Imation Announces First Quarter Results In Line With Expectations
Wednesday, April 25, 2001
OAKDALE, Minn. (April 24, 2001)—Imation Corp. today reported total revenue of $299.9 million for the first quarter ended March 31, 2001, which resulted in net income, excluding special charges, of $8.8 million or $0.25 per diluted share. This compares with total revenue of $328.6 million and income of $20.1 million, or $0.55 per diluted share, for the first quarter last year before the cumulative effect of an accounting change. Operating income in the quarter, excluding special charges, was $11.8 million compared with $17.9 million in the year-earlier period. Including the previously announced non-cash, capitalized software write-off of $5.7 million, the Company reported net income of $4.9 million, or $0.14 per diluted share. Results for the current quarter reflect a 32 percent tax rate compared with 22 percent in the year-earlier period. Additionally, the year-ago first quarter was benefited by venture capital distributions of approximately $7 million. Adjusting for these factors and the impact of foreign currency translation, first quarter earnings per share would have declined by $0.06 from an adjusted $0.31 in the year-earlier period. Data Storage revenues were $219.6 million compared with revenues of $220.8 million in the fourth quarter 2000 and $233.2 million in the year earlier quarter. Volume growth of almost 13 percent for data storage products was a significant positive factor for the first time in several quarters, although price pressure and negative foreign currency impact continued in the quarter. Commenting on results, Bill Monahan, chairman and chief executive officer said, "In the current environment of IT spending cutbacks, removable data storage offers a compelling, lower cost alternative to other methods of data storage. The need to store and back-up electronic information does not lessen in a soft economy. In addition, removable storage is benefiting from open system network businesses moving increasingly to tape back-up and the disciplines of archiving and disaster recovery preparedness that are typical of large data center environments. Imation's strong presence in data storage comes from our breadth of product and service offerings, the consistently high quality of our offerings, strong relationships with drive manufacturers, and global distribution capabilities. "We remain intensely focused on increasing the value of each of our three business units. In Data, we are building off a strong focus on our core media business for earnings stability. In Color Technologies, we are reinventing the business from a materials science-based analog business to a digital proofing and color software business. In Digital Solutions and Services, we are expanding our customer base to fill our worldwide factory of technical support personnel. And in each business, we are making focused, strategic investments in new offerings to drive profitable growth," said Monahan. Cash flow from operations for the first quarter was $37.4 million and EBITDA, excluding special charges, was $24.2 million. Cash increased by $17.1 million to $286.8 million from year end 2000. As expected, inventories increased slightly from year-end to $146.6 million and were down from March 31, 2000. Days of Inventory Supply were 66 compared to 74 last year and a record low for the Company of 63 set at year-end 2000. Accounts receivable were $170.0 million, about flat with December 31, 2000 and down from March 31, 2000. Days Sales Outstanding reached a new record low at March 31, 2001 of 47, down from 56 a year earlier and from 48 at year-end. Commenting on the balance of the year, Bill Monahan said, "Our strategy will continue to include disciplined cost control while we aggressively drive profitable sales to maximize operating income and cash flow. With first quarter results on target, our outlook for 2001 remains unchanged."