Lexmark International reports constant currency revenue growth of 17 percent for fourth quarter; Earnings per share reach new high in 2000.Business Editors & High Tech Writers LEXINGTON Lexington. 1 City (1990 pop. 225,366), seat of Fayette co., N central Ky., in the heart of the bluegrass region; inc. 1832, made coextensive with Fayette co. 1974. , Ky.--(BUSINESS WIRE)--Jan. 22, 2001 Lexmark (Lexmark International, Inc., Lexington, KY, www.lexmark.com) A manufacturer of desktop and network printers that was spun off from IBM in 1991. For five years, IBM and Lexmark agreed not to compete with each other, and IBM continued to market printers to its own mainframe and International, Inc. (NYSE NYSE See: New York Stock Exchange : LXK) today announced record revenue for both the fourth quarter and full year 2000. Fourth-quarter revenue was a record $1.096 billion, up 9 percent (17 percent in constant currency) from 1999. Diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. net earnings per share were 64 cents, before non-recurring charges of 22 cents associated with the company's previously announced restructuring restructuring - The transformation from one representation form to another at the same relative abstraction level, while preserving the subject system's external behaviour (functionality and semantics). plan. Full-year revenue increased 10 percent (16 percent in constant currency) to a record $3.807 billion, and diluted net earnings per share before the non-recurring charges were a record $2.35. "We are very pleased with the 17 percent constant currency revenue growth in the fourth quarter," said Paul Paul, 1901–64, king of the Hellenes (1947–64), brother and successor of George II. He married (1938) Princess Frederika of Brunswick. During Paul's reign Greece followed a pro-Western policy, and the Cyprus question was temporarily resolved. J. Curlander, chairman and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. . "In terms of customer demand, we exited 2000 with good momentum. For the year, we saw very strong growth in total printer shipments, particularly inkjet printers A printer that propels droplets of ink directly onto the medium. Today, almost all inkjet printers produce color. Low-end inkjets use three ink colors (cyan, magenta and yellow), but produce a composite black that is often muddy. , low-speed lasers and color lasers, with growth rates Growth Rates The compounded annualized rate of growth of a company's revenues, earnings, dividends, or other figures. Notes: Remember, historically high growth rates don't always mean a high rate of growth looking into the future. well in excess of the market. This growth resulted in market share gains and should drive strong growth of supplies in the years ahead." Fourth-quarter review: Printers and associated supplies revenue up 21 percent in constant currency Lexmark's revenue for the fourth quarter ended Dec. 31 was a record $1.096 billion, an increase of 9 percent versus revenue of $1.003 billion in the same period of 1999. Without the negative impact of foreign currency translation, revenue growth would have been 17 percent versus last year. Printers and associated supplies revenue increased in all major geographies and was up 13 percent from a year earlier, and would have grown 21 percent if not for the negative currency impact. Gross profit margin Gross profit margin Gross profit divided by sales, which is equal to each sales dollar left over after paying for the cost of goods sold. gross profit margin A measure calculated by dividing gross profit by net sales. was 30.8 percent for the quarter versus 34.4 percent a year ago due to lower hardware margins, the cost of airfreight air·freight n. 1. A system of transporting freight by air. 2. The amount charged for transporting freight by air. air , unfavorable foreign currency impact, and a mix shift among products. On an operational basis, operating expense Operating Expense The essential things that a company must purchase in order to maintain business. Notes: For example, the payment of employees wages are an operating expense. Also known as OPEX. increased 7 percent in the quarter, but declined to 19.5 percent of revenue, an improvement of 0.5 points from 1999. Operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. was $124 million versus the $145 million reported for the fourth quarter of 1999. Diluted net earnings per share for the period were 64 cents versus 73 cents a year ago. Lexmark's debt-to-total-capital ratio at Dec. 31, 2000 was 16 percent compared to 25 percent at the end of the third quarter. Capital expenditures were $104 million in the fourth quarter with most spending in support of new products and capacity expansion. The company repurchased 225,000 shares of its common stock during the quarter for $9 million, at prices ranging from $38.25 to $42.00. At year-end year-end also year·end n. The end of a year. adj. Occurring or done at the end of the year: a year-end audit. Noun 1. , remaining share repurchase Share Repurchase A program by which a company buys back its own shares from the marketplace, reducing the number of outstanding shares. This is usually an indication that the company's management thinks the shares are undervalued. authorization The right or permission to use a system resource; the process of granting access. See access control. was $118 million. Full-year highlights: Printers and associated supplies revenue grew 20 percent in constant currency Lexmark's 2000 annual revenue was a record $3.807 billion, an increase of 10 percent over 1999 revenue of $3.452 billion. Without the negative impact of foreign currency translation, revenue growth would have been 16 percent versus last year. Printers and associated supplies revenue increased in all major geographies and was up 15 percent from a year ago, and would have grown 20 percent if not for the negative currency impact. Gross profit margin in 2000 was 33.0 percent versus 35.6 percent last year. On an operational basis, operating expense increased 6 percent during 2000, but declined to 21.0 percent of revenue, an improvement of 0.8 points from 1999. Operating income was $457 million as compared to $477 million a year ago. Earnings per share for the year were a record $2.35, up from $2.32 in 1999. Other achievements During 2000, Lexmark completely revised its "Z" line of printers, which in PC World's November November: see month. and December December: see month. issues garnered the No. 1 and No. 2 rankings and held four of the top six spots overall. The $199 Lexmark Z82 Scan/Print/Copy multifunction device was also introduced, generating excellent sales in this new category for Lexmark-branded machines. The company also launched a new lineup A criminal investigation technique in which the police arrange a number of individuals in a row before a witness to a crime and ask the witness to identify which, if any, of the individuals committed the crime. of color not of the white race; - commonly meaning, esp. in the United States, of negro blood, pure or mixed. See also: Color and monochrome Also called "mono." Refers to display screens that use one foreground and one background color; for example, black on white, white on black or green on black. The first terminals connected to mainframes and minicomputers were monochrome, and monochrome screens were widely used on early laser printers that deliver outstanding performance at competitive prices. These innovative printing solutions opened new distribution channels and helped promote new partnerships. Looking forward: "As previously mentioned, we exited 2000 with strong customer demand," stated Curlander. "We are cautious about U.S. consumer PC demand and corporate IT spending, but we expect first quarter earnings of 55 to 61 cents per share Cents per share The amount of a mutual fund's dividend or capital gains distributions that a shareholder will receive for each share owned. . Based on our fourth quarter and current view of 2001, we are maintaining guidance of 15 to 20 percent earnings per share growth for the full year." Lexmark is hosting a conference call with securities analysts on Monday Monday: see week. , Jan. 22, 2001 at 8:30 a.m. Eastern Standard Time (800-530-9010, pass code No. 1010). A live broadcast over the Internet Internet Publicly accessible computer network connecting many smaller networks from around the world. It grew out of a U.S. Defense Department program called ARPANET (Advanced Research Projects Agency Network), established in 1969 with connections between computers at the , a complete replay, and a transcript A generic term for any kind of copy, particularly an official or certified representation of the record of what took place in a court during a trial or other legal proceeding. A transcript of record of the call will be available on Lexmark's investor relations Investor relations The process by which the corporation communicates with its investors. home page at http://investor.lexmark.com. Lexmark is a leading developer, manufacturer and supplier of printing solutions -- including laser and inkjet printers, associated supplies and services -- for offices and homes in more than 150 countries. Founded in 1991, Lexmark reported $3.8 billion of revenue in 2000, 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 and/or conj. Used to indicate that either or both of the items connected by it are involved. Usage Note: And/or is widely used in legal and business writing. other countries. All other trademarks are the property of their respective holders. Prices are estimated street prices; actual prices may vary. "Safe Harbor Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. " Statement under the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995: Statements in this release which are not historical facts are forward-looking for·ward-look·ing adj. Concerned with or making provision for the future: forward-looking educators; a forward-looking corporate plan. Adj. 1. and involve risks and uncertainties, including, but not limited to, changes in a country's or region's political or economic conditions, the impact of competitors' products and pricing, production and supply difficulties, market acceptance of new products and pricing programs, currency fluctuations, the ability to increase printer and associated supplies manufacturing capacity, increased investment to support product development and expand capacity, conflicts among sales channels, intellectual property and other legal claims and expenses, the outcome of pending and future litigation An action brought in court to enforce a particular right. The act or process of bringing a lawsuit in and of itself; a judicial contest; any dispute. When a person begins a civil lawsuit, the person enters into a process called litigation. or governmental proceedings, and other risks described in the company's Securities and Exchange Commission filings. The company undertakes no obligation to update any forward-looking statement forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. .
LEXMARK INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF EARNINGS
(In Millions, Except Per Share Amounts)
(Unaudited)
Three Months Ended Percent
December 31 Change
--------------------- --------
2000 1999
-------- --------
Revenue $1,095.7 $1,003.0 9%
Cost of revenue 758.2 657.9
-------- --------
Gross profit 337.5 345.1 (2)
-------- --------
Research and development 57.0 45.1
Selling, general and administrative 156.2 155.0
Restructuring and related charges 41.3 --
-------- --------
Operating expense 254.5 200.1 27
-------- --------
Operating income 83.0 145.0 (43)
Interest expense 3.3 3.1
Other 3.3 2.4
-------- --------
Earnings before income tax 76.4 139.5 (45)
Provision for income tax 21.4 39.8
-------- --------
Net earnings $ 55.0 $ 99.7 (45)
======== ========
Net earnings per share:
Basic $ 0.43 $ 0.78 (44)
======== ========
Diluted $ 0.42 $ 0.73 (43)
======== ========
Shares used in per share calculation:
Basic 127.7 128.5
======== ========
Diluted 132.3 135.9
======== ========
LEXMARK INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF EARNINGS
(In Millions, Except Per Share Amounts)
(Unaudited)
Year Ended Percent
December 31 Change
--------------------- --------
2000 1999
-------- --------
Revenue $3,807.0 $3,452.3 10%
Cost of revenue 2,550.9 2,222.8
-------- --------
Gross profit 1,256.1 1,229.5 2
-------- --------
Research and development 216.5 183.6
Selling, general and administrative 582.6 569.3
Restructuring and related charges 41.3 --
-------- --------
Operating expense 840.4 752.9 12
-------- --------
Operating income 415.7 476.6 (13)
Interest expense 12.8 10.7
Other 6.5 7.0
-------- --------
Earnings before income tax 396.4 458.9 (14)
Provision for income tax 111.0 140.4
-------- --------
Net earnings $ 285.4 $ 318.5 (10)
======== ========
Net earnings per share:
Basic $ 2.22 $ 2.46 (10)
======== ========
Diluted $ 2.13 $ 2.32 (8)
======== ========
Shares used in per share calculation:
Basic 128.4 129.4
======== ========
Diluted 134.3 137.5
======== ========
LEXMARK INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF FINANCIAL POSITION
(In Millions)
(Unaudited)
December 31 December 31
2000 1999
------------ ------------
ASSETS
Current assets:
Cash and cash equivalents $ 68.5 $ 93.9
Trade receivables, net 594.0 507.3
Inventories 412.3 387.7
Prepaid expenses and other current
assets 168.9 99.8
--------- ---------
Total current assets 1,243.7 1,088.7
Property, plant and equipment, net 730.6 561.0
Other assets 98.9 52.9
--------- ---------
Total assets $ 2,073.2 $ 1,702.6
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Short-term debt $ -- $ 16.2
Accounts payable 426.1 300.9
Accrued liabilities 552.9 418.4
--------- ---------
Total current liabilities 979.0 735.5
Long-term debt 148.9 148.7
Other liabilities 168.3 159.3
--------- ---------
Total liabilities 1,296.2 1,043.5
--------- ---------
Stockholders' equity:
Preferred stock -- --
Common stock and capital in excess of
par 717.3 631.9
Retained earnings 1,015.7 730.3
Treasury stock (881.1) (672.3)
Accumulated other comprehensive
earnings (loss) (74.9) (30.8)
--------- ---------
Total stockholders' equity 777.0 659.1
--------- ---------
Total liabilities and
stockholders' equity $ 2,073.2 $ 1,702.6
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