Lexmark 2009 Annual Report Download - page 41

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• The ISD strategy is to build a profitable, growing and sustainable inkjet business derived from a
more productive and higher page generating installed base of products and solutions that serve
SOHO and business users.
Lexmark continues to take actions to improve its cost and expense structure including continuing to
implement restructuring activities of its business to lower its cost and better allow it to fund these strategic
initiatives. See “Restructuring and Related Charges and Project Costs” that follows for further discussion.
Lexmark continues to maintain a strong financial position with good cash generation and a solid balance
sheet, which positions it to prudently invest in the future of the business and successfully compete even
during challenging times.
2009 Business Factors
The weakness of the global economy impacted revenue and operating income in both of the Company’s
segments during 2009. Lexmark continued to take actions to reduce cost and expenses worldwide and
improve the efficiency of the Company’s manufacturing operations and, as a result, the Company
announced additional restructuring actions in January, April and October of 2009. See “Restructuring
and Related Charges and Project Costs” that follows for further discussion.
PSSD
During 2009, Lexmark continued its investments in PSSD through new products and technology. With the
introduction of new laser products that began in the fall of 2008 and continued through the end of 2009, the
Company has announced products that represent the most extensive series of laser product introductions
in the Company’s history. The new product introductions have significantly strengthened the breadth and
depth of the Company’s monochrome laser line, color laser line and laser MFPs.
ISD
The Company undertook a significant shift in ISD strategy that began in 2007 and continued through 2009
that has aggressively shifted the Company’s ISD focus to geographic regions, product segments and
customers that generate higher page usage. The strategy shift and related initiatives have yielded the
following for the Company’s ISD segment since 2007:
• The introduction of new products such as Lexmark’s Professional Series, including the introduction
in September 2009 of inkjet AIOs (including new Web-connected touch screen AIOs) targeted for
small and medium businesses;
• An increasing amount of industry recognition and awards for its inkjet products; and
• An improvement in the Company’s retail presence in U.S. Office Super Stores.
By strengthening the Company’s focus on the sales of higher end, higher page generating inkjet devices,
the longer term ISD objective is to ultimately stabilize and grow supplies revenue based on a smaller
installed base of higher page generating devices.
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