Zebra Technologies Announces Financial Results for the 2013 Second Quarter

Lincolnshire, IL, May 2, 2013─Zebra Technologies Corporation (NASDAQ: ZBRA) today announced 2013 first quarter diluted earnings of $0.46 per share, which includes exit, restructuring and acquisition costs that reduced earnings by $0.04 per share. Earnings for the first quarter of 2012 totaled $0.58 per share. Net sales for the quarter ended March 30, 2013, decreased 2.8% to $236,937,000 from $243,875,000 for the first quarter of 2012.

Summary Financial Performance (Unaudited)





Net sales (in 000s)

  $   236,937

  $  243,875


Gross margin (%)



(1.5) pts.

Operating margin (%)



(5.4) pts.

Net income (in 000s)

  $     23,542

  $     30,164


Diluted earnings per share:

  $         0.46

  $         0.58


"Entering the first quarter, we expected growth in North America for the full quarter to offset the anticipated decline in Europe. However, a slowdown in our North American business during the first half of the period caused some of our distribution channel partners to meaningfully reduce inventories," stated Anders Gustafsson, Zebra's chief executive officer. "During the quarter, our international operations performed largely as expected. Business activity in all regions has now increased, and the pipeline of opportunities has improved. We also made progress on developing new, incremental revenue streams with solutions such as mobile point-of-sale, location solutions and RFID that are emerging with important technology trends. We remain confident in Zebra's continued ability to invest in those areas that deliver the highest risk-adjusted returns and increasing shareholder value."

Mr. Gustafsson added, "Looking ahead, our focus remains on driving growth, but we are cognizant of the ongoing business climate worldwide. As a result, we will remain responsive to these challenges by optimizing our cost structure and allocation of resources, while maintaining investments in important, high-return business development opportunities."

As of March 30, 2013, Zebra had $417,564,000 in cash and investments, and no long-term debt. Net inventories were $116,417,000, and net accounts receivable were $169,255,000.

Discussion and Analysis – First quarter

·         Net sales for the first quarter were affected by the ongoing challenged conditions in Europe and Asia, along with a slowdown in business during the first few weeks of the quarter in North America. Sales increases of 3.8% in Latin America and 0.9% in North America were offset by sales declines of 0.7% in Asia Pacific and 9.8% in the Europe, Middle East and Africa (EMEA) region. On a constant-currency basis, sales in EMEA declined 2.8%. Sales of supplies – thermal ribbons, labels, wristbands and receipts – increased by 14.3%.  

·         Gross profit margin of 47.7%, versus 49.2% in 2012, reflects lower sales across Europe, Middle East and Africa (EMEA), and Asia Pacific regions in addition to unfavorable movements in product mix.

·         Operating expense growth of 9.0%, including $1,895,000 in exit and restructuring costs and $482,000 in acquisition costs. Higher selling and marketing, research and development, and general and administrative expenses generally relate to increased employee-related expenses. Amortization also increased over 2012 levels.

Stock Purchase Update

During the first quarter of 2013, Zebra returned $3.9 million to shareholders through the repurchase of 87,254 shares of Zebra Technologies Corporation Class A Common Stock at an average price of $44.56 per share. At March 30, 2013, the company had 1,935,082 shares remaining in its stock buyback authorization, and 51,017,867 shares of common stock were outstanding.

Second Quarter Outlook

Zebra announced its financial forecast for the second quarter of 2013. Net sales are expected within a range of $246,000,000 to $258,000,000. Diluted earnings per share are expected within a range of $0.58 to $0.67.

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 first 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 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 second quarter of 2013 stated in the paragraph above captioned "Second 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.

Download the full PDF here.

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 www.zebra.com.