Imation Reports Wider Loss, 15% Drop in Revenue

Imation Reports Wider Loss, 15% Drop in Revenue

Imation’s first-quarter revenue was lower and its loss greater than analysts’ expectations.

Imation Corporation, a data storage and security company, on Wednesday reported a decline in revenue and a widened loss for its first quarter.
 
For the quarter that ended March 31, the Oakdale-based company reported a net loss of $21.1 million, or $0.52 per share, compared to a net loss of $12.2 million, or $0.33 per share, during the same period in 2012. Its adjusted loss per share, which excludes restructuring and other charges, was $0.31 per share, $0.09 lower than what analysts polled by Thomson Reuters had expected. The company said its loss from continuing operations totaled $15.6 million. 
 
Revenue, meanwhile, totaled $224.4 million, down 14.8 percent from $263.3 million in the first quarter of 2012. First-quarter revenue fell short of analysts’ projections of $264 million.
 
On January 1, Imation reorganized itself into two segments: a consumer storage and accessories segment and a tiered storage and security solutions segment.
 
Its consumer segment focuses on retail channels and is meant to generate cash flow for the company with consumer storage media, optical, and flash.
 
Its tiered segment focuses on small and medium-sized businesses, enterprise, and government consumers. It includes branded tiered and scalable storage solutions from both Imation and Thousand Oaks, California-based data storage company Nexsan, which Imation acquired at the end of 2012.
 
During the first quarter, the tiered segment grew 1.4 percent in net revenue whereas the consumer segment declined 24.9 percent.
 
Imation, which spun off from 3M in 1996, was founded as a maker of data storage media. In recent years it had expanded into “brand and product management.” However, in January 2011, the company announced its plans to shift its focus back to data storage, protection, and connectivity.
 
“Imation’s strategic transformation continues to center on leveraging our roots in data storage to build a platform for long-term growth and profitability,” President and CEO Mark Lucas said in a Wednesday statement. “Though we are making good progress, we are not yet where we need to be long-term and more work remains.”
 
This quarter reflects a continued decline for Imation’s financial results. The company ended its fourth quarter of 2012, with $299.1 million in revenue, down 12.6 percent from that same period in 2011. However, the net loss reported to this year’s first quarter was not as dramatic as in its fourth quarter, when it announced a loss of $310.2 million, compared to a loss of $12.9 million during that same period in 2011.
 
According to a filing with the U.S. Securities and Exchanges Commission, Imation had about 1,230 employees at the end of 2012 compared to 1,100 at the end of this first quarter. In October 2012, the company announced plans to cut its global work force by 20 percent.
 
Shares of Imation’s stock were trading down 1.6 percent at $3.62 mid-day Wednesday. The company’s stock has been on a decline since trending at $11.77 in April 2011.
 
Imation is among Minnesota’s 30-largest public companies based on revenue, which totaled $1.1 billion in 2012, down 14.8 percent from 2011.
 
In January, Twin Cities Business explored what’s behind Imation’s recent struggles, how it’s progressing with its turnaround plan, and its prospects for the future—including whether it’s time for the company to be sold, either in pieces or in its entirety. To read that story, click here.

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