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News Releases |
| Lexmark reports second quarter financial results | ||
| LEXINGTON, Ky., - 07/26/2005 | ||
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Investor Contact: John Morgan
Lexmark International, Inc. (NYSE: LXK) today announced financial results for its second quarter ended June 30, 2005. Second quarter revenue was $1.283 billion compared to $1.248 billion last year, an increase of 3 percent driven by 9 percent growth of laser and inkjet supplies revenue. EPS were $0.64 and would have been $1.06, up 4 percent without the tax cost of $53 million, or $0.42 per share, resulting from the approval to repatriate $684 million during 2005 under the American Jobs Creation Act. “Despite difficult market conditions that impacted our revenue growth, we grew laser and inkjet units each at a double-digit rate in the second quarter,” said Paul J. Curlander, Lexmark chairman and chief executive officer. “We also increased our cash generation in the quarter to $146 million which again demonstrates the strength of our business model.” Gross profit margin of 34.6 percent for the quarter compares to 35.3 percent last year, down 70 basis points due to lower product margins, somewhat offset by a higher mix of supplies. Operating expenses were 20.9 percent of revenue, up from 20.4 percent in the prior year, driven by increased strategic investments in development and marketing. Second quarter operating income margin was 13.7 percent versus 14.9 percent in the same quarter last year. “The distributed printing market presents attractive growth opportunities for Lexmark. In the quarter, we continued our R&D and marketing investments focused on driving the long-term growth of the company. Our objective is to expand our product line to enter and increase our presence in the future growth segments. We are also focused on increasing the awareness of Lexmark, and developing our brand. We started this in 2004, and have continued these initiatives in 2005,” said Curlander. As part of the company’s ongoing optimization of its expense structure, Lexmark also announced today that it will reduce its workforce by approximately 275 employees through the first half of 2006 with a majority of the affected employees exiting in the third quarter of 2005. This program is expected to result in pre-tax charges of $26 million. On an annual basis this reduction is expected to make $23 million available to reinvest in the company’s strategic initiatives. The pre-tax charges in the third quarter are expected to be approximately $13 million, with an impact on diluted net earnings per share of approximately 8 cents. Lexmark continues to “uncomplicate” distributed printing
Lexmark expanding solutions and manufacturing capabilities
First half financial results Looking forward In the third quarter of 2005, the company expects a low-single digit year-over-year revenue growth rate. It expects earnings per share of $0.95 to $1.05 excluding the estimated third quarter impact from the workforce reduction. Third quarter 2004 earnings per share were $1.17 ($1.02 excluding a $0.15 benefit from the resolution of income tax matters). ### Lexmark is hosting a conference call with securities analysts on Tuesday, July 26, 2005, at 8:30 a.m. Eastern Time. A live broadcast and a complete replay of this call can be accessed from Lexmark’s investor relations Web site at http://investor.lexmark.com. If you are unable to connect to the Internet, you can access the call via telephone at 888-338-6461 or the replay shortly after the call by calling 877-519-4471 using access code 6235059. This telephone replay will be available until noon on Monday, August 1, 2005. Lexmark International, Inc. makes it easier for businesses and consumers to move information between the digital and paper worlds. Since its inception in 1991, Lexmark has become a leading developer, manufacturer and supplier of printing and imaging solutions for customers in more than 150 countries. Lexmark reported $5.3 billion in revenue in 2004, and can be found on the Internet at www.lexmark.com. Lexmark and Lexmark with diamond design are trademarks of Lexmark International, Inc., registered in the U.S. and/or other countries. Prices are estimated street prices in U.S. dollars. "Safe Harbor" Statement under the Private Securities Litigation Reform Act of 1995: Statements in this release which are not historical facts are forward-looking and involve risks and uncertainties, including, but not limited to, aggressive pricing from competitors and resellers, market conditions, the impact of competitors’ products, market acceptance of new products and pricing programs, management of the company’s and resellers’ inventory levels, increased investment to support product development and marketing, unforeseen cost impacts including those as a result of new legislation, China’s revaluation of its currency, litigation or actions taken to maintain a competitive cost and expense structure, the ability and/or incremental expense to produce and deliver products to satisfy customer demand, changes in a country’s or region’s political or economic conditions, currency fluctuations, financial failure or loss of business with a key customer, reseller or supplier, production and supply difficulties including disruptions at important points of exit and entry and distribution centers, competition in aftermarket supplies, conflicts among sales channels, the outcome of pending and future litigation or governmental proceedings, intellectual property and other legal claims and expenses, difficulties or delays in software and information systems implementations, and other risks described in the company's Securities and Exchange Commission filings. The company undertakes no obligation to update any forward-looking statement. |
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