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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 Third Quarter 2008 Non-GAAP Earnings Per Share of $0.40

GAAP Earnings Per Share of $0.31; Revenue $328.1 Million

SUNNYVALE, Calif., Oct 23, 2008 -- Trimble (Nasdaq: TRMB) today announced revenue of $328.1 million for its third quarter ended Sept. 26, 2008. Revenue was up approximately 11 percent from revenue of $296.0 million in the third quarter of 2007.

Operating income for the third quarter of 2008 was $54.1 million, up 24 percent from operating income of $43.8 million in the third quarter of 2007. Operating margins in the third quarter of 2008 were 16.5 percent, compared to operating margins of 14.8 percent in the third quarter of 2007. Amortization of intangibles increased from $10.2 million in the third quarter of 2007 to $11.1million in the third quarter of 2008. The impact of stock-based compensation expense was flat year-over-year at $3.8 million. There was a $451 thousand restructuring expense and a $418 thousand amortization of inventory step-up charge in the third quarter of 2008 compared to no restructuring expense or amortization of inventory step-up charge in the third quarter of 2007. Excluding these impacts, non-GAAP operating income of $69.9 million was up 21 percent compared to the third quarter of 2007. Non-GAAP operating margins were 21.3 percent in the third quarter of 2008, up from 19.5 percent in the third quarter of 2007.

Net income for the third quarter of 2008 was $39.1 million, up 43 percent compared to net income of $27.4 million in the third quarter of 2007. Diluted earnings per share for the third quarter of 2008 were $0.31, up 41 percent from diluted earnings per share of $0.22 in the third quarter of 2007.

The tax rate for the third quarter of 2008 was 30 percent, compared to 39 percent in the third quarter of 2007. The lower tax rate is due to the previously announced implementation of a global supply chain structure.

Adjusting for the amortization of intangibles and the impact of stock- based compensation, restructuring expenses and amortization of inventory step- up, non-GAAP net income of $50.2 million for the third quarter of 2008 was up 40 percent compared to non-GAAP net income of $35.9 million in the third quarter of 2007. Non-GAAP earnings per share for the third quarter of 2008 were $0.40, up 38 percent from non-GAAP earnings per share of $0.29 in the third quarter of 2007.

"As we discussed in early October, our customer's buying decisions in the third quarter were impacted by a number of factors but most significantly by the uncertain credit markets," said Steven W. Berglund, Trimble's president and chief executive officer. "This uncertainty led to postponement of purchase decisions which negatively impacted our revenue. Our proactive steps taken earlier this year to control costs, in addition to tax-rate reductions, enabled us to deliver earnings per share growth of almost forty percent year- over-year," Berglund continued.

"The conditions that impacted the third quarter remain present in the fourth quarter making it difficult to forecast in the short-term. Our fourth quarter guidance is what we believe to be a sober assessment, reflecting the short-term uncertainty," Berglund said. "Fiscal year 2009 will undoubtedly be difficult. However, we believe once the short-term credit market uncertainties are resolved, there are a number of factors that will help Trimble offset recessionary conditions. These include continued strong international sales, continued growth in agriculture, a strong pipeline for mobile solutions products, momentum from the newly formed VirtualSite joint venture with Caterpillar and new product categories."

Trimble Results by Business Segment

Segment operating income is revenue less cost of goods sold and operating expenses, excluding general corporate expenses, restructuring expenses, amortization of intangibles, in-process research and development and the impact of stock-based compensation expense.

Engineering and Construction

Third quarter 2008 Engineering and Construction (E&C) revenue was $191.9 million, up approximately 5 percent when compared to revenue of $182.1 million in the third quarter of 2007. E&C growth was due to international sales, offset by slower sales in the U.S. and Europe.

Third quarter 2008 operating income in E&C was $41.6 million, or 21.7 percent of revenue, compared to $42.8 million, or 23.5 percent of revenue, in the third quarter of 2007.

Non-GAAP operating income in E&C was $42.7 million, or 22.3 percent of revenue, in the third quarter of 2008 compared to $43.7 million, or 24.0 percent of revenue, in the third quarter of 2007. The decline in operating margins was due to the impact of recent acquisitions which have not yet fully contributed to profitability, partially offset by the realization of expense reductions taken at the end of the second quarter of 2008.

Field Solutions

Third quarter 2008 Field Solutions revenue was $64.4 million, up approximately 44 percent compared to revenue of $44.8 million in the third quarter of 2007. Revenue growth was once again driven primarily by strong demand for agricultural products.

Third quarter 2008 operating income in Field Solutions was $22.1 million, or 34.3 percent of revenue compared to $11.9 million, or 26.7 percent of revenue, in the third quarter of 2007.

Non-GAAP operating income in Field Solutions was $22.3 million, or 34.6 percent of revenue, in the third quarter of 2008 compared to $12.1 million, or 27 percent of revenue, in the third quarter of 2007. Expansion in operating margin was due primarily to strong revenue growth.

Mobile Solutions

Third quarter 2008 Mobile Solutions revenue was $40.8 million, up approximately 4 percent when compared to revenue of $39.2 million in the third quarter of 2007.

Third quarter 2008 operating income in Mobile Solutions was $3.6 million, or 8.8 percent of revenue compared to $2.9 million, or 7.3 percent of revenue, in the third quarter of 2007.

Non-GAAP operating income in Mobile Solutions was $4.6 million, or 11.2 percent of revenue, in the third quarter of 2008 slightly up compared to $4.3 million, or 10.9 percent of revenue, in the third quarter of 2007.

Advanced Devices

Third quarter 2008 Advanced Devices revenue was $31.1 million, up approximately 4 percent when compared to revenue of $29.9 million in the third quarter of 2007.

Third quarter 2008 operating income in Advanced Devices was $6.8 million, or 20.3 percent of revenue compared to $4.9 million, or 16.4 percent of revenue, in the third quarter of 2007.

Non-GAAP operating income in Advanced Devices was $7.2 million, or 23.1 percent of revenue, in the third quarter of 2008 compared to $5.2 million, or 17.5 percent of revenue, in the third quarter of 2007. Improvements in operating margins were due to product mix and increased licensing revenue.

Stock Repurchase Program

As part of Trimble's stock repurchase program, in the third quarter Trimble purchased 2.45 million shares of Trimble stock at an average purchase price of $32.43 for a total of $79.5 million. This is in addition to the purchase of approximately 968 thousand shares of Trimble stock at an average purchase price of $26.71 in the first quarter of 2008 and approximately 287 thousand shares of Trimble stock at an average purchase price of $36.25 in the second quarter of 2008.

Use of Non-GAAP Financial Information

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 this earnings release. Additional financial information about our use of non-GAAP results can be found on the investor relations page of our Web site at http://investor.trimble.com.

Forward Looking Guidance

In the fourth quarter of 2008, Trimble is forecasting revenue between $315 million and $323 million. Trimble expects fourth quarter 2008 GAAP earnings per share between $0.22 and $0.25 and non-GAAP earnings per share between $0.32 and $0.35. Non-GAAP guidance for the fourth quarter of 2008 excludes the amortization of intangibles expected to be $11.5 million related to previous acquisitions, and the anticipated impact of stock-based compensation expense of $3.8 million. Both GAAP and non-GAAP guidance use a 23 percent tax rate and assume 125 million shares outstanding. Management notes that current uncertainty in global economic conditions makes it particularly difficult to predict product demand and other related matters and makes it more likely that Trimble's results could differ materially from these expectations.

Investor Conference Call / Webcast Details

Trimble will hold a conference call on Oct. 23, 2008 at 1:30 p.m. PT to review its third quarter 2008 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 66498751. 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 3,800 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 projections for revenue, effective tax rate, stock-based compensation, amortization of purchased intangibles, and earnings per share estimates for the fourth quarter of 2008. These statements also include possible factors that may offset recessionary conditions for the Company in 2009. 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, the current global credit crisis and recessionary conditions in the United States and Europe may be protracted, negatively impacting our customer's purchasing decisions worldwide including in emerging markets. In addition, the Company's results may be adversely affected if the growth rates, customer wins and profitability expectations for each of its four segments are not achieved, or if its joint ventures, including the newly formed VirtualSite joint venture, and recent acquisitions do not achieve anticipated results, or if the Company is unable to market, manufacture and ship new products. The mix of our U.S. versus international sales can impact our effective tax rate. Any failure to achieve predicted results could negatively impact the Company's revenues, operating margins and other financial results. Whether the Company achieves its guidance for the fourth quarter of 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   Nine Months Ended

                                     Sep-26,   Sep-28,    Sep-26,    Sep-28,
                                       2008      2007       2008       2007

    Revenue                          $328,087  $296,023  $1,061,150  $909,487
    Cost of sales                     162,464   149,083     534,052   452,248
    Gross margin                      165,623   146,940     527,098   457,239
    Gross margin (%)                    50.5%     49.6%       49.7%     50.3%

    Operating expenses
        Research and development       35,348    31,707     112,097    96,737
        Sales and marketing            48,664    45,274     151,727   134,967
        General and administrative     22,072    21,262      70,051    67,182
        Restructuring                      21         -       2,435     3,025
        Amortization of purchased
         intangible assets              5,462     4,911      15,768    14,212
        In-process research and
         development                        -         -           -     2,112
           Total operating expenses   111,567   103,154     352,078   318,235


    Operating income                   54,056    43,786     175,020   139,004

    Non-operating income, net
        Interest income                   404       770       1,369     2,607
        Interest expense                 (214)   (1,616)     (1,389)   (5,476)
        Foreign currency transaction
         gain (loss), net                 117      (459)      2,338      (532)
        Income from joint ventures,
         net                            2,163     1,943       6,796     6,445
        Other income (expense), net      (907)      451      (1,661)    1,173
           Total non-operating
            income, net                 1,563     1,089       7,453     4,217

    Income  before taxes               55,619    44,875     182,473   143,221

    Income tax provision               16,552    17,501      54,740    52,138
    Net income                        $39,067   $27,374    $127,733   $91,083


    Earnings per share :
         Basic                          $0.32     $0.23       $1.05     $0.77
         Diluted                        $0.31     $0.22       $1.02     $0.74

    Shares used in calculating
     earnings per share :
        Basic                         120,603   120,591     121,171   118,553
        Diluted                       124,423   125,687     125,071   123,691




                    CONDENSED CONSOLIDATED BALANCE SHEETS
                                (In thousands)
                                  Unaudited


                                                   Sep-26,           Dec-28,
                                                    2008              2007
    Assets

    Current assets:
       Cash and cash equivalents                   $70,479          $103,202
       Accounts receivables, net                   257,548           239,884
       Other receivables                             8,724            10,201
       Inventories, net                            162,033           143,018
       Deferred income taxes                        49,637            44,333
       Other current assets                         16,738            15,661
          Total current assets                     565,159           556,299

    Property and equipment, net                     50,819            51,444
    Goodwill                                       716,191           675,850
    Other purchased intangible assets,
     net                                           181,196           197,777
    Other non-current assets                        60,332            57,989

          Total assets                          $1,573,697        $1,539,359

    Liabilities and Shareholders' Equity

    Current liabilities:
       Current portion of long-term debt              $129              $126
       Accounts payable                             68,446            67,589
       Accrued compensation and benefits            47,994            55,133
       Deferred revenue                             56,559            49,416
       Accrued warranty expense                     12,077            10,806
       Income taxes payable                         17,201            14,802
       Other accrued liabilities                    35,808            51,980
          Total current liabilities                238,214           249,852

    Non-current portion of long-term debt           51,487            60,564
    Non-current deferred revenue                    12,921            15,872
    Deferred income taxes                           56,373            47,917
    Other non-current liabilities                   54,672            56,128

          Total liabilities                        413,667           430,333

    Commitments and contingencies

    Shareholders' equity:
       Common stock                                681,019           660,749
       Retained earnings                           421,155           388,557
       Accumulated other comprehensive
        income                                      57,856            59,720
          Total shareholders' equity             1,160,030         1,109,026

          Total liabilities and
           shareholders' equity                 $1,573,697        $1,539,359




               CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                (In thousands)
                                  Unaudited

                                                      Nine Months Ended
                                                   Sep-26,           Sep-28,
                                                    2008               2007

    Cash flow from operating activities:
        Net Income                                $127,733           $91,083

        Adjustments to reconcile net
         income  to net cash provided by
           operating activities:
             Depreciation expense                   14,287            12,733
             Amortization expense                   32,999            28,615
             Provision for doubtful
              accounts                                 597               684
             Amortization of debt
              issuance cost                            169               162
             Deferred income taxes                 (14,235)           (6,547)
             Non-cash restructuring
              expense                                  -               1,725
             Stock-based compensation               11,603            10,949
             In-process research and
              development                              -               2,112
             Equity gain from joint
              ventures                              (6,796)           (6,445)
             Excess tax benefit for
              stock-based compensation              (5,847)          (13,283)
             Provision for excess and
              obsolete inventories                   2,672             3,513
             Other non-cash items                      179               144

        Add decrease (increase) in
         assets:
             Accounts receivables                  (16,230)          (42,971)
             Other receivables                       1,598             4,619
             Inventories                           (16,165)          (15,512)
             Other current and non-
              current assets                          (201)            6,353

        Add increase (decrease) in
         liabilities:
             Accounts payable                       (1,859)           (7,518)
             Accrued compensation and
              benefits                              (7,426)           (6,182)
             Accrued liabilities                       725             5,350
             Deferred revenue                        2,862            25,989
             Income taxes payable                   15,280            33,511
     Net cash provided by operating
      activities                                   141,945           129,084

     Cash flows from investing
      activities:
          Acquisitions of businesses, net
           of cash acquired                        (69,310)         (285,523)
          Acquisition of property and
           equipment                               (11,293)           (9,208)
          Dividends received                         3,148             2,888
          Other                                       (154)              361
     Net cash used in investing
      activities                                   (77,609)         (291,482)

     Cash flow from financing activities:
          Issuance of common stock                  22,119            27,830
          Excess tax benefit for stock-
           based compensation                        5,847            13,283
          Repurchase and retirement of
           common stock                           (115,851)              -
          Proceeds from long-term debt
           and revolving credit lines               51,000           250,000
          Payments on long-term debt and
           revolving credit lines                  (60,316)         (170,037)
          Other                                        -                 -
     Net cash provided by (used in)
      financing activities                         (97,201)          121,076

     Effect of exchange rate changes on
      cash and cash equivalents                        142            (4,227)

     Net decrease in cash and cash
      equivalents                                  (32,723)          (45,549)
     Cash and cash equivalents -
      beginning of period                          103,202           129,621

     Cash and cash equivalents - end of
      period                                       $70,479           $84,072




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


                                     Three Months Ended   Nine Months Ended
                                     Sep-26,   Sep-28,    Sep-26,    Sep-28,
                                       2008      2007       2008       2007

    REVENUE:                         $328,087  $296,023  $1,061,150  $909,487

    GROSS MARGIN:
      GAAP gross margin:             $165,623  $146,940    $527,098  $457,239
        Restructuring           (A)       430       -         1,360       -
        Amortization of
         purchased intangibles  (B)     5,681     5,263      17,097    14,289
        Stock-based compensation(D)       453       469       1,433     1,240
        Amortization of
         acquisition-related
         inventory step-up      (E)       418         -         601         -
      Non-GAAP gross margin:         $172,605  $152,672    $547,589  $472,768
      Non-GAAP gross margin (% of
       revenue)                         52.6%     51.6%       51.6%     52.0%

    OPERATING EXPENSES:
      GAAP operating expenses:       $111,567  $103,154    $352,078  $318,235
        Restructuring           (A)       (21)      -        (2,435)   (3,025)
        Amortization of
         purchased intangibles  (B)    (5,462)   (4,911)    (15,768)  (14,212)
        In-process research and
         development            (C)       -         -           -      (2,112)
        Stock-based compensation(D)    (3,373)   (3,335)    (10,170)   (9,709)
      Non-GAAP operating expenses:   $102,711   $94,908    $323,705  $289,177

    OPERATING INCOME:
      GAAP operating income:          $54,056   $43,786    $175,020  $139,004
        Restructuring           (A)       451       -         3,795     3,025
        Amortization of
         purchased intangibles  (B)    11,143    10,174      32,865    28,501
        In-process research and
         development            (C)         -         -           -     2,112
        Stock-based compensation(D)     3,826     3,804      11,603    10,949
        Amortization of
         acquisition-related
         inventory step-up      (E)       418         -         601         -
      Non-GAAP operating income:      $69,894   $57,764    $223,884  $183,591
      Non-GAAP operating margin (%
       of revenue)                      21.3%     19.5%       21.1%     20.2%

    NET INCOME:
      GAAP net income:                $39,067   $27,374    $127,733   $91,083
        Restructuring           (A)       451       -         3,795     3,025
        Amortization of
         purchased intangibles  (B)    11,143    10,174      32,865    28,501
        In-process research and
         development            (C)         -         -           -     2,112
        Stock-based compensation(D)     3,826     3,804      11,603    10,949
        Amortization of
         acquisition-related
         inventory step-up      (E)       418         -         601         -
        Income tax effect on
         non-GAAP adjustments   (F)    (4,713)   (5,452)    (14,620)  (16,062)
      Non-GAAP net income:            $50,192   $35,900    $161,977  $119,608

    DILUTED NET INCOME PER SHARE:
      GAAP diluted net income per
       share:                           $0.31     $0.22       $1.02     $0.74
      Non-GAAP diluted net income
       per share:                       $0.40     $0.29       $1.30     $0.97

    SHARES USED TO COMPUTE DILUTED
     NET
    INCOME PER SHARE:
      GAAP and Non-GAAP shares used
       to compute
      net income per share:           124,423   125,687     125,071   123,691

    OPERATING LEVERAGE:
      Increase in non-GAAP operating
       income                         $12,130               $40,293
      Increase in revenue             $32,064              $151,663
      Operating leverage (increase
       in non-GAAP operating
      income as a % of increase in
       revenue)                         37.8%                 26.6%


    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 re

     (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 $5,681K and $5,263K of the amortization of
          purchased intangibles was included in cost of sales for the three
          months ended September 26, 2008 and September 28, 2007, and
          approximately $5,462K and $4,911K was reported as a separate line
          within operating expenses for the three months ended September 26,
          2008 and September 28, 2007, respectively.  Approximately $17,097K
          and $14,289K of the amortization of purchased intangibles was
          included in cost of sales for the nine months ended September 26,
          2008 and September 28, 2007, and approximately $15,768K and $14,212K
          was reported as a separate line within operating expenses for the
          nine months ended September 26, 2008 and September 28, 2007,
          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.  For the
          three and nine months ended September 26, 2008 and September 28,
          2007, stock-based compensation was allocated as follows:




                                            Three Months
                                               Ended      Nine Months Ended
                                          Sep-26, Sep-28,  Sep-26,  Sep-28,
                                            2008    2007    2008     2007
        Cost of sales                        $453    $469   $1,433   $1,240
        Research and development              796     868    2,629    2,619
        Sales and Marketing                   937   1,059    2,898    2,800
        General and administrative          1,640   1,408    4,643    4,290
                                           $3,826  $3,804  $11,603  $10,949

     (E)  Amortization of acquisition-related inventory step-up. The purchase
          accounting entries associated with our business acquisitions require
          us to record inventory at its fair value, which is sometimes greater
          than the previous book value of the inventory.  The increase in
          inventory value is amortized to cost of sales over the period that
          the related product is sold.  We exclude inventory step-up
          amortization from our non-GAAP measures because we do not believe it
          is reflective of our ongoing operating results, and it is not used
          by management to assess the core profitability of our business
          operations.
     (F)  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 SEPTEMBER 26,
     2008:
      Revenue                           $191,858   $64,354   $40,822  $31,053

      GAAP operating income before
       corporate allocations:            $41,560   $22,058    $3,602   $6,835
        Stock-based compensation    (G)    1,146       203       987      337
      Non-GAAP operating income before
       corporate allocations:            $42,706   $22,261    $4,589   $7,172
      Non-GAAP operating margin (% of
       segment external net revenues)      22.3%     34.6%     11.2%    23.1%

    THREE MONTHS ENDED SEPTEMBER 28,
     2007:
      Revenue                           $182,135   $44,763   $39,204  $29,921

      GAAP operating income before
       corporate allocations:            $42,824   $11,931    $2,855   $4,893
        Stock-based compensation    (G)      863       177     1,401      334
      Non-GAAP operating income before
       corporate allocations:            $43,687   $12,108    $4,256   $5,227
      Non-GAAP operating margin (% of
       segment external net revenues)      24.0%     27.0%     10.9%    17.5%

    NINE MONTHS ENDED SEPTEMBER 26,
     2008:
      Revenue                           $599,057  $242,461  $127,118  $92,514

      GAAP operating income before
       corporate allocations:           $123,675   $91,961    $7,997  $18,105
        Stock-based compensation    (G)    3,193       600     3,582      979
      Non-GAAP operating income before
       corporate allocations:           $126,868   $92,561   $11,579  $19,084
      Non-GAAP operating margin (% of
       segment external net revenues)      21.2%     38.2%      9.1%    20.6%

    NINE MONTHS ENDED SEPTEMBER 28,
     2007:
      Revenue                           $556,592  $150,998  $109,988  $91,909

      GAAP operating income before
       corporate allocations:           $137,359   $46,957    $6,778  $13,620
        Stock-based compensation    (G)    2,541       531     3,670    1,001
      Non-GAAP operating income before
       corporate allocations:           $139,900   $47,488   $10,448  $14,621
      Non-GAAP operating margin (% of
       segment external net revenues)      25.1%     31.4%      9.5%    15.9%



    (G) 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.  Stock-based
        compensation not allocated to the reportable segments was
        approximately $1,153K and $1,029K for the three months ended September
        26, 2008 and September 28, 2007, respectively and $3,249K and $3,206K
        for the nine months ended September 26, 2008 and September 28, 2007,
        respectively.




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