-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, A5DBC2+4JiXJknPybFzV3Fu7mV+MZIqt+gt4cKoWyDZwWrhT2UklC6XYco20S0Z0 grh7ATQBsvr+M+IN+jHkkw== /in/edgar/work/20000810/0000912057-00-035886/0000912057-00-035886.txt : 20000921 0000912057-00-035886.hdr.sgml : 20000921 ACCESSION NUMBER: 0000912057-00-035886 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20000701 FILED AS OF DATE: 20000810 FILER: COMPANY DATA: COMPANY CONFORMED NAME: ZEBRA TECHNOLOGIES CORP/DE CENTRAL INDEX KEY: 0000877212 STANDARD INDUSTRIAL CLASSIFICATION: [3560 ] IRS NUMBER: 366966580 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 000-19406 FILM NUMBER: 690464 BUSINESS ADDRESS: STREET 1: 333 CORPORATE WOODS PKWY CITY: VERNON HILLS STATE: IL ZIP: 60061 BUSINESS PHONE: 7086346700 10-Q 1 a10-q.txt 10-Q UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q [ X ] Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the quarterly period ended July 1, 2000 Commission File Number: 000-19406 Zebra Technologies Corporation ------------------------------ (Exact name of registrant as specified in its charter) Delaware 36-2675536 ------------------------------- ---------- (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 333 Corporate Woods Parkway, Vernon Hills, IL 60061 --------------------------------------------------- (Address of principal executive offices) (Zip Code) (847) 634-6700 -------------- (Registrant's telephone number, including area code) Indicate by check mark whether the registrant has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and has been subject to such filing requirements for the past 90 days. [ X ] Yes [ ] No As of August 9, 2000, there were the following shares outstanding: Class A Common Stock, $.01 par value 24,309,061 Class B Common Stock, $.01 par value 6,096,042
ZEBRA TECHNOLOGIES CORPORATION AND SUBSIDIARIES QUARTER ENDED JULY 1, 2000 INDEX
PAGE ---- PART I - FINANCIAL INFORMATION Item 1. Consolidated Financial Statements Independent Auditors' Review Report 3 Consolidated Balance Sheets as of July 1, 2000 (unaudited) and December 31, 1999 4 Consolidated Statements of Earnings (unaudited) for the three and six months ended July 1, 2000 and July 3, 1999 5 Consolidated Statements of Comprehensive Income (unaudited) for the three and six months ended July 1, 2000 and July 3, 1999 6 Consolidated Statements of Cash Flows (unaudited) for the three and six months ended July 1, 2000 and July 3, 1999 7 Notes to Consolidated Financial Statements 8 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 9 Item 3. Quantitative and Qualitative Disclosures About Market Risk 12 PART II - OTHER INFORMATION Item 4. Submissions of Matters to a Vote of Security Holders 13 Item 6. Exhibits and Reports on Form 8-K 14 SIGNATURES 15
2 PART I - FINANCIAL INFORMATION ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS INDEPENDENT AUDITORS' REVIEW REPORT The Board of Directors and Shareholders Zebra Technologies Corporation: We have reviewed the consolidated balance sheet of Zebra Technologies Corporation and subsidiaries as of July 1, 2000, and the related consolidated statements of earnings and comprehensive income for the three-month and six-month periods ended July 1, 2000 and July 3, 1999, and cash flows for the six-month periods ended July 1, 2000 and July 3, 1999. These consolidated financial statements are the responsibility of the Company's management. We conducted our review in accordance with standards established by the American Institute of Certified Public Accountants. A review of interim financial information consists principally of applying analytical procedures to financial data and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with generally accepted auditing standards, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion. Based on our review, we are not aware of any material modifications that should be made to the accompanying consolidated financial statements for them to be in conformity with generally accepted accounting principles. We have previously audited, in accordance with generally accepted auditing standards, the consolidated balance sheet of Zebra Technologies Corporation and subsidiaries as of December 31, 1999, and the related consolidated statements of earnings, comprehensive income, shareholders' equity, and cash flows for the year then ended (not presented herein); and in our report dated January 31, 2000, we expressed an unqualified opinion on those consolidated financial statements. In our opinion, the information set forth in the accompanying consolidated balance sheet as of December 31, 1999 is fairly stated, in all material respects, in relation to the consolidated balance sheet from which it has been derived. /s/KPMG LLP Chicago, Illinois July 17, 2000 3 ZEBRA TECHNOLOGIES CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (Amounts in thousands, except share and per share data)
JULY 1, DECEMBER 31, 2000 1999 ---------------- -------------- (Unaudited) ASSETS Current assets: Cash and cash equivalents $ 41,189 $ 38,501 Investments and marketable securities 134,524 197,067 Accounts receivable, net 78,967 62,870 Inventories 55,514 42,379 Deferred income taxes 3,353 3,467 Prepaid expenses 3,338 1,614 ---------------- -------------- Total current assets 316,885 345,898 ---------------- -------------- Property and equipment at cost, less accumulated depreciation and amortization 41,113 41,686 Long-term deferred income taxes 1,760 - Excess of cost over fair value of net assets acquired 35,128 189 Other intangibles 30,947 - Other assets 6,007 6,870 ---------------- -------------- TOTAL ASSETS $ 431,840 $ 394,643 ================ ============== LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Accounts payable $ 32,534 $ 23,798 Accrued liabilities 10,378 11,295 Short-term note payable 35,188 196 Current portion of obligation under capital lease with related party 181 264 Income taxes payable 7,473 7,541 ---------------- -------------- Total current liabilities 85,754 43,094 ---------------- -------------- Obligation under capital lease, less current portion 446 571 Long-term liability 74 93 Deferred income taxes - 1,473 Other 154 105 ---------------- -------------- TOTAL LIABILITIES 86,428 45,336 ---------------- -------------- Shareholders' equity: Preferred stock, $.01 par value; 10,000,000 shares authorized, none outstanding - - Class A Common Stock, $.01 par value; 50,000,000 shares authorized, 25,430,945 and 24,877,501 shares issued; 24,584,645 and 24,877,501 shares outstanding in 2000 and 1999, respectively 254 249 Class B Common Stock, $.01 par value; 28,358,189 shares authorized, 6,115,571 and 6,540,188 shares issued and outstanding in 2000 and 1999, respectively 61 65 Additional paid-in capital 63,483 60,072 Treasury stock (846,300 shares) (37,836) - Retained earnings 321,283 289,404 Accumulated other comprehensive income (1,833) (483) ---------------- -------------- TOTAL SHAREHOLDERS' EQUITY 345,412 349,307 ---------------- -------------- TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 431,840 $ 394,643 ================ ==============
See accompanying notes to consolidated financial statements. 4 ZEBRA TECHNOLOGIES CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF EARNINGS (Amounts in thousands, except per share data) (Unaudited)
THREE MONTHS ENDED SIX MONTHS ENDED --------------------------- ---------------------------- JULY 1, JULY 3, JULY 1, JULY 3, 2000 1999 2000 1999 ------------- ------------ ------------- ------------- Net sales $ 128,355 $ 97,321 $ 226,975 $ 187,143 Cost of sales 66,043 48,618 115,282 95,983 ------------- ------------ ------------- ------------- Gross profit 62,312 48,703 111,693 91,160 Operating expenses: Selling and marketing 12,469 9,684 23,082 18,756 Research and development 7,370 5,461 13,118 11,123 General and administrative 8,501 8,155 16,235 16,002 Amortization of intangible assets 1,344 75 1,411 152 Acquired in-process technology 5,953 - 5,953 - Merger costs 1,732 1,291 2,741 3,160 ------------- ------------ ------------- ------------- Total operating expenses 37,369 24,666 62,540 49,193 ------------- ------------ ------------- ------------- Operating income 24,943 24,037 49,153 41,967 ------------- ------------ ------------- ------------- Other income (expense): Investment income 3,316 2,922 6,531 5,207 Interest expense (15) (15) (33) (18) Other, net (2,228) (186) (5,840) (148) ------------- ------------ ------------- ------------- Total other income 1,073 2,721 658 5,041 ------------- ------------ ------------- ------------- Income before income taxes 26,016 26,758 49,811 47,008 Income taxes 9,366 9,636 17,932 17,236 ------------- ------------ ------------- ------------- Net income $ 16,650 $ 17,122 $ 31,879 $ 29,772 ============= ============ ============= ============= Basic earnings per share $ 0.54 $ 0.55 $ 1.02 $ 0.96 Diluted earnings per share $ 0.53 $ 0.55 $ 1.01 $ 0.95 Basic weighted average shares outstanding 30,976 31,043 31,133 31,018 Diluted weighted average and equivalent shares outstanding 31,372 31,283 31,559 31,233
See accompanying notes to consolidated financial statements. 5 ZEBRA TECHNOLOGIES CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Amounts in thousands) (Unaudited)
THREE MONTHS ENDED SIX MONTHS ENDED -------------------------- -------------------------- JULY 1, JULY 3, JULY 1, JULY 3, 2000 1999 2000 1999 -------------------------- -------------------------- Net income $ 16,650 $ 17,122 $ 31,879 $ 29,772 Other comprehensive income (loss): Foreign currency translation adjustment (912) (790) (1,350) (2,118) -------------------------- -------------------------- Comprehensive income $ 15,738 $ 16,332 $ 30,529 $ 27,654 ========================== ==========================
See accompanying notes to consolidated financial statements. 6 ZEBRA TECHNOLOGIES CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (Amounts in thousands) (Unaudited)
SIX MONTHS ENDED --------------------------------- JULY 1, JULY 3, 2000 1999 --------------------------------- Cash flows from operating activities: Net income $ 31,879 $ 29,772 Adjustments to reconcile net income to net cash provided by (used in) operating activities: Depreciation and amortization 6,522 4,892 Acquired in-process technology 5,953 -- Depreciation (appreciation) in market value of investments and marketable securities 2,898 (1,807) Deferred income taxes (3,119) 6 Changes in assets and liabilities, net of business acquired: Accounts receivable, net (2,132) (7,412) Inventories (5,841) 7,526 Other assets 1,040 (95) Accounts payable 2,632 (2,967) Accrued expenses (2,342) 1,326 Income taxes payable (68) 1,912 Other operating activities (2,119) (291) Investments and marketable securities 60,195 (19,518) -------------- ------------- Net cash provided by operating activities 95,498 13,344 -------------- ------------- Cash flows from investing activities: Purchases of property and equipment (3,247) (4,719) Acquisition of Comtec Information Systems, net of cash acquired (88,477) -- -------------- ------------- Net cash used in investing activities (91,724) (4,719) -------------- ------------- Cash flows from financing activities: Purchase of treasury stock (37,836) -- Proceeds from exercise of stock options 3,412 3,128 Issuance (repayment) of notes payable 34,973 (18) Issuance of (payments for) obligation under capital lease (285) 20 -------------- ------------- Net cash provided by financing activities 264 3,130 -------------- ------------- Effect of exchange rate changes on cash (1,350) (2,118) -------------- ------------- Net increase in cash and cash equivalents 2,688 9,637 Cash and cash equivalents at beginning of period 38,501 18,379 -------------- ------------- Cash and cash equivalents at end of period $ 41,189 $ 28,016 ============== ============= Supplemental disclosures of cash flow information: Interest paid $ 33 $ 18 Income taxes paid 23,568 15,860
See accompanying notes to consolidated financial statements. 7 ZEBRA TECHNOLOGIES CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS NOTE 1 - BASIS OF PRESENTATION The consolidated financial statements included herein have been prepared by Zebra Technologies Corporation and subsidiaries (the Company), without audit, pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations. These consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company's latest Annual Report on Form 10-K filed with the Securities and Exchange Commission. The consolidated balance sheet as of December 31, 1999, presented herein, has been derived from the audited consolidated balance sheet contained in the Annual Report on Form 10-K. In the opinion of the Company, the interim consolidated financial statements reflect all adjustments necessary to present fairly the consolidated financial position of the Company as of July 1, 2000, and the consolidated results of operations for the three months and six months ended July 1, 2000, and cash flows for the six months ended July 1, 2000, and July 3, 1999. The results of operations for such interim periods are not necessarily indicative of the results for the full year. NOTE 2 - ACQUISITION OF COMTEC INFORMATION SYSTEMS, INC. On April 3, 2000, the Company acquired Comtec Information Systems, Inc. ("Comtec"), acquiring all of the outstanding capital stock of Comtec for approximately $88,477,000 in cash. Located in Warwick, Rhode Island, Comtec had been a privately held company. Comtec designs, manufactures and supports portable wireless thermal printing solutions. The acquisition was accounted for under the purchase method. Accordingly, the purchase price has been allocated to identifiable tangible assets and intangible assets acquired and liabilities assumed based on their estimated fair values. Estimated amounts allocated to acquired in-process technology were expensed at the time of the acquisition. The excess of cost over net assets acquired is amortized on a straight-line basis over the expected period to be benefited of 20 years. The consolidated statements of operation reflect the results of operations of Comtec since the effective date of the acquisition. The following summary presents information concerning the purchase price allocation for the Comtec acquisition:
Amount (in thousands) Net tangible assets $ 15,236 Acquired in-process technology 5,953 Intangible assets 31,786 Goodwill 35,502 -------------- Purchase price $ 88,477 ==============
The following unaudited proforma summary presents Zebra's results of operations as if the Comtec acquisition had occurred at the beginning of each period. This summary is provided for information purposes only. It does not necessarily reflect the actual results that would have occurred had the acquisition been made as of their respective dates, or of results that may occur.
SIX MONTHS ENDED ------------------------------------ JULY 1, JULY 3, 2000 1999 ----------------- -------------- (in thousands ,except per share data) Net sales $ 249,513 $ 211,244 Net income 31,633 29,565 Diluted net income per share $ 1.00 $ 0.95
8 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS RESULTS OF OPERATIONS: SECOND QUARTER OF 2000 VERSUS SECOND QUARTER OF 1999, AND YEAR-TO-DATE 2000 VERSUS YEAR-TO-DATE 1999 Net sales for the second quarter of 2000, which include sales by Comtec, increased 31.9% to $128,355,000 from $97,321,000. Hardware sales (printers and replacement parts) increased 30.9%, sales of supplies advanced 20.8%, and service and software revenue increased 154.1%. As a percentage of net sales, hardware sales accounted for 79.7%, compared with 80.3% for the second quarter of 1999. Compared with the second quarter of 1999, supplies sales amounted to 16.0% of net sales versus 17.5%, and service and software revenue accounted for 4.3% of net sales versus 2.2%. The decline in percentage of sales derived from supplies and increasing percentage of service and software revenue were principally due to the effect of Comtec's results on the Company's sales mix. For the year to-date, net sales increased 21.3% to $226,975,000 from 187,143,000. International sales totaled $48,046,000, or 37.4% of second quarter sales, compared with $38,725,000, or 39.8% of net sales for the second quarter of 1999, for a 24.1% increase. The decline in the percentage of international sales was principally due to the lower proportion of international sales from Comtec. For the second quarter of 2000, net sales in North America increased 37.1%. The Company recorded growth in all of its international geographic territories, particularly in Europe and Asia Pacific. Management believes that international markets continue to hold significant growth opportunities for the Company. For the first six months of 2000, international sales increased 22.2% to $92,094,000, or 40.6% of net sales, from $75,369,000, or 40.3% of net sales. Gross profit for the second quarter of 2000 increased 27.9% to $62,312,000 from $48,703,000. As a percentage of net sales, gross profit decreased to 48.5% from 50.0%. Foreign currency translation on products sold into Europe, the Company's largest international region, and generally lower gross margin percentages on Comtec products lowered gross profit margin. Higher production volume and lower component costs on the Company's established business partially offset the negative impacts of foreign currency translation and product mix. For the year to-date, gross profit for 2000 totaled $111,693,000, or 49.2% of net sales, compared with $91,160,000, or 48.7% of net sales, for overall growth of 22.5%. Selling and marketing expenses for the second quarter of 2000 increased 28.8% to $12,469,000 from $9,684,000 for the second quarter of 1999. The growth in selling and marketing expenses was primarily due to increased payroll and business development expenses related to the Comtec acquisition, as well as additional personnel in the Company's established business units. The Company has undertaken these investments in sales and marketing human resources to generate higher levels of sales. As a percentage of net sales, second quarter selling and marketing expenses decreased to 9.7% from 10.0%. For the first six months of 2000, selling and marketing expenses increased 23.1% to $23,082,000 from $18,756,000 for the corresponding period in 1999. As a percentage of net sales for the year to-date, selling and marketing expenses were 10.2% in 2000, compared with 10.0% in 1999. Research and development expenses for the second quarter of 2000 increased 35.0% to $7,370,000 from $5,461,000. Increases in personnel-related expenses from higher staffing levels, primarily related to the Comtec acquisition, fees for outside professional services, and project expenses were largely responsible for the overall increase. As a percentage of net sales, quarterly research and development expenses increased to 5.7% from 5.6%. For the first six months of 2000, research and development expenses increased 17.9% to $13,118,000 from $11,123,000. On a year-to-date basis, research and development expenses represented 5.8% of net sales in 2000 and 5.9% in 1999. General and administrative expenses for the second quarter of 2000 increased by 4.2% to $8,501,000 from $8,155,000. Higher non-payroll expenses and payments for outside professional service were partially offset by lower payroll-related expense and overhead allocations. As a percentage of net sales, quarterly general and administrative expenses decreased to 6.6% from 8.4%. For the first six months of 2000, general and administrative expenses increased 1.5% to $16,235,000, or 7.2% of net sales, from $16,002,000, or 8.6% of net sales. Amortization of intangible assets totaled $1,344,000 for the second quarter of 2000, compared with $75,000 for the same period in 1999. The increase in amortization of intangible assets was related to the Comtec acquisition. For the first six months of 2000, amortization of intangible assets totaled $1,411,000, compared with $152,000 for the corresponding period in 1999. 9 In April 2000, the Company acquired printer and wireless technology as part of its acquisition of Comtec. A portion of the purchase price was attributed to acquired in-process technology, as the development work associated with the projects had not yet reached technical feasibility and was believed to have no alternative future use. The Company assessed the fair value of the acquired in-process technology using an income approach. During the second quarter of 2000, the company recorded a $5,953,000 charge to write-off this acquired in-process technology. During the second quarter of 2000, the Company recorded $1,732,000 in merger integration costs related to the integration of both Comtec and Eltron International, Inc., which the Company acquired in October 1998. For the second quarter of 1999, merger costs totaled $1,291,000. These costs, which could not be provided for at the time of the transactions, consisted principally of information technology expenditures to integrate Eltron operations into the Company's enterprise-wide resource planning (ERP) system. The Company expects to incur merger costs principally related to the Comtec acquisition through the second quarter of 2001. For the year to-date in 2000, merger costs totaled $2,741,000, compared with 3,160,000 for the year to-date in 1999. Operating income for the second quarter of 2000 increased 3.8% to $24,943,000, or 19.4% of net sales, from $24,037,000, or 24.7% of net sales. Excluding the merger-related costs and the charge for acquired in-process technology described above, operating income increased 28.8% to $32,628,000, or 25.4% of net sales from $25,328,000, or 26.0% of net sales. For the first six months of 2000, operating income totaled $49,153,000, or 21.7% of net sales, which was up 17.1% from $41,967,000 for the same period in 1999. Excluding the merger-related costs and the charge for acquired in-process technology, year-to-date operating income increased 36.1% to $71,234,000, or 31.4% of net sales, from $52,353,000, or 28.0% of net sales. Investment income for the second quarter of 2000 increased 13.5% to $3,316,000 from $2,922,000. The increase was primarily due to higher returns on lower invested balances in marketable securities. For the year to-date, investment income totaled $6,531,000 in 2000, up 25.4% from $5,207,000 in 1999. Other expenses for the second quarter of 2000 included $1,939,000 in losses from foreign currency transactions on the value of euro-denominated cash deposits and receivables from customers and pound sterling-denominated receivables from the Company's U.K. subsidiary. For the second quarter of 1999, the Company recorded a loss from foreign currency transactions of $474,000. The Company has implemented certain currency hedging strategies to minimize the effects of foreign currency transactions for the second half of 2000. For the first six months of 2000, other expense totaled $5,840,000, compared with $148,000 for the same period in 1999. Income before income taxes for the second quarter of 2000 was $26,016,000, compared with $26,758,000 for the same period in 1999, for a decrease of 2.8%. For the year to-date, income before income taxes amounted to $49,811,000, up 6.0% from $47,008,000 for the first six months of 1999. The effective income tax rate for the second quarter of 2000 was unchanged at 36.0% from the second quarter of 1999. Net income was $16,650,000, or $0.53 per diluted share, compared with $17,122,000, or $0.55 per share (basic and diluted). Excluding merger costs and the charge for acquired in-process technology, net income for the second quarter of 2000 was $21,568,000, or $0.69 per diluted share, compared with $17,956,000, or $0.57 per share, for the second quarter in 1999. For the year to-date, the effective income tax rate for 2000 was 36.0%, compared with 36.7% for the first six months of 1999. Net income was $31,879,000, up 7.1% from $29,772,000. On a per-share basis, diluted earnings were $1.01 for the first six months of 2000, compared with $0.95 for the same period in 1999. Excluding merger costs and the charge for acquired in-process technology, net income for the first six months of 2000 was $37,443,000, or $1.19 per diluted share, up 17.8% from $31,773,000, or $1.02 per diluted share, for the corresponding period in 1999. LIQUIDITY AND CAPITAL RESOURCES The Company's principal source of liquidity continues to be cash generated from operations. Cash and cash equivalents and investments and marketable securities totaled $175,713,000 at July 1, 2000, compared with $235,568,000 at December 31, 1999. As of July 1, 2000, the Company had a $35,188,000 short-term loan outstanding, the proceeds of which were used to fund the Comtec acquisition, which was completed on April 3, 2000. The interest rate on this loan, which is in the form of a reverse repurchase agreement, was calculated at 10 basis points over the 90-day London Interbank Offer Rate 10 (LIBOR) and was fixed for 90 days from the time of funding on March 31, 2000, at 6.38%. Management expects to repay the loan from the liquidation of a corresponding amount of securities from the Company's investment portfolio. Management believes that existing capital resources and funds generated from operations are sufficient to finance anticipated capital requirements. SIGNIFICANT CUSTOMER No single customer comprised 10.0% or more of the Company's sales for the second quarter of 2000 or the year to-date. SAFE HARBOR Forward-looking statements contained in this filing are subject to the safe harbor created by the Private Securities Litigation Reform Act of 1995 and are highly dependent upon a variety of important factors which could cause actual results to differ materially from those reflected in such forward looking statements. These factors include market acceptance of the Company's printer and software products and competitors' product offerings. They also include the success and speed of the Company's integration with Comtec, as well as the effect of market conditions in the North America and other geographic regions on the Company's financial results. Profits will be affected by the Company's ability to control manufacturing and operating costs. Because of the Company's large investment portfolio, interest rate and financial market conditions will also have an impact on results. Foreign exchange rates will have an effect on financial results due to the large percentage of the Company's international sales. When used in this document 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. Readers of this document are referred to prior filings with the Securities and Exchange Commission, including the Company's Form 10-K for the year ended December 31, 1999, for further discussions of issues that could affect the Company's future results. 11 ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK There have been no material changes in the Company's market risk during the second quarter ended July 1, 2000. For additional information on market risk, refer to the "Quantitative and Qualitative Disclosures About Market Risk" section of the Company's Annual Report on Form 10-K for the year ended December 31, 1999. 12 PART II - OTHER INFORMATION ITEM 4. SUBMISSIONS OF MATTERS TO A VOTE OF SECURITY HOLDERS (a) The Company held its Annual Meeting of Stockholders on May 16, 2000. (b) The Company's shareholders voted on the following proposals: 1. To elect six directors to the Company's Board of Directors.
Authority Directors For Withheld --------- --- --------- Gerhard Cless 81,710,244 335,025 Edward Kaplan 81,712,254 333,015 Christopher Knowles 81,854,585 190,684 David Riley 81,848,911 196,358 Donald Skinner 81,707,734 337,535 Michael Smith 81,856,920 188,349
2. To ratify the selection by the Board of Directors of KPMG LLP as the independent auditors of the Company's financial statements for the year ending December 31, 2000.
Authority Broker For Against Withheld Abstentions Non-votes --- ------- -------- ----------- --------- 81,975,268 20,352 -- 49,649 --
13 ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K (a) Exhibits. 15.1 Acknowledgment of Independent Certified Public Accountants Regarding Independent Auditors' Review Report 27.1 Financial Data Schedule (b) Reports. The Registrant filed one Form 8-K report dated April 18, 2000, and one Form 8-K/A report dated June 15, 2000. Both reports are related to the Comtec acquisition.
14 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. ZEBRA TECHNOLOGIES CORPORATION Date: August 10, 2000 By: /s/ Edward L. Kaplan -------------------- Edward L. Kaplan Chief Executive Officer Date: August 10, 2000 By: /s/ Charles R. Whitchurch ------------------------- Charles R. Whitchurch Chief Financial Officer 15 EX-15.1 2 ex-15_1.txt EX 15.1 Exhibit 15.1 ACKNOWLEDGMENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS REGARDING INDEPENDENT AUDITORS' REVIEW REPORT Zebra Technologies Corporation 333 Corporate Woods Parkway Vernon Hills, Illinois 60061-3109 Ladies and Gentlemen: With respect to the registration statements (No. 33-44706, No. 33-72774, No. 333-59733, and No. 333-63009) on Form S-8 of Zebra Technologies Corporation, we acknowledge our awareness of the incorporation by reference therein of our report dated July 17, 2000, related to our review of interim financial information as of July 1, 2000. Pursuant to Rule 436(c) under the Securities Act of 1933, such report is not considered part of a registration statement prepared or certified by an accountant or a report prepared or certified by an accountant within the meaning of Sections 7 and 11 of the Act. Very truly yours, /s/ KPMG LLP Chicago, Illinois August 7, 2000 EX-27.1 3 ex-27_1.txt EX 27.1
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM ZEBRA TECHNOLOGIES CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEET AS OF JULY 1, 2000, AND CONSOLIDATED STATEMENT OF EARNINGS FOR THE SIX MONTHS ENDED JULY 1, 2000, AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA. 1,000 6-MOS DEC-31-2000 JAN-01-2000 JUL-01-2000 41,189 134,524 80,459 (1,492) 55,514 316,885 79,972 (38,859) 431,840 85,754 0 0 0 315 345,097 431,840 221,349 226,975 113,098 115,282 62,614 (74) 33 49,811 17,932 31,879 0 0 0 31,879 1.02 1.01
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