The Globe and Mail

Go to the Globe and Mail homepage

Jump to main navigationJump to main content

Globe Investor

News Sources

Take control of your investments with the latest investing news and analysis

Press release from PR Newswire

Zebra Technologies Announces 2012 First Quarter Financial Results

Friday, April 27, 2012

Zebra Technologies Announces 2012 First Quarter Financial Results03:00 EDT Friday, April 27, 2012LINCOLNSHIRE, 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)1Q121Q11ChangeNet sales (in 000s)$243,875$237,3012.8%Gross margin (%)49.150.6-1.5 pts.Operating margin (%)17.218.7-1.5 pts.Income from continuing    operations (in 000s)$30,164$30,1280.1%Income from discontinued   operations, net of tax (in 000s)--$31,506NMNet income (in 000s)$30,164$61,634-51.1%Diluted earnings per share:Income from continuing operations$0.58$0.547.4%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 AnalysisNet 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 UpdateDuring 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 OutlookZebra 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 NotificationInvestors 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  Forward-looking StatementThis 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 TechnologiesA 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 Media:Douglas A. Fox, CFA Kerry Kelly-GuilianoVice President, Investor Relations Vice President, Strategic Communicationsand Treasurer F T I Consulting+1 847 793 6735+1 617 747 ZEBRA TECHNOLOGIES CORPORATIONCONSOLIDATED BALANCE SHEETS(Amounts in thousands)March 31, 2012December 31, 2011ASSETS(Unaudited)Current assets:Cash and cash equivalents$     41,943$     36,418Investments and marketable securities175,169182,398Accounts receivable, net 157,114155,230Receivable from buyer13,79027,580Inventories, net126,119133,288Deferred income taxes14,19413,931Income tax receivable6,91713,111Prepaid expenses and other current assets15,03622,917Total current assets550,282584,873Property and equipment at cost, less accumulated depreciation and amortization101,98597,822Long-term deferred income taxes11,99511,866Goodwill79,70379,703Other intangibles, net11,89712,667Long-term investments and marketable securities145,132107,879Other assets4,0924,196             Total assets$   905,086$   899,006LIABILITIES AND STOCKHOLDERS' EQUITYCurrent liabilities:Accounts payable$     33,019$     33,273Accrued liabilities47,76964,612Deferred revenue12,06511,089Total current liabilities92,853108,974Deferred rent1,4961,592Other long-term liabilities11,67411,515             Total liabilities106,023122,081Stockholders' equity:Preferred Stock----Class A Common Stock722722Additional paid-in capital134,472131,422Treasury stock(603,705)(596,622)Retained earnings1,275,7801,245,616Accumulated other comprehensive loss(8,206)(4,213)             Total stockholders' equity799,063776,925             Total liabilities and stockholders' equity$   905,086$   899,006 ZEBRA TECHNOLOGIES CORPORATIONCONSOLIDATED STATEMENTS OF EARNINGS(Amounts in thousands, except per share data)(Unaudited)Three Months EndedMarch 31, 2012April 2, 2011Net sales:   Net sales of tangible products$     232,476$     226,120   Revenue from services and software11,39911,181Total net sales243,875237,301Cost of sales   Cost of sales of tangible products119,053110,781   Cost of services and software4,9596,522Total cost of sales124,012117,303Gross profit119,863119,998Operating expenses:   Selling and marketing32,11428,528   Research and development20,41921,681   General and administrative24,55122,706   Amortization of intangible assets770835   Exit and restructuring costs--1,886Total operating expenses77,85475,636Operating income42,00944,362Other income (expense):   Investment income592560   Foreign exchange loss (342)(294)   Other, net(364)(254)Total other income (expense)(114)12Income from continuing operations   before income taxes 41,89544,374Income taxes11,73114,246Income from continuing operations30,16430,128Income from discontinued operations, net of tax--31,506Net income$      30,164$       61,634Basic earnings per share:   Income from continuing operations$          0.58$          0.54   Income from discontinued operations--0.57      Net income$          0.58$          1.11Diluted earnings per share:   Income from continuing operations$          0.58$          0.54   Income from discontinued operations--0.56      Net income$          0.58$          1.10Basic weighted average shares outstanding51,99855,353Diluted weighted average and equivalent shares outstanding52,30155,774 ZEBRA TECHNOLOGIES CORPORATION CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME(Amounts in thousands)(Unaudited)Three Months EndedMarch 31, 2012April 2, 2011Net income$   30,164$   61,634Other 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 taxes570(14)        Foreign currency translation adjustment83(553)Comprehensive income $   26,171$   58,311ZEBRA TECHNOLOGIES CORPORATION AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF CASH FLOWS(Amounts in thousands)(Unaudited)Three Months EndedMarch 31, 2012April 2, 2011Cash 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 amortization5,9595,932                Equity-based compensation3,8004,488                Excess tax benefit from equity-based compensation(66)(645)                Loss on sale of property and equipment839                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, net7,169(7,136)                        Other assets9,395(1,690)                        Accounts payable(3,378)(7,150)                        Accrued liabilities(16,881)(17,120)                        Deferred revenue1,151(15,749)                        Income taxes6,13527,732                        Other operating activities(4,725)(3,364)                                Net cash provided by (used in) operating activities36,553(5,169)Cash flows from investing activities:        Purchases of property and equipment(7,654)(3,922)        Proceeds from the sale of business13,790164,008        Purchases of investments and marketable securities(132,390)(382,410)        Maturities of investments and marketable securities81,189209,509        Proceeds from sales of investments and marketable securities21,74888,304                                Net cash provided by (used in) investing activities(23,317)75,489Cash flows from financing activities:        Purchase of treasury stock(9,775)(41,567)        Proceeds from exercise of stock options and stock purchase plan purchases1,9982,757        Excess tax benefit from equity-based compensation66645                                Net cash used in financing activities (7,711)(38,165)Effect of exchange rate changes on cash--336Net increase in cash and cash equivalents5,52532,491     Cash balance of discontinued operations at beginning of period--1,301     Less: Cash balance of discontinued operations at end of period--282Cash and cash equivalents at beginning of period36,41846,175Cash and cash equivalents at end of period$   41,943$   79,685Supplemental disclosures of cash flow information: Income taxes paid$     7,956$     8,958 ZEBRA TECHNOLOGIES CORPORATIONSUPPLEMENTAL SALES INFORMATION(Amounts in thousands)(Unaudited)SALES BY PRODUCT CATEGORYThree Months EndedMarch 31,April 2,PercentPercent ofPercent ofProduct Category20122011ChangeNet Sales - 2012Net Sales ? 2011Hardware$     181,196$     180,1360.674.375.9Supplies49,96244,63511.920.518.8Service and software11,39911,1811.94.74.7   Subtotal products242,557235,9522.899.599.4Shipping and handling1,3181,349(2.3)0.50.6   Total net sales$     243,875$     237,3012.8100.0100.0SALES BY GEOGRAPHIC REGIONThree Months EndedMarch 31,April 2,PercentPercent ofPercent ofGeographic Region20122011ChangeNet Sales - 2012Net Sales - 2011Europe, Middle East and Africa$       86,121$       84,2302.235.335.5Latin America22,28720,10410.99.18.5Asia-Pacific33,14832,4952.013.613.7   Total International141,556136,8293.558.057.7North America102,319100,4721.842.042.3   Total net sales$     243,875$     237,3012.8100.0100.0  ZEBRA TECHNOLOGIES CORPORATIONPRINTER UNITS and AVERAGE UNIT PRICES(Unaudited)Three Months EndedMarch 31,April 2,Percent20122011ChangeTotal printers shipped297,669284,1774.7Average selling price of printers shipped$503$524(4.0)SOURCE Zebra Technologies Corporation