form10q.htm
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
10-Q
(Mark
One)
x QUARTERLY
REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED APRIL 3, 2009
OR
o TRANSITION
REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM __________ TO __________
Commission
file number: 001-14845
TRIMBLE
NAVIGATION LIMITED
(Exact
name of registrant as specified in its charter)
California
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94-2802192
|
(State
or other jurisdiction of incorporation or organization)
|
(I.R.S.
Employer Identification
Number)
|
935
Stewart Drive, Sunnyvale, CA 94085
(Address
of principal executive offices) (Zip Code)
Telephone Number (408)
481-8000
(Registrant's
telephone number, including area code)
Indicate
by check mark whether the registrant (1) has filed all reports required to be
filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the registrant was required
to file such reports), and (2) has been subject to such filing requirements for
the past 90 days.
Yes x
No o
Indicate
by check mark whether the registrant has submitted electronically and posted on
its corporate Web site, if any, every Interactive Data File required to be
submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this
chapter) during the preceding 12 months (or for such shorter period that the
registrant was required to submit and post such files).
Yes o No o
Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting company. See
definition of “large accelerated filer”, “accelerated filer” and “smaller
reporting company” in Rule 12b-2 of the Exchange Act. (Check one):
Large
Accelerated Filer
|
x
|
|
Accelerated
Filer
|
o
|
Non-accelerated
Filer
|
o
|
(Do
not check if a smaller reporting company)
|
Smaller
Reporting Company
|
o
|
Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Exchange Act).
Yes o No x
As
of May 7, 2009, there were 119,522,998 shares of Common Stock (no par
value) outstanding.
FORM
10-Q for the Quarter Ended April 3, 2009
TABLE
OF CONTENTS
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PART
I.
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Financial
Information
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Page
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ITEM
1.
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3
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4
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5
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6
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ITEM
2.
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18
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ITEM
3.
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27
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ITEM
4.
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27
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PART
II.
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Other
Information
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ITEM
1.
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27
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ITEM
1A.
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27
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ITEM
6.
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28
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28
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PART I – FINANCIAL INFORMATION
ITEM
1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
TRIMBLE
NAVIGATION LIMITED
CONDENSED
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
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April 3,
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January 2,
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2009
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2009
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(Dollars in
thousands)
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ASSETS
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Current assets:
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Cash and cash
equivalents
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$
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146,827
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$
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147,531
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Accounts receivable,
net
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220,404
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204,269
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Other
receivables
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7,382
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17,540
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Inventories,
net
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165,413
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160,893
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Deferred income
taxes
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40,015
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41,810
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Other current
assets
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17,664
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16,404
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Total current
assets
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597,705
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588,447
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Property and equipment,
net
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48,458
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50,175
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Goodwill
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723,252
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715,571
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Other purchased intangible assets,
net
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222,752
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228,901
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Other non-current
assets
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49,944
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51,922
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Total
assets
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$
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1,642,111
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$
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1,635,016
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LIABILITIES
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Current
liabilities:
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Current portion of long-term
debt
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$
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196
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$
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124
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Accounts
payable
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62,131
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49,611
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Accrued compensation and
benefits
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43,353
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41,291
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Deferred
revenue
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61,876
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55,241
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Accrued warranty
expense
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14,207
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13,332
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Other current
liabilities
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45,534
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63,719
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Total current
liabilities
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227,297
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223,318
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Noncurrent portion of long-term
debt
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151,436
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151,464
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Non-current deferred
revenue
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10,257
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12,418
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Deferred income
taxes
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38,112
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42,207
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Other non-current
liabilities
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58,763
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61,553
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Total
liabilities
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485,865
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490,960
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Commitments and
contingencies
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EQUITY
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Shareholders'
equity:
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Preferred stock no par value;
3,000 shares authorized; none outstanding
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-
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-
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Common stock, no par value;
180,000 shares authorized; 119,474 and 119,051 shares issued and
outstanding at April 3, 2009 and January 2, 2009,
respectively
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693,653
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684,831
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Retained
earnings
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445,386
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427,921
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Accumulated other comprehensive
income
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13,243
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27,649
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Total Trimble Navigation Ltd.
shareholders' equity
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1,152,282
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1,140,401
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Noncontrolling
interests
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3,964
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3,655
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Total
equity
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1,156,246
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1,144,056
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Total liabilities and
equity
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$
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1,642,111
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$
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1,635,016
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See
accompanying Notes to the Condensed Consolidated Financial
Statements.
CONDENSED
CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
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Three Months
Ended
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April 3,
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March 28,
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2009
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2008
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(Dollars in thousands, except per
share data)
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Revenue (1)
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$ |
288,954 |
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$ |
355,296 |
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Cost of sales
(1)
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144,996 |
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180,920 |
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Gross
margin
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143,958 |
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174,376 |
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Operating
expenses
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Research and
development
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34,137 |
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37,345 |
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Sales and
marketing
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48,935 |
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51,158 |
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General and
administrative
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26,042 |
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22,690 |
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Restructuring
charges
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3,623 |
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- |
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Amortization of purchased
intangible assets
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6,969 |
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5,143 |
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Total operating
expenses
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119,706 |
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116,336 |
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Operating
income
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24,252 |
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58,040 |
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Non-operating income (expense),
net
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Interest
income
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199 |
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457 |
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Interest
expense
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(493 |
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(762 |
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Foreign currency transaction gain,
net
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184 |
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968 |
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Income from joint
ventures
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168 |
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2,015 |
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Other expense,
net
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(714 |
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(907 |
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Total non-operating income
(expense), net
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(656 |
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1,771 |
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Income before
taxes
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23,596 |
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59,811 |
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Income tax
provision
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5,899 |
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19,744 |
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Net income
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17,697 |
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40,067 |
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Less: Net income attributable to
noncontrolling interests
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232 |
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- |
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Net income attributable to Trimble
Navigation Ltd.
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$ |
17,465 |
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$ |
40,067 |
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Basic earnings per
share
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$ |
0.15 |
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$ |
0.33 |
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Shares used in calculating basic
earnings per share
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119,260 |
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121,467 |
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Diluted earnings per
share
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$ |
0.14 |
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$ |
0.32 |
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Shares used in calculating diluted
earnings per share
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120,926 |
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125,159 |
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(1) Sales to Caterpillar Trimble Control Technologies
Joint Venture (CTCT) and Nikon-Trimble Joint Venture (Nikon-Trimble)
were $4.4 million and $6.5 million for the three months ended April 3, 2009 and March 28,
2008,
respectively, with
associated cost of sales to
those related
parties of $2.9 million and $4.6 million, respectively. In addition, cost of sales associated
with related party net inventory purchases was $4.5 million and $6.0 million for the three months ended
April 3, 2009 and March 28,
2008, respectively. See Note 4 regarding joint ventures for further
information about related party transactions.
See
accompanying Notes to the Condensed Consolidated Financial
Statements.
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
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Three Months
Ended
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April 3,
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March 28,
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2009
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2008
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(Dollars in
thousands)
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Cash flow from operating
activities:
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Net income
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$ |
17,697 |
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$ |
40,067 |
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Adjustments to reconcile net
income to net cash provided by operating
activities:
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Depreciation
expense
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4,463 |
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4,571 |
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Amortization
expense
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12,298 |
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10,848 |
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Provision for doubtful
accounts
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2,212 |
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38 |
|
Amortization of debt issuance
costs
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|
56 |
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56 |
|
Deferred income
taxes
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|
(1,606 |
) |
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(885 |
) |
Stock-based
compensation
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|
4,226 |
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3,982 |
|
Income from joint
ventures
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(168 |
) |
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(2,015 |
) |
Excess tax benefit for stock-based
compensation
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(21 |
) |
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|
(1,992 |
) |
Provision for excess and obsolete
inventories
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|
904 |
|
|
|
2,103 |
|
Other non-cash
items
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(2,058 |
) |
|
|
202 |
|
Add decrease (increase) in
assets:
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Accounts
receivable
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(18,712 |
) |
|
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(39,280 |
) |
Other
receivables
|
|
|
5,486 |
|
|
|
516 |
|
Inventories
|
|
|
(7,327 |
) |
|
|
(3,437 |
) |
Other current and non-current
assets
|
|
|
730 |
|
|
|
(191 |
) |
Add increase (decrease) in
liabilities:
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Accounts
payable
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|
12,682 |
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3,760 |
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Accrued compensation and
benefits
|
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|
2,391 |
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(10,557 |
) |
Accrued
liabilities
|
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|
5,801 |
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|
(1,648 |
) |
Deferred
revenue
|
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|
4,107 |
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|
2,034 |
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Income taxes
payable
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|
- |
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|
12,547 |
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Net cash provided by operating
activities
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|
43,161 |
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20,719 |
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Cash flow from investing
activities:
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Acquisitions of businesses, net of
cash acquired
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(17,294 |
) |
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(39,593 |
) |
Acquisitions of property and
equipment
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(3,261 |
) |
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|
(3,711 |
) |
Acquisitions of intangible
assets
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|
(26,001 |
) |
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|
(179 |
) |
Other
|
|
|
14 |
|
|
|
136 |
|
Net cash used in investing
activities
|
|
|
(46,542 |
) |
|
|
(43,347 |
) |
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|
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Cash flow from financing
activities:
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|
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|
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Issuances of common
stock
|
|
|
4,602 |
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|
|
8,483 |
|
Excess tax benefit for stock-based
compensation
|
|
|
21 |
|
|
|
1,992 |
|
Repurchase and retirement of
common stock
|
|
|
- |
|
|
|
(25,870 |
) |
Payments on long-term debt and
revolving credit lines
|
|
|
- |
|
|
|
(312 |
) |
Net cash provided by (used in)
financing activities
|
|
|
4,623 |
|
|
|
(15,707 |
) |
|
|
|
|
|
|
|
|
|
Effect of exchange rate changes on
cash and cash equivalents
|
|
|
(1,946 |
) |
|
|
6,512 |
|
|
|
|
|
|
|
|
|
|
Net decrease in cash and cash
equivalents
|
|
|
(704 |
) |
|
|
(31,823 |
) |
Cash and cash equivalents,
beginning of period
|
|
|
147,531 |
|
|
|
103,202 |
|
Cash and cash equivalents, end of
period
|
|
$ |
146,827 |
|
|
$ |
71,379 |
|
See
accompanying Notes to the Condensed Consolidated Financial
Statements.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS –
UNAUDITED
NOTE 1.
OVERVIEW AND BASIS OF PRESENTATION
Trimble
Navigation Limited (the Company), incorporated in California in 1981, provides
positioning solutions to commercial and government users in a large number of
markets. These markets include surveying, agriculture, construction,
asset management, mapping, and mobile resource management.
The
Company has a 52-53 week fiscal year, ending on the Friday nearest to December
31, which for fiscal 2008 was January 2, 2009. The first quarter of fiscal 2009
and fiscal 2008 ended on April 3, 2009 and March 28, 2008,
respectively. Fiscal 2009 is a 52-week year and fiscal 2008 was a
53-week year. Unless otherwise stated, all dates refer to the
Company’s fiscal year and fiscal periods.
The
Condensed Consolidated Financial Statements include the results of the Company
and its majority-owned subsidiaries. Inter-company accounts and
transactions have been eliminated. Noncontrolling interests represent
the minority shareholders’ proportionate share of the net assets and results of
operations of the Company’s majority-owned subsidiaries. The
Condensed Consolidated Balance Sheet as of January 2, 2009 is derived from the
audited Consolidated Financial Statements included in the Annual Report on Form
10-K of Trimble Navigation Limited for fiscal year 2008. Certain amounts from
prior periods have been reclassified to conform to the current period
presentation.
The
accompanying financial data as of April 3, 2009 and for the three months ended
April 3, 2009 and March 28, 2008 has been prepared by the Company, without
audit, pursuant to the rules and regulations of the Securities and Exchange
Commission. Certain information and footnote disclosures normally included in
financial statements prepared in accordance with accounting principles generally
accepted in the U.S. have been condensed or omitted pursuant to such rules and
regulations. The following discussion should be read in conjunction
with the Company’s 2008 Annual Report on Form 10-K.
In the
opinion of management, all adjustments (which include only normal recurring
adjustments) necessary to present a fair statement of financial position as of
April 3, 2009, results of operations for the three months ended April 3, 2009
and March 28, 2008 and cash flows for the three months ended April 3, 2009 and
March 28, 2008, as applicable, have been made. The results of
operations for the three months ended April 3, 2009 are not necessarily
indicative of the operating results for the full fiscal year or any future
periods. Individual segment revenue may be affected by seasonal
buying patterns and general economic conditions.
The
preparation of financial statements in accordance with accounting principles
generally accepted in the U.S. requires management to make estimates and
assumptions that affect the amounts reported in its Condensed Consolidated
Financial Statements and accompanying notes. Management bases its
estimates on historical experience and various other assumptions believed to be
reasonable. Although these estimates are based on management’s best knowledge of
current events and actions that may impact the company in the future, actual
results may be different from the estimates.
NOTE 2.
UPDATES TO SIGNIFICANT ACCOUNTING POLICIES
There
have been no changes to the Company’s significant accounting polices during the
three months ended April 3, 2009 from those disclosed in the Company’s 2008 Form
10-K.
Recent
Accounting Pronouncements
Updates
to recent accounting standards as disclosed in the Company’s Annual Report on
Form 10-K for the fiscal year ended January 2, 2009 are as follows:
In
September 2006, the FASB issued SFAS No. 157, “Fair Value Measurements,” which
clarifies the definition of fair value, establishes a framework for measuring
fair value within GAAP, and expands the disclosures regarding fair value
measurements. In February 2008, the FASB issued FASB Staff Position
No. FAS 157-2 deferring the effective date of SFAS No. 157 to fiscal years
beginning after November 15, 2008 and interim periods within those fiscal years
for nonfinancial assets and nonfinancial liabilities that are recognized or
disclosed at fair value in the financial statements on a nonrecurring
basis. The Company adopted SFAS No. 157 in its first quarter of
fiscal 2008, except for those items specifically deferred under FSP No. SFAS
157-2, which were adopted in the first quarter of fiscal 2009. The
adoption of SFAS No. 157 did not have a material impact on the Company’s
financial position, results of operations, or cash flows.
In
December 2007, the FASB issued SFAS No. 141(R), “Business Combinations”. SFAS
No. 141(R) establishes principles and requirements for how an acquirer
recognizes and measures in its financial statements the identifiable assets
acquired, the liabilities assumed and any non-controlling interest in the
acquiree, and recognizes and measures the goodwill acquired in the business
combination or a gain from a bargain purchase. SFAS No. 141(R) also
sets forth the disclosures required to be made in the financial statements to
evaluate the nature and financial effects of the business combination. SFAS No.
141(R) applies prospectively to business combinations for which the acquisition
date is on or after the beginning of the first annual reporting period beginning
on or after December 15, 2008. Accordingly, the Company adopted this standard in
its first quarter of fiscal 2009. The Company expects SFAS No. 141(R)
will have an impact on the Company’s financial position, results of operations,
or cash flows, but the nature and magnitude of the specific effects will depend
largely upon the nature and size of the Company’s business
combinations. SFAS No. 141(R) did not have a material impact in the first
quarter of fiscal 2009.
In December 2007, the FASB issued SFAS
No. 160, “Noncontrolling
Interests in Consolidated
Financial Statements, an amendment of ARB No. 51”. SFAS 160 changed the accounting and reporting for
minority interests, which were recharacterized as noncontrolling
interests and classified as a component of equity. This new consolidation
method significantly changed the accounting for transactions with
minority interest holders. SFAS 160 required retroactive adoption of the
presentation and disclosure requirements for previously existing minority interests. All other
requirements of SFAS 160 are applied prospectively. SFAS 160 is effective for fiscal years
beginning after December 15, 2008 and, as such, the Company
adopted this standard in the first quarter of fiscal
2009. The
adoption of SFAS 160 did not have a material impact on the Company’s financial
position, results of operations, or cash flows.
In March 2008, the FASB issued SFAS No.
161, “Disclosures About
Derivative Instruments and Hedging Activities - An Amendment of FASB Statement
No. 133”, which requires
enhanced disclosures about (a) how and why an entity uses derivative
instruments, (b) how derivative instruments and related hedged items are
accounted for under SFAS 133 and its related interpretations, and (c) how
derivative instruments and related hedged items affect an entity’s financial position, financial performance,
and cash flows. SFAS No. 161 is effective for financial statements issued for
fiscal years and interim periods beginning after November 15, 2008, with early
application encouraged
and, as such, the Company
adopted this standard in
the first quarter of fiscal 2009. The adoption of SFAS 161 did not
have a material impact on
the Company’s financial position, results of
operations, or cash
flows.
NOTE 3.
SHAREHOLDERS’ EQUITY
Stock
Repurchase Activities
In
January 2008, the Company’s Board of Directors authorized a stock repurchase
program (“2008 Stock Repurchase Program”), authorizing the Company to repurchase
up to $250 million of Trimble’s common stock under this program. During the three months ended March 28,
2008, the Company
repurchased approximately 968,000 shares of common stock in open market
purchases at an average price of $26.71 per share, for a total of $25.9
million. To date, the Company has repurchased
approximately 4,243,000 shares of common stock in open market purchases at an average
price of $29.67 per share, for a total of $125.9 million. The purchase
price was reflected as a decrease to common stock based on the average stated
value per share with the remainder to retained earnings. No shares of common stock were repurchased during the three months
ended April 3, 2009. Common stock repurchases under the
program were recorded based upon the trade date for accounting
purposes. All common shares repurchased under this program have been
retired. As of April 3, 2009, the 2008 Stock Repurchase Program had remaining
authorized funds of $124.1 million. The timing and actual number of
future shares repurchased will depend on a variety of factors including price,
regulatory requirements, capital availability, and other market
conditions. The program does not require the purchase of any minimum
number of shares and may be suspended or discontinued at any time without public
notice.
Stock-Based
Compensation
The
Company accounts for its employee stock options and rights to purchase shares
under its stock participation plans at fair value, in accordance with SFAS
123(R), “Share-Based Payment.” SFAS 123(R) requires stock-based compensation to
be estimated using the fair value on the date of grant using an option-pricing
model. The value of the portion of the award that is expected to vest is
recognized as expense over the related employees’ requisite service periods in
the Company’s Condensed Consolidated Statements of Income.
The
following table summarizes stock-based compensation expense, net of tax, related
to employee stock-based compensation included in the Condensed Consolidated
Statements of Income in accordance with SFAS 123(R) for the three months ended
April 3, 2009 and March 28, 2008.
|
|
Three Months
Ended
|
|
|
|
April 3,
|
|
|
March 28,
|
|
|
|
2009
|
|
|
2008
|
|
(Dollars in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of
sales
|
|
$ |
438 |
|
|
$ |
493 |
|
|
|
|
|
|
|
|
|
|
Research and
development
|
|
|
784 |
|
|
|
917 |
|
Sales and
marketing
|
|
|
1,004 |
|
|
|
1,030 |
|
General and
administrative
|
|
|
2,000 |
|
|
|
1,542 |
|
Total operating
expenses
|
|
|
3,788 |
|
|
|
3,489 |
|
|
|
|
|
|
|
|
|
|
Total stock-based compensation
expense
|
|
|
4,226 |
|
|
|
3,982 |
|
Tax benefit
(1)
|
|
|
(408 |
) |
|
|
(94 |
) |
Total stock-based compensation
expense, net of tax
|
|
$ |
3,818 |
|
|
$ |
3,888 |
|
(1) Tax benefit related to U.S.
non-qualified options and restricted stock units, applying a Federal statutory
and State (Federal effected) tax rate for the respective periods.
Options
Stock
option expense recognized during the period is based on the value of the portion
of the stock option that is expected to vest during the period. The fair value
of each stock option is estimated on the date of grant using a binomial
valuation model. The Black-Scholes model was used to value those options granted
prior to the fourth quarter of fiscal 2005. Similar to the Black-Scholes model,
the binomial model takes into account variables such as volatility, dividend
yield rate, and risk free interest rate. For options granted during the three
months ended April 3, 2009 and March 28, 2008, the following weighted average
assumptions were used:
|
|
|
|
|
|
Three Months
Ended
|
|
|
|
April 3,
|
|
|
March 28,
|
|
|
|
2009
|
|
|
2008
|
|
Expected dividend
yield
|
|
|
-- |
|
|
|
-- |
|
Expected stock price
volatility
|
|
|
48.8 |
% |
|
|
35.9 |
% |
Risk free interest
rate
|
|
|
2.4 |
% |
|
|
4.7 |
% |
Expected life of
option
|
|
3.92 years
|
|
|
4.1 years
|
|
Expected Dividend Yield – The
dividend yield assumption is based on the Company’s history and expectation of
dividend payouts.
Expected Stock Price
Volatility – The Company’s computation of expected volatility is based on
a combination of implied volatilities from traded options on the Company’s stock
and historical volatility, commensurate with the expected life of the stock
options.
Expected Risk Free Interest
Rate – The risk-free interest rate is based on the U.S. Treasury yield
curve in effect at the time of grant for the expected life of the stock
options.
Expected Life Of Option – The
Company’s expected life represents the period that the Company’s stock options
are expected to be outstanding and is determined based on historical experience
of similar stock options with consideration to the contractual terms of the
stock options, vesting schedules, and expectations of future employee
behavior.
NOTE 4.
JOINT VENTURES
Caterpillar
Trimble Control Technologies Joint Venture
On April
1, 2002, Caterpillar Trimble Control Technologies LLC (CTCT), a joint venture
formed by the Company and Caterpillar, began operations. CTCT develops advanced
electronic guidance and control products for earth moving machines in the
construction and mining industries. The joint venture is 50% owned by the
Company and 50% owned by Caterpillar, with equal voting rights. The joint
venture is accounted for under the equity method of accounting. Under the equity
method, the Company’s share of profits and losses are included in Income from
joint ventures in the Non-operating income (expense), net section of the
Condensed Consolidated Statements of Income. During the three months
ended April 3, 2009, the Company recorded $0.7 million as its proportionate
share of CTCT net income. During the comparable period of 2008, the
Company recorded $1.8 million, as its proportionate share of CTCT net
income. During the fiscal quarters ended April 3, 2009 and March 28,
2008, there were no dividends received from CTCT. The carrying amount
of the investment in CTCT was $7.7 million at April 3, 2009 and $7.0 million at
January 2, 2009, and is included in Other non-current assets on the Condensed
Consolidated Balance Sheets.
The
Company acts as a contract manufacturer for CTCT. Products are
manufactured based on orders received from CTCT and are sold at direct cost,
plus a mark-up for the Company’s overhead costs to CTCT. CTCT then
resells products at cost, plus a mark-up in consideration for CTCT’s research
and development efforts to both Caterpillar and to the Company for sales through
their respective distribution channels. Generally, the Company sells products
through its after-market dealer channel, and Caterpillar sells products for
factory and dealer installation. CTCT does not have net inventory on
its balance sheet in that the resale of products to Caterpillar and the Company
occur simultaneously when the products are purchased from the
Company. During the three months ended April 3, 2009, the
Company recorded $0.9 million of revenue and $0.8 million of cost of sales
for the manufacturing of products sold by the Company to CTCT and then sold
through the Caterpillar distribution channel. During the comparable
three month period of fiscal 2008, the Company recorded $2.6 million of
revenue and $2.3 million of cost of sales. In addition, during
the three months ended April 3, 2009 and March 28, 2008, the Company recorded
$4.5 million and $6.0 million in net cost of sales for the manufacturing of
products sold by the Company to CTCT and then repurchased by the Company upon
sale through the Company’s distribution channel.
In
addition, the Company received reimbursement of employee-related costs from CTCT
for company employees dedicated to CTCT or performance of work for CTCT totaling $2.7 million and $4.0 million for
the three months ended April 3, 2009 and March 28, 2008, respectively. The
reimbursements were offset against operating expense.
At April
3, 2009 and January 2, 2009, the Company had amounts due to and from
CTCT. Receivables and payables to CTCT are settled individually with
terms comparable to other non-related parties. The amounts due to and
from CTCT are presented on a gross basis in the Condensed Consolidated Balance
Sheets. At April 3, 2009 and January 2, 2009, the receivables from
CTCT were $4.6 million and $4.1 million, respectively, and
are included within Accounts receivable, net, on the Condensed Consolidated
Balance Sheets. As of the same dates, the payables due to CTCT were
$4.7 million and
$3.1 million,
respectively, and are included within Accounts payable on the Condensed
Consolidated Balance Sheets.
Nikon-Trimble
Joint Venture
On March
28, 2003, Nikon-Trimble Co., Ltd (Nikon-Trimble), a joint venture, was formed by
the Company and Nikon Corporation. The joint venture began operations
in July 2003 and is 50% owned by the Company and 50% owned by Nikon, with equal
voting rights. It focuses on the design and manufacture of surveying instruments
including mechanical total stations and related products.
The joint
venture is accounted for under the equity method of accounting. Under
the equity method, the Company’s share of profits and losses are included in
Income from joint ventures in the Non-operating income (expense), net section of
the Condensed Consolidated Statements of Income. During the three
months ended April 3, 2009 and March 28, 2008, the Company recorded a loss of
$0.5 million and a
profit of $0.2 million, respectively, as
its proportionate share of Nikon-Trimble net income. During the three
months ended April 3, 2009 and March 28, 2008, there were no dividends received
from Nikon-Trimble. The carrying amount of the investment in
Nikon-Trimble was $13.5 million at April 3, 2009 and $13.9 million at January 2,
2009, and is included in Other non-current assets on the Condensed Consolidated
Balance Sheets.
Nikon-Trimble
is the distributor in Japan for Nikon and the Company’s products. The
Company is the exclusive distributor outside of Japan for Nikon branded survey
products. For products sold by the Company to Nikon-Trimble, revenue is
recognized by the Company on a sell-through basis from Nikon-Trimble to the end
customer.
The terms
and conditions of the sales of products from the Company to Nikon-Trimble are
comparable with those of the standard distribution agreements which the Company
maintains with its dealer channel and margins earned are similar to those from
third party dealers. Similarly, the purchases of product by the Company from
Nikon-Trimble are made on terms comparable with the arrangements which Nikon
maintained with its international distribution channel prior to the formation of
the joint venture with the Company. During the three months ended
April 3, 2009, the Company recorded $3.5 million of revenue and $2.1 million of
cost of sales for the manufacturing of products sold by the Company to
Nikon-Trimble. During the three months ended March 28, 2008, the Company
recorded $3.9 million of revenue and $2.4 million of cost of sales
for the manufacturing of products sold by the Company to
Nikon-Trimble. The Company also purchases product from Nikon-Trimble
for future sales to third party customers. Purchases of inventory from
Nikon-Trimble were $1.6 million and $2.9 million
during the three months ended April 3, 2009 and March 28, 2008,
respectively.
At April
3, 2009 and January 2, 2009, the Company had amounts due to and from
Nikon-Trimble. Receivables and payables to Nikon-Trimble are settled
individually with terms comparable to other non-related parties. The
amounts due to and from Nikon-Trimble are presented on a gross basis in the
Condensed Consolidated Balance Sheets. At April 3, 2009 and January 2, 2009, the
amounts due from Nikon-Trimble were $1.8 million and $2.0 million, respectively, and
are included within Accounts receivable, net on the Condensed Consolidated
Balance Sheets. As of the same dates, the amounts due to
Nikon-Trimble were $1.5 million and $2.3 million, respectively, and are included
within Accounts payable on the Condensed Consolidated Balance
Sheets.
NOTE 5.
GOODWILL AND INTANGIBLE ASSETS
Intangible
Assets
Intangible
Assets consisted of the following:
|
|
April 3,
2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross
|
|
|
|
|
|
|
|
|
|
Carrying
|
|
|
Accumulated
|
|
|
Net
Carrying
|
|
(Dollars in
thousands)
|
|
Amount
|
|
|
Amortization
|
|
|
Amount
|
|
Developed product
technology
|
|
$ |
195,962 |
|
|
$ |
(87,568 |
) |
|
$ |
108,394 |
|
Trade names and
trademarks
|
|
|
20,325 |
|
|
|
(13,840 |
) |
|
|
6,485 |
|
Customer
relationships
|
|
|
121,856 |
|
|
|
(42,103 |
) |
|
|
79,753 |
|
Distribution rights and other
intellectual properties *
|
|
|
37,745 |
|
|
|
(9,625 |
) |
|
|
28,120 |
|
|
|
$ |
375,888 |
|
|
$ |
(153,136 |
) |
|
$ |
222,752 |
|
|
|
January 2,
2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross
|
|
|
|
|
|
|
|
|
|
Carrying
|
|
|
Accumulated
|
|
|
Net
Carrying
|
|
(Dollars in
thousands)
|
|
Amount
|
|
|
Amortization
|
|
|
Amount
|
|
Developed
product technology
|
|
$ |
188,391 |
|
|
$ |
(78,867 |
) |
|
$ |
109,524 |
|
Trade
names and trademarks
|
|
|
20,254 |
|
|
|
(13,100 |
) |
|
|
7,154 |
|
Customer
relationships
|
|
|
124,596 |
|
|
|
(40,263 |
) |
|
|
84,333 |
|
Distribution
rights and other intellectual properties *
|
|
|
37,913 |
|
|
|
(10,023 |
) |
|
|
27,890 |
|
|
|
$ |
371,154 |
|
|
$ |
(142,253 |
) |
|
$ |
228,901 |
|
(*) Included within Distribution rights and other
intellectual properties is
a $25.0 million distribution right that the Company bought from Caterpillar, a
related party, during fiscal 2008. The fair value of the distribution right
was estimated using a discounted cash flow analysis. The distribution right is being
amortized over its estimated economic life of eight years. The $25.0 million distribution right was
accrued in the fourth quarter of fiscal 2008 and paid in the first quarter of
fiscal 2009.
The
estimated future amortization expense of intangible assets as of April 3, 2009,
is as follows (Dollars in thousands):
2009
(Remaining)
|
|
$ |
37,790 |
|
2010
|
|
|
48,530 |
|
2011
|
|
|
43,438 |
|
2012
|
|
|
35,960 |
|
2013
|
|
|
32,231 |
|
Thereafter
|
|
|
24,803 |
|
Total
|
|
$ |
222,752 |
|
Goodwill
The
changes in the carrying amount of goodwill by operating segment for the three
months ended April 3, 2009, are as follows:
|
|
Engineering and
Construction
|
|
|
Field
Solutions
|
|
|
Mobile
Solutions
|
|
|
Advanced
Devices
|
|
|
Total
|
|
(Dollars in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance as of January 2,
2009
|
|
$ |
363,908 |
|
|
$ |
10,651 |
|
|
$ |
328,721 |
|
|
$ |
12,291 |
|
|
$ |
715,571 |
|
Additions due to
acquisitions
|
|
|
9,745 |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
9,745 |
|
Purchase price
adjustments
|
|
|
5,775 |
|
|
|
(188 |
) |
|
|
1,145 |
|
|
|
- |
|
|
|
6,732 |
|
Foreign currency translation
adjustments
|
|
|
(7,803 |
) |
|
|
- |
|
|
|
(488 |
) |
|
|
(505 |
) |
|
|
(8,796 |
) |
Balance as of April 3,
2009
|
|
$ |
371,625 |
|
|
$ |
10,463 |
|
|
$ |
329,378 |
|
|
$ |
11,786 |
|
|
$ |
723,252 |
|
The purchase price adjustments relate
entirely to previous business acquisitions which closed prior to fiscal
2009. Of the
total purchase price adjustments of $6.7 million recorded during the three
months ended April 3,
2009, earn-out payments of $7.2 million were offset by a decrease of $0.2 million in tax adjustments and a decrease of $0.3 million in
purchase price allocation adjustments.
NOTE 6.
CERTAIN BALANCE SHEET COMPONENTS
Inventories,
net consisted of the following:
|
April 3,
|
|
January 2,
|
|
As of
|
2009
|
|
2009
|
|
(Dollars in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
Raw
materials
|
|
$ |
68,020 |
|
|
$ |
71,319 |
|
Work-in-process
|
|
|
5,168 |
|
|
|
5,551 |
|
Finished
goods
|
|
|
92,225 |
|
|
|
84,023 |
|
Total inventories,
net
|
|
$ |
165,413 |
|
|
$ |
160,893 |
|
Deferred
costs of revenue are included within finished goods and were $17.4 million at
April 3, 2009 and $15.4 million at January 2, 2009.
Other
non-current liabilities consisted of the following:
|
April 3,
|
|
January 2,
|
|
As of
|
2009
|
|
2009
|
|
(Dollars in
thousands)
|
|
|
|
|
|
|
|
|
|
Deferred
compensation
|
|
$ |
6,579 |
|
|
$ |
6,631 |
|
Unrecognized tax
benefits
|
|
|
35,165 |
|
|
|
34,275 |
|
Other non-current
liabilities
|
|
|
17,019 |
|
|
|
20,647 |
|
Total other non-current
liabilities
|
|
$ |
58,763 |
|
|
$ |
61,553 |
|
As of
April 3, 2009 and January 2, 2009, the Company has $35.2 million and $34.3 million,
respectively, of unrecognized tax benefits included in Other non-current
liabilities that, if recognized, would favorably affect the effective income tax
rate in future periods and interest and/or penalties related to income tax
matters.
NOTE 7.
SEGMENT INFORMATION
The
Company is a designer and distributor of positioning solutions enabled by GPS,
optical, laser, and wireless communications technology. The Company provides
products for diverse applications in its targeted markets.
To
achieve distribution, marketing, production, and technology advantages, the
Company manages its operations in the following four segments:
|
·
|
Engineering
and Construction — Consists of products currently used by survey and
construction professionals in the field for positioning, data collection,
field computing, data management, and machine guidance and control. The
applications served include surveying, road, runway, construction, site
preparation, and building
construction.
|
|
·
|
Field
Solutions — Consists of products that provide solutions in a variety of
agriculture and geographic information systems (GIS) applications. In
agriculture, these include precise land leveling and machine guidance
systems. In GIS these include handheld devices and software that enable
the collection of data on assets for a variety of governmental and private
entities.
|
|
·
|
Mobile
Solutions — Consists of products that enable end users to monitor and
manage their mobile assets by communicating location and activity-relevant
information from the field to the office. The Company offers a range of
products that address a number of sectors of this market including truck
fleets, security, and public safety
vehicles.
|
|
·
|
Advanced
Devices — The various operations that comprise this segment are aggregated
on the basis that no single operation accounts for more than 10% of the
Company’s total revenue, operating income, and assets. This segment is
comprised of the Component Technologies, Military and Advanced Systems,
Applanix, and Trimble Outdoors
businesses.
|
The
Company evaluates each of its segment's performance and allocates resources
based on segment operating income from operations before income taxes and some
corporate allocations. The Company and each of its segments employ consistent
accounting policies.
The
following table presents revenue, operating income, and identifiable assets for
the four segments. Operating income is revenue less cost of sales and operating
expense, excluding general corporate expense, amortization of purchased
intangibles, amortization of inventory step-up charges, in-process research and
development expense, merger and acquisition charges, restructuring charges,
non-operating income (expense) net, and income tax provision. The identifiable
assets that the Company's Chief Operating Decision Maker, its Chief Executive
Officer, views by segment are accounts receivable and inventories.
|
Reporting
Segments
|
|
|
|
|
|
|
Engineering
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
and
|
|
|
Field
|
|
|
Mobile
|
|
|
Advanced
|
|
|
|
|
|
|
Construction
|
|
|
Solutions
|
|
|
Solutions
|
|
|
Devices
|
|
Total
|
|
(Dollars in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended April 3,
2009
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment
revenue
|
|
$ |
127,651 |
|
|
$ |
99,157 |
|
|
$ |
38,288 |
|
|
$ |
23,858 |
|
|
$ |
288,954 |
|
Operating
income
|
|
|
2,509 |
|
|
|
42,203 |
|
|
|
3,148 |
|
|
|
4,312 |
|
|
|
52,172 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended March 28,
2008
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment
revenue
|
|
$ |
194,180 |
|
|
$ |
88,037 |
|
|
$ |
44,011 |
|
|
$ |
29,068 |
|
|
$ |
355,296 |
|
Operating
income
|
|
|
36,954 |
|
|
|
35,095 |
|
|
|
2,453 |
|
|
|
4,692 |
|
|
|
79,194 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of April 3,
2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts
receivable
|
|
$ |
115,751 |
|
|
$ |
64,708 |
|
|
$ |
23,502 |
|
|
$ |
16,443 |
|
|
$ |
220,404 |
|
Inventories
|
|
|
109,954 |
|
|
|
21,872 |
|
|
|
16,821 |
|
|
|
16,766 |
|
|
|
165,413 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of January 2,
2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts
receivable
|
|
$ |
125,734 |
|
|
$ |
37,791 |
|
|
$ |
23,736 |
|
|
$ |
17,008 |
|
|
$ |
204,269 |
|
Inventories
|
|
|
104,934 |
|
|
|
21,778 |
|
|
|
16,391 |
|
|
|
17,790 |
|
|
|
160,893 |
|
Unallocated
corporate expense includes general corporate expense, amortization of inventory
step-up charges, in-process research and development expense, and merger and
acquisition charges. A reconciliation of the Company’s consolidated
segment operating income to consolidated income before income taxes is as
follows:
|
|
Three Months
Ended
|
|
|
April 3,
|
|
|
March
28,
|
|
|
2009
|
|
|
2008
|
(Dollars in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated segment operating
income
|
|
$ |
52,172 |
|
|
$ |
79,194 |
|
Unallocated corporate
expense
|
|
|
(11,134 |
) |
|
|
(10,306 |
) |
Amortization of purchased
intangible assets
|
|
|
(12,298 |
) |
|
|
(10,848 |
) |
Restructuring
charges
|
|
|
(4,488 |
) |
|
|
- |
|
Consolidated operating
income
|
|
|
24,252 |
|
|
|
58,040 |
|
Non-operating income (expense),
net
|
|
|
(656 |
) |
|
|
1,771 |
|
Consolidated income before
taxes
|
|
$ |
23,596 |
|
|
$ |
59,811 |
|
NOTE 8.
LONG-TERM DEBT, COMMITMENTS AND CONTINGENCIES
Long-term
debt consisted of the following:
|
|
April 3,
|
|
|
January 2,
|
|
As of
|
|
2009
|
|
|
2009
|
|
(Dollars in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Credit
Facilities:
|
|
|
|
|
|
|
Revolving credit
facility
|
|
$ |
151,000 |
|
|
$ |
151,000 |
|
Promissory notes and
other
|
|
|
632 |
|
|
|
588 |
|
Total debt
|
|
|
151,632 |
|
|
|
151,588 |
|
|
|
|
|
|
|
|
|
|
Less current portion of long-term
debt
|
|
|
196 |
|
|
|
124 |
|
Non-current
portion
|
|
$ |
151,436 |
|
|
$ |
151,464 |
|
Credit Facilities
On July 28, 2005, the Company entered
into a $200 million unsecured revolving credit agreement (the 2005 Credit
Facility) with a syndicate of 10 banks with The Bank of Nova Scotia as the
administrative
agent. On February 16, 2007, the Company
amended its existing $200 million unsecured revolving credit agreement with a
syndicate of 11 banks with The Bank of Nova Scotia as the administrative agent
(the 2007 Credit Facility). Under the 2007 Credit Facility, the Company exercised the
option in the existing credit agreement to increase the availability under the
revolving credit line by $100 million, for an aggregate availability of up to
$300 million, and extended the maturity date of the revolving credit line by 18 months, from July
2010 to February 2012. Up to $25 million of the availability
under the revolving credit line may be used to issue letters of credit, and up
to $20 million may be used for paying off other debts or loans. The maximum leverage ratio under the 2007 Credit
Facility is 3.00:1.00. The funds available under the new 2007
Credit Facility may be used by the Company for acquisitions, stock repurchases,
and general corporate purposes. As of August 20, 2008, the Company amended its 2007 Credit Facility to allow it to redeem, retire or purchase common
stock of the Company. In addition, the definition of the fixed charge was amended to exclude
the impact of redemptions, retirements, or purchases
common stock of the Company from the fixed charges coverage
ratio.
In addition, during the first quarter of
fiscal 2007 the Company incurred a five-year term loan under the 2007 Credit
Facility in an aggregate principal amount of $100 million, which was repaid in
full during fiscal
2008. As of April 3, 2009, the Company had an outstanding
balance on the revolving credit line of $151.0 million which was drawn down in the third and the fourth quarters of fiscal
2008.
The Company may borrow funds under the
2007 Credit Facility in U.S. Dollars or in certain other currencies, and
borrowings will bear interest, at the Company's option, at either: (i) a base
rate, based on the administrative agent's prime rate, plus a margin of between
0% and 0.125%, depending on the Company's leverage ratio as of its most recently ended fiscal
quarter, or (ii) a reserve-adjusted rate based on the London Interbank Offered
Rate (LIBOR), Euro Interbank Offered Rate (EURIBOR), Stockholm Interbank Offered
Rate (STIBOR), or other agreed-upon rate, depending on the currency borrowed, plus a margin of between
0.625% and 1.125%, depending on the Company's leverage ratio as of the most
recently ended fiscal quarter. The Company's obligations under the 2007 Credit
Facility are guaranteed by certain of the Company's domestic subsidiaries.
The 2007 Credit Facility contains
customary affirmative, negative, and financial covenants including,
among other requirements, negative covenants that restrict the Company's ability
to dispose of assets, create liens, incur indebtedness, repurchase stock, pay dividends, make acquisitions, make
investments, enter into mergers and consolidations and make capital
expenditures, within certain limitations, and financial covenants that require the
maintenance of leverage and fixed charge coverage ratios. The 2007 Credit Facility
contains events of default that include, among others, non-payment of principal,
interest or fees, breach of covenants, inaccuracy of representations and
warranties, cross defaults to certain other indebtedness, bankruptcy and insolvency events, material
judgments, and events constituting a change of control. Upon the occurrence and
during the continuance of an event of default, interest on the obligations will
accrue at an increased rate and the lenders may accelerate the Company's obligations under the 2007
Credit Facility, however that acceleration will be automatic in the case of
bankruptcy and insolvency events of default. As of April 3, 2009, the Company
was in compliance with all financial debt covenants.
Notes Payable
As of April 3, 2009 and January 2, 2009, the Company had notes payable totaling
approximately $632,000 and $588,000, respectively, primarily consisting of government loans to foreign
subsidiaries.
Leases
and other commitments
The
estimated future minimum operating lease commitments as of April 3, 2009, are as
follows (Dollars in thousands):
2009
(Remaining)
|
|
$ |
14,229 |
|
2010
|
|
|
14,600 |
|
2011
|
|
|
9,843 |
|
2012
|
|
|
7,389 |
|
2013
|
|
|
2,591 |
|
Thereafter
|
|
|
849 |
|
Total
|
|
$ |
49,501 |
|
Additionally, as of April 3, 2009, the Company had acquisition-related earn-outs of $7.0 million and holdbacks of $20.7 million recorded in Other current
liabilities and Other non-current liabilities. The maximum remaining payments,
including the $7.0 million and $20.7 million recorded, will not exceed $63.6 million. The remaining payments are based upon
targets achieved or events occurring over time that would result in amounts paid
that may be lower than the maximum remaining payments. The remaining earn-outs and holdbacks
are payable through
2012.
At April 3, 2009, the Company had unconditional purchase
obligations of approximately $59.0 million. These unconditional purchase
obligations primarily represent open non-cancelable purchase orders for material
purchases with the
Company’s vendors. Purchase obligations exclude agreements
that are cancelable without penalty. These unconditional purchase obligations
are related primarily to inventory and other items.
NOTE
9. FAIR VALUE OF FINANCIAL INSTRUMENTS
As
discussed in Note 2, SFAS No. 157, which defines fair value, establishes a
framework for measuring fair value, and requires enhanced disclosures about
assets and liabilities measured at fair value, became effective for the Company
beginning in its first quarter of fiscal 2008. Fair value is defined as the
price at which an asset could be exchanged in a current transaction between
knowledgeable, willing parties. A liability’s fair value is defined as the
amount that would be paid to transfer the liability to a new obligor, not the
amount that would be paid to settle the liability with the creditor. Where
available, fair value is based on observable market prices or parameters or
derived from such prices or parameters. Where observable prices or inputs are
not available, valuation models are applied. These valuation techniques involve
some level of management estimation and judgment, the degree of which is
dependent on the price transparency for the instruments or market and the
instruments’ complexity.
Assets and liabilities recorded at fair value on a recurring basis in the Condensed Consolidated Balance Sheets are
categorized based upon the level of judgment associated with the inputs used to
measure their fair value.
Hierarchical levels, defined by SFAS No. 157 are directly related to the amount of subjectivity associated
with the inputs to fair valuation of these assets and liabilities,
and are as follows:
Level I – Observable inputs such as unadjusted, quoted prices in active
markets for identical assets or liabilities at the measurement date.
Level II – Inputs (other than quoted prices
included in Level I) are either directly or indirectly observable for the asset
or liability. These include quoted prices
for similar assets or liabilities in active markets and quoted prices for
identical or similar assets
or liabilities in markets that are not active.
Level III – Unobservable inputs that reflect management’s best estimate of what market
participants would use in pricing the asset or liability at the measurement
date. Consideration is
given to the risk inherent in the valuation technique and the risk inherent in
the inputs to the model.
Fair Value on a Recurring
Basis
Assets and liabilities measured at fair
value on a recurring basis are categorized in the tables below based
upon the lowest level of
significant input to the valuations.
|
|
Fair Values as of April 3,
2009
|
|
(Dollars in
thousands)
|
|
Level I
|
|
|
Level II
|
|
|
Level III
|
|
|
Total
|
|
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S. Treasury bills
(1)
|
|
$ |
29,995 |
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
29,995 |
|
Deferred compensation plan assets
(2)
|
|
|
- |
|
|
|
6,625 |
|
|
|
- |
|
|
|
6,625 |
|
Derivative assets
(3)
|
|
|
- |
|
|
|
878 |
|
|
|
- |
|
|
|
878 |
|
Total
|
|
$ |
29,995 |
|
|
$ |
7,503 |
|
|
$ |
- |
|
|
$ |
37,498 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deferred compensation plan
liabilities (2)
|
|
$ |
- |
|
|
$ |
6,579 |
|
|
$ |
- |
|
|
$ |
6,579 |
|
Derivative liabilities
(3)
|
|
|
- |
|
|
|
1,919 |
|
|
|
- |
|
|
|
1,919 |
|
Total
|
|
$ |
- |
|
|
$ |
8,498 |
|
|
$ |
- |
|
|
$ |
8,498 |
|
(1)
|
The Company may invest some of its
cash and cash equivalents in highly liquid investments such as
U.S. Treasury
bills. The fair
values are determined using observable quoted prices in active markets. U.S. Treasury bills are included in Cash and cash
equivalents on the Company’s Condensed Consolidated
Balance Sheets.
|
(2)
|
The Company maintains a
self-directed, non-qualified deferred compensation plan for certain
executives and other highly compensated employees. The investment assets
and liabilities included in Level II are valued using quoted prices for
similar assets or liabilities in active markets and quoted prices for
identical or similar assets or liabilities in markets that are not
active. Deferred compensation plan assets and
liabilities
are included in
Other non-current assets and
Other non-current liabilities on
the Company’s Condensed Consolidated
Balance Sheets.
|
(3)
|
Derivative assets and
liabilities included in Level II primarily
represent forward
currency exchange contracts. We enter into these contracts to
minimize the short-term impact of foreign currency fluctuations on certain
trade and inter-company receivables and payables. The derivatives are not designated as hedging instruments
under SFAS 133.
The fair
values
are determined using
inputs based on observable quoted prices. Derivative assets and
liabilities
are included in
Other current assets and Other current
liabilities,
respectively, on the
Company’s Condensed Consolidated
Balance
Sheets.
|
NOTE 10.
PRODUCT WARRANTIES
The
Company accrues for warranty costs as part of its cost of sales based on
associated material product costs, technical support labor costs, and costs
incurred by third parties performing work on the Company's
behalf. The Company’s expected future costs are primarily estimated
based upon historical trends in the volume of product returns within the
warranty period and the costs to repair or replace the equipment. The products
sold are generally covered by a warranty for periods ranging from 90 days to
three years, and in some instances up to 5.5 years.
While the
Company engages in extensive product quality programs and processes, including
actively monitoring and evaluating the quality of component suppliers, its
warranty obligation is affected by product failure rates, material usage, and
service delivery costs incurred in correcting a product failure. Should actual
product failure rates, material usage, or service delivery costs differ from the
estimates, revisions to the estimated warranty accrual and related costs may be
required.
Changes
in the Company’s product warranty liability during the three months ended April
3, 2009 are as follows (Dollars in thousands):
Balance as of January 2,
2009
|
|
$ |
13,332 |
|
Accruals for warranties
issued
|
|
|
5,092 |
|
Changes in
estimates
|
|
|
1,685 |
|
Warranty settlements (in cash or
in kind)
|
|
|
(5,902 |
) |
Balance as of April 3,
2009
|
|
$ |
14,207 |
|
NOTE 11.
EARNINGS PER SHARE
The
following data was used in computing earnings per share and the effect on the
weighted-average number of shares of potentially dilutive common
stock.
|
|
Three Months
Ended
|
|
|
|
April 3,
|
|
|
March 28,
|
|
|
|
2009
|
|
|
2008
|
|
(Dollars in thousands, except per
share amounts)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Numerator:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income attributable to Trimble
Navigation Ltd.
|
|
$ |
17,465 |
|
|
$ |
40,067 |
|
|
|
|
|
|
|
|
|
|
Denominator:
|
|
|
|
|
|
|
|
|
Weighted average number of common
shares used in basic earnings per share
|
|
|
119,260 |
|
|
|
121,467 |
|
Effect of dilutive securities
(using treasury stock method):
|
|
|
|
|
|
|
|
|
Common stock options and
restricted stock units
|
|
|
1,666 |
|
|
|
3,670 |
|
Common stock
warrants
|
|
|
- |
|
|
|
22 |
|
Weighted average number of common
shares and dilutive potential common shares used in diluted earnings per
share
|
|
|
120,926 |
|
|
|
125,159 |
|
|
|
|
|
|
|
|
|
|
Basic earnings per
share
|
|
$ |
0.15 |
|
|
$ |
0.33 |
|
Diluted earnings per
share
|
|
$ |
0.14 |
|
|
$ |
0.32 |
|
For the first quarter of fiscal 2009 and the
first quarter of fiscal 2008 the Company excluded 6.3 million shares and 2.6 million shares of
outstanding stock options, respectively, from the calculation of diluted
earnings per share because the exercise prices of these stock options were
greater than or equal to the average market value of the common
shares during the respective
periods. Inclusion of these shares would be
antidilutive. These options could be included in the
calculation in the future if the average market value of the common shares
increases and is greater than the exercise price of these options.
NOTE 12:
RESTRUCTURING CHARGES:
Restructuring
expense for the three months ended April 3, 2009 and March 28, 2008 was as
follows:
|
|
Three Months
Ended
|
|
|
|
April 3,
|
|
|
March 28,
|
|
(Dollars in
thousands)
|
|
2009
|
|
|
2008
|
|
|
|
|
|
|
|
|
|
|
Severance and
benefits
|
|
$ |
4,488 |
|
|
$ |
- |
|
During
the three months ended April 3, 2009, restructuring expense of $4.5 million was
related to decisions to streamline processes and reduce the cost structure of
the Company, with approximately 159 employees affected worldwide. As
a result of the decisions made in the first quarter of 2008, the
Company expects restructuring activities to result in additional restructuring
expense totaling approximately $0.3 million through the fourth quarter of
2009. Of the total restructuring expense, $3.6 million is shown as a
separate line within Operating expense and $0.9 million is included within Cost
of sales on the Company’s Condensed Consolidated Statements of Income. There was
no restructuring expense recorded in the first quarter of fiscal
2008.
Restructuring
liability:
The following table summarizes the
restructuring activity for the three months ended April 3, 2009 (Dollars
in thousands):
Balance as of January 2,
2009
|
|
$ |
1,917 |
|
Charges
|
|
|
4,488 |
|
Payments
|
|
|
(2,423 |
) |
Adjustment
|
|
|
(56 |
) |
Balance as of April 3,
2009
|
|
$ |
3,926 |
|
The $3.9 million restructuring accrual consists
of severance and benefits
and is included in Other
current liabilities. It is expected to be paid through the
fourth quarter of fiscal 2009.
NOTE 13:
INCOME TAXES
The
Company’s effective income tax rate for the three months ended April 3, 2009 was
25.0%, as compared to 33.0% for the three months ended March 28,
2008.
The
Company and its U.S. subsidiaries are subject to U.S. federal and state income
tax. The Company has substantially concluded all U.S. federal and
state income tax matters for years through 1992. Non-U.S. income tax
matters have been concluded for years through 2000. The Company is currently in
various stages of multiple year examinations by Federal, State, and foreign
taxing authorities. The Company does not anticipate a significant impact to the
unrecognized tax benefits balance under FIN 48 with respect to current tax
examinations. Although the timing of the resolution and/or the
closure on audits is highly uncertain, the Company does not believe that the
unrecognized tax benefits would materially change in the next twelve
months.
The
amount of liabilities for unrecognized tax benefits under FIN 48 (net of the
federal benefit on state issues) that, if recognized, would favorably affect the
effective income tax rate in any future period are $38.2 million and $37.3
million at April 3, 2009 and January 2, 2009, respectively. The
unrecognized tax benefits are recorded in Other non-current liabilities and
within the deferred tax accounts in the accompanying Condensed Consolidated
Balance Sheets.
The
Company’s continuing practice is to recognize interest and/or penalties related
to income tax matters in income tax expense. The Company’s unrecognized tax
benefit liabilities include interest and penalties at April 3, 2009 and January
2, 2009, of $4.6 million and $4.4 million, respectively, which were recorded in
Other non-current liabilities in the accompanying Condensed Consolidated Balance
Sheets.
On
September 30, 2008, the State of California enacted Assembly Bill 1452 into law
which among other provisions, suspends net operating loss deductions for 2008
and 2009 and extends the carryforward period of any net operating losses not
utilized due to such suspension, adopts the federal 20-year net operating loss
carryforward period, phases-in the federal two-year net operating loss carryback
periods beginning in 2011, and limits the utilization of tax credits to the
extent of 50 percent of a taxpayer’s tax liability before tax
credits.
The
Emergency Economic Stabilization Act of 2008, Energy Improvement and Extension
Act of 2008, and Tax Extenders and Alternative Minimum Tax Relief Act of 2008
(HR1424) were
signed into law on October 3, 2008. This legislation includes a
provision that retroactively extends the research tax credit from January 1,
2008 to December 31, 2009. The impact in 2008 was a tax benefit of
$1.9 million and an expected tax benefit of $1.6 million in 2009.
As of
February 20, 2009, California enacted elective legislation under CR & TC
25128.5 to use the single sales factor apportionment formula. The
impact of this legislation resulted in a tax benefit of $0.8 million in the
quarter ended April 3, 2009.
NOTE 14:
COMPREHENSIVE INCOME:
The
components of comprehensive income, net of related tax, and noncontrolling
interests are as follows:
|
|
Three Months
Ended
|
|
|
|
April 3,
|
|
|
March 28,
|
|
|
|
2009
|
|
|
2008
|
|
(Dollars in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
$ |
17,465 |
|
|
$ |
40,067 |
|
Foreign currency translation
adjustments, net of tax
|
|
|
(14,456 |
) |
|
|
20,708 |
|
Net unrealized actuarial gain
(loss)
|
|
|
6 |
|
|
|
(27 |
) |
Net unrealized gain on
investments
|
|
|
44 |
|
|
|
- |
|
Comprehensive
income
|
|
|
3,059 |
|
|
|
60,748 |
|
Comprehensive income attributable
to the noncontrolling interests
|
|
|
309 |
|
|
|
- |
|
Comprehensive income attributable
to Trimble
|
|
$ |
3,368 |
|
|
$ |
60,748 |
|
This
Quarterly Report on Form 10-Q contains 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, which are subject to the
“safe harbor” created by those sections. Actual results could differ materially
from those indicated in the forward-looking statements due to a number of
factors including, but not limited to, the risk factors discussed in “Risk
Factors” below and elsewhere in this report as well as in the Company's Annual
Report on Form 10-K for fiscal year 2008 and other reports and documents that
the Company files from time to time with the Securities and Exchange
Commission.
The
Company has attempted to identify forward-looking statements in this report by
placing an asterisk (*) before
paragraphs. Discussions containing such forward-looking statements
may be found in “Management’s Discussion and Analysis of Financial Condition and
Results of Operations” below. In some cases, forward-looking statements can be
identified by terminology such as “may,” ”will,” “should,” “could,” “predicts,”
“potential,” “continue,” “expects,” “anticipates,” “future,” “intends,” “plans,”
“believes,” “estimates,” and similar expressions. These forward-looking
statements are made as of the date of this Quarterly Report on Form 10-Q, and
the Company disclaims any obligation to update these statements or to explain
the reasons why actual results may differ.
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
The
discussion and analysis of our financial condition and results of operations are
based upon our condensed consolidated financial statements, which have been
prepared in accordance with accounting principles generally accepted in the U.
S. The preparation of these financial statements requires us to make estimates
and judgments that affect the reported amounts of assets, liabilities, revenue
and expense, and related disclosure of contingent assets and liabilities. On an
on-going basis, we evaluate our estimates, including those related to product
returns, doubtful accounts, inventories, investments, intangible assets, income
taxes, warranty obligations, restructuring costs, and contingencies and
litigation. We base our estimates on historical experience and on various other
assumptions that are believed to be reasonable under the circumstances, the
results of which form the basis for making judgments about the amount and timing
of revenue and expense and the carrying values of assets and liabilities that
are not readily apparent from other sources. Actual results may differ from
these estimates under different assumptions or conditions.
CRITICAL
ACCOUNTING POLICIES AND ESTIMATES
There
have been no changes to our significant accounting polices during the three
months ended April 3, 2009 from those disclosed in our 2008 Form
10-K.
Recent
Accounting Pronouncements
Updates
to recent accounting standards as disclosed in our Annual Report on Form 10-K
for the fiscal year ended January 2, 2009 are as follows:
In
September 2006, the FASB issued SFAS No. 157, “Fair Value Measurements,” which
clarifies the definition of fair value, establishes a framework for measuring
fair value within GAAP, and expands the disclosures regarding fair value
measurements. In February 2008, the FASB issued FASB Staff Position No. FAS
157-2 deferring the effective date of SFAS No. 157 to fiscal years beginning
after November 15, 2008 and interim periods within those fiscal years for
nonfinancial assets and nonfinancial liabilities that are recognized or
disclosed at fair value in the financial statements on a nonrecurring basis. We
adopted SFAS No. 157 in its first quarter of fiscal 2008, except for those items
specifically deferred under FSP No. SFAS 157-2, which were adopted in the first
quarter of fiscal 2009. The adoption did not have a material impact on our
financial position condition, results of operations, or cash flows.
In
December 2007, the FASB issued SFAS No. 141(R), “Business Combinations”. SFAS
No. 141(R) establishes principles and requirements for how an acquirer
recognizes and measures in its financial statements the identifiable assets
acquired, the liabilities assumed and any non-controlling interest in the
acquiree, and recognizes and measures the goodwill acquired in the business
combination or a gain from a bargain purchase. SFAS No. 141(R) also
sets forth the disclosures required to be made in the financial statements to
evaluate the nature and financial effects of the business combination. SFAS No.
141(R) applies prospectively to business combinations for which the acquisition
date is on or after the beginning of the first annual reporting period beginning
on or after December 15, 2008. Accordingly, we adopted this standard in the
first quarter of fiscal 2009. We expect SFAS No. 141(R) will have an
impact on our financial position, results of operations, or cash flows, but the
nature and magnitude of the specific effects will depend largely upon the nature
and size of our business combinations. However, SFAS No. 141(R) did not
have a material impact in the first quarter of fiscal 2009.
In December 2007, the FASB issued SFAS
No. 160, “Noncontrolling
Interests in Consolidated Financial Statements, an amendment of ARB No.
51”. SFAS 160 changed the accounting and
reporting for minority
interests, which were recharacterized as noncontrolling interests (NCI) and
classified as a component of equity. This new consolidation method significantly
changed the accounting for transactions with minority interest
holders. SFAS 160 required retroactive adoption of the
presentation and disclosure requirements for previously existing minority
interests. All other requirements of SFAS 160 are applied
prospectively. SFAS 160 is effective for fiscal years
beginning after December 15, 2008 and, as such, we adopted this
standard in the first quarter of fiscal 2009. The adoption of SFAS 160
did not have a material impact on our financial position, results of operations,
or cash flows.
In March 2008, the FASB issued SFAS No.
161, “Disclosures About Derivative Instruments
and Hedging Activities - An Amendment of FASB Statement No. 133”, which requires enhanced disclosures
about (a) how and why an entity uses derivative instruments, (b) how derivative
instruments and related hedged items are accounted for under SFAS 133
and its related interpretations, and (c) how derivative instruments and related
hedged items affect an entity’s financial position, financial
performance, and cash flows. SFAS No. 161 is effective for financial
statements issued for fiscal years and interim
periods beginning after November 15, 2008, with early application encouraged, as
such, we adopted this standard in the first quarter of fiscal 2009. The adoption of SFAS 161 did not have a
material impact on our financial position, results of
operations, or cash
flows.
EXECUTIVE
LEVEL OVERVIEW
Trimble’s focus is on combining positioning
technology with wireless communication and application capabilities to create
system-level solutions that enhance productivity and accuracy for our customers. The
majority of our markets are end-user markets, including engineering and
construction firms, governmental organizations, public safety workers, farmers
and companies who must manage fleets of mobile workers and assets. In our Advanced Devices segment, we also
provide components to original equipment manufacturers to incorporate into their
products. In the end user markets, we provide a
system that includes a hardware platform that may contain software and customer
support. Some examples of
our solutions include products that automate and simplify the process of
surveying land, products that automate the utilization of equipment such as
tractors and bulldozers, products that enable a company to manage its mobile
workforce and assets, and products that allow
municipalities to manage their fixed assets. In addition, we also provide
software applications on a stand-alone basis. For example, we provide software
for project management on construction sites.
Solutions targeted at the end-user make up a significant
majority of our revenue. To create compelling products, we must attain an
understanding of the end users’ needs and work flow, and how
location-based technology can enable that end user to work faster, more
efficiently, and more
accurately. We use this knowledge to create highly innovative products that
change the way work is done by the end-user. With the exception of our Mobile
Solutions and Advanced Devices segments, our products are generally sold through
a dealer channel, and it is crucial that we
maintain a proficient global, third-party distribution
channel.
We continued to execute our strategy
with a series of actions that can be summarized in four
categories.
Reinforcing our position in existing
markets
* We believe these markets provide us with
additional, substantial potential for substituting our technology for
traditional methods. We are continuing to develop new products and to strengthen
our distribution channels in order to expand our market opportunity. In our Field Solutions Segment,
we introduced a Variable
Rate Application Option for our EZ Guidance 500 Systems, new AgGPS Autopilot platform kits
for tractors, combines and sprayers, as well as the new Ag 162/262 Receivers that feature the
Trimble proprietary
Transcend Positioning Technology. We also enhanced our Utility Center
Software and the Trident-3D data capture and analyst software for mobile mapping
applications. In our Engineering and Construction
segment, we introduced a new portfolio of Robotic Total Stations (RTS555,
RTS655, and RTS633) for
construction layout applications, the new Nomad 800X series of rugged
handhelds, the HV301G Green Beam Laser, as well as the Spectra Precision Laser
LL1100 and LR20. Further enhancements to the Trimble® GCS900
Grade Control System, the Construction Manager software, and the Real Time
Kinematic (RTK) engine GPS firmware were also made available. In our Mobile Solutions segment, we
announced that Windstream Corporation and DirectSat USA are rolling out
the Trimble GeoManager
solution. All of these products strengthened our competitive position
and created new value for the user.
Extending our position in existing
markets through new product categories
* We are
utilizing the strength of the Trimble brand in our markets to expand our revenue
by bringing new products to existing users. In our Field Solutions segment, we
introduced the Ag FmX Display with Dual Integrated GNSS Receivers for Precision
Agriculture Applications. In our Engineering and Construction segment, we
launched the Trimble Tablet - a rugged fully connected handheld computer, the
Trimble Access software - a new field and office solution for surveyors, and the
Trimble Assistant - a subscription service that allows Trimble dealers to take
control of internet enabled Trimble device for trouble shooting or
training. We also introduced the Trimble PCS400 Paving Control
System, an automatic screed control system that can improve the accuracy and
productivity of asphalt paving applications. We also expanded the Trimble
VRS Now service to Illinois and Iowa, as well as launched the VRS I-Scope
service in Europe. These services help simplify project scheduling
and asset management by enabling subscribers to track and manage their assets in
real-time without the need for base station hardware and incremental GNSS
investment. Two new GPS
receivers designed specifically for marine construction applications (Trimble
SPS361 and SPS461) were also introduced. These are some examples of
new products brought to existing markets.
Bringing existing technology to new
markets
* We continue to reinforce our position
in existing markets and position ourselves in newer markets that will serve as
important sources of future growth. Our efforts are focused in Africa, China, India, the Middle-East and
Russia. We announced a GPS software technology
licensing agreement with Marvell, a leader in the development of storage,
communications and consumer silicon. The licensing agreement will enable Marvell
to provide customers with
comprehensive GPS solutions based on innovative architectures that are tailored
for high performance and low overall system power
consumption.
Entering new market
segments
* During the first quarter of fiscal 2009, we acquired QuickPen International based in Englewood,
Colorado. QuickPen is a leading provider of
Building Information Modeling (BIM) software for the heating, ventilation and
air conditioning (HVAC), mechanical construction and plumbing industries.
RECENT
BUSINESS DEVELOPMENTS
The following companies and joint ventures
were acquired or formed during twelve months ended April 3, 2009 and are combined in our results of operations since the date of
acquisition or formation:
QuickPen
On March 12, 2009, we acquired privately-held QuickPen International based in Englewood,
Colorado. QuickPen is a leading provider of
Building Information Modeling (BIM) software for the heating, ventilation and
air conditioning (HVAC), mechanical construction and plumbing industries. QuickPen’s performance is reported under our Engineering and
Construction business segment.
Rawson Control
Systems
On December 3, 2008, we acquired the
assets of privately-held Rawson Control Systems based in Oelwein, Iowa. Rawson
manufactures hydraulic and electronic controls for the agriculture equipment
industry, including variable rate planter drives and controllers, variable rate
fertilizer controllers, mechanical remote electric control valves and speed
reducers. Rawson Control Systems’ performance is reported under
our Field Solutions
business segment.
FastMap and GeoSite
On November 28, 2008, we acquired the
FastMap and GeoSite software assets from Korec, a privately-held Trimble
distributor serving the United Kingdom and Ireland. FastMap and GeoSite
performance is reported
under our Engineering and Construction and Field Solutions business segments,
respectively.
Callidus Precision
Systems
On November 28, 2008, we acquired the
assets of privately-held Callidus Precision Systems GmbH of Halle, Germany.
Callidus is a provider of
3D laser scanning solutions for the industrial market. Callidus’s performance is reported under our
Engineering and Construction business segment.
TopoSys
On November 13, 2008, we acquired
TopoSys GmbH of Biberach an der Riss, Germany. TopoSys is a leading provider of aerial
data collection systems comprised of LiDAR and metric cameras.
TopoSys’ performance is reported under our
Engineering and Construction business segment.
TruCount
On October 30, 2008, we acquired the
assets of privately-held
TruCount, Inc., of Ames, Iowa. TruCount is a leading manufacturer of air and
electric clutches that automate individual planter row shut-off.
TruCount’s performance is reported under
our Field Solutions business segment.
RolleiMetric
On October 20, 2008, we acquired the assets of
RolleiMetric from Rollei GmbH of Braunschweig, Germany. RolleiMetric is a
leading provider of metric camera systems for aerial imaging and terrestrial
close range photogrammetry. RolleiMetric’s performance is reported under our Engineering and Construction
business segment.
VirtualSite
Solutions
On October 3, 2008, VirtualSite
Solutions (VSS), a joint venture we formed with Caterpillar, began operations. We contributed $7.8 million in exchange
for a 65% ownership and Caterpillar contributed $4.2 million for a
35% ownership in VSS. VSS develops software for fleet
management and connected worksite solutions for both Caterpillar and us, and in
turn, sells software subscription services to Caterpillar and us, which we both
sell through our respective
distribution channels. For financial reporting purposes, VSS
assets and liabilities are consolidated with ours, as are its results of
operations, which are reported under our Engineering and Construction
business segment. Caterpillar’s 35% interest is included in our
Condensed Consolidated Financial Statements as
noncontrolling
interests.
SECO
On July 29, 2008, we acquired
privately-held SECO Manufacturing Company of Redding, California. SECO is a
leading manufacturer of accessories for the geomatics, surveying,
mapping, and construction industries. SECO’s performance is reported under our
Engineering and Construction business segment.
Seasonality of
Business
* Our individual segment revenue may be
affected by seasonal buying
patterns. Typically, the second fiscal quarter has been the strongest quarter
for the Company driven by the construction buying season.
RESULTS
OF OPERATIONS
Overview
The
following table is a summary of revenue, gross margin, and operating income for
the periods indicated and should be read in conjunction with the narrative
descriptions below.
|
|
Three Months
Ended
|
|
|
|
April 3,
|
|
|
March 28,
|
|
|
|
2009
|
|
|
2008
|
|
(Dollars in
thousands)
|
|
|
|
|
|
|
Total consolidated
revenue
|
|
$ |
288,954 |
|
|
$ |
355,296 |
|
Gross
margin
|
|
$ |
143,958 |
|
|
$ |
174,376 |
|
Gross margin
%
|
|
|
49.8 |
% |
|
|
49.1 |
% |
Total consolidated operating
income
|
|
$ |
24,252 |
|
|
$ |
58,040 |
|
Operating income
%
|
|
|
8.4 |
% |
|
|
16.3 |
% |
Revenue
In the
three months ended April 3, 2009, total revenue decreased by $66.3 million or
19%, as compared to the same corresponding period in fiscal 2008. The decrease
was primarily due to slower sales in the Engineering and Construction
segment. Engineering and Construction revenue decreased $66.5
million, Field Solutions increased $11.1 million, Mobile Solutions decreased
$5.7 million, and Advanced Devices decreased $5.2 million, as compared to the
same corresponding period in fiscal 2008. The revenue decrease was primarily due to recessionary conditions in the U.S. and European markets in Engineering and
Construction,
unfavorable foreign currency exchange
rates,
partially offset by new product sales, increased agricultural sales, as well as the impact of
acquisitions.
Gross
Margin
Gross
margin varies due to a number of factors including product mix, pricing,
distribution channel, production volumes, and foreign currency
translations.
Gross
margin decreased by $30.4 million for the three months ended April 3, 2009, as
compared to the corresponding period in the prior year, primarily due to the
revenue shortfall. Gross margin as a percentage of total revenue for the three
months ended April 3, 2009 was 49.8%, as compared to 49.1% for the three months
ended March 28, 2008. The slight increase in gross margin percentage
for the three month period was driven by a greater percentage of higher margin
products sold.
Operating
Income
Operating
income decreased by $33.8 million for the three months ended April 3, 2009, as
compared to the corresponding period in the prior year. Operating
income as a percentage of total revenue was 8.4% for the three months ended
April 3, 2009, as compared to 16.3% for the three months ended March 28,
2008. The decrease in operating income percentage for the three month
period was primarily due to lower revenue in
Engineering and Construction and restructuring charges, partially offset by lower expense and
higher gross margin, as compared to the corresponding period in the prior
year.
Results
by Segment
To
achieve distribution, marketing, production, and technology advantages in our
targeted markets, we manage our operations in the following four segments:
Engineering and Construction, Field Solutions, Mobile Solutions, and Advanced
Devices. Operating income equals net revenue less cost of sales and
operating expense, excluding general corporate expense, amortization of
purchased intangibles, amortization of inventory step-up charges, in-process
research and development expense, merger and acquisition charges, restructuring
charges, non-operating income
(expense) net, and income tax provision.
The
following table is a breakdown of revenue and operating income by
segment:
|
|
Three Months
Ended
|
|
|
|
April 3,
|
|
|
March 28,
|
|
|
|
2009
|
|
|
2008
|
|
(Dollars in thousands, except
percentages)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Engineering and
Construction
|
|
|
|
|
|
|
Revenue
|
|
$ |
127,651 |
|
|
$ |
194,180 |
|
Segment revenue as a percent of
total revenue
|
|
|
45 |
% |
|
|
55 |
% |
Operating
income
|
|
$ |
2,509 |
|
|
$ |
36,954 |
|
Operating income as a percent of
segment revenue
|
|
|
2 |
% |
|
|
19 |
% |
Field
Solutions
|
|
|
|
|
|
|
|
|
Revenue
|
|
$ |
99,157 |
|
|
$ |
88,037 |
|
Segment revenue as a percent of
total revenue
|
|
|
34 |
% |
|
|
25 |
% |
Operating
income
|
|
$ |
42,203 |
|
|
$ |
35,095 |
|
Operating income as a percent of
segment revenue
|
|
|
43 |
% |
|
|
40 |
% |
Mobile
Solutions
|
|
|
|
|
|
|
|
|
Revenue
|
|
$ |
38,288 |
|
|
$ |
44,011 |
|
Revenue as a percent of total
revenue
|
|
|
13 |
% |
|
|
12 |
% |
Operating
income
|
|
$ |
3,148 |
|
|
$ |
2,453 |
|
Operating income as a percent of
segment revenue
|
|
|
8 |
% |
|
|
6 |
% |
Advanced
Devices
|
|
|
|
|
|
|
|
|
Revenue
|
|
$ |
23,858 |
|
|
$ |
29,068 |
|
Segment revenue as a percent of
total revenue
|
|
|
8 |
% |
|
|
8 |
% |
Operating
income
|
|
$ |
4,312 |
|
|
$ |
4,692 |
|
Operating income as a percent of
segment revenue
|
|
|
18 |
% |
|
|
16 |
% |
Unallocated
corporate expense includes general corporate expense, amortization of inventory
step-up charges, in-process research and development expense, and merger and
acquisition charges. A reconciliation of our consolidated segment
operating income to consolidated income before income taxes
follows:
|
|
Three Months
Ended
|
|
|
April 3,
|
|
|
March
28,
|
|
|
2009
|
|
|
2008
|
(Dollars in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated segment operating
income
|
|
$ |
52,172 |
|
|
$ |
79,194 |
|
Unallocated corporate
expense
|
|
|
(11,134 |
) |
|
|
(10,306 |
) |
Amortization of purchased
intangible assets
|
|
|
(12,298 |
) |
|
|
(10,848 |
) |
Restructuring
charges
|
|
|
(4,488 |
) |
|
|
- |
|
Consolidated operating
income
|
|
|
24,252 |
|
|
|
58,040 |
|
Non-operating income (expense),
net
|
|
|
(656 |
) |
|
|
1,771 |
|
Consolidated income before
taxes
|
|
$ |
23,596 |
|
|
$ |
59,811 |
|
Engineering
and Construction
Engineering
and Construction revenue decreased by $66.5 million or 34% for the three months
ended April 3, 2009, as compared to the same corresponding period in fiscal
2008. Segment operating income decreased $34.4 million or 93% for the
three months ended April 3, 2009, as compared to the same corresponding period
in fiscal 2008.
The
revenue decline for the three months ended April 3, 2009 was primarily driven by
recessionary conditions in the U.S. and European markets. Segment operating income decreased
primarily due to the revenue shortfall and unfavorable foreign currency exchange
rates.
Field
Solutions
Field
Solutions revenue increased by $11.1million or 13% for the three months ended
April 3, 2009, as compared to the same corresponding period in fiscal
2008. Segment operating income increased by $7.1 million or 20% for
the three months ended April 3, 2009, as compared to the same corresponding
period in fiscal 2008.
The
revenue increase for the three month periods ended April 3, 2009 was driven by
the introduction of new agricultural products, increased sales worldwide, and
the impact of acquisitions. Operating income increased primarily due to higher
revenue, gross margin improvement, and operating expense control.
Mobile
Solutions revenue decreased by $5.7 million or 13% for the three months ended
April 3, 2009, as compared to the same corresponding period in fiscal
2008. Segment operating income increased $0.7 million or 28% for the
three months ended April 3, 2009, as compared to the same corresponding period
in fiscal 2008.
Revenue
declined primarily due to the impact in the prior year of the completion of
deliverables for two large contracts. The increase in operating income was
primarily due to gross margin improvement and lower spending due to operating
expense control.
Advanced
Devices
Advanced
Devices revenue decreased by $5.2 million or 18% for the three months ended
April 3, 2009, as compared to the same corresponding period in fiscal
2008. Segment operating income decreased by $0.4 million or 8% for
the three months ended April 3, 2009, as compared to the same corresponding
period in fiscal 2008.
The
decrease in revenue was driven by slower sales in Component Technologies and
Applanix. Operating income was slightly down due to the decrease in revenue,
partially offset by gross margin improvement and lower spending due to operating
expense control.
Research
and Development, Sales and Marketing, and General and Administrative
Expenses
Research
and development (R&D), sales and marketing (S&M), and general and
administrative (G&A) expense are summarized in the following
table:
|
|
Three Months
Ended
|
|
|
|
April 3,
|
|
|
March 28,
|
|
|
|
2009
|
|
|
2008
|
|
(Dollars in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Research and
development
|
|
$ |
34,137 |
|
|
$ |
37,345 |
|
Percentage of
revenue
|
|
|
12 |
% |
|
|
11 |
% |
Sales and
marketing
|
|
|
48,935 |
|
|
|
51,158 |
|
Percentage of
revenue
|
|
|
17 |
% |
|
|
14 |
% |
General and
administrative
|
|
|
26,042 |
|
|
|
22,690 |
|
Percentage of
revenue
|
|
|
9 |
% |
|
|
6 |
% |
Total
|
|
$ |
109,114 |
|
|
$ |
111,193 |
|
Percentage of
revenue
|
|
|
38 |
% |
|
|
31 |
% |
Overall,
R&D, S&M, and G&A expense decreased by approximately $2.1 million
for the three months ended April 3, 2009, as compared to the corresponding
period in fiscal 2008.
Research
and development expense decreased by $3.2 million in the first quarter of fiscal
2009, as compared to the first quarter of fiscal 2008, primarily due to foreign currency exchange rates
and decreased compensation related
expense, partially offset by the inclusion of expense from acquisitions not included in the prior year. All of our
R&D costs have been expensed as incurred. Costs of software developed for
external sale subsequent to reaching technical feasibility were not considered
material and were expensed as incurred. Spending overall was at approximately
12% of revenue in the first quarter of fiscal 2009,
as compared to 11% in the corresponding period of fiscal 2008.
* We
believe that the development and introduction of new products are critical to
our future success and we expect to continue active development of new
products.
Sales and
marketing expense decreased by $2.2 million in the first quarter of fiscal 2009,
as compared to the corresponding period of fiscal 2008. The decrease was
primarily due to foreign currency exchange rates, partially offset by the inclusion of expense from acquisitions not
applicable in the prior year, and trade show expense. Spending overall was at approximately
17% of revenue in the first quarter of fiscal 2009,
as compared to 14% in the corresponding period of fiscal 2008.
* Our
future growth will depend in part on the timely development and continued
viability of the markets in which we currently compete, as well as our ability
to continue to identify and develop new markets for our
products.
General
and administrative expense increased by $3.4 million in the first quarter of
fiscal 2009, as compared to the corresponding period in fiscal 2008 primarily due to the inclusion of expense from acquisitions not
applicable in the prior year and bad debt expense, partially offset by foreign currency exchange
rates. Spending overall was at approximately
9% of revenue in the first quarter of fiscal 2009,
as compared to 6% in the corresponding period of fiscal 2008.
Amortization
of Purchased Intangible Assets
Amortization
of purchased intangible assets was $12.3 million in the first quarter of
fiscal 2009, as compared to $10.8 million in the first quarter of fiscal
2008. Of the total $12.3 million in the first quarter of fiscal 2009,
$7.0 million is presented as a separate line within Operating expense and $5.3
million is included within Cost of sales on our Condensed Consolidated
Statements of Income. The increase was due primarily to acquisitions
not included in the corresponding period of fiscal 2008, primarily SECO,
RolleiMetric, TruCount, TopoSys, and Rawson. As of April 3, 2009,
future amortization of intangible assets is expected to be $37.8 million during
the remaining three quarters of fiscal 2009, $48.5 million during 2010,
$43.4 million during 2011, $36.0 million during 2012, $32.2 million during
2013, and $24.8 million thereafter.
Restructuring
Charges
Restructuring
expense for the three months ended April 3, 2009 and March 28, 2008 was as
follows:
|
|
Three Months
Ended
|
|
|
|
April 3,
|
|
|
March 28,
|
|
(Dollars in
thousands)
|
|
2009
|
|
|
2008
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Severance and
benefits
|
|
$ |
4,488 |
|
|
$ |
- |
|
During
the three months ended April 3, 2009, restructuring expense of $4.5 million was
related to decisions to streamline processes and reduce the cost structure of
the Company, with approximately 159 employees affected worldwide. As
a result of the decisions made in the first quarter of 2008, we expect
restructuring activities to result in additional restructuring expense totaling
approximately $0.3 million through the fourth quarter of 2009. Of the total
restructuring expense, $3.6 million is presented as a separate line within
Operating expense and $0.9 million is included within Cost of sales on our
Condensed Consolidated Statements of Income. There was no
restructuring expense recorded in the first quarter of fiscal
2008.
Restructuring
liability:
The following table summarizes the
restructuring activity for the three months ended April 3, 2009 (Dollars
in thousands):
Balance as of January 2,
2009
|
|
$ |
1,917 |
|
Charges
|
|
|
4,488 |
|
Payments
|
|
|
(2,423 |
) |
Adjustment
|
|
|
(56 |
) |
Balance as of April 3,
2009
|
|
$ |
3,926 |
|
The $3.9 million restructuring accrual
consists of severance and benefits and is included in Other current liabilities. It is expected to be paid through the
fourth quarter of fiscal 2009.
Non-operating
Income (Expense), Net
The
components of non-operating income (expense), net, are as follows:
|
|
Three Months
Ended
|
|
|
|
April 3,
|
|
|
March 28,
|
|
|
|
2009
|
|
|
2008
|
|
(Dollars in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
income
|
|
$ |
199 |
|
|
$ |
457 |
|
Interest
expense
|
|
|
(493 |
) |
|
|
(762 |
) |
Foreign currency transaction gain,
net
|
|
|
184 |
|
|
|
968 |
|
Income from joint
ventures
|
|
|
168 |
|
|
|
2,015 |
|
Other expense,
net
|
|
|
(714 |
) |
|
|
(907 |
) |
Total non-operating income
(expense), net
|
|
$ |
(656 |
) |
|
$ |
1,771 |
|
The
non-operating income (expense), net decreased $2.4 million for the first quarter
of fiscal 2009, as compared to the corresponding period in fiscal 2008. The
decrease was primarily due to lower income from joint ventures and
a decrease in foreign exchange
gains.
Income
Tax Provision
Our
effective income tax rate for the three months ended April 3, 2009 was 25.0%, as
compared to 33.0% for the three months ended March 28, 2008. The 2009
and 2008 first quarter fiscal rate is lower than the statutory federal income
tax rate of 35% primarily due to the geographical mix of our pre-tax
income.
OFF-BALANCE
SHEET FINANCINGS AND LIABILITIES
Other than lease commitments incurred
in the normal course of
business, we do not have any off-balance sheet financing arrangements or
liabilities, guarantee contracts, retained or contingent interests in
transferred assets, or any obligation arising out of a material variable
interest in an unconsolidated entity. We do not have any
majority-owned subsidiaries that are not included in the condensed consolidated financial statements.
Additionally, we do not have any interest in, or relationship with, any special
purpose entities.
In the normal course of business to facilitate sales of
its products, we indemnify other parties, including customers, lessors, and
parties to other transactions with us, with respect to certain matters. We
have agreed to hold the other party harmless against losses arising from a breach of representations or
covenants, or out of intellectual property infringement or other claims made
against certain parties. These agreements may limit the time within which an
indemnification claim can be made and the amount of the claim. In addition, we have entered into
indemnification agreements with our officers and directors, and our bylaws contain similar indemnification
obligations to our agents.
It is not possible to determine the
maximum potential amount under these indemnification agreements due to the limited history
of prior indemnification claims and the unique facts and circumstances involved
in each particular agreement. Historically, payments made by us under these
agreements were not material and no liabilities have been recorded for these obligations on the
Condensed Consolidated Balance Sheets as of
April 3, 2009 and January 2, 2009.
LIQUIDITY
AND CAPITAL RESOURCES
|
|
April 3,
|
|
|
January 2,
|
|
As of
|
|
2009
|
|
|
2009
|
|
(Dollars in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$ |
146,827 |
|
|
$ |
147,531 |
|
Total debt
|
|
$ |
151,632 |
|
|
$ |
151,588 |
|
|
|
|
|
|
|
|
|
|
|
|
April 3,
|
|
|
March 28,
|
|
Three Months
Ended
|
|
2009
|
|
|
2008
|
|
(Dollars in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash provided by operating
activities
|
|
$ |
43,161 |
|
|
$ |
20,719 |
|
Cash used in investing
activities
|
|
$ |
(46,542 |
) |
|
$ |
(43,347 |
) |
Cash provided by (used in)
financing activities
|
|
$ |
4,623 |
|
|
$ |
(15,707 |
) |
Effect of exchange rate changes on
cash and cash equivalents
|
|
$ |
(1,946 |
) |
|
$ |
6,512 |
|
Net decrease in cash and cash
equivalents
|
|
$ |
(704 |
) |
|
$ |
(31,823 |
) |
Cash
and Cash Equivalents
As of
April 3, 2009, cash and cash equivalents totaled $146.8 million as compared to
$147.5 million at January 2, 2009. Debt was $151.6 million as of April 3, 2009,
the same as the January 2, 2009 balance.
* Our
ability to continue to generate cash from operations will depend in large part
on profitability, the rate of collections of accounts receivable, our inventory
turns, and our ability to manage other areas of working capital.
* We
believe that our cash and cash equivalents, together with our revolving credit
facilities will be sufficient to meet our anticipated operating cash needs and
stock purchases under the stock repurchase program for at least the next twelve
months.
* We
anticipate that planned capital expenditures primarily for computer equipment,
software, manufacturing tools and test equipment, and leasehold improvements
associated with business expansion, will constitute a partial use of our cash
resources. Decisions related to how much cash is used for investing
are influenced by the expected amount of cash to be provided by
operations.
Operating
Activities
Cash
provided by operating activities was $43.2 million for the first quarter of
fiscal 2009, as compared to $20.7 million for the first quarter of fiscal
2008. This increase of $22.4 million was primarily driven by a
decrease in accounts receivable days sales outstanding (69 days versus 72 days
in the first quarter of 2008) and an increase in accounts payable, partially
offset by a decrease in net income before non-cash depreciation and
amortization.
Investing
Activities
Cash used
in investing activities was $46.5 million for the first quarter of fiscal 2009,
as compared to $43.3 million for the first quarter of fiscal
2008. The increase was due to slightly higher cash requirements for
business and intangible asset acquisitions.
Financing
Activities
Cash
provided by financing activities was $4.6 million for the first quarter of 2009,
as compared to cash used of $15.7 million for the first quarter of fiscal 2008,
primarily due to the stock repurchase in the first quarter of fiscal
2008.
Accounts Receivable and Inventory
Metrics
|
|
April 3,
|
|
January 2,
|
|
As of
|
|
2009
|
|
2009
|
|
|
|
|
|
|
|
Accounts receivable days sales
outstanding
|
|
|
69 |
|
|
|
69 |
|
Inventory turns per
year
|
|
|
3.9 |
|
|
|
4.2 |
|
Accounts receivable days sales
outstanding were 69 days as of April 3, 2009, the same as January 2, 2009. Our accounts receivable days sales
outstanding are calculated based on ending accounts receivable, net, divided by
revenue for the corresponding fiscal quarter, times a quarterly
average of 91 days. Our
inventory turns were 3.9 as of April 3, 2009, as compared to 4.2 as of January 2, 2009. Our inventory turnover is based on the
total cost of sales for the fiscal period over the average inventory for the
corresponding fiscal period.
Debt
As of
April 3, 2009, our total debt was comprised primarily of our revolving credit
line in the amount of $151.0 million, which was drawn down in the third
and the fourth quarters of fiscal 2008. As of April 3, 2009, 2009 and
January 2, 2009, there were also notes payable totaling approximately $632,000
and $588,000, respectively, primarily consisting of government loans to
foreign subsidiaries.
On July 28, 2005, we entered into a $200
million unsecured revolving credit agreement (the 2005 Credit Facility) with a
syndicate of 10 banks with
The Bank of Nova Scotia as the administrative agent. On February 16, 2007, we amended our
existing $200 million unsecured revolving credit agreement with a syndicate of
11 banks with The Bank of Nova Scotia as the administrative agent (the 2007 Credit Facility). Under
the 2007 Credit Facility, we exercised the option in the existing credit
agreement to increase the availability under the revolving credit line by $100
million, for an aggregate availability of up to $300 million, and extended the maturity date of the
revolving credit line by 18 months, from July 2010 to February 2012. Up to $25 million of the availability
under the revolving credit line may be used to issue letters of credit, and up
to $20 million may be used for paying off other debts or
loans. The maximum leverage ratio under the
2007 Credit Facility is 3.00:1.00. The funds available under the new 2007
Credit Facility may be used by us for acquisitions, stock repurchases, and
general corporate purposes. As of August 20, 2008, we amended
the 2007 Credit Facility to allow us to redeem, retire or purchase Trimble
common stock. In addition, the definition of the fixed charge was amended to exclude
the impact of redemptions, retirements, or purchases
of Trimble common stock
from the fixed charges coverage ratio. For additional discussion of our debt,
see Note 8 of Notes to the Condensed Consolidated Financial
Statements.
In addition, during the first quarter of
fiscal 2007 we incurred a five-year term loan under the 2007 Credit Facility in an aggregate
principal amount of $100 million, which was repaid in full during fiscal
2008.
We may borrow funds under the 2007
Credit Facility in U.S. Dollars or in certain other currencies, and borrowings
will bear interest, at our
option, at either: (i) a base rate, based on the administrative agent's prime
rate, plus a margin of between 0% and 0.125%, depending on our leverage ratio as
of our most recently ended fiscal quarter, or (ii) a reserve-adjusted rate based
on the London Interbank Offered Rate (LIBOR), Euro
Interbank Offered Rate (EURIBOR), Stockholm Interbank Offered Rate (STIBOR), or
other agreed-upon rate, depending on the currency borrowed, plus a margin of
between 0.625% and 1.125%, depending on our leverage ratio as of the most recently ended fiscal
quarter. Our obligations under the 2007 Credit Facility are guaranteed by
certain of our domestic subsidiaries.
The 2007 Credit Facility contains
customary affirmative, negative and financial covenants including, among
other requirements,
negative covenants that restrict our ability to dispose of assets, create liens,
incur indebtedness, repurchase stock, pay dividends, make acquisitions, make
investments, enter into mergers and consolidations and make capital
expenditures, within certain limitations, and
financial covenants that require the maintenance of leverage and fixed charge
coverage ratios. The 2007 Credit Facility contains events of default that
include, among others, non-payment of principal, interest or fees, breach of covenants, inaccuracy of
representations and warranties, cross defaults to certain other indebtedness,
bankruptcy and insolvency events, material judgments, and events constituting a
change of control. Upon the occurrence and during the continuance of an event of default, interest on the
obligations will accrue at an increased rate and the lenders may accelerate our
obligations under the 2007 Credit Facility, however that acceleration will be
automatic in the case of bankruptcy and insolvency events of default. As of April 3, 2009 we were in
compliance with all financial debt covenants.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE
ABOUT MARKET RISK
We are
exposed to market risk related to changes in interest rates and foreign currency
exchange rates. We use certain derivative financial instruments to manage these
risks. We do not use derivative financial instruments for speculative purposes.
All financial instruments are used in accordance with policies approved by our
Board of Directors.
Market
Interest Rate Risk
There
have been no significant changes to our market interest rate risk
assessment. Refer to our 2008 Annual Report on Form
10-K.
Foreign
Currency Exchange Rate Risk
There
have been no significant changes to our foreign currency exchange rate risk
assessment. Refer to our 2008 Annual Report on Form
10-K.
ITEM 4. CONTROLS AND PROCEDURES
(a)
Disclosure Controls and Procedures.
The management, with the participation
of our Chief Executive Officer and Chief Financial Officer, has evaluated the
effectiveness of our disclosure controls and procedures (as such term is defined
in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as
amended (the "Exchange Act")) as of the end of the period covered by this
report. Based on such evaluation, our Chief Executive Officer and
Chief Financial Officer have concluded that, as of the end of such period, our
disclosure controls and procedures are effective.
(b)
Internal Control Over Financial Reporting.
There
have not been any changes in our internal control over financial reporting (as
such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act)
during the fiscal quarter to which this report relates that have materially
affected, or are reasonably likely to materially affect, our internal control
over financial reporting.
PART II. OTHER INFORMATION
ITEM
1. LEGAL PROCEEDINGS
From time
to time, we are involved in litigation arising out of the ordinary course of its
business. There are no known claims or pending litigation expected to have a
material effect on our overall financial position, results of operations or
liquidity.
In
addition to the other information set forth in this report, you should consider
the risk factors discussed under "Risks and Uncertainties" in Item 1A of Part I
of our 2008 Annual Report on Form 10-K, which could materially affect our
business, financial condition or future results, and which are incorporated
herein by reference. The risk factors in our Form 10-K have not
materially changed since the filing of our 2008 Annual Report on Form
10-K. The risk factors described in our Form 10-K are not the only
risks facing our Company. Additional risks and uncertainties not
currently known to us or that we currently deem to be immaterial also may
materially adversely affect our business, financial conditions and/or operating
results.
3.1
|
Restated
Articles of Incorporation of the Company filed June 25, 1986.
(2)
|
3.2
|
Certificate
of Amendment of Articles of Incorporation of the Company filed October 6,
1988. (2)
|
3.3
|
Certificate
of Amendment of Articles of Incorporation of the Company filed July 18,
1990. (2)
|
3.4
|
Certificate
of Amendment of Articles of Incorporation of the Company filed May 29,
2003. (3)
|
3.5
|
Certificate
of Amendment of Articles of Incorporation of the Company filed March 4,
2004. (4)
|
3.6
|
Certificate
of Amendment of Articles of Incorporation of the Company filed February
21, 2007. (6)
|
3.7
|
Bylaws
of the Company, amended and restated through July 20, 2006.
(5)
|
4.1
|
Specimen
copy of certificate for shares of Common Stock of the Company.
(1)
|
10.1
|
Amended
and Restated 2002 Stock Plan, amended as of March 6, 2009.
(7)
|
10.2
|
Amended
and Restated 1988 Employee Stock Purchase Plan, amended as of March 6,
2009. (7)
|
31.1
|
Certification
of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley
Act of 2002 dated May 11, 2009.
(7)
|
31.2
|
Certification
of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley
Act of 2002 dated May 11, 2009. (7)
|
32.1
|
Certification
of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 dated May 11,
2009. (7)
|
32.2
|
Certification
of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 dated May 11,
2009. (7)
|
(1)
|
Incorporated
by reference to exhibit number 4.1 to the registrant's Registration
Statement on Form S-1, as amended (File No. 33-35333), which
became effective July 19, 1990.
|
(2)
|
Incorporated
by reference to identically numbered exhibits to the registrant's Annual
Report on Form 10-K for the fiscal year ended January 1,
1999.
|
(3)
|
Incorporated
by reference to exhibit number 3.5 to the registrant’s Quarterly Report on
Form 10-Q for the quarter ended July 4,
2003.
|
(4)
|
Incorporated
by reference to exhibit number 3.6 to the registrant’s Quarterly Report on
Form 10-Q for the quarter ended April 2,
2004.
|
(5)
|
Incorporated
by reference to exhibit number 3.7 to the Company’s Quarterly Report on
Form 10-Q for the quarter ended September 29,
2006.
|
(6)
|
Incorporated
by reference to exhibit number 3.7 to the Company’s Quarterly Report on
Form 10-Q for the quarter ended March 30,
2007.
|
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has
duly caused this report to be signed on its behalf by the undersigned, thereunto
duly authorized.
|
TRIMBLE NAVIGATION LIMITED
|
|
|
(Registrant)
|
|
|
|
|
|
|
|
By:
|
/s/ Rajat Bahri
|
|
|
Rajat
Bahri
|
|
|
Chief
Financial Officer
|
|
|
(Authorized
Officer and Principal
|
|
|
Financial
Officer)
|
|
DATE: May
11, 2009
EXHIBIT
INDEX
3.1
|
Restated
Articles of Incorporation of the Company filed June 25, 1986.
(2)
|
3.2
|
Certificate
of Amendment of Articles of Incorporation of the Company filed October 6,
1988. (2)
|
3.3
|
Certificate
of Amendment of Articles of Incorporation of the Company filed July 18,
1990. (2)
|
3.4
|
Certificate
of Amendment of Articles of Incorporation of the Company filed May 29,
2003. (3)
|
3.5
|
Certificate
of Amendment of Articles of Incorporation of the Company filed March 4,
2004. (4)
|
3.6
|
Certificate
of Amendment of Articles of Incorporation of the Company filed February
21, 2007. (6)
|
3.7
|
Bylaws
of the Company, amended and restated through July 20, 2006.
(5)
|
4.1
|
Specimen
copy of certificate for shares of Common Stock of the Company.
(1)
|
|
Amended
and Restated 2002 Stock Plan, amended as of March 6, 2009.
(7)
|
|
Amended
and Restated 1988 Employee Stock Purchase Plan, amended as of March 6,
2009. (7)
|
|
Certification
of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley
Act of 2002 dated May 11, 2009. (7)
|
|
Certification
of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley
Act of 2002 dated May 11, 2009. (7)
|
|
Certification
of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 dated May 11,
2009. (7)
|
|
Certification
of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 dated May 11,
2009. (7)
|
(1)
|
Incorporated
by reference to exhibit number 4.1 to the registrant's Registration
Statement on Form S-1, as amended (File No. 33-35333), which
became effective July 19, 1990.
|
(2)
|
Incorporated
by reference to identically numbered exhibits to the registrant's Annual
Report on Form 10-K for the fiscal year ended January 1,
1999.
|
(3)
|
Incorporated
by reference to exhibit number 3.5 to the registrant’s Quarterly Report on
Form 10-Q for the quarter ended July 4,
2003.
|
(4)
|
Incorporated
by reference to exhibit number 3.6 to the registrant’s Quarterly Report on
Form 10-Q for the quarter ended April 2,
2004.
|
(5)
|
Incorporated
by reference to exhibit number 3.7 to the Company’s Quarterly Report on
Form 10-Q for the quarter ended September 29,
2006.
|
(6)
|
Incorporated
by reference to exhibit number 3.7 to the Company’s Quarterly Report on
Form 10-Q for the quarter ended March 30,
2007.
|