SUNNYVALE, Calif., Oct. 29, 2015 /PRNewswire/ -- Trimble
(NASDAQ: TRMB) today announced financial results for the third
quarter of 2015.
Third Quarter 2015 Financial Summary
Third quarter 2015 revenue of $562.3
million was down 4 percent as compared to the third quarter
of 2014, and was approximately flat on a constant currency basis.
Engineering and Construction revenue was $326.4 million, down 5 percent. Field Solutions
revenue was $73.5 million, down 17
percent. Mobile Solutions revenue was $131.6
million, up 9 percent. Advanced Devices revenue was
$30.8 million, down 6 percent.
GAAP operating income was $46.0
million, up 314 percent as compared to the third quarter of
2014. GAAP operating margin was 8.2 percent of revenue as compared
to 1.9 percent of revenue in the third quarter of
2014.
GAAP net income was $37.1 million,
up 214 percent as compared to the third quarter of 2014. Diluted
GAAP earnings per share were $0.14 as
compared to diluted GAAP earnings per share of $0.04 in the third quarter of 2014.
Third quarter 2014 GAAP results were negatively impacted by an
approximately $51 million reserve for
legal matters related to a jury verdict, which was reversed in the
fourth quarter of 2014 when the verdict was overturned.
Non-GAAP operating income of $104.9
million was down 11 percent as compared to the third quarter
of 2014. Non-GAAP operating margin was 18.7 percent of revenue as
compared to 20.2 percent of revenue in the third quarter of
2014.
Non-GAAP net income of $77.8
million was down 11 percent as compared to the third quarter
of 2014. Diluted non-GAAP earnings per share were $0.30 as compared to diluted non-GAAP earnings
per share of $0.33 in the third
quarter of 2014.
The GAAP tax rate for the quarter was 15 percent and the
non-GAAP tax rate was 24 percent.
Operating cash flow for the first three quarters of 2015 was
$276.4 million, down 11 percent as
compared to the first three quarters of 2014.
During the third quarter of 2015, Trimble repurchased
approximately 8.2 million shares of its common stock for a total of
$154.6 million. Trimble received
approximately 3.7 million of these shares through the accelerated
share repurchase program announced on September 2, 2015, and additional shares will be
delivered in the fourth quarter upon completion of the program.
Following the completion of the program, approximately $250 million will remain on the current share
repurchase authorization.
"We met our revenue expectations and improved operating margins
sequentially in the quarter," said Steven
W. Berglund, Trimble's president and chief executive
officer. "Revenue was negatively impacted by continued poor
conditions in the agriculture market, the effects of oil price
declines, and foreign exchange effects. As these conditions
lessen we anticipate a return to growth in 2016."
Forward Looking Guidance
For the fourth quarter of 2015 Trimble expects revenue to be
between $520 million and $550 million
with GAAP earnings per share of $0.01 to
$0.08 and non-GAAP earnings per share of $0.19 to $0.26. Non-GAAP guidance excludes the
amortization of intangibles of $40
million related to previous acquisitions, anticipated
acquisition costs of $3 million, the
anticipated impact of stock-based compensation expense of
$14 million, and $3 million in anticipated restructuring charges.
GAAP guidance assumes a tax rate of 25 percent and non-GAAP
guidance assumes a tax rate of 24 percent. Both GAAP and non-GAAP
earnings per share assume approximately 253 million shares
outstanding.
Investor Conference Call / Webcast Details
Trimble will hold a conference call on October 29 at 1:30 p.m.
PT to review its third quarter 2015 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 (702) 928-6633 (international). The pass code is
56821478. The replay will also be available on the Web at the
address above.
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.
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. 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.
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, Trimble is
headquartered in Sunnyvale,
Calif.
For more information visit: www.trimble.com.
Safe Harbor
Certain statements made in this press release are
forward-looking statements within the meaning of Section 21E of the
Securities Exchange Act of 1934, as amended, and are made pursuant
to the safe harbor provisions of the Securities Litigation Reform
Act of 1995. These statements include expectations for future
financial market and economic conditions, the impact of
acquisitions, the ability to deliver revenue, earnings per share
and other financial projections that Trimble has guided for the
fourth quarter, the expected tax rate, the anticipated impact of
stock-based compensation expense, the amortization of intangibles
related to previous acquisitions and the anticipated number of
shares outstanding and interest costs. These forward-looking
statements are subject to change, and actual results may materially
differ from those set forth in this press release due to certain
risks and uncertainties. The Company's results may be adversely
affected if the Company is unable to market, manufacture and ship
new products, obtain new customers, or integrate new acquisitions.
The Company's results would also be negatively impacted by
weakening in the macro environment including declining oil prices
or foreign exchange fluctuations. Any failure to achieve predicted
results could negatively impact the Company's revenues, cash flow
from operations, and other financial results. The Company's
financial results will also depend on a number of other factors and
risks detailed from time to time in reports filed with the SEC,
including its quarterly reports on Form 10-Q and its annual report
on Form 10- K, such as changes in economic conditions, further
worsening in the agricultural market, critical part supply chain
shortages, possible write-offs of goodwill, and regulatory
proceedings affecting GPS. Undue reliance should not be placed on
any forward-looking statement contained herein, especially in light
of greater uncertainty than normal in the economy in general. These
statements reflect the Company's position as of the date of this
release. The Company expressly disclaims any undertaking to release
publicly any updates or revisions to any statements to reflect any
change in the Company's expectations or any change of events,
conditions, or circumstances on which any such statement is
based.
CONDENSED
CONSOLIDATED STATEMENTS OF INCOME
|
(In millions, except
per share data)
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
Third Quarter
of
|
|
First Three Quarters
of
|
|
|
|
|
|
|
|
|
|
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
|
|
|
|
|
|
|
|
|
Revenues:
|
|
|
|
|
|
|
|
|
Product
|
|
$373.0
|
|
$415.6
|
|
$1,168.2
|
|
$1,327.1
|
Service
|
|
103.9
|
|
98.3
|
|
310.5
|
|
291.7
|
Subscription
|
|
85.4
|
|
70.9
|
|
252.0
|
|
212.9
|
Total
revenues
|
|
562.3
|
|
584.8
|
|
1,730.7
|
|
1,831.7
|
|
|
|
|
|
|
|
|
|
Cost of
sales:
|
|
|
|
|
|
|
|
|
Product
|
|
175.5
|
|
189.3
|
|
554.0
|
|
605.4
|
Service
|
|
39.4
|
|
36.8
|
|
123.0
|
|
108.6
|
Subscription
|
|
26.1
|
|
21.8
|
|
75.8
|
|
58.4
|
Amortization of purchased intangible assets
|
|
23.3
|
|
20.1
|
|
68.8
|
|
61.0
|
Total cost of
sales
|
|
264.3
|
|
268.0
|
|
821.6
|
|
833.4
|
|
|
|
|
-
|
|
|
|
-
|
Gross
margin
|
|
298.0
|
|
316.8
|
|
909.1
|
|
998.3
|
Gross margin
(%)
|
|
53.0%
|
|
54.2%
|
|
52.5%
|
|
54.5%
|
|
|
|
|
|
|
|
|
|
Operating
expenses
|
|
|
|
|
|
|
|
|
Research and development
|
|
79.6
|
|
79.0
|
|
251.3
|
|
237.2
|
Sales and marketing
|
|
89.1
|
|
95.8
|
|
281.8
|
|
288.8
|
General and administrative
|
|
63.2
|
|
111.4
|
|
192.1
|
|
230.2
|
Restructuring charges
|
|
2.7
|
|
0.2
|
|
9.0
|
|
1.3
|
Amortization of purchased intangible assets
|
|
17.4
|
|
19.3
|
|
53.4
|
|
56.8
|
Total operating
expenses
|
|
252.0
|
|
305.7
|
|
787.6
|
|
814.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
income
|
|
46.0
|
|
11.1
|
|
121.5
|
|
184.0
|
|
|
|
|
|
|
|
|
|
Non-operating income
(expense), net
|
|
|
|
|
|
|
|
|
Interest expense, net
|
|
(6.4)
|
|
(3.0)
|
|
(19.1)
|
|
(9.8)
|
Foreign currency transaction gain (loss)
|
|
0.1
|
|
(3.2)
|
|
1.2
|
|
(3.8)
|
Income from equity method investments
|
|
4.7
|
|
2.8
|
|
14.1
|
|
11.5
|
Other income (expense), net
|
|
(0.9)
|
|
(0.6)
|
|
5.8
|
|
12.5
|
Total
non-operating income (expense), net
|
|
(2.5)
|
|
(4.0)
|
|
2.0
|
|
10.4
|
|
|
|
|
|
|
|
|
|
Income before
taxes
|
|
43.5
|
|
7.1
|
|
123.5
|
|
194.4
|
|
|
|
|
|
|
|
|
|
Income tax provision
(benefit)
|
|
6.5
|
|
(4.7)
|
|
26.7
|
|
36.4
|
Net income
|
|
37.0
|
|
11.8
|
|
96.8
|
|
158.0
|
Less: Net loss
attributable to noncontrolling interests
|
|
(0.1)
|
|
-
|
|
(0.3)
|
|
(0.3)
|
Net income
attributable to Trimble Navigation Ltd.
|
|
$ 37.1
|
|
$ 11.8
|
|
$ 97.1
|
|
$ 158.3
|
|
|
|
|
|
|
|
|
|
Earnings per share
attributable to Trimble Navigation Ltd.
|
|
|
|
|
|
|
|
|
Basic
|
|
$ 0.15
|
|
$ 0.05
|
|
$ 0.38
|
|
$ 0.61
|
Diluted
|
|
$ 0.14
|
|
$ 0.04
|
|
$ 0.37
|
|
$ 0.60
|
|
|
|
|
|
|
|
|
|
Shares used in
calculating earnings per share:
|
|
|
|
|
|
|
|
|
Basic
|
|
254.8
|
|
260.3
|
|
257.5
|
|
260.4
|
Diluted
|
|
257.2
|
|
264.4
|
|
260.3
|
|
265.1
|
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
(In
millions)
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
Third Quarter
of
|
|
Fiscal Year
End
|
As of
|
|
2015
|
|
2014
|
Assets
|
|
|
|
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
Cash and
cash equivalents
|
|
$
123.6
|
|
$
148.0
|
Accounts
receivable, net
|
|
344.5
|
|
362.0
|
Other
receivables
|
|
15.4
|
|
29.5
|
Inventories, net
|
|
271.4
|
|
278.1
|
Deferred
income taxes
|
|
51.9
|
|
45.6
|
Other
current assets
|
|
46.2
|
|
39.4
|
Total current
assets
|
|
853.0
|
|
902.6
|
|
|
|
|
|
Property and
equipment, net
|
|
162.0
|
|
157.4
|
Goodwill
|
|
2,083.7
|
|
2,085.8
|
Other purchased
intangible assets, net
|
|
502.1
|
|
594.5
|
Other non-current
assets
|
|
119.1
|
|
118.6
|
|
|
|
|
|
Total
assets
|
|
$
3,719.9
|
|
$
3,858.9
|
|
|
|
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
Current
portion of long-term debt
|
|
$
150.3
|
|
$
64.4
|
Accounts
payable
|
|
97.2
|
|
103.8
|
Accrued
compensation and benefits
|
|
82.7
|
|
98.9
|
Deferred
revenue
|
|
243.0
|
|
211.6
|
Accrued
warranty expense
|
|
19.1
|
|
20.6
|
Other
current liabilities
|
|
95.2
|
|
89.0
|
Total current
liabilities
|
|
687.5
|
|
588.3
|
|
|
|
|
|
Non-current portion
of long-term debt
|
|
609.1
|
|
674.0
|
Non-current deferred
revenue
|
|
32.0
|
|
26.3
|
Deferred income
taxes
|
|
93.8
|
|
121.1
|
Other non-current
liabilities
|
|
94.3
|
|
95.8
|
Total
liabilities
|
|
1,516.7
|
|
1,505.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity
|
|
|
|
|
|
|
|
|
|
Shareholders'
equity:
|
|
|
|
|
Common
stock
|
|
1,216.0
|
|
1,207.3
|
Retained
earnings
|
|
1,133.2
|
|
1,211.0
|
Accumulated other comprehensive loss
|
|
(147.0)
|
|
(76.7)
|
Total Trimble
Navigation Ltd. shareholders' equity
|
|
2,202.2
|
|
2,341.6
|
Noncontrolling
interests
|
|
1.0
|
|
11.8
|
Total
equity
|
|
2,203.2
|
|
2,353.4
|
|
|
|
|
|
Total liabilities and
equity
|
|
$
3,719.9
|
|
$
3,858.9
|
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
(In
millions)
|
(Unaudited)
|
|
|
First Three Quarters
of
|
|
|
2015
|
|
2014
|
|
|
|
|
|
Cash flow from
operating activities:
|
|
|
|
|
Net Income
|
|
$
96.8
|
|
$158.0
|
|
|
|
|
|
Adjustments to reconcile net income to net cash provided
by
|
|
|
|
|
operating
activities:
|
|
|
|
|
Depreciation expense
|
|
27.0
|
|
24.1
|
Amortization expense
|
|
122.2
|
|
117.8
|
Provision for doubtful accounts
|
|
1.7
|
|
2.9
|
Deferred income taxes
|
|
(0.5)
|
|
(1.2)
|
Stock-based compensation
|
|
37.3
|
|
32.1
|
Income from equity method investments
|
|
(14.1)
|
|
(11.5)
|
Gain
on an equity sale
|
|
-
|
|
(15.1)
|
Acquisition / divestiture (gain) loss
|
|
(5.8)
|
|
6.0
|
Excess tax benefit for stock-based compensation
|
|
(1.4)
|
|
(14.1)
|
Provision for excess and obsolete inventories
|
|
5.1
|
|
3.5
|
Other non-cash items
|
|
9.0
|
|
(0.6)
|
|
|
|
|
|
Add decrease (increase) in assets:
|
|
|
|
|
Accounts receivables
|
|
12.3
|
|
(12.7)
|
Other receivables
|
|
6.5
|
|
(4.7)
|
Inventories
|
|
(6.4)
|
|
(27.2)
|
Other current and non-current assets
|
|
(9.5)
|
|
(12.9)
|
|
|
|
|
|
Add increase (decrease) in liabilities:
|
|
|
|
|
Accounts payable
|
|
(6.9)
|
|
(6.8)
|
Accrued compensation and benefits
|
|
(15.4)
|
|
(9.3)
|
Deferred revenue
|
|
38.6
|
|
41.9
|
Accrued warranty expense
|
|
(1.4)
|
|
2.7
|
Other liabilities
|
|
(18.7)
|
|
37.6
|
Net cash
provided by operating activities
|
|
276.4
|
|
310.5
|
|
|
|
|
|
Cash flow from
investing activities:
|
|
|
|
|
Acquisitions of
businesses, net of cash acquired
|
|
(101.7)
|
|
(170.9)
|
Acquisitions of
property and equipment
|
|
(35.7)
|
|
(35.0)
|
Purchases of equity
investments
|
|
(3.6)
|
|
(10.9)
|
Acquisitions of
intangible assets
|
|
(0.1)
|
|
(7.0)
|
Net proceeds from sale
of business
|
|
12.1
|
|
-
|
Dividends received
from equity method investments
|
|
15.3
|
|
25.9
|
Other
|
|
0.3
|
|
(4.5)
|
Net cash used
in investing activities
|
|
(113.4)
|
|
(202.4)
|
|
|
|
|
|
Cash flow from
financing activities:
|
|
|
|
|
Issuance of common
stock, net of tax withholdings
|
|
29.1
|
|
53.6
|
Payments related to
repurchases of common stock
|
|
(234.4)
|
|
(65.0)
|
Excess tax benefit for
stock-based compensation
|
|
1.4
|
|
14.1
|
Proceeds from debt and
revolving credit lines
|
|
458.0
|
|
42.0
|
Payments on debt and
revolving credit lines
|
|
(431.1)
|
|
(153.3)
|
Net cash used
in financing activities
|
|
(177.0)
|
|
(108.6)
|
|
|
|
|
|
Effect of
exchange rate changes on cash and cash equivalents
|
|
(10.4)
|
|
(7.2)
|
|
|
|
|
|
Net decrease in
cash and cash equivalents
|
|
(24.4)
|
|
(7.7)
|
Cash and cash
equivalents - beginning of period
|
|
148.0
|
|
147.2
|
|
|
|
|
|
Cash and cash
equivalents - end of period
|
|
$
123.6
|
|
$139.5
|
REPORTING
SEGMENTS
|
(Dollars in
millions)
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reporting
Segments
|
|
|
|
|
|
Engineering
|
|
|
|
|
|
|
|
|
|
|
|
|
and
|
|
Field
|
|
Mobile
|
|
Advanced
|
|
|
|
|
|
|
Construction
|
|
Solutions
|
|
Solutions
|
|
Devices
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
THIRD QUARTER OF
FISCAL 2015 :
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
$ 326.4
|
|
$ 73.5
|
|
$ 131.6
|
|
$ 30.8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
before corporate allocations
|
|
$ 68.8
|
|
$ 19.5
|
|
$ 23.1
|
|
$ 10.8
|
|
|
|
Operating margin (%
of segment external net revenue)
|
|
21.1%
|
|
26.5%
|
|
17.6%
|
|
35.1%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
THIRD QUARTER OF
FISCAL 2014 :
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
$ 342.2
|
|
$ 88.8
|
|
$ 121.2
|
|
$ 32.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
before corporate allocations
|
|
$ 74.2
|
( A
)
|
$ 26.1
|
( A
)
|
$ 19.5
|
( A
)
|
$ 9.6
|
( A
)
|
|
|
Operating margin (%
of segment external net revenue)
|
|
21.7%
|
|
29.4%
|
|
16.1%
|
|
29.4%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FIRST THREE
QUARTERS OF 2015 :
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
$ 964.2
|
|
$ 275.9
|
|
$ 388.1
|
|
$ 102.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
before corporate allocations
|
|
$ 166.3
|
|
$ 85.0
|
|
$ 62.5
|
|
$ 37.1
|
|
|
|
Operating margin (%
of segment external net revenue)
|
|
17.2%
|
|
30.8%
|
|
16.1%
|
|
36.2%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FIRST THREE
QUARTERS OF 2014 :
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
$ 1,019.6
|
|
$ 341.4
|
|
$ 362.7
|
|
$ 108.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
before corporate allocations
|
|
$ 231.0
|
( A
)
|
$ 119.4
|
( A
)
|
$ 58.5
|
( A
)
|
$ 34.4
|
( A
)
|
|
|
Operating margin (%
of segment external net revenue)
|
|
22.7%
|
|
35.0%
|
|
16.1%
|
|
31.9%
|
|
|
( A ) Beginning with
the first quarter of fiscal 2015, the Company changed its
methodology for allocating stock-based compensation. Historically,
the Company allocated stock-based compensation to each business
segment. Beginning in the first quarter of fiscal 2015, stock-based
compensation is considered a corporate expense and not reflected in
segment results. The Company has adjusted the segment
operating income for all prior periods to conform to the current
year methodology.
|
GAAP TO NON-GAAP
RECONCILIATION
|
(Dollars in millions,
except per share data)
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Third Quarter
of
|
|
First Three Quarters
of
|
|
|
|
|
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
|
|
|
|
|
|
Dollar
|
% of
|
|
Dollar
|
% of
|
|
Dollar
|
% of
|
|
Dollar
|
% of
|
|
|
|
|
|
|
Amount
|
Revenue
|
|
Amount
|
Revenue
|
|
Amount
|
Revenue
|
|
Amount
|
Revenue
|
|
GROSS
MARGIN:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP gross
margin:
|
|
|
$ 298.0
|
53.0%
|
|
$ 316.8
|
54.2%
|
|
$ 909.1
|
52.5%
|
|
$ 998.3
|
54.5%
|
|
|
|
Restructuring
charges
|
( A )
|
|
0.3
|
0.1%
|
|
0.1
|
0.0%
|
|
0.8
|
0.0%
|
|
0.3
|
0.0%
|
|
|
|
Amortization of
purchased intangible assets
|
( B )
|
|
23.3
|
4.1%
|
|
20.1
|
3.4%
|
|
68.8
|
4.0%
|
|
61.0
|
3.3%
|
|
|
|
Stock-based
compensation
|
( C )
|
|
1.0
|
0.2%
|
|
0.8
|
0.1%
|
|
2.9
|
0.2%
|
|
2.3
|
0.1%
|
|
|
|
Amortization of
acquisition-related inventory step-up
|
( D )
|
|
-
|
0.0%
|
|
0.5
|
0.1%
|
|
-
|
0.0%
|
|
0.6
|
0.1%
|
|
|
Non-GAAP gross
margin:
|
|
|
$ 322.6
|
57.4%
|
|
$ 338.3
|
57.8%
|
|
$ 981.6
|
56.7%
|
|
$ 1,062.5
|
58.0%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OPERATING
EXPENSES:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP operating
expenses:
|
|
|
$ 252.0
|
44.8%
|
|
$ 305.7
|
52.3%
|
|
$ 787.6
|
45.5%
|
|
$ 814.3
|
44.5%
|
|
|
|
Restructuring
charges
|
( A )
|
|
(2.7)
|
-0.5%
|
|
(0.2)
|
0.0%
|
|
(9.0)
|
-0.5%
|
|
(1.3)
|
-0.1%
|
|
|
|
Amortization of
purchased intangible assets
|
( B )
|
|
(17.4)
|
-3.1%
|
|
(19.3)
|
-3.3%
|
|
(53.4)
|
-3.1%
|
|
(56.8)
|
-3.1%
|
|
|
|
Stock-based
compensation
|
( C )
|
|
(11.8)
|
-2.1%
|
|
(10.2)
|
-1.8%
|
|
(34.4)
|
-2.0%
|
|
(29.8)
|
-1.6%
|
|
|
|
Acquisition /
divestiture items
|
( E )
|
|
(2.4)
|
-0.4%
|
|
(4.1)
|
-0.7%
|
|
(8.0)
|
-0.4%
|
|
(7.5)
|
-0.4%
|
|
|
|
Litigation
|
( F )
|
|
-
|
0.0%
|
|
(52.0)
|
-8.9%
|
|
-
|
0.0%
|
|
(52.0)
|
-2.9%
|
|
|
Non-GAAP operating
expenses:
|
|
|
$ 217.7
|
38.7%
|
|
$ 219.9
|
37.6%
|
|
$ 682.8
|
39.5%
|
|
$ 666.9
|
36.4%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OPERATING
INCOME:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP operating
income:
|
|
|
$ 46.0
|
8.2%
|
|
$ 11.1
|
1.9%
|
|
$ 121.5
|
7.0%
|
|
$ 184.0
|
10.0%
|
|
|
|
Restructuring
charges
|
( A )
|
|
3.0
|
0.5%
|
|
0.3
|
0.0%
|
|
9.8
|
0.6%
|
|
1.6
|
0.1%
|
|
|
|
Amortization of
purchased intangible assets
|
( B )
|
|
40.7
|
7.2%
|
|
39.4
|
6.7%
|
|
122.2
|
7.1%
|
|
117.8
|
6.4%
|
|
|
|
Stock-based
compensation
|
( C )
|
|
12.8
|
2.3%
|
|
11.0
|
1.9%
|
|
37.3
|
2.1%
|
|
32.1
|
1.8%
|
|
|
|
Amortization of
acquisition-related inventory step-up
|
( D )
|
|
-
|
0.0%
|
|
0.5
|
0.1%
|
|
-
|
0.0%
|
|
0.6
|
0.0%
|
|
|
|
Acquisition /
divestiture items
|
( E )
|
|
2.4
|
0.5%
|
|
4.1
|
0.7%
|
|
8.0
|
0.5%
|
|
7.5
|
0.4%
|
|
|
|
Litigation
|
( F )
|
|
-
|
0.0%
|
|
52.0
|
8.9%
|
|
-
|
0.0%
|
|
52.0
|
2.9%
|
|
|
Non-GAAP operating
income:
|
|
|
$ 104.9
|
18.7%
|
|
$ 118.4
|
20.2%
|
|
$ 298.8
|
17.3%
|
|
$ 395.6
|
21.6%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NON-OPERATING
INCOME (EXPENSE), NET:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP non-operating
income (expense), net:
|
|
|
$ (2.5)
|
|
|
$ (4.0)
|
|
|
$ 2.0
|
|
|
$ 10.4
|
|
|
|
|
Acquisition /
divestiture items
|
( E )
|
|
(0.2)
|
|
|
1.7
|
|
|
(5.8)
|
|
|
6.0
|
|
|
|
|
Gain on an equity
sale
|
( G )
|
|
-
|
|
|
-
|
|
|
-
|
|
|
(15.1)
|
|
|
|
Non-GAAP
non-operating income (expense), net:
|
|
|
$ (2.7)
|
|
|
$ (2.3)
|
|
|
$ (3.8)
|
|
|
$ 1.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP
and
|
|
|
GAAP
and
|
|
|
GAAP
and
|
|
|
GAAP
and
|
|
|
|
|
|
|
|
Non-GAAP
|
|
|
Non-GAAP
|
|
|
Non-GAAP
|
|
|
Non-GAAP
|
|
|
|
|
|
|
|
Tax Rate %
|
( L )
|
|
Tax Rate %
|
( L )
|
|
Tax Rate %
|
( L )
|
|
Tax Rate %
|
( L )
|
INCOME TAX
PROVISION:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP income tax
provision:
|
|
|
$ 6.5
|
15%
|
|
$ (4.7)
|
-66%
|
|
$ 26.7
|
22%
|
|
$ 36.4
|
19%
|
|
|
|
Non-GAAP items tax
effected
|
( H )
|
|
8.8
|
|
|
13.9
|
|
|
37.8
|
|
|
36.3
|
|
|
|
|
Difference in GAAP
and Non-GAAP tax rate
|
( I )
|
|
9.2
|
|
|
-
|
|
|
6.3
|
|
|
-
|
|
|
|
|
Tax on gain on an
equity sale
|
( J )
|
|
-
|
|
|
-
|
|
|
-
|
|
|
(5.8)
|
|
|
|
|
Tax on RDS
litigation
|
( K )
|
|
-
|
|
|
19.8
|
|
|
-
|
|
|
19.8
|
|
|
|
Non-GAAP income tax
provision:
|
|
|
$ 24.5
|
24%
|
|
$ 29.0
|
25%
|
|
$ 70.8
|
24%
|
|
$ 86.7
|
22%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET
INCOME:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP net income
attributable to Trimble Navigation Ltd.
|
|
|
$ 37.1
|
|
|
$ 11.8
|
|
|
$ 97.1
|
|
|
$ 158.3
|
|
|
|
|
Restructuring
charges
|
( A )
|
|
3.0
|
|
|
0.3
|
|
|
9.8
|
|
|
1.6
|
|
|
|
|
Amortization of
purchased intangible assets
|
( B )
|
|
40.7
|
|
|
39.4
|
|
|
122.2
|
|
|
117.8
|
|
|
|
|
Stock-based
compensation
|
( C )
|
|
12.8
|
|
|
11.0
|
|
|
37.3
|
|
|
32.1
|
|
|
|
|
Amortization of
acquisition-related inventory step-up
|
( D )
|
|
-
|
|
|
0.5
|
|
|
-
|
|
|
0.6
|
|
|
|
|
Acquisition /
divestiture items
|
( E )
|
|
2.2
|
|
|
5.8
|
|
|
2.2
|
|
|
13.5
|
|
|
|
|
Gain on an equity
sale
|
( G )
|
|
-
|
|
|
-
|
|
|
-
|
|
|
(15.1)
|
|
|
|
|
Litigation
|
( F )
|
|
-
|
|
|
52.0
|
|
|
-
|
|
|
52.0
|
|
|
|
|
Non-GAAP tax
adjustments
|
( H ) - ( K
)
|
|
(18.0)
|
|
|
(33.7)
|
|
|
(44.1)
|
|
|
(50.3)
|
|
|
|
Non-GAAP net income
attributable to Trimble Navigation Ltd.
|
|
|
$ 77.8
|
|
|
$ 87.1
|
|
|
$ 224.5
|
|
|
$ 310.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
DILUTED NET INCOME
PER SHARE:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP diluted net
income per share attributable to Trimble Navigation Ltd.
|
|
|
$ 0.14
|
|
|
$ 0.04
|
|
|
$ 0.37
|
|
|
$ 0.60
|
|
|
|
|
Restructuring
charges
|
( A )
|
|
0.01
|
|
|
-
|
|
|
0.04
|
|
|
0.01
|
|
|
|
|
Amortization of
purchased intangible assets
|
( B )
|
|
0.16
|
|
|
0.15
|
|
|
0.47
|
|
|
0.44
|
|
|
|
|
Stock-based
compensation
|
( C )
|
|
0.05
|
|
|
0.04
|
|
|
0.14
|
|
|
0.12
|
|
|
|
|
Amortization of
acquisition-related inventory step-up
|
( D )
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
|
|
Acquisition /
divestiture items
|
( E )
|
|
0.01
|
|
|
0.02
|
|
|
0.01
|
|
|
0.05
|
|
|
|
|
Gain on an equity
sale
|
( G )
|
|
-
|
|
|
-
|
|
|
-
|
|
|
(0.06)
|
|
|
|
|
Litigation
|
( F )
|
|
-
|
|
|
0.20
|
|
|
-
|
|
|
0.20
|
|
|
|
|
Non-GAAP tax
adjustments
|
( H ) - ( K
)
|
|
(0.07)
|
|
|
(0.12)
|
|
|
(0.17)
|
|
|
(0.19)
|
|
|
|
Non-GAAP diluted net
income per share attributable to Trimble Navigation Ltd.
|
|
$ 0.30
|
|
|
$ 0.33
|
|
|
$ 0.86
|
|
|
$ 1.17
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OPERATING
LEVERAGE:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Increase (decrease)
in non-GAAP operating income
|
|
|
$ (13.5)
|
|
|
$ 0.2
|
|
|
$ (96.8)
|
|
|
$ 46.8
|
|
|
|
Increase (decrease)
in revenue
|
|
|
$ (22.5)
|
|
|
$ 28.3
|
|
|
$ (101.0)
|
|
|
$ 142.8
|
|
|
|
Operating leverage
(increase in non-GAAP operating
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
income as a % of
increase in revenue)
|
|
|
N/A
|
|
|
0.7%
|
|
|
N/A
|
|
|
32.8%
|
|
|
FOOTNOTES TO GAAP
TO NON-GAAP RECONCILIATION
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Our non-GAAP measures
are not meant to be considered in isolation or as a substitute for
comparable GAAP measures. The non-GAAP financial measures included
in the previous table as well as detailed explanations to the
adjustments to comparable GAAP measures, are set forth below:
Non-GAAP gross margin
We believe our investors benefit by understanding our non-GAAP
gross margin as a way of understanding how product mix, pricing
decisions and manufacturing costs influence our business.
Non-GAAP gross margin excludes restructuring costs, amortization of
purchased intangible assets, stock-based compensation and
amortization of acquisition-related inventory step-up from GAAP
gross margin. We believe that these exclusions offer investors
additional information that may be useful to view trends in our
gross margin performance.
Non-GAAP operating expenses
We believe this measure is important to investors evaluating our
non-GAAP spending in relation to revenue. Non-GAAP operating
expenses exclude restructuring costs, amortization of purchased
intangible assets, stock-based compensation,
acquisition/divestiture costs associated with external and
incremental costs resulting directly from merger and acquisition
activities such as legal, due diligence, and integration costs and
litigation expenses from GAAP operating expenses. We believe that
these exclusions offer investors supplemental information to
facilitate comparison of our operating expenses to our prior
results.
|
Non-GAAP operating
income
We believe our investors benefit by understanding our non-GAAP
operating income trends which are driven by revenue, gross margin,
and spending. Non-GAAP operating income excludes restructuring
costs, amortization of purchased intangible assets, stock-based
compensation, amortization of acquisition-related inventory
step-up, acquisition/divestiture costs associated with external and
incremental costs resulting directly from merger and acquisition
activities such as legal, due diligence, and integration costs and
litigation expenses. We believe that these exclusions offer an
alternative means for our investors to evaluate current operating
performance compared to results of other periods.
Non-GAAP non-operating income (expense), net
We believe this measure helps investors evaluate our non-operating
income trends. Non-GAAP non-operating income (expense), net
excludes acquisition and divestiture gains/losses associated with
unusual acquisition related items such as intangible asset
impairment charges and gains or losses related to the acquisition
or sale of certain businesses and investments, and a gain on an
equity sale. These gains/losses are specific to particular
acquisitions and divestitures and vary significantly in amount and
timing. We believe that these exclusions provide investors with a
supplemental view of our ongoing financial results.
|
Non-GAAP income tax
provision
We believe that providing investors with the non-GAAP income tax
provision is beneficial because it provides for consistent
treatment of the excluded items in our non-GAAP presentation.
In fiscal 2015 we began calculating a non-GAAP tax rate separate
from the GAAP rate as we expect this to add consistency in the
quarterly non-GAAP trends. We have not retroactively gone
back to prior periods to restate our quarterly non-GAAP results
with a similar separate rate. Therefore, comparability
between periods may be affected.
Non-GAAP net income
This measure provides a supplemental view of net income trends
which are driven by non-GAAP income before taxes and our non-GAAP
tax rate. Non-GAAP net income excludes restructuring costs,
amortization of purchased intangible assets, stock-based
compensation, amortization of acquisition-related inventory
step-up, acquisition and divestiture costs, a gain on an equity
sale, litigation and non-GAAP tax adjustments from GAAP net income.
We believe our investors benefit from understanding these
exclusions and from an alternative view of our net income
performance as compared to our past net income performance.
Non-GAAP diluted net income per share
We believe our investors benefit by understanding our non-GAAP
operating performance as reflected in a per share calculation as a
way of measuring non-GAAP operating performance by ownership in the
company. Non-GAAP diluted net income per share excludes
restructuring costs, amortization of purchased intangible assets,
stock-based compensation, amortization of acquisition-related
inventory step-up, acquisition and divestiture costs, a gain on an
equity sale, litigation and non-GAAP tax adjustments from GAAP
diluted net income per share. We believe that these exclusions
offer investors a useful view of our diluted net income per share
as compared to our past diluted net income per share.
Non-GAAP operating leverage
We believe this information is beneficial to investors as a measure
of how much incremental revenue contributed to our operating
income. Non-GAAP operating leverage is the increase in non-GAAP
operating income as a percentage of the increase in revenue. We
believe that this information offers investors supplemental
information to evaluate our current performance and to compare to
our past non-GAAP operating leverage.
|
These non-GAAP measures can be used to evaluate our historical and
prospective financial performance, as well as our performance
relative to competitors. 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.
Accordingly, management excludes from non-GAAP those items relating
to restructuring, amortization of purchased intangible assets,
stock based compensation, acquisition and divestiture costs, a gain
on an equity sale, a write off of debt issuance costs and non-GAAP
tax adjustments. For detailed explanations of the adjustments
made to comparable GAAP measures, see items (A) - ( I ) below,
|
( A )
|
Restructuring
costs.Included in our GAAP presentation of cost of sales and
operating expenses, restructuring costs recorded are primarily for
employee compensation resulting from reductions in employee
headcount in connection with our company restructurings. We
exclude restructuring costs from our non-GAAP measures because we
believe they do not reflect expected future operating expenses,
they are not indicative of our core operating performance, and they
are not meaningful in comparisons to our past operating
performance. We have incurred restructuring expense in each
of the periods presented however the amount incurred can vary
significantly based on whether a restructuring has occurred in the
period and the timing of headcount reductions.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( B )
|
Amortization of
purchased intangible assets.Included in our GAAP presentation
of gross margin and operating expenses is amortization of purchased
intangible assets. US GAAP accounting requires that intangible
assets are recorded at fair value and amortized over their useful
lives. Consequently, the timing and size of our acquisitions will
cause our operating results to vary from period to period, making a
comparison to past performance difficult for investors. This
accounting treatment may cause differences when comparing our
results to companies that grow internally because the fair value
assigned to the intangible assets acquired through acquisition may
significantly exceed the equivalent expenses that a company may
incur for similar efforts when performed internally. Furthermore,
the useful life that we expense our intangible assets over may be
substantially different from the time period that an internal
growth company incurs and recognizes such expenses. We believe that
by excluding the amortization of purchased intangible assets, which
primarily represents technology and/or customer relationships
already developed, it provides an alternative way for investors to
compare our operations pre-acquisition to those post-acquisitions
and to those of our competitors that have pursued internal growth
strategies. However, we note that companies that grow internally
will incur costs to develop intangible assets that will be expensed
in the period incurred, which may make a direct comparison more
difficult.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( C )
|
Stock-based
compensation. Included in our GAAP presentation of cost of sales
and operating expenses, stock-based compensation consists of
expenses for employee stock options and awards and purchase rights
under our employee stock purchase plan. We exclude stock-based
compensation expense from our non-GAAP measures because some
investors may view it as not reflective of our core operating
performance as it is a non-cash expense. For the third
quarter and first three quarters of fiscal 2015 and 2014,
stock-based compensation was allocated as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Third Quarter
of
|
|
First Three
Quarters
|
|
|
|
(Dollars in
millions)
|
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
|
|
|
Cost of
sales
|
|
|
$
1.0
|
|
$
0.8
|
|
$
2.9
|
|
$
2.3
|
|
|
|
Research and
development
|
|
|
2.1
|
|
1.6
|
|
6.4
|
|
4.8
|
|
|
|
Sales and
Marketing
|
|
|
2.2
|
|
2.0
|
|
6.7
|
|
6.0
|
|
|
|
General and
administrative
|
|
|
7.5
|
|
6.6
|
|
21.3
|
|
19.0
|
|
|
|
|
|
|
$
12.8
|
|
$
11.0
|
|
$
37.3
|
|
$
32.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( D )
|
Amortization of
acquisition-related inventory step-up. The purchase
accounting entries associated with our business acquisitions
require us to record inventory at its fair value, which is
sometimes greater than the previous book value of the
inventory. Included in our GAAP presentation of cost of
sales, the increase in inventory value is amortized to cost of
sales over the period that the related product is sold. We
exclude inventory step-up amortization from our non-GAAP measures
because it is a non-cash expense that we do not believe is
indicative of our ongoing operating results. We further
believe that excluding this item from our non-GAAP results is
useful to investors in that it allows for period-over-period
comparability.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( E )
|
Acquisition /
divestiture items. Included in our GAAP presentation of
operating expenses, acquisition costs consist of external and
incremental costs resulting directly from merger and acquisition
and strategic investment activities such as legal, due diligence,
and integration costs as well as adjustments to the fair value of
earn-out liabilities. Included in our GAAP presentation of
non-operating income (expense) net, acquisition / divestiture items
includes unusual acquisition, investment, or divestiture
gains/losses. Although we do numerous acquisitions, the costs that
have been excluded from the non-GAAP measures are costs specific to
particular acquisitions. These are one-time costs that vary
significantly in amount and timing and are not indicative of our
core operating performance.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( F )
|
Litigation.
The fiscal 2014 amount represents $0.7M of costs based on an
arbitration agreement, as well as $51.3M of estimated costs that
were reserved during the third quarter based on a jury verdict in
favor of the plaintiff, Recreational Data Services, Inc. and then
reversed during the fourth quarter after the judge overturned the
verdict. We have excluded these costs from our non-GAAP measures
because they are non-recurring expenses that are not indicative of
our ongoing operating results. We further believe that excluding
these items from our non-GAAP results is useful to investors in
that it allows for period-over-period
comparability.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( G )
|
Gain on an equity
sale. Included in our GAAP presentation of
non-operating income (expense), net this amount represents a gain
on a partial equity sale of Virtual Site Solutions. We
excluded the gain from our non-GAAP measures. We believe that
investors benefit from excluding this item from our non-GAAP
measures because it facilitates an evaluation of our non-operating
income trends.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( H )
|
Non-GAAP items tax
effected. This amount adjusts the provision for
income taxes to reflect the effect of the non-GAAP items ( A ) - (
E ) on non-GAAP net income. We believe this information
is useful to investors because it provides for consistent treatment
of the excluded items in this non-GAAP
presentation.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( I )
|
Difference in GAAP
and Non-GAAP tax rate. This amount represents the
difference between the GAAP and Non-GAAP tax rates applied to the
Non-GAAP Operating Income plus the Non-GAAP Non-Operating Income
(Loss), Net. In fiscal 2015 we began calculating a non-GAAP
tax rate separate from the GAAP rate as we expect this to add
consistency in the quarterly trends. We have not
retroactively gone back to prior periods to restate them with a
similar separate rate. Therefore, comparability between
periods may be affected.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( J )
|
Tax on gain on an
equity sale. This amount represents the tax effect of a
gain on a partial equity sale of Virtual Site Solutions. We
excluded this item as it represents the tax effect of a
non-recurring gain. We believe that investors benefit from
excluding this item from our non-GAAP income tax provision because
it facilitates a comparison of the non-GAAP tax rate in 2014 to the
non-GAAP tax rates in the current and prior periods.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( K )
|
Tax on
Recreational Data Services Inc. litigation. This amount
represents the tax effect of loss recorded as a result of a jury
verdict in favor of Recreational Data Services, Inc. We
excluded this item as it represents the tax effect of a
non-recurring expense. We believe that investors benefit from
excluding this item from our non-GAAP income tax provision because
it allows for period-over-period comparability.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( L )
|
GAAP and non-GAAP
tax rate %. These percentages are defined as GAAP income
tax provision as a percentage of GAAP income before taxes and
non-GAAP income tax provision as a percentage of non-GAAP income
before taxes. We believe that investors benefit from a
presentation of non-GAAP tax rate percentage as a way of
facilitating a comparison to non-GAAP tax rates in prior
periods. However, this comparability may be impacted since we
began separately calculating a non-GAAP tax rate in fiscal
2015.
|
FTRMB
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/trimble-reports-third-quarter-2015-results-300169006.html
SOURCE Trimble