Trimble Announces Second Quarter 2011 Revenue of $407.2 Million, Up 22 Percent; GAAP Earnings Per Share of $0.43, Up 760 Percent; Non-GAAP Earnings Per Share of $0.60, Up 43 Percent

(PRNewswire) — Trimble (NASDAQ: TRMB) today announced second quarter 2011 revenue of $407.2 million, up approximately 22 percent as compared to the second quarter of 2010.  

Operating income for the second quarter of 2011 was $51.6 million, up 27 percent as compared to the second quarter of 2010.  Operating margin in the second quarter of 2011 was 12.7 percent, compared to 12.2 percent in the second quarter of 2010.

Second quarter 2011 net income was $53.7 million, up 745 percent as compared to the second quarter of 2010.  Second quarter 2010 net income was impacted by a one-time charge for an IRS settlement.  Diluted earnings per share in the second quarter of 2011 were $0.43 as compared to diluted earnings per share of $0.05 in the second quarter of 2010.  

Second quarter 2011 non-GAAP operating income of $80.3 million was up 30 percent as compared to the second quarter of 2010.  Non-GAAP operating margin was 19.7 percent compared to 18.5 percent in the second quarter of 2010.  

Non-GAAP net income of $75.2 million for the second quarter of 2011 was up 46 percent as compared to the second quarter of 2010.  Diluted non-GAAP earnings per share in the second quarter of 2011 were $0.60 as compared to diluted non-GAAP earnings per share of $0.42 in the second quarter of 2010. 

Second quarter 2011 non-GAAP results exclude:

  • Restructuring expense of $550 thousand as compared to $430 thousand in the second quarter of 2010;
  • Amortization of intangibles of $16.6 million as compared to $13.9 million in the second quarter of 2010;
  • Stock-based compensation expense of $7.1 million as compared to $5.0 million in the second quarter of 2010;
  • Acquisition-related inventory step-up charge of $1.2 million as compared to no charge in the second quarter of 2010;
  • Acquisition-related costs of $3.7 million as compared to $1.8 million in the second quarter of 2010;
  • Write-off of debt issuance costs of $377 thousand on a terminated credit facility;
  • Gain on foreign exchange of $5.6 million associated with the Tekla acquisition versus no gain in the second quarter of 2010 and;
  • No IRS settlement costs excluded as compared to $27.5 million excluded in the second quarter of 2010.

"Second quarter results reflected strong performance with particularly strong results in the Engineering and Construction and Field Solutions segments.  Mobile Solutions results remain below our long-term targeted performance but did meet expectations for the quarter with the segment on track to improved performance later in the second half of 2011," said Steven W. Berglund, Trimble's president and chief executive officer.  "While acknowledging emerging concerns about the state of the economy and the potential for greater uncertainty, we currently expect total company results for the year to exceed our original expectations.

"During the quarter we announced the acquisition of Tekla, a leader in Building Information Modeling (BIM), which complements our existing portfolio of businesses focused on BIM and smart tools.  Subsequently we also announced our intent to acquire PeopleNet, a leader in transportation and logistics (T&L) solutions, which will extend our capabilities in our T&L vertical.  Both Tekla and PeopleNet have strong historical financial track records and are currently producing results consistent with Trimble's growth and margin targets," Berglund concluded.

Segment operating income is revenue less cost of goods sold 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)

Second quarter 2011 E&C revenue was $236.7 million, up 26 percent as compared to the second quarter of 2010, with growth in all regions and particular strength in North America and Europe. 

Operating income in E&C for the second quarter of 2011 was $47.0 million, or 19.9 percent of revenue, as compared to $33.9 million, or 18.0 percent of revenue in the second quarter of 2010.  Non-GAAP operating income was $49.4 million, or 20.9 percent of revenue, as compared to $35.8 million, or 19.0 percent of revenue, in the second quarter of 2010.  Non-GAAP operating margin was up due to higher revenue and product mix.

Field Solutions

Second quarter 2011 Field Solutions revenue was $104.0 million, up 30 percent as compared to the second quarter of 2010 due primarily to very strong sales of agricultural products.

Second quarter 2010 Field Solutions operating income was $42.5 million, or 40.9 percent of revenue, as compared to $29.0 million, or 36.2 percent of revenue, in the second quarter of 2010.  Non-GAAP operating income was $43.1, or 41.4 percent of revenue, as compared to $29.5 million, or 36.7 percent of revenue, in the second quarter of 2010.  The increase in non-GAAP operating margin was due to higher revenue and product mix.

Mobile Solutions

Second quarter 2011 Mobile Solutions revenue was $40.2 million, up 5 percent as compared to the second quarter of 2010 due primarily to acquisitions, partially offset by the previously announced loss of a major customer in the second quarter of 2010. 

The operating loss in Mobile Solutions in the second quarter 2011 was $2.7 million, or negative 6.7 percent of revenue, as compared to operating income of $324 thousand, or 0.8 percent of revenue, in the second quarter of 2010 due primarily to acquisitions and the loss of a major customer.  Non-GAAP operating loss was $1.9 million, or negative 4.7 percent of revenue, as compared to a profit of $541 thousand, or 1.4 percent of revenue, in the second quarter of 2010.  The decline in non-GAAP operating margin was due to the mix of hardware and subscription services revenue and the impact of acquisitions as well as the loss of a major customer in the second quarter of 2010.

Advanced Devices

Second quarter 2011 Advanced Devices revenue was $26.3 million, down 1 percent as compared to the second quarter of 2010 due to continued slower sales of timing products, partially offset by acquisitions. 

The operating income in Advanced Devices for the second quarter 2011 was $2.6 million, or 9.9 percent of revenue, as compared to $5.2 million, or 19.5 percent of revenue, in the second quarter of 2010. Non-GAAP operating income in Advanced Devices was $3.3 million, or 12.5 percent of revenue, as compared to $5.6 million, or 21.2 percent of revenue, in the second quarter of 2010.  The decline in non-GAAP operating margin was due to product mix and the impact of acquisitions.  

Use of Non-GAAP Financial Information

To help our investors understand our past financial performance and our future results, we supplement the financial results that we provide in accordance with generally accepted accounting principles, or GAAP, with non-GAAP financial measures. The specific non-GAAP measures which we use along with a reconciliation to the nearest comparable GAAP measures and the explanation for why these non-GAAP measures provide useful information to investors regarding our financial condition and results of operations and why management chose to exclude selected items can be found at the end of this release. The method we use to produce non-GAAP results is not computed according to GAAP and may differ from the methods used by other companies. Our non-GAAP results are not meant to be considered in isolation or as a substitute for comparable GAAP measures and should be read only in conjunction with our consolidated financial statements prepared in accordance with GAAP. 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. Management generally compensates for the limitations in the use of non-GAAP financial measures by relying on comparable GAAP financial measures and providing investors with a reconciliation of the non-GAAP financial measure to the most directly comparable GAAP financial measure or measures. Investors are encouraged to review the reconciliation of our non-GAAP financial measures to the comparable GAAP results, which is attached to this earnings release.  Additional financial information about our use of non-GAAP results can be found on the investor relations page of our Web site at http://investor.trimble.com .

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