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Imation Reports Second Quarter And First Half 2013 Financial Results

Stocks in this article: IMN

Imation Corp. (NYSE:IMN) today released financial results for the quarter and first six months ended June 30, 2013.

Imation President and Chief Executive Officer Mark Lucas commented, “Imation’s second quarter performance was in line with our expectations. Our transformation continues and we are seeing signs of progress. We are focused on high-growth market segments in data storage and security, and have dedicated teams launching differentiated products to meet customer needs globally.”

For the second quarter, Imation reported net revenue of $211.7 million, down 15.0 percent from Q2 2012, break-even operating income, including special charges of $5.1 million, and a diluted loss per share from continuing operations of $0.04. Excluding special charges, Q2 2013 operating income swung to a profit of $5.1 million and diluted earnings per share from continuing operations totaled $0.11 (See Tables Five and Six for non-GAAP measures).

For the six months ended June 30, 2013, Imation reported net revenue of $436.1 million, down 14.9 percent compared with the same period last year, an operating loss of $14.7 million, including special charges of $9.3 million, and a diluted loss per share from continuing operations of $0.43. Excluding special charges, the operating loss for the six months ended June 30, 2013 would have been $5.4 million and diluted loss per share from continuing operations would have been $0.20 (See Tables Five and Six for non-GAAP measures).

Operating results for Q2 and the first half of 2013 include the reversal of an accrual of $13.6 million for copyright levies as a result of an Italian Court ruling, discussed further below.

The Consumer Storage and Accessories (CSA) business performed better than expected in the second quarter given industry dynamics. Revenues were down 27.2 percent; however, gross margins and cash generation continued to be strong for this unit.

Imation’s Tiered Storage and Security Solutions (TSS) business posted revenue growth of almost 7 percent for the quarter driven by the added revenues from the acquisition of Nexsan TM, and second-quarter gross margins were 21.7 percent, up from 19.6 percent in the prior-year period. The Company expects continued margin gains as revenue of higher-margin products increases in the Nexsan and Imation Mobile Security product portfolios.

Continued Lucas, “Going forward, the TSS segment is the growth engine of Imation, and we are making investments to advance those product portfolios. We are leveraging our international channels, expanding our sales force and introducing new products in both Nexsan and Imation Mobile Security. We remain committed to becoming a key player in data storage and security, and are confident our transformation is on track.”

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