645 North Mary Avenue
Sunnyvale, California 94088
Telephone: (408) 481-8000
Fax: (408) 481-2000
Sales: $369.79 million (2000)
Stock Exchanges: NASDAQ
Ticker Symbol: TRMB
NAIC: 334511 Search, Detection, Navigation, Guidance, Aeronautical, and Nautical Systems and Instruments
As the only publicly held company in the world dedicated solely to GPS, Trimble is positioned as the major player in the industry. Every day, all over the world, Trimble GPS solutions go to work. Whether it's locating Caspian oil and gas in Kazakhstan or finding a taxi in Oslo, the variety of applications for Trimble GPS solutions is virtually endless and continues to increase.
1978: Company is founded to develop marine navigation products.
1990: Trimble Navigation converts to public ownership in July.
1999: Steven Berglund is appointed president and chief executive officer.
2000: Spectra Precision, noted for its expertise in optical and laser technology, is acquired.
2001: Trimble, as part of a new plan to narrow its business focus, sells its commercial avionics segment to Honeywell.
Trimble Navigation Limited develops satellite-based position data products using the Global Positioning System (GPS), a constellation of 24 transmitting satellites that enable instruments to determine precise locations on earth in three dimensions. Trimble designs mapping, marine navigation, and surveying devices capable of measuring latitude, longitude, and altitude. The company also sells components used to aid automobile navigation, machine guidance, and asset tracking.
In 1978, the year Charles Trimble founded Trimble Navigation, the original NAVSTAR satellite was launched, giving the U.S. government its first reference point for a worldwide radio-navigation system that became known as GPS, or Global Positioning System. Trimble had started his small company to develop marine navigation products, but he was soon intrigued by the business opportunities in GPS technology. Not long after forming his company, Trimble decided to devote Trimble Navigation's resources to the development of products that used the then emerging technology. Although GPS was developed to meet military needs exclusively, Trimble foresaw a wide range of commercial and business applications for a system that could pinpoint locations on every square meter of the planet. Trimble's decision to wed his company to the nascent NAVSTAR system moved his company to the forefront of satellite-based position technology, making Trimble Navigation a GPS pioneer.
The effort to create a revolutionary navigation system had begun in 1973, five years before the first NAVSTAR satellite was launched into orbit. The program was created by the U.S. Department of Defense to aid in the nation's defense against a Soviet attack, specifically to help guard against the attack of a nuclear warhead capable of traveling more than 9,000 miles. The advent of long-range, intercontinental ballistic missiles (ICBMs) had given U.S. and Soviet armed forces the capability to target each other's missile silos from great distances and with great precision. The precision of an ICBM was based on the knowledge of two measurements: the exact location of the target and the exact location of the missile launch site. Meeting these conditions presented a problem to U.S. armed forces, a problem that GPS would help resolve. At any given moment, the U.S. did not know where the majority of its warheads were, at least not as precisely as the targeting calculations for an ICBM required. The majority of the country's nuclear arsenal was at sea, aboard submarines whose exact position could not be quickly pinpointed. GPS, once fully operational, could supply such information by using a constellation of satellites and their ground stations.
The 1978 launch of NAVSTAR represented the first step toward developing a worldwide radio-navigation system. To achieve worldwide coverage, 24 satellites were required, each orbiting roughly 11,000 nautical miles above earth. Once placed in orbit, these satellites and their ground stations would serve as reference points to calculate positions accurate to a matter of meters, enabling GPS receivers to triangulate a position anywhere on earth via radio signals transmitted by the satellites. The U.S. government invested $12 billion in the project, eventually achieving full operational status in 1995, but the NAVSTAR system was partially operational well before the mid-1990s, proving to be an invaluable aid to the U.S. military.
GPS first earned its admirers during the Persian Gulf War, a time when, not coincidentally, Trimble Navigation captured the interest of industry observers. Within a matter of months, the company rose out of obscurity and slipped into the ranks of the country's most promising concerns. During Operation Desert Storm, Trimble Navigation provided troops with Trimpacks, devices that enabled soldiers to pinpoint their location. The hand-held receivers performed admirably, earning praise from military commanders and making Trimble Navigation an attractive prospect for investors. The company had completed a $30 million initial public offering of stock several months earlier, in July 1990, which thrust it into the public spotlight at just the right time to capitalize on its well publicized success in the Middle East. When sales in 1990 reached $63.3 million, the announcement fanned investor interest in the company. The figure exceeded Wall Street analysts' expectations by roughly 25 percent, prompting investors to look closer at the Sunnyvale, California-based enterprise. What they saw was a company controlling 60 percent of a market whose revenue volume was more than doubling annually. They saw a company poised to record robust growth in 1991, with industry analysts projecting $110 million in sales by the end of 1991. They saw a company whose orders for Trimpack receivers totaled $40 million between October 1990 and March 1991. Trimble Navigation's stock value soared as a result, but as quickly as the company's stature blossomed within the investment community, its luster began to fade.
Post-Gulf War Decline
A number of factors contributed to Trimble Navigation's anemic performance during the early 1990s. The end of the Persian Gulf War delivered a significant blow to the company's financial vitality. Military sales, which had fueled the company's meteoric rise in 1990 and 1991, plummeted to less than 3 percent of the company's revenue volume by 1992. It was a profound loss, one compounded by slower-than-anticipated growth of other markets. Further, Trimble Navigation's own success during Operation Desert Storm came back to haunt the company. Defense contractors, whose sales were sagging, were eager to find new business opportunities to spark growth. Trimble Navigation's success in developing GPS products for the military had not gone unnoticed, inducing massive concerns such as Honeywell, Hughes, Motorola, and Westinghouse to jump into the GPS market. Consequently, Trimble Navigation, once in firm command of the multibillion-dollar industry, found itself facing intense competition from companies with far greater resources than it possessed. The company also faced stiff competition from foreign concerns, particularly Japanese companies who focused on less expensive consumer products.
In the wake of the Persian Gulf War, Trimble Navigation was reeling from the collapse of its military business and from competitive pressures. The company focused its efforts on the upper end of the market, where it went head to head with defense contractors, but costs ran out of control. Charles Trimble, who served as chairman and chief executive officer, conceded his company's financial performance was "miserable," as quoted in the June 15, 1992 issue of the Business Journal. In the first three months of 1992, Trimble Navigation generated $22 million in revenue and posted a net loss of $9.7 million. For the same period in 1991, the company collected $36.8 million and recorded $2.2 million in net income, providing a clear indication of how far the company had fallen in one year. Not surprisingly, the company's reputation on Wall Street suffered, as Trimble Navigation's stock dropped in value from $19.25 per share at the end of 1991 to $8 per share by mid-1992.
Forced to respond to his company's deteriorating condition, Trimble took action shortly after the financial figures for the first quarter of 1992 were announced. In early June, a sweeping restructuring program was begun, which included laying off 100 workers, or 13 percent of Trimble Navigation's workforce. The restructuring effort was expected to lead to a $7 million charge for the company's second quarter in 1992, a sum necessary to cover severance costs, the consolidation of facilities, and other restructuring expenses. At the time the program was announced, analysts questioned whether the company could profit in the harsh competitive environment that existed both domestically and abroad. Survival, some pundits said, depended on Trimble Navigation being acquired by a larger company with greater financial resources and the marketing muscle to compete effectively in the satellite location device market. Trimble flatly refused to consider such an option, insisting that he had an opportunity to turn Trimble Navigation into a Fortune 500 company. Instead, he focused on forging strategic alliances with larger companies. By 1992, Trimble Navigation had entered into ventures with Silicon Graphics, Pioneer Electronics, Westinghouse, and others, relying on partnerships to steer its way out of the financial doldrums.
By the mid-1990s, commercial alliances with a variety of companies were propelling Trimble Navigation into new markets. The company was looking beyond supplying GPS devices for the military and nautical navigation markets and diversifying into a number of new areas, including the development of GPS devices for avionics, space, and automobiles. In 1995--the year the NAVSTAR system became fully operational--Trimble Navigation formed a partnership with Adobe Systems Inc., a developer of software that enabled users to create, display, print, and send electronic documents. Adobe and Trimble Navigation planned to create a mapping system for automobiles capable of pinpointing a driver's position and providing directions to particular destinations, such as restaurants, service stations, and airports. Trimble Navigation signed another important agreement in 1995, linking with Honeywell, a competitor in the GPS market. Under the terms of the agreement, the two companies agreed to create GPS-based products for the commercial, space, and military aviation markets.
New Management Sharpening Strategic Focus: Late 1990s
In pursuit of new markets, Trimble Navigation spread its energies far and wide. Commercial alliances enabled the company to diversify in earnest, but by the late 1990s the time had come for a narrower strategic focus. In 1998, when sales reached $268 million, the company lost a staggering $27 million. Trimble left the company in August; his replacement, Steven W. Berglund, arrived in May 1999, when he took control as Trimble Navigation's president and chief executive officer.
Before joining Trimble Navigation, Berglund had spent the previous 14 years of his professional career at Spectra-Physics AB. Berglund held various senior management positions at the company, whose corporate roots stretched to the 1940s, when a Swedish surveyor patented the principle of precisely measuring distances with a light beam. Later, the company was a pioneer in laser technology, inventing the first rotating construction laser, among other innovations. Berglund rose through the managerial ranks at Spectra-Physics, making his most notable mark on the company's development in the late 1990s. Berglund combined existing Spectra-Physics businesses, which included a GPS survey receiver manufacturer named Geotronics, and several acquisitions to create Spectra Precision, a survey, construction equipment, and machine-control company with $200 million in annual sales, 1,300 employees, and operations in 17 countries. The major restructuring program was completed in 1998, after which Berglund served as president and chief operating officer of Spectra Precision until joining Trimble Navigation.
Under Berglund's stewardship, Trimble Navigation reversed the crippling loss recorded in 1998. Sales in 1999 remained essentially flat, but the company recorded $18.6 million in net income for the year, providing an encouraging start to the Berglund era. The dramatic return to profitability was followed by an acquisition of great significance. In July 2000, Trimble Navigation announced it was acquiring Berglund's former company, Spectra Precision, for $200 million in cash and $80 million in seller debt financing. Spectra, which would be aligned with a new engineering and construction business group headquartered in Dayton, Ohio, gave Trimble Navigation expertise in optical and laser technology.
As Trimble Navigation prepared for the future, it did so with a narrow focus on business areas that were expected to provide growth and sustained profitability. Toward this end, the company divested its commercial avionics business in March 2001, selling it to Honeywell. The divestiture left the company's business and portfolio of products targeted toward four markets: fleet and asset management, agriculture, component technology, and engineering and construction.
Principal Subsidiaries: Trimble Navigation International Foreign Sales Corporation (Barbados); TR Navigation Corporation; Trimble Export Limited; Tripod Data Systems; TNL Flight Services, Inc.; Trimble Navigation France S.A.; Trimble Navigation Australia Pty Limited; Trimble Mexico S. de R.L.; Trimble Navigation Europe Limited (U.K.); Trimble Navigation Deutschland GmbH (Germany); Trimble Navigation New Zealand Limited; Trimble Navigation Iberica S.L. (Spain); Trimble Navigation Singapore PTE Limited; Datacom Software Limited; Trimble Japan K.K.; Trimble Navigation Italia s.r.l. (Italy); Trimble Navigation International Limited; Trimble International Holdings S.L. (Spain); Trimble Holdings GmbH (Germany); Trimble AB (Sweden); Spectra Precision Inc.; Spectra Precision USA, Inc.; Spectra Precision Software, Inc.; Spectra Precision BVBA (Belgium); Spectra Precision K.K. (Japan); Spectra Precision Pty Ltd. (Australia); Spectra Precision Ltd. (U.K.); SPHM Inc.; SPSE Inc.; Spectra Precision Credit Corp.; Spectra Precision B.V. (Netherlands); Spectra Precision s.r.l (Italy); Spectra Precision of Canada Ltd.; Spectra Precision S.A. (France); Spectra Precision GesmbH (Austria); Spectra Precision Mexicana, SA de CV (Mexico); Spectra Precision Servicios, SA de CV (Mexico); Spectra Precision Mexico, SA de CV; Spectra Precision GmbH (Germany); Spectra Precision Kaiserslautern GmbH (Germany); ZSP Geodetic Systems GmbH (Germany).
Principal Competitors: BAE Systems Canada Inc.; Lowrance Electronics, Inc.; Orbital Sciences Corporation.
Barry, David, "Trimble Signs Sunnyvale Lease," Business Journal--San Jose, March 25, 1991, p. 13.
Carlsen, Clifford, "Stirlen Jumps at Chance to Guide Trimble," San Francisco Business Times, March 1, 1991, p. 12.
Goldman, James S., "Trimble Searching Markets for Global Location Devices," Business Journal, June 15, 1992, p. 4.
Hostetler, Michele, "Trimble Maps Out Deals for Its Global Positioning Systems," Business Journal, June 26, 1995, p. 7.
"Trimble," World Oil, February 2001, p. 129.
"Trimble Buys Spectra Precision," Construction Equipment, January 2001, p. 18.
"Trimble Names CEO," GPS World, May 1999, p. 20.
"Trimble Navigation Ltd.," Insiders' Chronicle, June 15, 1992, p. 3.
"Trimble to Sell Air Transport Systems Business to Honeywell," Wireless Satellite and Broadcasting Newsletter, February 2001, p. 8.
Source: International Directory of Company Histories, Vol. 40. St. James Press, 2001.