According to Lucas, “Our more focused business units will allow us to operate more efficiently, right-size our operating expense levels and forge a path to improved profitability.”
Increased Focus on Data Storage and Security - As the Company intensifies its focus and investment in data storage and security, management will also explore strategic alternatives for its consumer electronic brands and businesses.
Lucas said, “We are assessing strategic options for our consumer electronic lines in order to focus our attention and resources on data storage and security in all our distribution channels.”
The Company will continue to evaluate potential asset impairments during the fourth quarter. The Company has total acquired intangible assets including goodwill of approximately $325 million. If the analysis indicates an impairment, a material non-cash charge could be incurred in the fourth quarter.Q3 2012 Financial Results Net revenue for Q3 2012 was $248.2 million, down 19.6 percent from Q3 2011. From a regional perspective, Americas revenue decreased 17.0 percent, Europe revenue decreased 22.0 percent, North Asia revenue decreased 17.7 percent and South Asia revenue decreased 29.9 percent. Gross margin for Q3 2012 was 18.4 percent, relatively flat from 18.5 percent in Q3 2011. Gross margins continued to improve in our Secure and Scalable Storage products as well as our AVI products, however, these were offset by modest declines in our traditional storage gross margins. Selling, general and administrative (SG&A) expenses for Q3 2012 were $50.7 million, down $2.0 million compared with Q3 2011 expenses of $52.7 million. Research and development (R&D) expenses for Q3 2012 were $5.1 million, relatively unchanged compared with Q3 2011 expenses of $5.3 million. Restructuring and other charges were a benefit of $3.6 million in Q3 2012 due primarily to adjustment of an acquisition-related contingent liability. Restructuring and other charges were $7.5 million in Q3 2011. Operating loss was $6.5 million in Q3 2012 compared with an operating loss of $8.3 million in Q3 2011. Excluding the impact of restructuring and other charges described in Tables Five and Six for Non-GAAP measures, adjusted operating loss would have been $10.1 million in Q3 2012 compared with adjusted operating loss on the same basis of $0.8 million in Q3 2011. Income tax benefit was $0.3 million in Q3 2012 compared with income tax provision of $2.1 million in Q3 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 $0.17 in Q3 2012 compared with $0.38 in Q3 2011. Excluding the impact of restructuring and other charges described in Tables Five and Six for Non-GAAP measures, adjusted loss per diluted share would have been $0.26 in Q3 2012 compared with adjusted loss per diluted share of $0.18 in Q3 2011. Cash and cash equivalents ending balance was $186.3 million as of September 30, 2012, down $25 million during the quarter driven primarily by a final payment associated with a 2009 litigation settlement. Webcast and Replay Information A teleconference is scheduled for 9:00 AM Central Time today, October 24, 2012, 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 and today’s other announcements will be discussed. A taped replay of the teleconference will be available beginning at 12:30 PM Central Time on October 24, 2012 until 11:00 PM Central Time on November 1, 2012 by dialing 855-859-2056 (conference ID 64542815). All remarks made during the teleconference will be current at the time of the teleconference and the replay will not be updated to reflect any subsequent developments.
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV