Imation Corp. (NYSE:IMN) today released financial results for the quarter ended June 30, 2012. The Company reported Q2 2012 net revenue of $270.6 million, down 16.2 percent from Q2 2011, an operating loss of $10.3 million including restructuring and other charges of $4.3 million, and a diluted loss per share of $0.32. Excluding restructuring and other charges, Q2 2012 operating loss would have been $6.0 million and diluted loss per share would have been $0.20 (see Tables Five and Six for non-GAAP measures). Imation President and Chief Executive Officer Mark Lucas commented: “We continue our focus on Imation’s transformation, executing on our strategy to build a platform for long-term growth and improved operating margins. The quarter’s revenue decline is not a surprise to us and stems from the timing lag between anticipated growth in our newer products offsetting the declines from the mature traditional storage categories. Several macro-economic factors were also in play in the second quarter. These included the broad-based European economic downturn, a soft global IT environment, negative currency impacts, and a weak U.S. retail environment,” Lucas continued. “We are making steady progress on our strategy in line with the plans we have previously outlined. For example, we again delivered gross margin improvement across all major product categories. Revenue from our new and differentiated products within secure and scalable storage grew 48 percent with strong gross margins. Our XtremeMac brand revenue grew globally, and magnetic tape margins reached their highest levels in over a year. Our cash position remains strong, and inclusive of share repurchase activity, we ended the quarter at $211 million. We remain very committed to our strategy and confident that we are on the path to return Imation to revenue growth as we exit 2012,” Lucas concluded. Q2 2012 Results compared with Q2 2011Net revenue for Q2 2012 was $270.6 million, down 16.2 percent from Q2 2011. From a regional perspective, Americas revenue decreased 8.6 percent, Europe revenue decreased 27.8 percent including a negative foreign currency impact of 7.4 percent, North Asia revenue decreased 20.0 percent and South Asia revenue decreased 17.5 percent. Overall, the Company’s international revenues were affected by negative currency impacts, as well as planned lower revenues from lower-margin commodity products in secure and scalable storage. Gross margin for Q2 2012 was 19.4 percent, up from 16.7 percent for Q2 2011. Gross margin was positively impacted by a continuation of the Company's strategic shift in product mix to higher gross margin products with improved gross margins in all major product categories. Selling, general and administrative (SG&A) expenses for Q2 2012 were $52.2 million, up $4.3 million compared with Q2 2011 expenses of $47.9 million due primarily to the additional ongoing SG&A expense related to Imation’s acquired businesses and acquisition-related intangible amortization. Research and development (R&D) expenses for Q2 2012 were $6.2 million, up $1.2 million compared with Q2 2011 expenses of $5.0 million primarily as a result of the Company’s investment to support growth initiatives. Restructuring and other charges were $4.3 million in Q2 2012 compared with $10.4 million in Q2 2011. Operating loss was $10.3 million in Q2 2012 compared with an operating loss of $9.3 million in Q2 2011. Excluding the restructuring and other charges described in Tables Five and Six for non-GAAP measures, adjusted operating loss would have been $6.0 million in Q2 2012 compared with adjusted operating income on the same basis of $1.4 million in Q2 2011. Income tax benefit was $0.1 million in Q2 2012 compared with income tax provision of $0.7 million in Q2 2011. The 2012 income tax benefit relates to the tax benefit outside the United States. 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 $0.32 in Q2 2012 compared with $0.33 in Q2 2011. Excluding the restructuring and other charges described in Tables Five and Six for non-GAAP measures, adjusted loss per diluted share would have been $0.20 in Q2 2012 compared with adjusted loss per diluted share of $0.05 in Q2 2011 (see Tables Five and Six). Cash and cash equivalents ending balance was $211.1 million as of June 30, 2012, including $2.4 million for share repurchase. Webcast and Replay Information A teleconference is scheduled for 9:00 AM Central Time today, July 26, 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 will be discussed. A taped replay of the teleconference will be available beginning at 12:30 PM Central Time on July 26, 2012 until 11:00 PM Central Time on August 3, 2012 by dialing 855-859-2056 (conference ID 64540003). 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.