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): November 4, 2010

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.)
475 Half Day Road, Suite 500, Lincolnshire, Illinois		60069
(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 Nov 4, 2010, we announced our results of operations and financial position for the three and nine-month periods ended, and as of, October 2, 2010. 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 November 4, 2010.

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: November 4, 2010	By:	/s/   Jim Kaput
		Jim Kaput
		SVP, General Counsel

EX-99.1

	Zebra Technologies Corporation
	475 Half Day Road, Suite 500
	Lincolnshire, IL 60069
	T: +1 847 634 6700
	F: +1 847 913 8766
	www.zebra.com

FOR IMMEDIATE RELEASE
Contact:
Investors:	Media:
Douglas A. Fox, CFA	Orlando De Bruce
Vice President, Investor Relations	Director, Global Public Relations
and Treasurer	+1 510 267 5052
+1 847 793 6735	odebruce@zebra.com
dfox@zebra.com

Zebra Technologies Announces Record EPS

for 2010 Third Quarter

Earnings benefit from stronger-than-expected sales and higher gross margin

Lincolnshire, IL, November 4, 2010–Zebra Technologies Corporation (NASDAQ: ZBRA) today announced 2010 third quarter net income of $26,151,000, or a record $0.46 per diluted share, on 23% growth in net sales to $246,507,000 from $200,778,000 for the third quarter of 2009. Net income for the third quarter of 2009 was $11,111,000, or $0.19 per diluted share, including $3,515,000 in exit, restructuring and integration costs which lowered diluted earnings by $0.04 per share.

Summary Financial Performance
		3Q10		3Q09	Change
Net sales (in thousands)	$	246,507	$	200,778	22.8%
Gross margin (%)		48.2		45.7	2.5 pts.
Operating margin (%)		15.8		7.6	8.2 pts.
Net income (in thousands)	$	26,151	$	11,111	135.4%
Diluted EPS	$	0.46	$	0.19	142.1%

“Solid operating leverage on sequential sales growth in all geographic regions and higher gross margin led to the record EPS,” stated Anders Gustafsson, Zebra’s chief executive officer. “Early returns on our investments in expanding sales in emerging markets complemented a steady run-rate business and high level of large-deal activity. During the quarter we recruited new channel partners to help us better serve customers in retail, government and other targeted industries. We also finalized several new printer products for launch in the fourth quarter and early next year. These and other

investments increase our confidence in Zebra’s future as we extend industry leadership and drive greater returns for our shareholders.”

As of October 2, 2010, Zebra had $262,196,000 in cash and investments, and no long-term debt. Net inventories were $95,842,000, and net accounts receivable were $165,423,000.

Discussion and Analysis

• Net sales, up 22.8% from the third quarter of 2009, benefited from improved business conditions in all geographic regions, with the highest growth rates occurring in Latin America and Asia Pacific.

• Gross margin of 48.2% versus 45.7% a year ago was principally driven by the improved product mix, higher volumes, and benefits from outsourcing thermal printer production to a third-party manufacturer. These factors were partially offset by unfavorable movements in foreign exchange rates and higher freight costs incurred to meet increased customer demand.

• Operating expenses increased 4.4% from the third quarter of 2009 substantially from increased selling and marketing and research and development expenses. Increases relate to higher compensation costs, which include salaries, benefits, bonuses and commissions. Other costs that increased over 2009 include business development costs, advertising and direct marketing, outside professional services, travel and entertainment, and project expenses.

Stock Purchase Update

During the third quarter of 2010, Zebra repurchased 764,749 shares of Zebra Technologies Corporation Class A Common Stock. At October 2, 2010, 2,750,000 shares remained in the company’s stock buyback authorization and 56,519,663 shares of common stock were outstanding.

Fourth Quarter Outlook

Zebra announced its financial forecast for the fourth quarter of 2010. Net sales are expected within a range of $240,000,000 and $252,000,000. Diluted earnings per share are expected within a range of $0.44 and $0.51.

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 third quarter of 2010. The conference call will be held at 11:00 AM 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 fourth quarter of 2010 stated in the paragraph above captioned “Fourth Quarter Outlook.” Actual results may differ from those expressed or

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implied in the company’s forward-looking statements. These statements represent estimates only as of the date they were made. Zebra undertakes no obligation, other than as may be required by law, to publicly update or revise any forward-looking statements, whether as a result of new information, future events, changed circumstances or any other reason after the date of this release.

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 customer acceptance of Zebra’s hardware and software products and competitors’ product offerings, and the potential effects of technological changes. The widely reported uncertainty over future global economic conditions, the availability of credit, capital markets volatility, may have adverse effects on Zebra, its suppliers and its customers. In addition, a disruption in our ability to obtain products from vendors as a result of natural disasters or other circumstances could restrict sales and negatively affect customer relationships. Profits and profitability will be affected by Zebra’s ability to control manufacturing and operating costs, including the effect of Zebra’s activities to transfer final assembly of its printers to a third-party manufacturer. 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 may be involved is another factor. 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, 2009.

About Zebra Technologies

Zebra Technologies Corporation (NASDAQ: ZBRA) provides the broadest range of innovative technology solutions to identify, track, and manage the deployment of critical assets for improved business efficiency. Zebra’s products include reliable on-demand printers and state-of-the-art software and hardware solutions utilizing a wide array of automatic identification technologies. By enabling improvements in sourcing, visibility, security and accuracy, Zebra helps its customers to put the right asset in the right place at the right time. Zebra serves more than 90 percent of Fortune 500 companies worldwide. For more information about Zebra’s solutions, visit http://www.zebra.com.

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ZEBRA TECHNOLOGIES CORPORATION

CONSOLIDATED BALANCE SHEETS

(Amounts in thousands)

	October 2,     2010		December 31,     2009
		(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	47,447	$	38,943
Restricted cash		1,615		1,725
Investments and marketable securities		123,058		114,064
Accounts receivable, net		165,423		150,992
Inventories, net		95,842		79,926
Deferred income taxes		11,282		10,792
Income taxes receivable		—		4,724
Prepaid expenses and other current assets		11,043		9,771
Total current assets		455,710		410,937
Property and equipment at cost, net of accumulated depreciation and amortization		84,809		77,589
Long-term deferred income taxes		32,234		35,842
Goodwill		152,418		153,225
Other intangibles, net		51,592		55,982
Long-term investments and marketable securities		90,076		91,989
Other assets		4,806		4,915
Total assets	$	871,645	$	830,479
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	33,908	$	28,137
Accrued liabilities		66,486		52,591
Deferred revenue		22,292		24,082
Income taxes payable		5,752		—
Total current liabilities		128,438		104,810
Deferred rent		2,853		4,108
Other long-term liabilities		9,647		9,432
Total liabilities		140,938		118,350
Stockholders’ equity:
Preferred Stock		—		—
Class A Common Stock		722		722
Additional paid-in capital		128,068		136,104
Treasury stock		(430,515)		(385,831)
Retained earnings		1,042,756		969,195
Accumulated other comprehensive loss		(10,324)		(8,061)
Total stockholders’ equity		730,707		712,129
Total liabilities and stockholders’ equity	$	871,645	$	830,479

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ZEBRA TECHNOLOGIES CORPORATION

CONSOLIDATED STATEMENTS OF EARNINGS

(Amounts in thousands, except per share data)

(Unaudited)

	Three Months Ended				Nine Months Ended
	October 2,     2010		October 3,     2009		October 2,     2010		October 3,     2009
Net sales:
Net sales of tangible products		$    221,795	$	175,334	$	632,198	$	503,947
Revenue from services and software		24,712		25,444		76,475		77,116
Total net sales		246,507		200,778		708,673		581,063
Cost of sales:
Cost of sales of tangible products		117,502		98,682		341,815		291,117
Cost of services and software		10,291		10,398		29,630		30,703
Total cost of sales		127,793		109,080		371,445		321,820
Gross profit		118,714		91,698		337,228		259,243
Operating expenses:
Selling and marketing		30,365		26,395		88,193		73,992
Research and development		26,746		21,454		75,189		64,552
General and administrative		20,302		22,447		60,889		61,881
Amortization of intangible assets		2,444		2,649		7,147		7,857
Exit, restructuring and integration costs		—		3,515		2,392		9,455
Asset impairment charges		—		—		—		(1,058)
Total operating expenses		79,857		76,460		233,810		216,679
Operating income		38,857		15,238		103,418		42,564
Other income (expense):
Investment income		635		813		2,111		2,238
Foreign exchange gain (loss)		(325)		575		235		(840)
Other, net		(216)		(286)		(1,052)		(622)
Total other income (expense)		94		1,102		1,294		776
Income before income taxes		38,951		16,340		104,712		43,340
Income taxes		12,800		5,229		31,151		13,866
Net income	$	26,151	$	11,111	$	73,561	$	29,474
Basic earnings per share	$	0.46	$	0.19	$	1.28	$	0.49
Diluted earnings per share	$	0.46	$	0.19	$	1.28	$	0.49
Basic weighted average shares outstanding		56,739		58,954		57,405		59,548
Diluted weighted average and equivalent shares outstanding		56,998		59,083		57,657		59,643

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ZEBRA TECHNOLOGIES CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Amounts in thousands)

(Unaudited)

	Nine Months Ended
	October 2,     2010		October 3,     2009
Cash flows from operating activities:
Net income	$	73,561	$	29,474
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Depreciation and amortization		23,698		24,409
Equity-based compensation		8,155		8,687
Excess tax benefit from equity-based compensation		(83)		(11)
Gain on sale of assets		(58)		357
Asset impairment charges		—		(1,058)
Deferred income taxes		3,208		4,259
Changes in assets and liabilities:
Accounts receivable, net		(14,463)		13,797
Inventories, net		(15,972)		22,632
Other assets		(1,192)		178
Accounts payable		6,747		(21,216)
Accrued liabilities		13,861		(19,389)
Deferred revenue		(1,530)		2,674
Income taxes		9,197		(2,394)
Other operating activities		(3,391)		584
Net cash provided by operating activities		101,738		62,983
Cash flows from investing activities:
Purchases of property and equipment		(23,752)		(19,499)
Payments for patents and licensing arrangements		(2,882)		(425)
Purchases of investments and marketable securities		(312,201)		(236,520)
Maturities of investments and marketable securities		230,715		194,939
Sales of investments and marketable securities		74,371		49,899
Net cash provided by (used in) investing activities		(33,749)		(11,606)
Cash flows from financing activities:
Purchase of treasury stock		(67,384)		(49,609)
Proceeds from exercise of stock options and stock purchase plan purchases		7,772		3,250
Excess tax benefit from equity-based compensation		83		11
Net cash used in financing activities		(59,529)		(46,348)
Effect of exchange rate changes on cash		44		752
Net increase in cash and cash equivalents		8,504		5,781
Cash and cash equivalents at beginning of period		38,943		33,267
Cash and cash equivalents at end of period	$	47,447	$	39,048
Supplemental disclosures of cash flow information:
Income taxes paid	$	17,162	$	9,764

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ZEBRA TECHNOLOGIES CORPORATION

SUPPLEMENTAL SALES INFORMATION

(Amounts in thousands)

(Unaudited)

SALES BY PRODUCT CATEGORY

	Three Months Ended
Product Category	October 2,     2010		October 3,     2009		Percent     Change		Percent of      Net Sales - 2010		Percent of      Net Sales - 2009
Hardware	$	178,991	$	130,856		36.8		72.6		65.2
Supplies		41,644		43,229		(3.7)		16.9		21.5
Service and software		24,712		25,443		(2.9)		10.0		12.7
Shipping and handling		1,160		1,250		(7.2)		0.5		0.6
Total net sales	$	246,507	$	200,778		22.8		100.0		100.0
	Nine Months Ended
Product Category	October 2,     2010		October 3,     2009		Percent     Change		Percent of      Net Sales - 2010		Percent of      Net Sales - 2009
Hardware	$	502,500	$	383,228		31.1		70.9		65.9
Supplies		125,914		116,836		7.8		17.8		20.1
Service and software		76,475		77,116		(0.8)		10.8		13.3
Shipping and handling		3,784		3,883		(2.5)		0.5		0.7
Total net sales	$	708,673	$	581,063		22.0		100.0		100.0

SALES BY GEOGRAPHIC REGION

,	Three Months Ended
Geographic Region	October 2,     2010		October 3,     2009		Percent     Change		Percent of      Net Sales - 2010		Percent of      Net Sales - 2009
Europe, Middle East and Africa	$	82,456	$	67,591		22.0		33.4		33.7
Latin America		22,338		17,452		28.0		9.1		8.7
Asia-Pacific		35,453		20,889		69.7		14.4		10.4
Total International		140,247		105,932		32.4		56.9		52.8
North America		106,260		94,846		12.0		43.1		47.2
Total net sales	$	246,507	$	200,778		22.8		100.0		100.0
	Nine Months Ended
Geographic Region	October 2,     2010		October 3,     2009		Percent     Change		Percent of      Net Sales - 2010		Percent of      Net Sales - 2009
Europe, Middle East and Africa	$	246,773	$	211,919		16.4		34.9		36.5
Latin America		64,063		44,864		42.8		9.0		7.7
Asia-Pacific		89,338		60,136		48.6		12.6		10.3
Total International		400,174		316,919		26.3		56.5		54.5
North America		308,499		264,144		16.8		43.5		45.5
Total net sales	$	708,673	$	581,063		22.0		100.0		100.0

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ZEBRA TECHNOLOGIES CORPORATION

SUPPLEMENTAL SEGMENT INFORMATION

(Amounts in thousands)

(Unaudited)

	Three Months Ended				Nine Months Ended
	October 2, 2010		October 3, 2009		October 2, 2010		October 3, 2009
Net sales:
SPG	$	222,819	$	180,757	$	643,873	$	519,434
ZES		23,688		20,021		64,800		61,629
Total	$	246,507	$	200,778	$	708,673	$	581,063
Cost of Sales:
SPG	$	115,574	$	101,926	$	342,092	$	297,058
ZES		12,219		7,154		29,353		24,762
Total	$	127,793	$	109,080	$	371,445	$	321,820
Operating expenses:
SPG	$	47,161	$	42,149	$	134,324	$	121,607
ZES		16,397		15,779		49,638		46,706
Corporate and other		16,299		18,532		49,848		48,366
Total	$	79,857	$	76,460	$	233,810	$	216,679
Operating income (loss):
SPG	$	60,084	$	36,682	$	167,457	$	100,769
ZES		(4,928)		(2,912)		(14,191)		(9,839)
Corporate and other		(16,299)		(18,532)		(49,848)		(48,366)
Total	$	38,857	$	15,238	$	103,418	$	42,564

Corporate and other includes corporate administration costs or assets that support both reporting segments.

ZEBRA TECHNOLOGIES CORPORATION

PRINTER UNITS and AVERAGE UNIT PRICES

(Unaudited)

	Three Months Ended
	October 2,		October 3,		Percent
	2010		2009		Change
Total printers shipped		265,962		201,713		31.9
Average selling price of printers shipped		$545		$530		2.8
	Nine Months Ended
	October 2,		October 3,		Percent
	2010		2009		Change
Total printers shipped		781,147		606,130		28.9
Average selling price of printers shipped		$532		$518		2.6

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