Attached files
| file | filename |
|---|---|
| 8-K - FORM 8-K - Intermec, Inc. | d343914d8k.htm |
| EX-99.1 - EARNINGS PRESS RELEASE - Intermec, Inc. | d343914dex991.htm |
| EX-10.1 - FOURTH AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT - Intermec, Inc. | d343914dex101.htm |
| EX-99.3 - PRESS RELEASE - Intermec, Inc. | d343914dex993.htm |
Exhibit 99.2
INTERMEC, INC.
RECONCILIATION OF GAAP TO NON-GAAP OPERATING INCOME,
NET EARNINGS AND EARNINGS PER SHARE
(In millions, except per share amounts)
(Unaudited)
| Quarter Ended April 3, 2011 | ||||||||||||
| Operating income (loss) (a) |
Net earnings (loss) |
Earnings(loss) per share | ||||||||||
| Profit (loss) as reported |
$ | (8.6 | ) | $ | (6.1 | ) | $ | (0.10 | ) | |||
| Acquisition related adjustments |
7.8 | 5.7 | 0.09 | |||||||||
| Income taxes - increase in valuation allowance |
— | 0.3 | (b) | — | ||||||||
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| Non-GAAP profit (loss) as adjusted |
$ | (0.8 | ) | $ | (0.1 | ) | $ | (0.01 | ) | |||
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| Quarter Ended July 3, 2011 | ||||||||||||
| Operating income (loss) (a) |
Net earnings (loss) |
Earnings(loss) per share | ||||||||||
| Profit (loss) as reported |
$ | (3.1 | ) | $ | (3.8 | ) | $ | (0.06 | ) | |||
| Acquisition related adjustments |
6.7 | 4.1 | 0.07 | |||||||||
| Restructuring charges |
5.1 | 5.1 | 0.08 | |||||||||
| Income taxes - increase in valuation allowance |
— | 0.5 | (b) | 0.01 | (b) | |||||||
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| Non-GAAP profit (loss) as adjusted |
$ | 8.7 | $ | 5.9 | $ | 0.10 | ||||||
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| Quarter Ended October 2, 2011 | ||||||||||||
| Operating income (loss) |
Net earnings (loss) |
Earnings(loss) per share | ||||||||||
| Profit (loss) as reported |
$ | 1.0 | $ | 0.7 | $ | 0.01 | ||||||
| Acquisition related adjustments |
7.1 | (c) | 4.4 | (c) | 0.07 | (c) | ||||||
| Restructuring charges |
0.6 | 0.6 | 0.01 | |||||||||
| Income taxes - increase in valuation allowance |
— | 0.3 | (b) | 0.01 | (b) | |||||||
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| Non-GAAP profit (loss) as adjusted |
$ | 8.7 | $ | 6.0 | $ | 0.10 | ||||||
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| Quarter Ended December 31, 2011 | ||||||||||||
| Operating income (loss) |
Net earnings (loss) |
Earnings(loss) per share | ||||||||||
| Profit (loss) as reported |
$ | 4.4 | $ | (21.6 | ) | $ | (0.36 | ) | ||||
| Acquisition related adjustments |
5.8 | 3.6 | 0.06 | |||||||||
| Capitalized legal fees charge |
5.6 | 3.4 | 0.06 | |||||||||
| Restructuring charges |
0.1 | 0.1 | — | |||||||||
| Impairment of property, plant and equipment |
0.9 | 0.6 | 0.01 | |||||||||
| Income taxes - increase in valuation allowance |
— | 21.4 | 0.36 | |||||||||
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| Non-GAAP profit (loss) as adjusted |
$ | 16.8 | $ | 7.5 | $ | 0.13 | ||||||
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| Twelve Months Ended December 31, 2011 | ||||||||||||
| Operating income (loss) |
Net earnings (loss) |
Earnings(loss) per share | ||||||||||
| Profit (loss) as reported |
$ | (6.2 | ) | $ | (30.8 | ) | $ | (0.51 | ) | |||
| Acquisition related adjustments |
27.4 | (d) | 17.8 | (d) | 0.29 | (d) | ||||||
| Capitalized legal fees charge |
5.6 | 3.4 | 0.06 | |||||||||
| Restructuring charges |
5.8 | 5.8 | 0.1 | |||||||||
| Impairment of property, plant and equipment |
0.9 | 0.6 | 0.01 | |||||||||
| Income taxes - increase in valuation allowance |
— | 22.5 | 0.38 | |||||||||
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| Non-GAAP profit (loss) as adjusted |
$ | 33.5 | $ | 19.3 | $ | 0.32 | ||||||
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| (a) | This table for the first and second quarters of 2011 has been modified to conform with the presentation made in the Company's earnings release for the third and fourth quarters of 2011. Specifically, the reconciliation in the Operating income (loss) column reconciles operating profit (loss) to non-GAAP operating profit (loss), rather than from loss before income taxes to non-GAAP profit (loss), which was presented in the first two quarters of 2011. |
| (b) | Non-GAAP adjustments for income taxes were not included in the reconciliations accompanying the Company’s earnings releases for the first three quarters of 2011, because they were not considered to be material at the time. However, due to a material valuation adjustment in the fourth quarter of 2011, the adjustments in the first three quarters when added to the fourth quarter adjustment are now considered to be material, and accordingly have been included in the reconciliation for those periods. |
| (c) | The Acquisition related adjustment for the third quarter of 2011 increased operating income by $0.3 million and increased net earnings by $0.2 million over the amounts reported in the reconciliation presented in the third quarter earnings release, because certain intangible amortization had been excluded from the original presentation. The effect of this adjustment on earnings (loss) per share was immaterial. |
| (d) | The Acquisition related adjustments included in the earnings release for the year ended December 31, 2011, were $25.8 million for Operating income (loss), $16.3 million for Net earnings (loss), and $0.27 for Earnings (loss) per share. Due to a footing error in the original calculation of these amounts for the 12-month period and the adjustment described above, Acquisition related adjustments for the 12-month period have been increased to $27.4 million for Operating income (loss), $17.8 million for Net earnings (loss), and $0.29 for Earnings (loss) per share. |
1
INTERMEC, INC.
RECONCILIATION OF GAAP TO NON-GAAP NET EARNINGS
(In thousands)
(Unaudited)
| Three Months Ended April 3, 2011 (a) | ||||||||||||||||||||
| GAAP Operating Results |
Non-GAAP Adjustments |
Non-GAAP Operating Results |
EBITDA Adjustments |
Adjusted EBITDA |
||||||||||||||||
| Total revenues |
$ | 178,518 | $ | 726 | $ | 179,244 | $ | — | $ | 179,244 | ||||||||||
| Costs and expenses: |
||||||||||||||||||||
| Cost of revenues |
110,224 | (2,265 | ) | 107,959 | (1,858 | ) | 106,101 | |||||||||||||
| Research and development |
17,815 | — | 17,815 | (277 | ) | 17,538 | ||||||||||||||
| Selling, general and administrative |
54,242 | — | 54,242 | (3,998 | ) | 50,244 | ||||||||||||||
| Acquisition costs |
4,839 | (4,839 | ) | — | — | — | ||||||||||||||
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|||||||||||
| Total costs and expenses |
187,120 | (7,104 | ) | 180,016 | (6,133 | ) | 173,883 | |||||||||||||
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| Operating (loss) income |
$ | (8,602 | ) | $ | 7,830 | $ | (772 | ) | $ | 6,133 | $ | 5,361 | ||||||||
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| Three Months Ended July 3, 2011 | ||||||||||||||||||||
| GAAP Operating Results |
Non-GAAP Adjustments |
Non-GAAP Operating Results |
EBITDA Adjustments |
Adjusted EBITDA |
||||||||||||||||
| Total revenues |
$ | 221,082 | $ | 2,178 | $ | 223,260 | $ | — | $ | 223,260 | ||||||||||
| Costs and expenses: |
||||||||||||||||||||
| Cost of revenues |
129,766 | (3,105 | ) | 126,661 | (2,217 | ) | 124,444 | |||||||||||||
| Research and development |
22,858 | (17 | ) | 22,841 | (369 | ) | 22,472 | |||||||||||||
| Selling, general and administrative |
66,052 | (981 | ) | 65,071 | (4,002 | ) | 61,069 | |||||||||||||
| Acquisition costs |
373 | (373 | ) | — | — | |||||||||||||||
| Restructuring charges |
5,111 | (5,111 | ) | — | — | |||||||||||||||
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|||||||||||
| Total costs and expenses |
224,160 | (9,587 | ) | 214,573 | (6,588 | ) | 207,985 | |||||||||||||
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| Operating (loss) income |
$ | (3,078 | ) | $ | 11,765 | $ | 8,687 | $ | 6,588 | $ | 15,275 | |||||||||
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| Three Months Ended October 2, 2011 | ||||||||||||||||||||
| GAAP Operating Results |
Non-GAAP Adjustments |
Non-GAAP Operating Results |
EBITDA Adjustments |
Adjusted EBITDA |
||||||||||||||||
| Total revenues |
$ | 211,805 | $ | 2,178 | $ | 213,983 | $ | — | $ | 213,983 | ||||||||||
| Costs and expenses: |
||||||||||||||||||||
| Cost of revenues |
123,950 | (3,170 | ) | 120,780 | (2,173 | ) (b) | 118,607 | |||||||||||||
| Research and development |
22,047 | (18 | ) | 22,029 | (413 | ) (b) | 21,616 | |||||||||||||
| Selling, general and administrative |
63,610 | (1,178 | ) (d) | 62,432 | (5,668 | ) (b) | 56,764 | |||||||||||||
| Acquisition costs |
554 | (554 | ) | — | — | — | ||||||||||||||
| Restructuring charges |
644 | (644 | ) | — | — | — | ||||||||||||||
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| Total costs and expenses |
210,805 | (5,564 | ) | 205,241 | (8,254 | ) | 196,987 | |||||||||||||
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| Operating income |
$ | 1,000 | $ | 7,742 | $ | 8,742 | $ | 8,254 | $ | 16,996 | ||||||||||
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2
| Three Months Ended December 31, 2011 | ||||||||||||||||||||
| GAAP Operating Results |
Non-GAAP Adjustments |
Non-GAAP Operating Results |
EBITDA Adjustments |
Adjusted EBITDA |
||||||||||||||||
| Total revenues |
$ | 236,776 | $ | 1,744 | $ | 238,519 | $ | — | $ | 238,519 | ||||||||||
| Costs and expenses: |
||||||||||||||||||||
| Cost of revenues |
137,504 | (2,882 | ) | 134,622 | (1,406 | ) (c) | 133,216 | |||||||||||||
| Research and development |
21,664 | (18 | ) | 21,646 | (353 | ) (c) | 21,293 | |||||||||||||
| Selling, general and administrative |
66,391 | (987 | ) | 65,404 | (6,016 | ) (c) | 59,388 | |||||||||||||
| Acquisition costs |
208 | (208 | ) | — | — | — | ||||||||||||||
| Capitalized legal fees charge |
5,573 | (5,573 | ) | — | — | — | ||||||||||||||
| Restructuring charges |
99 | (99 | ) | — | — | — | ||||||||||||||
| Impairment of Property, plant and equipment |
900 | (900 | ) | — | — | — | ||||||||||||||
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|||||||||||
| Total costs and expenses |
232,339 | (10,667 | ) | 221,672 | (7,775 | ) | 213,897 | |||||||||||||
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| Operating income |
$ | 4,437 | $ | 12,411 | $ | 16,847 | $ | 7,775 | $ | 24,622 | ||||||||||
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| Twelve Months Ended December 31, 2011 | ||||||||||||||||||||
| GAAP Operating Results |
Non-GAAP Adjustments |
Non-GAAP Operating Results |
EBITDA Adjustments |
Adjusted EBITDA |
||||||||||||||||
| Total revenues |
$ | 848,181 | $ | 6,826 | $ | 855,007 | $ | — | $ | 855,008 | ||||||||||
| Costs and expenses: |
||||||||||||||||||||
| Cost of revenues |
501,445 | (11,422 | ) | 490,023 | (7,654 | ) | 482,369 | |||||||||||||
| Research and development |
84,384 | (53 | ) | 84,331 | (1,412 | ) | 82,919 | |||||||||||||
| Selling, general and administrative |
250,296 | (3,146 | ) | 247,150 | (19,684 | ) | 227,466 | |||||||||||||
| Acquisition costs |
5,974 | (5,974 | ) | — | — | — | ||||||||||||||
| Capitalized legal fees charge |
5,573 | (5,573 | ) | — | — | — | ||||||||||||||
| Restructuring charges |
5,854 | (5,854 | ) | — | — | — | ||||||||||||||
| Impairment of property, plant and equipment |
900 | (900 | ) | — | — | — | ||||||||||||||
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| Total costs and expenses |
854,426 | (32,922 | ) | 821,504 | (28,750 | ) | 792,754 | |||||||||||||
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| Operating income (loss) |
$ | (6,245 | ) | $ | 39,748 | $ | 33,503 | $ | 28,750 | $ | 62,254 | |||||||||
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| (a) | This table was not included with the reconciliation accompanying the earnings release for the first quarter of 2011. It has been included to be consistent with the inclusion of this reconciliation in subsequent filings and because it is included in the reconciliations accompanying the earnings release for the first quarter of 2012. |
| (b) | Due to a calculation error in the reconciliation accompanying the third quarter 2011 earnings release, total amortization expense for the period increased to $5.1 million from the $4.7 million included in the original reconciliation. Portions of the $0.4 million adjustment were allocated to each of the line items listed. |
| (c) | Stock compensation expense was increased to $3.7 million from the $3.6 million used in the reconciliation for the fourth quarter of 2011 accompanying the 2011 year-end earnings release. Portions of the $0.1 million adjustment were allocated to Selling, general and administrative. |
| (d) | Total acquisition related amortization expense for the third quarter increased to $3.7 million from the $3.4 million reported in the reconciliation accompanying the third quarter 2011 press release due to the exclusion of amortization of certain intangibles from the calculation. The entire $0.3 million increase was allocated to the adjustment for Selling, general and administrative expense for the period. |
3
INTERMEC, INC.
RECONCILIATION OF GAAP TO NON-GAAP GROSS MARGINS
(In thousands)
(Unaudited)
| Three Months Ended April 3, 2011 | ||||||||||||
| As Reported | Non-GAAP Adjustments |
Non-GAAP as Adjusted |
||||||||||
| Revenues: |
||||||||||||
| Product |
$ | 141,736 | $ | — | $ | 141,736 | ||||||
| Service |
36,782 | 726 | 37,508 | |||||||||
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| Total revenues |
$ | 178,518 | $ | 726 | $ | 179,244 | ||||||
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| Cost of revenues: |
||||||||||||
| Product |
$ | 87,797 | $ | (2,265 | ) | $ | 85,532 | |||||
| Service |
22,427 | — | 22,427 | |||||||||
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| Total cost of revenues |
$ | 110,224 | $ | (2,265 | ) | $ | 107,959 | |||||
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| Gross margins: |
||||||||||||
| Product |
38.1 | % | 39.7 | % | ||||||||
| Service |
39.0 | % | 40.2 | % | ||||||||
| Total |
38.3 | % | 39.8 | % | ||||||||
| Three Months Ended July 3, 2011 | ||||||||||||
| As Reported | Non-GAAP Adjustments |
Non-GAAP as Adjusted |
||||||||||
| Revenues: |
||||||||||||
| Product |
$ | 177,751 | $ | — | $ | 177,751 | ||||||
| Service |
43,331 | 2,178 | 45,509 | |||||||||
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| Total revenues |
$ | 221,082 | $ | 2,178 | $ | 223,260 | ||||||
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| Cost of revenues: |
||||||||||||
| Product |
$ | 106,441 | $ | (3,105 | ) | $ | 103,336 | |||||
| Service |
23,325 | — | 23,325 | |||||||||
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| Total cost of revenues |
$ | 129,766 | $ | (3,105 | ) | $ | 126,661 | |||||
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| Gross margins: |
||||||||||||
| Product |
40.1 | % | 41.9 | % | ||||||||
| Service |
46.2 | % | 48.7 | % | ||||||||
| Total |
41.3 | % | 43.3 | % | ||||||||
4
| Three Months Ended October 2, 2011 | ||||||||||||
| As Reported | Non-GAAP Adjustments |
Non-GAAP as Adjusted |
||||||||||
| Revenues: |
||||||||||||
| Product |
$ | 165,294 | $ | — | $ | 165,294 | ||||||
| Service |
46,511 | 2,178 | 48,689 | |||||||||
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| Total revenues |
$ | 211,805 | $ | 2,178 | $ | 213,983 | ||||||
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| Cost of revenues: |
||||||||||||
| Product |
$ | 97,587 | $ | (3,170 | ) | $ | 94,417 | |||||
| Service |
26,363 | — | 26,363 | |||||||||
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| Total cost of revenues |
$ | 123,950 | $ | (3,170 | ) | $ | 120,780 | |||||
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|
|||||||
| Gross margins: |
||||||||||||
| Product |
41.0 | % | 42.9 | % | ||||||||
| Service |
43.3 | % | 45.9 | % | ||||||||
| Total |
41.5 | % | 43.6 | % | ||||||||
| Three Months Ended December 31, 2011 | ||||||||||||
| As Reported | Non-GAAP Adjustments |
Non-GAAP as Adjusted |
||||||||||
| Revenues: |
||||||||||||
| Product |
$ | 192,209 | $ | — | $ | 192,209 | ||||||
| Service |
44,566 | 1,744 | 46,310 | |||||||||
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| Total revenues |
$ | 236,775 | $ | 1,744 | $ | 238,519 | ||||||
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|
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| Cost of revenues: |
||||||||||||
| Product |
$ | 112,766 | $ | (2,882 | ) | $ | 109,884 | |||||
| Service |
24,738 | — | 24,738 | |||||||||
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|
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| Total cost of revenues |
$ | 137,504 | $ | (2,882 | ) | $ | 134,622 | |||||
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|
|||||||
| Gross margins: |
||||||||||||
| Product |
41.3 | % | 42.8 | % | ||||||||
| Service |
44.5 | % | 46.6 | % | ||||||||
| Total |
41.9 | % | 43.6 | % | ||||||||
| Twelve Months Ended December 31, 2011 | ||||||||||||
| As Reported | Non-GAAP Adjustments |
Non-GAAP as Adjusted |
||||||||||
| Revenues: |
||||||||||||
| Product |
$ | 676,991 | $ | — | $ | 676,991 | ||||||
| Service |
171,190 | 6,826 | 178,016 | |||||||||
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| Total revenues |
$ | 848,181 | $ | 6,826 | $ | 855,007 | ||||||
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|
|
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| Cost of revenues: |
||||||||||||
| Product |
$ | 404,591 | $ | (11,422 | ) | $ | 393,169 | |||||
| Service |
96,853 | — | 96,853 | |||||||||
|
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|
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| Total cost of revenues |
$ | 501,444 | $ | (11,422 | ) | $ | 490,022 | |||||
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|
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|
|
|||||||
| Gross margins: |
||||||||||||
| Product |
40.2 | % | 41.9 | % | ||||||||
| Service |
43.4 | % | 45.6 | % | ||||||||
| Total |
40.9 | % | 42.7 | % | ||||||||
This presentation has been adjusted to reflect certain reclassifications applied to subsequent periods.
Total cost of revenues and Total gross margins remain unchanged.
5
INTERMEC, INC.
SUPPLEMENTAL INFORMATION: EBITDA AND ADJUSTED EBITDA CALCULATION
(In thousands)
(Unaudited)
| Three Months Ended | Twelve Months Ended | |||||||||||||||||||
| April 3, 2011 | July 3, 2011 | October 2, 2011 | December 31, 2011 | December 31, 2011 | ||||||||||||||||
| Operating income (loss), as reported |
$ | (8,602 | ) | $ | (3,078 | ) | $ | 1,000 | $ | 4,435 | $ | (6,245 | ) | |||||||
| Acquisition adjustments |
||||||||||||||||||||
| Acquisition fair-value adjustments |
1,889 | 2,490 | 2,178 | 1,744 | 8,301 | |||||||||||||||
| Intangible amortization |
1,102 | 3,174 | 3,746 | (c) | 3,205 | 11,227 | (c) | |||||||||||||
| Acquisition costs |
4,839 | 373 | 554 | 208 | 5,974 | |||||||||||||||
| Capitalized legal fees charge |
— | — | — | 5,573 | 5,573 | |||||||||||||||
| Restructuring charges |
— | 5,112 | 644 | 99 | 5,855 | |||||||||||||||
| Impairment of property, plant and equipment |
— | — | — | 900 | 900 | |||||||||||||||
| Other |
— | 618 | 620 | 682 | 1,920 | |||||||||||||||
|
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|
|
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|
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|
|||||||||||
| Total adjustments |
7,830 | 11,767 | 7,742 | 12,411 | 39,750 | |||||||||||||||
|
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|
|
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|
|
|
|
|||||||||||
| Non-GAAP operating income (loss) |
$ | (772 | ) | $ | 8,689 | $ | 8,742 | $ | 16,846 | $ | 33,505 | |||||||||
| Adjusted EBITDA calculation |
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| Add: depreciation and amortization (excluding acquisition related) |
$ | 3,805 | $ | 4,540 | $ | 5,082 | (a) | $ | 4,027 | $ | 17,454 | (a) | ||||||||
| Add: stock-based compensation |
2,328 | 2,048 | 3,172 | 3,748 | (b) | 11,296 | ||||||||||||||
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| Adjusted EBITDA |
$ | 5,361 | $ | 15,277 | $ | 16,996 | $ | 24,621 | $ | 62,255 | ||||||||||
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| (a) | Due to a calculation error in the reconciliation accompanying the third quarter 2011 earnings release, total amortization expense for the period increased to $5.1 million from the $4.7 million included in the original reconciliation. |
| (b) | Stock compensation expense was increased to $3.7 million from the $3.6 million used in the reconciliation for the fourth quarter of 2011 accompanying the 2011 year-end earnings release. |
| (c) | Total Acquisition related amortization for the third quarter increased to $3.7 million from the $3.4 million reported in the reconciliation accompanying the third quarter 2011 press release due to the exclusion of amortization of certain intangibles from the calculation. |
Intermec is providing disclosure of the reconciliation of certain Non-US GAAP financial measures used in our financial reporting and within our press release, among other places, to our comparable financial measures on a US GAAP basis. The Company believes that these Non-US GAAP financial measures provide investors the additional information to evaluate financial performance in a way that is comparable to measures reported by other technology companies.
Earnings before interest, taxes, depreciation, and amortization (EBITDA) is net income (loss) before provisions for income taxes, net interest expense, and depreciation and amortization. EBITDA should not be considered an alternative to, or more meaningful than, income before income taxes, cash flow from operations, or other traditional indicators of operating performance. Rather, EBITDA is presented because it is a widely accepted supplemental financial measure that we believe provides relevant and useful information. Our calculation of adjusted EBITDA adds back the non-cash effect of stock-based compensation as accounted for under ACS 718 as we believe this is a meaningful view of our true cash earnings. Adjusted EBITDA may not be comparable to a similarly titled measure reported by other companies, since not all companies calculate this non-US GAAP measure in the same manner.
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