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Lexmark International CEO Discusses Q3 2010 Results – Earnings Call Transcript

Lexmark International CEO Discusses Q3 2010 Results â¿¿ Earnings Call Transcript

Lexmark International, Inc. (

LXK

)

Q3 2010 Earnings Call

TST Recommends

October 26, 2010; 08:30 am ET

Executives

Paul Curlander - Executive Chairman

Paul Rooke - President & Chief Executive Officer

John Gamble - Executive Vice President & Chief Financial Officer

Analysts

Mark Moskowitz – JPMorgan

Shannon Cross – Cross Research

Katy Huberty – Morgan Stanley

Rich Gardner – Citi

Brian Alexander – Raymond James

Toni Sacconaghi – Sanford Bernstein

Ben Reitzes – Barclays Capital

Ananda Baruah – Brean Murray Carret & Company

Bill Fearnley – Janney Montgomery Scott

Chris Whitmore – Deutsche Bank

Presentation

Operator

Compare to:
Previous Statements by LXK
» Lexmark International, Inc. Q2 2010 Earnings Call Transcript
» Lexmark International, Inc. Q1 2010 Earnings Call Transcript
» Lexmark International, Inc. Q4 2009 Earnings Call Transcript
» Lexmark International Q3 2009 Earnings Call Transcript

Welcome to the Lexmark International third quarter 2010 earnings conference call. During the company’s opening remarks, all participants will be in a listen-only mode. (Operator Instructions) As a reminder, this conference call is being recorded on Tuesday October 26, 2010.

I would now like to turn the call over to John Gamble, Executive Vice President and CFO of Lexmark. Please go ahead John.

John Gamble

Thank you. Good morning and thank you all for joining us. John Morgan, Lexmark’s Director of Investor Relations is not participating today as he has recently undergone surgery and is currently out of the office. We’re looking forward to John’s return, but in the meantime to reach Lexmark Investor Relations please continue to use John Morgan’s phone number or email and we’ll ensure your request is handled correctly.

Joining me on the call this morning is Lexmark’s Executive Chairman, Paul Curlander and Lexmark’s newly appointed President and CEO, Paul Rooke. After our remarks we’ll open the call for your questions as time permits. We ask that you please limit yourself to one question and one follow-up if needed so that we can get to everyone. As a reminder, we’ll be referring to non-GAAP numbers in today’s call unless, otherwise indicated.

The reconciliation of our non-GAAP comments to our GAAP results can be found in the 3Q ’10 earnings release and supplemental slide deck posted earlier today on the Investor Relations section of

www.lexmark.com

.

Also on this site, you will find details regarding our upcoming events, including our participation in the Credit Suisse Annual Technology Conference on December 1 and in the Barclays Capital Global Technology Conference on December 8.

Following the conclusion of this conference call today a complete replay will be made available at this site as well. Also as a reminder, any of today’s remarks that are statements of historical fact are forward-looking statements and involve certain risks and uncertainties that are disclosed in the Safe Harbor section of our earnings releases and SEC filings. Actual results may differ materially from such statements and Lexmark undertakes no obligation to update any forward-looking statements.

With that, I’ll turn the call over to Paul Curlander.

Paul Curlander

Thank you John. Well, this morning, I announced my intention to retire from Lexmark in the spring of 2011. As part of planned succession process, I’ve assumed the role of Executive Chairman effective today. I would like to invite everyone in the call to join me in congratulating Paul Rooke on his appointment as President and Chief Executive Officer of Lexmark. I have known and worked with Paul for over 20 years and throughout his carrier, he has demonstrated tremendous leadership, strategic thinking and operational ability.

Paul has been with the company since its inception in 1991. He has run both of our printer divisions PSSD and ISD and has been involved in all aspects on our business and has participated in the formulation of all other key strategic initiatives. He’s well respected by our employees, our customers and our investors. I have great confidence in Paul Rooke and I’m confident that he is the right person to lead Lexmark forward.

My 19-years with Lexmark including 12 years as Lexmark’s CEO has been an incredibly rewarding experience, but I have a long time personal goal to retire early and it feels like an appropriate time to make the transition. We have a very strong executive team at Lexmark with a lot of experience and continuity. Our business is seeing a positive impact from the key strategic investments in technology, solutions and services that we’ve made over the last four to five years.

We are seeing strong customer demand for management services, our industry work flow solutions, our work group, laser products and MFPs and our high-end inkjet devices. Now with the addition of Perceptive Software and our increased investments there, our future is focused on building a strong growing core of software solutions and services to complement our strong sales in working places and high-end inkjet devices, and to drive Lexmark’s long-term success. I think that this is an extraordinary and exciting time for our company.

In the near term, I will continue as Chairman of the Board of Directors and my role as Executive Chairman, I will assist with the leadership transition and continue to assist the Perceptive Software team with their integration activities. I have planned to retire from the Lexmark Board of Directors and as Executive Chairman in the spring of 2011.

I will now turn the call over to Paul Rooke, for the CEO’s quarterly report.

Paul Rooke

Thanks Paul. I want to thank you for your support and confidence in me. I am honored and humbled to be severing as Lexmark’s third CEO. Lexmark will turn 20 years old next March and I am excited about the chance to lead a talented Lexmark team into the years ahead. And for now, in addition to my new role, I will also be the acting President of ISD to keep the focus on our inkjet initiatives.

Now let’s turn to our third quarter results. Third quarter earnings were better than expected reflecting good revenue growth inline with our guidance range and strong earnings growth, exceeding our guidance range. GAAP revenue for the third quarter was $1.02 billion; revenue excluding acquisition related adjustments was $1.025 billion up 7% year-to-year.

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