Zebra Technologies (ZBRA) 8-K Zebra Technologies Announces Record 2014 Third Quarter Financial Results

Exhibit 99.1

FOR IMMEDIATE RELEASE

Contact:

Investors:	Media:
Douglas A. Fox, CFA	Robb Kristopher
Vice President, Investor Relations	Director, Corporate Communications
and Treasurer	and Public Relations
+ 1 847 793 6735	+ 1 847 793 5514
dfox@zebra.com	rkristopher@zebra.com

FOR IMMEDIATE RELEASE

Zebra Technologies Announces Record 2014 Third Quarter Financial Results

GAAP earnings of $0.29 per share includes impact of acquisition costs and other items;

Non-GAAP earnings up 21% to a record $0.93 per share on 15% sales growth

Lincolnshire, Ill., November 4, 2014—Zebra Technologies Corporation (NASDAQ: ZBRA) today reported 15.1% growth in net sales to a record $303,272,000 for the third quarter of 2014, compared with $263,523,000 for the third quarter of 2013. Diluted earnings per share of $0.29 for the third quarter of 2014 include $35,326,000 of acquisition expenses related to the acquisition of the Enterprise business of Motorola Solutions, which was completed on October 27, 2014. Diluted earnings per share for the third quarter of 2013 were $0.76 and included $268,000 of acquisition expenses.

For the third quarter of 2014, non-GAAP net income was $48,036,000, or $0.93 per diluted share, up 22.9% from $39,088,000, or $0.77 per diluted share, for the third quarter of 2013.

Summary Financial Performance (Unaudited)
	3Q14		3Q13		Change
Net sales (in 000s)	$	303,272	$	263,523		15.1	%
Gross margin (%)		50.0		48.8		1.2 pts.
GAAP net income (in 000s)	$	14,945	$	38,600		(61.3	)%
GAAP Diluted EPS	$	0.29	$	0.76		(61.8	)%
Non-GAAP net income (in 000s)	$	48,036	$	39,088		22.9	%
Non-GAAP Diluted EPS	$	0.93	$	0.77		20.8	%
Adjusted EBITDA	$	74,483	$	58,324		27.7	%

(1) A Reconciliation of Non-GAAP financial information to GAAP information is available in the financial tables in this release.

“Broad strength across virtually all dimensions of our business led to excellent results for the quarter,” stated Anders Gustafsson, Zebra’s chief executive officer. “A surge in large deals complemented record distribution sales, as more customers turned to Zebra for best-of-breed solutions that provide greater visibility into critical enterprise assets worldwide.”

Mr. Gustafsson added, “Favorable business momentum is continuing into the fourth quarter for Zebra and the Enterprise business that we acquired from Motorola Solutions on October 27. Together, no other company has the scale, focus and resources dedicated to enterprise asset intelligence. Zebra is now even better positioned to take advantage of important technology trends in mobility, cloud and the Internet of Things. We have great confidence in our future, and in our ability to create value for our customers, employees and shareholders over the long term.”

As of September 27, 2014, Zebra had $541,920,000 in cash and investments, and no long-term debt. Net inventories were $139,621,000, and net accounts receivable were $187,543,000.

Discussion and Analysis – Third Quarter

• Net sales for Zebra increased 15.1% from the comparable quarter a year ago from sales growth in all geographic regions to new record levels. The sales growth was broad, across multiple products and customers in retail, manufacturing, transportation and logistics and healthcare, among other industries. Movement in foreign currency, net of hedges, increased sales by $2,862,000.

• Gross margin of 50.0%, versus 48.8% in 2013, reflects higher sales volumes across all regions and product categories, lower product costs, and a reduction in freight costs. Favorable movements in foreign currency, net of hedges, increased second quarter gross profit by $1,668,000

• Operating expenses for the third quarter increased 52.2%, including $35,326,000 in acquisition costs related to the acquisition of the Enterprise business of Motorola Solutions, which was announced in April 2014. Zebra completed the transaction on October 27, 2014.

• The effective income tax rate was 39.8% for the quarter. During the third quarter, a change in the U.K. tax laws relating to deductibility of intercompany interest resulted in a reversal of the first and second quarter benefit of $5.9 million and an additional tax expense of $2.6 million for the current quarter.

Fourth Quarter Outlook

Zebra announced its financial forecast for the fourth quarter of 2014. For the pre-transaction Zebra, the company expects net sales within a range of $300,000,000 to $310,000,000 and proforma operating income of $55,000,000 to $63,000,000.

Conference Call Notification

Investors are invited to listen to a live webcast of Zebra’s conference call discussing the company’s financial results for the third quarter of 2014. The conference call will be held at 9:00 AM Eastern Time today. To listen to the call, visit the company’s website athttp://www.zebra.com.

Forward-looking Statement

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 financial forecast for the fourth quarter of 2014 stated in the paragraph above captioned “Fourth Quarter Outlook.” Similarly, statements herein that describe the transaction between Zebra and Motorola Solutions including, its financial impact, and other statements of managements’ beliefs, intentions, or goals are also forward-looking statements. When used in this release and documents referenced, the words “anticipate,” “believe,” “estimate,” 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. 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.

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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, 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 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 a large investment portfolio, 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, including the Enterprise business of Motorola Solutions, could also affect profitability, reported results and the company’s competitive position in it 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. 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. In particular, readers are referred to Zebra’s Form 10-K for the year ended December 31, 2013.

About Zebra Technologies

Zebra (NASDAQ: ZBRA) makes businesses as smart and connected as the world we live in. Zebra tracking and visibility solutions transform the physical to digital, creating the data streams businesses need in order to simplify operations, know more about their business, and empower their mobile workforce. For more information, visit www.zebra.com/possibilities.

Use of Non-GAAP Financial Information

This press release contains certain non-GAAP financial measures, consisting of “EBITDA,” “Adjusted EBITDA,” “Non-GAAP net income” and “Non-GAAP earnings per share” in addition to measure our operating performance. 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. Reconciliations of Operating Income to EBITDA, EBITDA to Adjusted EBITDA, and GAAP net income to Non-GAAP net income are included in the financial schedules contained in this press release. These measures, however, should not be construed as an alternative to any other measure of performance determined in accordance with GAAP.

Contact:

Investors:	Media:
Douglas A. Fox, CFA	Robb Kristopher
Vice President, Investor Relations	Director, Corporate Communications
and Treasurer	and Public Relations
+ 1 847 793 6735	+ 1 847 793 5514
dfox@zebra.com	rkristopher@zebra.com

3

ZEBRA TECHNOLOGIES CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(Amounts in thousands)

	September 27, 2014			December 31, 2013
	(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	60,214		$	62,827
Investments and marketable securities		481,706			350,380
Accounts receivable, net		187,543			176,917
Inventories, net		139,621			121,023
Deferred income taxes		19,480			19,810
Income tax receivable		9,813			7,622
Prepaid expenses and other current assets		22,673			15,524
Total current assets		921,050			754,103
Property and equipment at cost, less accumulated depreciation and amortization		113,206			109,588
Goodwill		153,515			155,800
Other intangibles, net		61,032			68,968
Other assets		34,367			31,353
Total assets	$	1,283,170		$	1,119,812
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	46,083		$	34,688
Accrued liabilities		83,035			61,962
Deferred revenue		18,965			15,506
Income taxes payable		10,131			6,898
Total current liabilities		158,214			119,054
Long-term deferred tax liability		27,387			25,492
Deferred rent		1,796			1,131
Other long-term liabilities		19,024			15,477
Total liabilities		206,421			161,154
Stockholders’ equity:
Class A Common Stock		722			722
Additional paid-in capital		153,026			143,295
Treasury stock		(660,294	)		(678,456	)
Retained earnings		1,586,986			1,502,878
Accumulated other comprehensive loss		(3,691	)		(9,781	)
Total stockholders’ equity		1,076,749			958,658
Total liabilities and stockholders’ equity	$	1,283,170		$	1,119,812

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ZEBRA TECHNOLOGIES CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF EARNINGS

(Amounts in thousands, except per share data)

(Unaudited)

	Three Months Ended						Nine Months Ended
	September 27, 2014			September 28, 2013			September 27, 2014			September 28, 2013
Net sales:
Net sales of tangible products	$	282,643		$	249,919		$	814,584		$	714,949
Revenue from services and software		20,629			13,604			65,377			38,671
Total net sales		303,272			263,523			879,961			753,620
Cost of sales:
Cost of sales of tangible products		141,842			128,191			409,253			370,966
Cost of services and software		9,924			6,722			29,095			20,072
Total cost of sales		151,766			134,913			438,348			391,038
Gross profit		151,506			128,610			441,613			362,582
Operating expenses:
Selling and marketing		36,781			34,395			107,952			101,740
Research and development		25,225			22,376			71,792			67,435
General and administrative		24,741			22,452			79,453			71,781
Amortization of intangible assets		2,597			1,831			7,936			5,557
Acquisition and integration costs		35,326			268			60,617			1,368
Exit and restructuring costs		(120	)		519			434			3,515
Total operating expenses		124,550			81,841			328,184			251,396
Operating income		26,956			46,769			113,429			111,186
Other income (expense):
Investment income		(2,448	)		550			(1,648	)		1,700
Foreign exchange loss		(83	)		(173	)		(332	)		(733	)
Forward swaps gain/(loss)		185			—			(2,248	)		—
Other, net		196			(5	)		147			1,468
Total other income (expense)		(2,150	)		372			(4,081	)		2,435
Income from continuing operations before income taxes		24,806			47,141			109,348			113,621
Income taxes		9,861			8,541			25,240			20,921
Income from continuing operations		14,945			38,600			84,108			92,700
Income from discontinued operations, net of tax		—			—			—			8
Net income	$	14,945		$	38,600		$	84,108		$	92,708
Basic earnings per share:
Income from continuing operations	$	0.29		$	0.76		$	1.66		$	1.82
Income from discontinued operations		—			—			—			—
Net income	$	0.29		$	0.76		$	1.66		$	1.82
Diluted earnings per share:
Income from continuing operations	$	0.29		$	0.76		$	1.64		$	1.81
Income from discontinued operations		—			—			—			—
Net income	$	0.29		$	0.76		$	1.64		$	1.81
Basic weighted average shares outstanding		50,835			50,590			50,615			50,808
Diluted weighted average and equivalent shares outstanding		51,461			50,924			51,251			51,171

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ZEBRA TECHNOLOGIES CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Amounts in thousands)

(Unaudited)

	Three Months Ended						Nine Months Ended
	September 27, 2014			September 28, 2013			September 27, 2014			September 28, 2013
Net income	$	14,945		$	38,600		$	84,108		$	92,708
Other comprehensive income (loss):
Unrealized gains (losses) on hedging transactions, net of income taxes		4,352			(1,007	)		5,741			345
Unrealized holding gains (losses) on investments, net of income taxes		240			433			736			(506	)
Foreign currency translation adjustment		(191	)		182			(387	)		499
Comprehensive income	$	19,346		$	38,208		$	90,198		$	93,046

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ZEBRA TECHNOLOGIES CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Amounts in thousands)

(Unaudited)

	Nine Months Ended
	September 27, 2014			September 28, 2013
Cash flows from operating activities:
Net income	$	84,108		$	92,708
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Depreciation and amortization		27,223			23,312
Share-based compensation		10,304			9,372
Impairment of long term investment		2,333			—
Excess tax benefit from share-based compensation		(5,779	)		(4,170	)
Loss on sale of property and equipment		135			172
Deferred income taxes		4,509			4,888
Loss on forward interest rate swaps		2,248			—
Changes in assets and liabilities:
Accounts receivable, net		(10,810	)		(6,641	)
Inventories, net		(18,606	)		16,702
Other assets		(10,859	)		2,257
Accounts payable		7,975			(445	)
Accrued liabilities		21,160			(6,256	)
Deferred revenue		2,667			1,752
Income taxes		6,664			3,040
Other operating activities		6,406			298
Net cash provided by operating activities		129,678			136,989
Cash flows from investing activities:
Purchases of property and equipment		(20,023	)		(13,522	)
Acquisition of intangible assets		—			(1,500	)
Purchase of long-term investments		(1,870	)		(1,708	)
Purchase of investments and marketable securities		(384,134	)		(338,227	)
Maturities of investments and marketable securities		44,158			41,021
Proceeds from sales of investments and marketable securities		211,975			223,905
Net cash used in investing activities		(149,894	)		(90,031	)
Cash flows from financing activities:
Purchase of treasury stock		—			(58,459	)
Proceeds from exercise of stock options and stock purchase plan purchases		11,964			6,470
Excess tax benefit from share-based compensation		5,779			4,170
Net cash provided by (used in) financing activities		17,743			(47,819	)
Effect of exchange rate changes on cash		(140	)		317
Net decrease in cash and cash equivalents		(2,613	)		(544	)
Cash and cash equivalents at beginning of period		62,827			64,740
Cash and cash equivalents at end of period	$	60,214		$	64,196
Supplemental disclosures of cash flow information:
Income taxes paid, net	$	12,656		$	10,951

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ZEBRA TECHNOLOGIES CORPORATION AND SUBSIDIARIES

SUPPLEMENTAL SALES INFORMATION

(Amounts in thousands)

(Unaudited)

SALES BY PRODUCT CATEGORY

	Three Months Ended
Product Category	September 27, 2014		September 28, 2013		Percent Change		Percent of Net Sales 2014		Percent of Net Sales 2013
Hardware	$	215,700	$	186,721		15.5		71.2		70.8
Supplies		65,643		61,897		6.1		21.6		23.5
Service and software		20,629		13,604		51.6		6.8		5.2
Subtotal products		301,972		262,222		15.2		99.6		99.5
Shipping and handling		1,300		1,301		-0.1		0.4		0.5
Total net sales	$	303,272	$	263,523		15.1		100		100
	Nine Months Ended
Product Category	September 27, 2014		September 28, 2013		Percent Change		Percent of Net Sales 2014		Percent of Net Sales 2013
Hardware	$	615,132	$	532,350		15.6		69.9		70.7
Supplies		194,426		178,638		8.8		22.1		23.7
Service and software		65,377		38,671		69.1		7.4		5.1
Subtotal products		874,935		749,659		16.7		99.4		99.5
Shipping and handling		5,026		3,961		26.9		0.6		0.5
Total net sales	$	879,961	$	753,620		16.8		100		100

SALES BY GEOGRAPHIC REGION

	Three Months Ended
Geographic Region	September 27, 2014		September 28, 2013		Percent Change		Percent of Net Sales 2014		Percent of Net Sales 2013
Europe, Middle East and Africa	$	94,375	$	79,225		19.1		31.1		30.1
Latin America		29,060		26,252		10.7		9.6		10
Asia-Pacific		45,705		41,922		9.0		15.1		15.9
Total International		169,140		147,399		14.7		55.8		56
North America		134,132		116,124		15.5		44.2		44
Total net sales	$	303,272	$	263,523		15.1		100		100
	Nine Months Ended
Geographic Region	September 27, 2014		September 28, 2013		Percent Change		Percent of Net Sales 2014		Percent of Net Sales 2013
Europe, Middle East and Africa	$	280,015	$	237,811		17.7		31.8		31.6
Latin America		79,904		73,706		8.4		9.1		9.8
Asia-Pacific		124,007		111,803		10.9		14.1		14.8
Total International		483,926		423,320		14.3		55		56.2
North America		396,035		330,300		19.9		45		43.8
Total net sales	$	879,961	$	753,620		16.8		100		100

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ZEBRA TECHNOLOGIES CORPORATION AND SUBSIDIARIES

RECONCILIATION OF GAAP TO NON-GAAP NET INCOME

(Amounts in thousands, except per-share data)

(Unaudited)

	Three Months Ended						Nine Months Ended
	September 27, 2014			September 28, 2013			September 27, 2014			September 28, 2013
Net income (GAAP)	$	14,945		$	38,600		$	84,108		$	92,708
Acquisition costs	$	35,326		$	268		$	60,617		$	1,368
Exit and restructuring costs		(120	)		519			434			3,515
Loss on minority investment		2,333						2,333
Interest rate swaps (Gain) loss		(185	)		—			2,248			—
Effect on income taxes due to change in the UK tax laws		8,536						8,536
Tax effect on pretax adjustments		(12,799	)		(299	)		(19,611	)		(1,856	)
Total adjustments	$	33,091		$	488		$	54,557		$	3,027
Net income (Non-GAAP)	$	48,036		$	39,088		$	138,665		$	95,735
GAAP net income per share
Basic	$	0.29		$	0.76		$	1.66		$	1.82
Diluted	$	0.29		$	0.76		$	1.64		$	1.81
Non-GAAP net income per share
Basic	$	0.94		$	0.77		$	2.74		$	1.88
Diluted	$	0.93		$	0.77		$	2.71		$	1.87
Basic weighted average shares outstanding		50,835			50,590			50,615			50,808
Diluted weighted average and equivalent shares outstanding		51,461			50,924			51,251			51,171

ZEBRA TECHNOLOGIES CORPORATION AND SUBSIDIARIES

GAAP to NON-GAAP RECONCILIATION

(Amounts in thousands, except per-share data)

(Unaudited)

	Three Months Ended						Nine Months Ended
	September 27, 2014			September 28, 2013			September 27, 2014		September 28, 2013
Income from continuing operations to EBITDA and Adjusted EBITDA
Income from continuing operations (GAAP)	$	14,945		$	38,600		$	84,108	$	92,700
Income taxes		9,861			8,541			25,240		20,921
Total other expense (income)		2,150			(372	)		4,081		(2,435	)
Operating income	$	26,956		$	46,769		$	113,429	$	111,186
Depreciation		6,530			6,069			19,287		17,756
Amortization of intangible assets		2,597			1,831			7,936		5,557
EBITDA (Non-GAAP)	$	36,083		$	54,669		$	140,652	$	134,499
Acquisition costs		35,326			268			60,617		1,368
Exit and restructuring costs		(120	)		519			434		3,515
Stock-based compensation expense		3,194			2,868			10,304		9,372
Adjusted EBITDA (Non-GAAP)	$	74,483		$	58,324		$	212,007	$	148,754

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