Trimble Navigation Limited
935 Stewart Drive
Post Office Box 3642
Sunnyvale, CA 94085
Trimble Announces Fiscal Second Quarter Results
SUNNYVALE, Calif., July 24, 2002 - Trimble (NASDAQ:TRMB) today announced results for the fiscal second quarter ended June 28, 2002. The Company reported second quarter revenues of $123.3 million, versus $133.6 million in the year ago quarter and $104.0 million in the first quarter of 2002.
Earnings per share (EPS) for the second quarter on a Generally Accepted Accounting Principles (GAAP) basis were $0.15, versus losses per share of ($0.08) in the year ago quarter and ($0.03) in the first quarter of 2002.
Adjusted EPS for the second quarter of 2002 was $0.24, versus adjusted EPS of $0.26 per share in the year ago quarter and adjusted EPS of $0.06 in the first quarter of 2002. The $0.24 in adjusted EPS for the second quarter includes an approximate ($0.02) foreign exchange loss primarily due to the revaluation of short-term inter-company account balances as a result of the weakening U.S. Dollar versus the Swedish Krona and the Euro. Company guidance was for adjusted EPS between $0.22 and $0.28. Adjusted EPS excludes any infrequent and acquisition related charges, being primarily intangible amortization costs from acquisitions, and restructuring charges related to the Company's cost-cutting measures that are included when reporting on a GAAP basis. Adjusted EPS numbers were calculated on a diluted basis using approximately 29.1 million shares.
"Trimble's second quarter results were in line with expectations," said Steven W. Berglund, president and CEO of Trimble. "We remain diligent in limiting our spending, while continuing to invest in new businesses that we believe have the potential to provide solid long-term growth."
Business Segment Highlights
Engineering and Construction (E&C)
The Company's machine control business posted stronger sales, as interest in 3D technology has increased significantly since the March 15 announcement of a joint venture with Caterpillar to develop this technology. However, sales in the U.S. land survey market were weaker than anticipated as some customers delayed delivery of orders due to uncertainty in state and federal government funding caused by lower tax revenues.
Trimble Field Solutions (TFS) - Agriculture and GIS
Agriculture demand remained strong in the second quarter for both the Company's high-end AgGPS® Autopilot and entry-level EZ-GuideTM tractor guidance products. This was offset by lower demand in Trimble's GIS business primarily due to postponed purchases by state and municipal governments.
Components Technologies (CT)
Components Technologies sales were higher than anticipated for the second quarter due to stronger demand for its in-vehicle navigation, embedded and wireless infrastructure products. In the wireless infrastructure area, sales were helped by the Company's continued efforts to diversify its customer base. In the embedded area, bookings of the Company's new GPS module, the postage stamp sized, low power LassenTM SQ, point towards improved results during the second half of the year.
Trimble Mobile Solutions (TMS)
Trimble Mobile Solutions' revenue lagged expectations, primarily due to a longer than anticipated initial sales cycle. The Company believes it is well positioned as customers continue to migrate towards complete, value-added, enterprise solutions utilizing wireless networks, the Internet, and applications software. To address this change, Trimble launched the TelvisantTM Mobile Resource Management platform in March, and began marketing this complete solution during the second quarter. The Company noted that it has begun several pilot programs in the ready mix concrete market.
Portfolio Technologies results met expectations, as the Company shipped a large military order that was postponed from the first quarter.
After more than 30 years in the survey and construction business, Karl Ramstrom, 59, senior vice president and general manager of Trimble's Engineering and Construction segment, announced that he will retire from the Company at the end of 2002.
Trimble will use this as an opportunity to restructure its Engineering and Construction segment to better align it with the changing needs of the business. Land survey and machine control will remain as one business area, while construction instruments will operate as a separate business area. Bryn Fosburgh, former head of land survey, will lead the combined land survey and machine control business, which will focus on providing customers with a complete positioning solution utilizing various positioning technologies, wireless communications and software products. The emphasis will be on concept selling and strong customer support. Chris Shephard, former head of operations for Engineering and Construction, will lead the Construction Instruments Division. This business will focus on lower-cost, high-quality, positioning tools used principally for layout on construction sites. Trimble will continue to report financial results from both business areas under the Engineering and Construction segment heading.
Berglund commented "We would all like to thank Karl for his years of dedicated service to both the Spectra Precision and Trimble organizations. His experience and leadership made him an excellent role model and mentor for our Engineering and Construction employees."
For the third quarter ending September 27, 2002, the Company expects revenues will be between $114 and $117 million. Gross margins are expected to be between 50 and 51 percent. Operating expenses, including approximately $2.2 million of amortization of intangibles, are expected to be between $49 and $50 million. Net interest expense is expected to be approximately $3.5 million, and income tax provision should be approximately $1.25 million. The Company anticipates other non-operating expense to be approximately $1.3 million. Within these guidelines, Trimble expects adjusted EPS to be between $0.15 and $0.20, assuming 29.3 million shares outstanding.
Investor Conference Call / Webcast Details
The Company will hold a conference call on Wednesday, July 24, 2002 at 8:00 AM Pacific Time to review its first quarter results. It will be broadcast live on the web at http://www.trimble.com/investors.html. A replay of the call will be available for 7 days beginning at 11:00 AM, Pacific Time. The replay number is (800) 642-1687, and the passcode is 4840775.
Trimble is a leading innovator of Global Positioning System (GPS) technology. In addition to providing advanced GPS components, Trimble augments GPS with other positioning technologies as well as wireless communications and software to create complete customer solutions. Trimble's worldwide presence and unique capabilities position the Company for growth in emerging applications including surveying, automobile navigation, machine guidance, asset tracking, wireless platforms, and telecommunications infrastructure. Founded in 1978 and headquartered in Sunnyvale, Calif., Trimble has more than 2,000 employees in more than 20 countries worldwide.
Certain statements made in this press release are forward looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and 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 whether our investments in new businesses will provide solid long-term growth, whether bookings for the Company's new Lassen TM SQ will result in improved results during the second half of the year and the Company's guidance for the third quarter. 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, our investments in new businesses may not succeed if we misjudge customer demand in these areas or encounter unforeseen costs in bringing new products to market which do not outweigh the potential benefit to the Company of those products. While our Lassen TM SQ product has initially met with success, bookings are not contractual commitments to purchase products and may be cancelled without penalty by the buyer. Whether we achieve our guidance for the third quarter will depend on a number of factors, including: budget constraints on state and municipal governments, and the continued uncertain economic climate, as well as the other 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.
Investor Relations Investor Relations of Trimble: 408-481-6914
Media Contact: LeaAnn McNabb of Trimble: 408-481-7808
Contact: David Pasquale of The Ruth Group: 646-536-7006