EX-99.1 3 er_q3.htm EARNINGS RELEASE er_q3.htm Intermec logo

 
Intermec, Inc.
6001 36th Avenue West
Everett, WA  98203-1264
www.intermec.com
FOR IMMEDIATE RELEASE
Contact:

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

 
INTERMEC REPORTS RECORD THIRD QUARTER REVENUES
 
·  
Revenues of $234M, up 14% over Q3’07
·  
Diluted  EPS of $0.18, up from $0.07 in Q3’07

EVERETT, Wash. – October 30, 2008 – Intermec, Inc. (NYSE: IN) today announced financial results for its third quarter, which ended September 28, 2008.

Third quarter 2008 revenues of $234 million and net earnings from continuing operations of $11.0 million, or $0.18 per diluted share, compared to 2007 third quarter revenues of $206 million and net earnings from continuing operations of $4.4 million, or $0.07 per diluted share. Third quarter 2008 results included a restructuring charge of $3.3 million or $0.03 per diluted share and $1.2 million in transition costs associated with the previously announced final assembly and service depot relocation initiative.

“Intermec executed very well in the third quarter, delivering record revenue, strong earnings results and solid cash flow from operations,” said Patrick J. Byrne, President and CEO. “In this uncertain economic environment, Intermec is focused on meeting customer needs with compelling new products, while accelerating our transformation initiatives in order to position the company for our target business model.”
 
Third Quarter 2008 Operating Performance

·  
Geographically, North American revenues increased 28 percent over the comparable prior-year period. Revenues in Europe, Mid-East and Africa (EMEA) increased 5 percent over the prior year period; Asia Pacific (APAC) decreased 28 percent and Latin American revenues were flat.

·  
Systems and Solutions revenue increased 23 percent and Printer & Media revenue decreased 1 percent over the comparable prior-year period. Service revenue increased 5 percent compared to the prior-year period.

·  
Gross profit margins increased 120 basis points to 39.1 percent and product gross margins increased 110 basis points to 38.7 percent over the third quarter of 2007.

·  
The Company’s third quarter 2008 effective tax rate was 35 percent compared with 16 percent in the prior-year quarter.

·  
The Company’s cash equivalents and short-term investment position at the end of the third quarter totaled $202 million. Net cash provided by operating activities was $15.5 million for the third quarter of 2008.

Recent Product Introductions

·  
The new CK3 includes a broad range of data collection and communication features which enables it to perform a variety of in-premise applications. Built on the same robust and proven architecture as many of our successful products, including the CN3, it combines the best-of-class platform components including Microsoft’s latest embedded operating system Windows Mobile 6.1 and Cisco Compatible Extensions.

·  
The new PB2 and PB3 commercial mobile receipt printers providing low cost, wearable receipt printing solutions for DSD/route accounting, retail queue busting and field service applications. The lightweight two-inch and three-inch printers seamlessly complement the Intermec mobile computer line.

 
Outlook - Fourth Quarter 2008

Intermec announced its financial forecast for the fourth quarter of 2008, which reflects an economic slowdown and weaker foreign currencies.

·  
Revenues are expected within a range of $220 million to $230 million.

·  
EPS are expected within a range of $0.14 to $0.18 per diluted share, including the expected impact of restructuring and transition related costs associated with the final assembly and service depot relocation, announced in July 2008.

·  
The restructuring costs are expected to be $0.7 million to $1.2 million, or $0.01 per diluted share.

·  
The transition related costs are expected to be $1.5 million to $2.5 million.

Conference Call Information
 
Intermec will hold its conference call on October 30, 2008 at 5 p.m. ET (2 p.m. PT).  The call will be hosted by Intermec President and Chief Executive Officer Patrick J. Byrne, SVP and Chief Financial Officer Lanny H. Michael, SVP Global Sales and Services Michael A. Wills, and Director of Investor Relations Kevin P. McCarty.
 
The dial-in numbers for participants are 1-(800) 621-8495 (US); 1-(210) 234-0002 (International); Passcode: (“Intermec”). The call will be broadcast on the Internet via a link from the investor’s Web page at the Intermec website at www.intermec.com/InvestorRelations

###

About Intermec, Inc.

Intermec, Inc. (NYSE:IN) develops, manufactures and integrates technologies that identify, track and manage supply chain assets. Core technologies include RFID, mobile computing and data collection systems, bar code printers and label media. 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.  Contact Intermec Investor Relations Director Kevin McCarty at kevin.mccarty@intermec.com, 425-265-2472.

(Forward-looking Statements)
Statements made in this release and related statements that express Intermec’s or our management’s intentions, hopes, indications, beliefs, expectations, 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: potential increases in revenue or in product or service volumes; our objectives for sales channel mix and target customer markets; our ability to develop, market and launch new or enhanced products and platforms as planned; customer acceptance of our products and technologies; our ability to improve business processes; our ability to successfully transition product final assembly to a third party and to realize intended business and financial benefits from the transition; our ability to improve gross margins or profits; 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 2008 or any future period.  They also include statements about our ability to compete effectively with our current products and newly launched products, reduce expenses, improve efficiency, realign resources, increase product development capacity, leverage our research and development investment to drive significant future revenue, and continue operational improvement and year-over-year growth, and about the applicability of accounting policies used in our financial reporting. Actual results may differ from those expressed or implied in our forward-looking statements. 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. Such forward-looking statements involve and are subject to certain risks and uncertainties. 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.
 
INTERMEC, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited, amounts in thousands except per share amounts)
 
 
   
Three Months Ended
    
Nine Months Ended
  
   
September
    
September
    
September
    
September
  
      28, 2008      30, 2007      28, 2008      30, 2007  
                                 
Revenues
                                
Product
   $ 195,727     $ 169,219     $ 555,756     $ 480,669  
Service
     38,656       36,787       113,667       115,178  
Total revenues
     234,383       206,006       669,423       595,847  
Costs and Expenses
                                
Cost of product revenues
     119,948       105,536       335,842       306,454  
Cost of service revenues
     22,783       22,404       65,642       65,611  
Research and development
     15,000       16,006       48,665       48,977  
Selling, general and administrative
     57,271       57,527       175,415       162,890  
Flood related charge
     -       -       1,122       -  
Restructuring
     3,337       -       3,337       -  
Total costs and expenses
     218,339       201,473       630,023       583,932  
                                 
Operating profit from continuing operations
     16,044       4,533       39,400       11,915  
Interest income
     874       2,910       3,720       7,930  
Interest expense
     (156 )     (2,204 )     (2,291 )     (6,847 )
Earnings from continuing operations before taxes
     16,762       5,239       40,829       12,998  
Provision for income taxes
     5,784       847       14,423       5,108  
Earnings from continuing operations
     10,978       4,392       26,406       7,890  
Loss from discontinued operations, net of tax
     -       -       -       (1,283 )
Net earnings
   $ 10,978     $ 4,392     $ 26,406     $ 6,607  
                                 
Basic earnings per share
                                
Continuing operations
   $ 0.18     $ 0.07     $ 0.43     $ 0.13  
Loss from discontinued operations
     -       -       -       (0.02 )
Net earnings per share
   $ 0.18     $ 0.07     $ 0.43     $ 0.11  
                                 
Diluted earnings per share
                                
Continuing operations
   $ 0.18     $ 0.07     $ 0.43     $ 0.13  
Loss from discontinued operations
     -       -       -       (0.02 )
Net earnings per share
   $ 0.18     $ 0.07     $ 0.43     $ 0.11  
                                 
Shares used in computing earnings (loss) per share
                                
Basic
     61,238       60,484       61,121       60,242  
Diluted
     61,644       61,325       61,599       61,099  

 
 
 
INTERMEC, INC.
CONSOLIDATED BALANCE SHEETS
(Unaudited, amounts in thousands)
 
 
   
September
    
December
  
     28, 2008      31, 2007  
ASSETS
                
                 
Current assets:
                
Cash and cash equivalents
   $ 201,854     $ 237,247  
Short-term investments
     304       28,230  
Accounts receivable, net of allowance for doubtful accounts
                
and sales returns of $12,727 and $12,854
     150,810       191,487  
Inventories
     122,491       113,145  
Net current deferred tax assets
     61,480       61,532  
Other current assets
     16,755       14,690  
Total current assets
     553,694       646,331  
                 
Property, plant and equipment, net
     42,572       47,732  
Intangibles, net
     3,799       4,138  
Net deferred tax assets
     141,695       150,154  
Other assets
     51,454       52,280  
Total assets
   $ 793,214     $ 900,635  
                 
LIABILITIES AND SHAREHOLDERS' INVESTMENT
                
Current liabilities:
                
Accounts payable and accrued expenses
   $ 103,244     $ 141,667  
Payroll and related expenses
     27,345       32,170  
Deferred revenue
     44,434       49,020  
Current portion of long-term debt
     -       100,000  
Total current liabilities
     175,023       322,857  
                 
Long-term deferred revenue
     26,340       20,109  
Other long-term liabilities
     75,677       73,558  
                 
Shareholders' investment:
                
Common stock, 250,000 shares authorized, 61,725 and 61,192 shares issued and outstanding
     617       612  
Additional paid-in-capital
     694,234       679,241  
Accumulated deficit
     (170,891 )     (196,795 )
Accumulated other comprehensive (loss) income
     (7,786 )     1,053  
Total shareholders' investment
     516,174       484,111  
Total liabilities and shareholders' investment
   $ 793,214     $ 900,635  

 
 
 
INTERMEC, INC.
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(Unaudited, amounts in thousands)

 
   
Nine Months Ended
  
   
September
    
September
  
     28, 2008    
30, 2007 (as restated)
  
               
Cash and cash equivalents at beginning of year
   $ 237,247     $ 155,027  
                 
Cash flows from operating activities of continuing operations:
                
Net earnings from operations
     26,406       6,607  
Net loss from discontinued operations
     -       1,283  
Adjustments to reconcile net earnings (loss) to net cash
                
provided by (used in) operating activities of continuing operations:
          
Depreciation and amortization
     11,770       9,601  
Deferred taxes
     12,099       3,598  
Excess tax benefits from stock-based payment arrangements
     (937 )     (2,232 )
Changes in working capital and other operating activities
     (11,057 )     2,937  
Net cash provided by operating activities of continuing operations
     38,281       21,794  
                 
Cash flows from investing activities of continuing operations:
                
Capital expenditures
     (9,880 )     (10,136 )
Purchases of investments
     (760 )     (1,465 )
Proceeds on sale of property, plant and equipment
     5,497       -  
Sale of investments
     28,515       1,407  
Other investing activities
     (2,827 )     (1,702 )
Net cash provided by (used in) investing activities of continuing operations
     20,545       (11,896 )
                 
Cash flows from financing activities of continuing operations:
                
Repayment of debt
     (100,000 )     -  
Excess tax benefits from stock-based payment arrangements
     937       2,232  
Stock options exercised
     4,167       5,654  
Other financing activities
     2,165       1,756  
Net cash (used in) provided by financing activities of continuing operations
     (92,731 )     9,642  
                 
Net cash provided by investing activities of discontinued operations
     -       1,601  
Effect of exchange rate changes on cash and cash equivalents
     (1,488 )     9,137  
                 
Resulting increase in cash and cash equivalents
     (35,393 )     30,278  
                 
Cash and cash equivalents at end of period
   $ 201,854     $ 185,305