Business News
Zebra Technologies Announces 2008 Third Quarter Financial Results
Wednesday 29. October 2008 - Zebra Technologies Corporation (NASDAQ:ZBRA) today announced net sales of $244,073,000 for the third quarter of 2008, up 12.4% from $217,218,000 for the third quarter of 2007. Net income for the period was $25,770,000, or $0.40 per diluted share, including exit costs and integration expenses of $4,304,000 which reduced earnings by $0.04 per diluted share.
Results also include four one-time items that had a combined positive impact of $0.03 per diluted share. For the third quarter of 2007, net income was $26,961,000, or $0.39 per diluted share.
“Zebra delivered more solutions that improve our customers’ business processes and controlled costs during this challenging time to extend industry leadership and deliver solid financial results,” stated Anders Gustafsson, Zebra’s chief executive officer. “Looking ahead, we will continue to focus on growth and profitability. We are managing costs by streamlining operations and maintaining investments in our new ERP and global supply chain transformation projects, which will deliver long-term benefits. At the same time, we are taking advantage of our strong financial condition to develop new solutions to meet more customer needs with a quick ROI. We will also continue to place more Zebra sales representatives in underserved geographic territories to extend global reach. In this way, Zebra remains well positioned to accelerate growth and build greater stockholder value as business conditions improve.”
Discussion and Analysis
For the third quarter of 2008 compared with the third quarter of 2007:
— Consolidated sales growth of 12.4% resulted from 3.5% growth in the company’s Specialty Printing Group (SPG) and $25,621,000 in sales from the company’s Enterprise Solutions Group (ESG). International sales increased 18.8%, with record sales in Asia Pacific and continued weakness in the Europe, Middle East and Africa region. North American sales increased 5.5%.
— Gross profit margin of 48.3% was comparable to gross profit margin of 48.2% a year ago.
— Operating expenses increased principally from acquisition-related additions of personnel and other expenses. The expenses were offset by a non-taxable $5,302,000 reduction in operating expenses for the settlement of Zebra’s claim against the escrow in its acquisition of WhereNet Corp., and a $1,121,000 gain on the sale/leaseback of the company’s facility in Camarillo, CA, recognized as a reduction in general and administrative expenses.
— Operating expenses were also affected by a $1,783,000 increase in the amortization of intangible assets from the acquisitions of Navis and Multispectral Solutions; $2,570,000 in exit costs related to the company’s previously announced initiative to transfer final assembly of thermal printers to a third party; and $1,734,000 in expenses for integrating operations in ESG.
— The company recorded a loss on investments of $5,140,000, which included write-downs of $4,374,000 for losses on securities and $2,897,000 on a long-term investment.
— The provision for income taxes of $9,205,000 includes a $2,600,000 reduction because the WhereNet escrow settlement was not taxable.
For the first nine months of 2008, the company had net sales of $744,132,000, up 17.2% from $634,706,000 for the same period a year ago. Year-to-date net income totaled $78,940,000, or $1.20 per diluted share, including $12,218,000 in exit costs and integration expenses which reduced earnings by $0.12 per diluted share.
At September 27, 2008, Zebra had $246,857,000 in cash and investments, and no long-term debt. Net inventories were $106,261,000, and accounts receivable, net, were $171,928,000.
During the third quarter of 2008, the company repurchased 1,890,100 shares of Zebra Technologies Class A Common Stock to complete an authorization to purchase up to 3,000,000 shares. Zebra’s Board of Directors has authorized the purchase of an additional 5,000,000 shares of Zebra stock.
Fourth Quarter Outlook
Zebra announced its financial forecast for the fourth quarter of 2008. Net sales are expected within a range of $225,000,000 to $241,000,000. Earnings are expected between $0.30 and $0.38 per diluted share. This outlook includes approximately $2,800,000 in expenses related to exit costs and integration expenses.