Yesterday, Zebra Technologies announced its 2014 Q4 and full year earnings. It was notably the first quarter since the acquisition in which Motorola Solutions’ Enterprise business unit was integrated with the company. VDC’s qualitative analysis of the most compelling comments made by the Zebra leadership team in the earnings call can be found in yesterday’s blog. This post will discuss some of the key AIDC-centric highlights from the call.
- The company reported total GAAP sales of $791 million, $315 million of which was attributed to Zebra Technologies and $476 million to the company’s new Enterprise segment during the two months of 2014 that Zebra owned it. Treasurer and VP Investor Relations Douglas A. Fox reported high gross margins and an adjusted EBITDA margin of 18.2% for Q4. Fox also stated that high operating expenses could be largely attributed to $66 million in acquisition and restructuring costs from the Enterprise segment. Zebra expects Q1 2015 net sales to fall within the $870 to $890 million range.
- Zebra’s CEO Anders Gustafsson stated that this quarter brought a 14% sequential increase in pro forma sales from the Enterprise segment. The company’s printer segment also grew substantially, with increases in mobile and tabletop sales as well as record shipments of desktop printers. The supplies segment, which includes media consumables, also experienced record sales.
- Gustafsson notes in the call that 2014 was a year of expansion for Zebra’s data capture business segment, penetrating the market for 2D imagers in addition to laser scanners. The MP6000 bioptic imager is specifically mentioned as a popular product among customers for its productivity and cost savings. 2014 also brought an addition of 12 new printer offerings dedicated primarily to mobility, healthcare and RFID encoding.
- Gustafsson concluded his prepared remarks with Zebra’s business direction and goals for 2015. Such objectives included further penetration into the supplies segment and integration of the Enterprise segment to ultimately achieve $150 million in cost synergies. A notable 2015 business opportunity highlighted by Zebra leadership was cross-selling; for example, Zebra was able to provide one large printer customer in North America with an additional 1,600 mobile computers and over 500 scanners.
- In the Q&A portion of the call, the transition from laser to 2D imager was discussed. Gustafsson noted that the acquisition of Motorola’s Enterprise segment does not change Zebra’s views on scanning technology. According to Gustafsson, 1D laser will continue to be the historical, traditional scanner; however, demand for increased functionality has been influencing a migration to 2D imager in all vertical markets. This migration is reflected in the growth of Zebra’s imager segment.
- Integrated solutions stood out as a key takeaway in the Q&A segment. Senior VP of Sales Joachim Heel noted that the Zebra sales force will this year begin intensive training to effectively integrate Motorola Solutions’ Enterprise products with Zebra printers. Heel is confident that this level of cross-selling would have a positive impact in 2015.
The call ended in a positive tone, reflecting Zebra leadership’s confidence in its market standing as well as optimism about business opportunities for 2015.
With Kelly Brown, Research Assistant
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