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Zebra Technologies Corp. : Zebra Technologies Announces 2012 First Quarter Financial Results

04/27/2012 | 03:05am US/Eastern
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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                       $30,164                    $30,128             0.1%
       operations (in 000s)
    Income from
     discontinued                                     --                    $31,506              NM
       operations, net of tax
        (in 000s)
    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,            December 31,
                                                                              2012                   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                              41,895                             44,374
       before
        income
        taxes
    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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