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): May 2, 2013
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) |
Registrants 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 May 2, 2013, we announced our results of operations and financial position as of and for the first quarter ended March 30, 2013. 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 |
Description of Exhibits | |
99.1 | Registrants Press Release dated May 2, 2013 |
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: May 2, 2013 | By: | /s/ Jim Kaput | ||||
Jim Kaput | ||||||
SVP, General Counsel |
EXHIBIT INDEX
Exhibit Number |
Description of Exhibits | |
99.1 | Registrants Press Release dated May 2, 2013 |
Exhibit 99.1
FOR IMMEDIATE RELEASE
Contact: | ||
Investors: | Media: | |
Douglas A. Fox, CFA | Robb Kristopher | |
Vice President, Investor Relations | Director, Corporate Communications | |
and Treasurer | and Public Relations | |
+ 1 847 793 6735 | + 1 847 793 5514 | |
dfox@zebra.com | rkristopher@zebra.com |
Zebra Technologies Announces Financial Results for the 2013 First Quarter
Temporary slowdown in North America prompts reduction in channel inventories;
Sales rebound expected for second quarter
Lincolnshire, IL, May 2, 2013Zebra Technologies Corporation (NASDAQ: ZBRA) today announced 2013 first quarter diluted earnings of $0.46 per share, which includes exit, restructuring and acquisition costs that reduced earnings by $0.04 per share. Earnings for the first quarter of 2012 totaled $0.58 per share. Net sales for the quarter ended March 30, 2013, decreased 2.8% to $236,937,000 from $243,875,000 for the first quarter of 2012.
Summary Financial Performance (Unaudited) |
||||||||||||
1Q13 | 1Q12 | Change | ||||||||||
Net sales (in 000s) |
$ | 236,937 | $ | 243,875 | (2.8 | )% | ||||||
Gross margin (%) |
47.7 | 49.2 | (1.5 | ) pts. | ||||||||
Operating margin (%) |
11.9 | 17.3 | (5.4 | ) pts. | ||||||||
Net income (in 000s) |
$ | 23,542 | $ | 30,164 | (22.0 | )% | ||||||
Diluted earnings per share: |
$ | 0.46 | $ | 0.58 | (20.7 | )% |
Entering the first quarter, we expected growth in North America for the full quarter to offset the anticipated decline in Europe. However, a slowdown in our North American business during the first half of the period caused some of our distribution channel partners to meaningfully reduce inventories, stated Anders Gustafsson, Zebras chief executive officer. During the quarter, our international operations performed largely as expected. Business activity in all regions has now increased, and the pipeline of opportunities has improved. We also made progress on developing new, incremental revenue streams with solutions such as mobile point-of-sale, location solutions and RFID that are emerging with important technology trends. We remain confident in Zebras continued ability to invest in those areas that deliver the highest risk-adjusted returns and increasing shareholder value.
Mr. Gustafsson added, Looking ahead, our focus remains on driving growth, but we are cognizant of the ongoing business climate worldwide. As a result, we will remain responsive to these challenges by optimizing our cost structure and allocation of resources, while maintaining investments in important, high-return business development opportunities.
As of March 30, 2013, Zebra had $417,564,000 in cash and investments, and no long-term debt. Net inventories were $116,417,000, and net accounts receivable were $169,255,000.
Discussion and Analysis First quarter
| Net sales for the first quarter were affected by the ongoing challenged conditions in Europe and Asia, along with a slowdown in business during the first few weeks of the quarter in North America. Sales increases of 3.8% in Latin America and 0.9% in North America were offset by sales declines of 0.7% in Asia Pacific and 9.8% in the Europe, Middle East and Africa (EMEA) region. On a constant-currency basis, sales in EMEA declined 2.8%. Sales of supplies thermal ribbons, labels, wristbands and receipts increased by 14.3%. |
| Gross profit margin of 47.7%, versus 49.2% in 2012, reflects lower sales across Europe, Middle East and Africa (EMEA), and Asia Pacific regions in addition to unfavorable movements in product mix. |
| Operating expense growth of 9.0%, including $1,895,000 in exit and restructuring costs and $482,000 in acquisition costs. Higher selling and marketing, research and development, and general and administrative expenses generally relate to increased employee-related expenses. Amortization also increased over 2012 levels. |
Stock Purchase Update
During the first quarter of 2013, Zebra returned $3.9 million to shareholders through the repurchase of 87,254 shares of Zebra Technologies Corporation Class A Common Stock at an average price of $44.56 per share. At March 30, 2013, the company had 1,935,082 shares remaining in its stock buyback authorization, and 51,017,867 shares of common stock were outstanding.
Second Quarter Outlook
Zebra announced its financial forecast for the second quarter of 2013. Net sales are expected within a range of $246,000,000 to $258,000,000. Diluted earnings per share are expected within a range of $0.58 to $0.67.
- 2 -
Conference Call Notification
Investors are invited to listen to a live webcast of Zebras conference call discussing the companys financial results for the first quarter of 2013. The conference call will be held at 11:00 AM Eastern Time today. To listen to the call, visit the companys website 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 companys financial forecast for the second quarter of 2013 stated in the paragraph above captioned Second Quarter Outlook. Actual results may differ from those expressed or implied in the companys 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 Zebras industry, market conditions, general domestic and international economic conditions, and other factors. These factors include customer acceptance of Zebras hardware and software products and competitors product offerings, and the potential effects of technological changes. The continued 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 supply chain constraints, natural disasters or other circumstances could restrict sales and negatively affect customer relationships. Profits and profitability will be affected by Zebras 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 may be involved is another factor. The success of integrating acquisitions could also affect profitability, reported results and the companys competitive position in it industry. These and other factors could have an adverse effect on Zebras 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 companys future operations and results can be found in Zebras filings with the Securities and Exchange Commission. In particular, readers are referred to Zebras Form 10-K for the year ended December 31, 2012.
About Zebra Technologies
A global leader respected for innovation and reliability, Zebra Technologies Corporation (NASDAQ: ZBRA) offers technologies that give a virtual voice to an organizations assets, people and transactions, enabling organizations to unlock greater business value. The companys extensive portfolio of marking and printing technologies, including RFID and real-time location solutions, illuminates mission-critical information to help customers take smarter business actions. For more information about Zebras solutions, visit http://www.zebra.com.
- 3 -
ZEBRA TECHNOLOGIES CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Amounts in thousands)
March 30, 2013 |
December 31, 2012 |
|||||||
(Unaudited) | ||||||||
ASSETS | ||||||||
Current assets: |
||||||||
Cash and cash equivalents |
$ | 49,592 | $ | 64,740 | ||||
Investments and marketable securities |
364,529 | 324,140 | ||||||
Accounts receivable, net |
169,255 | 168,732 | ||||||
Inventories, net |
116,417 | 123,357 | ||||||
Deferred income taxes |
12,962 | 13,484 | ||||||
Prepaid expenses and other current assets |
17,379 | 16,410 | ||||||
|
|
|
|
|||||
Total current assets |
730,134 | 710,863 | ||||||
|
|
|
|
|||||
Property and equipment at cost, less accumulated depreciation and amortization |
101,054 | 101,349 | ||||||
Long-term deferred income taxes |
2,134 | 2,602 | ||||||
Goodwill |
94,942 | 94,942 | ||||||
Other intangibles, net |
37,288 | 39,151 | ||||||
Long-term investments and marketable securities |
3,443 | 5,195 | ||||||
Other assets |
14,602 | 13,646 | ||||||
|
|
|
|
|||||
Total assets |
$ | 983,597 | $ | 967,748 | ||||
|
|
|
|
|||||
LIABILITIES AND STOCKHOLDERS EQUITY | ||||||||
Current liabilities: |
||||||||
Accounts payable |
$ | 20,141 | $ | 23,045 | ||||
Accrued liabilities |
43,932 | 57,234 | ||||||
Deferred revenue |
13,445 | 13,326 | ||||||
Income taxes payable |
2,374 | 1,609 | ||||||
|
|
|
|
|||||
Total current liabilities |
79,892 | 95,214 | ||||||
Deferred rent |
1,245 | 1,303 | ||||||
Other long-term liabilities |
16,096 | 14,229 | ||||||
|
|
|
|
|||||
Total liabilities |
97,233 | 110,746 | ||||||
|
|
|
|
|||||
Stockholders equity: |
||||||||
Preferred Stock |
| | ||||||
Class A Common Stock |
722 | 722 | ||||||
Additional paid-in capital |
140,736 | 139,523 | ||||||
Treasury stock |
(638,596 | ) | (641,438 | ) | ||||
Retained earnings |
1,392,062 | 1,368,520 | ||||||
Accumulated other comprehensive loss |
(8,560 | ) | (10,325 | ) | ||||
|
|
|
|
|||||
Total stockholders equity |
886,364 | 857,002 | ||||||
|
|
|
|
|||||
Total liabilities and stockholders equity |
$ | 983,597 | $ | 967,748 | ||||
|
|
|
|
- 4 -
ZEBRA TECHNOLOGIES CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EARNINGS
(Amounts in thousands, except per share data)
(Unaudited)
Three Months Ended | ||||||||
March 30, 2013 |
March 31, 2012 |
|||||||
Net sales: |
||||||||
Net sales of tangible products |
$ | 225,121 | $ | 232,476 | ||||
Revenue from services and software |
11,816 | 11,399 | ||||||
|
|
|
|
|||||
Total net sales |
236,937 | 243,875 | ||||||
|
|
|
|
|||||
Cost of sales |
||||||||
Cost of sales of tangible products |
117,111 | 119,033 | ||||||
Cost of services and software |
6,761 | 4,959 | ||||||
|
|
|
|
|||||
Total cost of sales |
123,872 | 123,992 | ||||||
|
|
|
|
|||||
Gross profit |
113,065 | 119,883 | ||||||
|
|
|
|
|||||
Operating expenses: |
||||||||
Selling and marketing |
33,515 | 32,114 | ||||||
Research and development |
21,858 | 20,416 | ||||||
General and administrative |
25,276 | 24,320 | ||||||
Amortization of intangible assets |
1,863 | 770 | ||||||
Acquisition costs |
482 | 254 | ||||||
Exit and restructuring costs |
1,895 | | ||||||
|
|
|
|
|||||
Total operating expenses |
84,889 | 77,874 | ||||||
|
|
|
|
|||||
Operating income |
28,176 | 42,009 | ||||||
|
|
|
|
|||||
Other income (expense): |
||||||||
Investment income |
677 | 592 | ||||||
Foreign exchange loss |
(98 | ) | (342 | ) | ||||
Other, net |
9 | (364 | ) | |||||
|
|
|
|
|||||
Total other income (expense) |
588 | (114 | ) | |||||
|
|
|
|
|||||
Income before income taxes |
28,764 | 41,895 | ||||||
Income taxes |
5,222 | 11,731 | ||||||
|
|
|
|
|||||
Net income |
$ | 23,542 | $ | 30,164 | ||||
|
|
|
|
|||||
Basic earnings per share |
$ | 0.46 | $ | 0.58 | ||||
Diluted earnings per share |
$ | 0.46 | $ | 0.58 | ||||
Basic weighted average shares outstanding |
50,980 | 51,998 | ||||||
Diluted weighted average and equivalent shares outstanding |
51,366 | 52,301 |
- 5 -
ZEBRA TECHNOLOGIES CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Amounts in thousands)
(Unaudited)
Three Months Ended | ||||||||
March 30, 2013 |
March 31, 2012 |
|||||||
Net income |
$ | 23,542 | $ | 30,164 | ||||
Other comprehensive income (loss): |
||||||||
Unrealized gains (loss) on hedging transactions, net of income taxes |
1,743 | (4,646 | ) | |||||
Unrealized holding gains (loss) on investments, net of income taxes |
(72 | ) | 570 | |||||
Foreign currency translation adjustment |
94 | 83 | ||||||
|
|
|
|
|||||
Comprehensive income |
$ | 25,307 | $ | 26,171 | ||||
|
|
|
|
- 6 -
ZEBRA TECHNOLOGIES CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Amounts in thousands)
(Unaudited)
Three Months Ended | ||||||||
March 30, 2013 | March 31, 2012 | |||||||
Cash flows from operating activities: |
||||||||
Net income |
$ | 23,542 | $ | 30,164 | ||||
Adjustments to reconcile net income to net cash provided by (used in) operating activities: |
||||||||
Depreciation and amortization |
7,372 | 5,959 | ||||||
Share-based compensation |
2,146 | 3,800 | ||||||
Excess tax benefit from share-based compensation |
(358 | ) | (66 | ) | ||||
Loss on sale of property and equipment |
136 | 83 | ||||||
Deferred income taxes |
990 | (391 | ) | |||||
Changes in assets and liabilities: |
||||||||
Accounts receivable, net |
(516 | ) | (1,862 | ) | ||||
Inventories, net |
6,943 | 7,169 | ||||||
Other assets |
(137 | ) | 9,395 | |||||
Accounts payable |
(7,119 | ) | (3,378 | ) | ||||
Accrued liabilities |
(12,787 | ) | (16,881 | ) | ||||
Deferred revenue |
1,618 | 1,151 | ||||||
Income taxes |
649 | 6,135 | ||||||
Other operating activities |
1,685 | (4,725 | ) | |||||
|
|
|
|
|||||
Net cash provided by operating activities |
24,164 | 36,553 | ||||||
|
|
|
|
|||||
Cash flows from investing activities: |
||||||||
Purchases of property and equipment |
(1,952 | ) | (7,654 | ) | ||||
Proceeds from the sale of business |
| 13,790 | ||||||
Acquisition of intangible assets |
(500 | ) | | |||||
Acquisition of long-term equity investment |
(604 | ) | | |||||
Purchases of investments and marketable securities |
(106,947 | ) | (132,390 | ) | ||||
Maturities of investments and marketable securities |
3,144 | 81,189 | ||||||
Proceeds from sales of investments and marketable securities |
65,094 | 21,748 | ||||||
|
|
|
|
|||||
Net cash used in investing activities |
(41,765 | ) | (23,317 | ) | ||||
|
|
|
|
|||||
Cash flows from financing activities: |
||||||||
Purchase of treasury stock |
(3,888 | ) | (9,775 | ) | ||||
Proceeds from exercise of stock options and stock purchase plan purchases |
5,913 | 1,998 | ||||||
Excess tax benefit from share-based compensation |
358 | 66 | ||||||
|
|
|
|
|||||
Net cash provided by (used in) financing activities |
2,383 | (7,711 | ) | |||||
|
|
|
|
|||||
Effect of exchange rate changes on cash |
70 | | ||||||
|
|
|
|
|||||
Net increase (decrease) in cash and cash equivalents |
(15,148 | ) | 5,525 | |||||
Cash and cash equivalents at beginning of period |
64,740 | 36,418 | ||||||
|
|
|
|
|||||
Cash and cash equivalents at end of period |
$ | 49,592 | $ | 41,943 | ||||
|
|
|
|
|||||
Supplemental disclosures of cash flow information: |
||||||||
Income taxes paid, net |
$ | 2,271 | $ | 7,956 |
- 7 -
ZEBRA TECHNOLOGIES CORPORATION AND SUBSIDIARIES
SUPPLEMENTAL SALES INFORMATION
(Amounts in thousands)
(Unaudited)
SALES BY PRODUCT CATEGORY
Three Months Ended | ||||||||||||||||||||
March 30, | March 31, | Percent | Percent of | Percent of | ||||||||||||||||
Product Category |
2013 | 2012 | Change | Net Sales 2013 | Net Sales 2012 | |||||||||||||||
Hardware |
$ | 166,692 | $ | 181,196 | (8.0 | ) | 70.3 | 74.3 | ||||||||||||
Supplies |
57,123 | 49,962 | 14.3 | 24.1 | 20.5 | |||||||||||||||
Service and software |
11,816 | 11,399 | 3.7 | 5.0 | 4.7 | |||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Subtotal products |
235,631 | 242,557 | (2.9 | ) | 99.4 | 99.5 | ||||||||||||||
Shipping and handling |
1,306 | 1,318 | (0.9 | ) | 0.6 | 0.5 | ||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Total net sales |
$ | 236,937 | $ | 243,875 | (2.8 | ) | 100.0 | 100.0 | ||||||||||||
|
|
|
|
|
|
|
|
SALES BY GEOGRAPHIC REGION
Three Months Ended | ||||||||||||||||||||
March 30, | March 31, | Percent | Percent of | Percent of | ||||||||||||||||
Geographic Region |
2013 | 2012 | Change | Net Sales 2013 | Net Sales 2012 | |||||||||||||||
Europe, Middle East and Africa |
$ | 77,673 | $ | 86,121 | (9.8 | ) | 32.8 | 35.3 | ||||||||||||
Latin America |
23,131 | 22,287 | 3.8 | 9.8 | 9.1 | |||||||||||||||
Asia-Pacific |
32,909 | 33,148 | (0.7 | ) | 13.9 | 13.6 | ||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Total International |
133,713 | 141,556 | (5.5 | ) | 56.5 | 58.0 | ||||||||||||||
North America |
103,224 | 102,319 | 0.9 | 43.5 | 42.0 | |||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Total net sales |
$ | 236,937 | $ | 243,875 | (2.8 | ) | 100.0 | 100.0 | ||||||||||||
|
|
|
|
|
|
|
|
ZEBRA TECHNOLOGIES CORPORATION AND SUBSIDIARIES
PRINTER UNITS and AVERAGE UNIT PRICES
(Unaudited)
Three Months Ended | ||||||||||||
March 30, | March 31, | Percent | ||||||||||
2013 | 2012 | Change | ||||||||||
Total printers shipped |
299,633 | 297,669 | 0.7 | |||||||||
Average selling price of printers shipped |
$ | 469 | $ | 503 | (6.7 | ) |
- 8 -
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