Attached files
| file | filename |
|---|---|
| 8-K - FORM 8-K - ZEBRA TECHNOLOGIES CORP | d8k.htm |
Exhibit 99.1
FOR IMMEDIATE RELEASE
| Contact: |
||
| Investors: Douglas A. Fox, CFA Vice President, Investor Relations and Treasurer +1 847 793 6735 dfox@zebra.com |
Media: Orlando De Bruce Director, Global Public Relations +1 510 267 5052 odebruce@zebra.com |
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, IL, May 4, 2011—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.
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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
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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.
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ZEBRA TECHNOLOGIES CORPORATION
CONSOLIDATED BALANCE SHEETS
(Amounts in thousands)
| April 2, 2011 |
December 31, 2010 |
|||||||
| (Unaudited) | ||||||||
| ASSETS | ||||||||
| 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 | ||||
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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 | ||||||
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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 | ) | |||
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ZEBRA TECHNOLOGIES CORPORATION
SUPPLEMENTAL SALES INFORMATION
(Amounts in thousands)
(Unaudited)
SALES BY PRODUCT CATEGORY
| Three Months Ended | ||||||||||||||||||||
| Product Category |
April 2, 2011 |
April 3, 2010 |
Percent Change |
Percent of Net Sales - 2011 |
Percent of 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 | ||||||||||||||||||||
| Geographic Region |
April 2, 2011 |
April 3, 2010 |
Percent Change |
Percent of Net Sales - 2011 |
Percent of 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, 2011 |
April 3, 2010 |
Percent Change |
||||||||||
| Total printers shipped |
284,177 | 244,386 | 16.3 | |||||||||
| Average selling price of printers shipped |
$ | 524 | $ | 547 | (4.2 | ) | ||||||
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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 | ||||||||||||
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