Trimble Reports Fourth Quarter and Fiscal 2012 Results

- Fourth Quarter 2012 Revenue $515.5 Million, Up 18 percent; Non-GAAP Diluted Earnings Per Share $0.57

(PRNewswire) — Trimble (NASDAQ: TRMB) today announced fourth quarter and fiscal year end results.

Fourth Quarter 2012

Fourth quarter 2012 revenue of $515.5 million was up 18 percent as compared to the fourth quarter of 2011.

GAAP operating income for the fourth quarter of 2012 was $30.3 million, up 6 percent as compared to the fourth quarter of 2011. GAAP operating margin in the fourth quarter of 2012 was 5.9 percent of revenue as compared to 6.6 percent of revenue in the fourth quarter of 2011.

GAAP net income for the fourth quarter of 2012 was $33.2 million, up 13 percent as compared to the fourth quarter of 2011. Diluted earnings per share in the fourth quarter of 2012 were $0.26 as compared to diluted earnings per share of $0.23 in the fourth quarter of 2011. The tax rate was 16 percent for the fourth quarter of 2012 as compared to 8 percent in the fourth quarter of 2011.

Fourth quarter 2012 non-GAAP operating income of $85.1 million was up 24 percent as compared to the fourth quarter of 2011. Non-GAAP operating margin was 16.5 percent of revenue as compared to 15.8 percent of revenue in the fourth quarter of 2011.

Non-GAAP net income of $73.4 million for the fourth quarter of 2012 was up 8 percent as compared to the fourth quarter of 2011. Diluted non-GAAP earnings per share in the fourth quarter of 2012 were $0.57 as compared to diluted non-GAAP earnings per share of $0.54 in the fourth quarter of 2011.

Fourth quarter 2012 non-GAAP results are adjusted for the following:

Restructuring expense of $350 thousand as compared to $644 thousand in the fourth quarter of 2011;
Amortization of intangibles of $36.4 million as compared to $29.2 million in the fourth quarter of 2011;
Stock-based compensation expense of $9.0 million as compared to $7.4 million in the fourth quarter of 2011;
Acquisition-related inventory step-up charge of $1.7 million as compared to $739 thousand in the fourth quarter of 2011;
Acquisition-related costs net of divestiture gain of $467 thousand as compared to $1.9 million in the fourth quarter of 2011;
No gain or loss on foreign currency exchange from a hedge associated with an acquisition as compared to a loss of $1.7 million in the fourth quarter of 2011;
Debt-issuance write-off of $82 thousand versus no debt-issuance write-off in the fourth quarter of 2011.

Fiscal 2012

Fiscal 2012 revenue of $2.0 billion was up 24 percent as compared to the fiscal 2011.

GAAP operating income for fiscal 2012 was $212.6 million, up 36 percent as compared to fiscal 2011. GAAP operating margin for fiscal 2012 was 10.4 percent of revenue as compared to 9.5 percent of revenue in fiscal 2011.

GAAP net income for fiscal 2012 was $191.1 million, up 27 percent as compared to fiscal 2011. Diluted earnings per share in the year of 2012 were $1.49 as compared to diluted earnings per share of $1.20 in fiscal 2011. The tax rate was 17 percent for fiscal 2012 as compared to a tax rate of 11 percent for fiscal 2011.

Fiscal 2012 non-GAAP operating income of $397.3 million was up 36 percent as compared to fiscal 2011. Non-GAAP operating margin was 19.5 percent of revenue as compared to 17.8 percent of revenue in fiscal 2011. Improvements in non-GAAP operating margin were due to leverage on higher revenue, product mix and acquisitions.

Non-GAAP net income of $339.6 million for fiscal 2012 was up 25 percent as compared to fiscal 2011. Fiscal 2012 diluted, non-GAAP earnings per share were $2.65 as compared to diluted non-GAAP earnings per share of $2.15 in fiscal 2011.

Fiscal 2012 non-GAAP results are adjusted for the following:

Restructuring expense of $2.4 million as compared to $2.8 million in fiscal 2011;
Amortization of intangibles of $125.7 million as compared to $85.9 million in fiscal 2011;
Stock-based compensation expense of $32.7 million as compared to $28.5 million in fiscal 2011;
Acquisition-related inventory step-up charge of $2.4 million as compared to $3.8 million in fiscal 2011;
Acquisition-related costs net of divestiture gain of $14.4 million as compared to $14.6 million in fiscal 2011;
Foreign currency exchange loss of $1.6 million associated with an acquisition as compared to a gain of $1.8 million in fiscal 2011;
Debt-issuance write-off of $82 thousand versus $377 thousand debt-issuance write-off in fiscal 2011.

"Our quarterly results were consistent with our expectations in an environment that remains volatile. In the U.S. we saw a clear improvement in commercial and residential construction markets which was offset by a general tendency late in the year to defer investment decisions pending better clarity on the outcome of government budget actions," said Steven W. Berglund, Trimble's president and chief executive officer. "Conditions in Europe remained difficult while most other regions continued to be comparatively healthy. Our outlook for 2013 remains that of healthy growth although it is conditioned upon the state of volatility in the U.S. and Europe."

Results by Segment

Segment operating income is revenue less cost of sales and operating expenses, excluding general corporate expenses, restructuring expenses, amortization of intangibles, amortization of acquisition-related inventory step-up charges and acquisition costs. Non-GAAP segment operating income also excludes the impact of stock-based compensation expense.

Engineering and Construction (E&C)

Fourth quarter 2012 E&C revenue was $269.1 million, up 13 percent as compared to the fourth quarter of 2011. Growth in E&C revenue came primarily from sales of heavy and highway and building construction solutions, as well as acquisitions.

Fourth quarter operating income in E&C was $39.2 million, or 14.6 percent of revenue as compared to $36.6 million, or 15.3 percent of revenue in the fourth quarter of 2011. Non-GAAP operating income was $42.4 million, or 15.8 percent of revenue, as compared to $39.4 million, or 16.5 percent of revenue, in the fourth quarter of 2011. Non-GAAP operating margin was down primarily due to operating expenses associated with Trimble Dimensions, Trimble's biannual user conference.

Fiscal 2012 E&C revenue was $1.1 billion, up 20 percent as compared to fiscal 2011. Growth in E&C revenue came from revenue growth across all major product categories as well as contributions from acquisitions.

Fiscal 2012 operating income in E&C was $207.2 million or 19.0 percent of revenue, as compared to $149.0 million, or 16.4 percent of revenue in fiscal 2011. Fiscal 2012 non-GAAP operating income was $219.1 million, or 20.1 percent of revenue, as compared to $159.2 million, or 17.6 percent of revenue, in fiscal 2011. Non-GAAP operating margin increased primarily due to leverage on higher revenue and product mix.

Field Solutions

Fourth quarter 2012 Field Solutions revenue was $108.1 million, up 13 percent as compared to the fourth quarter of 2011 due primarily to increased sales of agricultural products.

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