Lexmark reports record revenue

JOHANNESBURG (01/27/2004) - Lexmark International Inc. on Tuesday announced record financial results for both the fourth quarter and full year 2003.

Fourth-quarter revenue was US$1.37 billion, an increase of 13 percent, the highest year-to-year growth rate since the first quarter of 2000. Revenue for the full year ended December 31, 2003 was a record $4.75 billion. Diluted net earnings per share for the fourth quarter were $1.05, up by 17 percent from the $0.90 reported for the same period a year earlier. Full year earnings per share rose by 20 percent to a record $3.34.

"Our fourth-quarter revenue growth was significantly over our guidance, driven by strong printer sales," says Paul J. Curlander, Lexmark chairman and CEO. "Our earnings for the quarter exceeded expectations, as we achieved higher revenue and were able to hold gross profit margins fairly stable both sequentially and year-to-year."

For the fourth quarter, revenue was a record $1.37 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 by 10 percent from $654 million a year ago. Laser and inkjet printer revenue totalled $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 year prior, 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 by 17 percent to a record $1.05.

Lexmark's debt-to-total-capital ratio at December 31, 2003 was 8 percent compared with 9 percent at September 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 December 31, 2003.

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 percent a year ago, and represents 55 percent of total revenue versus 54 percent in 2002. Laser and inkjet printer revenue grew by 8 percent from last year to $1.760 billion.

Gross profit margin was up by one point 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 by 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 states.