Memorex 2014 Annual Report Download

Download and view the complete annual report

Please find the complete 2014 Memorex annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 114

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114

2014
STORE
PROTECT
CONNECT
YOUR
DIGITAL
WORLD
2014 IMATION ANNUAL REPORT AND FORM 10-K
ANNU AL REPORT
& FORM 10-K
2014
ANNUAL REPORT
& FORM 10-K
IMATION
STORAGE
SYSTEMS
NEXSAN
DATA STORAGE
SYSTEMS
IRONKEY
MOBILE
SYSTEMS
CONSUMER
PRODUCTS

Table of contents

  • Page 1
    2014 IMATION ANNUAL REPORT AND FORM 10-K STORE PROTECT CONNECT YOUR DIGITAL WORLD 2014 2014 ANNUAL REPORT ANNU AL REPORT & 10-K & FORM FORM 10-K NEXSAN DATA STORAGE SYSTEMS IMATION STORAGE SYSTEMS IRONKEY MOBILE SYSTEMS CONSUMER PRODUCTS

  • Page 2
    ... the data center by addressing mixed-application workloads cost effectively and in a scalable way. The NST portfolio, combined with the Assureon® line of secure archive solutions and the E-SeriesTM disk arrays, meet the data storage needs of varied vertical markets, such as media and entertainment...

  • Page 3
    ... well regarded brands such as Memorex® and TDK Life on Record, as well as the Imation brand. We have the leading share, but recordable optical media is a declining business. Imation's Audio and Accessories category posted double-digit sales gains in 2014, fueled by higher margin products that have...

  • Page 4
    ...and retail storage solutions, audio products and accessories sold under the Imation, Memorex and TDK Life on Record brands. The company has a 60-year legacy of technology leadership, and maintains the number one global market share in recordable optical media and magnetic tape cartridges. Imation is...

  • Page 5
    ...defined in Rule 12b-2 of the Exchange Act). Yes Aggregate market value of voting and non-voting stock of the registrant held by non-affiliates of the registrant, based on the closing price of $3.44 as reported on the New York Stock Exchange on June 30, 2014, was $138.9 million. The number of shares...

  • Page 6
    ... AND SUPPLEMENTARY DATA CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE CONTROLS AND PROCEDURES OTHER INFORMATION PART III ITEM 10 ITEM 11 ITEM 12 ITEM 13 ITEM 14 DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE EXECUTIVE COMPENSATION SECURITY OWNERSHIP OF...

  • Page 7
    PART I Item 1. Business. General Imation Corp., a Delaware Corporation, is a global data storage and security company. With a 60-year legacy of technology leadership, the Company's mission is to help organizations store, protect and connect their digital world. The Company operates in two focused ...

  • Page 8
    ...Consumer Storage Media Our Consumer Storage Media product line includes optical products, USB flash drives, flash cards and external hard disk drives. Imation's optical products consist of DVDs, CDs and Blu-rayâ„¢ recordable media. We have the leading global market share for recordable optical media...

  • Page 9
    ... tape media, recordable CDs, DVDs and Blu-ray discs, flash products and hard disk drives. The Memorex brand includes recordable CDs, DVDs and Blu-ray discs, optical drives and optical storage accessories. Memorex brand products are sold primarily in North America. We sold consumer electronics...

  • Page 10
    ... the markets for magnetic tape products as well as for optical media products. Customers, Marketing and Distribution Our products are sold to businesses and individual consumers. No one customer accounted for 10 percent or more of our revenue in 2014, 2013 or 2012. We market Imation products through...

  • Page 11
    ... the leading overall share for recordable optical media globally. In standard flash media, Imation's primary competitors include Kingston, SanDisk, Lexar and PNY. In standard external and removable hard drives, our major competitors are Western Digital and Seagate. The traditional flash media market...

  • Page 12
    ... came from sales outside the United States, primarily through subsidiaries, sales offices, distributors, VARs and relationships with OEMs throughout Europe, Asia, Latin America and Canada. We do not own any manufacturing facilities. See Note 14 - Business Segment Information and Geographic Data in...

  • Page 13
    ...provider of data storage products and a leader in hard disk drives and Storage Solutions. From 2004 to 2006, he served as Director of RAID solutions and external storage for Adaptec Inc. From 2000 to 2004 and following Compaq's acquisition by Hewlett-Packard Company, a computer software and hardware...

  • Page 14
    ... be affected. From time to time we have initiated restructuring programs related to our business strategy to, among other things, reduce operating expenses and address product line rationalization and infrastructure. We may not be able to realize the expected benefits and cost savings if we do not...

  • Page 15
    ..., personnel, technologies, products and information systems of acquired companies. We may experience delays in the timing and successful integration of acquired technologies and product development, unanticipated costs and expenditures, changing relationships with customers, suppliers and strategic...

  • Page 16
    ...provide appropriate levels of security to adequately store and protect our customers' data. Many of our secure storage products include software and hardware security such as user authentication, data encryption, and portable digital identities which are designed to prevent digital security breaches...

  • Page 17
    ... products could change as a result of our acquisitions and divestitures. Significant changes in discount rates, rates of return on pension assets, mortality tables and other factors could affect our future earnings, equity and pension funding requirements. Pension obligations and related costs are...

  • Page 18
    ... or indirectly affect the production, distribution, packaging, cost of raw materials and fuel could impact our business and financial results. We rely on our aging information systems to conduct our business, and failure to protect these systems against security breaches could adversely affect...

  • Page 19
    ... against the Company and the members of its Board of Directors. Plaintiffs contend that the defendants paid excessive compensation to the directors. They seek damages for breaches of fiduciary duties, waste of corporate assets and unjust enrichment. The market price of our common stock is volatile...

  • Page 20
    ... licensing authority for a pool of patents relating to Blu-ray discs, and four members of One-Blue, Koninklijke Philips N.V., Panasonic Corporation, Pioneer Corporation and Sony Corporation. The plaintiffs allege that Imation's sales of certain Blu-ray discs infringe six patents and seek unspecified...

  • Page 21
    .... They also seek corporate governance reforms related to the Company's compensation practices. The Company has not yet responded to the complaint and no trial date has been set. Copyright Levies In many European Union (EU) member countries, the sale of recordable optical media is subject to...

  • Page 22
    ...of levies on consumer channel sales in Italy. However, such amounts could be subject to challenge in court and there is no certainty that our estimates would be upheld and supported. Additionally, due to the expected continued decline in our sales associated with optical media products, we cannot be...

  • Page 23
    ..., no unregistered securities were sold in 2014 or 2013. Market for our Common Stock The following table sets forth, for the periods indicated, the intraday high and low sales prices of common stock as reported on the New York Stock Exchange. 2014 Sales Prices High Low 2013 Sales Prices High Low...

  • Page 24
    ... our Board of Directors authorized a share repurchase program of 5 million shares of common stock. The authorization has no expiration date. See Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters for additional information regarding the Company...

  • Page 25
    ...2011 12/31/2012 12/31/2013 12/31/2014 Imation Corp. S&P Midcap 400 Index S&P Small Cap 600 ...43.46 199.88 208.96 226.61 The stock performance graph shall not be deemed soliciting material or...be incorporated by reference into any past or future filing under the Securities Act or the Exchange Act, ...

  • Page 26
    Item 6. Selected Financial Data.* 2014 2013 2012 2011 2010 (Dollars in millions, except per share data) Statement of Operations Data... shareholders' equity Other Information: Current ratio Days sales outstanding(1) Days of inventory supply(1) Capital expenditures Number of employees _____ $ 729.5 ...

  • Page 27
    ... four major product categories: Storage and Security Solutions and Commercial Storage Media in our TSS business segment and Consumer Storage Media and Audio and Accessories in our CSA segment. Our brands include Imationâ„¢, Nexsanâ„¢, IronKeyâ„¢, TDK Life on Recordâ„¢, TREKâ„¢, and Memorexâ„¢. The...

  • Page 28
    ...Consumer Storage Media includes optical products, USB flash drives, flash cards and external hard disk drives. Our optical products consist of DVDs, CDs and Blu-rayâ„¢ recordable media. We have the leading global market share for recordable optical media; however, the overall market for CDs and DVDs...

  • Page 29
    ...premises centralized secure device management solutions. The Imation Mobile Security family, through the IronKey product line, delivers innovative secure data solutions for corporate employees who need to protect information on-the-go and targets organizations that require highly secure solutions in...

  • Page 30
    ...our Consumer Storage Media products in our CSA segment from 2013. Revenue in our TSS segment decreased 12.2 percent in 2014 compared with 2013 due to declines in Commercial Storage Media products due to revenue declines in tape media products. We believe we are holding our market share in tape media...

  • Page 31
    ...order to operate as a smaller company with more focused product lines and streamlined core operational processes. Incremental investment in Storage and Security Solutions partially offset these reductions in 2014 which included hiring sales resources, introducing new products and promoting the brand...

  • Page 32
    ... value of this reporting unit are heavily dependent on achieving significant revenue growth of our data solution products developed for our IronKey Workspaces for Microsoft Windows To Go. This is a new market in which we do not presently generate significant revenue and for which limited external...

  • Page 33
    ...rate reflected the relative risk of achieving cash flows as well as any other specific risks or factors related to the Storage Solutions reporting unit. 2012 Goodwill Analysis We acquired the assets of MXI Security from Memory Experts International Inc., and the secure data storage hardware business...

  • Page 34
    ... of 2014, we concluded that we did not have an impairment of our intangible assets in the Storage Solutions asset group at those times. As a part of our annual goodwill impairment test for our Storage Solutions and Mobile Security reporting units, we also tested for the impairment of long-lived...

  • Page 35
    ...are included in cost of goods sold in our Consolidated Statements of Operations. During the year ended December 31, 2013, severance expense of $1.6 million related to employees directly associated with XtremeMac and Memorex consumer electronics businesses was recorded in discontinued operations. See...

  • Page 36
    ...employee costs and consulting fees. During the year ended December 31, 2013 a gain of $9.8 million related to the sale of our Camarillo, California manufacturing facility was recorded. Operating Loss From Continuing Operations Years Ended December 31, 2014 2013 (In millions) 2012 Percent Change 2014...

  • Page 37
    ...DVDs, CDs and Blu-ray disc recordable media as well as flash media. Audio and Accessories include primarily headphones, audio electronics and accessories. We have two major product categories under our TSS segment: Commercial Storage Media and Storage and Security Solutions. Commercial Storage Media...

  • Page 38
    ...Audio and Accessories products in consumer electronic accessories and TDK Life on Record consumer electronic products partially offset the decrease in revenue from Consumer Storage Media. Tiered Storage and Security Solutions (TSS) Years Ended December 31, 2014 2013 (In millions) 2012 Percent Change...

  • Page 39
    Commercial Storage Media business, and an increased investment in R&D and SG&A in our Storage and Security Solutions businesses driven by hiring sales and engineering resources and value-added resellers, introducing new products and promoting the brand globally. The increase in TSS segment revenue ...

  • Page 40
    ... 2014, we received $3.4 million from the sales of our XtremeMac and Memorex consumer electronic business. Cash used in investing activities also included $5.6 million of capital expenditures. In 2013, we received $10.1 million for land classified as held for sale and $0.9 million related to the sale...

  • Page 41
    ...On May, 2, 2012, our Board of Directors authorized a share repurchase program that allowed for the repurchase of 5.0 million shares of common stock. The Company's previous authorization, which had 1.2 million shares remaining for purchase, was canceled with the new authorization. Since the inception...

  • Page 42
    ... subsidiaries of Imation Corp. (the Guarantors) and are secured by a first priority lien (subject to customary exceptions) on the real property comprising Imation Corp.'s corporate headquarters and all of the personal property of Imation Corp., its subsidiary Imation Enterprises Corp., which is...

  • Page 43
    ... above does not include payments for non-contributory defined benefit pension plans. It is our general practice, at a minimum, to fund amounts sufficient to meet the requirements set forth in applicable benefits laws and local tax laws. From time to time, we contribute additional amounts, as we deem...

  • Page 44
    ...would affect income tax expense and our related effective tax rate. Our U.S. federal income tax returns for 2011 through 2013 are subject to examination by the Internal Revenue Service (IRS). With few exceptions, we are no longer subject to examination by foreign tax jurisdictions or state and local...

  • Page 45
    ... ECJ ruling made clear that copyright holders are only entitled to fair compensation payments (funded by levy payments made by importers of applicable products, including the Company) when sales of optical media are made to natural persons presumed to be making private copies. Within this disclosure...

  • Page 46
    ... security products to withstand cyber-attacks; loss of a major customer, partner, or reseller; changes in European law or practice related to the imposition or collectability of optical levies; the seasonality and volatility of the markets in which we operate; significant changes in discount rates...

  • Page 47
    ... our review of strategic alternatives; the affect of a potential proxy contest for the election of directors at our annual meeting and other activist shareholder activities; the volatility of our stock price due to our results or market trends, as well as various factors set forth from time to time...

  • Page 48
    Item 8. Financial Statements and Supplementary Data. REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Board of Directors and Shareholders of Imation Corp.: In our opinion, the accompanying consolidated balance sheets and the related consolidated statement of operations, of ...

  • Page 49
    IMATION CORP. CONSOLIDATED STATEMENTS OF OPERATIONS Years Ended December 31, 2014 2013 2012 (In millions, except per share amounts) Net revenue Cost of goods sold Gross profit Operating expenses: Selling, general and administrative Research and development Intangible impairments Litigation ...

  • Page 50
    ..., net of tax: Liability adjustments for defined benefit pension plans Reclassification of adjustments for defined benefit plans recorded in net loss Total net pension adjustments Unrealized foreign currency translation losses Total other comprehensive income (loss), net of tax Comprehensive loss...

  • Page 51
    IMATION CORP. CONSOLIDATED BALANCE SHEETS As of December 31, 2014 2013 (In millions, except per share amounts) ASSETS Current assets Cash...stock, $.01 par value, authorized 25 million shares, none issued and outstanding Common stock, $.01 par value, authorized 100 million shares, 42.9 million issued...

  • Page 52
    ...Purchase of treasury stock Restricted stock grants and other 401(k) matching contribution Stock-based compensation related to options Net change in cumulative translation adjustment Pension adjustments, net of tax Cash flow hedging, net of tax Issuance of treasury stock for acquisition Balance as of...

  • Page 53
    ... activities: Depreciation and amortization 21.7 Stock-based compensation 5.3 Deferred income taxes and valuation allowance 3.2 Goodwill, intangible and other asset impairments 37.8 Inventory write-offs 4.6 Pension settlement 0.2 Changes in fair value of contingent consideration - Gain on sale...

  • Page 54
    ... Imation Corp. and its subsidiaries and consolidated entities unless the context indicates otherwise. Imation is a global data storage and data security company. With a 60-year history of technology leadership, the Company's mission is to help organizations store, protect, and connect their digital...

  • Page 55
    ... asset. We record all assets and liabilities acquired in purchase acquisitions, including intangibles, at estimated fair value. The initial recognition of intangible assets, the determination of useful lives and, if necessary, subsequent impairment analyses require management to make subjective...

  • Page 56
    ...sell a wide range of data storage, mobile security and consumer storage solutions audio products and accessories. Net revenue consists primarily of data storage, mobile security, magnetic, optical, flash media, consumer electronics and accessories sales. We recognize revenue when persuasive evidence...

  • Page 57
    ...programs that we offer vary across our businesses as we serve numerous markets. The most common incentives relate to amounts paid or credited to customers that are volume-based and rebates to support promotional activities. Concentrations of Credit Risk. We sell a wide range of products and services...

  • Page 58
    ... average market price of the Company's common stock for the period. See Note 3 - (Loss) Earnings per Common Share for our calculation of weighted average basic and diluted shares outstanding. Recent Accounting Pronouncements In April 2014, the Financial Accounting Standards Board (FASB) issued new...

  • Page 59
    ... of disk-based and hybrid disk-and-solid-state storage systems with existing customers worldwide. This acquisition was made for the intention to significantly accelerate our growth in the small and medium-sized business and distributed enterprise storage markets. The purchase price consisted...

  • Page 60
    ..., we recorded an adjustment to the purchase price related to working capital in the amount of $1.6 million. This adjustment resulted in a decrease to goodwill and a cash receipt for this amount. Goodwill associated with the acquisition of Nexsan is included in our Storage Solutions reporting unit...

  • Page 61
    ...by Imation. Discontinued Operations On February 13, 2013, we announced our plans to divest our XtremeMac and Memorex consumer electronics businesses. The consumer storage business under the Memorex and TDK Life on Record brands and the consumer electronics business under the TDK Life on Record brand...

  • Page 62
    ... expense that was recorded relating to these planned divestitures. The key components of the results of discontinued operations were as follows: Years Ended December 31, 2014 2013 (In millions) 2012 Net revenue (Loss) gain on sale of discontinued businesses, net of income taxes Loss from operations...

  • Page 63
    ... determined our asset groups to be at the level of each brand as this is the lowest level for which identifiable cash flows are available and are largely independent of the cash flows of other assets. Each reporting period, we review our long-lived assets and associated asset groups to determine if...

  • Page 64
    ...Storage Solutions asset group at those times. 2013 Intangible Asset Analysis As a part of our annual goodwill impairment test for our Storage Solutions and Mobile Security reporting units (as further discussed below), we also tested for impairment the long-lived...in service as of December 31, 2014, ...

  • Page 65
    ... See Note 4 - Acquisitions for information on goodwill acquired in the Nexsan acquisition during 2012. We test the carrying amount of a reporting unit's goodwill for impairment on an annual basis during the fourth quarter of each year or if an event occurs or circumstances change that would warrant...

  • Page 66
    ... service periods. 2012 Global Process Improvement Restructuring Program On October 2012, the Board of Directors approved our GPI Program in order to realign our business structure and significantly reduce operating expenses over time. This restructuring program addressed product line rationalization...

  • Page 67
    ... and $2.3 million related to the rationalization of certain product lines, for the years ended December 31, 2014, 2013 and 2012, respectively, which are included in cost of goods sold in our Consolidated Statements of Operations. Since the inception of the GPI Program, we have recorded a total of...

  • Page 68
    ... of $1.6 million related to employees directly associated with the XtremeMac and Memorex consumer electronics businesses was recorded in discontinued operations. See Note 4 Acquisitions and Divestitures for more information on our discontinued operations. Other Certain amounts recorded in Other are...

  • Page 69
    .... Awards issued to directors under this plan become fully exercisable on the first anniversary of the grant date. Stock options granted under these plans are not incentive stock options. Exercise prices of awards issued under these plans are equal to the fair value of the Company's stock on the...

  • Page 70
    ... and 113,125, respectively, were performance-based options that vest based on the Company's performance against Earnings Before Interest Taxes Depreciation and Amortization (EBITDA) targets for the subsequent three year period. Our 2014 performance was met and, accordingly, some of the options for...

  • Page 71
    ... vest based on the Company's cost reduction efforts and performance against EBITDA targets for the subsequent three year period. Our 2014 performance was met and, accordingly, some of the restricted stock for 2014 vested and will be issued subsequent to December 31, 2014. Our 2013 performance was...

  • Page 72
    ... percent for 2014. In accordance with the annual update process, the interest credit rate will be 3.04 percent for 2015. In connection with actions taken under our announced restructuring programs, the number of employees accumulating benefits under our pension plan in the United States continues to...

  • Page 73
    ... and plan assets, and the funded status of the defined benefit pension plans were as follows: United States As of December 31, 2014 2013 (In millions) 2014 International As of December 31, 2013 Change in benefit obligation Benefit obligation, beginning of year Service cost Interest cost Actuarial...

  • Page 74
    ... $ 25.7 25.7 19.7 Components of net periodic pension cost included the following: United States Years Ended December 31, 2014 2013 2012 (In millions) 2014 International Years Ended December 31, 2013 2012 Service cost Interest cost Expected return on plan assets Amortization of net actuarial loss...

  • Page 75
    ... by $0.3 million. The plans' asset allocations by asset category were as follows: United States As of December 31, 2014 2013 2014 International As of December 31, 2013 Short-term investments Fixed income securities Equity securities Absolute return strategy equity funds Insurance contracts Total...

  • Page 76
    .... Investments in common stock are valued at the closing price reported on major markets on which the individual securities are traded. Accordingly, these investments are classified as Level 1 financial instruments. Comingled trust funds. These assets are valued using the NAV of shares as of December...

  • Page 77
    ...fund Fixed income securities Absolute return strategy funds Common stocks Commingled trust funds Total $ 0.4 $ 0.4 $ - $ - $ 14.6 10.8 15.5 13.2 7.3 5.7 67.5 $ - 7.3 15.5 - 7.3 - 30.5 $ 14.6 3.5 - 13.2 - 5.7 37.0 $ International December 31, 2014 Quoted Prices in Active Markets...

  • Page 78
    ...fund Fixed income securities Absolute return strategy funds Common stocks Commingled trust funds Total $ 0.5 $ 0.5 $ - $ - $ 16.1 11.1 13.0 12.8 8.3 9.2 71.0 $ - 7.5 13.0 - 8.3 - 29.3 $ 16.1 3.6 - 12.8 - 9.2 41.7 $ International December 31, 2013 Quoted Prices in Active Markets...

  • Page 79
    ... December 31, 2014 2013 (In millions) 2012 Tax at statutory U.S. tax rate State income taxes, net of federal benefit Net effect of international operations Settlement of UK pension plan Valuation allowances Tax on unremitted earnings of foreign subsidiaries U.S. tax on foreign earnings Stock-based...

  • Page 80
    In 2014, 2013 and 2012 the net cash paid for income taxes, relating to both continuing and discontinued operations, was $4.7 million, $4.6 million and $4.4 million, respectively. Tax laws require certain items to be included in our tax returns at different times than the items are reflected in our ...

  • Page 81
    ...liability, and the remaining $1.6 million liability is related to foreign tax withholding, assuming such repatriation were to occur. Our income tax returns are subject to review by various U.S. and foreign taxing authorities. As such, we record accruals for items that we believe may be challenged by...

  • Page 82
    ... income tax expense and our related effective tax rate. Our federal income tax returns for 2011 through 2013 are subject to examination by the Internal Revenue Service (IRS). We currently have foreign tax audits underway in various jurisdictions. Based on available information, the uncertain tax...

  • Page 83
    ... applicable laws; and limitations regarding additional liens, indebtedness, certain acquisitions, investments and dispositions of assets. The Amended Credit Agreement contains a conditional financial covenant that requires Imation Corp. to have a Consolidated Fixed Charge Coverage Ratio (as defined...

  • Page 84
    ... that are Measured at Fair Value on a Nonrecurring Basis The Company's non-financial assets such as goodwill, intangible assets and property, plant and equipment are recorded at fair value when an impairment is recognized or at the time acquired in a business combination. As discussed in Note...

  • Page 85
    ...period operations. The following table sets forth our cash flow hedges which are measured at fair value on a recurring basis. December 31, 2014 Quoted Prices in Active Markets for Identical Assets (Level 1) Quoted Prices in Active Markets for Identical Assets (Level 1) December 31, 2013 Significant...

  • Page 86
    ... 2014 was acquired at an average price of $15.31 per share. The following is a summary of treasury share activity: Treasury Shares Balance as of December 31, 2011 Purchases Exercise of stock options Restricted stock grants and other 401(k) matching contribution Shares issued for acquisition Balance...

  • Page 87
    ...DVDs, CDs and Blu-ray disc recordable media as well as flash media. Audio and Accessories include primarily headphones, audio electronics and accessories. We have two major product categories under our TSS segment: Commercial Storage Media and Storage and Security Solutions. Commercial Storage Media...

  • Page 88
    ...periods presented. The consumer storage business under the Memorex and TDK Life on Record brands and the consumer electronics business under the TDK Life on Record brand are being retained. See Note 4 - Acquisitions and Divestitures for further information. Net revenue and operating income (loss) by...

  • Page 89
    ... licensing authority for a pool of patents relating to Blu-ray discs, and four members of One-Blue, Koninklijke Philips N.V., Panasonic Corporation, Pioneer Corporation and Sony Corporation. The plaintiffs allege that Imation's sales of certain Blu-ray discs infringe six patents and seek unspecified...

  • Page 90
    ...(EU) member countries, the sale of recordable optical media is subject to a private copyright levy. The levies are intended to compensate copyright holders with "fair compensation" for the harm caused by private copies made by natural persons of protected works under the European Copyright Directive...

  • Page 91
    ... ECJ ruling made clear that copyright holders are only entitled to fair compensation payments (funded by levy payments made by importers of applicable products, including the Company) when sales of optical media are made to natural persons presumed to be making private copies. Within this disclosure...

  • Page 92
    ...the arrangement to acquire the rights to the TDK Life on Record brand under an exclusive longterm license from TDK Corporation (TDK), TDK owned approximately 18 percent of our shares as of December 31, 2014 and 2013. In connection with this arrangement, we entered into a supply agreement, dated July...

  • Page 93
    ... purchase a limited number of LTO Tape media and Blu-ray removable recording media and accessory products for resale in the aggregate amounts of approximately $3 million, $28 million and $38 million, respectively, from TDK or its affiliates. The Supply Agreement was terminated on March 31, 2014. We...

  • Page 94
    ... continuing operations Loss from discontinued operations Net (loss) income (Loss) earnings per common share, continuing operations: Basic Diluted Loss per common share, discontinued operations: Basic Diluted (Loss) earnings per common share, net income: Basic Diluted 2014 Net revenue Gross profit...

  • Page 95
    ... Executive Officer, Imation Corp. See Executive Officers of the Registrant in Item 1. Business herein for further information. L. White Matthews, III, retired Executive Vice President and Chief Financial Officer, Ecolab Inc. (a developer and marketer of cleaning and sanitizing products and services...

  • Page 96
    ... Analysis," "Compensation Committee Report," "Compensation of Named Executive Officers" and "Board of Directors - Compensation of Directors" are incorporated by reference into this Form 10-K. Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters. The...

  • Page 97
    ...among Hanny Holding Limited, Hanny Magnetics (B.V.I.) Limited, Investor Capital Management Asia Limited, Investor Capital Partners - Asia Fund L.P, Global Media Limited, Memorex Holdings Limited and Imation Corp. (incorporated by reference to Exhibit 2.2 to Imation's Form 8-K Current Report filed on...

  • Page 98
    ..., 2002) 10.10* Imation Corp. 2000 Stock Incentive Plan, as amended (incorporated by reference to Exhibit 10.7 to Annual Report on Form 10-K for the year ended December 31, 2003) 10.11* Form of 2000 Stock Incentive Plan Restricted Stock Award Agreement - Executive Officers (incorporated by reference...

  • Page 99
    ... 30, 2004) 10.20* Imation Corp. 2005 Stock Incentive Plan, as amended November 9, 2005 (incorporated by reference to Exhibit 10.1 to Imation's Form 8-K Current Report filed on November 16, 2005) 10.21* Form of 2005 Stock Incentive Plan Stock Option Agreement - Employees (incorporated by reference to...

  • Page 100
    Number Description of Exhibit 10.39* Imation Corp. 2008 Stock Incentive Plan (incorporated by reference to Exhibit 10.1 to Imation's Form 8-K Current Report filed on May 12, 2008) 10.40* Form of 2008 Stock Incentive Plan Non-Qualified Stock Option Agreement for Executive Officers (incorporated by ...

  • Page 101
    ...Sarbanes-Oxley Act of 2002 101 The following financial information from Imation Corp.'s Annual Report on Form 10-K for the year ended December 31, 2014, filed with the SEC on March 16, 2015, formatted in Extensible Business Reporting Language (XBRL): (i) the Consolidated Statements of Operations for...

  • Page 102
    ...on its behalf by the undersigned, thereunto duly authorized. Imation Corp. By: /s/ MARK E. LUCAS Mark E. Lucas President and Chief Executive Officer Date: March 16, 2015 Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on...

  • Page 103
    ... Matthews, III * David B. Stevens Vice President, Chief Financial Officer (Principal Financial and Accounting Officer) March 16, 2015 Director March 16, 2015 Director March 16, 2015 Director March 16, 2015 Director March 16, 2015 Director March 16, 2015 *By: /s/ JOHN P. BREEDLOVE John...

  • Page 104
    ...the Sarbanes-Oxley Act of 2002 The following financial information from Imation Corp.'s Annual Report on Form 10-K for the year ended December 31, 2014, filed with the SEC on March 16, 2015, formatted in Extensible Business Reporting Language (XBRL): (i) the Consolidated Statements of Operations for...

  • Page 105
    ... Corp...Imation Latin America Corp ...Imation do Brasil Ltda ...Imation Chile S.A...Imation Latin America Marketing S.A...Imation Mercosur Trading S.A...Imation Funding Corp ...Memorex Products Inc...IMN Data Storage LLC ...Imation Holding BV ...Imation Europe BV ...TME GmbH ...Imation U.K. Limited...

  • Page 106
    ... Statement on Form S-3 (Registration No. 333-186061) of Imation Corp. of our report dated March 16, 2015, relating to the financial statements and the effectiveness of internal control over financial reporting, which appears in this Form 10-K. /s/ PricewaterhouseCoopers LLP PricewaterhouseCoopers...

  • Page 107
    ..., in any and all capacities, to sign the 2014 Annual Report on Form 10-K of Imation Corp., and any and all amendments thereto, and to file the same, with all exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in...

  • Page 108
    ...-Oxley Act of 2002 I, Mark E. Lucas, certify that: 1. I have reviewed this annual report on Form 10-K of Imation Corp.; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of...

  • Page 109
    ...-Oxley Act of 2002 I, Scott J. Robinson, certify that: 1. I have reviewed this annual report on Form 10-K of Imation Corp.; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light...

  • Page 110
    ... Act of 2002 In connection with the Annual Report of Imation Corp. (the "Company") on Form 10-K for the period ended December 31, 2014, as filed with the Securities and Exchange Commission (the "Report"), I, Mark E. Lucas, President and Chief Executive Officer of the Company, certify, pursuant to 18...

  • Page 111
    ... of 2002 In connection with the Annual Report of Imation Corp. (the "Company") on Form 10-K for the period ended December 31, 2014, as filed with the Securities and Exchange Commission (the "Report"), I, Scott J. Robinson, Vice President and Chief Financial Officer of the Company, certify, pursuant...

  • Page 112

  • Page 113
    ... 79 percent by 2017. Information technology and security professionals are increasingly challenged by the pace at which data files move both internally and externally. It's hard for them to manage data across all of the physical and other storage devices that file data lives on - personal computers...

  • Page 114
    ... Executive Officer Imation Corp. imationcorp.com: click on Investor Relations click on Financial and Investor Information click on Shareholder Information follow the prompts to submit your electronic consent David B. Stevens Former Chief Technology Officer and Vice President, Corporate Development...