Trimble Reports First Quarter 2013 Results

(PRNewswire) — Trimble (NASDAQ:  TRMB) today announced first quarter 2013 revenue of $556.1 million, up 11 percent as compared to the first quarter of 2012.

GAAP operating income for the first quarter of 2013 was $56.5 million, down 6 percent as compared to the first quarter of 2012. GAAP operating margin in the first quarter of 2013 was 10.2 percent of revenue as compared to 11.9 percent of revenue in the first quarter of 2012.

GAAP net income for the first quarter of 2013 was $49.8 million, down 2 percent as compared to the first quarter of 2012. Diluted earnings per share in the first quarter of 2013 were $0.19 as compared to diluted earnings per share of $0.20 in the first quarter of 2012. The tax rate was 10 percent for the first quarter of 2013 as compared to 17 percent in the first quarter of 2012. It should be noted that on March 21, 2013 the Company completed a 2:1 stock split.

First quarter 2013 non-GAAP operating income of $110.3 million was up 8 percent as compared to the first quarter of 2012. Non-GAAP operating margin was 19.8 percent of revenue as compared to 20.3 percent of revenue in the first quarter of 2012. 

Non-GAAP net income of $97.9 million for the first quarter of 2013 was up 12 percent as compared to the first quarter of 2012. Diluted non-GAAP earnings per share in the first quarter of 2013 were $0.38, as compared to diluted non-GAAP earnings per share of $0.34 in the first quarter of 2012. 

First quarter 2013 non-GAAP results are adjusted for the following:

  • Restructuring expense of $1.7 million as compared to $526 thousand in the first quarter of 2012;
  • Amortization of intangibles of $39.3 million as compared to $28.8 million in the first quarter of 2012;
  • Stock-based compensation expense of $8.8 million as compared to $7.8 million in the first quarter of 2012;
  • Acquisition-related inventory step-up charge of $603 thousand as compared to $8 thousand in the first quarter of 2012;
  • Acquisition and divestiture costs of $3.0 million as compared to $5.2 million in the first quarter of 2012;
  • No gain or loss on foreign currency exchange in the first quarter of 2013 as compared to $1.6 million loss on foreign currency exchange from a hedge associated with an acquisition in the first quarter of 2012;

"Our revenue growth in the quarter did not meet our expectation. While our original expectation anticipated conservative buying behavior by our users as a result of economic uncertainties, we were further impacted by the direct and indirect effects of the U.S. sequester and severe weather conditions in Europe and North America which delayed both the agricultural and construction seasons," said Steven W. Berglund, Trimble's president and chief executive officer. "In spite of the pressure on revenue, we maintained non-GAAP operating margins close to twenty percent and increased our non-GAAP gross margin compared to the first quarter of 2012. We do not believe the fundamentals of our markets have changed and our long term expectations remain unchanged.  While we are cautious about second quarter prospects, we currently anticipate improved organic growth in the second half of 2013."

Results by Segment

Segment operating income is revenue less cost of sales and operating expenses, excluding general corporate expenses, restructuring expenses, amortization of intangibles, amortization of acquisition-related inventory step-up charges and acquisition costs.  Non-GAAP segment operating income also excludes the impact of stock-based compensation expense.

Engineering and Construction (E&C)

First quarter 2013 E&C revenue was $266.9 million, up 7 percent as compared to the first quarter of 2012.  Growth in E&C revenue came primarily from global sales of building construction products and heavy and highway products in the U.S., offset by softer sales in Australia and Europe.

First quarter operating income in E&C was $43.0 million, or 16.1 percent of revenue as compared to $40.1 million, or 16.1 percent of revenue in the first quarter of 2012. Non-GAAP operating income was $45.8 million, or 17.2 percent of revenue, as compared to $ 42.8 million, or 17.2 percent of revenue, in the first quarter of 2012.

Field Solutions

First quarter 2013 Field Solutions revenue was $147.5 million, flat as compared to the first quarter of 2012. There was moderate growth in agricultural product sales, offset by a decline in sales of Geographical Information System (GIS) products.

First quarter 2013 Field Solutions operating income was $59.5 million, or 40.4 percent of revenue, as compared to $62.4 million, or 42.3 percent of revenue, in the first quarter of 2012. Non-GAAP operating income was $60.2 million, or 40.8 percent of revenue, as compared to $63.0 million, or 42.7 percent of revenue, in the first quarter of 2012. Non-GAAP operating margin was down primarily due to product mix in GIS sales. 

Mobile Solutions

First quarter 2013 Mobile Solutions revenue was $110.2 million, up 41 percent as compared to the first quarter of 2012 due primarily to higher service and subscription revenue and the impact of acquisitions.

First quarter 2013 Mobile Solutions operating income was $11.6 million, or 10.5 percent of revenue, as compared to $7.4 million, or 9.4 percent of revenue, in the first quarter of 2012. In the first quarter of 2013 non-GAAP operating income was $12.5 million, or 11.3 percent of revenue, as compared to $8.2 million, or 10.4 percent of revenue, in the first quarter of 2012. The increase in non-GAAP operating margins was primarily due to leverage from increased revenue and product mix, including higher subscription revenue.

Advanced Devices

First quarter 2013 Advanced Devices revenue was $31.6 million, up 15 percent as compared to the first quarter of 2012, primarily due to stronger sales of embedded devices and timing devices.

Operating income in Advanced Devices for the first quarter of 2013 was $6.5 million, or 20.5 percent of revenue, as compared to $3.3 million, or 12.1 percent of revenue, in the first quarter of 2012. Non-GAAP operating income in Advanced Devices was $7.3 million, or 23.2 percent of revenue, as compared to $4.0 million, or 14.4 percent of revenue, in the first quarter of 2012. The improvement in non-GAAP operating margin was due to leverage on higher revenue and product mix. 

Use of Non-GAAP Financial Information

To help our investors understand our past financial performance and our future results, as well as our performance relative to competitors, we supplement the financial results that we provide in accordance with generally accepted accounting principles, or GAAP, with non-GAAP financial measures. These non-GAAP measures can be used to evaluate our historical and prospective financial performance, as well as our performance relative to competitors. Our management regularly uses our supplemental non-GAAP financial measures internally to understand, manage and evaluate our business, and to make operating decisions. These non-GAAP measures are among the primary factors management uses in planning for and forecasting future periods. We believe that these non-GAAP financial measures reflect an additional way of viewing aspects of our operations that, when viewed with our GAAP results, provide a more complete understanding of factors and trends affecting our business. Further, we believe some of our investors track our "core operating performance" as a means of evaluating our performance in the ordinary, ongoing, and customary course of our operations.  Core operating performance excludes items that are non-cash, not expected to recur or not reflective of ongoing financial results. Management also believes that looking at our core operating performance provides a supplemental way to provide consistency in period to period comparisons. 

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