Exhibit 99.1
Lexmark reports first-quarter EPS growth of 25 percent
Lexington, Ky., April 19, 2004- Lexmark International, Inc. (NYSE: LXK) today
announced financial results for the first quarter of 2004. Revenue increased 13
percent to $1.256 billion and earnings per share were 91 cents, up 25 percent
from a year ago.
"Our first quarter results came in above our expectation and marked the third
consecutive quarter of double-digit revenue growth," stated Paul J. Curlander,
Lexmark chairman and CEO. "These strong results reflect Lexmark's exclusive
focus on printing solutions and the power of our supplies-driven business
model."
Gross profit was $411 million or 32.7 percent of revenue for the quarter, versus
$356 million or 32.1 percent a year ago. The higher gross profit margin was due
to improved product margins, somewhat offset by a higher mix of printer revenue.
Operating expense for the first quarter was $246 million compared to $228
million in the same period of 2003. Operating income was $165 million or 13.2
percent of revenue versus $129 million or 11.6 percent of revenue a year
earlier. Net earnings were $121 million in the first quarter, up 28 percent from
$95 million reported a year ago. Diluted net earnings per share for the period
were 91 cents, an increase of 25 percent from 73 cents in the prior year.
Lexmark's debt-to-total-capital ratio at March 31, 2004 was 8 percent, unchanged
from December 31, 2003. Capital expenditures were $23 million in the first
quarter.
New products raise the price/performance standard
During the first quarter, Lexmark unveiled an array of new inkjet printers and
All-In-One (AIO) products to meet the needs of consumers and small office/home
office professionals. For the photo enthusiast, a new fade-resistant ink
technology is now available in printers and AIOs at best-in-class print speeds.
Small businesses can benefit from several AIOs offering the latest ink
technology with easy-to-use software, all priced affordably from $79 to $129.
The company also launched the $699 Lexmark C510 color laser printer that
delivers up to 30 pages per minute (ppm) in monochrome and 8 ppm in color. This
is the latest addition to Lexmark's line of color lasers that includes the
Lexmark C752L which was announced earlier in the quarter with print speeds up to
20 ppm in color. Also introduced in January was the Lexmark X422 multifunction
laser, providing high-performance features for enhanced productivity at
breakthrough affordability.
Looking forward:
"Looking forward to the second quarter, we believe that our strong lineup of
printing solutions will keep us well-positioned for solid growth," Curlander
stated. "While we continue to see some indications of market improvement, we
remain cautious due to the uncertain economic environment and the potential for
aggressive price competition. In the second quarter of 2004, we expect a
year-over-year revenue growth rate of high-single to low-double digits and
earnings per share to be in the range of 88 to 98 cents, versus 77 cents
reported in 2003."
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Lexmark reports first-quarter EPS growth of 25 percent/Page 2
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Lexmark is hosting a conference call with securities analysts on Monday, April
19, 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.
Prices are estimated in U. S. dollars. 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, 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, aggressive pricing from competitors and
resellers, financial failure or loss of business with a key customer, reseller
or supplier, management of the company's and resellers' inventory levels,
changes in a country's or region's political or economic conditions, currency
fluctuations, 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
March 31
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2004 2003
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Revenue $1,256.0 $1,107.9
Cost of revenue 845.2 751.7
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Gross profit 410.8 356.2
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Research and development 72.2 62.1
Selling, general and administrative 173.4 165.5
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Operating expense 245.6 227.6
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Operating income 165.2 128.6
Interest (income)/expense, net (2.3) 0.7
Other 0.6 -
------- --------
Earnings before income taxes 166.9 127.9
Provision for income taxes 45.9 33.3
-------- --------
Net earnings $ 121.0 $ 94.6
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Net earnings per share:
Basic $ 0.93 $ 0.74
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Diluted $ 0.91 $ 0.73
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Shares used in per share calculation:
Basic 129.6 127.1
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Diluted
133.1 130.2
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LEXMARK INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF FINANCIAL POSITION
(In Millions)
(Unaudited)
March 31 December 31
2004 2003
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ASSETS
Current assets:
Cash and cash equivalents $ 749.8 $ 744.6
Marketable securities 612.9 451.5
Trade receivables, net 571.6 615.4
Inventories 443.0 437.0
Prepaid expenses and other current assets 196.8 195.3
---------- ----------
Total current assets 2,574.1 2,443.8
Property, plant and equipment, net 705.8 715.9
Other assets 315.2 290.7
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Total assets $ 3,595.1 $ 3,450.4
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LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Short-term debt $ 3.1 $ 1.1
Accounts payable 474.1 465.7
Accrued liabilities 647.3 716.5
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Total current liabilities 1,124.5 1,183.3
Long-term debt 149.4 149.3
Other liabilities 480.4 474.8
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Total liabilities 1,754.3 1,807.4
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Stockholders' equity:
Preferred stock - -
Common stock and capital in excess of par 1,013.4 958.0
Retained earnings 2,216.0 2,095.0
Treasury stock (1,213.1) (1,213.5)
Accumulated other comprehensive loss (175.5) (196.5)
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Total stockholders' equity 1,840.8 1,643.0
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Total liabilities and stockholders' equity $ 3,595.1 $ 3,450.4
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