Zebra Executes Clear, Focused Business Strategy

Zebra Technologies announced 2011 first quarter net income of US$61,634,000, or $1.10 per diluted share. Quarterly income from continuing operations totaled $30,128,000, or $0.54 per diluted share, for 2011 compared with $25,547,000, or $0.43 per diluted share, for the first quarter of 2010.

Income from discontinued operations for the first quarter of 2011 of $31,506,000, or $0.56 per diluted share, includes a recognized gain on the sale of the company’s Navis operation. First quarter net sales were $237,301,000 for 2011, up 11.9 percent from $211,975,000 for 2010.

Results for 2010 have been adjusted to account for the sale of Navis Holdings LLC, which was sold on March 18, 2011, and other immaterial operations which have been accounted for as discontinued operations.

“Excellent execution on a clear and focused business strategy helped Zebra deliver these record results,” stated Anders Gustafsson, Zebra’s chief executive officer.

“Innovative new products introduced over the past year are helping us meet more of our customers’ asset tagging needs in a more complex supply chain environment. At the same time, we are reaching more customers worldwide by building a larger, more formidable sales and marketing organization. The result of disciplined investments in products, channels and infrastructure makes us optimistic about extending Zebra’s industry leadership in a fundamentally attractive industry, and for continued success in building shareholder value.”

As of April 2, 2011, Zebra had $375,378,000 in cash and investments, and no long-term debt. Net inventories were $120,508,000, and net accounts receivable were $141,218,000.

Net sales for the first quarter of 2011 compared with the same quarter for 2010 benefited from improved business conditions in all geographic regions, with all major printer product categories and aftermarket parts contributing to the growth.

The addition of Zebra sales representatives placed in high-growth countries and regions over the past twelve months, and other initiatives as part of the company’s growth strategy, also contributed to the sales results. Quarterly sales increased 12.1 percent on a constant-currency basis from a year ago.

Gross margin of 50.6 percent, versus 46.1 percent a year ago, reflects lower costs for raw materials, higher volumes and lower freight charges.

Operating expense growth of 16.7 percent reflect higher employee-related compensation, payroll and benefit costs, in part related to geographic expansion and other growth initiatives.

Zebra announced its financial forecast for the second quarter of 2011: net sales are expected within a range of $240,000,000 to $250,000,000. Diluted earnings per share from continuing operations are expected within a range of $0.54 to $0.61, including $0.01 per share in exit, restructuring and integration costs.