First-Quarter Financial Highlights
-
Strong first-quarter net sales of $1,066 million; year-over-year
growth of 9.1% - Net income of $115 million and net income per diluted share of $2.12
- Non-GAAP diluted EPS increased 14% year-over-year to $2.92
-
Adjusted EBITDA increased 10.3% year-over-year to $225 million; and
adjusted EBITDA margin expanded 20 bps year-over-year to 21.1%
LINCOLNSHIRE, Ill.–(BUSINESS WIRE)–lt;a href=”https://twitter.com/search?q=%24ZBRA&src=ctag” target=”_blank”gt;$ZBRAlt;/agt; lt;a href=”https://twitter.com/hashtag/earnings?src=hash” target=”_blank”gt;#earningslt;/agt;–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 first quarter
ended March 30, 2019.
“Our first quarter results were driven by solid execution and strong
demand for our leading portfolio of solutions. We outperformed in data
capture and mobile computing and managed costs well,” said Anders
Gustafsson, chief executive officer of Zebra Technologies. “We are
increasing our 2019 sales and profit outlook based on our solid start to
the year and recent acquisition of Temptime Corporation. We remain
focused on our enterprise asset intelligence vision to drive innovative
solutions for our customers.”
| $ in millions, except per share amounts | 1Q19 | 1Q18 | Change | |||||||||||
| Select reported measures: | ||||||||||||||
| Net sales | $ | 1,066 | $ | 977 | 9.1 | % | ||||||||
| Gross profit | 501 | 465 | 7.7 | % | ||||||||||
| Net income | 115 | 109 | 5.5 | % | ||||||||||
| Net income per diluted share | $ | 2.12 | $ | 2.01 | 5.5 | % | ||||||||
| Select Non-GAAP measures: | ||||||||||||||
| Organic net sales growth | 7.9 | % | ||||||||||||
| Adjusted gross profit | 503 | 466 | 7.9 | % | ||||||||||
| Adjusted gross margin | 47.2 | % | 47.7 | % | (50) bps | |||||||||
| Adjusted EBITDA | 225 | 204 | 10.3 | % | ||||||||||
| Adjusted EBITDA margin | 21.1 | % | 20.9 | % | 20 bps | |||||||||
| Non-GAAP net income | $ | 160 | $ | 138 | 15.9 | % | ||||||||
| Non-GAAP earnings per diluted share | $ | 2.92 | $ | 2.56 | 14.1 | % | ||||||||
Reported (GAAP) results
Net sales were $1,066 million in the first quarter of 2019 compared to
$977 million in the first quarter of 2018. Net sales in the Enterprise
Visibility & Mobility (“EVM”) segment were $709 million in the first
quarter of 2019 compared with $625 million in the first quarter of 2018.
Asset Intelligence & Tracking (“AIT”) segment net sales were $357
million in the first quarter of 2019 compared to $352 million in the
prior year period. First-quarter 2019 gross profit was $501 million
compared to $465 million in the comparable prior year period. Net income
for the first quarter of 2019 was $115 million, or $2.12 per diluted
share, compared to net income of $109 million, or $2.01 per diluted
share, for the first quarter of 2018.
Adjusted (Non-GAAP) results
Consolidated net sales were $1,066 million in the first quarter of 2019
compared to $977 million in the prior year period, an increase of 9.1%.
Consolidated organic net sales growth for the first quarter was 7.9%
reflecting solid growth in APAC, EMEA and North America. First-quarter
year-over-year organic net sales growth was 11.6% in the EVM segment and
1.2% in the AIT segment.
Consolidated adjusted gross margin was 47.2% in the first quarter of
2019, compared to 47.7% in the prior year period. This decrease was
primarily due to unfavorable business mix. Adjusted operating expenses
increased in the first quarter of 2019 to $297 million from $282 million
in the prior year period primarily due to investments to accelerate
organic growth as well as inclusion of expenses from recently acquired
Xplore Technologies and Temptime Corporation.
Adjusted EBITDA for the first quarter of 2019 increased to $225 million,
or 21.1% of adjusted net sales, compared to $204 million, or 20.9% of
adjusted net sales, for the first quarter of 2018 primarily due to lower
operating expenses as a percentage of net sales.
Non-GAAP net income for the first quarter of 2019 was $160 million, or
$2.92 per diluted share, compared with $138 million, or $2.56 per
diluted share, for the first quarter of 2018.
Balance Sheet and Cash Flow
As of March 30, 2019, the company had cash and cash equivalents of $61
million and total debt of $1,744 million.
Free cash flow in the first quarter was $27 million. The company
generated $42 million of operating cash flow and incurred capital
expenditures of $15 million. The company had net borrowings of $146
million, primarily to fund the acquisition of Temptime Corporation.
Outlook
Second Quarter 2019
The company expects second-quarter 2019 net sales to increase
approximately 7% to 9% from the second quarter of 2018. This expectation
includes an approximately 250-300 basis point additive impact from
recently acquired businesses, and an approximately 50 basis point
negative impact from foreign currency translation.
Adjusted EBITDA margin is expected to be in the range of 20% to 21% for
the second quarter of 2019. Non-GAAP earnings per diluted share are
expected to be in the range of $2.80 to $2.95. This assumes an adjusted
effective tax rate of approximately 16% to 17%.
Full Year 2019
The company expects full-year 2019 net sales to increase approximately
5% to 8% from 2018. This expectation includes an approximately 2
percentage point positive impact from recently acquired businesses, and
an approximately 50 basis point negative impact from foreign currency
translation.
Adjusted EBITDA margin is expected to be in the range of 21% and 22% for
the full-year 2019, favorable to 2018.
For the full-year 2019, the company expects to generate free cash flow
of at least $625 million.
Conference Call Notification
Investors are invited to listen to a live webcast of Zebra’s conference
call regarding the company’s financial results for the first quarter of
2019. The conference call will be held today, Tuesday, Apr. 30, 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) empowers the front line of business in
retail/ecommerce, manufacturing, transportation and logistics,
healthcare and other industries to achieve a performance edge. With more
than 10,000 partners across 100 countries, we deliver industry-tailored,
end-to-end solutions that intelligently connect people, assets and data
to help our customers make business-critical decisions. Our
market-leading solutions elevate the shopping experience, track and
manage inventory as well as improve supply chain efficiency and patient
care. Ranked on Forbes’ list of America’s Best Employers for the last
three years, Zebra helps our customers capture their edge. For more
information, visit www.zebra.com/
or sign up for our news
alerts. Follow us on LinkedIn,
Twitter
and Facebook.
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 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 and 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
its debt, 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 could also
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 our 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 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,
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,” “EBITDA,”
“Adjusted EBITDA,” “Non-GAAP net income,” “Non-GAAP earnings per share,”
“free cash flow,” “organic net sales growth,” 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, for certain currencies,
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 both the current year
and 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) |
|||||||||
|
March 30, 2019 |
December 31, |
||||||||
| (Unaudited) | |||||||||
| Assets | |||||||||
| Current assets: | |||||||||
| Cash and cash equivalents | $ | 61 | $ | 44 | |||||
|
Accounts receivable, net of allowances for doubtful accounts of $2 million and $3 million as of March 30, 2019 and December 31, 2018, respectively |
488 | 520 | |||||||
| Inventories, net | 510 | 520 | |||||||
| Income tax receivable | 21 | 24 | |||||||
| Prepaid expenses and other current assets | 62 | 54 | |||||||
| Total Current assets | 1,142 | 1,162 | |||||||
| Property, plant and equipment, net | 257 | 249 | |||||||
| Right-of-use lease asset | 110 | — | |||||||
| Goodwill | 2,567 | 2,495 | |||||||
| Other intangibles, net | 311 | 232 | |||||||
| Long-term deferred income taxes | 97 | 114 | |||||||
| Other long-term assets | 92 | 87 | |||||||
| Total Assets | $ | 4,576 | $ | 4,339 | |||||
| Liabilities and Stockholders’ Equity | |||||||||
| Current liabilities: | |||||||||
| Current portion of long-term debt | $ | 131 | $ | 157 | |||||
| Accounts payable | 457 | 552 | |||||||
| Accrued liabilities | 275 | 322 | |||||||
| Deferred revenue | 222 | 210 | |||||||
| Income taxes payable | 61 | 60 | |||||||
| Total Current liabilities | 1,146 | 1,301 | |||||||
| Long-term debt | 1,605 | 1,434 | |||||||
| Long-term lease liabilities | 102 | — | |||||||
| Long-term deferred income taxes | 1 | 8 | |||||||
| Long-term deferred revenue | 178 | 172 | |||||||
| Other long-term liabilities | 77 | 89 | |||||||
| Total Liabilities | 3,109 | 3,004 | |||||||
| 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 | 305 | 294 | |||||||
|
Treasury stock at cost, 18,176,120 and 18,280,673 shares as of March 30, 2019 and December 31, 2018, respectively |
(611 | ) | (613 | ) | |||||
| Retained earnings | 1,803 | 1,688 | |||||||
| Accumulated other comprehensive loss | (31 | ) | (35 | ) | |||||
| Total Stockholders’ Equity | 1,467 | 1,335 | |||||||
| Total Liabilities and Stockholders’ Equity | $ | 4,576 | $ | 4,339 | |||||
|
ZEBRA TECHNOLOGIES CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (In millions, except share data) (Unaudited) |
|||||||||
| Three Months Ended | |||||||||
|
March 30, 2019 |
March 31, 2018 |
||||||||
| Net sales: | |||||||||
| Tangible products | $ | 924 | $ | 839 | |||||
| Services and software | 142 | 138 | |||||||
| Total Net sales | 1,066 | 977 | |||||||
| Cost of sales: | |||||||||
| Tangible products | 471 | 423 | |||||||
| Services and software | 94 | 89 | |||||||
| Total Cost of sales | 565 | 512 | |||||||
| Gross profit | 501 | 465 | |||||||
| Operating expenses: | |||||||||
| Selling and marketing | 122 | 120 | |||||||
| Research and development | 111 | 101 | |||||||
| General and administrative | 76 | 71 | |||||||
| Amortization of intangible assets | 28 | 23 | |||||||
| Acquisition and integration costs | 4 | 2 | |||||||
| Exit and restructuring costs | 1 | 4 | |||||||
| Total Operating expenses | 342 | 321 | |||||||
| Operating income | 159 | 144 | |||||||
| Other expenses: | |||||||||
| Foreign exchange loss | (3 | ) | — | ||||||
| Interest expense, net | (24 | ) | (11 | ) | |||||
| Other, net | (1 | ) | — | ||||||
| Total Other expenses, net | (28 | ) | (11 | ) | |||||
| Income before income tax | 131 | 133 | |||||||
| Income tax expense | 16 | 24 | |||||||
| Net income | $ | 115 | $ | 109 | |||||
| Basic earnings per share | $ | 2.14 | $ | 2.04 | |||||
| Diluted earnings per share | $ | 2.12 | $ | 2.01 | |||||
|
ZEBRA TECHNOLOGIES CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (In millions) (Unaudited) |
|||||||||
| Three Months Ended | |||||||||
|
March 30, 2019 |
March 31, 2018 |
||||||||
| Cash flows from operating activities: | |||||||||
| Net income | $ | 115 | $ | 109 | |||||
|
Adjustments to reconcile net income to net cash provided by operating activities: |
|||||||||
| Depreciation and amortization | 47 | 43 | |||||||
| Amortization of debt issuance costs and discounts | 1 | 2 | |||||||
| Share-based compensation | 10 | 10 | |||||||
| Deferred income taxes | (10 | ) | (2 | ) | |||||
| Unrealized loss/(gain) on forward interest rate swaps | 8 | (12 | ) | ||||||
| Other, net | 1 | (1 | ) | ||||||
| Changes in operating assets and liabilities: | |||||||||
| Accounts receivable, net | 28 | 9 | |||||||
| Inventories, net | 23 | 6 | |||||||
| Other assets | (10 | ) | (7 | ) | |||||
| Accounts payable | (97 | ) | (12 | ) | |||||
| Accrued liabilities | (94 | ) | (74 | ) | |||||
| Deferred revenue | 18 | 19 | |||||||
| Income taxes | 2 | 22 | |||||||
| Other operating activities | — | 4 | |||||||
| Net cash provided by operating activities | 42 | 116 | |||||||
| Cash flows from investing activities: | |||||||||
| Purchases of property, plant and equipment | (15 | ) | (18 | ) | |||||
| Acquisition of businesses, net of cash acquired | (179 | ) | — | ||||||
| Proceeds from sale of long-term investments | 10 | — | |||||||
| Purchases of long-term investments | — | (2 | ) | ||||||
| Net cash used in investing activities | (184 | ) | (20 | ) | |||||
| Cash flows from financing activities: | |||||||||
| Payments of long-term debt | (37 | ) | (95 | ) | |||||
| Proceeds from issuance of long-term debt | 183 | — | |||||||
| Other financing activities | 15 | 3 | |||||||
| Net cash provided by/(used in) financing activities | 161 | (92 | ) | ||||||
| Effect of exchange rate changes on cash | (2 | ) | (2 | ) | |||||
| Net increase in cash and cash equivalents | 17 | 2 | |||||||
| Cash and cash equivalents at beginning of period | 44 | 62 | |||||||
| Cash and cash equivalents at end of period | $ | 61 | $ | 64 | |||||
| Supplemental disclosures of cash flow information: | |||||||||
| Income taxes paid | $ | 22 | $ | 2 | |||||
| Interest paid | $ | 16 | $ | 26 | |||||
|
ZEBRA TECHNOLOGIES CORPORATION AND SUBSIDIARIES RECONCILIATION OF ORGANIC NET SALES GROWTH (Unaudited) |
||||||||||
| Three Months Ended | ||||||||||
| March 30, 2019 | ||||||||||
| AIT | EVM | Consolidated | ||||||||
| Reported GAAP Consolidated Net sales growth | 1.4 | % | 13.4 | % | 9.1 | % | ||||
| Adjustments: | ||||||||||
| Impact of foreign currency translation(1) | 1.0 | % | 0.8 | % | 0.9 | % | ||||
| Impact of acquisition(2) | (1.2 | )% | (2.6 | )% | (2.1 | )% | ||||
| Organic Net sales growth | 1.2 | % | 11.6 | % | 7.9 | % | ||||
| (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, for certain currencies, the current period results at the currency exchange rates used in the comparable prior year period, rather than the exchange rates in effect during the current period. In addition, we exclude the impact of the company’s foreign currency hedging program in both the current and prior year periods. |
| (2) |
For purposes of computing Organic Net sales, amounts directly attributable to the Xplore acquisition (included in our consolidated results beginning August 14, 2018) and the Temptime acquisition (included in our consolidated results beginning February 21, 2019) will be excluded for 12-months following the acquisition date. |
|
ZEBRA TECHNOLOGIES CORPORATION AND SUBSIDIARIES RECONCILIATION OF GAAP TO NON-GAAP GROSS MARGIN (In millions) (Unaudited) |
|||||||||||||||||||||||||
| Three Months Ended | |||||||||||||||||||||||||
| March 30, 2019 | March 31, 2018 | ||||||||||||||||||||||||
| AIT | EVM | Consolidated | AIT | EVM | Consolidated | ||||||||||||||||||||
|
GAAP |
|||||||||||||||||||||||||
| Reported Net sales | $ | 357 | $ | 709 | $ | 1,066 | $ | 352 | $ | 625 | $ | 977 | |||||||||||||
| Reported Gross profit (1) | 184 | 318 | 501 | 183 | 282 | 465 | |||||||||||||||||||
| Gross Margin | 51.5 | % | 44.9 | % | 47.0 | % | 52.0 | % | 45.1 | % | 47.6 | % | |||||||||||||
|
Non-GAAP |
|||||||||||||||||||||||||
| Adjusted Net sales | $ | 357 | $ | 709 | $ | 1,066 | $ | 352 | $ | 625 | $ | 977 | |||||||||||||
| Adjusted Gross profit (2) | 184 | 319 | 503 | 183 | 283 | 466 | |||||||||||||||||||
| Adjusted Gross Margin | 51.5 | % | 45.0 | % | 47.2 | % | 52.0 | % | 45.3 | % | 47.7 | % | |||||||||||||
| (1) |
Fiscal 2019 consolidated results include corporate eliminations related to business acquisitions that are not reported in segment results. |
|
| (2) |
Adjusted Gross profit excludes purchase accounting adjustments and 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 | ||||||||||
|
March 30, 2019 |
March 31, 2018 |
|||||||||
| Net income | $ | 115 | $ | 109 | ||||||
| Adjustments to Cost of sales(1) | ||||||||||
| Purchase accounting adjustments | 1 | — | ||||||||
| Share-based compensation | 1 | 1 | ||||||||
| Total adjustments to Cost of sales | 2 | 1 | ||||||||
| Adjustments to Operating expenses(1) | ||||||||||
| Amortization of intangible assets | 28 | 23 | ||||||||
| Acquisition and integration costs | 4 | 2 | ||||||||
| Share-based compensation | 12 | 10 | ||||||||
| Exit and restructuring costs | 1 | 4 | ||||||||
| Total adjustments to Operating expenses | 45 | 39 | ||||||||
| Adjustments to Other expenses, net(1) | ||||||||||
| Amortization of debt issuance costs and discounts | 1 | 2 | ||||||||
| Investment loss | 1 | — | ||||||||
| Foreign exchange loss | 3 | — | ||||||||
| Forward interest rate swaps loss/(gain) | 8 | (12 | ) | |||||||
| Total adjustments to Other expenses, net | 13 | (10 | ) | |||||||
| Income tax effect of adjustments(2) | ||||||||||
| Reported income tax expense | 16 | 24 | ||||||||
| Adjusted income tax | (31 | ) | (25 | ) | ||||||
| Total adjustments to income tax | (15 | ) | (1 | ) | ||||||
| Total adjustments | 45 | 29 | ||||||||
| Non-GAAP Net income | $ | 160 | $ | 138 | ||||||
| GAAP earnings per share | ||||||||||
| Basic | $ | 2.14 | $ | 2.04 | ||||||
| Diluted | $ | 2.12 | $ | 2.01 | ||||||
| Non-GAAP earnings per share | ||||||||||
| Basic | $ | 2.96 | $ | 2.59 | ||||||
| Diluted | $ | 2.92 |
|
$ | 2.56 | |||||
| (1) | Presented on a pre-tax basis. | |
| (2) |
Represents adjustments to the GAAP income tax expense commensurate with pre-tax non-GAAP adjustments and to exclude the impacts of certain discrete income tax items. |
|
ZEBRA TECHNOLOGIES CORPORATION AND SUBSIDIARIES GAAP to NON-GAAP RECONCILIATION TO EBITDA (In millions) (Unaudited) |
|||||||||
| Three Months Ended | |||||||||
|
March 30, 2019 |
March 31, 2018 |
||||||||
| Net income | $ | 115 | $ | 109 | |||||
| Add back: | |||||||||
| Depreciation | 19 | 20 | |||||||
| Amortization of intangible assets | 28 | 23 | |||||||
| Total Other expenses, net | 28 | 11 | |||||||
| Income tax expense | 16 | 24 | |||||||
| EBITDA (Non-GAAP) | 206 | 187 | |||||||
| Adjustments to Cost of sales | |||||||||
| Purchase accounting adjustments | 1 | — | |||||||
| Share-based compensation | 1 | 1 | |||||||
| Total adjustments to Cost of sales | 2 | 1 | |||||||
| Adjustments to Operating expenses | |||||||||
| Acquisition and integration costs | 4 | 2 | |||||||
| Share-based compensation | 12 | 10 | |||||||
| Exit and restructuring costs | 1 | 4 | |||||||
| Total adjustments to Operating expenses | 17 | 16 | |||||||
| Total adjustments to EBITDA | 19 | 17 | |||||||
| Adjusted EBITDA (Non-GAAP) | $ | 225 | $ | 204 | |||||
| Adjusted EBITDA % of Adjusted Net Sales | 21.1 | % | 20.9 | % | |||||
|
FREE CASH FLOW |
||||||||
| Three Months Ended | ||||||||
|
March 30, 2019 |
March 31, 2018 |
|||||||
| Net cash provided by operating activities | $ | 42 | $ | 116 | ||||
| Less: Purchases of property, plant and equipment | (15 | ) | (18 | ) | ||||
| Free cash flow (Non-GAAP)(1) | $ | 27 | $ | 98 | ||||
| (1) |
Free cash flow is defined as Net cash 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. |
Contacts
Investors
Michael Steele, CFA, IRC
Vice
President, Investor Relations
Phone: + 1 847 793 6707
[email protected]
Media
Therese Van Ryne
Director,
Global Public Relations
Phone: + 1 847 370 2317
[email protected]
