斑馬技術公司 (ZBRA) 2013 Q1 法說會逐字稿

Good morning, and welcome to the Zebra Technologies 2013 first quarter earnings release conference call. Joining us from Zebra Technologies are Anders Gustafsson, CEO; Mike Smiley, CFO; Mike Terzich, Senior Vice President, Global Sales and Marketing; and Doug Fox, Vice President, Investor Relations.

All lines will be in a listen-only mode until after today's presentation. Instructions will be given at that time in order to ask a question. At the request of Zebra Technologies, this conference call is being recorded. Should anyone have any objections, please disconnect at this time. At this time, I would like to introduce Mr. Doug Fox of Zebra Technologies. Sir, you may begin.

Thank you, and good morning, everyone. Thank you for joining us today. Certain statements made on this call will relate to future events or circumstances, and therefore will be forward-looking statements within the meaning of the Securities Litigation Reform Act of 1995. Words such as expect, believe and anticipate are a few examples of words identifying a forward-looking statement. Forward-looking information is subject to various risk risks and uncertainties which could significantly affect expected results. Risk factors were noted in the news release issued this morning and are also described in Zebra's 10-K for the year ended December 31, 2012, which is on file with the SEC. Now, let me turn the call over to Anders Gustafsson for some brief opening remarks.

Thank you, Doug, and good morning, everyone. Today, Zebra reported first quarter sales of $237 million and earnings of $0.46 per share, including $0.04 per share in exit and restructuring costs and acquisition expenses. While results fell short of our expectations and our guidance range for the quarter, which is seasonally the slowest period of the year for Zebra, we executed well on our strategy and advanced our industry leadership position. We enter the second quarter encouraged by a much improved pace of business and a growing pipeline of revenue opportunities. We expect this favorable environment to translate into a sequential increase of $9 million to $21 million in second quarter sales. In addition, important opportunities to expand our business in the second half of the year are developing. These opportunities span the range of Zebra products, including thermal printer supplies and service, as well as new growth platforms, such as mobile point of sale, or POS, and location solutions.

After several periods of solid performance in North America, the first quarter experienced a soft run rate business in the first half of the quarter, and slow large deal activity with key retailers. Consequently, some of our distribution channel partners made conservative decisions to aggressively reduce inventories. While the second half of the quarter was much improved, the pick up was not enough to fully overcome the slower start to the year. Our performance in EMEA, Asia-Pacific and Latin American was largely within expectations. While the business conditions in EMEA remain challenged, all of our international regions experienced a steady run rate business, indicating continued investment in asset visibility solutions by local customers.

Overall, our geographic diversity continued to benefit Zebra through an uncertain business climate, as ongoing strength in several countries helped to offset weakness in others. We remain optimistic about Zebra's opportunities for growth and long-term success, while staying watchful over uncertain business conditions in various regions worldwide. We will remain nimble in this environment by optimizing our cost structure and allocating our resources appropriately. By doing so, we are able to free up capacity to invest in additionally important high return business development opportunities. Our focus on improving operational effectiveness is reflected in the $1.9 million charge for exit and restructuring costs. These charges include moving additional supply chain functions within closer proximity of our China manufacturing base, redirecting our Global Sales and Marketing resources to deliver on the greatest opportunities, and optimizing worldwide support functions.

As we have noted in the past, we continue to pursue a vision and drive growth through five strategic pillars. First, intensify innovation; second, expand into new markets; third, maximize operational effectiveness; fourth, penetrate existing markets further; and lastly, inspire our people and culture. I will now highlight some areas of progress in the first quarter relative to our pillars. We continue to maintain a high level of innovation, a key element of our strategy that positions Zebra from improving performance in all our regions. During the quarter, we introduced four new innovative printer products, which will help drive growth in established and adjacent markets and applications.

To support emerging opportunities in mobile point of sale, we introduced the lightweight iMZ220 and iMZ320 wireless mobile receipt printers, both certified for use with Apple's proprietary bluetooth technology. We also strengthened our mobile printer line with the QLn420, a high performance model with multiple applications across a wide range of industries. All three incorporate Link-OS, our innovative operating system that pairs a powerful software development kit and software apps with smart Zebra devices. The operating system allows users to easily integrate, manage and maintain Zebra's suite of printers over the cloud from remote locations. During the first quarter, we also strengthened our line of Zebra card printers with the introduction of the ZXP 7. Designed for secure high performance use, the ZXP 7 is receiving an excellent reception from channel partners and customers. First installations of ZXP 7 card printers include applications for driver's licenses in Argentina and Columbia, as well as person ID solutions for Princess Cruise Lines, Brown University, and a major retail customer.

In North America, our activities to penetrate existing markets further are enabling Zebra to serve more customers in targeted industries with our full range of products and solutions. Healthcare stood out as a bright spot for Zebra in the region with sales of printers, wrist bands and other supplies nearly doubling. Our growth in healthcare has in part been the result of increased deployments of our technologies by hospitals investing to better meet the requirements under the Affordable Care Act to improve patient safety. We've also positioned Zebra for further growth in this segment. During the quarter, we reduced supply contracts with hospital group purchasing organizations. We doubled our investment in sales resources dedicated to healthcare, and also expanded our investment with a major Chicago-based provider of technology solutions to healthcare.

In retail, we continue to serve more customers with a broader range of industry-specific solutions. Global point of sale is the latest of an expanding array of solutions that offers retailers improved opportunities to enhance the shopping experience and build the brand loyalty. While early in its roll out, we have a nicely developing pipeline for mobile POS solutions that we expect to convert to sales later this year. Government and education are other areas where we have expanded our business. The first quarter wins for student IDs and driver's licenses with the ZXP 7 card printer are an early indication of success in this attractive area for growth.

In EMEA, investments to diversify our business across more countries have mitigated the challenges in the region. During the quarter, Turkey, where we invested to increase sales coverage, performed well. We also had favorable growth in Italy, where we were pleased with the competitive win for a large order of Zebra MC mobile printers, services and supplies from the Italian Postal Service. We also won our biggest RFID project in Germany to date. To improve production efficiency and quality, Europe's largest kitchen manufacturer is converting its production and logistics from bar code to RFID this year. Soon, every kitchen component will be identified and tracked with an RFID tag, to optimize asset visibility through the entire production process.

In Latin America, our investments to expand into new markets with greater sales coverage led to solid performance in Chile, Peru and Colombia. In the Mexico, the re-surging manufacturing sector led to strong growth, as well. These gains more than offset a year over year sales decline in Brazil, where general business conditions remain sluggish. In Asia-Pacific, we experienced improved business activity in Korea, Australia and other sub-regions.

In China, reduced shipments to a still challenged manufacturing sector were partially offset with sales to new customers in retail, government, and transportation and logistics sectors. We are pleased with our progress in diversifying our business in China, as its economy evolves towards being more consumer focused. The new products we introduced within the past two years have helped us gain share and brand leadership. Greater activity in China and Asia Pacific broadly gives us confidence of an improving trend in the region.

Lastly, we are making steady progress in location solutions, an area where we expect growth. During the first quarter, Zebra shipped its one millionth active RFID tag, an important milestone which further positions Zebra as a clear leader in active RFID. Based on a number of significant pilots that are underway, we are encouraged about the growth of this product line, reflecting the value of the realtime visibility our products provide and the tangible impact of our ongoing investments in R&D and innovation. During the first quarter, we secured business for Zebra realtime Locations Solutions from customers including automotive manufacturers and suppliers. These companies are finding meaningful value in the realtime visibility Zebra delivers in their manufacturing processes and in managing their extended supply chains.

Zebra's progress on several fronts positions the Company for high growth and returns. We will continue to invest in our proven strategy, which is enabling us to penetrate existing markets more deeply, and expand into new markets, technologies and applications. We are optimistic that the results of these efforts will become more apparent as the year progresses.

Now, I will ask our CFO, Mike Smiley, to provide a detailed review of first quarter results and guidance for the second quarter of 2013. After Mike's remarks, I will return for some brief closing comments.

Thank you, Anders. Let me highlight some of the key component of Zebra's results for the first quarter. My comments will principally focus on year over year changes in the performance of Zebra's operations. First, anticipated sales declines in Europe and Asia-Pacific were partially offset by sales growth in our North America and Latin America regions. Second, gross margin was most affected by product mix and sales volumes. And third, operating expenses increased from higher wages and other employee-related expenses, as well as exit and restructuring costs.

Let's take a look at sales. For the quarter, sales declined 2.8%, from $243.9 million last year to $236.9 million this year. The impact of foreign exchange, net of hedges, was not material. In EMEA, sales declined from 10% from peak sales a year ago, as expected, primarily the result of weak economic conditions in the region. Sales for North America increased 1%. From a product point of view, printer and other hardware sales were down in the region. Supply sales, which include labels, wrist bands and ribbons, remained on a strong year over year upward trend. As mentioned earlier, weak sales in the first half of the quarter triggered inventory reductions by our distributors, accounting for most of our difference.

In Asia-Pacific, sales were down 1% from a year ago. Manufacturing in Asia Pacific was affected by economic weakness in Europe, again consistent with our expectations. Latin American sales advanced 4%, benefiting from our geographic diversification and improved manufacturing environment in Mexico. By product category, hardware sales declined 8%, which was partially offset by 14% growth in supplies. While a portion of the supplies growth was due to the LaserBand acquisition, sales of thermal-based supplies were also up. On year over year basis, average printer unit prices declined from $503 to $469, principally because of mix.

Product mix and volume also had the largest impact on gross margin. For the first quarter, gross margin was 47.7%, compared with 49.2% last year. Operating expenses increased 9% from a year ago. Much of the increase was due to higher employment-related expenses. Year over year, the LaserBand and StepOne acquisitions, which occurred in the second half of last year, accounted for a portion of the SG&A expense increase, plus the additional $1.1 million of amortization. Operating expenses also include $1.9 million in exit restructuring costs, which added 2.4 percentage points to the year over year growth, as well as $482,000 in acquisition expenses. Quarterly operating income of $28 million plus depreciation and amortization of $7.4 million totaled $35.5 million of cash earnings, or $0.69 of cash EPS.

The effective income tax rate for the first quarter was 18.2%. The rate reflects the impact of a greater proportion of our income that is generated in lower taxed regions, a well as recognition of a $400,000 R&D tax credit in the US. Earnings totaled $0.46 per share, including a reduction of $0.04 per share for acquisition expenses, and exit and restructuring costs on 51.4 million average shares outstanding. At the end of the first quarter, we had 51 million shares outstanding.

In total, we generated $22 million of free cash flow, in part by improved management of Zebra's inventories by $7 million from the end of 2012. The days sales outstanding increased slightly from 64 days to 65 days. During the quarter, we returned $4 million to shareholders in the form of stock buybacks. We ended the period with $418 million of cash investments, with about $200 million held in foreign accounts.

Now let's look at our second quarter forecast. We are forecasting 2013 second quarter sales in the range of $246 million to $258 million. Our current deal pipeline backlog and level of activity support this outlook. Earnings are expected at $0.58 to $0.67 per share on a GAAP basis, or $0.60 to $0.70 share on a pro forma basis, before estimated restructuring charges of $0.02 per share. Our forecast assumes a consolidated gross margin in the range of 48% to 49%. Operating expenses are forecast between $79 million and $81 million, including the incremental expense from LaserBand and StepOne, but before estimated restructuring charges of $1.8 million. The forecast also assumes an effective income tax rate of 21%, which continues to reflect the benefit of our legal entity structure we put in place affecting our foreign operations last year.

This concludes my formal remarks. Thank you for your attention. Now here's Anders for some concluding comments.

Thank you, Mike. Although the first quarter was challenging, we remain confident in the second quarter and beyond. Near term, we are experiencing a growing pipeline; and the current pace of business should translate into sequential growth in all geographic regions. By consistently following a well-defined strategy, we have continued to extend our industry leadership. Our business execution, financial strength, and innovation have resulted in stronger relationships with more customers worldwide.

As we pursue our growth goals, we will continue to exercise effective control over operating expenses, to drive greater efficiencies and direct resources to those areas that will deliver the highest returns on our investments. We will also execute stock buybacks and pursue acquisitions for the benefit of our shareholders. Longer term, we are optimistic that meaningful returns on our investments in new incremental areas of growth will become increasingly evident as we progress through 2013. These areas build on the strength and brand of our core business. They also further move Zebra to new adjacencies which are expanding the total available market for Zebra's products and solutions, such as mobile POS and cloud-based applications to our Link-OS operating system.

RFID is another attractive area of growth, as customers in a broad range of industries are recognizing the gains in visibility that solutions built around this technology can offer. This week at the RFID Journal Live industry conference, we highlighted two important customers, Vail Resorts and GEA Farm Technologies, that are utilizing RFID in innovative ways to enhance the customer experience, integrate with social media, and increase the productivity and efficiency of operations. At the show, we also announced the planned introduction of our newest passive RFID printer encoder, the ZD 500R. This compact desktop unit offers great performance in a small footprint and incorporates Link-OS for enhanced printer operation. We also recently released our Material Flow wireless replenishment starter kit. Utilizing active RFID technology, Material Flow provides realtime visibility on the plant floor so manufacturers can respond quickly to changes in inventory, production status and customer requests. Material Flow can help decrease on-hand inventories, improve asset utilization, and reduce labor costs.

To conclude, we continue to have great confidence in our business and the strategy we are following to create shareholder value. Zebra, together with our partners, is working to build a smarter, more connected global business community. Increasingly, the internet of things and other emerging technology trends are creating new incremental revenue opportunities for Zebra. We also remain optimistic about our core business, where we are building stronger relationships with key strategic customers and enabling better penetration of established and new industries.

Thank you for your attention today. We look forward to providing you with regular updates on our progress through 2013. I would now like to turn the call back to Doug for Q&A.

Thank you, Anders. Before we open the call to your questions, let me ask that you limit your questions to one question and one follow-up. In addition, Mike and I will be available after the call for any further discussions.

(Operator Instructions)

Stephen Stone.

Good morning.

Good morning.

Good morning, Stephen.

My first question here is, can you give us the expectations you have for mobile POS and RFID? Are these becoming more meaningful to revenue and bottom line now?

Well, I shall start with RFID. We see continued steady progress on RFID, generally. We've moved from a few years back, primarily testing the technology with our customers, to now we're testing the applications and the business case. So most applications now are more leach oriented. They're more close loop oriented. But we see good traction, particularly in retail, but also in other manufacturing segments around -- particularly around automotive. But it's still a pretty small part of our Business, and it is somewhat lumpy as part of that. But we certainly see an upward trend, and we have great confidence that it will become a growing part of our Business.

Okay.

And I guess I should have talked about mobile POS, also. I guess I would frame that in around more of our total investments we've made in growth areas over the last few years. We have a portfolio of investments that we are pursuing, and many of those are more focused on the core part of our Business, so expanding into new geographic regions, increasing the cadence of new product introductions. That, I think, has been working out very well over last few years. We feel very, very strongly, though, that those have helped us accelerate revenue and certainly accelerate share gain in the industry.

But we also have some other investments that are a bit more into adjacencies than the core. Here we talk about some of the softer activities we're doing. I guess RFID would be part of that. And mobile point of sale is also part of that. And we feel that we are well on track, relative to our own plans, for realizing good returns of these programs. But they are more embryonic, you can say, in some respects, so it will take longer for them to come to fruition. The pipeline around, as I say, particularly, mobile point of sale is very attractive. We have quite a few meaningful deals that we hope to be able to close in the second half of this year.

Okay. My other question here is, what is your outlook on the acquisitions, the pipeline and also the competitive market, how does that look?

Well, we're always looking to invest in the opportunities with the highest risk adjusted returns. And our primary first goal for that, our top priority is really to invest in organic growth. We think that is the highest risk adjusted return we can find. Next, we have buybacks and acquisitions. We are actively looking at a number of acquisition opportunities, but they must meet our financial criteria and also pass through our strategic hurdles, make sure that they really do fit the business and are something that will accelerate our ability to execute on a strategy, or better enable us to execute on our strategy.

Okay. And if I could sneak just one more question in. What is the percentage of sales from your largest customers?

Yes. This is Mike. So we list three customers. Customer A is 16.6%. Customer we call B is 12%. And customer we call C is 11.9%. In comparison for 2012, a year ago, which you'd probably look at, customer A is 21.5%, Customer B was 11%, and Customer C was 9.7%.

Okay. Thank you.

Yes.

Brian Drab.

Good morning.

Good morning.

Good morning, Brian.

Good morning. Just first question, can you talk a little bit more about what happened in North America and whether the weakness was weighted more toward manufacturing or retailer? Were you able to discern what end markets were most challenged?

North America, we would say we had a slower start than we expected. The run rate business generally was somewhat weaker than we would have expected, and there was also fewer large deal activity going on. I think as we entered Q1, globally, but particularly in North America, I think the business community was quite hesitant to commit to spending money in Q2. I think it took longer for most businesses to hand out operating budgets to their business units. And that got us off to a slower start than we had expected.

Retail had been a very strong vertical for us in 2012. It was a bit more of a mixed bag in Q1. But we do expect retail to be a growth engine for us over the longer term and the rest of this year. Retailers are particularly interested, I think, in investing both in technology to help improve the operations, but also to help improve the shopping experience and build the brand, as they have to compete against on-line retailers. So we've seen a lot of benefit from that.

I think healthcare was the other market that we would probably highlight here. It was a bright spot for us. We almost doubled the revenues in healthcare, and that was very much the result of the investments we've made in building that vertical over the last three or four years. Mike, anything to add for you?

Brian, this is Mike Terzich. Let me add a little color on -- piece apart a little bit what happened in North America, from both the run rate and from our key Retail business. On the run rate side, as you know, over the past several quarters, we've talked about one of the assets that we have is our large install base, particularly in what we call the big iron, heavy metal products. And we saw perhaps a little bit of the tail end of a pretty robust refresh rate that had been going on for most of 2012, carried into 2013, perhaps not at the level that we were expecting.

On the key retail side, our business in retail, quite a bit of that business, is tied to our mobile devices, which are also tied to what is happening on the terminal side of the business. And as you know, Microsoft is going through a revision of their mobile device operating platform. I think retailers, in general, that have terminals tied to a lot of those mobile devices are a little bit in a wait and see mode as that gets sorted out. And that's been going on, I think, for a couple quarters. I think if you look back historically the last couple quarters, our large opportunity retail business has been a little sluggish. And that continues, but we do see some changes in the wins, as it relate to the second quarter.

Okay. Thanks for all of that. Good detail. And then just one modeling question here. I didn't see in the press release your typical disclosure of how much impact FX had on the top line. I don't know if you said it yet on the call. So could you talk about that, and then also what you expect in the second quarter in terms of a top line impact from FX?

Yes. Good question. We didn't -- there was really no FX impact in the first quarter, and we're not really expecting much of an impact in the second quarter at all.

Okay. Thank you.

Yes.

Michael Kim.

Hello. Good morning, everyone.

Good morning.

Good morning.

So just turning back to North America. Can you talk a little bit about the tone you're hearing from the distribution channel, given that they had aggressively brought down their channel inventories. Are you seeing a similar aggressive rebuild of the channel inventories? Do they feel better about the demand environment?

Yes. I think that Q1 was a bit unusual, generally, for us here. The first month of the quarter is normally the slowest, and we do about 50% of our business in the last month of the quarter. This year, in Q1 particularly -- or Q1's generally, January is particularly difficult to use as a guide for the rest of the quarter, because it does take much longer, some years, for businesses to hand out their budgets. And what we saw in Q1 was globally a pretty weak start. But our international regions were able to recover and bring that business back in the second half of the quarter, particularly in March.

In North America, that did not happen, particularly because some of our distribution channel partners were a little skittish about the overall economic situation and did not want to be caught out with too much inventory, if the markets weren't going to come back the way we had hoped. So they decided to really bring down inventories quite aggressively.

Okay. And then just in terms of implications for the guidance, if we look at the midpoint of the range, that seems to imply that the hardware business, the printer business recovers at the same run rate that you saw second half of last year. Is that the right way to think about the hardware business?

Yes, I think so. And you know, we are expecting that the sales in and sales out from our distribution partners will be neutral in the quarter. We're not expecting there to be any -- we're not factoring in any changes in inventory, particularly.

Okay. Great. And then just turning towards the product mix and ASPs, are you seeing a fundamental change in customer demand in terms of the mix of products that they're looking at? Is it focused more now on mobile and desktop, and less on high performance?

Yes. The AUP, as I said, is driven primarily by mix for us. We had a little less of our high end product line go through. And we've done lots of work over the last quarter and the prior quarters now to really try to understand very clearly what is driving it, and what are the conclusions from this. So far, the conclusions we have is that the pricing within each of our product family is very stable.

There is a very modest price erosion over time. But some of our newer, more low end products are growing much faster than the historical product portfolio we have. So we're seeing a stronger growth in the low end of the portfolio. So the mix then becomes lower priced. But we're also spending a lot of effort making sure we are aggressively taking costs out of those products, so that the gross margin of those products should be within the band of normalcy, as we see it, for gross margins.

We did talk a little bit about the mix relative to the geographic split. So if you go back to the previous comments around some of the North America refresh, which tends to be centered on manufacturing and warehousing, and if you look at what's happened globally, within EMEA, some constraint in the German market, which is a very heavy industrial manufacturing market for us, and then you factor in China, which we have been leveraging off of multinational manufacturing that actually kind of accelerated a little bit more of a distortion in the mix. So to Anders' point, while we're seeing some new business opportunity, and that tends to be in some of the mobile desktop space, as those markets kind of re-correct or rewrite themselves, we think the mix will actually become a little richer. It's actually reflected that way for us in our second quarter.

Great. And then last question, can you talk a little bit about the cadence or anticipated cadence of new product introductions? I think last year, you had 14. It looks likes you're off to a good start, with 4 this quarter. Would you anticipate to be above that 14 that you guys achieved last year?

Yes. Our expectation is that we will launch a similar amount of new products in 2013 as we did in 2012. You will probably see a slightly higher emphasis around software. So the Link-OS software platform that we talked about here now, we're going to have several releases of that coming out in the year, so the emphasis will move slightly more toward software. But you should expect a similar cadence on new product introductions going forward.

Okay. Great. Thank you very much.

John [Barta].

Hello, and thank you for taking my question. On the OpEx side, each line item was up quite a bit, while revenue was down. Can you provide a little more additional color on what were the puts and takes there?

Yes. This is Mike Smiley. There's a couple of things that are going on. First of all, we did do those StepOne and LaserBand acquisition, which drove a little bit of our increase. The other thing I would say is that when you compare year-over-year, we end up giving -- our withholding and those types of things happen in the first quarter. They happen in both quarters, but we also have the fact that we've had more raises come out in the first quarter that increases first quarter to first quarter. We also had increase in some headcount over and above the LaserBand and the StepOne acquisition, mostly in areas that we're trying to invest and grow, which is in sales and marketing, and the engineering. For example, engineering resources in China, our supply chain resources in China, and then some sales and marketing resources. So most of it is really, as I mentioned before, employee-related expenses.

Okay. And then more of a housekeeping question. Could you just restate the long-term gross margin goal, or target?

Our long-term gross margin target has not changed from prior quarters. We said high 40%, so 48% to 50% is our expected target range.

And I think we would classify the results for this quarter low-ish. I don't think this is what we would view as what we were expecting long run.

All right. Thank you.

Yes.

(Operator Instructions)

Greg Halter.

Yes. Thank you, and good morning.

Good morning.

On your combined cash and investment holdings of $417 million, or slightly over, what was the return on that in the quarter?

It was like 0.7%, or something. It's very low.

Okay. And given there was only, I think, $4 million repurchased of shares, I just wonder what your thoughts are going forward given the cash earning, not a whole lot, and $400-plus million of cash?

Yes. We've always said that we view stock buybacks as one of the key uses of cash for us. And if you look historically, we've returned quite a lot of cash through stock buybacks over the last five years. I think we've reduced our share capital by about 33%. This quarter -- we also always said that we want to be opportunistic in when we buy back shares. In Q1, there was such a strong momentum behind the share price, we thought that it would be chasing the share price up, and we'd rather have the patience to wait for the right opportunities. You go back to Q3 2011, when we bought back 1.8 million shares in one quarter. So, I think we've shown that we are willing to do that, in the right opportunities.

All right. One other quick one. Customer A had a pretty good drop, about five points on a year-over-year basis. Would that explain the comments in your -- or partially explain the comments in your release regarding the slowdown of North America and channel partners and so forth?

Yes. It would.

It would not necessarily explain the slowdown in the sales out of total market, which was quite strong, but it would indicate that that's where an inventory correction took place.

All right. Thank you.

Paul Coster.

Yes, thanks for taking the question. Anders, you seem to be indicating that growth will accelerate somewhat in the second half of this year, which for a book and ship business is difficult to do. But you seem quite confident in that it somehow or another is also going to express something new at the Company. What's going on? Why do you have such good visibility into this improvement in the second half of the year, and what is the message that you're trying to convey here regarding the changes at Zebra?

Well, first, we've given guidance for the next quarter. We talk about the larger deal pipeline being stronger and expecting some good things from that to come out. But the focus, really, of the comments are on Q2. And the guidance we've given is, the way we put that together is very much in line with how we put together guidance for the 23 quarters that I have been part of doing this. And I feel that the bookings trend so far this quarter, the pipeline we have, the conversations we have with our customers, which I feel is getting more constructive, is lending itself to that to be a reasonable forecast, that with the same risk profile, I would say, as we normally have in our forecasts.

Okay. In your analyst day from last year, I think you talked about a growth aspiration? What was that, and do you think that can be achieved this year?

So, the way we laid it out at our analyst meeting, in I think it was March or February 2012, was that we saw a market growth, a base market growth of 6% to 7%, based on VDC's independent analyst research. And we said we think we could grow 2% to 3% faster than the market. In 2012, I don't think we've seen official market data yet, but I'm confident that market did not grow 6% to 7%, but I believe that we grew our market share quite substantially. So at least that piece of it, I think we got right.

For 2013, it's clearly harder to achieve a higher single-digit growth for the year when we have a weak first quarter. But we do feel that over the next several years that when the markets become more, say, a bit even -- as I was saying, the last few years we've had some really, really good years, and some really crappy years. But I think in a normalized economic environment, I believe that we should be able to get into the higher single-digits growth rates.

All right. Thank you.

Okay. And now I'll turn it back to our speakers for closing remarks.

Okay. Thank you everybody for joining us today. We look forward to keeping in touch with you, as we progress through 2013. Have a good day.

Thank you, ladies and gentlemen. This conference is now concluded.