Lexmark 2009 Annual Report Download - page 43

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During 2009, laser and inkjet supplies revenue decreased 12% YTYas the Company experienced declines
in both laser and inkjet supplies. Laser and inkjet hardware revenue decreased 22% primarily due to
declines in laser and inkjet units.
During 2008, laser and inkjet supplies revenue decreased 4% YTY as growth in laser supplies was more
than offset by a decline in inkjet supplies. Laser and inkjet hardware revenue decreased 20% primarily due
to declines in laser and inkjet units.
During 2009, 2008 and 2007, one customer, Dell, accounted for $496 million or approximately 13%,
$596 million or approximately 13% and $717 million or approximately 14%, of the Company’s total
revenue, respectively. Sales to Dell are included in both PSSD and ISD.
Revenue by division:
(Dollars in Millions) 2009 2008 % Change 2008 2007 % Change
PSSD . . . . . . . . . . . . . . . . . $2,624.9 $2,981.6 (12)% $2,981.6 $2,999.2 (1)%
ISD . . . . . . . . . . . . . . . . . . . 1,255.0 1,546.8 (19)% 1,546.8 1,974.7 (22)%
Total revenue . . . . . . . . . . . . $3,879.9 $4,528.4 (14)% $4,528.4 $4,973.9 (9)%
PSSD
During 2009, revenue in PSSD decreased $357 million or 12% compared to 2008 due to a 19% decline in
laser hardware revenue as well as a decrease in laser supplies revenue. The lower laser hardware revenue
was due to lower unit volume and negative impact of currency, partially offset by a positive mix of
workgroup and MFP devices. Laser hardware unit shipments decreased approximately 21% YTY primarily
due to lower low-end mono-laser units, partially offset by unit growth in laser MFPs and single function
color devices. Laser hardware AUR, which reflects the changes in both pricing and mix, increased
approximately 4% YTY due to a positive product mix shift toward workgroup and MFP devices.
During 2008, revenue in PSSD decreased $18 million or 1% compared to 2007 due to a 9% decline in laser
hardware revenue, partially offset by growth in laser supplies revenue. The lower laser hardware revenue
was due to lower unit volume and aggressive pricing, partially offset by a positive currency impact and
positive mix of workgroup and MFP devices. Laser hardware unit shipments decreased approximately 7%
YTY primarily due to lower OEM units, partially offset by unit growth in laser MFPs. Laser hardware AUR,
which reflects the changes in both pricing and mix, decreased approximately 2% YTY due to aggressive
pricing, partially offset by a positive currency impact.
ISD
During 2009, revenue in ISD decreased $292 million or 19% compared to 2008 due to decreased inkjet
hardware and supplies revenue. Hardware revenue declined 28% YTY due to lower unit shipments and
negative net price impacts as well as negative foreign currency impacts, partially offset by an improvement
in mix toward higher end devices. Management believes supplies revenue declined YTY due to the impact
on end-user demand of broad global economic weakness and shrinkage in the installed base of inkjet
products and an associated decline in end-user demand for inkjet supplies. Inkjet hardware unit shipments
declined 37% YTY principally due to the Company’s decision to prioritize certain markets, segments and
customers and to reduce or eliminate others. Inkjet hardware AUR increased 13% YTY due to favorable
product mix shift.
During 2008, revenue in ISD decreased $428 million or 22% compared to 2007 due to decreased inkjet
hardware and supplies revenue. Hardware revenue declined 38% YTY due to lower unit shipments.
Management believes supplies revenue declined YTY due to shrinkage in the installed base of inkjet
products and an associated decline in end-user demand for inkjet supplies. Inkjet hardware unit shipments
declined 45% YTY principally due to the Company’s decision to prioritize certain markets, segments and
customers and to reduce or eliminate others. Units were also impacted by the weakening market and some
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