LEXINGTON, Ky. (July 24, 2012) — Lexmark International, Inc. (NYSE: LXK) today announced financial results for the second quarter of 2012 that were below the company’s April forecast, reflecting weaker than expected demand, particularly in Europe, and unfavorable currency impacts.
“While economic headwinds are impacting our results, we’re encouraged that Lexmark’s managed print services and Perceptive Software businesses continue to grow, demonstrating that our software and solutions value propositions resonate even in today’s difficult market, said Paul Rooke, Lexmark chairman and chief executive officer. “We remain focused on advancing our position in the higher value, higher growth segments of the business market. We are confident in our strategy and competitive strength, and will continue to closely monitor the challenging demand environment and make adjustments accordingly as we move through the year.”
Second quarter results
GAAP revenue of $919 million includes $2.4 million of acquisition-related adjustments. Non-GAAP revenue of $921 million declined 12 percent compared with last year.
GAAP earnings per share for the second quarter of 2012 were $0.55, compared with GAAP earnings of $1.27 per share in the second quarter of 2011. Non-GAAP earnings were $0.89 per share, compared with non-GAAP earnings of $1.36 per share in the second quarter of 2011.
Hardware revenue and supplies revenue declined 17 percent and 14 percent, respectively. Software and other revenue grew 24 percent, or 26 percent excluding acquisition-related adjustments. Core revenue, which principally includes laser and business inkjet hardware and supplies, managed print services and software, declined 9 percent year to year while Legacy revenue, which includes consumer inkjet hardware and supplies that the company is exiting, declined 35 percent. Lexmark’s focus continues to be on growing the company’s Core, as Legacy, which in the second quarter of 2012 represented about 9 percent of Lexmark’s revenue, continues to become a less significant portion of the company’s revenue mix.
Imaging Solutions and Services (ISS) revenue of $875 million declined 14 percent compared to the same period last year. Perceptive Software revenue was $44 million. Perceptive Software revenue excluding acquisition-related adjustments of $2.4 million was $46 million and grew 88 percent compared to the same period in 2011.
Second quarter 2012 GAAP results:
— Revenue was $919 million compared to $1.044 billion last year.
— Gross profit margin was 39.3 percent versus 39.6 percent in 2011.
— Operating expense was $301 million compared to $276 million last year.
— Operating income margin of 6.6 percent compared to 13.2 percent in 2011.
— Net earnings were $39 million compared to 2011 net earnings of $101 million.
Second quarter 2012 non-GAAP results:
— Revenue was $921 million compared to $1.045 billion last year.
— Gross profit margin was 40.5 percent versus 40.0 percent in 2011.
— Operating expense was $280 million compared to $270 million last year.
— Operating income margin was 10.1 percent compared to 14.2 percent last year.
— Net earnings were $64 million compared to $109 million in 2011.