Trimble Reports Fourth Quarter and Fiscal 2010 Results; Fourth Quarter 2010 Revenue Up 17 Percent, Non-GAAP EPS $0.46

(PRNewswire) — Trimble (Nasdaq: TRMB) today announced fourth quarter and fiscal 2010 financial results.  

Fourth Quarter 2010 Results

Fourth quarter 2010 revenue of $323.3 million was up 17 percent as compared to the fourth quarter of 2009.  

Operating income for the fourth quarter of 2010 was $19.3 million, up 52 percent as compared to the fourth quarter of 2009.  Operating margin in the fourth quarter of 2010 was 6.0 percent, as compared to an operating margin of 4.6 percent in the fourth quarter of 2009.  

Fourth quarter 2010 non-GAAP operating income of $46.4 million was up 37 percent as compared to the fourth quarter of 2009 and non-GAAP operating margin was 14.3 percent compared to 12.2 percent in the fourth quarter of 2009.  

Fourth quarter 2010 net income was $36.6 million, up 283 percent as compared to the fourth quarter of 2009.  Diluted earnings per share in the fourth quarter of 2010 were $0.29 as compared to diluted earnings per share of $0.08 in the fourth quarter of 2009.  

Non-GAAP net income of $57.1 million for the fourth quarter of 2010 was up 126 percent as compared to the fourth quarter of 2009.  Diluted non-GAAP earnings per share in the fourth quarter of 2010 were $0.46 as compared to diluted non-GAAP earnings per share of $0.21 in the fourth quarter of 2009.  It should be noted that in the fourth quarter of 2010 there was a non-GAAP tax benefit of 14 percent versus a tax rate of 27 percent in the fourth quarter of 2009.  The benefit was primarily driven by the geographical mix of profits and a catch up on research and development tax credits due to legislation passed in the fourth quarter of 2010.  

Fourth quarter 2010 non-GAAP results exclude:

  • Restructuring expense of  $641 thousand as compared to $1.6 million in the fourth quarter of 2009;
  • Amortization of intangibles of $15.5 million as compared to $13.7 million in the fourth quarter of 2009;
  • Stock-based compensation expense of $7.0 million as compared to $5.3 million in the fourth quarter of 2009;
  • Acquisition-related inventory step-up charge of $588 thousand as compared to no charge in the fourth quarter of 2009;
  • Non-recurring acquisition-related cost of $3.5 million as compared to $826 thousand in the fourth quarter of 2009 and;
  • Non-recurring income tax benefit for a valuation allowance release of $7.6 million as compared to no benefit in the fourth quarter of 2009.

Fiscal 2010 Results

Revenue for fiscal 2010 was $1.3 billion, up 15 percent as compared to fiscal 2009.

Operating income for fiscal 2010 was $127.6 million, up 49 percent as compared to fiscal 2009.  Operating margin in fiscal 2010 was 9.9 percent, as compared to an operating margin of 7.6 percent in fiscal 2009.

Fiscal 2010 non-GAAP operating income of $217.7 million was up 27 percent as compared to fiscal 2009 and non-GAAP operating margin was 16.8 percent as compared to 15.3 percent in fiscal 2009.  

Fiscal 2010 net income was $103.7 million, up 63 percent, as compared to fiscal 2009.  Diluted earnings per share in fiscal 2010 were $0.84, as compared to diluted earnings per share of $0.52 in fiscal 2009.

Fiscal 2010 non-GAAP net income of $199.5 million was up 58 percent, as compared to fiscal 2009. Diluted non-GAAP earnings per share in fiscal 2010 were $1.61 as compared to diluted non-GAAP earnings per share of $1.04 in 2009.  The non-GAAP tax rate for fiscal 2010 was 13 percent compared to 27 percent in fiscal 2009 due to the IRS settlement in the second quarter of 2010, which resulted in an ongoing lower tax rate, and the geographical mix of profits.

Fiscal 2010 non-GAAP results exclude:

  • Restructuring expense of $2.0 million as compared to $10.8 million in fiscal 2009;
  • Amortization of intangibles of $57.6 million as compared to $52.5 million in fiscal 2009;
  • Stock-based compensation expense of $23.1 million as compared to $18.7 million in fiscal 2009;
  • Acquisition-related inventory step-up charge of $728 thousand  as compared to $470 thousand in fiscal 2009;
  • Non-recurring acquisition-related costs of $3.4 million as compared to $3.8 million in 2009 and;
  • Non-recurring income tax charge of $27.5 million associated with the IRS settlement in the second quarter of 2010, partially offset by a tax benefit of $7.6 million associated with a valuation allowance release in the fourth quarter of 2010 as compared to no charge or benefit in 2009.

“We enter 2011 with confidence that we can demonstrate meaningful growth for the year,” said Steven W. Berglund, Trimble’s president and chief executive officer.  “Both the Engineering and Construction and Field Solutions segments are well positioned to generate growth.  In addition, we anticipate the Mobile Solutions segment, which did not meet our expectations in 2010, will also demonstrate growth and improving profitability during 2011.”

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, amortization of acquisition-related inventory step-up charges and non-recurring acquisition costs.  Non-GAAP segment operating income also excludes the impact of stock-based compensation expense.

Engineering and Construction (E&C)

Fourth quarter 2010 E&C revenue was $183.4 million, up 19 percent as compared to the fourth quarter of 2009, with growth driven by sales of products related to heavy and highway construction. 

Operating income in E&C for the fourth quarter 2010 was $21.6 million, or 11.8 percent of revenue, as compared to $15.5 million, or 10.0 percent of revenue, in the fourth quarter of 2009.  Non-GAAP operating income was $24.0 million, or 13.1 percent of revenue, as compared to $17.5 million, or 11.3 percent of revenue, in the fourth quarter of 2009.  The improvement in non-GAAP operating margin was due to operating leverage from increased revenue, partially offset by increased sales and marketing expenses primarily attributable to the Trimble Dimensions User Conference.

Fiscal 2010 E&C revenue was $719.1 million, up 24 percent as compared to fiscal 2009, with growth being across the product lines.  

Operating income in E&C for fiscal 2010 was $111.0 million, or 15.4 percent of revenue, as compared to $58.3 million, or 10.1 percent of revenue, in fiscal 2009.  Non-GAAP operating income was $118.9 million, or 16.5 percent of revenue, as compared to $64.6 million, or 11.2 percent of revenue, in fiscal 2009.  The improvement in non-GAAP operating margin was due to operating leverage from increased revenue.

Field Solutions

Fourth quarter 2010 Field Solutions revenue was $74.8 million, up 31 percent as compared to the fourth quarter of 2009 primarily due to strong sales of agricultural products.

Fourth quarter 2010 Field Solutions operating income was $27.1 million, or 36.1 percent of revenue, as compared to $15.9 million, or 27.8 percent of revenue, in the fourth quarter of 2009.  Non-GAAP operating income was $27.6 million, or 36.9 percent of revenue, as compared to $16.2 million, or 28.3 percent of revenue, in the fourth quarter of 2009. 

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