filings.toolsTrimble 10-K/A 2023-12-29
Filed 2025-01-16. 4 sections, 178K characters. Original on sec.gov · Markdown · JSON
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K/A
(Amendment No. 1)
| ☒ | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 | ||||
| For the fiscal year ended December 29, 2023 | |||||
| or | |||||
| ☐ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 | ||||
| For the transition period from to |
Commission File Number: 001-14845
TRIMBLE INC.
(Exact name of Registrant as specified in its charter)
| Delaware (State or other jurisdiction of incorporation or organization) | 94-2802192 (I.R.S. Employer Identification Number) |
10368 Westmoor Drive, Westminster, CO 80021
(Address of principal executive offices) (Zip Code)
(720) 887-6100
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||
| Common Stock, $0.001 par value | TRMB | NASDAQ Global Select Market |
Securities registered pursuant to Section 12(g) of the Act: NONE
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☒ No ☐
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Exchange Act. Yes ☐ No ☒
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically, every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer.
| Large Accelerated Filer | ☒ | Accelerated Filer | ☐ | |||||||||||
| Non-accelerated Filer | ☐ | Smaller Reporting Company | ☐ | |||||||||||
| Emerging Growth Company | ☐ |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant has filed a report on and attestation to its management's assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☒
If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒
As of June 30, 2023, the aggregate market value of the common stock held by non-affiliates of the registrant was approximately $13.1 billion based on the closing price as reported on the NASDAQ Global Select Market. Shares of common stock held by each officer and director of the registrant have been excluded in that such person may be deemed to be an affiliate. This determination of affiliate status is not necessarily a conclusive determination for any other purpose.
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.
| Class | Outstanding at February 20, 2024 | ||||||||||
| Common stock, $0.001 par value | 245,687,181 | shares | |||||||||
EXPLANATORY NOTE
Trimble Inc. (“Trimble” or “the Company” or “we” or “our” or “us”) is filing this Amendment No. 1 on Form 10-K/A (this “Amendment”) to our Annual Report on Form 10-K for the year ended December 29, 2023, which was filed with the Securities and Exchange Commission (the “SEC”) on February 26, 2024 (the “Original Form 10-K”) to make certain changes, as described below.
As previously disclosed in Item 8.01 of the Company’s Current Report on Form 8-K filed with the SEC on May 3, 2024, Ernst & Young LLP (“EY”), the Company’s independent registered public accounting firm, informed the Company that in preparing for an upcoming Public Company Accounting Oversight Board (“PCAOB”) inspection, EY had identified concerns regarding the design and execution of certain controls.
The Company’s management has determined that additional material weaknesses in its internal control over financial reporting existed that were not previously disclosed in Management’s Annual Report on Internal Control over Financial Reporting in the Original Form 10-K related to certain information technology general controls (“ITGCs”), undue reliance on controls over information technology (“IT”) interfaces, and the evaluation of standalone selling prices of performance obligations utilized in accounting for revenue. As a result, we are (i) including in Part II, Item 8 of this Amendment a revised opinion from EY on our internal control over financial reporting as of December 29, 2023 and (ii) replacing Part II, Item 9A, “Controls and Procedures” in this Amendment to update the conclusions regarding the effectiveness of our internal control over financial reporting as of December 29, 2023. The material weaknesses did not result in any change to the Company’s consolidated financial statements as set forth in the Original Form 10-K.
Pursuant to Rule 12b-15 of the Securities Exchange Act of 1934, as amended, this Amendment contains the complete text of Part II, Item 8. “Financial Statements and Supplementary Data”. Part IV, Item 15. “Exhibits and Financial Statement Schedules” has been amended to include (i) current certifications of the Company’s Chief Executive Officer and Chief Financial Officer as required under Sections 302 and 906 of the Sarbanes-Oxley Act of 2002, as amended, each dated as of the date of this Amendment, and attached as Exhibits 31.1, 31.2, 32.1, and 32.2, (ii) an updated Consent of Independent Registered Public Accounting Firm, attached as Exhibit 23.1, and (iii) updated inline XBRL exhibits, as applicable.
The only changes to the Original Form 10-K are those related to the matters described above. Except as described above, this Amendment does not amend, update, or change (i) the Company’s consolidated financial statements or (ii) any other item or disclosure in the Original Form 10-K and does not purport to reflect any information or event subsequent to the filing. As such, this Amendment speaks only as of the date that the Original Form 10-K was filed, and the Company has not undertaken to amend, update, or change any information contained in the Original Form 10-K to give effect to any subsequent event, other than as expressly indicated in this Amendment. Accordingly, this Amendment should be read in conjunction with the Original Form 10-K and any subsequent filings with the SEC.
TRIMBLE INC.
2023 FORM 10-K/A
TABLE OF CONTENTS
| PART II | ||||||||
| Item 8 | Financial Statements and Supplementary Data | 1 | ||||||
| Item 9A | Controls and Procedures | 32 | ||||||
| PART IV | ||||||||
| Item 15 | Exhibits and Financial Statement Schedules | 35 | ||||||
| Signatures | 38 |
PART II
Item 8. Financial Statements and Supplementary Data
TRIMBLE INC.
INDEX TO FINANCIAL STATEMENTS
Index to Financial Statements
TRIMBLE INC.
CONSOLIDATED BALANCE SHEETS
| At the End of Year | 2023 | 2022 | |||||||||
| (In millions, except par value) | |||||||||||
| ASSETS | |||||||||||
| Current assets: | |||||||||||
| Cash and cash equivalents | $ | 229.8 | $ | 271.0 | |||||||
| Accounts receivable, net | 706.6 | 643.3 | |||||||||
| Inventories | 235.7 | 402.5 | |||||||||
| Prepaid expenses | 89.8 | 73.7 | |||||||||
| Other current assets | 147.8 | 127.7 | |||||||||
| Assets held for sale | 421.2 | — | |||||||||
| Total current assets | 1,830.9 | 1,518.2 | |||||||||
| Property and equipment, net | 202.5 | 219.0 | |||||||||
| Operating lease right-of-use assets | 124.0 | 121.2 | |||||||||
| Goodwill | 5,350.6 | 4,137.9 | |||||||||
| Other purchased intangible assets, net | 1,243.5 | 498.1 | |||||||||
| Deferred income tax assets | 412.3 | 438.4 | |||||||||
| Other non-current assets | 375.5 | 336.2 | |||||||||
| Total assets | $ | 9,539.3 | $ | 7,269.0 | |||||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||||||
| Current liabilities: | |||||||||||
| Short-term debt | $ | 530.4 | $ | 300.0 | |||||||
| Accounts payable | 165.3 | 175.5 | |||||||||
| Accrued compensation and benefits | 181.2 | 159.4 | |||||||||
| Deferred revenue | 663.1 | 639.1 | |||||||||
| Income taxes payable | 39.7 | 23.7 | |||||||||
| Other current liabilities | 201.3 | 164.4 | |||||||||
| Liabilities held for sale | 48.3 | — | |||||||||
| Total current liabilities | 1,829.3 | 1,462.1 | |||||||||
| Long-term debt | 2,536.2 | 1,220.0 | |||||||||
| Deferred revenue, non-current | 98.3 | 98.5 | |||||||||
| Deferred income tax liabilities | 287.8 | 157.8 | |||||||||
| Operating lease liabilities | 121.9 | 105.1 | |||||||||
| Other non-current liabilities | 165.7 | 175.3 | |||||||||
| Total liabilities | 5,039.2 | 3,218.8 | |||||||||
| Commitments and contingencies (Note 10) | |||||||||||
| Stockholders’ equity: | |||||||||||
| Preferred stock, $0.001 par value; 3.0 shares authorized; none issued and outstanding | — | — | |||||||||
| Common stock, $0.001 par value; 360.0 shares authorized; 246.5 and 246.9 shares issued and outstanding at the end of 2023 and 2022 | 0.2 | 0.2 | |||||||||
| Additional paid-in-capital | 2,214.6 | 2,054.9 | |||||||||
| Retained earnings | 2,437.4 | 2,230.0 | |||||||||
| Accumulated other comprehensive loss | (152.1) | (234.9) | |||||||||
| Total stockholders' equity | 4,500.1 | 4,050.2 | |||||||||
| Total liabilities and stockholders' equity | $ | 9,539.3 | $ | 7,269.0 |
See accompanying Notes to the Consolidated Financial Statements.
Index to Financial Statements
TRIMBLE INC.
CONSOLIDATED STATEMENTS OF INCOME
| (In millions, except per share amounts) | 2023 | 2022 | 2021 | ||||||||||||||
| Revenue: | |||||||||||||||||
| Product | $ | 1,771.7 | $ | 1,986.1 | $ | 2,135.2 | |||||||||||
| Subscription and services | 2,027.0 | 1,690.2 | 1,523.9 | ||||||||||||||
| Total revenue | 3,798.7 | 3,676.3 | 3,659.1 | ||||||||||||||
| Cost of sales: |
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Item 9A. Controls and Procedures
(a) Evaluation of Disclosure Controls and Procedures
Management, including our Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”), had evaluated the effectiveness of our disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act), as of the end of the period covered by this report. Based on such evaluation, our CEO and CFO concluded that our disclosure controls and procedures were not effective as of the end of such period because of the material weaknesses in internal control over financial reporting described below.
Notwithstanding the identified material weaknesses, management has concluded that the consolidated financial statements as originally filed on Form 10-K on February 26, 2024, and as included in the Amendment, present fairly, in all material respects, our financial position at December 29, 2023 and December 30, 2022, and the results of operations and cash flows for each of the three years in the period ended December 29, 2023. There were no restatements to the consolidated financial statements for the periods presented in the Original Form 10-K or for any previously released financial results.
Inherent Limitations on Effectiveness of Controls
Management does not expect that the internal control over financial reporting will prevent or detect all errors and all fraud. A control system, no matter how well-designed and operated, can provide only reasonable, not absolute, assurance that the control system’s objectives will be met. The design of any system of controls is based in part on certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions.
(b) Management’s Annual Report on Internal Control over Financial Reporting
Management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rule 13a-15(f). The internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with U.S. GAAP.
Management conducted an evaluation of the effectiveness of the internal control over financial reporting based on the Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013
Index to Financial Statements
framework). Based on the assessment by management, it was determined that the Company’s internal control over financial reporting was not effective due to the material weaknesses described below.
-
We did not design and maintain effective controls over the accounting for the Company’s business combination with Transporeon. This included lack of appropriate oversight of third-party valuation specialists and insufficient design and operating effectiveness of management review controls, including controls over the completeness and accuracy of certain assumptions used in the valuation of intangible assets.
-
We did not design and maintain effective controls over certain ITGCs for certain business systems related to the Company’s financial reporting processes. Specifically, the Company did not design sufficient controls to (i) manage user access to systems, (ii) ensure that program changes made to systems were authorized and approved, or (iii) identify and resolve system issues impacting the financial reporting process. Certain business process controls that are dependent on the ineffective ITGCs, or that rely on data produced from systems impacted by the ineffective ITGCs, could have been adversely impacted, and were also deemed ineffective.
-
With respect to certain ITGCs and other controls for systems related to the Company’s financial reporting processes, there was undue reliance on controls over IT interfaces to transfer data between the order processing system and (i) billing system; (ii) financial reporting system; or (iii) revenue calculation system impacting the majority of revenue without effectively designed controls to ensure the completeness and accuracy of data transferred between the different systems. Certain business process controls that rely on data transferred between the different systems could have been adversely impacted and were also deemed ineffective.
-
We did not design and maintain effective controls over the evaluation of standalone selling prices of performance obligations utilized in accounting for revenue, including review controls over the establishment and subsequent changes to standard pricing and discounting.
We have excluded the businesses acquired in 2023 from our evaluation of the internal control over financial reporting. The excluded businesses constituted approximately 3% of both tangible assets and revenue as of and for the year ended December 29, 2023.
The effectiveness of our internal control over financial reporting at the end of 2023 has been audited by Ernst & Young LLP, an independent registered public accounting firm, as stated in their report.
Remediation Plan for Material Weaknesses
Management, with the oversight of the Audit Committee, is currently taking actions to remediate the material weaknesses and is implementing additional processes and controls to address the underlying causes associated with the material weaknesses described above. These efforts include:
-
We have finalized the design of review controls over third-party valuation specialists to add greater levels of precision to detect and prevent potential misstatements, including the establishment of process and controls to evaluate adequate review and evidence used in the valuation of acquired intangible assets. The Company had an acquisition with a purchase price of $26 million in the second quarter of 2024 for which the Company successfully tested the operating effectiveness of the remediated design of applicable business combination controls.
-
We are in the process of finalizing the design and implementation of controls of certain ITGCs for business systems related to the Company’s financial reporting processes.
-
We are in the process of finalizing the design and implementation of certain ITGCs and other controls for systems related to the Company’s financial reporting processes, specifically on the IT interfaces that transfer data between the order processing system and (i) billing system; (ii) financial reporting system; or (iii) revenue calculation system impacting the majority of revenue.
-
We are in the process of finalizing the design and implementation of controls over the evaluation of standalone selling prices of performance obligations utilized in accounting for revenue, including review controls over pricing and discounting.
The material weaknesses will not be considered remediated until the applicable remedial controls operate for a sufficient period of time and management has concluded, through testing, that these controls are operating effectively. We believe the measures described above will remediate the control deficiencies we have identified and strengthen our internal control over financial reporting. We are committed to continuing to improve our internal control processes and will continue to review, optimize, and enhance our financial reporting controls and procedures.
The process of designing and implementing an effective financial reporting system is a continuous effort that requires us to anticipate and react to changes in our business and the economic and regulatory environments, and to expend significant resources to maintain a financial reporting system that is adequate to satisfy our reporting obligations. As we continue to
Index to Financial Statements
evaluate and take actions to improve our internal control over financial reporting, we may determine to take additional actions to address control deficiencies or determine to modify certain of the remediation measures described above.
Changes in Internal Control over Financial Reporting
In addition to the identified material weaknesses noted above, we are implementing a customer relationship management tool across our businesses as a strategic initiative that will replace many legacy systems and that could materially affect our internal control over financial reporting (as such term is defined in Rules 13a - 15(f) and 15d - 15(f) under the Exchange Act). Other than as described above, there have been no changes that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting during the period for which this report relates.
Index to Financial Statements
PART IV
Item 15. Exhibits and Financial Statement Schedules.
(1) Financial Statements
The following consolidated financial statements required by this item are included in Part II, Item 8 hereof, under the caption “Financial Statements and Supplementary Data”.
(2) Financial Statement Schedules
All financial statement schedules have been omitted, since the required information is not applicable or is not present in amounts sufficient to require submission of the schedule, or because the information required is included in the consolidated financial statements and accompanying notes included in this report.
(3) Exhibits
We have filed, or incorporated into the report by reference, the exhibits listed on the accompanying Index to Exhibits immediately preceding the signature page of this report.
Index to Financial Statements
INDEX TO EXHIBITS
Index to Financial Statements
- Certain portions of this exhibit have been redacted pursuant to Item 601(b)(10)(iv) of Regulation S-K. The Company agrees to supplementally furnish an unredacted copy of this exhibit to the SEC upon request; provided, however, that the Company may request confidential treatment pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended, to the extent so furnished.
+ Indicates management contract or compensatory plan or arrangement required to be filed as an exhibit to this Annual Report on Form 10–K/A.
++ Pursuant to applicable securities laws and regulations, the Company is deemed to have complied with the reporting obligation relating to the submission of interactive data files in such exhibits and is not subject to liability under any anti-fraud provisions of the federal securities laws as long as the Company has made a good faith attempt to comply with the submission requirements and promptly amends the interactive data files after becoming aware that the interactive data files fails to comply with the submission requirements.
Index to Financial Statements
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized.
| TRIMBLE INC. | ||||||||
| By: | /S/ ROBERT G. PAINTER | |||||||
| Robert G. Painter, President and Chief Executive Officer | ||||||||
| January 15, 2025 |