Lexmark 2013 Annual Report Download - page 44

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Revenue by Reportable Segment
(Dollars in millions) 2013 2012 % Change 2012 2011 % Change
ISS $ 3,444.0 $ 3,641.6 (5) % $ 3,641.6 $ 4,078.2 (11) %
Perceptive Software 223.6 156.0 43 % 156.0 94.8 65 %
Total revenue $ 3,667.6 $ 3,797.6 (3) % $ 3,797.6 $ 4,173.0 (9) %
Revenue by Product
(Dollars in millions) 2013 2012 % Change 2012 2011 % Change
Hardware (1) $ 762.8 $ 826.5 (8) % $ 826.5 $ 990.4 (17) %
Supplies (2) 2,484.4 2,640.1 (6) % 2,640.1 2,910.6 (9) %
Software and Other (3) 420.4 331.0 27 % 331.0 272.0 22 %
Total revenue $ 3,667.6 $ 3,797.6 (3) % $ 3,797.6 $ 4,173.0 (9) %
(1) Includes laser, inkjet, and dot matrix hardware and the associated features sold on a unit basis or through a managed service agreement
(2) Includes laser, inkjet, and dot matrix supplies and associated supplies services sold on a unit basis or through a managed service agreement
(3) Includes parts and service related to hardware maintenance and includes software licenses and the associated software maintenance services sold
on a unit basis or as a subscription service
ISS
For the year ended December 31, 2013, ISS revenue decreased 5% compared to prior year, of which approximately 6% was due to the
Company’s exit of inkjet technology. Currency had a negligible impact on ISS revenue when compared to prior year. Hardware
revenue declined 8% YTY and laser hardware revenue declined 2% YTY. Large workgroup laser hardware revenue, which
represented about 82% of total hardware revenue for the year ended December 31, 2013 remained flat YTY with a 3% decline in
average unit revenue (“AUR”), and a 3% increase in units. Small workgroup laser hardware revenue, which for the year ended
December 31, 2013 represented 17% of total hardware revenue, declined 11% YTY driven by a 15% decline in units. Small
workgroup AUR increased 4% YTY. Inkjet exit hardware revenue, which for the year ended December 31, 2013 represented less than
1% of total hardware revenue, declined 92% YTY as the Company exits inkjet technology. Supplies revenue for the year ended
December 31, 2013 was down 6% compared to the same period in 2012. Inkjet exit supplies revenue declined 32% YTY due to
ongoing and expected declines in the inkjet install base as the Company exits inkjet technology. Laser supplies revenue increased 2%
YTY.
For the year ended December 31, 2012, ISS revenue decreased 11% compared to prior year, of which approximately 6% was due to
the Company’s exit of inkjet technology and 3% was due to the negative impact of currency. Hardware revenue declined 17% YTY
and laser hardware revenue declined 10% YTY. Large workgroup laser hardware revenue, which represented about 76% of total
hardware revenue for the year ended December 31, 2012 was down 9% YTY reflecting a 9% decline in AUR, driven by a 3%
currency impact and discounting to sell prior generation laser product ahead of new product launch. Small workgroup laser hardware
revenue, which for the year ended December 31, 2012 represented 18% of total hardware revenue, declined 10% YTY driven by a 9%
decline in units. Small workgroup AUR declined 1%. Inkjet exit hardware revenue, which for the year ended December 31, 2012
represented 6% of total hardware revenue, declined 62% YTY as the Company exits inkjet technology. Supplies revenue for the year
ended December 31, 2012 was down 9% compared to the same period in 2011. Laser supplies revenue declined 5% YTY driven by a
3% negative currency impact. Inkjet exit supplies revenue declined 21% YTY due to ongoing and expected declines in the inkjet
install base as the Company exits inkjet technology.
During 2013 and 2012, no one customer accounted for more than 10% of the Company’s total revenues. In 2011, one customer, Dell,
accounted for $415 million or approximately 10% of the Company’s total revenue. Sales to Dell are included primarily in the ISS
reportable segment.
Perceptive Software
For the year ended December 31, 2013, software and other increased 27% YTY, driven by the YTY growth in Perceptive Software.
Revenue for Perceptive Software increased 43% compared to the same period in 2012. Excluding the impact of acquisition-related
adjustments, revenue for Perceptive Software for the year ended December 31, 2013 increased 48% compared to the same period in
2012. The YTY increases are due to the acquisitions of Acuo in December 2012, Twistage and AccessVia in March of 2013, Saperion
in September of 2013, and Pacsgear in October of 2013, as well as organic growth of 16% in Perceptive Software. The 2013 and 2012
financial results for the Perceptive Software reportable segment include only the activity occurring after the dates of acquisition.
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