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Press release from PR Newswire

Zebra Technologies Announces Financial Results for the 2012 Fourth Quarter and Full Year

Tuesday, February 12, 2013

Zebra Technologies Announces Financial Results for the 2012 Fourth Quarter and Full Year03:00 EST Tuesday, February 12, 2013Record sales in Latin America and ongoing strength in North America lead to fourth consecutive sequential sales increase; Acquisition and restructuring costs reduce 2012 fourth quarter earnings by $0.03 per shareLINCOLNSHIRE, Ill., Feb. 12, 2013 /PRNewswire/ -- Zebra Technologies Corporation (NASDAQ: ZBRA) today announced 2012 fourth quarter diluted earnings from continuing operations of $0.68 per share, including acquisition and restructuring costs that reduced earnings by $0.03 per share. Earnings from continuing operations for the fourth quarter of 2011 totaled $0.63 per share. Net sales for the quarter ended December 31, 2012, increased 2.4% to $253,179,000 from $247,308,000 for the fourth quarter of 2011. Movements in foreign exchange rates decreased sales by $1,858,000 from a weaker euro against the U.S. dollar, compared with a year ago. Summary Financial Performance (Unaudited)4Q124Q11ChangeNet sales (in 000s)$       253,179$   247,3082.4%Gross margin (%)49.249.10.1 pts.Income from continuing    operations (in 000s)$         34,799$     32,8595.9%Income from discontinued   operations, net of tax (in 000s)$              191$        2,185N/MNet income (in 000s)$         34,990$     35,044N/MDiluted earnings per share:Income from continuing operations$          0.68$         0.637.9%Income from discontinued operations$          0.00$         0.04N/MNet income$          0.68$         0.671.5% "Results for the quarter and full year reflect the meaningful progress made on meeting more of our customers' extended supply chain visibility needs," stated Anders Gustafsson, Zebra's chief executive officer. "We introduced a record 14 new printer products in 2012. This high development cadence led to a stronger complement of innovative products and solutions. More effective sales and marketing programs enabled a deeper level of engagement with customers in manufacturing, healthcare and retail. We enter 2013 mindful of the challenges in the current business environment, yet optimistic about Zebra's opportunities for accelerating growth and improving profitability." For the full year, diluted earnings from continuing operations for 2012 totaled $2.35 per share, including acquisition and restructuring costs and an asset impairment charge that reduced earnings by $0.23 per share. For 2011, diluted earnings from continuing operations were $2.40, including acquisition and restructuring costs that reduced earnings by $0.03 per share. Net sales increased 1.3% to a record $996,168,000 for 2012 from $983,488,000 for 2011. As of December 31, 2012, Zebra had $394,075,000 in cash and investments, and no long-term debt. Net inventories were $123,357,000, and net accounts receivable were $168,732,000. Discussion and Analysis ? Fourth QuarterNet sales for the fourth quarter of 2012 included record sales in Latin America, up 21.7%. North American sales increased 6.7%. This growth offset sales declines of 2.5% in Asia Pacific and 5.7% in the Europe, Middle East and Africa (EMEA) region. On a constant-currency basis, sales in EMEA declined 3.6%. Sales of supplies ? thermal ribbons, labels, wristbands and receipts ? increased by 24.9% to a new quarterly record.   Gross profit of 49.2%, versus 49.1% in 2011, reflects reduced overhead, freight and reserve costs, partially offset by unfavorable movements in foreign exchange rates and product mix. Unfavorable foreign currency movements decreased fourth quarter gross profit by $1,806,000. Operating expense growth of 1.2% included higher general and administrative expenses, increased amortization expense, higher acquisition costs, and higher exit and restructuring costs. Stock Purchase UpdateDuring the fourth quarter of 2012, Zebra returned $14.7 million to shareholders through the repurchase of 400,000 shares of Zebra Technologies Corporation Class A Common Stock at an average price of $36.69 per share. At December 31, 2012, the company had 2,022,336 shares remaining in its stock buyback authorization, and 50,908,267 shares of common stock were outstanding. First Quarter OutlookZebra announced its financial forecast for the first quarter of 2013. Net sales are expected within a range of $240,000,000 to $252,000,000, which primarily reflects the company's typical seasonality in sales. Diluted earnings per share are expected within a range of $0.55 to $0.65. Conference Call NotificationInvestors are invited to listen to a live webcast of Zebra's conference call discussing the company's financial results for the fourth 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 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 first quarter of 2013 stated in the paragraph above captioned "First 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. The success of integrating acquisitions could also affect profitability, reported results and the company's competitive position in it industry. 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 innovation and reliability, Zebra Technologies Corporation (NASDAQ: ZBRA) offers technologies that give a virtual voice to an organization's assets, people and transactions, enabling organizations to unlock greater business value. The company's extensive portfolio of marking and printing technologies, including RFID and real-time location solutions, illuminates mission-critical information to help customers take smarter business actions. For more information about Zebra's solutions, visit http://www.zebra.com. ZEBRA TECHNOLOGIES CORPORATION AND SUBSIDIARIESCONSOLIDATED BALANCE SHEETS(Amounts in thousands)(Unaudited)December 31, 2012December 31, 2011ASSETSCurrent assets:Cash and cash equivalents$         64,740$       36,418Investments and marketable securities324,140182,398Accounts receivable, net 168,732155,230Receivable from buyer027,580Inventories, net123,357133,288Deferred income taxes13,48413,931Income tax receivable013,111Prepaid expenses and other current assets16,41022,917Total current assets710,863584,873Property and equipment at cost, less accumulated depreciation and amortization101,34997,822Long-term deferred income taxes2,60211,866Goodwill94,94279,703Other intangibles, net39,15112,667Long-term investments and marketable securities5,195107,879Other assets13,6464,196                         Total assets$       967,748$     899,006LIABILITIES AND STOCKHOLDERS' EQUITYCurrent liabilities:Accounts payable$         23,045$       33,273Accrued liabilities57,23464,612Deferred revenue13,32611,089Income taxes payable1,6090Total current liabilities95,214108,974Deferred rent1,3031,592Other long-term liabilities14,22911,515                         Total liabilities110,746122,081Stockholders' equity:Preferred Stock--Class A Common Stock722722Additional paid-in capital139,523131,422Treasury stock(641,438)(596,622)Retained earnings1,368,5201,245,616Accumulated other comprehensive loss(10,325)(4,213)                         Total stockholders' equity857,002776,925                         Total liabilities and stockholders' equity$       967,748$     899,006 ZEBRA TECHNOLOGIES CORPORATION AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF EARNINGS(Amounts in thousands, except per share data)(Unaudited)Three Months EndedTwelve Months EndedDecember 31, 2012December 31, 2011December 31, 2012December 31, 2011Net sales:  Net sales of tangible products$      241,257$        235,714$      948,227$     936,282  Revenue from services and software11,92211,59447,94147,206Total net sales253,179247,308996,168983,488Cost of sales  Cost of sales of tangible products121,869118,792479,633469,834  Cost of services and software6,8506,99624,89126,885Total cost of sales128,719125,788504,524496,719Gross profit124,460121,520491,644486,769Operating expenses:   Selling and marketing33,31336,377129,906127,797   Research and development22,60523,17487,36489,926   General and administrative20,96418,97392,16781,345   Amortization of intangible assets1,4638064,6733,320   Acquisition costs1,0371163,109304   Exit and restructuring costs960(49)9602,041   Asset impairment charge009,1140Total operating expenses80,34279,397327,293304,733Operating income44,11842,123164,351182,036Other income (expense):   Investment income5265942,4851,944   Foreign exchange loss (5)(706)(941)(2,006)   Other, net(577)(899)(1,721)(2,255)Total other income (expense)(56)(1,011)(177)(2,317)Income from continuing operations before income taxes44,06241,112164,174179,719Income taxes9,2638,25342,27749,376Income from continuing operations34,79932,859121,897130,343Income from discontinued operations, net of tax1912,1851,00744,300Net income$        34,990$          35,044$      122,904$     174,643Basic earnings per share:   Income from continuing operations$            0.69$             0.63$          2.36$          2.42   Income from discontinued operations0.000.040.020.82      Net income$            0.69$             0.67$          2.38$          3.24Diluted earnings per share:   Income from continuing operations$            0.68$             0.63$          2.35$          2.40   Income from discontinued operations0.000.040.020.82      Net income$            0.68$             0.67$          2.37$          3.22Basic weighted average shares outstanding50,96852,10851,56653,854Diluted weighted average and equivalent shares outstanding51,26252,35451,84354,191 ZEBRA TECHNOLOGIES CORPORATION AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME(Amounts in thousands)(Unaudited)Three Months EndedTwelve Months EndedDecember 31, 2012December 31, 2011December 31, 2012December 31, 2011Net income$       34,990$       35,044$     122,904$     174,643Other comprehensive income (loss):   Unrealized gain (loss) on hedging transactions, net of income taxes(1,048)3,371(7,241)6,209   Unrealized holding gain (loss) on investments, net of income taxes(30)(82)887(385)   Foreign currency translation adjustment42(59)242(688)Comprehensive income$       33,954$       38,274$     116,792$     179,779 ZEBRA TECHNOLOGIES CORPORATION AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF CASH FLOWS(Amounts in thousands)(Unaudited)Twelve Months EndedDecember 31, 2012December 31, 2011Cash flows from operating activities:        Net income$      122,904$       174,643        Adjustments to reconcile net income to net cash provided by (used in) operating activities:                Depreciation and amortization26,17724,000                Equity-based compensation14,72714,095                Asset impairment charge9,1140                Impairment of investments0219                Excess tax benefit from equity-based compensation(1,578)(1,392)                Loss on sale of property and equipment311284                Gain on sale of business(930)(68,745)                Deferred income taxes8,06710,796                Changes in assets and liabilities:                        Accounts receivable, net(8,647)(3,269)                        Inventories, net11,530(19,545)                        Other assets7,304(12,721)                        Accounts payable(14,605)(5,439)                        Accrued liabilities(4,193)(11,086)                        Deferred revenue4,351(14,131)                        Income taxes16,335(14,983)                        Other operating activities(7,536)5,582                             Net cash provided by operating activities183,33178,308Cash flows from investing activities:     Purchases of property and equipment(22,443)(26,918)     Proceeds from the sale of business27,580161,206     Acquisition of business, net of cash acquired(59,876)0     Acquisition of intangible assets(3,500)(1,232)     Purchase of long-term investment(9,125)0     Purchases of investments and marketable securities(347,609)(991,633)     Maturities of investments and marketable securities145,028607,996     Proceeds from sales of investments and marketable securities164,410303,801                          Net cash provided by (used in) investing activities(105,535)53,220Cash flows from financing activities:    Purchase of treasury stock(54,373)(160,200)    Proceeds from exercise of stock options and stock purchase plan purchases3,36113,009    Excess tax benefit from equity-based compensation1,5781,392                         Net cash used in financing activities (49,434)(145,799)Effect of exchange rate changes on cash(40)1,835Net increase in cash and cash equivalents28,322(12,436)   Cash balance of discontinued operations at beginning of period01,301   Less: Cash balance of discontinued operations at end of period00Cash and cash equivalents at beginning of period36,41847,553Cash and cash equivalents at end of period$        64,740$         36,418Supplemental disclosures of cash flow information:Income taxes paid$        20,059$         65,364 ZEBRA TECHNOLOGIES CORPORATION AND SUBSIDIARIESSUPPLEMENTAL SALES INFORMATION(Amounts in thousands)(Unaudited)SALES BY PRODUCT CATEGORYThree Months EndedProduct CategoryDecember 31,2012December 31,2011PercentChangePercent ofNet Sales - 2012Percent ofNet Sales ? 2011Hardware$   182,267$    188,198(3.2)72.076.1Supplies57,60746,13524.922.818.6Service and software11,92211,5942.84.74.7   Subtotal products251,796245,9272.499.599.4Shipping and handling1,3831,3810.10.50.6   Total net sales$   253,179$    247,3082.4100.0100.0Twelve Months EndedProduct CategoryDecember 31,2012December 31,2011PercentChangePercent ofNet Sales - 2012Percent ofNet Sales ? 2011Hardware$   730,489$   743,308(1.7)73.475.5Supplies212,499187,45713.421.319.1Service and software47,94147,2061.64.84.8   Subtotal products990,929977,9711.399.599.4Shipping and handling5,2395,517(5.0)0.50.6   Total net sales$   996,168$   983,4881.3100.0100.0 SALES BY GEOGRAPHIC REGIONThree Months EndedGeographic RegionDecember 31,2012December 31,2011PercentChangePercent ofNet Sales - 2012Percent ofNet Sales - 2011Europe, Middle East and Africa$ 83,355$ 88,360(5.7)32.935.7Latin America26,25521,57821.710.48.7Asia-Pacific31,66532,470(2.5)12.513.1  Total International141,275142,408(0.8)55.857.5North America111,904104,9006.744.242.5  Total net sales$ 253,179$ 247,3082.4100.0100.0Twelve Months EndedGeographic RegionDecember 31,2012December 31,2011PercentChangePercent ofNet Sales - 2012Percent ofNet Sales - 2011Europe, Middle East and Africa$ 322,970$ 342,578(5.7)32.434.8Latin America100,10189,71511.610.09.1Asia-Pacific137,577141,987(3.1)13.814.5  Total International560,648574,280(2.4)56.258.4North America435,520409,2086.443.841.6  Total net sales$ 996,168$ 983,4881.3100.0100.0 ZEBRA TECHNOLOGIES CORPORATION AND SUBSIDIARIESPRINTER UNITS and AVERAGE UNIT PRICES(Unaudited)Three Months EndedDecember 31,December 31,Percent20122011ChangeTotal printers shipped321,314312,4092.9Average selling price of printers shipped$477$506(5.7)Twelve Months EndedDecember 31,December 31,Percent20122011ChangeTotal printers shipped1,260,1411,188,8926.0Average selling price of printers shipped$485$527(7.9) Contact:Investors:Media:Douglas A. Fox, CFARobb KristopherVice President, Investor Relations Director,Corporate Communicationsand Treasurerand Public Relations+ 1 847 793 6735+ 1 847 793 5514dfox@zebra.com rkristopher@zebra.comSOURCE Zebra Technologies Corporation