EX-99.1 3 q28kpressrel.htm 2009 Q2 PRESS RELEASE q28kpressrel.htm
Exhibit 99.1
 
 
Intermec, Inc.
6001 36th Avenue West
Everett, WA  98203-1264
www.intermec.com
FOR IMMEDIATE RELEASE
Contact:

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

 
INTERMEC REPORTS SECOND QUARTER 2009 RESULTS IN-LINE WITH GUIDANCE
 
§  
Q2’09 Revenue of $158 Million, Cash Increases to $227 Million
§  
Q2’09 EPS Loss of ($0.11), excluding Restructuring EPS Loss of ($0.03)

EVERETT, Wash. – July 30, 2009 – Intermec, Inc. (NYSE: IN) today announced financial results for its second quarter, which ended June 28, 2009.

Second quarter 2009 revenues were $158 million with a net loss of ($6.5) million, or ($0.11) per diluted share, compared to 2008 second quarter revenues of $218 million and net earnings of $7.7 million, or $0.13 per diluted share.

“Intermec executed well in a challenging economic environment, delivering within our quarterly guidance and generating cash,” said Patrick J. Byrne, Intermec’s president and CEO. “Our recent new product introductions, channel expansion programs, and lower break even point position us well for market recovery.”

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

   
Quarter Ended June 28, 2009
   
Quarter Ended June 29, 2008
 
($ in millions, except per share amounts)
 
(Loss) earnings from operations before taxes
   
Net (loss) earnings
   
Diluted (loss) earnings per share
   
Earnings from operations before taxes
   
Net earnings
   
Diluted earnings per share
 
                                     
Earnings as Reported
  $ (10.3 )   $ (6.5 )   $ (0.11 )   $ 11.1     $ 7.7     $ 0.13  
Restructuring charges
  $ 7.3     $ 4.7     $ 0.08       -       -       -  
                                                 
Earnings as Adjusted
  $ (3.0 )   $ (1.8 )   $ (0.03 )   $ 11.1     $ 7.7     $ 0.13  

 
 
 

Second Quarter 2009 Operating Performance

§  
Total revenues of $158 million were down 28% from the prior year quarter.  Approximately 5 percentage points of the decline was due to currency translation.

§  
Geographically, North American revenues declined 22% over the comparable prior-year period. Revenues in Europe, Middle East and Africa (EMEA) were down 36% from the prior year period with approximately 12 percentage points of the decline due to currency translation. Latin American revenues decreased 34%, and Asia Pacific (APAC) revenues decreased 21%, both over the comparable prior-year period.

§  
From a product line perspective, Systems and Solutions revenue decreased 33% and Printer and Media revenue declined 28% both over the comparable prior-year period. Service revenue was 9% below the prior-year period.

§  
Gross profit margins decreased 4.5 percentage points to 36.2%, and product gross margins decreased 5.6 percentage points to 34.4%, both compared to the second quarter of 2008.  The gross profit margin decline was attributable to the competitive and economic environment, reduced product volumes, product and geographical mix and the impact of currency translation.  Service gross margins of 42.7% declined 1.3 percentage points from over the second quarter of 2008.

§  
Operating expenses excluding restructuring charges were $60.1 million, down 23%, compared to $77.8 million in the second quarter 2008. There were no restructuring charges in the second quarter of 2008.

§  
Included in second quarter 2009 results are pre-tax restructuring charges of $7.3 million or ($0.08) per diluted share relating to business restructuring plans announced in 2009. Excluding these charges the non-GAAP adjusted net loss for the second quarter of 2009 was ($1.8) million, or ($0.03) per diluted share, as compared with the prior year second quarter’s net income of $7.7 million, or $0.13 per diluted share, as described in the Non-GAAP (Adjusted) Financial Measures section of this release.

§  
The Company’s second quarter 2009 effective tax rate was approximately 36%, consistent with the prior-year comparable quarter.

§  
Operating cash flow was positive $8 million in the quarter, including the impact of cash paid for restructuring of $4 million.

§  
The Company’s cash and cash equivalents increased during the quarter to $227 million. The Company has no debt.

 
 
 

Recent Product Introductions

§  
During the quarter we announced the CN4, the most lightweight, fully rugged 3.5G mobile computer in its class - designed to perform in the most demanding work environments. With a six-foot drop specification - on all faces, sides and corners, compact internal antenna design, and IP64 sealing - the CN4 can reduce worker downtime and the risk of critical data or revenue loss. The CN4 integrates with a wide range of performance-optimized printers and accessories for in-vehicle or stand-alone implementation, and leverages system software and a wide range of accessories with Intermec’s leading CN3-series.

§  
We also announced the CN50 high performing 3.75G mobile computer, which is optimally designed for “hold and carry” environments and direct customer interactions.  The CN50 enables mobile workers to run data-intensive applications in a small, lightweight and ruggedized form factor. The CN50 features numerous performance innovations, including a Flexible NetworkTM Radio that can be re-provisioned to a different network as business needs or coverage options evolve. This capability enables customers to deploy a single hardware solution on the wireless network offering the best cost and geographic coverage.

The CN50 and CN4 are both available with an optional Enhanced Mobile Document Imaging (eMDI) capability, providing mobile workers with a fast, reliable way to convert full page paper documents into electronic documents at the point-of-transaction. With eMDI-enabled devices, mobile workers now have the ability to transmit high-quality document images, captured in all lighting conditions, to back office applications in real-time.

§  
Intermec also added five new rugged mobile printers to its PB product family – the PB21, PB22, PB31, PB32 and PB51. The new printers feature two times more memory, print twenty to thirty percent faster than competing solutions, and are the industry’s only “Smart” rugged mobile receipt, label and invoice printers. The two, three, and four inch printers enable mobile workforces in route accounting, transportation and logistics, retail and field service applications to print high quality, graphically complex receipts.  In addition, an enhanced version of the successful PB50 is now available, including an improved label self strip feature and media holder.

Outlook – Third Quarter 2009

Intermec announced its financial forecast for the third quarter of 2009.

§  
Revenues are expected to be within a range of $165 to $175 million.

§  
Earnings (loss) per share are expected to be within a range of ($0.08) to ($0.03) per diluted share, including the expected impact of approximately ($0.06) for the restructuring plans announced in 2009. Excluding these restructuring charges the non-GAAP adjusted earnings (loss) per share are expected to be within a range of ($0.02) to $0.03 per diluted share.


 
 
 

Conference Call Information

Intermec will hold its conference call on July, 30 2009 at 5 p.m. ET (2 p.m. PT).  The dial-in numbers for participants are 1 (517) 308-9090 (US and International) 1 (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 third 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) 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 third 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 expenses, improve efficiency, realign resources, continue operational improvement and year-over-year 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. 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.
 
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
 
( in thousands except per share amounts)
 
( Unaudited)
 
                         
   
Three Months Ended
   
Six Months Ended
 
     
June 28, 2009
     
June 29, 2008
     
June 28, 2009
     
June 29, 2008
 
Revenues
                               
Product
  $ 123,339     $ 180,455     $ 252,002     $ 360,028  
Service
    34,376       37,806       68,286       75,011  
Total revenues
    157,715       218,261       320,288       435,039  
                                 
Costs and Expenses
                               
Cost of product revenues
    80,927       108,189       164,293       215,894  
Cost of service revenues
    19,714       21,154       39,851       42,859  
Research and development
    15,375       17,822       31,288       35,015  
Selling, general and administrative
    44,711       58,828       95,719       116,793  
Restructuring charges
    7,345       -       15,927       -  
Flood related charge
    -       1,122       -       1,122  
Total costs and expenses
    168,072       207,115       347,078       411,683  
                                 
Operating (loss) profit
    (10,357 )     11,146       (26,790 )     23,356  
Interest income
    261       1,171       602       2,846  
Interest expense
    (227 )     (345 )     (452 )     (2,135 )
(Loss) earnings before taxes
    (10,323 )     11,972       (26,640 )     24,067  
Income tax (benefit) expense
    (3,781 )     4,250       (9,698 )     8,639  
Net (loss) earnings
  $ (6,542 )   $ 7,722     $ (16,942 )   $ 15,428  
                                 
Basic (loss) earnings per share
  $ (0.11 )   $ 0.13     $ (0.28 )   $ 0.25  
Diluted (loss) earnings per share
  $ (0.11 )   $ 0.13     $ (0.28 )   $ 0.25  
                                 
Shares used in computing basic (loss) earnings per share
    61,606       61,103       61,532       61,030  
Shares used in computing diluted (loss) earnings per share
    61,606       61,611       61,532       61,543  

 
 
 

INTERMEC, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)
   
 
   
 
 
     
June 28, 2009
     
December 31, 2008
 
   ASSETS
Current assets:
               
Cash and cash equivalents
  $ 227,075     $ 221,335  
Short-term investments
    132       156  
Accounts receivable, net of allowance for doubtful accounts and sales returns of $8,188 and $10,789
    106,260       138,549  
Inventories
    92,348       116,949  
Net current deferred tax assets
    66,568       56,295  
Other current assets
    18,041       14,405  
Total current assets
    510,424       547,689  
                 
Property, plant and equipment, net
    38,924       41,348  
Intangibles, net
    3,006       3,521  
Net deferred tax assets
    153,428       167,834  
Other assets
    31,137       29,503  
Total assets
  $ 736,919     $ 789,895  
                 
  LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
               
Accounts payable and accrued expenses
  $ 78,964     $ 112,772  
Payroll and related expenses
    31,924       24,799  
Deferred revenues
    41,280       38,712  
Total current liabilities
    152,168       176,283  
                 
Long-term deferred revenues
    22,219       25,980  
Pension liability
    53,158       92,129  
Other long-term liabilities
    12,478       13,747  
                 
Commitments
               
                 
Shareholders' equity:
               
Common stock (250,000 shares authorized, 62,038 and 61,766 shares issued and outstanding)
    620       618  
Additional paid-in-capital
    698,789       694,296  
Accumulated deficit
    (179,344 )     (162,402 )
Accumulated other comprehensive loss
    (23,169 )     (50,756 )
Total shareholders' equity
    496,896       481,756  
Total liabilities and shareholders' equity
  $ 736,919     $ 789,895  

 
 
 

INTERMEC, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
   
Six Months Ended
 
   
June 28, 2009
   
June 29, 2008
 
Cash and cash equivalents at beginning of the period
  $ 221,335     $ 237,247  
                 
Cash flows from operating activities:
               
Net (loss) earnings
    (16,942 )     15,428  
Adjustments to reconcile net (loss) earnings to net cash
               
provided by operating activities:
               
Depreciation and amortization
    7,846       7,842  
Deferred taxes
    (10,634 )     7,295  
Excess tax shortfall (benefit) from stock-based payment arrangements
    547       (1,340 )
Change in operating assets and liabilities:
               
Accounts receivable
    32,289       31,823  
Inventories
    24,516       (27,481 )
Accounts payable and accrued expenses
    (34,968 )     (21,754 )
Payroll and related expenses
    7,125       (3,192 )
Other operating activities
    (1,970 )     13,795  
Net cash provided by operating activities
    7,809       22,416  
                 
Cash flows from investing activities:
               
Capital expenditures
    (4,720 )     (5,779 )
Proceeds from sale of property
    1,867       5,497  
Purchases of investments
    -       (760 )
Sale of investments
    -       28,515  
Capitalized patent legal fees
    (2,321 )     (778 )
Net cash (used in) provided by investing activities
    (5,174 )     26,695  
                 
Cash flows from financing activities:
               
Repayment of debt
    -       (100,000 )
Excess tax (shortfall) benefit from stock-based payment arrangements
    (547 )     1,340  
Stock options exercised
    218       3,595  
Other financing activities
    652       1,559  
Net cash provided by (used in) financing activities
    323       (93,506 )
                 
Effect of exchange rate changes on cash and cash equivalents
    2,782       6,162  
                 
Resulting increase (decrease) in cash and cash equivalents
    5,740       (38,233 )
                 
Cash and cash equivalents at end of the period
  $ 227,075     $ 199,014  




 

 
 
 

INTERMEC, INC.
RECONCILIATION OF GAAP TO NON-GAAP NET EARNINGS
(Unaudited, amounts in thousands except per share amounts)
                                               
   
Three Months Ended
   
Six Months Ended
 
   
 
   
Non GAAP
   
Adjusted
   
 
   
 
   
Non GAAP
   
Adjusted
   
 
 
     
June 28, 2009
   
   Adjustments
   
June 28, 2009
      June 29, 2008      
June 28, 2009
   
   Adjustments
   
June 28, 2009
      June 29, 2008  
                                                         
Revenues
                                                       
Product
  $ 123,339           $ 123,339     $ 180,455     $ 252,002           $ 252,002     $ 360,028  
Service
    34,376             34,376       37,806       68,286             68,286       75,011  
Total revenues
    157,715             157,715       218,261       320,288             320,288       435,039  
                                                             
Costs and Expenses
                                                           
Cost of product revenues
    80,927             80,927       108,189       164,293             164,293       215,894  
Cost of service revenues
    19,714             19,714       21,154       39,851             39,851       42,859  
Research and development
    15,375             15,375       17,822       31,288             31,288       35,015  
Selling, general and administrative
    44,711             44,711       58,828       95,719             95,719       116,793  
Flood related charge
    -             -       1,122       -             -       1,122  
Restructuring
    7,345       (7,345 )     -       -       15,927       (15,927 )     -       -  
Total costs and expenses
    168,072       (7,345 )     160,727       207,115       347,078       (15,927 )     331,151       411,683  
                                                                 
Operating (loss) profit
    (10,357 )     7,345       (3,012 )     11,146       (26,790 )     15,927       (10,863 )     23,356  
Interest income
    261               261       1,171       602               602       2,846  
Interest expense
    (227 )             (227 )     (345 )     (452 )             (452 )     (2,135 )
(Loss) earnings before taxes
    (10,323 )     7,345       (2,978 )     11,972       (26,640 )     15,927       (10,713 )     24,067  
Income tax (benefit) expense
    (3,781 )     2,701       (1,080 )     4,250       (9,698 )     5,770       (3,928 )     8,639  
Net (loss) earnings
    (6,542 )     4,644       (1,898 )     7,722       (16,942 )     10,157       (6,785 )     15,428  
                                                                 
                                                                 
Basic (loss) earnings per share
  $ (0.11 )   $ 0.08     $ (0.03 )   $ 0.13     $ (0.28 )   $ 0.16     $ (0.11 )   $ 0.25  
                                                                 
Diluted (loss) earnings per share
  $ (0.11 )   $ 0.08     $ (0.03 )   $ 0.13     $ (0.28 )   $ 0.16     $ (0.11 )   $ 0.25  
                                                                 
Shares used in computing basic (loss) earnings per share
    61,606       61,606       61,606       61,103       61,532       61,606       61,606       61,030  
Shares used in computing diluted (loss) earnings per share
    61,606       61,606       61,606       61,611       61,532       61,606       61,606       61,543  

 
 
 

INTERMEC, INC.
RECONCILIATION OF GAAP TO NON-GAAP OUTLOOK FOR THE QUARTER ENDED SEPTEMBER 27, 2009
(Unaudited)
       
   
Diluted (loss) earnings per share
       
As Reported
  $ (0.08) to (0.03)
Restructuring charge
  $
  0.06
       
As Adjusted
  $ (0.02) to 0.03