Lexmark News

This week we received an email from Lexmark telling us that Lexmark was “exiting” the inkjet printer business. Here are some excerpts from the email.

Lexmark International, Inc. (NYSE: LXK) today announced restructuring actions, including the exiting of the development and manufacturing of the company's remaining inkjet hardware, which are expected to result in annualized savings of $95 million once fully implemented. Lexmark will continue to provide service, support and aftermarket supplies for its inkjet installed base.

"Today's announcement represents difficult decisions, which are necessary to drive improved profitability and significant savings," said Paul Rooke, Lexmark chairman and chief executive officer. "Our investments are focused on higher value imaging and software solutions, and we believe the synergies between imaging and the emerging software elements of our business will continue to drive growth across the organization.

"As we move forward, we remain confident in our strategy, competitiveness and ability to create value for shareholders," added Rooke.

The actions include closing the Cebu, Philippines, inkjet supplies manufacturing facility by the end of 2015. The actions also include eliminating inkjet development worldwide, including costs related to facilities, tooling, equipment, contract termination, and scrapping in process inventory, which are expected to be principally complete by the end of 2013.

These restructuring actions are expected to result in the elimination of approximately 1,700 positions worldwide, including 1,100 manufacturing positions.

Lexmark is continuing to execute on its previously announced capital allocation framework of returning more than 50 percent of free cash flow(1) to shareholders, on average, through dividends and share repurchases, while building and growing its solutions and software business through expansion and acquisitions.

Lexmark’s stock price went up almost 15% on Tuesday after the announcement came out which reflects the belief of investors that Lexmark is doing the right thing.

Personally we have always loved Lexmark printers, especially their versatile MultiFunction Units.