UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 10-Q
[ X ] Quarterly Report Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
For the quarterly period ended June 28, 1997
Commission File Number: O-19406
Zebra Technologies Corporation
(Exact name of registrant as specified in its charter)
Delaware 36-2675536
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
333 Corporate Woods Parkway, Vernon Hills, IL 60061
(Address of principal executive offices) (Zip Code)
(847) 634-6700
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934
during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports) and has been subject to such
filing requirements for the past 90 days.
[ X ] Yes [ ] No
As of August 1, 1997, there were the following shares outstanding:
Class A Common Stock, $.01 par value: 17,002,342
Class B Common Stock, $.01 par value: 7,255,404
<PAGE>
ZEBRA TECHNOLOGIES CORPORATION AND SUBSIDIARIES
QUARTER ENDED JUNE 28, 1997
INDEX
<TABLE>
PAGE
<S> <C>
PART I - FINANCIAL INFORMATION
Item 1. Consolidated Financial Statements
Independent Auditors' Review Report 2
Consolidated Balance Sheets
as of June 28, 1997 (unaudited) and December 31, 1996 3
Consolidated Statements of Earnings (unaudited)
for the three-months and six-months ended June 28, 1997
and June 29, 1996 4
Consolidated Statements of Cash Flows (unaudited)
for the six-months ended June 28, 1997 and June 29, 1996 5
Notes to Consolidated Financial Statements 6
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 7
PART II - OTHER INFORMATION
Item 1. Legal Proceedings 11
Item 4. Submissions of Matters to a Vote of Security Holders 11
Item 6. Exhibits and Reports on Form 8-K 13
SIGNATURES 17
</TABLE>
<PAGE>
Item 1. Consolidated Financial Statements
Independent Auditors' Review Report
The Board of Directors
Zebra Technologies Corporation:
We have reviewed the consolidated balance sheet of Zebra Technologies
Corporation and subsidiaries as of June 28, 1997, and the related
consolidated statements of earnings for the three-month and six-month
periods ended June 28, 1997 and June 29, 1996 and consolidated statements
of cash flows for six-months ended June 28, 1997 and June 29, 1996. These
consolidated financial statements are the responsibility of the Company's
management.
We conducted our review in accordance with standards established by the
American Institute of Certified Public Accountants. A review of interim
financial information consists principally of applying analytical procedures
to financial data and making inquiries of persons responsible for financial
and accounting matters. It is substantially less in scope than an audit
conducted in accordance with generally accepted auditing standards, the
objective of which is the expression of an opinion regarding the financial
statements taken as a whole. Accordingly, we do not express such an opinion.
Based on our review, we are not aware of any material modifications that
should be made to the accompanying consolidated financial statements for
them to be in conformity with generally accepted accounting principles.
We have previously audited, in accordance with generally accepted auditing
standards, the consolidated balance sheet of Zebra Technologies Corporation
and subsidiaries as of December 31, 1996, and the related consolidated
statements of earnings, stockholders' equity, and cash flows for the year
then ended (not presented herein); and in our report dated February 7, 1997,
we expressed an unqualified opinion on those consolidated financial
statements. In our opinion, the information set forth in the accompanying
consolidated balance sheet as of December 31, 1996, is fairly stated, in all
material respects, in relation to the consolidated balance sheet from
which it has been derived.
Chicago, Illinois /s/KPMG Peat Marwick LLP
July 15, 1997
<PAGE>
ZEBRA TECHNOLOGIES CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)
<TABLE>
June 28, December 31,
1997 1996
(Unaudited)
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $11,583 $5,168
Investments and marketable securities 100,169 89,372
Accounts receivable, net of allowance of
$1,300 in 1997 and $960 in 1996 29,754 31,631
Inventories:
Finished goods 10,161 10,428
Work-in-process 484 325
Raw materials 11,880 10,750
Total inventories 22,525 21,503
Deferred income taxes 1,729 -
Prepaid expenses 2,385 1,322
Total current assets 168,145 148,996
Machinery and equipment at cost, less
accumulated depreciation and amortization 12,071 11,328
Other assets 688 2,812
Deferred income taxes - 147
Total assets $180,904 $163,283
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $12,479 $12,200
Accrued liabilities 7,308 4,180
Short-term note payable 137 1
Current portion of obligation under
capitalized lease with related party 63 62
Income taxes payable 2,940 3,750
Total current liabilities 22,927 20,193
Obligation under capitalized lease with
related party, less current portion 83 115
Long-term liability 212 2,211
Other 297 308
Total liabilities 23,519 22,827
Stockholders' equity:
Preferred stock, $.01 par value,
10,000,000 shares authorized,none outstanding - -
Class A Common Stock, $.01 par value;
35,000,000 shares authorized, 16,994,342 and
16,924,973 shares issued and outstanding in
1997 and 1996, respectively 170 169
Class B Common Stock, $.01 par value;
35,000,000 shares authorized, 7,255,404 and
7,315,404 shares issued and outstanding in
1997 and 1996, respectively 73 73
Paid-in capital 29,192 30,386
Retained earnings 127,140 108,624
Unrealized holding gain/(loss) on investments - (6)
Cumulative translation adjustment 810 1,210
Total stockholders' equity 157,385 140,456
Total liabilities and stockholders' equity $180,904 $163,283
</TABLE>
See accompanying notes to consolidated financial statements.
<PAGE>
ZEBRA TECHNOLOGIES CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EARNINGS
(Amounts in thousands, except for per share data)
(Unaudited)
<TABLE>
Three Months Ended Six Months Ended
June 28, June 29, June 28, June 29,
1997 1996 1997 1996
<S> <C> <C> <C> <C>
Net sales $47,844 $38,920 $88,853 $75,446
Cost of sales 23,546 20,468 44,124 39,429
Gross profit 24,298 18,452 44,729 36,017
Operating Expenses:
Sales and marketing 5,070 4,050 8,945 7,370
Research and new product
development 2,775 2,872 5,167 5,864
General and administrative 3,923 2,837 6,917 5,647
Acquisition Costs - - - -
Acquired in-process technology - - - 1,114
Total operating expenses 11,768 9,759 21,029 19,995
Income from operations 12,530 8,693 23,700 16,022
Other income (expense):
Investment income 1,356 833 2,437 1,691
Gain on securities 665 622 1,235 1,068
Other, net 215 74 5,686 52
Total other income 2,236 1,529 9,358 2,811
Income from continuing
operations before income
taxes 14,766 10,222 33,058 18,833
Provision for income taxes 5,121 3,440 11,887 6,343
Net income from continuing
operations 9,645 6,782 21,171 12,490
Discontinued operations
(Note 2):
Loss from discontinued operations
(less applicable income tax
benefit of $149 for the 1st
Qtr 1997, $1,064 for the 2nd
Qtr 1997, and $1,213 YTD
1997, respectively) (1,400) (522) (1,692) (981)
Loss on disposal of
discontinued operations
including provision of
$1,819 for operating
losses during the phase-out
period (less applicable
income tax benefit of $615) (963) - (963) -
Net income $7,281 $6,260 $18,516 $11,509
Net income per share from
continuing operations $0.40 $0.28 $0.87 $0.52
Net income per share $0.30 $0.26 $0.76 $0.48
Average shares outstanding 24,244 24,198 24,242 24,194
</TABLE>
See accompanying notes to consolidated financial statements.
<PAGE>
ZEBRA TECHNOLOGIES CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars in thousands)
(Unaudited)
<TABLE>
Six Months Ended
June 28, June 29,
1997 1996
<S> <C> <C>
Cash flows from operating activities:
Net income $18,516 $11,509
Adjustments to reconcile net income to
net cash provided by operating activities:
Depreciation and amortization 1,957 1,487
Appreciation in market value of
investments & marketable securities 1,190 636
Acquired in-process technology - 1,114
Discontinued operations (3,371) -
(Increase) decrease in accounts receivable 1,877 (1,294)
Increase in inventories (1,022) (337)
Decrease in other assets 2,124 499
Increase (decrease) in accounts payable 279 (3,422)
Increase in accrued liabilities & other 3,117 467
Decrease in income taxes payable (810) (1,443)
Decrease (increase) in deferred income taxes (1,582) 537
Net increase (decrease) in other operating
activities (1,462) 360
Net purchases of investments and marketable
securities (18,026) (6,547)
Net cash provided by operating activities 2,787 3,566
Cash flows from investing activities:
Purchases of machinery and equipment (2,700) (3,399)
Net (purchases) sales of investments and
marketable securities 6,044 (145)
Payment for acquisition - (1,049)
Net cash provided by (used in) investing
activities 3,344 (4,593)
Cash flows from financing activities:
Proceeds from sale of stock 179 393
Issuance of short-term notes payable 136 196
Payments for obligation under capital lease (31) (29)
Net cash provided by financing activities 284 560
Net increase (decrease) in cash and cash
equivalents 6,415 (467)
Cash and cash equivalents at beginning of
period 5,168 10,017
Cash and cash equivalents at end of period $11,583 $9,550
Supplemental disclosures of cash flow
information:
Interest paid $6 $13
Income taxes paid $12,343 $7,227
</TABLE>
See accompanying notes to consolidated financial statements.
<PAGE>
ZEBRA TECHNOLOGIES CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 1 - Basis of Presentation
The consolidated financial statements included herein have been prepared by
Zebra Technologies Corporation and subsidiaries (the "Company"), without
audit, pursuant to the rules and regulations of the Securities and Exchange
Commission. Certain information and footnote disclosures normally included
in financial statements prepared in accordance with generally accepted
accounting principles have been condensed or omitted pursuant to such rules
and regulations. These consolidated financial statements should be read in
conjunction with the consolidated financial statements and notes thereto
included in the Company's Annual Report on Form 10-K filed with the
Securities and Exchange Commission. The consolidated balance sheet as of
December 31, 1996 presented herein has been derived from the audited
consolidated balance sheet contained in the Annual Report on Form 10-K. In
the opinion of the Company, the consolidated financial statements reflect all
adjustments necessary to present fairly the consolidated financial position
of Zebra Technologies Corporation and subsidiaries as of June 28, 1997 and
December 31, 1996, and the consolidated results of their operations for the
three-month and six-month period ended June 28, 1997 and June 29, 1996 and
six-months ended cash flow for June 28, 1997 and June 29, 1996. The results
of operations for such interim periods are not necessarily indicative of the
results for the full year.
Note 2 - Discontinued Business Operations
As of June 28, 1997, the Company made the decision to discontinue the
operations of its subsidiary, Zebra Technologies VTI ("VTI"). The
discontinuance of VTI and the related PC retail channel will be completed
during the third quarter of 1997. A one-time charge of $2,363,000, net of
income tax benefits, was recorded in the second quarter and is related to the
discontinuance VTI and the related retail software business. The one-time
charge includes a provision for expected product returns from present retail
channel partners, provision for slow moving/obsolete product, and provisions
for estimated contingent liabilities.
Note 3 - Legal Proceedings
As of June 28, 1997, the Company has settled the pending litigation between
Zebra and Messrs. Carter and Flury, the former officers of VTI. The legal
actions which were initiated in March of 1996 have been settled out of court.
Terms are confidential and all payments have been completed. The settlement
did not unfavorably impact Company's net income. In connection with the
settlement of the litigation, the Company reduced long-term liabilities by
$1,999,000 and paid-in capital by $1,372,000.
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
Results of Continuing Operations Second Quarter of 1997 versus Second
Quarter of 1996 and Year-to-date 1997 versus Year-to-date 1996
Net sales for the second quarter of 1997 22.9% to $47,844,000 versus net
sales of $38,920,000 for the second quarter of 1996. On a year-to-date
basis, 1997 sales increased 17.8% to $88,853,000 versus sales of $75,446,000
in the corresponding period last year. This sales increase for the quarter
and year-to-date is attributed to unit growth in all product categories, as
the average unit price of printer products has decreased due to product mix
changes. Printer sales increased by 26.6% and supplies sales by 13.2% over
the second quarter of 1996, bringing printer sales to 75.7% and supplies
sales to 22.2% of consolidated net sales, respectively for the second quarter
of 1997 versus 73.5% and 24.1% for the same period of 1996. On a
year-to-date basis, printer sales increased by 20.2% and supplies sales by
10.6% over the same period 1996, bringing printer sales to 74.4% and
supplies sales to 23.3% of consolidated net sales, respectively for the first
half of 1997 versus 73.3% and 24.9% for the first half of 1996. Approximately
47.4% of 1997 second quarter net sales were derived from international
sources as compared to 45.0% during the second quarter of 1996. Similarly,
47.2% of year-to-date net sales for 1997 were derived from international
customers as compared to 45.4% in the comparable prior year period.
Gross profit increased to $24,298,000 for the second quarter of 1997, a 31.7%
gain over the gross profit of $18,452,000 for the second quarter of 1996. As
a percentage of net sales, gross profit increased 3.4% from 47.4% in the
second quarter of last year to 50.8% in the second quarter of 1997.
Year-to-date gross profit of $44,729,000 also increased as a percentage of net
sales, from 47.7% last year to 50.3% this year. This increase for the
quarter and year-to-date is principally due to decreased material costs of
high volume printer parts plus a favorable product mix within the Company's
printer products and a lower percentage of supplies sales.
Sales and marketing expenses of $5,070,000 were up 25.2% in the second
quarter of 1997 compared to $4,050,000 in the second quarter of 1996. As a
percentage of net sales, second quarter sales and marketing expenses
increased slightly to 10.6% from 10.4% for the same period last year.
Year-to-date sales and marketing expenses of $8,945,000 were up 21.4% over
last year, increasing as a percentage of net sales from 9.8% last year to
10.1% during 1997. Increased spending on a quarterly and year-to-date basis
is principally due to increased staffing, advertising, public relations, and
outside consulting services. These expense increases were offset in part by
reductions in warranty and travel in comparison to last year on both a
quarterly and year-to-date basis.
Research and development expenses for the second quarter of 1997 decreased
by 3.4% to $2,775,000 (5.8% of net sales) versus $2,872,000 (7.4% of net
sales) in the second quarter of 1996. Year-to-date research and development
expenses decreased by 11.9% to $5,167,000 (5.8% of net sales) versus
$5,864,000 (7.8% of net sales) last year. Decreases on a quarterly and
year-to-date basis resulted from reductions in unusually high development
costs in prior periods to more normal levels in the current period.
General and administrative expenses for the second quarter of 1997 increased
by 38.3% to $3,923,000 (8.2% of net sales) as compared to $2,837,000 (7.3% of
net sales) in the second quarter of 1996. On a year-to-date basis, general
and administrative expenses increased by 22.5% to $6,917,000 (7.8% of net
<PAGE>
sales) compared to $5,647,000 (7.5% of net sales) for the comparable period
last year. The increase in general and administrative expenses for the
quarter and year-to-date on both a dollar and percentage basis was primarily
the result of increases in staffing, depreciation, and building expenses.
The increases were offset in part by reductions in mainframe computer
expenses. Both periods include the amortization of intangible assets and
goodwill for the acquisition of the assets of Fenestra Computer Services, as
described in the Liquidity and Capital Resources section below.
Income from operations for the second quarter of 1997 increased by $3,837,000
or 44.1% to $12,530,000 (26.2% of net sales) compared to $8,693,000 (22.3% of
net sales) for the second quarter of 1996. Income from operations for the
first half of 1997 increased by $7,678,000 or 5.2% to $23,700,000 (26.7% of
net sales) compared to $16,022,000 (21.2% of net sales) in the first half of
1996. This increase on a quarterly and year-to-date basis was due to higher
gross profits, as previously indicated, offset in part by the non-recurring
write-off of acquired in-process technology of $1,114,000 in the first
quarter of 1996 as a result of the Company's acquisition of Fenestra
Computer Services.
Investment income and gain on securities for the second quarter of 1997
increased by $566,000 or 38.9% to $2,021,000 versus $1,455,000 for the second
quarter of 1996. On a year-to-date basis, investment income increased by
$913,000 or 33.1% to $3,672,000 versus $2,759,000 in 1996. On both a
quarterly and year to date basis, the Company had larger cash and marketable
securities balances invested and was able to earn a higher rate of return
than in the comparable period from 1996. On a year-to-date basis, average
cash and marketable securities increased from $94,540,000 in 1996 to
$111,752,000 in 1997. Other income includes a one-time gain of $5,458,000
during the first quarter of 1997 from the sale of 350,000 shares of Norand
Corporation common stock, which was purchased in October of 1995 when
management briefly considered Norand a possible acquisition candidate.
Income from continuing operations before income taxes was $14,766,000 in the
second quarter of 1997 compared to $10,222,000 in the same quarter of last
year, an increase of $4,543,000 or 44.4%. The provision for income taxes was
34.7% in the second quarter of 1997, resulting in income from continuing
operations of $9,645,000 or 20.2% of net sales and earnings per share from
continuing operations of $0.40 on 24,244,000 weighted average shares
outstanding. In the second quarter of 1996, the provision for income taxes
was 33.7% resulting in income from continuing operations of $6,782,000 or
17.4% of net sales and earnings per share from continuing operations of $0.28
on 24,198,000 weighted average shares outstanding. Income from continuing
operations before income taxes of $33,058,000 for the first half of 1997 was
$14,225,000 or 75.5% above the prior year amount of $18,833,000 for the same
period. The provision for income taxes for the first half of 1997 was 36.0%,
resulting in income from continuing operations of $21,171,000 or 23.8% of net
sales and earnings per share from continuing operations of $0.87 on
24,242,000 weighted average shares outstanding. The provision for income
taxes for the first half of 1996 was 33.7% resulting in income from
continuing operations of $12,490,000 or 16.6% of net sales and earnings per
share from continuing operations of $0.52 on 24,194,000 weighted average
shares outstanding.
As of June 28, 1997, the Company settled the pending litigation between Zebra
and Messrs. Carter and Flury, the former officers and principals of Zebra
Technologies VTI. The legal actions initiated in March 1996 have been
settled out of court. Terms are confidential and all payments have been
completed. The Company acquired VTI in July 1995. At the time of the
<PAGE>
acquisition an accrual for future payments due to the officers and management
of VTI was established. The amounts originally accrued for Messrs. Carter
and Flury were adequate to cover the settlement amounts. In connection with
the settlement of the litigation, the Company reduced long-term liabilities
by $1,999,000 and paid-in capital by $1,372,000.
As of June 28, 1997, the Company made the decision to discontinue the
operations of its VTI subsidiary. The discontinuance of VTI and the related
PC retail channel will be completed during the third quarter of 1997. A one-
time charge of $2,363,000, net of income tax benefits, was recorded in the
second quarter related to the discontinuance of VTI and the Company's presence
in the PC retail channel. The one-time charge includes a provision for
expected product returns from present retail channel partners, provision for
slow moving/obsolete product, and provisions for estimated contingent
liabilities. As part of recording the provisions and charges, the related
remaining goodwill and intangible assets were written off as part of the
discontinued operation charge. The transition of remaining salable products
and the business records and duties will be made during the third quarter of
1997 to appropriate personnel at the Company's Vernon Hills facility.
Liquidity and Capital Resources
The Company's principal source of liquidity continues to be cash generated
from operations and its cash and marketable securities balances. At June 28,
1997, the Company had $111,752,000 in cash and marketable securities versus
$94,540,000 at the end of 1996.
Effective February 16, 1996, the Company purchased the assets of Fenestra
Computer Services, a UK partnership, in exchange for $1,398,000 paid in cash
and Zebra Class A common stock. The transaction has been accounted for under
the purchase method of accounting. Assets and liabilities, including
software and hardware technology, and trade names were recorded at their
respective fair market values with $1,114,000 assigned to acquired in-process
technology based on an independent third-party appraisal. The entire amount
of the acquired in-process technology was expensed in the first quarter of 1996.
The Company has no commitments or agreements with respect to acquisitions or
other significant capital expenditures.
Recently Issued Accounting Pronouncements
Effective February 1997, the Financial Accounting Standards Board issued SFAS
No. 128, "Earnings per Share" ("EPS"). Implementation of SFAS No. 128 is
required for the periods ending after December 15, 1997. The standard
establishes new methods for computing and presenting EPS and replaces the
presentation of primary and fully-diluted EPS with basic and diluted EPS.
The new methods under this standard are not expected to have a significant
impact on the Company's EPS amounts.
<PAGE>
Safe Harbor
Forward looking statements contained in this filing are subject to the safe
harbor created by the Private Securities Litigation Reform Act of 1995 and
are highly dependent upon a variety of important factors which could cause
actual results to differ materially from those reflected in such forward
looking statements. These factors include the acceptance of the Company's
printer and software products by the market, and product offerings made by
its competitors. Profits will be affected by the Company's ability to
control manufacturing and operating costs. Due to the Company's large
investment portfolio, interest rate conditions will also have an impact on
results, as will foreign exchange rates due to the large percentage of the
Company's sales in international markets. When used in this document 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. Readers
of this release are referred to prior filings with the Securities and
Exchange Commission, for further discussions of factors that could affect
Zebra's future results.
<PAGE>
PART II. - OTHER INFORMATION
Item 1. Legal Proceedings
As of June 28, 1997, the Company has settled the pending litigation between
Zebra and Messrs. Carter and Flury, the former officers of VTI. The legal
actions initiated in March of 1996, have been settled out of court. Terms
are confidential and all payments have been completed. At the time of the
acquisition, an accrual for payments due to the VTI officers and management,
over a period of 3 years, was established. The amounts originally accrued
for Messrs. Carter and Flury were adequate to cover the settlement amounts.
In connection with the settlement of the litigation, the Company reduced
long-term liabilities by $1,999,000 and paid-in capital by $1,372,000.
Item 4. Submissions of Matters to a Vote of Security Holders
(a) The Annual Meeting of Stockholders of the Company was held on May 20, 1997.
(b) 1. The Stockholders voted to elect five directors to the Company's Board
of Directors, with the following votes:
<TABLE>
Authority Broker
Directors For Against Withheld Abstentions Non-Votes
<S> <C> <C> <C> <C> <C>
Gerhard Cless 87,204,133 ---- 61,878 ---- ----
Edward Kaplan 87,204,193 ---- 61,818 ---- ----
Christopher Knowles 87,204,093 ---- 61,918 ---- ----
David Riley 87,204,193 ---- 61,818 ---- ----
Michael Smith 87,204,193 ---- 61,818 ---- ----
</TABLE>
2. The Stockholders also voted to ratify the selection by the Board of
Directors of KPMG Peat Marwick LLP as the independent auditors of the
Company's financial Statements for the fiscal year ending December 31, 1997 \
with the following vote:
<TABLE>
Authority Broker
For Against Withheld Abstentions Non-Votes
<S> <C> <C> <C> <C> <C>
87,233,836 16,703 ---- 15,472 ----
</TABLE?
<PAGE>
3. The Stockholders also voted to increase the authorized shares of the
Company's Class A Common Stock from 35,000,000 to 50,000,000 shares with the
following vote:
</TABLE>
<TABLE>
Authority Broker
For Against Withheld Abstentions Non-Votes
<S> <C> <C> <C> <C> <C>
86,356,348 775,081 ---- 26,451 108,131
</TABLE>
4. The Stockholders also voted on the adoption of Zebra Technologies
Corporation 1997 Stock Option Plan with the following vote:
<TABLE>
Authority Broker
For Against Withheld Abstentions Non-Votes
<S> <C> <C> <C> <C> <C>
88,792,025 1,381,102 ---- 92,884 ----
</TABLE>
5. The Stockholders also voted on the adoption of Zebra Technologies
Corporation 1997 Non-Employee Directors' Stock Option Plan with the following
vote:
<TABLE>
Authority Broker
For Against Withheld Abstentions Non-Votes
<S> <C> <C> <C> <C> <C>
86,322,358 85,612 ---- 92,041 ----
</TABLE>
<PAGE>
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits.
3.1. Amendment to Certificate of Incorporation of Registrant
15. Acknowledgment of Independent Certified Public Accountants
Regarding Independent Auditors' Review Report
27. Financial Data Schedule
(b) Reports.
No reports on Form 8-K have been filed by the Registrant for the
quarterly period covered by this report.
<PAGE>
Exhibit 3.1
CERTIFICATE OF AMENDMENT OF CERTIFICATE OF INCORPORATION OF
ZEBRA TECHNOLOGIES CORPORATION
ZEBRA TECHNOLOGIES CORPORATION (the "Corporation"), a corporation organized
and existing under and by virtue of the General Corporation Law of the State
of Delaware (the "Act"), DOES HEREBY CERTIFY THAT:
1. In accordance with the provisions of Section 242 of the Act, and the
Certificate of Incorporation of the Corporation (the "Certificate of
Incorporation"), an amendment to the Certificate of Incorporation has been
duly adopted by the Board of Directors acting at a duly convened meeting
and approved by the requisite votes of the stockholders of the Corporation
entitled to vote thereon voting at a duly convened meeting.
2. Said amendment amends the first paragraph of Article Fourth of the
Certificate of Incorporation so that, as amended, said first paragraph of
Article Fourth, in its entirety, shall read as follows:
"Fourth: The total number of shares of capital stock of all classes which the
Corporation shall have authority to issue is 88,358,189 shares, which shall
be divided as follows: (i) 50,000,000 shares of Class A common stock, par
value $.01 per share (the "Class A Common Stock"), (ii) 28,358,189 shares of
Class B common stock, par value $.01 per share (the "Class B Common Stock"),
and (iii) 10,000,000 shares of preferred stock, par value $.01 per share (the
"Preferred Stock"). "Common Stock", when used herein, shall mean the Class A
Common Stock and the Class B Common Stock together."
3. Said amendment amends the second sentence of the first paragraph of
Section 4.A.5. of the Certificate of Incorporation so that, as amended, said
sentence, in its entirety, shall read as follows:
"Upon such conversion, the total number of shares of Class A Common Stock
the Corporation shall have authority to issue shall be 78,358,189 and the
total number of shares of Class B Common Stock the Corporation shall have
authority to issue shall be zero."
IN WITNESS WHEREOF, ZEBRA TECHNOLOGIES CORPORATION has caused this
Certificate of Amendment to be executed this 25th day of June, 1997.
ZEBRA TECHNOLOGIES CORPORATION
By: /s/ Edward L. Kaplan
Edward L. Kaplan
Chairman and Chief Executive Officer
<PAGE>
Exhibit 15
Acknowledgment of Independent Certified Public
Accountants Regarding Independent Auditors'
Review Report
Zebra Technologies Corporation
333 Corporate Woods Parkway
Vernon Hills, Illinois 60061-3109
Ladies and Gentlemen:
With respect to the registration statements (No. 33-44706 and No. 33-72774)
on Form S-8 of Zebra Technologies Corporation, we acknowledge our awareness
of the use therein of our report dated July 15, 1997 related to our review of
interim financial information as of June 28, 1997.
Pursuant to Rule 436(c) under the Securities Act of 1933, such report is not
considered part of a registration statement prepared or certified by an
accountant or a report prepared or certified by an accountant within the
meaning of Sections 7 and 11 of the Act.
Very truly yours,
/s/KPMG Peat Marwick LLP
Chicago, Illinois
August 1, 1997
<PAGE>
Exhibit 27
The schedule contains summary financial information extracted from Zebra
Technologies Corporation and subsidiaries consolidated balance sheets for
June 28, 1997 and consolidated statements of earnings for the six months
ended June 28, 1997 and is qualified in its entirety by reference to such
financial statements.
ZEBRA TECHNOLOGIES CORPORATION
Appendix A to Item 601(c) of Regulation S-K
Commercial and Industrial Companies
Article 5 of Regulation S-X
<TABLE>
Item Number Item Description Amount
<S> <C> <C>
5-02(1) cash and cash items 11,583
5-02(2) marketable securities 100,169
5-02(3)(a)(1) notes and accounts receivable-trade 31,054
5-02(4) allowances for doubtful accounts (1,300)
5-02(6) inventory 22,525
5-02(9) total current assets 168,145
5-02(13) property, plant and equipment 24,825
5-02(14) accumulated depreciation (12,754)
5-02(18) total assets 180,904
5-02(21) total current liabilities 22,927
5-02(22) bonds, mortgages and similar debt 0
5-02(28) preferred stock-mandatory redemption 0
5-02(29) preferred stock-no mandatory redemption 0
5-02(30) common stock 242
5-02(31) other stockholder's equity 157,141
5-02(32) total liabilities and stockholder's equity 180,904
5-03(b)1(a) net sales of tangible products 47,086
5-03(b)1 total revenues 47,844
5-03(b)2(a) cost of tangible goods sold 23,262
5-03(b)2 total costs and expenses applicable to
sales and revenues 23,546
5-03(b)3 other costs and expenses 11,393
5-03(b)5 provision for doubtful accounts and notes 372
5-03(b)(8) interest and amortization of debt discount 3
5-03(b)(10) income before income taxes 14,766
5-03(b)11 income tax expense 5,121
5-03(b)(14) income/loss 9,645
5-03(b)(15) discontinued operations (2,364)
5-03(b)(17) extraordinary items 0
5-03(b)(18) cumulative effect- changes in accounting
principles 0
5-03(b)(19) net income or loss 7,281
5-03(b)(20) earnings per share-primary 0.30
5-03(b)(20) earnings per share-fully diluted 0.30
</TABLE>
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
ZEBRA TECHNOLOGIES CORPORATION
Date: August 1, 1997 By: /s/Edward L. Kaplan
Edward L. Kaplan
Chief Executive Officer
Date: August 1, 1997 By: /s/Charles R. Whitchurch
Charles R. Whitchurch
Chief Financial Officer
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> JUN-28-1997
<CASH> 11583
<SECURITIES> 100169
<RECEIVABLES> 31054
<ALLOWANCES> (1300)
<INVENTORY> 22525
<CURRENT-ASSETS> 168145
<PP&E> 24825
<DEPRECIATION> (12754)
<TOTAL-ASSETS> 180904
<CURRENT-LIABILITIES> 22927
<BONDS> 0
0
0
<COMMON> 242
<OTHER-SE> 157141
<TOTAL-LIABILITY-AND-EQUITY> 180904
<SALES> 47086
<TOTAL-REVENUES> 47844
<CGS> 23262
<TOTAL-COSTS> 23546
<OTHER-EXPENSES> 11393
<LOSS-PROVISION> 372
<INTEREST-EXPENSE> 3
<INCOME-PRETAX> 14766
<INCOME-TAX> 5121
<INCOME-CONTINUING> 9645
<DISCONTINUED> (2364)
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 7281
<EPS-PRIMARY> 0.30
<EPS-DILUTED> 0.30
</TABLE>
