Exhibit 99.1
Intermec Announces First Quarter 2006 Results
EVERETT, Wash.--(BUSINESS WIRE)--May 8, 2006--Intermec, Inc.
(NYSE:IN):
-- Q1 Revenues of $227M, including IP settlement
-- Q1 Diluted EPS from Continuing Operations of $0.23
-- Cash Equivalents and Short-Term Investments increase $45.7M
during the quarter to $302.5M
Intermec, Inc. (NYSE:IN) today announced financial results for its
first quarter of fiscal year 2006.
Intermec reported 2006 first quarter revenues of $226.8 million
and net earnings from continuing operations of $15.1 million, or $0.23
per diluted share, compared to 2005 first quarter revenues of $196.5
million and earnings of $5.4 million, or $0.09 per diluted share.
First quarter 2006 product and service revenue was $203.8 million
compared to first quarter 2005 product and service revenue of $196.5
or a 3.7 percent increase over the prior-year quarter.
The 2006 first quarter includes Intellectual Property (IP)
settlement revenue and operating profit of $23.0 million and $16.5
million, respectively, contributing $0.16 per share to EPS. A
restructuring charge in the 2006 first quarter relating to the planned
closure of it design centers in Goteborg and Lund, Sweden negatively
impacted operating profit by $1.1 million, or ($0.01) per share. The
Company's 2006 first quarter includes $1.9 million of stock
compensation expense recorded under the provisions of FAS 123(R),
which negatively impacts EPS by ($0.02) per share. The tax provision
for the 2006 first quarter was reduced by $2.2 million due to the
favorable conclusion of a Canadian tax audit. The effective tax rate
for the current-quarter was 21 percent, compared to 32 percent in the
prior-year quarter.
The Company's cash equivalents and short-term investments position
at the end of the first quarter was $302.5 million, an increase of
$45.7 million during the first quarter. The increase in cash
equivalents and short-term investments primarily reflects cash flows
from operating activities and the Company's (IP) settlement.
Geographically during the first quarter, North American revenues
increased 19 percent over the comparable prior-year period. This
increase represents the second largest North American quarterly growth
rate in the Company's history. Revenues in Europe, Mid-East and Africa
(EMEA) decreased 17 percent; and the rest of the world, consisting of
Asia Pacific and Latin America, increased 19 percent and decreased 22
percent, respectively.
By product line during the first quarter, Systems and Solutions
revenue increased 7 percent and Printer and Media revenues decreased
10 percent over the comparable prior-year period. Service revenue
increased 9 percent over the comparable prior-year period.
"The strong performance in our North American market was offset by
a general weakness in Europe aggravated by a strong dollar versus the
prior-year and impending product regulatory changes," said Larry D.
Brady, Chairman and CEO. "Nonetheless, the competitive position of our
core System and Solutions product line remains a continued source of
strength."
In March 2006, Intermec announced its planned closure of its
design centers in Goteborg and Lund, Sweden. The activities currently
assigned to the design centers in Sweden will be reassigned to other
parts of Intermec or moved to third-party vendors to improve
efficiencies and benefit from reduced cost. In addition to the
expected cost savings, the Company anticipates that this realignment
of resources will result in a significant increase in new product
development capacity. Estimated restructuring costs of $6 million
include employee severance, facility closure and other exit costs. The
Company recorded a restructuring charge of $1.1 million in the first
quarter of 2006, and anticipates the majority of the remaining
restructuring costs will be recognized over the remainder of 2006.
Intermec estimates that the savings from these restructuring
activities will begin in the fourth quarter of 2006, and reach an
estimated annual pre-tax savings of $8 million in the first quarter of
2007. Some portion of these expected savings may be re-invested in
other research and development activities.
Other Business Highlights
-- Received board authorization to repurchase up to $100 million
of outstanding common stock in open market purchases or
privately negotiated transactions.
-- For the second year in a row, was named Cisco's Solutions
Technology Integrator Partner of the Year.
-- With partners Cisco, Red Prairie and Cascade, introduced the
Forklift of the Future, an advanced forklift system that
incorporates RFID and wireless technology into a forklift's
very infrastructure. The concept turns a forklift into a vital
communications hub and opens the door to many types of more
efficient RFID implementations.
-- Announced that with its acquisition of PSC, Datalogic has
become a member of Intermec's RFID Rapid Start intellectual
property licensing program.
About Intermec Inc.
Intermec Inc. (NYSE:IN) develops, manufactures and integrates
technologies that identify, track and manage supply chain assets. Core
technologies include RFID, mobile computing and data collection
systems, bar code printers and label media. The company's products and
services are used by customers in many industries worldwide to improve
the productivity, quality and responsiveness of business operations.
For more information about Intermec, visit www.intermec.com or call
800-347-2636. Contact Intermec Investor Relations Director Kevin
McCarty at kevin.mccarty@intermec.com, 425-265-2472.
(Forward-looking Statement)
Certain forward-looking statements in this release (as defined by
Section 27A of the Securities Act of 1933, as amended, and Section 21E
of the Securities Exchange Act of 1934) relate to matters that are not
historical facts. They include, but are not limited to, statements
about the Company's ability to continue to improve profit of its
business segments, compete effectively with its current product lines,
effectively complete the closure of certain facilities and redeploy
related function, reduce expenses, improve efficiency, realign
resources, increase product development capacity, leverage its
research and development investment to drive significant future
revenue, and the ability to continue operational improvement and year
over year growth. Such forward-looking statements involve and are
subject to certain risks and uncertainties. These include, but are not
limited to, other risks and uncertainties described more fully in the
Company's filings with the Securities and Exchange Commission
including, but not limited to, its annual report on Form 10-K and
quarterly reports on Form 10-Q.
INTERMEC, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited, amounts in thousands except per share amounts)
Quarter Ended
-----------------------
April 2, April 3,
2006 2005
---------- ----------
Revenues
Product $ 166,350 $ 161,943
Service 37,481 34,552
Intellectual Property Settlements 23,000 -
---------- ----------
Total Revenues 226,831 196,495
Costs and Expenses
Cost of product revenues 100,614 92,747
Cost of service revenues 22,861 20,886
Cost of intellectual property settlements 6,462 -
Selling, general and administrative 77,793 72,771
Restructuring charge 1,107 -
---------- -----------
Total Costs and Expenses 208,837 186,404
---------- ----------
Operating Profit From Continuing Operations 17,994 10,091
Interest income (expense), net 1,144 (2,126)
---------- ----------
Earnings From Continuing Operations Before
Taxes 19,138 7,965
Provision for income taxes 4,069 2,553
---------- ----------
Earnings From Continuing Operations 15,069 5,412
Loss from discontinued operations, net of tax (1,078) (1,932)
---------- ----------
Net Earnings $ 13,991 $ 3,480
========== ==========
Basic Earnings per Share
Continuing operations 0.24 $ 0.09
Loss from Discontinued operations (0.02) (0.03)
---------- ----------
Net earnings per share $ 0.22 $ 0.06
========== ==========
Diluted Earnings per Share
Continuing operations $ 0.23 $ 0.09
Loss from Discontinued operations (0.01) (0.03)
---------- ----------
Net earnings per share $ 0.22 $ 0.06
========== ==========
Shares Used in Computing Earnings (Loss) per
Share
Basic 63,025 61,093
Diluted 64,603 62,813
INTERMEC, INC.
CONSOLIDATED BALANCE SHEETS
(Unaudited, amounts in thousands)
April 2, December 31,
2006 2005
---------- -----------
Assets
Current Assets:
Cash and cash equivalents $ 282,788 $ 256,782
Short-term investments 19,695 -
Accounts receivable, net 158,209 180,985
Inventories 88,954 82,088
Net deferred tax assets 49,677 100,656
Assets held for sale 8,050 8,517
Other current assets 22,795 29,468
---------- -----------
Total Current Assets 630,168 658,496
Property, Plant and Equipment, Net 33,401 30,820
Other Intangibles, Net 6,771 6,871
Net Deferred Tax Assets 186,313 137,578
Other Assets 66,408 68,955
---------- -----------
Total Assets $ 923,061 $ 902,720
========== ===========
Liabilities and Shareholders' Investment
Current Liabilities:
Accounts payable and accrued expenses $ 142,834 $ 148,731
Payroll and related expenses 26,101 31,011
Deferred revenue 44,708 38,369
---------- -----------
Total Current Liabilities 213,643 218,111
Deferred Revenue 20,583 20,095
Long-term Debt 100,000 100,000
Other Long-term Liabilities 88,884 88,711
Shareholders' Investment:
Common stock 631 627
Additional paid-in capital 745,285 736,224
Accumulated deficit (230,912) (244,903)
Accumulated other comprehensive income
(loss) (15,053) (16,145)
---------- -----------
Total Shareholders' Investment 499,951 475,803
---------- -----------
Total Liabilities and Shareholders'
Investment $ 923,061 $ 902,720
========== ===========
CONTACT: Intermec, Inc.
Kevin P. McCarty, 425-265-2472
kevin.mccarty@intermec.com