Attached files
| file | filename |
|---|---|
| 8-K - FORM 8-K - ZEBRA TECHNOLOGIES CORP | d8k.htm |
Exhibit 99.1
UNAUDITED PRO FORMA FINANCIAL STATEMENTS
The following unaudited pro forma consolidated financial statements of Zebra Technologies Corporation (“Zebra”) have been prepared to reflect the disposition on March 18, 2011 of Navis Holdings LLC (“Navis”), as described in Item 2.01 of Zebra’s Current Report on Form 8-K dated January 28, 2011. In addition, the Pro forma Financial Statements reflect the impact of discontinuing other immaterial Zebra operations which will be classified as discontinued as of January 28, 2011.
Zebra’s unaudited pro forma consolidated statements of earnings for the fiscal years ended December 31, 2010, 2009 and 2008 are based on Zebra’s historical consolidated statements of earnings, and give effect to the disposition and discontinuance of operations as if it had occurred on January 1, 2008. The anticipated non-recurring after tax gain on the disposition is not reflected in the unaudited pro forma consolidated statements of earnings. The unaudited pro forma consolidated balance sheet as of December 31, 2010 is based on Zebra’s historical balance sheet as of December 31, 2010.
The unaudited pro forma consolidated financial statements presented below are based upon assumptions and adjustments described in the accompanying notes and do not reflect any adjustments of non-recurring items, overhead and administrative expense reductions, or changes in operating strategies arising as a result of the disposition. The sales and expenses related to the WhereNet Marine Terminal Solution software product line that was sold as part of the disposition above are included in Zebra’s results of continuing operations for all periods presented in accordance with the appropriate accounting guidance. Zebra’s management believes that the assumptions used and the adjustments made in this presentation are reasonable under the circumstances and given the information available.
These unaudited pro forma consolidated financial statements are presented for illustrative purposes only and are not necessarily indicative of the operating results or financial position that would have been achieved had the disposition been consummated as of the dates indicated or of the results that may be obtained in the future. These unaudited pro forma consolidated financial statements and the accompanying notes should be read together with Zebra’s audited consolidated financial statements and accompanying notes, as of and for the fiscal year ended December 31, 2010, and Management’s Discussion and Analysis of Financial Condition and Results of Operations included in Zebra’s Annual Report on Form 10-K for the fiscal year ended December 31, 2010.
ZEBRA TECHNOLOGIES CORPORATION AND SUBSIDIARIES
PRO FORMA CONSOLIDATED BALANCE SHEET
(Amounts in thousands)
(Unaudited)
| December 31, 2010 | ||||
| ASSETS | ||||
| Current assets: |
||||
| Cash and cash equivalents |
$ | 46,175 | ||
| Restricted cash |
1,378 | |||
| Investments and marketable securities |
125,567 | |||
| Accounts receivable, net |
130,143 | |||
| Inventories, net |
112,970 | |||
| Deferred income taxes |
15,670 | |||
| Income taxes receivable |
— | |||
| Prepaid expenses and other current assets |
11,505 | |||
| Assets of discontinued operations |
148,169 | |||
| Total current assets |
591,577 | |||
| Property and equipment at cost, less accumulated depreciation and amortization |
87,093 | |||
| Long-term deferred income taxes |
21,254 | |||
| Goodwill |
79,703 | |||
| Other intangibles, net |
9,755 | |||
| Long-term investments and marketable securities |
85,478 | |||
| Other assets |
4,004 | |||
| Total assets |
$ | 878,864 | ||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||
| Current liabilities: |
||||
| Accounts payable |
$ | 34,578 | ||
| Accrued liabilities |
65,163 | |||
| Deferred revenue |
8,966 | |||
| Income taxes payable |
5,900 | |||
| Liabilities of discontinued operations |
21,827 | |||
| Total current liabilities |
136,434 | |||
| Deferred rent |
2,207 | |||
| Other long-term liabilities |
10,191 | |||
| Total liabilities |
148,832 | |||
| Stockholders’ equity: |
||||
| Preferred Stock |
— | |||
| Class A Common Stock |
722 | |||
| Additional paid-in capital |
129,715 | |||
| Treasury stock |
(462,029 | ) | ||
| Retained earnings |
1,070,973 | |||
| Accumulated other comprehensive loss |
(9,349 | ) | ||
| Total stockholders’ equity |
730,032 | |||
| Total liabilities and stockholders’ equity |
$ | 878,864 | ||
2
ZEBRA TECHNOLOGIES CORPORATION AND SUBSIDIARIES
PRO FORMA CONSOLIDATED STATEMENTS OF EARNINGS
(Amounts in thousands, except per share data)
(Unaudited)
| For the Year Ended December 31, 2010 | ||||||||||||
| Historical Zebra |
Pro Forma Adjustments |
Pro Forma Zebra |
||||||||||
| Net sales: |
||||||||||||
| Net sales of tangible products |
$ | 855,269 | $ | (5,739 | ) | $ | 849,530 | |||||
| Revenue from services and software |
101,579 | (56,750 | ) | 44,829 | ||||||||
| Total net sales |
956,848 | (62,489 | ) | 894,359 | ||||||||
| Cost of sales: |
||||||||||||
| Cost of sales of tangible products |
455,007 | (4,437 | ) | 450,570 | ||||||||
| Cost of services and software |
40,972 | (18,048 | ) | 22,924 | ||||||||
| Total cost of sales |
495,979 | (22,485 | ) | 473,494 | ||||||||
| Gross profit |
460,869 | (40,004 | ) | 420,865 | ||||||||
| Operating expenses: |
||||||||||||
| Selling and marketing |
122,689 | (10,324 | ) | 112,365 | ||||||||
| Research and development |
101,930 | (19,355 | ) | 82,575 | ||||||||
| General and administrative |
79,710 | (6,481 | ) | 73,229 | ||||||||
| Amortization of intangible assets |
9,573 | (6,362 | ) | 3,211 | ||||||||
| Litigation settlement |
(1,082 | ) | — | (1,082 | ) | |||||||
| Exit, restructuring and integration costs |
4,197 | (1,935 | ) | 2,262 | ||||||||
| Total operating expenses |
317,017 | (44,457 | ) | 272,560 | ||||||||
| Operating income |
143,852 | 4,453 | 148,305 | |||||||||
| Other income (expense): |
||||||||||||
| Investment income |
2,681 | (3 | ) | 2,678 | ||||||||
| Foreign exchange gain (loss) |
(213 | ) | 44 | (169 | ) | |||||||
| Other, net |
(1,385 | ) | 268 | (1,117 | ) | |||||||
| Total other income |
1,083 | 309 | 1,392 | |||||||||
| Income before income taxes |
144,935 | 4,762 | 149,697 | |||||||||
| Income taxes |
43,157 | 1,836 | 44,993 | |||||||||
| Income from continuing operations |
101,778 | 2,926 | 104,704 | |||||||||
| Loss from discontinued operations, net of tax |
— | (2,926 | ) | (2,926 | ) | |||||||
| Net income |
$ | 101,778 | $ | — | $ | 101,778 | ||||||
| Basic earnings per share: |
||||||||||||
| Income from continuing operations |
$ | 1.78 | $ | 1.83 | ||||||||
| Loss from discontinued operations |
— | (0.05 | ) | |||||||||
| Net income |
$ | 1.78 | $ | 1.78 | ||||||||
| Diluted earnings per share: |
||||||||||||
| Income from continuing operations |
$ | 1.77 | $ | 1.82 | ||||||||
| Loss from discontinued operations |
— | (0.05 | ) | |||||||||
| Net income |
$ | 1.77 | $ | 1.77 | ||||||||
| Basic weighted average shares outstanding |
57,143 | 57,143 | ||||||||||
| Diluted weighted average and equivalent shares outstanding |
57,428 | 57,428 | ||||||||||
3
ZEBRA TECHNOLOGIES CORPORATION AND SUBSIDIARIES
PRO FORMA CONSOLIDATED STATEMENTS OF EARNINGS
(Amounts in thousands, except per share data)
(Unaudited)
| For the Year Ended December 31, 2009 | ||||||||||||
| Historical Zebra |
Pro Forma Adjustments |
Pro Forma Zebra |
||||||||||
| Net sales: |
||||||||||||
| Net sales of tangible products |
$ | 701,044 | $ | (4,941 | ) | $ | 696,103 | |||||
| Revenue from services and software |
102,541 | (60,162 | ) | 42,379 | ||||||||
| Total net sales |
803,585 | (65,103 | ) | 738,482 | ||||||||
| Cost of sales: |
||||||||||||
| Cost of sales of tangible products |
401,727 | (3,411 | ) | 398,316 | ||||||||
| Cost of services and software |
41,137 | (18,558 | ) | 22,579 | ||||||||
| Total cost of sales |
442,864 | (21,969 | ) | 420,895 | ||||||||
| Gross profit |
360,721 | (43,134 | ) | 317,587 | ||||||||
| Operating expenses: |
||||||||||||
| Selling and marketing |
102,535 | (10,492 | ) | 92,043 | ||||||||
| Research and development |
86,390 | (19,913 | ) | 66,477 | ||||||||
| General and administrative |
81,395 | (5,463 | ) | 75,932 | ||||||||
| Amortization of intangible assets |
10,466 | (7,512 | ) | 2,954 | ||||||||
| Exit, restructuring and integration costs |
12,191 | (2,289 | ) | 9,902 | ||||||||
| Asset impairment charges |
(1,058 | ) | 1,058 | — | ||||||||
| Total operating expenses |
291,919 | (44,611 | ) | 247,308 | ||||||||
| Operating income |
68,802 | 1,477 | 70,279 | |||||||||
| Other income (expense): |
||||||||||||
| Investment income |
2,933 | (2 | ) | 2,931 | ||||||||
| Foreign exchange gain (loss) |
(45 | ) | (59 | ) | (104 | ) | ||||||
| Other, net |
(1,167 | ) | 380 | (787 | ) | |||||||
| Total other income |
1,721 | 319 | 2,040 | |||||||||
| Income before income taxes |
70,523 | 1,796 | 72,319 | |||||||||
| Income taxes |
23,419 | 409 | 23,828 | |||||||||
| Income (loss) from continuing operations |
47,104 | 1,387 | 48,491 | |||||||||
| Loss from discontinued operations, net of tax |
— | (1,387 | ) | (1,387 | ) | |||||||
| Net income |
$ | 47,104 | $ | — | $ | 47,104 | ||||||
| Basic earnings per share: |
||||||||||||
| Income (loss) from continuing operations |
$ | 0.79 | $ | 0.81 | ||||||||
| Income (loss) from discontinued operations |
— | (0.02 | ) | |||||||||
| Net income (loss) |
$ | 0.79 | $ | 0.79 | ||||||||
| Diluted earnings per share: |
||||||||||||
| Income (loss) from continuing operations |
$ | 0.79 | $ | 0.81 | ||||||||
| Income (loss) from discontinued operations |
— | (0.02 | ) | |||||||||
| Net income (loss) |
$ | 0.79 | $ | 0.79 | ||||||||
| Basic weighted average shares outstanding |
59,306 | 59,306 | ||||||||||
| Diluted weighted average and equivalent shares outstanding |
59,425 | 59,425 | ||||||||||
4
ZEBRA TECHNOLOGIES CORPORATION AND SUBSIDIARIES
PRO FORMA CONSOLIDATED STATEMENTS OF EARNINGS (LOSS)
(Amounts in thousands, except per share data)
(Unaudited)
| For the Year Ended December 31, 2008 | ||||||||||||
| Historical Zebra |
Pro Forma Adjustments |
Pro Forma Zebra |
||||||||||
| Net sales: |
||||||||||||
| Net sales of tangible products |
$ | 871,587 | $ | (1,746 | ) | $ | 869,841 | |||||
| Revenue from services and software |
105,113 | (64,889 | ) | 40,224 | ||||||||
| Total net sales |
976,700 | (66,635 | ) | 910,065 | ||||||||
| Cost of sales: |
||||||||||||
| Cost of sales of tangible products |
452,208 | (1,965 | ) | 450,243 | ||||||||
| Cost of services and software |
45,187 | (23,884 | ) | 21,303 | ||||||||
| Total cost of sales |
497,395 | (25,849 | ) | 471,546 | ||||||||
| Gross profit |
479,305 | (40,786 | ) | 438,519 | ||||||||
| Operating expenses: |
||||||||||||
| Selling and marketing |
126,325 | (13,566 | ) | 112,759 | ||||||||
| Research and development |
95,800 | (23,095 | ) | 72,705 | ||||||||
| General and administrative |
81,644 | (7,798 | ) | 73,846 | ||||||||
| Amortization of intangible assets |
18,575 | (7,735 | ) | 10,840 | ||||||||
| Litigation settlement |
(5,302 | ) | — | (5,302 | ) | |||||||
| Exit, restructuring and integration costs |
20,009 | (2,077 | ) | 17,932 | ||||||||
| Asset impairment charges |
157,600 | (12,650 | ) | 144,950 | ||||||||
| Total operating expenses |
494,651 | (66,921 | ) | 427,730 | ||||||||
| Operating income (loss) |
(15,346 | ) | 26,135 | 10,789 | ||||||||
| Other income (expense): |
||||||||||||
| Investment income |
1,281 | (120 | ) | 1,161 | ||||||||
| Foreign exchange gain (loss) |
3,518 | 913 | 4,431 | |||||||||
| Other, net |
(1,366 | ) | 70 | (1,296 | ) | |||||||
| Total other income |
3,433 | 863 | 4,296 | |||||||||
| Income before income taxes |
(11,913 | ) | 26,998 | 15,085 | ||||||||
| Income taxes |
26,508 | 7,624 | 34,132 | |||||||||
| Income (Loss) from continuing operations |
(38,421 | ) | 19,374 | (19,047 | ) | |||||||
| Loss from discontinued operations, net of tax |
(19,374 | ) | (19,374 | ) | ||||||||
| Net income |
$ | (38,421 | ) | $ | — | $ | (38,421 | ) | ||||
| Basic earnings per share: |
||||||||||||
| Loss from continuing operations |
$ | (0.60 | ) | $ | (0.31 | ) | ||||||
| Loss from discontinued operations |
— | (0.29 | ) | |||||||||
| Net loss |
$ | (0.60 | ) | $ | (0.60 | ) | ||||||
| Diluted earnings per share: |
||||||||||||
| Loss from continuing operations |
$ | (0.60 | ) | $ | (0.31 | ) | ||||||
| Loss from discontinued operations |
— | (0.29 | ) | |||||||||
| Net loss |
$ | (0.60 | ) | $ | (0.60 | ) | ||||||
| Basic weighted average shares outstanding |
64,524 | 64,524 | ||||||||||
| Diluted weighted average and equivalent shares outstanding |
64,524 | 64,524 | ||||||||||
5
ZEBRA TECHNOLOGIES CORPORATION AND SUBSIDIARIES
NOTES TO PRO FORMA FINANCIAL STATEMENTS
(Unaudited)
Note 1 – Discontinued operations
On March 18, 2011, Zebra sold its ownership interest in Navis Holdings, LLC (Navis), a Zebra Enterprise Solutions (ZES) entity, to a third party. The results of operations for Navis and certain other ZES assets are reported pro forma for the periods presented as discontinued operations.
The components of assets and liabilities of discontinued operations in our unaudited pro forma consolidated balance sheet are as follows (in thousands):
| December 31, 2010 | ||||
| Assets: |
||||
| Cash and cash equivalents |
$ | 1,301 | ||
| Accounts receivable, net |
24,003 | |||
| Inventories |
772 | |||
| Deferred income taxes |
3,492 | |||
| Prepaid expenses and other current assets |
3,328 | |||
| Property and equipment, net |
1,890 | |||
| Goodwill |
72,230 | |||
| Other intangibles, net |
39,951 | |||
| Other assets |
1,202 | |||
| Assets of discontinued operations |
$ | 148,169 | ||
| Liabilities: |
||||
| Accounts payable |
$ | 726 | ||
| Accrued liabilities |
2,927 | |||
| Deferred revenue |
17,791 | |||
| Deferred rent |
199 | |||
| Other long-term liabilities |
184 | |||
| Liabilities of discontinued operations |
$ | 21,827 | ||
Summary results of operations for Navis reflected as discontinued operations in our unaudited pro forma consolidated statement of earnings for the years ended are as follows (in thousands):
| Year Ended | ||||||||||||
| December 31, 2010 |
December 31, 2009 |
December 31, 2008 |
||||||||||
| Net sales |
$ | 62,489 | $ | 65,103 | $ | 66,635 | ||||||
| Loss before income tax |
$ | (4,762 | ) | $ | (1,796 | ) | $ | (26,998 | ) | |||
| Income tax benefit |
(1,836 | ) | (409 | ) | (7,624 | ) | ||||||
| Loss from discontinued operations |
$ | (2,926 | ) | $ | (1,387 | ) | $ | (19,374 | ) | |||
6
ZEBRA TECHNOLOGIES CORPORATION AND SUBSIDIARIES
PRO FORMA CONSOLIDATED STATEMENTS OF EARNINGS BY QUARTER FOR 2010
(Amounts in thousands, except per share data)
(Unaudited)
| Quarter Ended | ||||||||||||||||
| April 3, 2010 | July 3, 2010 | Oct. 2, 2010 | Dec. 31, 2010 | |||||||||||||
| Net sales: |
||||||||||||||||
| Net sales of tangible products |
$ | 201,463 | $ | 207,748 | $ | 218,271 | $ | 222,048 | ||||||||
| Revenue from services and software |
10,512 | 10,810 | 11,536 | 11,971 | ||||||||||||
| Total net sales |
211,975 | 218,558 | 229,807 | 234,019 | ||||||||||||
| Cost of sales: |
||||||||||||||||
| Cost of sales of tangible products |
109,075 | 114,081 | 114,924 | 112,490 | ||||||||||||
| Cost of services and software |
5,137 | 5,068 | 5,636 | 7,083 | ||||||||||||
| Total cost of sales |
114,212 | 119,149 | 120,560 | 119,573 | ||||||||||||
| Gross profit |
97,763 | 99,409 | 109,247 | 114,446 | ||||||||||||
| Operating expenses: |
||||||||||||||||
| Selling and marketing |
24,673 | 27,682 | 28,068 | 31,942 | ||||||||||||
| Research and development |
18,324 | 20,653 | 21,862 | 21,736 | ||||||||||||
| General and administrative |
19,318 | 17,955 | 18,147 | 17,809 | ||||||||||||
| Amortization of intangible assets |
741 | 740 | 839 | 891 | ||||||||||||
| Litigation settlement |
— | — | — | (1,082 | ) | |||||||||||
| Exit, restructuring and integration costs |
1,766 | 466 | — | 30 | ||||||||||||
| Asset impairment charges |
— | — | — | — | ||||||||||||
| Total operating expenses |
64,822 | 67,496 | 68,916 | 71,326 | ||||||||||||
| Operating income |
32,941 | 31,913 | 40,331 | 43,120 | ||||||||||||
| Other income (expense): |
||||||||||||||||
| Investment income |
842 | 634 | 635 | 567 | ||||||||||||
| Foreign exchange gain (loss) |
168 | 424 | (148 | ) | (613 | ) | ||||||||||
| Other, net |
(270 | ) | (455 | ) | (160 | ) | (232 | ) | ||||||||
| Total other income (expense) |
740 | 603 | 327 | (278 | ) | |||||||||||
| Income before income taxes |
33,681 | 32,516 | 40,658 | 42,842 | ||||||||||||
| Income taxes |
8,134 | 10,331 | 13,411 | 13,117 | ||||||||||||
| Income from continuing operations |
25,547 | 22,185 | 27,247 | 29,725 | ||||||||||||
| Income (loss) from discontinued operations, net of tax |
(814 | ) | 492 | (1,096 | ) | (1,508 | ) | |||||||||
| Net income |
$ | 24,733 | $ | 22,677 | $ | 26,151 | $ | 28,217 | ||||||||
| Basic earnings per share: |
||||||||||||||||
| Income from continuing operations |
$ | 0.44 | $ | 0.38 | $ | 0.48 | $ | 0.53 | ||||||||
| Income (loss) from discontinued operations |
(0.01 | ) | 0.01 | (0.02 | ) | (0.03 | ) | |||||||||
| Net income |
$ | 0.43 | $ | 0.39 | $ | 0.46 | $ | 0.50 | ||||||||
| Diluted earnings per share: |
||||||||||||||||
| Income from continuing operations |
$ | 0.44 | $ | 0.38 | $ | 0.48 | $ | 0.53 | ||||||||
| Income (loss) from discontinued operations |
(0.02 | ) | 0.01 | (0.02 | ) | (0.03 | ) | |||||||||
| Net income |
$ | 0.42 | $ | 0.39 | $ | 0.46 | $ | 0.50 | ||||||||
| Basic weighted average shares outstanding |
58,016 | 57,489 | 56,739 | 56,332 | ||||||||||||
| Diluted weighted average and equivalent shares outstanding |
58,265 | 57,737 | 56,998 | 56,692 | ||||||||||||
7
Summary results of operations for Navis reflected as discontinued operations in our unaudited pro forma consolidated statement of earnings by quarter for 2010 are as follows (in thousands):
| Quarter Ended | ||||||||||||||||
| April 3, 2010 | July 3, 2010 | Oct. 2, 2010 | Dec. 31, 2010 | |||||||||||||
| Net sales |
$ | 14,456 | $ | 17,176 | $ | 16,701 | $ | 14,156 | ||||||||
| Income (loss) before income tax |
$ | (1,269 | ) | $ | 833 | $ | (1,707 | ) | $ | (2,619 | ) | |||||
| Income tax expense (benefit) |
(455 | ) | 341 | (611 | ) | (1,111 | ) | |||||||||
| Income (loss) from discontinued operations |
$ | (814 | ) | $ | 492 | $ | (1,096 | ) | $ | (1,508 | ) | |||||