Hey JT, now its PIXR's turn with TSII!
Company Press Release
Imation Corp. Reports Record Earnings of $0.37 per
share from Continuing Operations on Comparable
Revenue
Growth of 9 Percent for Q3 1999
Outlook for Q4 Revised Upward to $0.33 - 0.37 EPS; Operating Income Growth in the range of 20
Percent Anticipated for 2000
OAKDALE, Minn.--(BUSINESS WIRE)--Oct. 28, 1999-- Imation Corp. (NYSE:IMN - news) today announced record
earnings for the third quarter and nine months ended September 30, 1999.
Net income from continuing operations in the third quarter was $13.8 million or $0.37 per fully diluted share. This represents a
146 percent increase over net income of $5.6 million, or $0.14 per fully diluted share for the comparable period last year.
Results for 1998 benefited from a $13.2 million reversal of restructuring charges. Without that reversal, the Company would
have reported a loss of $0.02 per fully diluted share in Q3 1998.
For nine months, net income on continuing operations was $28.0 million or $0.74 per fully diluted share compared with a net
loss of $7.9 million or $0.20 per fully diluted share for the comparable period last year. Excluding one-time benefits totaling
$16.8 million for the 1998 period, the Company would have reported a loss of $0.40 per share.
Commenting on the results, Imation's chairman and chief executive officer Bill Monahan said, ``Third quarter record results are
the third consecutive quarter of improving earnings and illustrate the momentum Imation has achieved as we've built a profitable
growth, high tech company focused on sustainable leadership in data storage and color management. Our continued focus on
reducing our cost structure and developing world-class manufacturing processes resulted in a solid 32 percent gross margin and
a record low SG&A margin of 20 percent.'
``With our leveraged business model, operational improvements have generated significant earnings growth', said Monahan.
``Year to date, we've seen an operating profit swing of $48 million in Data Storage on 37 percent revenue growth. We
continue to grow in excess of the overall market growth rate. In Color Technologies and Digital Solutions & Services, we've
made excellent progress in operations and in establishing clear direction and customer successes in the third quarter.'
``We are revising our expectations upward for the fourth quarter to $0.33 to $0.37 earnings per share. Next year, we plan to
drive revenue growth in all business segments, and anticipate operating income growth of about 20 percent as we continue to
build strong, long-term sustainable growth businesses in Data Storage and Color Technologies,' Monahan concluded.
Revenues on continuing operations for the third quarter were $346.0 million, a 4.3 percent increase over reported revenues of
$331.7 million from the comparable period last year and a 9 percent year-over-year increase, excluding the CD-ROM
replication business sold by the Company last year. Revenue for the nine months was $1,041.4 million, a 4.9 percent increase
over the $992.6 million in revenues for the comparable period last year. Excluding the CD-ROM replication business, revenues
for the nine months were up 10.5 percent. Revenue growth in the quarter came from all geographies, lead by non-U.S. growth
of 17 percent.
Operating income from continuing operations in the third quarter was $22.7 million, or a record 6.6 percent of revenues, a 92
percent increase over the $11.8 million in operating income reported for the third quarter of last year. For the nine months,
operating income from continuing operations was $44.1 million, compared with a loss of $2.7 million for the same period a year
ago.
The Company reported discontinued operations related to medical imaging and photo film businesses sold in 1998 and 1999.
For the third quarter and nine-months ended September 30, 1999, earnings including discontinued operations were $0.29 per
fully diluted share and $0.78 per fully diluted share, respectively. For the third quarter and nine-month periods of 1998,
earnings were $0.34 and $0.51 per fully diluted share, respectively.
The Company indicated that, under the terms of its share repurchase plan, it bought back approximately 500,000 shares of its
common stock in the quarter for $14.8 million in cash. Through September 30, 1999, a total of 4.1 million shares had been
repurchased for $76.3 million. The remaining authorization outstanding provides for the repurchase of up to an additional 5.9
million shares. At the end of the quarter the Company had approximately 37.1 million shares outstanding. Employee headcount
totaled approximately 4,850.
Imation supplies a variety of products and services worldwide for the information and image management industry, specializing
in imaging and data storage solutions. Additional information about Imation is available on the Company's Website at
www.imation.com or by calling Imation toll-free at 1-888-466-3456. To receive recent earnings and new releases, corporate
information and related shareholder services, call Imation's toll-free shareholder information line at 1-888-IMN-NYSE
(1-888-466-6973).
Certain information contained in this news release which does not relate to historical financial information may be deemed to
constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such
statements are subject to certain risks and uncertainties that could cause the Company's actual results in the future to differ
materially from its historical results and those presently anticipated or projected. Among these factors are the Company's ability
to meet its cost reduction and revenue growth targets, lower SG&A reimbursements from Kodak and Schroeder Ventures as
transition services the Company provides associated with the sale of certain businesses decline, certain seasonal factors, the
competitive pricing environment, foreign currency fluctuations, the ability of Imation to secure adequate supply of certain high
demand products, the market acceptance of newly introduced product and service offerings, the rate of decline for certain
existing products as well as various factors set forth in the Company's filings with the Securities and Exchange Commission,
including its 1998 Annual Report on Form 10-K and subsequent 10-Q filings.
Imation(TM) is a registered trademark of Imation Corp. All other trademarks are the property of their respective companies.
IMATION CORP.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In millions, except per share amounts)
(Unaudited)
Three months ended Nine months ended
September 30, September 30,
1999 1998 1999 1998
Net revenues $346.0 $331.7 $1,041.4 $992.6
Cost of goods sold 235.1 216.3 719.9 670.2
------ ------ ------ ------
Gross profit 110.9 115.4 321.5 322.4
Operating expenses:
Selling, general and
administrative 69.1 94.2 220.2 276.8
Research and development 19.1 22.6 57.2 65.1
Restructuring - (13.2) - (16.8)
------ ------- ------ --------
Total 88.2 103.6 277.4 325.1
Operating income (loss) 22.7 11.8 44.1 (2.7)
Other income and expense:
Interest expense 0.5 3.1 1.4 9.3
Other, net (0.8) (0.9) (3.9) 1.7
------- ------- ------- --------
Total (0.3) 2.2 (2.5) 11.0
Income (loss) from continuing
operations before taxes 23.0 9.6 46.6 (13.7)
Income tax provision
(benefit) 9.2 4.0 18.6 (5.8)
------- ------- ------- --------
Income (loss) from continuing
operations 13.8 5.6 28.0 (7.9)
Discontinued Operations:
Income from operations of
discontinued businesses,
net of taxes - 7.8 4.6 28.1
Loss on disposal of
discontinued businesses,
net of tax (3.0) - (3.0) -
------- ------- ------- --------
Net income $ 10.8 $ 13.4 $ 29.6 $ 20.2
======= ======= ======= =======
Earnings(loss) per
common share
Continuing operations $ 0.38 $ 0.14 $ 0.74 $(0.20)
Discontinued operations $(0.09) $ 0.20 $ 0.05 $ 0.71
------- ------- ------- -------
Net income $ 0.29 $ 0.34 $ 0.79 $ 0.51
======= ======= ======= ========
Earnings(loss) per
common share-
assuming dilution
Continuing operations $ 0.37 $ 0.14 $ 0.74 $(0.20)
Discontinued operations $(0.08) $ 0.20 $ 0.04 $ 0.71
------- ------- ------- -------
Net income $ 0.29 $ 0.34 $ 0.78 $ 0.51
======= ======= ======= ========
Weighted average basic
shares outstanding 36.5 39.5 37.6 39.3
======= ======= ======= ========
Weighted average diluted
shares outstanding 37.1 39.6 37.8 39.4
======= ======= ======= =======
Historic financial information presented above has been
reclassified to reflect the Medical Imaging and Photo Color businesses
as discontinued operations.
IMATION CORP.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In Millions, Except Per Share Amounts)
September 30,
1999 December 31,
(Unaudited) 1998
ASSETS
Current assets
Cash and equivalents $ 167.2 $ 64.2
Accounts receivable - net 257.1 326.3
Inventories 215.9 263.7
Other current assets 134.9 265.7
--------- ---------
Total current assets 775.1 919.9
Property, plant and equipment - net 211.0 233.8
Other assets 155.6 159.6
--------- ----------
Total assets $1,141.7 $1,313.3
========= =========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Accounts payable $ 115.6 $ 128.9
Accrued payroll 40.5 30.3
Short-term debt 12.1 25.2
Other current liabilities 200.9 228.8
--------- ---------
Total current liabilities 369.1 413.2
Other liabilities 51.4 106.3
Long-term debt 1.2 32.7
Total shareholders' equity 720.0 761.1
Total liabilities and
shareholders' equity $1,141.7 $1,313.3
IMATION CORP.
SUPPLEMENTAL INFORMATION
(Unaudited)
Operations & Cash Flow - Additional Information ($ Millions)
Qtr ended Sept 30 Nine Months
ended Sept 30,
1999 1998 1999 1998
Gross Margin % (a) 32.1% 34.8% 30.9% 32.5%
EBITDA (a)/(a)(a) $43.2 $23.8 $108.1 $49.5
Capital Expenditures $16.2 $13.5 $46.5 $49.6
Depreciation $17.7 $27.2 $57.0 $84.1
Amortization $3.4 $8.2 $11.9 $12.1
(a) Gross margin and EBITDA are for Continuing Operations. Other
information reflects total Imation.
(a)(a) EBITDA is calculated as operating income plus depreciation and
amortization.
Asset Utilization Information
Sept 30, December 31,
1999 1998
Days Sales Outstanding 68 80
Months of Inventory 2.9 3.2
Debt to Total Capital 1.8% 7.1%
Other Information
Approximate employee count as of Sept 30, 1999: 4,850
Book value per share as of Sept 30, 1999: $19.30
Shares used to calculate book value per share (millions): 37.3
Revenues by Area ($ Millions)
Quarter ended Sept 30, Nine Months ended Sept 30,
1999 1998 1999 1998
United States $195.5 $201.6 $580.8 $571.9
% of total 56% 61% 56% 58%
International $150.5 $130.1 $460.6 $420.7
% of total 44% 39% 44% 42%
IMATION CORP.
Segment Information - Continuing Operations
($ millions)
1999
Revenue Operating Income
Q1 Q2 Q3 YTD Q1 Q2 Q3 YTD
Data Storage & 219.9 237.7 235.7 693.3 0.7 5.7 16.0 22.4
Information
Management
Color
Technology 88.9 85.8 81.2 255.9 6.1 13.0 8.4 27.5
Digital Solutions
& 30.8 29.7 27.4 87.9 (0.8) (0.5) (0.5) (1.8)
Services
Corporate & Other 1.6 1.0 1.7 4.3 (1.3) (1.5) (1.2) (4.0)
----- ----- ----- ----- ----- ----- ----- -----
TOTAL 341.2 354.2 346.0 1,041.4 4.7 16.7 22.7 44.1
1998
Revenue
Q1 Q2 Q3 Q4 Year
Data Storage & 177.7 155.8 172.8 207.9 714.2
Information Management
Color Technology 104.9 105.4 105.7 94.0 410.0
Digital Solutions & 41.7 33.3 35.8 32.7 143.5
Services
Divested Businesses, 24.8 17.3 17.4 1.7 61.2
Corporate & Other (a)
TOTAL 349.1 311.8 331.7 336.3 1,328.9
1998
Operating Income (loss)
Q1 Q2 Q3 Q4 Year
Data Storage & (3.2) (15.9) (6.3) (5.1) (30.5)
Information Management
Color Technology 6.7 13.4 12.2 3.2 35.5
Digital Solutions & (0.1) (4.0) 1.7 (0.9) (3.3)
Services
Divested Businesses, (10.1) (1.3) 4.2 (5.5) (12.7)
Corporate & Other (a)
TOTAL (6.7) (7.8) 11.8 (8.3) (11.0)
Historic financial information presented above has been restated
to exclude the Medical Imaging and Photo Color businesses which are
now classified as discontinued operations.
(a) Includes results for the CD ROM business until divested in Q3
1998, restructuring reserve adjustments ($3.6 million of income in Q2
1998 and $13.2 million of income in Q3 1998), and unabsorbed overhead
which was previously allocated to the Medical Imaging and Photo Color
business.
IMATION CORP.
1998 CONSOLIDATED STATEMENTS OF OPERATIONS
Resclassified for Discontinued Operations
(In millions, except per share amounts)
(Unaudited)
Three months ended Year
Ended
Mar 31, June 30, Sep 30, Dec 31, Dec 31,
1998 1998 1998 1998 1998
------ ------ ------- ------- ------
Net revenues $349.1 $311.8 $331.7 $336.3 $1,328.9
Cost of goods sold 238.8 215.1 216.3 231.9 902.1
------ ------ ------- ------- --------
Gross profit 110.3 96.7 115.4 104.4 426.8
Operating expenses:
Selling, general and
administrative 93.5 89.1 94.2 90.0 366.8
Research and development 23.5 19.0 22.6 22.7 87.8
Restructuring - ( 3.6) (13.2) - (16.8)
------ ------- -------- ------ -------
Total 117.0 104.5 103.6 112.7 437.8
Operating income (loss) (6.7) (7.8) 11.8 (8.3) (11.0)
Other income and expense:
Interest expense 3.0 3.2 3.1 2.4 11.7
Other, net 1.5 1.1 (0.9) (2.4) (0.7)
------ ------- -------- ------- -------
Total 4.5 4.3 2.2 - 11.0
Income (loss)from
continuing
operations
before taxes: (11.2) (12.1) 9.6 (8.3) (22.0)
Income tax provision
(benefit) (4.7) (5.1) 4.0 (3.5) (9.3)
------ ------- ------- ------- ------
Income (loss) from
continuing
Operations (6.5) (7.0) 5.6 (4.8) (12.7)
Discontinued operations:
Income from operations
of discontinued
businesses, net of
taxes 8.5 11.8 7.9 5.2 33.4
Gain on disposal of
discontinued businesses,
net of taxes - - - 36.4 36.4
------- ------- ------- ----- ------
Net income $ 2.0 $ 4.8 $ 13.5 $ 36.8 $ 57.1
======= ======= ======== ======= =======
Basic and diluted earnings
(loss) per common share:
Continuing operations $(0.17) $(0.18) $ 0.14 $(0.12) $(0.33)
Discontinued operations $ 0.22 $ 0.30 $ 0.20 $ 1.06 $ 1.78
------- ------- -------- ------- -------
Net Income $ 0.05 $ 0.12 $ 0.34 $ 0.94 $ 1.45
======= ======= ======== ======= =======
Historic financial information presented above has been reclassified to reflect the Medical Imaging and Photo Color businesses
as discontinued operations.
Contact:
Imation, Oakdale
Investor Contact: Brad Allen
Vice President, Corporate Communications
& Investor Relations
(651) 704-5818
or
Media Contact: Jason Thunstrom
Manager, Public Relations
(651) 704-3164 |
