Imation Corp. (IMN, Financial) filed Quarterly Report for the period ended 2009-09-30.
Imation Corp. develops manufactures and markets worldwide a widevariety of products and services for color management imaging and data storage applications. Their product and service offerings are used to capture process store enhance manipulate reproduce and distribute information and images in a wide range of commercial and consumer markets including enterprise data center computing network computing desktop and mobile computing commercial printing marketing communications and graphic arts and consumer photography. Imation Corp. has a market cap of $322.4 million; its shares were traded at around $8.47 with and P/S ratio of 0.2.
Our worldwide revenue for the nine months ended September 30, 2009 compared with the same period last year was negatively impacted by overall volume declines of approximately 4 percent, price erosion of approximately 11 percent and unfavorable foreign currency translation of approximately 3 percent. The continuing soft economy, particularly given lower magnetic media purchases from the financial sector and the mature markets for some of our legacy tape products resulted in revenue declines in magnetic products of $152.3 million, optical products of $98.8 million, flash products of $16.0 million and electronic products, accessories and other products of $2.2 million.
A litigation settlement charge of $49.0 million was recorded for the nine months ended September 30, 2009. On July 13, 2009, we entered into a confidential settlement agreement ending all legal disputes with Philips Electronics N.V., U.S. Philips Corporation and North American Philips Corporation (collectively, Philips). We had been involved in a complex series of disputes in multiple jurisdictions regarding cross-licensing and patent infringement related to recordable optical media. The settlement provided resolution of all claims and counterclaims filed by the parties without any finding or admission of liability or wrongdoing by any party. As part of the settlement, Imation, Philips and Moser Baer India Ltd. (MBI) jointly requested a stay of all proceedings in all jurisdictions while MBI requested approval for an element of the settlement from the Reserve Bank of India. We placed $20.0 million in escrow in July 2009, which is to be released to Philips upon MBI receiving approval from the Reserve Bank of India of its agreement with Philips and final dismissal of all related litigations. That approval has not yet been received. We will pay an additional $33.0 million over a period of three years. Based on the present value of these settlement payments, we recorded a charge in the second quarter of 2009 of $49.0 million and interest accretion of $0.3 million during the three months ended September 20, 2009. The interest accretion is recorded in the interest expense line item of the Condensed Consolidated Results of Operations.
Restructuring and other expense was $7.5 million and $22.8 million for the three and nine month periods ended September 30, 2009, respectively. For the three and nine month periods ended September 30, 2009, we recorded $5.6 million and $10.8 million of pension settlement charges, respectively. We recorded $1.9 million and $9.5 million of restructuring charges for the three and nine month periods ended September 30, 2009, respectively, mainly related to our 2008 corporate redesign restructuring program initiated during the fourth quarter of 2008. This program further accelerates the alignment of our cost structure by reducing SG&A expense. See Note 10 to the Condensed Consolidated Financial Statements herein. We also recorded $2.3 million of asset impairment and $0.2 million of other charges for the nine months ended September 30, 2009.
Restructuring and other expense was $14.3 million for the three months ended September 30, 2008 related to asset impairments of $6.0 million offset by a gain on sale of assets of $0.7 million, restructuring charges of $5.8 million and pension settlement and curtailment costs of $3.2 million. Restructuring and other expense was $19.0 million for the nine months ended September 30, 2008 related to restructuring charges of $12.9 million, pension settlement and curtailment costs of $3.2 million and asset impairments of $6.0 million, offset by a gain on sale of assets of $0.8 million and a post-closing adjustment gain on the TDK acquisition of $2.3 million.
Income from discontinued operations was $2.4 million and $3.7 million for the nine months ended September 30, 2009 and 2008, respectively. The decrease was due to the wind down of the GDM joint venture during the three months ended September 30, 2009 and overall lower revenue resulting from the continuing soft economy.
Read the The complete ReportIMN is in the portfolios of Private Capital of Private Capital Management, Third Avenue Management.
Imation Corp. develops manufactures and markets worldwide a widevariety of products and services for color management imaging and data storage applications. Their product and service offerings are used to capture process store enhance manipulate reproduce and distribute information and images in a wide range of commercial and consumer markets including enterprise data center computing network computing desktop and mobile computing commercial printing marketing communications and graphic arts and consumer photography. Imation Corp. has a market cap of $322.4 million; its shares were traded at around $8.47 with and P/S ratio of 0.2.
Highlight of Business Operations:
Our worldwide revenue for the three months ended September 30, 2009 compared with the same period last year was negatively impacted by overall volume declines of 3 percent, price erosion of 11 percent and unfavorable foreign currency translation of 2 percent. The continuing soft economy, particularly given lower magnetic media purchases from the financial sector and the mature markets for some of our legacy tape products resulted in revenue declines in magnetic products of $45.2 million, optical products of $20.6 million, electronic products, accessories and other products of $6.3 million and flash products of $2.5 million.Our worldwide revenue for the nine months ended September 30, 2009 compared with the same period last year was negatively impacted by overall volume declines of approximately 4 percent, price erosion of approximately 11 percent and unfavorable foreign currency translation of approximately 3 percent. The continuing soft economy, particularly given lower magnetic media purchases from the financial sector and the mature markets for some of our legacy tape products resulted in revenue declines in magnetic products of $152.3 million, optical products of $98.8 million, flash products of $16.0 million and electronic products, accessories and other products of $2.2 million.
A litigation settlement charge of $49.0 million was recorded for the nine months ended September 30, 2009. On July 13, 2009, we entered into a confidential settlement agreement ending all legal disputes with Philips Electronics N.V., U.S. Philips Corporation and North American Philips Corporation (collectively, Philips). We had been involved in a complex series of disputes in multiple jurisdictions regarding cross-licensing and patent infringement related to recordable optical media. The settlement provided resolution of all claims and counterclaims filed by the parties without any finding or admission of liability or wrongdoing by any party. As part of the settlement, Imation, Philips and Moser Baer India Ltd. (MBI) jointly requested a stay of all proceedings in all jurisdictions while MBI requested approval for an element of the settlement from the Reserve Bank of India. We placed $20.0 million in escrow in July 2009, which is to be released to Philips upon MBI receiving approval from the Reserve Bank of India of its agreement with Philips and final dismissal of all related litigations. That approval has not yet been received. We will pay an additional $33.0 million over a period of three years. Based on the present value of these settlement payments, we recorded a charge in the second quarter of 2009 of $49.0 million and interest accretion of $0.3 million during the three months ended September 20, 2009. The interest accretion is recorded in the interest expense line item of the Condensed Consolidated Results of Operations.
Restructuring and other expense was $7.5 million and $22.8 million for the three and nine month periods ended September 30, 2009, respectively. For the three and nine month periods ended September 30, 2009, we recorded $5.6 million and $10.8 million of pension settlement charges, respectively. We recorded $1.9 million and $9.5 million of restructuring charges for the three and nine month periods ended September 30, 2009, respectively, mainly related to our 2008 corporate redesign restructuring program initiated during the fourth quarter of 2008. This program further accelerates the alignment of our cost structure by reducing SG&A expense. See Note 10 to the Condensed Consolidated Financial Statements herein. We also recorded $2.3 million of asset impairment and $0.2 million of other charges for the nine months ended September 30, 2009.
Restructuring and other expense was $14.3 million for the three months ended September 30, 2008 related to asset impairments of $6.0 million offset by a gain on sale of assets of $0.7 million, restructuring charges of $5.8 million and pension settlement and curtailment costs of $3.2 million. Restructuring and other expense was $19.0 million for the nine months ended September 30, 2008 related to restructuring charges of $12.9 million, pension settlement and curtailment costs of $3.2 million and asset impairments of $6.0 million, offset by a gain on sale of assets of $0.8 million and a post-closing adjustment gain on the TDK acquisition of $2.3 million.
Income from discontinued operations was $2.4 million and $3.7 million for the nine months ended September 30, 2009 and 2008, respectively. The decrease was due to the wind down of the GDM joint venture during the three months ended September 30, 2009 and overall lower revenue resulting from the continuing soft economy.
Read the The complete ReportIMN is in the portfolios of Private Capital of Private Capital Management, Third Avenue Management.
