2014

Zebra Technologies Announces 2009 Fourth Quarter Financial Results Improved business in all regions leads to 72% sequential growth in operating income on an 11% sequential increase in sales that were well ahead of expectations

LINCOLNSHIRE, Ill., Feb. 9 /PRNewswire-FirstCall/ -- Zebra Technologies Corporation (Nasdaq: ZBRA) today announced 2009 fourth quarter net sales of $222,522,000 and net income of $17,630,000, or $0.30 per diluted share, including $2,737,000 in exit, restructuring and integration costs which lowered diluted earnings by $0.03 per share. For the fourth quarter of 2008, the company had net sales of $232,568,000 and a net loss of $117,361,000, or $1.88 per basic and diluted share. Results for the fourth quarter of 2008 include pretax non-cash impairment charges of $157,600,000, or $2.20 per basic and diluted share after tax, and pretax exit, restructuring and integration expenses of $7,791,000 which reduced earnings by $0.08 per basic and diluted share after tax.  

"Strong customer demand in all geographic regions led to results well ahead of expectations, as customers invested in Zebra products and solutions to improve their business processes and become more competitive in a stabilizing economic environment," stated Anders Gustafsson, Zebra's chief executive officer. "We experienced broad-based sales through our industry-leading global channel network and to large enterprise customers."

Mr. Gustafsson added, "Zebra enters 2010 a leaner, more responsive company with many opportunities for growth and stockholder value creation. Streamlined North American sales and marketing processes are improving customer intimacy in the region. In Asia-Pacific, Latin America and other high-growth territories, we are adding Zebra sales personnel to capture more available business. New, innovative products, such as our recently introduced re-transfer card printer, are enabling us to meet more of our customers' identification and supply chain management needs."  

At December 31, 2009, Zebra had $246,721,000 in cash and investments, and no long-term debt. Net inventories were $79,926,000, and net accounts receivable were $150,992,000.  

Discussion and Analysis

  • Net sales, up 10.8% from the third quarter of 2009 and down 4.3% from the fourth quarter of 2008, benefited from stronger customer demand in all geographic regions and an improved product mix including higher sales of high-performance and mid-range tabletop thermal printers.
  • The improved product mix, higher volumes and benefits from outsourcing thermal printer production, offset by higher freight costs incurred to meet greatly increased customer demand, were the major factors affecting gross margins.
  • Operating expenses continued to benefit from lower employee-related costs.
  • During the fourth quarter of 2008, the company recorded non-cash charges of $157,600,000 following an impairment review in accordance with the Statement of Financial Accounting Standard (SFAS) No. 142 "Goodwill and Other Intangibles" (currently ASC 350) and SFAS No. 144 "Accounting for the Impairment or Disposal of Long-lived Assets" (currently ASC 360). The charges were primarily attributable to impairment of goodwill and other assets recorded in connection with acquisitions in Zebra Enterprise Solutions in response to then-current and expected business conditions primarily in automotive and industrial manufacturing associated with the business from the WhereNet acquisition in 2007. The impairment also included a charge for a reduction in the estimated value of radio frequency identification (RFID) licenses, patents and other intellectual property related to the company's Specialty Printing Group.

For the full year, net sales were $803,585,000 for 2009, compared with $976,700,000 for 2008. Net income for the twelve months was $47,104,000, or $0.79 per diluted share, including $12,191,000 in exit, restructuring and integration costs which lowered diluted earnings by $0.14 per diluted share. For 2008, net loss was $38,421,000, or $0.60 per basic and diluted share, including the $157,600,000 in impairment charges and $20,009,000 in exit, restructuring and integration costs.

Stock Purchase Update

During the fourth quarter of 2009, the company repurchased 593,552 shares of Zebra Technologies Corporation Class A Common Stock. At December 31, 2009, Zebra had 2,199,286 shares remaining in the company's stock buyback authorization and 58,318,983 shares of common stock outstanding.

First Quarter Outlook

Zebra announced its financial forecast for the first quarter of 2010. Net sales are expected within a range of $217,000,000 and $230,000,000. Diluted earnings per share are expected within a range of $0.25 and $0.32. This forecast includes expected exit and restructuring costs of $0.02 per diluted share.  

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 fourth quarter of 2009. The conference call will be held at 11:00 AM Eastern Time today. To listen to the call, visit the company's Web site at http://www.zebra.com.  

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 first quarter of 2010 stated in the paragraph above captioned "First 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 undertakes no obligation, other than as may be required by law, to publicly update or revise any forward-looking statements, whether as a result of new information, future events, changed circumstances or any other reason after the date of this release.

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. The widely reported uncertainty over future global economic conditions, the availability of credit, and capital markets volatility 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. 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 December 31, 2008 and Form 10-Q for the quarter ended October 3, 2009.

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.

    
    
                         ZEBRA TECHNOLOGIES CORPORATION
                          CONSOLIDATED BALANCE SHEETS
                            (Amounts in thousands)
    
                                                     December      December
                                                     31, 2009      31, 2008
                                                   ------------    --------
                                                    (Unaudited)
                        ASSETS
    Current assets:
       Cash and cash equivalents                       $38,943    $33,267
       Restricted cash                                   1,725      1,639
       Investments and marketable securities           114,064     85,654
       Accounts receivable, net                        150,992    152,679
       Inventories, net                                 79,926    100,199
       Deferred income taxes                            10,792     11,679
       Income taxes receivable                           3,550          -
       Prepaid expenses and other current assets        10,945     11,701
                                                        ------     ------
          Total current assets                         410,937    396,818
                                                       -------    -------
    
    Property and equipment at cost, less
     accumulated depreciation and amortization          77,589     75,363
    Long-term deferred income taxes                     35,842     51,251
    Goodwill                                           153,225    151,356
    Other intangibles, net                              55,982     66,359
    Long-term investments and marketable
     securities                                         91,989    104,326
    Other assets                                         4,915      5,405
                                                         -----      -----
    Total assets                                      $830,479   $850,878
                                                      ========   ========
    
    LIABILITIES AND STOCKHOLDERS' EQUITY
    
    Current liabilities:
       Accounts payable                                $28,137    $38,152
       Accrued liabilities                              52,591     67,911
       Deferred revenue                                 24,082     18,366
       Income taxes payable                                  -        558
                                                           ---        ---
          Total current liabilities                    104,810    124,987
    Deferred rent                                        4,108      4,903
    Other long-term liabilities                          9,432     10,250
                                                         -----     ------
    Total liabilities                                  118,350    140,140
                                                       -------    -------
    
    Stockholders' equity:
       Preferred Stock                                       -          -
       Class A Common Stock                                722        722
       Additional paid-in capital                      136,104    144,861
       Treasury stock                                 (385,831)  (344,147)
       Retained earnings                               969,195    922,091
       Accumulated other comprehensive loss             (8,061)   (12,789)
                                                        ------    -------
                Total stockholders' equity             712,129    710,738
                                                       -------    -------
    Total liabilities and stockholders' equity        $830,479   $850,878
                                                      ========   ========
    
    
    
    
    
                         ZEBRA TECHNOLOGIES CORPORATION
                       CONSOLIDATED STATEMENTS OF EARNINGS
                  (Amounts in thousands, except per share data)
    
                              Three Months Ended          Year Ended
                              ------------------          ----------
                             December     December     December   December
                             31, 2009     31, 2008     31, 2009   31, 2008
                            ---------    ---------    ---------   ---------
                           (Unaudited)  (Unaudited)  (Unaudited)
    Net sales:
      Net sales of
       tangible products      $197,097     $206,410     $701,044   $871,587
      Revenue from
       services and
       software                 25,425       26,158      102,541    105,113
                                ------       ------      -------    -------
    Total net sales            222,522      232,568      803,585    976,700
                               -------      -------      -------    -------
    
    Cost of sales:
      Cost of sales of
       tangible products       110,611      109,734      401,727    452,208
      Cost of services
       and software             10,433       11,945       41,137     45,187
                                ------       ------       ------     ------
    Total cost of sales        121,044      121,679      442,864    497,395
                               -------      -------      -------    -------
    
    Gross profit               101,478      110,889      360,721    479,305
                               -------      -------      -------    -------
    
    Operating expenses:
       Selling and
        marketing               28,006       29,982      100,199    121,435
       Research and
        development             21,516       23,104       85,089     94,449
       General and
        administrative          20,373       20,090       85,032     87,885
       Amortization of
        intangible assets        2,608        4,671       10,466     18,575
       Claim settlement              -            -            -     (5,302)
       Exit, restructuring
        and integration costs    2,737        7,791       12,191     20,009
       Asset impairment
        charges                      -      157,600       (1,058)   157,600
                                ------      -------       ------    -------
    Total operating
     expenses                   75,240      243,238      291,919    494,651
                                ------      -------      -------    -------
    
    Operating income
     (loss)                     26,238     (132,349)      68,802    (15,346)
                                ------     --------       ------    -------
    
    Other income (expense):
       Investment income           695        1,295        2,933      1,281
       Foreign exchange
        gain (loss)                795        2,640          (45)     3,518
       Other, net                 (546)        (277)      (1,167)    (1,366)
                                  ----         ----       ------     ------
    Total other income             944        3,658        1,721      3,433
                                   ---        -----        -----      -----
    
    Income (loss)
     before income taxes        27,182     (128,691)      70,523    (11,913)
    
    Income taxes                 9,552      (11,330)      23,419     26,508
                                 -----      -------       ------     ------
    
    Net income (loss)          $17,630    $(117,361)     $47,104   $(38,421)
                               =======    =========      =======   ========
    
    Basic earnings per
     share                       $0.30       $(1.88)       $0.79     $(0.60)
    Diluted earnings
     per share                   $0.30       $(1.88)       $0.79     $(0.60)
    
    Basic weighted
     average shares
     outstanding                58,583       62,561       59,306     64,524
    Diluted weighted
     average and
     equivalent
     shares outstanding         58,769       62,561       59,425     65,524
    
    
    
    
    
                         ZEBRA TECHNOLOGIES CORPORATION
                      CONSOLIDATED STATEMENTS OF CASH FLOWS 
                             (Amounts in thousands)
    
                                                           Year Ended
                                                           ----------
                                                    December        December
                                                    31, 2009        31, 2008
                                                    --------        --------
                                                  (Unaudited)
    Cash flows from operating activities:
        Net income (loss)                            $47,104        $(38,421)
        Adjustments to reconcile net income
         (loss) to net cash provided by 
         operating activities:
           Depreciation and amortization              32,913          38,581
           Share-based compensation                   11,467          14,962
           Asset impairment charges                   (1,058)        157,600
           Impairment of investments                     943           7,271
           Excess tax benefit from
            share-based compensation                     (13)           (192)
           Loss (gain) on sale of assets                 829          (1,121)
           Deferred income taxes                      16,247         (23,138)
           Changes in assets and liabilities,
            net of businesses acquired:
             Accounts receivable, net                  8,747         (21,891)
             Inventories                              22,315         (26,222)
             Other assets                               (718)         (2,758)
             Accounts payable                        (16,105)         17,891
             Accrued liabilities                     (16,315)          1,429
             Deferred revenue                          4,966          11,281
             Income taxes payable                     (5,705)         (1,002)
             Other operating activities                   81           4,012
                                                         ---           -----
                 Net cash provided by
                  operating activities               105,698         138,282
                                                     -------         -------
    
    Cash flows from investing activities:
       Purchases of property and equipment           (24,890)        (40,889)
       Proceeds from sale of asset                         -          14,796
       Acquisition of businesses,
        net of cash acquired                               -         (18,588)
       Acquisition of intangible assets                 (425)         (1,384)
       Purchases of investments                     (329,292)       (723,791)
       Maturities of investments                     257,936         592,749
       Sales of investments                           56,020         198,541
                                                      ------         -------
                 Net cash provided by (used
                  in) investing activities           (40,651)         21,434
                                                     -------          ------
    
    Cash flows from financing activities:
        Purchase of treasury shares                  (65,445)       (157,582)
        Proceeds from exercise of stock options
         and stock purchase plan purchases             4,972           7,145
        Excess tax benefit from
         share-based compensation                         13             192
                                                         ---             ---
                 Net cash used in financing
                  activities                         (60,460)       (150,245)
                                                     -------        --------
    
    Effect of exchange rate changes on cash            1,089         (14,415)
                                                       -----         -------
    
    Net increase (decrease) in
     cash and cash equivalents                         5,676          (4,944)
    Cash and cash equivalents at
     beginning of year                                33,267          38,211
                                                      ------          ------
    Cash and cash equivalents at
     end of year                                     $38,943         $33,267
                                                     =======         =======
    
    Supplemental disclosures of
     cash flow information:
     Income taxes paid                                10,742          49,092
    
    
    
    
    
                         ZEBRA TECHNOLOGIES CORPORATION
                         SUPPLEMENTAL SALES INFORMATION
                             (Amounts in thousands)
                                  (Unaudited)
    
                           SALES BY PRODUCT CATEGORY
    
                     Three Months Ended
                     ------------------
                                                      Percent of  Percent of
    Product        December      December   Percent    Net Sales   Net Sales
     Category      31, 2009      31, 2008    Change      -2009       -2008
    ---------      --------      --------    ------      -----       -----
    Hardware       $156,706      $164,042     (4.5)       70.4        70.5
    Supplies         39,011        40,870     (4.5)       17.5        17.6
    Service and 
     software        25,425        26,158     (2.8)       11.4        11.2
    Shipping and
     handling         1,380         1,498     (7.9)        0.7         0.7
                      -----         -----                  ---         ---
       Total sales $222,522      $232,568     (4.3)      100.0       100.0
                   ========      ========                =====       =====
    
                        Year Ended
                        ----------
                                                      Percent of  Percent of
    Product        December      December   Percent    Net Sales   Net Sales
     Category      31, 2009      31, 2008    Change      -2009       -2008
    ---------      --------      --------    ------      -----       -----
    Hardware       $539,934      $692,638    (22.0)       67.1        70.9
    Supplies        155,847       172,106     (9.4)       19.4        17.6
    Service and
     software       102,541       105,113     (2.4)       12.8        10.8
    Shipping and
     handling         5,263         6,843    (23.1)        0.7         0.7
                      -----         -----                  ---         ---
       Total sales $803,585      $976,700    (17.7)      100.0       100.0
                   ========      ========                =====       =====
    
    
    
    
    
                           SALES BY GEOGRAPHIC REGION
    
                     Three Months Ended
                     ------------------
                                                        Percent  Percent 
                                                        of Net   of Net
                       December      December  Percent  Sales -  Sales -
    Geographic Region  31, 2009      31, 2008   Change   2009     2008
    -----------------  --------      --------   ------   ----     ----
    Europe, Middle
     East and Africa   $82,377       $81,302       1.3   37.0     35.0
    Latin America       20,196        17,871      13.0    9.1      7.7
    Asia-Pacific        21,984        21,411       2.7    9.9      9.1
                        ------        ------              ---      ---
       Total
        International  124,557       120,584       3.3   56.0     51.8
    North America       97,965       111,984     (12.5)  44.0     48.2
                        ------       -------     -----   ----     ----
       Total sales    $222,522      $232,568      (4.3) 100.0    100.0
                      ========      ========            =====    =====
    
    
                           Year Ended
                           ----------
                                                         Percent  Percent
                                                         of Net   of Net
    Geographic         December      December  Percent   Sales -  Sales -
     Region            31, 2009      31, 2008   Change   2009     2008
    ----------         --------      ---------  ------   ----     ----
    Europe, Middle
     East and
     Africa           $294,296      $353,273     (16.7)  36.6     36.2
    Latin America       65,060        76,489     (14.9)   8.1      7.8
    Asia-Pacific        82,120       102,672     (20.0)  10.2     10.5
                        ------          ----             ----     ----
       Total
        International  441,476       532,434     (17.1)  54.9     54.5
    North America      362,109       444,266     (18.5)  45.1     45.5
                       -------          ----
       Total sales    $803,585      $976,700     (17.7) 100.0    100.0
                      ========      ========            =====    =====
    
    
    
    
    
                         ZEBRA TECHNOLOGIES CORPORATION
                        SUPPLEMENTAL SEGMENT INFORMATION
                             (Amounts in thousands)
                                  (Unaudited)
    
                      Three Months Ended                  Year Ended
                      ------------------                  ----------
                   December        December        December        December
                   31, 2009        31, 2008        31, 2009        31, 2008
                   --------        --------        --------        --------
    Net sales:
    Specialty
     Printing
     Group         $203,122        $210,494       $722,556        $882,459
    Zebra 
     Enterprise
     Solutions       19,400          22,074         81,029          94,241
                     ------          ------         ------          ------
       Total       $222,522        $232,568       $803,585        $976,700
                   ========        ========       ========        ========
    
    Cost of
     sales:
    Specialty
     Printing
     Group         $113,253        $113,187       $410,311        $454,337
    Zebra
     Enterprise
     Solutions        7,791           8,492         32,553          43,058
                      -----           -----         ------          ------
       Total       $121,044        $121,679       $442,864        $497,395
                   ========        ========       ========        ========
    
    Operating
     expenses:
    Specialty
     Printing
     Group          $42,519         $66,781       $164,124        $221,934
    Zebra
     Enterprise
     Solutions       17,024         163,208         63,730         217,149
    Corporate and
     other           15,697          13,249         64,065          55,568
                     ------          ------         ------          ------
       Total        $75,240        $243,238       $291,919        $494,651
                    =======        ========       ========        ========
    
    Operating
     income
     (loss):
    Specialty
     Printing
     Group          $47,350         $30,526       $148,121        $206,188
    Zebra
     Enterprise
     Solutions       (5,415)       (149,626)       (15,254)       (165,966)
    
    Corporate and
     other          (15,697)        (13,249)       (64,065)        (55,568)
                    -------         -------        -------         -------
       Total        $26,238       $(132,349)       $68,802        $(15,346)
                    =======       =========        =======        ========
    
    Corporate and other includes corporate administration costs or assets 
    that support both reporting segments.
    
    
    
    
    
                         ZEBRA TECHNOLOGIES CORPORATION
                      PRINTER UNITS and AVERAGE UNIT PRICES
                                  (Unaudited)
    
                       Three Months
                          Ended                    Year Ended       
                       December 31,                December 31,
                       ------------   Percent      ------------    Percent
                      2009      2008  Change      2009      2008   Change
                      ----      ----  ------      ----      ----   ------
    Total
     printers
     shipped       244,100   249,902    (2.3)  850,230   972,478    (12.6)
    Average
     selling
     price of
     printers
     shipped          $531      $538    (1.3)     $527      $594    (11.3)
    
    
    CONTACT:
    Investors:                           Media:
    Douglas A. Fox, CFA                  Orlando De Bruce
    Vice President, Investor Relations   Director, Global Public Relations
    and Treasurer                        +1 510 267 5052
    +1 847 793 6735                      odebruce@zebra.comdfox@zebra.com

SOURCE Zebra Technologies Corporation



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