8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of report (Date of earliest event reported): April 26, 2006

ZEBRA TECHNOLOGIES CORPORATION

(Exact Name of Registrant as Specified in Charter)

Delaware	000-19406	36-2675536
(State or Other Jurisdiction of Incorporation)	(Commission File Number)	(IRS Employer Identification No.)

333 Corporate Woods Parkway, Vernon Hills, Illinois	60061
(Address of Principal Executive Offices)	(Zip Code)

Registrant’s telephone number, including area code: 847-634-6700

(Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13c-4(c))

Item 2.02. Results of Operations and Financial Conditions.

The information contained in this Form 8-K shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.

On April 26, 2006, we announced our results of operations and financial position as of and for the three-month period ended April 1, 2006. The press release is attached hereto as Exhibit 99.1 and is incorporated herein by reference.

Item 9.01. Financial Statements, Pro Forma Financial Information and Exhibits.

(c) Exhibits. The following Exhibit is being furnished herewith:

99.1    Registrant’s Press Release dated April 26, 2006.

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 hereunto duly authorized.

	ZEBRA TECHNOLOGIES CORPORATION
Date: April 26, 2006	By:	/s/ Edward L. Kaplan
		Chairman of the Board and Chief Executive Officer

EX-99.1

Exhibit 99.1

FOR IMMEDIATE RELEASE

Zebra Technologies Announces First Quarter Financial Results for 2006

Vernon Hills, IL, April 26, 2006—Zebra Technologies Corporation (NASDAQ: ZBRA) today announced that net sales for the quarter ended April 1, 2006, were $175,814,000, a 3.0% increase over the $170,727,000 recorded for the first quarter of 2005. Quarterly net income was $26,091,000, or $0.37 per diluted share, compared with $25,819,000, or $0.36 per diluted share, for the same period a year ago. Financial results for 2006 include the cumulative effect of a change in accounting for the adoption of SFAS 123(R), Share-Based Payments. Results for 2005 have been restated to reflect this adoption as well.

“Zebra’s ability to build greater stockholder value remains firmly intact,” stated Edward Kaplan, Zebra’s chairman and chief executive officer. “Robust growth in international territories is the direct result of more Zebra representatives working with a greater number of channel partners. Our expansion activities in China, Eastern Europe and Latin America are extending Zebra’s global reach and enabling us to pursue more business opportunities in these developing market economies. New mobile, tabletop, card and photo printers are receiving excellent customer acceptance and broadening the range of specialty printing applications we serve. Our stronger channel partnerships and alliance relationships are yielding additional large business opportunities that we are now converting into a firm order stream in field force automation, supply chain management, route accounting, and retail.”

Discussion and Analysis

For the first quarter of 2006 compared with the first quarter of 2005:

• All three of the company’s international territories experienced sales growth, with the Europe, Middle East and Africa region achieving record sales in local currencies. Nearly all printer product lines contributed to 12.5% unit volume growth, offset by lower average unit prices. Sales of supplies increased 14.6% for the quarter. Unfavorable foreign currency movements reduced first quarter sales by $5,405,000.

• Gross profit margin declined to 47.0% from 51.0%. During the quarter, unfavorable currency movements reduced first quarter gross profit by $4,855,000. The decline in gross margin also was due to a number of factors including: temporary capacity constraints in label manufacturing, new products currently undergoing ramp up and cost reduction, expediting costs for manufacturing materials to meet increased demand, mix shifts toward lower margin products, increases in material costs related to RoHS compliance, and various pricing actions focused on increasing market share.

• Operating expenses were affected by higher employee-related costs related to increased staffing in global sales and marketing and product development, offset by lower expenditures on legal activities, market development funds, consulting services, and audit and tax service fees.

At April 1, 2006, Zebra had $569,523,000 in cash and investments, and no long-term debt. Inventories totaled $66,605,000. Accounts receivable increased to $116,415,000 from $111,551,000, primarily due to the timing of shipments.

Second Quarter Outlook

Zebra also announced upward sequential guidance in its financial forecast for the second quarter of 2006. Net sales are expected within a range of $180,000,000 and $190,000,000. Earnings are expected within a range of $0.34 and $0.39 per diluted share, compared with $0.35 per diluted share for the second quarter of 2005.

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 2006 stated in the paragraph directly above. 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. We may elect to update forward-looking statements but expressly disclaim any obligation to do so, even if our estimates change.

These forward-looking statements are based on current expectations, forecasts and assumptions and are subject to the risks and uncertainties inherent in general industry and market conditions, of general domestic and international economic conditions, and other factors. These factors include market acceptance of Zebra’s printer and software products and competitors’ product offerings and the potential effects of technological changes. They also include the effect of market conditions in North America and other geographic regions on our financial results. Profits and profitability will be affected by our ability to control manufacturing and operating costs. Because of a 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 because of the large percentage of our international sales. The outcome of litigation in which Zebra is involved, and particularly litigation or claims related to infringement of third party intellectual property rights, is another factor. Also, beginning July 1, 2006, Zebra’s product shipments into the European Union must conform with the RoHS Directive, or “the restriction of the use of certain hazardous substances in electrical and electronic equipment.” This Directive will ban the placing in the EU market of new electrical and electronic equipment containing more than agreed levels of certain substances beginning July 1, 2006. Zebra’s ability to meet this Directive will affect its results in the second and third quarters of 2006. 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, 2005.

Zebra Technologies Corporation delivers innovative and reliable on-demand printing solutions for business improvement and security applications in 100 countries around the world. More than 90 percent of Fortune 500 companies use Zebra-brand printers. A broad range of applications benefit from Zebra-brand thermal bar code, “smart” label, receipt, and card printers, resulting in enhanced security, increased productivity, improved quality, lower costs, and better customer service. The company has sold more than five million printers, including RFID printer/encoders and wireless mobile solutions, and also offers software, connectivity solutions and printing supplies. Information about Zebra bar code, card and RFID products can be found at http://www.zebra.com.

Investors are invited to listen to a live Internet broadcast of Zebra’s conference call discussing the company’s financial results for the first quarter of 2006. The conference call will be held at 11:00 Eastern Time today. To listen to the call, visit the company’s Web site at www.zebra.com.

For Information, Contact:

Charles R. Whitchurch

Chief Financial Officer

Phone: 847.634.6700

Fax: 847.821.2545

ZEBRA TECHNOLOGIES CORPORATION

CONSOLIDATED BALANCE SHEETS

(Amounts in thousands)

	April 1, 2006			December 31, 2005
	(Unaudited)			(Restated)
ASSETS
Current assets:
Cash and cash equivalents	$	17,543		$	25,621
Investments and marketable securities		198,762			518,618
Accounts receivable, net		116,415			111,551
Inventories, net		66,605			63,638
Deferred income taxes		8,097			8,188
Prepaid expenses		5,497			5,098
Total current assets		412,919			732,714
Property and equipment at cost, less accumulated depreciation and amortization		51,610			49,643
Long-term deferred income taxes		6,220			6,216
Goodwill		69,097			69,097
Other intangibles, net		18,555			19,002
Long-term investments and marketable securities		353,218			—
Other assets		40,857			41,743
Total assets	$	952,476		$	918,415
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	22,860		$	24,885
Accrued liabilities		28,109			28,928
Income taxes payable		7,027			535
Total current liabilities		57,996			54,348
Deferred rent		572			574
Other long-term liabilities		5,898			5,521
Total liabilities		64,466			60,443
Stockholders’ equity:
Preferred Stock		—			—
Class A Common Stock		722			722
Additional paid-in capital		135,140			139,433
Treasury stock		(52,060	)		(64,013	)
Retained earnings		805,544			779,453
Accumulated other comprehensive income (loss)		(1,336	)		2,377
Total stockholders’ equity		888,010			857,972
Total liabilities and stockholders’ equity	$	952,476		$	918,415

Note: Figures for December 31, 2005, were restated for the adoption of SFAS 123 (R), Share-Based Payments, using the modified retrospective approach.

ZEBRA TECHNOLOGIES CORPORATION

CONSOLIDATED STATEMENTS OF EARNINGS

(Amounts in thousands, except per share data)

(Unaudited)

	Three Months Ended
	April 1, 2006			April 2, 2005
				(Restated)
Net sales	$	175,814		$	170,727
Cost of sales		93,116			83,599
Gross profit		82,698			87,128
Operating expenses:
Selling and marketing		22,109			21,564
Research and development		12,035			11,052
General and administrative		14,649			15,802
Amortization of intangible assets		747			647
Exit costs		—			1,517
Total operating expenses		49,540			50,582
Operating income		33,158			36,546
Other income (expense):
Investment income		5,207			3,277
Interest expense		(218	)		(3	)
Foreign exchange gains (loss)		110			53
Other, net		(448	)		(304	)
Total other income		4,651			3,023
Income before income taxes and cumulative effect of accounting change		37,809			39,569
Income taxes		13,037			13,750
Income before cumulative effect of accounting change		24,772			25,819
Cumulative effect of accounting change (net of tax)		1,319			—
Net income	$	26,091		$	25,819
Basic earnings per share before cumulative effect of accounting change	$	0.35		$	0.36
Diluted earnings per share before cumulative effect of accounting change	$	0.35		$	0.36
Basic earnings per share	$	0.37		$	0.36
Diluted earnings per share	$	0.37		$	0.36
Basic weighted average shares outstanding		70,566			71,873
Diluted weighted average and equivalent shares outstanding		71,119			72,649

Note: Figures for the three months ended April 2, 2005, were restated for the adoption of SFAS 123 (R), Share-Based Payments, using the modified retrospective approach.

ZEBRA TECHNOLOGIES CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Amounts in thousands)

(Unaudited)

	Three Months Ended
	April 1, 2006			April 2, 2005
				(Restated)
Cash flows from operating activities:
Net income	$	26,091		$	25,819
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		3,669			3,093
Stock-based compensation		1,511			1,975
Additional tax benefit from share-base compensation		575			720
Excess tax benefit from share-base compensation		(1,285	)		(799	)
Cumulative effect of accounting change (net of tax)		(1,319	)		—
Deferred income taxes		94			(158	)
Changes in assets and liabilities:
Accounts receivable, net		(4,298	)		(5,157	)
Inventories		(2,817	)		(4,826	)
Other assets		963			(5,311	)
Accounts payable		(2,225	)		(640	)
Accrued liabilities		(875	)		(2,801	)
Income taxes payable		6,459			9,487
Other operating activities		(920	)		(368	)
Net cash provided by operating activities		25,623			21,034
Cash flows from investing activities:
Purchases of property and equipment		(4,836	)		(2,586	)
Acquisition of assets of Retail Systems International, Inc.		—			(7,700	)
Purchases of investments and marketable securities		(275,517	)		(254,856	)
Maturities of investments and marketable securities		183,300			160,688
Sales of investments and marketable securities		55,284			76,322
Net cash used in investing activities		(41,769	)		(28,132	)
Cash flows from financing activities:
Proceeds from exercise of stock options and stock purchase plan purchases		6,893			3,777
Benefit of stock option exercises in excess of compensation costs recognized		1,285			799
Payments for obligation under capital lease		—			(13	)
Net cash provided by financing activities		8,178			4,563
Effect of exchange rate changes on cash		(110	)		(97	)
Net decrease in cash and cash equivalents		(8,078	)		(2,632	)
Cash and cash equivalents at beginning of period		25,621			17,983
Cash and cash equivalents at end of period	$	17,543		$	15,351
Supplemental disclosures of cash flow information:
Interest paid	$	218		$	3
Income taxes paid		3,442			3,794

Note: Figures for the three months ended April 2, 2005, were restated for the adoption of SFAS 123 (R), Share-Based Payments, using the modified retrospective approach.

ZEBRA TECHNOLOGIES CORPORATION

SUPPLEMENTAL SALES INFORMATION

(Amounts in thousands)

(Unaudited)

Sales by Product Category

	Three Months Ended					Percent Change		Percent of Total Sales
	April 1, 2006		April 2, 2005
Hardware	$	133,468	$	133,470		—		75.9
Supplies		34,326		29,949		14.6		19.5
Service and software		6,231		6,079		2.5		3.5
Shipping and handling		1,417		1,502		(5.7	)	0.9
Cash flow from hedging activities		372		(273	)	NM		0.2
Total sales	$	175,814	$	170,727		3.0		100.0

Sales by Geographic Region

	Three Months Ended				Percent Change		Percent of Total Sales
	April 1, 2006		April 2, 2005
Europe, Middle East and Africa	$	60,681	$	60,580	0.2		34.5
Latin America		12,919		10,127	27.6		7.3
Asia-Pacific		15,227		12,458	22.2		8.7
Total international		88,827		83,165	6.8		50.5
North America		86,987		87,562	(0.7	)	49.5
Total sales	$	175,814	$	170,727	3.0		100.0

ZEBRA TECHNOLOGIES CORPORATION

RESTATED CONSOLIDATED STATEMENTS OF EARNINGS

(Amounts in thousands, except per share data)

(Unaudited)

	For the three months ended												For the year ended
	April 2, 2005			July 2, 2005			October 1, 2005			December 31, 2005			December 31, 2005
Net sales	$	170,727		$	176,614		$	175,636		$	179,294		$	702,271
Cost of sales		83,599			87,467			88,103			89,682			348,851
Gross profit		87,128			89,147			87,533			89,612			353,420
Operating expenses:
Selling and marketing		21,564			23,050			21,290			25,725			91,629
Research and development		11,052			12,386			11,818			12,103			47,359
General and administrative		15,802			17,801			15,631			14,817			64,051
Amortization of intangible assets		647			387			509			798			2,341
Exit costs		1,517			141			283			71			2,012
Total operating expenses		50,582			53,765			49,531			53,514			207,392
Operating income		36,546			35,382			38,002			36,098			146,028
Other income
Investment income		3,277			3,072			3,254			3,814			13,417
Interest expense		(3	)		(27	)		(41	)		(8	)		(79	)
Foreign exchange gain/(loss)		53			812			334			87			1,286
Other, net		(304	)		(243	)		251			(74	)		(370	)
Total other income		3,023			3,614			3,798			3,819			14,254
Income before income taxes		39,569			38,996			41,800			39,917			160,282
Income taxes		13,750			13,551			13,724			13,073			54,098
Net income	$	25,819		$	25,445		$	28,076		$	26,844		$	106,184
Basic earnings per share	$	0.36		$	0.35		$	0.39		$	0.38		$	1.49
Diluted earnings per share	$	0.36		$	0.35		$	0.39		$	0.38		$	1.47
Basic weighted average shares outstanding		71,873			72,013			71,263			70,385			71,364
Diluted weighted average and equivalent shares outstanding		72,649			72,679			71,817			70,940			72,000

Note: Restated for the adoption of SFAS 123 (R), Share-Based Payments, using the modified retrospective approach.