EFI REVENUES EXCEED EXPECTATIONS

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EFI REVENUES EXCEED EXPECTATIONS

 user 2004-05-04 at 12:17:00 pm Views: 76
  • #5407

    <FONT size=3><FONT color=blue><strong>EFI Revenue and Earnings Exceed Expectations; 25% Revenue Growth Fueled by Professional Printing Customers</strong> </FONT></FONT>
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    <P><FONT color=blue>FOSTER CITY, Calif., Apr 21, 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. </FONT></P>
    <P><FONT color=blue>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. </FONT></P>
    <P><FONT color=blue>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. </FONT></P>
    <P><FONT color=blue>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. </FONT></P>
    <P><FONT color=blue>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. </FONT></P>
    <P><FONT color=blue>”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.” </FONT></P>
    <P><FONT color=blue>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. </FONT></P>
    <P><FONT color=blue>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.” </FONT></P>
    <P><FONT color=blue>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. </FONT></P>
    <P><FONT color=blue>About our convertible debt </FONT></P>
    <P><FONT color=blue>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. </FONT></P>
    <P><FONT color=blue>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. </FONT></P>
    <P><FONT color=blue>About our Pro Forma Net Income and Adjustments </FONT></P>
    <P><FONT color=blue>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. </FONT></P>
    <P><FONT color=blue>Safe Harbor for Forward Looking Statements </FONT></P>
    <P><FONT color=blue>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. </FONT></P>
    <P><FONT color=blue>About Electronics For Imaging/EFI </FONT></P>
    <P><FONT color=blue>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. </FONT></P></FONT></FONT></FONT></FONT></FONT></FONT></FONT></FONT></FONT></FONT></FONT></FONT></FONT></FONT></FONT></FONT></FONT></FONT></FONT></FONT></FONT></FONT></FONT></FONT><PRE><FONT color=blue> 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
    ======== =======
    </FONT></PRE><FONT face=”verdana, arial, helvetica, sans-serif” color=#000000 size=-1>
    <P><FONT color=blue size=3>SOURCE: Electronics For Imaging</FONT> </P></FONT></TD></TR></TBODY></TABLE></CENTER>