-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Re77X3zU9aQ+aaFySFJj27SzBG/fvDygr6A5jd7cUqgbmLiaYr5I+BD6bIAnG+6D WQG8SAeKvuFxkLrDbF42ew== 0000912057-00-023958.txt : 20000515 0000912057-00-023958.hdr.sgml : 20000515 ACCESSION NUMBER: 0000912057-00-023958 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 20000401 FILED AS OF DATE: 20000512 FILER: COMPANY DATA: COMPANY CONFORMED NAME: ZEBRA TECHNOLOGIES CORP/DE CENTRAL INDEX KEY: 0000877212 STANDARD INDUSTRIAL CLASSIFICATION: GENERAL INDUSTRIAL MACHINERY & EQUIPMENT [3560] IRS NUMBER: 366966580 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 000-19406 FILM NUMBER: 629599 BUSINESS ADDRESS: STREET 1: 333 CORPORATE WOODS PKWY CITY: VERNON HILLS STATE: IL ZIP: 60061 BUSINESS PHONE: 7086346700 10-Q 1 10-Q UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D. C. 20549 FORM 10-Q [ X ] Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the quarterly period ended April 1, 2000 Commission File Number: 000-19406 Zebra Technologies Corporation ------------------------------------------------------ (Exact name of registrant as specified in its charter) Delaware 36-2675536 ------------------------------- ---------------- (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 333 Corporate Woods Parkway, Vernon Hills, IL 60061 --------------------------------------------------- (Address of principal executive offices) (Zip Code) (847) 634-6700 ---------------------------------------------------- (Registrant's telephone number, including area code) Indicate by check mark whether the registrant has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and has been subject to such filing requirements for the past 90 days. [X] Yes [ ] No As of May 11, 2000, there were the following shares outstanding: Class A Common Stock, $.01 par value 24,714,607 Class B Common Stock, $.01 par value 6,121,714 ZEBRA TECHNOLOGIES CORPORATION AND SUBSIDIARIES QUARTER ENDED APRIL 1, 2000 INDEX PAGE PART I - FINANCIAL INFORMATION Item 1. Consolidated Financial Statements Independent Auditors' Review Report 3 Consolidated Balance Sheets as of April 1, 2000 (unaudited) and December 31, 1999 4 Consolidated Statements of Earnings (unaudited) for the three months ended April 1, 2000 and April 3, 1999 5 Consolidated Statements of Comprehensive Income (unaudited) for the three months ended April 1, 2000 and April 3, 1999 6 Consolidated Statements of Cash Flows (unaudited) for the three months ended April 1, 2000 and April 3, 1999 7 Notes to Consolidated Financial Statements 8 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 9 Item 3. Quantitative and Qualitative Disclosures About Market Risk 11 PART II - OTHER INFORMATION Item 6. Exhibits and Reports on Form 8-K 12 SIGNATURES 13 2 PART I - FINANCIAL INFORMATION ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS INDEPENDENT AUDITORS' REVIEW REPORT The Board of Directors and Shareholders Zebra Technologies Corporation: We have reviewed the consolidated balance sheet of Zebra Technologies Corporation and subsidiaries as of April 1, 2000, and the related consolidated statements of earnings, comprehensive income, and cash flows for the three-month periods ended April 1, 2000 and April 3, 1999. These consolidated financial statements are the responsibility of the Company's management. We conducted our review in accordance with standards established by the American Institute of Certified Public Accountants. A review of interim financial information consists principally of applying analytical procedures to financial data and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with generally accepted auditing standards, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion. Based on our review, we are not aware of any material modifications that should be made to the accompanying consolidated financial statements for them to be in conformity with generally accepted accounting principles. We have previously audited, in accordance with generally accepted auditing standards, the consolidated balance sheet of Zebra Technologies Corporation and subsidiaries as of December 31, 1999, and the related consolidated statements of earnings, comprehensive income, shareholders' equity, and cash flows for the year then ended (not presented herein); and in our report dated January 31, 2000, we expressed an unqualified opinion on those consolidated financial statements. In our opinion, the information set forth in the accompanying consolidated balance sheet as of December 31, 1999 is fairly stated, in all material respects, in relation to the consolidated balance sheet from which it has been derived. /s/KPMG LLP Chicago, Illinois April 21, 2000 3 ZEBRA TECHNOLOGIES CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (Amounts in thousands, except share and per share data)
APRIL 1, DECEMBER 31, 2000 1999 -------------- --------------- ASSETS (Unaudited) Current assets: Cash and cash equivalents $ 134,858 $ 38,501 Investments and marketable securities 163,620 197,067 Accounts receivable, net 59,203 62,870 Inventories 47,182 42,379 Deferred income taxes 3,518 3,467 Prepaid expenses 1,692 1,614 -------------- --------------- Total current assets 410,073 345,898 -------------- --------------- Property and equipment at cost, less accumulated depreciation and amortization 41,803 41,686 Other assets 6,182 7,059 -------------- --------------- TOTAL ASSETS $ 458,058 $ 394,643 ============== =============== LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Accounts payable $ 20,681 $ 23,798 Accrued liabilities 6,251 11,295 Short-term note payable 50,188 196 Current portion of obligation under capital lease with related party 200 264 Income taxes payable 10,750 7,541 -------------- --------------- Total current liabilities 88,070 43,094 -------------- --------------- Obligation under capital lease with related party, less current portion 466 571 Long-term liability 74 93 Deferred income taxes 2,125 1,473 Other 130 105 -------------- --------------- TOTAL LIABILITIES 90,865 45,336 -------------- --------------- Shareholders' equity: Preferred stock, $.01 par value; 10,000,000 shares authorized, none outstanding - - Class A Common Stock, $.01 par value; 50,000,000 shares authorized, 25,301,091 and 24,877,501 shares issued and outstanding in 2000 and 1999, respectively 253 249 Class B Common Stock, $.01 par value; 28,358,189 shares authorized, 6,240,100 and 6,540,188 shares issued and outstanding in 2000 and 1999, respectively 62 65 Additional paid-in capital 63,166 60,072 Retained earnings 304,632 289,404 Accumulated other comprehensive income (920) (483) -------------- --------------- TOTAL SHAREHOLDERS' EQUITY 367,193 349,307 -------------- --------------- TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 458,058 $ 394,643 ============== ===============
See accompanying notes to consolidated financial statements. 4 ZEBRA TECHNOLOGIES CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF EARNINGS (Amounts in thousands, except per share data) (Unaudited)
THREE MONTHS ENDED ----------------------------- APRIL 1, APRIL 3, 2000 1999 -------------- ------------- Net sales $ 98,619 $ 89,822 Cost of sales 49,239 47,365 -------------- ------------- Gross profit 49,380 42,457 Operating expenses: Selling and marketing 10,613 9,072 Research and development 5,748 5,662 General and administrative 7,734 7,847 Merger costs 1,009 1,869 -------------- ------------- Total operating expenses 25,104 24,450 -------------- ------------- Operating income 24,276 18,007 -------------- ------------- Other income (expense): Investment income 3,215 2,284 Interest expense (18) (3) Other, net (3,679) (38) -------------- ------------- Total other income (482) 2,243 -------------- ------------- Income before income taxes 23,794 20,250 Income taxes 8,566 7,600 -------------- ------------- Net income $ 15,228 $ 12,650 ============== ============= Basic earnings per share $ 0.48 $ 0.41 Diluted earnings per share $ 0.48 $ 0.41 Basic weighted average shares outstanding 31,462 30,958 Diluted weighted average and equivalent shares outstanding 31,956 31,137
See accompanying notes to consolidated financial statements. 5 ZEBRA TECHNOLOGIES CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Amounts in thousands) (Unaudited)
THREE MONTHS ENDED ------------------------------ APRIL 1, APRIL 3, 2000 1999 ------------ ------------ Net income $ 15,228 $ 12,650 Other comprehensive income (loss): Foreign currency translation adjustment (437) (1,328) ------------ ------------ Comprehensive income $ 14,791 $ 11,322 ============ ============
See accompanying notes to consolidated financial statements. 6 ZEBRA TECHNOLOGIES CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (Amounts in thousands) (Unaudited)
THREE MONTHS ENDED --------------------------------- APRIL 1, APRIL 3, 2000 1999 --------------- ---------------- Cash flows from operating activities: Net income $ 15,228 $ 12,650 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 2,527 2,374 Appreciation in market value of investments and marketable securities (1,553) (823) Deferred income taxes 601 6 Changes in assets and liabilities: Accounts receivable, net 3,667 (1,205) Inventories (4,803) 4,858 Other assets 810 552 Accounts payable (3,117) (2,842) Accrued expenses (5,044) (77) Income taxes payable 3,209 4,176 Other operating activities (53) (256) Investments and marketable securities 35,000 (6,370) --------------- ---------------- Net cash provided by operating activities 46,472 13,043 --------------- ---------------- Cash flows from investing activities: Purchases of property and equipment (2,577) (2,204) --------------- ---------------- Net cash used in investing activities (2,577) (2,204) --------------- ---------------- Cash flows from financing activities: Proceeds from exercise of stock options 3,095 419 Net issuance (repayment) of notes payable 49,973 (18) Payments for obligation under capital lease (169) (17) --------------- ---------------- Net cash provided by financing activities 52,899 384 --------------- ---------------- Effect of exchange rate changes on cash (437) (1,328) --------------- ---------------- Net increase in cash and cash equivalents 96,357 9,895 Cash and cash equivalents at beginning of period 38,501 11,391 --------------- ---------------- Cash and cash equivalents at end of period $ 134,858 $ 21,286 =============== ================ Supplemental disclosures of cash flow information: Interest paid $ 18 $ 3 Income taxes paid 5,251 4,833
See accompanying notes to consolidated financial statements. 7 ZEBRA TECHNOLOGIES CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS NOTE 1 - BASIS OF PRESENTATION The consolidated financial statements included herein have been prepared by Zebra Technologies Corporation and subsidiaries (the Company), without audit, pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations. These consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company's latest Annual Report on Form 10-K filed with the Securities and Exchange Commission. The consolidated balance sheet as of December 31, 1999, presented herein, has been derived from the audited consolidated balance sheet contained in the Annual Report on Form 10-K. In the opinion of the Company, the interim consolidated financial statements reflect all adjustments necessary to present fairly the consolidated financial position of the Company as of April 1, 2000, and the consolidated results of operations and cash flows for the three months ended April 1, 2000, and April 3, 1999. The results of operations for such interim periods are not necessarily indicative of the results for the full year. NOTE 2 - SUBSEQUENT EVENT On April 3, 2000, the Company completed the acquisition of Comtec Information Systems, Inc. ("Comtec"), acquiring all of the outstanding capital stock of Comtec for approximately $90,000,000 in cash. Located in Warwick, Rhode Island, Comtec was formerly a privately held company. The Company believes Comtec is an industry leader in the design, manufacture and support of portable wireless thermal printing solutions. 8 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS RESULTS OF OPERATIONS: FIRST QUARTER OF 2000 VERSUS FIRST QUARTER OF 1999 Net sales for the first quarter increased 9.8% to $98,619,000 from $89,822,000. Hardware sales (printers and replacement parts) increased 10.3% on unit volume increases. For the first quarter, hardware sales accounted for 79.8% of net sales. Supplies sales increased 9.8% to comprise 18.3% of net sales. The remaining 1.9% of net sales consisted of service and software revenue. International sales of $44,049,000 accounted for 44.7% of 2000 first quarter sales, compared with 40.8% of net sales for the first quarter of 1999. The increase in the percentage of international sales is due to 20.2% sales growth in international markets, compared with 2.6% sales growth in North America. The Company recorded growth in all of the Company's international geographic territories, particularly in Europe and Latin America. Management views international markets as holding significant growth opportunities for the Company. To support this growth, the Company expanded its international presence with the opening of new sales offices in Seoul, South Korea, and Hong Kong during the first quarter of 2000. In North America, robust sales growth of instant-issuance plastic card printers and a favorable trend in supplies sales was offset by weakness in bar code label printer sales. Gross profit for the first quarter of 2000 was $49,380,000, up 16.3% from the gross profit of $42,457,000. As a percentage of net sales, gross profit increased to 50.1% from 47.3%. The increase in gross profit margin was principally the result of product cost reductions enabled by the October 1998 merger with Eltron International combined with unit volume increases, which increased capacity utilization of the Company's manufacturing operations. Selling and marketing expenses increased 17.0% to $10,613,000 from $9,072,000 for the first quarter of 1999. The growth in selling and marketing expenses was primarily due to increased payroll and business development expenses to support new sales initiatives, programs to expand distribution channels and to improve service. Management indicated that these initiatives are important elements for driving sales growth. As a percentage of net sales, first quarter selling and marketing expenses increased to 10.8% from 10.1%. Research and development expenses for the first quarter increased 1.5% to $5,748,000 from $5,662,000. Increases in fees for outside professional services, building expenses related to new engineering facilities in Vernon Hills, and payroll were substantially offset by reductions in project expenses and non-payroll expenditures. As a percentage of net sales, quarterly research and development expenses decreased to 5.8% from 6.3%. General and administrative expenses for the first quarter declined by 1.4% to $7,734,000 from $7,847,000. Lower bad debt expense was partially offset by increased non-payroll expenses. As a percentage of net sales, quarterly general and administrative expenses decreased to 7.8% from 8.7%. During the first quarter of 2000, Zebra recorded $1,009,000 in merger costs, which are related to integration of the operations of Eltron International, Inc., with which the Company merged in October 1998. For the first quarter of 1999, merger costs totaled $1,869,000. These costs, which could not be provided for at the time of the merger, consisted principally of information technology expenditures to integrate Eltron operations into the Company's enterprise-wide resource planning (ERP) system. The Company expects to incur merger costs for the Eltron integration through the second quarter of 2000. Operating income for the first quarter increased 34.8% to $24,276,000, or 24.6% of net sales, from $18,007,000, or 20.0% of net sales. Excluding the merger costs described above, operating income increased 27.2% to $25,285,000, or 25.6% of net sales from $19,876,000, or 22.1% of net sales. Investment income increased 40.7% to $3,215,000 from $2,284,000. The increase was primarily due to higher average balances invested in marketable securities. Other expense for the first quarter of 2000 included $3,417,000 in losses from foreign currency transactions on the value of euro-denominated cash deposits and receivables from customers and pound sterling-denominated receivables from the 9 Company's U.K. subsidiary. For the first quarter of 1999, the Company recorded a gain from foreign currency transactions of $139,000. Income before income taxes for the first quarter of 2000 was $23,794,000, compared with $20,250,000 for the same period in 1999, for an increase of 17.5%. The effective income tax rate for the first quarter of 2000 was 36.0%, compared with 37.5% for the same period in 1999. The provision for income taxes for the first quarter of 1999 included a one-time tax accrual. Net income was $15,228,000, or $0.48 per share (basic and diluted), compared with $12,650,000, or $0.41 per share (basic and diluted). Excluding the $1,009,000 and $1,869,000 in merger costs, net income for the first quarter was $15,875,000, or $0.50 per diluted share, in 2000 and $13,818,000, or $0.44 per share, in 1999. LIQUIDITY AND CAPITAL RESOURCES The Company's principal source of liquidity continues to be cash generated from operations. Cash and cash equivalents and investments and marketable securities totaled $298,478,000 at April 1, 2000, compared with $235,568,000 at December 31, 1999. As of April 1, 2000, the Company had a $50,000,000 short-term loan outstanding, the proceeds of which were used to fund the acquisition of Comtec Information Systems, which was completed on April 3, 2000. The interest rate on this loan, which is in the form of a reverse repurchase agreement, was calculated at 10 basis points over the 90-day London Interbank Offer Rate (LIBOR), and was fixed for 90 days from the time of funding on March 31, 2000, at 6.38%. Management expects to repay the loan from the liquidation of a corresponding amount of securities from the Company's investment portfolio. Management believes that existing capital resources and funds generated from operations are sufficient to finance anticipated capital requirements. SIGNIFICANT CUSTOMER No customer accounted for 10% or more of total sales during the first quarter of 2000. Sales to United Parcel Service (UPS), one of the Company's designated key accounts, accounted for 10.0% of the Company's net sales for the first quarter of 1999. SAFE HARBOR Forward-looking statements contained in this filing are subject to the safe harbor created by the Private Securities Litigation Reform Act of 1995 and are highly dependent upon a variety of important factors which could cause actual results to differ materially from those reflected in such forward looking statements. These factors include market acceptance of the Company's printer and software products and competitors' product offerings. They also include the success and speed of the Company's integration with Comtec, as well as the effect of market conditions in the North America and other geographic regions on the Company's financial results. Profits will be affected by the Company's ability to control manufacturing and operating costs. Because of the Company's large investment portfolio, interest rate and financial market conditions will also have an impact on results. Foreign exchange rates will have an effect on financial results due to the large percentage of the Company's international sales. When used in this document 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. Readers of this document are referred to prior filings with the Securities and Exchange Commission, including Zebra's Form 10-K for the year ended December 31, 1999, for further discussions of issues that could affect Zebra's future results. 10 ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK During the first quarter of 2000, the Company modified its investment strategy. The Company's investment portfolio at December 31, 1999, consisted of U.S. government securities, state and municipal bonds, partnership interests, and equity securities, which were held indirectly in diversified funds actively managed by investment professionals. During the second quarter Zebra began re-deploying its cash reserves into a traditional corporate cash management program, which consists of an actively managed diversified portfolio of U.S. government securities, state and municipal bonds, and corporate bonds. This program is also administered by outside professional investment managers. Management expects this move to reduce volatility of returns on invested funds and increase liquidity. For additional information on market risk, refer to the "Quantitative and Qualitative Disclosures About Market Risk" section of the Company's Annual Report on Form 10-K for the year ended December 31, 1999. 11 PART II - OTHER INFORMATION ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K (a) Exhibits. 10.1 Amendment to the lease between the Registrant and Unique Building Corporation for the Registrant's facility in Vernon Hills, Illinois, dated as of July 1, 1999 15.1 Acknowledgment of Independent Certified Public Accountants Regarding Independent Auditors' Review Report 27.1 Financial Data Schedule (b) Reports. No reports on Form 8-K have been filed by the Registrant for the quarterly period covered by this report. 12 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 thereunto duly authorized. ZEBRA TECHNOLOGIES CORPORATION Date: May 12, 2000 By: /s/Edward L. Kaplan --------------------------- Edward L. Kaplan Chief Executive Officer Date: May 12, 2000 By: /s/Charles R. Whitchurch ------------------------ Charles R. Whitchurch Chief Financial Officer 13 EX-10.1 2 EXHIBIT 10.1 Exhibit 10.1 AMENDMENT TO INDUSTRIAL BUILDING LEASE THIS AMENDMENT TO INDUSTRIAL BUILDING LEASE is dated as of July 1, 1999, by and between ZEBRA TECHNOLOGIES CORPORATION, as Lessee, and UNIQUE BUILDING CORPORATION, as Lessor, for the Property commonly known as 333 Corporate Woods Parkway, Vernon Hills, Illinois (the "Property"). WHEREAS, on May 15, 1989, Lessor and Lessee executed an Industrial Building Lease (the "Lease") for the Property for a term commencing September 1, 1989, and expiring August 31, 1999; WHEREAS, on July 1, 1991, April 1, 1993, December 1, 1994, October 1, 1995, June 1, 1996, and June 2, 1996, Lessor and Lessee entered into several amendments to the Lease (collectively the "Amendments") whereby additional premises were added to the Property and leased by Lessee for the term and at the rent set forth in the Amendments; WHEREAS, Lessee desires to lease additional premises at the Property and Lessor desires to lease said premises to Lessee on the terms and conditions set forth herein; WHEREAS, Lessee and Lessor desire to summarize all the Premises leased at the Property by Lessee; WHEREAS, Lessee and Lessor desire to amend the Lease and Amendments so that there is a common expiration date of June 30, 2014; WHEREAS, Lessor and Lessee desire to amend the Base Rent paid by Lessee for the Premises under the Lease and Amendments. NOW, THEREFORE, in consideration of Ten and No/l00 Dollars, and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged by the parties, Lessor and Lessee hereby agree as follows: 1. Lessee hereby leases from Lessor the newly constructed premises commonly known as the Cless Technology Center, consisting of improvements of approximately 57,508 square feet and a 167-car parking area (hereinafter the "Cless Technology Center Premises"). 2. The term for the Cless Technology Center Premises will commence July 1, 1999, and expire June 30, 2014. Base Rent for the Cless Technology Center Premises will be as follows: (i) July 1, 1999, through June 30, 2004: $58,376.00 per month; (ii) July 1, 2004, through June 30, 2009: $67,132.00 per month; (iii) July 1, 2009, through June 30, 2014: $77,202.00 per month. 3. The parties acknowledge and agree that the Base Rent for the entire Premises less the Cless Technology Center Premises is currently as follows: (i) As of the date hereof and for the period through August 31, 1999: $111,997.00 per month; (ii) For the period of September 1, 1999, through March 31, 2003: $115,355.00 per month; (iii) For the period of April 1, 2003, through March 31, 2008: $127,570.00 per month. The parties further agree that the Lease is hereby further amended to provide that the Base Rent for the entire Premises less the Cless Technology Center Premises for the remainder of the term subsequent to March 31, 2008, shall be as follows: (i) For the period of April 1, 2008, through June 30, 2009: $132,354.00 per month; (ii) For the period of July 1, 2009, through June 30, 2014: $152,207.00 per month. 4. Lessor and Lessee agree that all premises and parking areas leased at the Property by Lessee pursuant to the Lease, the Amendments and this Amendment to Industrial Building Lease are described as follows: The real estate, including parking areas and all improvements thereon containing approximately 225,133 square feet (including the Cless Technology Center Premises) located at 333 Corporate Woods Parkway, Vernon Hills, Illinois, and legally described as follows: Lots 113 through 132 in the Corporate Woods, being a Subdivision of portions of Section 9, 10, 15 and 16, Township 43 North, Range 11, East of the Third Principal Meridian according to the Plat thereof recorded August 5, 1986 as Document 2468419 and recorded October 22, 1986 as Document 2496355 and amended by Letter of Amendments recorded as Document 2561505 and 2585702, in Lake County, Illinois (collectively, the "Premises"). 5. The Lease as heretofore amended is hereby further amended to provide that the term of the Lease for the entire Premises (to the extent not already provided) is extended to June 30, 2014. 6. The parties agree that, as heretofore amended, the Lease is hereby further amended to provide that the Base Rent for the entire Premises shall be as follows: (i) For the period of July 1, 1999, through August 31, 1999: $170,373.00 per month; (ii) For the period of September 1, 1999, through March 31, 2003: $173,731.00 per month; (iii) For the period of April 1, 2003, through June 30, 2004: $185,946.00 per month; (iv) For the period of July 1, 2004, through March 31, 2008: $194,702.00 per month; (v) For the period of April 1, 2008, through June 30, 2009: $199,486.00 per month; (vi) For the period of July 1, 2009, through June 30, 2014: $229,409.00 per month. 7. The effective date of this Amendment is July 1, 1999. 8. Except as they may have been modified by anything set forth in this Amendment, all of the terms and provisions of the Lease and Amendments are hereby ratified and confirmed by the parties hereto as being in full force and effect. 9. In the event of a conflict between the terms and conditions of the Lease and Amendments and this Amendment to Lease, the provisions of this Amendment to Lease shall prevail. IN WITNESS WHEREOF, the parties hereto have set their hands and seals as of this 1st day of July, 1999. LESSEE: LESSOR: ZEBRA TECHNOLOGIES CORPORATION UNIQUE BUILDING CORPORATION By: /s/ Edward L. Kaplan By: /s/ Edward L. Kaplan ----------------------------------- -------------------------------- Title: Chief Executive Officer Title: President -------------------------------- ----------------------------- EX-15.1 3 EXHIBIT 15.1 Exhibit 15.1 ACKNOWLEDGMENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS REGARDING INDEPENDENT AUDITORS' REVIEW REPORT Zebra Technologies Corporation 333 Corporate Woods Parkway Vernon Hills, Illinois 60061-3109 Ladies and Gentlemen: With respect to the registration statements (No. 33-44706, No. 33-72774, No. 333-59733, and No. 333-63009) on Form S-8 of Zebra Technologies Corporation, we acknowledge our awareness of the incorporation by reference therein of our report dated April 21, 2000, related to our review of interim financial information as of April 1, 2000. Pursuant to Rule 436(c) under the Securities Act of 1933, such report is not considered part of a registration statement prepared or certified by an accountant or a report prepared or certified by an accountant within the meaning of Sections 7 and 11 of the Act. Very truly yours, /s/KPMG LLP Chicago, Illinois May 8, 2000 EX-27 4 EXHIBIT 27
5 1,000 3-MOS DEC-31-1999 JAN-01-2000 APR-01-2000 134,858 163,620 60,835 (1,632) 47,182 410,073 78,192 (36,389) 458,058 88,070 0 0 0 315 366,878 458,058 97,274 98,619 48,456 49,239 25,051 53 18 23,794 8,566 15,228 0 0 0 15,228 0.48 0.48
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