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): October 22, 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 October 22, 2007, we announced our results of operations and financial position as of and for the three-month period ended September 29, 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 October 22, 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:	October 22, 2007	By:	/s/     Anders Gustafsson
			Chief Executive Officer

EX-99.1

Exhibit 99.1

FOR IMMEDIATE RELEASE

Zebra Technologies Announces 2007 Third Quarter Financial Results

Vernon Hills, IL, October 22, 2007—Zebra Technologies Corporation (NASDAQ: ZBRA) today announced 16.5% growth in net sales to a record $217,218,000 for the quarter ended September 29, 2007, up from $186,386,000 for the third quarter of 2006. Net income for the period was $26,961,000, or $0.39 per diluted share, compared with a net loss of $4,263,000, or $0.06 per basic and diluted share, a year ago.

“Record international and North American sales and further improvement in gross profit margin led to solid growth and financial performance,” stated Anders Gustafsson, Zebra’s chief executive officer. “Zebra continues to benefit from focused activities to accelerate sales growth through further penetration of targeted vertical markets, placing more Zebra sales representatives in high-growth regions, and building stronger relationships with channel partners and key accounts. Operational improvements are resulting in lower manufacturing variances to increase profitability. Our acquisition program is positioning the company for further growth by expanding our customer base, adding to our technology portfolio and providing additional high-value solutions to enable companies to identify, locate and track critical assets. All of these actions make Zebra a more formidable competitor and position the company for further growth and improvement as we look to 2008 and beyond.”

Discussion and Analysis

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

• All international territories achieved strong sales growth, with record sales in Latin America and Asia Pacific. The company’s North America territory achieved record sales with an improving growth trend. Sales from WhereNet Corp., which was acquired in January 2007, and Swecoin, which was acquired in October 2006, supplemented sales growth. Foreign currency translation also had a favorable effect on sales growth.

• Gross profit margin of 48.2% increased from 47.1%. Profitability was positively affected by the higher sales volume and a favorable product mix, as well as improvements in manufacturing variances and movements in foreign exchange translation.

• Consolidated expenses for sales and marketing, research and development, and general and administrative activities increased principally from the addition of personnel related to the acquisitions of WhereNet, Swecoin and proveo, which Zebra acquired in the third quarter of 2007. In addition, general and administrative expenses include $3,979,000, or $0.04 per share, in one-time charges related to the retirement of former CEO Ed Kaplan and Board of Director project activity related to the search and hiring of a new chief executive officer.

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 third quarter was 48.3%, compared with 47.2% for the previous year. Operating income on a non-GAAP basis was $44,726,000, or 20.6% of net sales.

For the first nine months of 2007, net sales increased 15.5% to $634,706,000 from $549,621,000 for the corresponding period a year ago. Net income totaled $79,310,000, or $1.15 per diluted share, versus $49,500,000, or $0.70 per diluted share, for the first three quarters of 2006.

At September 29, 2007, Zebra had $469,360,000 in cash and investments, and no long-term debt. Net inventories were $84,512,000, and accounts receivable, net, were $133,880,000.

Fourth Quarter Outlook

Zebra also announced its financial forecast for the fourth quarter of 2007. Net sales are expected within a range of $215,000,000 and $227,000,000. Earnings are expected within a range of $0.38 and $0.45 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 fourth 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 WhereNet, which was completed in January 2007, and proveo, which was completed in the third quarter of 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 third quarter of 2007. The conference call will be held at 11:00 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)

	September 29, 2007			December 31, 2006
ASSETS	(Unaudited)
Current assets:
Cash and cash equivalents	$	33,031		$	41,014
Investments and marketable securities		161,599			219,930
Accounts receivable, net		133,880			122,540
Inventories, net		84,512			81,190
Deferred income taxes		13,526			9,464
Prepaid expenses		5,975			5,552
Total current assets		432,523			479,690
Property and equipment at cost, less accumulated depreciation and amortization		62,616			57,431
Long-term deferred income taxes		31,903			11,917
Goodwill		161,877			70,714
Other intangibles, net		62,235			34,025
Long-term investments and marketable securities		274,730			298,245
Other assets		12,184			11,120
Total assets	$	1,038,068		$	963,142
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	33,815		$	28,980
Accrued liabilities		58,932			43,191
Income taxes payable		510			2,683
Total current liabilities		93,257			74,854
Deferred rent		782			638
Other long-term liabilities		11,473			9,969
Total liabilities		105,512			85,461
Stockholders’ equity:
Preferred Stock		—			—
Class A Common Stock		722			722
Additional paid-in capital		141,468			139,083
Treasury stock		(146,360	)		(119,335	)
Retained earnings		929,709			850,399
Accumulated other comprehensive income		7,017			6,812
Total stockholders’ equity		932,556			877,681
Total liabilities and stockholders’ equity	$	1,038,068		$	963,142

ZEBRA TECHNOLOGIES CORPORATION

CONSOLIDATED STATEMENTS OF EARNINGS (LOSS)

(Amounts in thousands, except per share data)

(Unaudited)

	Three Months Ended						Nine Months Ended
	September 29, 2007			September 30, 2006			September 29, 2007			September 30, 2006
Net sales	$	217,218		$	186,386		$	634,706		$	549,621
Cost of sales		112,590			98,600			330,886			289,611
Gross profit		104,628			87,786			303,820			260,010
Operating expenses:
Selling and marketing		29,080			23,467			86,313			69,086
Research and development		13,904			11,774			41,958			36,191
General and administrative		21,694			14,642			59,502			44,372
Amortization of intangible assets		2,928			789			7,871			2,259
Litigation settlement		—			53,392			—			53,392
Acquired in-process research and development		—			—			1,853			—
Total operating expenses		67,606			104,064			197,497			205,300
Operating income (loss)		37,022			(16,278	)		106,323			54,710
Other income (expense):
Investment income		4,393			6,008			15,421			16,202
Interest expense		(73	)		(5	)		(92	)		(236	)
Foreign exchange gains		(23	)		457			(30	)		187
Other, net		(157	)		(287	)		(438	)		(912	)
Total other income		4,140			6,173			14,861			15,421
Income (loss) before income taxes and cumulative effect of accounting change		41,162			(10,105	)		121,184			69,951
Income tax (benefit)		14,201			(5,842	)		41,874			21,770
Income (loss) before cumulative effect of accounting change		26,961			(4,263	)		79,310			48,181
Cumulative effect of accounting change (net of tax effect of $694)		—			—			—			1,319
Net income (loss)	$	26,961		$	(4,263	)	$	79,310		$	49,500
Basic earnings (loss) per share before cumulative effect of accounting change	$	0.39		$	(0.06	)	$	1.15		$	0.68
Diluted earnings (loss) per share before cumulative effect of accounting change	$	0.39		$	(0.06	)	$	1.15		$	0.68
Basic earnings (loss) per share	$	0.39		$	(0.06	)	$	1.15		$	0.70
Diluted earnings (loss) per share	$	0.39		$	(0.06	)	$	1.15		$	0.70
Basic weighted average shares outstanding		68,580			70,802			68,814			70,702
Diluted weighted average and equivalent shares outstanding		69,005			70,802			69,259			71,152

ZEBRA TECHNOLOGIES CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Amounts in thousands)

(Unaudited)

	Nine Months Ended
	September 29, 2007			September 30, 2006
Cash flows from operating activities:
Net income	$	79,310		$	49,500
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		19,184			11,338
Stock-based compensation		11,333			5,272
Excess tax benefit from share-based compensation		(797	)		(1,437	)
Cumulative effect of accounting change (net of tax)		—			(1,319	)
Acquired in-process research and development		1,853			—
Deferred income taxes		(4,862	)		(1,345	)
Changes in assets and liabilities, net of effects of acquisitions:
Accounts receivable, net		(1,050	)		(1,146	)
Inventories		257			(16,746	)
Other assets		248			(1,157	)
Accounts payable		(6,016	)		(1,387	)
Accrued liabilities		13,978			7,527
Income taxes payable		(1,614	)		(6,149	)
Other operating activities		(2,001	)		(2,063	)
Net cash provided by operating activities		109,823			40,888
Cash flows from investing activities:
Purchases of property and equipment		(15,702	)		(14,640	)
Acquisition of businesses acquired, net of cash acquired		(141,277	)		—
Acquisition of intangible assets		(2,800	)		(18,091	)
Purchases of investments and marketable securities		(645,843	)		(860,250	)
Maturities of investments and marketable securities		538,025			583,582
Sales of investments and marketable securities		190,393			275,601
Net cash used in investing activities		(77,204	)		(33,798	)
Cash flows from financing activities:
Purchase of treasury stock		(48,913	)		(4,069	)
Proceeds from exercise of stock options and stock purchase plan purchases		7,593			9,050
Excess tax benefit from share-based compensation		797			1,437
Net cash provided by (used in) financing activities		(40,523	)		6,418
Effect of exchange rate changes on cash		(79	)		428
Net increase (decrease) in cash and cash equivalents		(7,983	)		13,936
Cash and cash equivalents at beginning of period		41,014			25,621
Cash and cash equivalents at end of period	$	33,031		$	39,557
Supplemental disclosures of cash flow information:
Interest paid	$	92		$	236
Income taxes paid		45,063			29,402

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
	Sept. 29,			Sept. 30,			Sept. 29,		Sept. 30,		Sept. 29,			Sept. 30,
	2007			2006			2007		2006		2007			2006
Net Sales	$	217,218		$	186,386						$	217,218		$	186,386
Cost of Sales		112,590			98,600		(385	)	(163	)		112,205			98,437
Gross Profit		104,628			87,786		385		163			105,013			87,949
Gross Margin		48.2	%		47.1	%						48.3	%		47.2	%
Operating Expenses
Selling and marketing		29,080			23,467		(732	)	(445	)		28,348			23,022
Research and development		13,904			11,774		(510	)	(276	)		13,394			11,498
General and administrative		21,694			14,642		(3,149	)	(903	)		18,545			13,739
Litigation settlement		—			53,392		—		—			—			53,392
Amortization of intangible assets		2,928			789		(2,928	)	(789	)		—			—
Total operating expenses		67,606			104,064		(7,319	)	(2,413	)		60,287			101,651
Operating income (loss)		37,022			(16,278	)	7,704		2,576			44,726			(13,702	)
Operating Margin		17.1	%		NM							20.6	%		NM

	Nine Months Ended
	As Reported--GAAP						Adjustments				As Adjusted
	Sept. 29,			Sept. 30,			Sept. 29,		Sept. 30,		Sept. 29,			Sept. 30,
	2007			2006			2007		2006		2007			2006
Net Sales	$	634,706		$	549,621						$	634,706		$	549,621
Cost of Sales		330,886			289,611		(1,227	)	(489	)		329,659			289,122
Gross Profit		303,820			260,010		1,227		489			305,047			260,499
Gross Margin		47.9	%		47.3	%						48.1	%		47.4	%
Operating Expenses
Selling and marketing		86,313			69,086		(1,847	)	(1,307	)		84,466			67,779
Research and development		41,958			36,191		(1,701	)	(803	)		40,257			35,388
General and administrative		59,502			44,372		(6,557	)	(2,674	)		52,945			41,698
Amortization of intangible assets		7,871			2,259		(7,871	)	(2,259	)		—			—
Litigation settlement		—			53,392		—		—			—			53,392
Acquired in-process technology		1,853			—		(1,853	)	—			—			—
Total operating expenses		197,497			205,300		(19,829	)	(7,043	)		177,668			198,257
Operating income		106,323			54,710		21,056		7,532			127,379			62,242
Operating Margin		16.8	%		10.0	%						20.1	%		11.3	%

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
	Sept. 29,			Sept. 30,			Percent	Percent of
	2007			2006			Change	Total Sales
Hardware	$	164,756		$	140,892		16.9	75.8
Supplies		41,731			38,408		8.7	19.2
Service and software		9,728			6,280		54.9	4.5
Shipping and handling		1,708			1,527		11.9	0.8
Cash flow from hedging activities		(705	)		(721	)	NM	(0.3	)
Total sales	$	217,218		$	186,386		16.5	100.0

Sales by Geographic Region

	Three Months Ended
	Sept. 29,		Sept. 30,		Percent	Percent of
	2007		2006		Change	Total Sales
Europe, Middle East and Africa	$	74,200	$	59,250	25.2	34.2
Latin America		16,703		13,589	22.9	7.7
Asia-Pacific		21,221		16,776	26.5	9.8
Total international		112,124		89,615	25.1	51.7
North America		105,094		96,771	8.6	48.3
Total sales	$	217,218	$	186,386	16.5	100.0

Sales by Product Category

	Nine Months Ended
	Sept. 29,			Sept. 30,			Percent	Percent of
	2007			2006			Change	Total Sales
Hardware	$	482,640		$	414,921		16.3	76.1
Supplies		120,098			112,130		7.1	18.9
Service and software		28,681			18,710		53.3	4.5
Shipping and handling		5,082			4,413		15.2	0.8
Cash flow from hedging activities		(1,795	)		(553	)	NM	(0.3	)
Total sales	$	634,706		$	549,621		15.5	100.0

Sales by Geographic Region

	Nine Months Ended
	Sept. 29,		Sept. 30,		Percent	Percent of
	2007		2006		Change	Total Sales
Europe, Middle East and Africa	$	226,330	$	190,272	19.0	35.7
Latin America		44,638		39,765	12.3	7.0
Asia-Pacific		55,771		44,651	24.9	8.8
Total international		326,739		274,688	18.9	51.5
North America		307,967		274,933	12.0	48.5
Total sales	$	634,706	$	549,621	15.5	100.0