Press Releases

Lexmark International, Inc. (NYSE: LXK) today announced financial results for the second quarter of 2004. Revenue of $1.248 billion grew 11 percent from a year ago and earnings per share increased 32 percent to $1.02.

“Our second quarter results mark the fourth consecutive quarter of double-digit revenue and earnings growth,” stated Paul J. Curlander, Lexmark chairman and CEO. “These consistent results reflect Lexmark’s exclusive focus on printing solutions and the power of our supplies-driven business model.”
 
Gross profit for the quarter was $440 million or 35.3 percent of revenue versus $381 million or 34.0 percent a year ago due to improved product margins, partially offset by a negative mix among products.

Operating expense for the second quarter was $254 million compared to $244 million in the same period of 2003. Operating income was $186 million or 14.9 percent of revenue versus $137 million or 12.2 percent of revenue a year earlier. Net earnings were $137 million in the second quarter, up 34 percent from $102 million reported a year ago. Diluted net earnings per share for the period were $1.02, up 32 percent from 77 cents in the prior year.

Lexmark’s debt-to-total-capital ratio at June 30, 2004 was 7 percent compared to 8 percent at March 31, 2004. Capital expenditures were $41 million in the second quarter. Net cash provided by operating activities was $134 million in the quarter. Lexmark repurchased 750,000 shares of its common stock during the quarter for $70 million. The company’s remaining share repurchase authorization was approximately $113 million as of June 30, 2004.

First half 2004 financial results
Revenue for the six months ended June 30, 2004 was $2.504 billion, an increase of 12 percent versus $2.228 billion in the same period of 2003. Gross profit margin was 34.0 percent, up 0.9 points from the prior year. Operating income was $351 million versus $266 million a year earlier, an increase of 32 percent. Net earnings for the period grew 31 percent to $258 million versus $196 million a year ago. Diluted net earnings per share were $1.93, an increase of 29 percent over the $1.50 per share recorded in the first half of 2003.

Looking forward:
“As we look forward, we believe that our recent new product introductions and our business model position us well for continued growth,” Curlander stated. “We continue to be cautious, however, due to the uncertainty in the market, and the potential for aggressive price competition. In the third quarter of 2004, we expect a year-over-year revenue growth rate of high-single to low-double digits and earnings per share to be in the range of $0.90 to $1.00, versus 79 cents reported in the third quarter of 2003.”

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