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Intermec Reports Record First Quarter RevenuesEVERETT, Wash. --(Business Wire)-- Intermec, Inc. (NYSE:IN) today announced financial results for its first quarter, which ended March 30, 2008. Intermec reported 2008 first quarter revenues of $217 million and net earnings of $7.7 million, or $0.13 per diluted share, compared to 2007 first quarter revenues of $179 million and a net loss of ($4.4) million, or ($0.07) per diluted share. "Intermec delivered a solid first quarter with continued progress in our objectives of accelerating growth and improving gross margins towards our target business model," said Patrick J. Byrne, President and CEO. "The record first quarter revenue delivered and strong operating leverage are a result of the powerful combination of market focus, product excellence, deep application expertise, and operating discipline." First quarter 2008 revenues increased 21 percent compared to the first quarter of 2007. Geographically during the first quarter, North American revenues increased 25 percent over the comparable prior-year period. Revenues in Europe, Mid-East and Africa (EMEA) increased 24 percent over the prior year period; while Asia Pacific (APAC) and Latin America increased 28 percent and decreased 14 percent, respectively. During the first quarter, Systems and Solutions revenue increased 35 percent and Printer and Media revenue increased 12 percent over the comparable prior-year period. Service revenue decreased 2 percent compared to the prior-year period. The Company's first quarter 2008 effective tax rate was 36.3 percent. The first quarter of 2007 tax benefit was reduced primarily from the recording of a valuation allowance for certain foreign deferred tax assets and the impact of changes in tax rates. During the quarter, the Company paid off at maturity its $100 million debentures, which eliminated the Company's long-term debt. The Company's cash equivalents and short-term investments decreased $77.8 million in the quarter, primarily as a result of the debt repayment. Cash flows from operations were approximately $17.5 million during the quarter. The cash equivalents and short-term investments position at the end of the first quarter totaled $187.7 million. Product Related Highlights: -- The new PW50 four-inch mobile workboard printer uses Bluetooth connectivity and an integrated dock to complement Intermec's mobile computers, scanners and media. The PW50 combines a convenient form factor with application-specific features to increase productivity for DSD, field service, and route accounting applications. -- The IP30 was selected as a finalist for the coveted "Best in Show" award presented by RFID Journal, the world's leading media and events Company covering radio frequency identification (RFID) technology. The IP30 RFID reader is a cost-effective, compact, FCC and ETSI certified solution for adding mobile RFID read/write capability to the latest generation of Intermec mobile computers, including the CN3 and the CK61. -- The IF61 Smart Reader has been validated as a remote platform to host IBM data capture applications with IBM's newly released WebSphere Premises Server 6.1. The Intermec IF61 is the first RFID reader to provide implementers of IBM-based RFID solutions the ability to develop, deploy and maintain RFID business logic on an intelligent RFID reader platform. RFID Patent License Activity: -- Honeywell, Inc., a diversified technology and manufacturing leader has become a Rapid Start licensee under Intermec's RFID patents following its acquisition of Hand Held Products, Inc. -- Toppan Printing Co., the world's leading and largest printing and communications company has expanded its existing Rapid Start RFID License Agreement. The additional running royalty license will allow Toppan and its customers to use RFID technology for supply chain management, identifying, tracking and tracing of printed circuit boards. -- Intelleflex Corporation, a leader in RFID products and solutions with extended range, reliability, memory, and security has taken a running royalty license under Intermec's RFID patents. -- Applied Wireless Identifications Group, Inc. (AWID) is a world-wide leading provider of RFID products and solutions for embedded markets, security industries, and fast-growth value-added RFID solutions has expanded its license under Intermec's RFID patents to include portable as well as fixed RFID readers. Outlook - Second Quarter 2008 -- Intermec also reported today its revenue outlook for the Second quarter 2008. Revenues for the period are expected to be within a range of $227 million to $232 million. -- For the second quarter of 2008, EPS are expected to be within a range of $0.18 to $0.21, per diluted share. Conference Call Information Intermec will hold its conference call on May 1, 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, VP RFID Ray Cronin and Director of Investor Relations Kevin P. McCarty. The dial-in numbers for participants are 1-800-779-9977 (US); 1-210-839-8500 (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 [email protected], 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 product 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 improve gross margins or profits; our cost reduction plans; and our revenue, expense, earnings or financial outlook for the second 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
(Thousands of dollars, except per share amounts)
(Unaudited)
Quarter Ended
-------------------
March 30, April 1,
2008 2007
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Revenues:
Product $179,574 $141,512
Service 37,205 37,806
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Total revenues 216,779 179,318
Costs and expenses:
Cost of product revenues 107,705 92,194
Cost of service revenues 21,706 22,583
Research and development 16,522 16,506
Selling, general and administrative 58,636 53,055
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Total costs and expenses 204,569 184,338
--------- ---------
Operating profit (loss) 12,210 (5,020)
Interest income 1,675 2,553
Interest expense (1,790) (2,295)
--------- ---------
Earnings (loss) before income taxes 12,095 (4,762)
Provision (benefit) for income taxes 4,389 (330)
--------- ---------
Net earnings (loss) $ 7,706 $ (4,432)
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Basic earnings (loss) per share $ 0.13 $ (0.07)
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Diluted earnings (loss) per share $ 0.13 $ (0.07)
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Shares used in computing basic earnings (loss) per
share 60,956 59,990
Shares used in computing diluted earnings (loss)
per share 61,475 59,990
INTERMEC, INC.
CONSOLIDATED BALANCE SHEETS
(Unaudited, amounts in thousands of dollars)
March 30, December
2008 31, 2007
---------- ----------
ASSETS
Current assets:
Cash and cash equivalents $ 186,528 $ 237,247
Short-term investments 1,137 28,230
Accounts receivable, net of allowance for
doubtful accounts and sales returns of $11,700
and $12,854 166,033 191,487
Inventories 130,172 113,145
Net current deferred tax assets 61,532 61,532
Other current assets 13,752 14,690
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Total current assets 559,154 646,331
Property, plant and equipment, net 48,490 47,732
Intangibles, net 3,906 4,138
Net deferred tax assets 146,873 150,154
Other assets 58,397 52,280
---------- ----------
Total assets $ 816,820 $ 900,635
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LIABILITIES AND SHAREHOLDERS' INVESTMENT
Current liabilities:
Accounts payable and accrued expenses $ 141,416 $ 141,667
Payroll and related expenses 24,900 32,170
Deferred revenue 54,948 49,020
Current debt - 100,000
---------- ----------
Total current liabilities 221,264 322,857
Long-term deferred revenue 19,114 20,109
Other long-term liabilities 74,946 73,558
Shareholders' investment:
Common stock 615 612
Additional paid-in-capital 685,099 679,241
Accumulated deficit (189,917) (196,795)
Accumulated other comprehensive income 5,699 1,053
---------- ----------
Total shareholders' investment 501,496 484,111
---------- ----------
Total liabilities and shareholders' investment $ 816,820 $ 900,635
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INTERMEC, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited, amounts in thousands of dollars)
Quarter Ended
--------------------
March 30, April 1,
2008 2007
---------- ---------
Cash and cash equivalents at beginning of year $ 237,247 $155,027
---------- ---------
Cash flows from operating activities:
Net earnings (loss) from operations 7,706 (4,432)
Adjustments to reconcile net earnings (loss) to
net cash provided by (used in) operating
activities:
Depreciation and amortization 3,742 3,093
Deferred taxes 3,804 166
Excess tax benefits from stock-based payment
arrangements (581) (649)
Changes in working capital and other
operating activities 2,845 (10,057)
---------- ---------
Net cash provided by (used in) operating
activities 17,516 (11,879)
Cash flows from investing activities:
Capital expenditures (3,803) (2,160)
Purchases of investments (760) (595)
Sale of investments 27,755 837
Other investing activities (778) (577)
---------- ---------
Net cash provided by (used in) investing
activities 22,414 (2,495)
Cash flows from financing activities:
Repayment of debt (100,000) -
Excess tax benefits from stock-based payment
arrangements 581 649
Stock options exercised 2,345 1,389
Other financing activities 879 521
---------- ---------
Net cash (used in) provided by financing
activities (96,195) 2,559
Effect of exchange rate changes on cash and cash
equivalents 5,546 749
---------- ---------
Resulting decrease in cash and cash equivalents (50,719) (11,066)
---------- ---------
Cash and cash equivalents at end of period $ 186,528 $143,961
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