Trimble Reports Fourth Quarter Revenue Growth of 25 Percent and Fiscal 2006 Revenue Growth of 21 Percent; Announces Two-for-One Stock Split

SUNNYVALE, Calif., Jan. 25 /PRNewswire-FirstCall/ -- 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.

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