Oakdale, Minn. - Imation today reported a slight operating profit in the fiscal first quarter, the last of retiring CEO Frank Russomanno's career, while revenue was down compared with the same period last year.
The storage company reported revenue of $365.8 million, down 7.7 percent compared with Q1 2009 revenue of $396.5 million, though that is a substantially lower rate of decline from recent quarters. The company cited price erosion of approximately 10 percent and overall volume declines of approximately 1 percent, partially offset by favorable currency impact.
From a product perspective, the overall revenue decrease was driven primarily by declines in optical and magnetic products, partially offset by increases in flash products and removable and external hard drives.
Operating income moved into the black, at $200,000 in Q1, compared with an operating loss of $8.6 million in Q1 2009. Gross margin, at 16.9 percent, was flat compared with the previous year's period.
Revenue in Imation's Americas segment, which represented 37.2 percent of total revenue in the quarter, decreased 10.7 percent from last year's quarter, driven mainly by declines in magnetic and optical products, the company said.
Commenting on the results, Russomanno,
by Imation president/COO Mark Lucas on May 5, said, "We are pleased with the solid start we have had to the year, continuing the momentum we saw in the second half of 2009. Our emerging storage formats of flash and removable and external hard disk drives had significant revenue growth in the quarter. Also, we saw lower revenue declines in our larger traditional storage areas of magnetic and optical compared to 2009. Our revenue in electronics and accessories declined, reflecting our more selective participation in this category, especially in video products."
He continued, "We have weathered what we expect to be the worst of the recession and are emerging with a strong financial foundation in place. We have returned to operating profitability, have dramatically improved our cash flow generation, and remain debt free. I am optimistic as I retire from Imation and our current president and COO Mark Lucas assumes responsibility as the company's new CEO next month, that our strong financial foundation provides an excellent platform upon which to build for the future."