Zebra Technologies Announces Financial Results for the 2012 Fourth Quarter and Full Year
Record 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 share
LINCOLNSHIRE, 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) |
|||
| 4Q12 |
4Q11 |
Change |
|
| Net sales (in 000s) |
$ 253,179 |
$ 247,308 |
2.4% |
| Gross margin (%) |
49.2 |
49.1 |
0.1 pts. |
| Income from continuing operations (in 000s) |
$ 34,799 |
$ 32,859 |
5.9% |
| Income from discontinued operations, net of tax (in 000s) |
$ 191 |
$ 2,185 |
N/M |
| Net income (in 000s) |
$ 34,990 |
$ 35,044 |
N/M |
| Diluted earnings per share: |
|||
| Income from continuing operations |
$ 0.68 |
$ 0.63 |
7.9% |
| Income from discontinued operations |
$ 0.00 |
$ 0.04 |
N/M |
| Net income |
$ 0.68 |
$ 0.67 |
1.5% |
"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 Quarter
- Net 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 Update
During 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 Outlook
Zebra 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 Notification
Investors 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 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 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 Technologies
A 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) (Unaudited) |
|||
| December 31, 2012 |
December 31, 2011 |
||
| ASSETS |
|||
| Current assets: |
|||
| Cash and cash equivalents |
$ 64,740 |
$ 36,418 |
|
| Investments and marketable securities |
324,140 |
182,398 |
|
| Accounts receivable, net |
168,732 |
155,230 |
|
| Receivable from buyer |
0 |
27,580 |
|
| Inventories, net |
123,357 |
133,288 |
|
| Deferred income taxes |
13,484 |
13,931 |
|
| Income tax receivable |
0 |
13,111 |
|
| Prepaid expenses and other current assets |
16,410 |
22,917 |
|
| Total current assets |
710,863 |
584,873 |
|
| Property and equipment at cost, less accumulated depreciation and amortization |
101,349 |
97,822 |
|
| Long-term deferred income taxes |
2,602 |
11,866 |
|
| Goodwill |
94,942 |
79,703 |
|
| Other intangibles, net |
39,151 |
12,667 |
|
| Long-term investments and marketable securities |
5,195 |
107,879 |
|
| Other assets |
13,646 |
4,196 |
|
| Total assets |
$ 967,748 |
$ 899,006 |
|
| LIABILITIES AND STOCKHOLDERS' EQUITY |
|||
| Current liabilities: |
|||
| Accounts payable |
$ 23,045 |
$ 33,273 |
|
| Accrued liabilities |
57,234 |
64,612 |
|
| Deferred revenue |
13,326 |
11,089 |
|
| Income taxes payable |
1,609 |
0 |
|
| Total current liabilities |
95,214 |
108,974 |
|
| Deferred rent |
1,303 |
1,592 |
|
| Other long-term liabilities |
14,229 |
11,515 |
|
| Total liabilities |
110,746 |
122,081 |
|
| Stockholders' equity: |
|||
| Preferred Stock |
- |
- |
|
| Class A Common Stock |
722 |
722 |
|
| Additional paid-in capital |
139,523 |
131,422 |
|
| Treasury stock |
(641,438) |
(596,622) |
|
| Retained earnings |
1,368,520 |
1,245,616 |
|
| Accumulated other comprehensive loss |
(10,325) |
(4,213) |
|
| Total stockholders' equity |
857,002 |
776,925 |
|
| Total liabilities and stockholders' equity |
$ 967,748 |
$ 899,006 |
|
| ZEBRA TECHNOLOGIES CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF EARNINGS (Amounts in thousands, except per share data) (Unaudited) |
|||||||
| Three Months Ended |
Twelve Months Ended |
||||||
| December 31, 2012 |
December 31, 2011 |
December 31, 2012 |
December 31, 2011 |
||||
| Net sales: |
|||||||
| Net sales of tangible products |
$ 241,257 |
$ 235,714 |
$ 948,227 |
$ 936,282 |
|||
| Revenue from services and software |
11,922 |
11,594 |
47,941 |
47,206 |
|||
| Total net sales |
253,179 |
247,308 |
996,168 |
983,488 |
|||
| Cost of sales |
|||||||
| Cost of sales of tangible products |
121,869 |
118,792 |
479,633 |
469,834 |
|||
| Cost of services and software |
6,850 |
6,996 |
24,891 |
26,885 |
|||
| Total cost of sales |
128,719 |
125,788 |
504,524 |
496,719 |
|||
| Gross profit |
124,460 |
121,520 |
491,644 |
486,769 |
|||
| Operating expenses: |
|||||||
| Selling and marketing |
33,313 |
36,377 |
129,906 |
127,797 |
|||
| Research and development |
22,605 |
23,174 |
87,364 |
89,926 |
|||
| General and administrative |
20,964 |
18,973 |
92,167 |
81,345 |
|||
| Amortization of intangible assets |
1,463 |
806 |
4,673 |
3,320 |
|||
| Acquisition costs |
1,037 |
116 |
3,109 |
304 |
|||
| Exit and restructuring costs |
960 |
(49) |
960 |
2,041 |
|||
| Asset impairment charge |
0 |
0 |
9,114 |
0 |
|||
| Total operating expenses |
80,342 |
79,397 |
327,293 |
304,733 |
|||
| Operating income |
44,118 |
42,123 |
164,351 |
182,036 |
|||
| Other income (expense): |
|||||||
| Investment income |
526 |
594 |
2,485 |
1,944 |
|||
| 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 taxes |
44,062 |
41,112 |
164,174 |
179,719 |
|||
| Income taxes |
9,263 |
8,253 |
42,277 |
49,376 |
|||
| Income from continuing operations |
34,799 |
32,859 |
121,897 |
130,343 |
|||
| Income from discontinued operations, net of tax |
191 |
2,185 |
1,007 |
44,300 |
|||
| Net income |
$ 34,990 |
$ 35,044 |
$ 122,904 |
$ 174,643 |
|||
| Basic earnings per share: |
|||||||
| Income from continuing operations |
$ 0.69 |
$ 0.63 |
$ 2.36 |
$ 2.42 |
|||
| Income from discontinued operations |
0.00 |
0.04 |
0.02 |
0.82 |
|||
| Net income |
$ 0.69 |
$ 0.67 |
$ 2.38 |
$ 3.24 |
|||
| Diluted earnings per share: |
|||||||
| Income from continuing operations |
$ 0.68 |
$ 0.63 |
$ 2.35 |
$ 2.40 |
|||
| Income from discontinued operations |
0.00 |
0.04 |
0.02 |
0.82 |
|||
| Net income |
$ 0.68 |
$ 0.67 |
$ 2.37 |
$ 3.22 |
|||
| Basic weighted average shares outstanding |
50,968 |
52,108 |
51,566 |
53,854 |
|||
| Diluted weighted average and equivalent shares outstanding |
51,262 |
52,354 |
51,843 |
54,191 |
|||
| ZEBRA TECHNOLOGIES CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Amounts in thousands) (Unaudited) |
|||||||
| Three Months Ended |
Twelve Months Ended |
||||||
| December 31, 2012 |
December 31, 2011 |
December 31, 2012 |
December 31, 2011 |
||||
| Net income |
$ 34,990 |
$ 35,044 |
$ 122,904 |
$ 174,643 |
|||
| Other 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 adjustment |
42 |
(59) |
242 |
(688) |
|||
| Comprehensive income |
$ 33,954 |
$ 38,274 |
$ 116,792 |
$ 179,779 |
|||
| ZEBRA TECHNOLOGIES CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (Amounts in thousands) (Unaudited) |
|||
| Twelve Months Ended |
|||
| December 31, 2012 |
December 31, 2011 |
||
| Cash 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 amortization |
26,177 |
24,000 |
|
| Equity-based compensation |
14,727 |
14,095 |
|
| Asset impairment charge |
9,114 |
0 |
|
| Impairment of investments |
0 |
219 |
|
| Excess tax benefit from equity-based compensation |
(1,578) |
(1,392) |
|
| Loss on sale of property and equipment |
311 |
284 |
|
| Gain on sale of business |
(930) |
(68,745) |
|
| Deferred income taxes |
8,067 |
10,796 |
|
| Changes in assets and liabilities: |
|||
| Accounts receivable, net |
(8,647) |
(3,269) |
|
| Inventories, net |
11,530 |
(19,545) |
|
| Other assets |
7,304 |
(12,721) |
|
| Accounts payable |
(14,605) |
(5,439) |
|
| Accrued liabilities |
(4,193) |
(11,086) |
|
| Deferred revenue |
4,351 |
(14,131) |
|
| Income taxes |
16,335 |
(14,983) |
|
| Other operating activities |
(7,536) |
5,582 |
|
| Net cash provided by operating activities |
183,331 |
78,308 |
|
| Cash flows from investing activities: |
|||
| Purchases of property and equipment |
(22,443) |
(26,918) |
|
| Proceeds from the sale of business |
27,580 |
161,206 |
|
| Acquisition of business, net of cash acquired |
(59,876) |
0 |
|
| Acquisition of intangible assets |
(3,500) |
(1,232) |
|
| Purchase of long-term |
(9,125) |
0 |
|
| Purchases of investments and marketable securities |
(347,609) |
(991,633) |
|
| Maturities of investments and marketable securities |
145,028 |
607,996 |
|
| Proceeds from sales of investments and marketable securities |
164,410 |
303,801 |
|
| Net cash provided by (used in) investing activities |
(105,535) |
53,220 |
|
| Cash flows from financing activities: |
|||
| Purchase of treasury stock |
(54,373) |
(160,200) |
|
| Proceeds from exercise of stock options and stock purchase plan purchases |
3,361 |
13,009 |
|
| Excess tax benefit from equity-based compensation |
1,578 |
1,392 |
|
| Net cash used in financing activities |
(49,434) |
(145,799) |
|
| Effect of exchange rate changes on cash |
(40) |
1,835 |
|
| Net increase in cash and cash equivalents |
28,322 |
(12,436) |
|
| Cash balance of discontinued operations at beginning of period |
0 |
1,301 |
|
| Less: Cash balance of discontinued operations at end of period |
0 |
0 |
|
| Cash and cash equivalents at beginning of period |
36,418 |
47,553 |
|
| Cash and cash equivalents at end of period |
$ 64,740 |
$ 36,418 |
|
| Supplemental disclosures of cash flow information: |
|||
| Income taxes paid |
$ 20,059 |
$ 65,364 |
|
| ZEBRA TECHNOLOGIES CORPORATION AND SUBSIDIARIES SUPPLEMENTAL SALES INFORMATION (Amounts in thousands) (Unaudited) |
|||||||||
| SALES BY PRODUCT CATEGORY |
|||||||||
| Three Months Ended |
|||||||||
| Product Category |
December 31, 2012 |
December 31, 2011 |
Percent Change |
Percent of Net Sales - 2012 |
Percent of Net Sales – 2011 |
||||
| Hardware |
$ 182,267 |
$ 188,198 |
(3.2) |
72.0 |
76.1 |
||||
| Supplies |
57,607 |
46,135 |
24.9 |
22.8 |
18.6 |
||||
| Service and software |
11,922 |
11,594 |
2.8 |
4.7 |
4.7 |
||||
| Subtotal products |
251,796 |
245,927 |
2.4 |
99.5 |
99.4 |
||||
| Shipping and handling |
1,383 |
1,381 |
0.1 |
0.5 |
0.6 |
||||
| Total net sales |
$ 253,179 |
$ 247,308 |
2.4 |
100.0 |
100.0 |
||||
| Twelve Months Ended |
|||||||||
| Product Category |
December 31, 2012 |
December 31, 2011 |
Percent Change |
Percent of Net Sales - 2012 |
Percent of Net Sales – 2011 |
||||
| Hardware |
$ 730,489 |
$ 743,308 |
(1.7) |
73.4 |
75.5 |
||||
| Supplies |
212,499 |
187,457 |
13.4 |
21.3 |
19.1 |
||||
| Service and software |
47,941 |
47,206 |
1.6 |
4.8 |
4.8 |
||||
| Subtotal products |
990,929 |
977,971 |
1.3 |
99.5 |
99.4 |
||||
| Shipping and handling |
5,239 |
5,517 |
(5.0) |
0.5 |
0.6 |
||||
| Total net sales |
$ 996,168 |
$ 983,488 |
1.3 |
100.0 |
100.0 |
||||
| SALES BY GEOGRAPHIC REGION |
|||||||||
| Three Months Ended |
|||||||||
| Geographic Region |
December 31, 2012 |
December 31, 2011 |
Percent Change |
Percent of Net Sales - 2012 |
Percent of Net Sales - 2011 |
||||
| Europe, Middle East and Africa |
$ 83,355 |
$ 88,360 |
(5.7) |
32.9 |
35.7 |
||||
| Latin America |
26,255 |
21,578 |
21.7 |
10.4 |
8.7 |
||||
| Asia-Pacific |
31,665 |
32,470 |
(2.5) |
12.5 |
13.1 |
||||
| Total International |
141,275 |
142,408 |
(0.8) |
55.8 |
57.5 |
||||
| North America |
111,904 |
104,900 |
6.7 |
44.2 |
42.5 |
||||
| Total net sales |
$ 253,179 |
$ 247,308 |
2.4 |
100.0 |
100.0 |
||||
| Twelve Months Ended |
|||||||||
| Geographic Region |
December 31, 2012 |
December 31, 2011 |
Percent Change |
Percent of Net Sales - 2012 |
Percent of Net Sales - 2011 |
||||
| Europe, Middle East and Africa |
$ 322,970 |
$ 342,578 |
(5.7) |
32.4 |
34.8 |
||||
| Latin America |
100,101 |
89,715 |
11.6 |
10.0 |
9.1 |
||||
| Asia-Pacific |
137,577 |
141,987 |
(3.1) |
13.8 |
14.5 |
||||
| Total International |
560,648 |
574,280 |
(2.4) |
56.2 |
58.4 |
||||
| North America |
435,520 |
409,208 |
6.4 |
43.8 |
41.6 |
||||
| Total net sales |
$ 996,168 |
$ 983,488 |
1.3 |
100.0 |
100.0 |
||||
| ZEBRA TECHNOLOGIES CORPORATION AND SUBSIDIARIES PRINTER UNITS and AVERAGE UNIT PRICES (Unaudited) |
|||||
| Three Months Ended |
|||||
| December 31, |
December 31, |
Percent |
|||
| 2012 |
2011 |
Change |
|||
| Total printers shipped |
321,314 |
312,409 |
2.9 |
||
| Average selling price of printers shipped |
$477 |
$506 |
(5.7) |
||
| Twelve Months Ended |
|||||
| December 31, |
December 31, |
Percent |
|||
| 2012 |
2011 |
Change |
|||
| Total printers shipped |
1,260,141 |
1,188,892 |
6.0 |
||
| Average selling price of printers shipped |
$485 |
$527 |
(7.9) |
||
| 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 |
SOURCE Zebra Technologies Corporation
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