Imation Reports First Quarter 2010 Financial Results

Imation Reports First Quarter 2010 Financial Results

OAKDALE, Minn., Apr 27, 2010 (BUSINESS WIRE) --Imation Corp. (NYSE:IMN) today released financial results for the quarter ended March 31, 2010. All financial information included in this press release reflects the continuing operations of the Company's businesses for all periods presented unless otherwise indicated.

Key points for Q1 include the following:

• Revenue of $365.8 million was down 7.7 percent compared with Q1 2009 revenue of $396.5 million, a substantially lower rate of decline from recent quarters.
• Gross margin of 16.9 percent was flat compared with Q1 2009.
• Operating expenseswere $57.5 million or 15.7 percent of revenue in Q1 2010, down $12.5 million compared with $70.0 million or 17.7 percent of revenue in Q1 2009.
• Operating income of $0.2 million and diluted loss per share of $0.07 in Q1 2010 compared with operating loss of $8.6 million and diluted loss per share of $0.34 in Q1 2009. Operating income includes restructuring and other charges in Q1 2010 and Q1 2009 of $4.0 million, or $0.07 per diluted share, and $5.5 million, or $0.10 per diluted share, respectively (see table entitled Reconciliation of GAAP to Adjusted Non-GAAP Results below).
• Total cash and cash equivalents were $224.2 million at March 31, 2010 compared with $163.4 million at December 31, 2009, an increase of $60.8 million.

Commenting on the results, Imation Vice Chairman and Chief Executive Officer Frank Russomanno said, "We are pleased with the solid start we have had to the year, continuing the momentum we saw in the second half of 2009."

"Our cash generation in the quarter was excellent. With our continued focus on working capital management, we added an additional $60.8 million to our cash balance, ending the quarter at $224.2 million in cash."

"Our emerging storage formats of flash and removable and external hard disk drives had significant revenue growth in the quarter. Also, we saw lower revenue declines in our larger traditional storage areas of magnetic and optical compared to 2009. Our revenue in electronics and accessories declined, reflecting our more selective participation in this category, especially in video products."

"We continue our Company transformation, developing and launching new products in storage, accessories, and electronics while leveraging our technology leadership, global distribution footprint and portfolio of strong brands - including Imation, Memorex, TDK Life on Record, and XtremeMac."

"We have weathered what we expect to be the worst of the recession and are emerging with a strong financial foundation in place. We have returned to operating profitability, have dramatically improved our cash flow generation, and remain debt free. I am optimistic as I retire from Imation and our current President and COO Mark Lucas assumes responsibility as the Company's new CEO next month, that our strong financial foundation provides an excellent platform upon which to build for the future," concluded Russomanno.

A teleconference is scheduled for 9:00 AM Central Time today, April 27, 2010 (see Webcast and Replay Information at the bottom of this release).

View full press release including Q1 and 2009 Financial Highlights

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