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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

 

Trimble Reports Second Quarter 2007 Revenue Growth of 34 Percent

Revenue $327.7 Million - GAAP Earnings Per Share $0.28; Non-GAAP Earnings Per Share $0.35

SUNNYVALE, Calif., July 31, 2007 /PRNewswire-FirstCall via COMTEX News Network/ -- Trimble (Nasdaq: TRMB) today announced results for its second quarter 2007, ended June 29, 2007. Revenue for the second quarter of 2007 was $327.7 million, up approximately 34 percent from revenue of $245.3 million in the second quarter of 2006.

Operating income for the second quarter of 2007 was $56.0 million, up 45 percent from the second quarter of 2006. Operating margins in the second quarter of 2007 were 17.1 percent, compared to 15.8 percent in the second quarter of 2006. It should be noted in year-over-year comparisons that amortization of intangibles increased from $3.7 million in the second quarter of 2006 to $10.4 million in the second quarter of 2007. Additionally, the impact of stock-based compensation expense was $3.8 million in the second quarter of 2007, compared to $3.3 million in the second quarter of 2006. In-process research and development expense was $1.0 million in the second quarter of 2006; there was no in-process research and development expense in the second quarter of 2007. Restructuring expense was $333 thousand in the second quarter of 2007; there was no restructuring expense in the second quarter of 2006. Excluding these impacts, non-GAAP operating income of $70.5 million grew by 51 percent compared to the second quarter of 2006. Non-GAAP operating income margins were 21.5 percent in the second quarter of 2007, up from 19.0 percent in the second quarter of 2006.

Net income for the second quarter of 2007 was up approximately 23 percent, to $35.0 million, compared to net income of $28.5 million in the second quarter of 2006. Diluted earnings per share for the second quarter of 2007 were $0.28, compared to diluted earnings per share of $0.25 in the second quarter of 2006. The tax rate for the second quarter of 2007 was 38 percent, compared to 31 percent in the second quarter of 2006. GAAP earnings per share in the second quarter of 2007 were negatively impacted by approximately $0.05 due to amortization of intangibles and by $0.02 due to stock-based compensation expense.

Adjusting for the amortization of intangibles, in-process research and development, restructuring, and the impact of stock-based compensation expenses, non-GAAP net income for the second quarter of 2007 was up 29 percent, to $44.1 million, compared to non-GAAP net income of $34.1 million in the second quarter of fiscal 2006. Non-GAAP earnings per share for the second quarter of 2007 were $0.35, up approximately 21 percent from non-GAAP earnings per share of $0.29 in the second quarter of 2006.

"Second quarter growth in revenue and profit was strong across all segments with some segments reflecting particularly strong international growth," said Steven W. Berglund, Trimble's president and chief executive officer. "The @Road transition continued as planned and produced meaningful earnings for the Mobile Solutions segment in the quarter. Overall market conditions continue to be positive."

Trimble Results by Business Segment

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

Engineering and Construction

Second quarter 2007 Engineering and Construction (E&C) revenue was $198.9 million, up approximately 18 percent when compared to revenue of $168.0 million in the second quarter of 2006. E&C revenue was driven by growth in most product categories and particularly strong international sales.

Operating income in E&C was $52.4 million, or 26.3 percent of revenue compared to $38.8 million, or 23.1 percent of revenue, in the second quarter of 2006.

Non-GAAP operating income in E&C was $53.2 million, or 26.7 percent of revenue, in the second quarter of 2007 compared to $39.9 million, or 23.7 percent of revenue, in the second quarter of 2006.

Field Solutions

Second quarter 2007 Field Solutions (TFS) revenue was $55.3 million, up 52 percent compared to $36.3 million in revenue in the second quarter of 2006. Revenue growth was driven by positive agricultural market conditions and robust new agriculture and GIS product sales.

Operating income in TFS was $18.4 million, or 33.3 percent of revenue, for the second quarter of 2007 compared to $11.3 million, or 31.1 percent of revenue, in the second quarter of 2006.

Non-GAAP operating income was $18.6 million, or 33.6 percent of revenue, for the second quarter of 2007 compared to $11.5 million, or 31.8 percent of revenue, in the second quarter of 2006.

Mobile Solutions

Second quarter 2007 Mobile Solutions revenue (TMS) was $40.9 million, up 176 percent from revenue of $14.9 million in the second quarter of 2006.

Operating income in TMS was $2.9 million, or 7.1 percent of revenue, for the second quarter of 2007 compared to $374 thousand, or 2.5 percent of revenue, in the second quarter of 2006.

Non-GAAP operating income in TMS was $4.4 million, or 10.8 percent of revenue, for the second quarter of 2007 compared to $538 thousand, or 3.6 percent of revenue, in the second quarter of 2006.

Advanced Devices

Second quarter 2007 Advanced Devices revenue was $32.7 million, up approximately 25 percent from revenue of $26.1 million in the second quarter of 2006 primarily due to strong sales of embedded products.

Operating income in Advanced Devices was $5.4 million, or 16.5 percent of revenue, for the second quarter of 2007 compared to $2.2 million, or 8.6 percent of revenue, in the second quarter of 2006.

Non-GAAP operating income in Advanced Devices was $5.7 million, or 17.4 percent of revenue, for the second quarter of 2007 compared to $2.7 million, or 10.4 percent of revenue, in the second quarter of 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 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 http://www.investor.trimble.com.

Forward Looking Guidance

In the third quarter of 2007, Trimble expects revenue to grow 25 to 27 percent compared to the third quarter of 2006, with revenue between $294 million and $299 million. At a 38 percent tax rate, with approximately 125.1 million shares outstanding, Trimble expects third quarter 2007 GAAP earnings per share between $0.18 and $0.20.

Trimble expects third quarter 2007 non-GAAP earnings per share between $0.26 and $0.28, compared to actual split-adjusted non-GAAP earnings per share of $0.25 in the third quarter of 2006. Non-GAAP guidance for the third quarter of 2007 uses a 38 percent tax rate and excludes the amortization of intangibles of $10.5 million related to previous acquisitions, and the anticipated impact of stock-based compensation expense of $4.5 million.

Investor Conference Call / Webcast Details

Trimble will hold a conference call on July 31, 2007 at 1:30 p.m. PDT to review its second quarter 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 passcode is 4917771. 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 3,400 employees in over 18 countries.

For more information visit Trimble's Web site at http://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 and earnings per share estimates for the second quarter and full year 2007. 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. The Company's results would also be negatively impacted by unforeseen costs associated with the integration of @Road or delays in integrating the two companies. 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 quarter of 2007 and fiscal 2007 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   Six Months Ended

                                     Jun-29,   Jun-30,   Jun-29,   Jun-30,
                                      2007      2006      2007      2006

    Revenue                         $327,732  $245,326  $613,464  $471,180
    Cost of sales                    160,563   123,670   303,165   242,061
    Gross margin                     167,169   121,656   310,299   229,119
    Gross margin (%)                    51.0%     49.6%     50.6%     48.6%

    Operating expenses
      Research and development        33,867    27,607    65,030    52,053
      Sales and marketing             47,546    35,747    89,693    68,453
      General and administrative      24,278    16,205    45,920    31,966
      Restructuring                      333         -     3,025         -
      Amortization of purchased
       intangible assets               5,195     2,408     9,301     3,893
      In-process research and
       development                         -     1,020     2,112     1,020
        Total operating expenses     111,219    82,987   215,081   157,385

    Operating income                  55,950    38,669    95,218    71,734

    Non-operating income
     (expense), net
      Interest income                    593       763     1,837     1,275
      Interest expense                (2,459)     (165)   (3,860)     (243)
      Income from joint ventures       2,080     1,575     4,502     3,191
      Other income, net                   57       352       649     1,109
        Total non-operating
         income (expense), net           271     2,525     3,128     5,332

    Income  before taxes              56,221    41,194    98,346    77,066

    Income tax provision              21,195    12,691    34,637    22,735
    Net income                       $35,026   $28,503   $63,709   $54,331

    Earnings per share :
        Basic                          $0.29     $0.26     $0.54     $0.50
        Diluted                        $0.28     $0.25     $0.52     $0.47

    Shares used in calculating
     earnings per share :
        Basic                        119,621   109,694   117,535   109,088
        Diluted                      124,584   116,256   122,539   115,522



                      CONDENSED CONSOLIDATED BALANCE SHEETS
                                  (In thousands)
                                    Unaudited

                                             Jun-29,    Dec-29,
                                              2007       2006
    Assets

    Current assets:
      Cash and cash equivalents              $73,760  $129,621
      Accounts receivables, net              235,192   177,054
      Other receivables                       11,939     6,014
      Inventories, net                       137,664   112,552
      Other current assets                    55,265    38,931
        Total current assets                 513,820   464,172

    Property and equipment, net               52,271    47,998
    Goodwill                                 657,746   374,510
    Other purchased intangible assets, net   202,693    67,172
    Other non-current assets                  47,844    29,625

        Total assets                      $1,474,374  $983,477

    Liabilities and Shareholders' Equity

    Current liabilities:
      Current portion of long-term debt      $11,250        $-
      Accounts payable                        63,795    49,194
      Deferred revenue                        41,440    28,060
      Deferred income taxes                    3,291     4,525
      Income taxes payable                    30,963    23,814
      Other accrued liabilities               90,577    80,586
        Total current liabilities            241,316   186,179

    Non-current portion of long-term debt    111,739       481
    Non-current deferred revenue              10,105         -
    Deferred income taxes                     45,584    21,633
    Other non-current liabilities             54,877    27,519

          Total liabilities                  463,621   235,812

    Commitments and contingencies

    Shareholders' equity:
      Common stock                           628,624   435,371
      Retained earnings                      334,892   271,183
      Accumulated other comprehensive
       income                                 47,237    41,111
        Total shareholders' equity         1,010,753   747,665

        Total liabilities and
         shareholders' equity             $1,474,374  $983,477




                CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (In thousands)
                                    Unaudited
                                                      Six Months Ended
                                                   Jun-29,           Jun-30,
                                                    2007              2006

    Cash flow from operating activities:
      Net Income                                   $63,709           $54,331

      Adjustments to reconcile net income
       to net cash provided by operating
       activities:
        Depreciation expense                         8,426             6,489
        Amortization expense                        18,394             6,145
        Provision for doubtful accounts                358                95
        Amortization of debt issuance cost             105                90
        Deferred income taxes                       (8,636)           (1,678)
        Non-Cash Restructuring expense               1,725                 -
        Stock-based compensation                     7,145             6,489
        In-process research and development          2,112             1,020
        Equity gain from joint ventures             (4,503)           (3,191)
        Excess tax benefit for stock-based
         compensation                               (5,929)           (4,770)
        Provision for excess and obsolete
         inventories                                 1,941             4,196
        Other noncash items                            140               463

      Add decrease (increase) in assets:
        Accounts receivables                       (41,832)          (19,417)
        Other receivables                            2,968               341
        Inventories                                (11,760)           (6,933)
        Other current and non-current assets         9,414            (2,097)

      Add increase (decrease) in liabilities:
        Accounts payable                            (6,298)            1,386
        Accrued liabilities                          3,216            (1,076)
        Deferred revenue                            12,132             9,862
        Income taxes payable                        33,630             7,624
    Net cash provided by operating activities       86,457            59,369

    Cash flows from investing activities:
       Acquisitions, net of cash acquired         (277,743)          (38,137)
       Acquisition of property and equipment        (6,270)          (10,943)
       Proceeds from dividends                         581                 -
       Other                                           378                 -
    Net cash used in investing activities         (283,054)          (49,080)

    Cash flow from financing activities:
      Issuance of common stock                      15,761            17,162
      Excess tax benefit for stock-based
       compensation                                  5,929             4,770
      Proceeds from long-term debt and
       revolving credit lines                      250,000                 -
      Payments on long-term debt and
       revolving credit lines                     (127,517)                -
      Other                                              -              (777)
    Net cash provided by financing activities      144,173            21,155

    Effect of exchange rate changes on cash
     and cash equivalents                           (3,437)            2,429

    Net increase (decrease) in cash and
     cash equivalents                              (55,861)           33,873
    Cash and cash equivalents -
     beginning of period                           129,621            73,853

    Cash and cash equivalents - end of
     period                                        $73,760          $107,726



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


                                       Three Months Ended   Six Months Ended
                                        Jun-29,   Jun-30,   Jun-29,   Jun-30,
                                         2007      2006      2007      2006

    REVENUE:                           $327,732  $245,326  $613,464  $471,180

    GROSS MARGIN:
      GAAP gross margin:               $167,169  $121,656  $310,299  $229,119
        Amortization of purchased
         intangibles             ( B )    5,237     1,334     9,026     2,189
        Stock-based compensation ( D )      429       309       771       596
      Non-GAAP gross margin:           $172,835  $123,299  $320,096  $231,904
      Non-GAAP gross margin
       (% of revenue)                      52.7%     50.3%     52.2%     49.2%

    OPERATING INCOME:
      GAAP operating income:            $55,950   $38,669   $95,218   $71,734
        Restructuring            ( A )      333         -     3,025         -
        Amortization of purchased
         intangibles             ( B )   10,432     3,742    18,327     6,082
        In-process research and
         development             ( C )        -     1,020     2,112     1,020
        Stock-based compensation ( D )    3,792     3,259     7,145     6,489
      Non-GAAP operating income:        $70,507   $46,690  $125,827   $85,325
      Non-GAAP operating margin
       (% of revenue)                      21.5%     19.0%     20.5%     18.1%

    NET INCOME:
      GAAP net income                   $35,026   $28,503   $63,709   $54,331
        Restructuring            ( A )      333         -     3,025         -
        Amortization of purchased
         intangibles             ( B )   10,432     3,742    18,327     6,082
        In-process research and
         development             ( C )        -     1,020     2,112     1,020
        Stock-based compensation ( D )    3,792     3,259     7,145     6,489
        Income tax effect on
         non-GAAP adjustments    ( E )   (5,489)   (2,449)  (10,610)   (4,009)
      Non-GAAP net income               $44,094   $34,075   $83,708   $63,913

    DILUTED NET INCOME PER SHARE:
      GAAP diluted net income per
       share:                             $0.28     $0.25     $0.52     $0.47
      Non-GAAP diluted net income
       per share:                         $0.35     $0.29     $0.68     $0.55

    SHARES USED TO COMPUTE DILUTED NET
     INCOME PER SHARE:
      GAAP and Non-GAAP shares
       used to compute net
       income per share:                124,584   116,256   122,539   115,522

    OPERATING LEVERAGE:
      Increase in non-GAAP
       operating income                 $23,817             $40,502
      Increase in revenue               $82,406            $142,284
      Operating leverage
       (increase in  non-GAAP
       operating income as a
       % of increase in revenue)           28.9%               28.5%


    The non-GAAP financial measures included in the table above are non-GAAP
    gross margin, 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 $5,237K and $1,334K of the amortization of
         purchased intangibles was included in cost of sales for the three
         months ended June 29, 2007 and June 30, 2006, respectively, and
         approximately $5,195K and $2,408K was reported as a separate line
         within operating expenses for the three months ended June 29, 2007
         and June 30, 2006, respectively.  Approximately $9,026K and $2,189K
         of the amortization of purchased intangibles was included in cost of
         sales for the six months ended June 29, 2007 and June 30, 2006,
         respectively, and approximately $9,301K and $3,893K was reported as a
         separate line within operating expenses for the six months ended June
         29, 2007 and June 30, 2006, respectively.

    (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 and six months ended June 29, 2007 and June 30, 2006,
         stock-based compensation was allocated as follows:



                                        Three Months Ended Six Months Ended
                                          Jun-29,  Jun-30,  Jun-29,  Jun-30,
                                            2007     2006     2007     2006
        Cost of sales                       $429     $309     $771     $596
        Research and development           1,022      667    1,751    1,306
        Sales and Marketing                  974      711    1,741    1,452
        General and administrative         1,367    1,572    2,882    3,135
                                          $3,792   $3,259   $7,145   $6,489

    (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
     JUNE 29, 2007:
      Revenue                      $198,853    $55,273     $40,927    $32,679

      GAAP operating income
       before corporate
       allocations:                 $52,371    $18,398      $2,906     $5,384
        Stock-based
         compensation          ( F )    806        164       1,527        303
      Non-GAAP operating income
       before corporate
       allocations:                 $53,177    $18,562      $4,433     $5,687
      Non-GAAP operating margin
       (% of segment external
       net revenues)                   26.7%      33.6%       10.8%      17.4%

    THREE MONTHS ENDED
     JUNE 30, 2006:
      Revenue                      $168,041    $36,320     $14,851    $26,114

      GAAP operating income
       before corporate
       allocations:                 $38,803    $11,299        $374     $2,243
        Stock-based
         compensation          ( F )  1,062        249         164        483
      Non-GAAP operating
       income before corporate
       allocations:                 $39,865    $11,548        $538     $2,726
      Non-GAAP operating margin
       (% of segment external
       net revenues)                   23.7%      31.8%        3.6%      10.4%

    SIX MONTHS ENDED
     JUNE 29, 2007:
      Revenue                      $374,457   $106,235     $70,784    $61,988

      GAAP operating income
       before corporate
       allocations:                 $94,535    $35,026      $3,916     $8,727
        Stock-based
         compensation          ( F )  1,678        354       2,269        667
      Non-GAAP operating
       income before corporate
       allocations:                 $96,213    $35,380      $6,185     $9,394
      Non-GAAP operating margin
       (% of segment external
       net revenues)                   25.7%      33.3%        8.7%      15.2%

    SIX MONTHS ENDED
     JUNE 30, 2006:
      Revenue                      $314,774    $79,362     $27,458    $49,586

      GAAP operating income
       before corporate
       allocations:                 $65,180    $25,207        $597     $4,566
        Stock-based
         compensation          ( F )  2,096        494         340        968
      Non-GAAP operating income
       before corporate
       allocations:                 $67,276    $25,701        $937     $5,534
      Non-GAAP operating margin
       (% of segment external
       net revenues)                   21.4%      32.4%        3.4%      11.2%

    (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 $992K and $1,301K for the three
         months ended June 29, 2007 and June 30, 2006, respectively and
         $2,177K and $2,591K for the six months ended June 29, 2007 and
         June 30, 2007, respectively.



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