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Trimble Announces Second Quarter 2022 Results

·11 min read
Cision
  • Record annualized recurring revenue of $1.51 billion, up 12 percent and 15 percent on an organic basis

  • Second quarter total revenue of $941 million, up 6 percent on an organic basis

SUNNYVALE, Calif., Aug. 5, 2022 /PRNewswire/ -- Trimble Inc. (NASDAQ:TRMB) today announced financial results for the second quarter of 2022.

Second Quarter 2022 Financial Highlights

  • Revenue of $941.2 million, up 6 percent excluding the effects of divestitures, acquisitions, and foreign currency translation

  • Annualized recurring revenue (ARR) was $1.51 billion, up 12 percent year over year

  • GAAP operating income was $134.9 million and non-GAAP operating income was $210.7 million

  • GAAP net income was $168.0 million and non-GAAP net income was $161.6 million

  • Diluted earnings per share was $0.67 on a GAAP basis and $0.64 on a non-GAAP basis

  • Adjusted EBITDA of $227.5 million, 24.2 percent of revenue

  • Share repurchases of $200.0 million

Executive Quote

"Our second quarter results exceeded expectations," said Rob Painter, Trimble's president and chief executive officer. "Growth in annualized recurring revenue and gross margin demonstrate the potential of our Connect & Scale strategy. We remain committed to investing in our strategy while navigating macroeconomic uncertainties."

Forward Looking Guidance

For the full-year 2022, Trimble now expects to report revenue between $3,760 million and $3,820 million and GAAP earnings per share of $1.89 to $1.99, and non-GAAP earnings per share between $2.70 and $2.80. GAAP guidance assumes a tax rate of 23 percent and non-GAAP guidance assumes a tax rate of 18.5 percent. Both GAAP and non-GAAP earnings per share assume approximately 251 million shares outstanding. A reconciliation of the non-GAAP measures to the most directly comparable GAAP measures and other information relating to these non-GAAP measures are included in the supplemental reconciliation scheduled attached.

Investor Conference Call / Webcast Details

Trimble will hold a conference call on August 5, 2022 at 5:00 a.m. PT to review its second quarter 2022 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 (888) 660-6347 (U.S.) or (929) 201-6594 (international). The conference ID is 1043223. The replay will also be available on the web at the address above.

About Trimble

Trimble is an industrial technology company transforming the way the world works by delivering solutions that enable our customers to thrive. Core technologies in positioning, modeling, connectivity and data analytics connect the digital and physical worlds to improve productivity, quality, safety, transparency and sustainability. From purpose-built products to enterprise lifecycle solutions, Trimble is transforming industries such as agriculture, construction, geospatial and transportation. 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 about our future financial and operational results. These forward-looking statements are subject to change, and actual results may materially differ 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, effectively integrate new acquisitions or consummate divestitures in a timely manner. The Company's results would also be negatively impacted by deterioration in economic conditions as a result of the COVID-19 pandemic, supply chain shortages and disruptions, as well as general inflationary pressures, resulting in increases in costs and reduced revenue, adverse geopolitical developments and the potential impact of volatility and conflict in the political and economic environment, including the Russian invasion of Ukraine and its direct and indirect impact on our business, weakening in the macroeconomic environment, foreign exchange fluctuations, the pace we transition our business model towards a subscription model, and the imposition of barriers to international trade. Any failure to achieve predicted results could negatively impact the Company's revenue, 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. Undue reliance should not be placed on any forward-looking statement contained herein. 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)



Second Quarter of


First Two Quarters of


2022


2021


2022


2021

Revenue:








Product

$ 564.5


$ 594.9


$ 1,186.1


$ 1,134.3

Service

158.0


162.1


319.1


324.4

Subscription

218.7


188.2


429.7


373.0

Total revenue

941.2


945.2


1,934.9


1,831.7

Cost of sales:








Product

269.9


286.0


578.3


541.7

Service

63.4


58.0


126.7


117.6

Subscription

49.4


53.8


99.3


109.6

Amortization of purchased intangible assets

21.0


22.0


43.5


44.1

Total cost of sales

403.7


419.8


847.8


813.0

Gross margin

537.5


525.4


1,087.1


1,018.7

Gross margin (%)

57.1 %


55.6 %


56.2 %


55.6 %

Operating expense:








Research and development

140.1


138.3


280.4


267.7

Sales and marketing

138.9


125.2


270.8


247.6

General and administrative

106.9


99.6


208.4


185.0

Restructuring charges

5.4


4.5


12.3


6.0

Amortization of purchased intangible assets

11.3


13.0


23.4


26.7

Total operating expense

402.6


380.6


795.3


733.0

Operating income

134.9


144.8


291.8


285.7

Non-operating income, net:








Divestitures gain, net

106.0


20.4


97.1


22.4

Interest expense, net

(15.3)


(16.6)


(31.3)


(33.5)

Income from equity method investments, net

5.8


10.0


15.5


21.8

Other income (expense), net

(9.8)


3.8


(13.0)


3.4

Total non-operating income, net

86.7


17.6


68.3


14.1

Income before taxes

221.6


162.4


360.1


299.8

Income tax provision

53.6


23.5


81.8


46.3

Net income

168.0


138.9


278.3


253.5

Net gain attributable to noncontrolling interests




0.1

Net income attributable to Trimble Inc.

$ 168.0


$ 138.9


$ 278.3


$ 253.4

Earnings per share attributable to Trimble Inc.:








Basic

$ 0.67


$ 0.55


$ 1.11


$ 1.01

Diluted

$ 0.67


$ 0.55


$ 1.11


$ 1.00

Shares used in calculating earnings per share:








Basic

249.2


251.5


250.0


251.3

Diluted

250.7


254.2


251.7


254.2

CONDENSED CONSOLIDATED BALANCE SHEETS
(In millions)
(Unaudited)



Second Quarter of


Year End

As of

2022


2021

Assets




Current assets:




Cash and cash equivalents

$ 350.1


$ 325.7

Accounts receivable, net

589.3


624.8

Inventories

371.7


363.3

Other current assets

163.9


136.8

Total current assets

1,475.0


1,450.6

Property and equipment, net

228.5


233.2

Operating lease right-of-use assets

133.2


141.0

Goodwill

3,886.0


3,981.5

Other purchased intangible assets, net

432.9


506.6

Deferred income tax assets

464.0


502.0

Other non-current assets

299.9


284.7

Total assets

$ 6,919.5


$ 7,099.6

Liabilities and Stockholders' Equity




Current liabilities:




Short-term debt

$ 300.0


$ —

Accounts payable

191.7


207.3

Accrued compensation and benefits

168.4


231.0

Deferred revenue

599.2


548.8

Other current liabilities

190.2


201.5

Total current liabilities

1,449.5


1,188.6

Long-term debt

994.1


1,293.2

Deferred revenue, non-current

86.0


83.0

Deferred income tax liabilities

198.4


263.1

Income taxes payable

40.9


54.5

Operating lease liabilities

114.4


121.4

Other non-current liabilities

141.7


151.1

Total liabilities

3,025.0


3,154.9

Stockholders' equity:




Common stock

0.2


0.3

Additional paid-in-capital

1,987.7


1,935.6

Retained earnings

2,145.7


2,170.5

Accumulated other comprehensive loss

(239.1)


(161.7)

Total Trimble Inc. stockholders' equity

3,894.5


3,944.7

Noncontrolling interests


Total stockholders' equity

3,894.5


3,944.7

Total liabilities and stockholders' equity

$ 6,919.5


$ 7,099.6

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In millions)
(Unaudited)



First Two Quarters of


2022


2021

Cash flow from operating activities:




Net income

$ 278.3


$ 253.5

Adjustments to reconcile net income to net cash provided by operating activities:




Depreciation expense

20.0


20.8

Amortization expense

66.9


70.8

Deferred income taxes

(24.9)


(4.9)

Stock-based compensation

61.3


62.8

Divestitures gain, net

(97.1)


(24.0)

Other, net

12.6


3.6

(Increase) decrease in assets:




Accounts receivable, net

(1.5)


35.2

Inventories

(72.4)


(0.3)

Other current and non-current assets

(25.6)


(22.4)

Increase (decrease) in liabilities:




Accounts payable

(7.9)


39.2

Accrued compensation and benefits

(46.4)


6.3

Deferred revenue

67.3


3.9

Other current and non-current liabilities

(28.8)


(15.7)

Net cash provided by operating activities

201.8


428.8

Cash flow from investing activities:




Purchases of property and equipment

(28.5)


(21.4)

Net proceeds from sale of businesses

210.5


46.0

Net proceeds from sale of property and equipment

0.1


20.7

Other, net

(9.8)


(2.4)

Net cash provided by investing activities

172.3


42.9

Cash flow from financing activities:




Issuance of common stock, net of tax withholdings

(21.7)


(17.3)

Repurchases of common stock

(304.7)


(40.0)

Proceeds from debt and revolving credit lines

138.2


198.9

Payments on debt and revolving credit lines

(138.2)


(363.3)

Other, net

(8.9)


(1.4)

Net cash used in financing activities

(335.3)


(223.1)

Effect of exchange rate changes on cash and cash equivalents

(14.4)


(1.9)

Net increase in cash and cash equivalents

24.4


246.7

Cash and cash equivalents - beginning of period

325.7


237.7

Cash and cash equivalents - end of period

$ 350.1


$ 484.4

REPORTING SEGMENTS
GAAP TO NON-GAAP RECONCILIATION
(In millions)
(Unaudited)




Reporting Segments



Buildings and
Infrastructure


Geospatial


Resources and
Utilities


Transportation

SECOND QUARTER OF 2022:









Segment revenue


$ 382.6


$ 193.7


$ 214.8


$ 150.1










Segment operating income


$ 101.4


$ 57.8


$ 73.0


$ 11.8










Segment operating income as a % of segment revenue


26.5 %


29.8 %


34.0 %


7.9 %










SECOND QUARTER OF 2021:









Segment revenue


$ 364.8


$ 219.7


$ 197.5


$ 163.3










Segment operating income


$ 104.1


$ 66.1


$ 70.5


$ 12.8










Segment operating income as a % of segment revenue


28.5 %


30.1 %


35.7 %


7.8 %



Reporting Segments



Buildings and
Infrastructure


Geospatial


Resources and
Utilities


Transportation

FIRST TWO QUARTERS OF 2022:









Segment revenue


$ 780.2


$ 401.2


$ 444.7


$ 308.8










Segment operating income


$ 222.1


$ 115.7


$ 148.1


$ 21.0










Segment operating income as a % of segment revenue


28.5 %


28.8 %


33.3 %


6.8 %










FIRST TWO QUARTERS OF 2021:









Segment revenue


$ 707.9


$ 401.4


$ 402.7


$ 320.0










Segment operating income


$ 200.5


$ 114.8


$ 150.6


$ 21.2










Segment operating income as a % of segment revenue


28.3 %


28.6 %


37.4 %


6.6 %

GAAP TO NON-GAAP RECONCILIATION
(Dollars in millions, except per share data)
(Unaudited)







Second Quarter of


First Two Quarters of






2022


2021


2022


2021






Dollar
Amount

% of
Revenue


Dollar
Amount

% of
Revenue


Dollar
Amount

% of
Revenue


Dollar
Amount

% of
Revenue

REVENUE:















GAAP revenue:



$ 941.2



$ 945.2



$ 1,934.9



$ 1,831.7




Purchase accounting adjustments

(A)




0.1





0.3



Non-GAAP revenue:



$ 941.2



$ 945.3



$ 1,934.9



$ 1,832.0


















GROSS MARGIN:















GAAP gross margin:



$ 537.5

57.1 %


$ 525.4

55.6 %


$ 1,087.1

56.2 %


$ 1,018.7

55.6 %



Purchase accounting adjustments

(A)


21.0



22.1



43.5



44.4




Stock-based compensation / deferred
compensation

(C)


3.1



2.6



5.3



4.6