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WirelessDevNet.com Press Release
Trimble Reports Fourth Quarter Revenue Growth of 25% and Fiscal 2006 Revenue Growth of 21%
SUNNYVALE, Calif., Jan. 25 -- Trimble (Nasdaq:
TRMB) today announced results for its fourth quarter and fiscal year 2006,
ended December 29, 2006. Revenue for the fourth quarter of 2006 was $234.1
million, up 25 percent from revenue of $186.8 million in the fourth quarter
of 2005. Fiscal 2006 revenue was $940.2 million, up 21 percent when
compared to fiscal 2005 revenue of $774.9 million.
Operating income for the fourth quarter of 2006 was $27.3 million, up
19 percent from the fourth quarter of 2005. Operating income for fiscal
2006 was $135.4 million, up 8 percent from fiscal 2005. For year-over-year
comparisons it should be noted that the impact of stock-based compensation
expense resulting from the adoption of FAS 123(R) was $3.1 million in the
fourth quarter of 2006 and $12.6 million for fiscal 2006. The net impact of
transactions with the Caterpillar Trimble Control Technologies (CTCT) joint
venture, which were included in non-operating results in 2005, reduced
operating results by $3.1 million in the quarter and by $18.2 million for
the year. In addition, amortization of purchased intangibles and purchased
in-process research and development expense increased by $2.4 million in
the fourth quarter of 2006 compared to the fourth quarter of 2005 and by
$7.0 million for fiscal 2006 compared to fiscal 2005, due to acquisitions.
Adjusting for the above factors, operating income in the fourth quarter of
2006 was up 51 percent compared to the fourth quarter of 2005 and up 36
percent for fiscal 2006, compared to fiscal 2005.
Net income for the fourth quarter of 2006 was $24.0 million, up 3
percent when compared to net income of $23.4 million in the fourth quarter
of 2005. Net income for fiscal 2006 was $103.7 million, up 22 percent
compared to fiscal 2005. Earnings per share for the fourth quarter of 2006
were $0.41, flat compared to earnings per share of $0.41 in the fourth
quarter of 2005. Earnings per share for fiscal 2006 were $1.79, up
approximately 20 percent compared to fiscal 2005. Earnings per share in the
fourth quarter of 2006 were negatively impacted by approximately $0.04 due
to the adoption of FAS 123(R) and by approximately $0.06 due to higher
amortization of intangibles and in-process research and development.
Earnings per share for fiscal 2006 were negatively impacted by $0.15 due to
FAS 123(R) and by $0.18 due to higher amortization of intangibles and
purchased in-process research and development expense. It should also be
noted that net income in the fourth quarter of 2005 was favorably impacted
by the recognition of a deferred gain of $9.3 million related to the CTCT
joint venture.
Adjusting for the impact of FAS 123(R) and acquisition-related
expenses, non-GAAP net income for the fourth quarter of 2006 was $30.1
million, up 85 percent compared to non-GAAP net income of $16.2 million in
the fourth quarter of fiscal 2005. Using the same adjustments, non-GAAP net
income for fiscal 2006 was $123.0 million, up 51 percent compared to fiscal
2005. Non-GAAP net income in the fourth quarter of 2006 benefited from a
lower tax rate of 25 percent driven by a research and development tax
credit and the favorable resolution of an international tax audit.
Non-GAAP earnings per share for the fourth quarter of 2006 were $0.51,
up approximately 77 percent from non-GAAP earnings per share of $0.29 in
the fourth quarter of 2005. Non-GAAP earnings per share for fiscal 2006
were $2.12, up approximately 48 percent compared to fiscal 2005. GAAP and
non-GAAP earnings per share for the fourth quarter and fiscal 2006 were
calculated on a diluted basis using approximately 58.6 million shares and
58 million shares, respectively.
"Trimble's growth in 2006 demonstrated successful execution across our
segments, particularly in Engineering and Construction and Mobile
Solutions. It is encouraging to see our strategic focus on Mobile Solutions
beginning to have a significant impact on results," said Steven W.
Berglund, Trimble's president and chief executive officer. "Early in 2007
it appears market conditions remain steady. Our 2007 results will be
determined by our success with initiatives to further penetrate our
markets, integrate acquisitions, and establish new standards of customer
satisfaction."
Trimble Results by Business Segment
For year-over-year comparisons it should be noted that 2005 results did
not include stock-based compensation expense because FAS 123(R) was not
adopted until the first quarter of 2006.
Engineering and Construction
Revenue for Engineering and Construction (E&C) was $160.0 million for
the fourth quarter of 2006, up approximately 24 percent compared to the
fourth quarter of 2005. Fiscal 2006 revenue for E&C was $637.1 million up
approximately 21 percent compared to fiscal 2005.
Operating income margins in E&C were 20 percent in the fourth quarter
of 2006, compared to 19 percent in the fourth quarter of 2005. Operating
income margins for fiscal 2006 were 21 percent, compared to 22 percent in
fiscal 2005. Excluding the impact of FAS 123(R) adoption and the CTCT joint
venture transactions discussed above, E&C operating income margins were 23
percent for the fourth quarter and 25 percent for fiscal 2006.
E&C continued to grow throughout 2006 due to successful market
segmentation, a steady construction spending environment, and the
increasing demand for productivity-enhancing technology.
Field Solutions
Field Solutions (TFS) revenue was $30.6 million in the fourth quarter
of 2006, up 21 percent compared to the fourth quarter of 2005. GIS sales in
the quarter were particularly strong. TFS revenue for fiscal 2006 was
$139.2 million, up 9 percent year-over-year.
TFS operating income margins for the fourth quarter of 2006 were 21
percent, compared to 20 percent in the fourth quarter of 2005. TFS
operating income margins for fiscal 2006 were 27 percent, compared to 25
percent in fiscal 2005. Excluding the impact of FAS 123(R) adoption TFS
operating income margins were 22 percent for the fourth quarter and 28
percent for fiscal 2006.
Mobile Solutions
Mobile Solutions (TMS) fourth quarter 2006 revenue was $17.0 million,
up 63 percent from the fourth quarter of 2005. TMS revenue for fiscal 2006
was $60.9 million, up 93 percent from fiscal 2005. Growth in TMS for 2006
came from increased growth in subscribers and software seats, as well as
from acquisitions.
TMS operating income margins were 5 percent for the fourth quarter of
2006, compared to 2 percent in the fourth quarter of 2005. TMS operating
income margins for fiscal 2006 were 4 percent, compared to a loss of 10
percent in 2005. Excluding the impact of FAS 123(R) adoption TMS operating
income margins were 6 percent for the fourth quarter and 5 percent for
fiscal 2006. Improvements in operating income margins were due to increases
in higher gross margin subscription revenue.
Advanced Devices
Advanced Devices revenue was $26.5 million, up 20 percent from the
fourth quarter of 2005. Advanced Devices revenue for fiscal 2006 was $103.0
million, up 13 percent from fiscal 2005 revenue, primarily due to increased
sales in embedded and airborne products and revenue from the licensing of
intellectual property to Nokia.
Advanced Devices operating income margins for the fourth quarter of
2006 were 5 percent, compared to 11 percent in the fourth quarter of 2005.
Advanced Devices operating income margins for fiscal 2006 were 10 percent,
compared to 14 percent in fiscal 2005. Excluding the impact of FAS 123(R)
adoption Advanced Devices operating income margins were 7 percent for the
fourth quarter and 12 percent for fiscal 2006. Declines in operating income
margins for the quarter and the fiscal year were due to product mix and
increased development costs.
Two-for-One Stock Split
On January 17, 2007, Trimble's Board of Directors approved a
two-for-one split of all outstanding shares of the Company's Common stock,
payable February 22, 2007, to stockholders of record on February 8, 2007.
Stockholders who receive shares in the acquisition of @Road will have their
shares adjusted to reflect the stock split. Earnings per share numbers
detailed in this press release do not reflect the stock split.
Non-GAAP vs. GAAP Financials
The Company provides non-GAAP financial measures including "non-GAAP
net income," "non-GAAP operating 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, acquisition
related step-up charges, write-off of debt issuance costs, 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 and in some cases were applicable to both periods because of
acquisitions or accounting change rules. 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
GAAP guidance for the first quarter of 2007 does not include the impact
of the anticipated acquisition of @Road announced on December 11, 2006,
which is expected to close in February of 2007.
In the first quarter of 2007, the Company expects revenue to grow 16 to
18 percent compared to the first quarter of 2006, with revenue between $262
million and $267 million. At a 36 percent tax rate, with approximately 59.0
million shares outstanding, the Company expects first quarter 2007 GAAP
earnings per share between $0.45 and $0.48.
The above GAAP guidance includes stock-based compensation. On a
post-tax basis, the Company expects stock-based compensation for the first
quarter of 2007 to be approximately $0.03 per share.
The Company expects non-GAAP earnings per share between $0.54 and $0.57
in the first quarter of 2007. Non-GAAP guidance for the first quarter of
2007 uses a 36 percent tax rate and excludes the amortization of
intangibles of $5.1 million in the quarter, as well as the anticipated
impact of stock-based compensation expense of $3.3 million. For
year-over-year comparisons, it should be noted that the tax rate in the
first quarter of 2006 was 28 percent and is forecasted to be 36 percent for
the first quarter of 2007. It should also be noted that first quarter 2007
guidance includes the expected impact of deferred revenue write downs for
acquisitions made in the fourth quarter of 2006.
As guided in the @Road announcement in December 2006, Trimble currently
expects total 2007 company revenue between $1,140 million and $1,170
million, assuming a February 2007 close of the @Road acquisition. Of this
amount, approximately $80 million to $85 million in revenue is expected to
come from the acquisition of @Road.
Trimble expects full-year 2007 non-GAAP earnings per share of between
$2.10 and $2.15. Trimble's baseline outlook for the company, excluding the
@Road acquisition, is between $2.30 and $2.35 non-GAAP earnings per share.
The @Road transaction is expected to be single-digit dilutive in 2007 on a
percent basis due to interest payments on debt, an assumed higher share
count and the deferred revenue write down, partially offset by synergy
savings and improved business profitability. Trimble will update its total
company guidance for 2007 in detail, including the impact from @Road, on
its April 2007 conference call.
Investor Conference Call / Webcast Details
Trimble will hold a conference call on January 25, 2007 at 1:30 p.m. PT
to review its fourth quarter and fiscal 2006 results. It will be broadcast
live on the Web at http://investor.trimble.com. Investors without Internet
access may dial into the call at (800) 528-9198 (U.S.) or (706) 634-6089
(international). A replay of the call will be available for thirty days
beginning at 8:00 p.m. PT on January 25, 2007. The replay number is (800)
642-1687 (U.S.), or (706) 645-9291 (international), and the pass code is
5782391.
About Trimble
Trimble applies technology to make field and mobile workers in
businesses and government significantly more productive. Solutions are
focused on applications requiring position or location-including surveying,
construction, agriculture, fleet and asset management, public safety and
mapping. In addition to utilizing positioning technologies, such as GPS,
lasers and optics, Trimble solutions may include software content specific
to the needs of the user. Wireless technologies are utilized to deliver the
solution to the user and to ensure a tight coupling of the field and the
back office. Founded in 1978 and headquartered in Sunnyvale, Calif.,
Trimble has a worldwide presence with more than 2,800 employees in over 18
countries.
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