses, net 878 6,014 1,856 9,389
Income tax 4,356 1,400 6,621 2,400
Depreciation expense 1,981 2,243 4,172 4,460
Amortization of purchased intangibles 2,116 1,961 4,151 3,938
----- ----- ----- -----
EBITDA $ 28,818 $ 19,723 $ 49,127 $ 33,645
========== ========= ========= =========
</table>
Non-GAAP Reconciliation-using GAAP effective tax rate
(In thousands, except per share data)
(Unaudited)
<table>
<caption>
Three Months Ended Six Months Ended
------------------ ----------------
July 2, July 4, July 2, July 4,
2004 2003 2004 2003
---- ---- ---- ----
<s> <c> <c> <c> <c>
GAAP income before income taxes $ 23,843 $ 9,505 $ 38,948 $15,858
Non-GAAP adjustments :
Amortization of purchased intangibles assets 2,075 1,725 4,059 3,520
Amortization of acquisition-related inventory step-up 290 - 475 -
Restructuring charges 327 716 327 1,106
Debt issuance charges 2,224 2,224
Warrants charges 1,332 1,332
----- -----
Total Non-GAAP adjustments 2,692 5,997 4,861 8,182
----- ----- ----- -----
Non-GAAP income before income taxes 26,535 15,502 43,809 24,040
Income tax provision 4,857 1,400 7,448 2,400
----- ----- ----- -----
Non-GAAP net income $ 21,678 $14,102 $ 36,361 $21,640
======== ======= ======== =======
Diluted Non-GAAP earnings per share $ 0.40 $ 0.28 $ 0.67 $ 0.46
======== ======= ======== =======
Shares used in calculating diluted non-GAAP earnings per share 54,627 49,619 54,424 47,346
======== ======= ======== =======
</table>