Trimble Reports Second Quarter 2013 Revenue of $576.3 Million, GAAP EPS of $0.21 and Non-GAAP EPS of $0.38

(PRNewswire) — Trimble (NASDAQ: TRMB) today announced second quarter 2013 revenue of $576.3 million, up 11 percent as compared to the second quarter of 2012.

GAAP operating income for the second quarter of 2013 was $64.9 million, or 11.3 percent of revenue, as compared to 11.4 percent of revenue in the second quarter of 2012. 

GAAP net income for the second quarter of 2013 was $54.6 million, up 2 percent as compared to the second quarter of 2012. Diluted GAAP earnings per share in the second quarter of 2013 were $0.21, flat with the second quarter of 2012.  The tax rate for the second quarter of 2013 was 20 percent as compared to 16 percent in the second quarter of 2012.

Non-GAAP operating income for the second quarter of 2013 was $120.3 million, or 20.9 percent of revenue, compared to $105.2 million, or 20.3 percent of revenue, in the second quarter of 2012.  

Non-GAAP net income of $98.6 million for the second quarter of 2013 was up 7 percent as compared to the second quarter of 2012.  Diluted non-GAAP earnings per share were $0.38 in the second quarter of 2013, as compared to diluted non-GAAP earnings per share of $0.36 in the second quarter of 2012. 

Second quarter 2013 non-GAAP results included the following adjustments as compared to the second quarter of 2012:

  • Restructuring expense of $3.7 million as compared to $1.1 million;
  • Amortization of intangibles of $39.8 million as compared to $29.1 million;
  • Stock-based compensation expense of $8.4 million as compared to $8.2 million;
  • Acquisition-related inventory step-up charge of $524 thousand as compared to $122 thousand;
  • Acquisition and divestiture costs of $2.5 million as compared to $7.3 million.

"We met expectations in the second quarter in spite of problematic conditions in some of our markets.  Despite those challenges the Engineering & Construction, Mobile Solutions, and Advanced Devices segments all demonstrated year-to-year revenue and margin growth," said Steven W. Berglund, Trimble's president and chief executive officer.  "The most significant issue for us was in the Field Solutions segment which declined year-to-year, primarily as a result of lower GIS revenues which were impacted by cutbacks in government funding.  Agriculture sales declined slightly due to market conditions in the U.S., which were partially offset by strong growth in the rest of the world.  We anticipate some of these market conditions to continue for the rest of the year; we nonetheless continue to expect double digit revenue growth for the second half."  

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)

Second quarter 2013 E&C revenue was $313.4 million, up 10 percent as compared to the second quarter of 2012 primarily due to organic growth in buildings and construction solutions sales and contributions from acquisitions.

Operating income in E&C for the second quarter of 2013 was $66.8 million, or 21.3 percent of revenue, as compared to 20.9 percent of revenue in the second quarter of 2012.  Non-GAAP operating income was $69.7 million, or 22.2 percent of revenue, as compared to 22.1 percent of revenue in the second quarter of 2012.

Field Solutions

Second quarter 2013 Field Solutions revenue was $115.9 million, down 6 percent as compared to the second quarter of 2012, due primarily to softer sales of Geographical Information System (GIS) solutions.  Sales of agricultural solutions were also down slightly.

Second quarter 2013 Field Solutions operating income was $43.4 million, or 37.4 percent of revenue, as compared to $46.6 million, or 37.8 percent of revenue, in the second quarter of 2012.  Non-GAAP operating income was $44.2 million, or 38.1 percent of revenue, as compared to $47.3 million, or 38.3 percent of revenue, in the second quarter of 2012.  The slight decrease in non-GAAP operating margin was due primarily to lower revenue, as well as GIS product mix, partially offset by positive product mix and pricing in agriculture.

Mobile Solutions  

Second quarter 2013 Mobile Solutions revenue was $115.5 million, up 42 percent as compared to the second quarter of 2012 due to higher revenue from transportation and logistics sales, primarily due to acquisitions.

Second quarter 2013 Mobile Solutions operating income was $15.4 million, or 13.4 percent of revenue, as compared to $5.6 million, or 6.9 percent of revenue, in the second quarter of 2012.  Second quarter 2013 non-GAAP operating income was $16.4 million, or 14.2 percent of revenue, as compared to $5.9 million, or 7.2 percent of revenue, in the second quarter of 2012.  The increase in non-GAAP operating margins was primarily due to leverage from increased revenue, product mix and cost controls.

Advanced Devices

Second quarter 2013 Advanced Devices revenue was $31.5 million, up 10 percent as compared to the second quarter of 2012, primarily due to stronger sales of military and RFID components and subsystems.

Operating income in Advanced Devices for the second quarter of 2013 was $6.5 million, or 20.7 percent of revenue, as compared to $3.9 million, or 13.7 percent of revenue, in the second quarter of 2012. Non-GAAP operating income in Advanced Devices was $7.4 million, or 23.6 percent of revenue, as compared to $4.5 million, or 15.6 percent of revenue, in the second quarter of 2012. The improvement in non-GAAP operating margin was due to leverage on higher revenue. 

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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