Zebra Technologies Announces 1Q 2019 Results

Zebra Technologies announced results for the first quarter ended March 30, 2019.
 
Net sales were $1,066 million in the first quarter of 2019 compared to $977 million in the first quarter of 2018. Net sales in the Enterprise Visibility & Mobility (EVM) segment were $709 million in the first quarter of 2019 compared with $625 million in the first quarter of 2018. Asset Intelligence & Tracking (AIT) segment net sales were $357 million in the first quarter of 2019 compared to $352 million in the prior year period.
 
“Our first quarter results were driven by solid execution and strong demand for our leading portfolio of solutions. We outperformed in data capture and mobile computing and managed costs well,” said Anders Gustafsson, chief executive officer of Zebra Technologies. “We are increasing our 2019 sales and profit outlook based on our solid start to the year and recent acquisition of Temptime Corporation. We remain focused on our enterprise asset intelligence vision to drive innovative solutions for our customers.”
 
First-quarter 2019 gross profit was $501 million compared to $465 million in the comparable prior year period. Net income for the first quarter of 2019 was $115 million, or $2.12 per diluted share, compared to net income of $109 million, or $2.01 per diluted share, for the first quarter of 2018.
 
Consolidated adjusted gross margin was 47.2% in the first quarter of 2019, compared to 47.7% in the prior year period. This decrease was primarily due to unfavorable business mix. Adjusted operating expenses increased in the first quarter of 2019 to $297 million from $282 million in the prior year period primarily due to investments to accelerate organic growth as well as inclusion of expenses from recently acquired Xplore Technologies and Temptime Corporation.
 
Adjusted EBITDA for the first quarter of 2019 increased to $225 million, or 21.1% of adjusted net sales, compared to $204 million, or 20.9% of adjusted net sales, for the first quarter of 2018 primarily due to lower operating expenses as a percentage of net sales.
 
As of March 30, 2019, the company had cash and cash equivalents of $61 million and total debt of $1,744 million. Free cash flow in the first quarter was $27 million.
 
The company expects full-year 2019 net sales to increase approximately 5% to 8% from 2018. This expectation includes an approximately 2 percentage point positive impact from recently acquired businesses, and an approximately 50 basis point negative impact from foreign currency translation.
 
Adjusted EBITDA margin is expected to be in the range of 21% and 22% for the full-year 2019, favorable to 2018. For the full-year 2019, the company expects to generate free cash flow of at least $625 million.