SUNNYVALE, Calif., April 27, 2017 /PRNewswire/ -- Trimble Inc.
(NASDAQ: TRMB) today announced financial results for the first
quarter of 2017.
First Quarter 2017 Financial Summary
First quarter 2017 revenue of $613.9
million was up 5 percent as compared to the first quarter of
2016. As previously announced, Trimble has changed the reporting of
its segment financial results to better reflect the Company's
customer base and end markets, and our first quarter results are
based on these new segments. Buildings and Infrastructure revenue
was $188.1 million, up 8 percent.
Geospatial revenue was $149.8
million, down 2 percent. Resources and Utilities revenue was
$119.9 million, up 5 percent.
Transportation revenue was $156.1
million, up 9 percent.
GAAP operating income was $56.6
million, up 89 percent as compared to the first quarter of
2016. GAAP operating margin was 9.2 percent of revenue as compared
to 5.1 percent of revenue in the first quarter of 2016.
GAAP net income was $50.5 million,
up 155 percent as compared to the first quarter of 2016. Diluted
GAAP earnings per share were $0.20 as
compared to diluted GAAP earnings per share of $0.08 in the first quarter of 2016.
Non-GAAP operating income of $109.2
million was up 23 percent as compared to the first quarter
of 2016. Non-GAAP operating margin was 17.8 percent of revenue as
compared to 15.1 percent of revenue in the first quarter of
2016.
Non-GAAP net income of $84.8
million was up 31 percent as compared to the first quarter
of 2016. Diluted non-GAAP earnings per share were $0.33 as compared to diluted non-GAAP earnings
per share of $0.25 in the first
quarter of 2016.
The GAAP tax rate for the quarter was 23 percent as compared to
33 percent in the first quarter of 2016, and the non-GAAP tax rate
was 23 percent as compared to 24 percent in the first quarter of
2016.
Operating cash flow for the first quarter of 2017 was
$102.9 million, down 10 percent as
compared to the first quarter of 2016. Deferred revenue for the
first quarter of 2017 was $337.0
million, up 5 percent as compared to the first quarter of
2016.
During the first quarter, Trimble repurchased approximately 0.5
million shares of its common stock for $14.2
million. Approximately $116
million remains under the current share repurchase
authorization as of the end of the first quarter.
"We continued to demonstrate progression in the first quarter,
with accelerating revenue growth and significant margin
improvement," said Steven W.
Berglund, Trimble's president and chief executive officer.
"Our outlook for the remainder of the year anticipates continuing
year-over-year improvement in both revenue and profitability."
Forward Looking Guidance
For the second quarter of 2017 Trimble expects revenue to be
between $625 million and $655 million
with GAAP earnings per share of $0.16 to
$0.22 and non-GAAP earnings per share of $0.33 to $0.38. Non-GAAP guidance excludes the
amortization of intangibles of $35
million related to previous acquisitions, anticipated
acquisition costs of $3 million, the
anticipated impact of stock-based compensation expense of
$15 million, and $2 million in anticipated restructuring charges.
GAAP guidance assumes a tax rate of 22 percent and non-GAAP
guidance assumes a tax rate of 23 percent. Both GAAP and non-GAAP
earnings per share assume approximately 257 million shares
outstanding.
Investor Conference Call / Webcast Details
Trimble will hold a conference call on April 27 at 2:00 p.m.
PT to review its first quarter 2017 results. An accompanying
slide presentation will be made available on the "Investors"
section of the Trimble Website, www.trimble.com, under
the subheading "Events & Presentations". The call 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
(702) 928-6633 (international). The passcode is 8299038. The replay
will also be available on the Web at the address above.
Use of Non-GAAP Financial Information
To help our investors understand our past financial performance
and our future results, as well as our performance relative to
competitors, we supplement the financial results that we provide in
accordance with generally accepted accounting principles, or GAAP,
with non-GAAP financial measures. These non-GAAP measures can be
used to evaluate our historical and prospective financial
performance, as well as our performance relative to competitors.
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. Further, we believe some of our investors track our "core
operating performance" as a means of evaluating our performance in
the ordinary, ongoing, and customary course of our operations. Core
operating performance excludes items that are non-cash, not
expected to recur or not reflective of ongoing financial results.
Management also believes that looking at our core operating
performance provides a supplemental way to provide consistency in
period to period comparisons.
The specific non-GAAP measures, which we use along with a
reconciliation to the nearest comparable GAAP measures and the
explanation for why these non-GAAP measures provide useful
information to investors regarding our financial condition and
results of operations and why management chose to exclude selected
items 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. 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.
Segment Information
For a description of our new reporting segments, and financial
segment information for fiscal years 2014, 2015, 2016, and the
first quarter of fiscal 2017, please visit the Investor Relations
section of the Company's Website at:
http://investor.trimble.com.
About Trimble
Trimble is transforming the way the world works by delivering
products and services that connect the physical and digital worlds.
Core technologies in positioning, modeling, connectivity and data
analytics enable customers to improve productivity, quality, safety
and sustainability. From purpose built products to enterprise
lifecycle solutions, Trimble software, hardware and services are
transforming a broad range of industries such as agriculture,
construction, geospatial and transportation and logistics. For more
information about Trimble (NASDAQ:TRMB), visit:
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 expectations for future
financial market and economic conditions, the potential for
growth and margin expansion in 2017, the impact of
acquisitions, the ability to deliver revenue, earnings per share
and other financial projections that Trimble has guided for the
second quarter of 2017, including the expected tax rate,
anticipated impact of stock-based compensation expense,
amortization of intangibles related to previous acquisitions,
anticipated acquisition costs, restructuring charges, and the
anticipated number of diluted shares outstanding. 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. The Company's
results may be adversely affected if the Company is unable to
market, manufacture and ship new products, obtain new customers, or
integrate new acquisitions. The Company's results would also be
negatively impacted by weakening in the macro environment or
foreign exchange fluctuations, or the imposition of barriers to
international trade. Any failure to achieve predicted results could
negatively impact the Company's revenues, cash flow from
operations, and other financial results. The Company's financial
results will also depend on a number of other factors and 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, such as changes in economic conditions, further worsening in
the geospatial market, critical part supply chain shortages, and
possible write-offs of goodwill. Undue reliance should not be
placed on any forward-looking statement contained herein,
especially in light of greater uncertainty than normal in the
economy in general. 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 millions, except
per share data)
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
First Quarter
of
|
|
|
|
|
|
|
|
|
|
2017
|
|
2016
|
|
|
|
|
|
|
Revenue:
|
|
|
|
|
|
Product
|
$
405.4
|
|
$
393.6
|
|
|
Service
|
106.8
|
|
101.6
|
|
|
Subscription
|
101.7
|
|
87.8
|
Total
revenue
|
613.9
|
|
583.0
|
|
|
|
|
|
|
Cost of
sales:
|
|
|
|
|
|
Product
|
194.4
|
|
190.0
|
|
|
Service
|
47.1
|
|
41.6
|
|
|
Subscription
|
26.8
|
|
26.7
|
|
|
Amortization of
purchased intangible assets
|
19.0
|
|
24.1
|
Total cost of
sales
|
287.3
|
|
282.4
|
|
|
|
|
|
|
Gross
margin
|
326.6
|
|
300.6
|
Gross margin
(%)
|
53.2 %
|
|
51.6 %
|
|
|
|
|
|
|
Operating
expense:
|
|
|
|
|
Research and
development
|
88.7
|
|
87.7
|
|
Sales and
marketing
|
94.8
|
|
96.7
|
|
General and
administrative
|
69.3
|
|
68.3
|
|
Restructuring
charges
|
2.9
|
|
1.8
|
|
Amortization of
purchased intangible assets
|
14.3
|
|
16.2
|
|
|
Total operating
expense
|
270.0
|
|
270.7
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
income
|
56.6
|
|
29.9
|
|
|
|
|
|
|
Non-operating income
(expense), net:
|
|
|
|
|
Interest expense,
net
|
(6.1)
|
|
(6.6)
|
|
Foreign currency
transaction gain (loss), net
|
1.4
|
|
(0.1)
|
|
Income from equity
method investments, net
|
4.2
|
|
2.9
|
|
Other income,
net
|
9.5
|
|
3.3
|
|
|
Total non-operating
income (expense), net
|
9.0
|
|
(0.5)
|
|
|
|
|
|
|
Income before
taxes
|
65.6
|
|
29.4
|
|
|
|
|
|
|
Income tax
provision
|
15.1
|
|
9.7
|
Net income
|
50.5
|
|
19.7
|
|
Less: Net loss
attributable to noncontrolling interests
|
—
|
|
(0.1)
|
Net income
attributable to Trimble Inc.
|
$
50.5
|
|
$
19.8
|
|
|
|
|
|
|
Earnings per share
attributable to Trimble Inc.:
|
|
|
|
|
Basic
|
$
0.20
|
|
$
0.08
|
|
Diluted
|
$
0.20
|
|
$
0.08
|
|
|
|
|
|
|
Shares used in
calculating earnings per share:
|
|
|
|
|
Basic
|
252.0
|
|
251.0
|
|
Diluted
|
255.9
|
|
254.0
|
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
(In
millions)
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
First Quarter
of
|
|
Fiscal Year
End
|
As of
|
|
2017
|
|
2016
|
Assets
|
|
|
|
|
|
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
280.8
|
|
$
216.1
|
|
Short-term
investments
|
|
141.8
|
|
111.1
|
|
Accounts receivable,
net
|
|
394.7
|
|
354.8
|
|
Other
receivables
|
|
30.5
|
|
35.4
|
|
Inventories
|
|
221.1
|
|
218.8
|
|
Other current
assets
|
|
46.6
|
|
42.5
|
|
|
Total current
assets
|
|
1,115.5
|
|
978.7
|
|
|
|
|
|
|
|
Property and
equipment, net
|
|
142.8
|
|
144.2
|
Goodwill
|
|
2,128.6
|
|
2,077.6
|
Other purchased
intangible assets, net
|
|
361.6
|
|
333.3
|
Other non-current
assets
|
|
148.9
|
|
140.0
|
|
|
|
|
|
|
|
|
|
Total
assets
|
|
$
3,897.4
|
|
$
3,673.8
|
|
|
|
|
|
|
|
Liabilities and
Shareholders' Equity
|
|
|
|
|
|
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
Short-term
debt
|
|
$
138.3
|
|
$
130.3
|
|
Accounts
payable
|
|
115.9
|
|
109.8
|
|
Accrued compensation
and benefits
|
|
85.8
|
|
97.5
|
|
Deferred
revenue
|
|
299.3
|
|
246.5
|
|
Accrued warranty
expense
|
|
17.4
|
|
17.2
|
|
Other current
liabilities
|
|
102.6
|
|
86.9
|
|
|
Total current
liabilities
|
|
759.3
|
|
688.2
|
|
|
|
|
|
|
|
Long-term
debt
|
|
509.8
|
|
489.6
|
Non-current deferred
revenue
|
|
37.7
|
|
37.7
|
Deferred income tax
liabilities
|
|
39.2
|
|
38.8
|
Other non-current
liabilities
|
|
130.5
|
|
113.8
|
|
|
Total
liabilities
|
|
1,476.5
|
|
1,368.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders'
equity:
|
|
|
|
|
|
Common
stock
|
|
0.3
|
|
0.3
|
|
Additional
paid-in-capital
|
|
1,399.4
|
|
1,348.3
|
|
Retained
earnings
|
|
1,216.1
|
|
1,177.1
|
|
Accumulated other
comprehensive loss
|
|
(194.8)
|
|
(219.9)
|
Total Trimble Inc.
stockholders' equity
|
|
2,421.0
|
|
2,305.8
|
Noncontrolling
interests
|
|
(0.1)
|
|
(0.1)
|
|
|
Total stockholders'
equity
|
|
2,420.9
|
|
2,305.7
|
|
|
|
|
|
|
|
|
|
Total liabilities and
stockholders' equity
|
|
$
3,897.4
|
|
$
3,673.8
|
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
(In
millions)
|
(Unaudited)
|
|
|
|
|
|
First Quarter
of
|
|
|
|
|
|
2017
|
|
2016
|
|
|
|
|
|
|
|
|
Cash flow from
operating activities:
|
|
|
|
|
|
Net Income
|
|
$
50.5
|
|
$
19.7
|
|
|
|
|
|
|
|
|
|
Adjustments to
reconcile net income to net cash provided by operating
activities:
|
|
|
|
|
|
|
|
Depreciation
expense
|
|
8.9
|
|
9.1
|
|
|
|
Amortization
expense
|
|
33.3
|
|
40.3
|
|
|
|
Provision for
doubtful accounts
|
|
—
|
|
0.6
|
|
|
|
Deferred income
taxes
|
|
0.2
|
|
(0.1)
|
|
|
|
Stock-based
compensation
|
|
13.7
|
|
13.7
|
|
|
|
Income from equity
method investments
|
|
(4.2)
|
|
(2.9)
|
|
|
|
Divestiture gain,
net
|
|
(8.1)
|
|
(3.1)
|
|
|
|
Provision for excess
and obsolete inventories
|
|
1.9
|
|
4.1
|
|
|
|
Other non-cash
items
|
|
(2.5)
|
|
0.7
|
|
|
|
|
|
|
|
|
|
Decrease (increase)
in assets:
|
|
|
|
|
|
|
|
Accounts
receivables
|
|
(34.8)
|
|
(14.1)
|
|
|
|
Other
receivables
|
|
3.9
|
|
(2.2)
|
|
|
|
Inventories
|
|
(2.3)
|
|
3.1
|
|
|
|
Other current and
non-current assets
|
|
(8.0)
|
|
(4.9)
|
|
|
|
|
|
|
|
|
|
Increase (decrease)
in liabilities:
|
|
|
|
|
|
|
|
Accounts
payable
|
|
3.6
|
|
11.9
|
|
|
|
Accrued compensation
and benefits
|
|
(14.7)
|
|
(13.5)
|
|
|
|
Deferred
revenue
|
|
49.6
|
|
54.1
|
|
|
|
Accrued
warranty
|
|
0.1
|
|
(0.7)
|
|
|
|
Other
liabilities
|
|
11.8
|
|
(1.4)
|
Net cash provided by
operating activities
|
|
102.9
|
|
114.4
|
|
|
|
|
|
|
|
|
Cash flow from
investing activities:
|
|
|
|
|
|
Acquisitions of
businesses, net of cash acquired
|
|
(79.2)
|
|
(15.8)
|
|
Acquisitions of
property and equipment
|
|
(5.7)
|
|
(4.9)
|
|
Purchases of equity
method investments
|
|
—
|
|
(0.4)
|
|
Purchases of
short-term investments
|
|
(59.0)
|
|
—
|
|
Net proceeds from
sale of businesses
|
|
19.2
|
|
8.1
|
|
Proceeds from
maturities of short-term investments
|
|
24.4
|
|
—
|
|
Proceeds from sales
of short-term investments
|
|
3.9
|
|
—
|
|
Dividends received
from equity method investments
|
|
1.5
|
|
5.0
|
|
Other
|
|
0.4
|
|
(0.3)
|
Net cash used in
investing activities
|
|
(94.5)
|
|
(8.3)
|
|
|
|
|
|
|
|
|
Cash flow from
financing activities:
|
|
|
|
|
|
Issuance of common
stock, net of tax withholdings
|
|
39.6
|
|
16.1
|
|
Repurchases and
retirement of common stock
|
|
(14.2)
|
|
(12.2)
|
|
Proceeds from debt
and revolving credit lines
|
|
252.0
|
|
92.0
|
|
Payments on debt and
revolving credit lines
|
|
(226.1)
|
|
(147.0)
|
Net cash provided by
(used in) financing activities
|
|
51.3
|
|
(51.1)
|
|
|
|
|
|
|
|
|
Effect of exchange
rate changes on cash and cash equivalents
|
|
5.0
|
|
3.7
|
|
|
|
|
|
|
|
|
Net increase in cash
and cash equivalents
|
|
64.7
|
|
58.7
|
Cash and cash
equivalents - beginning of period
|
|
216.1
|
|
116.0
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents - end of period
|
|
$
280.8
|
|
$
174.7
|
REPORTING
SEGMENTS
|
(Dollars in
millions)
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reporting
Segments
|
|
|
|
|
Buildings
|
|
|
|
Resources
|
|
|
|
|
|
|
and
|
|
|
|
and
|
|
|
|
|
|
|
Infrastructure
|
|
Geospatial
|
|
Utilities
|
|
Transportation
|
|
|
|
|
|
|
|
|
|
|
|
FIRST QUARTER OF
FISCAL 2017 :
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
$
188.1
|
|
$
149.8
|
|
$
119.9
|
|
$
156.1
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
before corporate allocations
|
|
$
32.7
|
|
$
27.9
|
|
$
42.2
|
|
$
24.8
|
|
|
Operating margin (%
of segment external net revenue)
|
|
17.4 %
|
|
18.6 %
|
|
35.2 %
|
|
15.9 %
|
|
|
|
|
|
|
|
|
|
|
|
FIRST QUARTER OF
FISCAL 2016 :
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
$
173.7
|
|
$
152.2
|
|
$
113.8
|
|
$
143.3
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
before corporate allocations
|
|
$
22.4
|
|
$
26.1
|
|
$
34.9
|
|
$
23.8
|
|
|
Operating margin (%
of segment external net revenue)
|
|
12.9 %
|
|
17.1 %
|
|
30.7 %
|
|
16.6 %
|
GAAP TO NON-GAAP
RECONCILIATION
|
(Dollars in millions,
except per share data)
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
First Quarter
of
|
|
|
|
|
|
|
2017
|
|
2016
|
|
|
|
|
|
|
Dollar
|
% of
|
|
Dollar
|
% of
|
|
|
|
|
|
|
Amount
|
Revenue
|
|
Amount
|
Revenue
|
|
GROSS
MARGIN:
|
|
|
|
|
|
|
|
|
|
GAAP gross
margin:
|
|
|
$326.6
|
53.2 %
|
|
$300.6
|
51.6 %
|
|
|
|
Restructuring
charges
|
( A )
|
|
0.5
|
0.1 %
|
|
0.3
|
0.1 %
|
|
|
|
Amortization of
purchased intangible assets
|
( B )
|
|
19.0
|
3.1 %
|
|
24.1
|
4.0 %
|
|
|
|
Stock-based
compensation
|
( C )
|
|
0.8
|
0.1 %
|
|
1.0
|
0.2 %
|
|
|
|
Amortization of
acquisition-related inventory step-up
|
( D )
|
|
0.1
|
—%
|
|
—
|
—%
|
|
|
Non-GAAP gross
margin:
|
|
|
$347.0
|
56.5 %
|
|
$326.0
|
55.9 %
|
|
|
|
|
|
|
|
|
|
|
|
|
OPERATING
EXPENSES:
|
|
|
|
|
|
|
|
|
|
GAAP operating
expenses:
|
|
|
$270.0
|
44.0 %
|
|
$270.7
|
46.4 %
|
|
|
|
Restructuring
charges
|
( A )
|
|
(2.9)
|
(0.6)%
|
|
(1.8)
|
(0.3)%
|
|
|
|
Amortization of
purchased intangible assets
|
( B )
|
|
(14.3)
|
(2.3)%
|
|
(16.2)
|
(2.8)%
|
|
|
|
Stock-based
compensation
|
( C )
|
|
(12.9)
|
(2.1)%
|
|
(12.7)
|
(2.2)%
|
|
|
|
Acquisition /
divestiture items
|
( E )
|
|
(2.1)
|
(0.3)%
|
|
(1.6)
|
(0.3)%
|
|
|
|
Executive transition
costs
|
( F )
|
|
—
|
—%
|
|
(0.9)
|
(0.1)%
|
|
|
Non-GAAP operating
expenses:
|
|
|
$237.8
|
38.7 %
|
|
$237.5
|
40.7 %
|
|
|
|
|
|
|
|
|
|
|
|
|
OPERATING
INCOME:
|
|
|
|
|
|
|
|
|
|
GAAP operating
income:
|
|
|
$
56.6
|
9.2 %
|
|
$
29.9
|
5.1 %
|
|
|
|
Restructuring
charges
|
( A )
|
|
3.4
|
0.7 %
|
|
2.1
|
0.4 %
|
|
|
|
Amortization of
purchased intangible assets
|
( B )
|
|
33.3
|
5.4 %
|
|
40.3
|
6.8 %
|
|
|
|
Stock-based
compensation
|
( C )
|
|
13.7
|
2.2 %
|
|
13.7
|
2.4 %
|
|
|
|
Amortization of
acquisition-related inventory step-up
|
( D )
|
|
0.1
|
—%
|
|
—
|
—%
|
|
|
|
Acquisition /
divestiture items
|
( E )
|
|
2.1
|
0.3 %
|
|
1.6
|
0.3 %
|
|
|
|
Executive transition
costs
|
( F )
|
|
—
|
—%
|
|
0.9
|
0.1 %
|
|
|
Non-GAAP operating
income:
|
|
|
$109.2
|
17.8 %
|
|
$
88.5
|
15.1 %
|
|
|
|
|
|
|
|
|
|
|
|
|
NON-OPERATING
INCOME (EXPENSE), NET:
|
|
|
|
|
|
|
|
|
|
GAAP non-operating
income (expense), net:
|
|
|
$
9.0
|
|
|
$
(0.5)
|
|
|
|
|
Acquisition /
divestiture items
|
( E )
|
|
(8.1)
|
|
|
(3.1)
|
|
|
|
Non-GAAP
non-operating income (expense), net:
|
|
|
$
0.9
|
|
|
$
(3.6)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP and
|
|
|
GAAP and
|
|
|
|
|
|
|
|
Non-GAAP
|
|
|
Non-GAAP
|
|
|
|
|
|
|
|
Tax Rate %
|
( I )
|
|
Tax Rate %
|
( I )
|
INCOME TAX
PROVISION:
|
|
|
|
|
|
|
|
|
|
GAAP income tax
provision:
|
|
|
$
15.1
|
23 %
|
|
$
9.7
|
33 %
|
|
|
|
Non-GAAP items tax
effected
|
( G )
|
|
10.2
|
|
|
18.3
|
|
|
|
|
Difference in GAAP
and Non-GAAP tax rate
|
( H )
|
|
—
|
|
|
(7.5)
|
|
|
|
Non-GAAP income tax
provision:
|
|
|
$
25.3
|
23 %
|
|
$
20.5
|
24 %
|
|
|
|
|
|
|
|
|
|
|
|
|
NET
INCOME:
|
|
|
|
|
|
|
|
|
|
GAAP net income
attributable to Trimble Inc.
|
|
|
$
50.5
|
|
|
$
19.8
|
|
|
|
|
Restructuring
charges
|
( A )
|
|
3.4
|
|
|
2.1
|
|
|
|
|
Amortization of
purchased intangible assets
|
( B )
|
|
33.3
|
|
|
40.3
|
|
|
|
|
Stock-based
compensation
|
( C )
|
|
13.7
|
|
|
13.7
|
|
|
|
|
Amortization of
acquisition-related inventory step-up
|
( D )
|
|
0.1
|
|
|
—
|
|
|
|
|
Acquisition /
divestiture items
|
( E )
|
|
(6.0)
|
|
|
(1.5)
|
|
|
|
|
Executive transition
costs
|
( F )
|
|
—
|
|
|
0.9
|
|
|
|
|
Non-GAAP tax
adjustments
|
( G ) + ( H
)
|
|
(10.2)
|
|
|
(10.8)
|
|
|
|
Non-GAAP net income
attributable to Trimble Inc.
|
|
|
$
84.8
|
|
|
$
64.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
DILUTED NET INCOME
PER SHARE:
|
|
|
|
|
|
|
|
|
|
GAAP diluted net
income per share attributable to Trimble Inc.
|
|
|
$
0.20
|
|
|
$
0.08
|
|
|
|
|
Restructuring
charges
|
( A )
|
|
0.01
|
|
|
0.01
|
|
|
|
|
Amortization of
purchased intangible assets
|
( B )
|
|
0.13
|
|
|
0.16
|
|
|
|
|
Stock-based
compensation
|
( C )
|
|
0.05
|
|
|
0.05
|
|
|
|
|
Amortization of
acquisition-related inventory step-up
|
( D )
|
|
—
|
|
|
—
|
|
|
|
|
Acquisition /
divestiture items
|
( E )
|
|
(0.02)
|
|
|
(0.01)
|
|
|
|
|
Executive transition
costs
|
( F )
|
|
—
|
|
|
—
|
|
|
|
|
Non-GAAP tax
adjustments
|
( G ) + ( H
)
|
|
(0.04)
|
|
|
(0.04)
|
|
|
|
Non-GAAP diluted net
income per share attributable to Trimble Inc.
|
|
|
$
0.33
|
|
|
$
0.25
|
|
|
|
FOOTNOTES TO GAAP
TO NON-GAAP RECONCILIATION
|
|
(Unaudited)
|
|
Our non-GAAP measures
are not meant to be considered in isolation or as a substitute for
comparable GAAP measures. The non-GAAP financial measures included
in the previous table as well as detailed explanations to the
adjustments to comparable GAAP measures, are set forth
below:
|
|
Non-GAAP gross
margin
We believe our investors benefit by understanding our non-GAAP
gross margin as a way of understanding how product mix, pricing
decisions and manufacturing costs influence our business.
Non-GAAP gross margin excludes restructuring charges, amortization
of purchased intangible assets, stock-based compensation and
amortization of acquisition-related inventory step-up from GAAP
gross margin. We believe that these exclusions offer investors
additional information that may be useful to view trends in our
gross margin performance.
|
|
Non-GAAP operating
expenses
We believe this measure is important to investors evaluating our
non-GAAP spending in relation to revenue. Non-GAAP operating
expenses exclude restructuring charges, amortization of purchased
intangible assets, stock-based compensation,
acquisition/divestiture costs associated with external and
incremental costs resulting directly from merger and acquisition
activities such as legal, due diligence, and integration costs, and
executive transition costs from GAAP operating expenses. We believe
that these exclusions offer investors supplemental information to
facilitate comparison of our operating expenses to our prior
results.
|
|
Non-GAAP operating
income
We believe our investors benefit by understanding our non-GAAP
operating income trends which are driven by revenue, gross margin,
and spending. Non-GAAP operating income excludes restructuring
charges, amortization of purchased intangible assets, stock-based
compensation, amortization of acquisition-related inventory
step-up, acquisition/divestiture costs associated with external and
incremental costs resulting directly from merger and acquisition
activities such as legal, due diligence, and integration costs, and
executive transition costs. We believe that these exclusions offer
an alternative means for our investors to evaluate current
operating performance compared to results of other
periods.
|
|
Non-GAAP
non-operating income (expense), net
We believe this measure helps investors evaluate our non-operating
income trends. Non-GAAP non-operating income (expense), net
excludes acquisition/divestiture gains/losses associated with
unusual acquisition related items such as intangible asset
impairment charges and gains or losses related to the acquisition
or sale of certain businesses and investments. We believe that
these exclusions provide investors with a supplemental view of our
ongoing financial results.
|
|
Non-GAAP income tax
provision
We believe that providing investors with the non-GAAP income tax
provision is beneficial because it provides for consistent
treatment of the excluded items in our non-GAAP
presentation.
|
|
Non-GAAP net
income
This measure provides a supplemental view of net income trends
which are driven by non-GAAP income before taxes and our non-GAAP
tax rate. Non-GAAP net income excludes restructuring charges,
amortization of purchased intangible assets, stock-based
compensation, amortization of acquisition-related inventory
step-up, acquisition/divestiture costs, executive transition costs,
and non-GAAP tax adjustments from GAAP net income. We believe our
investors benefit from understanding these exclusions and from an
alternative view of our net income performance as compared to our
past net income performance.
|
|
Non-GAAP diluted net
income per share
We believe our investors benefit by understanding our non-GAAP
operating performance as reflected in a per share calculation as a
way of measuring non-GAAP operating performance by ownership in the
company. Non-GAAP diluted net income per share excludes
restructuring charges, amortization of purchased intangible assets,
stock-based compensation, amortization of acquisition-related
inventory step-up, acquisition/divestiture costs, executive
transition costs, and non-GAAP tax adjustments from GAAP diluted
net income per share. We believe that these exclusions offer
investors a useful view of our diluted net income per share as
compared to our past diluted net income per share.
|
|
These non-GAAP
measures can be used to evaluate our historical and prospective
financial performance, as well as our performance relative to
competitors. We believe some of our investors track our "core
operating performance" as a means of evaluating our performance in
the ordinary, ongoing, and customary course of our operations. Core
operating performance excludes items that are non-cash, not
expected to recur or not reflective of ongoing financial
results. Management also believes that looking at our core
operating performance provides a supplemental way to provide
consistency in period to period comparisons. Accordingly,
management excludes from non-GAAP those items relating to
restructuring charges, amortization of purchased intangible assets,
stock-based compensation, amortization of acquisition-related
inventory step-up, acquisition/divestiture costs, executive
transition costs, litigation expenses and non-GAAP tax
adjustments. For detailed explanations of the adjustments
made to comparable GAAP measures, see items (A) - ( I )
below.
|
|
( A )
|
Restructuring
charges. Included in our GAAP presentation of cost of sales and
operating expenses, restructuring charges recorded are primarily
for employee compensation resulting from reductions in employee
headcount in connection with our company restructurings. We
exclude restructuring charges from our non-GAAP measures because we
believe they do not reflect expected future operating expenses,
they are not indicative of our core operating performance, and they
are not meaningful in comparisons to our past operating
performance. We have incurred restructuring expense in each
of the periods presented. However the amount incurred can
vary significantly based on whether a restructuring has occurred in
the period and the timing of headcount reductions.
|
|
( B )
|
Amortization of
purchased intangible assets. Included in our GAAP presentation
of gross margin and operating expenses is amortization of purchased
intangible assets. U.S. GAAP accounting requires that intangible
assets are recorded at fair value and amortized over their useful
lives. Consequently, the timing and size of our acquisitions will
cause our operating results to vary from period to period, making a
comparison to past performance difficult for investors. This
accounting treatment may cause differences when comparing our
results to companies that grow internally because the fair value
assigned to the intangible assets acquired through acquisition may
significantly exceed the equivalent expenses that a company may
incur for similar efforts when performed internally. Furthermore,
the useful life that we use to amortize our intangible assets over
may be substantially different from the time period that an
internal growth company incurs and recognizes such expenses. We
believe that by excluding the amortization of purchased intangible
assets, which primarily represents technology and/or customer
relationships already developed, it provides an alternative way for
investors to compare our operations pre-acquisition to those
post-acquisitions and to those of our competitors that have pursued
internal growth strategies. However, we note that companies that
grow internally will incur costs to develop intangible assets that
will be expensed in the period incurred, which may make a direct
comparison more difficult.
|
|
( C )
|
Stock-based
compensation. Included in our GAAP presentation of cost of
sales and operating expenses, stock-based compensation consists of
expenses for employee stock options and awards and purchase rights
under our employee stock purchase plan. We exclude stock-based
compensation expense from our non-GAAP measures because some
investors may view it as not reflective of our core operating
performance as it is a non-cash expense. For the first
quarter of fiscal years 2017 and 2016, stock-based compensation was
allocated as follows:
|
|
|
|
|
|
|
|
First Quarter
of
|
|
|
(Dollars in millions)
|
|
2017
|
|
2016
|
|
|
Cost of sales
|
|
$
0.8
|
|
$
1.0
|
|
|
Research and development
|
|
2.4
|
|
2.3
|
|
|
Sales and marketing
|
|
2.2
|
|
2.0
|
|
|
General and administrative
|
|
8.3
|
|
8.4
|
|
|
|
|
$
13.7
|
|
$
13.7
|
|
|
|
( D )
|
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. Included in our GAAP
presentation of cost of sales, 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 it is a non-cash expense that we do not
believe is indicative of our ongoing operating results. We further
believe that excluding this item from our non-GAAP results is
useful to investors in that it allows for period-over-period
comparability.
|
|
( E )
|
Acquisition /
divestiture items. Included in our GAAP presentation of
operating expenses, acquisition costs consist of external and
incremental costs resulting directly from merger and acquisition
and strategic investment activities such as legal, due diligence,
and integration costs, as well as adjustments to the fair value of
earn-out liabilities. Included in our GAAP presentation of
non-operating income (expense), net, acquisition / divestiture
items includes unusual acquisition, investment, and/or divestiture
gains/losses. Although we do numerous acquisitions, the costs that
have been excluded from the non-GAAP measures are costs specific to
particular acquisitions. These are one-time costs that vary
significantly in amount and timing and are not indicative of our
core operating performance.
|
|
( F )
|
Executive
transition costs. Included in our GAAP presentation of
operating expenses are amounts paid to the Company's former CFO
upon his departure under the terms of his executive severance
agreement. We excluded these payments from our non-GAAP measures
because they represent non-recurring expenses and are not
indicative of our ongoing operating expenses. We further believe
that excluding the executive transition costs from our non-GAAP
results is useful to investors in that it allows for
period-over-period comparability.
|
|
( G )
|
Non-GAAP items tax
effected. This amount adjusts the provision for income
taxes to reflect the effect of the non-GAAP items ( A ) - ( F ) on
non-GAAP net income. We believe this information is useful to
investors because it provides for consistent treatment of the
excluded items in this non-GAAP presentation.
|
|
( H )
|
Difference in GAAP
and Non-GAAP tax rate. This amount represents the
difference between the GAAP and Non-GAAP tax rates applied to the
Non-GAAP operating income plus the Non-GAAP non-operating
income (expense), net.
|
|
( I )
|
GAAP and non-GAAP
tax rate %. These percentages are defined as GAAP income tax
provision as a percentage of GAAP income before taxes and non-GAAP
income tax provision as a percentage of non-GAAP income before
taxes. We believe that investors benefit from a presentation of
non-GAAP tax rate percentage as a way of facilitating a comparison
to non-GAAP tax rates in prior periods.
|
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/trimble-reports-first-quarter-2017-results-300447492.html
SOURCE Trimble