- Revenue of $1.7 billion, flat versus a year ago
- GAAP earnings per share (EPS) of $1.12, up 30%
- Non-GAAP EPS* of $1.49, up 16%
- Backlog of $10.4 billion, up $48 million versus a year ago,
inclusive of $462 million of unfavorable currency rates
- Generated $308 million of operating cash flow, up 23%
Motorola Solutions, Inc. (NYSE: MSI) today reported its earnings
results for the first quarter of 2020. Click here for a printable
news release and financial tables.
“In Q1, we generated strong earnings and cash flow with solid
demand for video security and software & services," said Greg
Brown, chairman and CEO of Motorola Solutions. "The mission
critical nature of our solutions, coupled with our strong balance
sheet provides us with a solid foundation to navigate this
unprecedented and dynamic environment.”
KEY FINANCIAL RESULTS (presented in millions, except per
share data and percentages)
Q1 2020
Q1 2019
% Change
Sales
$1,655
$1,657
—%
GAAP
Operating Earnings
$259
$229
13%
% of Sales
15.6%
13.8%
EPS
$1.12
$0.86
30%
Non-GAAP*
Operating Earnings
$347
$315
10%
% of Sales
21.0%
19.0%
EPS
$1.49
$1.28
16%
Products and Systems Integration
Segment
Sales
$993
$1,069
(7)%
GAAP Operating Earnings
$92
$108
(15)%
% of Sales
9.3%
10.1%
Non-GAAP Operating Earnings*
$123
$147
(16)%
% of Sales
12.4%
13.8%
Software and Services Segment
Sales
$662
$588
13%
GAAP Operating Earnings
$167
$121
38%
% of Sales
25.2%
20.6%
Non-GAAP Operating Earnings*
$224
$168
33%
% of Sales
33.8%
28.6%
*Non-GAAP financial information excludes the after-tax impact of
approximately $0.37 per diluted share related to share-based
compensation, intangible assets amortization expense and
highlighted items. Details on these non-GAAP adjustments and the
use of non-GAAP measures are included later in this news
release.
OTHER SELECTED FINANCIAL RESULTS
- Revenue - Sales were $1.7 billion, flat from the
year-ago quarter with North America up 4% offset by a 7% decline in
International. Revenue from acquisitions was $48 million, and
currency headwinds were $7 million in the quarter. The Products and
Systems Integration segment declined 7% primarily due to lower
sales of professional and commercial radio (PCR) products,
partially offset by growth in video security. The Software and
Services segment grew 13%, driven by growth in command center
software and services.
- Operating margin - GAAP operating margin was 15.6% of
sales, up from 13.8% in the year-ago quarter. Non-GAAP operating
margin was 21.0% of sales, up from 19.0% in the year-ago quarter.
The improvement in both GAAP and non-GAAP was driven by gross
margin expansion in the Software and Services segment.
- Taxes - The GAAP effective tax rate was 12%, compared
with 18% in the year-ago quarter. The non-GAAP effective tax rate
was 15% compared with 20% in the year-ago quarter. Both the GAAP
and non-GAAP tax rates were lower in the current quarter primarily
due to higher excess tax benefits on share-based compensation.
- Cash flow - Operating cash flow was $308 million,
compared with $251 million in the year-ago quarter. Free cash flow
was $260 million, compared with $185 million in the year-ago
quarter. Cash flow for the quarter increased year over year
primarily due to improved working capital.
- Liquidity - Due to the uncertainty around market
liquidity as a result of the COVID-19 pandemic, the company drew
down $800 million from its syndicated, unsecured revolving credit
facility during the quarter. The company ended the quarter with
$1.7 billion in cash and had $1.4 billion of additional committed
undrawn capacity on the revolving credit facility. The company
ended the quarter with $5.9 billion in debt, inclusive of the $800
million from the revolving credit facility, has no debt maturities
in 2020 or 2021, absent the revolver, and has no expected pension
contributions until 2023.
- Capital allocation - During the quarter, the company
repurchased $253 million of common stock, paid $109 million in cash
dividends, incurred $48 million of capital expenditures, and used
$36 million for acquisitions.
- Backlog - The company ended the quarter with backlog of
$10.4 billion, up $48 million from the year-ago quarter. Software
and Services backlog was up 2% or $120 million, inclusive of $423
million of unfavorable currency rates. The growth was primarily
driven by multi-year agreements in North America. Products and
Systems Integration segment backlog was down 2% or $72 million,
inclusive of $39 million of unfavorable currency adjustments. The
decline was due to lower International backlog, partially offset by
growth in North America.
NOTABLE WINS AND ACHIEVEMENTS
Software and Services
- $8 million P25 multi-year services contracts with Cleveland,
Ohio
- $6 million P25 multi-year services contract with a customer in
Latin America
- $4 million command center software suite contract with
Brampton, Ontario
- $3 million command center software suite contract with Ft.
Wayne, Indiana
Products and Systems
Integration
- $28 million video security win with a large utility in the
U.S.
- Over $50 million of sales into government across the video
solutions portfolio
- $12 million P25 order from Dinwiddie County, Virginia
- $8 million TETRA order from Germany's Armed Forces
BUSINESS OUTLOOK
- Second-quarter 2020 - Motorola Solutions expects revenue
decline of (17%) to (14%) compared with the second quarter of 2019.
The company expects non-GAAP earnings per share in the range of
$1.18 to $1.27. This assumes approximately $30 million of currency
headwinds at current rates, approximately 175 million fully diluted
shares, and an effective tax rate of 24% to 25%.
- Full-year 2020 - Motorola Solutions is withdrawing its
full year guidance, due to uncertainty surrounding the COVID-19
pandemic.
COVID-19
In response to the evolving COVID-19 pandemic, the company has
implemented preparedness plans to keep its employees and customers
healthy and safe, as well as to ensure continued operations and
business continuity. Safety measures during this outbreak include
having office workers work remotely, suspending employee travel,
withdrawing from certain industry events, increased cleaning,
encouraging face coverings and using thermal scanning. The company
has ensured customer continuity by fulfilling several emergency
orders, completing remote software maintenance where possible, and
the visitation by field workers to customer sites to keep
mission-critical networks operating. Supply chain partners have
been supportive and continue to do their part to ensure that
service levels to the company and its customers remain solid.
Additionally, the pandemic has impacted the company's professional
commercial radio business and delayed engagement and deployments
with some of its state and local customers in the near term which
may impact future revenue. The company has also taken actions in a
number of areas to reduce our operating expenses.
CONFERENCE CALL AND WEBCAST Motorola Solutions will host
its quarterly conference call beginning at 4 p.m. U.S. Central
Daylight Time (5 p.m. U.S. Eastern Daylight Time) on Thursday, May
7th. The conference call will be webcast live at
www.motorolasolutions.com/investors.
CONSOLIDATED GAAP RESULTS (presented in millions,
except per share data)
A comparison of results from operations is as follows:
Q1 2020
Q1 2019
Net sales
$1,655
$1,657
Gross margin
787
773
Operating earnings
259
229
Amounts attributable to Motorola
Solutions, Inc. common stockholders
Net earnings
197
151
Diluted EPS
$1.12
$0.86
Weighted average diluted common shares
outstanding
175.9
174.6
HIGHLIGHTED ITEMS
The table below includes highlighted items, share-based
compensation expenses and intangible amortization for the first
quarter of 2020.
(per diluted common share)
Q1 2020
GAAP Earnings
$1.12
Highlighted Items:
Intangibles amortization expense
0.23
Share-based compensation expenses
0.17
Hytera-related legal expenses
0.11
Reorganization of business charges
0.08
Acquisition-related transaction fees
0.01
Legal settlements
0.01
Fair value adjustments to equity
investments
(0.01)
Release of uncertain tax positions
(0.01)
Gain on sale of property, plant, and
equipment
(0.22)
Non-GAAP Diluted EPS
$1.49
USE OF NON-GAAP FINANCIAL INFORMATION
In addition to the GAAP results included in this presentation,
Motorola Solutions also has included non-GAAP measurements of
results. The company has provided these non-GAAP measurements to
help investors better understand its core operating performance,
enhance comparisons of core operating performance from period to
period and allow better comparisons of operating performance to its
competitors. Among other things, management uses these operating
results, excluding the identified items, to evaluate performance of
the businesses and to evaluate results relative to certain
incentive compensation targets. Management uses operating results
excluding these items because it believes this measurement enables
it to make better period-to-period evaluations of the financial
performance of core business operations. The non-GAAP measurements
are intended only as a supplement to the comparable GAAP
measurements and the company compensates for the limitations
inherent in the use of non-GAAP measurements by using GAAP measures
in conjunction with the non-GAAP measurements. As a result,
investors should consider these non-GAAP measurements in addition
to, and not in substitution for or as superior to, measurements of
financial performance prepared in accordance with generally
accepted accounting principles.
Highlighted items: The company has excluded the effects of
highlighted items including, but not limited to,
acquisition-related transaction costs, tangible and intangible
asset impairments, restructuring charges, certain non-cash pension
adjustments, legal settlements and other contingencies, gains and
losses on investments and businesses, Hytera-related legal
expenses, and the income tax effects of significant tax matters,
from its non-GAAP operating expenses and net income measurements
because the company believes that these historical items do not
reflect expected future operating earnings or expenses and do not
contribute to a meaningful evaluation of the company's current
operating performance or comparisons to the company's past
operating performance. For the purposes of management's internal
analysis over operating performance, the company uses financial
statements that exclude highlighted items, as these charges do not
contribute to a meaningful evaluation of the company's current
operating performance or comparisons to the company's past
operating performance.
Hytera-Related Legal Expenses: On February 14, 2020, we
announced that a jury in the U.S. District Court for the Northern
District of Illinois decided in our favor in our trade secret theft
and copyright infringement case against Hytera Communications
Corporation Limited of Shenzhen, China; Hytera America, Inc.; and
Hytera Communications America (West), Inc. (collectively,
“Hytera”). In connection with this verdict, the jury awarded
Motorola Solutions $345.8 million in compensatory damages and
$418.8 million in punitive damages, for a total of $764.6 million.
In the first quarter of 2020, we revised our definition of non-GAAP
operating income to exclude the impact of Hytera-related legal
expenses. The $25 million of Hytera-related legal expense incurred
in the first quarter of 2020 reflects costs primarily associated
with this jury trial. Hytera has filed a motion for a new trial,
and given our inability to predict the timing and outcome of this
motion, together with the uncertainty of our ability to ultimately
collect amounts awarded, at this time we have not recognized in our
financial statements any gain related to the Hytera litigation.
Management typically considers legal expenses associated with
defending our intellectual property as “normal and recurring” and
accordingly, Hytera-related legal expenses were included in both
our GAAP and non-GAAP operating income for fiscal years 2017, 2018
and 2019. We anticipate further expenses associated with
Hytera-related litigation; however, we believe that these expenses
are no longer a part of the “normal and recurring” legal expenses
incurred to operate our business. In addition, if any contingent or
actual gain associated with the Hytera litigation is recognized in
the future, it will be similarly excluded from our non-GAAP
operating income. We believe after the jury award, the presentation
of excluding both Hytera-related legal expenses and gains related
to awards better aligns with how management evaluates our ongoing
underlying business performance.
For comparative purposes, $10 million, or $0.05 of earnings per
share, net of tax, of Hytera-related legal expense was included in
our first quarter 2019 Non-GAAP operating earnings.
Share-based compensation expenses: The company has excluded
share-based compensation expenses from its non-GAAP operating
expenses and net income measurements. Although share-based
compensation is a key incentive offered to the company’s employees
and the company believes such compensation contributed to the
revenue earned during the periods presented and also believes it
will contribute to the generation of future period revenues, the
company continues to evaluate its performance excluding share-based
compensation expenses primarily because it represents a significant
non-cash expense. Share-based compensation expenses will recur in
future periods.
Intangible assets amortization expense: The company has excluded
intangible assets amortization expense from its non-GAAP operating
expenses and net earnings measurements, primarily because it
represents a non-cash expense and because the company evaluates its
performance excluding intangible assets amortization expense.
Amortization of intangible assets is consistent in amount and
frequency but is significantly affected by the timing and size of
the company’s acquisitions. Investors should note that the use of
intangible assets contributed to the company’s revenues earned
during the periods presented and will contribute to the company’s
future period revenues as well. Intangible assets amortization
expense will recur in future periods.
Free cash flow: Free cash flow represents operating cash flow
less capital expenditures. We believe that free cash flow is also
useful to investors as the basis for comparing our performance and
coverage ratios with other companies in our industries, although
our measure of free cash flow may not be directly comparable to
similar measures used by other companies.
Organic Revenue: Organic revenue reflects net sales calculated
under GAAP excluding net sales from acquired business owned for
less than four full quarters. The company believes non-GAAP organic
revenue growth provides useful information for evaluating the
periodic growth of the business on a consistent basis and provides
for a meaningful period-to-period comparison and analysis of trends
in the business.
Details of the above items and reconciliations of the non-GAAP
measurements to the corresponding GAAP measurements can be found at
the end of this press release.
The company has not quantitatively reconciled its guidance for
non-GAAP metrics to their most comparable GAAP measure because the
company does not provide specific guidance for the various
reconciling items as certain items that impact these measures have
not occurred, are out of the company’s control, or cannot be
reasonably predicted. Accordingly, a reconciliation to the most
comparable GAAP financial metric is not available without
unreasonable effort. Please note that the unavailable reconciling
items could significantly impact the company’s results.
BUSINESS RISKS
This news release contains "forward-looking statements" within
the meaning of applicable federal securities law. These statements
are made pursuant to the safe harbor provisions of the Private
Securities Litigation Reform Act of 1995 and generally include
words such as “believes,” “expects,” “intends,” “anticipates,”
“estimates” and similar expressions. The company can give no
assurance that any actual or future results or events discussed in
these statements will be achieved. Any forward-looking statements
represent the company’s views only as of today and should not be
relied upon as representing the company’s views as of any
subsequent date. Readers are cautioned that such forward-looking
statements are subject to a variety of risks and uncertainties that
could cause the company’s actual results to differ materially from
the statements contained in this release. Such forward-looking
statements include, but are not limited to, Motorola Solutions’
financial outlook for the second quarter 2020. Motorola Solutions
cautions the reader that the risk factors below, as well as those
on pages 10 through 22 in Item 1A of Motorola Solutions’ 2019
Annual Report on Form 10-K and in its other SEC filings available
for free on the SEC’s website at www.sec.gov and on Motorola
Solutions’ website at www.motorolasolutions.com, could cause
Motorola Solutions’ actual results to differ materially from those
estimated or predicted in the forward-looking statements. Many of
these risks and uncertainties cannot be controlled by Motorola
Solutions, and factors that may impact forward-looking statements
include, but are not limited to: (1) the economic outlook for the
government communications industry; (2) the impact of foreign
currency fluctuations on the company; (3) the level of demand for
the company's products; (4) the company's ability to refresh
existing and introduce new products and technologies in a timely
manner; (5) exposure under large systems and managed services
contracts, including risks related to the fact that certain
customers require that the company build, own and operate their
systems, often over a multi-year period; (6) negative impact on the
company's business from global economic and political conditions,
which may include: (i) continued deferment or cancellation of
purchase orders by customers; (ii) the inability of customers to
obtain financing for purchases of the company's products; (iii)
increased demand to provide vendor financing to customers; (iv)
increased financial pressures on third-party dealers, distributors
and retailers; (v) the viability of the company's suppliers that
may no longer have access to necessary financing; (vi) counterparty
failures negatively impacting the company’s financial position;
(vii) changes in the value of investments held by the company's
pension plan and other defined benefit plans, which could impact
future required or voluntary pension contributions; (viii) the
company’s ability to access the capital markets on acceptable terms
and conditions; and (ix) the ongoing COVID-19 pandemic and
governmental and societal responses thereto; (7) the impact of a
security breach or other significant disruption in the company’s IT
systems, those of its partners or suppliers or those it sells to or
operates or maintains for its customers; (8) the outcome of ongoing
and future tax matters; (9) the company's ability to purchase
sufficient materials, parts and components to meet customer demand,
particularly in light of global economic conditions and reductions
in the company’s purchasing power; (10) risks related to dependence
on certain key suppliers, subcontractors, third-party distributors
and other representatives; (11) the impact on the company's
performance and financial results from strategic acquisitions or
divestitures; (12) risks related to the company's manufacturing and
business operations in foreign countries; (13) the creditworthiness
of the company's customers and distributors, particularly
purchasers of large infrastructure systems; (14) the ownership of
certain logos, trademarks, trade names and service marks including
“MOTOROLA” by Motorola Mobility Holdings, Inc.; (15) variability in
income received from licensing the company's intellectual property
to others, as well as expenses incurred when the company licenses
intellectual property from others; (16) unexpected liabilities or
expenses, including unfavorable outcomes to any pending or future
litigation or regulatory or similar proceedings; (17) the impact of
the percentage of cash and cash equivalents held outside of the
United States; (18) the ability of the company to pay future
dividends due to possible adverse market conditions or adverse
impacts on the company’s cash flow; (19) the ability of the company
to complete acquisitions or repurchase shares under its repurchase
program due to possible adverse market conditions or adverse
impacts on the company’s cash flow; (20) the impact of changes in
governmental policies, laws or regulations; (21) negative
consequences from the company's use of third party vendors for
various activities, including certain manufacturing operations,
information technology and administrative functions; and (22) the
company’s ability to settle the par value of its 1.75% senior
convertible notes in cash. Motorola Solutions undertakes no
obligation to publicly update any forward-looking statement or risk
factor, whether as a result of new information, future events or
otherwise.
ABOUT MOTOROLA SOLUTIONS
Motorola Solutions is a global leader in mission-critical
communications and analytics. Our technology platforms in
mission-critical communications, command center software and video
security & analytics, bolstered by managed & support
services, make cities safer and help communities and businesses
thrive. At Motorola Solutions, we are ushering in a new era in
public safety and security. Learn more at
www.motorolasolutions.com.
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. ©2020 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 March
28, 2020 March 30, 2019 Net sales from products
$
884
$
945
Net sales from services
771
712
Net sales
1,655
1,657
Costs of products sales
397
444
Costs of services sales
471
440
Costs of sales
868
884
Gross margin
787
773
Selling, general and administrative expenses
341
327
Research and development expenditures
168
162
Other charges (income)
(34)
5
Intangibles amortization
53
50
Operating earnings
259
229
Other income (expense): Interest expense, net
(52)
(55)
Gains on sales of investments and businesses, net
-
1
Other, net
17
10
Total other expense
(35)
(44)
Net earnings before income taxes
224
185
Income tax expense
26
33
Net earnings
198
152
Less: Earnings attributable to non-controlling interests
1
1
Net earnings attributable to Motorola Solutions, Inc.
$
197
$
151
Earnings per common share:
Basic
$
1.15
$
0.92
Diluted
$
1.12
$
0.86
Weighted average common shares
outstanding: Basic
170.6
164.0
Diluted
175.9
174.6
Percentage of Net Sales* Net sales from products
53.4 %
57.0 %
Net sales from services
46.6 %
43.0 %
Net sales
100.0 %
100.0 %
Costs of products sales
44.9 %
47.0 %
Costs of services sales
61.1 %
61.8 %
Costs of sales
52.4 %
53.3 %
Gross margin
47.6 %
46.7 %
Selling, general and administrative expenses
20.6 %
19.7 %
Research and development expenditures
10.2 %
9.8 %
Other charges (income)
(2.1)%
0.3 %
Intangibles amortization
3.2 %
3.0 %
Operating earnings
15.6 %
13.8 %
Other income (expense): Interest expense, net
(3.1)%
(3.3)%
Gains on sales of investments and businesses, net - % - % Other,
net
1.0 %
0.6 %
Total other expense
(2.1)%
(2.7)%
Net earnings before income taxes
13.5 %
11.2 %
Income tax expense
1.6 %
2.0 %
Net earnings
12.0 %
9.2 %
Less: Earnings attributable to non-controlling interests
0.1 %
- % Net earnings attributable to Motorola Solutions, Inc.
11.9 %
9.1 %
* Percentages may not add up due to rounding
GAAP-2
Motorola Solutions, Inc. and Subsidiaries Condensed
Consolidated Balance Sheets (In millions)
March 28, 2020
December 31, 2019
Assets
Cash and cash equivalents
$
1,672
$
1,001
Accounts receivable, net
1,122
1,412
Contract assets
958
1,046
Inventories, net
442
447
Other current assets
287
272
Total current assets
4,481
4,178
Property, plant and equipment,
net
932
992
Operating lease assets
521
554
Investments
154
159
Deferred income taxes
918
943
Goodwill
2,075
2,067
Intangible assets, net
1,242
1,327
Other assets
393
422
Total assets
$
10,716
$
10,642
Liabilities and Stockholders'
Equity (Deficit)
Current portion of long-term
debt
$
814
$
16
Accounts payable
531
618
Contract liabilities
1,278
1,449
Accrued liabilities
1,256
1,356
Total current liabilities
3,879
3,439
Long-term debt
5,111
5,113
Operating lease liabilities
458
497
Other liabilities
2,198
2,276
Total Motorola Solutions, Inc.
stockholders’ equity (deficit)
(948)
(700)
Non-controlling interests
18
17
Total liabilities and
stockholders’ equity (deficit)
$
10,716
$
10,642
GAAP-3
Motorola Solutions, Inc. and Subsidiaries Condensed
Consolidated Statements of Cash Flows (In millions)
Three Months Ended March 28, 2020 March 30,
2019 Operating Net earnings attributable to Motorola
Solutions, Inc.
$
197
$
151
Earnings attributable to non-controlling interests
1
1
Net earnings
198
152
Adjustments to reconcile Net earnings to Net cash provided by
operating activities: Depreciation and amortization
99
95
Non-cash other (income) charges
(51)
10
Share-based compensation expenses
38
27
Gain on sales of investments and businesses, net
-
(1)
Changes in assets and liabilities, net of effects of acquisitions,
dispositions, and foreign currency translation adjustments:
Accounts receivable
275
168
Inventories
2
(63)
Other current assets and contract assets
48
136
Accounts payable, accrued liabilities, and contract liabilities
(301)
(261)
Other assets and liabilities
(4)
(6)
Deferred income taxes
4
(6)
Net cash provided by operating activities
308
251
Investing Acquisitions and investments, net
(36)
(368)
Proceeds from sales of investments and businesses, net
2
2
Capital expenditures
(48)
(66)
Proceeds from sales of property, plant and equipment
56
-
Net cash used for investing activities
(26)
(432)
Financing Repayments of debt
(4)
(8)
Net proceeds from revolver draw
800
-
Issuances of common stock
5
45
Purchases of common stock
(253)
(145)
Payments of dividends
(109)
(93)
Net cash provided by (used for) financing activities
439
(201)
Effect of exchange rate changes on total cash and cash equivalents
(50)
22
Net increase (decrease) in total cash and cash equivalents
671
(360)
Cash and cash equivalents, beginning of period
1,001
1,257
Cash and cash equivalents, end of period
$
1,672
$
897
Financial Ratios: Free cash flow*
$
260
$
185
*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 March 28, 2020 March 30,
2019 % Change Products and Systems Integration
$
993
$
1,069
(7)%
Software and Services
662
588
13 %
Total Motorola Solutions
$
1,655
$
1,657
- %
Operating Earnings Three
Months Ended March 28, 2020 March 30, 2019
% Change Products and Systems Integration
$
92
$
108
(15)%
Software and Services
167
121
38 %
Total Motorola Solutions
$
259
$
229
13 %
Operating Earnings % Three Months
Ended March 28, 2020 March 30, 2019
Products and Systems Integration
9.3 %
10.1 %
Software and Services
25.2 %
20.6 %
Total Motorola Solutions
15.6 %
13.8 %
Non-GAAP-1
Motorola Solutions, Inc. and Subsidiaries Non-GAAP
Adjustments (Intangibles Amortization Expense, Share-Based
Compensation Expenses and Highlighted Items) (In
millions) Q1 2020 Non-GAAP Adjustments
Statement Line PBT(Inc)/Exp TaxInc/(Exp)
PAT(Inc)/Exp EPS impact Intangibles
amortization expense Intangibles amortization
$
53
$
13
$
40
$
0.23
Share-based compensation expenses Cost of sales, SG&A and
R&D
38
9
29
0.17
Hytera-related legal expenses SG&A
25
6
19
0.11
Reorganization of business charges Cost of sales and Other charges
(income)
18
4
14
0.08
Acquisition-related transaction fees Other charges (income)
2
-
2
0.01
Legal settlements Other charges (income)
2
-
2
0.01
Fair value adjustments to equity investments Other expense
(1)
-
(1)
(0.01)
Release of uncertain tax positions Other income, Income tax expense
-
1
(1)
(0.01)
Gain on sale of property, plant, and equipment Other charges
(income)
(50)
(12)
(38)
(0.22)
Total impact on Net earnings
$
87
$
21
$
66
$
0.37
Non-GAAP-2
Motorola Solutions, Inc. and Subsidiaries Non-GAAP
Segment Information (In millions) Net
Sales Three Months Ended March 28,
2020 March 30, 2019 % Change Products and Systems
Integration
$
993
$
1,069
(7)%
Software and Services
662
588
13 %
Total Motorola Solutions
$
1,655
$
1,657
- %
Non-GAAP Operating Earnings
Three Months Ended March 28, 2020 March 30,
2019 % Change Products and Systems Integration
$
123
$
147
(16)%
Software and Services
224
168
33 %
Total Motorola Solutions
$
347
$
315
10 %
Non-GAAP Operating Earnings % Three
Months Ended March 28, 2020 March 30, 2019
Products and Systems Integration
12.4 %
13.8 %
Software and Services
33.8 %
28.6 %
Total Motorola Solutions
21.0 %
19.0 %
Non-GAAP-3 Motorola Solutions, Inc. and
Subsidiaries Operating Earnings after Non-GAAP
Adjustments (In millions) Q1 2020
TOTAL Products andSystems Integration Software
andServices Net sales
$
1,655
$
993
$
662
Operating earnings ("OE")
$
259
$
92
$
167
Above-OE non-GAAP adjustments: Intangibles amortization
expense
53
12
41
Share-based compensation expenses
38
27
11
Hytera-related legal expenses
25
25
-
Reorganization of business charges
18
14
4
Acquisition-related transaction fees
2
1
1
Legal settlements
2
2
-
Gain on sale of property, plant, and equipment
(50)
(50)
-
Total above-OE non-GAAP adjustments
88
31
57
Operating earnings after non-GAAP adjustments
$
347
$
123
$
224
Operating earnings as a percentage of net sales - GAAP
15.6 %
9.3 %
25.2 %
Operating earnings as a percentage of net sales - after non-GAAP
adjustments
21.0 %
12.4 %
33.8 %
Non-GAAP-4
Motorola Solutions, Inc. and Subsidiaries Non-GAAP
Organic Revenue (In millions) Total Motorola
Solutions Three Months Ended March 28,
2020 March 30, 2019 % Change Net sales
$ 1,655
$ 1,657
- % Non-GAAP adjustments: Sales from acquisitions
51
3
Organic revenue
1,604
1,654
(3)%
View source
version on businesswire.com: https://www.businesswire.com/news/home/20200507006072/en/
MEDIA CONTACT Alexandra Reynolds Motorola Solutions +1
312-965-3968 Alexandra.Reynolds@motorolasolutions.com
INVESTOR CONTACT Tim Yocum Motorola Solutions +1
847-576-6899 Tim.Yocum@motorolasolutions.com
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