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Original Source: FD (FAIR DISCLOSURE) WIRE
. Don Flick, Director & VP, IR . Dan Carp, Chairman & CEO . Antonio Perez, President & COO . Jim Langley, President, Graphic Communications Group . Bob Brust, CFO
EK announced the acquisition of Creo, Inc. The acquisition is expected to be modestly dilutive in 2005 and accretive by at least $0.05 per share in 2006. The company's 2005 operational earnings guidance range of $2.60-2.90 per share remains unchanged. Q&A Focus: financing, synergies, and business with Xerox.
A. Key Data From Call 1. Acquisition should be modestly dilutive in 2005. 2. 2005 operational earnings guidance range of $2.60-2.90 per share remains unchanged. 3. Acquisition is expected to be accretive by $0.05 per share in 2006.
S1. Executive Overview (D.C.) 1. Important Announcement: 1. Agreed today to acquire Creo. 1. Have reached conclusion of acquisition program of digital growth strategy. 2. Will continue to concentrate on effective integration of actions taken. 3. Running ahead in major acquisitions already. 2. Not altering 2005 operational earnings guidance range of $2.60-2.90 per share. 1. Expect modest dilution in 2005, but incremental synergies in graphic communications permit co. to keep earnings expectations unchanged. 2. 2005 Hallmark Year: 1. In progress to profitable digital future. 1. Today's announcement is one more clear step in that process.
S2. Operational Implications (A.P.) 1. Graphic Communications Group Portfolio: 1. Last week, remarked that management was happy with basic portfolio in graphic communications group. 1. Versamark and NexPress provide market-leading products in their respective segments. 2. In the process of adding broad distribution reach and breadth of portfolio of Kodak Polychrome Graphics. 2. Creo adds significant depth to the portfolio. 1. Brings market-leading products in computer-to-plate equipment and workflow software solutions.
2. Continues strategy of adding market leaders to portfolio. 1. Creo has leading market share across a range of products. 2. Provides option to accelerate market reach. 3. Enables co. to bring end-to-end solutions to simplify and improve operational effectiveness of customers, something industry needs in midst of difficult transformation.
4. Creo also offers significant cost synergies. 1. Operates with very attractive gross profit margins in low to mid-40s as a percent of sales. 2. Well above EK's corporate average. 5. Combination will bring economies of scale to the Creo portfolio, unlocking value co. could not deliver on its own. 6. Acquisition is modestly dilutive in 2005. 7. Additional Graphic Communication Group synergies should keep view of 2005 operational earnings essentially unchanged.
8. Going forward, expect acquisition to add at least $0.05 per
share in 2006 and more beyond that. 9. Further increases confidence in meeting or exceeding operational earnings per share goal of $3.00 in 2006. 1. Because of disciplined nature of co., confident in ability
to get synergies and achieve goals. 3. Since mid-2003, have worked deliberately to assemble the proper pieces in the proper order to achieve goals in this market. 1. Today, have reached successful conclusion of acquisition portion of that strategic vision. 2. Can now state that co. has created three strong pillars of profitable growth: Jim Langley's Graphic Communications Group, Dan Kerpelman's Health Imaging Group, and the digital side of Bernard Masson's Digital & Film Images System Group. 3. Have essentially concluded the acquisition portion of digital growth strategy as presented in September 2003.
S3. Graphic Communications Group (J.L.) 1. Exciting Few Weeks:
1. At New York meeting last week, detailed progress of the business. 2. Today took another important step in strengthening the …