Exhibit 99.1
SYMBOL TECHNOLOGIES REPORTS
2004 FOURTH-QUARTER AND FULL-YEAR RESULTS
o FOURTH-QUARTER REVENUE OF $450.5 MILLION; NET EARNINGS OF $28.5
MILLION, OR $0.11 DILUTED EPS
o FULL-YEAR 2004 REVENUE OF $1.73 BILLION; NET EARNINGS OF $81.8
MILLION, OR $0.33 DILUTED EPS
o TELECONFERENCE 8 A.M. WEDNESDAY, MARCH 2, TO DISCUSS RESULTS
HOLTSVILLE, N.Y. - March 1, 2005 - Symbol Technologies, Inc. (NYSE:SBL), The
Enterprise Mobility Company(TM), today announced results for the fourth quarter
and full year ended December 31, 2004.
Revenue for the fourth quarter ended December 31, 2004, was a record $450.5
million, slightly exceeding the Company's guidance of $445 million to $450
million. Fourth-quarter revenue represented a 15 percent increase compared to
the $393 million in revenue reported in the corresponding year-earlier period.
Gross margin, at 48.1 percent, was above 45 percent for the fifth sequential
quarter. Fourth-quarter net earnings were $28.5 million, or $0.11 diluted
earnings per share, compared to $16.2 million, or $0.07 diluted earnings per
share, in the corresponding year-earlier period.
Revenue for the year ended December 31, 2004, was $1.73 billion, compared to
$1.53 billion for the year ended December 31, 2003. Net earnings for the year
ended December 31, 2004, were $81.8 million, or $0.33 diluted earnings per
share, compared to net earnings of $3.3 million, or $0.01 diluted earnings per
share, in the prior year.
FOURTH-QUARTER AND FULL-YEAR 2004 HIGHLIGHTS
Fourth-quarter 2004 results extended some of the positive financial trends that
the Company has been achieving as follows:
o Four sequential quarters of revenue of more than $400 million, most
recently to $450.5 million from $429 million in 2004's third quarter.
o Seven sequential quarters of increased product bookings, reaching $382
million and representing a 15 percent increase over $332 million
product bookings in
2003's fourth quarter.
o Five sequential quarters with gross margins in excess of 45 percent,
improving to 48.1 percent in the fourth quarter from 46.8 percent in
the prior quarter.
o Four sequential quarters of DSOs below 30 days.
o Fourth-quarter inventory turns of 4.5 were the highest of any quarter
in 2004.
o Cash flow from operations (CFFO) of $224.5 million in 2004, the second
year sequentially with CFFO in excess of $200 million.
PRODUCT REVENUE INCREASE
Fourth-quarter 2004 product revenue of $375.0 million represented a 19 percent
increase over product revenue of $314.1 million in 2003's fourth quarter and a 6
percent gain sequentially from 2004's third-quarter product revenue of $354
million. Product revenue gains were led by sales of the Symbol MC9000 rugged
mobile computer in its three form factors. As of December 31, 2004, Symbol had
shipped more than $200 million in MC9000 products since its initial release in
late 2003.
SERVICE REVENUE AT ANTICIPATED ANNUALIZED RATE
Fourth-quarter 2004 service revenue was $75.5 million, a 4 percent decrease
versus fourth-quarter 2003 service revenue of $78.9 million, and in line with
the Company's anticipated annual run rate of approximately $300.0 million.
CONTINUED GROSS MARGIN GROWTH
Year-over-year, fourth-quarter 2004 gross margin increased 18 percent to $216.7
million from $184.1 million in fourth quarter 2003 and increased 8 percent
sequentially from third-quarter 2004 gross margin of $200.7 million. Gross
margin percentage rose to 48.1 percent in the fourth quarter from 46.8 percent a
year ago and from 46.8 percent in 2004's third quarter.
OPERATING EXPENSES RISE
Operating expenses in fourth quarter 2004 were $178.1 million, up 10 percent
compared to 2003's fourth-quarter operating expenses of $161.7 million and up 4
percent sequentially from third-quarter 2004 operating expenses of $172.0
million.
OPERATING INCOME AND MARGIN GAINS
Earnings from operations for 2004's fourth quarter were $38.6 million, a 72
percent increase from the prior year's fourth-quarter total of $22.4 million.
Operating margin for
the fourth quarter 2004 rose sequentially 1.9 percentage points from third
quarter 2004 to 8.6 percent.
OTHER INCOME/EXPENSE AND EFFECTIVE TAX RATE
The Company's fourth-quarter 2004 net earnings of $28.5 million, or $0.11 per
diluted share, was negatively impacted by a pre-tax charge of $6.3 million
related to a write-off of deferred financing costs of a short-term credit
facility refinanced December 29, 2004. The Company's net earnings in the fourth
quarter 2004 were positively impacted by an effective tax rate of approximately
2 percent. The Company's effective tax rate for the year ended December 31,
2004, was 33.9 percent.
SOLID CASH FLOW FROM OPERATIONS
The Company's strong cash flow from operations continued with $224.5 million in
fiscal 2004, following $233.8 million in fiscal 2003. The Company ended December
2004 with strong cash balances of $217.6 million, up 45 percent from $150
million at December 31, 2003.
FULL-YEAR FINANCIAL SUMMARY
Revenue for the 12 months ended December 31, 2004, was $1.73 billion, an
increase of 13 percent over revenue of $1.53 billion in the 12 months ended
December 31, 2003. Gross profit for the 12 months ended December 31, 2004, was
$809 million or 46.7 percent compared to $675.2 million or 44.1 percent in the
12 months ended December 31, 2003. Operating expenses increased $0.9 million to
$668.6 million for the 12 months ended December 31, 2004, from $667.7 million
for the 12 months ended December 31, 2003. Net earnings were $81.8 million, or
$0.33 per diluted share, for the 12 months ended December 31, 2004, compared
with net earnings of a $3.3 million, or $0.01 per diluted share, for the 12
months ended December 31, 2003.
2005 FIRST-QUARTER GUIDANCE
Based on the strong fourth-quarter 2004 results, the Company expects that
first-quarter 2005 revenue will be approximately $465 million, up 3 percent
sequentially and up 11 percent year over year. Earnings per share for the first
quarter of 2005 are expected to be $0.10 to $0.11. This range does not include
the impact, if any, of the Company's eventual issuing of shares to class action
plaintiffs from a settlement approved in
October 2004. The Company currently has accrued $86.6 million relating to this
settlement. However, the accounting, under the terms of this settlement,
requires the Company to mark-to-market the appreciation in the value of shares
to be issued above a pre-determined price in the settlement of $16.41 per share
through a non-cash charge to earnings. The Company believes that for every $1.00
per share in appreciation of its market value above $16.41, the impact to
earnings would be approximately $3.2 million, or $0.01 per diluted share.
`POSITIVE MOMENTUM'
"Fourth quarter 2004 and the year were validation of the hard work, effort and
results of our associates and channel partners. I want to recognize and thank
them for their focus and execution. During the last year, Symbol has undergone
significant change management that positively influenced customer and partner
satisfaction, bottom-line results, cash flow and productivity, and provided us a
strong foundation of business and financial controls. The addition of Matrics
and the work done by the Symbol team on our vision-to-execution plan set the
foundation for future success. We look forward to 2005 and beyond with
confidence and excitement," William R. Nuti, Symbol president and chief
executive officer, said.
"Going forward, our goal is to drive profitable top-line growth and increase our
market share in all sales theaters, product divisions and vertical markets. We
need to do this while staying 100 percent laser focused on becoming an industry
leader in cost structure, both process and technology innovation, product
lifecycle management and solutions selling," Nuti added.
"Our earnings performance in the fourth quarter was encouraging, and we're also
very pleased to be able to announce that Symbol will be certifying its
compliance with the internal control provisions of Sarbanes-Oxley 404 -- an
outstanding achievement in light of where we were from an internal controls
perspective two years ago," Mark T. Greenquist, senior vice president and chief
financial officer, said.
TELECONFERENCE SCHEDULED WEDNESDAY, MARCH 2, 2005 Symbol has scheduled a
conference call and Web cast for 8 a.m. Wednesday, March 2, 2005, at which time
it will discuss results for the fourth quarter and full year ended December 31,
2004.
TELECONFERENCE INFORMATION: To participate in the Wednesday morning
teleconference, dial 1- 800-263-8506 (domestic) and 719-457-2681 (international)
at least 10 minutes prior to commencement of the call.
WEB CAST INFORMATION: To listen to a live audiocast (listen only), access
www.symbol.com/investor and click on the link next to the microphone icon.
TELECONFERENCE PRESENTATION: To view the financial presentation via Web, access
www.symbol.com/investor at least 10 minutes prior to the start of the
teleconference. At the site, click on the link next to the microphone icon, you
are required to provide your name and e-mail address. Please be advised that
registration permits you to enroll prior to the conference, but this is not
mandatory for participation. This is an unrestricted Web site and a password is
not required. In addition, a copy of the presentation will be posted in PDF
format on the Company's investor home page, www.symbol.com/investor.
REPLAY INFORMATION: A synchronized Web cast and audio replay will be available
on the Company's investor home page on a 24-hour non-stop basis within two hours
of the conclusion of the call. An audio replay of the teleconference will be
available from 10 a.m. Wednesday, March 2, through Thursday, March 31, by
calling toll-free 1-888-203-1112 (domestic) and 719-457-0820 (international),
and entering access code 5228041.
ABOUT SYMBOL TECHNOLOGIES
- -------------------------
Symbol Technologies, Inc., The Enterprise Mobility Company(TM), is a recognized
worldwide leader in enterprise mobility, delivering products and solutions that
capture, move and manage information in real time to and from the point of
business activity. Symbol enterprise mobility solutions integrate advanced data
capture products, radio frequency identification technology, mobile computing
platforms, wireless infrastructure, mobility software and world-class services
programs under the Symbol Enterprise Mobility Services brand. Symbol enterprise
mobility products and solutions are proven to increase workforce productivity,
reduce operating costs, drive operational efficiencies and realize competitive
advantages for the world's leading companies. More information is available at
www.symbol.com.
THIS NEWS RELEASE MAY CONTAIN FORWARD-LOOKING STATEMENTS BASED ON
CURRENT EXPECTATIONS, FORECASTS AND ASSUMPTIONS THAT INVOLVE RISKS AND
UNCERTAINTIES THAT COULD CAUSE ACTUAL OUTCOMES AND RESULTS TO DIFFER MATERIALLY.
THESE RISKS AND UNCERTAINTIES INCLUDE PRICE AND PRODUCT COMPETITION, DEPENDENCE
ON NEW PRODUCT DEVELOPMENT, RELIANCE ON MAJOR CUSTOMERS, CUSTOMER DEMAND FOR OUR
PRODUCTS AND SERVICES, CONTROL OF COSTS AND EXPENSES, INTERNATIONAL GROWTH,
GENERAL INDUSTRY AND MARKET CONDITIONS AND GROWTH RATES AND GENERAL DOMESTIC AND
INTERNATIONAL ECONOMIC CONDITIONS INCLUDING INTEREST RATE AND CURRENCY EXCHANGE
RATE FLUCTUATIONS. FOR A FURTHER LIST AND DESCRIPTION OF SUCH RISKS AND
UNCERTAINTIES, SEE THE REPORTS FILED BY SYMBOL WITH THE SECURITIES AND EXCHANGE
COMMISSION. SYMBOL DISCLAIMS ANY INTENTION OR OBLIGATION TO UPDATE OR REVISE ANY
FORWARD-LOOKING STATEMENTS, WHETHER AS A RESULT OF NEW INFORMATION, FUTURE
EVENTS OR OTHERWISE.
# # # #
FOR FINANCIAL INFORMATION: FOR MEDIA INFORMATION:
NANCY H. TULLY PATRICIA HALL
Symbol Technologies, Inc. Symbol Technologies, Inc.
631-738-5050 631-738-5636
SYMBOL TECHNOLOGIES, INC. & SUBSIDIARIES
Condensed Consolidated Statement of Operations
THREE MONTHS ENDING
--------------------------------------------------------
($ MILLIONS, EXCEPT PER SHARE DATA) DECEMBER 31, 2004 SEPTEMBER 30, 2004 DECEMBER 31, 2003
----------------- ------------------ -----------------
Net Revenue $ 450.5 $ 429.2 $ 393.0
Cost of Revenue 233.8 228.5 208.9
------- ------- -------
Gross Profit 216.7 200.7 184.1
Operating Expenses:
Net Engineering 41.4 55.4 38.9
S, G&A 136.1 125.1 115.6
Recovery from legal settlements -- (12.4) --
Other 0.6 3.9 7.2
------- ------- -------
Total Operating Expenses 178.1 172.0 161.7
------- ------- -------
Earnings from operations 38.6 28.7 22.4
Other Expense, net 9.6 -- 1.4
------- ------- -------
Net earnings before taxes 29.0 28.7 21.0
Provision for income taxes 0.5 10.9 4.8
------- ------- -------
Net Earnings $ 28.5 $ 17.8 $ 16.2
======= ======= =======
Earnings per share $ 0.11 $ 0.07 $ 0.07
------- ------- -------
PERCENTAGE OF REVENUE*
Net Revenue 100.0% 100.0% 100.0%
Cost of Revenue 51.9% 53.2% 53.2%
------- ------- -------
Gross Profit 48.1% 46.8% 46.8%
Operating Expenses:
Net Engineering 9.2% 12.9% 9.9%
S, G&A 30.2% 29.1% 29.4%
Recovery from legal settlements -- (2.9)% --
Other 0.1% 1.0% 1.8%
------- ------- -------
Total Operating Expenses 39.5% 40.1% 41.1%
------- ------- -------
Earnings from operations 8.6% 6.7% 5.7%
Other Expense, net 2.2% -- 0.4%
------- ------- -------
Net earnings before taxes 6.4% 6.7% 5.3%
Provision for income taxes 0.1% 2.6% 1.2%
------- ------- -------
Net Earnings 6.3% 4.1% 4.1%
======= ======= =======
* Percentages may differ slightly due to rounding
Page 1 of 4
SYMBOL TECHNOLOGIES, INC. & SUBSIDIARIES
Condensed Consolidated Balance Sheet Trend
BALANCE SHEET AT
-----------------------------------------------------------
($ MILLIONS) DECEMBER 31, 2004 SEPTEMBER 30, 2004 DECEMBER 31, 2003
----------------- ------------------ -----------------
Assets
Cash and temp. investments $ 217.6 $ 231.5 $ 150.0
Accounts receivable, net 113.7 99.8 152.4
Inventories 207.3 223.3 212.9
Deferred income taxes 179.9 174.6 182.6
Other current assets 24.3 32.0 36.1
-------- -------- --------
Total current assets 742.8 761.2 734.0
Property, plant & equipment, net 241.5 228.1 210.9
Intangible and other assets, net 946.1 928.5 701.6
-------- -------- --------
Total assets $1,930.4 $1,917.8 $1,646.5
======== ======== ========
Liabilities & stockholders' equity
A/P and accrued exp. $ 414.9 $ 431.1 $ 490.7
Current portion of L.T.D. 118.1 257.0 0.2
Income taxes payable 20.1 9.2 5.5
Deferred revenue & Other 53.7 53.3 39.8
-------- -------- --------
Total current liabilities 606.8 750.6 536.2
L.T.D., less current maturities 176.1 84.6 99.0
Other liabilities and deferred rev. 75.0 68.7 90.7
Stockholders' equity
Common stock issued 2.7 2.7 2.6
Other stockholders' equity 1,069.8 1,011.2 918.0
-------- -------- --------
Total stockholders' equity 1,072.5 1,013.9 920.6
-------- -------- --------
Total liabilities and equity $1,930.4 $1,917.8 $1,646.5
======== ======== ========
Financial ratios:
Days sales outstanding 23 21 35
Inventory turnover 4.5 4.1 3.9
Working capital% of revenue 7.5% 0.6% 12.6%
Return on assets 5.9% 4.0% 4.0%
Return on equity 10.9% 7.1% 7.9%
* Percentages may differ slightly due to rounding
Page 2 of 4
SYMBOL TECHNOLOGIES, INC. & SUBSIDIARIES
Condensed Consolidated Statement of Operations
12 MONTHS ENDING
----------------------------------------
($ MILLIONS, EXCEPT PER SHARE DATA) DECEMBER 31, 2004 DECEMBER 31, 2003
----------------- -----------------
Net Revenue $ 1,732.1 $ 1,530.3
Cost of Revenue 923.1 855.1
--------- ---------
Gross Profit 809.0 675.2
Operating Expenses:
Net Engineering 180.3 156.3
S, G&A 502.3 421.1
(Recovery from)/Provision for legal settlements (21.4) 72.0
Other 7.4 18.3
--------- ---------
Total Operating Expenses 668.6 667.7
--------- ---------
Earnings from operations 140.4 7.5
Other Expense, net 16.6 3.6
--------- ---------
Net Earnings before taxes 123.8 3.9
Provision for income taxes 42.0 0.6
--------- ---------
Net earnings $ 81.8 $ 3.3
========= =========
Earnings per share $ 0.33 $ 0.01
Fully diluted shares 246.2 236.4
--------- ---------
PERCENTAGE OF REVENUE
Net Revenue 100.0% 100.0%
Cost of Revenue 53.3% 55.9%
--------- ---------
Gross Profit 46.7% 44.1%
Operating Expenses:
Net Engineering 10.4% 10.2%
S, G&A 29.0% 27.5%
(Recovery from)/Provision for legal settlements (1.2)% 4.7%
Other 0.4% 1.2%
--------- ---------
Total Operating Expenses 38.6% 43.6%
--------- ---------
Earnings from operations 8.1% 0.5%
Other Expense, net 1.0% 0.2%
--------- ---------
Net Earnings before taxes 7.1% 0.3%
Provision for income taxes 2.4% 0.1%
--------- ---------
Net earnings 4.7% 0.2%
========= =========
* Percentages may differ slightly due to rounding
Page 3 of 4
SYMBOL TECHNOLOGIES, INC. & SUBSIDIARIES
Condensed Consolidated Cash Flow Trend
12 MONTHS ENDING
------------------------------------
($ MILLIONS) DECEMBER 31, 2004 DECEMBER 31, 2003
----------------- -----------------
CASH FLOWS FROM OPERATING ACTIVITIES
Net earnings $ 81.8 $ 3.3
Depreciation & amortization 77.8 68.8
Write-off of IPR&D 12.8 --
CHANGES IN ASSETS & LIABILITIES
Accounts receivable 32.5 3.6
Inventories (5.9) 33.5
Accounts payable & accrued expenses (66.6) (9.2)
Other changes, net 92.1 133.8
------ ------
NET CASH PROVIDED BY OPERATING ACTIVITIES 224.5 233.8
------ ------
CASH FLOWS FROM INVESTING ACTIVITIES
Acquisition of Matrics & Other (239.3) (15.0)
Expenditures for PP&E (91.6) (60.6)
Other investing (50.9) (3.7)
------ ------
NET CASH USED IN INVESTING ACTIVITIES (381.8) (79.3)
------ ------
CASH FLOWS FROM FINANCING ACTIVITIES
Net changes in debt 199.8 (86.8)
Other 25.1 6.2
------ ------
NET CASH PROVIDED BY/(USED IN) FINANCING ACTIVITIES (INC. FX) 224.9 (80.6)
====== ======
NET CHANGE IN CASH 67.6 73.9
====== ======
Beginning Cash Balance 150.0 76.1
====== ======
Ending Cash Balance $217.6 $150.0
====== ======
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