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Topic: EXBY>>Diluted EPS of 0.53, selling at 0.005

R.A.
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Shares Outstanding: 17.25M
Float: 14.06M

Day's Range: 0.0050 - 0.0050
52wk Range: 0.10 - 2.95
Volume: 100
Avg Vol (3m): 43,330.8

Friday, November 10 2006 10:01 AM, EST Imation reports Q3 revenue of $424.7 million, up 42% diluted EPS of $0.53; Memorex acquisition on track with solid results revenue and earnings outlook increased M2 "Press Wire "
M2 PressWIRE - November 10, 2006 - Bracknell - Imation Corp (NYSE:IMN) has released financial results for the third quarter ended September 30, 2006 .
Highlights for the quarter include the following:
Q3 2006 revenue of $424.7 million (including revenue of $109.9 million from the Memorex acquisition) is up 42.2 per cent compared with Q3 2005 revenue of $298.6 million .
Q3 2006 revenue excluding Memorex grew 5.4 per cent compared to Q3 2005, driven by continued growth in optical, flash and LTO tape products.
Q3 2006 operating income of $28.3 million included $2.7 million of incremental stock-based compensation expense. This is compared with $23.6 million of operating income in the third quarter of 2005, which did not have similar stock-based compensation expense. Diluted EPS from continuing operations was $0.53 for Q3 2006 and included incremental stock-based compensation expense of $0.05 per share compared with $0.48 per share in Q3 2005.
Q3 2006 operating expense as a per cent of revenue matched our record low of 14.1 per cent.
Cash flow from operations totaled $38.6 million in the quarter. Total cash was $245.2 million as of September 30, 2006 after the repurchase of 257,000 shares during the quarter for $10.2 million .
The outlook for 2006 revenue and earnings has been increased as a result of continued strong year-to-date results. Diluted EPS from continuing operations for FY 2006 is now estimated to be in the range of $1.96 to $2.02 , up from previous guidance of $1.70 to $1.80 (see Business Outlook below for details).
Commenting on the quarter, Chairman and CEO Bruce Henderson said: " Imation's worldwide team has delivered another strong quarter and we anticipate a solid finish to the year, enabling us to increase our revenue and earnings outlook."
Frank Russomanno , EVP and Chief Operating Officer for Imation , said: "We are pleased with the third quarter results. Revenue growth of 73 per cent in the Americas was driven by the Memorex acquisition as well as growth in optical, flash and LTO tape products. In Europe , our 27 per cent revenue increase was driven by strong growth in optical products, particularly from our Global Data Media joint venture and Memorex. In Asia Pacific , revenues declined nine per cent driven by an aggressive pricing environment and a greater focus on higher gross margin business. The contribution from the Memorex acquisition is meeting our expectations and the integration process continues on track."
Net Revenue was $424.7 million for the quarter, up 42.2 percent from Q3 2005. Excluding Memorex revenue of $109.9 million , revenue increased 5.4 per cent compared with the third quarter of 2005 with volume growth of approximately twelve per cent and foreign currency benefit of one per cent offset by price declines of eight per cent. For the nine-month period ended September 30, 2006 , revenue was $1,125.7 million , up 23.0 per cent from revenue of $915.1 million for Q3 2005. Excluding Memorex revenue of $175.6 million , year-to-date revenue was up 3.8 per cent.
Gross Margin of 20.8 per cent in Q3 2006 was 2.8 percentage points below Q3 2005's margin of 23.6 per cent due to product and channel mix changes. For the nine-month periods ended September 30, 2006 and 2005 gross margin was 22.4 per cent and 24.9 per cent, respectively.
Selling, General & Administrative (SG&A) spending was $47.4 million or 11.1 per cent of revenue in Q3 2006 compared with $33.8 million or 11.3 per cent of revenue, in Q3 2005. The increase was due to the addition of Memorex SG&A expenses, intangible asset amortisation and incremental stock-based compensation expense, partially offset by spending declines. For the nine-month periods ended September 30, 2006 and 2005, SG&A spending was $127.1 million and $110.2 million , respectively.
Research & Development (R&D) spending of $12.6 million or 3.0 per cent of revenue in Q3 2006 was $0.5 million lower than the $13.1 million or 4.4 per cent of revenue reported in Q3 2005. For the nine-month periods ended September 30, 2006 and 2005 R&D spending was $37.7 million and $39.1 million , respectively.
Operating Income for the quarter was $28.3 million , up 19.9 per cent from operating income of $23.6 million reported for the third quarter of 2005. Operating income in Q3 2006 included incremental stock-based compensation expenses of $2.7 million resulting from the adoption of FAS 123R at the beginning of 2006. Operating income in Q3 2005 had no similar stock-based compensation expense. Excluding stock-based compensation expense noted above, operating income would have been $31.0 million in the quarter, up 31.4 per cent from the comparable quarter a year ago.
Operating income for the nine months ended September 30, 2006 was $76.2 million compared with operating income of $78.7 million for the comparable period a year ago and included restructuring and other charges of $10.7 million associated with integrating the Memorex acquisition and actions taken to simplify structure. Operating income for the nine months ended September 30, 2006 included incremental stock-based compensation expense of $7.0 million . Operating income in the first nine months of 2005 had neither restructuring nor similar stock-based compensation expense. Excluding restructuring and stock-based compensation expense noted above, operating income would have been $93.9 million for the nine-month period ended September 30, 2006 , up 19.3 per cent from the comparable period a year ago (see table entitled Reconciliation of GAAP to Adjusted Results above).
Non-operating Income/Expense and Taxes: Net non-operating income of $1.1 million in Q3 2006 is compared with $1.7 million in Q3 2005. The decline in net non-operating income was primarily due to the reduction of interest income as a result of the decline in cash balances. The tax rate in Q3 2006 was 37 per cent, up from the 34 per cent tax rate in Q3 2005.
Diluted Earnings per Share from continuing operations was $0.53 in Q3 2006 and included $0.05 per share from incremental stock-based compensation expense. This compares with diluted EPS of $0.48 per share for the comparable quarter last year which had no similar stock-based compensation expense. Adjusting for incremental stock-based compensation expense, diluted EPS would have been $0.58 per share in Q3 2006 (see table entitled Reconciliation of GAAP to Adjusted Results above).
Cash Flow, Working Capital and Balance Sheet: Cash flow generated from operations totaled approximately $38.6 million for the quarter and included a timing benefit of approximately $10 million that will reverse in the fourth quarter of 2006. For the nine-month period ended September 30, 2006 operating cash flow was $91.9 million . Ending cash and cash equivalents of $245.2 million as of September 30, 2006 decreased by $237.8 million from December 31, 2005 driven by the payment of $329.3 million related to the Memorex acquisition partially offset by cash generated from operations. We repurchased 257,000 shares of common stock in the quarter for $10.2 million , with remaining authorization to repurchase an additional 2.4 million shares. Capital spending was $5.0 million in the quarter. Depreciation and amortisation totaled $10.5 million in the quarter.
Business Outlook
This business outlook is subject to the risks and uncertainties described below.
Revenue for the full year 2006 is estimated to be in the range of $1.57 billion to $1.60 billion , which represents growth of approximately 25 per cent to 27 per cent over fiscal 2005. Our prior outlook was $1.54 billion to $1.59 billion . As a result, revenue in the fourth quarter is estimated to be in the range of $445 million to $475 million .
Full year 2006 operating income, including restructuring and stock-based compensation expense, is estimated to be in the range of $105 million to $108 million . Our prior outlook was $93 million to $98 million . Operating income, excluding restructuring and incremental stock-based compensation expense, is estimated to be in the range of $127 million to $130 million for the year. The prior outlook was $120 million to $125 million . As a result, operating income in the fourth quarter is estimated to be in the range of $29 million to $32 million and includes $1 million of anticipated restructuring charges and $3 million of incremental stock-based compensation expense. Excluding restructuring and stock-based compensation expense, operating income in the fourth quarter is estimated to be in the range of $33 million to $36 million .
Diluted EPS from continuing operations, including restructuring and stock-based compensation expense, is estimated to be in the range of $1.96 to $2.02 for the full year 2006. Our prior outlook was $1.70 to $1.80 . Excluding restructuring and incremental stock-based compensation expense, diluted EPS is estimated to be in the range of $2.35 to $2.41 . The prior outlook was $2.20 to $2.29 . As a result, diluted EPS in the fourth quarter is estimated to be in the range of $0.52 to $0.58 and includes restructuring and stock-based compensation expense of $0.07 per share.
We currently anticipate restructuring expense of $11 million to $12 million for the full year 2006 and $1 million to $2 million in 2007 for a total restructuring programme cost of $12 million to $14 million . In the prior full year outlook total restructuring programme expense was $13 million to $17 million . Incremental stock-based compensation expense for 2006 is currently estimated to be $10 million . The prior full year outlook for stock-based compensation expense was between $10 million and $12 million .
Capital spending for 2006 is targeted to be approximately $20 million , down from previous guidance of $25 million .
The tax rate for the fourth quarter of 2006 is currently anticipated to be in a range of 36 to 37 per cent absent any one-time items that may occur, while the full year rate is targeted to be 35 to 36 per cent as a result of the tax benefit recognised in the second quarter of 2006. This is unchanged from our prior outlook.
Depreciation and amortisation for 2006 is targeted in the range of $38 million to $40 million including amortisation of intangible assets of approximately $7 million resulting from the Memorex acquisition. Prior guidance was $38 million to $42 million .
Notes to editors
Comparison of GAAP to Non-GAAP Financial Measures The impact of the restructuring charges and other items, as described above, is provided to assist an investor's understanding of the impact of these components on our actual results of operations when compared with prior periods. Imation believes this will assist investors in making an evaluation of our performance against prior periods on a comparable basis by adjusting for those items. 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 .
About Imation Corp
Imation Corp is the only company in the world solely focused on the development, manufacture and supply of removable data storage products spanning the four pillars of magnetic, optical, flash and removable hard disk storage. With more than 50 years of data storage leadership beginning with the development of the world's first computer tape, Imation proudly marks its tenth anniversary as an independent company. In addition to the Imation brand, Imation Corp's global brand portfolio includes the Memorex brand, one of the most widely recognised names in the consumer electronics industry, famous for the slogan, "Is it live or is it Memorex?"
Imation , the Imation logo, Memorex, and "Is it live or is it Memorex?" are trademarks of Imation Corp and its subsidiaries. All other trademarks are the property of their respective owners.
Imation General Information: More information about Imation is available at www.imation.uk or via www.imation-europe.com
Imation European Pressroom On-line: Quick access to the latest news, pictures, backgrounds, the Imation news archive and more is available in 12 languages at: http://pressroom.imation.com
Risk and Uncertainties
Certain information contained in this press release which does not relate to historical financial information, including the Business Outlook, may be deemed to constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements are subject to certain risks and uncertainties that could cause our actual results in the future to differ materially from our historical results and those presently anticipated or projected. We wish to caution investors not to place undue reliance on any such forward-looking statements. Any forward-looking statements speak only as of the date on which such statements are made, and we undertake no obligation to update such statements to reflect events or circumstances arising after such date. Risk factors include our ability to successfully integrate the Memorex acquisition and achieve anticipated benefits and synergies; our ability to successfully defend our intellectual property, including the Memorex brand and key cross licenses; continuing uncertainty in global economic conditions that make it particularly difficult to predict product demand; our ability to meet our cost reduction and revenue growth targets; our ability to introduce new offerings in a timely manner either independently or in association with OEMs or other third parties; our ability to achieve the expected benefits in a timely manner from the Moser Baer and other strategic relationships, including the Global Data Media joint venture and Exabyte relationships; the competitive pricing environment; foreign currency fluctuations; the outcome of any pending or future litigation; our ability to secure adequate supply of certain high demand products; the ready availability and price of energy; availability of key raw materials or critical components; the market acceptance of newly introduced product and service offerings; the rate of decline for certain existing products, as well as various factors set forth from time to time in our filings with the Securities and Exchange Commission .
((Comments on this story may be sent to info*m2.com))
Â© 2006 M2 COMMUNICATIONS LTD

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stocktrader22
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If this had any type of volume it would fly!

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R.A.
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I know... it's crazy!

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R.A.
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This one defentely needs more volume, up 56.8% with a less than 100$ trade. L2 looks wonderful. It's bottom player with excellent news. Anyways...

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Vance
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why is this trading so low??

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R.A.
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That's what I'm trying to understand.

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Vance
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what is the connection between EXBY and IMN??

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stocktrader22
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Yup shouldnt be trading anywhere near as low as this. Definitely way way undervalued

Good buy!

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JohnnyRotten
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quote:
what is the connection between EXBY and IMN??

this needs to be answered before i plunge.

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Vance
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Is this the connection between the two companies?

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our ability to achieve the expected benefits in a timely manner from the Moser Baer and other strategic relationships, including the Global Data Media joint venture and Exabyte relationships

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Baxt06
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You guys reading the story or just the headline? News is about Imation...the large corporation. Got nothing to do with EXBY as far as I can tell. No news at Yahoo under that ticker.

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Vance
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I read the story, that's why I asked what the connection between the two companies was...

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stocktrader22
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http://www.pinksheets.com/quote/print_filings.jsp?url=%2Fredirect.asp%3Ffilename %3D0000855109%252D06%252D000074%252Etxt%26filepath%3D%255C2006%255C08%255C11%255 C&symbol=EXBY

That says it all

$4million earnings last quarter on 19 mill revenue.

Read the DEF14A for october, acquistion in the works.

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Baxt06
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Yeah, wasn't talking to you specifically. I think you picked it out above. Imation has an EPS of .53, and their report mentions EXBY. Nothing more than that.

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stocktrader22
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posted

L2

1 at .01
1 at .019
1 at .014
1 at .0149
2 at .015
3 at .02

This is ready to fly!

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Vance
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posted

thanks st22

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Success is having the time and money to enjoy all of life's wonders...

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Baxt06
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Yeah, good find

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R.A.
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Yeah yeah I made a mistake in the topic name, sorry guys, but this thing is still a nice play, very low volume, L2 looks great, near bottom, buys coming in right now.

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stocktrader22
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posted

1 left at .015

then .02

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Vance
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posted

Was that 10Q just released?

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Success is having the time and money to enjoy all of life's wonders...

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R.A.
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Look at that [Smile]

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R.A.
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L2 is faboulous!

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stocktrader22
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1 left at .023 then .025

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stocktrader22
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couldnt get greedy, should have though! Got out at .023

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R.A.
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It's unstoppable!

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Baxt06
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wow, crazy. .034

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Vance
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wish I would have pulled the trigger at .01, got filled at .023

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stocktrader22
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Damn wish I stayed in.

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R.A.
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That's what I'm talking about! Up 684%

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Baxt06
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L2's anybody?

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stocktrader22
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Hahaha wow!

Only had 62,500 shares...wish I held on though to .04's

WOW!!! Great call R.A.

Very undervalued

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Vance
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posted

.042x.045

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R.A.
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Nice ride. [Wink]

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Vance
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out at .042, almost 100% gain in 10min!! I'll look to get back in on a dip... Great call R.A!

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tompom
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great call!

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