2010 Fourth Quarter Record Earnings
Zebra Technologies Announces Record Earnings per Share in 2010
Investments in geographic expansion contribute to strong growth in international regions
Lincolnshire, IL, February 15, 2011─Zebra Technologies Corporation (NASDAQ: ZBRA) today announced fourth quarter net income of $28,217,000, or a recored $0.50 per diluted share, including $1,134,000 in exit, restructuring and integration costs that reduce diluted earnings by $0.01 per share. Quarterly net sales of $248,175,000 were up 11.5% from $222,522,000 for the same period of 2009. Net income for the fourth quarter of 2009 was $17,630,000, or $0.30 per diluted share, including $2,737,000 in exit, restructuring and integration costs which lowered diluted earnings by $0.03 per share.
"Zebra's sixth quarter of sequential sales growth accompanied
further improvements in gross margin to produce our second quarterly
record in EPS" stated Anders Gustafsson, Zebra's chief executive
officer. "Our success in the fourth quarter and throughout 2010
is a direct result of the leverage we have in our financial strength,
global go-to-market channels, broad product line and other competitive
advantages. During the year we extended our industry leadership with
additional sales representation in high-growth regions, broader and
stronger distribution, and introductions of new, innovative products
that enable us to serve more of our customers' asset tagging needs.
These and other accomplishments make us optimistic in our capacity to
achieve further growth and create greater value for all of our
As of December 31, 2010, Zebra had $259,899,000 in cash and investments, and no long-term debt. Net inventories were
$113,742,000, and net accounts receivable were $154,146,000.
Discussion and Analysis
- Net sales for the fourth quarter of 2010 compared with the
2009 fourth quarter benefited from improved business conditions in
all geographic regions, with the highest growth rates occurring in
Latin America and Asia Pacific. All major printer product categories
and aftermarket parts contributed to the growth. Quarterly sales
increased 14.4% on a constant-currency basis from a year ago.
- Gross margin of 49.8% versus 45.6% a year ago was
principally driven by higher volumes, an improved product mix,
product material savings and lower overhead and freight charges.
These factors were partially offset by unfavorable movements in
foreign exchange rates.
- Operating expenses
increased 10.6% from the fourth quarter of 2009 substantially from
increased selling and marketing and research and development
expenses related to higher costs for compensation, business
development, outside professional services, travel and
entertainment, and project expenses.
- Fourth quarter
operating expenses for 2010 include $1,082,000 in favourable
litigation settlements related to escrow funds associated with prior
- The income tax rate of 29.9% for the
fourth quarter of 2010 reflects an extension of Federal R&D tax
credits. In addition, as Zebra's business continued to expand more
rapidly in international regions that have lower tax rates, the
company's consolidated global tax rate has declined.
For the full year, net sales were $956,848,000, up 19.1% from
$803,585,000. Net income for 2010 totaled $101,778,000,
or a record $1.77 per diluted share, compared with $47,104,000, or $0.79 per diluted share for 2009. Exit, restructuring and integration costs for 2010 totaled $4,197,000 and reduced diluted earnings by $0.05 per share. For 2009, exit, restructuring and integration costs of $12,191,000 lowered diluted earnings by $0.14 per share.
Stock Purchase Update
During the fourth quarter of 2010, Zebra repurchased 900,000 shares of Zebra Technologies Corporation Class A Common Stock. At December 31, 2010, 1,850,000 shares remained in the company's stock buyback authorization, and 55,711,325 shares of common stock were outstanding.
First Quarter Outlook
Zebra announced its financial forecast for the first quarter of
2011. Net sales are expected within a range of $224,000,000 to
$235,000,000, reflecting the pending sale of the company's Navis
operation and certain other assets. For the first quarter of 2010,
Zebra's reported net sales were $226,431,000, including sales for
Navis and the certain other assets in the range of $14,000,000 to
$16,000,000. Adjusting for these sales, the company calculates that
first quarter 2010 net sales were in the range of $210,431,000 and
$212,431,000. Diluted earnings per share from continuing operations
for the first quarter of 2011 are expected within a range of $0.41 to
$0.47, including $0.02 per share in exit, restructuring and
On January 31, 2011, Zebra announced a definitive agreement to sell
its Navis operation and other related assets to Cargotec Corporation
for approximately $190,000,000 in cash. The transaction is expected to
be completed in the first quarter of 2011 and is subject to regulatory
approvals, customary closing conditions and working capital
adjustments. The Navis operation and certain other assets will be
designated as discontinued operations beginning in the first quarter
Conference Call Notification
Investors are invited to listen to a live Internet broadcast of Zebra's conference call discussing the company's financial results for the fourth quarter of 2010. The conference call will be held at 11:00 AM Eastern Time today. To listen to the call, visit the company's Web site at http://www.zebra.com.
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 2011 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
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. Risks to financial
results also include the timing and successful completion of the Navis
divestiture as well as the successful integration of the remaining
portion of Zebra Enterprise Solutions into Zebra. 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, 2009.
About Zebra Technologies
Zebra Technologies Corporation (NASDAQ: ZBRA) gives customers visibility of critical assets, people and transactions through a broad range of printing and location technologies. Our barcode, card, kiosk and RFID printers as well as real-time location solutions have made us a recognised global leader in providing enabling solutions that identify, track, and manage critical assets, people and transactions for improved business efficiencies.
For more information about Zebra's solutions, visit http://www.zebra.com.
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