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 24, 2008

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 24, 2008, we announced our results of operations and financial position as of and for the three-month period ended June 28, 2008. 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 24, 2008.

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 24, 2008	By:	/s/    Anders Gustafsson
		Anders Gustafsson
		Chief Executive Officer

EX-99.1

Exhibit 99.1

CONTACT:	Investors:	Media:
	Douglas A. Fox, CFA	Michelle Meek
	Vice President, Investor Relations	Outlook Marketing Services
	+1 847 793 6735	+1 312 873 3424
	dfox@zebra.com	michelle@outlookmarketingsrv.com

FOR IMMEDIATE RELEASE

Zebra Technologies Announces 2008 Second Quarter Financial Results

Solid performance across the company leads to record sales and sustained high gross margin

Vernon Hills, IL, July 24, 2008—Zebra Technologies Corporation (NASDAQ: ZBRA) today announced 21.5% growth in net sales to a record $253,782,000 for the second quarter of 2008 from $208,912,000 for the second quarter of 2007. Net income for the period was $25,526,000, or $0.39 per diluted share, including exit costs of $4,680,000 which reduced earnings by $0.05 per diluted share. For the second quarter of 2007, net income was $25,633,000, or $0.37 per diluted share.

“Strong business execution led to high international and North American sales growth for specialty printing and a sharp sequential increase in our enterprise solutions business,” stated Anders Gustafsson, Zebra’s chief executive officer. “Our programs to penetrate more deeply into targeted vertical markets and extend our geographic reach are building a more diversified customer base. We are winning additional business opportunities with new products and solutions that help our customers identify, manage and track a broader range of assets within the enterprise and across the supply chain. These activities make us optimistic about further growth and give us confidence in our ability to meet our long-term objectives.”

Discussion and Analysis

For the second quarter of 2008 compared with the second quarter of 2007:

• Consolidated sales growth of 21.5% resulted from 12.8% growth in the company’s Specialty Printing Group (SPG) and $25,020,000 in sales from the company’s Enterprise Solutions Group (ESG). International sales increased 28.0%, with record sales in the Asia Pacific and Latin America regions. North American sales increased 14.1%. Consolidated sales were affected by $5,009,000 in unfavorable adjustments from revenue hedging activities.

• Gross profit margin increased to 50.3% from 47.6%. Profitability was favorably affected by lower product costs, favorable changes in foreign exchange, and certain one-time items that accounted for 1.0 percentage points of the gross margin improvement.

• Operating expenses increased from acquisition-related additions of personnel and other expenses, the implementation of annual merit pay increases, higher SPG marketing expenses and costs for two customer conferences.

• Operating expenses were also affected by a $2,059,000 increase in the amortization of intangible assets from the acquisitions of Navis and Multispectral Solutions, as well as $4,680,000 in exit costs related to the company’s previously announced initiative to transfer final assembly of thermal printers to a third party.

For the first six months of 2008, the company had net sales of $500,059,000, up 19.8% from $417,488,000 for the same period a year ago. First-half net income totaled $53,170,000, or $0.81 per diluted share, including $7,914,000 in exit costs which reduced earnings by $0.08 per diluted share.

At June 28, 2008, Zebra had $270,148,000 in cash and investments, and no long-term debt. Net inventories were $101,339,000, and accounts receivable, net, were $179,081,000.

During the second quarter of 2008, the company repurchased 461,000 shares of Zebra Technologies Class A Common Stock under an authorization to purchase up to 3,000,000 shares. In the first six months of 2008, the company repurchased 1,490,600 shares of Zebra stock for $48,402,000.

Third Quarter Outlook

Zebra announced its financial forecast for the third quarter of 2008. Net sales are expected within a range of $242,000,000 to $253,000,000, which reflects an expected seasonal slowdown in Europe, a more cautious economic outlook and unfavorable adjustments from revenue hedging activities of approximately $5,000,000. Earnings are expected between $0.35 and $0.41 per diluted share. This outlook includes approximately $3,500,000 expenses related to exit costs.

Conference Call Notification

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 2008. The conference call will be held at 11:00 a.m. Eastern Time today. To listen to the call, visit the company’s Web site at http://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 third quarter of 2008 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, proveo and Navis, which were completed in 2007, and Multispectral Solutions, which was completed in April 2008, 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 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, 2007.

Zebra Technologies Corporation helps companies identify, track and manage 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 percent 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.

ZEBRA TECHNOLOGIES CORPORATION

CONSOLIDATED BALANCE SHEETS

(Amounts in thousands)

	June 28, 2008			December 31, 2007
	(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	41,916		$	38,211
Restricted cash		1,870			2,497
Investments and marketable securities		81,936			98,438
Accounts receivable, net		179,081			150,775
Inventories, net		101,339			85,038
Deferred income taxes		14,625			14,772
Prepaid expenses		8,915			31,101
Total current assets		429,682			420,832
Property and equipment at cost, less accumulated depreciation and amortization		78,948			67,686
Long-term deferred income taxes		28,592			28,407
Goodwill		261,517			246,510
Other intangibles, net		119,058			119,424
Long-term investments and marketable securities		144,426			142,033
Other assets		8,240			9,386
Total assets	$	1,070,463		$	1,034,278
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	56,882		$	42,351
Accrued liabilities		66,663			69,437
Deferred revenue		14,750			9,633
Income taxes payable		2,587			751
Total current liabilities		140,882			122,172
Deferred rent		2,212			961
Other long-term liabilities		9,878			8,452
Total liabilities		152,972			131,585
Stockholders’ equity:
Preferred Stock		—			—
Class A Common Stock		722			722
Additional paid-in capital		144,725			141,522
Treasury stock		(247,409	)		(205,058	)
Retained earnings		1,013,682			960,512
Accumulated other comprehensive income		5,771			4,995
Total stockholders’ equity		917,491			902,693
Total liabilities and stockholders’ equity	$	1,070,463		$	1,034,278

ZEBRA TECHNOLOGIES CORPORATION

CONSOLIDATED STATEMENTS OF EARNINGS

(Amounts in thousands, except per share data)

(Unaudited)

	Three Months Ended						Six Months Ended
	June 28, 2008			June 30, 2007			June 28, 2008			June 30, 2007
Net sales	$	253,782		$	208,912		$	500,059		$	417,488
Cost of sales		126,067			109,510			249,429			218,296
Gross profit		127,715			99,402			250,630			199,192
Operating expenses:
Selling and marketing		34,322			29,069			65,183			57,233
Research and development		22,849			13,869			42,756			28,054
General and administrative		24,216			19,875			49,261			37,808
Amortization of intangible assets		4,679			2,620			9,193			4,943
Exit costs		4,680			—			7,914			—
Acquired in-process research and development		—			—			—			1,853
Total operating expenses		90,746			65,433			174,307			129,891
Operating income		36,969			33,969			76,323			69,301
Other income (expense):
Investment income		2,722			5,724			5,127			11,028
Foreign exchange gains		(69	)		(182	)		631			(7	)
Other, net		(651	)		(376	)		(905	)		(300	)
Total other income		2,002			5,166			4,853			10,721
Income before income taxes		38,971			39,135			81,176			80,022
Income taxes		13,445			13,502			28,006			27,673
Net income	$	25,526		$	25,633		$	53,170		$	52,349
Basic earnings per share	$	0.39		$	0.37		$	0.81		$	0.76
Diluted earnings per share	$	0.39		$	0.37		$	0.81		$	0.75
Basic weighted average shares outstanding		65,128			69,098			65,664			68,996
Diluted weighted average and equivalent shares outstanding		65,502			69,559			66,046			69,453

ZEBRA TECHNOLOGIES CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Amounts in thousands)

(Unaudited)

	Six Months Ended
	June 28, 2008			June 30, 2007
Cash flows from operating activities:
Net income	$	53,170		$	52,349
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		18,607			12,243
Stock-based compensation		6,536			6,557
Excess tax benefit from share-based compensation		(131	)		(690	)
Acquired in-process research and development		—			1,853
Deferred income taxes		(3,185	)		(1,893	)
Changes in assets and liabilities, net of effects of acquisitions:
Accounts receivable, net		(29,780	)		6,676
Inventories		(14,754	)		3,515
Other assets		1,485			(547	)
Accounts payable		13,129			(7,022	)
Accrued liabilities		(3,876	)		(381	)
Deferred revenue		6,793			168
Income taxes payable		1,796			(1,114	)
Other operating activities		762			1,002
Net cash provided by operating activities		50,552			72,716
Cash flows from investing activities:
Purchases of property and equipment		(20,249	)		(10,903	)
Acquisition of businesses acquired, net of cash acquired		(17,987	)		(127,426	)
Acquisition of intangible assets		(470	)		—
Purchases of investments and marketable securities		(305,088	)		(360,792	)
Maturities of investments and marketable securities		227,129			332,542
Sales of investments and marketable securities		113,838			114,145
Net cash used in investing activities		(2,827	)		(52,434	)
Cash flows from financing activities:
Purchase of treasury stock		(48,402	)		(6,048	)
Proceeds from exercise of stock options and stock purchase plan purchases		3,383			6,382
Excess tax benefit from share-based compensation		131			690
Net cash provided by (used in) financing activities		(44,888	)		1,024
Effect of exchange rate changes on cash		868			835
Net increase in cash and cash equivalents		3,705			22,141
Cash and cash equivalents at beginning of period		38,211			39,648
Cash and cash equivalents at end of period	$	41,916		$	61,789
Supplemental disclosures of cash flow information:
Income taxes paid		27,096			30,101
Supplemental disclosures of non-cash transactions:
Purchase of treasury shares not paid in the second quarter of 2008	$	570			—

ZEBRA TECHNOLOGIES CORPORATION

SUPPLEMENTAL SALES INFORMATION

(Amounts in thousands)

(Unaudited)

Sales by Product Category

	Three Months Ended
	June 28, 2008			June 30, 2007			Percent Change	Percent of Total Sales
Hardware	$	185,640		$	158,297		17.3	73.1
Supplies		43,803			40,285		8.7	17.3
Service and software		27,516			9,559		187.9	10.8
Shipping and handling		1,832			1,726		6.1	0.8
Cash flow from hedging activities		(5,009	)		(955	)	NM	(2.0	)
Total sales	$	253,782		$	208,912		21.5	100.0
Sales by Geographic Region
	Three Months Ended
	June 28, 2008			June 30, 2007			Percent Change	Percent of Total Sales
Europe, Middle East and Africa	$	93,787		$	76,146		23.2	37.0
Latin America		21,367			15,412		38.6	8.4
Asia-Pacific		26,356			18,986		38.8	10.4
Total international		141,510			110,544		28.0	55.8
North America		112,272			98,368		14.1	44.2
Total sales	$	253,782		$	208,912		21.5	100.0
Sales by Product Category
	Six Months Ended
	June 28, 2008			June 30, 2007			Percent Change	Percent of Total Sales
Hardware	$	365,821		$	317,885		15.1	73.3
Supplies		85,706			78,367		9.4	17.1
Service and software		52,695			18,952		178.0	10.5
Shipping and handling		3,634			3,374		7.7	0.7
Cash flow from hedging activities		(7,797	)		(1,090	)	NM	(1.6	)
Total sales	$	500,059		$	417,488		19.8	100.0
Sales by Geographic Region
	Six Months Ended
	June 28, 2008			June 30, 2007			Percent Change	Percent of Total Sales
Europe, Middle East and Africa	$	191,157		$	152,130		25.7	38.2
Latin America		37,350			27,935		33.7	7.5
Asia-Pacific		50,134			34,549		45.1	10.0
Total international		278,641			214,614		29.8	55.7
North America		221,418			202,874		9.1	44.3
Total sales	$	500,059		$	417,488		19.8	100.0

ZEBRA TECHNOLOGIES CORPORATION

SUPPLEMENTAL SEGMENT INFORMATION

(Amounts in thousands)

(Unaudited)

	Three Months Ended				Six Months Ended
	June 28, 2008		June 30, 2007		June 28, 2008		June 30, 2007
Sales
Specialty Printing	$	228,762	$	202,794	$	453,513	$	404,689
Enterprise Solutions		25,020		6,118		46,546		12,799
Total	$	253,782	$	208,912	$	500,059	$	417,488
Cost of sales
Specialty Printing		113,338		105,688		226,151		209,954
Enterprise Solutions		12,729		3,822		23,278		8,342
Total		126,067		109,510		249,429		218,296
Gross profit		127,715		99,402		250,630		199,192
Operating expenses
Specialty Printing		55,829		46,028		106,161		91,866
Enterprise Solutions		19,957		5,266		37,997		11,007
Administrative and other		14,960		14,139		30,149		27,018
Total		90,746		65,433		174,307		129,891
Operating income	$	36,969	$	33,969	$	76,323	$	69,301
ZEBRA TECHNOLOGIES CORPORATION PRINTER UNITS and AVERAGE UNIT PRICES (Unaudited)
	Three Months Ended				Six Months Ended
	June 28, 2008		June 30, 2007		June 28, 2008		June 30, 2007
Total Printers Shipped		238,458		226,542		480,859		456,329
Average Unit Prices	$	630	$	573	$	622	$	570