Imation Anticipates Weak 3Q08

Imation Corp. provided an outlook on the third quarter ended September 30th based on preliminary unaudited financial results. For the quarter, the Company estimates revenue of approximately $525 million, and a reported operating loss of approximately $8 million to $10 million including restructuring and other charges of approximately $16 million to $17 million, the vast majority from previously announced restructuring programs. Excluding restructuring and other charges, operating income is estimated to be between $6 million and $8 million.

These preliminary results are below the Company’s expectations and were driven by economic weakness, which accelerated late in the quarter. Given the softness in the current quarter and continued concerns about the economic environment for the rest of the year, the Company believes full year results will be well below the revenue and earnings outlook provided on July 22nd, and investors should not rely on that outlook. Third quarter results are scheduled to be released on October 21, 2008 at which time the Company will also discuss its outlook for the rest of the year.

Commenting on the current results, President and CEO Frank Russomanno said: "Challenging economic and industry conditions around the world have clearly hurt our Q3 results. Specifically, the continued financial market turmoil has disrupted IT spending for our tape products in this important customer sector. Slowed consumer spending and reduced projections by many of our retail channel partners for the upcoming fourth quarter have also dampened demand in Q3. We see impacts in our largest markets of the U.S. and Europe as well as some recent softness in Japan."

"Our financial position remains strong as we manage through the current economic weakness. As we have in the past, this management team will act aggressively to improve results as we focus on building for our long-term success. We remain confident in our strategy and the power of the solid brand portfolio we are building. We also remain committed to the ongoing transformation of Imation to a brand and product management company," Russomanno concluded.