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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