Just days after acknowledging that it is seeking “strategic alternatives” including a possible sale, Lexington-based technology company Lexmark International Inc. reported a negative third quarter result and cut its forecast.
The company reported a loss of $15.2 million, or about 6 percent year over year. Speaking to shareholders Tuesday morning, Lexmark CEO Paul Rooke and CFO David Reeder pointed to several factors, including more competition, continuing currency woes in Europe, supply chain restructuring and major acquisitions.
Officials also said it expected revenue for the forth quarter to decline 4 to 6 percent, with guidance for the full year now seeing revenue fall 3 to 4 percent.
Rooke and Reeder highlighted brighter spots, including in the company’s management print services and subscription contracts. Indeed despite the negative result for the quarter, Rooke said the board of directors believes the company is undervalued.
That belief has lead Lexmark to consider way to “unlock that intrinsic value,” Rooke said.
To that end, Lexmark said it is working with Goldman, Sachs & Co., Ernst & Young LLP and the law firm Wachtell, Lipton, Rosen & Katz to explore options.
Rooke reiterated on Tuesday morning’s call that Lexmark will not be commenting on the process until it concludes or “the Board approves a specific transaction.”
Tuesday’s earnings announcement was the second consecutive tough result for Lexmark. In July, Lexmark said it planned to cut 500 jobs worldwide after reporting lower earnings for the second quarter. For the quarter, the company took in $891 million, down from $894 million during the same period in 2014. Earnings per share also fell, to 97 cents from 99 cents.
At the time, Rooke said the restructuring — including the job losses — was a result of recent high-profile acquisitions. Chief among these were the recent purchase of two software companies: Sweden-based ReadSoft and California-based Kofax Ltd.
The Kofax deal in particular looked likely to produce job overlap. That deal was valued at $1 billion and essentially doubled the size of Lexmark’s Enterprise Software division.
Rooke said then that the cuts would come from a variety of disciplines, and that it would affect its worldwide workforce of 12,000 to 13,000 workers.
On Tuesday, Reeder said the company had incurred some costs from “accelerating the integration” of the acquired companies but said that process was producing benefits. He also said the company would continue to deliver quarterly dividends.