Trimble Navigation Limited
935 Stewart Drive
Post Office Box 3642
Sunnyvale, CA 94085
Trimble's Fiscal Third Quarter Results Exceed Revised Guidance
Better Than Anticipated Results Driven by Strong Survey and Machine Control Sales
SUNNYVALE, Calif., Oct. 24, 2002 - Trimble (Nasdaq: TRMB) today announced results for the fiscal third quarter ended September 27, 2002. The Company reported third quarter revenues of $114.7 million, versus $117.4 million in the year ago quarter. Earnings per share (EPS) for the third quarter on a Generally Accepted Accounting Principles (GAAP) basis were $0.09, versus a loss per share of ($0.11) in the year ago quarter.
Adjusted EPS for the third quarter of 2002 were $0.16, versus adjusted EPS of $0.19 in the year ago quarter. This year's third quarter GAAP and adjusted EPS benefited from a lower-than-anticipated income tax provision, which added $0.03 - $0.04, but were negatively impacted by approximately ($0.10) due to adverse events as disclosed in the Company's September 17 news release. These events led the Company to revise its third quarter revenue guidance to $110.0 - $112.0 million, and adjusted EPS guidance to $0.04 - $0.07. Specifically, the revision in guidance was related to the write-off of $1.5 million of receivables associated with the bankruptcy filing of a Japanese distributor, and the deferral of approximately $2.4 million in orders for a new geographic information systems (GIS) product until the fourth quarter due to the delayed delivery of a component by a vendor. 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 29.2 million shares.
"We are encouraged by our results in what was a challenging quarter," said Steven W. Berglund, president and CEO of Trimble. "The combination of a late quarter surge in demand for our new survey and machine control products, and a more favorable income tax provision, helped offset the write-off associated with the bankruptcy of a Japanese distributor and the shipping delay of our new GeoExplorer CE series handheld."
Berglund continued, "Our survey, machine control and components businesses came in ahead of expectations. Our new GPS survey product that began shipping in September has been very well received, machine control continues to gain momentum following the formation of the joint venture with Caterpillar, and our components business saw strength for the second consecutive quarter. Overall, we remain cautious due to continued economic uncertainty, but at the same time, we continue to improve our competitive position through innovative new products, expanded distribution, strategic alliances and new customers."
Business Segment Highlights
Engineering and Construction (E&C)
Trimble's survey and machine control businesses were both ahead of expectations as a result of strong September sales. Survey benefited from the late August introduction of a new GPS product, while machine control sales remained strong, as contractors continued to realize cost and time savings, and increased productivity on the construction site due to implementation of the technology.
Trimble's Construction Instruments business produced positive operating margins for the second consecutive quarter. This turnaround stems from new and improved products, as well as the expansion of the business' distribution channels.
Trimble Field Solutions (TFS) - Agriculture and Geographic Information Systems (GIS)
Trimble's GIS business was negatively impacted by softness in government spending and the delay in shipments to customers of its new GeoExplorer® CE series handheld, which is used for high-value data collection and mobile mapping. The Company noted the GeoExplorer CE series began shipping in early October.
Agriculture results were mixed, as a year-over-year increase in sales of precision machine control products were offset by softness in the Company's water management product line. Despite this, Trimble still expects to see double digit growth in its Agriculture business for the entire fiscal 2002.
Component Technologies (CT)
Component Technologies sales were higher than anticipated for the second consecutive quarter due to continued demand from in-vehicle navigation, embedded and wireless infrastructure customers. The Company's new postage stamp-sized, low power LassenTM SQ GPS module, began shipping in volume this quarter and continues to see increasing demand in the early part of the fourth quarter.
Trimble Mobile Solutions (TMS)
Trimble Mobile Solutions' revenues increased 22 percent sequentially, as the business began to gain traction in the ready-mix concrete market. During the quarter, the Company also launched GPRS service for its TelvisantTM Mobile Resource Management (MRM) System in the U.S. and Canada. The GPRS service allows TMS to offer high-speed, high capacity data transfer for real-time fleet management applications at a significantly lower cost than competitive CDPD offerings.
Portfolio Technologies' results were below expectations due to the deferral of non-reoccurring engineering (NRE) funds in Trimble's military business.
For the fourth quarter ending January 3, 2003, the Company expects revenues will be between $113.0 and $115.0 million. Gross margins are expected to be approximately 50 percent. Operating expenses, including approximately $2.0 million of amortization of intangibles and an expected restructuring charge of approximately $300,000, are expected to be between $48.0 and $49.0 million. Net interest expense is expected to be approximately $3.5 million, and income tax provision should be approximately $250,000. The Company anticipates other non-operating expense to be approximately $1.35 million. Within these revenue guidelines, Trimble expects adjusted EPS to be between $0.18 and $0.20, assuming 29.5 million shares outstanding.
Investor Conference Call / Webcast Details
The Company will hold a conference call on Thursday, October 24, 2002 at 8:00 AM Pacific Time to review its third 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 6029458.
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 the expected growth for the Company's agriculture business and the increasing demand for the Lassen SQ GPS module. 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 agriculture business may not grow as expected if there is a downturn in the agriculture industry. Whether we achieve our guidance for the fourth 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