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Zebra Technologies Announces First-Quarter 2022 Results

05/03/2022

First-Quarter Financial Highlights

  • Net sales of $1,432 million; year-over-year increase of 6.3%
  • Net income of $205 million and net income per diluted share of $3.83, year-over-year decreases of 10.1% and 9.2%, respectively
  • Non-GAAP diluted EPS decreased 16.3% year-over-year to $4.01
  • Adjusted EBITDA decreased 16.4% year-over-year to $285 million

Zebra Technologies Corporation (NASDAQ: ZBRA), an innovator at the edge of the enterprise with solutions and partners that enable businesses to gain a performance edge, today announced results for the first quarter ended April 2, 2022.

"Our team delivered solid first quarter results, executing well in a challenging macro environment. Sales and earnings exceeded the high end of our guidance ranges, despite supply chain costs that were higher than our expectations,”​ said Anders Gustafsson, Chief Executive Officer of Zebra Technologies. “Despite global macro headwinds, we are reiterating our full-year 2022 sales outlook given our strong order backlog and robust pipeline. Due to increased premium freight and supply chain costs from global pressures since our prior outlook, we are lowering our full-year 2022 adjusted EBITDA margin guide. We continue to invest in our vibrant business and are excited about our proposed acquisition of Matrox Imaging which will create a comprehensive portfolio of machine vision solutions to address the increased needs of manufacturers.”​

$ in millions, except per share amounts

 

1Q22

 

 

1Q21

 

Change

Select reported measures:

 

 

 

Net sales

$

1,432

 

$

1,347

 

6.3

%

Gross profit

 

637

 

 

655

 

(2.7

%)

Gross margin

 

44.5

%

 

48.6

%

(410) bps

Net income

 

205

 

 

228

 

(10.1

%)

Net income margin

 

14.3

%

 

16.9

%

(260) bps

Net income per diluted share

$

3.83

 

$

4.22

 

(9.2

%)

 

 

 

 

Select Non-GAAP measures:

 

 

 

Adjusted net sales

$

1,432

 

$

1,350

 

6.1

%

Organic net sales growth

 

 

5.4

%

Adjusted gross profit

 

638

 

 

660

 

(3.3

%)

Adjusted gross margin

 

44.6

%

 

48.9

%

(430) bps

Adjusted EBITDA

 

285

 

 

341

 

(16.4

%)

Adjusted EBITDA margin

 

19.9

%

 

25.3

%

(540) bps

Non-GAAP net income

$

214

 

$

258

 

(17.1

%)

Non-GAAP earnings per diluted share

$

4.01

 

$

4.79

 

(16.3

%)

Net sales were $1,432 million in the first quarter of 2022 compared to $1,347 million in the first quarter of 2021. Net sales in the Enterprise Visibility & Mobility ("EVM") segment were $1,038 million in the first quarter of 2022 compared with $921 million in the first quarter of 2021. Asset Intelligence & Tracking ("AIT") segment net sales were $394 million in the first quarter of 2022 compared to $429 million in the prior year period. Consolidated organic net sales for the first quarter increased 5.4%. First-quarter year-over-year organic net sales increased by 11.6% in the EVM segment and decreased by 8.1% in the AIT segment.

First quarter 2022 gross profit was $637 million compared to $655 million in the prior year period. Gross margin decreased to 44.5% for the first quarter of 2022 compared to 48.6% in the prior year period. The decrease was primarily due to increased premium freight and component part costs, as well as unfavorable business mix. These decreases were partially offset by higher service and software margin. Adjusted gross margin was 44.6% in the first quarter of 2022 compared to 48.9% in the prior year period.

Operating expenses increased in the first quarter of 2022 to $425 million from $383 million in the prior year period, primarily due to recently acquired businesses, as well as increased marketing program activities and employee travel as in-person activities resumed. Adjusted operating expenses increased in the first quarter of 2022 to $372 million from $337 million in the prior year period.

Net income for the first quarter of 2022 was $205 million, or $3.83 per diluted share, compared to net income of $228 million, or $4.22 per diluted share, for the first quarter of 2021. Non-GAAP net income for the first quarter of 2022 decreased to $214 million, or $4.01 per diluted share, compared to $258 million, or $4.79 per diluted share, for the prior year period.

Adjusted EBITDA for the first quarter of 2022 decreased to $285 million, or 19.9% of adjusted net sales, compared to $341 million, or 25.3% of adjusted net sales for the first quarter of 2021 due to lower gross profit and higher operating expenses as a percentage of sales.

Balance Sheet and Cash Flow

As of April 2, 2022, the company had cash and cash equivalents of $141 million and total debt of $1,101 million.

For the first three months of 2022, the company generated $54 million of operating cash flow and made capital expenditures of $14 million, resulting in free cash flow of $40 million. The company made $5 million in venture investments. In addition, the company made $305 million of share repurchases under its existing authorization and had net debt borrowings of $105 million.

Outlook

Second Quarter 2022

The company expects second quarter 2022 adjusted net sales to increase 3% to 7% compared to the second quarter of 2021 which assumes a net neutral impact from acquisitions and foreign currency translation.

Adjusted EBITDA margin for the second quarter of 2022 is expected to be approximately 20% to 21%, which includes approximately $60 million of premium supply chain costs. Non-GAAP earnings per diluted share are expected to be in the range of $4.05 to $4.35. This assumes an adjusted effective tax rate of approximately 18%.

Full Year 2022

The Company continues to expect adjusted net sales to increase 3% to 7% from 2021, which assumes approximately 50 basis point negative net impact from foreign currency translation and acquisitions.

Adjusted EBITDA margin is now expected to be approximately 22% to 23%. This assumes approximately $200 million impact from premium supply chain costs.

Free cash flow is now expected to be at least $800 million.

The outlook amounts provided above do not include any projected results from the acquisition of Matrox Imaging, which is expected to close mid-2022.

The company does not provide a reconciliation for non-GAAP estimates on a forward-looking basis where it is unable to provide a meaningful or accurate calculation or estimation of reconciling items and the information is not available without unreasonable effort. This is due to the inherent difficulty of forecasting the timing or amount of the most directly comparable forward-looking GAAP financial measure as discussed under the "Forward-Looking Statements" caption below. This would include items that have not yet occurred, are out of the company’s control and/or cannot be reasonably predicted, and that would impact diluted net earnings per share. For the same reasons, the company is unable to address the probable significance of the unavailable information. Forward-looking non-GAAP financial measures provided without the most directly comparable GAAP financial measures may vary materially from the corresponding GAAP financial measures.

Conference Call Notification

Investors are invited to listen to a live webcast of Zebra’s conference call regarding the company’s financial results. The conference call will be held today, Tuesday May 3, at 7:30 a.m. Central Time (8:30 a.m. Eastern Time). To view the webcast, visit the investor relations section of the company’s website at investors.zebra.com.

About Zebra

Zebra (NASDAQ: ZBRA) empowers organizations to thrive in the on-demand economy by making every front-line worker and asset at the edge visible, connected and fully optimized. With an ecosystem of more than 10,000 partners across more than 100 countries, Zebra serves customers of all sizes – including 94% of the Fortune 100 – with an award-winning portfolio of hardware, software, services and solutions that digitize and automate workflows. Supply chains are more dynamic, customers and patients are better served, and workers are more engaged when they utilize Zebra innovations that help them sense, analyze and act in real time. In 2021, Zebra expanded its industrial automation portfolio with its Fetch Robotics acquisition and increased its machine vision and AI software capabilities with the acquisitions of Adaptive Vision and antuit.ai. Zebra is #25 on Newsweek's inaugural list of America's Most Loved Workplaces and on Forbes' list of America's best employers for the fifth year. Learn more at zebra.com or sign up for news alerts. Follow Zebra's Your Edge blog, LinkedIn, Twitter and Facebook, and check out our Story Hub: Zebra Perspectives.

Forward-Looking Statements

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 outlook. 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 undertakes no obligation, other than as may be required by law, to publicly update or revise any forward-looking statements, whether as a result of new information, future events, changed circumstances or any other reason after the date of this release.

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 customer acceptance of Zebra’s offerings and competitors' offerings and the potential effects of emerging technologies and changes in customer requirements. The effect of global market conditions, and the availability of credit and capital markets volatility may have adverse effects on Zebra, its suppliers and its customers. In addition, natural disasters, man-made disasters, public health issues (including pandemics), and cybersecurity incidents may have negative effects on our business and results of operations. Our ability to purchase sufficient materials, parts, and components as well as our ability to provide services and software to meet customer demand could negatively impact our results of operations and customer relationships. Profits and profitability may be affected by Zebra’s ability to control manufacturing and operating costs. Because of its debt, interest rates and financial market conditions may also have an impact on results. Foreign exchange rates, customs duties and trade policies may have an effect on financial results because of the large percentage of our international sales. The impacts of changes in foreign and domestic governmental policies, regulations, or laws, as well as the outcome of litigation or tax matters in which Zebra may be involved are other factors. The success of integrating acquisitions could also affect profitability, reported results and the company’s competitive position in its industry. 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,” “outlook,” 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, including the company’s most recent Form 10-K and Form 10-Q.

Use of Non-GAAP Financial Information

This press release contains certain Non-GAAP financial measures, consisting of “adjusted net sales,” “adjusted gross profit,” “EBITDA,” “Adjusted EBITDA,” “Non-GAAP net income,” “Non-GAAP earnings per share,” “free cash flow,” “organic net sales growth,” and “adjusted operating expenses.” Management presents these measures to focus on the on-going operations and believes it is useful to investors because they enable them to perform meaningful comparisons of past and present operating results. The company believes it is useful to present non-GAAP financial measures, which exclude certain significant items, as a means to understand the performance of its ongoing operations and how management views the business. Please see the “Reconciliation of GAAP to Non-GAAP Financial Measures” tables and accompanying disclosures at the end of this press release for more detailed information regarding non-GAAP financial measures herein, including the items reflected in adjusted net earnings calculations. These measures, however, should not be construed as an alternative to any other measure of performance determined in accordance with GAAP.

The company does not provide a reconciliation for non-GAAP estimates on a forward-looking basis (including the information under “Outlook” above) where it is unable to provide a meaningful or accurate calculation or estimation of reconciling items and the information is not available without unreasonable effort. This is due to the inherent difficulty of forecasting the timing or amount of various items that have not yet occurred, are out of the company’s control and/or cannot be reasonably predicted, and that would impact diluted net earnings per share, the most directly comparable forward-looking GAAP financial measure. For the same reasons, the company is unable to address the probable significance of the unavailable information. Forward-looking non-GAAP financial measures provided without the most directly comparable GAAP financial measures may vary materially from the corresponding GAAP financial measures.

As a global company, Zebra's operating results reported in U.S. dollars are affected by foreign currency exchange rate fluctuations because the underlying foreign currencies in which the company transacts change in value over time compared to the U.S. dollar; accordingly, the company presents certain organic growth financial information, which includes impacts of foreign currency translation, to provide a framework to assess how the company’s businesses performed excluding the impact of foreign currency exchange rate fluctuations. Foreign currency impact represents the difference in results that are attributable to fluctuations in the currency exchange rates used to convert the results for businesses where the functional currency is not the U.S. dollar. This impact is calculated by translating current period results at the currency exchange rates used in the comparable period in the prior year, rather than the exchange rates in effect during the current period. In addition, the company excludes the impact of its foreign currency hedging program in the prior year periods. The company believes these measures should be considered a supplement to and not in lieu of the company’s performance measures calculated in accordance with GAAP.

ZEBRA TECHNOLOGIES CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(In millions, except share data)

 

 

April 2,
2022

 

December 31,
2021

 

(Unaudited)

 

 

Assets

 

 

 

Current assets:

 

 

 

Cash and cash equivalents

$

141

 

 

$

332

 

Accounts receivable, net of allowances for doubtful accounts of $1 million each as of April 2, 2022 and December 31, 2021

 

808

 

 

 

752

 

Inventories, net

 

469

 

 

 

491

 

Income tax receivable

 

14

 

 

 

8

 

Prepaid expenses and other current assets

 

137

 

 

 

106

 

Total Current assets

 

1,569

 

 

 

1,689

 

Property, plant and equipment, net

 

271

 

 

 

272

 

Right-of-use lease assets

 

133

 

 

 

131

 

Goodwill

 

3,266

 

 

 

3,265

 

Other intangibles, net

 

437

 

 

 

469

 

Deferred income taxes

 

226

 

 

 

192

 

Other long-term assets

 

227

 

 

 

197

 

Total Assets

$

6,129

 

 

$

6,215

 

Liabilities and Stockholders’ Equity

 

 

 

Current liabilities:

 

 

 

Current portion of long-term debt

$

183

 

 

$

69

 

Accounts payable

 

691

 

 

 

700

 

Accrued liabilities

 

459

 

 

 

639

 

Deferred revenue

 

397

 

 

 

380

 

Income taxes payable

 

69

 

 

 

12

 

Total Current liabilities

 

1,799

 

 

 

1,800

 

Long-term debt

 

913

 

 

 

922

 

Long-term lease liabilities

 

122

 

 

 

121

 

Deferred income taxes

 

4

 

 

 

6

 

Long-term deferred revenue

 

318

 

 

 

315

 

Other long-term liabilities

 

67

 

 

 

67

 

Total Liabilities

 

3,223

 

 

 

3,231

 

Stockholders’ Equity:

 

 

 

Preferred stock, $.01 par value; authorized 10,000,000 shares; none issued

 

 

 

 

 

Class A common stock, $.01 par value; authorized 150,000,000 shares; issued 72,151,857 shares

 

1

 

 

 

1

 

Additional paid-in capital

 

487

 

 

 

462

 

Treasury stock at cost, 19,367,014 and 18,736,582 shares as of April 2, 2022 and December 31, 2021, respectively

 

(1,331

)

 

 

(1,023

)

Retained earnings

 

3,778

 

 

 

3,573

 

Accumulated other comprehensive loss

 

(29

)

 

 

(29

)

Total Stockholders’ Equity

 

2,906

 

 

 

2,984

 

Total Liabilities and Stockholders’ Equity

$

6,129

 

 

$

6,215

 

ZEBRA TECHNOLOGIES CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(In millions, except share data)

(Unaudited)

 

 

Three Months Ended

 

April 2,
2022

 

April 3,
2021

Net sales:

 

 

 

Tangible products

$

1,207

 

$

1,153

Services and software

 

225

 

 

194

Total Net sales

 

1,432

 

 

1,347

Cost of sales:

 

 

 

Tangible products

 

681

 

 

591

Services and software

 

114

 

 

101

Total Cost of sales

 

795

 

 

692

Gross profit

 

637

 

 

655

Operating expenses:

 

 

 

Selling and marketing

 

152

 

 

134

Research and development

 

137

 

 

140

General and administrative

 

99

 

 

82

Amortization of intangible assets

 

33

 

 

26

Acquisition and integration costs

 

4

 

 

1

Total Operating expenses

 

425

 

 

383

Operating income

 

212

 

 

272

Other income, net:

 

 

 

Foreign exchange gain

 

8

 

 

2

Interest income, net

 

30

 

 

2

Total Other income, net

 

38

 

 

4

Income before income tax

 

250

 

 

276

Income tax expense

 

45

 

 

48

Net income

$

205

 

$

228

Basic earnings per share

$

3.86

 

$

4.26

Diluted earnings per share

$

3.83

 

$

4.22

ZEBRA TECHNOLOGIES CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In millions)

(Unaudited)

 

 

Three Months Ended

 

April 2,
2022

 

April 3,
2021

Cash flows from operating activities:

 

 

 

Net income

$

205

 

 

$

228

 

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

 

 

 

Depreciation and amortization

 

52

 

 

 

44

 

Share-based compensation

 

17

 

 

 

16

 

Deferred income taxes

 

(37

)

 

 

(2

)

Unrealized gain on forward interest rate swaps

 

(38

)

 

 

(12

)

Other, net

 

(1

)

 

 

(1

)

Changes in operating assets and liabilities:

 

 

 

Accounts receivable, net

 

(56

)

 

 

(15

)

Inventories, net

 

22

 

 

 

(17

)

Other assets

 

(19

)

 

 

(18

)

Accounts payable

 

(14

)

 

 

(30

)

Accrued liabilities

 

(143

)

 

 

(47

)

Deferred revenue

 

18

 

 

 

50

 

Income taxes

 

51

 

 

 

28

 

Other operating activities

 

(3

)

 

 

 

Net cash provided by operating activities

 

54

 

 

 

224

 

Cash flows from investing activities:

 

 

 

Purchases of property, plant and equipment

 

(14

)

 

 

(10

)

Purchases of long-term investments

 

(5

)

 

 

(13

)

Net cash used in investing activities

 

(19

)

 

 

(23

)

Cash flows from financing activities:

 

 

 

Payments of long-term debt

 

(25

)

 

 

(156

)

Proceeds from issuance of long-term debt

 

130

 

 

 

 

Payments for repurchases of common stock

 

(305

)

 

 

 

Net proceeds (payments) related to share-based compensation plans

 

5

 

 

 

(6

)

Change in unremitted cash collections from servicing factored receivables

 

(25

)

 

 

(19

)

Net cash used in financing activities

 

(220

)

 

 

(181

)

Effect of exchange rate changes on cash and cash equivalents, including restricted cash

 

(2

)

 

 

(2

)

Net (decrease) increase in cash and cash equivalents, including restricted cash

 

(187

)

 

 

18

 

Cash and cash equivalents, including restricted cash, at beginning of period

 

344

 

 

 

192

 

Cash and cash equivalents, including restricted cash, at end of period

$

157

 

 

$

210

 

Less restricted cash, included in Prepaid expenses and other current assets

 

(16

)

 

 

(33

)

Cash and cash equivalents at end of period

$

141

 

 

$

177

 

Supplemental disclosures of cash flow information:

 

 

 

Income taxes paid

$

29

 

 

$

22

 

Interest paid

$

8

 

 

$

9

 

ZEBRA TECHNOLOGIES CORPORATION AND SUBSIDIARIES

RECONCILIATION OF ORGANIC NET SALES GROWTH

(Unaudited)

 

 

 

 

 

 

 

Three Months Ended

 

April 2, 2022

 

AIT

 

EVM

 

Consolidated

Reported GAAP Consolidated Net sales growth

(8.2

) %

 

12.7

%

 

6.3

%

Adjustments:

 

 

 

 

 

Impact of foreign currency translation (1)

0.1

%

 

0.1

%

 

0.1

%

Impact of acquisitions (2)

%

 

(1.2

) %

 

(1.0

) %

Consolidated Organic Net sales growth

(8.1

) %

 

11.6

%

 

5.4

%

(1)

Operating results reported in U.S. Dollars are affected by foreign currency exchange rate fluctuations. Foreign currency translation impact represents the difference in results that are attributable to fluctuations in the currency exchange rates used to convert the results for businesses where the functional currency is not the U.S. Dollar. This impact is calculated by translating the current period results at the currency exchange rates used in the comparable prior year period, inclusive of the Company’s foreign currency hedging program.

 

(2)

For purposes of computing Organic Net sales growth, amounts directly attributable to the acquisitions of Adaptive Vision, Fetch and Antuit are excluded for twelve months following their respective acquisitions.

ZEBRA TECHNOLOGIES CORPORATION AND SUBSIDIARIES

RECONCILIATION OF GAAP TO NON-GAAP GROSS MARGIN

(In millions)

(Unaudited)

 

 

Three Months Ended

 

April 2, 2022

 

April 3, 2021

 

AIT

 

EVM

 

Consolidated

 

AIT

 

EVM

 

Consolidated

GAAP

 

 

 

 

 

 

 

 

 

 

 

Reported Net sales (1)

$

394

 

 

$

1,038

 

 

$

1,432

 

 

$

429

 

 

$

921

 

 

$

1,347

 

Reported Gross profit (1)

 

154

 

 

 

483

 

 

 

637

 

 

 

207

 

 

 

451

 

 

 

655

 

Gross Margin

 

39.1

%

 

 

46.5

%

 

 

44.5

%

 

 

48.3

%

 

 

49.0

%

 

 

48.6

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-GAAP

 

 

 

 

 

 

 

 

 

 

 

Adjusted Net sales

$

394

 

 

$

1,038

 

 

$

1,432

 

 

$

429

 

 

$

921

 

 

$

1,350

 

Adjusted Gross profit (2)

 

154

 

 

 

484

 

 

 

638

 

 

 

207

 

 

 

453

 

 

 

660

 

Adjusted Gross Margin

 

39.1

%

 

 

46.6

%

 

 

44.6

%

 

 

48.3

%

 

 

49.2

%

 

 

48.9

%

(1)

Consolidated results include corporate eliminations related to business acquisition purchase accounting adjustments that are not reported in segment results.

(2)

Adjusted Gross profit excludes business acquisition purchase accounting adjustments and share-based compensation expense.

ZEBRA TECHNOLOGIES CORPORATION AND SUBSIDIARIES

RECONCILIATION OF GAAP TO NON-GAAP NET INCOME

(In millions, except share data)

(Unaudited)

 

 

Three Months Ended

 

April 2,
2022

 

April 3,
2021

Net income

$

205

 

 

$

228

 

Adjustments to Net sales(1)

 

 

 

Purchase accounting adjustments

 

 

 

 

3

 

Total adjustments to Net sales

 

 

 

 

3

 

Adjustments to Cost of sales(1)

 

 

 

Share-based compensation

 

1

 

 

 

2

 

Total adjustments to Cost of sales

 

1

 

 

 

2

 

Adjustments to Operating expenses(1)

 

 

 

Amortization of intangible assets

 

33

 

 

 

26

 

Acquisition and integration costs

 

4

 

 

 

1

 

Share-based compensation

 

16

 

 

 

19

 

Total adjustments to Operating expenses

 

53

 

 

 

46

 

Adjustments to Other income (expense), net(1)

 

 

 

Amortization of debt issuance costs and discounts

 

 

 

 

1

 

Investment gain

 

 

 

 

(1

)

Foreign exchange gain

 

(8

)

 

 

(2

)

Forward interest rate swap gain

 

(34

)

 

 

(8

)

Total adjustments to Other income (expense), net

 

(42

)

 

 

(10

)

Income tax effect of adjustments(2)

 

 

 

Reported income tax expense

 

45

 

 

 

48

 

Less: Adjusted income tax expense

 

(48

)

 

 

(59

)

Total adjustments to income tax

 

(3

)

 

 

(11

)

Total adjustments

 

9

 

 

 

30

 

Non-GAAP Net income

$

214

 

 

$

258

 

 

 

 

 

GAAP earnings per share

 

 

 

Basic

$

3.86

 

 

$

4.26

 

Diluted

$

3.83

 

 

$

4.22

 

Non-GAAP earnings per share

 

 

 

Basic

$

4.04

 

 

$

4.83

 

Diluted

$

4.01

 

 

$

4.79

 

 

 

 

 

Basic weighted average shares outstanding

 

53,021,423

 

 

 

53,484,265

 

Diluted weighted average and equivalent shares outstanding

 

53,446,740

 

 

 

53,964,330

 

(1)

Presented on a pre-tax basis.

(2)

Represents adjustments to GAAP income tax expense commensurate with pre-tax non-GAAP adjustments (including the resulting impacts to U.S. BEAT/GILTI provisions), as well as adjustments to exclude the impacts of certain discrete income tax items and incorporate the anticipated annualized effects of current year tax planning.

ZEBRA TECHNOLOGIES CORPORATION AND SUBSIDIARIES

GAAP to NON-GAAP RECONCILIATION TO EBITDA

(In millions)

(Unaudited)

 

 

Three Months Ended

 

April 2,
2022

 

April 3,
2021

Net income

$

205

 

 

$

228

 

Add back:

 

 

 

Depreciation

 

19

 

 

 

18

 

Amortization of intangible assets

 

33

 

 

 

26

 

Total Other income, net

 

(38

)

 

 

(4

)

Income tax expense

 

45

 

 

 

48

 

EBITDA (Non-GAAP)

 

264

 

 

 

316

 

 

 

 

 

Adjustments to Net sales

 

 

 

Purchase accounting adjustments

 

 

 

 

3

 

Total adjustments to Net sales

 

 

 

 

3

 

Adjustments to Cost of sales

 

 

 

Share-based compensation

 

1

 

 

 

2

 

Total adjustments to Cost of sales

 

1

 

 

 

2

 

Adjustments to Operating expenses

 

 

 

Acquisition and integration costs

 

4

 

 

 

1

 

Share-based compensation

 

16

 

 

 

19

 

Total adjustments to Operating expenses

 

20

 

 

 

20

 

Total adjustments to EBITDA

 

21

 

 

 

25

 

Adjusted EBITDA (Non-GAAP)

$

285

 

 

$

341

 

 

 

 

 

Adjusted EBITDA % of Adjusted Net Sales

 

19.9

%

 

 

25.3

%

FREE CASH FLOW

 

 

Three Months Ended

 

April 2,
2022

 

April 3,
2021

Net cash provided by operating activities

$

54

 

 

$

224

 

Less: Purchases of property, plant and equipment

 

(14

)

 

 

(10

)

Free cash flow (Non-GAAP)(1)

$

40

 

 

$

214

 

(1)

Free cash flow is defined as Net cash provided by operating activities in a period minus purchases of property, plant and equipment (capital expenditures) made in that period. This measure does not represent residual cash flows available for discretionary expenditures as the measure does not deduct the payments required for debt service and other contractual obligations or payments for future business acquisitions. Therefore, we believe it is important to view free cash flow as a measure that provides supplemental information to our entire statements of cash flows.

ZEBRA TECHNOLOGIES CORPORATION AND SUBSIDIARIES

SEGMENT INFORMATION

 

Effective January 1, 2022, the location solutions offering moved from our AIT segment into our EVM segment contemporaneous with a change in our organizational structure and management of the business. Prior period results have been revised to conform to the current segment presentation. This change does not have an impact to the Consolidated Financial Statements. The revised prior period results set forth below are GAAP measures. The effects of our segment change similarly impacted the Company's relevant Non-GAAP measures.

 

 

2021

2020

 

Q1 2021
QTD

Q2 2021
QTD

Q3 2021
QTD

Q4 2021
QTD

Q4 2021
YTD

Q1 2020
QTD

Q2 2020
QTD

Q3 2020
QTD

Q4 2020
QTD

Q4 2020
YTD

Net sales:

 

 

 

 

 

 

 

 

 

 

AIT Tangible products

$

407

 

$

390

 

$

354

 

$

412

 

$

1,563

 

$

331

 

$

249

 

$

310

 

$

396

 

$

1,286

 

AIT Services and software

 

22

 

 

24

 

 

24

 

 

24

 

 

94

 

 

19

 

 

20

 

 

22

 

 

22

 

 

83

 

Total AIT sales

 

429

 

 

414

 

 

378

 

 

436

 

 

1,657

 

 

350

 

 

269

 

 

332

 

 

418

 

 

1,369

 

EVM Tangible products

 

746

 

 

802

 

 

886

 

 

848

 

 

3,282

 

 

570

 

 

562

 

 

662

 

 

733

 

 

2,527

 

EVM Services and software

 

175

 

 

164

 

 

172

 

 

183

 

 

694

 

 

132

 

 

125

 

 

140

 

 

162

 

 

559

 

Total EVM sales

 

921

 

 

966

 

 

1,058

 

 

1,031

 

 

3,976

 

 

702

 

 

687

 

 

802

 

 

895

 

 

3,086

 

Total segment Net sales

 

1,350

 

 

1,380

 

 

1,436

 

 

1,467

 

 

5,633

 

 

1,052

 

 

956

 

 

1,134

 

 

1,313

 

 

4,455

 

Corporate, eliminations Tangible products

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Corporate, eliminations Services and software

 

(3

)

 

(3

)

 

 

 

 

 

(6

)

 

 

 

 

 

(2

)

 

(5

)

 

(7

)

Total Net sales

 

1,347

 

 

1,377

 

 

1,436

 

 

1,467

 

 

5,627

 

 

1,052

 

 

956

 

 

1,132

 

 

1,308

 

 

4,448

 

 

 

 

 

 

 

 

 

 

 

 

Gross profit:

 

 

 

 

 

 

 

 

 

 

AIT

 

207

 

 

199

 

 

165

 

 

188

 

 

759

 

 

170

 

 

123

 

 

156

 

 

204

 

 

653

 

EVM

 

451

 

 

462

 

 

481

 

 

481

 

 

1,875

 

 

304

 

 

298

 

 

340

 

 

421

 

 

1,363

 

Corporate, eliminations

 

(3

)

 

(3

)

 

 

 

 

 

(6

)

 

(1

)

 

(2

)

 

(3

)

 

(7

)

 

(13

)

Total Gross profit

 

655

 

 

658

 

 

646

 

 

669

 

 

2,628

 

 

473

 

 

419

 

 

493

 

 

618

 

 

2,003

 

 

 

 

 

 

 

 

 

 

 

 

Gross margin

 

 

 

 

 

 

 

 

 

 

AIT

 

48.3

%

 

48.1

%

 

43.7

%

 

43.1

%

 

45.8

%

 

48.6

%

 

45.7

%

 

47.0

%

 

48.8

%

 

47.7

%

EVM

 

49.0

%

 

47.8

%

 

45.5

%

 

46.7

%

 

47.2

%

 

43.3

%

 

43.4

%

 

42.4

%

 

47.0

%

 

44.2

%

 

 

 

 

 

 

 

 

 

 

 

Operating expenses

 

 

 

 

 

 

 

 

 

 

AIT

 

96

 

 

99

 

 

87

 

 

95

 

 

377

 

 

84

 

 

69

 

 

76

 

 

93

 

 

322

 

EVM

 

260

 

 

282

 

 

287

 

 

296

 

 

1,125

 

 

213

 

 

211

 

 

221

 

 

261

 

 

906

 

Corporate, eliminations

 

27

 

 

30

 

 

35

 

 

55

 

 

147

 

 

25

 

 

20

 

 

46

 

 

33

 

 

124

 

Total Operating expenses

 

383

 

 

411

 

 

409

 

 

446

 

 

1,649

 

 

322

 

 

300

 

 

343

 

 

387

 

 

1,352

 

 

 

 

 

 

 

 

 

 

 

 

Operating income:

 

 

 

 

 

 

 

 

 

 

AIT

 

111

 

 

100

 

 

78

 

 

93

 

 

382

 

 

86

 

 

54

 

 

80

 

 

111

 

 

331

 

EVM

 

191

 

 

180

 

 

194

 

 

185

 

 

750

 

 

91

 

 

87

 

 

119

 

 

160

 

 

457

 

Total segment operating income

 

302

 

 

280

 

 

272

 

 

278

 

 

1,132

 

 

177

 

 

141

 

 

199

 

 

271

 

 

788

 

Corporate, eliminations

 

(30

)

 

(33

)

 

(35

)

 

(55

)

 

(153

)

 

(26

)

 

(22

)

 

(49

)

 

(40

)

 

(137

)

Total Operating income

$

272

 

$

247

 

$

237

 

$

223

 

$

979

 

$

151

 

$

119

 

$

150

 

$

231

 

$

651

 

 

Investors
Michael Steele, CFA, IRC
Vice President, Investor Relations
Phone: + 1 847 793 6707
msteele@zebra.com

Media
Therese Van Ryne
Senior Director, External Communications
Phone: + 1 847 370 2317
therese.vanryne@zebra.com

Source: Zebra Technologies Corporation
Categories: Press Releases
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