Fourth-Quarter Financial Highlights
- Net sales of $1,009 million; year-over-year decrease of
32.9%
- Net income of $17 million and net income per diluted share of
$0.31, year-over-year decrease of 90.9% and decrease of 91.3%,
respectively
- Non-GAAP diluted EPS decreased 64.0% year-over-year to
$1.71
- Adjusted EBITDA decreased 54.1% year-over-year to $155
million
- Expanded cost reduction plans now expected to drive $120
million annualized net expense savings, an increase from $100
million
Zebra Technologies Corporation (NASDAQ: ZBRA), an innovator at
the edge of the enterprise with solutions and partners that enable
businesses to gain a performance edge, today announced results for
the fourth quarter and full year ended December 31, 2023.
“As expected, our fourth quarter results continued to be
impacted by broad-based softness across our end markets and
distributor destocking. We realized sequential improvement in
sales, profitability and free cash flow through demand improvement,
restructuring actions and inventory management initiatives,” said
Bill Burns, Chief Executive Officer of Zebra Technologies.
“Entering 2024, distributor inventories are aligned with the
current demand environment. Although we are seeing some improvement
in order activity, we are not yet seeing signs of a broad market
recovery. We continue to be well positioned to address our
customers’ biggest challenges and return to growth in 2024."
$ in millions, except per share
amounts
4Q23
4Q22
Change
FY23
FY22
Change
Select reported measures:
Net sales
$
1,009
$
1,503
(32.9
%)
$
4,584
$
5,781
(20.7
%)
Gross profit
448
685
(34.6
%)
2,123
2,624
(19.1
%)
Gross margin
44.4
%
45.6
%
(120) bps
46.3
%
45.4
%
90 bps
Net income
17
186
(90.9
%)
296
463
(36.1
%)
Net income margin
1.7
%
12.4
%
(1070) bps
6.5
%
8.0
%
(150) bps
Net income per diluted share
$
0.31
$
3.57
(91.3
%)
$
5.72
$
8.80
(35.0
%)
Select Non-GAAP measures:
Adjusted net sales
$
1,009
$
1,503
(32.9
%)
$
4,584
$
5,781
(20.7
%)
Organic net sales decline
(33.1
%)
(19.8
%)
Adjusted gross profit
450
686
(34.4
%)
2,129
2,630
(19.0
%)
Adjusted gross margin
44.6
%
45.6
%
(100) bps
46.4
%
45.5
%
90 bps
Adjusted EBITDA
155
338
(54.1
%)
824
1,235
(33.3
%)
Adjusted EBITDA margin
15.4
%
22.5
%
(710) bps
18.0
%
21.4
%
(340) bps
Non-GAAP net income
$
89
$
246
(63.8
%)
$
508
$
918
(44.7
%)
Non-GAAP earnings per diluted share
$
1.71
$
4.75
(64.0
%)
$
9.82
$
17.47
(43.8
%)
Net sales were $1,009 million in the fourth quarter of 2023
compared to $1,503 million in the prior year. Net sales in the
Enterprise Visibility & Mobility ("EVM") segment were $663
million in the fourth quarter of 2023 compared to $986 million in
the prior year. Asset Intelligence & Tracking ("AIT") segment
net sales were $346 million in the fourth quarter of 2023 compared
to $517 million in the prior year. Consolidated organic net sales
for the fourth quarter decreased 33.1%. Fourth-quarter
year-over-year organic net sales decreased by 32.7% in the EVM
segment and decreased by 33.6% in the AIT segment.
Fourth-quarter 2023 gross profit was $448 million compared to
$685 million in the prior year. Gross margin decreased to 44.4% for
the fourth quarter of 2023 compared to 45.6% in the prior year. The
decrease was primarily due to volume deleveraging and a $10 million
charge associated with the renegotiation of an electronic component
supplier agreement; partially offset by lower premium supply chain
costs and improved services and software gross margins. Adjusted
gross margin was 44.6% in the fourth quarter of 2023, compared to
45.6% in the prior year.
Operating expenses decreased in the fourth quarter of 2023 to
$374 million from $425 million in the prior year. Operating
expenses decreased primarily due to cost reductions and lower
employee incentive compensation associated with financial
performance, partially offset by increased exit and restructuring
costs. Adjusted operating expenses decreased in the fourth quarter
of 2023 to $312 million from $364 million in the prior year.
Net income for the fourth quarter of 2023 was $17 million, or
$0.31 per diluted share, compared to net income of $186 million, or
$3.57 per diluted share, in the prior year. Non-GAAP net income for
the fourth quarter of 2023 decreased to $89 million, or $1.71 per
diluted share, compared to $246 million, or $4.75 per diluted
share, in the prior year.
Adjusted EBITDA for the fourth quarter of 2023 decreased to $155
million, or 15.4% of adjusted net sales, compared to $338 million,
or 22.5% of adjusted net sales, in the prior year due to lower
gross profit and higher operating expense as a percentage of
revenue.
Balance Sheet and Cash Flow
As of December 31, 2023, the company had cash and cash
equivalents of $137 million and total debt of $2,226 million.
For the full year 2023, net cash used in operating activities
was $4 million and the Company made capital expenditures of $87
million, resulting in negative free cash flow of $91 million. The
Company made share repurchases under its existing authorization of
$52 million and had net debt proceeds of $195 million.
Cost Initiatives
As previously announced, the Company is executing on the 2022
Productivity Plan and the Voluntary Retirement Plan to generate
cost efficiencies. Together, these Exit and Restructuring plans are
expected to generate approximately $120 million of net annualized
cost savings, an increase from $100 million, and were mostly
complete entering 2024. In 2023, we realized approximately $50
million of operating expense savings (majority in the second half
of 2023) and expect to realize approximately $60 million of
incremental savings in 2024, with remaining savings realized into
2025.
The total charges associated with the Exit and Restructuring
plans are now expected to be approximately $130 million, an
increase from $105 million. We have incurred total charges of $110
million through year-end 2023, with the remaining charges expected
to be substantially complete by mid-2024.
Outlook
First Quarter 2024
The company expects net sales to decline between 17% and 20%
compared to the first quarter of 2023. This expectation includes an
approximately 50 basis point favorable impact from foreign currency
translation.
Adjusted EBITDA margin for the first quarter of 2024 is expected
to be approximately 18%. Non-GAAP diluted earnings per share are
expected to be in the range of $2.30 to $2.60. This assumes an
adjusted effective tax rate of approximately 16%.
Full Year 2024
The Company expects net sales to be in the range of a 1% decline
and 3% growth compared to 2023. This expectation assumes a
negligible impact from foreign currency translation.
Adjusted EBITDA margin is expected to be approximately 19%.
Free cash flow is expected to be at least $550 million inclusive
of the final $45 million payment from the previously announced
settlement.
The Company does not provide a reconciliation for non-GAAP
estimates on a forward-looking basis where it is unable to provide
a meaningful or accurate calculation or estimation of reconciling
items and the information is not available without unreasonable
effort. This is due to the inherent difficulty of forecasting the
timing or amount of the most directly comparable forward-looking
GAAP financial measure as discussed under the "Forward-Looking
Statements" caption below. This would include items that have not
yet occurred, are out of the Company’s control and/or cannot be
reasonably predicted, and that would impact diluted net earnings
per share. For the same reasons, the Company is unable to address
the probable significance of the unavailable information.
Forward-looking non-GAAP financial measures provided without the
most directly comparable GAAP financial measures may vary
materially from the corresponding GAAP financial measures.
Conference Call Notification
Investors are invited to listen to a live webcast of Zebra’s
conference call regarding the company’s financial results. The
conference call will be held today at 7:30 a.m. Central Time (8:30
a.m. Eastern Time). To view the webcast, visit the investor
relations section of the company’s website at
investors.zebra.com.
About Zebra
Zebra (NASDAQ: ZBRA) helps organizations monitor, anticipate,
and accelerate workflows by empowering their frontline and ensuring
that everyone and everything is visible, connected and fully
optimized. Our award-winning portfolio spans software to
innovations in robotics, machine vision, automation and digital
decisioning, all backed by a +50-year legacy in scanning,
track-and-trace and mobile computing solutions. With an ecosystem
of 10,000 partners across more than 100 countries, Zebra's
customers include over 80% of the Fortune 500. Newsweek recently
recognized Zebra as one of America's Most Loved Workplaces and
Greatest Workplaces for Diversity, and we are on Fast Company's
list of the Best Workplaces for Innovators. Learn more at
www.zebra.com or sign up for news alerts. Follow Zebra’s Your Edge
blog, LinkedIn, X and Facebook, and check out our Story Hub: Zebra
Perspectives.
Forward-Looking Statements
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 outlook. 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.
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 offerings and competitors' offerings, and the potential
effects of emerging technologies and changes in customer
requirements. The effect of global market conditions, and the
availability of credit and capital markets volatility may have
adverse effects on Zebra, its suppliers and its customers. In
addition, natural disasters, man-made disasters, public health
issues (including pandemics), and cybersecurity incidents may have
negative effects on Zebra's business and results of operations.
Zebra's ability to purchase sufficient materials, parts, and
components, and ability to provide services, software and products
to meet customer demand could negatively impact Zebra's results of
operations and customer relationships. Profits and profitability
will be affected by Zebra’s ability to control manufacturing and
operating costs. Because of its debt, interest rates and financial
market conditions may also have an adverse impact on results.
Foreign exchange rates, customs duties and trade policies may have
an adverse effect on financial results because of the large
percentage of Zebra's international sales. The impacts of changes
in foreign and domestic governmental policies, regulations, or
laws, as well as the outcome of litigation or tax matters in which
Zebra may be involved are other factors that could adversely affect
Zebra's business and results of operations. The success of
integrating acquisitions could also adversely affect profitability,
reported results and the company’s competitive position in its
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 Zebra's financial results. When used in
this release and documents referenced, the words “anticipate,”
“believe,” “outlook,” 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. Descriptions of certain risks,
uncertainties and other factors that could adversely affect the
company’s future operations and results can be found in Zebra’s
filings with the Securities and Exchange Commission, including the
company’s most recent Form 10-K and Form 10-Q.
Use of Non-GAAP Financial Information
This press release contains certain Non-GAAP financial measures,
consisting of “adjusted net sales,” “adjusted gross profit,”
“adjusted gross margin,” “EBITDA,” “Adjusted EBITDA,” “Adjusted
EBITDA margin,” “Adjusted EBITDA % of adjusted net sales,”
“Non-GAAP net income,” “Non-GAAP earnings per share,” “Non-GAAP
diluted earnings per share,” “free cash flow,” “organic net sales,”
“organic net sales decline,” and “adjusted operating expenses.”
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. Please see the
“Reconciliation of GAAP to Non-GAAP Financial Measures” tables and
accompanying disclosures at the end of this press release for more
detailed information regarding non-GAAP financial measures herein,
including the items reflected in adjusted net earnings
calculations. These measures, however, should not be construed as
an alternative to any other measure of performance determined in
accordance with GAAP.
The company does not provide a reconciliation for non-GAAP
estimates on a forward-looking basis (including the information
under “Outlook” above) where it is unable to provide a meaningful
or accurate calculation or estimation of reconciling items and the
information is not available without unreasonable effort. This is
due to the inherent difficulty of forecasting the timing or amount
of various items that have not yet occurred, are out of the
company’s control and/or cannot be reasonably predicted, and that
would impact diluted net earnings per share, the most directly
comparable forward-looking GAAP financial measure. For the same
reasons, the company is unable to address the probable significance
of the unavailable information. Forward-looking non-GAAP financial
measures provided without the most directly comparable GAAP
financial measures may vary materially from the corresponding GAAP
financial measures.
As a global company, Zebra's operating results reported in U.S.
dollars are affected by foreign currency exchange rate fluctuations
because the underlying foreign currencies in which the company
transacts change in value over time compared to the U.S. dollar;
accordingly, the company presents certain organic growth financial
information, which includes impacts of foreign currency
translation, to provide a framework to assess how the company’s
businesses performed excluding the impact of foreign currency
exchange rate fluctuations. Foreign currency impact represents the
difference in results that are attributable to fluctuations in the
currency exchange rates used to convert the results for businesses
where the functional currency is not the U.S. dollar. This impact
is calculated by translating current period results at the currency
exchange rates used in the comparable period in the prior year,
rather than the exchange rates in effect during the current period.
In addition, the company excludes the impact of its foreign
currency hedging program in the prior year periods. The company
believes these measures should be considered a supplement to and
not in lieu of the company’s performance measures calculated in
accordance with GAAP.
ZEBRA TECHNOLOGIES CORPORATION
AND SUBSIDIARIES
CONSOLIDATED BALANCE
SHEETS
(In millions, except share
data)
December 31,
2023
2022
Assets
Current assets:
Cash and cash equivalents
$
137
$
105
Accounts receivable, net of allowances for
doubtful accounts of $1 million each as of December 31, 2023 and
2022
521
768
Inventories, net
804
860
Income tax receivable
63
26
Prepaid expenses and other current
assets
147
124
Total Current assets
1,672
1,883
Property, plant and equipment, net
309
278
Right-of-use lease assets
169
156
Goodwill
3,895
3,899
Other intangibles, net
527
630
Deferred income taxes
438
407
Other long-term assets
296
276
Total Assets
$
7,306
$
7,529
Liabilities and Stockholders' Equity
Current liabilities:
Current portion of long-term debt
$
173
$
214
Accounts payable
456
811
Accrued liabilities
504
744
Deferred revenue
458
425
Income taxes payable
7
138
Total Current liabilities
1,598
2,332
Long-term debt
2,047
1,809
Long-term lease liabilities
152
139
Deferred income taxes
67
75
Long-term deferred revenue
312
333
Other long-term liabilities
94
108
Total Liabilities
4,270
4,796
Stockholders’ Equity:
Preferred stock, $.01 par value;
authorized 10,000,000 shares; none issued
—
—
Class A common stock, $.01 par value;
authorized 150,000,000 shares; issued 72,151,857 shares
1
1
Additional paid-in capital
615
561
Treasury stock at cost, 20,772,995 and
20,700,357 shares as of December 31, 2023 and 2022,
respectively
(1,858
)
(1,799
)
Retained earnings
4,332
4,036
Accumulated other comprehensive loss
(54
)
(66
)
Total Stockholders’ Equity
3,036
2,733
Total Liabilities and Stockholders’
Equity
$
7,306
$
7,529
ZEBRA TECHNOLOGIES CORPORATION
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF
OPERATIONS
(In millions, except per share
data)
Three Months Ended
Twelve Months Ended
(Unaudited)
December 31,
2023
December 31,
2022
December 31,
2023
December 31,
2022
Net sales:
Tangible products
$
780
$
1,285
$
3,665
$
4,915
Services and software
229
218
919
866
Total Net sales
1,009
1,503
4,584
5,781
Cost of sales:
Tangible products
453
701
2,012
2,699
Services and software
108
117
449
458
Total Cost of sales
561
818
2,461
3,157
Gross profit
448
685
2,123
2,624
Operating expenses:
Selling and marketing
136
155
581
607
Research and development
116
142
519
570
General and administrative
78
87
334
375
Settlement and related costs
—
—
—
372
Amortization of intangible assets
26
29
104
136
Acquisition and integration costs
2
2
6
21
Exit and restructuring costs
16
10
98
14
Total Operating expenses
374
425
1,642
2,095
Operating income
74
260
481
529
Other (loss) income, net:
Foreign exchange loss
(4
)
(8
)
(2
)
(3
)
Interest (expense) income, net
(64
)
(25
)
(133
)
23
Other expense, net
(4
)
(2
)
(12
)
(5
)
Total Other (expense) income, net
(72
)
(35
)
(147
)
15
Income before income tax
2
225
334
544
Income tax (benefit) expense
(15
)
39
38
81
Net income
$
17
$
186
$
296
$
463
Basic earnings per share
$
0.32
$
3.59
$
5.75
$
8.86
Diluted earnings per share
$
0.31
$
3.57
$
5.72
$
8.80
ZEBRA TECHNOLOGIES CORPORATION
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF
CASH FLOWS
(In millions)
Year Ended December
31,
2023
2022
Cash flows from operating activities:
Net income
$
296
$
463
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization
176
204
Share-based compensation
55
88
Deferred income taxes
(36
)
(210
)
Unrealized loss (gain) on forward interest
rate swaps
17
(89
)
Other, net
3
5
Changes in operating assets and
liabilities:
Accounts receivable, net
249
(5
)
Inventories, net
50
(341
)
Other assets
(25
)
(48
)
Accounts payable
(365
)
92
Accrued liabilities
(97
)
(51
)
Deferred revenue
12
60
Income taxes
(168
)
108
Settlement liability
(180
)
225
Other operating activities
9
(13
)
Net cash (used in) provided by operating
activities
(4
)
488
Cash flows from investing activities:
Acquisition of businesses, net of cash
acquired
—
(881
)
Purchases of property, plant and
equipment
(87
)
(75
)
Purchases of short-term investments
(4
)
—
Purchases of long-term investments
(1
)
(12
)
Net cash used in investing activities
(92
)
(968
)
Cash flows from financing activities:
Proceeds from issuance of long-term
debt
440
1,284
Payments of long term-debt
(245
)
(247
)
Payment of debt issuance costs,
extinguishment costs and discounts
—
(8
)
Payments for repurchases of common
stock
(52
)
(751
)
Net payments related to share-based
compensation plans
(8
)
(14
)
Change in unremitted cash collections from
servicing factored receivables
(18
)
(11
)
Net cash provided by financing
activities
117
253
Effect of exchange rate changes on cash
and cash equivalents, including restricted cash
—
—
Net increase (decrease) in cash and cash
equivalents, including restricted cash
21
(227
)
Cash and cash equivalents, including
restricted cash, at beginning of period
117
344
Cash and cash equivalents, including
restricted cash, at end of period
$
138
$
117
Less restricted cash, included in Prepaid
expenses and other current assets
(1
)
(12
)
Cash and cash equivalents at end of
period
$
137
$
105
Supplemental disclosures of cash flow
information:
Income taxes paid
$
252
$
168
Interest paid
$
111
$
58
ZEBRA TECHNOLOGIES CORPORATION
AND SUBSIDIARIES
RECONCILIATION OF ORGANIC NET
SALES DECLINE
(Unaudited)
Three Months Ended
December 31, 2023
AIT
EVM
Consolidated
Consolidated Reported GAAP Net sales
decline
(33.1
)%
(32.8
)%
(32.9
)%
Adjustments:
Impact of foreign currency translations
(1)
(0.5
)%
0.1
%
(0.2
)%
Consolidated Organic Net sales decline
(33.6
)%
(32.7
)%
(33.1
)%
Twelve Months Ended
December 31, 2023
AIT
EVM
Consolidated
Consolidated Reported GAAP Net sales
decline
(10.1
)%
(25.6
)%
(20.7
)%
Adjustments:
Impact of foreign currency translations
(1)
1.3
%
1.5
%
1.4
%
Impact of acquisitions (2)
—
(0.8
)%
(0.5
)%
Consolidated Organic Net sales decline
(8.8
)%
(24.9
)%
(19.8
)%
(1)
Operating results reported in U.S. Dollars
are affected by foreign currency exchange rate fluctuations.
Foreign currency translation impact represents the difference in
results that are attributable to fluctuations in the currency
exchange rates used to convert the results for businesses where the
functional currency is not the U.S. Dollar. This impact is
calculated by translating the current period results at the
currency exchange rates used in the comparable prior year period,
inclusive of the Company’s foreign currency hedging program.
(2)
For purposes of computing Organic Net
sales decline, amounts directly attributable to business
acquisitions are excluded for twelve months following their
respective acquisitions.
ZEBRA TECHNOLOGIES CORPORATION
AND SUBSIDIARIES
RECONCILIATION OF GAAP TO
NON-GAAP GROSS MARGIN
(In millions)
(Unaudited)
Three Months Ended
December 31, 2023
December 31, 2022
AIT
EVM
Consolidated
AIT
EVM
Consolidated
GAAP
Reported Net sales
$
346
$
663
$
1,009
$
517
$
986
$
1,503
Reported Gross profit
159
289
448
238
447
685
Gross Margin
46.0
%
43.6
%
44.4
%
46.0
%
45.3
%
45.6
%
Non-GAAP
Adjusted Net sales
$
346
$
663
$
1,009
$
517
$
986
$
1,503
Adjusted Gross profit (1)
160
290
450
239
447
686
Adjusted Gross Margin
46.2
%
43.7
%
44.6
%
46.2
%
45.3
%
45.6
%
Twelve Months Ended
December 31, 2023
December 31, 2022
AIT
EVM
Consolidated
AIT
EVM
Consolidated
GAAP
Reported Net sales
$
1,651
$
2,933
$
4,584
$
1,837
$
3,944
$
5,781
Reported Gross profit
787
1,336
2,123
795
1,829
2,624
Gross Margin
47.7
%
45.6
%
46.3
%
43.3
%
46.4
%
45.4
%
Non-GAAP
Adjusted Net sales
$
1,651
$
2,933
$
4,584
$
1,837
$
3,944
$
5,781
Adjusted Gross profit (1)
789
1,340
2,129
797
1,833
2,630
Adjusted Gross Margin
47.8
%
45.7
%
46.4
%
43.4
%
46.5
%
45.5
%
(1)
Adjusted Gross profit excludes share-based
compensation expense.
ZEBRA TECHNOLOGIES CORPORATION
AND SUBSIDIARIES
RECONCILIATION OF GAAP TO
NON-GAAP NET INCOME
(In millions, except share
data)
(Unaudited)
Three Months Ended
Twelve Months Ended
December 31,
2023
December 31,
2022
December 31,
2023
December 31,
2022
GAAP Net income
$
17
$
186
$
296
$
463
Adjustments to Cost of sales(1)
Share-based compensation
2
1
6
6
Total adjustments to Cost of
sales
2
1
6
6
Adjustments to Operating expenses(1)
Amortization of intangible assets
26
29
104
136
Acquisition and integration costs
2
2
6
21
Settlement and related costs
—
—
—
372
Share-based compensation
18
20
60
90
Exit and restructuring costs
16
10
98
14
Total adjustments to Operating
expenses
62
61
268
633
Adjustments to Other income (expense),
net(1)
Amortization of debt issuance costs and
discounts
1
—
3
4
Investment loss
—
—
1
—
Foreign exchange loss
4
8
2
3
Forward interest rate swap loss (gain)
25
1
(9
)
(83
)
Total adjustments to Other income
(expense), net
30
9
(3
)
(76
)
Income tax effect of adjustments(2)
Reported income tax expense
(15
)
39
38
81
Adjusted income tax
(7
)
(50
)
(97
)
(189
)
Total adjustments to income tax
(22
)
(11
)
(59
)
(108
)
Total adjustments
72
60
212
455
Non-GAAP Net income
$
89
$
246
$
508
$
918
GAAP earnings per share
Basic
$
0.32
$
3.59
$
5.75
$
8.86
Diluted
$
0.31
$
3.57
$
5.72
$
8.80
Non-GAAP earnings per share
Basic
$
1.72
$
4.78
$
9.88
$
17.59
Diluted
$
1.71
$
4.75
$
9.82
$
17.47
Basic weighted average shares
outstanding
51,366,299
51,645,205
51,378,051
52,207,903
Diluted weighted average and equivalent
shares outstanding
51,687,374
51,942,060
51,710,962
52,558,712
(1)
Presented on a pre-tax basis.
(2)
Represents adjustments to GAAP income tax
expense commensurate with pre-tax non-GAAP adjustments (including
the resulting impacts to U.S. BEAT/GILTI provisions), as well as
adjustments to exclude the impacts of certain discrete income tax
items and incorporate the anticipated annualized effects of current
year tax planning.
ZEBRA TECHNOLOGIES CORPORATION
AND SUBSIDIARIES
GAAP to NON-GAAP
RECONCILIATION TO EBITDA
(In millions)
(Unaudited)
Three Months Ended
Twelve Months Ended
December 31,
2023
December 31,
2022
December 31,
2023
December 31,
2022
GAAP Net income
$
17
$
186
$
296
$
463
Add back:
Depreciation (excluding exit and
restructuring costs)
17
16
69
67
Amortization of intangible assets
26
29
104
136
Total Other expense (income), net
72
35
147
(15
)
Income tax (benefit) expense
(15
)
39
38
81
EBITDA (Non-GAAP)
117
305
654
732
Adjustments to Cost of sales
Share-based compensation
2
1
6
6
Total adjustments to Cost of sales
2
1
6
6
Adjustments to Operating expenses
Acquisition and integration costs
2
2
6
21
Settlement and related costs
—
—
—
372
Share-based compensation
18
20
60
90
Exit and restructuring costs
16
10
98
14
Total adjustments to Operating
expenses
36
32
164
497
Total adjustments to EBITDA
38
33
170
503
Adjusted EBITDA (Non-GAAP)
$
155
$
338
$
824
$
1,235
Adjusted EBITDA % of Adjusted Net Sales
(Non-GAAP)
15.4
%
22.5
%
18.0
%
21.4
%
FREE CASH
FLOW
Twelve Months Ended
December 31,
2023
December 31,
2022
Net cash (used in) provided by operating
activities
$
(4
)
$
488
Less: Purchases of property, plant and
equipment
(87
)
(75
)
Free cash flow (Non-GAAP)(1)
$
(91
)
$
413
(1)
Free cash flow, a non-GAAP measure, is
defined as Net cash (used in) provided by operating activities in a
period minus purchases of property, plant and equipment (capital
expenditures) made in that period. This measure does not represent
residual cash flows available for discretionary expenditures as the
measure does not deduct the payments required for debt service and
other contractual obligations or payments for future business
acquisitions. Therefore, we believe it is important to view free
cash flow as a measure that provides supplemental information to
our entire statements of cash flows.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240215757046/en/
Investors Michael Steele, CFA, IRC
Vice President, Investor Relations Phone: + 1 847 518 6432
InvestorRelations@zebra.com
Media Therese Van Ryne Senior
Director, External Communications Phone: + 1 847 370 2317
therese.vanryne@zebra.com
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