*NEWS*EFI REVENUES EXCEED EXPECTATIONS/2004-05-04

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*NEWS*EFI REVENUES EXCEED EXPECTATIONS/2004-05-04

 Anonymous 2013-06-21 at 10:08:31 am Views: 105
  • #1975

    EFI Revenue and Earnings Exceed Expectations; 25% Revenue Growth Fueled by Professional Printing Customers

    FOSTER CITY, 2004 (BUSINESS WIRE) — Electronics For Imaging (EFI)(Nasdaq:EFII), the world leader in digital imaging and print management solutions for commercial and enterprise printing, announced today that, for the quarter ended March 31, 2004, revenues grew 25% to $106.7 million when compared to $85.7 million for the same period in 2003.

    Pro forma net income was $12.3 million or $0.22 per diluted share in the first quarter of 2004, an increase of 76% when compared to $7.0 million or $0.13 per diluted share for the same period in 2003.

    GAAP net income was $11.0 million or $0.20 per diluted share in the first quarter of 2004, compared to $5.1 million, or $0.09 per diluted share for there same period in 2003.

    Pro forma net income is computed by adjusting GAAP net income by the impact of amortization of acquisition-related intangibles, and other non-recurring charges and gains.

    As of March 31, 2004, the company's total assets were $1.0 billion, unchanged from the $1.0 billion reported as of December 31, 2003. Total liabilities as of March 31, 2004 were $351.8 million, down slightly from $358.8 million as of December 31, 2003.

    "We continue to advance our leadership role in supplying professional and enterprise printing customers with the highest quality solutions for improving their efficiency, profitability and customer collaboration," said EFI CEO Guy Gecht. "We are very encouraged by the market response to our latest offerings in applications as well as the strength in our traditional server and embedded businesses."

    The Company also stated it currently anticipates its business momentum will allow second quarter results to be in line with current consensus estimates of $0.23 pro forma earnings per share and $109 million in revenue.

    The Company additionally announced that it is adding the responsibilities of Chief Operating Officer to Joseph Cutts, EFI's Chief Financial Officer. CEO Gecht commented, "We see a great deal of opportunity ahead for growing our business. Joe has done an outstanding job as CFO and he is ready to take on additional responsibilities to help execute our strategy. This change will free more time for our President, Fred Rosenzweig, and me to focus on further developing EFI's product offerings and on exploring and closing more business opportunities."

    EFI will discuss the Company's financial results by conference call at 2:00 p.m. PDT today. Instructions for listening to the conference call over the Web are available on the investor relations portion of EFI's website at http://www.efi.com.

    About our convertible debt

    In the second quarter of 2003, EFI issued $240 million of convertible debentures with a coupon rate of 1.5%. The quarterly pre-tax interest expense related to the bonds is $0.9 million and the related quarterly pre-tax amortization of issuance costs is $0.3 million. Under certain circumstances, our debt may be converted to approximately 9.1 million shares of common stock. During the quarter in which the debt holder has the right to convert, the associated shares will be considered outstanding for that entire quarter, and the full 9.1 million shares will be included in the calculation of our diluted earnings per share. Also, once the debt holder has the right to convert, the interest expense and the amortized issuance costs related to the bonds would be excluded from the calculation of diluted earning per share. The net impact of a conversion would mean a reduction of earnings per share by approximately $0.01 in the quarter the debt is deemed converted.

    Holders may convert their debentures into shares of our common stock prior to stated maturity under the following circumstances: (1) during any fiscal quarter (beginning with the quarter ending September 30, 2004) if the sale price of our common stock for at least 20 consecutive trading days in the 30 consecutive trading-day period ending on the last trading day of the immediately preceding fiscal quarter exceeds 120% of the conversion price on that 30th trading day; (2) during any 5 consecutive trading day period after any 5 consecutive trading periods in which the average trading price of the debentures during the measurement period was less than 97% of the average conversion value and the conversion value for each day of such period was less than $900 per $1,000 principal amount of the debentures; (3) upon the occurrence of specified corporate transactions; or (4) if we have called the debentures for redemption. For more information, please see our recently filed S-3.

    About our Pro Forma Net Income and Adjustments

    To supplement our consolidated financial results prepared under generally accepted accounting principles ("GAAP"), we use a pro forma measure of net income that is GAAP net income adjusted to exclude certain costs, expenses and gains. Our pro forma net income gives an indication of our baseline performance before gains, losses or other charges that are considered by management to be outside of our core operating results. In addition, pro forma net income is among the primary indicators management uses as a basis for planning and forecasting future periods. These measures are not in accordance with, or an alternative for, GAAP and may be materially different from pro forma measures used by other companies. We compute pro forma net income by adjusting GAAP net income with the impact of amortization of acquisition-related intangibles, and other non-recurring charges and gains. The presentation of this additional information should not be considered in isolation or as a substitute for net income prepared in accordance with GAAP. In the second quarter of 2004, the expected amortization of acquisition related intangibles would lead to a $0.05 per share reduction from the pro forma earnings per share amount.

    Safe Harbor for Forward Looking Statements

    The statements: "The Company also stated it currently anticipates its business momentum will allow second quarter results to be in line with current consensus estimates of $0.23 pro forma earnings per share and $109 million in revenue" and "The net impact of a conversion would mean a reduction of earnings per share by approximately $0.01 in the quarter the debt is deemed converted" and "In the second quarter of 2004, the expected amortization of acquisition related intangibles would lead to a $0.05 per share reduction from the pro forma earnings per share amount" are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended and Section 21E of the Securities and Exchange Act of 1934, as amended, and are subject to certain risks and uncertainties that could cause actual results to differ materially, including, but not necessarily limited to, the following: (1) Management's ability to forecast revenues and control expenses, especially on a quarterly basis, continues to be a challenge. Unexpected declines in revenue without a corresponding and timely decline in expenses could have a material adverse effect on results of operations; (2) current world wide financial/economic difficulties continue including variations in foreign exchange rates; (3) variations in growth rates or declines in the printing and imaging market across various geographic regions may cause a material impact in our results; (4) changes in historic customer order patterns, including changes in customer and channel inventory levels may cause a material impact in our results; (5) changes in the mix of products sold leads to variations in results; (6) market acceptance of new products and contribution to EFI's revenue cannot be assured; (7) delays in product delivery can cause quarterly revenues and income to fall significantly short of anticipated levels; (8) competition and/or market factors in the various markets may pressure EFI to reduce prices on certain products; (9) competition with products internally developed by EFI's customers may result in declines in EFI sales and revenues; (10) excess or obsolete inventory and variations in inventory valuation may cause a material impact in our results; (11) continued success in technological advances, including development and implementation of new processes and strategic products for specific market segments may not be assured; (12) timely and qualitative execution in the manufacturing of products may not be assured; (13) litigation involving intellectual property or other matters may cause a material impact in our results; (14) our ability to adequately service our debt and dilution of earnings if the company's convertible debenture is treated on an "as converted basis" for purposes of calculating diluted earnings per share; (15) other risk factors listed from time to time in the company's SEC reports. EFI undertakes no obligation to update information contained in this release. For further information regarding risks and uncertainties associated with EFI's business, please refer to the Risk Factors section (entitled "Factors That Could Adversely Affect Performance") of EFI Corporation's SEC filings, including, but not limited to, its annual report on Form 10-K and quarterly reports on Form 10-Q, copies of which may be obtained by contacting EFI Corporation's Investor Relations Department at 650-357-3828 or email at investor.relations@efi.com or EFI's Investor Relations website at http://www.efi.com.

    About Electronics For Imaging/EFI

    EFI (www.efi.com) is the world leader in digital imaging and print management solutions for commercial and enterprise printing. EFI's award-winning technologies offer document management tools from creation to print, including high fidelity color and black and white Fiery(R) print servers that can output up to 2000 ppm; powerful production workflow and print management information software solutions for increased performance and cost efficiency; and an array of business-critical enterprise and mobile printing solutions. EFI maintains 25 offices worldwide.

                         Electronics For Imaging, Inc.
                       Consolidated Statements of Income
                     (in thousands, except per share data)
                                  (unaudited)
                                                       Three Months Ended
                                                            March 31,
                                                          2004      2003
                                                       --------   -------
    Revenue                                            $106,682   $85,715
    Cost of revenue                                      38,120    36,228
                                                        --------   -------
              Gross profit                               68,562    49,487
                                                        --------   -------
    Research and development                             27,164    22,810
    Sales and marketing                                  18,962    14,730
    General and administrative                            6,633     4,991
    Amortization of identified intangibles and other
     acquisition-related charges                          4,462     2,545
                                                        --------   -------
              Total operating expenses                   57,221    45,076
                                                        --------   -------
    Income from operations                               11,341     4,411
    Interest income and other income, net                 1,763     2,578
    Litigation settlement income and gain on sale of
     Unimobile assets                                     3,052        --
                                                        --------   -------
              Income before income taxes                 16,156     6,989
    Provision for income taxes                           (5,147)   (1,887)
                                                        --------   -------
                       Net income                      $ 11,009   $ 5,102
                                                        ========   =======
    Shares used in per share calculation                 55,991    55,190
                                                        ========   =======
    Net income per diluted common share                $   0.20   $  0.09
                                                        ========   =======
    Reconciliation of Reported GAAP Net Income to
     Pro Forma Net Income
    Net income                                         $ 11,009   $ 5,102
    In process research and development expense           1,000     1,220
    Amortization of acquisition related intangibles       3,462     1,325
    Litigation settlement income and gain on sale of
     Unimobile assets                                    (3,052)       --
    Tax effect of pro forma adjustments                    (123)     (687)
                                                        --------   -------
    Pro forma net income                               $ 12,296   $ 6,960
                                                        ========   =======
    Shares used in per share calculation                 55,991    55,190
                                                        ========   =======
    Pro forma net income per diluted common share      $   0.22   $  0.13
                                                        ========   =======
                         Electronics For Imaging, Inc.
                          Consolidated Balance Sheets
                                (in thousands)
                                                 March 31,   December 31,
                                                     2004           2003
                                                (unaudited)
    ASSETS                                      ----------    -----------
    Cash, cash equivalents and Short-term
     investments                                $  613,804     $  624,112
    Restricted short-term investments               69,863         69,669
    Accounts receivable, net                        42,950         53,317
    Inventories, net                                 8,802          7,989
    Other current assets                            29,145         28,718
                                                 ----------     ----------
           Total current assets                    764,564        783,805
    Property and equipment, net                     48,115         49,094
    Restricted investments                          43,080         43,080
    Goodwill                                        76,710         67,166
    Intangible assets, net                          50,725         51,032
    Other assets                                    18,481         19,484
                                                 ----------     ----------
            Total assets                        $1,001,675     $1,013,661
                                                 ==========     ==========
    LIABILITIES AND STOCKHOLDERS' EQUITY
    Accounts payable                            $   15,722     $   17,995
    Accrued and other liabilities                   59,528         67,386
    Income taxes payable                            36,280         33,231
                                                 ----------     ----------
    Total current liabilities                      111,530        118,612
    Long-term obligations                          240,236        240,236
                                                 ----------     ----------
            Total liabilities                      351,766        358,848
                                                 ----------     ----------
    Stockholders' equity:
            Common stock                               627            620
            Treasury stock                        (188,007)      (159,077)
            Additional paid-in-capital             338,890        326,761
            Retained earnings                      498,399        486,509
                                                 ----------     ----------
            Total stockholders' equity             649,909        654,813
                                                 ----------     ----------
      Total liabilities and
       stockholders' equity                     $1,001,675     $1,013,661
                                                 ==========     ==========
                         Electronics For Imaging, Inc.
                              Revenue Break-Down
                                (in thousands)
                                  (unaudited)
                                                       Three Months Ended
                                                            March 31,
                                                         2004      2003
                                                      ---------   -------
    Revenue by product
       Servers                                         $ 50,776   $41,685
       Embedded Products                                 31,168    29,449
       Professional Printing Applications                15,364     2,661
       Miscellaneous                                      9,374    11,920
                                                        --------   -------
    Total                                              $106,682   $85,715
                                                        ========   =======
    Shipments by geographic area
      North America                                    $ 59,035   $42,783
      Europe                                             30,391    28,721
      Japan                                              13,416     9,717
      Rest of World                                       3,840     4,494
                                                        --------   -------
    Total                                              $106,682   $85,715
                                                        ========   =======
    

    SOURCE: Electronics For Imaging







    * Post was edited: 2004-05-04 12:18:00