Trimble Reports Second Quarter 2016 Results

- Second Quarter 2016 Revenue $609.6 Million

(PRNewswire) —  Trimble (NASDAQ: TRMB) today announced financial results for the second quarter of 2016.

Second Quarter 2016 Financial Summary

Second quarter 2016 revenue of $609.6 million was up 4 percent as compared to the second quarter of 2015. Engineering and Construction revenue was $351.2 million, up 4 percent. Field Solutions revenue was $87.1 million, approximately flat. Mobile Solutions revenue was $138.1 million, up 8 percent. Advanced Devices revenue was $33.2 million, up 4 percent. Foreign currency translation had a neutral impact on company revenue compared to the second quarter of 2015. 

GAAP operating income was $40.5 million, up 13 percent as compared to the second quarter of 2015. GAAP operating margin was 6.7 percent of revenue as compared to 6.1 percent of revenue in the second quarter of 2015.   

GAAP net income was $35.7 million, up 38 percent as compared to the second quarter of 2015. Diluted GAAP earnings per share were $0.14 as compared to diluted GAAP earnings per share of $0.10 in the second quarter of 2015.

Non-GAAP operating income of $99.0 million was up 2 percent as compared to the second quarter of 2015. Non-GAAP operating margin was 16.2 percent of revenue as compared to 16.6 percent of revenue in the second quarter of 2015.

Non-GAAP net income of $74.1 million was flat as compared to the second quarter of 2015. Diluted non-GAAP earnings per share were $0.29 as compared to diluted non-GAAP earnings per share of $0.28 in the second quarter of 2015.

The GAAP tax rate for the quarter was 7 percent as compared to 28 percent in the second quarter of 2015, and the non-GAAP tax rate was 24 percent, unchanged from the second quarter of 2015. 

Operating cash flow for the first two quarters of 2016 was $192.5 million, down 6 percent as compared to the first two quarters of 2015. Deferred revenue for the second quarter of 2016 was $315.2 million, up 10 percent as compared to the second quarter of 2015.

During the second quarter, Trimble repurchased approximately $80 million of its common stock, and has repurchased approximately $92 million of its common stock year to date. Approximately $158 million remains under the current share repurchase authorization as of the end of the second quarter.

"Second quarter results were consistent with expectations and reinforced the trend towards higher revenue growth," said Steven W. Berglund, Trimble's president and chief executive officer. "Although Brexit and the outcome of the US elections have introduced new uncertainties, we continue to anticipate higher growth in the second half of 2016 which is expected to carry into 2017. Higher revenue growth, combined with our cost and portfolio rationalization efforts, will enable operating margin expansion."

Forward Looking Guidance

For the third quarter of 2016 Trimble expects revenue to be between $587 million and $617 million with GAAP earnings per share of $0.11 to $0.16 and non-GAAP earnings per share of $0.28 to $0.33. Non-GAAP guidance excludes the amortization of intangibles of $37 million related to previous acquisitions, anticipated acquisition costs of $1 million, the anticipated impact of stock-based compensation expense of $14 million, and $5 million in anticipated restructuring charges. GAAP guidance assumes a tax rate of 26 percent and non-GAAP guidance assumes a tax rate of 24 percent. Both GAAP and non-GAAP earnings per share assume approximately 253 million shares outstanding.

Investor Conference Call / Webcast Details

Trimble will hold a conference call on August 2 at 2:00 p.m. PT to review its second quarter 2016 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 53406055. 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.

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 impact of acquisitions, the ability to deliver revenue, earnings per share and other financial projections that Trimble has guided for the third quarter and full year, 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. 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 agricultural 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.

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