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EFI Reports Fourth Quarter And Full Year 2012 Results

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 "Risk Factors" 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 .

Use of Non-GAAP Financial Information

To supplement our condensed consolidated financial results prepared under generally accepted accounting principles, or GAAP, we use non-GAAP measures of net income (loss), as the case may be, and earnings per diluted share that are GAAP net income (loss), as the case may be, and GAAP earnings per diluted share adjusted to exclude certain recurring and non-recurring costs, expenses and gains. A reconciliation of the adjustments to GAAP results for the three and twelve months ended December 31, 2012 and 2011 is provided below. In addition, an explanation of how management uses non-GAAP financial information to evaluate its business, the substance behind management's decision to use this non-GAAP financial information, the material limitations associated with the use of non-GAAP financial information, the manner in which management compensates for those limitations, and the substantive reasons management believes that this non-GAAP financial information provides useful information to investors is included under "About our Non-GAAP Net Income and Adjustments" after the tables below.

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), as the case may be, or earnings per diluted share prepared in accordance with GAAP.

Electronics For Imaging, Inc.
Condensed Consolidated Statements of Operations
(in thousands, except per share data)
(unaudited)
         
  Three Months Ended December 31, Year Ended December 31,
         
  2012 2011 2012 2011
         
Revenue  $ 174,105  $ 163,058  $ 652,137  $ 591,556
Cost of revenue  79,820  72,141  297,316  260,573
Gross profit  94,285  90,917  354,821  330,983
Operating expenses:        
Research and development  30,103  30,051  120,298  115,901
Sales and marketing  32,035  31,451  125,513  119,487
General and administrative  13,893  13,206  50,727  53,756
Amortization of identified intangibles  5,160  2,528  18,594  11,248
Restructuring and other  1,273  942  5,803  3,258
Total operating expenses  82,464  78,178  320,935  303,650
Income from operations  11,821  12,739  33,886  27,333
Interest and other income (expense), net  336  (1,484)  1,137  3,087
Income before income taxes  12,157  11,255  35,023  30,420
Benefit from (provision for) income taxes  44,462  222  48,246  (2,955)
Net income  $ 56,619  $ 11,477  $ 83,269  $ 27,465
         
Fully Diluted EPS calculation        
Net income  $ 56,619  $ 11,477  $ 83,269  $ 27,465
Net income per diluted common share  $ 1.19  $ 0.25  $ 1.74  $ 0.58
Shares used in diluted per share calculation  47,566  46,765  47,734  47,579
 
 
Electronics For Imaging, Inc.
Reconciliation of GAAP Net Income to Non-GAAP Net Income
(in thousands, except per share data)
(unaudited)
         
  Three Months Ended December 31, Year Ended December 31,
         
  2012 2011 2012 2011
         
Net income  $ 56,619  $ 11,477  $ 83,269  $ 27,465
Amortization of identified intangibles  5,160  2,528 18,594 11,248
Stock based compensation – Cost of revenue  367  330 1,193 1,664
Stock based compensation – Research and development  1,532  1,711 5,719 5,723
Stock based compensation – Sales and marketing  915  1,047 3,320 4,133
Stock based compensation – General and administrative  2,572  2,718 9,490 11,848
Acquisition-related transaction costs  993  787 2,200 2,326
Imputed net expenses related to sale of building and land  377 —  377 — 
Change in fair value of contingent consideration  44 —  (1,360) 1,476
Restructuring and other  1,273  942 5,803 3,258
Litigation settlements —  —  256 — 
Gain on sale of minority investment in a privately-held company —  —  —  (2,866)
Tax effect of non-GAAP adjustments  (50,022)  (4,912) (67,375) (13,214)
Non-GAAP net income  $ 19,830  $ 16,628  $ 61,486  $ 53,061
         
Non-GAAP net income per diluted common share  $ 0.42  $ 0.36  $ 1.29  $ 1.12
Shares used in per share calculation  47,566  46,765  47,734  47,579
         
Note: all items included within general and administrative expense unless otherwise indicated by the caption.
 
 
Electronics For Imaging, Inc.
Condensed Consolidated Balance Sheets
(in thousands)
(unaudited)
  Years Ended December 31,
  2012 2011
     
Assets    
Cash and cash equivalents  $ 283,996  $ 120,058
Short-term investments  80,966  99,100
Accounts receivable, net  135,110  91,923
Inventories  58,343  44,788
Other current assets  74,877  20,792
Total current assets  633,292  376,661
Property and equipment, net  86,582  30,096
Restricted investments —   56,850
Goodwill  218,269  164,323
Intangible assets, net  80,244  55,992
Other assets  55,397  55,812
Total assets  $ 1,073,784  $ 739,734
     
Liabilities & Stockholders' equity    
Accounts payable  $ 63,446  $ 46,965
Deferred proceeds from property transaction  180,216 — 
Accrued and other liabilities  118,060  82,289
Income taxes payable  7,562  2,583
Total current liabilities  369,284  131,837
Contingent and other liabilities  17,742  3,427
Deferred tax liabilities  6,210  4,090
Long term taxes payable  29,755  35,597
Total liabilities  422,991  174,951
Total stockholders' equity  650,793  564,783
Total liabilities and stockholders' equity  $ 1,073,784  $ 739,734
 
 
Electronics For Imaging, Inc.
Condensed Consolidated Statements of Cash Flows
(in thousands)
(unaudited)
     
  Years Ended December 31,
  2012 2011
     
Cash flows from operating activities:    
Net income   $ 83,269  $ 27,465
Adjustments to reconcile net income to net cash provided by operating activities:    
Depreciation and amortization 27,032 18,765
Deferred taxes (52,820) (2,691)
Excess tax benefit from stock-based compensation (1,360) (2,038)
Stock-based compensation 19,721 23,369
Provision for inventory obsolescence 3,231 6,991
Provision for allowance for bad debts and sales-related allowances 3,250 2,010
Gain on sale of minority investment in a privately-held company —  (2,866)
Other non-cash charges and adjustments 3,193 2,852
Changes in operating assets and liabilities (32,162) (1,661)
Net cash provided by operating activities 53,354 72,196
     
Cash flows from investing activities:    
Purchases of short-term investments (64,528) (99,155)
Proceeds from sales and maturities of short-term investments 80,992 101,716
Purchases, net of proceeds from sales, of property and equipment (6,147) (9,828)
Proceeds from property transaction, net of direct transaction costs 179,173 — 
Businesses purchased, net of cash acquired (61,591) (36,690)
Proceeds from sale of minority investment in a privately-held company —  2,866
Proceeds from notes receivable of acquired business 5,216 713
Net cash provided by (used for) investing activities 133,115 (40,378)
     
Cash flows from financing activities:    
Proceeds from issuance of common stock 18,958 8,123
Purchases of treasury stock and net settlement of restricted stock (35,176) (45,841)
Repayment of debt assumed through business acquisitions (6,914) (210)
Contingent consideration related to businesses acquired (969) (1,746)
Excess tax benefit from stock-based compensation 1,360 2,038
Net cash used for financing activities (22,741) (37,636)
     
Effect of foreign exchange rate changes on cash and cash equivalents 210 (487)
Increase (decrease) in cash and cash equivalents 163,938 (6,305)
Cash and cash equivalents at beginning of year 120,058 126,363
Cash and cash equivalents at end of period  $ 283,996  $ 120,058

 

 
 
Electronics For Imaging, Inc.
Revenue by Operating Segment and Geographic Area
(in thousands)
(unaudited)
         
  Three Months Ended December 31, Year Ended December 31,
         
Revenue by Operating Segment 2012 2011 2012 2011
Industrial Inkjet  $ 86,219  $ 72,629  $ 320,228  $ 240,318
Productivity Software (1)  29,423  23,659  103,466  81,165
Fiery  58,463  66,770  228,443  270,073
Total  $ 174,105  $ 163,058  $ 652,137  $ 591,556
         
Revenue by Geographic Area        
Americas  $ 102,762  $ 103,323  $ 354,114  $ 345,303
EMEA  47,574  44,701  195,397  178,471
APAC  23,769  15,034  102,626  67,782
Japan  5,580  7,068  27,870  35,655
ROW  18,189  7,966  74,756  32,127
Total  $ 174,105  $ 163,058  $ 652,137  $ 591,556
         
(1) Previously referred to as APPS. In Q1 2012, we re-named our APPS operating segment as the "Productivity Software" operating segment.

 

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