Imation Reports Fourth Quarter and Full Year 2012 Results and Additional Steps in Transformation to a Secure and Scalable

  Imation Reports Fourth Quarter and Full Year 2012 Results and Additional
  Steps in Transformation to a Secure and Scalable Storage Company

      Company announces intent to divest consumer electronics businesses

Business Wire

OAKDALE, Minn. -- February 13, 2013

Imation Corp. (NYSE:IMN), a global scalable storage and data security company,
today released financial results for its 2012 fourth quarter and fiscal year
ended December 31, 2012. The Company also provided an update on its continued
strategic transformation.

CEO Mark Lucas said, “Imation’s opportunity for higher margin, differentiated
products is in our Secure and Scalable Storage portfolio which grew 16.7
percent in the fourth quarter and rose to 21 percent of total revenues, up
from 15.7 percent a year earlier. With our recently announced purchase of
Nexsan, we expect to derive more revenue from this category in the future. As
anticipated, our audio and video information category declined 23.6 percent
and will drop further given the divestitures we are announcing today. We have
discussed previously that our traditional storage business is in secular
decline; therefore, we are acting with urgency to reduce our cost structure
and transform Imation into a company focused on high growth markets in data
storage and data security.”

Imation reported Q4 2012 net revenue of $299.1 million, down 12.6 percent from
Q4 2011. Special charges were $305.2 million, creating an operating loss of
$310.4 million, and a diluted loss per share of $8.34. Special charges
included intangible asset impairments of $260.5 million, goodwill impairment
of $23.3 million and other charges of $21.4 million. Excluding special
charges, Q4 2012 operating loss would have been $5.2 million and diluted loss
per share would have been $0.14.

For the full year 2012, revenue was $1.1 billion, down 14.8 percent from 2011,
and the operating loss was $336.1 million, or $9.09 per diluted share. Special
charges for the full year were $307.2 million and excluding these special
charges, 2012 operating loss would have been $28.9 million, and diluted loss
per share would have been $0.90. EBITDA for the year totaled $6.9 million and
for the fourth quarter was $2.8 million (See Tables Five and Six for non-GAAP
measures).

Transformation Strategy

Imation is currently in the midst of a strategic transformation to build a
long-term platform for growth, increased margins and improved profitability.
The Company is accelerating this transformation through a number of actions
including the following:

  *Nexsan Acquisition - On December 31, 2012, Imation acquired Nexsan
    Corporation, a successful, higher margin, disk-based and hybrid
    disk-and-solid-state storage systems company, to invest in growth
    platforms for data storage solutions. The acquisition is expected to
    significantly contribute to Imation’s growth in the small- and
    medium-sized business and distributed enterprise storage markets, and
    Imation will provide the Nexsan business with global scale and a
    well-known storage brand.

  *Exiting Lower Margin Businesses - As the Company intensified its focus on
    data storage and data security, management announced in the third quarter
    that Imation would be exploring strategic alternatives for the consumer
    electronics brands and businesses. Imation has decided to divest its
    Memorex and XtremeMac consumer electronics businesses. The Company will
    continue its TDK Life on Record business on a more focused basis. Lucas
    commented, “Divesting the Memorex and XtremeMac consumer electronics
    brands will allow us to direct our time and resources to the right
    opportunities in data storage and security, as well as our retail optical
    business under the Memorex and TDK Life on Record brands.”
  *Cost Reductions - As previously reported, Imation is aggressively
    implementing cost savings initiatives to right size the Company.
    Management is targeting to exceed a 25 percent reduction in operating
    expenses.
  *Business Structure Realignment - Also, as previously announced, to better
    align the Company with its key commercial and retail segments, Imation
    established two new business units effective January 1, 2013: Tiered
    Storage and Security Solutions (TSS) and Consumer Storage and Accessories
    (CSA). The two segments will be independently managed and provide a
    focused customer-centric structure, resulting in faster decision-making,
    clear accountability, a more nimble organization and increased efficiency
    worldwide.

“We are committed to transforming the Company and building a sustainable
platform for growth, increased margins and long-term shareholder value.
Combined, the acquisition of Nexsan, divestiture of certain consumer
businesses, improvements in cost structure, and a more efficient business unit
model truly represent an acceleration of our transformation strategy. In 2013,
we are building on these actions and moving as swiftly as we can to become a
major player in data storage and security on a global basis,” Lucas concluded.

Detailed Q4 2012 Analysis

Net revenue for Q4 2012 was $299.1 million, down 12.6 percent from Q4 2011.
From a regional perspective, Americas revenue decreased 22.2 percent driven by
optical and consumer electronics revenue reductions; Europe revenue decreased
7.7 percent; North Asia revenue increased 0.6 percent and South Asia revenue
decreased 3.8 percent.

Gross margin for Q4 2012 was 16.1 percent, up from 15.0 percent in Q4 2011.
Gross margin was 16.9 percent excluding inventory write offs of $2.3 million,
which were part of the Company’s restructuring program, compared to 17.2
percent on the same basis in 2011.

Selling, general and administrative (SG&A) expenses for Q4 2012 were $50.5
million, down $2.4 million compared with Q4 2011 expenses of $52.9 million.

Research and development (R&D) expenses for Q4 2012 were $5.1 million, down
$0.9 million compared with Q4 2011 expenses of $6.0 million.

Special charges were $305.2 million in Q4 2012 consisting of intangible asset
impairments of $260.5 million, goodwill impairment of $23.3 million and $21.4
million of restructuring and other charges. The intangible asset charges,
which related primarily to the Memorex International Inc. acquisition in 2006
and TDK Recording Media acquisition in 2007, were driven mainly by an
accelerated optical market secular decline. Special charges were $12.3 million
in Q4 2011 (See Tables Five and Six for non-GAAP measures).

Operating loss was $310.4 million in Q4 2012 compared with an operating loss
of $12.1 million in Q4 2011. Excluding the impact of special charges described
above, adjusted operating loss would have been $5.2 million in Q4 2012
compared with adjusted operating income on the same basis of $0.2 million in
Q4 2011.

Income tax benefit was $1.0 million in Q4 2012 compared with income tax
benefit of $0.7 million in Q4 2011. The Company maintains a valuation
allowance related to its U.S. deferred tax assets and, therefore, no tax
provision or benefit was recorded related to its 2012 U.S. results.

Loss per diluted share was $8.34 in Q4 2012 compared with $0.34 in Q4 2011.
Excluding the impact of special charges described above, adjusted loss per
diluted share would have been $0.14 in Q4 2012 compared with $0.14 in Q4 2011.

Cash and cash equivalents balance was $108.7 million as of December 31,2012,
down $77.6 million during the quarter, driven primarily by the payment of
$104.6 million in cash for the Nexsan acquisition, offset by short-term
borrowings of $20.0 million and net cash provided by operations of $14.1
million.

Webcast and Replay Information

A teleconference is scheduled for 9:00 AM Central Time today, February 13,
2013, and will be available on the Internet on a listen-only basis at
www.ir.Imation.com or www.streetevents.com. The Company's quarterly financial
results will be discussed.

A taped replay of the teleconference will be available beginning at 12:30 p.m.
Central time today, February 13, 2013, until 11:00 p.m. Central time February
20, 2013 by dialing 855-859-2056 (Conference ID #64544023). All remarks made
during the teleconference will be current at the time of the call and the
replay will not be updated to reflect any subsequent developments.

Description of Tables

Table One - Consolidated Statements of Operations

Table Two - Consolidated Balance Sheets

Table Three - Supplemental Segment and Product Information

Table Four - Operations, Cash Flow and Additional Information

Table Five - Non-GAAP Financial Measures

Table Six - Non-GAAP Financial Measures

Non-GAAP Financial Measures

The Non-GAAP financial measurements (including adjusted operating income
(loss), adjusted income (loss) per diluted share, adjusted gross margin and
EBITDA) are provided to assist in understanding the impact of certain items on
Imation's actual results of operations when compared with prior periods (see
Tables Five and Six). Management believes this will assist investors in making
an evaluation of Imation's performance against prior periods on a comparable
basis by adjusting for these items. Management understands that there are
material limitations on the use of Non-GAAP measures. Non-GAAP measures are
not substitutes for GAAP measures for the purpose of analyzing financial
performance. These Non-GAAP measures are not in accordance with, or an
alternative for measures prepared in accordance with, generally accepted
accounting principles and may be different from Non-GAAP measures used by
other companies. In addition, these Non-GAAP measures are not based on any
comprehensive set of accounting rules or principles. This information should
not be construed as an alternative to the reported results, which have been
determined in accordance with accounting principles generally accepted in the
United States of America.

Accounting Valuations Not Yet Finalized

The financial statements released today reflect the impacts associated with
the purchase price allocation from the acquisition of Nexsan Corporation as
well as impairment charges related to intangible assets and goodwill from
prior acquisitions. These items are subject to change pending finalization of
the required valuations. We expect all applicable information to be finalized
prior to the filing of the Imation Form 10-K in March.

About Imation Corp.

Imation (NYSE: IMN) is a global scalable storage and data security company.
Imation reaches customers in more than 100 countries through a powerful global
distribution network and well recognized brands. Additional information about
Imation is available at www.imation.com.

Risk and Uncertainties

Certain information contained in this press release which does not relate to
historical 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 our actual results in the future to differ materially from our
historical results and those presently anticipated or projected. We wish to
caution investors not to place undue reliance on any such forward-looking
statements. Any forward-looking statements speak only as of the date on which
such statements are made, and we undertake no obligation to update such
statements to reflect events or circumstances arising after such date. Risk
factors include our ability to successfully implement our strategy; our
ability to grow our business in new products with profitable margins and the
rate of revenue decline for certain existing products; the ability of our data
security products to withstand cyber-attacks; the ability to quickly develop,
source, introduce and deliver differentiating and innovative products; our
potential dependence on third parties for new product introductions or
technologies in order to introduce our own new products; the ready
availability and price of energy and key raw materials or critical components
including due to the effects of natural disasters and our ability to pass
along raw materials price increases to our customers; continuing uncertainty
in global and regional economic conditions including adverse effects of the
ongoing sovereign debt crisis in Europe, increased Euro currency exchange rate
volatility, and related austerity measures and their potential impact on
European economic growth; our ability to identify, value, integrate and
realize the expected benefits from any acquisition which has occurred or may
occur in connection with our strategy; the possibility that our goodwill or
any goodwill that we acquire may become impaired; the seasonality and
volatility of the markets in which we operate; foreign currency fluctuations;
changes in European law or practice related to the imposition or
collectability of optical levies; significant changes in discount rates and
other assumptions used in the valuation of our pension plans; the possibility
that our intangible assets may become impaired; acquisition related contingent
consideration, which is recorded at fair value and revalued each period,
differs from the obligation recorded during the previous period resulting in
income or expense being recorded on the consolidated statements of operations;
changes in tax laws, regulations and results of inspections by various tax
authorities; our ability to successfully defend our intellectual property
rights and the ability or willingness of our suppliers to provide adequate
protection against third party intellectual property or product liability
claims; the outcome of any pending or future litigation; failure to adequately
protect our information systems from cyber-attacks; our ability to meet our
revenue growth, gross margin and earnings targets and the volatility of our
stock price due to our results or market trends, as well as various factors
set forth from time to time in our filings with the Securities and Exchange
Commission.

Table One

IMATION CORP.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In millions, except for per share amounts)
(Unaudited)
                                               
                   Three Months Ended              Twelve Months Ended
                   December 31                     December 31
                   2012            2011          2012          2011
Net revenue        $  299.1          $ 342.3       $ 1,099.6       $ 1,290.4
Cost of goods        251.0          290.8       897.3         1,073.7 
sold
Gross profit          48.1             51.5          202.3           216.7
                                                                     
Operating
expense:
Selling,
general and           50.5             52.9          210.7           203.7
administrative
Research and          5.1              6.0           22.8            21.0
development
Goodwill              23.3             -             23.3            1.6
impairment
Intangible            260.5            -             260.5           -
impairment
Litigation            -                -             -               2.0
settlement
Restructuring        19.1           4.7         21.1          21.5    
and other
Total                 358.5            63.6          538.4           249.8
                                                                     
Operating loss        (310.4  )        (12.1 )       (336.1  )       (33.1   )
                                                                     
Other expense
(income):
Interest income       (0.1    )        (0.2  )       (0.5    )       (0.9    )
Interest              0.5              1.0           2.9             3.7
expense
Other, net           0.4            0.7         2.6           7.0     
Total                 0.8              1.5           5.0             9.8
                                                                     
Loss before           (311.2  )        (13.6 )       (341.1  )       (42.9   )
income taxes
                                                                     
Income tax
(benefit)            (1.0    )       (0.7  )      (0.4    )      3.8     
provision
                                                                     
Net loss           $  (310.2  )      $ (12.9 )     $ (340.7  )     $ (46.7   )
                                                                     
(Loss) earnings
per common
share
Basic              $  (8.34   )      $ (0.34 )     $ (9.09   )     $ (1.24   )
Diluted               (8.34   )        (0.34 )       (9.09   )       (1.24   )
                                                                     
Weighted
average shares
outstanding
Basic                 37.2             37.4          37.5            37.7
Diluted               37.2             37.4          37.5            37.7
                                                                     
                                                                     
*These Financial Statements and information presented in the following tables
reflect the impacts associated with the purchase price allocation from the
acquisition of Nexsan Corporation as well as impairment charges related to
intangible assets and goodwill from prior acquisitions. These items are
subject to change pending finalization of the required valuations. We expect
all applicable information to be finalized prior to the filing of the Imation
Form 10-K in March.


Table Two

IMATION CORP.
CONSOLIDATED BALANCE SHEETS *
(In millions)
(Unaudited)
                                                      
                               December 31,                  December 31,
                               2012                          2011
ASSETS
Current assets
Cash and cash                  $       108.7                 $     223.1
equivalents
Accounts receivable, net               220.8                       234.9
Inventories                            166.0                       208.8
Other current assets                  61.4                       49.7
                                                                   
Total current assets                   556.9                       716.5
                                                                   
Property, plant and                    58.9                        55.4
equipment, net
Intangible assets, net                 81.9                        321.7
Goodwill                               73.5                        31.3
Other assets                          21.1                       24.4
                                                                   
Total assets                   $       792.3                 $     1,149.3
                                                                   
LIABILITIES AND
SHAREHOLDERS' EQUITY
Current liabilities
Accounts payable               $       162.7                 $     205.2
Other current                          157.8                       151.2
liabilities
Short-term debt                       20.0                       -
                                                                   
Total current                          340.5                       356.4
liabilities
                                                                   
Other liabilities                      51.4                        69.2
                                                                
Total liabilities                     391.9                      425.6
Commitments and                                                 
contingencies
Shareholders' equity                  400.4                      723.7
                                                                   
Total liabilities and          $       792.3                 $     1,149.3
shareholders' equity
                                                                   
                                                                   
*These Financial Statements and information presented in the following tables
reflect the impacts associated with the purchase price allocation from the
acquisition of Nexsan Corporation as well as impairment charges related to
intangible assets and goodwill from prior acquisitions. These items are
subject to change pending finalization of the required valuations. We expect
all applicable information to be finalized prior to the filing of the Imation
Form 10-K in March.


Table Three

IMATION CORP.
SUPPLEMENTAL SEGMENT AND PRODUCT INFORMATION
(Dollars in millions)
(Unaudited)
                                                                    
                   Three months ended          Three months ended
                   December 31,                December 31,
                   2012                        2011                       % Change
                   Revenue         % Total     Revenue         % Total
Americas           $ 131.1         43.8   %    $ 168.6         49.3  %    -22.2  %
Europe               59.8          20.0   %      64.8          18.9  %    -7.7   %
North Asia           78.1          26.1   %      77.6          22.7  %    0.6    %
South Asia          30.1         10.1   %     31.3         9.1   %    -3.8   %
Total              $ 299.1        100.0  %    $ 342.3        100.0 %
                                                                          
                   Revenue         % Total     Revenue         % Total
Traditional
storage
Optical products   $ 109.0         36.5   %    $ 128.1         37.4  %    -14.9  %
Magnetic             71.2          23.8   %      82.7          24.2  %    -13.9  %
products
Other
traditional         3.7          1.2    %     9.1          2.7   %    -59.3  %
storage
Total
traditional          183.9         61.5   %      219.9         64.3  %    -16.4  %
storage
Secure and           62.8          21.0   %      53.8          15.7  %    16.7   %
scalable storage
Audio and video     52.4         17.5   %     68.6         20.0  %    -23.6  %
information
Total              $ 299.1        100.0  %    $ 342.3        100.0 %
                                                                          
                                                                          
                   Operating                   Operating
                   Income          OI %        Income          OI %
                   (Loss)                      (Loss)
Americas           $ (0.1    )     -0.1   %    $ 6.1           3.6   %    -101.6 %
Europe               1.9           3.2    %      2.5           3.9   %    -24.0  %
North Asia           3.1           4.0    %      3.4           4.4   %    -8.8   %
South Asia           (0.2    )     -0.7   %      1.7           5.4   %    -111.8 %
Corp/Unallocated    (315.1  )     NM          (25.8   )     NM        NM
(1)
Total              $ (310.4  )     -103.8 %    $ (12.1   )     -3.5  %
                                                                          
                   Gross Margin                Gross Margin
                                                                          
Traditional          17.8      %                 19.1      %
storage
Secure and           14.6                        18.0
scalable storage
Audio and video     16.0                      10.8    
information
                     16.9                        17.2
Inventory
write-offs
related to          (0.8    )                  (2.2    )
restructuring
programs
Total               16.1     %                15.0     %
                                                                          
                   Twelve months ended         Twelve months ended
                   December 31,                December 31,
                   2012                        2011                       % Change
                   Revenue         % Total     Revenue         % Total
Americas           $ 504.7         45.9   %    $ 595.9         46.2  %    -15.3  %
Europe               208.8         19.0   %      248.0         19.2  %    -15.8  %
North Asia           272.5         24.8   %      307.2         23.8  %    -11.3  %
South Asia          113.6        10.3   %     139.3        10.8  %    -18.4  %
Total              $ 1,099.6      100.0  %    $ 1,290.4      100.0 %
                                                                          
                                                                          
                   Revenue         % Total     Revenue         % Total
Traditional
storage
Optical products   $ 426.8         38.8   %    $ 511.9         39.7  %    -16.6  %
Magnetic             286.2         26.0   %      327.4         25.3  %    -12.6  %
products
Other
traditional         15.4         1.4    %     47.7         3.7   %    -67.7  %
storage
Total
traditional          728.4         66.2   %      887.0         68.7  %    -17.9  %
storage
Secure and           210.1         19.1   %      210.1         16.3  %    0.0    %
scalable storage
Audio and video     161.1        14.7   %     193.3        15.0  %    -16.7  %
information
Total              $ 1,099.6      100.0  %    $ 1,290.4      100.0 %
                                                                          
                                                                          
                   Operating                   Operating
                   Income          OI %        Income          OI %
                   (Loss)                      (Loss)
Americas           $ 2.9           0.6    %    $ 8.4           1.4   %    -65.5  %
Europe               (3.9    )     -1.9   %      10.3          4.2   %    -137.9 %
North Asia           5.9           2.2    %      12.5          4.1   %    -52.8  %
South Asia           0.6           0.5    %      4.0           2.9   %    -85.0  %
Corp/Unallocated    (341.6  )     NM          (68.3   )     NM        NM
(1)
Total              $ (336.1  )     -30.6  %    $ (33.1   )     -2.6  %
                                                                          
                   Gross Margin                Gross Margin
                                                                          
Traditional          19.0      %                 19.0      %
storage
Secure and           18.8                        15.1
scalable storage
Audio and video     16.4                      13.0    
information
                     18.6                        17.5
Inventory
write-offs
related to          (0.2    )                  (0.7    )
restructuring
programs
Total               18.4     %                16.8     %
                                                                          
                                                                          
NM - Not
Meaningful
(1) Corporate and unallocated amounts include inventory write-offs related to
restructuring programs, goodwill impairment, intangible impairment, intangible
accelerated amortization, research and development expense, corporate expense,
stock-based compensation expense, and restructuring and other charges that are not
allocated to the regional markets we serve. We believe this avoids distorting the
operating income for the regional segments.
                                                                          

   Table Four
   
   IMATION CORP.
   OPERATIONS, CASH FLOW AND ADDITIONAL INFORMATION
   (Dollars in millions)
   (Unaudited)
                                                           
                                                                             
                       Three Months Ended            Twelve Months Ended
   (Dollars in         December 31                   December 31
   millions)
                       2012            2011          2012          2011
   Operations
   Gross Profit        $  48.1         $ 51.5        $ 202.3       $   216.7
   Gross Margin           16.1   %       15.0  %       18.4   %        16.8  %
   %
   Operating           $  (310.4 )     $ (12.1 )     $ (336.1 )    $   (33.1 )
   (Loss) Income
   Operating
   (Loss) Income          -103.8 %       -3.5  %       -30.6  %        -2.6  %
   %
                                                                             
   Cash Flow
   Net cash
   (used in)
   provided by         $  14.1         $ 15.3        $ (8.5   )    $   (16.3 )
   operating
   activities
   Net cash
   (used in)
   provided by         $  (109.6 )     $ (22.2 )     $ (115.7 )    $   (54.3 )
   investing
   activities
   Net cash
   (used in)
   provided by         $  18.4         $ -           $ 9.9         $   (9.1  )
   financing
   activities
   Cash and cash
   equivalents -       $  108.7        $ 223.1       $ 108.7       $   223.1
   end of period
                                                                             
   Capital             $  1.8          $ 1.2         $ 10.2        $   7.3
   Spending
   Depreciation        $  2.2          $ 2.3         $ 8.3         $   10.7
   Amortization        $  5.8          $ 7.2         $ 27.5        $   26.0
                                                                             
   NM - Not
   Meaningful
                                                                             
   Asset
   Utilization
   Information *
                                                     December 31   December 31
                                                     2012          2011
                                                                             
   Days Sales
   Outstanding                                         59              58
   (DSO)
   Days of
   Inventory                                           89              85
   Supply
   Debt to Total                                       4.8    %        0.0   %
   Capital
                                                                             
   Other
   Information
                                                                             
** Approximate employee count as of December 31, 2012:                 1,230
   Approximate employee count as of December 31, 2011:                 1,130
   Book value per share as of December 31, 2012:                     $ 9.94
   Shares used to calculate book value per share (millions):           40.3
   Imation repurchased approximately 396,0000 shares of its stock during the
   quarter for $1.7 million.
   Authorization for repurchase of approximately 3.8 million shares remains
   outstanding based on the latest Board authorization.
                                                                             
*  These operational measures, which we regularly use, are provided to assist
   in the investor's further understanding of our operations.
                                                                             
** Includes approximately 200 employees of Nexsan Corporation which was
   acquired on December 31, 2012.
                                                                             
   Days Sales Outstanding is calculated using the count-back method, which
   calculates the number of days of most recent revenue that are reflected in
   the net accounts receivable balance.
                                                                   
   Days of Inventory Supply is calculated using the current period inventory
   balance divided by an estimate of the inventoriable portion of cost of
   goods sold expressed in days. December 31, 2012 amount excludes Nexsan
   Corporation.
                                                                             
   Debt to Total Capital is calculated by dividing total debt (long term plus
   short term) by total shareholders' equity and total debt.
                                                                             

Table Five

IMATION CORP.
Non-GAAP Financial Measures
(In millions, except for per share amounts)
(Unaudited)
                                                                             
              Three Months Ended                            Three Months Ended
              December 31, 2012                             December 31, 2011
              GAAP            Adj *         Non-GAAP        GAAP            Adj *        Non-GAAP
Net revenue   $ 299.1         $ -           $ 299.1         $ 342.3         $ -          $ 342.3
Cost of        251.0         (2.3  )      248.7         290.8         (7.6 )      283.2   
goods sold
Adjusted
gross         $ 48.1         $ 2.3        $ 50.4         $ 51.5         $ 7.6       $ 59.1    
profit
                                                                                                   
Adjusted
gross           16.1    %                     16.9    %       15.0    %                    17.2    %
margin
                                                                                                   
Operating
(loss)        $ (310.4  )     $ 305.2       $ (5.2    )     $ (12.1   )     $ 12.3       $ 0.2
income
                                                                                                   
Adjusted
income tax    $ (1.0    )     $ 0.1         $ (0.9    )     $ (0.7    )     $ 4.6        $ 3.9
provision
(benefit)
                                                                                                   
Adjusted
(loss)        $ (310.2  )     $ 305.1       $ (5.1    )     $ (12.9   )     $ 7.7        $ (5.2    )
income
                                                                                                   
Adjusted
(loss)
earnings      $ (8.34   )                   $ (0.14   )     $ (0.34   )                  $ (0.14   )
per common
share -
Diluted
                                                                                                   
Adjusted
weighted
average         37.2                          37.2            37.4                         37.4
shares
outstanding
- Diluted
                                                                                                   
                                                                                                   
              Twelve Months Ended                           Twelve Months Ended
              December 31, 2012                             December 31, 2011
              GAAP            Adj *         Non-GAAP        GAAP            Adj *        Non-GAAP
Net revenue   $ 1,099.6       $ -           $ 1,099.6       $ 1,290.4       $ -          $ 1,290.4
Cost of        897.3         (2.3  )      895.0         1,073.7       (9.1 )      1,064.6 
goods sold
Adjusted
gross         $ 202.3        $ 2.3        $ 204.6        $ 216.7        $ 9.1       $ 225.8   
profit
                                                                                                   
Adjusted
gross           18.4    %                     18.6    %       16.8    %                    17.5    %
margin
                                                                                                   
Operating
(loss)        $ (336.1  )     $ 307.2       $ (28.9   )     $ (33.1   )     $ 34.2       $ 1.1
income
                                                                                                   
Adjusted
income tax    $ (0.4    )     $ 0.1         $ (0.3    )     $ 3.8           $ 5.0        $ 8.8
provision
(benefit)
                                                                                                   
Adjusted
(loss)        $ (340.7  )     $ 307.1       $ (33.6   )     $ (46.7   )     $ 29.2       $ (17.5   )
income
                                                                                                   
Adjusted
(loss)
earnings      $ (9.09   )                   $ (0.90   )     $ (1.24   )                  $ (0.46   )
per common
share -
Diluted
                                                                                                   
Adjusted
weighted
average         37.5                          37.5            37.7                         37.7
shares
outstanding
- Diluted
                                                                                                   
                                                                                                   
*See Table
Six
                                                                                                   

Table Six

IMATION CORP.
Non-GAAP Financial Measures
(In millions, except for per share amounts)
(Unaudited)

Operating (loss) income / Adjusted operating (loss) income
                                                             
                  Three Months Ended                  Twelve Months Ended
                  December 31                         December 31
                  2012                2011            2012           2011
Operating         $  (310.4  )        $  (12.1  )     $ (336.1 )     $ (33.1 )
loss:
Restructuring
and other
Restructuring        15.2                5.0            19.7           11.4
Other                3.9                 (0.3   )       1.4            10.1
Goodwill             23.3                -              23.3           1.6
impairment
Intangible           260.5               -              260.5          -
impairment
Litigation           -                   -              -              2.0
settlement
Inventory
write-downs
related to
restructuring       2.3               7.6          2.3          9.1   
programs
included in
cost of goods
sold
Total               305.2             12.3         307.2        34.2  
adjustments
Adjusted
operating         $  (5.2    )        $  0.2         $ (28.9  )     $ 1.1   
(loss) income
- Non-GAAP
                                                                             
Effect on
diluted EPS:
(Loss) income
from              $  (8.34   )        $  (0.34  )     $ (9.09  )     $ (1.24 )
operations
Restructuring
and other
Restructuring        0.40                0.13           0.52           0.31
Other                0.11                -              0.04           0.27
Goodwill             0.63                -              0.62           0.04
impairment
Intangible           7.00                -              6.95           -
impairment
Litigation           -                   -              -              0.05
settlement
Inventory            0.06                0.20           0.06           0.24
write-downs
Reversal of
net operating
loss                -                 (0.13  )      -            (0.13 )
carryforward
valuation
Adjusted
diluted EPS -     $  (0.14   )        $  (0.14  )     $ (0.90  )     $ (0.46 )
Non-GAAP
                                                                             
                                                                             
EBITDA:
Operating loss    $  (310.4  )        $  (12.1  )     $ (336.1 )     $ (33.1 )
Depreciation         2.2                 2.3            8.3            10.7
Amortization        5.8               7.2          27.5         26.0  
EBITDA            $  (302.4  )        $  (2.6   )     $ (300.3 )     $ 3.6   
Restructuring        19.1                4.7            21.1           21.5
and other
Goodwill             23.3                -              23.3           1.6
impairment
Intangible           260.5               -              260.5          -
impairment
Litigation           -                   -              -              2.0
settlement
Inventory
write-downs
related to
restructuring       2.3               7.6          2.3          9.1   
programs
included in
cost of goods
sold
Total               305.2             12.3         307.2        34.2  
adjustments
Adjusted          $  2.8             $  9.7         $ 6.9         $ 37.8  
EBITDA
                                                                             
                                                                             
EBITDA is defined as operating income less depreciation and amortization.
Adjusted EBITDA is defined as EBITDA before goodwill, restructuring and other,
and inventory write-downs related to restructuring programs included in cost
of goods sold.
                                                                             
The Non-GAAP financial measurements (adjusted operating income (loss),
adjusted income(loss), adjusted diluted EPS, EBITDA and adjusted EBITDA) are
provided to assist in understanding the impact of certain items on Imation's
actual results of operations when compared with prior periods. Management
believes this will assist investors in making an evaluation of Imation's
performance against prior periods on a comparable basis by adjusting for these
items. Management understands that there are material limitations on the use
of Non-GAAP measures. Non-GAAP measures are not substitutes for GAAP measures
for the purpose of analyzing financial performance. These Non-GAAP measures
are not in accordance with, or an alternative for measures prepared in
accordance with, generally accepted accounting principles and may be different
from Non-GAAP measures used by other companies. In addition, these Non-GAAP
measures are not based on any comprehensive set of accounting rules or
principles. This information should not be construed as an alternative to the
reported results, which have been determined in accordance with accounting
principles generally accepted in the United States of America.

Contact:

Imation Corp.
Scott Robinson, 651-704-4311
srobinson@imation.com
 
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