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Imation Reports Fourth Quarter and Full Year 2012 Results and Additional Steps in Transformation to a Secure and Scalable Storage Company

Imation Corp. (NYSE:IMN), a global scalable storage and data security company, today released financial results for its 2012 fourth quarter and fiscal year ended December 31, 2012. The Company also provided an update on its continued strategic transformation.

CEO Mark Lucas said, “Imation’s opportunity for higher margin, differentiated products is in our Secure and Scalable Storage portfolio which grew 16.7 percent in the fourth quarter and rose to 21 percent of total revenues, up from 15.7 percent a year earlier. With our recently announced purchase of Nexsan, we expect to derive more revenue from this category in the future. As anticipated, our audio and video information category declined 23.6 percent and will drop further given the divestitures we are announcing today. We have discussed previously that our traditional storage business is in secular decline; therefore, we are acting with urgency to reduce our cost structure and transform Imation into a company focused on high growth markets in data storage and data security.”

Imation reported Q4 2012 net revenue of $299.1 million, down 12.6 percent from Q4 2011. Special charges were $305.2 million, creating an operating loss of $310.4 million, and a diluted loss per share of $8.34. Special charges included intangible asset impairments of $260.5 million, goodwill impairment of $23.3 million and other charges of $21.4 million. Excluding special charges, Q4 2012 operating loss would have been $5.2 million and diluted loss per share would have been $0.14.

For the full year 2012, revenue was $1.1 billion, down 14.8 percent from 2011, and the operating loss was $336.1 million, or $9.09 per diluted share. Special charges for the full year were $307.2 million and excluding these special charges, 2012 operating loss would have been $28.9 million, and diluted loss per share would have been $0.90. EBITDA for the year totaled $6.9 million and for the fourth quarter was $2.8 million (See Tables Five and Six for non-GAAP measures).

Transformation Strategy

Imation is currently in the midst of a strategic transformation to build a long-term platform for growth, increased margins and improved profitability. The Company is accelerating this transformation through a number of actions including the following:

  • Nexsan Acquisition - On December 31, 2012, Imation acquired Nexsan Corporation, a successful, higher margin, disk-based and hybrid disk-and-solid-state storage systems company, to invest in growth platforms for data storage solutions. The acquisition is expected to significantly contribute to Imation’s growth in the small- and medium-sized business and distributed enterprise storage markets, and Imation will provide the Nexsan business with global scale and a well-known storage brand.
  • Exiting Lower Margin Businesses - As the Company intensified its focus on data storage and data security, management announced in the third quarter that Imation would be exploring strategic alternatives for the consumer electronics brands and businesses. Imation has decided to divest its Memorex and XtremeMac consumer electronics businesses. The Company will continue its TDK Life on Record business on a more focused basis. Lucas commented, “Divesting the Memorex and XtremeMac consumer electronics brands will allow us to direct our time and resources to the right opportunities in data storage and security, as well as our retail optical business under the Memorex and TDK Life on Record brands.”
  • Cost Reductions - As previously reported, Imation is aggressively implementing cost savings initiatives to right size the Company. Management is targeting to exceed a 25 percent reduction in operating expenses.
  • Business Structure Realignment - Also, as previously announced, to better align the Company with its key commercial and retail segments, Imation established two new business units effective January 1, 2013: Tiered Storage and Security Solutions (TSS) and Consumer Storage and Accessories (CSA). The two segments will be independently managed and provide a focused customer-centric structure, resulting in faster decision-making, clear accountability, a more nimble organization and increased efficiency worldwide.

“We are committed to transforming the Company and building a sustainable platform for growth, increased margins and long-term shareholder value. Combined, the acquisition of Nexsan, divestiture of certain consumer businesses, improvements in cost structure, and a more efficient business unit model truly represent an acceleration of our transformation strategy. In 2013, we are building on these actions and moving as swiftly as we can to become a major player in data storage and security on a global basis,” Lucas concluded.

Detailed Q4 2012 Analysis

Net revenue for Q4 2012 was $299.1 million, down 12.6 percent from Q4 2011. From a regional perspective, Americas revenue decreased 22.2 percent driven by optical and consumer electronics revenue reductions; Europe revenue decreased 7.7 percent; North Asia revenue increased 0.6 percent and South Asia revenue decreased 3.8 percent.

Gross margin for Q4 2012 was 16.1 percent, up from 15.0 percent in Q4 2011. Gross margin was 16.9 percent excluding inventory write offs of $2.3 million, which were part of the Company’s restructuring program, compared to 17.2 percent on the same basis in 2011.

Selling, general and administrative (SG&A) expenses for Q4 2012 were $50.5 million, down $2.4 million compared with Q4 2011 expenses of $52.9 million.

Research and development (R&D) expenses for Q4 2012 were $5.1 million, down $0.9 million compared with Q4 2011 expenses of $6.0 million.

Special charges were $305.2 million in Q4 2012 consisting of intangible asset impairments of $260.5 million, goodwill impairment of $23.3 million and $21.4 million of restructuring and other charges. The intangible asset charges, which related primarily to the Memorex International Inc. acquisition in 2006 and TDK Recording Media acquisition in 2007, were driven mainly by an accelerated optical market secular decline. Special charges were $12.3 million in Q4 2011 (See Tables Five and Six for non-GAAP measures).

Operating loss was $310.4 million in Q4 2012 compared with an operating loss of $12.1 million in Q4 2011. Excluding the impact of special charges described above, adjusted operating loss would have been $5.2 million in Q4 2012 compared with adjusted operating income on the same basis of $0.2 million in Q4 2011.

Income tax benefit was $1.0 million in Q4 2012 compared with income tax benefit of $0.7 million in Q4 2011. The Company maintains a valuation allowance related to its U.S. deferred tax assets and, therefore, no tax provision or benefit was recorded related to its 2012 U.S. results.

Loss per diluted share was $8.34 in Q4 2012 compared with $0.34 in Q4 2011. Excluding the impact of special charges described above, adjusted loss per diluted share would have been $0.14 in Q4 2012 compared with $0.14 in Q4 2011.

Cash and cash equivalents balance was $108.7 million as of December 31, 2012, down $77.6 million during the quarter, driven primarily by the payment of $104.6 million in cash for the Nexsan acquisition, offset by short-term borrowings of $20.0 million and net cash provided by operations of $14.1 million.

Webcast and Replay Information

A teleconference is scheduled for 9:00 AM Central Time today, February 13, 2013, and will be available on the Internet on a listen-only basis at www.ir.Imation.com or www.streetevents.com. The Company's quarterly financial results will be discussed.

A taped replay of the teleconference will be available beginning at 12:30 p.m. Central time today, February 13, 2013, until 11:00 p.m. Central time February 20, 2013 by dialing 855-859-2056 (Conference ID #64544023). All remarks made during the teleconference will be current at the time of the call and the replay will not be updated to reflect any subsequent developments.

Description of Tables

Table One - Consolidated Statements of Operations

Table Two - Consolidated Balance Sheets

Table Three - Supplemental Segment and Product Information

Table Four - Operations, Cash Flow and Additional Information

Table Five - Non-GAAP Financial Measures

Table Six - Non-GAAP Financial Measures

Non-GAAP Financial Measures

The Non-GAAP financial measurements (including adjusted operating income (loss), adjusted income (loss) per diluted share, adjusted gross margin and EBITDA) are provided to assist in understanding the impact of certain items on Imation's actual results of operations when compared with prior periods (see Tables Five and Six). Management believes this will assist investors in making an evaluation of Imation's performance against prior periods on a comparable basis by adjusting for these items. Management understands that there are material limitations on the use of Non-GAAP measures. Non-GAAP measures are not substitutes for GAAP measures for the purpose of analyzing financial performance. These Non-GAAP measures are not in accordance with, or an alternative for measures prepared in accordance with, generally accepted accounting principles and may be different from Non-GAAP measures used by other companies. In addition, these Non-GAAP measures are not based on any comprehensive set of accounting rules or principles. This information should not be construed as an alternative to the reported results, which have been determined in accordance with accounting principles generally accepted in the United States of America.

Accounting Valuations Not Yet Finalized

The financial statements released today reflect the impacts associated with the purchase price allocation from the acquisition of Nexsan Corporation as well as impairment charges related to intangible assets and goodwill from prior acquisitions. These items are subject to change pending finalization of the required valuations. We expect all applicable information to be finalized prior to the filing of the Imation Form 10-K in March.

About Imation Corp.

Imation (NYSE: IMN) is a global scalable storage and data security company. Imation reaches customers in more than 100 countries through a powerful global distribution network and well recognized brands. Additional information about Imation is available at www.imation.com.

Risk and Uncertainties

Certain information contained in this press release which does not relate to historical information may be deemed to constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements are subject to certain risks and uncertainties that could cause our actual results in the future to differ materially from our historical results and those presently anticipated or projected. We wish to caution investors not to place undue reliance on any such forward-looking statements. Any forward-looking statements speak only as of the date on which such statements are made, and we undertake no obligation to update such statements to reflect events or circumstances arising after such date. Risk factors include our ability to successfully implement our strategy; our ability to grow our business in new products with profitable margins and the rate of revenue decline for certain existing products; the ability of our data security products to withstand cyber-attacks; the ability to quickly develop, source, introduce and deliver differentiating and innovative products; our potential dependence on third parties for new product introductions or technologies in order to introduce our own new products; the ready availability and price of energy and key raw materials or critical components including due to the effects of natural disasters and our ability to pass along raw materials price increases to our customers; continuing uncertainty in global and regional economic conditions including adverse effects of the ongoing sovereign debt crisis in Europe, increased Euro currency exchange rate volatility, and related austerity measures and their potential impact on European economic growth; our ability to identify, value, integrate and realize the expected benefits from any acquisition which has occurred or may occur in connection with our strategy; the possibility that our goodwill or any goodwill that we acquire may become impaired; the seasonality and volatility of the markets in which we operate; foreign currency fluctuations; changes in European law or practice related to the imposition or collectability of optical levies; significant changes in discount rates and other assumptions used in the valuation of our pension plans; the possibility that our intangible assets may become impaired; acquisition related contingent consideration, which is recorded at fair value and revalued each period, differs from the obligation recorded during the previous period resulting in income or expense being recorded on the consolidated statements of operations; changes in tax laws, regulations and results of inspections by various tax authorities; our ability to successfully defend our intellectual property rights and the ability or willingness of our suppliers to provide adequate protection against third party intellectual property or product liability claims; the outcome of any pending or future litigation; failure to adequately protect our information systems from cyber-attacks; our ability to meet our revenue growth, gross margin and earnings targets and the volatility of our stock price due to our results or market trends, as well as various factors set forth from time to time in our filings with the Securities and Exchange Commission.

Table One

 
IMATION CORP.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In millions, except for per share amounts)
(Unaudited)
     
Three Months Ended Twelve Months Ended
December 31 December 31
2012     2011 2012     2011
Net revenue $ 299.1 $ 342.3 $ 1,099.6 $ 1,290.4
Cost of goods sold   251.0     290.8     897.3     1,073.7  
Gross profit 48.1 51.5 202.3 216.7
 
Operating expense:
Selling, general and administrative 50.5 52.9 210.7 203.7
Research and development 5.1 6.0 22.8 21.0
Goodwill impairment 23.3 - 23.3 1.6
Intangible impairment 260.5 - 260.5 -
Litigation settlement - - - 2.0
Restructuring and other   19.1     4.7     21.1     21.5  
Total 358.5 63.6 538.4 249.8
 
Operating loss (310.4 ) (12.1 ) (336.1 ) (33.1 )
 
Other expense (income):
Interest income (0.1 ) (0.2 ) (0.5 ) (0.9 )
Interest expense 0.5 1.0 2.9 3.7
Other, net   0.4     0.7     2.6     7.0  
Total 0.8 1.5 5.0 9.8
 
Loss before income taxes (311.2 ) (13.6 ) (341.1 ) (42.9 )
 
Income tax (benefit) provision   (1.0 )   (0.7 )   (0.4 )   3.8  
 
Net loss $ (310.2 ) $ (12.9 ) $ (340.7 ) $ (46.7 )
 
(Loss) earnings per common share
Basic $ (8.34 ) $ (0.34 ) $ (9.09 ) $ (1.24 )
Diluted (8.34 ) (0.34 ) (9.09 ) (1.24 )
 
Weighted average shares outstanding
Basic 37.2 37.4 37.5 37.7
Diluted 37.2 37.4 37.5 37.7
 
 
*These Financial Statements and information presented in the following tables reflect the impacts associated with the purchase price allocation from the acquisition of Nexsan Corporation as well as impairment charges related to intangible assets and goodwill from prior acquisitions. These items are subject to change pending finalization of the required valuations. We expect all applicable information to be finalized prior to the filing of the Imation Form 10-K in March.
 

Table Two

 
IMATION CORP.
CONSOLIDATED BALANCE SHEETS *
(In millions)
(Unaudited)
     
December 31, December 31,
2012 2011
ASSETS
Current assets
Cash and cash equivalents $ 108.7 $ 223.1
Accounts receivable, net 220.8 234.9
Inventories 166.0 208.8
Other current assets   61.4   49.7
 
Total current assets 556.9 716.5
 
Property, plant and equipment, net 58.9 55.4
Intangible assets, net 81.9 321.7
Goodwill 73.5 31.3
Other assets   21.1   24.4
 
Total assets $ 792.3 $ 1,149.3
 
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Accounts payable $ 162.7 $ 205.2
Other current liabilities 157.8 151.2
Short-term debt   20.0   -
 
Total current liabilities 340.5 356.4
 
Other liabilities 51.4 69.2
       
Total liabilities   391.9   425.6
Commitments and contingencies        
Shareholders' equity   400.4   723.7
 

Total liabilities and shareholders' equity

$ 792.3 $ 1,149.3
 
 
*These Financial Statements and information presented in the following tables reflect the impacts associated with the purchase price allocation from the acquisition of Nexsan Corporation as well as impairment charges related to intangible assets and goodwill from prior acquisitions. These items are subject to change pending finalization of the required valuations. We expect all applicable information to be finalized prior to the filing of the Imation Form 10-K in March.
 

Table Three

 
IMATION CORP.
SUPPLEMENTAL SEGMENT AND PRODUCT INFORMATION
(Dollars in millions)
(Unaudited)
         

Three months ended
December 31,

Three months ended
December 31,

2012 2011 % Change
Revenue % Total Revenue % Total
Americas $ 131.1 43.8 % $ 168.6 49.3 % -22.2 %
Europe 59.8 20.0 % 64.8 18.9 % -7.7 %
North Asia 78.1 26.1 % 77.6 22.7 % 0.6 %
South Asia   30.1   10.1 %   31.3   9.1 % -3.8 %
Total $ 299.1   100.0 % $ 342.3   100.0 %
 
Revenue % Total Revenue % Total
Traditional storage
Optical products $ 109.0 36.5 % $ 128.1 37.4 % -14.9 %
Magnetic products 71.2 23.8 % 82.7 24.2 % -13.9 %
Other traditional storage   3.7   1.2 %   9.1   2.7 % -59.3 %
Total traditional storage 183.9 61.5 % 219.9 64.3 % -16.4 %
Secure and scalable storage 62.8 21.0 % 53.8 15.7 % 16.7 %
Audio and video information   52.4   17.5 %   68.6   20.0 % -23.6 %
Total $ 299.1   100.0 % $ 342.3   100.0 %
 
 

Operating Income
(Loss)

OI %

Operating Income
(Loss)

OI %
Americas $ (0.1 ) -0.1 % $ 6.1 3.6 % -101.6 %
Europe 1.9 3.2 % 2.5 3.9 % -24.0 %
North Asia 3.1 4.0 % 3.4 4.4 % -8.8 %
South Asia (0.2 ) -0.7 % 1.7 5.4 % -111.8 %
Corp/Unallocated (1)   (315.1 ) NM     (25.8 ) NM   NM
Total $ (310.4 ) -103.8 % $ (12.1 ) -3.5 %
 
Gross Margin Gross Margin
 
Traditional storage 17.8 % 19.1 %
Secure and scalable storage 14.6 18.0
Audio and video information   16.0     10.8  
16.9 17.2

Inventory write-offs related to restructuring programs

  (0.8 )   (2.2 )
Total   16.1   %   15.0   %
 

Twelve months ended
December 31,

Twelve months ended
December 31,

2012 2011 % Change
Revenue % Total Revenue % Total
Americas $ 504.7 45.9 % $ 595.9 46.2 % -15.3 %
Europe 208.8 19.0 % 248.0 19.2 % -15.8 %
North Asia 272.5 24.8 % 307.2 23.8 % -11.3 %
South Asia   113.6   10.3 %   139.3   10.8 % -18.4 %
Total $ 1,099.6   100.0 % $ 1,290.4   100.0 %
 
 
Revenue % Total Revenue % Total
Traditional storage
Optical products $ 426.8 38.8 % $ 511.9 39.7 % -16.6 %
Magnetic products 286.2 26.0 % 327.4 25.3 % -12.6 %
Other traditional storage   15.4   1.4 %   47.7   3.7 % -67.7 %
Total traditional storage 728.4 66.2 % 887.0 68.7 % -17.9 %
Secure and scalable storage 210.1 19.1 % 210.1 16.3 % 0.0 %
Audio and video information   161.1   14.7 %   193.3   15.0 % -16.7 %
Total $ 1,099.6   100.0 % $ 1,290.4   100.0 %
 
 

Operating Income
(Loss)

OI %

Operating Income
(Loss)

OI %
Americas $ 2.9 0.6 % $ 8.4 1.4 % -65.5 %
Europe (3.9 ) -1.9 % 10.3 4.2 % -137.9 %
North Asia 5.9 2.2 % 12.5 4.1 % -52.8 %
South Asia 0.6 0.5 % 4.0 2.9 % -85.0 %
Corp/Unallocated (1)   (341.6 ) NM     (68.3 ) NM   NM
Total $ (336.1 ) -30.6 % $ (33.1 ) -2.6 %
 
Gross Margin Gross Margin
 
Traditional storage 19.0 % 19.0 %
Secure and scalable storage 18.8 15.1
Audio and video information   16.4     13.0  
18.6 17.5
Inventory write-offs related to restructuring programs   (0.2 )   (0.7 )
Total   18.4   %   16.8   %
 
 

NM - Not Meaningful

(1) Corporate and unallocated amounts include inventory write-offs related to restructuring programs, goodwill impairment, intangible impairment, intangible accelerated amortization, research and development expense, corporate expense, stock-based compensation expense, and restructuring and other charges that are not allocated to the regional markets we serve. We believe this avoids distorting the operating income for the regional segments.
 

Table Four

 
IMATION CORP.
OPERATIONS, CASH FLOW AND ADDITIONAL INFORMATION
(Dollars in millions)
(Unaudited)
             
 
Three Months Ended Twelve Months Ended
(Dollars in millions) December 31 December 31
2012 2011 2012 2011
Operations
Gross Profit $ 48.1 $ 51.5 $ 202.3 $ 216.7
Gross Margin % 16.1 % 15.0 % 18.4 % 16.8 %
Operating (Loss) Income $ (310.4 ) $ (12.1 ) $ (336.1 ) $ (33.1 )
Operating (Loss) Income % -103.8 % -3.5 % -30.6 % -2.6 %
 
Cash Flow
Net cash (used in) provided by operating activities $ 14.1 $ 15.3 $ (8.5 ) $ (16.3 )
Net cash (used in) provided by investing activities $ (109.6 ) $ (22.2 ) $ (115.7 ) $ (54.3 )
Net cash (used in) provided by financing activities $ 18.4 $ - $ 9.9 $ (9.1 )
Cash and cash equivalents - end of period $ 108.7 $ 223.1 $ 108.7 $ 223.1
 
Capital Spending $ 1.8 $ 1.2 $ 10.2 $ 7.3
Depreciation $ 2.2 $ 2.3 $ 8.3 $ 10.7
Amortization $ 5.8 $ 7.2 $ 27.5 $ 26.0
 

NM - Not Meaningful

 

Asset Utilization Information *

December 31 December 31
2012 2011
 
Days Sales Outstanding (DSO) 59 58
Days of Inventory Supply 89 85
Debt to Total Capital 4.8 % 0.0 %
 

Other Information

 

**

Approximate employee count as of December 31, 2012:

1,230
Approximate employee count as of December 31, 2011: 1,130
Book value per share as of December 31, 2012: $ 9.94
Shares used to calculate book value per share (millions): 40.3
Imation repurchased approximately 396,0000 shares of its stock during the quarter for $1.7 million.
Authorization for repurchase of approximately 3.8 million shares remains outstanding based on the latest Board authorization.
 

*

These operational measures, which we regularly use, are provided to assist in the investor's further understanding of our operations.

 

**

Includes approximately 200 employees of Nexsan Corporation which was acquired on December 31, 2012.

 

Days Sales Outstanding is calculated using the count-back method, which calculates the number of days of most recent revenue that are reflected in the net accounts receivable balance.

 

Days of Inventory Supply is calculated using the current period inventory balance divided by an estimate of the inventoriable portion of cost of goods sold expressed in days. December 31, 2012 amount excludes Nexsan Corporation.

 

Debt to Total Capital is calculated by dividing total debt (long term plus short term) by total shareholders' equity and total debt.

 

Table Five

 
IMATION CORP.
Non-GAAP Financial Measures
(In millions, except for per share amounts)
(Unaudited)
                     
Three Months Ended Three Months Ended
December 31, 2012 December 31, 2011
GAAP Adj * Non-GAAP GAAP Adj * Non-GAAP
Net revenue $ 299.1 $ - $ 299.1 $ 342.3 $ - $ 342.3
Cost of goods sold   251.0     (2.3 )   248.7     290.8     (7.6 )   283.2  
Adjusted gross profit $ 48.1   $ 2.3   $ 50.4   $ 51.5   $ 7.6   $ 59.1  
 
Adjusted gross margin 16.1 % 16.9 % 15.0 % 17.2 %
 
Operating (loss) income $ (310.4 ) $ 305.2 $ (5.2 ) $ (12.1 ) $ 12.3 $ 0.2
 
Adjusted income tax provision (benefit) $ (1.0 ) $ 0.1 $ (0.9 ) $ (0.7 ) $ 4.6 $ 3.9
 
Adjusted (loss) income $ (310.2 ) $ 305.1 $ (5.1 ) $ (12.9 ) $ 7.7 $ (5.2 )
 
Adjusted (loss) earnings per common share - Diluted $ (8.34 ) $ (0.14 ) $ (0.34 ) $ (0.14 )
 
Adjusted weighted average shares outstanding - Diluted 37.2 37.2 37.4 37.4
 
 
Twelve Months Ended Twelve Months Ended
December 31, 2012 December 31, 2011
GAAP Adj * Non-GAAP GAAP Adj * Non-GAAP
Net revenue $ 1,099.6 $ - $ 1,099.6 $ 1,290.4 $ - $ 1,290.4
Cost of goods sold   897.3     (2.3 )   895.0     1,073.7     (9.1 )   1,064.6  
Adjusted gross profit $ 202.3   $ 2.3   $ 204.6   $ 216.7   $ 9.1   $ 225.8  
 
Adjusted gross margin 18.4 % 18.6 % 16.8 % 17.5 %
 
Operating (loss) income $ (336.1 ) $ 307.2 $ (28.9 ) $ (33.1 ) $ 34.2 $ 1.1
 
Adjusted income tax provision (benefit) $ (0.4 ) $ 0.1 $ (0.3 ) $ 3.8 $ 5.0 $ 8.8
 
Adjusted (loss) income $ (340.7 ) $ 307.1 $ (33.6 ) $ (46.7 ) $ 29.2 $ (17.5 )
 
Adjusted (loss) earnings per common share - Diluted $ (9.09 ) $ (0.90 ) $ (1.24 ) $ (0.46 )
 
Adjusted weighted average shares outstanding - Diluted 37.5 37.5 37.7 37.7
 
 
*See Table Six
 

Table Six

 

IMATION CORP.
Non-GAAP Financial Measures
(In millions, except for per share amounts)
(Unaudited)
 
Operating (loss) income / Adjusted operating (loss) income
             
Three Months Ended Twelve Months Ended
December 31 December 31
2012 2011 2012 2011
Operating loss: $ (310.4 ) $ (12.1 ) $ (336.1 ) $ (33.1 )
Restructuring and other
Restructuring 15.2 5.0 19.7 11.4
Other 3.9 (0.3 ) 1.4 10.1
Goodwill impairment 23.3 - 23.3 1.6
Intangible impairment 260.5 - 260.5 -
Litigation settlement - - - 2.0
Inventory write-downs related to restructuring programs included in cost of goods sold   2.3     7.6     2.3     9.1  
Total adjustments   305.2     12.3     307.2     34.2  
Adjusted operating (loss) income - Non-GAAP $ (5.2 ) $ 0.2   $ (28.9 ) $ 1.1  
 
Effect on diluted EPS:
(Loss) income from operations $ (8.34 ) $ (0.34 ) $ (9.09 ) $ (1.24 )
Restructuring and other
Restructuring 0.40 0.13 0.52 0.31
Other 0.11 - 0.04 0.27
Goodwill impairment 0.63 - 0.62 0.04
Intangible impairment 7.00 - 6.95 -
Litigation settlement - - - 0.05
Inventory write-downs 0.06 0.20 0.06 0.24
Reversal of net operating loss carryforward valuation   -     (0.13 )   -     (0.13 )
Adjusted diluted EPS - Non-GAAP $ (0.14 ) $ (0.14 ) $ (0.90 ) $ (0.46 )
 
 
EBITDA:
Operating loss $ (310.4 ) $ (12.1 ) $ (336.1 ) $ (33.1 )
Depreciation 2.2 2.3 8.3 10.7
Amortization   5.8     7.2     27.5     26.0  
EBITDA $ (302.4 ) $ (2.6 ) $ (300.3 ) $ 3.6  
Restructuring and other 19.1 4.7 21.1 21.5
Goodwill impairment 23.3 - 23.3 1.6
Intangible impairment 260.5 - 260.5 -
Litigation settlement - - - 2.0
Inventory write-downs related to restructuring programs included in cost of goods sold   2.3     7.6     2.3     9.1  
Total adjustments   305.2     12.3     307.2     34.2  
Adjusted EBITDA $ 2.8   $ 9.7   $ 6.9   $ 37.8  
 
 

EBITDA is defined as operating income less depreciation and amortization. Adjusted EBITDA is defined as EBITDA before goodwill, restructuring and other, and inventory write-downs related to restructuring programs included in cost of goods sold.

 
The Non-GAAP financial measurements (adjusted operating income (loss), adjusted income(loss), adjusted diluted EPS, EBITDA and adjusted EBITDA) are provided to assist in understanding the impact of certain items on Imation's actual results of operations when compared with prior periods. Management believes this will assist investors in making an evaluation of Imation's performance against prior periods on a comparable basis by adjusting for these items. Management understands that there are material limitations on the use of Non-GAAP measures. Non-GAAP measures are not substitutes for GAAP measures for the purpose of analyzing financial performance. These Non-GAAP measures are not in accordance with, or an alternative for measures prepared in accordance with, generally accepted accounting principles and may be different from Non-GAAP measures used by other companies. In addition, these Non-GAAP measures are not based on any comprehensive set of accounting rules or principles. This information should not be construed as an alternative to the reported results, which have been determined in accordance with accounting principles generally accepted in the United States of America.

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SYS-CON Events announced today that Numerex Corp, a leading provider of managed enterprise solutions enabling the Internet of Things (IoT), will exhibit at the 19th International Cloud Expo | @ThingsExpo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. Numerex Corp. (NASDAQ:NMRX) is a leading provider of managed enterprise solutions enabling the Internet of Things (IoT). The Company's solutions produce new revenue streams or create operating...
Information technology is an industry that has always experienced change, and the dramatic change sweeping across the industry today could not be truthfully described as the first time we've seen such widespread change impacting customer investments. However, the rate of the change, and the potential outcomes from today's digital transformation has the distinct potential to separate the industry into two camps: Organizations that see the change coming, embrace it, and successful leverage it; and...
Data is an unusual currency; it is not restricted by the same transactional limitations as money or people. In fact, the more that you leverage your data across multiple business use cases, the more valuable it becomes to the organization. And the same can be said about the organization’s analytics. In his session at 19th Cloud Expo, Bill Schmarzo, CTO for the Big Data Practice at EMC, will introduce a methodology for capturing, enriching and sharing data (and analytics) across the organizati...
DevOps at Cloud Expo, taking place Nov 1-3, 2016, at the Santa Clara Convention Center in Santa Clara, CA, is co-located with 19th Cloud Expo and will feature technical sessions from a rock star conference faculty and the leading industry players in the world. The widespread success of cloud computing is driving the DevOps revolution in enterprise IT. Now as never before, development teams must communicate and collaborate in a dynamic, 24/7/365 environment. There is no time to wait for long dev...
I'm a lonely sensor. I spend all day telling the world how I'm feeling, but none of the other sensors seem to care. I want to be connected. I want to build relationships with other sensors to be more useful for my human. I want my human to understand that when my friends next door are too hot for a while, I'll soon be flaming. And when all my friends go outside without me, I may be left behind. Don't just log my data; use the relationship graph. In his session at @ThingsExpo, Ryan Boyd, Engi...
The vision of a connected smart home is becoming reality with the application of integrated wireless technologies in devices and appliances. The use of standardized and TCP/IP networked wireless technologies in line-powered and battery operated sensors and controls has led to the adoption of radios in the 2.4GHz band, including Wi-Fi, BT/BLE and 802.15.4 applied ZigBee and Thread. This is driving the need for robust wireless coexistence for multiple radios to ensure throughput performance and th...
The Internet of Things can drive efficiency for airlines and airports. In their session at @ThingsExpo, Shyam Varan Nath, Principal Architect with GE, and Sudip Majumder, senior director of development at Oracle, will discuss the technical details of the connected airline baggage and related social media solutions. These IoT applications will enhance travelers' journey experience and drive efficiency for the airlines and the airports. The session will include a working demo and a technical d...
SYS-CON Events announced today the Enterprise IoT Bootcamp, being held November 1-2, 2016, in conjunction with 19th Cloud Expo | @ThingsExpo at the Santa Clara Convention Center in Santa Clara, CA. Combined with real-world scenarios and use cases, the Enterprise IoT Bootcamp is not just based on presentations but with hands-on demos and detailed walkthroughs. We will introduce you to a variety of real world use cases prototyped using Arduino, Raspberry Pi, BeagleBone, Spark, and Intel Edison. Y...
Fact is, enterprises have significant legacy voice infrastructure that’s costly to replace with pure IP solutions. How can we bring this analog infrastructure into our shiny new cloud applications? There are proven methods to bind both legacy voice applications and traditional PSTN audio into cloud-based applications and services at a carrier scale. Some of the most successful implementations leverage WebRTC, WebSockets, SIP and other open source technologies. In his session at @ThingsExpo, Da...
If you’re responsible for an application that depends on the data or functionality of various IoT endpoints – either sensors or devices – your brand reputation depends on the security, reliability, and compliance of its many integrated parts. If your application fails to deliver the expected business results, your customers and partners won't care if that failure stems from the code you developed or from a component that you integrated. What can you do to ensure that the endpoints work as expect...
SYS-CON Events announced today that China Unicom will exhibit at the 19th International Cloud Expo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. China United Network Communications Group Co. Ltd ("China Unicom") was officially established in 2009 on the basis of the merger of former China Netcom and former China Unicom. China Unicom mainly operates a full range of telecommunications services including mobile broadband (GSM, WCDMA, LTE F...
Enterprise IT has been in the era of Hybrid Cloud for some time now. But it seems most conversations about Hybrid are focused on integrating AWS, Microsoft Azure, or Google ECM into existing on-premises systems. Where is all the Private Cloud? What do technology providers need to do to make their offerings more compelling? How should enterprise IT executives and buyers define their focus, needs, and roadmap, and communicate that clearly to the providers?
SYS-CON Events announced today that SoftLayer, an IBM Company, has been named “Gold Sponsor” of SYS-CON's 18th Cloud Expo, which will take place on June 7-9, 2016, at the Javits Center in New York, New York. SoftLayer, an IBM Company, provides cloud infrastructure as a service from a growing number of data centers and network points of presence around the world. SoftLayer’s customers range from Web startups to global enterprises.
The Transparent Cloud-computing Consortium (abbreviation: T-Cloud Consortium) will conduct research activities into changes in the computing model as a result of collaboration between "device" and "cloud" and the creation of new value and markets through organic data processing High speed and high quality networks, and dramatic improvements in computer processing capabilities, have greatly changed the nature of applications and made the storing and processing of data on the network commonplace.
Digital innovation is the next big wave of business transformation based on digital technologies of which IoT and Big Data are key components, For example: Business boundary innovation is a challenge to excavate third-party business value using IoT and BigData, like Nest Business structure innovation may propose re-building business structure from scratch, as Uber does in the taxicab industry The social model innovation is also a big challenge to the new social architecture with the design fr...
SYS-CON Events announced today that Pulzze Systems will exhibit at the 19th International Cloud Expo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. Pulzze Systems, Inc. provides infrastructure products for the Internet of Things to enable any connected device and system to carry out matched operations without programming. For more information, visit http://www.pulzzesystems.com.
IoT is fundamentally transforming the auto industry, turning the vehicle into a hub for connected services, including safety, infotainment and usage-based insurance. Auto manufacturers – and businesses across all verticals – have built an entire ecosystem around the Connected Car, creating new customer touch points and revenue streams. In his session at @ThingsExpo, Macario Namie, Head of IoT Strategy at Cisco Jasper, will share real-world examples of how IoT transforms the car from a static p...
Big Data has been changing the world. IoT fuels the further transformation recently. How are Big Data and IoT related? In his session at @BigDataExpo, Tony Shan, a renowned visionary and thought leader, will explore the interplay of Big Data and IoT. He will anatomize Big Data and IoT separately in terms of what, which, why, where, when, who, how and how much. He will then analyze the relationship between IoT and Big Data, specifically the drilldown of how the 4Vs of Big Data (Volume, Variety,...
The many IoT deployments around the world are busy integrating smart devices and sensors into their enterprise IT infrastructures. Yet all of this technology – and there are an amazing number of choices – is of no use without the software to gather, communicate, and analyze the new data flows. Without software, there is no IT. In this power panel at @ThingsExpo, moderated by Conference Chair Roger Strukhoff, panelists will look at the protocols that communicate data and the emerging data analy...
Video experiences should be unique and exciting! But that doesn’t mean you need to patch all the pieces yourself. Users demand rich and engaging experiences and new ways to connect with you. But creating robust video applications at scale can be complicated, time-consuming and expensive. In his session at @ThingsExpo, Zohar Babin, Vice President of Platform, Ecosystem and Community at Kaltura, will discuss how VPaaS enables you to move fast, creating scalable video experiences that reach your...