Oakdale, Minn. (October 30, 1996) -- Imation Corp. (NYSE:IMN), the new imaging and information company spun-off July 1 from Minnesota, Mining and Manufacturing (NYSE:MMM), today announced results for the third quarter ended September 30, 1996, including a net profit of $11.8 million, or $.29 per share, on revenues of $559.3 million. This is an improvement of $.33 per share from the comparable quarter a year ago, when the businesses that make up Imation had a net loss of $1.8 million, or (.04) per share, on revenues of $546.2 million.

Imation reported revenue growth of 2.4 percent, the first in 11 quarters for these business units.

"We are very pleased with our first reported financial results as an independent company. It is solid evidence that our products are winning in the marketplace, our plans are realistic and our efforts are beginning to pay off," said Imation Chairman and Chief Executive Officer William T. Monahan. "Last November, we started the process of creating a new company. Now we have a strong, viable company with growing revenues, a healthy financial position and a much more competitive cost structure. We have a new organization, a solid foundation of technology and new products that are focused specifically for success in the imaging and information industry."

Commenting on several strategically important announcements made last quarter, Monahan cited the acquisition of Luminous Corporation -- a company strategically positioned in pre-press software work flow which leverages Imation's total Rainbow™ Digital Proofing solution. In Medical Imaging, Imation now has more than 10,000 laser imagers, both wet and dry, installed worldwide including approximately 1500 new DryView™ systems installed in the first twelve months of the program.

"In our data storage business, Travan™ data cartridges continue to achieve broadening market acceptance and strong annual growth. The LS-120 consortium members - Imation, Compaq Computer, MKE and OR Technologies - recognize what it takes to establish an industry standard and we believe we have the product, the partners and the technology road map to be successful," Monahan said. Volume shipment of LS-120 drives by MKE are scheduled to start in the fourth quarter of 1996 with Mitsubishi commencing in the first quarter of 1997. Also, Kaifa Technology, one of the largest computer products manufacturer in mainland China, announced they will produce the slim line LS-120 drive.

Spending on research and development (R&D) in the third quarter was $38.6 million. Selling, general and administrative spending (SG&A) totaled $133.5 million. R&D and SG&A combined declined 6 percent from the comparable quarter a year ago.

For the nine months ending September 30, excluding restructuring charges and one-time costs, Imation's net income would have been $28.7 million, or $.69 per share. Including pre-tax restructuring charges of $53.9 million primarily related to employee separations and special one-time costs of $22.5 million primarily related to start-up activities, Imation reported a net loss of $19.9 million, or ($.48) per share, on revenues of $1,696.6 million. These restructuring charges and one-time costs were reported in Imationís results for the first six months of 1996. For the comparable period a year ago, Imation, as a part of 3M, realized net income of $2.5 million, or $.06 per share, on revenues of $1,687.9 million.

The acquisition of Luminous Corporation was completed in October. As a result of that transaction an after tax non-deductible write-off of $12 million related to in-process R&D will be absorbed in the fourth quarter of 1996.

Imation was created from the tax-free spin-off by Minnesota Mining and Manufacturing (NYSE:MMM) of its data storage and imaging businesses. Imation Corp. supplies a variety of products and services worldwide for the imaging and information industry, specializing in information storage and imaging applications. The company employs approximately 9,400 people and is based in Oakdale, Minn.

Certain portions of this news release which do not relate to historical financial information may be deemed to constitute forward looking statements which are subject to various factors that could cause actual results in the future to differ materially from these statements. Among these factors are the company's ability to meet its cost reduction or revenue growth targets, the competitive pricing environment, foreign currency fluctuations, and the market acceptance of newly introduced products as well as various factors set forth in the Company's Information Statement included in the Form 10 Registration Statement, filed with the Securities and Exchange Commission on June 21, 1996, in the section titled 'SPECIAL FACTORS.'

Rainbow™, DryView™ and Travan™ are trademarks of Imation Corp.

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