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Trimble Third Quarter Results Exceed Guidance
GAAP EPS for the third quarter of 2003 were $0.29, versus $0.09 in the third quarter of 2002. GAAP EPS for the third quarter of 2003 included approximately $0.05 per share for amortization of purchased intangibles and approximately $0.02 per share for restructuring activities, while GAAP EPS for the third quarter of 2002 were reduced by approximately $0.06 per share for amortization of purchased intangibles. GAAP EPS for the third quarter of 2003 were calculated on a diluted basis using approximately 34.6 million shares.
The net accounts receivables balance for the third quarter of 2003 decreased sequentially to $97.4 million from $109.7 million in the second quarter of 2003, while days sales outstanding improved to 59 days from 69 days during the same time period. This contributed to positive operating cash flow of $19.4 million for the quarter.
"During the third quarter we continued to validate our position as a market leader in our core businesses, while moving forward on emerging opportunities that will provide for additional growth over the next several years," said Steven W. Berglund, president and CEO of Trimble. "We also continued to show organic growth in most of our key businesses, while at the same time integrating the Applanix acquisition and the products from the Nikon joint venture. Additionally, we made progress in the implementation of our regional fulfillment centers, which led to a sequential decline in days sales outstanding and inventory days and provided a significant increase in operating cash flow."
Third Fiscal Quarter Business Segment Highlights
Engineering and Construction (E&C)
Total third quarter E&C revenues increased by 14 percent over the third quarter of 2002. Sales of survey instruments and Tripod Data Systems data collection software and rugged handheld computing products remained strong, leading to the double-digit sales growth for the business over the third quarter of 2002. Sales of construction laser products grew during the quarter, reflecting a broader product portfolio and distribution.
Field Solutions (TFS) - Agriculture and Geographic Information Systems (GIS)
TFS revenues for the third quarter increased by approximately 52 percent over the third quarter of 2002. Strong demand for GeoExplorer® CE series GPS handhelds fueled GIS sales, with particular strength coming from utilities and the federal government ahead of its fiscal year-end. Agriculture product sales also grew significantly during the quarter, with high-end guidance products continuing to gain momentum on new tractor platforms, and in new geographies and crop types.
Trimble deferred approximately $2.4 million of revenue from the third quarter of 2002 into the fourth quarter of 2002 due to the delayed release of the GeoExplorer CE Series GPS handheld.
Component Technologies (CT)
Third quarter revenues for CT increased by approximately 11 percent over the third 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 the second consecutive quarter of record operating margins.
Mobile Solutions (TMS)
TMS achieved a 40 percent sequential increase in subscriber count, despite sales softness due to seasonality in the ready mix market and failures of purchased components in the field. TMS sales and marketing efforts during the quarter were diluted as a result, which led to a sequential decline in revenues. These component issues have been addressed and sales and marketing efforts have returned to normal.
The fourth quarter is typically a seasonally soft period for most of Trimble's businesses. Year over year fourth quarter comparisons may be difficult due to the previously stated deferral of GIS revenue, exceptionally strong timing revenues, and a 14-week quarter in fourth quarter of 2002.
For the fourth quarter ending January 2, 2004, the Company expects revenues will be between $128.0 and $130.0 million. Gross margins are expected to be approximately 50 percent. Operating expenses, including approximately $2.5 million of amortization of intangibles and restructuring charges 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 $1.8 million. The income tax provision should be approximately $1.4 million. Within these revenue guidelines, Trimble expects GAAP EPS to be between $0.16 and $0.19. GAAP EPS guidance was calculated assuming 34.7 million shares outstanding.
For the full-year ending January 2, 2004, Trimble expects revenue to be between $533.0 and $535.0 million, a 14 - 15 percent increase over 2002. GAAP EPS should be between $0.87 and $0.90, a 142 - 150 percent increase over 2002.
For fiscal year 2004, the Company is issuing preliminary guidance for revenues between $570.0 and $580.0 million, with GAAP EPS of $1.30 to $1.40. The Company will update this guidance when it reports fourth quarter 2003 earnings in early February.
Investor Conference Call / Webcast Details
The Company will hold a conference call on Tuesday, October 28, 2003 at 2:00 PM 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 5:00 PM, Pacific Time. The replay number is (800) 642-1687, and the passcode is 3167012.
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. For an interactive look at Company news and products, visit Trimble's Web site at http://www.trimble.com
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 and year ending January 2, 2004 and for the fiscal year 2004 ending December 31, 2004. 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 because of a decline in the overall health of the economy and international markets, which may result in reduced capital spending. In addition, the Nikon-Trimble joint venture and Applanix acquisition may not achieve anticipated results. Any failure to achieve predicted results could negatively impact the Company's revenues and gross margin. Whether the Company achieves its guidance for the fourth quarter of 2003 and fiscal year 2004 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