Lexmark International, Inc. (NYSE: LXK) today announced record financial results for its fourth quarter and full year ended Dec. 31, 2004. Fourth quarter revenue was $1.544 billion, an increase of 13 per cent compared to $1.370 billion last year. Laser and inkjet printer revenue increased 16 per cent year over year and revenue from laser and inkjet supplies was up 13 per cent. Diluted net earnings per share for the quarter were $1.18, up 12 per cent compared to $1.05 in the same quarter last year.
We are pleased to deliver record revenue and earnings that exceeded our expectations for the fourth quarter, said Paul J. Curlander, Lexmark chairman and chief executive officer. This was a very good quarter for Lexmark. We achieved double-digit revenue growth in both hardware and supplies. Most importantly, we continued disciplined investment in our core strategic development and marketing initiatives to drive future growth, and delivered a 28 per cent year-to-year increase in EPS for the full year.
Gross profit margin was 32.0 per cent for the quarter versus 31.9 per cent a year ago. An increase in the mix of printers was offset by improved product margins. Operating expenses, which included an approximate $15 million increase in advertising, were $297 million compared with $249 million in the prior year. Operating income was a record $197 million, up from $188 million last year.
Net cash provided by operating activities was $284 million in the fourth quarter. Capital expenditures for the quarter were $79 million. Lexmark repurchased 1,620,000 shares of its common stock during the quarter for $139 million. The companys remaining share repurchase authorization was approximately $901 million at year-end.
New multifunction products are fast, flexible, easy to use
Earlier this month, Lexmark announced three new powerful multifunction products that give businesses the ability to move documents seamlessly from paper to digital formats. The Lexmark X634e and Lexmark X634dte with estimated street prices of $2,899 and $3,699 respectively, deliver up to 45 page per minute performance and an easy-to-use color touch-screen display at a fraction of the cost of larger departmental devices. The compact Lexmark X632s with print speeds of up to 40 pages per minute is perfect for small enterprise workgroups and is affordably priced at $1,999.
Full-year financial results
Revenue for the 12 months ended Dec. 31, 2004 was $5.314 billion, an increase of 12 per cent versus $4.755 billion in the same period of 2003. Gross profit margin was 33.7 per cent, up 1.2 points from the prior year. Operating income was $732 million versus $594 million a year earlier, an increase of 23 per cent. Net earnings per share on a diluted basis increased 28 per cent in 2004 to $4.28. Net cash provided by operating activities for the year was $775 million. Full-year capital expenditures were $198 million. The company repurchased 3,220,000 shares in 2004 for $281 million.
In the first quarter of 2005, the company expects a year-over-year revenue growth rate of mid- to high-single digits and earnings per share of $0.95 to $1.05. This compares to earnings per share of $0.91 in the same quarter a year ago. The company believes that the strength of its product line and its supplies-driven business model will keep it well positioned for continued growth, however uncertainty in the economy and the potential for aggressive price competition continue.