Separately, Imation also announced that its Board of Directors has authorized a stock repurchase program for up to two million shares of the company's common stock.

Revenues for the fourth quarter increased 4.3 percent to $581.6 million compared to $557.7 million in the fourth quarter of the preceding year. Excluding a write-off for R&D, fourth quarter net income was $11.4 million, or $0.28 per share. This compares to net income of $0.8 million, excluding special charges, or $0.02 per share for the fourth quarter of 1995. Reported results for the fourth quarter, including the non-deductible $12 million R&D write-off related to the recent acquisition of Luminous Corporation, showed a net loss of $0.6 million, or $0.02 per share. Reported results for the same period in 1995, which included pre-tax restructuring and one-time charges of $166.3 million, showed a net loss of $87.5 million, or $2.08 per share.

"Revenues in the fourth quarter are the highest in more than three years and fiscal year 1996 is the first year in the last four that the businesses now making up Imation have achieved top line growth," said Bill Monahan, Chairman and Chief Executive Officer. "These results demonstrate that we are on track in our efforts to accelerate growth, develop a competitive cost structure and produce solid operating results."

"We also improved economic profit by $65 million in fiscal 1996, and are well on the way to meeting our $150 million economic profit improvement goal by the end of 1998. With all the activity related to spinning off from 3M -- creating a new name and identity, and launching a wide range of new products -- we remained focused on the business, on maintaining customer loyalty, and on building a company organized specifically for the imaging and information industry."

"The company's fourth quarter revenues increased 4.3 percent over the same quarter a year ago, with volume growth of 9.9 percent, partially offset by price declines of 4.1 percent and negative currency impact of 1.5 percent. Our four new product platforms -- DryView™ laser imagers, Travan™ data cartridges, Rainbow™ color proofing systems and LS-120 diskettes -- constituted 15.6 percent of revenue in the quarter and 11.3 percent for 1996, consistent with our plan for the year." Monahan said. "Customer interest and demand accelerated across all four platforms in the fourth quarter. We are well positioned to continue the momentum, as we look to these four new product platforms to reach our goal of 20 percent of revenue in 1997."

Gross margins, prior to special charges, improved to 35.0 percent and 35.3 percent of revenue for the fourth quarter and the full year, respectively. This compares to gross margins of 33.4 percent and 34.5 percent for the same periods in 1995, prior to special charges.

Spending on research and development (R&D) in the fourth quarter (prior to the $12 million write-off) was $39.0 million. Selling, general and administrative spending (SG&A) totaled $139.6 million. Combined, R&D and SG&A before special charges declined 2.8 percent from the comparable quarter a year ago. Excluding recurring start-up costs of $9.8 million in the fourth quarter, combined spending on R&D and SG&A declined 8.1 percent from the same quarter a year ago. In the six month period since the spin-off from 3M, July 1 to December 31, Imation's revenues grew 3.4 percent, compared to the same period in 1995. Net income before special charges for the same period improved by more than $24 million, from a loss of $1 million in the second half of 1995.

For the twelve months ended December 31, 1996, Imation's net income, excluding special charges, was $40.1 million, or $0.97 per share, compared to net income of $3.3 million or $0.08 per share in the previous year on a 1.5 percent revenue increase, from $2,245.6 million to $2,278.2 million. Including special charges, Imation showed a net loss of $20.5 million, or $0.49 per share, compared with a reported net loss of $85.0 million or $2.02 per share in 1995. These results include pre-tax restructuring and other special charges of $88.4 million and $166.3 million in 1996 and 1995, respectively. Imation Corp. supplies a variety of products and services worldwide for the imaging and information industry, specializing in imaging and information storage applications. The company employs approximately 9,400 people and is based in Oakdale, Minn.

Additional information about Imation is available on the company's web site at http://www.imation.com. To receive stock quote updates, recent earnings and news releases, corporate information and related shareholder services, call Imation's toll-free shareholder information line at 1-888-IMN-NYSE(1-888-466-6973).

Certain portions of this news release which do not relate to historicalfinancial information may be deemed to constitute forward looking statements which are subject to various factors that could cause actual result in the future to differ materially from these statements. Among these factors are the company's ability to meet its cost reduction and revenue growth targets, its ability to establish itself as an independent public company, competitive industry conditions including historical price erosion in certain product categories, 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. Imation™, Travan™, and DryView™, are registered trademarks of Imation Corp. Rainbow™ is a trademark of Imation Corp.

Go To | General Press Releases | Imation Corp. Reports $581.6 Million In Revenues... | Consolidated Statements Of Operations | Fourth Quarter 1996 Bill Monahan, Chairman & Chief Executive Officer | Fourth Quarter 1996 Jill Burchill, Chief Financial Officer |

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