Lexmark Reports Second-Quarter Results

LEXINGTON, Ky., July 29, 2016 /PRNewswire/ — Lexmark International, Inc. today announced financial results for the second quarter of 2016.

Results1

     
       

GAAP Summary

2Q16

2Q15

Year-to-Year
Change

 

Revenue (millions)

$863

$879

-2%

 

     ISS2

$698

$740

-6%

 

     ES3

$165

$139

+18%

 

     Core4

$848

$845

0%

 

     Higher Value Solutions5

$371

$342

+9%

 

Gross Profit Margin

39.1%

41.2%

   

Operating Income Margin

2.7%

-2.5%

   

EPS

-$0.56

-$0.56

   

Non-GAAP Summary

2Q16

2Q15

Year-to-Year
Change

Year-to-Year
Change at
Constant
Currency6

 

Revenue (millions)

$865

$891

-3%

+1%

 

     ISS

$698

$740

-6%

-2%

 

     ES

$167

$150

+11%

+12%

 

    Core                                                                             

$850

$856

-1%

+3%

 

     Higher Value Solutions

$374

$353

+6%

+8%

 

Gross Profit Margin

41.5%

43.8%

   

Operating Income Margin

8.6%

10.6%

   

Adjusted EBITDA7

$114

$139

   

EPS

$0.69

$0.97

   
     
     

Balance Sheet / Cash Flow (millions)

2Q16

 

Cash8

$103

 

   U.S.

$6

 

   Non-U.S.

$97

 

Net debt9

$886

 

Operating cash flow

$24

 

Free cash flow10

$9

 

Quarterly dividend ($0.36/share)

$23

 
     
     

Lexmark Paid Second Quarter Dividend, Declared Third Quarter Dividend

  • Lexmark today announced that its Board of Directors declared a quarterly cash dividend of $0.36 per share of Lexmark Class A Common Stock payable on Sept. 16, 2016, to shareholders of record as of the close of business on Sept. 2, 2016.
  • During the second quarter, Lexmark paid a quarterly dividend of $0.36 per share, which totaled $23 million.

Shareholders Approved Merger Agreement

  • On July 22, 2016, Lexmark announced that its shareholders approved the definitive merger agreement with a consortium of investors led by Apex Technology Co., Ltd. and PAG Asia Capital. Legend Capital Management Co., Ltd. is also a member of the consortium.
  • The transaction remains subject to certain regulatory approvals, including among others the Committee on Foreign Investment in the U.S., and other customary closing conditions.
  • The acquisition remains on track to be completed in the second half of 2016.
  • At closing, this all-cash transaction will provide Lexmark’s shareholders $40.50per share in cash, representing a 30 percent premium to the undisturbed stock price on Oct. 21, 2015.

Looking forward

  • The company will not conduct quarterly conference calls while the transaction is pending.
  • Upon closing, Lexmark common stock will cease to be publicly traded on the New York Stock Exchange.

Earnings materials  
This earnings release, including reconciliations between GAAP and non-GAAP financial measures, will be available on Lexmark’s investor relations website at http://investor.lexmark.com.

GAAP to non-GAAP Financial Measures  
In an effort to provide investors with additional information regarding the company’s results as determined by generally accepted accounting principles (GAAP), the company has also disclosed in this press release non-GAAP financial measures such as Adjusted EBITDA, earnings per share amounts and related income statement items which management believes provides useful information to investors. When used in this press release, “non-GAAP” Adjusted EBITDA, earnings per share amounts and related income statement items exclude restructuring charges and project costs, acquisition and divestiture-related adjustments, pension plan actuarial gains/losses, and remediation-related adjustments. The rationale for management’s use of non-GAAP measures is included in Appendix A to the financial information attached hereto.

About Lexmark 
Lexmark (NYSE: LXK) creates enterprise software, hardware and services that remove the inefficiencies of information silos and disconnected processes, connecting people to the information they need at the moment they need it. Open the possibilities atwww.Lexmark.com.

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