Intermec Reports Third Quarter 2009 Results

• Revenue of $159 Million
• Gross Margin of 38.6% down 0.5 Percentage Points Y/Y, up 2.4 Percentage Points Q/Q
• GAAP EPS of $0.00, Adjusted EPS of $0.03, excluding Restructuring

• Press Release
• Source: Intermec, Inc.
• On 4:00 pm EDT, Thursday October 29, 2009

EVERETT, Wash.--(BUSINESS WIRE)--Intermec, Inc. (NYSE:IN - News) today announced financial results for its third quarter, which ended September 27, 2009.

Related Quotes

Symbol	Price	Change
IN	12.85	-0.03

{"s" : "in","k" : "c10,l10,p20,t10","o" : "","j" : ""}

Third quarter 2009 revenues were $159 million and net earnings of $0.1 million, or $0.00 per diluted share, compared to 2008 third quarter revenues of $234 million and net earnings of $11.0 million, or $0.18 per diluted share.

“Intermec delivered above guidance on earnings and strong cash flow in the quarter,” said Patrick J. Byrne, Intermec President and CEO, “With our recently introduced new products, expanded channel, and lower break even point, we believe we are well positioned for strong operating leverage when the markets recover more fully.”

The following table presents our GAAP earnings from operations before taxes, net earnings, and diluted earnings per share as reported for the third quarters of 2009 and 2008, and as adjusted by excluding the impact of restructuring charges.

Excluding these charges the non-GAAP adjusted net earnings for the third quarter of 2009 were $1.8 million, or $0.03 per diluted share, as described in the Non-GAAP (Adjusted) Financial Measures section of this release.

Third Quarter 2009 Operating Performance

• Total revenues of $159 million were down 32% from the prior-year quarter. Approximately 2 percentage points of the year-over-year decline was due to currency translation.
• Geographically, compared to the prior-year quarter, revenues in North America declined 31%. In Europe, Middle East and Africa (EMEA) revenues declined 41% with approximately 5 percentage points of the year-over-year decline due to currency translation. Latin America declined 23% and Asia Pacific (APAC) increased 8%.
  
  Sequentially, revenues in North America increased 1%, EMEA decreased 5%, Latin American increased 4%, and APAC increased 33%.

• From a product line perspective, compared to the prior-year quarter, Systems and Solutions revenue decreased 39%, Printer and Media revenue declined 25% and Service revenue was down 15%.
• Gross profit margins of 38.6% declined 0.5 percentage points over the prior-year period. Product gross margins of 37.0% decreased 1.7 percentage points compared to the third quarter of 2008. Service gross margins of 44.7% increased 3.6 percentage points over the third quarter of 2008. Sequentially, product gross margins increased 2.6 percentage points and service gross margins increased 2.0 percentage points.
• Operating expenses excluding restructuring charges of $2.7 million were $58.5 million in the quarter, lower by 19% compared to $72.2 million in the third quarter 2008 which excluded restructuring charges of $3.3 million. Total operating expenses for these same periods were $61.2 million and $75.6 million, respectively.

• Included in third quarter 2009 results are restructuring charges of $2.7 million or ($0.03) per diluted share relating to business restructuring plans announced in 2009. This compares to restructuring charges of $3.3 million or ($0.03) in the comparable period of 2008.
• The Company’s third quarter 2009 effective tax rate was approximately 35.4%, consistent with the prior-year comparable quarter.
• Operating cash flow was positive $10 million in the quarter and $18 million year-to-date.
• The Company’s cash, cash equivalents, and short-term investments increased during the quarter to $239 million. The Company has no debt.
• During the quarter the CN50 rugged mobile computer, equipped with Qualcomm technology, began shipping to customers worldwide. Intermec collaborated with Qualcomm to develop the 3G wireless WAN Flexible Network™ radio. The combination of the computer’s quad band radio and multi-processor architecture provides superior computing performance, communication speeds and low battery consumption.
• Frost & Sullivan awarded the CN50 with the North American Product Innovation Award in the North American Mobile Resource Management (MRM) Market.
• Intermec’s CN3 rugged mobile computer was selected as a Best Channel Product by Business Solutions Magazine, citing the product’s richness of features, functionality, product reliability and durability.

Outlook – Fourth Quarter 2009

Intermec announced its financial guidance for the fourth quarter of 2009.

• Revenues are expected to be within a range of $160 to $170 million.
• Earnings per share are expected to be within a range of $0.00 to $0.05 per diluted share, including the expected impact of approximately $0.02 for the restructuring plans announced in 2009. Excluding these restructuring charges the non-GAAP adjusted earnings per share are expected to be within a range of $0.02 to $0.07 per diluted share.

Conference Call Information

Intermec will hold its conference call on October 29, 2009 at 5 p.m. ET (2 p.m. PT). The dial-in numbers for participants are (212) 547-0282 (US and International) (800) 621-8495 (Toll free); Passcode: (“Intermec”). The call will be broadcast on the Internet via a link from the investor’s Web page at www.intermec.com/InvestorRelations

Non-GAAP (Adjusted) Financial Measures

This press release includes non-GAAP (adjusted) financial measures for earnings (loss) from operations before taxes, net (loss) earnings, and earnings (loss) per diluted share. It also includes an outlook for the fourth quarter 2009 non-GAAP (adjusted) earnings (loss) per diluted share. Reconciliations of each of these non-GAAP financial measures to the most directly comparable GAAP financial measures are detailed in the Reconciliation of GAAP to Non-GAAP Net Earnings attached to this press release.

Our non-GAAP measures should be read in conjunction with the corresponding GAAP measures. The non-GAAP measures should be considered in addition to and not as an alternative or substitute for the measures prepared in accordance with generally accepted accounting principles.

We believe that excluding restructuring charges (principally related to severance costs in connection with distinct organizational initiatives to reduce costs and improve operational efficiency) provides supplemental information useful to investors’ and management’s understanding of the company’s core operating results, especially when comparing those results on a consistent basis to results for previous periods and anticipated results for future periods.

About Intermec, Inc.

Intermec Inc. (NYSE:IN - News) develops and integrates products, services and technologies that identify, track and manage supply chain assets and information. Core technologies include rugged mobile computing and data collection systems, bar code printers, label media, and RFID. The company’s products and services are used by customers in many industries worldwide to improve the productivity, quality and responsiveness of business operations. For more information about Intermec, visit www.intermec.com or call 800-347-2636.

(Forward-looking Statements)

Statements made in this release and related statements that express Intermec’s or our management’s intentions, hopes, indications, beliefs, expectations, guidance, estimates, forecasts or predictions of the future constitute forward-looking statements, as defined by the Private Securities Litigation Reform Act of 1995, and relate to matters that are not historical facts. They include, without limitation, statements regarding: our cost reduction plans; our view of general economic and market conditions; and our revenue, expense, earnings or financial outlook for the fourth quarter of 2009 or any current or future period. They also include statements about our ability to develop, produce, market or sell our products, either directly or through third parties, reduce or control expenses, improve efficiency, realign resources, continue operational improvement and year-over-year or sequential growth, and about the applicability of accounting policies used in our financial reporting. These statements represent beliefs and expectations only as of the date they were made. We may elect to update forward-looking statements but we expressly disclaim any obligation to do so, even if our beliefs and expectations change. Actual results may differ from those expressed or implied in our forward-looking statements. Such forward-looking statements involve and are subject to certain risks and uncertainties which may cause our actual results to differ materially from the discussed in a forward looking statement. These include, but are not limited to, risks and uncertainties described more fully in our reports filed or to be filed with the Securities and Exchange Commission including, but not limited to, our annual reports on Form 10-K and quarterly reports on Form 10-Q, which are available on our website at www.intermec.com.

Intermec, Inc.
Kevin P. McCarty, 425-265-2472
Director, Investor Relations
kevin.mccarty@intermec.com