Business News

Lexmark reports third quarter results

Tuesday 26. October 2010 - -- Revenue of $1.020 billion, up from $958 million in the prior year period -- Net earnings in third quarter of $72.0 million, up 622 percent year on year -- Net cash from operations for third quarter of $130 million, and year-to-date of $367 million

Lexmark International, Inc. (NYSE: LXK) today announced financial results for the third quarter of 2010. Third quarter GAAP revenue of $1.020 billion increased from $958 million in the same quarter last year.
Earnings Per Share 3Q10 3Q09
—- —-
GAAP $0.90 $0.13
Restructuring-related
adjustments 0.08 0.52
Acquisition-related
adjustments 0.11 0.00
—- —-
Non-GAAP $1.09 $0.65
—– —–
Third quarter GAAP earnings per share were $0.90. Excluding $0.19 per share for restructuring-related and acquisition-related adjustments, earnings per share for the third quarter of 2010 would have been $1.09. Third quarter 2009 GAAP earnings per share were $0.13. Earnings per share for the third quarter of 2009 would have been $0.65 excluding $0.52 per share for restructuring-related adjustments.
“Lexmark’s third quarter earnings were better than expected with ongoing good revenue growth, strong earnings growth and strong cash flow,” said Paul Rooke, Lexmark president and chief executive officer.
“These results were driven by our improved product lines, continued growth in managed print services, and ongoing strong growth in workgroup lasers and higher end inkjet products,” added Rooke.
Third quarter Printing Solutions and Services Division (PSSD) revenue of $731 million grew 12 percent year to year, Imaging Solutions Division (ISD) revenue of $274 million declined 10 percent year to year, and all other GAAP revenue was $14 million, or $20 million excluding acquisition-related adjustments.
The company ended the quarter with $1.1 billion in cash and current marketable securities. Third quarter net cash provided by operating activities was $130 million. Capital expenditures for the quarter were $28 million. Depreciation and amortization in the quarter was $51 million.
In the third quarter of 2010:
— Gross profit margin was 35.4 percent versus 32.7 percent in 2009.
— Operating expense was $268 million compared to $289 million last year.
— Operating expense to revenue ratio was 26.3 percent compared to 30.1
percent last year.
— Operating income margin of 9.1 percent includes $19 million pretax for
restructuring-related and acquisition-related adjustments. Operating
income margin in 2009 of 2.5 percent included $51 million for pretax
restructuring-related adjustments.
— Net earnings for the quarter were $72.0 million, an increase of 622
percent compared to third quarter 2009 net earnings of $10 million.
On a non-GAAP basis, excluding restructuring-related and acquisition-related adjustments, in the third quarter of 2010:
— Revenue would have been $1.025 billion, up 7 percent from last year.
— Gross profit margin would have been 36.5 percent, up 2.6 percentage
points from 33.9 percent in the same period last year.
— Operating expense would have been $262 million, compared to $250 million
last year.
— Operating expense to revenue ratio would have been 25.6 percent, down
0.4 percentage points from 26 percent last year.
— Operating income margin would have been 10.9 percent, an increase of 3.1
percentage points from 7.8 percent last year.
— Net earnings would have been $87 million, an increase of 69 percent
compared to $51 million in the third quarter of 2009.
New Smart Devices Strengthen Lexmark’s Workgroup Color Lineup
Earlier this month, Lexmark announced a significant expansion of its workgroup color devices with the introduction of the new Lexmark X792 family of color laser multifunction products (MFPs), Lexmark C792 family of color laser printers and the Lexmark X925 and C925 Series of A3 (11-inch x 17-inch)/ledger color offerings. An intuitive color touch screen that enables customers to access and manage their documents faster and with greater flexibility highlights each device.
— The Lexmark X792 family of color laser MFPs includes a 10.2-inch touch
screen, the largest in its class(1) and features the fastest print and
copy speeds in its category. This new family is available in six models
that can be configured with additional input/output options and advanced
finishing capabilities based on the needs of the workgroup. In fact, it
is the only device in its class(1) to offer hole punch finishing
capability.
— The Lexmark C792 family of color laser printers, includes the only A4
(8.5-inch x 11-inch) color laser printer in its class(2) to feature a
touch screen (4.3-inch). The new flash interface, similar to a smart
phone, enables users to operate the printer with ease and confidence
through an intuitive navigation and simple business workflow solutions.
The Lexmark C792 family is available in four configurations.
— The Lexmark X925de color MFP is equipped with a 10.2-inch touch screen
and delivers high-performance printing, copying, scanning and faxing as
well as time-saving software solutions all in a compact design.
— Lexmark’s C925de color printer is capable of handling banner-size media
(11.7-inch x 48-inch) and is the only single-function A3 color printer
in its class(3) with a touch screen (4.3-inch).
Concurrently, the company also announced Markvision Enterprise, a new browser-based device management software solution that enables IT administrators to have better visibility into proactively managing their fleets of printing devices.
Lexmark’s Newest, Web-Connected All-In-One (AIO) Inkjet Printer
Recently, Lexmark introduced Lexmark Genesis, a unique device that extends the company’s line of inkjet AIOs by targeting professionals, small business and home office customers who are looking for innovative technology that is productive, while also being bold and stylish.
Through its built-in innovative Flash Scan camera technology, the Lexmark Genesis delivers blazing scanning speeds that enable the AIO to deliver an instant scan preview to the color touch screen and to transfer a page from “document to digital” in as few as three seconds(4).
The Web-connected device(5) is equipped with sophisticated features and functionality, including the 4.3-inch capacitive color touch screen that is also available on Lexmark’s other award-winning AIOs, the Platinum, Pinnacle and Interact.
The Lexmark Genesis also features the company’s Vizix print technology, which uses separate ink cartridges to enable greater speed and produces high quality print output at an economical replacement cost for customers.
Yesterday, Lexmark announced the availability of its Software Development Kit (SDK) platform, to enable third-party developers to help expand the company’s inkjet AIO base of applications, known as SmartSolutions. SmartSolutions expand traditional inkjet AIOs from a print, scan, copy and fax-based functionality – to a work station that is empowered with productivity enhancing, Web-connected software applications for small business and home office customers.
Looking Forward
In the fourth quarter of 2010, the company currently expects low single digit revenue growth, and GAAP earnings per share to be around $0.86 to $0.96, or $1.03 to $1.13 excluding $0.17 per share for restructuring-related and acquisition-related adjustments. GAAP earnings per share in the fourth quarter of 2009 were $0.76, or $1.16 excluding $0.40 per share for restructuring-related adjustments.