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): July 25, 2007

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 July 25, 2007, we announced our results of operations and financial position as of and for the three-month period ended June 30, 2007. The press release is attached hereto as Exhibit 99.1 and is incorporated herein by reference.

Item 9.01. Financial Statements and Exhibits.

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

Exhibit Number	Description of Exhibits
99.1	Registrant’s Press Release dated July 25, 2007.

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: July 25, 2007	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 2007 Second Quarter Financial Results

Vernon Hills, IL, July 25, 2007—Zebra Technologies Corporation (NASDAQ: ZBRA) today announced that net sales for the quarter ended June 30, 2007, were $208,912,000, an increase of 11.5% from $187,421,000 for the second quarter of 2006. Net income for the period was $25,633,000, or $0.37 per diluted share, compared with $27,672,000, or $0.39 per diluted share, a year ago.

“Zebra had record sales in all international territories but encountered some late-quarter order deferrals from retailers in North America and business timing issues in Europe,” stated Edward Kaplan, Zebra’s chairman and chief executive officer. “During the quarter, we achieved many of our operational and strategic goals, including reductions in manufacturing variances, further expansion of international operations and winning more business through the channel and with national accounts. Business continues to benefit from improved sales execution and pipeline management of specialty printing solutions. Our recent entry into active RFID and real-time locating systems has expanded the range of available business opportunities. The outlook for Zebra remains bright. We have great confidence in our ability to generate increasing value for our stockholders.”

Discussion and Analysis

For the second quarter of 2007 compared with the second quarter of 2006:

• All international territories achieved record sales, with growth accelerating in Latin America and Asia Pacific. Moderated sales growth in North America from some project delays, and in the Europe, Middle East and Africa region from the timing of business, affected overall sales growth for the company. Sales from WhereNet Corp., which was acquired in January 2007, and Swecoin, which was acquired in October 2006, supplemented sales growth. Sales growth was also favorably affected by foreign currency translation.

• Gross profit margin was 47.6%, compared with 47.8%. Profitability was favorably affected by improvements in manufacturing variances and movements in foreign exchange translation, offset by product mix and higher period costs.

• Consolidated operating expense growth resulted from increases in expenditures for information systems, and professional engineering fees related to new product development work. The addition of personnel from the WhereNet and Swecoin acquisitions also contributed to higher operating expenses.

On a non-GAAP basis, excluding charges for stock-based compensation and the amortization of intangible assets, the company’s gross profit margin for the second quarter was 47.8%, compared with 47.9% for the previous year. Operating income declined by 1.8% versus a decline of 10.2% under GAAP accounting rules. Non-GAAP operating margin with the same charges excluded for the second quarter of 2007 was 19.1% versus 21.6% a year ago.

For the first six months of 2007, net sales increased 14.9% to $417,488,000 from $363,235,000 for the corresponding period a year ago. Net income totaled $52,349,000, or $0.75 per diluted share, versus $53,763,000, or $0.76 per diluted share, for the first half of 2006.

At June 30, 2007, Zebra had $495,075,000 in cash and investments, and no long-term debt. Net inventories were $79,478,000, and accounts receivable, net, were $124,584,000.

Third Quarter Outlook

Zebra also announced its financial forecast for the third quarter of 2007. Net sales are expected within a range of $208,000,000 and $220,000,000. Earnings are expected within a range of $0.34 and $0.40 per diluted share.

Use of Non-GAAP Financial Measures

In addition to results presented in accordance with Generally Accepted Accounting Principles (“GAAP”), this release includes non-GAAP financial measures stated above and in the Supplemental Information chart attached to this press release. The Supplemental Information chart reconciles these non-GAAP financial measures to the GAAP financial measures. Management believes these non-GAAP financial measures provide information useful to investors in understanding the underlying operational performance of Zebra’s business. Management uses these non-GAAP measures internally to assess Zebra’s current performance and to make strategic decisions. These non-GAAP measures should not, however, be considered a substitute for GAAP financial measures.

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 third quarter of 2007 stated in the paragraph 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. Zebra may elect to update forward-looking statements but expressly disclaims any obligation to do so, even if the company’s estimates change.

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 market conditions in North America and other geographic regions and market acceptance of Zebra’s printer and software products and competitors’ product offerings and the potential effects of technological changes. Other factors include U.S. and foreign regulations that pertain to electrical and electronic equipment, including European Union and other country directives relating to the collection, recycling, treatment and disposal of products and the reduction or elimination of certain specified materials in such products. Zebra’s failure to comply with these regulations may subject Zebra to penalties, prevent Zebra from selling its products in a certain country, or increase the cost of supplying the products. Profits and profitability will be affected by the company’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 is involved, and particularly litigation or claims related to alleged infringement of third-party intellectual property rights, is another factor. In addition, the acquisitions of Swecoin, which was completed in October 2006, and WhereNet, which was completed in January 2007, have risks relating to integrating these companies’ businesses and operations with Zebra’s. These and other factors could have an adverse effect on Zebra’s revenues, 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, 2006.

Zebra Technologies Corporation helps companies identify, locate and track assets, transactions and people with on-demand specialty digital printing and automatic identification solutions in more than 100 countries around the world. More than 90% of Fortune 500 companies use innovative and reliable Zebra printers, supplies, RFID products and software to increase productivity, improve quality, lower costs, and deliver better customer service. Information about Zebra and Zebra-brand 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 second quarter of 2007. The conference call will be held at 10:00 Eastern Time today. To listen to the call, visit the company’s Web site at http://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)

(Unaudited)

	June 30, 2007			December 31, 2006
	(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	63,210		$	41,014
Investments and marketable securities		146,096			219,930
Accounts receivable, net		124,584			122,540
Inventories, net		79,478			81,190
Deferred income taxes		14,617			9,464
Prepaid expenses		6,242			5,552
Total current assets		434,227			479,690
Property and equipment at cost, less accumulated depreciation and amortization		61,559			57,431
Long-term deferred income taxes		29,388			11,917
Goodwill		151,394			70,714
Other intangibles, net		58,493			34,025
Long-term investments and marketable securities		285,769			298,245
Other assets		11,793			11,120
Total assets	$	1,032,623		$	963,142
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	32,443		$	28,980
Accrued liabilities		43,535			43,191
Income taxes payable		1,012			2,683
Total current liabilities		76,990			74,854
Deferred rent		735			638
Other long-term liabilities		11,527			9,969
Total liabilities		89,252			85,461
Stockholders’ equity:
Preferred Stock		—			—
Class A Common Stock		722			722
Additional paid-in capital		139,261			139,083
Treasury stock		(107,318	)		(119,335	)
Retained earnings		902,748			850,399
Accumulated other comprehensive income		7,958			6,812
Total stockholders’ equity		943,371			877,681
Total liabilities and stockholders’ equity	$	1,032,623		$	963,142

ZEBRA TECHNOLOGIES CORPORATION

CONSOLIDATED STATEMENTS OF EARNINGS (LOSS)

(Amounts in thousands, except per share data)

(Unaudited)

	Three Months Ended						Six Months Ended
	June 30, 2007			July 1, 2006			June 30, 2007			July 1, 2006
Net sales	$	208,912		$	187,421		$	417,488		$	363,235
Cost of sales		109,510			97,895			218,296			191,011
Gross profit		99,402			89,526			199,192			172,224
Operating expenses:
Selling and marketing		29,069			23,510			57,233			45,619
Research and development		13,869			12,382			28,054			24,417
General and administrative		19,875			15,081			37,808			29,730
Amortization of intangible assets		2,620			723			4,943			1,470
Acquired in-process research and development		—			—			1,853			—
Total operating expenses		65,433			51,696			129,891			101,236
Operating income		33,969			37,830			69,301			70,988
Other income (expense):
Investment income		5,724			4,987			11,028			10,194
Interest expense		(10	)		(13	)		(20	)		(231	)
Foreign exchange gains		(182	)		(380	)		(7	)		(269	)
Other, net		(366	)		(177	)		(280	)		(626	)
Total other income		5,166			4,417			10,721			9,068
Income before income taxes and cumulative effect of accounting change		39,135			42,247			80,022			80,056
Income taxes		13,502			14,575			27,673			27,612
Income before cumulative effect of accounting change		25,633			27,672			52,349			52,444
Cumulative effect of accounting change (net of tax effect of $694)		—			—			—			1,319
Net income	$	25,633		$	27,672		$	52,349		$	53,763
Basic earnings per share before cumulative effect of accounting change	$	0.37		$	0.39		$	0.76		$	0.74
Diluted earnings per share before cumulative effect of accounting change	$	0.37		$	0.39		$	0.75		$	0.74
Basic earnings per share	$	0.37		$	0.39		$	0.76		$	0.76
Diluted earnings per share	$	0.37		$	0.39		$	0.75		$	0.76
Basic weighted average shares outstanding		69,098			70,781			68,996			70,661
Diluted weighted average and equivalent shares outstanding		69,559			71,229			69,453			71,154

ZEBRA TECHNOLOGIES CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Amounts in thousands)

(Unaudited)

	Six Months Ended
	June 30, 2007			July 1, 2006
Cash flows from operating activities:
Net income	$	52,349		$	53,763
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		12,243			7,300
Stock-based compensation		6,557			3,485
Excess tax benefit from share-based compensation		(690	)		(1,362	)
Cumulative effect of accounting change (net of tax)		—			(1,319	)
Acquired in-process research and development		1,853			—
Deferred income taxes		(1,893	)		(2,419	)
Changes in assets and liabilities, net of effects of acquisitions:
Accounts receivable, net		6,676			(479	)
Inventories		3,515			(12,729	)
Other assets		(492	)		2,387
Accounts payable		(7,022	)		(2,358	)
Accrued liabilities		(213	)		3,261
Income taxes payable		(1,114	)		1,107
Other operating activities		1,002			(2,259	)
Net cash provided by operating activities		72,771			48,378
Cash flows from investing activities:
Purchases of property and equipment		(10,903	)		(10,446	)
Acquisition of businesses acquired, net of cash acquired		(127,426	)		—
Acquisition of intangible assets					(3,898	)
Purchases of investments and marketable securities		(360,792	)		(543,095	)
Maturities of investments and marketable securities		332,542			345,300
Sales of investments and marketable securities		114,145			155,611
Net cash used in investing activities		(52,434	)		(56,528	)
Cash flows from financing activities:
Purchase of treasury stock		(6,048	)		—
Proceeds from exercise of stock options and stock purchase plan purchases		6,382			8,126
Excess tax benefit from share-based compensation		690			1,362
Net cash provided by (used in) financing activities		1,024			9,488
Effect of exchange rate changes on cash		835			668
Net increase in cash and cash equivalents		22,196			2,006
Cash and cash equivalents at beginning of period		41,014			25,621
Cash and cash equivalents at end of period	$	63,210		$	27,627
Supplemental disclosures of cash flow information:
Interest paid	$	20		$	231
Income taxes paid		30,101			27,196

ZEBRA TECHNOLOGIES CORPORATION

SUPPLEMENTAL INFORMATION

Effect of Share Based Compensation and Acquisition-Related

Non-Cash Charges on Gross Profit and Operating Income

	Three Months Ended
	As Reported--GAAP						Adjustments				As Adjusted
	June 30,			July 1,			June 30,		July 1,		June 30,			July 1,
	2007			2006			2007		2006		2007			2006
Net Sales	$	208,912		$	187,421						$	208,912		$	187,421
Cost of Sales		109,510			97,895		(390	)	(188	)		109,120			97,707
Gross Profit		99,402			89,526		390		188			99,792			89,714
Gross Margin		47.6	%		47.8	%						47.8	%		47.9	%
Operating Expenses
Selling and marketing		29,069			23,510		(692	)	(559	)		28,377			22,951
Research and development		13,869			12,382		(534	)	(296	)		13,335			12,086
General and administrative		19,875			15,081		(1,603	)	(931	)		18,272			14,150
Amortization of intangible assets		2,620			723		(2,620	)	(723	)		—			—
Total operating expenses		65,433			51,696		(5,449	)	(2,509	)		59,984			49,187
Operating income		33,969			37,830		5,839		2,697			39,808			40,527
Operating Margin		16.3	%		20.2	%						19.1	%		21.6	%

	Six Months Ended
	As Reported--GAAP						Adjustments				As Adjusted
	June 30,			July 1,			June 30,		July 1,		June 30,			July 1,
	2007			2006			2007		2006		2007			2006
Net Sales	$	417,488		$	363,235						$	417,488		$	363,235
Cost of Sales		218,296			191,011		(842	)	(326	)		217,454			190,685
Gross Profit		199,192			172,224		842		326			200,034			172,550
Gross Margin		47.7	%		47.4	%						47.9	%		47.5	%
Operating Expenses
Selling and marketing		57,233			45,619		(1,115	)	(862	)		56,118			44,757
Research and development		28,054			24,417		(1,191	)	(526	)		26,863			23,891
General and administrative		37,808			29,730		(3,409	)	(1,771	)		34,399			27,959
Amortization of intangible assets		4,943			1,470		(4,943	)	(1,470	)		—			—
Acquired in-process technology		1,853			—		(1,853	)	—			—			—
Total operating expenses		129,891			101,236		(12,511	)	(4,629	)		117,380			96,607
Operating income		69,301			70,988		13,353		4,955			82,654			75,943
Operating Margin		16.6	%		19.5	%						19.8	%		20.9	%

Adjustments consist of the following:

1. All share-based compensation expense

2. Amortization of intangible assets and in-process technology related to the company’s acquisitions

ZEBRA TECHNOLOGIES CORPORATION

SUPPLEMENTAL SALES INFORMATION

(Amounts in thousands)

(Unaudited)

Sales by Product Category
	Three Months Ended
	June 30, 2007			July 1, 2006			Percent Change	Percent of Total Sales
Hardware	$	158,297		$	140,558		12.6	75.8
Supplies		40,285			39,399		2.2	19.3
Service and software		9,559			6,199		54.2	4.6
Shipping and handling		1,726			1,469		17.5	0.8
Cash flow from hedging activities		(955	)		(204	)	NM	(0.5	)
Total sales	$	208,912		$	187,421		11.5	100.0
Sales by Geographic Region
	Three Months Ended
	June 30, 2007			July 1, 2006			Percent Change	Percent of Total Sales
Europe, Middle East and Africa	$	76,146		$	69,304		9.9	36.4
Latin America		15,412			13,257		16.3	7.4
Asia-Pacific		18,986			13,687		38.7	9.1
Total international		110,544			96,248		14.9	52.9
North America		98,368			91,173		7.9	47.1
Total sales	$	208,912		$	187,421		11.5	100.0
Sales by Product Category
	Six Months Ended
	June 30, 2007			July 1, 2006			Percent Change	Percent of Total Sales
Hardware	$	317,885		$	274,029		16.0	76.2
Supplies		78,367			73,722		6.3	18.8
Service and software		18,952			12,430		52.5	4.5
Shipping and handling		3,374			2,886		16.9	0.8
Cash flow from hedging activities		(1,090	)		168		NM	(0.3	)
Total sales	$	417,488		$	363,235		14.9	100.0
Sales by Geographic Region
	Six Months Ended
	June 30, 2007			July 1, 2006			Percent Change	Percent of Total Sales
Europe, Middle East and Africa	$	152,130		$	131,023		16.1	36.4
Latin America		27,935			26,176		6.7	6.7
Asia-Pacific		34,549			27,875		23.9	8.3
Total international		214,614			185,074		16.0	51.4
North America		202,874			178,161		13.9	48.6
Total sales	$	417,488		$	363,235		14.9	100.0