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EFI Reports Loss for Second Quarter

Wednesday, July 30, 2008

Press release from the issuing company

FOSTER CITY, Calif.-- EFI, the world leader in customer-focused digital printing, announced today its results for the second quarter of 2008. For the quarter ended June 30, 2008, the Company reported revenues of $143.8 million, compared to second quarter 2007 revenue of $162.4 million.

GAAP net income (loss) was $(0.1) million or $(0.00) per diluted share in the second quarter of 2008, compared to $9.6 million or $0.15 per diluted share for the same period in 2007.

GAAP net income (loss) was $(5.3) million or $(0.10) per diluted share for the six months ended June 30, 2008, compared to $11.7 million or $0.19 per diluted share for the same period in 2007.

Non-GAAP net income was $12.0 million or $0.21 per diluted share in the second quarter of 2008, compared to $21.8 million or $0.33 per diluted share for the same period in 2007.

Non-GAAP net income was $24.0 million or $0.41 per diluted share for the six months ended June 30, 2008, down 42% from $41.3 million or $0.63 pre diluted share for the same period in 2007.

Non-GAAP net income is computed by adjusting GAAP net income by the impact of recurring amortization of acquisition-related intangibles, stock-based compensation expenses, certain tax charges, as well as other non-recurring charges and gains.

The Company also announced it has acquired privately held Pace Systems Group, Inc. for approximately $21 million in cash plus an additional cash earn out amount which is contingent upon achieving certain performance targets.

(Editor's Note: Also see a Special Report and analysis of this deal by Cary Sherburne.)

Pace Systems Group is a print management software company providing practical print MIS and e-commerce. The acquisition is expected to be neutral to non-GAAP earnings in Q3 and slightly accretive in Q4.

"We are pleased with the performance of our balanced product portfolio," said Guy Gecht, CEO of EFI. "At the same time, tough economic conditions in the US and also within portions of Europe provided a challenging environment. While we expect these conditions to continue, for the third quarter we expect a sequential improvement in both revenues and earnings. In addition, we are looking forward to the opportunities the Pace acquisition affords us to streamline our product portfolio and increase the profitability of our software business."

Outlook for Q3 2008

- For the third quarter of 2008, the Company expects revenues in the range of $145 million to $150 million.

- For the third quarter of 2008, the Company expects GAAP earnings per share of $0.01 to $0.05.

- For the third quarter of 2008, the Company expects non-GAAP earnings per share of $0.23 to $0.27.

- For the third quarter of 2008, the Company expects a non-GAAP tax rate of approximately 22%.

GAAP net income outlook includes an estimated charge related to non-cash based stock compensation expense. This estimate does not include anticipated charges and amortization of acquisition-related intangibles related to the Pace Systems Group acquisition. This estimate is subject to change.

 

 

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