EFI and Presstek CFO’s Comment on Financial Problems at Xerox
Press release from the issuing company
Electronics for Imaging (EFI) and Presstek both expressed serious concern about the credit crunch placed on Xerox. The CFO’s for each respective company commented yesterday in a story for USA today. The story examined how large companies who have problems often snowball.
Joe Cutts, CFO of EFI, said Xerox has been paying them on time, but he still makes sure that the Xerox account is current before shipping products. EFI’s stock has dropped from $62 a share in May to just over $16 as of Friday. Has Xerox had anything to do with the drop? ''Xerox is one reason,'' Cutts says. ''Other major distributors have struggled with cash problems.''
Neil Rossen, CFO of Presstek reports similar concerns. Presstek signed a contract to sell equipment to Xerox in September. According to USA Today, Rossen has received several calls from nervous shareholders. ''We have yet to deliver product to Xerox,'' CFO Neil Rossen says, and the agreement requires ''certain substantial prepayments.''
When the contract was drawn, Presstek questioned Xerox about its solvency. ''They assured us that the concern was misplaced,'' Rossen says. ''I would just say, as a general observation, that default would expose executives to considerable legal risk.'' Advance checks received from Xerox are clearing, he says.
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