Add
TRMB to Portfolio
Set Alert
Email to a
Friend
| |||
|
|
Quotes & Info
|
| TRMB > SEC Filings for TRMB > Form 10-Q on 6-Nov-2009 | All Recent SEC Filings |
6-Nov-2009
Quarterly Report
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, 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 nine months ended October 2, 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 accounting guidance on fair value measurements. This standard, which is now codified under the Fair Value Measurements and Disclosures Topic of the FASB Accounting Standards Codification, 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 deferred the effective date of the guidance 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 the fair value measurement guidance in the first quarter of fiscal 2008, except for those items specifically deferred by the FASB, which were adopted in the first quarter of fiscal 2009. The adoption did not have a material impact on our financial position, results of operations, or cash flows.
In December 2007, the FASB issued revised accounting guidance on business combinations. This revised standard, now codified under the Business Combination Topic of the FASB Accounting Standards Codification, 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. The guidance also sets forth the disclosures required to be made in the financial statements to evaluate the nature and financial effects of the business combination. The guidance 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 guidance in the first quarter of fiscal 2009. We expect the implementation of the new guidance to 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. The adoption of the guidance did not have a material impact in the first nine months of fiscal 2009.
In December 2007, the FASB issued guidance related to the accounting for noncontrolling interests in consolidated financial statements. The guidance, now codified under the Consolidation Topic of the FASB Accounting Standards Codification, changed the accounting and reporting for minority interests, which were re-characterized as noncontrolling interests and classified as a component of equity. This new consolidation method significantly changed the accounting for transactions with minority interest holders. The guidance required retroactive adoption of the presentation and disclosure requirements for previously existing minority interests. All other requirements of the guidance are applied prospectively. We adopted this new accounting guidance in the first quarter of fiscal 2009. The adoption of the guidance did not have a material impact on our financial position, results of operations, or cash flows.
In March 2008, the FASB issued accounting guidance on disclosures about derivative instruments and hedging activities. The new accounting guidance, now codified under the Derivatives and Hedging Topic of the FASB Accounting Standards Codification, requires enhanced disclosures about (a) how and why an entity uses derivative instruments, (b) how derivative instruments and related hedged items are accounted for, and (c) how derivative instruments and related hedged items affect an entity's financial position, financial performance, and cash flows. We adopted this new accounting guidance in the first quarter of fiscal 2009. The adoption of the guidance did not have an impact on our financial position, results of operations, or cash flows.
In May 2009, the FASB issued accounting guidance on subsequent events. The standard, now codified under the Subsequent Events Topic of the FASB Accounting Standards Codification, became effective for and was adopted by us during the second quarter of fiscal 2009. The guidance establishes the accounting for and disclosure of events that occur after the balance sheet date but before financial statements are issued or are available to be issued. Specifically, this guidance sets forth the period after the balance sheet date during which management of a reporting entity should evaluate events or transactions that may occur for potential recognition or disclosure in the financial statements, the circumstances under which an entity should recognize events or transactions occurring after the balance sheet date in its financial statements, and the disclosures that an entity should make about events or transactions that occurred after the balance sheet date. The guidance is effective for interim or annual financial periods ending after June 15, 2009. The adoption of the guidance did not have an impact on our financial position, results of operations or cash flows, other than the disclosures required by the guidance.
In June 2009, the FASB issued accounting guidance which changes the consolidation guidance applicable to a variable interest entity ("VIE"). The guidance, now codified under the Consolidation Topic of the FASB Accounting Standards Codification, also amends the guidance governing the determination of whether an enterprise is the primary beneficiary of a VIE, and is, therefore, required to consolidate an entity, by requiring a qualitative analysis rather than a quantitative analysis. The qualitative analysis will include, among other things, consideration of who has the power to direct the activities of the entity that most significantly impact the entity's economic performance and who has the obligation to absorb losses or the right to receive benefits of the VIE that could potentially be significant to the VIE. This guidance also requires continuous reassessments of whether an enterprise is the primary beneficiary of a VIE. Previously, GAAP required reconsideration of whether an enterprise was the primary beneficiary of a VIE only when specific events had occurred. We are required to adopt this guidance beginning in fiscal 2010. We are evaluating the impact of the adoption of the guidance on our financial position, results of operations and cash flows.
In June 2009, the FASB issued guidance which establishes the FASB Accounting Standards Codification (the "Codification") as the source of authoritative accounting principles recognized by the FASB to be applied by nongovernmental entities in the preparation of financial statements in conformity with U.S. GAAP. Rules and interpretive releases of the SEC under authority of federal securities laws are also sources of authoritative U.S. GAAP for SEC registrants. The Codification is effective for financial statements issued for interim and annual periods ending after September 15, 2009. The Codification supersedes all accounting standards in U.S. GAAP, aside from those issued by the SEC. We adopted this guidance in the third quarter of fiscal 2009. The adoption did not have an impact on our financial position, results of operations, or cash flows.
In October 2009, the FASB issued revised guidance on multiple-deliverable revenue arrangements which requires entities to allocate revenue in an arrangement using estimated selling prices of the delivered goods and services based on a selling price hierarchy, and eliminates the residual method of revenue allocation. It also requires revenue to be allocated using the relative selling price method. The FASB also issued accounting guidance on the applicability of software revenue accounting for certain arrangements that include software elements, which remove tangible products from the scope of software revenue guidance and provides guidance on determining whether software deliverables in an arrangement that includes a tangible product are covered by the scope of the software revenue guidance. The guidance on both of these topics, which are now codified under the Revenue Recognition Topic of the FASB Accounting Standards Codification, should be applied on a prospective basis for revenue arrangements entered into or materially modified in fiscal years beginning on or after June 15, 2010, with early adoption permitted. We are evaluating the expected impact of the new revenue guidance on our financial position, results of operations and cash flows, and when we will adopt the revised guidance.
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 three 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. In our Engineering and Construction segment, we introduced the new Excavator DDS300 Depth Display system, which provides dynamic depth display for compacting equipment to improve the accuracy and productivity of trenching, excavating and grading operations, and the AllTrak™ Asset Management system, which is designed to help contractors manage their construction equipment and tools. New versions of the GCS900 Grade Control system for milling machines and the LM80 Layout Manager were also released. We further expanded our Trimble Access software to include Spatial Imaging and Monitoring technology. The new software extends the benefits of Trimble Access to make sophisticated 3D scanning easier, faster, and more intuitive for the surveying community.
In our Field Solutions Segment, we introduced the Ag3000 modem for use as part of a Trimble GPS Autopilot™ system. The modem allows farmers to improve machine guidance accuracy by accessing network correction signals that use Trimble VRS technology via a cellular connection. We also introduced the TrueGuide Implement Guidance system which allows a tractor, equipped with Trimble Autopilot™ and an FmX display, to pull an implement along a more accurate line without additional steering hardware. In addition, we also released the Utility Center Mainenance-2 software module to help utilities maintain and manage all types of plant equipment in one solution and the Utility Center Field Inspector software, which provides a robust handheld field maintenance inspection solution for optimizing utility field operations.
In our Mobile Solutions segment, we introduced Trimble® Performance Manager, a unique business intelligence application that alerts companies managing field operations when there is a deviation between what is planned and what is actually occurring in the field. This allows cost reductions through fewer miles driven and better utilization of fleet vehicles, which also decreases an organization's carbon footprint. In our Advanced Devices segment, we introduced the AP series of embedded GNSS-Inertial OEM boards plus IMU with advanced Maxwell™ technology and Applanix In-Fusion™ GNSS-Inertial integration technology, enabling continuous mobile positioning and high-accuracy orientation in poor signal environments. We also introduced the BD970, a 220 channel, Real-Time Kinematic (RTK) GNSS receiver module for precise positioning OEM applications. All of these products strengthened our competitive position and created new value for the user.
Extending our position in new and 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 new and existing users. In our Engineering and Construction segment, we expanded the Trimble VRS Now service to the Czech Republic and Mississippi. Also within Engineering and Construction, we introduced the Trimble Digital Pen which converts form and markup information to digital data allowing notes, sketches, data and markups to be aggregated into the original file and tracked by user, pen and time. In our Field Solutions segment, the acquisition of Farm Works' assets continues the expansion of our Precision Agriculture Solutions business with the addition of Farm Works software solutions for information and farm operations management.
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 emerging markets in Africa, China, India, the Middle-East and Russia.
RECENT BUSINESS DEVELOPMENTS
The following companies and joint ventures were acquired or formed during the twelve months ended October 2, 2009 and are combined in our results of operations since the date of acquisition or formation:
Farm Works
On July 16, 2009, we acquired the assets of privately-held CTN Data Service, LLC, creator of Farm Works software, located in Hamilton, Indiana. Farm Works provides integrated office and mobile software solutions for both the farmer and agriculture service professional. Farm Works' performance is reported under our Field Solutions business segment.
Accutest
On June 5, 2009, we acquired Accutest Engineering Solutions Ltd, based in Derbyshire, UK. Accutest is a leading provider of vehicle diagnostics and telematics technologies for the automotive industry. Accutest's performance is reported under our Mobile Solutions business segment.
NTech
On June 4, 2009, we acquired privately-held NTech Industries, based in Ukiah, Calif. NTech is a leading provider of crop-sensing technology that allows farmers to reduce costs and environmental impact by controlling the application of nitrogen, herbicide and other crop inputs. NTech's performance is reported under our Field Solutions business segment.
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's 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, based in 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, based in Biberach an der Riss, Germany. TopoSys is a leading provider of aerial data collection systems comprised of LiDAR and metric cameras. TopoSys's performance is reported under our Engineering and Construction business segment.
TruCount
On October 30, 2008, we acquired the assets of privately-held TruCount, Inc., based in 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, based in 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.
Seasonality of Business
* Our individual segment revenue may be affected by seasonal buying patterns. Historically, the second fiscal quarter has been the strongest quarter for the Company driven by the construction buying season.
|
|