GAAP net sales were $942 million in the fourth quarter of 2016 compared to $951 million in the fourth quarter of 2015. Fourth quarter 2016 gross profit was $432 million compared to $428 million in the comparable prior year period. Net income for the fourth quarter of 2016 was $17 million, or $0.34 per diluted share, compared with a net loss of $28 million, or $0.53 per diluted share, for the fourth quarter of 2015.
Adjusted gross margin for the quarter was 46.1%, compared to 45.2% in the prior year period. Adjusted EBITDA for the fourth quarter of 2016 was $179 million, or 19.0% of adjusted net sales compared to $152 million, or 15.9% of adjusted net sales for the fourth quarter of 2015, primarily due to higher gross margins and lower operating expenses.
“We delivered solid fourth-quarter and full-year results, driven largely by strong demand for our innovative solutions. We returned to organic sales growth, expanded gross margin and reduced operating expenses, resulting in a significant improvement in profitability,” said Anders Gustafsson, CEO of Zebra Technologies.
Free cash flow was $99 million and $295 million in the fourth quarter and full year of 2016, respectively. As of Dec. 31, 2016, the company had cash and cash equivalents of $156 million and total long-term debt of $2.6 billion.
“Zebra entered 2017 with an unmatched portfolio of innovative solutions, a solid backlog, and a healthy pipeline of opportunities to drive profitable sales growth,” Gustafsson added. “Additionally, we are committed to further deleveraging our capital structure and are on track to exceed our two-year debt paydown target of $650 million.”