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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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The 19th International Cloud Expo has announced that its Call for Papers is open. Cloud Expo, to be held November 1-3, 2016, at the Santa Clara Convention Center in Santa Clara, CA, brings together Cloud Computing, Big Data, Internet of Things, DevOps, Digital Transformation, Microservices and WebRTC to one location. With cloud computing driving a higher percentage of enterprise IT budgets every year, it becomes increasingly important to plant your flag in this fast-expanding business opportuni...
SYS-CON Events announced today Telecom Reseller has been named “Media Sponsor” of SYS-CON's 19th International Cloud Expo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. Telecom Reseller reports on Unified Communications, UCaaS, BPaaS for enterprise and SMBs. They report extensively on both customer premises based solutions such as IP-PBX as well as cloud based and hosted platforms.
For basic one-to-one voice or video calling solutions, WebRTC has proven to be a very powerful technology. Although WebRTC’s core functionality is to provide secure, real-time p2p media streaming, leveraging native platform features and server-side components brings up new communication capabilities for web and native mobile applications, allowing for advanced multi-user use cases such as video broadcasting, conferencing, and media recording.
Data is the fuel that drives the machine learning algorithmic engines and ultimately provides the business value. In his session at Cloud Expo, Ed Featherston, a director and senior enterprise architect at Collaborative Consulting, will discuss the key considerations around quality, volume, timeliness, and pedigree that must be dealt with in order to properly fuel that engine.
Pulzze Systems was happy to participate in such a premier event and thankful to be receiving the winning investment and global network support from G-Startup Worldwide. It is an exciting time for Pulzze to showcase the effectiveness of innovative technologies and enable them to make the world smarter and better. The reputable contest is held to identify promising startups around the globe that are assured to change the world through their innovative products and disruptive technologies. There w...
Is the ongoing quest for agility in the data center forcing you to evaluate how to be a part of infrastructure automation efforts? As organizations evolve toward bimodal IT operations, they are embracing new service delivery models and leveraging virtualization to increase infrastructure agility. Therefore, the network must evolve in parallel to become equally agile. Read this essential piece of Gartner research for recommendations on achieving greater agility.
Akana has announced the availability of version 8 of its API Management solution. The Akana Platform provides an end-to-end API Management solution for designing, implementing, securing, managing, monitoring, and publishing APIs. It is available as a SaaS platform, on-premises, and as a hybrid deployment. Version 8 introduces a lot of new functionality, all aimed at offering customers the richest API Management capabilities in a way that is easier than ever for API and app developers to use.
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...
Personalization has long been the holy grail of marketing. Simply stated, communicate the most relevant offer to the right person and you will increase sales. To achieve this, you must understand the individual. Consequently, digital marketers developed many ways to gather and leverage customer information to deliver targeted experiences. In his session at @ThingsExpo, Lou Casal, Founder and Principal Consultant at Practicala, discussed how the Internet of Things (IoT) has accelerated our abil...
SYS-CON Events announced today that 910Telecom 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. Housed in the classic Denver Gas & Electric Building, 910 15th St., 910Telecom is a carrier-neutral telecom hotel located in the heart of Denver. Adjacent to CenturyLink, AT&T, and Denver Main, 910Telecom offers connectivity to all major carriers, Internet service providers, Internet backbones and ...
With so much going on in this space you could be forgiven for thinking you were always working with yesterday’s technologies. So much change, so quickly. What do you do if you have to build a solution from the ground up that is expected to live in the field for at least 5-10 years? This is the challenge we faced when we looked to refresh our existing 10-year-old custom hardware stack to measure the fullness of trash cans and compactors.
The emerging Internet of Everything creates tremendous new opportunities for customer engagement and business model innovation. However, enterprises must overcome a number of critical challenges to bring these new solutions to market. In his session at @ThingsExpo, Michael Martin, CTO/CIO at nfrastructure, outlined these key challenges and recommended approaches for overcoming them to achieve speed and agility in the design, development and implementation of Internet of Everything solutions wi...
19th Cloud Expo, taking place November 1-3, 2016, at the Santa Clara Convention Center in Santa Clara, CA, will feature technical sessions from a rock star conference faculty and the leading industry players in the world. Cloud computing is now being embraced by a majority of enterprises of all sizes. Yesterday's debate about public vs. private has transformed into the reality of hybrid cloud: a recent survey shows that 74% of enterprises have a hybrid cloud strategy. Meanwhile, 94% of enterpri...
Today we can collect lots and lots of performance data. We build beautiful dashboards and even have fancy query languages to access and transform the data. Still performance data is a secret language only a couple of people understand. The more business becomes digital the more stakeholders are interested in this data including how it relates to business. Some of these people have never used a monitoring tool before. They have a question on their mind like “How is my application doing” but no id...
SYS-CON Events announced today that Venafi, the Immune System for the Internet™ and the leading provider of Next Generation Trust Protection, will exhibit at @DevOpsSummit at 19th International Cloud Expo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. Venafi is the Immune System for the Internet™ that protects the foundation of all cybersecurity – cryptographic keys and digital certificates – so they can’t be misused by bad guys in attacks...
Smart Cities are here to stay, but for their promise to be delivered, the data they produce must not be put in new siloes. In his session at @ThingsExpo, Mathias Herberts, Co-founder and CTO of Cityzen Data, will deep dive into best practices that will ensure a successful smart city journey.
In today's uber-connected, consumer-centric, cloud-enabled, insights-driven, multi-device, global world, the focus of solutions has shifted from the product that is sold to the person who is buying the product or service. Enterprises have rebranded their business around the consumers of their products. The buyer is the person and the focus is not on the offering. The person is connected through multiple devices, wearables, at home, on the road, and in multiple locations, sometimes simultaneously...
Internet of @ThingsExpo, taking place November 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 Internet of Things (IoT) is the most profound change in personal and enterprise IT since the creation of the Worldwide Web more than 20 years ago. All major researchers estimate there will be tens of billions devices - comp...
Amazon has gradually rolled out parts of its IoT offerings in the last year, but these are just the tip of the iceberg. In addition to optimizing their back-end AWS offerings, Amazon is laying the ground work to be a major force in IoT – especially in the connected home and office. Amazon is extending its reach by building on its dominant Cloud IoT platform, its Dash Button strategy, recently announced Replenishment Services, the Echo/Alexa voice recognition control platform, the 6-7 strategic...
Cloud computing is being adopted in one form or another by 94% of enterprises today. Tens of billions of new devices are being connected to The Internet of Things. And Big Data is driving this bus. An exponential increase is expected in the amount of information being processed, managed, analyzed, and acted upon by enterprise IT. This amazing is not part of some distant future - it is happening today. One report shows a 650% increase in enterprise data by 2020. Other estimates are even higher....