Zebra Technologies Announces 3Q 2020 Results

Zebra Technologies announced results for the third quarter ended Sept. 26, 2020.

Net sales were $1,132 million in the third quarter of 2020 compared to $1,130 million in the third quarter of 2019. Net sales in the Enterprise Visibility & Mobility (EVM) segment were $788 million in the third quarter of 2020 compared with $757 million in the third quarter of 2019. Asset Intelligence & Tracking (AIT) segment net sales were $346 million in the third quarter of 2020 compared to $373 million in the prior year period.

Consolidated organic net sales for the third quarter increased 0.3%. Third-quarter year-over-year organic net sales increased by 4% in the EVM segment and decreased by 7.1% in the AIT segment.

Third-quarter 2020 gross profit was $493 million compared to $535 million in the comparable prior year period. Gross margin decreased to 43.6% for the third quarter of 2020, compared to 47.3% in the prior year period.

“In the third quarter, our teams executed well in an environment that has disproportionately impacted our smaller customers and certain end-markets. We are pleased to deliver sales, EBITDA margin, and earnings per share results that exceeded our outlook, as many enterprise customers prioritized their spending on our solutions. I am proud of our employees’ resiliency and focus on serving our customers’ critical needs in these challenging times,” said Anders Gustafsson, CEO of Zebra Technologies.

“Demand from our large strategic customers continues to be at record levels, driven by accelerated trends to digitize and automate workflows as a result of the pandemic, while demand through the channel is recovering from the peak global macro pressure that we saw in the second quarter,” Gustafsson added. “Our strong order backlog, sales momentum, and encouraging pipeline of business gives us confidence in a strong finish to the year.”

Net income for the third quarter of 2020 was $116 million, or $2.16 per diluted share, compared to net income of $136 million, or $2.50 per diluted share, for the third quarter of 2019. Adjusted EBITDA for the third quarter of 2020 decreased to $230 million, or 20.3% of adjusted net sales, compared to $257 million, or 22.7% of adjusted net sales, for the third quarter of 2019 due to lower gross margin.

As of Sept. 26, 2020, the company had cash and cash equivalents of $39 million and total debt of $1,575 million. For the first nine months of 2020, the company generated $531 million of operating cash flow and incurred capital expenditures of $49 million, resulting in free cash flow of $482 million.