2014

Zebra Technologies Reports Record Results for First Quarter of 2011 Record income from continuing operations driven by continued strong sales growth and further improvements in profitability

LINCOLNSHIRE, Ill., May 4, 2011 /PRNewswire/ -- Zebra Technologies Corporation (NASDAQ: ZBRA) today announced 2011 first quarter net income of $61,634,000, or $1.10 per diluted share. Quarterly income from continuing operations totaled $30,128,000, or $0.54 per diluted share, for 2011 compared with $25,547,000, or $0.43 per diluted share, for the first quarter of 2010. Income from discontinued operations for the first quarter of 2011 of $31,506,000, or $0.56 per diluted share, includes a recognized gain on the sale of the company's Navis operation. First quarter net sales were $237,301,000 for 2011, up 11.9% from $211,975,000 for 2010. Results for 2010 have been adjusted to account for the sale of Navis Holdings LLC, which was sold on March 18, 2011, and other immaterial operations which have been accounted for as discontinued operations.


Summary Financial Performance (Unaudited)


1Q11

1Q10

Change

Net sales (in 000s)

$237,301

$211,975

11.9%

Gross margin (%)

50.6

46.1

4.5 pts.

Operating margin (%)

18.7

15.5

3.2 pts.

Income from continuing
  operations (in 000s)

$30,128

$25,547

17.9%

Income (loss) from discontinued
  operations, net of tax (in 000s)

31,506

(814)

NM

Net income (in 000s)

$61,634

$24,733

149.2%

Diluted earnings per share:




Income from continuing
  operations

$0.54

$0.43

25.6%

Income (loss) from discontinued
  operations, net of tax

0.56

(0.01)

NM

Net income

$1.10

$0.42

161.9%

Note: Net sales and results for 2010 have been adjusted for the March 2011 sale of Navis,
and other immaterial operations which have been reflected as discontinued operations.




"Excellent execution on a clear and focused business strategy helped Zebra deliver these record results," stated Anders Gustafsson, Zebra's chief executive officer. "Innovative new products introduced over the past year are helping us meet more of our customers' asset tagging needs in a more complex supply chain environment. At the same time, we are reaching more customers worldwide by building a larger, more formidable sales and marketing organization. The result of disciplined investments in products, channels and infrastructure makes us optimistic about extending Zebra's industry leadership in a fundamentally attractive industry, and for continued success in building shareholder value."

As of April 2, 2011, Zebra had $375,378,000 in cash and investments, and no long-term debt. Net inventories were $120,508,000, and net accounts receivable were $141,218,000.

Discussion and Analysis

  • Net sales for the first quarter of 2011 compared with the same quarter for 2010 benefited from improved business conditions in all geographic regions, with all major printer product categories and aftermarket parts contributing to the growth. The addition of Zebra sales representatives placed in high-growth countries and regions over the past twelve months, and other initiatives as part of the company's growth strategy, also contributed to the sales results. Quarterly sales increased 12.1% on a constant-currency basis from a year ago.
  • Gross margin of 50.6%, versus 46.1% a year ago, reflects lower costs for raw materials, higher volumes and lower freight charges.
  • Operating expense growth of 16.7% reflect higher employee-related compensation, payroll and benefit costs, in part related to geographic expansion and other growth initiatives.
  • Income from discontinued operations includes a gain on the sale of the company's Navis operation, partially offset by losses in the discontinued businesses in 2011.

Stock Purchase Update

During the first quarter of 2011, Zebra repurchased 1,100,000 shares of Zebra Technologies Corporation Class A Common Stock. At April 2, 2011, 750,000 shares remained in the company's stock buyback authorization, and 54,730,861 shares of common stock were outstanding.

Second Quarter Outlook

Zebra announced its financial forecast for the second quarter of 2011. Net sales are expected within a range of $240,000,000 to $250,000,000. Diluted earnings per share from continuing operations are expected within a range of $0.54 to $0.61, including $0.01 per share in exit, restructuring and integration costs.  

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 2011. 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 2011 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, 2010.

About Zebra Technologies

Zebra Technologies Corporation offers the broadest range of enabling solutions to identify, track, and manage critical assets, people and transactions for improved business efficiencies. Serving more than 90 percent of Global Fortune 500 companies in more than 100 countries around the world, our specialty on-demand printing, RFID and enterprise location solutions help customers create smarter and more connected infrastructures, resulting in significant improvements in visibility and business performance. For more information about Zebra's solutions, visit 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 2,
2011


December 31,
2010

ASSETS

(Unaudited)



Current assets:




Cash and cash equivalents

$  79,685


$  46,175

Restricted cash

65


1,378

Investments and marketable securities

164,812


125,567

Accounts receivable, net

141,218


130,143

Receivable from buyer

12,290


-

Inventories, net

120,508


112,970

Deferred income taxes

18,592


15,670

Prepaid expenses and other current assets

10,252


11,505

Discontinued operations

1,111


148,169

Total current assets

548,533


591,577





Property and equipment at cost, less accumulated depreciation and amortization

90,745


87,093

Long-term deferred income taxes

19,286


21,254

Goodwill

79,703


79,703

Other intangibles, net

8,920


9,755

Long-term investments and marketable securities

130,816


85,478

Receivable from buyer

12,290


-

Other assets

3,913


4,004

Total assets

$  894,207


$  878,864





LIABILITIES AND STOCKHOLDERS' EQUITY








Current liabilities:




Accounts payable

$  32,413


$  34,578

Accrued liabilities

50,845


65,163

Deferred revenue

11,019


8,966

Income taxes payable

33,256


5,900

Discontinued operations

476


21,827

Total current liabilities

128,009


136,434

Deferred rent

1,799


2,207

Other long-term liabilities

9,993


10,191

Total liabilities

139,801


148,832





Stockholders' equity:




Preferred Stock

-


-

Class A Common Stock

722


722

Additional paid-in capital

133,232


129,715

Treasury stock

(499,483)


(462,029)

Retained earnings

1,132,607


1,070,973

Accumulated other comprehensive loss

(12,672)


(9,349)

Total stockholders' equity

754,406


730,032

Total liabilities and stockholders' equity

$  894,207


$  878,864




ZEBRA TECHNOLOGIES CORPORATION

CONSOLIDATED STATEMENTS OF EARNINGS

(Amounts in thousands, except per share data)

(Unaudited)



Three Months Ended


April 2, 2011


April 3, 2010

Net sales:




 Net sales of tangible products

$  226,120


$  201,463

 Revenue from services and software

11,181


10,512

Total net sales

237,301


211,975





Cost of sales:




 Cost of sales of tangible products

110,781


109,075

 Cost of services and software

6,522


5,137

Total cost of sales

117,303


114,212





Gross profit

119,998


97,763





Operating expenses:




  Selling and marketing

28,528


24,673

  Research and development

21,681


18,324

  General and administrative

22,706


19,318

  Amortization of intangible assets

835


741

  Exit and restructuring costs

1,886


1,766

Total operating expenses

75,636


64,822





Operating income

44,362


32,941





Other income (expense):




  Investment income

560


842

  Foreign exchange gain (loss)

(294)


168

  Other, net

(254)


(270)

Total other income (expense)

12


740





Income before income taxes

44,374


33,681

Income taxes

14,246


8,134





Income from continuing operations

30,128


25,547

Income (loss) from discontinued operations, net of tax

31,506


(814)





Net income

$  61,634


$  24,733





Basic earnings per share:




  Income from continuing operations

$  0.54


$  0.44

  Income (loss) from discontinued operations

0.57


(0.01)

     Net income

$  1.11


$  0.43

Diluted earnings per share:




  Income from continuing operations

$  0.54


$  0.43

  Income (loss) from discontinued operations

0.56


(0.01)

     Net income

$  1.10


$  0.42





Basic weighted average shares outstanding

55,353


58,016

Diluted weighted average and equivalent shares outstanding

55,774


58,265




ZEBRA TECHNOLOGIES CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Amounts in thousands)

(Unaudited)



Three Months Ended


April 2, 2011


April 3, 2010

Cash flows from operating activities:




  Net income

$  61,634


$  24,733

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




  operating activities:




     Depreciation and amortization

5,932


7,814

     Equity-based compensation

4,488


2,231

     Excess tax benefit from equity-based compensation

(645)


(3)

     Gain on divestiture

(67,213)


-

     Loss (gain) on sale of assets

9


(82)

     Deferred income taxes

2,540


3,535

     Changes in assets and liabilities:




        Accounts receivable, net

12,563


3,990

        Inventories, net

(7,136)


(1,780)

        Other assets

(1,690)


224

        Accounts payable

(7,150)


870

        Accrued liabilities

(17,120)


(9,118)

        Deferred revenue

(15,749)


(1,618)

        Income taxes

27,732


4,295

        Other operating activities

(3,364)


(4,917)

           Net cash (used in) provided by operating activities

(5,169)


30,174





Cash flows from investing activities:




  Purchases of property and equipment

(3,922)


(5,818)

  Proceeds from the sale of business

188,588


-

  Receivable from buyer

(24,580)


-

  Purchases of investments and marketable securities

(382,410)


(89,586)

  Maturities of investments and marketable securities

209,509


61,144

  Sales of investments and marketable securities

88,304


17,736

           Net cash provided by (used in) investing activities

75,489


(16,524)





Cash flows from financing activities:




  Purchase of treasury stock

(41,567)


(20,823)

  Proceeds from exercise of stock options and stock purchase plan purchases

2,757


4,191

  Excess tax benefit from equity-based compensation

645


3

           Net cash used in financing activities

(38,165)


(16,629)





Effect of exchange rate changes on cash

336


24





Net increase (decrease) in cash and cash equivalents

32,491


(2,955)

  Cash balance of discontinued operations at beginning of period

1,301


1,693

  Cash balance of discontinued operations at end of period

(282)


(729)

Cash and cash equivalents at beginning of period

46,175


37,250

Cash and cash equivalents at end of period

$  79,685


$  35,259





Supplemental disclosures of cash flow information:




Income taxes paid (refunded)

$  8,958


$  (454)








ZEBRA TECHNOLOGIES CORPORATION

SUPPLEMENTAL SALES INFORMATION

(Amounts in thousands)

(Unaudited)



SALES BY PRODUCT CATEGORY



Three Months Ended







April 2,


April 3,


Percent


Percent of


Percent of

Product Category

2011


2010


Change


Net Sales - 2011


Net Sales – 2010

Hardware

$  180,136


$  159,409


13.0


75.9


75.2

Supplies

44,635


40,697


9.7


18.8


19.2

Service and software

11,181


10,512


6.4


4.7


5.0

  Subtotal products

235,952


210,618


12.0


99.4


99.4

Shipping and handling

1,349


1,357


(0.6)


0.6


0.6

  Total net sales

$  237,301


$  211,975


11.9


100.0


100.0




SALES BY GEOGRAPHIC REGION



Three Months Ended







April 2,


April 3,


Percent


Percent of


Percent of

Geographic Region

2011


2010


Change


Net Sales - 2011


Net Sales - 2010

Europe, Middle East and Africa

$  84,230


$  76,316


10.4


35.5


36.0

Latin America

20,104


19,482


3.2


8.5


9.2

Asia-Pacific

32,495


23,120


40.5


13.7


10.9

  Total International

136,829


118,918


15.1


57.7


56.1

North America

100,472


93,057


8.0


42.3


43.9

  Total net sales

$  237,301


$  211,975


11.9


100.0


100.0




ZEBRA TECHNOLOGIES CORPORATION

PRINTER UNITS and AVERAGE UNIT PRICES

(Unaudited)



Three Months Ended


April 2,


April 3,


Percent


2011


2010


Change

Total printers shipped

284,177


244,386


16.3

Average selling price of printers shipped

$524


$547


(4.2)




ZEBRA TECHNOLOGIES CORPORATION

PRO FORMA CONSOLIDATED STATEMENTS
OF EARNINGS BY QUARTER FOR 2010

(Amounts in thousands, except per share data)

(Unaudited)



Quarter Ended


April 3, 2010

July 3, 2010

Oct. 2, 2010

Dec. 31, 2010

Net sales:





Net sales of tangible products

$  201,463

$  207,748

$  218,271

$  222,048

Revenue from services and software

10,512

10,810

11,536

11,971

Total net sales

211,975

218,558

229,807

234,019






Cost of sales:





Cost of sales of tangible products

109,075

114,081

114,924

112,490

Cost of services and software

5,137

5,068

5,636

7,083

Total cost of sales

114,212

119,149

120,560

119,573






Gross profit

97,763

99,409

109,247

114,446






Operating expenses:





Selling and marketing

24,673

27,682

28,068

31,942

Research and development

18,324

20,653

21,862

21,736

General and administrative

19,318

17,955

18,147

17,809

Amortization of intangible assets

741

740

839

891

Litigation settlement

--

--

--

(1,082)

Exit and restructuring costs

1,766

466

--

30

Total operating expenses

64,822

67,496

68,916

71,326






Operating income

32,941

31,913

40,331

43,120






Other income (expense):





Investment income

842

634

635

567

Foreign exchange gain(loss)

168

424

(148)

(613)

Other, net

(270)

(455)

(160)

(232)

Total other income(expense)

740

603

327

(278)






Income before income taxes

33,681

32,516

40,658

42,842

Income taxes

8,134

10,331

13,411

13,117

Income from continuing operations

25,547

22,185

27,247

29,725






Income (loss) from discontinued operations,
  net of tax


   (814)


   492


   (1,096)


   (1,508)

Net income

$  24,733

$  22,677

$  26,151

$  28,217






Basic earnings per share:





Income from continuing operations

$  0.44

$  0.38

$  0.48

$  0.53

Income (loss) from discontinued operations

(0.01)

0.01

(0.02)

(0.03)

Net income

$  0.43

$  0.39

$  0.46

$  0.50






Diluted earnings per share:





Income from continuing operations

$  0.43

$  0.38

$  0.48

$  0.53

Income (loss) from discontinued operations

(0.01)

0.01

(0.02)

(0.03)

Net income

$  0.42

$  0.39

$  0.46

$  0.50






Basic weighted average shares outstanding

58,016

57,489

56,739

56,332

Diluted weighted average and equivalent shares outstanding

58,265

57,737

56,998

56,692




SOURCE Zebra Technologies Corporation



RELATED LINKS
http://www.zebra.com

Custom Packages

Browse our custom packages or build your own to meet your unique communications needs.

Start today.

 

PR Newswire Membership

Fill out a PR Newswire membership form or contact us at (888) 776-0942.

Learn about PR Newswire services

Request more information about PR Newswire products and services or call us at (888) 776-0942.