Lexmark International reports first-quarter financial results; Earnings per share at the top end of guidance.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)--April 22, 2002 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 financial results for the first quarter of 2002. First-quarter revenue was a record $1.050 billion, up 6 percent (8 percent in constant currency) from 2001. 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 53 cents. "As we entered the first quarter, given existing market conditions, we anticipated flat revenue year-to-year and earnings per share in the range of 43 to 53 cents. However, our first quarter revenue growth of 6 percent exceeded our expectations and earnings per share came in at the top end of our guidance," stated 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. . "Our positive results were driven by double-digit dou·ble-dig·it adj. Being between 10 and 99 percent: double-digit inflation. growth in laser and 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. , particularly consumer all-in-one (1) A combination computer printer, scanner, copy machine and fax machine. Some all-in-ones exclude the fax capability or make it an option. (2) A desktop computer that houses every component except the keyboard and mouse inside the same case as the monitor. products. I believe these results indicate that Lexmark has continued to outperform Outperform An analyst recommendation meaning a stock is expected to do slightly better than the market return. Notes: Exact definitions vary by brokerage, but in general this rating is better than neutral and worse than buy or strong buy. in a weak market and reflect the power of our supplies-annuity business model." Financial highlights: Laser and inkjet See inkjet printer. supplies account for 52 percent of revenue Lexmark's revenue for the first quarter ended March 31 was $1.050 billion, an increase of 6 percent versus $988.0 million in the same period of 2001. Without the negative impact of foreign currency translation, revenue growth would have been 8 percent versus last year. Laser and inkjet supplies revenue was $546 million, a 16 percent increase over $471 million a year ago and now represents 52 percent of total revenue, up from 48 percent in the prior year. Laser and inkjet printer revenue was $401 million in the first quarter of 2002 versus $383 million a year earlier, a growth rate of 5 percent. 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 29.5 percent for the quarter versus 32.6 percent a year ago due to lower laser and inkjet printer margins, partially offset by an increase of supplies in the product mix. Operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. were 19.5 percent of revenue, a reduction of 1.2 points from the prior year, reflecting the company's continuing focus on expense management. 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 $105 million in the first quarter of 2002 versus $118 million last year due to the lower gross profit margin. Diluted net earnings per share for the period were 53 cents. Lexmark's debt-to-total-capital ratio at March 31, 2002 was 13 percent, unchanged from year end 2001. Capital expenditures were $22 million in the first quarter with most spending in support of new product development, infrastructure support and the completion of capacity expansion projects initiated in prior years. The company repurchased approximately 1.5 million shares of its common stock during the quarter for $77 million, at prices ranging from $50.00 to $54.95 per share. During the first quarter, Lexmark's board of directors increased the cumulative stock repurchase Stock repurchase A firm's repurchase of outstanding shares of its common stock. authorization The right or permission to use a system resource; the process of granting access. See access control. by $200 million to $1.2 billion, of which $241 million remains at March 31, 2002. New inkjet family launched: During the first quarter, Lexmark again demonstrated its technology leadership with the launch of a new generation of the award-winning Adj. 1. award-winning - having received awards; "this award-winning bridge spans a distance of five miles" "Z" family of inkjet printers. The $199 Lexmark Z65 Color Jetprinter (along with the $229 Z65n network model) at 4800 x 1200 dots per inch (dpi), offers twice the resolution of the closest competitor and delivers best-in-class print speeds of up to 21 pages per minute (ppm (Pages Per Minute) The measurement of printer speed. See gppm. PPM - Portable Pixmap ) in black and 15 ppm in color. The new Lexmark Z55 also provides best-in-class 3600 x 1200 dpi resolution and a three picoliter microfine color drop size for only $129. Rounding out the new line are the Lexmark Z45, Z35 and Z25 Color Jetprinters at $89, $69 and $49, respectively, each establishing new standards for price and performance in the market. Looking forward: "We believe that Lexmark is well-positioned due to our strong product announcements in 2001 and early 2002 and we expect to continue to outperform the market," said Curlander. "As we move through 2002, we are uncertain about the level of information technology spending and therefore, remain cautious. In the second quarter of 2002, we anticipate that year-over-year revenue growth will exceed that of the first quarter, and could grow at a double-digit rate. We expect earnings per share to be in the range of 56 to 66 cents." Lexmark is hosting a conference call with securities analysts on Monday, April 22, 2002 at 8:30 a.m. Eastern Time (888-338-6461, pass code LXK102). 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 can be accessed from Lexmark's investor relations Investor relations The process by which the corporation communicates with its investors. web site at http://investor.lexmark.com. Lexmark International, Inc. is a leading developer, manufacturer and supplier of printing solutions -- including laser and inkjet printers, multifunction products, associated supplies and services -- for offices and homes in more than 150 countries. Founded in 1991, Lexmark reported more than $4.1 billion in revenue in 2001, 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. Color Jetprinter is a trademark of Lexmark International, Inc. 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 and involve risks and uncertainties, including, but not limited to, the impact of competitors' products and pricing, management of the company's and resellers' inventory levels, market acceptance of new products and pricing programs, competition in aftermarket Aftermarket See: Secondary market. aftermarket See secondary market. supplies, changes in a country's or region's political or economic conditions, production and supply difficulties, unforeseen cost impacts, currency fluctuations, increased investment to support product development, conflicts among sales channels, financial failure or loss of a key customer or reseller An organization that sells hardware and software to the general public. Resellers purchase products from software publishers and hardware manufacturers. , 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, intellectual property and other legal claims and expenses, 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
March 31
--------------------
2002 2001
--------- --------
Revenue $ 1,050.1 $ 988.0
Cost of revenue 740.5 665.5
--------- --------
Gross profit 309.6 322.5
--------- --------
Research and development 61.2 62.2
Selling, general and administrative 143.8 142.6
--------- --------
Operating expense 205.0 204.8
--------- --------
Operating income 104.6 117.7
Interest expense 3.1 2.8
Other 4.2 4.2
--------- --------
Earnings before income taxes 97.3 110.7
Provision for income taxes 25.8 31.0
--------- --------
Net earnings $ 71.5 $ 79.7
========= ========
Net earnings per share:
Basic $ 0.55 $ 0.62
========= ========
Diluted $ 0.53 $ 0.60
========= ========
Shares used in per share calculation:
Basic 130.6 128.0
========= ========
Diluted 134.0 132.7
========= ========
Note: Certain 2001 amounts have been reclassified due to the company's
adoption of EITF 00-25. Details of this reclassification are
available at http://investor.lexmark.com.
LEXMARK INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF FINANCIAL POSITION
(In Millions)
(Unaudited)
March 31 December 31
2002 2001
--------- ---------
ASSETS
Current assets:
Cash and cash equivalents $ 115.0 $ 90.7
Trade receivables, net 680.4 702.8
Inventories 457.9 455.1
Prepaid expenses and other
current assets 243.5 244.5
--------- ---------
Total current assets 1,496.8 1,493.1
Property, plant and equipment, net 785.7 800.4
Other assets 155.6 156.4
--------- ---------
Total assets $ 2,438.1 $ 2,449.9
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Short-term debt $ 11.8 $ 11.0
Accounts payable 374.7 384.7
Accrued liabilities 541.5 535.4
--------- ---------
Total current liabilities 928.0 931.1
Long-term debt 149.1 149.1
Other liabilities 274.0 293.8
--------- ---------
Total liabilities 1,351.1 1,374.0
--------- ---------
Stockholders' equity:
Preferred stock -- --
Common stock and capital in
excess of par 822.2 807.8
Retained earnings 1,360.6 1,289.1
Treasury stock (956.4) (879.8)
Accumulated other comprehensive loss (139.4) (141.2)
--------- ---------
Total stockholders' equity 1,087.0 1,075.9
--------- ---------
Total liabilities and
stockholders' equity $ 2,438.1 $ 2,449.9
========= =========
|
|
||||||||||||||
Printer friendly
Cite/link
Email
Feedback
Reader Opinion