Zebra Technologies Announces 2012 Third Quarter Financial Results
Results include $9.1 million non-cash asset impairment charge; Record sales in North America and Latin America offset weakness in Europe
Lincolnshire, IL, November 6, 2012─Zebra Technologies Corporation (NASDAQ: ZBRA) today announced 2012 third quarter continuing operations diluted earnings per share of $0.51, including a noncash asset impairment charge of $9,114,000, which reduced earnings by $0.18 per share. Earnings from continuing operations for the third quarter of 2011 totaled $0.64 per share. Net sales for the quarter ended September 29, 2012, decreased 0.5% to $252,037,000 from $253,338,000 for the third quarter of 2011. Movements in foreign exchange rates decreased sales by $3,767,000, or 1.5 percentage points, from a weaker euro against the U.S. dollar, compared with a year ago.
"Zebra delivered strong results in a challenged environment on the basis of the diversity of our business," stated Anders Gustafsson, Zebra's chief executive officer. "Investments in sales resources and channel expansion have resulted in engagements with more customers in targeted markets. In addition, we are serving our customers with a broader array of innovative solutions from a more efficient and productive product development process. During the quarter, we also deployed $75 million on the acquisition of LaserBand and share buybacks. We remain confident in our ability to deliver increasing returns to enhance shareholder value over the long term."
As of September 29, 2012, Zebra had $368,795,000 in cash and investments, and no long-term debt. Net inventories were $122,915,000, and net accounts receivable were $165,160,000.
Discussion and Analysis
- Net sales for the third quarter of 2012 included year-over-year growth of 6.9% in North America and 9.3% in Latin America, both records. This growth offset sales declines of 4.9% in Asia Pacific and 10.6% in the Europe, Middle East and Africa region.
- Gross profit of 50.4%, versus 48.8% 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 third quarter gross profit by $2,939,000.
- Operating expense growth of 18.1% included a non-cash asset impairment charge of $9,114,000, increased amortization costs, higher compensation costs, consulting fees, rent, and depreciation.
- The 2012 effective tax rate increase in the third quarter reflects the non-deductibility of the non-cash asset impairment charge, as well as a rate decrease related to the second quarter implementation of a new structure for Zebra's international subsidiaries. The effect of the non-deductibility of the asset impairment charge increased the effective tax rate by 6.0% for the third quarter of 2012.
Stock Purchase Update
During the third quarter of 2012, Zebra returned $15.0 million to shareholders through the repurchase of 400,000 shares of Zebra Technologies Corporation Class A Common Stock. At September 29, 2012, the company had 2,422,336 shares remaining in its stock buyback authorization, and 51,252,384 shares of common stock were outstanding.
Fourth Quarter Outlook
Zebra announced its financial forecast for the fourth quarter of 2012. Net sales are expected within a range of $245,000,000 to $255,000,000. Diluted earnings per share are expected within a range of $0.62 to $0.70.
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 third 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.
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 fourth quarter of 2012 stated in the paragraph above captioned "Fourth 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. 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 forwardlooking 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.
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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 organisation's assets, people and transactions, enabling organisations 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.