Exhibit 99.1
Intermec Announces Second Quarter 2006 Results
EVERETT, Wash.--(BUSINESS WIRE)--Aug. 3, 2006--Intermec, Inc.
(NYSE:IN)
-- Q2 Revenues of $231.4M, at upper end of Intermec's guidance
-- EPS from Continuing Operations of $0.18, significantly exceeds
guidance of $0.07 to $0.11
-- Cash Equivalents and Short-Term Investments increase to
historic high of $322.8M
-- Intermec and Symbol reach landmark resolution to settle
intellectual property (IP) disputes
Intermec, Inc. (NYSE:IN) today announced financial results for its
second fiscal quarter of 2006.
Intermec reported 2006 second quarter revenues of $231.4 million
and net earnings from continuing operations of $11.3 million, or $0.18
per diluted share, compared to 2005 second quarter revenues of $217.5
million and earnings of $11.9 million, or $0.19 per diluted share.
The results for the current quarter include a pre-tax gain of $2.3
million, or $0.02 per share, from the gain on investment in Savi
Technology, whose sale to Lockheed Martin was completed in June of
2006. The 2006 second quarter also includes a restructuring charge
relating to the planned closure of the Company's design centers in
Goteborg and Lund, Sweden, which negatively impacted operating profit
by ($1.1) million, or ($0.01) per share. The Company's 2006 second
quarter includes ($1.0) million of incremental stock compensation
expense recorded under the provisions of FAS 123-R, which negatively
impacted EPS by ($0.01) per share.
The effective tax rate for the current-quarter was 37 percent,
compared to 32 percent in the prior-year quarter.
Second quarter 2006 revenue increased 6.4 percent, compared to the
prior-year quarter. Geographically, North American revenues increased
8 percent over the comparable prior-year period. Revenues in Europe,
Mid-East and Africa (EMEA) increased 3 percent; and the rest of the
world, consisting of Asia Pacific and Latin America, increased 9
percent.
By product line during the second quarter, Systems and Solutions
revenue increased 9 percent and Printer and Media revenues decreased 3
percent over the comparable prior-year period. Service revenue
increased 7 percent over the comparable prior-year period.
"We're encouraged by the revenue and earnings per share results
Intermec delivered during its second quarter," said Larry D. Brady,
Chairman and CEO. "Contributing to the quarter's positive outcome was
our ability to leverage our productivity improvement programs while
still supporting strategic future growth opportunities in R&D."
Other Business Highlights
Symbol Technologies and Intermec reached a landmark resolution
that settles all outstanding intellectual property (IP) disputes
between the two companies. Under the settlement agreement, Intermec
and Symbol have cross-licensed certain patents, have entered into
four-year covenants not to sue with respect to remaining patents, and
have released patent infringement damage claims that may have existed
on the settlement date or may arise before the covenants expire. The
specific terms of the settlement agreement are confidential.
METRO Group, one of the world's largest retailers, has gone live
with Intermec Gen 2 RFID (radio frequency identification) technology
in its Cash & Carry wholesale stores throughout Germany. METRO
suppliers now are able to ship tagged pallets with Gen 2 RFID
technology.
Intermec introduced a full array of new products during the
quarter. The PB42, a new portable printer that is lightweight, rugged
with integrated Bluetooth(tm) capability in a compact design, offers
the convenience of a personal area network (PAN) for receipt printing
to frontline workers. The PD41 bar code printer, housed in a rugged
metal case, makes best-in-class performance and versatility for
transportation and logistics, light industrial and retail
applications.
The new IP4 portable RFID reader delivers first-of-its-kind
capability by combining the power of a handheld mobile computing
device equipped with multiple radios (PAN, LAN and WAN) as well as a
multi-protocol RFID radio that can be used worldwide. Intermec RFID
also introduced a reusable, ruggedized rigid RFID tag capable of
withstanding temperature extremes and hazardous exposures common in
manufacturing and material handling operations.
The introduction of two new scan engines, the EL20, a standard
range-plus scan engine, the second in our series of
micro-electromechanical systems ("MEMS")-based scan engines, and the
EV12 linear imager engine further enhances Intermec's breadth of
scanning products and capabilities. In addition, version 2.2 of
Intermec's SmartSystems technology was released, providing
intelligence and capabilities that allow communication between an
Intermec system console and all Intermec devices on that system,
including those in multiple and remote locations. The system
automatically configures SmartSystems-enabled ADC equipment, downloads
security patches and performs routine maintenance.
Frost & Sullivan awarded its 2006 Supply Chain Enabling Technology
Award to Intermec, citing Intermec's dedication to developing and
strengthening supply chain technologies and its special understanding
of customer requirements. Intermec received special recognition for
development of its Intellibeam EL10 bar code scan engine, the first in
Intermec's family of ADC scan engines that use MEMS-based technology.
Intermec has attained Gold Certified Partner status in the
Microsoft Partner Program, which recognizes Intermec's expertise and
impact in the technology marketplace. As a Gold Certified Partner,
Intermec has demonstrated expertise with Microsoft technologies and a
proven ability to meet customers' requirements.
The Company's cash equivalents and short-term investments position
at the end of the second quarter reached a historic high of $322.8
million, an increase of $20.3 million during the second quarter. The
increase in cash equivalents and short-term investments primarily
resulted from cash flows from operating activities.
Intermec also reported today its GAAP basis outlook for the third
quarter and full fiscal year 2006.
Third Quarter Outlook
-- Revenues are expected within a range of $230 million to $240
million
-- Diluted EPS from continuing operations are expected within a
range of $0.17 to $0.21
Full Year 2006 Outlook
-- Revenues are expected within a range of $953 million to $973
million.
-- Diluted EPS from continuing operations are expected within a
range of $0.90 to $1.00
Intermec will hold a conference call on August 3, 2006 at 5 p.m.
EDT (2 p.m. PDT). The call will be hosted by Intermec, Inc. Chairman
and Chief Executive Officer, Larry D. Brady, President and COO, Steven
J. Winter, Controller and Acting Chief Financial Officer, Rick B.
Anderson and Director of Investor Relations, Kevin P. McCarty. The
dial-in numbers for participants is 1-(888) 790-1641 (US); 1-(210)
234-0001 (International); Passcode: ("Intermec").
The call will be broadcast on the Internet via a link from the
investor's Web page at the Intermec website at
www.intermec.com/InvestorRelations
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)
Three Months Ended Six Months Ended
------------------- -------------------
July 2, July 3, July 2, July 3,
2006 2005 2006 2005
--------- --------- --------- ---------
Revenues
Product $192,440 $181,007 $358,790 $342,950
Service 38,997 36,452 76,478 71,004
Intellectual property
settlement - - 23,000 -
--------- --------- --------- ---------
Total Revenues 231,437 217,459 458,268 413,954
Costs and Expenses
Cost of product revenues 116,401 101,954 217,015 194,701
Cost of service revenues 21,413 21,084 44,274 41,970
Cost of intellectual
property settlement - - 6,462 -
Selling, general and
administrative 78,496 75,777 156,289 148,548
Restructuring charge 1,135 - 2,242 -
--------- --------- --------- ---------
Total Costs and
Expenses 217,445 198,815 426,282 385,219
--------- --------- --------- ---------
Operating Profit From
Continuing Operations 13,992 18,644 31,986 28,735
Gain on sale of investments 2,305 - 2,305 -
Interest income (expense), net 1,766 (1,120) 2,910 (3,246)
--------- --------- --------- ---------
Earnings From Continuing
Operations Before Taxes 18,063 17,524 37,201 25,489
Provision for income taxes 6,767 5,669 10,835 8,222
--------- --------- --------- ---------
Earnings From Continuing
Operations 11,296 11,855 26,366 17,267
Earnings (loss) from
discontinued operations,
net of tax (940) 213 (2,019) (1,719)
--------- --------- --------- ---------
Net Earnings $10,356 $12,068 $24,347 $15,548
========= ========= ========= =========
Basic Earnings per Share
Continuing operations 0.18 $0.19 $0.42 $0.28
Loss from Discontinued
operations (0.02) 0.01 (0.03) (0.03)
--------- --------- --------- ---------
Net earnings per share $0.16 $0.20 $0.39 $0.25
========= ========= ========= =========
Diluted Earnings per Share
Continuing operations 0.18 $0.19 $0.41 $0.28
Loss from Discontinued
operations (0.02) 0.00 (0.03) (0.03)
--------- --------- --------- ---------
Net earnings per share $0.16 $0.19 $0.38 $0.25
========= ========= ========= =========
Shares Used in Computing
Earnings (Loss) per Share
Basic 63,252 61,361 63,138 61,228
Diluted 64,529 62,768 64,565 62,792
INTERMEC, INC.
CONSOLIDATED BALANCE SHEETS
(Unaudited, amounts in thousands)
July 2, Dec. 31,
2006 2005
--------- ---------
Assets
Current Assets:
Cash and cash equivalents $303,683 $256,782
Short-term investments 19,130 -
Accounts receivable, net 162,379 180,985
Inventories 104,628 82,088
Net deferred tax assets 51,554 100,656
Assets held for sale 8,239 8,517
Other current assets 18,275 29,468
--------- ---------
Total Current Assets 667,888 658,496
Property, Plant and Equipment, Net 38,778 30,820
Other Intangibles, Net 6,794 6,871
Net Deferred Tax Assets 182,046 137,578
Other Assets 63,424 68,955
--------- ---------
Total Assets $958,930 $902,720
========= =========
Liabilities and Shareholders' Investment
Current Liabilities:
Accounts payable and accrued expenses $155,399 $148,731
Payroll and related expenses 30,639 31,011
Deferred revenue 44,861 38,369
--------- ---------
Total Current Liabilities 230,899 218,111
Deferred Revenue 19,479 20,095
Long-term Debt 100,000 100,000
Other Long-term Liabilities 89,754 88,711
Shareholders' Investment:
Common stock 632 627
Additional paid-in capital 750,362 736,224
Accumulated deficit (220,557) (244,903)
Accumulated other comprehensive income
(loss) (11,639) (16,145)
--------- ---------
Total Shareholders' Investment 518,798 475,803
--------- ---------
Total Liabilities and Shareholders' Investment $958,930 $902,720
========= =========
CONTACT: Intermec, Inc.
Kevin P. McCarty, Director of Investor Relations
425-265-2472
kevin.mccarty@intermec.com