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Press release from PR Newswire

Zebra Technologies Announces Financial Results for the 2013 Second Quarter

Tuesday, August 06, 2013

Zebra Technologies Announces Financial Results for the 2013 Second Quarter

03:00 EDT Tuesday, August 06, 2013

Sales up 2.5% from a year ago and 6.8% from the first quarter of 2013

LINCOLNSHIRE, Ill., Aug. 6, 2013 /PRNewswire/ -- Zebra Technologies Corporation (NASDAQ: ZBRA) today announced 2013 second quarter diluted earnings per share from continuing operations of $0.60, including exit, restructuring and acquisition costs that reduced earnings by $0.03 per share. Income from continuing operations for the second quarter of 2012 totaled $0.58 per share. Net sales for the quarter ended June 29, 2013, increased 2.5% to $253,160,000 from $247,077,000 for the second quarter of 2012.

Summary Financial Performance (Unaudited)

2Q13

2Q12

Change

Net sales (in 000s)

$     253,160

$     247,077

2.5%

Gross margin (%)

47.8

48.7

(0.9) pts.

Operating margin (%)

14.3

15.9

(1.7) pts.

Income from continuing    operations (in 000s)

$       37,716

$       39,719

(5.0)%

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

$                8

$            300

N/M

Net income (in 000s)

$       30,566

$       30,653

(0.3)%

Diluted earnings per share:

Income from continuing operations

$          0.60

$          0.58

3.4%

Income from discontinued operations

$          0.00

$          0.01

N/M

Net income

$          0.60

$          0.59

1.7%

"In a quarter still challenged by uneven global business conditions, we won more business with strategic customers in targeted industries and delivered a broader range of products and solutions to a more diversified customer base," stated Anders Gustafsson, Zebra's chief executive officer. "During the quarter, the cadence of our product development activities remained high, with the recent introductions of our ZXP Series 1 and updated ZXP Series 3 card printers, and our EM220 II wireless mobile receipt printer. We also accelerated investments to introduce innovative Internet of Things products and solutions to serve customers in sports and entertainment. Our recently launched Zebra Commerce? brand will help us to more effectively deliver the broad suite of Zebra products and services to customers in the retail and field service industries. We look to the second half of 2013 with optimism about making further progress on our strategic initiatives and building greater value for our shareholders."

As of June 29, 2013, Zebra had $454,038,000 in cash and investments, and no long-term debt. Net inventories were $109,149,000, and net accounts receivable were $170,856,000.

For the first six months of 2013, net sales were $490,097,000, compared with $490,952,000 for the first half of 2012. Net income for the six months that ended June 29, 2013, was $54,108,000, or $1.05 per diluted share, compared with $60,817,000, or $1.17 per diluted share, for the same period in 2012.

Discussion and Analysis ? Second Quarter

  • Net sales growth of 2.5% included increased sales for the company in North America, Asia Pacific and the Europe, Middle East and Africa region. Organic growth of Zebra's label and wristband business was supplemented with sales from the July 2012 acquisition of LaserBand.
  • Gross profit margin of 47.8%, versus 48.7% in 2012, reflects changes in product mix and selected pricing on certain large business opportunities with strategic customers in targeted markets.
  • Operating expense growth of 4.6% includes $1,101,000 for exit and restructuring costs and $618,000 for acquisition costs. Other increases in operating expenses principally relate to accelerated product development and sales and marketing activities supporting Zebra's entry to serve customers in the sports industry. Amortization increased over 2012 levels primarily due to intangible assets acquired as part of the July 2012 LaserBand acquisition.
  • Other income includes a net $1,557,000 favorable litigation settlement, which is related to an investment loss that was recorded in prior years.

Stock Purchase UpdateDuring the second quarter of 2013, Zebra returned $24,674,000 to shareholders through the repurchase of 539,788 shares of Zebra Technologies Corporation Class A Common Stock at a weighted average price of $45.71 per share. At June 29, 2013, the company had 1,395,294 shares remaining in its stock buyback authorization, and 50,782,000 shares of common stock were outstanding.

Third Quarter OutlookZebra announced its financial forecast for the third quarter of 2013. Net sales are expected within a range of $253,000,000 to $263,000,000. Diluted earnings per share are expected within a range of $0.61 to $0.71.

Conference Call NotificationInvestors are invited to listen to a live webcast of Zebra's conference call discussing the company's financial results for the second quarter of 2013. 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 third quarter of 2013 stated in the paragraph above captioned "Third 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, 2012.

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 SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(Amounts in thousands)

June 29, 2013

December 31, 2012

ASSETS

(Unaudited)

Current assets:

Cash and cash equivalents

$         55,886

$         64,740

Investments and marketable securities

389,799

324,140

Accounts receivable, net

170,856

168,732

Inventories, net

109,149

123,357

Deferred income taxes

13,190

13,484

Income taxes receivable

7,481

-

Prepaid expenses and other current assets

16,246

16,410

    Total current assets

762,607

710,863

Property and equipment at cost, less accumulated depreciation and amortization

101,737

101,349

Long-term deferred income taxes

-

2,602

Goodwill

94,942

94,942

Other intangibles, net

35,425

39,151

Long-term investments and marketable securities

8,353

5,195

Other assets

15,491

13,646

                                     Total assets

$    1,018,555

$       967,748

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:

Accounts payable

$         31,945

$         23,045

Accrued liabilities

50,584

57,234

Deferred revenue

12,416

13,326

Income taxes payable

6,870

1,609

    Total current liabilities

101,815

95,214

Long-term deferred tax liability

1,544

-

Deferred rent

1,332

1,303

Other long-term liabilities

17,285

14,229

                                    Total liabilities

121,976

110,746

Stockholders' equity:

Preferred Stock

-

-

Class A Common Stock

722

722

Additional paid-in capital

137,342

139,523

Treasury stock

(654,518)

(641,438)

Retained earnings

1,422,628

1,368,520

Accumulated other comprehensive loss

(9,595)

(10,325)

                                    Total stockholders' equity

896,579

857,002

                                    Total liabilities and stockholders' equity

$    1,018,555

$       967,748

 

 

ZEBRA TECHNOLOGIES CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF EARNINGS

(Amounts in thousands, except per share data)

(Unaudited)

Three Months Ended

Six Months Ended

June 29, 2013

June 30, 2012

June 29, 2013

June 30, 2012

Net sales:

  Net sales of tangible products

$     239,909

$     234,708

$     465,030

$     467,184

  Revenue from services and software

13,251

12,369

25,067

23,768

Total net sales

253,160

247,077

490,097

490,952

Cost of sales:

  Cost of sales of tangible products

125,664

119,980

242,775

239,013

  Cost of services and software

6,589

6,720

13,350

11,679

Total cost of sales

132,253

126,700

256,125

250,692

Gross profit

120,907

120,377

233,972

240,260

Operating expenses:

   Selling and marketing

33,830

32,158

67,345

64,272

   Research and development

23,201

22,336

45,059

42,752

   General and administrative

24,053

24,402

49,329

48,722

   Amortization of intangible assets

1,863

770

3,726

1,540

   Acquisition costs

618

1,252

1,100

1,506

   Exit and restructuring costs

1,101

0

2,996

0

Total operating expenses

84,666

80,918

169,555

158,792

Operating income

36,241

39,459

64,417

81,468

Other income (expense):

   Investment income

473

826

1,150

1,418

   Foreign exchange loss

(462)

(80)

(560)

(422)

   Other, net

1,464

(486)

1,473

(850)

Total other income

1,475

260

2,063

146

Income from continuing operations before income taxes

37,716

39,719

66,480

81,614

Income taxes

7,158

9,366

12,380

21,097

Income from continuing operations

30,558

30,353

54,100

60,517

Income from discontinued operations, net of tax

8

300

8

300

Net income

$       30,566

$       30,653

$       54,108

$       60,817

Basic earnings per share:

   Income from continuing operations

$          0.60

$          0.58

$          1.06

$          1.16

   Income from discontinued operations

0.00

0.01

0.00

0.01

      Net income

$          0.60

$          0.59

$          1.06

$          1.17

Diluted earnings per share:

   Income from continuing operations

$          0.60

$          0.58

$          1.05

$          1.16

   Income from discontinued operations

0.00

0.01

0.00

0.01

      Net income

$          0.60

$          0.59

$          1.05

$          1.17

Basic weighted average shares outstanding

50,900

51,771

50,929

51,881

Diluted weighted average and equivalent shares outstanding

51,283

52,030

51,310

52,156

 

 

 

ZEBRA TECHNOLOGIES CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Amounts in thousands)

(Unaudited)

Three Months Ended

Six Months Ended

June 29, 2013

June 30, 2012

June 29, 2013

June 30, 2012

Net income

$       30,566

$       30,653

$       54,108

$       60,817

Other comprehensive income (loss):

   Unrealized gains (losses) on hedging transactions, net of income taxes

(391)

2,400

1,352

(2,246)

   Unrealized holding gains (losses) on investments, net of income taxes

(867)

(46)

(939)

524

   Foreign currency translation adjustment

223

105

317

188

Comprehensive income

$       29,531

$       33,112

$       54,838

$       59,283

 

ZEBRA TECHNOLOGIES CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Amounts in thousands)

(Unaudited)

Six Months Ended

June 29, 2013

June 30, 2012

Cash flows from operating activities:

        Net income

$    54,108

$    60,817

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

        operating activities:

                Depreciation and amortization

15,412

11,964

                Share-based compensation

6,504

8,045

                Excess tax benefit from share-based compensation

(3,727)

(1,358)

                Loss on sale of property and equipment

182

147

                Gain on sale of business

0

(613)

                Deferred income taxes

4,439

367

                Changes in assets and liabilities:

                        Accounts receivable, net

(1,976)

(657)

                        Inventories, net

14,190

16,599

                        Other assets

1,313

527

                        Accounts payable

3,263

(9,594)

                        Accrued liabilities

(6,094)

(11,422)

                        Deferred revenue

1,585

1,460

                        Income taxes

476

10,714

                        Other operating activities

1,381

(2,341)

                                Net cash provided by operating activities

91,056

84,655

Cash flows from investing activities:

        Purchases of property and equipment

(8,547)

(10,599)

        Proceeds from the sale of business

0

13,790

        Acquisition of intangible assets

(500)

0

        Purchase of long-term equity investment

(604)

(5,000)

        Purchases of investments and marketable securities

(231,174)

(313,863)

        Maturities of investments and marketable securities

19,188

228,105

        Proceeds from sales of investments and marketable securities

142,230

95,106

                                Net cash provided by (used in) investing activities

(79,407)

7,539

Cash flows from financing activities:

        Purchase of treasury stock

(28,563)

(24,645)

        Proceeds from exercise of stock options and stock purchase plan purchases

4,104

142

        Excess tax benefit from share-based compensation

3,727

1,358

                                Net cash used in financing activities

(20,732)

(23,145)

Effect of exchange rate changes on cash

229

(99)

Net increase (decrease) in cash and cash equivalents

(8,854)

68,950

Cash and cash equivalents at beginning of period

64,740

36,418

Cash and cash equivalents at end of period

$     55,886

$ 105,368

Supplemental disclosures of cash flow information:

 Income taxes paid

$       5,346

$   13,479

 

 

ZEBRA TECHNOLOGIES CORPORATION AND SUBSIDIARIES

SUPPLEMENTAL SALES INFORMATION

(Amounts in thousands)

(Unaudited)

SALES BY PRODUCT CATEGORY

Three Months Ended

June 29,

June 30,

Percent

Percent of

Percent of

Product Category

2013

2012

Change

Net Sales ? 2013

Net Sales ? 2012

Hardware

$   178,938

$    183,973

(2.7)

70.8

74.5

Supplies

59,618

49,508

20.4

23.5

20.0

Service and software

13,251

12,369

7.1

5.2

5.0

   Subtotal products

251,807

245,850

2.4

99.5

99.5

Shipping and handling

1,353

1,227

10.3

0.5

0.5

   Total net sales

$   253,160

$    247,077

2.5

100.0

100.0

Six Months Ended

June 29,

June 30,

Percent

Percent of

Percent of

Product Category

2013

2012

Change

Net Sales ? 2013

Net Sales ? 2012

Hardware

$   345,630

$    365,169

(5.4)

70.6

74.4

Supplies

116,741

99,470

17.4

23.8

20.3

Service and software

25,067

23,768

5.5

5.1

4.8

   Subtotal products

487,438

488,407

(0.2)

99.5

99.5

Shipping and handling

2,659

2,545

4.5

0.5

0.5

   Total net sales

$   490,097

$    490,952

(0.2)

100.0

100.0

SALES BY GEOGRAPHIC REGION

Three Months Ended

June 29,

June 30,

Percent

Percent of

Percent of

Geographic Region

2013

2012

Change

Net Sales ? 2013

Net Sales - 2012

Europe, Middle East and Africa

$     80,913

$     77,857

3.9

32.0

31.5

Latin America

24,322

25,371

(4.1)

9.6

10.3

Asia-Pacific

36,973

35,921

2.9

14.6

14.5

   Total International

142,208

139,149

2.2

56.2

56.3

North America

110,952

107,928

2.8

43.8

43.7

   Total net sales

$   253,160

$   247,077

2.5

100.0

100.0

Six Months Ended

June 29,

June 30,

Percent

Percent of

Percent of

Geographic Region

2013

2012

Change

Net Sales - 2013

Net Sales - 2012

Europe, Middle East and Africa

$   158,586

$   163,978

(3.3)

32.4

33.4

Latin America

47,454

47,658

(0.4)

9.7

9.7

Asia-Pacific

69,882

69,069

1.2

14.3

14.1

   Total International

275,922

280,705

(1.7)

56.4

57.2

North America

214,175

210,247

1.9

43.6

42.8

   Total net sales

$   490,097

$   490,952

(0.2)

100.0

100.0

 

 

ZEBRA TECHNOLOGIES CORPORATION AND SUBSIDIARIES

PRINTER UNITS and AVERAGE UNIT PRICES

(Unaudited)

Three Months Ended

June 29,

June 30,

Percent

2013

2012

Change

Total printers shipped

328,392

330,186

(0.5)

Average selling price of printers shipped

$462

$471

(1.9)

Six Months Ended

June 29,

June 30,

Percent

2013

2012

Change

Total printers shipped

628,025

627,855

       N/M

Average selling price of printers shipped

$466

$486

(4.1)

 

Contact:

Investors:

Media:

Douglas A. Fox, CFA

Robb Kristopher

Vice President, Investor Relations

Director, Corporate Communications

and Treasurer

and Public Relations

+ 1 847 793 6735

+ 1 847 793 5514

dfox@zebra.com

rkristopher@zebra.com

SOURCE Zebra Technologies Corporation

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