With some noted exceptions, companies trading with such low price to book ratios are not likely to be profitable or they wouldn't trade at such low levels. Imation is no anomaly in this regard. Due to various restructuring, pension, asset impairment and litigation charges, along with the current recession, Imation hasn't been profitable for the better part of three years. But last quarter, even including the charges, Imation managed to eek out a small profit, which could suggest they are making progress in aligning costs with revenues.
The company's storage solutions are offered to large customers, many of which are financial institutions. As these companies have been drastically cutting costs, Imation experienced a revenue shock. But as the company eventually aligns its costs with a lower revenue environment, it should be able to generate returns commensurate with its historical average.
And what offers investors protection while this company attempts to return to profitability is the fact that Imation has no debt, and has a cash buffer of $80 million (after subtracting upcoming payments for a recent litigation settlement). Furthermore, its net current asset value (current assets less all liabilities) is $400 million, well over the company's market cap.
Disclosure: Author has a long position in shares of IMN