Lexmark International Reports Best Year Ever Since Independent of IBM.
Worldwide revenues from Lexmark's desktop printers will result in growth of more than 25 percent in 1994, said Mann. In spite of aggressive price reductions in the desktop printer industry, Lexmark's printer business will also show significant improvement in profitability, he added. Mann also noted that in the U.S., in the 15-20 page-per-minute laser printer segment, Lexmark expects to double its market share this year to almost 11 percent.
Worldwide revenues are expected to be in excess of $1.8 billion, about 10 percent ahead of 1993 and operating income more than 12 percent ahead, said Mann.
Revenues also improved year to year in all major geographies as international operating profitability improved significantly, particularly in Europe, which had been impacted by economic recessions, the chairman reported.
Among the year's highlights singled out by the chairman was a $280 million reduction in the company's debt, or 40 percent in the past 12 months. The company has reduced its debt to $370 million as it continues to prepay debt from the original plan of $1.15 billion at the time the company was formed.
Lexmark was created in 1991 when IBM's information processing products business became an independent company. The worldwide information processing products company develops, manufactures and markets network and personal printers, typewriters, information processing supplies and keyboards.
"We've had a terrific year and we're looking ahead to '95 and again are planning for double-digit growth in our printer revenue and profits," said Mann.
"Over the next few years we see industry growth fueled by a 25 percent growth in color inkjet shipments and a 7 percent increase in laser printers. As the only U.S. company that develops and manufactures laser and inkjet printers, we are well positioned to participate in this growth.
"This year we considerably strengthened our printer product line with the introduction of 12 new printers, eight of them laser printers, plus the ExecJet IIc, our first color inkjet printer using our inkjet technology. This flow of new products will continue in 1995.
"Our development cycle times continue to improve. We're bringing new printer products to market faster than ever before. In just 16 months, between June 1993 and October 1994, we introduced three new families of laser printer products, the 4039, 4039 plus and Optra. In the past, the development cycle for a single printer was often 24 months or more," said the chairman.
"In October we announced the Lexmark Optra laser printer family which offered a true breakthrough in desktop printing with the introduction of the industry's first family of 1,200 x 1,200 dots-per-inch (dpi) laser printers. These printers produce photographic-like images and text that are four times sharper than current 600 dpi laser printers.
"The Optra announcement marked the first time we used only the Lexmark logo to identify our printer products," stated the chairman. Previously, Lexmark had incorporated the IBM logo as well as its own name under a license with IBM that expires in 1996. Chairman Mann said increased awareness and a positive image worldwide of the Lexmark name and products convinced the company that now was the time to rely solely on the Lexmark brand.
Chairman Mann also said that the company's organizational changes at the beginning of the year had greatly benefited Lexmark. "By creating network printer and personal printer divisions with separate sales and marketing organizations, we sharpened our marketplace focus. Additions to the direct sales force for network printers and concentration on industry segments such as banking, retail/pharmacy and healthcare contributed to hardware sales. In 1995 we will continue to increase the large account sales force as well as expand the vertical industry teams. In the personal printer business we will be introducing enhanced printer products through the retail and dealer channel," Mann stated.
Lexmark's successful performance in 1994 wasn't confined to the desktop printer business. Chairman Mann reported that the typewriter business continues to gain share in a declining industry. "Our market share in the U.S. will increase by 4 percent this year to approximately 60 percent of the office typewriter market. This business continues to be a significant contributor to the company's cash flow," he said.
The keyboard business continues under tremendous pricing pressure and the plans for 1995 include new lower-cost keyboard design to improve its competitiveness in this business. Lexmark doubled its OEM keyboard business this year and plans to triple it in 1995 in the face of a business environment in which keyboard prices in some segments have declined in excess of 20 percent.
"To broaden our product scope and improve our market position for future growth we are evaluating the possibility of strategic acquisitions and partnerships," Chairman Mann said.
"In almost four years we've come a long way in a very competitive marketplace and this gives us reason to be optimistic about the future," said Mann. -0- Lexmark is a trademark of Lexmark International Inc. IBM is a registered trademark of International Business Machines Corporation in the United States and/or other countries, and used under license.
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