Zebra Technologies Corporation (NASDAQ:ZBRA) Q4 2019 Earnings Conference Call - Final Transcript

Feb 13, 2020 • 08:30 am ET


Zebra Technologies Corporation (NASDAQ:ZBRA) Q4 2019 Earnings Conference Call - Final Transcript


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Good day and welcome to the Q4 and Full Year 2019 Zebra Technologies Earnings Conference Call. All participants will be in listen-only mode. [Operator Instructions] After today's presentation, there will be an opportunity to ask questions. Please note this event is being recorded. I would now like to turn the conference over to Mike Steele, Vice President, Investor Relations. Please go ahead.

Michael Steele

Good morning and thank you for joining us today. Before we begin, I need to inform you that certain statements made on this call are forward-looking and subject to the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. These statements are based on current expectations and assumptions and are subject to risks and uncertainties. Actual results could differ materially due to factors discussed in our filings with the Securities and Exchange Commission.

During this call, we will make reference to non-GAAP financial measures as we describe our business performance. You can find reconciliations of our GAAP to non-GAAP results in today's earnings press release and at the end of this slide presentation. This presentation will include prepared remarks from Anders Gustafsson, our Chief Executive Officer and Olivier Leonetti, our Chief Financial Officer. Anders will begin by discussing our fourth quarter and full year highlights. Then Olivier will provide additional detail on the financials and discuss our 2020 outlook. Anders will conclude with recent progress made on advancing our Enterprise Asset Intelligence vision. Following the prepared remarks, Joe Heel, our Senior Vice President of Global Sales will join us as we take your questions.

Also throughout this presentation, unless otherwise indicated, our references to sales growth are year-over-year on a constant currency basis and exclude results from the recently acquired Cortexica, Temptime, and Profitect businesses for the 12 months following each acquisition. This presentation is being simulcast on our website at investors.zebra.com and will be archived there for at least one year. Now, I'll turn the call over to Anders.

Anders Gustafsson

Thank you, Mike. Good morning everyone and thank you for joining us. Our team drove profitable growth in the fourth quarter. As you can see on slide 4, we reported net sales growth of 4.6%, adjusted EBITDA margin of 21.4%, which expanded by 30 basis points, and non-GAAP diluted earnings per share of $3.56, a 15% increase from the prior year. We posted a record level of EPS, although it was at the lower end of our guidance range due to tariff expenses at the high end of our expectations and prioritizing a higher mix of large mobile computing year-end budget orders, each of which impacted gross margin.

Our diversified business is enabling us to post solid growth despite an uneven global macro economy. The continued soft environment in China was more than offset by growth in our North America and EMEA regions. We grew all our major verticals led by healthcare, retail and transportation and logistics. We drove double-digit growth in our enterprise mobile computing portfolio which capped another exceptional year. Our customers utilize our