Imation Corp. announced a series of moves this week designed to stop the hemorrhaging at the struggling data storage company that has endured declining sales, a sagging stock price and public management upheavals.
In a statement issued late Monday, Oakdale-based Imation said it will "wind down" its non-European legacy tape media business and its consumer storage and accessories business. It also is ending its long-term license agreement with Japanese electronics manufacturer TDK Corp., a strategy that was once heralded as a growth engine.
Officials said they will redeploy the cash saved by shutting down the tape and TDK operations into its "tiered storage and security" business.
Imation is trying to transform itself in the wake of changing technology appetites. While Imation built its reputation as a company that makes recordable CDs, DVDs and magnetic data storage tapes, such products are increasingly out of fashion.
Imation is changing its formula to become more of a company that offers corporations data storage and data security solutions.
"After careful consideration, we concluded these wind-downs are critical in our ongoing effort to create a leaner, more focused Imation," said Barry Kasoff, Imation's interim president, in a statement. "Our tiered storage and security segment is the foundation for the company's profitable growth over the long term. The board, together with management, remains intensely focused on building that business and driving efficiencies throughout the organization to enhance performance."
Imation's stock fell 5 cents to close Tuesday at $2.15 a share.
Lake Street Capital Markets equity analyst Eric Martinuzzi said that some of Imation's moves are smart, but perhaps not dramatic enough to bring rapid profit changes.
