Overview of the Transaction - The company plans to sell 100% equity of its indirect subsidiary, Lexmark International II, LLC, to Xerox Corporation for a cash transaction [3][4] - The transaction involves the joint investment entity Ninestar Holdings Company Limited, which is controlled by the company, PAG Asia Capital, and Shoda Investment [3][5] - The transaction is classified as a major asset restructuring due to the significant proportion of Lexmark's assets and revenue compared to the company's total assets and revenue [7][8] Transaction Details - The estimated transaction price is based on a benchmark amount of $1.5 billion, adjusted for estimated financing liabilities, net working capital, cash on the closing date, and transaction costs [4][10] - The final transaction price will be adjusted post-closing based on the final net working capital, financing liabilities, and other factors, with a maximum adjustment limit of $30 million [11] - The transaction is expected to close on July 1, 2025, subject to the fulfillment of certain conditions [9][10] Financial Analysis - The valuation report by Zhonglian International indicates that the equity value of Lexmark International II, LLC is estimated between $172 million and $198 million, with net adjustments leading to a final estimated value of $99 million to $125 million after accounting for various expenses [7] - The financial metrics of Lexmark International II, LLC show total assets of approximately ¥1,958.41 million and revenue of ¥1,596.13 million, which represent 52.43% and 60.43% of the company's respective totals [7] Regulatory and Approval Process - The transaction has undergone necessary internal approvals from the board and shareholders, and external regulatory approvals are in process [9][14] - The transaction does not constitute a related party transaction, and there are no changes in the company's control as a result of this sale [8][9] Company Background - The company, Nasda, is listed on the Shenzhen Stock Exchange with the stock code 002180 and has a registered capital of ¥1,422,989,339 [5][6] - Xerox Corporation, the buyer, is a publicly traded company on the NASDAQ with a focus on document management systems and solutions [6]

Summary of Key Points Core Viewpoint - The independent financial advisor, Dongfang Securities, has provided a verification opinion on the major asset sale of Nasda Co., Ltd., indicating that the transaction has been conducted in compliance with relevant laws and regulations, and that all necessary procedures have been followed [1][15]. Group 1: Transaction Overview - The transaction involves the sale of 100% equity of Lexmark International II, LLC (the target company) from Ninestar Group Company Limited to Xerox Corporation, with an estimated transaction price of $1.5 billion [6][8]. - The transaction is classified as a major asset restructuring, as the total assets and revenue of Lexmark International exceed 50% of Nasda's total assets and revenue [8][9]. - The transaction does not constitute a related party transaction, and there will be no change in the actual control of the company post-transaction [9]. Group 2: Financial Details - The estimated purchase price is calculated as $1.5 billion minus estimated financing liabilities and adjusted for net working capital, with a final purchase price adjustment not exceeding $30 million [11][12]. - The valuation of Lexmark's 100% equity is estimated between $172 million and $198 million, with net adjustments leading to a final estimated purchase price of approximately $90 million [7][11]. Group 3: Approval and Implementation - The transaction has completed all necessary internal and external approval processes, including board and shareholder meetings [10][11]. - The closing date for the transaction is set for July 1, 2025, with all preconditions for closing confirmed to be met [10][11]. - The transfer of the target company's equity has been completed, and there are no significant obstacles to the asset transfer [12][15].

Core Viewpoint - The European Commission has approved Xerox's acquisition of Lexmark, stating that the deal will have a limited impact on competition in the market for both companies [1] Company Summary - Xerox is set to acquire Lexmark, a manufacturer of laser printers, following the approval from the European Commission [1] - The European Commission assessed the competitive landscape and concluded that the merger would not raise any competition concerns [1] Industry Summary - The approval indicates a favorable regulatory environment for mergers and acquisitions within the printing and imaging industry [1] - The limited impact on competition suggests that the market dynamics will remain stable post-acquisition, potentially benefiting both companies in terms of market share and operational synergies [1]

Core Viewpoint - Xerox's shares dropped 13.7% following the announcement of a second dividend cut in six months, indicating a lack of confidence but also a strategic move to manage acquisition debt amid global economic uncertainty [1][5]. Group 1: Dividend Cuts - The first dividend cut occurred in December 2024, reducing the annual dividend from $1 per share to $0.50 due to the $1.5 billion acquisition of Lexmark International and an increase in debt load [2]. - The second cut announced recently further reduced the dividend to $0.10 annually, an 80% decrease, attributed to the accelerated closing of the Lexmark acquisition and global uncertainties from tariff policies [3]. Group 2: Financial Outlook - Xerox's market capitalization has fallen to $555 million, reflecting a low valuation multiple of 6 to 7 times projected operating income based on guidance for low-single-digit revenue growth and a 5% adjusted operating margin [6][7]. - The company anticipates generating approximately $315 million in operating income, leading to around $90 million in pre-tax income, assuming consistent interest expenses of $225 million [6]. Group 3: Strategic Considerations - The dividend cuts, while negative, are seen as a prudent measure to enhance financial flexibility and focus on debt reduction post-acquisition [5]. - Successful integration of Lexmark could provide significant upside potential for Xerox, despite current low growth prospects and high debt levels [8].

Group 1: Ross Stores, Inc. - Ross Stores reported quarterly earnings of $1.47 per share, beating the Street estimate of $1.44, with quarterly revenue of $4.99 billion, surpassing the consensus estimate of $4.97 billion [1][2] - The company issued second-quarter GAAP EPS guidance in the range of $1.40 to $1.55, which is below the analyst estimate of $1.65 [2] - Following the guidance, Ross Stores shares fell 11.2% to $135.00 in pre-market trading [2] Group 2: Other Companies - Bicara Therapeutics Inc. shares dipped 20.2% to $12.50 after announcing mixed results from a phase 1/1b trial for ficerafusp alfa [4] - Deckers Outdoor Corporation shares fell 16% to $105.90 after reporting fourth-quarter financial results and expecting first-quarter revenue of $890 million to $910 million, below estimates of $925.86 million [4] - Gyre Therapeutics, Inc. shares fell 14.4% to $9.60 due to a $20.0 million public offering of common stock [4] - Hallador Energy Company shares tumbled 9.7% to $17.00 in pre-market trading [4] - Xerox Holdings Corporation shares dipped 9.6% to $4.62 after reducing its quarterly dividend from $0.125 per share to $0.025 [4] - MINISO Group Holding Limited shares fell 8.5% to $20.30 following third-quarter results [4] - Workday, Inc. shares declined 6.5% to $254.40 after issuing second-quarter sales guidance below estimates [4] - Navitas Semiconductor Corporation shares dipped 6.3% to $4.73 after a significant jump of 164% on Thursday due to collaboration with Nvidia [4]

Financial Data and Key Metrics Changes - The meeting confirmed that there were 125,779,735 shares of common stock outstanding as of March 28, 2025, with approximately 96,207,757 shares represented at the meeting, indicating a quorum of about 76% of outstanding shares [4]. Business Line Data and Key Metrics Changes - No specific data or metrics related to individual business lines were provided in the meeting. Market Data and Key Metrics Changes - No specific market data or metrics were discussed during the meeting. Company Strategy and Development Direction and Industry Competition - The meeting included proposals for the election of directors, ratification of the independent auditor, and approval of executive compensation, indicating a focus on governance and operational efficiency [7][10]. Management's Comments on Operating Environment and Future Outlook - Management did not provide specific comments on the operating environment or future outlook during this meeting. Other Important Information - The proposals presented included the election of nine nominees for a one-year term as directors, the ratification of PricewaterhouseCoopers as the independent auditor for fiscal year 2025, and the approval of an amendment to increase share reserve in the equity and performance incentive plan [7][10]. Q&A Session All Questions and Answers - There were no questions or comments regarding the proposals during the meeting, indicating shareholder agreement or lack of inquiries [8].

Revenue Performance - Total revenue for Q1 2025 was $1.46 billion, a decrease of 3.0% year-over-year, including a 6.6-percentage point benefit from the acquisition of ITsavvy and a 1.9-percentage point unfavorable impact from currency [199]. - Total revenue for Q1 2025 decreased by 3.0% to $1,457 million compared to Q1 2024, with a 1.9-percentage point adverse impact from currency fluctuations [212]. - The Print and Other segment revenue decreased by 9.4% to $1.294 billion, while IT Solutions segment revenue increased by 121.6% to $164 million [202]. - First quarter 2025 revenues for the Print and Other segment were $1,294 million, a decrease of 9.4% from $1,428 million in Q1 2024, with equipment sales down 2.1% and post-sale revenue down 11.2% [254][257]. - IT products revenue surged by 123.4% to $105 million, driven by the ITsavvy acquisition, although excluding this impact, revenue decreased by 20.4% [218]. Profitability and Loss - Adjusted operating income for Q1 2025 was $22 million, a decrease of $11 million compared to Q1 2024, reflecting lower revenue and gross profit [192]. - Net loss for Q1 2025 was $90 million, an improvement of $23 million from a net loss of $113 million in Q1 2024, primarily due to divestitures and lower restructuring costs [201]. - Adjusted operating income margin for Q1 2025 was 1.5%, a decrease of 0.7 percentage points compared to Q1 2024, reflecting lower revenue and gross profit [245]. - Pre-tax loss improved to $67 million in Q1 2025 from a loss of $150 million in Q1 2024, resulting in a pre-tax loss margin of (4.6)% [219]. - The company reported a pre-tax loss of $1,216 million for the full year 2024, impacted by a goodwill impairment of $1,058 million [276]. Expenses and Cost Management - Selling, Administrative and General (SAG) expenses were $378 million, a decrease of $19 million from Q1 2024, with SAG as a percentage of revenue at 25.9% [227]. - Research, Development and Engineering (RD&E) expenses totaled $42 million, down from $49 million in Q1 2024, with RD&E as a percentage of revenue decreasing to 2.9% [223]. - The company anticipates a $50 million reduction in operating income due to incremental tariff costs in 2025, but expects to offset this through price increases and supply chain mitigation efforts [193]. - The company incurred inventory-related charges of approximately $7 million in Q1 2025 due to the exit of certain production print manufacturing operations, compared to $32 million in Q1 2024 [321]. Cash Flow and Debt Management - Operating cash flows are projected to be between $420 million to $470 million, with capital expenditures expected to be approximately $70 million in 2025 [207]. - As of March 31, 2025, total cash, cash equivalents, and restricted cash decreased to $390 million from $631 million at December 31, 2024, reflecting a decrease of $241 million [279]. - Total debt as of March 31, 2025, was $3,298 million, down from $3,399 million at December 31, 2024 [288]. - The company plans to use proceeds from new debt financing to fund the $1.5 billion acquisition of Lexmark International II LLC [279]. - The company completed a private offering of $400 million in aggregate principal amount of 10.25% Senior Secured First Lien Notes and $400 million in aggregate principal amount of 13.5% Senior Secured Second Lien Notes due in 2031 [322]. Acquisitions and Strategic Initiatives - The pending acquisition of Lexmark is progressing, with 32% of the required shareholder vote secured and expected closing in Q3 2025 [195]. - The company is focusing on restructuring efforts and managing financial risks as outlined in the "Financial Risk Management" section of the quarterly report [324]. - The company has not materially modified its financial risk management strategies in response to current market events [303]. Market Conditions and Future Outlook - The company expects revenue growth at low single-digits in constant currency for the full year 2025, including a full year of revenue from ITsavvy [207]. - The company anticipates continued monitoring of economic conditions which may affect future bad debt reserves [228]. - The effective tax rate for the three months ended March 31, 2025, was -34.3%, while the adjusted effective tax rate was 60.0% [318]. - The company is exposed to market risks from foreign currency exchange rates and interest rates, managing these through derivative financial instruments [300].

Core Insights - The article emphasizes a fundamentals-based approach to value investing, highlighting the importance of long-term growth and a strong balance sheet over low multiple stocks [1] Group 1: Company Analysis - Xerox (NASDAQ: XRX) has been recommended for a sell rating due to poor fundamentals and lack of visible earnings growth [1] - The author believes that many investors mistakenly assume that low multiple stocks are inherently cheap, which is not always the case [1] Group 2: Investment Philosophy - The focus is on identifying companies with steady long-term growth, minimal cyclicality, and robust financial health [1] - There is an acknowledgment of the risks involved in investing, particularly the potential to overpay for successful companies, underscoring the significance of valuation [1] - The article suggests that in certain situations, the potential for growth may outweigh immediate price concerns [1]

Core Insights - Xerox Holdings Corporation reported a first-quarter 2025 loss of six cents per share, which was worse than the Zacks Consensus Estimate of a loss of 5 cents and a decline from the year-ago earnings of 6 cents [1] - Revenues for the quarter were $1.46 billion, missing the Zacks Consensus Estimate by 3.2% and decreasing 3% year over year on a reported basis, with a 1.1% decline on a constant-currency basis [1] Revenue Details - Post-sale revenues were $1.17 billion, down 3.2% year over year on a reported basis and 1.2% at constant currency, falling short of the estimate of $1.21 billion [2] - Equipment sales totaled $284 million, a decline of 2.1% year over year on a reported basis but beating the estimate of $262.8 million [2] - The Print and Other segment's revenues were $1.29 billion, down 9.4% year over year and missing the estimate of $1.46 billion [2] Operating Performance - Adjusted operating income was $22 million, reflecting a 33.3% decrease year over year, with an adjusted operating margin of 1.5%, down 70 basis points from the previous year [4] Balance Sheet and Cash Flow - Xerox ended the quarter with cash and cash equivalents of $336 million, down from $576 million at the end of the prior quarter [5] - Net cash used in operating activities was $89 million, while free cash flow was $109 million for the quarter [5] 2025 Guidance - The company expects low single-digit revenue growth at constant currency and an adjusted operating margin of at least 5% [6] - Free cash flow is anticipated to be between $350 million and $400 million, with operating cash flow expected to be around $420-470 million and capital expenditures projected at $70 million [6]

Core Insights - Xerox Holdings Corporation reported $1.46 billion in revenue for Q1 2025, a 3% decline year-over-year, with an EPS of -$0.06 compared to $0.06 a year ago, indicating a significant drop in profitability [1] - The revenue fell short of the Zacks Consensus Estimate of $1.5 billion by 3.19%, and the EPS was also below the consensus estimate of -$0.05, resulting in a surprise of -20% [1] Revenue Breakdown - Services, maintenance, and rentals generated $900 million, below the average estimate of $980.68 million, reflecting a 4% year-over-year decline [4] - Sales revenue reached $557 million, exceeding the average estimate of $490.15 million, marking a 6.5% increase year-over-year [4] - Supplies, paper, and other sales totaled $168 million, significantly lower than the average estimate of $223.04 million, representing a 27.9% decline year-over-year [4] - Equipment sales amounted to $284 million, slightly above the estimated $267.11 million, but showed a 2.1% decrease compared to the previous year [4] - Post-sale revenue was reported at $1.17 billion, below the average estimate of $1.24 billion, indicating a 3.2% year-over-year decline [4] - Mid-range equipment sales reached $198 million, surpassing the average estimate of $175.84 million, with a 2.6% increase year-over-year [4] Stock Performance - Xerox shares have declined by 10.2% over the past month, contrasting with the Zacks S&P 500 composite's decline of only 0.7%, suggesting underperformance in the market [3] - The stock currently holds a Zacks Rank 4 (Sell), indicating potential continued underperformance in the near term [3]