Exhibit 99.1
Lexmark reports record revenue and EPS for
fourth quarter and full year 2003
- -- Highest year-to-year sales growth in 15 quarters --
Lexington, Ky., Jan. 26, 2004 - Lexmark International, Inc. (NYSE: LXK) today
announced record financial results for both the fourth quarter and full year
2003. Fourth-quarter revenue was $1.370 billion, an increase of 13 percent, the
highest year-to-year growth rate since first quarter 2000. Revenue for the full
year ended Dec. 31, 2003 was a record $4.755 billion. Diluted net earnings per
share for the fourth quarter were $1.05, up 17 percent from the 90 cents
reported for the same period a year earlier. Full year earnings per share rose
20 percent to a record $3.34.
"Our fourth-quarter revenue growth was significantly over our guidance, driven
by strong printer sales," said Paul J. Curlander, Lexmark chairman and chief
executive officer. "Lexmark's earnings for the quarter exceeded our expectations
as we achieved higher revenue and were able to hold gross profit margins fairly
stable both sequentially and year-to-year."
Fourth-quarter laser and inkjet printer revenue increases 23 percent
For the fourth quarter, Lexmark's revenue was a record $1.370 billion, a 13
percent increase from the $1.207 billion reported in the same period of 2002.
Laser and inkjet supplies revenue of $716 million was up 10 percent from $654
million a year ago. Laser and inkjet printer revenue was $560 million in the
fourth quarter, an increase of 23 percent from $456 million a year earlier.
Gross profit margin was 31.9 percent for the quarter versus 31.8 percent a year
ago. Operating expenses were $249 million compared with $224 million in the
prior year, and were a record low 18.2 percent of revenue. Operating income
margin was 13.7 percent in the fourth quarter versus 13.2 percent in the same
period a year earlier. Diluted net earnings per share for the period rose 17
percent to a record $1.05.
Lexmark's debt-to-total-capital ratio at Dec. 31, 2003 was 8 percent compared
with 9 percent at Sept. 30, 2003. Net cash provided by operating activities for
the quarter was $269 million. Capital expenditures for the quarter were $39
million. Lexmark repurchased approximately 70,000 shares of its common stock
during the fourth quarter for $5 million, at prices ranging from $71.51 to
$74.30 per share. The company's remaining share repurchase authorization was
approximately $183 million as of Dec. 31, 2003.
Full year 2003 net cash provided by operating activities was $748 million
Lexmark's 2003 annual revenue was $4.755 billion, an increase of 9 percent over
2002 revenue of $4.356 billion. Laser and inkjet supplies revenue was $2.629
billion for the year, a 13 percent increase from $2.335 billion a year ago, and
represents 55 percent of total revenue versus 54 percent in 2002. Laser and
inkjet printer revenue grew 8 percent from last year to $1.760 billion.
Gross profit margin was up 1.0 points from the prior year to 32.5 percent.
Operating income was 12.5 percent of revenue or $594 million, versus $511
million a year earlier. Diluted net earnings per share for the year were $3.34,
up 20 percent over $2.79 per share in 2002.
Lexmark's net cash provided by operating activities was $748 million in 2003 and
capital expenditures for the year were $94 million. "Our continued focus on
improving operational efficiency and reducing cash cycle days resulted in
another year of strong cash generation for the company," Curlander stated.
Looking forward:
"We had strong customer demand for our printing solutions in the fourth quarter,
and we believe this positions us well for growth in the first quarter," said
Curlander. "While we do see some indications of market improvement, we continue
to remain cautious due to the uncertain economic environment and the potential
for aggressive price competition. In the first quarter of 2004, we expect a
year-over-year revenue growth rate of mid- to high-single digits and earnings
per share in the range of 79 to 89 cents."
###
Lexmark is hosting a conference call with securities analysts on Monday, Jan.
26, 2004 at 8:30 a.m. Eastern Time (888-338-6461). A live broadcast over the
Internet and a complete replay of this call can be accessed from Lexmark's
investor relations web site at http://investor.lexmark.com.
Lexmark International, Inc. is a leading developer, manufacturer and supplier of
printing solutions -- including laser and inkjet printers, multifunction
products, associated supplies and services -- for offices and homes in more than
150 countries. Founded in 1991, Lexmark reported approximately $4.8 billion in
revenue in 2003, and can be found on the Internet at www.lexmark.com.
Lexmark and Lexmark with diamond design are trademarks of Lexmark International,
Inc., registered in the U.S. and/or other countries. All other trademarks are
property of their respective holders.
"Safe Harbor" Statement under the Private Securities Litigation Reform Act of
1995: Statements in this release which are not historical facts are
forward-looking
and involve risks and uncertainties, including, but not limited to, aggressive
pricing from competitors and resellers, the impact of competitors' products, the
ability and/or incremental expense to produce and deliver products to satisfy
customer demand, market acceptance of new products and pricing programs,
financial failure or loss of business with a key customer, reseller or supplier,
management of the company's and resellers' inventory levels, currency
fluctuations, changes in a country's or region's political or economic
conditions, production and supply difficulties including disruptions at
important points of exit and entry and distribution centers, competition in
aftermarket supplies, increased investment to support product development,
unforeseen cost impacts, conflicts among sales channels, difficulties or delays
in software and information systems implementations, the outcome of pending and
future litigation or governmental proceedings, intellectual property and other
legal claims and expenses, and other risks described in the company's Securities
and Exchange Commission filings. The company undertakes no obligation to update
any forward-looking statement.
LEXMARK INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF EARNINGS
(In Millions, Except Per Share Amounts)
(Unaudited)
Three Months Ended
December 31
----------------------
2003 2002
---- ----
Revenue $1,369.5 $1,207.3
Cost of revenue 932.8 823.5
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Gross profit 436.7 383.8
-------- --------
Research and development 70.4 65.3
Selling, general and administrative 178.5 164.6
Restructuring reversals - (5.9)
-------- --------
Operating expense 248.9 224.0
-------- --------
Operating income 187.8 159.8
Interest (income)/expense, net (0.7) 1.1
Other 1.0 1.5
-------- --------
Earnings before income taxes 187.5 157.2
-------- --------
Provision for income taxes 48.7 40.9
-------- --------
Net earnings $ 138.8 $ 116.3
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Net earnings per share:
Basic $ 1.08 $ 0.92
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Diluted $ 1.05 $ 0.90
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Shares used in per share calculation:
Basic 128.9 126.6
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Diluted 132.2 129.8
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LEXMARK INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF EARNINGS
(In Millions, Except Per Share Amounts)
(Unaudited)
Year Ended
December 31
------------------------
2003 2002
---- ----
Revenue $4,754.7 $4,356.4
Cost of revenue 3,209.6 2,985.8
-------- --------
Gross profit 1,545.1 1,370.6
-------- --------
Research and development 265.7 247.9
Selling, general and administrative 685.5 617.8
Restructuring reversals - (5.9)
-------- --------
Operating expense 951.2 859.8
-------- --------
Operating income 593.9 510.8
Interest (income)/expense, net (0.4) 9.0
Other 0.8 6.2
-------- --------
Earnings before income taxes 593.5 495.6
Provision for income taxes 154.3 128.9
-------- --------
Net earnings $ 439.2 $ 366.7
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Net earnings per share:
Basic $ 3.43 $ 2.85
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Diluted $ 3.34 $ 2.79
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Shares used in per share calculation:
Basic 128.1 128.5
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Diluted 131.4 131.6
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LEXMARK INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF FINANCIAL POSITION
(In Millions)
(Unaudited)
December 31 December 31
2003 2002
------------------- -----------------
ASSETS
Current assets:
Cash and cash equivalents $ 744.6 $ 497.7
Marketable securities 451.5 -
Trade receivables, net 615.4 600.3
Inventories 437.0 410.3
Prepaid expenses and other current assets 195.3 290.5
--------- ---------
Total current assets 2,443.8 1,798.8
Property, plant and equipment, net 715.9 747.6
Other assets 290.7 261.7
--------- ---------
Total assets $ 3,450.4 $ 2,808.1
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LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Short-term debt $ 1.1 $ 12.3
Accounts payable 465.7 378.5
Accrued liabilities 716.5 708.2
--------- ---------
Total current liabilities 1,183.3 1,099.0
Long-term debt 149.3 149.2
Other liabilities 474.8 478.3
--------- ---------
Total liabilities 1,807.4 1,726.5
--------- ---------
Stockholders' equity:
Preferred stock - -
Common stock and capital in excess of par 958.0 865.1
Retained earnings 2,095.0 1,655.8
Treasury stock (1,213.5) (1,209.6)
Accumulated other comprehensive loss (196.5) (229.7)
--------- ---------
Total stockholders' equity 1,643.0 1,081.6
--------- ---------
Total liabilities and stockholders' equity $ 3,450.4 $ 2,808.1
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