Trimble Navigation Limited
935 Stewart Drive
Post Office Box 3642
Sunnyvale, CA 94085
Trimble Reports Record Quarterly Results
GAAP EPS for the second quarter were $0.25, which were reduced by an approximate $0.11 per share non-recurring/non-cash charge recorded as Interest Expense, related to the Company's debt refinancing announced on June 25, 2003. This charge was not included in the Company's guidance of $0.25 - $0.29 given in its April 29, 2003 earnings release. GAAP EPS were also reduced by approximately $0.05 per share for amortization of purchased intangibles and approximately $0.02 per share for restructuring activities. GAAP EPS were $0.15 for the second quarter of 2002, and were reduced by approximately $0.08 per share for amortization of purchased intangibles and approximately $0.01 per for restructuring activities. Second quarter 2003 GAAP EPS were calculated on a diluted basis using approximately 33.1 million shares.
"Trimble's record financial results are a result of our efforts to establish market leadership in our core businesses through a combination of innovative products, targeted distribution channels and strong customer support," said Steven W. Berglund, president and CEO of Trimble. "Following a strong first quarter, demand remained healthy for our surveying and construction products with market momentum in survey instruments leading to record overall Engineering and Construction sales in the quarter. Component Technologies demonstrated continuing strength in the wireless infrastructure area and produced excellent operating margins. Field Solutions results reflected strong year over year growth in both geographic information systems products and automated agricultural guidance. Mobile Solutions continued to progress as subscribers grew more than 80 percent during the quarter. These positive results, combined with the commencement of operations for the recently announced Nikon-Trimble joint venture and Applanix acquisition, position us well for future growth."
Second Fiscal Quarter Business Segment Highlights Engineering and Construction (E&C)
Total second quarter E&C revenues increased by 14 percent over the second quarter of 2002. Sales of GPS survey products remained strong, leading to double-digit sales growth for the entire survey business over the second quarter of 2002. Sales of Tripod Data Systems and construction instruments products were also strong during the quarter, with each reporting double-digit sales growth over the second quarter of 2002. While up strongly on a sequential basis, machine control sales did not grow versus the second quarter of 2002, principally due to adverse weather conditions in parts of the United States. The second quarter of 2002 was also strong as it followed the announcement of the joint venture with Caterpillar.
Field Solutions (TFS) - Agriculture and Geographic Information Systems (GIS)
Second quarter revenues for TFS increased by approximately 10 percent over the second quarter of 2002. GIS product sales increased by double-digits over the second quarter of 2002, driven by demand from state and municipal governments ahead of their June 30 fiscal year end. Agriculture product sales were seasonally weak during the quarter, although high-end guidance products continued to gain momentum in new geographies and crop types.
Component Technologies (CT)
Second quarter revenues for CT increased by approximately 11 percent over the second quarter of 2002. Continued strong demand for wireless infrastructure products led to a favorable product mix. This favorable product mix, combined with increased volumes in automotive and embedded products, and cost reductions related to the transfer of the business' manufacturing operations from California to China during the second half of 2002 led to record operating margins for CT.
Mobile Solutions (TMS)
TMS reported a 15 percent sequential increase in revenue during the second quarter, as it continued to gain traction in the ready mix concrete market. Revenue related to the TelevisantTM Fleet Management System and associated hardware products increased by over 20 percent sequentially, while subscribers increased by more than 80 percent during the quarter.
For the third quarter ending October 3, 2003, the Company expects revenues will be between $129.0 and $132.0 million, which represents a 12 - 15 percent increase over the third quarter of 2002. Gross margins are expected to be approximately 50 percent. Operating expenses, including approximately $2.0 million of amortization of intangibles are expected to be approximately $54.0 million. Net interest expense is expected to be approximately $1.1 million, and other non-operating expense should be approximately $1.6 million. The income tax provision should be approximately $1.4 million. Within these revenue guidelines, Trimble expects GAAP EPS to be between $0.19 and $0.23, which represents a 111 - 155 percent increase over the third quarter of last year. GAAP EPS guidance was calculated assuming 34.5 million shares outstanding.
Investor Conference Call / Webcast Details
The Company will hold a conference call on Tuesday, July 29, 2003 at 2:00 PM Pacific Time to review its second quarter results. It will be broadcast live on the web at www.trimble.com/investors.html. A replay of the call will be available for 7 days beginning at 5:00 PM, Pacific Time. The replay number is (800) 642-1687, and the passcode is 1650806.
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, California, 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 the revenue, gross margin, operating expenses, net interest expense, non-operating expense, income tax provision and earnings per share estimates for the quarter ending Oct 3, 2003. 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, recent strong demand for the Company's products may not continue. Any failure to achieve predicted results could negatively impact the Company's revenues and gross margin. The overall health of the economy and international markets may result in reduced capital spending which could impair the Company's ability to reach the forecasted results. In addition, the Nikon-Trimble joint venture and Applanix acquisition may not achieve anticipated results. Whether the Company achieves its guidance for the third quarter 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.
Investor Relations Contact: Investor Relations of Trimble: (408) 481-6914
Media Contact: LeaAnn McNabb of Trimble: 408-481-7808