Press release

Zebra Technologies Announces First-Quarter 2021 Results

0
Sponsored by Businesswire

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 3, 2021.

“I’m proud of our teams’ exceptional first quarter performance as we continue to realize a strong recovery from the pandemic. We achieved record quarterly sales and earnings which exceeded our expectations, despite industry supply chain challenges,” said Anders Gustafsson, Chief Executive Officer of Zebra Technologies. “We enter Q2 with a strong order backlog as we see global business demand recover and customers prioritizing spending on our solutions. This momentum drives our exceptionally strong Q2 sales growth expectation, and coupled with our encouraging pipeline of business, enables us to raise our full year 2021 outlook for both sales and profitability. We continue to be excited about our growing portfolio of solutions that digitize and automate our customers’ workflows in an increasingly on-demand economy.”

$ in millions, except per share amounts

1Q21

1Q20

Change

Select reported measures:

 

 

 

Net sales

$

1,347

 

$

1,052

 

28.0

%

Gross profit

655

 

473

 

38.5

%

Gross margin

48.6

%

45.0

%

360 bps

Net income

228

 

89

 

156.2

%

Net income margin

16.9

%

8.5

%

840 bps

Net income per diluted share

$

4.22

 

$

1.65

 

155.8

%

 

 

 

 

Select Non-GAAP measures:

 

 

 

Adjusted net sales

$

1,350

 

$

1,052

 

28.3

%

Organic net sales growth

 

 

25.0

%

Adjusted gross profit

660

 

475

 

38.9

%

Adjusted gross margin

48.9

%

45.2

%

370 bps

Adjusted EBITDA

341

 

201

 

69.7

%

Adjusted EBITDA margin

25.3

%

19.1

%

620 bps

Non-GAAP net income

$

258

 

$

145

 

77.9

%

Non-GAAP earnings per diluted share

$

4.79

 

$

2.67

 

79.4

%

Net sales were $1,347 million in the first quarter of 2021 compared to $1,052 million in the first quarter of 2020. Net sales in the Enterprise Visibility & Mobility (“EVM”) segment were $914 million in the first quarter of 2021 compared with $697 million in the first quarter of 2020. Asset Intelligence & Tracking (“AIT”) segment net sales were $436 million in the first quarter of 2021 compared to $355 million in the prior year period. Consolidated organic net sales for the first quarter increased 25.0%. First-quarter year-over-year organic net sales increased by 26.8% in the EVM segment and increased by 21.4% in the AIT segment.

First-quarter 2021 gross profit was $655 million compared to $473 million in the prior year period. Gross margin increased to 48.6% for the first quarter of 2021, compared to 45.0% in the prior year period. This increase was primarily due to favorable business mix, higher service and software margin, $10 million net favorability in Chinese import tariffs, and contribution from higher margin business acquisitions. This favorability was partially offset by $11 million of incremental premium freight expense, and surcharges on certain component parts. Adjusted gross margin was 48.9% in the first quarter of 2021, compared to 45.2% in the prior year period.

Operating expenses increased in the first quarter of 2021 to $383 million from $322 million in the prior year period, primarily due to higher employee incentive-based compensation associated with improved financial performance; the inclusion of operating and amortization expenses associated with recently acquired businesses; and increased investment in research and development programs principally within our EVM segment. These increases were partially offset by lower travel expenses in the current year and the prior year costs associated with the 2019 Productivity Plan and product sourcing geographic diversification initiative. Adjusted operating expenses increased in the first quarter of 2021 to $337 million from $292 million in the prior year period.

Net income for the first quarter of 2021 was $228 million, or $4.22 per diluted share, compared to net income of $89 million, or $1.65 per diluted share, for the first quarter of 2020. Non-GAAP net income for the first quarter of 2021 increased to $258 million, or $4.79 per diluted share, compared to $145 million, or $2.67 per diluted share, for the prior year period.

Adjusted EBITDA for the first quarter of 2021 increased to $341 million, or 25.3% of adjusted net sales, compared to $201 million, or 19.1% of adjusted net sales, for the first quarter of 2020 due to higher gross margin and lower operating expenses as a percentage of sales.

Balance Sheet and Cash Flow

As of April 3, 2021, the company had cash and cash equivalents of $177 million and total debt of $1,096 million.

For the first three months of 2021, the company generated $224 million of operating cash flow and incurred capital expenditures of $10 million, resulting in free cash flow of $214 million. The company also made $13 million in venture investments.

For the first three months of 2021, the company made debt repayments of $156 million and cash interest payments of $9 million.

Outlook

Second Quarter 2021

The company expects second-quarter 2021 adjusted net sales to increase 38% to 42% from the second quarter of 2020 as the global economy continues to recover and we continue to realize pent-up demand from many customers. This expectation includes an approximately 450-500 basis point additive impact from the Reflexis acquisition and foreign currency translation, and reflects industry supply chain challenges.

Adjusted EBITDA margin for the second quarter of 2021 is expected to be in the range of 21% to 22%, which includes approximately $18 million of premium freight expense. Non-GAAP earnings per diluted share are expected to be in the range of $4.00 to $4.20. This assumes an adjusted effective tax rate of approximately 18%.

Full-Year 2021

The Company now expects adjusted net sales to increase 18% to 22% from 2020, which includes an approximately 3 percentage point additive impact from the Reflexis acquisition and foreign currency translation, and reflects industry supply chain challenges.

Adjusted EBITDA margin is now expected to be approximately 22% to 23%.

Free cash flow is now expected to be at least $850 million.

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 for the first quarter of 2021. The conference call will be held today, Tuesday, May 4, 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 the front line in retail/e-commerce, manufacturing, transportation and logistics, healthcare, public sector and other industries to achieve a performance edge. With more than 10,000 partners across 100 countries, Zebra delivers industry-tailored, end-to-end solutions to enable every asset and worker to be visible, connected and fully optimized. The company’s market-leading solutions elevate the shopping experience, track and manage inventory as well as improve supply chain efficiency and patient care. In 2020, Zebra made Forbes Global 2000 list for the second consecutive year and was listed among Fast Company’s Best Companies for Innovators. For more information, visit www.zebra.com or sign up for news alerts. Participate in Zebra’s Your Edge blog, follow the company on 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 hardware and software products and competitors’ product offerings, and the potential effects of technological changes. The continued uncertainty over future global economic conditions, the availability of credit and capital markets volatility may have adverse effects on Zebra, its suppliers and its customers. In addition, a disruption in our ability to obtain products from vendors as a result of supply chain constraints, natural disasters, public health issues (including pandemics), or other circumstances could restrict sales and negatively affect customer relationships. Profits and profitability will be affected by Zebra’s ability to control manufacturing and operating costs. Because of its debt, interest rates and financial market conditions will also have an impact on results. Foreign exchange rates will have an effect on financial results because of the large percentage of our international sales. The outcome of litigation in which Zebra may be involved is another factor. 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 3,

2021

 

December 31,

2020

 

(Unaudited)

 

 

Assets

 

 

 

Current assets:

 

 

 

Cash and cash equivalents

$

177

 

 

$

168

 

Accounts receivable, net of allowances for doubtful accounts of $1 million as of April 3, 2021 and December 31, 2020

521

 

 

508

 

Inventories, net

528

 

 

511

 

Income tax receivable

7

 

 

16

 

Prepaid expenses and other current assets

110

 

 

70

 

Total Current assets

1,343

 

 

1,273

 

Property, plant and equipment, net

269

 

 

274

 

Right-of-use lease assets

129

 

 

135

 

Goodwill

2,989

 

 

2,988

 

Other intangibles, net

376

 

 

402

 

Deferred income taxes

133

 

 

139

 

Other long-term assets

172

 

 

164

 

Total Assets

$

5,411

 

 

$

5,375

 

Liabilities and Stockholders’ Equity

 

 

 

Current liabilities:

 

 

 

Current portion of long-term debt

$

134

 

 

$

364

 

Accounts payable

573

 

 

601

 

Accrued liabilities

457

 

 

559

 

Deferred revenue

344

 

 

308

 

Income taxes payable

38

 

 

19

 

Total Current liabilities

1,546

 

 

1,851

 

Long-term debt

956

 

 

881

 

Long-term lease liabilities

122

 

 

129

 

Long-term deferred revenue

287

 

 

273

 

Other long-term liabilities

89

 

 

97

 

Total Liabilities

3,000

 

 

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

405

 

 

395

 

Treasury stock at cost, 18,641,691 and 18,689,775 shares as of April 3, 2021 and December 31, 2020, respectively

(919

)

 

(919

)

Retained earnings

2,964

 

 

2,736

 

Accumulated other comprehensive loss

(40

)

 

(69

)

Total Stockholders’ Equity

2,411

 

 

2,144

 

Total Liabilities and Stockholders’ Equity

$

5,411

 

 

$

5,375

 

ZEBRA TECHNOLOGIES CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(In millions, except share data)

(Unaudited)

 

 

Three Months Ended

 

April 3,

2021

 

March 28,

2020

Net sales:

 

 

 

Tangible products

$

1,153

 

$

901

 

Services and software

194

 

151

 

Total Net sales

1,347

 

1,052

 

Cost of sales:

 

 

 

Tangible products

591

 

486

 

Services and software

101

 

93

 

Total Cost of sales

692

 

579

 

Gross profit

655

 

473

 

Operating expenses:

 

 

 

Selling and marketing

134

 

122

 

Research and development

140

 

105

 

General and administrative

82

 

74

 

Amortization of intangible assets

26

 

16

 

Acquisition and integration costs

1

 

1

 

Exit and restructuring costs

 

4

 

Total Operating expenses

383

 

322

 

Operating income

272

 

151

 

Other income (expense):

 

 

 

Foreign exchange gain (loss)

2

 

(3

)

Interest income (expense), net

2

 

(45

)

Total Other income (expense), net

4

 

(48

)

Income before income tax

276

 

103

 

Income tax expense

48

 

14

 

Net income

$

228

 

$

89

 

Basic earnings per share

$

4.26

 

$

1.66

 

Diluted earnings per share

$

4.22

 

$

1.65

 

ZEBRA TECHNOLOGIES CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In millions)

(Unaudited)

 

 

Three Months Ended

 

April 3,

2021

 

March 28,

2020

Cash flows from operating activities:

 

 

 

Net income

$

228

 

 

$

89

 

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

 

 

 

Depreciation and amortization

44

 

 

34

 

Share-based compensation

16

 

 

7

 

Deferred income taxes

(2

)

 

(2

)

Unrealized (gain) loss on forward interest rate swaps

(12

)

 

34

 

Other, net

(1

)

 

 

Changes in operating assets and liabilities:

 

 

 

Accounts receivable, net

(15

)

 

108

 

Inventories, net

(17

)

 

33

 

Other assets

(18

)

 

(4

)

Accounts payable

(30

)

 

(109

)

Accrued liabilities

(47

)

 

(87

)

Deferred revenue

50

 

 

19

 

Income taxes

28

 

 

(16

)

Other operating activities

 

 

2

 

Net cash provided by operating activities

224

 

 

108

 

Cash flows from investing activities:

 

 

 

Purchases of property, plant and equipment

(10

)

 

(13

)

Purchases of long-term investments

(13

)

 

(2

)

Net cash used in investing activities

(23

)

 

(15

)

Cash flows from financing activities:

 

 

 

Payments of long-term debt

(156

)

 

(36

)

Proceeds from issuance of long-term debt

 

 

157

 

Payments for repurchases of common stock

 

 

(200

)

Net payments related to share-based compensation plans

(6

)

 

(1

)

Change in unremitted cash collections from servicing factored receivables

(19

)

 

(22

)

Other financing activities

 

 

4

 

Net cash used in financing activities

(181

)

 

(98

)

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

(2

)

 

(1

)

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

18

 

 

(6

)

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

192

 

 

30

 

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

$

210

 

 

$

24

 

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

(33

)

 

 

Cash and cash equivalents at end of period

$

177

 

 

$

24

 

Supplemental disclosures of cash flow information:

 

 

 

Income taxes paid

$

22

 

 

$

30

 

Interest paid

$

9

 

 

$

9

 

ZEBRA TECHNOLOGIES CORPORATION AND SUBSIDIARIES

RECONCILIATION OF ORGANIC NET SALES GROWTH

(Unaudited)

 

 

 

 

 

 

 

Three Months Ended

 

April 3, 2021

 

AIT

 

EVM

 

Consolidated

Reported GAAP Consolidated Net sales growth

22.8

%

 

31.1

%

 

28.0

%

Adjustments:

 

 

 

 

 

Impact of foreign currency translation (1)

(1.4)

%

 

(1.7)

%

 

(1.6)

%

Impact of acquisitions (2)

%

 

(2.6)

%

 

(1.4)

%

Consolidated Organic Net sales growth

21.4

%

 

26.8

%

 

25.0

%

(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 acquisition of Reflexis are excluded for twelve months following the September 1, 2020 acquisition date.

ZEBRA TECHNOLOGIES CORPORATION AND SUBSIDIARIES

RECONCILIATION OF GAAP TO NON-GAAP GROSS MARGIN

(In millions)

(Unaudited)

 

 

Three Months Ended

 

April 3, 2021

 

March 28, 2020

 

AIT

 

EVM

 

Consolidated

 

AIT

 

EVM

 

Consolidated

GAAP

 

 

 

 

 

 

 

 

 

 

 

Reported Net sales (1)

$

436

 

 

$

914

 

 

$

1,347

 

 

$

355

 

 

$

697

 

 

$

1,052

 

Reported Gross profit (1)

210

 

 

448

 

 

655

 

 

171

 

 

303

 

 

473

 

Gross Margin

48.2

%

 

49.0

%

 

48.6

%

 

48.2

%

 

43.5

%

 

45.0

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-GAAP

 

 

 

 

 

 

 

 

 

 

 

Adjusted Net sales

$

436

 

 

$

914

 

 

$

1,350

 

 

$

355

 

 

$

697

 

 

$

1,052

 

Adjusted Gross profit (2)

210

 

 

450

 

 

660

 

 

171

 

 

304

 

 

475

 

Adjusted Gross Margin

48.2

%

 

49.2

%

 

48.9

%

 

48.2

%

 

43.6

%

 

45.2

%

(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, share-based compensation expense, and product sourcing diversification costs.

ZEBRA TECHNOLOGIES CORPORATION AND SUBSIDIARIES

RECONCILIATION OF GAAP TO NON-GAAP NET INCOME

(In millions, except share data)

(Unaudited)

 

 

Three Months Ended

 

April 3,

2021

 

March 28,

2020

Net income

$

228

 

 

$

89

 

Adjustments to Net sales(1)

 

 

 

Purchase accounting adjustments

3

 

 

 

Total adjustments to Net sales

3

 

 

 

Adjustments to Cost of sales(1)

 

 

 

Share-based compensation

2

 

 

1

 

Product sourcing diversification initiative

 

 

1

 

Total adjustments to Cost of sales

2

 

 

2

 

Adjustments to Operating expenses(1)

 

 

 

Amortization of intangible assets

26

 

 

16

 

Acquisition and integration costs

1

 

 

1

 

Share-based compensation

19

 

 

5

 

Exit and restructuring costs

 

 

4

 

Product sourcing diversification initiative

 

 

4

 

Total adjustments to Operating expenses

46

 

 

30

 

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

 

 

 

Amortization of debt issuance costs and discounts

1

 

 

1

 

Investment gain

(1

)

 

 

Foreign exchange (gain) loss

(2

)

 

3

 

Forward interest rate swap (gain) loss

(8

)

 

35

 

Total adjustments to Other income (expense), net

(10

)

 

39

 

Income tax effect of adjustments(2)

 

 

 

Reported income tax expense

48

 

 

14

 

Less: Adjusted income tax expense

(59

)

 

(29

)

Total adjustments to income tax

(11

)

 

(15

)

Total adjustments

30

 

 

56

 

Non-GAAP Net income

$

258

 

 

$

145

 

 

 

 

 

GAAP earnings per share

 

 

 

Basic

$

4.26

 

 

$

1.66

 

Diluted

$

4.22

 

 

$

1.65

 

Non-GAAP earnings per share

 

 

 

Basic

$

4.83

 

 

$

2.70

 

Diluted

$

4.79

 

 

$

2.67

 

 

 

 

 

Basic weighted average shares outstanding

53,484,265

 

 

53,760,873

 

Diluted weighted average and equivalent shares outstanding

53,964,330

 

 

54,318,044

 

(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 3,

2021

 

March 28,

2020

Net income

$

228

 

 

$

89

 

Add back:

 

 

 

Depreciation (excluding exit and restructuring costs)

18

 

 

18

 

Amortization of intangible assets

26

 

 

16

 

Total Other (income) expense, net

(4

)

 

48

 

Income tax expense

48

 

 

14

 

EBITDA (Non-GAAP)

316

 

 

185

 

 

 

 

 

Adjustments to Net sales

 

 

 

Purchase accounting adjustments

3

 

 

 

Total adjustments to Net sales

3

 

 

 

Adjustments to Cost of sales

 

 

 

Share-based compensation

2

 

 

1

 

Product sourcing diversification initiative

 

 

1

 

Total adjustments to Cost of sales

2

 

 

2

 

Adjustments to Operating expenses

 

 

 

Acquisition and integration costs

1

 

 

1

 

Share-based compensation

19

 

 

5

 

Exit and restructuring costs

 

 

4

 

Product sourcing diversification initiative

 

 

4

 

Total adjustments to Operating expenses

20

 

 

14

 

Total adjustments to EBITDA

25

 

 

16

 

Adjusted EBITDA (Non-GAAP)

$

341

 

 

$

201

 

 

 

 

 

Adjusted EBITDA % of Adjusted Net Sales

25.3

%

 

19.1

%

FREE CASH FLOW

 

Three Months Ended

 

April 3,

2021

 

March 28,

2020

Net cash provided by operating activities

$

224

 

 

$

108

 

Less: Purchases of property, plant and equipment

(10

)

 

(13

)

Free cash flow (Non-GAAP)(1)

$

214

 

 

$

95

 

(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, 2021, we moved the retail solutions offering 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.

 

 

2020

2019

 

Q1 2020

QTD

Q2 2020

QTD

Q3 2020

QTD

Q4 2020

QTD

Q4 2020

YTD

Q1 2019

QTD

Q2 2019

QTD

Q3 2019

QTD

Q4 2019

QTD

Q4 2019

YTD

Net sales:

 

 

 

 

 

 

 

 

 

 

AIT Tangible products

$

333

 

$

251

 

$

314

 

$

400

 

$

1,298

 

$

320

 

$

344

 

$

337

 

$

346

 

$

1,347

 

AIT Services and software

22

 

22

 

25

 

25

 

94

 

23

 

21

 

29

 

27

 

100

 

Total AIT sales

355

 

273

 

339

 

425

 

1,392

 

343

 

365

 

366

 

373

 

1,447

 

EVM Tangible products

568

 

560

 

658

 

729

 

2,515

 

604

 

619

 

644

 

693

 

2,560

 

EVM Services and software

129

 

123

 

137

 

159

 

548

 

119

 

113

 

120

 

126

 

478

 

Total EVM sales

697

 

683

 

795

 

888

 

3,063

 

723

 

732

 

764

 

819

 

3,038

 

Total segment Net sales

1,052

 

956

 

1,134

 

1,313

 

4,455

 

1,066

 

1,097

 

1,130

 

1,192

 

4,485

 

Corporate, eliminations Tangible products

 

 

 

 

 

 

 

 

 

 

Corporate, eliminations Services and software

 

 

(2

)

(5

)

(7

)

 

 

 

 

 

Total Net sales

1,052

 

956

 

1,132

 

1,308

 

4,448

 

1,066

 

1,097

 

1,130

 

1,192

 

4,485

 

 

 

 

 

 

 

 

 

 

 

 

Gross profit:

 

 

 

 

 

 

 

 

 

 

AIT

171

 

125

 

158

 

204

 

658

 

174

 

180

 

184

 

182

 

720

 

EVM

303

 

296

 

338

 

421

 

1,358

 

328

 

342

 

354

 

363

 

1,387

 

Corporate, eliminations

(1

)

(2

)

(3

)

(7

)

(13

)

(1

)

(2

)

(3

)

(1

)

(7

)

Total Gross profit

473

 

419

 

493

 

618

 

2,003

 

501

 

520

 

535

 

544

 

2,100

 

 

 

 

 

 

 

 

 

 

 

 

Gross margin

 

 

 

 

 

 

 

 

 

 

AIT

48.2

%

45.8

%

46.6

%

48.0

%

47.3

%

50.7

%

49.3

%

50.3

%

48.8

%

49.8

%

EVM

43.5

%

43.3

%

42.5

%

47.4

%

44.3

%

45.4

%

46.7

%

46.3

%

44.3

%

45.7

%

 

 

 

 

 

 

 

 

 

 

 

Operating expenses

 

 

 

 

 

 

 

 

 

 

AIT

89

 

73

 

80

 

98

 

340

 

89

 

95

 

91

 

94

 

369

 

EVM

208

 

207

 

217

 

256

 

888

 

220

 

230

 

221

 

229

 

900

 

Corporate, eliminations

25

 

20

 

46

 

33

 

124

 

33

 

35

 

38

 

33

 

139

 

Total Operating expenses

322

 

300

 

343

 

387

 

1,352

 

342

 

360

 

350

 

356

 

1,408

 

 

 

 

 

 

 

 

 

 

 

 

Operating income:

 

 

 

 

 

 

 

 

 

 

AIT

82

 

52

 

78

 

106

 

318

 

85

 

85

 

93

 

88

 

351

 

EVM

95

 

89

 

121

 

165

 

470

 

108

 

112

 

133

 

134

 

487

 

Total segment operating income

177

 

141

 

199

 

271

 

788

 

193

 

197

 

226

 

222

 

838

 

Corporate, eliminations

(26

)

(22

)

(49

)

(40

)

(137

)

(34

)

(37

)

(41

)

(34

)

(146

)

Total Operating income

$

151

 

$

119

 

$

150

 

$

231

 

$

651

 

$

159

 

$

160

 

$

185

 

$

188

 

$

692