Motorola Solutions Reports First-Quarter 2015 Financial Results

DEFINITIONS

1 Amounts attributable to Motorola Solutions, Inc. common shareholders.

2Non-GAAP financial information excludes from GAAP results the effects of share-based compensation expense, intangible assets amortization expense and highlighted items.

3 Net debt represents cash and cash equivalents less long-term debt, including current portion

4 Business outlook excludes share-based compensation expense, intangible assets amortization expense and charges associated with items typically highlighted by the company in its quarterly earnings releases.

5 Based on currency rates as of May 4, 2015.

ABOUT MOTOROLA SOLUTIONS

Motorola Solutions (NYSE: MSI) creates innovative, mission-critical communication solutions and services that help public safety and commercial customers build safer cities and thriving communities. For ongoing news, visit www.motorolasolutions.com/newsroom or subscribe to a news feed.

MOTOROLA, MOTOROLA SOLUTIONS and the Stylized M Logo are trademarks or registered trademarks of Motorola Trademark Holdings, LLC and are used under license. All other trademarks are the property of their respective owners. ©2015 Motorola Solutions, Inc. All rights reserved.

     
GAAP-1
Motorola Solutions, Inc. and Subsidiaries
Condensed Consolidated Statements of Operations
(In millions, except per share amounts)
     
Three Months Ended
April 4, 2015 March 29, 2014
Net sales from products $ 758 $ 752
Net sales from services   465     476  
Net sales 1,223 1,228
 
Costs of products sales 359 350
Costs of services sales   316     301  
Costs of sales 675 651
   
Gross margin   548     577  
 
Selling, general and administrative expenses 256 307
Research and development expenditures 159 174
Other charges (income) 12 (12 )
Intangibles amortization   2     1  
Operating earnings   119     107  
 
Other income (expense):
Interest expense, net: (40 ) (25 )
Gains on sales of investments and businesses, net 46 7
Other   3     -  
Total other income (expense)   9     (18 )
Earnings from continuing operations before income taxes 128 89
Income tax expense   40     4  
Earnings from continuing operations 88 85
-
Earnings (loss) from discontinued operations, net of tax   (13 )   42  
Net earnings 75 127
 
Less: Earnings attributable to noncontrolling interests   1     -  
Net earnings attributable to Motorola Solutions, Inc. $ 74   $ 127  
 
Amounts attributable to Motorola Solutions, Inc. common shareholders
Earnings from continuing operations, net of tax $ 87 $ 85
Earnings (loss) from discontinued operations, net of tax   (13 )   42  
Net earnings attributable to Motorola Solutions, Inc. $ 74   $ 127  
 

Earnings (loss) per common share

Basic:
Continuing operations $ 0.40 $ 0.33
Discontinued operations   (0.06 )   0.17  
$ 0.34   $ 0.50  
 
Diluted:
Continuing operations $ 0.40 $ 0.33
Discontinued operations   (0.06 )   0.16  
$ 0.34   $ 0.49  
 

Weighted average common shares outstanding

Basic 215.3 254.1
Diluted   217.8     258.3  
 
     
Percentage of Net Sales*
Net sales from products 62.0 % 61.2 %
Net sales from services   38.0 %   38.8 %
Net sales   100 %   100 %
 
Costs of products sales 47.4 % 46.5 %
Costs of services sales   68.0 %   63.2 %
Costs of sales 55.2 % 53.0 %
   
Gross margin   44.8 %   47.0 %
 
Selling, general and administrative expenses 20.9 % 25.0 %
Research and development expenditures 13.0 % 14.2 %
Other charges (income) 1.0 % -1.0 %
Intangibles amortization   0.2 %   0.1 %
Operating earnings   9.7 %   8.7 %
 
Other income (expense):
Interest expense, net: -3.3 % -2.0 %
Gains on sales of investments and businesses, net 3.8 % 0.6 %
Other   0.2 %   0.0 %
Total other income (expense)   0.7 %   -1.5 %
Earnings from continuing operations before income taxes 10.5 % 7.2 %
Income tax expense   3.3 %   0.3 %
Earnings from continuing operations 7.2 % 6.9 %
Earnings (loss) from discontinued operations, net of tax   -1.1 %   3.4 %
Net earnings 6.1 % 10.3 %
 
Less: Earnings attributable to noncontrolling interests   0.1 %   0.0 %
Net earnings attributable to Motorola Solutions, Inc.   6.1 %   10.3 %
 
* Percentages may not add up due to rounding
     
GAAP-2
Motorola Solutions, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
(In millions)
   
April 4, December 31,
2015 2014
Assets
Cash and cash equivalents $ 3,353 $ 3,954
Accounts receivable, net 1,084 1,409
Inventories, net 381 345
Deferred income taxes 416 431
Other current assets   650     740
Total current assets   5,884     6,879
 
Property, plant and equipment, net 530 549
Investments 285 316
Deferred income taxes 2,179 2,151
Goodwill 390 383
Other assets   157     145
Total assets $ 9,425   $ 10,423
 
Liabilities and Stockholders' Equity
Current portion of long-term debt $ 4 $ 4
Accounts payable 437 540
Accrued liabilities   1,536     1,706
Total current liabilities   1,977     2,250
 
Long-term debt 3,392 3,396
Other liabilities 1,962 2,011
 
Total Motorola Solutions, Inc. stockholders' equity 2,086 2,735
 
Noncontrolling interests   8     31
   
Total liabilities and stockholders' equity $ 9,425   $ 10,423
 
Financial Ratios:
Net cash (debt)* $ (43 ) $ 554
 
*Net cash (debt) = Total cash - Current portion of long-term debt - Long-term debt
     
GAAP-3
Motorola Solutions, Inc. and Subsidiaries
Condensed Consolidated Statements of Cash Flows
(In millions)
     
Three Months Ended
April 4, 2015 March 29, 2014
Operating
Net earnings attributable to Motorola Solutions, Inc. $ 74 $ 127
Earnings attributable to noncontrolling interests   1     -  
Net earnings 75 127
Earnings (loss) from discontinued operations, net of tax   (13 )   42  
Earnings from continuing operations, net of tax 88 85
Adjustments to reconcile Earnings from continuing operations to Net cash provided by operating activities:
Depreciation and amortization 41 40
Gain on sale of building and land - (21 )
Non-cash other charges (income) 1 (3 )
Share-based compensation expense 21 28
Gains on sales of investments and businesses, net (46 ) (7 )
Deferred income taxes 23 22
Changes in assets and liabilities, net of effects of acquisitions, dispositions, and foreign currency translation adjustments:
Accounts receivable 309 160
Inventories (44 ) (12 )
Other current assets 26 16
Accounts payable and accrued liabilities (252 ) (175 )
Other assets and liabilities   (16 )   (121 )
Net cash provided by operating activities from continuing operations   151     12  
Investing
Acquisitions and investments, net (74 ) (4 )
Proceeds from sales of investments and businesses, net 88 11
Capital expenditures (33 ) (41 )
Proceeds from sales of property, plant and equipment   1     24  
Net cash used for investing activities from continuing operations   (18 )   (10 )
Financing
Repayment of debt (1 ) (1 )
Net proceeds from issuance of debt - 4
Issuance of common stock 46 14
Repurchase of common stock (653 ) (57 )
Excess tax benefit from share-based compensation 1 5
Payments of dividends (75 ) (79 )
Distributions from discontinued operations   -     26  
Net cash used for financing activities from continuing operations   (682 )   (88 )
Discontinued Operations
Net cash provided by operating activities from discontinued operations - 34
Net cash used for investing activities from discontinued operations - (8 )
Net cash used for financing activities from discontinued operations   -     (26 )
Net cash provided by discontinued operations   -     -  
 
Effect of exchange rate changes on cash and cash equivalents from continuing operations   (52 )   2  
Net decrease in cash and cash equivalents (601 ) (84 )
Cash and cash equivalents, beginning of period   3,954     3,225  
Cash and cash equivalents, end of period $ 3,353   $ 3,141  
 
Financial Ratios:
Free cash flow* $ 118 $ (29 )
 
*Free cash flow = Net cash provided by operating activities - Capital expenditures
         
GAAP-4
Motorola Solutions, Inc. and Subsidiaries
Segment Information
(In millions)
                 
Net Sales
     
Three Months Ended
   
April 4, March 29,  
2015 2014 % Change
Products $ 758 $ 752 1 %
Services   465     476   -2 %
Total Motorola Solutions $ 1,223   $ 1,228   0 %
                 
Operating Earnings
     
Three Months Ended
   
April 4, March 29,  
2015 2014 % Change
Products $ 64 $ 39 64 %
Services   55     68   -19 %
Total Motorola Solutions $ 119   $ 107   11 %
                 
Operating Earnings %
     
Three Months Ended
   
April 4, March 29,
2015 2014
Products 8.4 % 5.2 %
Services 11.8 % 14.3 %
Total Motorola Solutions   9.7 %   8.7 %
               
GAAP-5
Motorola Solutions, Inc. and Subsidiaries
Regional Revenue Information
(In millions)
 
During the first quarter of 2015, we restructured our regions operationally separating the Asia Pacific and Middle East region into two regions which are now reflected as Asia Pacific ("AP") and Middle East ("ME"). As a result of this change, our sales force is better aligned and focused on the growth opportunities within each geographic region. Accordingly, we now report net sales in the following five geographic regions: North America, Latin America, Europe and Africa ("EA"), AP, and ME.
 
The Company’s regional net sales under the new regional alignment and as previously reported were as follows:
                         
Revised regional sales
                     
Q1 Q2 Q3 Q4 FY FY FY
2014   2014   2014   2014   2014 2013 2012
North America 727 841 880 1,151 3,599 3,894 3,905
Latin America 125 134 109 140 508 518 577
EA 214 231 277 312 1,034 988 858
AP 141 168 151 185 645 749 816
ME   21     19     19     36     95   78   113
$ 1,228   $ 1,393   $ 1,436   $ 1,824   $ 5,881 $ 6,227 $ 6,269
                         
Regional sales as previously reported
                     
Q1 Q2 Q3 Q4 FY FY FY
2014   2014   2014   2014   2014 2013 2012
North America 727 841 880 1,151 3,599 3,894 3,905
Latin America 125 134 109 140 508 518 577
EA 214 231 277 312 1,034 988 858
APME   162     187     170     221     740   827   929
$ 1,228   $ 1,393   $ 1,436   $ 1,824   $ 5,881 $ 6,227 $ 6,269
         
Non-GAAP-1
Motorola Solutions, Inc. and Subsidiaries
Non-GAAP Adjustments (Intangibles Amortization Expense, Share-Based Compensation Expense and Highlighted Items)
                     
Q1 2015
 
PBT Tax PAT
Highlighted Items Statement Line (Inc)/Exp Inc/(Exp) (Inc)/Exp EPS impact
 
Share-based compensation expense Cost of sales, SG&A and R&D $ 21 $ 7 $ 14 $ 0.06
Reorganization of business charges Cost of sales and Other charges 14 4 10 0.05
Intangibles amortization expense Intangibles amortization 2 1 1 -
Gain on sale of equity investment Gains on sales of investments and businesses, net (46 ) (17 ) (29 ) (0.13 )
       
Total impact on Net earnings $ (9 ) $ (5 ) $ (4 ) $ (0.02 )
         
Non-GAAP-2
Motorola Solutions, Inc. and Subsidiaries
Non-GAAP Segment Information
(In millions)
                 
Net Sales
     
Three Months Ended
   
April 4, March 29,  
2015 2014 % Change
Products $ 758 $ 752 1 %
Services   465     476   -2 %
Total Motorola Solutions $ 1,223   $ 1,228   0 %
                 
Non-GAAP Operating Earnings
     
Three Months Ended
   
April 4, March 29,  
2015 2014 % Change
Products $ 90 $ 52 73 %
Services   66     74   -11 %
Total Motorola Solutions $ 156   $ 126   24 %
                 
Non-GAAP Operating Earnings %
     
Three Months Ended
   
April 4, March 29,
2015 2014
Products 11.9 % 6.9 %
Services 14.2 % 15.5 %
Total Motorola Solutions   12.8 %   10.3 %
     
Non-GAAP-3
Motorola Solutions, Inc. and Subsidiaries
Operating Earnings after Non-GAAP Adjustments
             
Q1 2015
       
    TOTAL Products Services
Net sales $ 1,223 $ 758 $ 465
Operating earnings ("OE")   $ 119 $ 64 $ 55
 
Above-OE non-GAAP adjustments:
Share-based compensation expense 21 14 7
Reorganization of business charges 14 10 4
Intangibles amortization expense 2 2 -
Total above-OE non-GAAP adjustments 37 26 11
         
Operating earnings after non-GAAP adjustments   $ 156 $ 90 $ 66
     
Operating earnings as a percentage of net sales - GAAP 9.7% 8.4% 11.8%
Operating earnings as a percentage of net sales - after non-GAAP adjustments 12.8% 11.9% 14.2%

« Previous Page 1 | 2 | 3 | 4 | 5 | 6 | 7  Next Page »



Review Article Be the first to review this article

EMA:

Featured Video
Editorial
Peggy AycinenaWhat Would Joe Do?
by Peggy Aycinena
Retail Therapy: Jump starting Black Friday
Peggy AycinenaIP Showcase
by Peggy Aycinena
REUSE 2016: Addressing the Four Freedoms
More Editorial  
Jobs
ACCOUNT MANAGER MUNICH GERMANY EU for EDA Careers at MUNICH, Germany
AE-APPS SUPPORT/TMM for EDA Careers at San Jose-SOCAL-AZ, CA
Principal Circuit Design Engineer for Rambus at Sunnyvale, CA
FAE FIELD APPLICATIONS SAN DIEGO for EDA Careers at San Diego, CA
Development Engineer-WEB SKILLS +++ for EDA Careers at North Valley, CA
Manager, Field Applications Engineering for Real Intent at Sunnyvale, CA
Upcoming Events
Zuken Innovation World 2017, April 24 - 26, 2017, Hilton Head Marriott Resort & Spa in Hilton Head Island, SC at Hilton Head Marriott Resort & Spa Hilton Head Island NC - Apr 24 - 26, 2017
CST Webinar Series



Internet Business Systems © 2016 Internet Business Systems, Inc.
595 Millich Dr., Suite 216, Campbell, CA 95008
+1 (408)-337-6870 — Contact Us, or visit our other sites:
AECCafe - Architectural Design and Engineering TechJobsCafe - Technical Jobs and Resumes GISCafe - Geographical Information Services  MCADCafe - Mechanical Design and Engineering ShareCG - Share Computer Graphic (CG) Animation, 3D Art and 3D Models
  Privacy Policy