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Imation Reports Second Quarter And First Half 2013 Financial Results

Table Four
 
IMATION CORP.
ADDITIONAL INFORMATION
(Dollars in millions)
(Unaudited)
    Three Months Ended     Six Months Ended
June 30 June 30
Cash and Cash Flow Information 2013     2012 2013     2012
 
Cash and cash equivalents - end of period $ 94.4 $ 211.1 $ 94.4 $ 211.1
Capital Spending $ 2.1 $ 3.1 $ 3.5 $ 5.1
Depreciation $ 2.7 $ 2.1 $ 5.5 $ 4.2
Amortization $ 3.3 $ 7.3 $ 6.9 $ 14.5
 
 
Asset Utilization Information *
June 30 December 31
2013 2012
 
Days Sales Outstanding (DSO) 60 59
Days of Inventory Supply 72 89
Debt to Total Capital 5.1 % 4.8 %
 
 
Other Information
 
Approximate employee count as of June 30, 2013: 1,010
Approximate employee count as of December 31, 2012: 1,230
Book value per share as of June 30, 2013: $ 9.18
Shares used to calculate book value per share (millions): 40.4

Imation repurchased approximately 616,000 shares of its stock during the quarter for $2.5 million.

 
*     These operational measures, which we regularly use, are provided to assist in the investor's further understanding of our operations.
 
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
June 30, 2013 June 30, 2012
GAAP     Adj *     Non-GAAP GAAP     Adj *     Non-GAAP
Net revenue $ 211.7 $ - $ 211.7 $ 249.2 $ - $ 249.2
Cost of goods sold   156.5     (0.7 )   155.8     199.6     -   199.6  
Adjusted gross profit $ 55.2   $ 0.7   $ 55.9   $ 49.6   $ - $ 49.6  
 
Adjusted gross margin 26.1 % 26.4 % 19.9 % 19.9 %
 
Operating income (loss) from continuing operations $ - $ 5.1 $ 5.1 $ (7.5 ) $ 4.3 $ (3.2 )
 
Adjusted income tax provision $ 1.1 $ (1.1 ) $ - $ 0.2 $ - $ 0.2
 
Adjusted (loss) from continuing operations $ (1.8 ) $ 6.2 $ 4.4 $ (9.5 ) $ 4.3 $ (5.2 )
 
Adjusted (loss) earnings per common share from
continuing operations - Diluted $ (0.04 ) $ 0.11 $ (0.25 ) $ (0.14 )
 
Adjusted weighted average shares outstanding - Diluted 40.5 40.5 37.7 37.7
 
Six Months Ended Six Months Ended
June 30, 2013 June 30, 2012
GAAP Adj * Non-GAAP GAAP Adj * Non-GAAP
Net revenue $ 436.1 $ - $ 436.1 $ 512.5 $ - $ 512.5
Cost of goods sold   338.8     (2.8 )   336.0     409.3     -   409.3  
Adjusted gross profit $ 97.3   $ 2.8   $ 100.1   $ 103.2   $ - $ 103.2  
 
Adjusted gross margin 22.3 % 23.0 % 20.1 % 20.1 %
 
Operating (loss) income from continuing operations $ (14.7 ) $ 9.3 $ (5.4 ) $ (13.1 ) $ 5.6 $ (7.5 )
 
Adjusted income tax provision $ 1.5 $ - $ 1.5 $ 1.5 $ - $ 1.5
 
Adjusted (loss) from continuing operations $ (17.4 ) $ 9.3 $ (8.1 ) $ (18.7 ) $ 5.6 $ (13.1 )
 
Adjusted (loss) earnings per common share from
continuing operations - Diluted $ (0.43 ) $ (0.20 ) $ (0.50 ) $ (0.35 )
 
Adjusted weighted average shares outstanding - Diluted 40.5 40.5 37.6 37.6
 
 
*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 Six Months Ended
June 30 June 30
2013     2012 2013     2012
Operating loss: $ - $ (7.5 ) $ (14.7 ) $ (13.1 )
Restructuring and other
Restructuring 1.6 3.1 3.1 3.7
Other 2.8 1.2 3.4 1.9
Inventory write-downs related to restructuring programs included in cost of goods sold   0.7     -     2.8     -  
Total adjustments   5.1     4.3     9.3     5.6  
Adjusted operating (loss) income - Non-GAAP $ 5.1   $ (3.2 ) $ (5.4 ) $ (7.5 )
 
Effect on diluted EPS:
(Loss) income from operations $ (0.04 ) $ (0.25 ) $ (0.43 ) $ (0.50 )
Restructuring and other
Restructuring 0.05 0.08 0.08 0.10
Other 0.08 0.03 0.08 0.05
Inventory write-downs   0.02     -     0.07     -  
Adjusted diluted EPS - Non-GAAP $ 0.11   $ (0.14 ) $ (0.20 ) $ (0.35 )
 
 
EBITDA:
Operating loss $ - $ (7.5 ) $ (14.7 ) $ (13.1 )
Depreciation 2.7 2.1 5.5 4.2
Amortization   3.3     7.3     6.9     14.5  
EBITDA $ 6.0   $ 1.9   $ (2.3 ) $ 5.6  
Restructuring and other 4.4 4.3 6.5 5.6
Inventory write-downs related to restructuring programs included in cost of goods sold   0.7     -     2.8     -  
Total adjustments   5.1     4.3     9.3     5.6  
Adjusted EBITDA $ 11.1   $ 6.2   $ 7.0   $ 11.2  
 
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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