*NEWS*LEXMARK INVESTOR QUESTIONS INKJET ?

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Date: Tuesday June 19, 2007 10:40:00 am
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    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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