OTHER SELECTED FINANCIAL RESULTS
- Revenue – Sales decreased 2 percent, including $22 million of unfavorable foreign currency impact and $61 million in sales associated with the Airwave acquisition. These results include 2 percent growth in North America, which delivered increases in both Products and Services sales. Overall company product sales declined due to weakness in Latin America and Europe as well as currency headwinds. The Services business increased 6 percent due to the addition of Airwave and solid growth in organic Managed & Support results. The Services business declined 8 percent excluding the impact of Airwave, due primarily to currency headwinds and a decline in systems integration revenues associated with a large project in Europe.
- Operating margin – GAAP operating margin was 8.4 percent of sales in the first quarter of 2016, compared with 9.7 percent in the first quarter of 2015; non-GAAP operating margin was 13.9 percent of sales, compared with 12.8 percent in the first quarter of 2015, reflecting $43 million in lower operating expenses compared with the first quarter of 2015, due to the company's cost reduction initiatives and a stronger dollar.
- Taxes – The first quarter of 2016 GAAP effective tax rate was 23 percent. This compares with a tax rate of 31 percent in the first quarter of 2015. The first quarter of 2016 non-GAAP tax rate was 26 percent, compared with a tax rate of 29 percent in the first quarter of 2015. The full-year non-GAAP tax rate is expected to be approximately 33 percent.
- Cash flow – The company generated $13 million in operating cash from continuing operations during the quarter, reflecting a decrease of $143 million over the prior year. Free cash flow2 was a use of $38 million in the quarter. The decrease was largely driven by incentive costs and higher tax payments during the quarter.
- Cash and cash equivalents – The company ended the quarter with cash and cash equivalents of $1.9 billion and a net debt position of approximately $3.1 billion3. The company repurchased approximately $64 million of its common stock in the first quarter of 2016 and paid approximately $71 million in cash dividends.
KEY HIGHLIGHTS
- Significant win in the United Kingdom to provide interoperability between the nationwide land-mobile radio (LMR) network and new public safety long-term evolution (LTE) network with Motorola’s WAVE 7000 solution
- $77 million with five U.S. state and local customers to upgrade their mission-critical communication networks to Motorola’s latest P25 solution
- $25 million in North Africa for next-generation DMR MOTOTRBO trunking solution
- $20 million with a U.S. utility customer for a multi-year Managed & Support services contract
- Continued wins and expansion of the Emergency CallWorks Next Gen 9-1-1 solution that now has deployments in more than half of the U.S. states
BUSINESS OUTLOOK
- Second quarter 2016 – Motorola Solutions expects a revenue increase of 1 to 3 percent compared with the second quarter of 2015. This assumes approximately $130 million in revenues associated with the Airwave acquisition. The company expects non-GAAP earnings per share from continuing operations in the range of $0.82 to $0.88 per share.
- Full-year 2016 – The company reaffirms its full-year outlook for revenue growth of 5 to 7 percent compared to 2015. This revenue outlook includes approximately $450 million in revenues associated with the Airwave acquisition. The company expects non-GAAP earnings per share from continuing operations in the range of $4.45 to $4.65 per share.
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 5. The conference call will be webcast live with audio and
slides at
www.motorolasolutions.com/investor .
