Lexmark 2Q14 results exceed forecasts

July 23, 2014

lexmark-logoWhile OEM’s earnings fell 88 percent, adjusted results were better than expected, leading to an increased outlook for the year.

Market Watch reported on Lexmark’s second quarter results, which showed that earnings fell 88 percent year-on-year due to the previous year reaping the benefit from the sale of the company’s inkjet business. Consequently, the adjusted results actually exceeded Lexmark’s previous forecast, with the OEM increasing its outlook for the year as a result.

Following the second quarter results, Lexmark now expects revenue to be “flat to down two percent year-over-year” with adjusted per-share earnings of $0.85 (€0.63) to $0.95 (€0.71), compared to its earlier forecast for a decline of between two and four percent for $3.80 (€2.82) to $4 (€2.97) per share, which had been influenced by the company’s expectation of a “continued negative impact” from its exit from the inkjet business.

2Q14 saw the company achieve a profit of $37.5 million (€27.8 million) or $0.59 (€0.44) per share, down from 2Q13’s profit of $24.1 million (€17.9 million) or $1.47 (€1.09); while revenue increased by less than one percent to $891.8 million (€662 million). Operating expenses meanwhile increased by 40 percent to $288.8 million (€214.4 million).

The article noted that Lexmark’s business tactic against the maturing hardware market has been to “stick to its core business and add software around it”, which has differed to other OEMs such as Xerox which has “diversified further afield with new offerings, such as outsourcing”.

The Recycler reported in April on Lexmark’s first quarter results, which saw earnings fall 27 percent due to weaker product revenue and higher operating expenses; with profit reported at $29.3 million (€21.75 million).

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Lexmark launches four new Smart MFPs

June 18, 2014

The OEM launched the monochrome devices featuring “enhanced productivity”.

Lexmark's MX910 MFP

Lexmark’s MX910 MFP

Lexmark’s announcement saw it reveal four new A3 monochrome laser printers in its Smart MFP range, which it states “complement enterprise portfolio[s]” with “enhanced productivity [and] security”, and which would “provide an intuitive and consistent user experience to bridge the paper and digital worlds across the enterprise”.

The four new machines include the MS911 and MX910 ranges, which are a monochrome single-function and MFP respectively, and are said to be “ideal for high usage environments” as well as featuring “long-life components, enterprise security and advanced finishing options”. The devices have quicker first print times, paper capacities of up to 6,650 sheets, and “shake-free” toner cartridges.

The machines also feature finishing options including staples, hole punches, folding and saddle stitch binding, while an encrypted hard drive, user authentication and “automatic disk wiping” help provide “enhanced security” for users.

Marty Canning, Lexmark’s Executive Vice President and President of Imaging Solutions and Services, stated: “Cost and size advantages of A4/letter devices often make them the best fit in most enterprise environments; however, having A3/ledger devices that can print on 11-inch by 17-inch media can be crucial for certain business applications.

“For those instances, the Lexmark MS911 and MX910 series products are excellent choices, providing simple and consistent user experiences across the fleet with productivity-enhancing solutions that bridge the paper and digital worlds across the enterprise.”


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New Lexmark printers designed for SMBs

May 21, 2014

Lexmark MS310 series

Lexmark MS310 series

OEM introduces MS310/MS410 series of black and white printers, which offer “superior performance, security and value” for SMBs and enterprises.

The two devices are designed to deliver enterprise-level features to small and medium businesses in addition to large organisations; featuring a colour display panel, automatic duplex printing and optional wireless printing, as well as added security with Lexmark’s confidential print feature.

Included in the series is the MS415dn, which is described as being a “highly competitive product” for “companies of all sizes, including the finance and manufacturing industries”, with print speeds of up to 38 ppm and a 256MB memory. The MS312dn meanwhile can print up to 33 ppm and boasts a range of eco-friendly features such as an eco mode and duplex printing.

The series supports mobile printing via the Lexmark Mobile Printing App, while remote manageability allows designated staff to control printer settings from any browser when connected to a network, including security settings, device defaults and consumables alerts.

The printers come with 5,000-yield ‘Return Programme’ toner cartridges that are sold at a discount in exchange for the customer’s agreement to use the cartridge only once before returning it to Lexmark for remanufacturing or recycling. Lexmark stated that the 5,000-yield cartridge “is one of the most sought-after cartridges for this segment”. The licensing on these cartridges was reported on by The Recycler yesterday.

Commenting on the product launches, Marty Canning, Executive Vice President of Lexmark and President of Imaging Solutions and Services, said: “Small business needs the same speed, reliability and usability found in enterprise-level printers. The Lexmark MS310 and MS410 series offer unexpected features such as confidential print, network security and remote manageability that are designed to keep small business on the leading edge of print technology.”

The MS312dn and MS415dn are priced from £169 ($285/€208) to £249 ($420/€307).

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Lexmark cartridges feature one-use warning

May 20, 2014

Packaging for Lexmark toner cartridges sold in Europe appears to feature updated licensing terms that prohibit multiple uses of the cartridge under “patent restriction[s]”.

A photocopy of the Lexmark packaging, containing the English, French and Italian versions

A photocopy of the Lexmark packaging, containing the English, French and Italian versions

The Recycler has received a scan of a Lexmark toner cartridge box, which features “updated license terms” stating customers should “please read before opening”. The language in the terms seems to suggest that the cartridge should be used “only once” before returning it to Lexmark “for remanufacturing and/or recycling”, and that not doing this would invalidate the “license”.

The message, featured in English, French, Italian, German and Spanish, starts by stating that “opening this package or using the patented cartridge inside confirms your acceptance of the following license agreement”, adding that “if you don’t accept these terms, return the unopened package to your point of purchase”.

The terms continue by noting that the “patented” toner cartridge is “sold at a special price subject to a patent restriction that it may be used only once”, and that “following the initial use, you agree to return it only to Lexmark for remanufacturing and/or recycling”. Adding that the cartridge is “designed to stop working after delivering a fixed amount of toner”, the terms state that “a variable amount of toner will remain in it when replacement is required”.

Additionally, the terms state that the cartridge is “designed to automatically update the memory in your printer to protect against the introduction of counterfeit and/or unauthorised third-party cartridges”, and that “by installing the enclosed cartridge, you authorise Lexmark to make these changes”.

What do you think of these new license terms? Comment below or contact us at news@therecycler.com.

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Lexmark products receive Mopria certification

April 30, 2014

Lexmark MS310 series

Lexmark MS310 series

Several of the OEM’s product lines receive certification for delivering simple wireless printing from Mopria-certified mobile devices.

Biz Community reported that Lexmark, which is an executive member of the Mopria Alliance, has received Mopria certification across several of its product series due to their ability to deliver simple wireless printing from smartphones, tablets and other Mopria-certified mobile devices.

The Mopria Alliance – a non-profit membership organisation consisting of OEMs including HP, Samsung, Epson, Canon, Xerox and Kyocera that aims to provide simple wireless printing from mobile devices – has reportedly built upon the basic print framework recently introduced by Google in version 4.4 of its Android operating system, providing a plug-in for handsets using Android 4.4 OS. The plug-in will also soon include print device compatibility to all Mopria-certified printers as well as connectivity for NFC tap-to-print and PDF support.

Among Lexmark’s product series that have recently received Mopria certification are: the MS310; MS410; MS510; MS610; MS710; MS810; CS310; CS410; CS510; CX310; CX410; CCX510; MX310; MX410; MX510; MS610; MX710; XC2100; M1100; M3100; M5100; XM1100; XM3100; XM5100; and XM7100.

Marty Canning, Executive Vice President of Lexmark and President of the company’s Imaging Solutions and Services, commented: “Lexmark is committed to remaining in a leadership position in mobile technology and compatibility adoption. We are pleased to receive Mopria certification across 17 product families, representing more than 100 Lexmark products.”

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Lexmark’s Andrew Gardner set to speak at Static Control’s Polish seminar

April 24, 2014

Andrew Gardner

Andrew Gardner

The OEM’s Worldwide Brand Protection Manager will speak at the conference, taking place tomorrow in Lódz, Poland.

The largest manufacturer of aftermarket imaging systems and components announced that Gardner, who previously spoke at The Recycler’s Focus on Europe conference in 2012, will speak at the free seminar tomorrow at Andel’s Hotel Lódz tomorrow in Lódz, Poland.

Static Control stated that Gardner will “discuss clone cartridges from the OEM perspective”, with the OEM joining HP as the “second OEM to recognise Static Control as a leader in the imaging aftermarket and a partner in the fight against counterfeit and clone cartridges”. It added that Lexmark “has a vested interest in Poland” due to having a toner cartridge manufacturing site in Zary.

Gardner’s talk will cover clones “in detail”, specifically covering the raids that took place at Remanexpo@Paperworld 2014 earlier this year, in which Lexmark MS cartridges were seized from a range of exhibitors. The seminars are free to current Static Control customers, with the next seminar taking place in Athens, Greece on Wednesday 7 May.

The seminar follows a previous seminar hosted by both Static Control and ETIRA in March, and comes after the company announced the programme of free seminars across both Europe and Asia late last month. Static Control added that the Polish seminar is the first of 22 to be held this year, with each session “information-intensive” and “targeted towards the demands of each particular market” as well as being “tailored to suit local remanufacturers”.

Ken Lalley, Static Control’s Sales Director, stated: “We are very excited to have Andrew Gardner at our kick-off seminar. We know the importance of intellectual property in this industry and have taken a strong stance against new build clones invading the aftermarket. We are delighted to have Andrew speak on behalf of Lexmark and share his expertise with our Polish customers.”

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Lexmark 1Q2014 earnings fall 27 percent

April 23, 2014

lexmark-logoWeaker product revenue and higher operating expenses attributed to first quarter decline.

Market Watch reported on Lexmark’s 27 percent fall in profit during the first quarter of 2014 (1Q2014), with the OEM reporting a profit of $29.3 million (€21.2 million), or 46 cents per share, compared to a profit of $40 million (€29 million), or 62 cents per share, a year earlier.

Lexmark has attributed the decline to weaker product revenue as well as higher operating expenses, with the company “wrestling with a maturing hardware market” and “facing squeezed margins and weaker growth from developed countries” over recent years. However, the article notes that, unlike some OEMs, Lexmark has “worked to stick to its core business and add software around it” rather than diversifying further afield.

Per-share earnings reportedly declined to 92 cents from 95 cents, while revenue fell by 0.8 percent to $877.7 million (€634 million). This differed to the prediction of analysts that earnings would fall to 87 cents per share on $856 million (€618.4 million) in revenue.

Looking ahead to the second quarter of the year, the company has forecasted an adjusted profit of 85 cents to 95 cents per share on a revenue decline of between two and four percent, compared with analyst estimates of 94 cents per share and a revenue decline of four percent.

Lexmark reportedly stated that it expects a “continued negative impact” following its decision to exit its consumer and business inkjet hardware and supplies business in 2012.

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Lexmark introduces new printer series for SMBs

April 4, 2014

Lexmark MS415dn

Lexmark MS415dn

MS310/MS410 series designed to bring “enterprise-level” features to SMBs.

The OEM has announced the release of three new printers offering features designed for small and medium businesses (SMBs); including optional wireless and mobile printing, a higher input capacity and added security features.

The Lexmark MS312dn, MS315dn and MS415dn all boast environmentally friendly features such as energy saving mode and duplex printing, and allow users to control the printing of documents via a 2.4 inch colour LCD panel as well as view device and job status and, in the MS315dn and MS415dn, support “confidential print” for added security.

Mobile printing is an option for both iOS and Android device users via the Lexmark Mobile Printing App; while “remote manageability” enables designated staff to control printer settings from any browser when network-connected; including security settings, device defaults and consumables alerts, allowing for “greater flexibility and control”.

In terms of print speeds, the MS312dn offers output at up to 35ppm, the MS315dn at up to 37ppm and the MS315dn at up to 40ppm.

Marty Canning, Executive Vice President of Lexmark and President of Lexmark’s Imaging Solutions and Services, said: “Small business needs the same speed, reliability and usability found in enterprise-level printers. The Lexmark MS310 and MS410 series offer unexpected features such as confidential print, network security and remote manageability that are designed to keep small business on the leading edge of print technology.”

The printers are priced at $199 (€145), $299 (€218) and $399 (€291) for the MS312dn, MS315dn and MS415dn respectively.

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Static Control wins right to sue Lexmark over false advertising

March 26, 2014

Attorney Joseph Smith (second from left) with Static Control's Dale Lewis, William London, Bill Swartz and Michael Swartz

Attorney Joseph Smith (second from left) with Static Control’s Dale Lewis, William London, Bill Swartz and Michael Swartz

The largest manufacturer of aftermarket imaging systems and components was favoured in a unanimous decision by Supreme Court judges in the false advertising case, giving Static the right to sue Lexmark under the Lanham Act.

The company reported that the unanimous decision, which was passed down yesterday, means that Static Control now “has the right to sue Lexmark on grounds of false advertising” under the Lanham Act, with regards to the OEM’s ‘Prebate’ programme.

The case relates to the first case in 2002, where Lexmark sued Static Control, and was successful in getting counterclaims from Static thrown out. The claims are based, stated Static, on Lexmark “falsely telling remanufacturers that remanufacturing ‘Prebate’ cartridges was illegal”, with the Lanham Act used against Lexmark as it “prohibits false advertising”.

The case went to trial in 2007, where a jury ruled in Static’s favour, and after this trial, Static “successfully convinced” the Sixth Court of Appeals to reinstate its claims for Unfair and Deceptive Trade Practices and false advertising against Lexmark. This was rejected by the trail court, but the Sixth Court reinstated it, and Lexmark then asked the Supreme Court to overrule this in March last year.

The request from the OEM was granted in June 2013, with Static responding soon after, and the Supreme Court proceedings began in December 2013, with Static again reporting from the Court.

Justice Antonin Scalia of the Supreme Court wrote the opinion, which was adopted by all nine justices, and which read: “Static Control adequately alleged proximate causation by alleging that it designed, manufactured, and sold microchips that both (1) were necessary for, and (2) had no other use than, refurbishing Lexmark toner cartridges. It follows from that allegation that any false advertising that reduced the remanufacturers’ business necessarily injured Static Control as well.”

Static Control’s President Bill Swartz commented: “We are extremely pleased the Supreme Court agrees Lexmark should be held accountable for its actions. I only wish Ed, our founder, my father, were here to enjoy this victory with us.”

William London, the company’s General Counsel, added: “The Supreme Court’s unanimous decision should send a strong message to Lexmark. We plan to move forward with our false advertising suit against Lexmark and prove we were damaged by Lexmark’s false advertising.”

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Lexmark’s CFO discusses the OEM’s “reinvention”

February 14, 2014

John Gamble

John Gamble

John Gamble spoke to the Wall Street Journal about the company’s move away from inkjet.

The news outlet published an interview with Gamble, prefacing it with a note that the growth in popularity of smartphones and tablets “meant the decline, and eventual sale, of the consumer inkjet printing business” at Lexmark to Funai Electric in April 2013.

Gamble is said to have “played a key role in reinventing” Lexmark over the past three years through “strategic acquisitions”, and he stated that the OEM “started seeing the consumer print business declining quite some time ago” in 2007, with Lexmark focusing on MPS and enterprise sectors, which “have much better market characteristics”, and MPS in particular offering the ability to “improve effectiveness while minimising costs” for customers.

Describing Lexmark as “becoming a solutions, services and software company that helps customers manage their unstructured information and unmanaged imaging device environment”, Gamble believes that the OEM “can deliver a much more complete” printing solution for companies through MPS, with a heavy investment “internally to enhance our imaging hardware, printers and multifunction printers, and service capabilities”.

Specifically discussing MPS, Gamble stated that “growing our MPS capabilities and revenue is a key part of our strategy, and ensuring our software strategy supports MPS growth is key to our transition”. Lexmark’s acquisition strategy, he added, is now focused on companies that “can expand our content and process technology”, with the biggest lesson learned at the OEM being that its transition “takes a lot of endurance” and an ability to be “well-focused on the strategic goal”.

Gamble went on: “All of the decision you make, even the small ones, need to stay highly-focused on the transition to a solutions, services and software company. We’ve made sure every organisation within Lexmark had a strategy to transition at the same time. [The biggest obstacle] is just a lot of work and therefore maintaining focus across the organisation. It is something that takes a lot of sustained effort on a very detailed level.

“Can we go fast enough? There are tremendous opportunities and we need to move as fast as possible.”

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