EX-99.1 2 dex991.htm REGISTRANT'S PRESS RELEASE DATED APRIL 23, 2008 Registrant's Press Release dated April 23, 2008

Exhibit 99.1




CONTACT:    Investors:    Media:
   Douglas A. Fox, CFA    Tim Dreyer
   Vice President, Investor Relations    Manager, Public Relations
   +1 847 793 6735    +1 847 793 5677
   dfox@zebra.com    tdreyer@zebra.com


Zebra Technologies Announces 2008 First Quarter Financial Results

Strong sales growth in core Specialty Printing business

and gross margin improvement lead to solid first quarter performance

Vernon Hills, IL, April 23, 2008—Zebra Technologies Corporation (NASDAQ: ZBRA) today announced 18.1% growth in net sales to a record $246,277,000 for the first quarter of 2008 from $208,576,000 for the first quarter of 2007. Net income for the period was $27,644,000, or $0.42 per diluted share, compared with $26,716,000, or $0.39 per diluted share, a year ago.

“Strong international sales, favorable performance in our new Enterprise Solutions business unit and progress on our strategic priorities gave Zebra a solid start in 2008,” stated Anders Gustafsson, Zebra’s chief executive officer. “Our programs to deliver more identification and tracking solutions to targeted vertical markets are delivering real results. Customers around the world, supported by an expanding geographic Zebra presence, are responding positively to the broader range of automatic identification technologies we’re now able to provide to improve their business processes. Zebra is well positioned to benefit from the demands for better management over an increasingly complex global supply chain. The diversity of our solutions portfolio, customers and geographic presence make us optimistic about further growth.”

Discussion and Analysis

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



Sales growth of 11.3% in the company’s Specialty Printing business unit and the sales contributions of its 2007 acquisitions fueled consolidated sales growth of 18.1%. International sales increased 31.8%, with record sales in the Asia Pacific and Europe, Middle East and Africa regions.



Gross profit margin increased to 49.9% from 47.8%. Profitability was favorably affected by an improved product mix in specialty printers, better overhead utilization and a positive contribution from the company’s Enterprise Solutions business unit.



Expenses for sales and marketing, research and development, and general and administrative activities increased principally from the addition of personnel and other expenses related to the acquisitions of WhereNet, proveo and Navis in 2007.



Operating expenses were also affected by a $2,191,000 increase in the amortization of intangible assets, as well as $3,234,000 in exit costs related to the company’s previously announced initiative to transfer final assembly of thermal printers to a third party.

At March 29, 2008, Zebra had $306,284,000 in cash and investments, and no long-term debt. Net inventories were $89,443,000, and accounts receivable, net, were $171,862,000.

During the first quarter of 2008, the company repurchased 1,029,000 shares of Zebra Technologies Class A Common Stock under an authorization to purchase up to 3,000,000 shares.

Second Quarter Outlook

Zebra announced its financial forecast for the second quarter of 2008. Net sales are expected within a range of $248,000,000 to $260,000,000. Earnings are expected between $0.38 and $0.44 per diluted share. This outlook includes approximately $4,800,000 in exit costs.

Conference Call Notification

Investors are invited to listen to a live Internet broadcast of Zebra’s conference call discussing the company’s financial results for the first quarter of 2008. The conference call will be held at 11:00 a.m. Eastern Time today. To listen to the call, visit the company’s Web site at http://www.zebra.com.

Forward-looking Statement

This press release contains forward-looking statements, as defined by the Private Securities Litigation Reform Act of 1995, including, without limitation, the statements regarding the company’s financial forecast for the second quarter of 2008 stated in the paragraph above. Actual results may differ from those expressed or implied in the company’s forward-looking statements. These statements represent estimates only as of the date they were made. Zebra may elect to update forward-looking statements but expressly disclaims any obligation to do so, even if the company’s estimates change.

These forward-looking statements are based on current expectations, forecasts and assumptions and are subject to the risks and uncertainties inherent in Zebra’s industry, market conditions, general domestic and international economic conditions, and other factors. These factors include market conditions in North America and other geographic regions and market acceptance of Zebra’s printer and software products and competitors’ product offerings and the potential effects of technological changes. Other factors include U.S. and foreign regulations that pertain to electrical and electronic equipment, including European Union and other country directives relating to the collection, recycling, treatment and disposal of products and the reduction or elimination of certain specified materials in such products. Zebra’s failure to comply with these regulations may subject Zebra to penalties, prevent Zebra from selling its products in a certain country, or increase the cost of supplying the products. Profits and profitability will be affected by the company’s ability to control manufacturing and operating costs. Because of a large investment portfolio, interest rates and financial market conditions will also have an impact on results. Foreign exchange rates will have an effect on financial results because of the large percentage of our international sales. The outcome of litigation in which Zebra is involved, and particularly litigation or claims related to alleged infringement of third-party intellectual property rights, is another factor. In addition, the acquisitions of WhereNet, proveo and Navis, which were completed in 2007, and Multispectral Solutions, which was completed in April 2008, have risks relating to integrating these companies’ businesses and operations with Zebra’s. These and other factors could have an adverse effect on Zebra’s sales, gross profit margins and results of operations and increase the volatility of our financial results. When used in this release and documents referenced, the words “anticipate,” “believe,” “estimate,” and “expect” and similar expressions, as they relate to the company or its management, are intended to identify such forward-looking statements, but are not the exclusive means of identifying these statements. Descriptions of the risks, uncertainties and other factors that could affect the company’s future operations and results can be found in Zebra’s filings with the Securities and Exchange Commission. In particular, readers are referred to Zebra’s Form 10-K for the year ended December 31, 2007.

Zebra Technologies Corporation helps companies identify, track and manage assets, transactions and people with on-demand specialty digital printing and automatic identification solutions. In more than 100 countries around the world, more than 90 percent of Fortune 500 companies use innovative and reliable Zebra printers, supplies, RFID products and software to increase productivity, improve quality, lower costs, and deliver better customer service. Information about Zebra and Zebra-brand products can be found at http://www.zebra.com.



(Amounts in thousands)


     March 29,
    December 31,



Current assets:


Cash and cash equivalents

   $ 58,510     $ 38,211  

Restricted cash

     1,042       2,497  

Investments and marketable securities

     97,407       98,438  

Accounts receivable, net

     171,862       150,775  

Inventories, net

     89,443       85,038  

Deferred income taxes

     14,483       14,772  

Prepaid expenses

     10,776       31,101  

Total current assets

     443,523       420,832  

Property and equipment at cost, less accumulated depreciation and amortization

     69,716       67,686  

Long-term deferred income taxes

     31,990       28,407  


     247,670       246,510  

Other intangibles, net

     115,287       119,424  

Long-term investments and marketable securities

     149,325       142,033  

Other assets

     9,095       9,386  

Total assets

   $ 1,066,606     $ 1,034,278  



Current liabilities:


Accounts payable

   $ 47,119     $ 42,351  

Accrued liabilities

     85,229       69,437  

Deferred revenue

     11,111       9,633  

Income taxes payable

     13,300       751  

Total current liabilities

     156,759       122,172  

Deferred rent

     1,011       961  

Other long-term liabilities

     9,681       8,452  

Total liabilities

     167,451       131,585  

Stockholders’ equity:


Preferred Stock

     —         —    

Class A Common Stock

     722       722  

Additional paid-in capital

     143,457       141,522  

Treasury stock

     (236,722 )     (205,058 )

Retained earnings

     988,156       960,512  

Accumulated other comprehensive income

     3,542       4,995  

Total stockholders’ equity

     899,155       902,693  

Total liabilities and stockholders’ equity

   $ 1,066,606     $ 1,034,278  



(Amounts in thousands, except per share data)



     Three Months Ended
     March 29, 2008     March 31, 2007

Net sales

   $ 246,277     $ 208,576

Cost of sales

     123,480       108,786

Gross profit

     122,797       99,790

Operating expenses:


Selling and marketing

     30,861       28,164

Research and development

     19,789       14,185

General and administrative

     25,045       17,932

Amortization of intangible assets

     4,514       2,323

Exit costs

     3,234       —  

Acquired in-process research and development

     —         1,853

Total operating expenses

     83,443       64,457

Operating income

     39,354       35,333

Other income (expense):


Investment income

     2,405       5,304

Foreign exchange gains

     700       175

Other, net

     (254 )     76

Total other income

     2,851       5,555

Income before income taxes

     42,205       40,888

Income taxes

     14,561       14,172

Net income

   $ 27,644     $ 26,716

Basic earnings per share

   $ 0.42     $ 0.39

Diluted earnings per share

   $ 0.42     $ 0.39

Basic weighted average shares outstanding

     66,134       68,908

Diluted weighted average and equivalent shares outstanding

     66,518       69,367



(Amounts in thousands)



     Three Months Ended  
     March 29, 2008     March 31, 2007  

Cash flows from operating activities:


Net income

   $ 27,644     $ 26,716  

Adjustments to reconcile net income to net cash provided by operating activities:


Depreciation and amortization

     9,088       5,853  

Stock-based compensation

     3,417       3,338  

Excess tax benefit from share-based compensation

     (51 )     (479 )

Acquired in-process research and development

     —         1,853  

Deferred income taxes

     (3,553 )     (1,097 )

Changes in assets and liabilities, net of effects of acquisitions:


Accounts receivable, net

     (21,393 )     (7,065 )


     (3,834 )     2,779  

Other assets

     2,952       (123 )

Accounts payable

     2,901       (12,275 )

Accrued liabilities

     7,085       (7,619 )

Deferred revenue

     2,745       3,301  

Income taxes payable

     12,534       10,815  

Other operating activities

     (5,635 )     834  

Net cash provided by operating activities

     33,900       26,831  

Cash flows from investing activities:


Purchases of property and equipment

     (5,909 )     (5,333 )

Acquisition of businesses acquired, net of cash acquired

     —         (127,200 )

Purchases of investments and marketable securities

     (190,530 )     (166,285 )

Maturities of investments and marketable securities

     128,723       195,424  

Sales of investments and marketable securities

     78,156       78,069  

Net cash used in investing activities

     10,440       (25,325 )

Cash flows from financing activities:


Purchase of treasury stock

     (24,600 )     (6,048 )

Proceeds from exercise of stock options and stock purchase plan purchases

     667       4,337  

Excess tax benefit from share-based compensation

     51       479  

Net cash used in financing activities

     (23,882 )     (1,232 )

Effect of exchange rate changes on cash

     (159 )     18  

Net increase in cash and cash equivalents

     20,299       292  

Cash and cash equivalents at beginning of period

     38,211       39,648  

Cash and cash equivalents at end of period

   $ 58,510     $ 39,940  

Supplemental disclosures of cash flow information:


Income taxes paid

   $ 2,471     $ 4,357  

Supplemental disclosures of non-cash transactions:


Purchase of treasury shares not paid in the first quarter of 2008

   $ 9,153       —    



(Amounts in thousands)


Sales by Product Category


     Three Months Ended             
     Mar. 29,
    Mar. 31,
   Percent of
Total Sales


   $ 180,181     $ 159,588     12.9    73.2  


     41,902       38,081     10.0    17.0  

Service and software

     25,180       9,394     168.0    10.2  

Shipping and handling

     1,802       1,648     9.3    0.7  

Cash flow from hedging activities

     (2,788 )     (135 )   NM    (1.1 )

Total sales

   $ 246,277     $ 208,576     18.1    100.0  

Sales by Geographic Region


     Three Months Ended          
     Mar. 29,
   Mar. 31,
   Percent of
Total Sales

Europe, Middle East and Africa

   $ 97,370    $ 75,985    28.1    39.5

Latin America

     15,983      12,523    27.6    6.5


     23,778      15,562    52.8    9.7

Total international

     137,131      104,070    31.8    55.7

North America

     109,146      104,506    4.4    44.3

Total sales

   $ 246,277    $ 208,576    18.1    100.0



(Amounts in thousands)



     Three Months Ended
     March 29, 2008    March 31, 2007



Specialty Printing

   $ 224,751    $ 201,895

Enterprise Solutions

     21,526      6,681


     246,277      208,576

Cost of sales


Specialty Printing

     112,812      104,266

Enterprise Solutions

     10,668      4,520


     123,480      108,786

Gross profit

     122,797      99,790

Operating expenses


Specialty Printing

     50,334      45,837

Enterprise Solutions

     17,921      5,741

Administrative and other

     15,188      12,879


     83,443      64,457

Operating income

   $ 39,354    $ 35,333