Trimble Annual Report 2000

FY2000 Annual Report · Trimble

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2000 Annual Report

focused on performance

2000 highlights

Trimble’s significant growth areas:

• 45% growth in GPS-enabled precision agriculture
• 30% unit growth for our CrossCheck™ mobile GPS wireless devices
• 20% growth in GPS-enabled construction machine guidance systems

Trimble’s new product introductions, such as:

• FirstGPS™ technology for mobile platforms
• Virtual Reference Station (VRS™) for precision positioning
• CrossCheck™ GSM mobile communicator for fleet management
• TerraSync™ software for Geographic Information Systems (GIS)

data management

• LaserStation™ System for one-person construction layout
• Trimble™ 5600 DR 200+ for long-range reflectorless surveying

Trimble’s contract wins, such as:

• Zurich International Airport for permanent reference station
• China’s Ministry of Railways for survey
• Britain’s Royal Automobile Club for vehicle safety
• Digicore Holdings Inc. in South Africa for fleet management

Trimble’s reorganization of its management team
around four key growth markets:

• Component Technologies
• Agriculture
• Engineering & Construction
• Fleet and Asset Management

Trimble’s two strategic acquisitions:

• Spectra Precision Group, which catapulted Trimble to # 1

in Engineering & Construction

• Tripod Data Systems, a leading developer of data collection software

for Land Survey, Construction and GIS

Trimble is a leading innovator of Global Positioning System (GPS) technology. In addition to
providing advanced GPS components, Trimble augments GPS with other positioning technologies as
well as wireless communications and software to create complete customer solutions. Trimble’s world-
wide presence and unique capabilities position the Company for growth in emerging
applications including surveying, automobile navigation, machine guidance, asset tracking,
wireless platforms, and telecommunications infrastructure. Founded in 1978 and headquartered
in Sunnyvale, California, Trimble has more than 2,200 employees in more than 20 countries worldwide.

financial highlights

Fiscal Year Ended

(in thousands except per share amounts)

Operating Data:

Net revenue

EBITDA

Net income (loss)

from continuing operations

Diluted net income (loss) per share

from continuing operations

Balance Sheet Data:

Cash, cash equivalents,

and short-term investments

Working capital

Total assets

Notes payable, other noncurrent liabilities,

less current portion

Shareholders’ equity

2000

1999

1998

$369,798

$ 54,295

$271,364

$ 29,534

$268,323

$ (11,404)

$ 31,135(1)

$ 18,662

$ (27,335)

1.20(1)

0.82

(1.22)

$ 40,876

$ (10,439)

$490,504

$151,783

$134,943

$101,992

$111,808

$181,751

$ 33,821

$100,796

$ 57,134

$ 81,956

$156,279

$ 31,640

$ 74,691

This document may contain forward-looking statements based on current expectations that involve a number of risks and uncertainties. Other potential risks and

uncertainties that could cause actual results to differ materially are included in the SEC filings, including Form 10-K and Form 10-Q, for Trimble.

(1) Adjusted for certain one-time and acquisition-related charges.

letter to our shareholders

Overall, the year was one of progression that combined strategic and organizational advances with some operational challenges.
In this letter, I would like to review the year and set forth some goals for 2001 and beyond.

Strategic Progress
During 2000, we took a number of steps to implement the strategy we articulated in late 1999.

The most significant step was the acquisition of Spectra Precision in July. The acquisition established Trimble as the market leader
for positioning solutions in our largest segment, Engineering and Construction. This market began consolidating several years ago,
and the trend accelerated during 2000 as the three leading participants each made strategic acquisitions. At the beginning of the
year, Trimble had a significant position in the GPS segment of the construction market but did not have a full set of positioning
technologies to offer the customer. The acquisition of Spectra Precision both solidifies our leadership and enables us to bring
complete solutions to our customers. Looking to the future, our strengthened worldwide distribution capability and deep appli-
cations insight enable us to bring new applications, such as fleet management, to our construction industry customers. We also
acquired Tripod Data Systems (TDS) late in the year. TDS provides us with a source of low-cost, rugged, hardware platforms that may
be used in many of our businesses and add significant software resources that will accelerate our product development process.

Another event with long-term implications is the opening of our Colorado applications center. Recruiting the best employees has
always been integral to Trimble’s success. This move provides significant benefits, including cost savings and enhanced flexibility
in recruiting and retaining employees. While we are committed to maintaining a strong technical presence in northern California,
we expect to relocate cost-sensitive elements of the business away from California over time.

Early in 2001, we announced our intention to divest our commercial aviation business to Honeywell and to shut down our
manufacturing facility in Austin. As of March 2001, the divestiture has been completed. This move is consistent with our
continuing effort to reshape our business and product portfolio around our targeted markets.

Operations
Our operational challenges in 2000 had two primary, related elements.

The first was the limited supply of electronic components, particularly those required in the wireless and computer industries.
We saw the lead times of many components extend from a few days to over 300 days.

These component shortages occurred simultaneously with the implementation of our prior decision to outsource all of our
Sunnyvale-based manufacturing to Solectron. The move to contract manufacturing is a major transition for any company, one
that is accompanied by the need to re-evaluate processes, accountabilities, and reporting. The convergence of these two events
compromised our ability to meet the demand for our products.

In the fourth quarter, we established a senior management task force with Solectron to explore the mechanisms for improving
both short-term and long-term performance. We demonstrated significant improvement in the fourth quarter and expect the
trends to continue to improve as we attack the root causes of the problems.

in millions except for earnings per share

400

300

200

100

–20

1.20

.60

–.60

–1.20

Revenue

Gross Margin

EBITDA

Adjusted EPS
Adjusted for one-time and
acquisition-related charges.

Strategic Direction
Our fundamental goal as a company is to achieve the potential inherent in our employees, our technology, and our products.
Going forward, our goals are to:

• Achieve greater penetration in today’s core business of providing value-added positioning solutions to commercial and
professional users. Trimble’s development as a company has, to a large extent, derived from the combination of accurate
and reliable GPS with software and other capabilities to create high-value solutions to businesses and professionals. Current
examples include land surveying, machine guidance, Geographic Information Systems (GIS), and fleet management. These
applications will continue to provide the basis of growth and profitability.

• Play a leading role in the wireless markets for positioning. We believe that the further improvements of GPS in cost, power,
and robustness will enable GPS to become a standard feature in a wide array of both existing and future mass market
platforms. For example, we believe that GPS will become a standard element of cell phones. We also believe that the
market penetration will be progressive over the next few years as GPS capabilities are developed to conform to the needs
of the industry. We are committed to providing the technical leadership necessary to accomplish this task.

• Become a leading participant in the market for “location-based services.” As mobile platforms proliferate, major opportunities exist
for providing Internet-accessible services. We believe that a significant portion, if not the majority, of those services
will utilize location as the foundation of the service. They may take many forms ranging from locating the nearest fast food
restaurant to tracking delivery vans around a city. We already participate in the industry as a major provider of combined
GPS and wireless modules. We believe that we have a significant opportunity to provide additional value and accelerate the
development of the market by bundling a package of hardware, software, and Internet-based services.

• Show clear evidence that the acquisition of Spectra Precision is working. This should include an accelerated flow of new
products, cost synergies, and evidence that we are enhancing our leading position in the market place. Later in the year,
we should be able to show that we can accelerate the growth rate in this business by emphasizing new applications such
as machine guidance and fleet management.

Although we anticipate that 2001 will be a challenging economic environment, we believe there are opportunities in the Company’s
existing and new markets to drive significant customer and revenue growth that in turn
generates sustained earnings volume.

I would like to thank our shareholders, customers, partners, and dedicated employees
for their continued support this past year.

Steven W. Berglund

President and Chief Executive Officer

Trimble’s competencies focused on performance

Trimble is building on its success by focusing on three key technologies:
positioning, information, and communication. In fact, these three primary
elements of our business are reflected in Trimble’s new logo: the triangle and
the globe represent the three elements of the Company’s position-centric
solutions and their global nature. These technologies enable Trimble to create
new applications and solve new problems, generating growth for the Company
and value for the shareholders.

Trimble provides value in many different ways

Application
Examples

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Product Categories

Commercial Solutions

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Positioning technologies for a variety of requirements

Application

Water
Management

Construction,
Survey,
Machine
Guidance

Precision
Farming,
Asset
Management

Fleet
Management,
In-vehicle
Navigation,
Cell Phones,
PDAs

Technology

Rotating
Lasers,
RTK GPS

RTK GPS,
Optics

Differential
GPS

Autonomous
GPS

Position
Accuracy

1mm–2cm

1–5cm

10cm–1m

>10m

Focused on positioning
Trimble delivers a variety of complementary positioning
capabilities, including GPS, optical, and laser technologies.
There have been significant advancements in GPS over the
past five years, and Trimble has consistently responded
quickly and effectively, including 479 patented technologies
for a variety of applications. GPS technology will continue
to play an important role in our growth in key emerging
applications such as personal digital assistants (PDAs), cell
phones, and other wireless devices.

Trimble’s technology is ideal for a wide range of uses in
a variety of different markets requiring different attributes.
In agriculture, for example, drip tape buried underneath
crops can be precisely set and cultivation guided by highly
accurate GPS can be performed while leaving the drip tape
undisturbed. This can save significant time and money
by enabling the irrigation system to remain in place for
several years. Trimble GPS is also used in a number of
consumer applications, such as navigation systems for
Mercedes-Benz, BMW, Honda, Renault, and Audi.

During 2000, the fundamental GPS solution was made more
robust by the removal of Selective Availability by the U.S.
government, significantly improving the unaided accuracy
of the GPS solution from a football field-sized area to
a garage-sized area. This has improved, for example, the
ability of fleet managers to locate lost or stolen cargo.

Through our acquisition of Spectra Precision, Trimble now
offers a much more complete suite of positioning offerings
than ever before, including optical and laser solutions.
Optical technology is ideal for applications requiring an
accurate source of position without a view of the sky, while
rotating lasers provide a convenient level measurement
with high accuracy over significant distance. Together,
these technologies provide the positioning component
required for the automation of future construction sites.

Focused on information
Information represents the foundation for Trimble’s
position-centric solutions. Trimble is building on this
foundation to deliver enhanced solutions that link
position with data collection to create useable, relevant
information. For example, our CrossCheck series
of products for fleet management includes the intelligence
to send only the predetermined alarms, position data, or
condition information that the user has requested.

The acquisition of TDS reinforced our position as a provider
of information solutions for Engineering and Construction
and, in a more general sense, extended our company-wide
information capabilities. While TDS’ traditional focus has
been on writing software for the collection of position
data, they are now creating software for new data collection
application areas such as the cable television market.
In addition, expanding on this foundation enables
Trimble to significantly improve our capabilities in each
of our primary growth markets.

Dramatic efficiency improvements result when information
about the job at hand is associated with its position. The
owner of a delivery vehicle can now discover technical
problems on the truck that otherwise may have gone
unnoticed, putting the driver or cargo at risk. The same
owner can also track stolen vehicles, recovering not only
the truck, but the cargo as well, based on the route of the
stolen truck. Position-based information also helps
in a variety of consumer applications. In Japan, for
example, Trimble GPS technology in Seiko Epson’s PDA
allows users to query and find restaurants that serve
a specified cuisine within walking distance of the user,
and then provides directions to the chosen restaurant.

Focused on communications
Communications provide the real-time wireless link to
information in Trimble’s solutions. Trimble is already helping
to advance communications infrastructure technology
through the provision of cost-effective precise time
synchronization and will continue to provide major contri-
butions that will enable new, more robust applications.
In positioning, the FirstGPS chipset achieves the lowest
power consumption in the industry by offloading non-
real-time tasks to external processors, making it ideal for
integration with communication devices such as cell phones.

Advancements in communications promise to revolutionize
productivity in the engineering and construction,
agriculture, and GIS markets. One critical advantage
communication provides is the delivery of real-time GPS
corrections that generate decimeter- and centimeter-level
position solutions. Also, many of the current on-site
applications will be enhanced by the addition of data
communication links. This will eliminate delays in the
transmission of needed information, reduce the probability
of errors in the transmission, and enable everyone with
a need to access the information to do so in real time. Over
the past year, Trimble developed a system with Caterpillar
that integrates a series of radios to create a wireless data
network for immediate access to critical information.

Wireless communication is critical to fleet management
applications and potentially enhances the more general
category of asset management significantly. The primary
challenge to enabling many of the applications of the
future will be the cost of communications, both the cost
of the hardware itself and the cost of providing the
communications service on the frequency demanded by
the application. As the costs of both communication
services and the hardware itself decline, the number
of applications is expected to grow significantly. These
advantages are already being seen in organizations like
Chicago’s 911 emergency service system, in which
Trimble plays a critical role by communicating real-time
vehicle positioning to the 911 dispatch center for
emergency response within minutes.

Focused on key growth markets

When GPS technology was in the early stages of development, Trimble concentrated on areas where our
high-precision capabilities added the most value to our customers, and which generated early profits for
the Company. As both the market and Trimble’s technology evolved, we expanded our offerings to encom-
pass a wide variety of GPS-related products. In 1999, Trimble chose to focus on the market areas that pro-
vide the best opportunity for future growth, profitability, and sustainable leadership positions. This led to
the establishment of four strategic business areas: Fleet and Asset Management, Agriculture, Component
Technologies, and Engineering and Construction.

Fleet and Asset Management
Traditionally, fleet management applications have focused on
public safety. Today, there is an increasing need for services
such as vehicle fleet management systems that can deliver
relevant, cost-effective information. Key applications for this
technology include the transmission of vehicle problems for
immediate corrective action, route management tools
for operators and managers, and fleet security solutions
such as vehicle and load theft recovery. To address these new
opportunities and improve the robustness of the business,
Trimble has expanded its Fleet Management business model
to include enhanced application software and services
content. In the area of fixed assets, Trimble’s solid foundation
in GIS data collection products continues to make Trimble
the choice for data collection and utilization systems. These
systems help urban managers digitize asset locations
and conditions and use that data for relocation and
maintenance of those assets.

Agriculture
Trimble’s strength as a technical innovator and our ability
to provide support, service, and application-specific
customizable software content have put us at the forefront
of the rapidly growing agriculture market. Our Agriculture
Division offers innovative field and water management,
machine guidance, and control systems, as well as laser-
based systems for land leveling and subsurface drainage.
In the agriculture market, there is an increasing demand
for information and guidance solutions that allow people
and equipment on farms to be more efficient. Positioning
is playing a large role in agricultural applications, from
ground preparation to harvesting and overall farm
management. Trimble’s advanced positioning compo-
nents and systems benefit farmers and agri-businesses
through significantly improved machine efficiencies,
better yields, and improved information availability for better
decision making.

“Trimble’s system saved us valuable time, and we were able
to respond in 80 seconds, saving a young boy’s life. That’s
when seconds really count.”

Joe Frasier
Dispatcher
Phoenix Fire Department

“With Trimble Parallel Swathing, we’re getting something

back: hours and accuracy, and that saves us money.”

Leo Metzger
Partner
Metzger Brothers Farms (one of Ohio’s largest farms,
with more than 5,000 acres)

Component Technologies
As a worldwide leader in GPS technology, Trimble
provides GPS boards, modules, chipsets, and technology
licenses to major original equipment manufacturers (OEMs)
around the world. Our customers use Trimble components
and technology to add positioning functionality to their
business and consumer products, including automobile
navigation systems, PDAs, cell phones, and many other
applications, making their products more capable and more
successful. Through advancements in this technology,
we are focused on making position ubiquitous for both
consumer and commercial applications on as many
platforms as possible by providing the best value in low-
cost, low-power GPS technology. Trimble is also the
leading choice for GPS timing technology to the growing
area of synchronizing wireless networks, such as the
cellular infrastructure and computer networks.

Engineering and Construction
Trimble is the worldwide leader in the engineering and
construction market, offering “concept to completion”
solutions that include GPS and optical total station survey
systems, construction lasers, machine control systems,
and software. The addition of Spectra Precision’s positioning
solutions to Trimble’s GPS expertise propelled us to
number one in the engineering and construction market
in 2000. Nevertheless, the construction site of today has
not benefited as much from the information age as have
other industries such as banking and manufacturing.
From site design to earth moving, this market still relies
heavily on paper documentation and traditional technology.
The newly emerging integration of positioning, design
information, and communication technologies linking the
field and office together will provide significant efficiencies
to the construction site. By combining these technologies
in a more complete solution, Trimble has the unique
opportunity to transform the industry from users of tools
to beneficiaries of position-centric information systems.

“Trimble’s Acutime™II smart antennae’s ability to synchronize
our networks, down to the microsecond, is critical for us
and its proven reliability is just as critical. Neither Glenayre
nor our customers can afford downtime.”

Tom Oliver
Product Manager for Glenayre GL-C2000
base station controllers
Glenayre (the world’s leading supplier of infrastructure
components to the wireless communications industry)

“Using GPS increased the speed, precision, and economy
of our entire operation. GPS also reduced the complexity
and specialization of the equipment normally required for
each phase of this complex project. We couldn’t have done
it without Trimble GPS.”

Doug Wrock
Survey Manager
Modern Continental Construction
Boston’s Big Dig project, the Fort Point Channel Crossing

Executive Officers
Steven W. Berglund
President and Chief Executive Officer

Mary Ellen Genovese
Chief Financial Officer

Ron C. Hyatt
Sr. Vice President, General Manager
Agriculture Division

Michael W. Lesyna
Vice President, General Manager
Mobile Positioning & Communications Division

Karl G. Ramstrom
Sr. Vice President, General Manager
Engineering & Construction Division

Alan R. Townsend
Vice President, General Manager
Mapping & GIS Division

Dennis L. Workman
Vice President, General Manager
Component Technologies Division

William C. Burgess
Vice President
Human Resources

David M. Hall
Sr. Vice President
Marketing & Business Development

John E. Huey
Treasurer

Irwin L. Kwatek
Vice President & General Counsel

Bonnie L. Lemon
Corporate Controller

Bruce E. Peetz
Vice President
Advanced Technology & Systems

Board of Directors
Robert S. Cooper, Ph.D., Chairman
Atlantic Aerospace

Steven W. Berglund
Trimble Navigation Limited

John B. Goodrich, Secretary
Wilson, Sonsini, Goodrich & Rosati

William Hart
Technology Partners
West Fund Ltd.

Ulf J. Johansson, Ph.D.
Europolitan Holdings AB

Bradford W. Parkinson, Ph.D.
Stanford University
Hansen Labs

Shareholder Information
Corporate Headquarters:
Trimble Navigation Limited
645 N. Mary Avenue
Sunnyvale, California 94088-3642
Phone: (408) 481-8000
Phone: (800) 827-8000
(408) 481-2218
Fax:

Corporate Counsel:
Wilson, Sonsini, Goodrich & Rosati
Palo Alto, California

Independent Auditors:
Ernst & Young LLP
Palo Alto, California

Transfer Agent & Registrar:
Mellon Investor Services
San Francisco, California
Phone: (800) 589-9836
http://www.mellon-investor.com

Investor Relations group:
Morgen-Walke Associates, Inc.
New York, NY

Additional Information
Further copies of the Company’s annual report on
10-K, as filed with the Securities Exchange Commission,
will be furnished upon request to Investor Relations at
Trimble corporate headquarters.

Trimble Investors Information:
Traded: The NASDAQ Stock Mkt.
Symbol: TRMB
Closing price for year-end: $24.00
Closing year range: $18.00–$62.812

Trimble’s Web Site:
http://www.trimble.com
Annual Meeting: May 10, 2001

© Copyright 2001, Trimble Navigation Limited. All rights
reserved. The Trimble logo with Trimble, Acutime II,
CrossCheck, CrossCheck GSM, FirstGPS, LaserStation,
TerraSync, Trimble, and VRS are trademarks of Trimble
Navigation Limited. All other trademarks are the property
of their respective holders.

Trimble Locations Worldwide

Corporate Headquarters

International Sales Centers

Asia Region

Trimble Australia
Level 1/123 Gotha Street
Fortitude Valley QLD 4006
Australia

Trimble China
Suite 16D, Building 2, Epoch Center
4 Beiwa Road, Haidian District
Beijing, P.R.
China, 100081

Trimble Japan
Shin-Ohashi Riverside Building 101
1-8-2, Shin-Ohashi Kohtoh-ku
Tokyo 135-0007
Japan

Trimble Singapore
88 Marine Parade Road
22-06, Parkway Parade
Singapore 449269
Singapore

European Region

Trimble Austria
Linke Wienzeile 110
A-1060 Vienna,
Austria

Trimble Belgium
Oostjachtpark 9
Sint-Niklaas, 9100
Belgium

Trimble France
Parc Hightec VI
9, avenue de Canada
Les Ulis 91966 Courtabceuf
Cedex
France

Trimble GmbH
Am Prime Parc 11
D-65479 Raunheim
Germany

Trimble Italy
Largo Temistocle Solera, 7
00199 Rome
Italy

Trimble Netherlands
Prof. Dr. Dorgelolaan 20
5613 AM Eindhoven
Netherlands

Trimble Russia
23, 1st Tverskaya-Yamskaya St.
Moscow, 125047
Russia

Trimble Spain
Via de las Dos Castillas No. 33
Atica. Edificio 6. Despacho B-2
28224 Pozuelo de Alarcon
Madrid
Spain

Trimble U.K.
Trimble House
Meridian Office Park
Osborn Way, Hook
Hampshire RG27 9HX
England

Latin America Region

Trimble Latin America
6505 Blue Lagoon Drive
Suite 120
Miami, FL 33126

Trimble Mexico
Insurgentes Sur 800-Piso 8
Col. del Valle
03100 Mexico D.F.

Trimble Navigation Limited
645 North Mary Avenue
Sunnyvale, CA 94088-3642
Phone: 408-481-8000
Fax: 408-481-6860

Operations

Spectra Precision Software
5901 Peachtree Dunwoody Road NE
Suite A300
Atlanta, GA 30328-5548

Tripod Data Systems
345 SW Avery Avenue
Corvallis, OR 97333

Trimble Engineering
& Construction Division
5475 Kellenburger Road
Dayton, OH 45424-1099

Trimble Navigation Colorado
7403 Church Ranch Boulevard
Suite 100
Westminster, CO 80021

Spectra Precision terraSat
Haringstrasse 19 D-85635
Hohenkirchen-Siegertsbrunn
Germany

Trimble Jena GmbH
Carl-Zeiss Promenade 10
D-07745 Jena
Germany

Trimble Kaiserslautern GmbH
Am Sportplatz 5, D-67661
Kaiserslautern
Germany

Trimble AB
Box 64, Rinkebyvagen 17
182 11, Danderyd
Sweden

Trimble Navigation New Zealand
Limited
11 Birmingham Drive
P.O. Box 8729
Riccarton, Christchurch
New Zealand