Electronics For Imaging Announces Revenue and Earnings for Third Quarter of 1999 - Company Financial Information

Edge: Work-Group Computing Report, Oct 18, 1999

Electronics For Imaging, Inc. (Nasdaq:EFII), Wednesday announced financial results for its third quarter of 1999.

Included in the financial results, both in the current quarter and historically, are the results of the company formerly known as Management Graphics, Inc., which merged with EFI on August 31, 1999, in a pooling of interests transaction.

Revenue for the third quarter of 1999 was $158 million, up 12 percent from $141 million in the second quarter of 1999, and up 22 percent from $130 million in the third quarter last year. Income from operations for the third quarter of 1999 was $39 million, up $7 million or 22 percent from the $32 million recorded in the second quarter of 1999, and up $17 million or 77 percent from the $22 million recorded in the third quarter of 1998. Net income

was $29 million or $0.51 per share for the third quarter of 1999, up $5 million or 21 percent from $24 million or $0.41 per share in the second quarter of 1999, and up $12 million or 71 percent from $17 million or $0.31 per share in the third quarter of last year. Excluding the one-time, merger-related costs of approximately $1.4 million (or $1.0 million net of taxes) incurred in the third quarter of 1999, pro forma net income amounted to $30 million or $0.53 per share for the third quarter of 1999, up $6 million or 25 percent from $24 million or $0.41 per share in the second quarter of 1999, and up $13 million or 76 percent from $17 million or $0.31 per share in the third quarter of last year.

For the nine months ended September 30, 1999, revenue was $423 million compared to $316 million in the nine-month period a year earlier, a 34 percent increase. For the nine months ended September 30, 1999, income from operations was $93 million compared to $36 million in the nine month period a year earlier, a 158 percent increase. Net income for the nine months ended September 30, 1999 increased 141 percent to $70 million or $1.23 per share compared to $29 million or $0.53 per share for the same period in 1998. Excluding the one-time, merger-related costs of approximately $1.4 million (or $1.0 million net of taxes) incurred in the third quarter of 1999, pro forma net income for the nine months ended September 30, 1999 increased 145 percent to $71 million or $1.25 per share compared to $29 million or $0.53 per share for the same period in 1998.

The company's total assets stand at $607 million as of September 30, 1999, up $123 million from the $484 million reported as of December 31, 1998. Cash and short-term investments are at $433 million as of September 30, 1999.

Electronics For Imaging, Inc. (EFI), recently ranked among Business Week's "Information Technology 100," is the world leader in enabling networked printing solutions. The company's Fiery color servers incorporate advanced hardware and software technologies to achieve fast, photographic-quality color output, and provide network connectivity for a range of devices, including digital color copiers from all leading suppliers, wide-format plotters, and digital presses. Fiery Driven controllers leverage these technologies to increase the output speed and improve the print quality of digital copiers and desktop color laser printers, while Fiery Prints are renowned as the reference standard for high-quality, cost-effective digital-color output. Fiery color servers and Fiery Driven color printers are installed worldwide in leading corporations, advertising agencies, graphic design studios, and print-for-pay businesses. Founded in 1989 and headquartered in Foster City, Calif., the company employs more than 740 people and maintains 22 sales offices worldwide.

EFI's products are distributed by the company's blue-chip OEM partners -- Canon, ENCAD, Epson, Fuji-Xerox, Hewlett-Packard, Kodak/Danka Business Systems, Konica, Lanier, Minolta, Oce, Ricoh, Sharp, and Xerox.

Additional information regarding EFI may be obtained by calling the company directly at 650/357-3500, or through public sources, including the company's SEC filings. EFI may also be reached on the World Wide Web at http://www.efi.com.

                  Electronics For Imaging, Inc.
           Combined Consolidated Statements of Income
              (in thousands, except per share data)
                           (unaudited)

                         Three Months Ended     Nine Months Ended
                           September 30,          September 30,
                          1999        1998       1999       1998
                          ----        ----       ----       ----
Revenue               $ 158,211   $ 129,804  $ 423,101   $316,215
Cost of revenue          79,236      73,191    216,211    177,072
                         ------      ------    -------    -------
                         78,975      56,613    206,890    139,143
                         ------      ------    -------    -------
Operating expenses:

Research and development 19,360      15,502     54,541     44,720
Sales and marketing      14,843      14,923     44,278     45,808
General and
 administrative           4,607       4,422     13,568     12,319
Merger related expenses   1,422        ----      1,422        ---
                         ------      ------    -------    -------
                         40,232      34,847    113,809    102,847
                         ------      ------    -------    -------

Income from operations   38,743      21,766     93,081     36,296

Other income              4,160       2,474     11,631      6,368
                         ------      ------    -------    -------
    Income before
  income taxes           42,903      24,240    104,712     42,664

Provision for
 income taxes            13,545       7,101     34,544     13,674
                         ------      ------    -------    -------

 Net income            $ 29,358    $ 17,139   $ 70,168   $ 28,990
                         ======      ======    =======    =======
Net income per
 basic common share       $0.53       $0.32      $1.28      $0.55
                         ======      ======    =======    =======
Shares used in per
 share calculation       55,314      53,124     54,754     53,085
                         ======      ======    =======    =======
Net income per
 diluted common share     $0.51       $0.31      $1.23      $0.53
                         ======      ======    =======    =======

Shares used in per
 share calculation       57,709      54,422     56,906     54,459
                         ======      ======    =======    =======

                  Electronics For Imaging, Inc.
              Combined Consolidated Balance Sheets
                         (in thousands)
                           (unaudited)

                                     September 30,   December 31,
                                         1999           1998
                                     ------------    -----------
ASSETS
Current assets:
  Cash and cash equivalents            $ 98,779        $ 58,909
  Short-term investments                334,617         269,823
  Accounts receivable, net               86,803          59,660
  Inventories                             8,649          16,485
  Other current assets                   17,619          21,853
                                      -----------     ----------
  Total current assets                  546,467         426,730

Property and equipment, net              51,512          47,632
Other assets                              9,434           9,829
                                      -----------     ----------
  Total assets                        $ 607,413       $ 484,191
                                      ===========     ==========

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
  Accounts payable                     $ 39,952        $ 32,849
  Accrued and other liabilities          33,331          29,009
  Income taxes payable                    8,578           9,511
                                      -----------     ----------
  Total current liabilities              81,861          71,369
                                      -----------     ----------
Long-term obligations,
 less current portion                     3,625           4,142
                                      -----------     ----------

Stockholders' equity:
  Common stock                              555             540
  Additional paid-in-capital            196,764         153,700
  Retained earnings                     324,608         254,440
                                      -----------     ----------
 Total stockholders' equity             521,927         408,680
                                      -----------     ----------
    Total liabilities and
  stockholders' equity                $ 607,413       $ 484,191
                                      ===========     ==========