Exhibit 99.1
Zebra Technologies Announces
2014 Fourth Quarter and Full-Year Financial Results
Robust business activity leads to strong sales at Zebra and Enterprise;
Company provides favorable outlook for the first quarter of 2015
Lincolnshire, Ill., March 17, 2015—Zebra Technologies Corporation (NASDAQ: ZBRA) today reported financial results for the 2014 fourth quarter and full year, which include two months of results of the Enterprise business that the company acquired from Motorola Solutions on October 27, 2014. Net sales were a record $790,611,000 for the fourth quarter of 2014, compared with $284,539,000 for the fourth quarter of 2013. The quarterly loss per share of $1.02 for 2014 includes $66,094,000 of acquisition and integration costs. Diluted earnings per share for the fourth quarter of 2013 were $0.82.
Summary Financial Performance (Unaudited)
| 4Q14 | 4Q13 | Change | ||||||||||
| GAAP net sales (in 000s) |
$ | 790,611 | $ | 284,539 | 177.9 | % | ||||||
| Gross margin (%) |
42.6 | 49.6 | (7.0 | ) pts. | ||||||||
| GAAP net income (loss) (in 000s) |
$ | (51,679 | ) | $ | 41,650 | NM | ||||||
| GAAP diluted earnings (loss) per share |
$ | (1.02 | ) | $ | 0.82 | NM | ||||||
| Non-GAAP net income (in 000s) |
$ | 58,192 | $ | 48,831 | 19.2 | % | ||||||
| Non-GAAP diluted earnings per share |
$ | 1.15 | $ | 0.96 | 19.7 | % | ||||||
| Adjusted EBITDA |
$ | 145,197 | $ | 67,311 | 115.7 | % | ||||||
| (1) | A Reconciliation of Non-GAAP financial information to GAAP information is available in the financial tables in this release. |
“Robust sales across products, geographies, customers and industries highlighted the strong finish to a transformative year for Zebra,” stated Anders Gustafsson, Zebra’s chief executive officer. “We have made significant progress on multiple fronts to drive performance and capture business synergies since acquiring the Enterprise business in October 2014. Customers and partners are responding well to the new Zebra, which has already yielded some early wins with our robust, industry-leading products and solutions. We have entered 2015 with favorable business momentum, and the outlook for Zebra is very bright. We are well positioned to benefit from important technology trends including the Internet of Things, cloud computing and mobility, as organizations invest in visibility solutions to gain real-time insights into their assets, transactions and people to achieve improved work flow and deliver better customer service.”
Non-GAAP Financial Results (unaudited)
Adjusted EBITDA for the fourth quarter of 2014 was $145,197,000, versus $67,311,000 for the 2013 fourth quarter. Quarterly EBITDA totaled $29,309,000, compared with $57,877,000 for the fourth quarter of 2013. For the fourth quarter of 2014, non-GAAP net income was $58,192,000, or $1.15 per diluted share, compared with $48,831,000, or $0.96 per diluted share, for the fourth quarter of 2013.
1
Discussion and Analysis – Fourth Quarter
| • | Net sales increased 177.9% from the comparable quarter a year ago. The Enterprise business acquired from Motorola Solutions contributed $476,036,000 to 2014 fourth quarter sales, including a purchase accounting reduction of $6,181,000 for deferred revenue on service contracts. Sales of pre-transaction Zebra totaled $314,575,000, up 10.6% from $284,539,000 for the fourth quarter of 2013. The effect of movements in foreign currency, net of hedges, was not material. |
| • | Gross margin of 42.6%, versus 49.6% in 2013, reflects the mix of products sold during the quarter, including Enterprise products which generally have lower gross margins than Zebra products. Cost of sales for the fourth quarter of 2014 includes additional costs of $28,483,000 for the sale of inventory related to the Enterprise acquisition, which was recorded at fair value. The combination of the purchase accounting adjustments to sales and cost of sales reduced gross margin by 4.0 percentage points. The effect of movements in foreign currency, net of hedges, was not material. |
| • | Operating expenses for the fourth quarter of 2014 were $361,251,000, an increase of $269,302,000 from the prior year’s fourth quarter, primarily as a result of the Enterprise acquisition. Operating expenses for the fourth quarter of 2014 include $66,094,000 in acquisition and integration costs, versus $3,322,000 in the prior year, and $46,160,000 in amortization of intangible assets, compared with $1,826,000 for the fourth quarter of 2013. |
| • | The company incurred a foreign exchange loss of $8,427,000 related to changes in valuation of balance sheet items. In addition, a forward swap loss of $2,401,000 reflects a change in interest rates. |
| • | Interest expense of $56,715,000 reflects the increase in debt related to funding the acquisition of the Enterprise business from Motorola Solutions, in addition to $18,750,000 for an unused bridge loan commitment. |
| • | An income tax benefit of $41,040,000, compared with income taxes of $8,681,000, reflects a loss on North American operations primarily as a result of transaction and integration costs and debt financing related to the Enterprise acquisition, which is partially offset by income generated in non-U.S. jurisdictions. |
As of December 31, 2014, Zebra had cash and investments of $418,335,000, accounts receivable of $670,402,000, inventories of $394,176,000, and long-term debt of $3,182,962,000.
First Quarter Outlook
Zebra announced its financial forecast for the first quarter of 2015. The company expects net sales within a range of $870,000,000 to $890,000,000. This forecast incorporates an expectation of year-over-year growth of 6.0% to 8.0% in constant currency, on a proforma basis. Non-GAAP diluted earnings are expected in the range of $0.95 and $1.20 per share. Adjusted EBITDA are forecast within a range of $125,000,000 and $140,000,000 for the first quarter of 2015.
Conference Call Notification
Investors are invited to listen to a live webcast of Zebra’s conference call discussing the company’s financial results for the fourth quarter of 2014. The conference call will be held at 7:30 a.m. Eastern Time today. To listen to the call, visit the company’s 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 company’s financial forecast for the first quarter of 2015 stated in the paragraph above captioned “First Quarter Outlook.” Similarly, statements herein that describe the transaction between Zebra and Motorola Solutions including, its financial impact, and other statements of management’s beliefs, intentions, or goals are also forward-looking statements. When used in this release and documents referenced, the words “anticipate,” “believe,” “estimate,” and “expect” and similar expressions, as they
2
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. 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 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 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 Zebra’s ability to control manufacturing and operating costs. Because of its debt, 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, including the Enterprise business of Motorola Solutions, could also affect profitability, reported results and the company’s competitive position in it industry. 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. 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, 2014.
About Zebra Technologies
Zebra (NASDAQ: ZBRA) makes businesses as smart and connected as the world we live in. Zebra tracking and visibility solutions transform the physical to digital, creating the data streams businesses need in order to simplify operations, know more about their business, and empower their mobile workforce. For more information, visit www.zebra.com/possibilities.
Use of Non-GAAP Financial Information
This press release contains certain non-GAAP financial measures, consisting of “EBITDA,” “Adjusted EBITDA,” “Non-GAAP net income” and “Non-GAAP earnings per share” in addition to measure our operating performance. Management presents these measures to focus on the on-going operations and believes it is useful to investors because they enable them to perform meaningful comparisons of past and present operating results. The Company believes it is useful to present non-GAAP financial measures, which exclude certain significant items, as a means to understand the performance of its ongoing operations and how management views the business. Reconciliations of Operating Income to EBITDA, EBITDA to Adjusted EBITDA, and GAAP net income to Non-GAAP net income are included in the financial schedules contained in this press release. These measures, however, should not be construed as an alternative to any other measure of performance determined in accordance with GAAP.
| Contact: | ||
| Investors: | Media: | |
| Douglas A. Fox, CFA | Robb Kristopher | |
| Vice President, Investor Relations and Treasurer |
Director, Corporate Communications and Public Relations | |
| + 1 847 793 6735 | + 1 847 793 5514 | |
| dfox@zebra.com | rkristopher@zebra.com |
3
ZEBRA TECHNOLOGIES CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Amounts in thousands)
| December 31, 2014 |
December 31, 2013 |
|||||||
| (Unaudited) | ||||||||
| ASSETS | ||||||||
| Current assets: |
||||||||
| Cash and cash equivalents |
$ | 393,950 | $ | 62,827 | ||||
| Investments and marketable securities |
24,385 | 350,380 | ||||||
| Accounts receivable, net |
670,402 | 176,917 | ||||||
| Inventories, net |
394,176 | 121,023 | ||||||
| Deferred income taxes |
122,772 | 19,810 | ||||||
| Income tax receivable |
12,988 | 7,622 | ||||||
| Prepaid expenses and other current assets |
53,377 | 15,524 | ||||||
|
|
|
|
|
|||||
| Total current assets |
1,672,050 | 754,103 | ||||||
|
|
|
|
|
|||||
| Property and equipment at cost, less accumulated depreciation and amortization |
255,092 | 109,588 | ||||||
| Goodwill |
2,489,510 | 155,800 | ||||||
| Other intangibles, net |
1,029,293 | 68,968 | ||||||
| Debt issuance cost |
23,989 | — | ||||||
| Other assets |
98,917 | 31,353 | ||||||
|
|
|
|
|
|||||
| Total assets |
$ | 5,568,851 | $ | 1,119,812 | ||||
|
|
|
|
|
|||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
| Current liabilities: |
||||||||
| Accounts payable |
$ | 326,524 | $ | 34,688 | ||||
| Accrued liabilities |
421,070 | 61,962 | ||||||
| Deferred revenue |
196,213 | 15,506 | ||||||
| Current portion of long-term debt |
7,522 | — | ||||||
| Income taxes payable |
4,518 | 6,898 | ||||||
|
|
|
|
|
|||||
| Total current liabilities |
955,847 | 119,054 | ||||||
| Long-term debt |
3,182,962 | — | ||||||
| Long-term deferred tax liability |
199,853 | 25,492 | ||||||
| Long-term deferred revenue |
115,847 | 10,651 | ||||||
| Other long-term liabilities |
74,434 | 5,957 | ||||||
|
|
|
|
|
|||||
| Total liabilities |
4,528,943 | 161,154 | ||||||
|
|
|
|
|
|||||
| Stockholders’ equity: |
||||||||
| Class A Common Stock |
722 | 722 | ||||||
| Additional paid-in capital |
147,090 | 143,295 | ||||||
| Treasury stock |
(634,664 | ) | (678,456 | ) | ||||
| Retained earnings |
1,535,307 | 1,502,878 | ||||||
| Accumulated other comprehensive loss |
(8,547 | ) | (9,781 | ) | ||||
|
|
|
|
|
|||||
| Total stockholders’ equity |
1,039,908 | 958,658 | ||||||
|
|
|
|
|
|||||
| Total liabilities and stockholders’ equity |
$ | 5,568,851 | $ | 1,119,812 | ||||
|
|
|
|
|
|||||
4
ZEBRA TECHNOLOGIES CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EARNINGS
(Amounts in thousands, except per share data)
(Unaudited)
| Three Months Ended | Twelve Months Ended | |||||||||||||||
| December 31, 2014 |
December 31, 2013 |
December 31, 2014 |
December 31, 2013 |
|||||||||||||
| Net sales |
||||||||||||||||
| Net sales of tangible products |
$ | 683,978 | $ | 269,583 | $ | 1,498,562 | $ | 984,532 | ||||||||
| Revenue from services and software |
106,633 | 14,956 | 172,010 | 53,627 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Total net sales |
790,611 | 284,539 | 1,670,572 | 1,038,159 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Cost of sales |
||||||||||||||||
| Cost of sales of tangible products |
382,884 | 136,547 | 792,137 | 507,513 | ||||||||||||
| Cost of services and software |
71,315 | 6,964 | 100,410 | 27,036 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Total cost of sales |
454,199 | 143,511 | 892,547 | 534,549 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Gross profit |
336,412 | 141,028 | 778,025 | 503,610 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Operating expenses: |
||||||||||||||||
| Selling and marketing |
105,352 | 36,280 | 213,304 | 138,020 | ||||||||||||
| Research and development |
79,311 | 23,712 | 151,103 | 91,147 | ||||||||||||
| General and administrative |
58,761 | 24,434 | 138,214 | 96,216 | ||||||||||||
| Amortization of intangible assets |
46,160 | 1,826 | 54,096 | 7,383 | ||||||||||||
| Acquisition and integration costs |
66,094 | 3,322 | 126,711 | 4,690 | ||||||||||||
| Exit and restructuring costs |
5,573 | 2,375 | 6,007 | 5,890 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Total operating expenses |
361,251 | 91,949 | 689,435 | 343,346 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Operating income |
(24,839 | ) | 49,079 | 88,590 | 160,264 | |||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Other income (expense): |
||||||||||||||||
| Investment income gain (loss) |
934 | 666 | (714 | ) | 2,366 | |||||||||||
| Foreign exchange loss |
(8,427 | ) | 209 | (8,759 | ) | (524 | ) | |||||||||
| Forward swaps loss |
(2,401 | ) | — | (4,649 | ) | — | ||||||||||
| Interest expense |
(56,715 | ) | (30 | ) | (56,836 | ) | (98 | ) | ||||||||
| Other, net |
(1,271 | ) | 282 | (1,003 | ) | 1,819 | ||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Total other (expense) income |
(67,880 | ) | 1,127 | (71,961 | ) | 3,563 | ||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Income (loss) from continuing operations before income taxes |
(92,719 | ) | 50,206 | 16,629 | 163,827 | |||||||||||
| Income taxes (benefit) |
(41,040 | ) | 8,681 | (15,800 | ) | 29,602 | ||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Income (loss) from continuing operations |
(51,679 | ) | 41,525 | 32,429 | 134,225 | |||||||||||
| Income from discontinued operations, net of tax |
— | 125 | — | 133 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Net (loss) income |
$ | (51,679 | ) | $ | 41,650 | $ | 32,429 | $ | 134,358 | |||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Basic earnings per share |
||||||||||||||||
| Income (loss) from continuing operations |
||||||||||||||||
| Income from discontinued operations |
$ | (1.02 | ) | $ | 0.83 | $ | 0.64 | $ | 2.65 | |||||||
| Net (loss) income |
— | — | — | — | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| $ | (1.02 | ) | $ | 0.83 | $ | 0.64 | $ | 2.65 | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Diluted earnings per share |
||||||||||||||||
| Income (loss) from continuing operations |
$ | (1.02 | ) | $ | 0.82 | $ | 0.63 | $ | 2.63 | |||||||
| Income from discontinued operations |
— | — | — | — | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Net (loss) income |
$ | (1.02 | ) | $ | 0.82 | $ | 0.63 | $ | 2.63 | |||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Basic weighted average shares outstanding |
50,452 | 50,289 | 50,789 | 50,693 | ||||||||||||
| Diluted weighted average and equivalent shares outstanding |
50,452 | 50,666 | 51,380 | 51,063 | ||||||||||||
5
ZEBRA TECHNOLOGIES CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Amounts in thousands)
(Unaudited)
| Three months ended | Twelve months ended | |||||||||||||||
| December 31, 2014 |
December 31, 2013 |
December 31, 2014 |
December 31, 2013 |
|||||||||||||
| Net (loss) income |
$ | (51,679 | ) | $ | 41,650 | $ | 32,429 | $ | 134,358 | |||||||
| Unrealized gains (losses) on anticipated sales hedging transactions, net of tax |
1,449 | (228 | ) | 7,190 | 118 | |||||||||||
| Unrealized gains (losses) on forward interest rate swaps hedging transactions, net of tax |
(7,699 | ) | — | (7,699 | ) | — | ||||||||||
| Unrealized holding gains (losses) on investments: |
(311 | ) | 50 | 425 | (456 | ) | ||||||||||
| Foreign currency translation adjustment |
1,704 | 382 | 1,318 | 882 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| $ | (56,536 | ) | $ | 41,854 | $ | 33,663 | $ | 134,902 | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
6
ZEBRA TECHNOLOGIES CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Amounts in thousands)
(Unaudited)
| Twelve Months Ended | ||||||||
| December 31, 2014 |
December 31, 2013 |
|||||||
| Cash flows from operating activities: |
||||||||
| Net income (loss) |
$ | 32,429 | $ | 134,358 | ||||
| Adjustments to reconcile net income to net cash provided by (used in) operating activities: |
||||||||
| Depreciation and amortization |
81,371 | 32,110 | ||||||
| Amortization of debt issuance cost and discount |
2,113 | — | ||||||
| Equity-based compensation |
19,891 | 13,109 | ||||||
| Impairment of long term investment |
2,333 | — | ||||||
| Excess tax benefit from share-based compensation |
(6,127 | ) | (4,277 | ) | ||||
| Loss on sale of property and equipment |
1,793 | 224 | ||||||
| Gain on sale of business |
— | (201 | ) | |||||
| Deferred income taxes |
(44,340 | ) | 7,929 | |||||
| Loss on forward interest rate swaps |
4,649 | — | ||||||
| Changes in assets and liabilities, net of businesses acquired: |
||||||||
| Accounts receivable, net |
(69,628 | ) | (6,488 | ) | ||||
| Inventories, net |
(2,398 | ) | 2,743 | |||||
| Other assets |
(20,947 | ) | (342 | ) | ||||
| Accounts payable |
62,188 | 7,544 | ||||||
| Accrued liabilities |
164,269 | 6,220 | ||||||
| Deferred revenue |
10,034 | 2,133 | ||||||
| Income taxes |
(5,691 | ) | (242 | ) | ||||
| Other operating activities |
8,386 | (54 | ) | |||||
|
|
|
|
|
|||||
| Net cash provided by operating activities |
240,325 | 194,766 | ||||||
|
|
|
|
|
|||||
| Cash flows from investing activities: |
||||||||
| Acquisition of businesses, net of cash acquired |
(3,398,600 | ) | (95,328 | ) | ||||
| Purchases of property and equipment |
(31,291 | ) | (20,211 | ) | ||||
| Acquisition of intangible assets |
— | (1,500 | ) | |||||
| Purchases of long-term investments |
(2,454 | ) | (12,021 | ) | ||||
| Purchases of investments and marketable securities |
(651,698 | ) | (410,283 | ) | ||||
| Maturities of investments and marketable securities |
336,329 | 49,453 | ||||||
| Proceeds from sales of investments and marketable securities |
644,378 | 336,741 | ||||||
|
|
|
|
|
|||||
| Net cash used in investing activities |
(3,103,336 | ) | (153,149 | ) | ||||
|
|
|
|
|
|||||
| Cash flows from financing activities: |
||||||||
| Payment of debt issuance costs |
(24,473 | ) | — | |||||
| Proceeds from issuance of long-term debt |
3,188,855 | — | ||||||
| Purchase of treasury stock |
— | (63,102 | ) | |||||
| Proceeds from exercise of stock options and stock purchase plan purchases |
21,725 | 14,652 | ||||||
| Excess tax benefit from equity-based compensation |
6,127 | 4,277 | ||||||
|
|
|
|
|
|||||
| Net cash provided by (used in) financing activities |
3,192,234 | (44,173 | ) | |||||
|
|
|
|
|
|||||
| Effect of exchange rate changes on cash |
1,900 | 643 | ||||||
|
|
|
|
|
|||||
| Net increase (decrease) in cash and cash equivalents |
331,123 | (1,913 | ) | |||||
| Cash and cash equivalents at beginning of period |
62,827 | 64,740 | ||||||
|
|
|
|
|
|||||
| Cash and cash equivalents at end of period |
$ | 393,950 | $ | 62,827 | ||||
|
|
|
|
|
|||||
| Supplemental disclosures of cash flow information: |
||||||||
| Income taxes paid |
$ | 17,433 | $ | 18,418 | ||||
7
ZEBRA TECHNOLOGIES CORPORATION AND SUBSIDIARIES
SUPPLEMENTAL SALES INFORMATION
(Amounts in thousands)
(Unaudited)
SALES BY PRODUCT CATEGORY
| Three Months Ended | ||||||||||||||||||||
| December 31, 2014 |
December 31, 2013 |
Percent Change |
Percent of Net Sales 2014 |
Percent of Net Sales 2013 |
||||||||||||||||
| Product category | ||||||||||||||||||||
| Hardware |
$ | 614,529 | $ | 204,256 | 200.9 | 77.8 | 71.7 | |||||||||||||
| Supplies |
70,750 | 65,327 | 8.3 | 8.9 | 23.0 | |||||||||||||||
| Service and software |
105,332 | 14,956 | 604.3 | 13.3 | 5.3 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||
| Total net sales |
$ | 790,611 | $ | 284,539 | 177.9 | 100.0 | 100.0 | |||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||
| Twelve Months Ended | ||||||||||||||||||||
| December 31, 2014 |
December 31, 2013 |
Percent Change |
Percent of Net Sales 2014 |
Percent of Net Sales 2013 |
||||||||||||||||
| Product category | ||||||||||||||||||||
| Hardware |
$ | 1,233,386 | $ | 740,567 | 66.5 | 73.8 | 71.3 | |||||||||||||
| Supplies |
265,176 | 243,965 | 8.7 | 15.9 | 23.5 | |||||||||||||||
| Service and software |
172,010 | 53,627 | 220.8 | 10.3 | 5.2 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||
| Total net sales |
$ | 1,670,572 | $ | 1,038,159 | 60.9 | 100.0 | 100.0 | |||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||
SALES BY GEOGRAPHIC REGION
| Three Months Ended | ||||||||||||||||||||
| December 31, 2014 |
December 31, 2013 |
Percent Change |
Percent of Net Sales 2014 |
Percent of Net Sales 2013 |
||||||||||||||||
| Geographic region | ||||||||||||||||||||
| Europe, Middle East and Africa |
$ | 302,991 | $ | 88,660 | 241.7 | 38.3 | 31.2 | |||||||||||||
| Latin America |
54,734 | 25,335 | 116.0 | 6.9 | 8.9 | |||||||||||||||
| Asia-Pacific |
91,904 | 40,936 | 124.5 | 11.6 | 14.4 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||
| Total International |
449,629 | 154,931 | 190.2 | 56.8 | 54.5 | |||||||||||||||
| North America |
340,982 | 129,608 | 163.1 | 43.2 | 45.5 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||
| Total net sales |
$ | 790,611 | $ | 284,539 | 177.9 | 100.0 | 100.0 | |||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||
| Twelve Months Ended | ||||||||||||||||||||
| December 31, 2014 |
December 31, 2013 |
Percent Change |
Percent of Net Sales 2014 |
Percent of Net Sales 2013 |
||||||||||||||||
| Geographic region | ||||||||||||||||||||
| Europe, Middle East and Africa |
$ | 583,005 | $ | 326,470 | 78.6 | 34.9 | 31.4 | |||||||||||||
| Latin America |
134,638 | 99,041 | 35.9 | 8.1 | 9.5 | |||||||||||||||
| Asia-Pacific |
215,911 | 152,740 | 41.4 | 12.9 | 14.7 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||
| Total International |
933,554 | 578,251 | 61.4 | 55.9 | 55.6 | |||||||||||||||
| North America |
737,018 | 459,908 | 60.3 | 44.1 | 44.4 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||
| Total net sales |
$ | 1,670,572 | $ | 1,038,159 | 60.9 | 100.0 | 100.0 | |||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||
8
ZEBRA TECHNOLOGIES CORPORATION AND SUBSIDIARIES
RECONCILIATION OF GAAP TO NON-GAAP NET INCOME
(Amounts in thousands, except per-share data)
(Unaudited)
| Three Months Ended | Twelve Months Ended | |||||||||||||||
| December 31, 2014 |
December 31, 2013 |
December 31, 2014 |
December 31, 2013 |
|||||||||||||
| Income (loss) from continuing operations (GAAP) |
$ | (51,679 | ) | $ | 41,525 | $ | 32,429 | $ | 134,225 | |||||||
| Income tax (benefit) |
$ | (41,040 | ) | 8,681 | (15,800 | ) | 29,602 | |||||||||
| Stock-based compensation expense |
9,587 | 3,737 | 19,891 | 13,109 | ||||||||||||
| Acquisition and integration costs |
66,094 | 3,322 | 126,711 | 4,690 | ||||||||||||
| Exit and restructuring costs |
5,573 | 2,375 | 6,007 | 5,890 | ||||||||||||
| Loss on minority investment |
— | — | 2,333 | — | ||||||||||||
| Purchase accounting adjustments |
34,634 | — | 34,634 | — | ||||||||||||
| Amortization of intangible assets |
46,160 | 1,826 | 54,096 | 7,383 | ||||||||||||
| Interest rate swaps (gain) loss |
2,401 | — | 4,649 | — | ||||||||||||
| Tax effect on pretax adjustments |
(13,538 | ) | (12,635 | ) | (68,207 | ) | (40,510 | ) | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Total adjustments |
$ | 109,871 | $ | 7,306 | $ | 164,314 | $ | 20,164 | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Income from continuing operations (Non-GAAP) |
$ | 58,192 | $ | 48,831 | $ | 196,743 | $ | 154,389 | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| GAAP income from continuing operations per share |
||||||||||||||||
| Basic |
$ | (1.02 | ) | $ | 0.82 | $ | 0.64 | $ | 2.65 | |||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Diluted |
$ | (1.02 | ) | $ | 0.82 | $ | 0.63 | $ | 2.63 | |||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Non-GAAP income from continuing operations per share |
||||||||||||||||
| Basic |
$ | 1.15 | $ | 0.97 | $ | 3.87 | $ | 3.05 | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Diluted |
$ | 1.15 | $ | 0.96 | $ | 3.83 | $ | 3.02 | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Basic weighted average shares outstanding |
50,452 | 50,289 | 50,789 | 50,693 | ||||||||||||
| Diluted weighted average and equivalent shares outstanding |
50,452 | 50,666 | 51,380 | 51,063 | ||||||||||||
9
ZEBRA TECHNOLOGIES CORPORATION AND SUBSIDIARIES
GAAP to NON-GAAP RECONCILIATION
(Amounts in thousands, except per-share data)
(Unaudited)
| Three Months Ended | Twelve Months Ended | |||||||||||||||
| December 31, 2014 |
December 31, 2013 |
December 31, 2014 |
December 31, 2013 |
|||||||||||||
| Income from continuing operations to EBITDA and Adjusted EBITDA |
||||||||||||||||
| Income (loss) from continuing operations (GAAP) |
$ | (51,679 | ) | $ | 41,525 | $ | 32,429 | $ | 134,225 | |||||||
| Income tax (benefit) |
(41,040 | ) | 8,681 | (15,800 | ) | 29,602 | ||||||||||
| Total other expense (income) |
67,880 | (1,127 | ) | 71,961 | (3,563 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Operating income (loss) |
$ | (24,839 | ) | $ | 49,079 | $ | 88,590 | $ | 160,264 | |||||||
| Depreciation |
7,988 | 6,972 | 27,275 | 24,727 | ||||||||||||
| Amortization of intangible assets |
46,160 | 1,826 | 54,096 | 7,383 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| EBITDA (Non-GAAP) |
$ | 29,309 | $ | 57,877 | $ | 169,961 | $ | 192,374 | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Acquisition and integration costs |
66,094 | 3,322 | 126,711 | 4,690 | ||||||||||||
| Purchase price accounting adjustments |
34,634 | — | 34,634 | — | ||||||||||||
| Exit and restructuring costs |
5,573 | 2,375 | 6,007 | 5,890 | ||||||||||||
| Stock-based compensation expense |
9,587 | 3,737 | 19,891 | 13,109 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Adjusted EBITDA (Non-GAAP) |
$ | 145,197 | $ | 67,311 | $ | 357,204 | $ | 216,063 | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
10