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Zebra Technologies Announces Financial Results for the 2012 Fourth Quarter and Full Year
Submitted by admin on 2/12/2013 @ 12:00 AM
Companies mentioned in this article:
Zebra Technologies Corporation
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 $34,799 $32,859 5.9%
operations (in 000s)
Income from discontinued $191 $2,185 N/M
operations, net of tax
(in 000s)
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, December 31,
2012 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, December 31, 2012 December 31,
2011 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-terminvestment (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
------------------
December 31, December 31, Percent Percent of Percent of
Product
Category 2012 2011 Change Net Sales - 2012 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
-------------------
December 31, December 31, Percent Percent of Percent of
Product
Category 2012 2011 Change Net Sales - 2012 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
------------------
December 31, December 31, Percent Percent of Percent of
Geographic Region 2012 2011 Change Net Sales - 2012 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
December 31, December 31, Percent Percent of Percent of
Geographic Region 2012 2011 Change Net Sales - 2012 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
dfox@zebra.com rkristopher@zebra.com
SOURCE Zebra Technologies Corporation