TRIMBLE, INC. SUNNYVALE, Calif., April 27, 2017 /PRNewswire/ -- Trimble Inc. (NASDAQ: TRMB) today announced financial results for the first quarter of 2017.
First Quarter 2017 Financial Summary
First quarter 2017 revenue of $613.9 million was up 5 percent as compared to the first quarter of 2016. As previously announced, Trimble has changed the reporting of its segment financial results to better reflect the Company's customer base and end markets, and our first quarter results are based on these new segments. Buildings and Infrastructure revenue was $188.1 million, up 8 percent. Geospatial revenue was $149.8 million, down 2 percent. Resources and Utilities revenue was $119.9 million, up 5 percent. Transportation revenue was $156.1 million, up 9 percent.
GAAP operating income was $56.6 million, up 89 percent as compared to the first quarter of 2016. GAAP operating margin was 9.2 percent of revenue as compared to 5.1 percent of revenue in the first quarter of 2016.
GAAP net income was $50.5 million, up 155 percent as compared to the first quarter of 2016. Diluted GAAP earnings per share were $0.20 as compared to diluted GAAP earnings per share of $0.08 in the first quarter of 2016.
Non-GAAP operating income of $109.2 million was up 23 percent as compared to the first quarter of 2016. Non-GAAP operating margin was 17.8 percent of revenue as compared to 15.1 percent of revenue in the first quarter of 2016.
Non-GAAP net income of $84.8 million was up 31 percent as compared to the first quarter of 2016. Diluted non-GAAP earnings per share were $0.33 as compared to diluted non-GAAP earnings per share of $0.25 in the first quarter of 2016.
The GAAP tax rate for the quarter was 23 percent as compared to 33 percent in the first quarter of 2016, and the non-GAAP tax rate was 23 percent as compared to 24 percent in the first quarter of 2016.
Operating cash flow for the first quarter of 2017 was $102.9 million, down 10 percent as compared to the first quarter of 2016. Deferred revenue for the first quarter of 2017 was $337.0 million, up 5 percent as compared to the first quarter of 2016.
During the first quarter, Trimble repurchased approximately 0.5 million shares of its common stock for $14.2 million. Approximately $116 million remains under the current share repurchase authorization as of the end of the first quarter.
"We continued to demonstrate progression in the first quarter, with accelerating revenue growth and significant margin improvement," said Steven W. Berglund, Trimble's president and chief executive officer. "Our outlook for the remainder of the year anticipates continuing year-over-year improvement in both revenue and profitability."
Forward Looking Guidance
For the second quarter of 2017 Trimble expects revenue to be between $625 million and $655 million with GAAP earnings per share of $0.16 to $0.22 and non-GAAP earnings per share of $0.33 to $0.38. Non-GAAP guidance excludes the amortization of intangibles of $35 million related to previous acquisitions, anticipated acquisition costs of $3 million, the anticipated impact of stock-based compensation expense of $15 million, and $2 million in anticipated restructuring charges. GAAP guidance assumes a tax rate of 22 percent and non-GAAP guidance assumes a tax rate of 23 percent. Both GAAP and non-GAAP earnings per share assume approximately 257 million shares outstanding.
Investor Conference Call / Webcast Details
Trimble will hold a conference call on April 27 at 2:00 p.m. PT to review its first quarter 2017 results. An accompanying slide presentation will be made available on the "Investors" section of the Trimble Website, www.trimble.com, under the subheading "Events & Presentations". The call will be broadcast live on the Web at http://investor.trimble.com. Investors without Internet access may dial into the call at (800) 528-9198 (U.S.) or (702) 928-6633 (international). The passcode is 8299038. The replay will also be available on the Web at the address above.
Use of Non-GAAP Financial Information
To help our investors understand our past financial performance and our future results, as well as our performance relative to competitors, we supplement the financial results that we provide in accordance with generally accepted accounting principles, or GAAP, with non-GAAP financial measures. These non-GAAP measures can be used to evaluate our historical and prospective financial performance, as well as our performance relative to competitors. Our management regularly uses our supplemental non-GAAP financial measures internally to understand, manage and evaluate our business, and to make operating decisions. These non-GAAP measures are among the primary factors management uses in planning for and forecasting future periods. We believe that these non-GAAP financial measures reflect an additional way of viewing aspects of our operations that, when viewed with our GAAP results, provide a more complete understanding of factors and trends affecting our business. Further, we believe some of our investors track our "core operating performance" as a means of evaluating our performance in the ordinary, ongoing, and customary course of our operations. Core operating performance excludes items that are non-cash, not expected to recur or not reflective of ongoing financial results. Management also believes that looking at our core operating performance provides a supplemental way to provide consistency in period to period comparisons.
The specific non-GAAP measures, which we use along with a reconciliation to the nearest comparable GAAP measures and the explanation for why these non-GAAP measures provide useful information to investors regarding our financial condition and results of operations and why management chose to exclude selected items can be found at the end of this release. The method we use to produce non-GAAP results is not computed according to GAAP and may differ from the methods used by other companies. Our non-GAAP results are not meant to be considered in isolation or as a substitute for comparable GAAP measures and should be read only in conjunction with our consolidated financial statements prepared in accordance with GAAP. Investors are encouraged to review the reconciliation of our non-GAAP financial measures to the comparable GAAP results, which is attached to this earnings release. Additional financial information about our use of non-GAAP results can be found on the investor relations page of our Web site at: http://investor.trimble.com.
Segment Information
For a description of our new reporting segments, and financial segment information for fiscal years 2014, 2015, 2016, and the first quarter of fiscal 2017, please visit the Investor Relations section of the Company's Website at: http://investor.trimble.com.
About Trimble
Trimble is transforming the way the world works by delivering products and services that connect the physical and digital worlds. Core technologies in positioning, modeling, connectivity and data analytics enable customers to improve productivity, quality, safety and sustainability. From purpose built products to enterprise lifecycle solutions, Trimble software, hardware and services are transforming a broad range of industries such as agriculture, construction, geospatial and transportation and logistics. For more information about Trimble (NASDAQ:TRMB), visit: www.trimble.com.
Safe Harbor
Certain statements made in this press release are forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, and are made pursuant to the safe harbor provisions of the Securities Litigation Reform Act of 1995. These statements include expectations for future financial market and economic conditions, the potential for growth and margin expansion in 2017, the impact of acquisitions, the ability to deliver revenue, earnings per share and other financial projections that Trimble has guided for the second quarter of 2017, including the expected tax rate, anticipated impact of stock-based compensation expense, amortization of intangibles related to previous acquisitions, anticipated acquisition costs, restructuring charges, and the anticipated number of diluted shares outstanding. These forward-looking statements are subject to change, and actual results may materially differ from those set forth in this press release due to certain risks and uncertainties. The Company's results may be adversely affected if the Company is unable to market, manufacture and ship new products, obtain new customers, or integrate new acquisitions. The Company's results would also be negatively impacted by weakening in the macro environment or foreign exchange fluctuations, or the imposition of barriers to international trade. Any failure to achieve predicted results could negatively impact the Company's revenues, cash flow from operations, and other financial results. The Company's financial results will also depend on a number of other factors and risks detailed from time to time in reports filed with the SEC, including its quarterly reports on Form 10-Q and its annual report on Form 10- K, such as changes in economic conditions, further worsening in the geospatial market, critical part supply chain shortages, and possible write-offs of goodwill. Undue reliance should not be placed on any forward-looking statement contained herein, especially in light of greater uncertainty than normal in the economy in general. These statements reflect the Company's position as of the date of this release. The Company expressly disclaims any undertaking to release publicly any updates or revisions to any statements to reflect any change in the Company's expectations or any change of events, conditions, or circumstances on which any such statement is based.
FTRMB
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In millions, except per share data)
(Unaudited)
First Quarter of
----------------
2017 2016
---- ----
Revenue:
Product $405.4 $393.6
Service 106.8 101.6
Subscription 101.7 87.8
Total revenue 613.9 583.0
----- -----
Cost of sales:
Product 194.4 190.0
Service 47.1 41.6
Subscription 26.8 26.7
Amortization of purchased
intangible assets 19.0 24.1
Total cost of sales 287.3 282.4
----- -----
Gross margin 326.6 300.6
----- -----
Gross margin (%) 53.2 % 51.6 %
Operating expense:
Research and
development 88.7 87.7
Sales and
marketing 94.8 96.7
General and
administrative 69.3 68.3
Restructuring
charges 2.9 1.8
Amortization of
purchased
intangible
assets 14.3 16.2
Total operating expense 270.0 270.7
----- -----
Operating income 56.6 29.9
Non-operating income (expense), net:
Interest
expense, net (6.1) (6.6)
Foreign currency
transaction
gain (loss),
net 1.4 (0.1)
Income from
equity method
investments,
net 4.2 2.9
Other income,
net 9.5 3.3
Total non-operating income
(expense), net 9.0 (0.5)
--- ----
Income before taxes 65.6 29.4
Income tax provision 15.1 9.7
Net income 50.5 19.7
Less: Net loss
attributable to
noncontrolling
interests - (0.1)
Net income attributable to
Trimble Inc. $50.5 $19.8
===== =====
Earnings per share attributable to Trimble Inc.:
Basic $0.20 $0.08
-----
Diluted $0.20 $0.08
-------
Shares used in calculating earnings per share:
Basic 252.0 251.0
-----
Diluted 255.9 254.0
-------
CONDENSED CONSOLIDATED BALANCE SHEETS
(In millions)
(Unaudited)
First Quarter of Fiscal Year End
As of 2017 2016
----- ---- ----
Assets
Current assets:
Cash and cash
equivalents $280.8 $216.1
Short-term
investments 141.8 111.1
Accounts
receivable, net 394.7 354.8
Other
receivables 30.5 35.4
Inventories 221.1 218.8
Other current
assets 46.6 42.5
Total current assets 1,115.5 978.7
Property and equipment, net 142.8 144.2
Goodwill 2,128.6 2,077.6
Other purchased intangible assets, net 361.6 333.3
Other non-current assets 148.9 140.0
----- -----
Total assets $3,897.4 $3,673.8
======== ========
Liabilities and Shareholders' Equity
Current liabilities:
Short-term debt $138.3 $130.3
Accounts payable 115.9 109.8
Accrued
compensation
and benefits 85.8 97.5
Deferred revenue 299.3 246.5
Accrued warranty
expense 17.4 17.2
Other current
liabilities 102.6 86.9
Total current liabilities 759.3 688.2
Long-term debt 509.8 489.6
Non-current deferred revenue 37.7 37.7
Deferred income tax liabilities 39.2 38.8
Other non-current liabilities 130.5 113.8
Total liabilities 1,476.5 1,368.1
------- -------
Stockholders' equity:
Common stock 0.3 0.3
Additional paid-
in-capital 1,399.4 1,348.3
Retained
earnings 1,216.1 1,177.1
Accumulated
other
comprehensive
loss (194.8) (219.9)
Total Trimble Inc. stockholders' equity 2,421.0 2,305.8
Noncontrolling interests (0.1) (0.1)
----
Total stockholders' equity 2,420.9 2,305.7
------- -------
Total liabilities and
stockholders' equity $3,897.4 $3,673.8
======== ========
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In millions)
(Unaudited)
First Quarter of
----------------
2017 2016
---- ----
Cash flow from operating activities:
Net Income $50.5 $19.7
Adjustments to
reconcile net
income to net cash
provided by
operating
activities:
Depreciation expense 8.9 9.1
Amortization expense 33.3 40.3
Provision for doubtful accounts - 0.6
Deferred income taxes 0.2 (0.1)
Stock-based compensation 13.7 13.7
Income from equity method
investments (4.2) (2.9)
Divestiture gain, net (8.1) (3.1)
Provision for excess and obsolete
inventories 1.9 4.1
Other non-cash items (2.5) 0.7
Decrease (increase)
in assets:
Accounts receivables (34.8) (14.1)
Other receivables 3.9 (2.2)
Inventories (2.3) 3.1
Other current and non-current
assets (8.0) (4.9)
Increase (decrease)
in liabilities:
Accounts payable 3.6 11.9
Accrued compensation and benefits (14.7) (13.5)
Deferred revenue 49.6 54.1
Accrued warranty 0.1 (0.7)
Other liabilities 11.8 (1.4)
Net cash provided by operating activities 102.9 114.4
----- -----
Cash flow from investing activities:
Acquisitions of
businesses, net of
cash acquired (79.2) (15.8)
Acquisitions of
property and
equipment (5.7) (4.9)
Purchases of equity
method investments - (0.4)
Purchases of short-
term investments (59.0) -
Net proceeds from
sale of businesses 19.2 8.1
Proceeds from
maturities of
short-term
investments 24.4 -
Proceeds from sales
of short-term
investments 3.9 -
Dividends received
from equity method
investments 1.5 5.0
Other 0.4 (0.3)
Net cash used in investing activities (94.5) (8.3)
----- ----
Cash flow from financing activities:
Issuance of common
stock, net of tax
withholdings 39.6 16.1
Repurchases and
retirement of
common stock (14.2) (12.2)
Proceeds from debt
and revolving
credit lines 252.0 92.0
Payments on debt and
revolving credit
lines (226.1) (147.0)
Net cash provided by (used in) financing activities 51.3 (51.1)
---- -----
Effect of exchange rate changes on cash and cash
equivalents 5.0 3.7
--- ---
Net increase in cash and cash equivalents 64.7 58.7
Cash and cash equivalents - beginning of period 216.1 116.0
----- -----
Cash and cash equivalents - end of period $280.8 $174.7
====== ======
REPORTING SEGMENTS
(Dollars in millions)
(Unaudited)
Reporting Segments
------------------
Buildings Resources
and and
Infrastructure Geospatial Utilities Transportation
-------------- ---------- --------- --------------
FIRST QUARTER OF FISCAL 2017 :
Revenue $188.1 $149.8 $119.9 $156.1
Operating income before
corporate allocations $32.7 $27.9 $42.2 $24.8
Operating margin (% of segment external net revenue) 17.4 % 18.6 % 35.2 % 15.9 %
FIRST QUARTER OF FISCAL 2016 :
Revenue $173.7 $152.2 $113.8 $143.3
Operating income before
corporate allocations $22.4 $26.1 $34.9 $23.8
Operating margin (% of segment external net revenue) 12.9 % 17.1 % 30.7 % 16.6 %
GAAP TO NON-GAAP RECONCILIATION
(Dollars in millions, except per share data)
(Unaudited)
First Quarter of
----------------
2017 2016
----
Dollar % of Dollar % of
Amount Revenue Amount Revenue
------ ------- ------ -------
GROSS MARGIN:
GAAP gross
margin: $326.6 53.2 % $300.6 51.6 %
Restructuring charges ( A ) 0.5 0.1 % 0.3 0.1 %
Amortization of purchased
intangible assets ( B ) 19.0 3.1 % 24.1 4.0 %
Stock-based compensation ( C ) 0.8 0.1 % 1.0 0.2 %
Amortization of acquisition-
related inventory step-up ( D ) 0.1 -% - -%
--- --- --- ---
Non-GAAP gross
margin: $347.0 56.5 % $326.0 55.9 %
------ ------
OPERATING EXPENSES:
GAAP operating
expenses: $270.0 44.0 % $270.7 46.4 %
Restructuring charges ( A ) (2.9) (0.6)% (1.8) (0.3)%
Amortization of purchased
intangible assets ( B ) (14.3) (2.3)% (16.2) (2.8)%
Stock-based compensation ( C ) (12.9) (2.1)% (12.7) (2.2)%
Acquisition / divestiture items ( E ) (2.1) (0.3)% (1.6) (0.3)%
Executive transition costs ( F ) - -% (0.9) (0.1)%
Non-GAAP
operating
expenses: $237.8 38.7 % $237.5 40.7 %
------ ------
OPERATING INCOME:
GAAP operating
income: $56.6 9.2 % $29.9 5.1 %
Restructuring charges ( A ) 3.4 0.7 % 2.1 0.4 %
Amortization of purchased
intangible assets ( B ) 33.3 5.4 % 40.3 6.8 %
Stock-based compensation ( C ) 13.7 2.2 % 13.7 2.4 %
Amortization of acquisition-
related inventory step-up ( D ) 0.1 -% - -%
Acquisition / divestiture items ( E ) 2.1 0.3 % 1.6 0.3 %
Executive transition costs ( F ) - -% 0.9 0.1 %
Non-GAAP
operating
income: $109.2 17.8 % $88.5 15.1 %
------ -----
NON-OPERATING INCOME (EXPENSE), NET:
GAAP non-
operating income
(expense), net: $9.0 $(0.5)
Acquisition / divestiture items ( E ) (8.1) (3.1)
----
Non-GAAP non-
operating income
(expense), net: $0.9 $(3.6)
GAAP and GAAP and
Non-GAAP Non-GAAP
Tax Rate % ( I ) Tax Rate % ( I )
--------- ---------
INCOME TAX PROVISION:
GAAP income tax
provision: $15.1 23 % $9.7 33 %
Non-GAAP items tax effected ( G ) 10.2 18.3
Difference in GAAP and Non-GAAP
tax rate ( H ) - (7.5)
Non-GAAP income
tax provision: $25.3 23 % $20.5 24 %
----- -----
NET INCOME:
GAAP net income
attributable to
Trimble Inc. $50.5 $19.8
Restructuring charges ( A ) 3.4 2.1
Amortization of purchased
intangible assets ( B ) 33.3 40.3
Stock-based compensation ( C ) 13.7 13.7
Amortization of acquisition-
related inventory step-up ( D ) 0.1 -
Acquisition / divestiture items ( E ) (6.0) (1.5)
Executive transition costs ( F ) - 0.9
Non-GAAP tax adjustments ( G ) + ( H ) (10.2) (10.8)
Non-GAAP net
income
attributable to
Trimble Inc. $84.8 $64.5
DILUTED NET INCOME PER SHARE:
GAAP diluted net
income per share
attributable to
Trimble Inc. $0.20 $0.08
Restructuring charges ( A ) 0.01 0.01
Amortization of purchased
intangible assets ( B ) 0.13 0.16
Stock-based compensation ( C ) 0.05 0.05
Amortization of acquisition-
related inventory step-up ( D ) - -
Acquisition / divestiture items ( E ) (0.02) (0.01)
Executive transition costs ( F ) - -
Non-GAAP tax adjustments ( G ) + ( H ) (0.04) (0.04)
Non-GAAP diluted
net income per
share
attributable to
Trimble Inc. $0.33 $0.25
FOOTNOTES TO GAAP TO NON-GAAP RECONCILIATION
(Unaudited)
Our non-GAAP measures are not meant to be considered
in isolation or as a substitute for comparable GAAP
measures. The non-GAAP financial measures included
in the previous table as well as detailed
explanations to the adjustments to comparable GAAP
measures, are set forth below:
Non-GAAP gross margin
We believe our investors benefit by understanding our
non-GAAP gross margin as a way of understanding how
product mix, pricing decisions and manufacturing
costs influence our business. Non-GAAP gross
margin excludes restructuring charges, amortization
of purchased intangible assets, stock-based
compensation and amortization of acquisition-
related inventory step-up from GAAP gross margin.
We believe that these exclusions offer investors
additional information that may be useful to view
trends in our gross margin performance.
Non-GAAP operating expenses
We believe this measure is important to investors
evaluating our non-GAAP spending in relation to
revenue. Non-GAAP operating expenses exclude
restructuring charges, amortization of purchased
intangible assets, stock-based compensation,
acquisition/divestiture costs associated with
external and incremental costs resulting directly
from merger and acquisition activities such as
legal, due diligence, and integration costs, and
executive transition costs from GAAP operating
expenses. We believe that these exclusions offer
investors supplemental information to facilitate
comparison of our operating expenses to our prior
results.
Non-GAAP operating income
We believe our investors benefit by understanding our
non-GAAP operating income trends which are driven
by revenue, gross margin, and spending. Non-GAAP
operating income excludes restructuring charges,
amortization of purchased intangible assets, stock-
based compensation, amortization of acquisition-
related inventory step-up, acquisition/divestiture
costs associated with external and incremental costs
resulting directly from merger and acquisition
activities such as legal, due diligence, and
integration costs, and executive transition costs.
We believe that these exclusions offer an
alternative means for our investors to evaluate
current operating performance compared to results of
other periods.
Non-GAAP non-operating income (expense), net
We believe this measure helps investors evaluate our
non-operating income trends. Non-GAAP non-
operating income (expense), net excludes
acquisition/divestiture gains/losses associated
with unusual acquisition related items such as
intangible asset impairment charges and gains or
losses related to the acquisition or sale of certain
businesses and investments. We believe that these
exclusions provide investors with a supplemental
view of our ongoing financial results.
Non-GAAP income tax provision
We believe that providing investors with the non-
GAAP income tax provision is beneficial because it
provides for consistent treatment of the excluded
items in our non-GAAP presentation.
Non-GAAP net income
This measure provides a supplemental view of net
income trends which are driven by non-GAAP income
before taxes and our non-GAAP tax rate. Non-GAAP
net income excludes restructuring charges,
amortization of purchased intangible assets, stock-
based compensation, amortization of acquisition-
related inventory step-up, acquisition/divestiture
costs, executive transition costs, and non-GAAP tax
adjustments from GAAP net income. We believe our
investors benefit from understanding these
exclusions and from an alternative view of our net
income performance as compared to our past net
income performance.
Non-GAAP diluted net income per share
We believe our investors benefit by understanding our
non-GAAP operating performance as reflected in a
per share calculation as a way of measuring non-
GAAP operating performance by ownership in the
company. Non-GAAP diluted net income per share
excludes restructuring charges, amortization of
purchased intangible assets, stock-based
compensation, amortization of acquisition-related
inventory step-up, acquisition/divestiture costs,
executive transition costs, and non-GAAP tax
adjustments from GAAP diluted net income per share.
We believe that these exclusions offer investors a
useful view of our diluted net income per share as
compared to our past diluted net income per share.
These non-GAAP measures can be used to evaluate our
historical and prospective financial performance, as
well as our performance relative to competitors. We
believe some of our investors track our "core
operating performance" as a means of evaluating our
performance in the ordinary, ongoing, and customary
course of our operations. Core operating performance
excludes items that are non-cash, not expected to
recur or not reflective of ongoing financial
results. Management also believes that looking at
our core operating performance provides a
supplemental way to provide consistency in period to
period comparisons. Accordingly, management
excludes from non-GAAP those items relating to
restructuring charges, amortization of purchased
intangible assets, stock-based compensation,
amortization of acquisition-related inventory step-
up, acquisition/divestiture costs, executive
transition costs, litigation expenses and non-GAAP
tax adjustments. For detailed explanations of the
adjustments made to comparable GAAP measures, see
items (A) - ( I ) below.
( A ) Restructuring
charges.
Included in
our GAAP
presentation
of cost of
sales and
operating
expenses,
restructuring
charges
recorded are
primarily for
employee
compensation
resulting from
reductions in
employee
headcount in
connection
with our
company
restructurings.
We exclude
restructuring
charges from
our non-GAAP
measures
because we
believe they
do not reflect
expected
future
operating
expenses, they
are not
indicative of
our core
operating
performance,
and they are
not meaningful
in comparisons
to our past
operating
performance.
We have
incurred
restructuring
expense in
each of the
periods
presented.
However the
amount
incurred can
vary
significantly
based on
whether a
restructuring
has occurred
in the period
and the timing
of headcount
reductions.
( B ) Amortization of
purchased
intangible
assets.
Included in
our GAAP
presentation
of gross
margin and
operating
expenses is
amortization
of purchased
intangible
assets. U.S.
GAAP
accounting
requires that
intangible
assets are
recorded at
fair value and
amortized over
their useful
lives.
Consequently,
the timing and
size of our
acquisitions
will cause our
operating
results to
vary from
period to
period, making
a comparison
to past
performance
difficult for
investors.
This
accounting
treatment may
cause
differences
when comparing
our results to
companies that
grow
internally
because the
fair value
assigned to
the intangible
assets
acquired
through
acquisition
may
significantly
exceed the
equivalent
expenses that
a company may
incur for
similar
efforts when
performed
internally.
Furthermore,
the useful
life that we
use to
amortize our
intangible
assets over
may be
substantially
different from
the time
period that an
internal
growth company
incurs and
recognizes
such expenses.
We believe
that by
excluding the
amortization
of purchased
intangible
assets, which
primarily
represents
technology
and/or
customer
relationships
already
developed, it
provides an
alternative
way for
investors to
compare our
operations
pre-
acquisition to
those post-
acquisitions
and to those
of our
competitors
that have
pursued
internal
growth
strategies.
However, we
note that
companies that
grow
internally
will incur
costs to
develop
intangible
assets that
will be
expensed in
the period
incurred,
which may make
a direct
comparison
more
difficult.
( C ) Stock-based
compensation.
Included in
our GAAP
presentation
of cost of
sales and
operating
expenses,
stock-based
compensation
consists of
expenses for
employee stock
options and
awards and
purchase
rights under
our employee
stock purchase
plan. We
exclude stock-
based
compensation
expense from
our non-GAAP
measures
because some
investors may
view it as not
reflective of
our core
operating
performance as
it is a non-
cash expense.
For the first
quarter of
fiscal years
2017 and 2016,
stock-based
compensation
was allocated
as follows:
First Quarter of
----------------
(Dollars in millions) 2017 2016
---- ----
Cost of sales $0.8 $1.0
Research and development 2.4 2.3
Sales and marketing 2.2 2.0
General and administrative 8.3 8.4
---
$13.7 $13.7
----- -----
( D ) Amortization of
acquisition-
related
inventory
step-up. The
purchase
accounting
entries
associated
with our
business
acquisitions
require us to
record
inventory at
its fair
value, which
is sometimes
greater than
the previous
book value of
the inventory.
Included in
our GAAP
presentation
of cost of
sales, the
increase in
inventory
value is
amortized to
cost of sales
over the
period that
the related
product is
sold. We
exclude
inventory
step-up
amortization
from our non-
GAAP measures
because it is
a non-cash
expense that
we do not
believe is
indicative of
our ongoing
operating
results. We
further
believe that
excluding this
item from our
non-GAAP
results is
useful to
investors in
that it allows
for period-
over-period
comparability.
( E ) Acquisition /
divestiture
items. Included
in our GAAP
presentation of
operating
expenses,
acquisition
costs consist
of external and
incremental
costs resulting
directly from
merger and
acquisition and
strategic
investment
activities such
as legal, due
diligence, and
integration
costs, as well
as adjustments
to the fair
value of earn-
out
liabilities.
Included in our
GAAP
presentation of
non-operating
income
(expense), net,
acquisition /
divestiture
items includes
unusual
acquisition,
investment,
and/or
divestiture
gains/losses.
Although we do
numerous
acquisitions,
the costs that
have been
excluded from
the non-GAAP
measures are
costs specific
to particular
acquisitions.
These are one-
time costs that
vary
significantly
in amount and
timing and are
not indicative
of our core
operating
performance.
( F ) Executive
transition
costs.
Included in
our GAAP
presentation
of operating
expenses are
amounts paid
to the
Company's
former CFO
upon his
departure
under the
terms of his
executive
severance
agreement. We
excluded these
payments from
our non-GAAP
measures
because they
represent non-
recurring
expenses and
are not
indicative of
our ongoing
operating
expenses. We
further
believe that
excluding the
executive
transition
costs from our
non-GAAP
results is
useful to
investors in
that it allows
for period-
over-period
comparability.
( G ) Non-GAAP items
tax effected.
This amount
adjusts the
provision for
income taxes to
reflect the
effect of the
non-GAAP items
( A ) - ( F )
on non-GAAP
net income. We
believe this
information is
useful to
investors
because it
provides for
consistent
treatment of
the excluded
items in this
non-GAAP
presentation.
( H ) Difference in
GAAP and Non-
GAAP tax rate.
This amount
represents the
difference
between the
GAAP and Non-
GAAP tax rates
applied to the
Non-GAAP
operating
income plus the
Non-GAAP non-
operating
income
(expense), net.
( I ) GAAP and non-
GAAP tax rate
%. These
percentages are
defined as GAAP
income tax
provision as a
percentage of
GAAP income
before taxes
and non-GAAP
income tax
provision as a
percentage of
non-GAAP
income before
taxes. We
believe that
investors
benefit from a
presentation of
non-GAAP tax
rate percentage
as a way of
facilitating a
comparison to
non-GAAP tax
rates in prior
periods.
To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/trimble-reports-first-quarter-2017-results-300447492.html
SOURCE Trimble
