LEXMARK:INVESTOR QUESTIONS INKJET DIV.

[Anonymous]

LEXMARK:Investor questions inkjet division
CEO CITES STRENGTH, GROWTH, PROFITABILITY
It’s almost a ritual now.An investor at a recent conference attended by Lexmark International asked the company’s CEO why it holds on to its struggling inkjet printer division.The question is becoming as popular as the “Tell us about your business with Dell” inquiry, regarding the computer maker for whom Lexmark manufactures printers that are sold under Dell’s brand.

The answer to that one, by the way, is Lexmark doesn’t talk about its customers’ business.
Back to the present. An investor at the recent Sanford C. Bernstein & Co. Strategic Decisions Conference asked Lexmark CEO Paul Curlander why the company should stay in inkjet. After all, that division has been slower to recover than its laser business since Lexmark saw a downturn in the latter half of 2005.Since that time, the company has exited about 20 percent of its inkjet business — primarily bundles that didn’t meet profit expectations. But as time has gone on, the company has seen difficulty in its OEM business, in which it sells printers to companies such as Dell that then sell them under their own brands.

Curlander told the investor that the company has “a lot of strengths in the inkjet market.”
“We are No. 2 in the U.S., in fact in the North American market, and we’re a strong No. 2,” he said. “We’re quite a bit stronger than anybody else in the market other than Hewlett-Packard.”Curlander said the company also sees a great opportunity in its new lineup of wireless-enabled inkjets. The line offers the feature at prices far below the market’s average, leading Lexmark to say it could jump-start another period of growth.”So we see a lot of strengths. We see profitability. We’ve seen historic growth. And we see opportunity,” Curlander said. “These are all the reasons why we think that this is a business we should be in.”

For sale: Scotland factory
Lexmark’s former inkjet cartridge manufacturing plant in Rosyth, Scotland, has attracted the interest of two manufacturers, according to a report in The Scotsman newspaper.Lexmark closed the plant last year as part of a worldwide restructuring that eliminated 925 jobs and transferred 525 to lower-wage countries. It affected about 200 employees at the company’s headquarters in Lexington. The Scotsman report stated the Rosyth factory employed 700 at the time of closure.Lexmark sold the plant for more than £4 million in February to two Scottish developers — the Kilmartin Property Group and Deanway, the paper reported.A director of one of the groups declined to identify the two companies, but said one was interested in buying the 155,557-square-foot building while the other was interested in leasing, the report said. 

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June 19, 2007 at 10:39 AM