OAKDALE, Minn.- Jan. 29, 2002-- Imation released fourth quarter and full year results which reflect continued strength in its core data storage business. Imation, a leading supplier of removable data storage media, today announced $16 million in operating income for the fourth quarter ended December 31, 2001, up 25 percent from the year-ago period, excluding special items. Data storage revenue was $243.4 million, over 10 percent growth compared to the prior year on strong demand in all sectors of the market. As previously disclosed, the Company closed on the sale of its color proofing and color software business to Kodak Polychrome Graphics LLC on December 31, 2001 for $50 million. In addition, the Company also recorded restructuring and special charges in the fourth quarter of 2001 related to the previously disclosed restructuring program. Special items included in 2001 reported results for the total Company include restructuring and other special charges, the write-off of previously capitalized software, and gain on the sale of the color business. Reported results for the total Company include these special items as well as operations for the Company's two other operating segments, Color Technologies and Digital Solutions and Services. Results have been presented on both an adjusted basis excluding special items as well as a reported basis to aid understanding of the impact of the various special items on results in 2001 and 2000. Special items are further described in the attached financial statements. The adjusted results should be read in conjunction with reported results including all charges. According to the adjusted results for the fourth quarter ended December 31, 2001, operating income increased by 25 percent to $16 million from $12.8 million in the year-earlier period. Net income was $10.8 million and earnings per diluted share were $0.31, compared to $14.8 million and $0.43 per diluted share for the fourth quarter of 2000. For the full year 2001, adjusted operating income of $54.1 million increased by 18 percent over $45.9 million last year. Net income was $39.6 million, or $1.13 per diluted share, versus $63.3 million, or $1.79 per diluted share in the prior year. Results for 2000 were benefited by substantial gains from venture capital distributions and a significantly lower tax rate. Including special items of $54.6 million pretax, or $37.4 million after-tax, the Company reported a net loss of $26.6 million, or $0.76 per diluted share, on revenue of $313.9 million for the fourth quarter ended December 31, 2001. This compares to a reported net loss for the year-ago period of $1.0 million, or $0.03 per diluted share, including special items, which total $15.8 million after-tax, on revenue of $308.5 million. For the twelve months ended December 31, 2001, the Company reported a net loss of $1.7 million, or $0.05 per diluted share, including special items totaling $41.3 million after-tax on revenue of $1,176 million. This compares to a net loss for 2000 of $4.4 million, or $0.13 per diluted share, including special items totaling $67.7 million after-tax on revenue of $1,235 million. Commenting on results, CEO Bill Monahan said, "Throughout the first three quarters of 2001, we consistently delivered operating earnings on track with guidance that remained unchanged despite a challenging business environment. We're very pleased to close 2001 with a fourth quarter performance that not only exceeds our target operating income, excluding special items, but also delivers the best full year operating income for our Data Storage segment since spin-off. Imation is well-positioned to sustain this progress and deliver solid results in 2002 with our focus on the data storage industry and the positive opportunities it affords us.'' "Our results also reflect the sustained, successful focus we've maintained on business fundamentals. Inventories declined to $130.3 million and days of supply declined sequentially by 12 days to 67. Accounts receivable days sales outstanding declined sequentially by two days and were flat with the previous year at 48 days. Cost control remains strong with SG&A spending, as adjusted, at a record low 19.2 percent of revenue and with the restructuring program we just announced, we are taking the necessary critical steps to maintain solid cost discipline and further streamline the Company after the recent sale of the color business. Cash increased by $120 million for the year, to $389.8 million, further strengthening our financial position,'' concluded Monahan. Imation's Data Storage segment reported $16.6 million of operating income for the fourth quarter, up 89 percent from the $8.8 million earned the year earlier. Revenue for the segment was $243.4 million, up 10 percent compared to revenue in last year's fourth quarter of $220.8 million. For the full year, Data Storage operating income of $52.5 million increased by 115 percent over 2000 operating income of $24.4 million. Revenue for the twelve months ended December 31, 2001 increased slightly to $875.9 million compared to $866.6 million last year. EBITDA for the quarter, excluding special items, of $28.5 million was the highest quarterly level this year and cash flow from operations was $37.2 million. At December 31, 2001, the Company had cash of $389.8 million available for general corporate purposes, including accelerated investment in its data storage business and for its stock repurchase program. The Company has authorization for the repurchase of up to 3.2 million shares of its 35.3 million outstanding common shares.