Business News
Zebra Technologies Announces Record Sales and Earnings per Share for 2007 Fourth Quarter and Full Year
Tuesday 26. February 2008 - Company completes 3 million share stock buyback; Board authorizes additional 3 million share purchase
Zebra Technologies Corporation (NASDAQ:ZBRA) today announced record net sales of $233,573,000 for the quarter ended December 31, 2007, up 11.3% from $209,903,000 for the fourth quarter of 2006. Net income for the period was $30,803,000, or $0.45 per diluted share, compared with $21,446,000, or $0.30 per diluted share, a year ago.
“Ongoing strong international growth, record sales in North America and increasing contributions from the businesses acquired earlier in 2007 led to solid results for the quarter and provide a favorable outlook for 2008 and beyond,” stated Anders Gustafsson, Zebra’s chief executive officer. “We enter 2008 with many more opportunities to accelerate sales and increase profitability. We will continue to drive more deeply into attractive vertical markets with solutions that deliver a measurable and quick return on investment for our customers. At the same time, our international expansion activities will enable us to provide a broader range of Zebra solutions to businesses in high-growth developing regions. In 2008, we will also take advantage of the business opportunities brought by our acquisitions of WhereNet, proveo and Navis. Together, these companies enable Zebra to provide a broad range of complex enterprise solutions that help our customers identify, track and manage assets, people and transactions within the enterprise and across the supply chain.”
Discussion and Analysis
For the fourth quarter of 2007 compared with the fourth quarter of 2006:
— The company had record sales in its North American and EMEA regions,
along with high growth in Latin America. Sales from WhereNet Corp.,
which was acquired in January 2007, and proveo, which was acquired in
the third quarter of 2007, supplemented sales growth. Revenue from
Navis Holdings, LLC, which was acquired on December 14th, had a
minimal effect on fourth quarter sales. Foreign currency translation
also had a favorable effect on sales growth.
— Gross profit margin of 48.5% increased from 46.9%. Profitability was
positively affected by the higher sales volume, a favorable product
mix and movements in foreign exchange translation, partly offset by
increases to inventory reserves and warranty expense.
— 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. These increases were partially offset
by the absence of an insurance receivable reserve, which was
established in the fourth quarter of 2006.
For 2007, net sales advanced 14.3% to a record $868,279,000 from $759,524,000 for 2006. Net income totaled $110,113,000, or $1.60 per diluted share, versus $70,946,000, or $1.00 per diluted share, for the prior year.
At December 31, 2007, Zebra had $281,179,000 in cash and investments, and no long-term debt. Net inventories were $85,038,000, and accounts receivable, net, were $150,775,000.
First Quarter Outlook
Zebra announced its financial forecast for the first quarter of 2008. Net sales are expected within a range of $238,000,000 and $255,000,000. Earnings are expected within a range of $0.36 and $0.44 per diluted share. This outlook excludes approximately $4,800,000 in deferred software revenue that the company is unable to recognize because of purchase accounting rules. The first quarter outlook includes approximately $4,700,000 in expenses related to Zebra’s initiative to transfer final assembly of thermal printers to a third party. This global supply chain project was announced on February 6, 2008. In combination, these items have the effect of reducing projected first quarter earnings by $0.09 per diluted share.
Stock Purchase Authorization
The company also announced it completed the purchase of 3 million shares of Zebra Technologies Corporation Common Stock that was previously authorized by its Board of Directors. The Board has authorized the purchase of an additional 3 million shares, which represent approximately 4.5% of Zebra stock outstanding. These purchases would be made from time to time, in the open market or in private transactions.