Zebra Technologies Reports 1Q 2022 Results

Zebra Technologies Corporation announced results for the first quarter ended April 2, 2022.

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.

“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, CEOI of Zebra Technologies.

“Despite global macro headwinds, we are reiterating our full-year 2022 sales outlook given our strong order backlog and robust pipeline,” Gustafsson added. “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.”

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.

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.

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.