2014

Zebra Technologies Announces 2012 First Quarter Financial Results

LINCOLNSHIRE, Ill., April 27, 2012 /PRNewswire/ -- Zebra Technologies Corporation (NASDAQ: ZBRA) today announced 2012 first quarter diluted earnings per share of $0.58, up 7.4% from $0.54 from continuing operations for the first quarter of 2011. Net sales for the quarter ended March 31, 2012, increased 2.8% to $243,875,000 from $237,301,000 for the first quarter of 2011. 

Summary Financial Performance (Unaudited)


1Q12

1Q11

Change

Net sales (in 000s)

$243,875

$237,301

2.8%

Gross margin (%)

49.1

50.6

-1.5 pts.

Operating margin (%)

17.2

18.7

-1.5 pts.

Income from continuing

   operations (in 000s)

$30,164

$30,128

0.1%

Income from discontinued

   operations, net of tax (in 000s)

--

$31,506

NM

Net income (in 000s)

$30,164

$61,634

-51.1%

Diluted earnings per share:




Income from continuing operations

$0.58

$0.54

7.4%

Income from discontinued operations

--

$0.56

-100.0%

Net income

$0.58

$1.10

-47.3%

"Strategically-driven activities to gain share, penetrate targeted industries more deeply and extend geographic reach led to sales growth in all geographic regions," stated Anders Gustafsson, Zebra's chief executive officer. "Our formidable product line, extensive global channel relationships and business diversity enabled us to win more business with customers in a broad range of industries. In a challenged business environment, we matched excellent execution with effective control over operating expenses. We continued to invest in those areas critical to Zebra's long-term success. This year, we are on target to deliver a high number of innovative new printer products. These and other solutions are enabling our customers to gain greater visibility into assets, transactions and people across their value chains. We remain confident in Zebra's future and our ability to accelerate growth and deliver higher returns for our shareholders."

As of March 31, 2012, Zebra had $362,244,000 in cash and investments, and no long-term debt. Net inventories were $126,119,000, and net accounts receivable were $157,114,000.

Discussion and Analysis

  • Net sales for the first quarter of 2012 included year-over-year growth in all four of the company's geographic regions. Sales growth of supplies and card printers were notably strong. The impact of movements in foreign exchange, net of hedges, was not material to sales growth.
  • Gross margin of 49.1%, versus 50.6% a year ago, primarily reflects movements in product mix.  
  • Operating expense growth of 2.9% includes a modest increase in administrative expenses, as well as higher sales and marketing expenses which were principally related to activities supporting the company's geographic expansion and market development activities. This growth was partially offset by a decline in engineering expenses. Operating profit margin decreased from 18.7% to 17.2%.

Stock Purchase Update
During the first quarter of 2012, Zebra repurchased 264,567 shares of Zebra Technologies Corporation Class A Common Stock. At March 31, 2012, the company had 3,231,632 shares remaining in its stock buyback authorization, and 51,908,000 shares of common stock were outstanding.

Second Quarter Outlook
Zebra announced its financial forecast for the second quarter of 2012. Net sales are expected within a range of $250,000,000 to $260,000,000. Diluted earnings per share are expected within a range of $0.58 to $0.63

Conference Call Notification
Investors are invited to listen to a live webcast of Zebra's conference call discussing the company's financial results for the first quarter of 2012. The conference call will be held at 11:00 AM Eastern Time today. To listen to the call, visit the company's website 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 second quarter of 2012 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 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 continued uncertainty over future global economic conditions, the availability of credit, capital markets volatility, may have adverse effects on Zebra, its suppliers and its customers. In addition, a disruption in our ability to obtain products from vendors as a result of supply chain constraints, natural disasters or other circumstances could restrict sales and negatively affect customer relationships. Profits and profitability will be affected by Zebra's ability to control manufacturing and operating costs. 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, 2011.

About Zebra Technologies
A global leader respected for innovaion and reliability, Zebra Technologies Corporation (NASDAQ: ZBRA) provides enabling technologies that allow customers to take smarter actions. Our extensive portfolio of bar code, receipt, card, kiosk and RFID printers and supplies, as well as real-time location solutions give a digital voice to assets, people and transactions that provides greater visibility into mission-critical information. For more information about Zebra's solutions, visit http://www.zebra.com.

Contact:


Investors:

Media:

Douglas A. Fox, CFA

Kerry Kelly-Guiliano

Vice President, Investor Relations

Vice President, Strategic Communications

and Treasurer

F T I Consulting

+1 847 793 6735

+1 617 747 3603

dfox@zebra.com

kerry.guiliano@fticonsulting.com



ZEBRA TECHNOLOGIES CORPORATION
CONSOLIDATED BALANCE SHEETS
(Amounts in thousands)






March 31,

2012


December 31,

2011

ASSETS

(Unaudited)



Current assets:




Cash and cash equivalents

$     41,943


$     36,418

Investments and marketable securities

175,169


182,398

Accounts receivable, net

157,114


155,230

Receivable from buyer

13,790


27,580

Inventories, net

126,119


133,288

Deferred income taxes

14,194


13,931

Income tax receivable

6,917


13,111

Prepaid expenses and other current assets

15,036


22,917

Total current assets

550,282


584,873





Property and equipment at cost, less accumulated depreciation and amortization

101,985


97,822

Long-term deferred income taxes

11,995


11,866

Goodwill

79,703


79,703

Other intangibles, net

11,897


12,667

Long-term investments and marketable securities

145,132


107,879

Other assets

4,092


4,196

             Total assets

$   905,086


$   899,006





LIABILITIES AND STOCKHOLDERS' EQUITY




Current liabilities:




Accounts payable

$     33,019


$     33,273

Accrued liabilities

47,769


64,612

Deferred revenue

12,065


11,089

Total current liabilities

92,853


108,974

Deferred rent

1,496


1,592

Other long-term liabilities

11,674


11,515

             Total liabilities

106,023


122,081





Stockholders' equity:




Preferred Stock

--


--

Class A Common Stock

722


722

Additional paid-in capital

134,472


131,422

Treasury stock

(603,705)


(596,622)

Retained earnings

1,275,780


1,245,616

Accumulated other comprehensive loss

(8,206)


(4,213)

             Total stockholders' equity

799,063


776,925

             Total liabilities and stockholders' equity

$   905,086


$   899,006

 

ZEBRA TECHNOLOGIES CORPORATION
CONSOLIDATED STATEMENTS OF EARNINGS

(Amounts in thousands, except per share data)
(Unaudited)





Three Months Ended



March 31, 2012


April 2, 2011


Net sales:





   Net sales of tangible products

$     232,476


$     226,120


   Revenue from services and software

11,399


11,181


Total net sales

243,875


237,301







Cost of sales





   Cost of sales of tangible products

119,053


110,781


   Cost of services and software

4,959


6,522


Total cost of sales

124,012


117,303







Gross profit

119,863


119,998







Operating expenses:





   Selling and marketing

32,114


28,528


   Research and development

20,419


21,681


   General and administrative

24,551


22,706


   Amortization of intangible assets

770


835


   Exit and restructuring costs

--


1,886


Total operating expenses

77,854


75,636







Operating income

42,009


44,362







Other income (expense):





   Investment income

592


560


   Foreign exchange loss

(342)


(294)


   Other, net

(364)


(254)


Total other income (expense)

(114)


12







Income from continuing operations

   before income taxes

41,895


44,374


Income taxes

11,731


14,246







Income from continuing operations

30,164


30,128


Income from discontinued operations, net of tax

--


31,506


Net income

$      30,164


$       61,634







Basic earnings per share:





   Income from continuing operations

$          0.58


$          0.54


   Income from discontinued operations

--


0.57


      Net income

$          0.58


$          1.11


Diluted earnings per share:





   Income from continuing operations

$          0.58


$          0.54


   Income from discontinued operations

--


0.56


      Net income

$          0.58


$          1.10







Basic weighted average shares outstanding

51,998


55,353


Diluted weighted average and equivalent shares outstanding

52,301


55,774







 

ZEBRA TECHNOLOGIES CORPORATION
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Amounts in thousands)
(Unaudited)




Three Months Ended


March 31, 2012


April 2, 2011





Net income

$   30,164


$   61,634





Other comprehensive income (loss):




        Unrealized losses on hedging transactions, net of income taxes

(4,646)


(2,756)

        Unrealized holding gains (losses) on investments, net of income taxes

570


(14)

        Foreign currency translation adjustment

83


(553)

Comprehensive income

$   26,171


$   58,311



ZEBRA TECHNOLOGIES CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Amounts in thousands)
(Unaudited)




Three Months Ended


March 31, 2012


April 2, 2011

Cash flows from operating activities:




        Net income

$    30,164


$    61,634

        Adjustments to reconcile net income to net cash provided by (used in)




        operating activities:




                Depreciation and amortization

5,959


5,932

                Equity-based compensation

3,800


4,488

                Excess tax benefit from equity-based compensation

(66)


(645)

                Loss on sale of property and equipment

83


9

                Gain on sale of business

--


(67,213)

                Deferred income taxes

(391)


2,540

                Changes in assets and liabilities:




                        Accounts receivable, net

(1,862)


12,563

                        Inventories, net

7,169


(7,136)

                        Other assets

9,395


(1,690)

                        Accounts payable

(3,378)


(7,150)

                        Accrued liabilities

(16,881)


(17,120)

                        Deferred revenue

1,151


(15,749)

                        Income taxes

6,135


27,732

                        Other operating activities

(4,725)


(3,364)

                                Net cash provided by (used in) operating activities

36,553


(5,169)





Cash flows from investing activities:




        Purchases of property and equipment

(7,654)


(3,922)

        Proceeds from the sale of business

13,790


164,008

        Purchases of investments and marketable securities

(132,390)


(382,410)

        Maturities of investments and marketable securities

81,189


209,509

        Proceeds from sales of investments and marketable securities

21,748


88,304

                                Net cash provided by (used in) investing activities

(23,317)


75,489





Cash flows from financing activities:




        Purchase of treasury stock

(9,775)


(41,567)

        Proceeds from exercise of stock options and stock purchase plan purchases

1,998


2,757

        Excess tax benefit from equity-based compensation

66


645

                                Net cash used in financing activities

(7,711)


(38,165)





Effect of exchange rate changes on cash

--


336





Net increase in cash and cash equivalents

5,525


32,491

     Cash balance of discontinued operations at beginning of period

--


1,301

     Less: Cash balance of discontinued operations at end of period

--


282

Cash and cash equivalents at beginning of period

36,418


46,175

Cash and cash equivalents at end of period

$   41,943


$   79,685





Supplemental disclosures of cash flow information:




 Income taxes paid

$     7,956


$     8,958

 

ZEBRA TECHNOLOGIES CORPORATION
SUPPLEMENTAL SALES INFORMATION
(Amounts in thousands)
(Unaudited)


SALES BY PRODUCT CATEGORY









Three Months Ended







March 31,


April 2,


Percent


Percent of


Percent of

Product Category

2012


2011


Change


Net Sales - 2012


Net Sales – 2011

Hardware

$     181,196


$     180,136


0.6


74.3


75.9

Supplies

49,962


44,635


11.9


20.5


18.8

Service and software

11,399


11,181


1.9


4.7


4.7

   Subtotal products

242,557


235,952


2.8


99.5


99.4

Shipping and handling

1,318


1,349


(2.3)


0.5


0.6

   Total net sales

$     243,875


$     237,301


2.8


100.0


100.0








SALES BY GEOGRAPHIC REGION









Three Months Ended







March 31,


April 2,


Percent


Percent of


Percent of

Geographic Region

2012


2011


Change


Net Sales - 2012


Net Sales - 2011

Europe, Middle East and Africa

$       86,121


$       84,230


2.2


35.3


35.5

Latin America

22,287


20,104


10.9


9.1


8.5

Asia-Pacific

33,148


32,495


2.0


13.6


13.7

   Total International

141,556


136,829


3.5


58.0


57.7

North America

102,319


100,472


1.8


42.0


42.3

   Total net sales

$     243,875


$     237,301


2.8


100.0


100.0

 

 

ZEBRA TECHNOLOGIES CORPORATION
PRINTER UNITS and AVERAGE UNIT PRICES
(Unaudited)




Three Months Ended


March 31,


April 2,


Percent


2012


2011


Change

Total printers shipped

297,669


284,177


4.7

Average selling price of printers shipped

$503


$524


(4.0)

SOURCE Zebra Technologies Corporation



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