Zebra Tech announced 21.5% growth in net sales

BSE | NSE 10/02/12

Zebra Technologies Corporation (NASDAQ: ZBRA) today announced 21.5% growth in net sales to a record $253,782,000 for the second quarter of 2008 from $208,912,000 for the second quarter of 2007. Net income for the period was $25,526,000, or $0.39 per diluted share, including exit costs of $4,680,000 which reduced earnings by $0.05 per diluted share. For the second quarter of 2007, net income was $25,633,000, or $0.37 per diluted share.  

 

"Strong business execution led to high international and North American sales growth for specialty printing and a sharp sequential increase in our enterprise solutions business," stated Anders Gustafsson, Zebra's chief executive officer. "Our programs to penetrate more deeply into targeted vertical markets and extend our geographic reach are building a more diversified customer base. We are winning additional business opportunities with new products and solutions that help our customers identify, manage and track a broader range of assets within the enterprise and across the supply chain. These activities make us optimistic about further growth and give us confidence in our ability to meet our long-term objectives." 

 

Discussion and Analysis

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

 

• Consolidated sales growth of 21.5% resulted from 12.8% growth in the company's Specialty Printing Group (SPG) and $25,020,000 in sales from the company's Enterprise Solutions Group (ESG). International sales increased 28.0%, with record sales in the Asia Pacific and Latin America regions. North American sales increased 14.1%. Consolidated sales were affected by $5,009,000 in unfavorable adjustments from revenue hedging activities. 
• Gross profit margin increased to 50.3% from 47.6%. Profitability was favorably affected by lower product costs, favorable changes in foreign exchange, and certain one-time items that accounted for 1.0 percentage points of the gross margin improvement.
• Operating expenses increased from acquisition-related additions of personnel and other expenses, the implementation of annual merit pay increases, higher SPG marketing expenses and costs for two customer conferences.
• Operating expenses were also affected by a $2,059,000 increase in the amortization of intangible assets from the acquisitions of Navis and Multispectral Solutions, as well as $4,680,000 in exit costs related to the company's previously announced initiative to transfer final assembly of thermal printers to a third party. 

For the first six months of 2008, the company had net sales of $500,059,000, up 19.8% from $417,488,000 for the same period a year ago. First-half net income totaled $53,170,000, or $0.81 per diluted share, including $7,914,000 in exit costs which reduced earnings by $0.08 per diluted share. 

 

At June 28, 2008, Zebra had $270,148,000 in cash and investments, and no long-term debt. Net inventories were $101,339,000, and accounts receivable, net, were $179,081,000. 

 

During the second quarter of 2008, the company repurchased 461,000 shares of Zebra Technologies Class A Common Stock under an authorization to purchase up to 3,000,000 shares. In the first six months of 2008, the company repurchased 1,490,600 shares of Zebra stock for $48,402,000. 

 

Third Quarter Outlook

Zebra announced its financial forecast for the third quarter of 2008. Net sales are expected within a range of $242,000,000 to $253,000,000, which reflects an expected seasonal slowdown in Europe, a more cautious economic outlook and unfavorable adjustments from revenue hedging activities of approximately $5,000,000. Earnings are expected between $0.35 and $0.41 per diluted share. This outlook includes approximately $3,500,000 expenses related to exit costs. 

 

Sourced From: Corporate Voice|Weber Shandwick