Zebra Technologies Announces 2009 First Quarter Financial Results
"We moved aggressively to align costs with the lower demand levels to successfully navigate through the current environment," stated
At
Discussion and Analysis
For the first quarter of 2009, compared with the first quarter of 2008:
- Consolidated net sales were affected by the impact of declining global economic activity on business conditions. Sales declined on a comparable percentage basis in all of the company's geographic regions, with the largest sales decline occurring in
North America . Product mix also had an effect on sales, with larger sales declines among high performance and midrange tabletop printers. Unfavorable foreign exchange currency movements reduced first quarter sales by$6,739,000 . - Gross profit margin of 44.6% versus 49.9% a year ago was principally affected by the lower sales volume, unfavorable product mix and unfavorable foreign exchange rates. These factors were partially offset by higher profitability in the company's Zebra Enterprise Solutions group.
- Operating expenses declined
$11,926,000 as a result of cost-reduction actions taken in the second half of 2008, in addition to lower commissions and amortization of intangible assets, and a decline in exit, restructuring and integration costs. - The effective income tax rate of 32.0%, compared with 34.5% a year ago, reflects the effect of lower quarterly income and a higher proportion of permanent tax adjustments.
Stock Purchase Update
During the first quarter of 2009, the company repurchased 1,652,772 shares of Zebra Technologies Corporation Class A Common Stock. At the end of the first quarter, Zebra had 3,719,696 shares remaining in the company's stock buyback authorization and 59,398,813 outstanding shares of common stock.
Second Quarter Outlook
Zebra announced its financial forecast for the second quarter of 2009. Net sales are expected within a range of
Conference Call Notification
Investors are invited to listen to a live Internet broadcast of Zebra's conference call discussing the company's financial results for the first quarter of 2009. The conference call will be held at
Forward-looking Statement
This press release contains forward-looking statements, as defined by the Private Securities Litigation Reform Act of 1995, including, without limitation, the statements regarding the company's financial forecast for the second quarter of 2009 stated in the paragraph above captioned "Second Quarter Outlook." Actual results may differ from those expressed or implied in the company's forward-looking statements. These statements represent estimates only as of the date they were made. Zebra may elect to update forward-looking statements but expressly disclaims any obligation to do so, even if the company's estimates change.
These forward-looking statements are based on current expectations, forecasts and assumptions and are subject to the risks and uncertainties inherent in Zebra's industry, market conditions, general domestic and international economic conditions, and other factors. These factors include customer acceptance of Zebra's hardware and software products and competitors' product offerings, and the potential effects of technological changes. These factors also include the current credit crisis, capital markets volatility, and disruptions and overall worldwide deteriorating economic conditions that have been widely reported, as they may have adverse effects on Zebra, its suppliers and its customers. Profits and profitability will be affected by Zebra's ability to control manufacturing and operating costs, including the effect of Zebra's activities to transfer final assembly of its printers to a third-party manufacturer. Because of a large investment portfolio, interest rates and financial market conditions will also have an impact on results. Foreign exchange rates will have an effect on financial results because of the large percentage of our international sales. The outcome of litigation in which Zebra may be involved is another factor. In addition, the acquisitions of WhereNet, proveo, Navis and Multispectral Solutions have risks relating to integrating these companies' businesses and operations with Zebra's. These and other factors could have an adverse effect on Zebra's sales, gross profit margins and results of operations and increase the volatility of our financial results. When used in this release and documents referenced, the words "anticipate," "believe," "estimate," and "expect" and similar expressions, as they relate to the company or its management, are intended to identify such forward-looking statements, but are not the exclusive means of identifying these statements. Descriptions of the risks, uncertainties and other factors that could affect the company's future operations and results can be found in Zebra's filings with the Securities and Exchange Commission. In particular, readers are referred to Zebra's Form 10-K for the year ended
Zebra Technologies Corporation helps its customers identify, track and manage assets, transactions and people with systems and solutions that improve business processes. Companies use innovative and reliable Zebra printers, supplies, RFID products and software to increase productivity, improve quality, lower costs, and deliver better customer service. Information about Zebra and Zebra-brand products can be found at http://www.zebra.com.
CONTACT: Investors: Media:
Douglas A. Fox, CFA Tim Dreyer
Vice President, Investor Relations Manager, Public Relations
and Treasurer +1 847 793 5677
+1 847 793 6735 tdreyer@zebra.com
dfox@zebra.com
ZEBRA TECHNOLOGIES CORPORATION
CONSOLIDATED BALANCE SHEETS
(Amounts in thousands)
April 4, December 31,
2009 2008
ASSETS (Unaudited)
Current assets:
Cash and cash equivalents $34,699 $33,267
Restricted cash 1,556 1,639
Investments and marketable securities 58,071 85,654
Accounts receivable, net 137,176 152,679
Inventories, net 101,248 100,199
Deferred income taxes 11,719 11,679
Income taxes receivable 7,257 --
Prepaid expenses and other current assets 11,785 11,701
Total current assets 363,511 396,818
Property and equipment at cost, less accumulated
depreciation and amortization 76,840 75,363
Long-term deferred income taxes 48,039 51,251
Goodwill 150,404 151,356
Other intangibles, net 63,916 66,359
Long-term investments and marketable securities 94,985 104,326
Other assets 5,134 5,405
Total assets $802,829 $850,878
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $30,089 $38,152
Accrued liabilities 42,789 67,911
Deferred revenue 19,766 18,366
Income taxes payable -- 558
Total current liabilities 92,644 124,987
Deferred rent 4,702 4,903
Other long-term liabilities 10,847 10,250
Total liabilities 108,193 140,140
Stockholders' equity:
Preferred Stock -- --
Class A Common Stock 722 722
Additional paid-in capital 141,622 144,861
Treasury stock (365,376) (344,147)
Retained earnings 931,443 922,091
Accumulated other comprehensive loss (13,775) (12,789)
Total stockholders' equity 694,636 710,738
Total liabilities and stockholders' equity $802,829 $850,878
ZEBRA TECHNOLOGIES CORPORATION
CONSOLIDATED STATEMENTS OF EARNINGS
(Amounts in thousands, except per share data)
(Unaudited)
Three Months Ended
April 4, 2009 March 29, 2008
Net sales $192,609 $246,277
Cost of sales 106,800 123,362
Gross profit 85,809 122,915
Operating expenses (income):
Selling and marketing 22,676 28,553
Research and development 21,804 22,215
General and administrative 22,225 25,045
Amortization of intangible assets 2,634 4,514
Exit, restructuring and integration costs 2,296 3,234
Total operating expenses 71,635 83,561
Operating income 14,174 39,354
Other income (expense):
Investment income 1,178 2,405
Foreign exchange gain (loss) (1,284) 700
Other, net (317) (254)
Total other income (expense) (423) 2,851
Income before income taxes 13,751 42,205
Income taxes 4,399 14,561
Net income $9,352 $27,644
Basic earnings per share $0.16 $0.42
Diluted earnings per share $0.16 $0.42
Basic weighted average shares outstanding 60,266 66,134
Diluted weighted average and equivalent
shares outstanding 60,332 66,518
ZEBRA TECHNOLOGIES CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Amounts in thousands)
(Unaudited)
Three Months Ended
April 4, March 29,
2009 2008
Cash flows from operating activities:
Net income $9,352 $27,644
Adjustments to reconcile net income to net
cash provided by (used in) operating activities:
Depreciation and amortization 7,953 9,088
Stock-based compensation 3,167 3,417
Excess tax benefit from share-based compensation -- (51)
Deferred income taxes 3,263 (3,553)
Changes in assets and liabilities, net of
effects of acquisitions:
Accounts receivable, net 13,018 (21,393)
Inventories (1,400) (3,834)
Other assets (244) 1,256
Accounts payable (6,539) 2,901
Accrued liabilities (23,946) 7,085
Deferred revenue 2,544 2,745
Income taxes payable (8,055) 12,534
Other operating activities (327) (5,635)
Net cash (used in) provided by operating
activities (1,214) 32,204
Cash flows from investing activities:
Purchases of property and equipment (6,802) (5,909)
Payments for patents and licensing
arrangements (425) --
Purchases of investments and marketable
securities (57,473) (190,530)
Maturities of investments and marketable
securities 72,401 128,723
Sales of investments and marketable securities 22,583 78,156
Net cash provided by investing activities 30,284 10,440
Cash flows from financing activities:
Purchase of treasury stock (28,593) (24,600)
Proceeds from exercise of stock options and
stock purchase plan purchases 1,168 667
Excess tax benefit from share-based
compensation -- 51
Net cash used in financing activities (27,425) (23,882)
Effect of exchange rate changes on cash (213) (159)
Net increase in cash and cash equivalents 1,432 18,603
Cash and cash equivalents at beginning of period 33,267 38,211
Cash and cash equivalents at end of period $34,699 $56,814
Supplemental disclosures of cash flow information:
Income taxes paid $8,302 $2,471
Supplemental disclosures of non-cash transactions:
Purchase of treasury shares not paid in the first
quarter of 2008 -- $9,153
ZEBRA TECHNOLOGIES CORPORATION
SUPPLEMENTAL SALES INFORMATION
(Amounts in thousands)
(Unaudited)
Sales by Product Category
Three Months Ended
Apr. 4, Mar. 29, Percent Percent of
2009 2008 Change Net Sales
Hardware $125,865 $180,181 (30.1) 65.3
Supplies 38,081 41,902 (9.1) 19.8
Service and software 25,925 25,180 3.0 13.5
Shipping and handling 1,368 1,802 (24.1) 0.7
Cash flow from hedging
activities 1,370 (2,788) NM 0.7
Total sales $192,609 $246,277 (21.8) 100.0
Sales by Geographic Region
Three Months Ended
Apr. 4, Mar. 29, Percent Percent of
2009 2008 Change Net Sales
Europe, Middle East
and Africa $74,620 $95,509 (21.9) 38.7
Latin America 13,071 15,983 (18.2) 6.8
Asia-Pacific 19,409 25,639 (24.3) 10.1
Total international 107,100 137,131 (21.9) 55.6
North America 85,509 109,146 (21.7) 44.4
Total sales $192,609 $246,277 (21.8) 100.0
ZEBRA TECHNOLOGIES CORPORATION
SUPPLEMENTAL SEGMENT INFORMATION
(Amounts in thousands)
(Unaudited)
Three Months Ended
April 4, March 29,
2009 2008
Sales
Specialty Printing $170,768 $224,752
Enterprise Solutions 21,841 21,525
Total $192,609 $246,277
Cost of sales
Specialty Printing 97,096 112,814
Enterprise Solutions 9,704 10,548
Total 106,800 123,362
Gross profit 85,809 122,915
Operating expenses
Specialty Printing 39,673 50,333
Enterprise Solutions 15,496 18,040
Administrative and other 16,466 15,188
Total 71,635 83,561
Operating income $14,174 $39,354
ZEBRA TECHNOLOGIES CORPORATION
PRINTER UNITS and AVERAGE UNIT PRICES
(Unaudited)
Three Months Ended
April 4, March 29,
2009 2008
Total Printers Shipped 199,218 242,401
Average Unit Prices $517 $614
SOURCE Zebra Technologies Corporation
RELATED LINKS
http://www.zebra.com
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