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Trimble Navigation Limited
935 Stewart Drive
Post Office Box 3642
Sunnyvale, CA 94085
1.408.481.8000 phone
1.408.481.7781 fax

  NEWS RELEASE

 

Fourth Quarter Revenue $312.8 Million; GAAP Earnings Per Share $0.21; Non-GAAP Earnings Per Share $0.28
Fiscal Year 2007 Revenue $1.222 Billion; GAAP Earnings Per Share $0.94; Non-GAAP Earnings Per Share $1.25

SUNNYVALE, Calif., Jan. 29, 2008, 2008 /PRNewswire-FirstCall via COMTEX News Network/ -- Trimble (Nasdaq: TRMB) today announced results for its fourth quarter and fiscal year 2007, ended Dec. 28, 2007. Revenue for the fourth quarter of 2007 was $312.8 million, up approximately 34 percent from revenue of $234.1 million in the fourth quarter of 2006. Fiscal 2007 revenue was $1.222 billion, up 30 percent when compared to fiscal 2006 revenue of $940.2 million.

Operating income for the fourth quarter of 2007 was $39.3 million, up 44 percent from the fourth quarter of 2006. Operating margins in the fourth quarter of 2007 were 12.6 percent, compared to 11.7 percent in the fourth quarter of 2006. It should be noted in year-over-year comparisons that amortization of intangibles increased from $4.1 million in the fourth quarter of 2006 to $10.1 million in the fourth quarter of 2007. Additionally, the impact of stock-based compensation expense was $4.1 million in the fourth quarter of 2007, compared to $3.1 million in the fourth quarter of 2006. There was no in-process research and development expense in the fourth quarter of 2007, while there was a $860 thousand in-process research and development expense in the fourth quarter of 2006. Excluding these impacts, non-GAAP operating income of $53.4 million grew by 51 percent compared to the fourth quarter of 2006. Non-GAAP operating margins were 17.1 percent in the fourth quarter of 2007, up from 15.1 percent in the fourth quarter of 2006.

Operating income for fiscal 2007 was $178.3 million, up 32 percent compared to 2006. Fiscal 2007 operating margins were 14.6 percent, compared to 14.4 percent in 2006. Amortization of intangibles increased from $13.1 million in 2006 to $38.6 million in 2007 due to acquisitions. Stock-based compensation expense was $15.0 million in 2007, compared to $12.6 million in the fourth quarter of 2006. In-process research and development expense was $2.1 million in 2007 compared to $1.9 million in 2006. In 2007 there was a $3.0 million restructuring expense, while in 2006 there was no restructuring expense. Excluding these impacts, 2007 non-GAAP operating income of $237.0 million grew by 45 percent compared to 2006. Non-GAAP operating income margins were 19.4 percent in 2007, up from 17.3 percent in 2006.

Net income for the fourth quarter of 2007 was up approximately 10 percent, to $26.3 million, compared to net income of $24.0 million in the fourth quarter of 2006. Diluted earnings per share for the fourth quarter of 2007 were $0.21, up from diluted earnings per share of $0.20 in the fourth quarter of 2006. The tax rate for the fourth quarter of 2007 was 35 percent, compared to 25 percent in the fourth quarter of 2006.

Adjusting for the amortization of intangibles, in-process research and development, and the impact of stock-based compensation expenses, non-GAAP net income for the fourth quarter of 2007 was up 18 percent, to $35.5 million, compared to non-GAAP net income of $30.1 million in the fourth quarter of 2006. Non-GAAP earnings per share for the fourth quarter of 2007 were $0.28, up from non-GAAP earnings per share of $0.26 in the fourth quarter of 2006.

Net income for fiscal 2007 was up approximately 13 percent, to $117.4 million, compared to net income of $103.7 million in 2006. Diluted earnings per share for fiscal 2007 were $0.94 up from diluted earnings per share of $0.89 in the fourth quarter of 2006. The full year tax rate for 2007 was 36 percent, compared to 30 percent in 2006.

Adjusting for restructuring charges, the amortization of intangibles, in- process research and development, and the impact of stock-based compensation expenses, non-GAAP net income for fiscal 2007 was up 26 percent, to $155.1 million, compared to non-GAAP net income of $123.2 million in 2006. Non-GAAP earnings per share for 2007 were $1.25, up approximately 17 percent from 2006 non-GAAP earnings per share of $1.06.

"Trimble achieved a number of milestones in 2007 including that of becoming a billion dollar revenue company," said Steven W. Berglund, Trimble's chief executive officer. "Our future success remains centered on continuous innovation, aggressive expansion into international markets, and executing at a world class level for our users."

"Despite a slower U.S. construction market we continue to believe we can grow revenue by 14 to 17 percent in 2008 based on continued strength in international markets, a strong agriculture market, and achieving the potential within our Mobile Solutions segment," Berglund concluded.

Trimble Results by Business Segment

Segment operating income is revenue less cost of goods sold and operating expenses, excluding general corporate expenses, amortization of intangibles, and in-process research and development. In addition, for each segment, non- GAAP operating income excludes the impact of stock-based compensation expense.

Engineering and Construction

Fourth quarter 2007 Engineering and Construction (E&C) revenue was $186.7 million, up approximately 17 percent when compared to revenue of $160.0 million in the fourth quarter of 2006, driven by all businesses within the segment and a strong international market.

Fourth quarter 2007 operating income in E&C was $36.8 million, or 19.7 percent of revenue compared to $32.6 million, or 20.4 percent of revenue, in the fourth quarter of 2006.

Non-GAAP operating income in E&C was $37.9 million, or 20.3 percent of revenue, in the fourth quarter of 2007 compared to $33.6 million, or 21.0 percent of revenue, in the fourth quarter of 2006. The margin declined slightly due to product mix and acquisition impacts.

Fiscal 2007 E&C revenue was $743.3 million, up approximately 17 percent when compared to revenue of $637.1 million in 2006, driven by all businesses within the segment.

Operating income in E&C was $174.2 million for 2007, or 23.4 percent of revenue, compared to $136.2 million, or 21.4 percent of revenue, in 2006.

Non-GAAP operating income in E&C was $177.8 million, or 23.9 percent of revenue, in 2007 compared to $140.1 million, or 22.0 percent of revenue, in 2006.

Field Solutions

Fourth quarter 2007 Field Solutions (TFS) revenue was $49.6 million, up approximately 62 percent when compared to revenue of $30.6 million in the fourth quarter of 2006. During the fourth quarter of 2007, sales of agricultural products were extremely robust.

Fourth quarter 2007 operating income in TFS was $14.0 million, or 28.2 percent of revenue compared to $6.5 million, or 21.3 percent of revenue, in the fourth quarter of 2006.

Non-GAAP operating income in TFS was $14.2 million, or 28.6 percent of revenue, in the fourth quarter of 2007 compared to $6.8 million, or 22.1 percent of revenue, in the fourth quarter of 2006.

Fiscal 2007 TFS revenue was $200.6 million, up approximately 44 percent when compared to revenue of $139.2 million in 2006.

Operating income in TFS was $60.9 million for 2007, or 30.4 percent of revenue, compared to $37.4 million, or 26.8 percent of revenue, in 2006.

Non-GAAP operating income in TFS was $61.7 million, or 30.8 percent of revenue, in 2007 compared to $38.4 million, or 27.5 percent of revenue, in 2006.

Mobile Solutions

For year-over-year comparisons it should be noted that 2006 results do not include the acquisition of @Road.

Fourth quarter 2007 Mobile Solutions (TMS) revenue was $47.7 million, up approximately 181 percent when compared to revenue of $17.0 million in the fourth quarter of 2006.

Fourth quarter 2007 operating income in TMS was $5.7 million, or 12.0 percent of revenue compared to $828 thousand, or 4.9 percent of revenue, in the fourth quarter of 2006.

Non-GAAP operating income in TMS was $7.0 million, or 14.8 percent of revenue, in the fourth quarter of 2007 compared to $1.1 million, or 6.2 percent of revenue, in the fourth quarter of 2006.

Fiscal 2007 TMS revenue was $157.7 million, up approximately 159 percent when compared to revenue of $60.9 million in 2006.

Operating income in TMS was $12.5 million for 2007, or 7.9 percent of revenue, compared to $2.6 million, or 4.2 percent of revenue, in 2006.

Non-GAAP operating income in TMS was $17.5 million, or 11.1 percent of revenue, in 2007 compared to $3.3 million, or 5.4 percent of revenue, in 2006.

Advanced Devices

Fourth quarter 2007 Advanced Devices revenue was $28.8 million, up approximately 8 percent when compared to revenue of $26.5 million in the fourth quarter of 2006.

Fourth quarter 2007 operating income in Advanced Devices was $3.7 million, or 12.7 percent of revenue compared to $1.4 million, or 5.3 percent of revenue, in the fourth quarter of 2006.

Non-GAAP operating income in Advanced Devices was $4.0 million, or 14.0 percent of revenue, in the fourth quarter of 2007 compared to $1.8 million, or 6.9 percent of revenue, in the fourth quarter of 2006.

Fiscal 2007 Advanced Devices revenue was $120.7 million, up approximately 17 percent when compared to revenue of $102.9 million in 2006.

Operating income in Advanced Devices was $17.3 million for 2007, or 14.3 percent of revenue, compared to $10.1 million, or 9.8 percent of revenue, in 2006.

Non-GAAP operating income in Advanced Devices was $18.6 million, or 15.4 percent of revenue, in 2007 compared to $11.9 million, or 11.6 percent of revenue, in 2006.

Use of Non-GAAP Financial Information

Our results of operations have undergone significant change primarily due to the impact of acquisitions and FAS 123(R). To help our readers 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 management chose to exclude selected items and the additional purposes for which these non-GAAP measures are used 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 our quarterly earnings release and which can be found, along with other financial information, on the investor relations page of our Web site at www.investor.trimble.com.

Forward Looking Guidance

In the first quarter of 2008, Trimble expects revenue to grow 17 to 19 percent compared to the first quarter of 2007, with revenue between $334 million and $339 million. Trimble expects first quarter 2008 GAAP earnings per share between $0.26 and $0.28 and non-GAAP earnings per share between $0.33 and $0.35. Non-GAAP guidance for the first quarter of 2008 excludes the amortization of intangibles of $10.2 million related to previous acquisitions, and the anticipated impact of stock-based compensation expense of $3.7 million. Both GAAP and non-GAAP guidance use a 38 percent tax rate, compared to an actual 32 percent tax rate in the first quarter of 2007, and assume 127 million shares outstanding.

For the full year of 2008 Trimble expects revenue to grow 14 to 17 percent compared to fiscal 2007, with revenue between $1.39 billion and $1.43 billion. Trimble expects 2008 non-GAAP earnings per share to be between $1.39 and $1.44. This assumes a non-GAAP margin expansion of 100 basis points in 2008, a tax rate of 38 percent and 129 million shares outstanding. Non-GAAP guidance for the full year excludes the amortization of intangibles of $41.2 million and the anticipated impact of stock-based compensation expense of $14.7 million. Including these impacts, Trimble expects 2008 GAAP earnings per share to be between $1.12 and $1.17.

Investor Conference Call / Webcast Details

Trimble will hold a conference call on January 29, 2008 at 1:30 p.m. PT to review its fourth quarter and fiscal 2007 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 (706) 634-6089 (international). A replay of the call will be available for seven days at (800) 642-1687 (U.S.) or ((706) 645-9291 (international) and the pass code is 28986410. The replay will also be available on the Web at the address above.

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 and headquartered in Sunnyvale, Calif., Trimble has a worldwide presence with more than 3,600 employees in over 18 countries.

For more information visit Trimble's Web site at 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 the revenue, effective tax rate, stock-based compensation, the impact from in- process research and development expense, amortization of purchased intangibles, gross margin, and earnings per share estimates for the first quarter of 2008 and fiscal 2008. 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. 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 first quarter of 2008 and fiscal 2008 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.


FTRMB


                   CONDENSED CONSOLIDATED STATEMENTS OF INCOME
                     (In thousands, except per share data)
                                   (Unaudited)

                                    Three Months Ended     Fiscal Year Ended

                                     Dec-28,   Dec-29,     Dec-28,    Dec-29,
                                      2007      2006        2007       2006

    Revenue                         $312,783  $234,119  $1,222,270  $940,150
    Cost of sales                    157,117   118,348     609,365   479,069
    Gross margin                     155,666   115,771     612,905   461,081
    Gross margin (%)                   49.8%     49.4%       50.1%     49.0%

    Operating expenses
        Research and development      34,731    26,607     131,468   103,840
        Sales and marketing           51,528    40,268     186,495   143,623
        General and administrative    25,390    18,469      92,572    68,416
        Restructuring                      -         -       3,025         -
        Amortization of purchased
         intangible assets             4,754     2,266      18,966     7,906
        In-process research and
         development                       -       860       2,112     1,930
           Total operating expenses  116,403    88,470     434,638   325,715


    Operating income                  39,263    27,301     178,267   135,366

    Non-operating income, net
        Interest income                  895     1,122       3,502     3,799
        Interest expense              (1,126)     (228)     (6,602)     (558)
        Income from joint ventures     1,932     2,751       8,377     6,989
        Other income (expense), net     (429)    1,092         212     2,496
           Total non-operating
            income, net                1,272     4,737       5,489    12,726

    Income before taxes               40,535    32,038     183,756   148,092

    Income tax provision              14,244     8,053      66,382    44,434
    Net income                       $26,291   $23,985    $117,374  $103,658


    Earnings per share:
         Basic                         $0.22     $0.22       $0.98     $0.94
         Diluted                       $0.21     $0.20       $0.94     $0.89

    Shares used in calculating
     earnings per share:
        Basic                        121,428   111,324     119,280   110,044
        Diluted                      126,532   117,174     124,410   116,072

 

                      CONDENSED CONSOLIDATED BALANCE SHEETS
                                 (In thousands)
                                    Unaudited

                                                   Dec-28,           Dec-29,
                                                     2007              2006
    Assets

    Current assets:
       Cash and cash equivalents                   $103,202         $129,621
       Accounts receivables, net                    239,884          177,054
       Other receivables                             10,201            6,014
       Inventories, net                             143,018          112,552
       Deferred income taxes                         51,233           25,905
       Other current assets                          15,661           13,026
          Total current assets                      563,199          464,172

    Property and equipment, net                      51,444           47,998
    Goodwill                                        675,850          374,510
    Other purchased intangible assets,
     net                                            197,777           67,172
    Other non-current assets                         57,989           29,625

          Total assets                           $1,546,259         $983,477

    Liabilities and Shareholders' Equity

    Current liabilities:
       Current portion of long-term debt               $126             $-
       Accounts payable                              67,589           49,194
       Accrued compensation and benefits             55,133           47,006
       Deferred revenue                              49,416           28,060
       Deferred income taxes                          4,129            4,525
       Income taxes payable                          14,802           23,814
       Other accrued liabilities                     58,657           33,580
          Total current liabilities                 249,852          186,179

    Non-current portion of long-term debt            60,564              481
    Non-current deferred revenue                     15,872              -
    Deferred income taxes                            54,817           21,633
    Other non-current liabilities                    56,128           27,519

          Total liabilities                         437,233          235,812

    Commitments and contingencies

    Shareholders' equity:
       Common stock                                 660,749          435,371
       Retained earnings                            388,557          271,183
       Accumulated other comprehensive
        income                                       59,720           41,111
          Total shareholders' equity              1,109,026          747,665

          Total liabilities and
           shareholders' equity                  $1,546,259         $983,477


                CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (In thousands)
                                    Unaudited
                                                       Fiscal Year Ended
                                                   Dec-28,           Dec-29,
                                                    2007              2006

    Cash flow from operating activities:
        Net Income                                $117,374          $103,658

        Adjustments to reconcile net
         income to net cash provided by
           operating activities:
             Depreciation expense                   17,212            13,523
             Amortization expense                   38,744            13,259
             Provision for doubtful
              accounts                               1,410               163
             Amortization of debt
              issuance cost                            218               180
             Deferred income taxes                   6,368            10,368
             Non-Cash Restructuring
              expense                                1,725               -
             Stock-based compensation               15,016            12,571
             In-process research and
              development                            2,112             1,930
             Equity gain from joint
              ventures                              (8,377)           (6,989)
             Excess tax benefit for
              stock-based compensation             (12,409)           (8,761)
             Provision for excess and
              obsolete inventories                   4,352             7,376
             Other non-cash items                      651               720

        Add decrease (increase) in
         assets:
             Accounts receivables                  (35,696)          (12,185)
             Other receivables                       4,825               (51)
             Inventories                           (18,678)           (7,588)
             Other current and non-
              current assets                         7,650           (18,936)

        Add increase (decrease) in
         liabilities:
             Accounts payable                       (3,521)           (4,487)
             Accrued compensation and
              benefits                               1,691             7,807
             Accrued liabilities                    (4,635)            9,790
             Deferred revenue                       32,400             3,263
             Income taxes payable                   18,553            10,232
     Net cash provided by operating
      activities                                   186,985           135,843

     Cash flows from investing activities:
          Acquisitions of businesses, net
           of cash acquired                       (295,848)          (99,887)
          Acquisition of property and
           equipment                               (13,187)          (16,529)
          Purchases of debt and equity
           securities                               (5,576)              -
          Proceeds from dividends                    2,888             2,244
          Other                                        331               (16)
     Net cash used in investing
      activities                                  (311,392)         (114,188)

     Cash flow from financing activities:
          Issuance of common stock                  31,864            26,566
          Excess tax benefit for stock-
           based compensation                       12,409             8,761
          Proceeds from long-term debt
           and revolving credit lines              250,000               -
          Payments on long-term debt and
           revolving credit lines                 (190,457)              -
          Other                                        -              (1,165)
     Net cash provided by financing
      activities                                   103,816            34,162

     Effect of exchange rate changes on
      cash and cash equivalents                     (5,828)              (49)

     Net increase (decrease) in cash and
      cash equivalents                             (26,419)           55,768
     Cash and cash equivalents -
      beginning of period                          129,621            73,853

     Cash and cash equivalents - end of
      period                                      $103,202          $129,621

 

                           NON-GAAP RECONCILIATION
                   CONDENSED CONSOLIDATED STATEMENTS OF INCOME
                 (Dollars in thousands, except per share data)
                                   (Unaudited)


                                     Three Months Ended   Fiscal Year Ended
                                     Dec-28,   Dec-29,    Dec-28,    Dec-29,
                                       2007      2006       2007       2006

    REVENUE:                         $312,783  $234,119  $1,222,270  $940,150

    GROSS MARGIN:
      GAAP gross margin:             $155,666  $115,771    $612,905  $461,081
        Amortization of
         purchased intangibles (B)      5,330     1,850      19,619     5,167
        Stock-based
         compensation          (D)        493       292       1,733     1,173
      Non-GAAP gross margin:         $161,489  $117,913    $634,257  $467,421
      Non-GAAP gross margin
       (% of revenue)                    51.6%     50.4%       51.9%     49.7%

    OPERATING EXPENSES:
      GAAP operating expenses:       $116,403   $88,470    $434,638  $325,715
        Restructuring          (A)        -         -        (3,025)      -
        Amortization of
         purchased intangibles (B)     (4,754)   (2,266)    (18,966)   (7,906)
        In-process research and
         development           (C)        -        (860)     (2,112)   (1,930)
        Stock-based
         compensation          (D)     (3,574)   (2,842)    (13,283)  (11,398)
      Non-GAAP operating expenses:   $108,075   $82,502    $397,252  $304,481

    OPERATING INCOME:
      GAAP operating income:          $39,263   $27,301    $178,267  $135,366
        Restructuring          (A)        -         -         3,025       -
        Amortization of
         purchased intangibles (B)     10,084     4,116      38,585    13,073
        In-process research and
         development           (C)          -       860       2,112     1,930
        Stock-based
         compensation          (D)      4,067     3,134      15,016    12,571
      Non-GAAP operating income:      $53,414   $35,411    $237,005  $162,940
      Non-GAAP operating margin
       (% of revenue)                    17.1%     15.1%       19.4%     17.3%

    NET INCOME:
      GAAP net income:                $26,291   $23,985    $117,374  $103,658
        Restructuring          (A)        -         -         3,025       -
        Amortization of
         purchased intangibles (B)     10,084     4,116      38,585    13,073
        In-process research and
         development           (C)          -       860       2,112     1,930
        Stock-based
         compensation          (D)      4,067     3,134      15,016    12,571
        Income tax effect on
         non-GAAP adjustments  (E)     (4,973)   (1,987)    (21,035)   (8,051)
      Non-GAAP net income:            $35,469   $30,108    $155,077  $123,181

    DILUTED NET INCOME PER SHARE:
      GAAP diluted net income per
       share:                           $0.21     $0.20       $0.94     $0.89
      Non-GAAP diluted net income
       per share:                       $0.28     $0.26       $1.25     $1.06

    SHARES USED TO COMPUTE DILUTED
     NET
    INCOME PER SHARE:
      GAAP and Non-GAAP shares used
       to compute
      net income per share:           126,532   117,174     124,410   116,072

    OPERATING LEVERAGE:
      Increase in non-GAAP operating
       income                         $18,003               $74,065
      Increase in revenue             $78,664              $282,120
      Operating leverage (increase
       in non-GAAP operating
      income as a % of increase in
       revenue)                         22.9%                 26.3%


    The non-GAAP financial measures included in the table above are non-GAAP
    gross margin, non-GAAP operating expenses, non-GAAP operating income, non-
    GAAP net income and non-GAAP diluted net income per share, which adjust
    for the following items: expenses related to acquisitions, stock-based
    compensation expense and restructuring charges.  Management uses these
    non-GAAP measures to assess trends in its business and for budgeting
    purposes, as many of these excluded items are non-cash. In addition, we
    believe that the presentation of these non-GAAP financial measures is
    useful to investors for the reasons associated with each of the
    adjusting items as described below.

    (A)  Restructuring. The amounts recorded are for employee compensation
         resulting from reductions in employee headcount in connection
         with our company restructurings and we believe they are not
         directly related to the operation of our business.

    (B)  Amortization of purchased intangibles. The amounts recorded as
         amortization of purchased intangibles arise from prior acquisitions
         and are non-cash in nature.  We exclude these expenses because we
         believe they are not reflective of ongoing operating results in the
         period incurred and are not directly related to the operation of our
         business.  Approximately $5,330K and $1,850K of the amortization of
         purchased intangibles was included in cost of sales for the three
         months ended December 28, 2007 and December 29, 2006, respectively,
         and approximately $4,754K and $2,266K was reported as a separate line
         within operating expenses for the three months ended December 28,
         2007 and December 29, 2006, respectively.  Approximately $19,619K and
         $5,167K of the amortization of purchased intangibles was included in
         cost of sales for the fiscal year ended December 28, 2007 and
         December 29, 2006, respectively, and approximately $18,966K and
         $7,906K was reported as a separate line within operating expenses for
         the fiscal year ended December 28, 2007 and December 29, 2006.

     (C) In-process research and development. The amounts recorded as
         in-process research and development arise from prior
         acquisitions and are non-cash in nature.  We exclude these expenses
         because we believe they are not reflective of ongoing operating
         results in the period incurred and not directly related to the
         operation of our business.

     (D) Stock-based Compensation.  The amounts consist of expenses for
         employee stock options and purchase rights under our employee stock
         purchase plan determined in accordance with SFAS 123(R), which became
         effective for us on January 1, 2006.  We exclude these stock-based
         compensation expenses because they are non-cash expenses that we
         believe are not reflective of ongoing operation results.  Further, we
         believe it is useful to investors to understand the impact of the
         application of SFAS 123(R) to our results of operations.  For the
         three months and fiscal year ended December 28, 2007 and December 29,
         2006, stock-based compensation was allocated as follows:

                                     Three Months Ended   Fiscal Year Ended
                                       Dec-28,   Dec-29,     Dec-28,   Dec-29,
                                         2007      2006        2007      2006
        Cost of sales                    $493      $292      $1,733    $1,173
        Research and development          954       628       3,573     2,554
        Sales and Marketing             1,091       700       3,891     2,815
        General and administrative      1,529     1,514       5,819     6,029
                                       $4,067    $3,134     $15,016   $12,571

    (E) Income tax effect on non-GAAP adjustments. This amounts adjusts the
        provision for income taxes to reflect the effect of the non-GAAP
        adjustments on non-GAAP operating income.


                             NON-GAAP RECONCILIATION
                                REPORTING SEGMENTS
                             (Dollars in thousands)
                                   (Unaudited)


                                                 Reporting Segments
                                     Engineering
                                         and      Field     Mobile   Advanced
                                    Construction Solutions Solutions  Devices

    THREE MONTHS ENDED DECEMBER 28, 2007:
      Revenue                          $186,699   $49,616   $47,685   $28,783

      GAAP operating income before
       corporate allocations:           $36,818   $13,976    $5,739    $3,656
        Stock-based compensation (F)      1,073       232     1,306       368
      Non-GAAP operating income before
       corporate allocations:           $37,891   $14,208    $7,045    $4,024
      Non-GAAP operating margin (% of
       segment external net revenues)     20.3%     28.6%     14.8%     14.0%

    THREE MONTHS ENDED DECEMBER 29, 2006:
      Revenue                          $159,974   $30,632   $16,970   $26,543

      GAAP operating income before
       corporate allocations:           $32,640    $6,536      $828    $1,405
        Stock-based compensation (F)        962       246       225       424
      Non-GAAP operating income before
       corporate allocations:           $33,602    $6,782    $1,053    $1,829
      Non-GAAP operating margin (% of
       segment external net revenues)     21.0%     22.1%      6.2%      6.9%

    FISCAL YEAR ENDED DECEMBER 28, 2007:
      Revenue                          $743,291  $200,614  $157,673  $120,692

      GAAP operating income before
       corporate allocations:          $174,177   $60,933   $12,510   $17,276
        Stock-based compensation (F)      3,614       763     4,976     1,369
      Non-GAAP operating income before
       corporate allocations:          $177,791   $61,696   $17,486   $18,645
      Non-GAAP operating margin (% of
       segment external net revenues)     23.9%     30.8%     11.1%     15.4%

    FISCAL YEAR ENDED DECEMBER 29, 2006:
      Revenue                          $637,118  $139,230   $60,854  $102,948

      GAAP operating income before
       corporate allocations:          $136,157   $37,377    $2,550   $10,084
        Stock-based compensation (F)      3,964       973       736     1,850
      Non-GAAP operating income before
       corporate allocations:          $140,121   $38,350    $3,286   $11,934
      Non-GAAP operating margin (% of
       segment external net revenues)     22.0%     27.5%      5.4%     11.6%


    (F)  Stock-based Compensation. The amounts consist of expenses for
         employee stock options and purchase rights under our employee stock
         purchase plan determined in accordance with SFAS 123(R), which became
         effective for us on January 1, 2006.  We discuss our operating
         results by segment with and with-out stock-based compensation
         expense, as we believe it is useful to investors to understand the
         impact of the application of SFAS 123(R) to our results of operations
         because it facilitates trends in the business prior to the adoption
         of SFAS 123(R).  Stock-based compensation not allocated to the
         reportable segments was approximately $1,088K and $1,277K for the
         three months ended December 28, 2007 and December 29, 2006,
         respectively and $4,294K and $5,048K for the fiscal year ended
         December 28, 2007 and December 29, 2006, respectively.




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