Oakdale, Minn. — Imation released financial results for its third quarter, ended Sept. 30.
Third-quarter revenue was $527.5 million compared with $525.5 million during the same period in 2007. Operating loss was $8.7 million compared with operating income of $16.3 million for the prior-year quarter; the loss included charges of $16.3 million related mainly to previously announced restructuring actions, Imation said in a statement. Excluding these charges, operating income would have been $7.6 million in the third quarter of this year, it said.
Diluted loss per share was $0.16 for the third quarter of this year compared with $0.24 diluted earnings per share in the prior-year third quarter. Adjusting for the impacts of restructuring and related charges in the third quarter of this year of $0.27 per share, diluted earnings per share would have been $0.11 for Q3 2008 compared with $0.23 for Q3 2007.
Imation said it “is in the process of analyzing its cost structure to further reduce operating expenses. Additional information including potential restructuring charges, timing and impacts will be disclosed in the coming weeks as plans are finalized.”
Frank Russomanno, Imation president and CEO, said in the statement, “Revenue and earnings were substantially below the company’s previous expectations as the company noted in its press release of Oct. 9. Demand slowed across several sectors in the U.S. and Europe and more recently in Japan. We have been negatively impacted by a slowdown in consumer spending for consumer electronics and optical media … We expect the same factors that affected us in Q3 to continue to impact our business in Q4. As a result, we will not meet our previous full year outlook, and have adjusted it accordingly.”
“As we continue to benchmark ourselves against companies with brand portfolios and those with significant distribution businesses across both commercial and consumer markets, we have established a target business model in line with our strategic direction. Given our year-to-date performance as well as current market and industry conditions, we cannot simply grow our way into that business model. As a result, we intend to reduce total operating expenses to drive profitable growth as a lean and fast acting company focused on delivering acceptable gross margins and improved operating profit and return on invested capital. We will have more information to share in the coming weeks.
“While the current economic environment is challenging, we remain firmly committed to our strategic direction for Imation.”