Company raises full-year revenue and EPS
guidance following strong Q1 results
- Sales of $1.8 billion, up 7% versus a year ago
- Software and Services segment sales grew 15% and expanded
operating margins
- GAAP earnings per share (EPS) of $1.41
- Non-GAAP EPS* of $1.87, up 26% versus a year ago
- Backlog of $11.3 billion, up 8% versus a year ago
- Generated $370 million of operating cash flow, up 20% versus a
year ago
- Announced $2 billion increase to share repurchase program
Motorola Solutions, Inc. (NYSE: MSI) today
reported its earnings results for the first quarter of 2021. Click
here for a printable news release and financial tables.
"Q1 was an outstanding quarter, with record first-quarter
revenue, operating earnings, cash flow and ending backlog,” said
Greg Brown, chairman and CEO of Motorola Solutions. “I’m very
pleased with our double digit growth in video security, command
center software and LMR services. This strong demand combined with
our ending backlog position is driving our increased expectations
for the full year.”
The company also announced that its board of directors has
approved, subsequent to quarter end, a $2 billion increase to the
share repurchase program, raising the total authorization since
July 2011 to $16 billion. Under the company’s previously authorized
$14 billion share repurchase program, approximately $479 million in
repurchase authority remained at the end of the first quarter of
2021. The company may continue to repurchase shares from time to
time in the open market or in other privately negotiated
transactions, subject to market conditions.
KEY FINANCIAL RESULTS (presented in millions, except per
share data and percentages)
Q1 2021
Q1 2020
% Change
Sales
$1,773
$1,655
7 %
GAAP
Operating Earnings
$298
$259
15 %
% of Sales
16.8 %
15.6 %
EPS
$1.41
$1.12
26 %
Non-GAAP*
Operating Earnings
$411
$347
18 %
% of Sales
23.2 %
21.0 %
EPS
$1.87
$1.49
26 %
Products and Systems Integration
Segment
Sales
$1,015
$993
2 %
GAAP Operating Earnings
$77
$92
(16)%
% of Sales
7.6 %
9.3 %
Non-GAAP Operating Earnings*
$131
$123
7 %
% of Sales
12.9 %
12.4 %
Software and Services Segment
Sales
$758
$662
15 %
GAAP Operating Earnings
$221
$167
32 %
% of Sales
29.1 %
25.2 %
Non-GAAP Operating Earnings*
$280
$224
25 %
% of Sales
36.9 %
33.8 %
*Non-GAAP financial information excludes the after-tax impact of
approximately $0.46 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 $1.8 billion, up 7% from the
year-ago quarter driven by growth in both North America and
International. Revenue from acquisitions was $48 million and
currency tailwinds were $32 million in the quarter. The Products
and Systems Integration segment grew 2% driven primarily by growth
in video security and professional and commercial radio (PCR). The
Software and Services segment grew 15%, driven by growth in LMR
services, video security, and command center software.
- Operating margin - GAAP operating margin was 16.8% of
sales, up from 15.6% in the year-ago quarter. Non-GAAP operating
margin was 23.2% of sales, up from 21.0% in the year-ago quarter.
The increase in both GAAP and non-GAAP operating margins was
primarily due to higher sales and improved operating leverage in
both segments.
- Taxes - The GAAP effective tax rate was 15.1%, compared
to 11.8% in the year-ago quarter. The non-GAAP effective tax rate
was 17.7%, compared to 15.4% in the year-ago quarter. Both the GAAP
and non-GAAP tax rates were higher in the first quarter of 2021
primarily due to lower tax benefits on share-based
compensation.
- Cash flow - Operating cash flow was $370 million,
compared to $308 million in the year-ago quarter. Free cash flow
was $318 million, compared to $260 million in the year-ago quarter.
Cash flow for the quarter increased primarily due to higher
earnings and improved working capital.
- Capital allocation - During the quarter, the company
repurchased $170 million of shares, paid $121 million in cash
dividends, and incurred $52 million of capital expenditures.
Additionally, the company entered into a new five-year $2.25
billion revolving credit facility, which replaces the prior $2.2
billion revolving credit facility.
- Backlog - The company ended the quarter with backlog of
$11.3 billion, up 8% or $866 million from the year-ago quarter.
Software and Services segment backlog was up 7% or $548 million.
The growth was primarily driven by multi-year services and software
agreements in North America. Products and Systems Integration
segment backlog was up 11%, or $318 million. The growth was driven
by strong LMR demand in North America and International.
NOTABLE WINS AND ACHIEVEMENTS
Software and Services
- $40+ million P25 services, upgrade and body-worn camera orders
with Nashville, TN
- $35 million PTT over broadband multi-year contract with large
U.S. customer
- $22 million P25 and PTT over broadband contract with large
Middle Eastern customer
- $13 million body-worn camera orders with multiple U.K.
customers
- $5 million command center software cloud suite contract with
St. Lucie, FL
- Announced integration of V300 body-worn camera with APX P25
radio
Products and Systems
Integration
- $300+ million TETRA frame agreement with German MOD; $154
million initial order received in Q1
- $72 million of video sales with government customers, up 32%
year over year
- $37 million P25 upgrade order for government agency in
Canada
- $33 million TETRA upgrade for large customer in Europe
- $12 million P25 order with large U.S. federal customer
BUSINESS OUTLOOK
- Second-quarter 2021 - Motorola Solutions expects revenue
growth of 19% to 20% compared to the second quarter of 2020. The
company expects non-GAAP earnings per share in the range of $1.90
to $1.95. This assumes current foreign exchange rates,
approximately 173 million fully diluted shares, and an effective
tax rate of 23% to 24%.
- Full-year 2021 - Motorola Solutions now expects revenue
growth of 8% to 9%, up from the prior guidance of growth of 7.25%
to 8%, and non-GAAP earnings per share in the range of $8.70 to
$8.80, up from the prior guidance of $8.50 to $8.62. This assumes
current foreign exchange rates, approximately 173 million fully
diluted shares, and an effective tax rate of 22.5% to 23%.
The company has not quantitatively reconciled its guidance for
forward-looking non-GAAP metrics to their most comparable GAAP
measures 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.
COVID-19
In response to the COVID-19 pandemic, the company continues to
adhere to its plans to keep its employees and customers healthy and
safe, including having office workers work remotely, reducing
employee travel, withdrawing from certain industry events,
increasing the frequency of cleaning services, encouraging face
coverings, and using thermal scanning. We have continued to ensure
customer continuity by fulfilling several emergency orders,
completing remote software maintenance where possible, and
continuing to service our mission-critical networks on-site as
needed to ensure seamless operations. In addition, the company's
supply chain partners remain supportive and continue to work to
fulfill the necessary service levels to the company and its
customers.
The sales teams’ have continued to improve virtual engagement
with our customers. Additionally, the company’s engineering teams
have adapted its solutions offerings to equip customers with the
latest technology in an effort to protect their workplace from the
spread of COVID-19. Specifically, in Video Security and Analytics,
the company has adapted its software and hardware offerings to
provide analytics for occupancy counting, face mask detection and
thermal detection capabilities.
Although the COVID-19 pandemic continued to influence our
business activities in the first quarter of 2021, the negative
impacts on our business from COVID-19 have begun to ease. In March
2021, the President of the United States signed into law the
American Rescue Plan Act of 2021 (the "ARPA"), which is intended to
provide economic stimulus, specifically additional funding to state
and local governments, education and healthcare, as well as other
funding relief provisions, in order to address the impact of the
COVID-19 pandemic. We continue to evaluate the potential impact of
the ARPA on our business and results of operations. In addition, we
continue to assess our operating expenses and identify cost
reducing initiatives, including lower travel costs, contractor
spend and reducing our real estate footprint.
CONFERENCE CALL AND WEBCAST Motorola Solutions will host
its quarterly conference call beginning at 4 p.m. U.S. Central Time
(5 p.m. U.S. Eastern Time) on Thursday, May 6. The conference call
will be webcast live at www.motorolasolutions.com/investor.
CONSOLIDATED GAAP RESULTS (presented in millions,
except per share data)
A comparison of results from operations is as follows:
Q1 2021
Q1 2020
Net sales
$1,773
$1,655
Gross margin
860
787
Operating earnings
298
259
Amounts attributable to Motorola
Solutions, Inc. common stockholders
Net earnings
244
197
Diluted EPS
1.41
1.12
Weighted average diluted common shares
outstanding
173.2
175.9
HIGHLIGHTED ITEMS
The table below includes highlighted items, share-based
compensation expense and intangible assets amortization expense for
the first quarter of 2021.
(per diluted common share)
Q1 2021
GAAP EPS
$1.41
Highlighted Items:
Intangible assets amortization expense
0.26
Share-based compensation expenses
0.13
Reorganization of business charges
0.07
Operating lease asset impairments
0.03
Hytera-related legal expenses
0.01
Acquisition-related transaction fees
0.01
Fair value adjustments to equity
investments
(0.02)
Release of uncertain tax positions
(0.03)
Non-GAAP EPS
$1.87
USE OF NON-GAAP FINANCIAL INFORMATION
In addition to the GAAP results included in this news release,
Motorola Solutions also has included non-GAAP measurements of
results, including free cash flow, non-GAAP operating earnings,
non-GAAP EPS, non-GAAP operating margin, non-GAAP tax rate and
organic revenue. 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.
Reconciliations: Details and reconciliations of such non-GAAP
measurements to the corresponding GAAP measurements can be found at
the end of this news release.
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.
Non-GAAP operating earnings, non-GAAP EPS and non-GAAP operating
margin each excludes highlighted items, share-based compensation
expenses and intangible assets amortization expense, as
follows:
Highlighted items: The company has excluded the effects of
highlighted items including, but not limited to,
acquisition-related transaction fees, tangible and intangible asset
impairments, reorganization of business 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 March 14, 2017, the company
filed a complaint in the U.S. District Court for the Northern
District of Illinois (the “Court”) against Hytera Communications
Corporation Limited of Shenzhen, China; Hytera America, Inc.; and
Hytera Communications America (West), Inc. (collectively,
“Hytera”), alleging trade secret theft and copyright infringement
and seeking, among other things, injunctive relief, compensatory
damages, and punitive damages. On February 14, 2020, the company
announced that a jury decided in the company's favor in its trade
secret theft and copyright infringement case. In connection with
this verdict, the jury awarded the company $345.8 million in
compensatory damages and $418.8 million in punitive damages, for a
total of $764.6 million. The Court denied Hytera’s motion for a new
trial on October 20, 2020. On December 17, 2020, the Court denied
the company’s motion for a permanent injunction, finding instead
that Hytera must pay the company a forward-looking reasonable
royalty on products that use the company’s stolen trade secrets.
The royalty rate is yet to be determined, and will be set by the
Court absent agreement of the parties.
On January 11, 2021, the Court granted Hytera’s motion for
certain equitable relief and reduced the $764.6 million judgment
award to $543.7 million. That same day, the Court also granted the
company’s motion for pre-judgment interest, although the precise
amount of interest owed to the company by Hytera is still to be
determined by the Court. On March 25, 2021, the Court entered
rulings favorable to the company with respect to several of the
company's post-trial motions, including the company's motion for
attorneys' fees and its motion to require Hytera to turn over
certain assets in satisfaction of the company’s judgment award.
On May 27, 2020, Hytera America, Inc. and Hytera Communications
America (West), Inc. each filed for Chapter 11 bankruptcy
protection in the U.S. Bankruptcy Court for the Central District of
California (the “Bankruptcy Court”). The company filed motions in
the Bankruptcy Court to dismiss the bankruptcy proceedings in July
2020. On January 22, 2021, the Bankruptcy Court entered an agreed
order, allowing a partial sale of Hytera's U.S. assets in the
bankruptcy proceedings. The proposed sale does not include Hytera
inventory accused of including the company’s intellectual
property.
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, as of 2020, 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.
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.
FORWARD LOOKING STATEMENTS
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 and full year of 2021.
Motorola Solutions cautions the reader that the risks and
uncertainties below, as well as those in Part I Item 1A of Motorola
Solutions' 2020 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: (i) the impact
including increased costs and potential liabilities, associated
with changes in laws and regulations regarding privacy, data
protection and information security; (ii) challenges relating to
existing or future legislation and regulations pertaining to
artificial intelligence (“AI”) and AI-enabled products; (iii) the
impact of government regulation of radio frequencies; (iv) audits
and regulations and laws applicable to our U.S. government customer
contracts and grants; (v) the continuing and future impact of the
COVID-19 pandemic on our business; (vi) increased risk and
competition associated with the expansion of our platforms within
our Products and Systems Integration and Software and Services
segments; (vii) the effectiveness of our investments in new
products and technologies; (viii) the effectiveness of our
integrations of acquired businesses; (ix) a security breach or
other significant disruption of our IT systems; (x) our inability
to protect our intellectual property or potential infringement of
intellectual property rights of third parties; (xi) our license of
the MOTOROLA, MOTO, MOTOROLA SOLUTIONS and the Stylized M logo and
all derivatives and formatives thereof from Motorola Trademark
Holdings, LLC; (xii) the global nature of our employees, customers,
suppliers and outsource partners; (xiii) our use of third-parties
to develop, design and/or manufacture many of our components and
some of our products, and to perform portions of our business
operations; (xiv) the inability of our subcontractors to perform in
a timely and compliant manner; (xv) our inability to purchase at
acceptable prices a sufficient amount of materials, parts, and
components, as well as software and services, to meet the demands
of our customers; (xvi) risks related to our large, multi-year
system and services contracts; (xvii) the inability of our products
to meet our customers’ expectations or regulatory or industry
standards; (xviii) impact of current global economic and political
conditions in the markets in which we operate; (xix) the inability
to settle for cash our 1.75% senior convertible notes; (xx) impact
of returns on pension and retirement plan assets and interest rate
changes; (xxi) inability to attract and retain senior management
and key employees; (xxii) impact of product regulatory and safety,
consumer, worker safety and environmental laws; (xxiii) inability
to access the capital markets for financing on acceptable terms and
conditions; (xxiv) impact of tax matters; (xxv) impact of the
American Rescue Plan Act of 2021 on our business; and (xxvi) the
return of capital to shareholders through dividends and/or
repurchasing shares. 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 land
mobile radio mission critical communications, command center
software and video security & analytics, bolstered by managed
& support services, make cities safer and help businesses stay
productive and secure. 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. ©2021 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 3, 2021 March 28, 2020 Net sales from
products
$
926
$
884
Net sales from services
847
771
Net sales
1,773
1,655
Costs of products sales
438
397
Costs of services sales
475
471
Costs of sales
913
868
Gross margin
860
787
Selling, general and administrative expenses
303
341
Research and development expenditures
180
168
Other charges (income)
21
(34
)
Intangibles amortization
58
53
Operating earnings
298
259
Other income (expense): Interest expense, net
(54
)
(52
)
Other, net
45
17
Total other expense
(9
)
(35
)
Net earnings before income taxes
289
224
Income tax expense
44
26
Net earnings
245
198
Less: Earnings attributable to non-controlling interests
1
1
Net earnings attributable to Motorola Solutions, Inc.
$
244
$
197
Earnings per common share: Basic
$
1.44
$
1.15
Diluted
$
1.41
$
1.12
Weighted average common shares
outstanding: Basic
169.3
170.6
Diluted
173.2
175.9
Percentage of Net Sales* Net sales from products
52.2
%
53.4
%
Net sales from services
47.8
%
46.6
%
Net sales
100.0
%
100.0
%
Costs of products sales
47.3
%
44.9
%
Costs of services sales
56.1
%
61.1
%
Costs of sales
51.5
%
52.4
%
Gross margin
48.5
%
47.6
%
Selling, general and administrative expenses
17.1
%
20.6
%
Research and development expenditures
10.2
%
10.2
%
Other charges
1.2
%
(2.1
)%
Intangibles amortization
3.3
%
3.2
%
Operating earnings
16.8
%
15.6
%
Other income (expense): Interest expense, net
(3.0
)%
(3.1
)%
Other, net
2.5
%
1.0
%
Total other expense
(0.5
)%
(2.1
)%
Net earnings before income taxes
16.3
%
13.5
%
Income tax expense
2.5
%
1.6
%
Net earnings
13.8
%
12.0
%
Less: Earnings attributable to non-controlling interests
-
%
0.1
%
Net earnings attributable to Motorola Solutions, Inc.
13.8
%
11.9
%
* Percentages may not add up due to rounding
GAAP-2
Motorola Solutions, Inc. and Subsidiaries Consolidated
Balance Sheets (In millions) April 3, 2021
December 31, 2020 Assets Cash and cash equivalents
$
1,320
$
1,254
Accounts receivable, net
1,090
1,390
Contract assets
767
933
Inventories, net
530
508
Other current assets
235
242
Total current assets
3,942
4,327
Property, plant and equipment, net
1,028
1,022
Operating lease assets
448
468
Investments
168
158
Deferred income taxes
955
966
Goodwill
2,221
2,219
Intangible assets, net
1,180
1,234
Other assets
481
482
Total assets
$
10,423
$
10,876
Liabilities and Stockholders' Equity (Deficit) Current portion of
long-term debt
$
11
$
12
Accounts payable
484
612
Contract liabilities
1,419
1,554
Accrued liabilities
1,181
1,311
Total current liabilities
3,095
3,489
Long-term debt
5,164
5,163
Operating lease liabilities
356
402
Other liabilities
2,286
2,363
Total Motorola Solutions, Inc. stockholders’ equity (deficit)
(496
)
(558
)
Non-controlling interests
18
17
Total liabilities and stockholders’ equity (deficit)
$
10,423
$
10,876
GAAP-3
Motorola Solutions, Inc. and Subsidiaries Consolidated
Statements of Cash Flows (In millions) Three
Months Ended April 3, 2021 March 28, 2020
Operating Net earnings
$
245
$
198
Adjustments to reconcile Net earnings to Net cash provided by
operating activities: Depreciation and amortization
110
99
Non-cash other income
(7
)
(51
)
Share-based compensation expenses
29
38
Changes in assets and liabilities, net of effects of acquisitions,
dispositions, and foreign currency translation adjustments:
Accounts receivable
298
275
Inventories
(24
)
2
Other current assets and contract assets
149
48
Accounts payable, accrued liabilities, and contract liabilities
(426
)
(301
)
Other assets and liabilities
(5
)
(4
)
Deferred income taxes
1
4
Net cash provided by operating activities
370
308
Investing Acquisitions and investments, net
(2
)
(36
)
Proceeds from sales of investments and businesses, net
2
2
Capital expenditures
(52
)
(48
)
Proceeds from sales of property, plant and equipment
-
56
Net cash used for investing activities
(52
)
(26
)
Financing Revolving credit facility renewal fees
(7
)
-
Repayment of debt
(3
)
(4
)
Proceeds from unsecured revolving credit facility draw
-
800
Issuances of common stock
45
5
Purchases of common stock
(170
)
(253
)
Payments of dividends
(121
)
(109
)
Net cash provided by (used for) financing activities
(256
)
439
Effect of exchange rate changes on total cash and cash equivalents
4
(50
)
Net increase in total cash and cash equivalents
66
671
Cash and cash equivalents, beginning of period
1,254
1,001
Cash and cash equivalents, end of period
$
1,320
$
1,672
Financial Ratios: Free cash flow*
$
318
$
260
*Free cash flow is a non-GAAP financial measure and is calculated
as 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 3, 2021 March 28,
2020 % Change Products and Systems Integration
$
1,015
$
993
2
%
Software and Services
758
662
15
%
Total Motorola Solutions
$
1,773
$
1,655
7
%
Operating Earnings Three Months Ended
April 3, 2021 March 28, 2020 % Change
Products and Systems Integration
$
77
$
92
(16
)%
Software and Services
221
167
32
%
Total Motorola Solutions
$
298
$
259
15
%
Operating Earnings % Three Months Ended
April 3, 2021 March 28, 2020 Products and
Systems Integration
7.6
%
9.3
%
Software and Services
29.1
%
25.2
%
Total Motorola Solutions
16.8
%
15.6
%
Non-GAAP-1
Motorola Solutions, Inc. and Subsidiaries Non-GAAP
Adjustments (Intangibles Amortization Expense, Share-Based
Compensation Expenses, and Highlighted Items) (In
millions) Q1 2021 Non-GAAP
Adjustments Statement Line PBT (Inc)/Exp
TaxInc/(Exp) PAT(Inc)/Exp EPS impact
Intangible assets amortization expense Intangibles amortization
$
58
$
13
$
45
$
0.26
Share-based compensation expenses Cost of sales, SG&A and
R&D
29
6
23
0.13
Reorganization of business charges Cost of sales and Other charges
(income)
16
3
13
0.07
Operating lease asset impairments Other charges (income)
7
1
6
0.03
Hytera-related legal expenses SG&A
2
1
1
0.01
Acquisition-related transaction fees Other charges (income)
1
-
1
0.01
Fair value adjustments to equity investments Other income (expense)
(5
)
(1
)
(4
)
(0.02
)
Release of uncertain tax positions Other income (expense)
(1
)
4
(5
)
(0.03
)
Total impact on Net earnings
$
107
$
27
$
80
$
0.46
Non-GAAP-2
Motorola Solutions, Inc. and Subsidiaries Non-GAAP
Segment Information (In millions) Net
Sales Three Months Ended April 3,
2021 March 28, 2020 % Change Products and Systems
Integration
$
1,015
$
993
2
%
Software and Services
758
662
15
%
Total Motorola Solutions
$
1,773
$
1,655
7
%
Non-GAAP Operating Earnings Three Months
Ended April 3, 2021 March 28, 2020 %
Change Products and Systems Integration
$
131
$
123
7
%
Software and Services
280
224
25
%
Total Motorola Solutions
$
411
$
347
18
%
Non-GAAP Operating Earnings % Three Months
Ended April 3, 2021 March 28, 2020
Products and Systems Integration
12.9
%
12.4
%
Software and Services
36.9
%
33.8
%
Total Motorola Solutions
23.2
%
21.0
%
Non-GAAP-3
Motorola Solutions, Inc. and Subsidiaries Operating
Earnings after Non-GAAP Adjustments (In millions)
Q1 2021 TOTAL Products and Systems
Integration Software and Services Net sales
$
1,773
$
1,015
$
758
Operating earnings ("OE")
$
298
$
77
$
221
Above-OE non-GAAP adjustments: Intangible assets amortization
expense
58
13
45
Share-based compensation expenses
29
22
7
Reorganization of business charges
16
12
4
Operating lease asset impairment
7
5
2
Hytera-related legal expenses
2
2
-
Acquisition-related transaction fees
1
-
1
Total above-OE non-GAAP adjustments
113
54
59
Operating earnings after non-GAAP adjustments
$
411
$
131
$
280
Operating earnings as a percentage of net sales - GAAP
16.8
%
7.6
%
29.1
%
Operating earnings as a percentage of net sales - after non-GAAP
adjustments
23.2
%
12.9
%
36.9
%
Non-GAAP-4
Motorola Solutions, Inc. and Subsidiaries Non-GAAP
Organic Revenue (In millions) Three Months
Ended April 3, 2021 March 28, 2020 %
Change Net sales
$
1,773
$
1,655
7
%
Non-GAAP adjustments: Sales from acquisitions
49
1
Organic revenue
$
1,724
$
1,654
4
%
View source
version on businesswire.com: https://www.businesswire.com/news/home/20210506006196/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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