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Lexmark Q1 Sales Climb 8%

4/21/2003 08:25:00 AM Eastern

Lexington, Ky. - Despite a slow technology market and a sluggish economy, laser and inkjet printer and supplies maker Lexmark International recorded $1.11 billion in sales for the first quarter, up 6 percent from the $1.05 billion reported last year.

This figure was positively impacted by 7 percent from foreign currency translation.

Laser and inkjet supplies revenue reached $642 million in the three months, ended March 31, a 17 percent increase over the $546 million rung up in the same quarter in 2002. Supplies now represent 56 percent of total Lexmark revenue, up from 52 percent year-on-year.

Laser and inkjet printer revenue dropped 8 percent in the first quarter, to $370 million, compared with $401 million in the first three months of last year.

Consolidated net earnings reached $94.6 million in the first quarter, up from $71.5 million in the same quarter a year ago.

Gross profit climbed to 32.1 percent of revenue in the first quarter, hitting $356.2 million, compared with 29.5 percent of revenue, or $309.6 million year over year. Lexmark's 260 basis point increase in gross profit margin was attributed to an increase of supplies in the product mix and higher supplies margins, somewhat offset by lower printer margins.

Operating income was $128.6 million in the first three months, or 11.6 percent of revenue, compared with $104.6 million, or 10 percent of revenue a year earlier.

Looking ahead, Lexmark said it is well positioned for second quarter growth. However, the company remains cautious, due to softness in corporate and consumer spending, as well as aggressive pricing competition.

Lexmark expects a year-over-year revenue growth rate in the low- to mid-single digits in the second quarter of 2003, with earnings in the range of 70 cents to 80 cents, compared with 67 cents reported in the same quarter in 2002.