Oakdale, Minn. – Imation sold off its XtremeMac consumer electronics brand on Jan. 31 following the October sale of the Memorex brand as part of an effort to divest itself from lower margin non-core business.
Imation also said in its fourth-quarter financial report that its TDK Life on Record audio and accessories business, however, “enjoyed strong year-over- year revenue increases, and we have many new consumer-storage products on our roadmap for 2014,” Imation said.
The company said it does not expect its consumer storage and accessories (CSA) business — which includes storage media, audio and accessories — to return to revenue growth in the near term, but Imation noted that “it is expected to continue to be an important contributor of earnings and cash flow to the company.”
CSA accounted for 55.6 percent of the company’s $860.8 million in consolidated 2013 revenue from continuing operations.
Imation purchased XtremeMac in mid-2008 for $9 million as “another building block in our strategy as we build a portfolio of strong brands that resonate with consumers — in this case the large and growing number of iPod, iPhone and Apple TV customers,” the company said at the time. The company purchased Memcorp and its Memorex brand about a year earlier.
For the full fiscal year, Imation generated $860.8 million in consolidated revenues from continuing operations, down 14.5 percent. Operating losses shrank to $20.1 million from 2012’s $318.4 million loss. Net loss for the year shrank to $44.4 million from the year-ago $340.7 million loss.
During 2013, said CEO Mark Lucas, “Imation continued to move away from our legacy media businesses to focus on growth categories in both consumer and commercial storage solutions. We also rebalanced our portfolio through the strategic Nexsan acquisition in data storage and the divestiture of two lower margin businesses. We continued to right-size our infrastructure, and operating expenses, excluding acquisitions, declined over 30 percent. We remain committed to our transformation and confident in its ultimate success.”
The company is “pleased with our fourth-quarter results, which benefited from lower than anticipated revenue declines in our legacy business, solid working capital and cost management, and several one-time gains,” he said. “While this is encouraging, we have not reached an inflection point in our transformation as our growth products have not yet offset secular revenue declines in our legacy business. We ended 2013 with some of our lowest inventories ever and $132.6 million in cash, which provides us with the financial strength to execute our strategic transformation.”