Inkjet & Digital Printing

Lexmark reports first quarter 2011 results

Wednesday 27. April 2011 - - GAAP revenue of $1.034 billion, Non-GAAP of $1.037 billion - GAAP operating income margin of 10.9 percent, Non-GAAP of 11.9 percent - GAAP EPS of $1.04, Non-GAAP of $1.14

Lexmark International, Inc. (NYSE: LXK) today announced financial results for the first quarter of 2011.
“Despite the near-term marketplace and transitional challenges we faced this quarter, Lexmark’s strategic focus areas grew as we continue to execute our long-term strategy of targeting higher usage, higher growth areas of the business market,” said Paul Rooke, Lexmark president and chief executive officer. “Yesterday’s product announcements advance Lexmark’s position in two rapidly growing segments; workgroup color lasers and enterprise content management.
“Lexmark’s strong balance sheet, good liquidity and long history of solid cash generation position us well to continue to compete successfully and to invest in strategic initiatives aimed at delivering improved shareholder value,” added Rooke.
First Quarter 2011 Results
GAAP revenue for the first quarter of 2011 of $1.034 billion declined 1 percent from the same quarter last year.
GAAP earnings per share for the first quarter of 2011 were $1.04. Excluding $0.10 per share for restructuring-related and acquisition-related adjustments, earnings per share for the first quarter of 2011 would have been $1.14. GAAP earnings per share for the first quarter of 2010 were $1.20. Earnings per share for the first quarter of 2010 would have been $1.35 excluding $0.15 per share for restructuring-related adjustments.
In the first quarter, hardware revenue declined 12 percent year on year, supplies revenue was about flat, and Software and Other revenue grew 44 percent, or 50 percent excluding acquisition-related adjustments.
Imaging Solutions and Services (ISS) revenue of $1.015 billion declined 3 percent in the first quarter compared to the same period last year. Perceptive Software revenue in the first quarter was $19 million, or $21 million excluding acquisition-related adjustments.
First quarter 2011 GAAP results:
— Revenue was $1.034 billion compared to $1.043 billion last year.
— Gross profit margin was 37.6 percent versus 36.9 percent in 2010.
— Operating expense was $276 million compared to $251 million last year,
higher principally due to the acquisition of Perceptive Software.
— Operating income margin of 10.9 percent includes $10 million pretax for
restructuring-related and acquisition-related adjustments. Operating
income margin in 2010 of 12.8 percent included $15 million for pretax
restructuring-related adjustments.
— Net earnings for the quarter were $83 million compared to first quarter
2010 net earnings of $95 million.
First quarter 2011 non-GAAP results, excluding restructuring-related and acquisition-related adjustments:
— Revenue would have been $1.037 billion compared to $1.043 billion last
year.
— Gross profit margin would have been 38.2 percent versus 37.6 percent in
2010.
— Operating expense would have been $272 million compared to $244 million
last year, higher principally due to the acquisition of Perceptive
Software.
— Operating income margin would have been 11.9 percent compared to 14.2
percent last year.
— Net earnings would have been $91 million compared to $107 million in the
first quarter of 2010.
In the first quarter of 2011, net cash provided by operating activities was $85 million, capital expenditures were $36 million, and depreciation and amortization was $51 million. The company ended the quarter with $1.3 billion in cash and current marketable securities.
New Offerings Target Strategic Growth Areas
Recently, Lexmark announced new hardware and software offerings that strengthen its position in two strategic growth areas, workgroup color lasers and document workflow solutions. Lexmark again gained market share in 2010 in its key segment of branded workgroup devices due to a strong focus on developing innovative hardware technology that integrates seamlessly with intelligent software solutions – enabling customers to save time and money.
Lexmark X548 Color Laser MFP Family
The addition yesterday of the Lexmark X548 color laser multifunction product (MFP) family is aligned squarely with Lexmark’s strategy to provide disruptive A4 (8.5-inch x 11-inch) technology to business customers through smart devices. Designed for the rapidly growing mid-size workgroup segment, the Lexmark X548de and X548dte deliver the performance, capabilities, solutions and security features representative of more costly devices – but with a smaller footprint and at an affordable price point. Accentuated by a sophisticated, 7-inch color touch screen, the Lexmark X548 color laser MFP family comes standard with pre-loaded, time-saving applications and can be customized with tailored workflows based on unique business needs.
Lexmark Solutions Platform
During the first quarter, Lexmark announced Lexmark Print Release with My e-Task and Lexmark Accounting. This bundled solution gives users the flexibility to access and print from any enabled MFP on their company’s global network. It also enhances security by holding jobs in the print queue until they are released by the user, eliminating unclaimed documents. Once a user authenticates at the device, Lexmark My e-Task presents a personalized user interface including personal shortcuts and workflow icons. Lexmark Accounting provides organizations with a complete view of printing practices and the ability to identify areas where print volumes are higher than desired. This trio of solutions is delivered on the Lexmark Solutions Platform, premise based technology developed solely by Lexmark.
Lexmark Back-Office ECM Solutions
Enterprise Content Management (ECM) solutions expand Lexmark’s growth opportunities around the globe by leveraging Perceptive Software’s ImageNow platform – further integrating the two companies’ technologies to provide customers with a more comprehensive, end-to-end content management solution to capture, manage and access key information within their businesses.
Yesterday, Lexmark debuted three back-office end-to-end solutions that accelerate the flow of information and enable companies to improve both compliance and productivity. These solutions decrease paperwork, boost efficiency and reduce risk and compliance issues for human resources, accounting and travel reimbursement departments.
— Recruitment and Onboarding makes the hiring process more efficient for
managers, as well as HR staff, by eliminating manual tasks. The solution
also ensures compliance by automatically detecting missing information
such as critical forms, reports or signatures and reduces risk
associated with managing and storing hard copy documents.
— Invoice Processing initiates the task at the point of receipt with
intelligent capture on Lexmark MFPs to speed the process and reduce cost
of mailing hardcopy invoices. The solution accelerates matching,
approval and payment by automating manual tasks in order to capitalize
on vendor discounts, and synchronizes data with ERP and financial
systems to ensure real-time visibility to payables.
— Travel and Expense eliminates paper and postage expenses by
electronically capturing receipts in distributed locations. The solution
reduces employee inquiries by providing self-service visibility to the
report’s status, and it also eases reporting, reconciliation and audit
preparation by collecting documentation in a single repository.
Perceptive Software’s ImageNow
Also during the quarter, Perceptive Software announced version 6.6 of its award winning ImageNow software. Perceptive Software’s new 64-bit server architecture provides a more robust platform for the company to target and compete for larger enterprise deployments.
Looking Forward
In the second quarter of 2011, the company currently expects a low single-digit percentage decline in revenue year on year and GAAP earnings per share to be around $0.89 to $0.99, or $1.00 to $1.10 excluding $0.11 per share for restructuring-related and acquisition-related adjustments. GAAP earnings per share in the second quarter of 2010 were $1.07, or $1.23 excluding $0.16 per share for restructuring-related and acquisition-related adjustments.