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Lexmark Reports Record Year and 4Q Revenue

Press release from the issuing company

LEXINGTON, Ky - Lexmark International, Inc. (NYSE: LXK) today announced record revenue for both the fourth quarter and full year 2000. Fourth-quarter revenue was a record $1.096 billion, up 9 percent (17 percent in constant currency) from 1999. Diluted net earnings per share were 64 cents, before non-recurring charges of 22 cents associated with the company’s previously announced restructuring plan. Full-year revenue increased 10 percent (16 percent in constant currency) to a record $3.807 billion, and diluted net earnings per share before the non-recurring charges were a record $2.35. "We are very pleased with the 17 percent constant currency revenue growth in the fourth quarter," said Paul J. Curlander, chairman and CEO. "In terms of customer demand, we exited 2000 with good momentum. For the year, we saw very strong growth in total printer shipments, particularly inkjet printers, low-speed lasers and color lasers, with growth rates well in excess of the market. This growth resulted in market share gains and should drive strong growth of supplies in the years ahead." Fourth-quarter review: Printers and associated supplies revenue up 21 percent in constant currency Lexmark’s revenue for the fourth quarter ended Dec. 31 was a record $1.096 billion, an increase of 9 percent versus revenue of $1.003 billion in the same period of 1999. Without the negative impact of foreign currency translation, revenue growth would have been 17 percent versus last year. Printers and associated supplies revenue increased in all major geographies and was up 13 percent from a year earlier, and would have grown 21 percent if not for the negative currency impact. Gross profit margin was 30.8 percent for the quarter versus 34.4 percent a year ago due to lower hardware margins, the cost of airfreight, unfavorable foreign currency impact, and a mix shift among products. On an operational basis, operating expense increased 7 percent in the quarter, but declined to 19.5 percent of revenue, an improvement of 0.5 points from 1999. Operating income was $124 million versus the $145 million reported for the fourth quarter of 1999. Diluted net earnings per share for the period were 64 cents versus 73 cents a year ago. Lexmark’s debt-to-total-capital ratio at Dec. 31, 2000 was 16 percent compared to 25 percent at the end of the third quarter. Capital expenditures were $104 million in the fourth quarter with most spending in support of new products and capacity expansion. The company repurchased 225,000 shares of its common stock during the quarter for $9 million, at prices ranging from $38.25 to $42.00. At year-end, remaining share repurchase authorization was $118 million. "As previously mentioned, we exited 2000 with strong customer demand," stated Curlander. "We are cautious about U.S. consumer PC demand and corporate IT spending, but we expect first quarter earnings of 55 to 61 cents per share. Based on our fourth quarter and current view of 2001, we are maintaining guidance of 15 to 20 percent earnings per share growth for the full year."

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