For the first quarter of 2015, non-GAAP net income was $72.4 million, or $1.39 per diluted share, compared with $48.8 million, or $0.96 per diluted share, for the first quarter of 2014. Adjusted EBITDA for the first quarter of 2015 was $152.2 million, versus $70.6 million for the 2014 first quarter. The company’s calculation of non-GAAP net income adjusts for certain items on a tax-effected basis, including stock-based compensation expense, acquisition and integration costs, exit and restructuring costs, purchase accounting adjustments, and amortization of intangible assets.
“We started the year with strong, positive momentum, as business activity remained high specifically in North America and Europe,” said Anders Gustafsson, Zebra’s CEO. “Our partners and customers are responding enthusiastically to our greatly expanded portfolio of solutions and capabilities, and our enhanced focus on giving them improved visibility into their assets, transactions and people for better enterprise asset intelligence.
“During the quarter we also made material progress on achieving our cost-synergy targets, pursuing growth initiatives and integrating Zebra with the Enterprise business acquired from Motorola Solutions in October,” he added. “The favorable business trends are continuing into the second quarter, as Zebra is well positioned to benefit over the long term from the convergence of technology trends in the Internet of Things, mobility and cloud computing.”
Net sales increased 209.8% from the comparable quarter a year ago. The Enterprise business acquired from Motorola Solutions contributed $561.6 million to 2015 first quarter sales, including a reduction in sales for purchase accounting adjustments of $5.6 million related to service contracts acquired with the Enterprise business.
Sales of legacy Zebra totaled $331.6 million, up 15.0% from $288.3 million for the first quarter of 2014. The effect of movements in foreign currency, net of hedges, reduced sales on legacy Zebra by $2.4 million.
Gross margin for the first quarter of 2015 of 45.8%, compared with 51.3% for 2014, reflects the changing mix of products and services sold during the quarter, including Enterprise products which generally have lower gross margins than legacy Zebra products.
Operating expenses for the first quarter of 2015 of $389.7 million, increased by $295.2 million from the prior year’s first quarter, primarily as a result of the Enterprise acquisition. Operating expenses for the first quarter of 2015 include $37.5 million in acquisition, integration, exit and restructuring costs, versus $5.2 million for the prior year, and $67.6 million in amortization of intangible assets, compared with $2.7 million for the first quarter of 2014.
As of April 4, 2015, Zebra had cash of $329.5 million, accounts receivable of $637.9 million, inventories of $405.5 million, and long-term debt of $3.1 billion.
Zebra announced its financial forecast for the second quarter of 2015. The company expects net sales within a range of $865 million to $895 million. This forecast incorporates an expectation of year-over-year growth of 9% to 13% in constant currency, on a proforma basis. Non-GAAP diluted earnings are expected in the range of $1.00 and $1.25 per share. Adjusted EBITDA are forecast within a range of $130 million and $145 million for the second quarter of 2015.