Business News

EFI Reports Q1 2011 Results

Wednesday 27. April 2011 - Revenue Increases 26% Year-Over-Year With Non-GAAP EPS of $0.28

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.
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.