(Mark One) |
þ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
o | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Delaware | 41-1838504 | |
(State or other jurisdiction of | (I.R.S. Employer | |
incorporation or organization) | Identification No.) | |
1 Imation Way | ||
Oakdale, Minnesota | 55128 | |
(Address of principal executive offices) | (Zip Code) |
Large accelerated filer o | Accelerated filer þ |
Non-accelerated filer o (Do not check if a smaller reporting company) |
Smaller reporting company o |
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In millions, except for per share amounts)
(Unaudited)
Three Months Ended
Six Months Ended
June 30,
June 30,
2010
2009
2010
2009
$
354.4
$
400.0
$
720.2
$
796.5
295.9
336.6
600.0
666.2
58.5
63.4
120.2
130.3
51.5
59.2
104.6
123.9
3.9
4.7
8.3
10.0
23.5
23.5
49.0
49.0
3.4
9.8
7.4
15.3
82.3
122.7
143.8
198.2
(23.8
)
(59.3
)
(23.6
)
(67.9
)
(0.2
)
(0.2
)
(0.4
)
(0.4
)
1.0
0.3
2.1
0.7
2.1
3.3
5.0
10.7
2.9
3.4
6.7
11.0
(26.7
)
(62.7
)
(30.3
)
(78.9
)
(11.0
)
(24.4
)
(12.1
)
(27.9
)
(15.7
)
(38.3
)
(18.2
)
(51.0
)
1.4
(0.1
)
2.5
1.4
(0.1
)
2.5
$
(15.7
)
$
(36.9
)
$
(18.3
)
$
(48.5
)
$
(0.42
)
$
(1.02
)
$
(0.48
)
$
(1.36
)
0.04
0.07
(0.42
)
(0.98
)
(0.49
)
(1.29
)
$
(0.42
)
$
(1.02
)
$
(0.48
)
$
(1.36
)
0.04
0.07
(0.42
)
(0.98
)
(0.49
)
(1.29
)
37.8
37.5
37.7
37.5
37.8
37.5
37.7
37.5
Table of Contents
CONDENSED CONSOLIDATED BALANCE SHEETS
(In millions)
(Unaudited)
June 30,
December 31,
2010
2009
$
251.3
$
163.4
238.1
314.9
220.3
235.7
159.4
164.4
869.1
878.4
103.2
109.8
329.9
337.3
23.5
51.8
44.8
$
1,354.0
$
1,393.8
$
222.5
$
201.4
12.4
19.7
127.6
150.8
362.5
371.9
92.7
94.7
455.2
466.6
898.8
927.2
$
1,354.0
$
1,393.8
Table of Contents
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In millions)
(Unaudited)
Six Months Ended
June 30,
2010
2009
$
(18.3
)
$
(48.5
)
9.1
9.7
11.8
11.6
(6.3
)
(20.4
)
23.5
2.3
3.2
3.8
5.2
4.0
49.0
2.4
0.7
66.6
53.8
6.0
32.0
(0.3
)
(20.4
)
26.7
(60.8
)
(24.4
)
(15.7
)
2.5
102.5
6.3
(3.5
)
(7.2
)
(5.0
)
0.1
0.8
(8.4
)
(6.4
)
(2.9
)
(2.9
)
(6.2
)
(4.4
)
87.9
(7.4
)
163.4
96.6
$
251.3
$
89.2
Table of Contents
Table of Contents
Three Months Ended
Six Months Ended
June 30,
June 30,
(In millions)
2010
2009
2010
2009
$
(15.7
)
$
(38.3
)
$
(18.2
)
$
(51.0
)
1.4
(0.1
)
2.5
$
(15.7
)
$
(36.9
)
$
(18.3
)
$
(48.5
)
37.8
37.5
37.7
37.5
37.8
37.5
37.7
37.5
$
(0.42
)
$
(1.02
)
$
(0.48
)
$
(1.36
)
0.04
0.07
(0.42
)
(0.98
)
(0.49
)
(1.29
)
$
(0.42
)
$
(1.02
)
$
(0.48
)
$
(1.36
)
0.04
0.07
(0.42
)
(0.98
)
(0.49
)
(1.29
)
4.4
4.8
4.9
4.5
Table of Contents
June 30,
December 31,
(In millions)
2010
2009
(Unaudited)
$
259.9
$
343.5
(21.8
)
(28.6
)
$
238.1
$
314.9
$
198.4
$
210.4
7.1
8.9
14.8
16.4
$
220.3
$
235.7
$
39.1
$
42.7
16.4
19.1
7.2
7.2
51.6
35.1
45.1
60.3
$
159.4
$
164.4
$
349.1
$
350.8
(245.9
)
(241.0
)
$
103.2
$
109.8
$
44.4
$
35.5
7.4
9.3
$
51.8
$
44.8
$
49.6
$
66.1
8.2
7.9
4.7
4.3
10.2
12.0
54.9
60.5
$
127.6
$
150.8
$
35.2
$
36.3
22.5
21.8
2.9
3.3
15.9
16.0
16.2
17.3
$
92.7
$
94.7
*
Accounts receivable reserves and allowances include estimated amounts for customer returns,
terms discounts and the inability of certain customers to make the required payment.
Table of Contents
Customer
(In millions)
Trade Names
Software
Relationships
Other
Total
$
332.0
$
52.7
$
57.6
$
9.5
$
451.8
(39.3
)
(47.7
)
(31.2
)
(3.7
)
(121.9
)
$
292.7
$
5.0
$
26.4
$
5.8
$
329.9
$
333.2
$
62.3
$
65.5
$
6.6
$
467.6
(34.4
)
(56.8
)
(33.9
)
(5.2
)
(130.3
)
$
298.8
$
5.5
$
31.6
$
1.4
$
337.3
Three Months Ended
Six Months Ended
June 30,
June 30,
(In millions)
2010
2009
2010
2009
$
6.0
$
5.7
$
11.8
$
11.6
Our Americas segment includes North America, South America and the Caribbean.
Our Europe segment includes Europe and all of Africa.
Our North Asia segment includes Japan, China, Hong Kong, Korea and Taiwan.
Our South Asia segment includes Australia, Singapore, India, and the Middle East.
Table of Contents
Electronic
(In millions)
Americas
Europe
North Asia
South Asia
Products
Total
$
64.3
$
39.2
$
10.2
$
$
38.6
$
152.3
(64.3
)
(39.2
)
(10.2
)
(15.1
)
(128.8
)
23.5
23.5
38.6
(38.6
)
(15.1
)
15.1
(23.5
)
(23.5
)
102.9
39.2
10.2
152.3
(102.9
)
(39.2
)
(10.2
)
(152.3
)
$
$
$
$
$
$
Reporting unit
Excess of carrying
Percentage of carrying
(In millions)
Goodwill
carrying amount
amount over fair value
amount over fair value
$
23.5
$
336.5
$
173.5
206
%
June 30,
December 31,
(In millions)
2010
2009
$
(65.6
)
$
(50.4
)
(18.6
)
(18.8
)
0.8
0.3
$
(83.4
)
$
(68.9
)
Table of Contents
Three Months Ended
Six Months Ended
June 30,
June 30,
(In millions)
2010
2009
2010
2009
$
(15.7
)
$
(36.9
)
$
(18.3
)
$
(48.5
)
(10.4
)
9.4
(15.2
)
(1.0
)
0.1
4.5
0.2
4.5
0.3
(3.5
)
0.5
0.2
$
(25.7
)
$
(26.5
)
$
(32.8
)
$
(44.8
)
Three Months Ended
Six Months Ended
June 30,
June 30,
(In millions)
2010
2009
2010
2009
$
1.5
$
2.0
$
3.2
$
3.8
Weighted
Average
Stock
Exercise
Options
Price
4,594,838
$
27.19
825,407
10.57
(1,000
)
8.11
(269,102
)
31.22
(96,648
)
12.46
5,053,495
$
24.33
Table of Contents
2010
42.8
%
2.54
%
66
0.0
%
Weighted
Average
Grant Date Fair
Restricted
Value Per
Stock
Share
461,702
$
14.84
480,423
10.57
(197,234
)
15.48
(2,979
)
10.34
741,912
$
11.44
Table of Contents
United States
International
United States
International
Three Months Ended June 30,
Six Months Ended June 30,
(In millions)
2010
2009
2010
2009
2010
2009
2010
2009
$
0.4
$
0.6
$
0.2
$
0.2
$
0.8
$
1.4
$
0.4
$
0.4
1.2
1.1
0.8
0.8
2.4
2.8
1.4
1.6
(1.4
)
(1.7
)
(0.8
)
(0.8
)
(2.9
)
(3.4
)
(1.5
)
(1.6
)
0.1
0.1
0.1
0.1
0.2
0.1
$
0.3
$
0.0
$
0.3
$
0.2
$
0.5
$
0.9
$
0.4
$
0.5
5.2
5.2
$
0.3
$
5.2
$
0.3
$
0.2
$
0.5
$
6.1
$
0.4
$
0.5
Three Months Ended
Six Months Ended
(In millions)
June 30, 2010
June 30, 2010
$
3.3
$
4.9
0.1
0.3
3.4
5.2
2.2
$
3.4
$
7.4
Table of Contents
Lease
Severance and
Termination
(In millions)
Related
Costs
Total
$
4.3
$
$
4.3
1.6
0.2
1.8
(1.9
)
(0.2
)
(2.1
)
(0.1
)
(0.1
)
$
3.9
$
$
3.9
3.3
0.1
3.4
(2.3
)
(0.1
)
(2.4
)
(0.2
)
(0.2
)
$
4.7
$
$
4.7
Table of Contents
Our Americas segment includes North America, South America and the Caribbean.
Our Europe segment includes Europe and all of Africa.
Our North Asia segment includes Japan, China, Hong Kong, Korea and Taiwan.
Our South Asia segment includes Australia, Singapore, India, and the Middle East.
Three Months Ended
Six Months Ended
June 30,
June 30,
(In millions)
2010
2009
2010
2009
$
181.2
$
210.6
$
342.9
$
394.6
64.5
85.5
151.2
184.0
73.0
70.3
154.3
151.3
35.7
33.6
71.8
66.6
$
354.4
$
400.0
$
720.2
$
796.5
Three Months Ended
Six Months Ended
June 30,
June 30,
(In millions)
2010
2009
2010
2009
$
9.4
$
13.2
$
18.5
$
21.5
(1.5
)
0.4
0.3
1.8
2.4
2.9
5.5
7.6
1.0
(0.1
)
2.0
0.6
(35.1
)
(75.7
)
(49.9
)
(99.4
)
$
(23.8
)
$
(59.3
)
$
(23.6
)
$
(67.9
)
Table of Contents
Three Months Ended
Six Months Ended
June 30,
June 30,
(In millions)
2010
2009
2010
2009
$
153.2
$
179.4
$
310.6
$
361.0
84.2
98.6
174.2
203.6
16.7
18.3
32.8
38.9
254.1
296.3
517.6
603.5
48.9
37.3
106.4
77.5
51.4
66.4
96.2
115.5
$
354.4
$
400.0
$
720.2
$
796.5
Table of Contents
June 30, 2010
December 31, 2009
(In millions)
Level 1
Level 2
Level 3
Level 1
Level 2
Level 3
$
$
0.4
$
$
$
0.9
$
0.1
(0.1
)
(0.1
)
(0.3
)
$
$
0.2
$
$
$
0.7
$
June 30, 2010
December 31, 2009
Fair Value
Fair Value
Other
Other
Other
Other
Notional
Current
Current
Notional
Current
Current
(In millions)
Amount
Assets
Liabilities
Amount
Assets
Liabilities
$
56.0
$
0.4
$
(0.2
)
$
48.0
$
0.8
$
28.0
88.8
0.2
(0.3
)
$
84.0
$
0.4
$
(0.2
)
$
136.8
$
1.0
$
(0.3
)
Table of Contents
Pretax Gain on
Pretax Gain
Effective Portion of
(Loss) Recognized
Derivative
Pretax Loss
in Other
Reclassification from
Recognized in the
Comprehensive
Accumulated Other
Condensed
Income on
Comprehensive
Statement of
Effective Portion
Income to Cost of
Operations in Other
(In millions)
of Derivative
Goods Sold, net
Expense, net
$
0.1
$
0.3
$
(0.3
)
$
0.1
$
0.3
$
(0.3
)
$
(4.6
)
$
$
(10.4
)
$
(4.6
)
$
$
(10.4
)
$
0.8
$
0.4
$
(1.2
)
$
0.8
$
0.4
$
(1.2
)
$
0.5
$
0.8
$
(9.7
)
$
0.5
$
0.8
$
(9.7
)
Table of Contents
Net revenue from continuing operations of $720.2 million for the six months ended June
30, 2010 was down 9.6 percent compared with $796.5 million in the same period last year.
Goodwill impairment expense of $23.5 million was recorded for the six months ended June
30, 2010.
Operating loss was $23.6 million for the six months ended June 30, 2010, compared with
operating loss of $67.9 million in the same period last year which included the Philips
litigation settlement of $49.0 million.
Diluted loss per share from continuing operations was $0.48 for the six months ended
June 30, 2010, compared with diluted loss per share from continuing operations of $1.36 for
the same period last year.
Cash and cash equivalents totaled $251.3 million as of June 30, 2010, compared with
$163.4 million at December 31, 2009.
Cash flow provided by operating activities was $102.5 million for the six months ended
June 31, 2010, compared with $6.3 million in the same period last year.
Three Months Ended
Six Months Ended
June 30,
Percent
June 30,
Percent
(Dollars in millions)
2010
2009
Change
2010
2009
Change
$
354.4
$
400.0
-11.4
%
$
720.1
$
796.5
-9.6
%
Table of Contents
Three Months Ended
Six Months Ended
June 30,
Percent
June 30,
Percent
(Dollars in millions)
2010
2009
Change
2010
2009
Change
$
58.5
$
63.4
-7.7
%
$
120.2
$
130.3
-7.8
%
16.5
%
15.9
%
16.7
%
16.4
%
Three Months Ended
Six Months Ended
June 30,
Percent
June 30,
Percent
(Dollars in millions)
2010
2009
Change
2010
2009
Change
$
51.5
$
59.2
-13.0
%
$
104.6
$
123.9
-15.6
%
14.5
%
14.8
%
14.5
%
15.6
%
Three Months Ended
Six Months Ended
June 30,
Percent
June 30,
Percent
(Dollars in millions)
2010
2009
Change
2010
2009
Change
$
3.9
$
4.7
-17.0
%
$
8.3
$
10.0
-17.0
%
1.1
%
1.2
%
1.2
%
1.3
%
Table of Contents
Three Months Ended
Six Months Ended
June 30,
Percent
June 30,
Percent
(Dollars in millions)
2010
2009
Change
2010
2009
Change
$
3.4
$
9.8
-65.3
%
$
7.4
$
15.3
-51.6
%
1.0
%
2.5
%
1.0
%
1.9
%
Three Months Ended
Six Months Ended
June 30,
Percent
June 30,
Percent
(Dollars in millions)
2010
2009
Change
2010
2009
Change
$
(23.8
)
$
(59.3
)
NM
$
(23.6
)
$
(67.9
)
NM
(6.7)
%
(14.8)
%
(3.3)
%
(8.5)
%
Table of Contents
Three Months Ended
Six Months Ended
June 30,
Percent
June 30,
Percent
(Dollars in millions)
2010
2009
Change
2010
2009
Change
$
(0.2
)
$
(0.2
)
0.0
%
$
(0.4
)
$
(0.4
)
0.0
%
1.0
0.3
233.3
%
2.1
0.7
200.0
%
2.1
3.3
-36.4
%
5.0
10.7
-53.3
%
2.9
3.4
-14.7
%
6.7
11.0
-39.1
%
0.8
%
0.9
%
0.9
%
1.4
%
Three Months Ended
Six Months Ended
June 30,
Percent
June 30,
Percent
(Dollars in millions)
2010
2009
Change
2010
2009
Change
$
(11.0
)
$
(24.4
)
NM
$
(12.1
)
$
(27.9
)
NM
41.2
%
38.9
%
39.9
%
35.4
%
NM
- Not Meaningful
Table of Contents
Our Americas segment includes North America, South America and the Caribbean.
Our Europe segment includes Europe and all of Africa.
Our North Asia segment includes Japan, China, Hong Kong, Korea and Taiwan.
Our South Asia segment includes Australia, Singapore, India, and the Middle East.
Three Months Ended
Six Months Ended
June 30,
Percent
June 30,
Percent
(Dollars in millions)
2010
2009
Change
2010
2009
Change
$
181.2
$
210.6
-14.0
%
$
342.9
$
394.6
-13.1
%
9.4
13.2
-28.8
%
18.5
21.5
-14.0
%
5.2
%
6.3
%
5.4
%
5.4
%
Three Months Ended
Six Months Ended
June 30,
Percent
June 30,
Percent
(Dollars in millions)
2010
2009
Change
2010
2009
Change
$
64.5
$
85.5
-24.6
%
$
151.2
$
184.0
-17.8
%
-1.5
0.4
NM
0.3
1.8
-83.3
%
-2.3
%
0.5
%
0.2
%
1.0
%
Table of Contents
Three Months Ended
Six Months Ended
June 30,
Percent
June 30,
Percent
(Dollars in millions)
2010
2009
Change
2010
2009
Change
$
73.0
$
70.3
3.8
%
$
154.3
$
151.3
2.0
%
2.4
2.9
-17.2
%
5.5
7.6
-27.6
%
3.3
%
4.1
%
3.6
%
5.0
%
Three Months Ended
Six Months Ended
June 30,
Percent
June 30,
Percent
(Dollars in millions)
2010
2009
Change
2010
2009
Change
$
35.7
$
33.6
6.3
%
$
71.8
$
66.6
7.8
%
1.0
(0.1
)
NM
2.0
0.6
NM
2.8
%
(0.3
)%
2.8
%
0.9
%
NM
- Not Meaningful
Table of Contents
Three Months Ended
Six Months Ended
June 30,
Percent
June 30,
Percent
(Dollars in millions)
2010
2009
Change
2010
2009
Change
$
(35.1
)
$
(75.7
)
NM
$
(49.9
)
$
(99.4
)
NM
NM
- Not Meaningful
Table of Contents
Six Months Ended
June 30,
(Dollars in millions)
2010
2009
$
(18.3
)
$
(48.5
)
20.9
21.3
(6.3
)
(20.4
)
23.5
3.2
3.8
2.3
4.0
5.2
49.0
2.4
0.7
77.1
(11.1
)
$
102.5
$
6.3
Six Months Ended
June 30,
(Dollars in millions)
2010
2009
$
(3.5
)
$
(7.2
)
(5.0
)
0.1
0.8
$
(8.4
)
$
(6.4
)
Six Months Ended
June 30,
(Dollars in millions)
2010
2009
(2.9
)
$
$
(2.9
)
Table of Contents
up to 85 percent of eligible accounts receivable; plus
up to the lesser of 65 percent of eligible inventory or 85 percent of the appraised
net orderly liquidation value of eligible inventory; plus
up to 60 percent of the appraised fair market value of eligible real estate (the
Original Real Estate Value), such Original Real Estate Value to be reduced each calendar
month by 1/84th, provided, that the Original Real Estate Value shall not exceed
$40,000,000; plus
such other classes of collateral as may be mutually agreed upon and at advance rates
as may be determined by the Agent; minus
such reserves as the Agent may establish in good faith.
Our Americas segment includes North America, South America and the Caribbean.
Our Europe segment includes Europe and all of Africa.
Our North Asia segment includes Japan, China, Hong Kong, Korea and Taiwan.
Our South Asia segment includes Australia, Singapore, India, and the Middle East.
Table of Contents
Reporting unit
Excess of carrying
Percentage of carrying
(In millions)
Goodwill
carrying amount
amount over fair value
amount over fair value
$
23.5
$
336.5
$
173.5
206
%
Table of Contents
Table of Contents
30
Exhibit
Number
Description of Exhibit
Amended and Restated Bylaws of Imation Corp., effective May 5, 2010
(incorporated by reference to Exhibit
3.1 to Imations Form 8-K Current Report filed on May 7, 2010)
Director Compensation Program Effective May 4, 2005 (As amended May 5, 2010)
(incorporated by reference
to Exhibit 10.1 to Imations Form 8-K Current Report filed on July 6, 2010)
Form of Performance-Based Option Award Agreement for Executive Officers
Form of Performance-Based Restricted Stock Award Agreement for Executive Officers
Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
Table of Contents
31
Imation Corp.
Date: August 6, 2010
/s/ Paul R. Zeller
Paul R. Zeller
Senior Vice President and Chief Financial Officer
(duly authorized officer and principal financial
officer)
Table of Contents
32
Exhibit
Number
Description of Exhibit
Amended and Restated Bylaws of Imation Corp., effective May 5, 2010 (incorporated by
reference to Exhibit
3.1 to Imations Form 8-K Current Report filed on May 7, 2010)
Director Compensation Program Effective May 4, 2005 (As amended May 5, 2010)
(incorporated by
reference to Exhibit 10.1 to Imations Form 8-K Current Report filed on July 6, 2010)
Form of Performance-Based Option Award Agreement for Executive Officers
Form of Performance-Based Restricted Stock Award Agreement for Executive Officers
Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
2
3
4
5
6
7
8
9
IMATION CORP.
|
||||
By: | ||||
Name: | ||||
Title: | ||||
10
11
2
3
4
5
6
7
IMATION CORP.
|
||||
By: | ||||
Name: | ||||
Title: |
8
9
By: | /s/ MARK E. LUCAS | |||
Mark E. Lucas, | ||||
President and Chief Executive Officer |
33
By: | /s/ PAUL R. ZELLER | |||
Paul R. Zeller, | ||||
Senior Vice President and Chief Financial Officer |
34
/s/ MARK E. LUCAS | ||||
Mark E. Lucas, | ||||
President and Chief Executive Officer |
35
/s/ PAUL R. ZELLER | ||||
Paul R. Zeller, | ||||
Senior Vice President and Chief Financial Officer | ||||
36