Monday, July 27, 2009

Lexmark's Master Plan

We put an interesting thought on Lexmark at the end of this 2 - what is your thoughts?

Lexmark reports second quarter results LEXINGTON, Ky. - 07/21/2009

Lexmark International, Inc. (NYSE: LXK) today announced financial results for the second quarter of 2009. Second quarter revenue was $905 million, down 21 percent compared to revenue of $1.14 billion last year as weak global economic conditions continued to negatively impact demand for both hardware and supplies.

  • 2Q2009 - GAAP Earnings Per Share $0.22
  • 2Q2008 - GAAP Earnings Per Share $0.89
  • 2Q2009 - Restructuring Charges $0.33
  • 2Q2008 - Restructuring Charges $0.07
  • 2Q2009 - Non-GAAP Earnings Per Share $0.56
  • 2Q2008 - Non-GAAP Earnings Per Share $0.96

Second quarter GAAP earnings per share were $0.22. Excluding $0.33 per share for restructuring-related activities, earnings per share for the second quarter of 2009 would have been $0.55. Second quarter 2008 GAAP earnings per share were $0.89. Earnings per share for the second quarter of 2008 would have been $0.96 excluding $0.07 per share for restructuring-related activities.

“While second quarter results were in line with our expectation, global economic conditions continue to negatively impact Lexmark and the overall distributed printing market,” said Paul J. Curlander, Lexmark chairman and chief executive officer. “Despite this, we made good progress during the quarter on our key strategic initiatives in both divisions.

“Specifically, we continued the rollout of new laser products with the introduction of the new Lexmark C730/X730 Series of color laser printers and MFPs. Our ongoing initiatives in color laser and laser MFPs drove good unit growth in both of these segments during the quarter.

“The progress of our inkjet technology development team culminated in the announcement last week regarding our new line of inkjet AIOs featuring Lexmark’s new Vizix inkjet technology, including three new Web-connected, touch screen, business focused AIOs," Curlander said.

Second quarter Printing Solutions and Services Division revenue of $624 million declined 18 percent year to year. Imaging Solutions Division revenue of $281 million declined 25 percent compared to a year ago.

In the second quarter of 2009:
• Gross profit margin was 31.0 percent versus 36.6 percent in 2008.
• Operating expense was $253 million compared to $316 million last year.
• Operating income margin of 3.1 percent includes $32 million pretax restructuring-related charges. Operating income margin in 2008 of 8.9 percent included $9 million pretax restructuring-related charges.
• Net earnings for the quarter were $17 million compared to second quarter 2008 net earnings of $84 million.

On a non-GAAP basis, excluding restructuring-related charges, in the second quarter of 2009:
• Gross profit margin would have been 33.4 percent, down 3.6 percentage points from 37.0 percent in the same period last year, principally due to a decline in product margins.
• Operating expense would have been $243 million, a reduction of 22 percent from last year primarily driven by reduced marketing and general and administrative expense.
• Operating income margin would have been 6.6 percent, down from 9.6 percent last year.
• Net earnings would have been $43 million, compared to $90 million in the second quarter of 2008.

The company ended the quarter with $810 million in cash and current marketable securities. Second quarter net cash provided by operating activities was $84 million. Capital expenditures for the quarter were $79 million. Depreciation and amortization in the quarter was $63 million.

Simple questions, are they setting themselves to be acquired or to go private?

So who would be the best bet to acquire Lexmark?

  • Private Venture Firm
  • Xerox
  • Dell
  • Samsung
  • Hewlett Packard
  • How about Panasonic or Okidata? These two would be interesting!
We still like going out on the financial message boards and and see what possible rumors are being discussed.

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