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Trimble Reports First Quarter 2006 Revenue Growth of 16 Percent and Earnings Per Share Growth of 45 Percent |
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SUNNYVALE, Calif., April 19, 2006 - Trimble (NASDAQ: TRMB) today announced results for its first quarter 2006, ended March 31, 2006. Revenue for the first quarter of 2006 was $225.9 million, up approximately 16 percent from revenue of $195.4 million in the first quarter of 2005. Operating income for the first quarter of 2006 was $33.1 million, up 10 percent over operating income of $30.2 million in the first quarter of 2005. For year-over-year comparisons, it should be noted that for the first time operating income reflects the impact of stock-based compensation resulting from the adoption of FAS 123® of $3.2 million. Additionally, the quarter was the first in which transactions with the Caterpillar joint venture, Caterpillar Trimble Control Technologies (CTCT), which were $5.2 million, were reflected in operating results, versus non-operating results. On a comparative basis, adjusting for the above factors, operating income in the first quarter of 2006 was up 38 percent compared to the first quarter of 2005. Net income for the first quarter of 2006 was $25.8 million, up 48 percent when compared to net income of $17.4 million in the first quarter of 2005. Earnings per share for the first quarter of 2006 were $0.45, up approximately 45 percent compared to earnings per share of $0.31 in the first quarter of 2005. Earnings per share were negatively impacted by $0.04 due to the adoption of FAS 123®. It should be noted that the tax rate for the first quarter of 2006 was 28 percent, compared to a first quarter 2005 tax rate of 34 percent, due to the favorable outcome of an income tax audit. Trimbles results in the first quarter of 2006 demonstrate continuing progression in both our strategic and financial development, said Steven W. Berglund, Trimbles president and chief executive officer. We continue to see robust demand for position-centric productivity solutions as we convert traditional work techniques to new solutions enabled by technology. Our outlook for the full year remains positive in each of our segments.
Trimble Results by Business Segment
Engineering and Construction On a reported basis, operating margins in E&C were 18 percent in the first quarter of 2006, flat when compared to the first quarter of 2005. Excluding the impact of FAS 123® adoption and the CTCT joint venture, discussed above, E&C operating margins were up significantly year-over-year. E&C growth was driven by a steady market and upgrade cycle, as well as continued sales of products introduced in the last year. Margins were positively impacted by higher gross margins, as well as strong operating leverage.
Field Solutions TFS operating margins for the first quarter of 2006 were 32 percent, compared to 34 percent in the first quarter of 2005 due to shifts in product mix.
Advanced Devices First quarter 2006 revenue in the segment was $23.5 million, up 5 percent from revenue of $22.4 million in the first quarter of 2005. Advanced Devices operating margins were 10 percent, compared to 14 percent in the first quarter of 2005. The decline is mainly due to the impact of product mix and higher spending for new product development and roll-out.
Mobile Solutions TMS operating margins were 2 percent for the first quarter of 2006, compared to a negative 9 percent in the first quarter of 2005. The Company achieved break-even in this segment in the fourth quarter of 2005 and expects to maintain profitability going forward.
Non-GAAP Net Income and Earnings Per Share Non-GAAP earnings per share for the first quarter of 2006 was $0.52 up approximately 53 percent from $0.34 per share in the first quarter of 2005. GAAP and non-GAAP earnings per share for the first quarter of 2006 were calculated on a diluted basis using approximately 57.9 million shares.
Forward Looking Guidance The above GAAP guidance includes stock-based compensation due to the adoption of FAS 123®. On a post-tax basis, the Company expects stock-based compensation for the second quarter of 2006 to be $2.1 million, or approximately $0.04 per share. For comparative purposes, in the second quarter of 2005 the pro forma stock-based compensation expense was $2.5 million, or $0.05 per share. Using a 34 percent tax rate excluding the amortization of intangibles of $2.3 million and the impact of stock-based compensation expense of $3.1 million the Company expects non-GAAP earnings per share between $0.49 and $0.52.
Non-GAAP vs. GAAP Financials The Company excludes the amortization of purchased intangibles, restructuring charges, the amortization of acquisition related inventory step-up charges, and the impact of stock-based compensation in computing non-GAAP measures because the chief executive officer excludes these items when budgeting and evaluating the business. These non-GAAP financial measures are not intended to supersede or replace the Company's GAAP results. Please see the supplemental financial statements, attached to this press release, for a reconciliation of GAAP to non-GAAP results.
Investor Conference Call / Webcast Details
About Trimble 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 the revenue, operating margins, effective tax rate, stock-based compensation, amortization of purchased intangibles and earnings per share estimates for the second fiscal quarter of 2006 and the Companys outlook for the remainder of the year. 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. For example, strong demand for the Company's products may not continue because of a decline in the overall health of the economy and international markets, which may result in reduced capital spending. Fuel and other operating costs could remain high or increase, which could weaken sales into the agricultural market. In addition, the Company's results may be adversely affected if the growth rates and profitability expectations for each of its four segments are not achieved, or its joint ventures and recent acquisitions do not achieve anticipated results, or if the Company is unable to market, manufacture and ship new products. Any failure to achieve predicted results could negatively impact the Company's revenues, gross margin and other financial results. Whether the Company achieves its guidance for the second fiscal quarter of 2006 will also depend on a number of other factors, including the 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. Undue reliance should not be placed on any forward-looking statement, contained herein. 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. Financial Tables
Consolidated Statements of Operations Investor Relations Contact: Willa McManmon of Trimble: 408-481-7838 Media Contact: LeaAnn McNabb of Trimble: 408-481-7808 |
