updated 4/25/2011 4:17:19 PM ET 2011-04-25T20:17:19

FOSTER CITY, Calif., April 25, 2011 (GLOBE NEWSWIRE) -- Electronics For Imaging, Inc. (Nasdaq:EFII), a world leader in customer-focused digital printing innovation, today announced its results for the first quarter of 2011. For the quarter ended March 31, 2011, the Company reported revenue of $140.1 million, compared to first quarter 2010 revenue of $110.8 million.

GAAP net income was $6.2 million or $0.13 per diluted share in the first quarter of 2011, compared to GAAP net loss of $(11.4) million or $(0.25) per diluted share for the same period in 2010. Q1 2011 GAAP net income of $6.2 million was primarily driven by a strong revenue quarter and significant improvements in gross margin.

Non-GAAP net income was $13.5 million or $0.28 per diluted share in the first quarter of 2011, compared to non-GAAP net loss of ($0.1) million or ($0.00) per diluted share for the same period in 2010.

"Our exceptional results in Q1, with 26% year-over-year revenue growth, are a strong indication of the opportunities ahead for EFI as we maintain our focus on the fastest growing segments of printing," said Guy Gecht, Chief Executive Officer of EFI. "The efficiencies and profitability our customers are achieving with EFI's innovative technology are driving strong growth across all three of our businesses. We look forward to furthering our market leadership and customer loyalty as we introduce innovative new products this week at Connect 2011, EFI's user conference, and the ISA industry show."

Previously reported revenue in the Fiery and APPS operating segments for the three months ended March 31, 2010 has been revised to conform to the presentation used for the three months ended March 31, 2011, reflecting the reclassification of Proofing software revenue from the APPS to the Fiery operating segment. Total revenue reported for the three months ended March 31, 2010 has not changed.

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 www.efi.com .

About our Non-GAAP Net Income and Adjustments

To supplement our consolidated financial results prepared under generally accepted accounting principles, or GAAP, we use non-GAAP measures of net income (loss) and earnings per diluted share that are GAAP net income (loss) and GAAP earnings per diluted share adjusted to exclude certain recurring and non-recurring costs, expenses and gains. 

We believe that the presentation of non-GAAP net income (loss) and non-GAAP earnings per diluted share provides important supplemental information regarding non-cash expenses, significant recurring and non-recurring items that we believe are important to understanding our financial, and business trends relating to our financial condition and results of operations. Non-GAAP net income (loss) and non-GAAP earnings per diluted share are among the primary indicators used by management as a basis for planning and forecasting future periods and by management and our board of directors to determine whether our operating performance has met specified targets and thresholds. Management uses non-GAAP net income (loss) and non-GAAP earnings per diluted share when evaluating operating performance because it believes that the exclusion of the items described below, for which the amounts and/or timing may vary significantly depending upon the Company's activities and other factors, facilitates comparability of the Company's operating performance from period to period. We have chosen to provide this information to investors so they can analyze our operating results in the same way that management does and use this information in their assessment of our business and the valuation of our Company.

We compute non-GAAP net income (loss) and non-GAAP earnings per diluted share by adjusting GAAP net income (loss) and GAAP earnings per diluted share to remove the impact of recurring amortization of acquisition-related intangibles, stock-based compensation expense, as well as restructuring related and non-recurring charges and gains and the tax effect of these adjustments. Such non-recurring charges and gains include end-of-life inventory purchase and related obsolescence, asset impairment charges, acquisition-related transaction costs, and costs to integrate such acquisitions into our business. Examples of these excluded items are:

  • Recurring charges and gains, including:
  • Amortization of acquisition-related intangibles. Intangible assets acquired to date are being amortized on a straight-line basis.
  • Stock-based compensation expense is recognized in accordance with FASB Accounting Standards Codification, Topic 718, Stock Compensation.
  • Non-recurring charges and gains, including:
  • Excess solvent inventories and related end-of-life purchases.
  • Acquisition-related transaction costs associated with the acquisition of privately held Streamline Development, LLC ("Streamline"), which closed on February 16, 2011. Streamline is the provider of PrintStream PMIS software focused on mailing and fulfillment services for the printing industry.
  • Restructuring and Other consists of:

          -- Restructuring related charges. We have incurred restructuring charges as we reduce the number and size of our facilities and the
              size of our workforce.

          -- Asset impairment costs consist primarily of a facility closure and the write-off of a private minority investment.

          -- Expenses incurred to integrate Streamline.

  • Tax effect of non-GAAP adjustments. After removing the non-GAAP items, we apply the principles of ASC 740, Income Taxes, to estimate the non-GAAP income tax provision in each jurisdiction in which we operate. 

These non-GAAP measures are not in accordance with or an alternative to GAAP and may be materially different from other non-GAAP measures, including similarly titled non-GAAP measures, used by other companies. The presentation of this additional information should not be considered in isolation from, as a substitute for, or superior to, net income (loss) or earnings per diluted share prepared in accordance with GAAP. Non-GAAP financial measures have limitations in that they do not reflect certain items that may have a material impact upon our reported financial results. We expect to continue to incur expenses of a nature similar to the non-GAAP adjustments described above, and exclusion of these items from our non-GAAP net income (loss) and non-GAAP earnings per diluted share should not be construed as an inference that these costs are unusual, infrequent or non-recurring.

For more information on the non-GAAP adjustments, please see the table captioned "Reconciliation of GAAP Net Income to non-GAAP Net Income" included in this press release.

Safe Harbor for Forward Looking Statements

Certain statements in this press release are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Statements other than statements of historical fact including words such as "anticipate", "believe", "estimate", "expect", "consider" and "plan" and statements in the future tense are forward looking statements. The statements in this press release that could be deemed forward-looking statements include statements regarding growth prospects, market positioning, short and long term opportunities, and any statements or assumptions underlying any of the foregoing.

Forward-looking statements are subject to certain risks and uncertainties that could cause our actual future results to differ materially, or cause a material adverse impact on our results. Potential risks and uncertainties include, but are not necessarily limited to, inaccurate data or assumptions; unforeseen expenses; the difficulty of aligning expense levels with revenue; our ability to maintain effective cost control measures; management's ability to forecast revenues, expenses and earnings; the market price of the Company's common stock; the uncertainty regarding the amount and timing of future share repurchases by the Company; any world-wide financial and economic difficulties and downturns; adverse tax-related matters such as tax audits, changes in our effective tax rate or new tax legislative proposals; changes in, or the failure or inability to comply with governmental regulations, including import/export regulations or duties; failure to retain key employees; a significant decline or delay in demand for our products by any of our important OEM partners; the unpredictability of development schedules and commercialization of our OEM partners' products; variations in growth rates or declines in the printing and imaging markets across various geographic regions; changes in the mix of products sold; the uncertainty of market acceptance of new product introductions; intense competition in each of our businesses, including competition from products developed by EFI's customers; challenge of managing assets levels, including inventory and variations in inventory levels; the uncertainty of continued success in technological advances; the challenges of obtaining timely, efficient and quality product manufacturing and components supplying; litigation involving intellectual property rights or other related matters; our ability to successfully integrate acquired businesses; the potential that investments in new business strategies and initiatives could disrupt the Company's ongoing businesses and may present risks not originally contemplated; differences between the financial results as filed with the SEC and the preliminary results included in our earnings or other press releases, among other things, due to the complexity in accounting rules; and any other risk factors that may be included from time to time in the Company's SEC reports.

The statements in this press release are made as of the date of this press release. EFI undertakes no obligation to update information contained in this press release. For further information regarding risks and uncertainties associated with EFI's businesses, please refer to the section entitled "Factors That Could Adversely Affect Performance" in the Company's SEC filings, including, but not limited to, its annual report on Form 10-K and its quarterly reports on Form 10-Q, copies of which may be obtained by contacting EFI's Investor Relations Department by phone at 650-357-3828 or by email at investor.relations@efi.com or EFI's Investor Relations website at www.efi.com .

About EFI      

EFI ( www.efi.com ) is a world leader in customer-focused digital printing innovation. EFI's award-winning solutions, integrated from creation to print, deliver increased performance, cost savings and productivity. The company's product portfolio includes Fiery® digital color print servers; VUTEk® superwide digital inkjet printers, UV and solvent inks; Rastek UV wide-format inkjet printers; Jetrion® industrial inkjet printing systems; print production workflow and management information software; and corporate printing solutions.

The Electronics For Imaging, Inc. logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=7332

Electronics For Imaging, Inc.
Condensed Consolidated Statements of Operations
(in thousands, except per share data)
(unaudited)
     
  Three Months Ended

March 31,
     
  2011 2010
     
Revenue  $ 140,053  $ 110,830
Cost of revenue  61,342  52,059
Gross profit  78,711  58,771
Operating expenses:    
Research and development 27,471  26,128
Sales and marketing 28,248  25,103
General and administrative 13,157  9,977
Amortization of identified intangibles  3,420  2,928
Restructuring and other  1,347  2,012
Total operating expenses  73,643  66,148
Income (loss) from operations  5,068  (7,377)
     
Interest and other income (expense), net  2,396  (2,314)
Income (loss) before income taxes  7,464  (9,691)
Provision for income taxes  (1,215)  (1,687)
Net income (loss)  $ 6,249  $ (11,378)
     
Fully Diluted EPS calculation    
Net income (loss)  $ 6,249  $ (11,378)
Net income (loss) per diluted common share  $ 0.13  $ (0.25)
Shares used in diluted per share calculation  48,445  44,699
 
 
Electronics For Imaging, Inc.
Reconciliation of GAAP Net Income (Loss) to Non-GAAP Net Income (Loss)
(in thousands, except per share data)
(unaudited)
  Three Months Ended

March 31,
     
  2011 2010
     
Net income (loss)  $ 6,249  $ (11,378)
Amortization of identified intangibles 3,420 2,928
Stock based compensation expense – Cost of revenue 236 255
Stock based compensation expense – Research and development 877 1,110
Stock based compensation expense – Sales and marketing 885 952
Stock based compensation expense – General and administrative 3,173 1,644
Acquisition-related transaction costs 600 628
Restructuring and other 1,347 2,012
Tax effect of non-GAAP adjustments  (3,285)  1,727
Non-GAAP net income (loss)  $ 13,502  $ (122)
     
Non-GAAP net income (loss) per diluted common share  $ 0.28  $ (0.00)
Shares used in per share calculation  48,445  44,699
 
 
Electronics For Imaging, Inc.
Condensed Consolidated Balance Sheets
(in thousands)
(unaudited)
  March 31,

2011
December 31,

2010
     
Assets    
Cash, cash equivalents, and short-term investments  $ 225,211  $ 229,663
Accounts receivable, net  92,588  85,453
Inventories  44,865  46,216
Other current assets  32,338  24,317
Total current assets  395,002  385,649
     
Property and equipment, net  28,900  26,547
Restricted investments  56,850  56,850
Goodwill  143,246  139,517
Intangible assets, net  50,053  49,140
Other assets  45,535  48,878
Total assets  $ 719,586  $ 706,581
     
Liabilities & Stockholders' equity    
Accounts payable  $ 46,233  $ 49,189
Accrued and other liabilities  75,094  70,028
Income taxes payable  1,397  1,182
Total current liabilities  122,724  120,399
Contingent liability  999  619
Deferred tax liabilities  1,329  1,292
Long term taxes payable  34,130  32,522
Total liabilities  159,182  154,832
Total stockholders' equity  560,404  551,749
Total liabilities and stockholders' equity  $ 719,586  $ 706,581
   
   
Electronics For Imaging, Inc.  
Revenue by Operating Segment and Geographic Area  
(in thousands)  
(unaudited)  
  Three Months Ended

March 31,
 
       
Revenue by Operating Segment 2011 2010  
Fiery  $ 72,364  $ 55,529  
Inkjet  51,035  43,839  
Professional printing applications  16,654  11,462  
Total  $ 140,053  $ 110,830  
       
Revenue by Geographic Area      
Americas  $ 74,192  $ 62,622  
EMEA  44,538  31,408  
Japan  11,821  13,094  
Other international locations  9,502  3,706  
Total  $ 140,053  $ 110,830  
       
Revenue in the Fiery and APPS operating segments for the three months ended

March 31, 2010 has been revised to conform to the presentation used for the

three months ended March 31, 2011, reflecting the reclassification of proofing

software revenue from the APPS to the Fiery operating segment. Total revenue

reported for the three months ended March 31, 2010 has not changed.
CONTACT: Vincent Pilette
         Chief Financial Officer
         EFI
         650-357-3500
         
         Investor Relations:
         JoAnn Horne
         Market Street Partners
         415-445-3235

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