Memorex 2012 Annual Report Download - page 5

PART I
Item 1. Business.
General
Imation Corp., a Delaware corporation, is a global scalable storage and data security company. Our portfolio includes
commercial and consumer data storage and security products as well as products designed to manage audio and video
information in the home. Imation reaches customers in more than 100 countries through a global distribution network. As used
herein, the terms “Imation,” “Company,” ‘‘we,” “us,” or “our” mean Imation Corp. and its subsidiaries unless the context
indicates otherwise.
In July 1996, Imation was established as a spin-off of the businesses which comprised substantially all of the data
storage and imaging groups of 3M Company. We subsequently divested all of the non-data storage businesses and focused
on data storage media, primarily as a manufacturer of magnetic tape products under the Imation brand, sold to commercial
end users through multiple distribution channels. We then expanded our business into other removable data storage media
such as optical media, flash and solid state drives and removable and external hard disk drives. In 2006, we acquired
substantially all of the assets of Memorex International Inc. (Memorex), followed by the acquisition of the TDK Recording
Media business (TDK Life on Record) in 2007. In 2007, we also acquired certain assets of Memcorp, Inc. and Memcorp Asia
Limited (together Memcorp) used in or relating to the sourcing and sale of consumer electronic products, principally under the
Memorex brand name. This acquisition established our foundation in audio and video consumer electronic products. In 2008,
we expanded our presence in consumer electronic products with the acquisition of certain assets of Xtreme Accessories, LLC
(XtremeMac), a maker of accessories for Apple consumer electronics products. In 2011, we launched our strategy to grow in
the secure and scalable storage markets and create a global leadership position in high-security data storage and device
management with three acquisitions: the secure data storage hardware business of IronKey Systems, Inc. (IronKey), the
portable security solutions and technologies of MXI Security from Memory Experts International, Inc., the Encryptx security
solutions for removable storage devices and removable storage media from BeCompliant Corporation. On December 31,
2012, we acquired Nexsan Corporation (Nexsan), a provider of disk-based storage systems. The acquisition included the
Nexsan technology platform and portfolio of disk-based and hybrid disk-and-solid-state storage systems. This acquisition
helps build a platform for long-term growth in high-growth data storage and security solutions markets.
Our global brand portfolio includes the Imation™ brand, the Memorex™ brand, the XtremeMac™ brand, IronKey™
brand and the Nexsan™ brand. Imation is also the exclusive licensee of the TDK Life on Record™ brand, one of the world’s
leading recording media brands.
Strategic Transformation
During the fourth quarter of 2012, we announced the acceleration of our strategic transformation, including the planned
realignment of our global business into two new business units, a cost reduction program and our increased focus on data
storage and security including exploring strategic options for our consumer electronics brands and businesses. As our
traditional media businesses decline, we are accelerating our business transformation to further focus on data storage and
data security. Further, on February 13, 2013, we announced our plans to divest our XtremeMac and Memorex consumer
electronics businesses. We will continue our TDK Life on Record business on a more selective basis.
The realignment of our global business into two new business units will better align the Company with our key
commercial and consumer channels. The two business units will consist of Tiered Storage and Security Solutions (TSS),
which will focus on small and medium business, and enterprise and government customers; and Consumer Storage and
Accessories (CSA), which will focus on retail channels. We continued to manage and evaluate results through December 31,
2012 under our historic regional segment presentation but will report segment information under the new structure beginning
with the first quarter of 2013. See Note 14 — Business Segment Information and Geographical Data in our Notes to
Consolidated Financial Statements for more information on our business segments.
In October 2012, the Board of Directors approved a restructuring program in order to realign our business structure and
reduce operating expenses by more than 25 percent over time. This restructuring program addresses product line
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