Large Format Review - Business News

• Canon is launching a competition that involves the submission of a formal business plan via its Ipex 2010 microsite
• Total prize value will exceed 100,000 Euros with the first prize being a fully configured, light production Canon imageRUNNER ADVANCE C9070 PRO digital press
• Canon is setting out to support digital print companies as they look to achieve long-term financial security through innovation and robust forward planning

Further demonstrating its ongoing commitment to the professional print industry, Canon Europe, world leader in digital imaging solutions, today announces the launch of its pan-European ‘Business Leap’ Competition.

With Canon’s third Insight report today (Please see relevant press release dated 9 February 2010) revealing that many print service providers would not have survived the downturn without a digital printing capability, it is hoped that the competition will both stimulate printers to consider new ways to develop their businesses (or start new ones) and provide guidance in the creation of a comprehensive business plan, a key requirement when seeking access to finance.

Open to anyone aged over 18 and resident in Western Europe*, the competition invites all printers, together with entrepreneurs seeking an opportunity to join the industry, to submit a formal business plan for a commercial venture that involves digital printing. The plans will be scrutinised and reduced to a shortlist of finalists, who will then be individually interviewed by a panel of independent business consultants and a winner and two runners-up selected.

The first prize will be a fully configured, light production Canon imageRUNNER ADVANCE C9070 PRO digital press, which the winner will be able to retain for three years. The second prize will be a 44 inch Canon imagePROGRAF large format solution, which again the winner will be able to retain for three years. The third prize comes in the form of bespoke business consultancy, which the first two prize winners will also receive. The total value of the prizes will be in excess of 100,000 Euros. The competition will run from the end of March to the end of July 2010 and the winners will be presented with their prizes at an awards ceremony in Paris in October 2010.

David Preskett, Director of Professional Print, Canon Europe, explains the rationale behind the competition: “With most of the key territories in Europe still enduring the recession, it’s clear that, to secure their long-term commercial future, printers need to think about their businesses in a new way and take a more entrepreneurial approach towards customers and customer needs. The industry has changed and we are encouraging our customer to adapt to this change – to make a leap into the future of print. We’re therefore launching the Canon ‘Business Leap’ Competition to offer guidance in the preparation of a creative and comprehensive business case. At the same time, we’re giving entrants the opportunity to win a top-of-the-range light production digital press, a Canon imageRUNNER ADVANCE C9070 PRO, together with practical business consultancy from independent experts.

“In running the competition,” continues Preskett, “Canon is setting out to help printers develop profitable businesses for the longer term, while giving entrants the chance to turn their business ideas into a commercial reality. I’d therefore urge any printer who is looking to move into digital printing or any entrepreneur looking to break into this industry to submit an entry!”

Any qualifying person who wishes to enter the Canon Business Leap Competition must register their details on the Canon Ipex 2010 microsite at www.canon-europe.com/ipex, which will be live from 31 March 2010. They will then be able to download an entry form, which should be completed and emailed, together with any supporting documentation the entrant believes will strengthen their case, to This email address is being protected from spambots. You need JavaScript enabled to view it.

The terms and conditions of the competition and a guide to completing the entry form will also be available via the Canon Ipex 2010 microsite and any entrant requiring clarification on a point may also email their question to Canon at This email address is being protected from spambots. You need JavaScript enabled to view it.. The decision of the judges is final and Canon will not enter into any correspondence with any entrant over the outcome of the competition.

On 16 November 2009 Canon and Océ announced that they had reached conditional agreement to combine their printing activities through a fully self-funded, public cash offer by Canon for all the outstanding ordinary shares of Océ.

The offer price of €8.60 per outstanding ordinary share of Océ represents a premium of 70% over the closing price of Friday 13 November 2009 and 137% to the average closing price of Océ’s shares over the 12 months prior to 16 November 2009. Canon and Océ will be able to build upon each other’s strong history and proven track record of innovation and customer servicing and will create a strong joint enterprise capable of long term success.

The combination will capitalize on an excellent complementary fit in product mix, channel mix, R&D and business lines resulting in an outstanding client offer spanning the entire printing industry. Océ remains a separate legal entity as a Canon division, headquartered in Venlo (The Netherlands); within this division the Océ brand name is to be maintained and applied in all relevant markets. Océ continues to lead its R&D and manufacturing.

The Management Board and key management will remain in place. Employees will become part of the industry leader. Océ and Canon do not see any material negative consequences as a result of the recommended offer for the existing employment level of Océ, excluding already announced personnel reductions. The Management and Supervisory Boards of Océ fully and unanimously support and recommend the intended offer.

Holders of the depository receipts for Océ’s cumulative preference shares (approximately 19% of the total share capital) agreed to sell their interests to Canon; large shareholder Bestinver Gestion, SGIIC S.A. (approximately 9.5% of the outstanding ordinary shares) has provided an irrevocable undertaking to tender. Canon has acquired 28.05% of the outstanding ordinary shares since 16 November 2009 and received approval from all relevant anti-trust authorities.

Eastman Kodak Company today reported fourth-quarter 2009 earnings from continuing operations of $430 million, or $1.36 per share, on sales of $2.582 billion, reflecting the emergence of a company able to deliver improved profitability especially as the economy recovers.

"Despite a difficult economic environment, we delivered in 2009," said Antonio M. Perez, Chairman and Chief Executive Officer, Eastman Kodak Company. "Our momentum is returning and our strategy is paying off. During 2009, we generated significant traction with our key digital businesses, we achieved sustainable operational improvements across the company, our earnings improved substantially, and we ended the year with more than $2.0 billion in cash on our balance sheet."

The company's fourth-quarter results demonstrate the success of the focused investments that Kodak is making in new products and growth businesses, including consumer and commercial inkjet and digital plates; the successful conclusion of intellectual property licensing agreements; improved profit margins; and a lean cost structure.

Fourth-quarter sales were $2.582 billion, a sequential increase of 45% from the third quarter of 2009 and a 6% increase from the year-ago quarter, including 4% of favorable foreign exchange impact. Revenue from digital businesses totaled $1.991 billion, a 12% increase from $1.779 billion in the prior-year quarter, resulting from the combination of an increase in non- recurring intellectual property licensing revenue and increased demand for consumer inkjet printer systems, kiosk media and digital plates. Revenue from the company's traditional business decreased 10% to $589 million for the fourth quarter. This revenue decline rate was significantly reduced compared to the first three quarters of 2009, reflecting sequentially improved demand across all traditional businesses, particularly Entertainment Imaging.

On the basis of U.S. generally accepted accounting principles (GAAP), the company reported fourth-quarter earnings from continuing operations of $430 million, or $1.36 per share, compared with a loss on the same basis of $914 million, or $3.40 per share, in the year-ago period. Items of net benefit that impacted comparability in the fourth quarter of 2009 totaled $90 million after tax, or $0.28 per share, primarily related to benefits from asset sales and tax-related items, partially offset by restructuring charges and other miscellaneous items. Items of net expense that impacted comparability in the fourth quarter of 2008 totaled $893 million after tax, or $3.32 per share, primarily related to a goodwill impairment charge, restructuring charges, a legal contingency, and tax-related items. (Please refer to the attached Items of Comparability table for more information.)

For full-year 2009, the company reported a loss from continuing operations of $232 million, or $0.87 per share. This compares to a loss of $727 million, or $2.58 per share, in 2008. Full-year revenue totaled $7.606 billion, a 19% decline from 2008. Full-year digital revenue totaled $5.345 billion, a 17% decline from 2008, and traditional revenue totaled $2.257billion, a 24% decline. These results reflect the recession's impact on demand, especially in the first half of 2009. The company expects that customer demand for its digital products will continue to grow, as the economy recovers.

Other 2009 details:

• In the fourth quarter of 2009, Gross Profit margin was 34.4% of sales, an increase from 20.4% in the year-ago period. Approximately six percentage points of this increase was driven by productivity improvements and higher demand for digital plates and kiosk media, productivity gains for digital cameras and devices, consumer inkjet, electrophotographic printing and traditional photofinishing, and favorable foreign exchange. The balance of the increase was driven by non-recurring intellectual property licensing agreements.
• Selling, General and Administrative (SG&A) expenses, on a GAAP basis, were $347 million in the fourth quarter, down 15%, or $61 million, from $408 million in the year-ago quarter, as a result of company-wide efficiency gains.
• Research and Development expenses, on a GAAP basis, were $86 million in the fourth quarter, down 25%, or $28 million, from $114 million in the year-ago quarter, reflecting the continued focusing of resources to core growth businesses, which require lower research and development investment versus a year ago.
• Fourth-quarter cash generation, before restructuring payments, was $909 million, compared with $508 million in the year-ago quarter. This corresponds to net cash provided by continuing operations from operating activities of $822 million for the fourth quarter of 2009 and $520 million for the year-ago period. For full-year 2009, cash generation, before restructuring payments, was $45 million, compared with cash usage on the same basis of $147 million for 2008. This corresponds to net cash used in continuing operations from operating activities of $136 million for 2009, compared with a net cash usage of $128 million for 2008.
• Kodak held $2.024 billion in cash and cash equivalents as of December 31, 2009, up from $1.147 billion on September 30, 2009.
• The carrying value of the company's debt, on a GAAP basis, stood at $1.191 billion as of December 31, 2009.

Segment sales and earnings from continuing operations before interest, taxes, and other income and charges (segment earnings from operations), are as follows:

• Consumer Digital Imaging Group fourth-quarter sales were $1.212 billion, a 27% increase from the prior-year quarter. Fourth-quarter earnings from operations for the segment were $380 million, compared with a loss of $41 million in the year-ago quarter. The year-over-year improvement was driven by a combination of higher non-recurring intellectual property licensing revenue; improved profitability in consumer inkjet systems, including an 81% revenue increase in consumer inkjet printer hardware and ink; improved operating performance in Digital Capture & Devices and Retail Systems Solutions; and reduced SG&A expenses across the segment. Excluding the impact of non-recurring intellectual property royalties, segment earnings improved by more than $100 million.
• Graphic Communications Group fourth-quarter 2009 sales were $779 million, a 5% decline from the fourth quarter of 2008. Fourth-quarter earnings from operations for the segment were $36 million, a $40 million improvement over the year-ago quarter. This earnings increase was primarily driven by operational improvements across all product lines, increased demand for digital plates and enterprise workflow products, and lower raw material costs.
• Film, Photofinishing and Entertainment Group fourth-quarter sales were $589 million, a 10% decline from the year-ago quarter. Fourth-quarter earnings from operations for the segment were $53 million, compared with earnings of $39 million in the year-ago period. The increase in earnings was driven by significant operational improvements in Traditional Photofinishing, cost reductions across the segment, favorable foreign exchange, and improvement in raw material costs, partially offset by industry-related volume declines in Film Capture, and negative price/mix.
• 
  

"In the second half of 2009 we began to see some improvement in the economy, and that helped to highlight the true strength of our digital portfolio," said Perez. "During 2009, we doubled the installed base for our consumer inkjet printers while maintaining our price premium. In the fourth quarter, we grew sales of commercial inkjet products, including a 33% increase in sales of our VL2000 printing system and enjoyed continued strong customer orders for our PROSPER product line. We delivered positive cash performance before restructuring for the past two quarters and for all of 2009, and our cost structure is providing us with significant operating leverage as the economic recovery continues. We enter the new year with the most competitive digital portfolio ever, strong presence in key markets, and a significant amount of positive momentum. All of this positions us well for improved performance in 2010."

With reference to the joint press releases of Canon Inc. (trading symbol CAJ) ("Canon") and Océ N.V. (trading symbol OCE) ("Océ") of 16 November 2009 and 14 December 2009, Canon Finance Netherlands B.V., a wholly owned subsidiary of Canon (the "Offeror") and Océ hereby jointly announce that the Offeror is making a fully self-funded, public cash offer for all the issued and outstanding ordinary shares with a nominal value of EUR 0.50 each in the capital of Océ (the "Shares") at an offer price of EUR 8.60 in cash per Share (the "Offer").

Terms not defined herein shall have the meaning as set forth in the Offer Memorandum

Highlights

• Canon and Océ aim to create the overall No. 1 presence in the printing industry.
• The Offer is a fully self-funded and recommended cash offer for all the Shares at an offer price of EUR 8.60 in cash per Share.
• The Offer represents a premium of 70% over the closing price of Friday 13 November 2009 (being the last trading day before the public announcement of the intended Offer) and 137% over the average share price over the last 12 months prior to 16 November 2009.
• The Offer presents the best possible way forward for Océ at conditions that are favourable to its Shareholders and all other stakeholders.
• The Supervisory Board and the Management Board of Océ fully support and unanimously recommend the Offer to all Shareholders for acceptance.
• The acceptance period under the Offer begins at 9:00 hours, Amsterdam time, on 29 January 2010 and ends at 17:30 hours, Amsterdam time, on 1 March 2010, unless extended.
• Océ will convene an Extraordinary General Meeting of Shareholders at 14:30 hours, Amsterdam time, on 12 February 2010 at Van der Grintenstraat 1, 5914 HD, Venlo, the Netherlands during which, amongst other things, the Offer will be discussed.
• The Offer shall be subject to the fulfilment of the Offer Conditions as set out in the Offer Memorandum, including but not limited to, the condition that on the Acceptance Closing Date the number of Tendered Shares together with the Shares that are directly or indirectly held at that time by the Offeror represents at least 85% of the Shares on a fully diluted basis. The Offeror has the right, but not the obligation, to waive certain Offer Conditions, including but not limited to, the 85% acceptance threshold, as further described in the Offer Memorandum.
• The Depositary Receipt Holders, Ducatus, ASR and ING (approximately 19% of the total share capital), agreed to sell their interests to Canon; large Shareholder Bestinver Gestion S.A., SGIIC (approximately 9.5% of the Shares) has provided an irrevocable undertaking to tender.
• As at the date of the Offer Memorandum, Canon holds indirectly through the Offeror 23,807,737 Shares, which represent approximately 22.18% of the Company's total issued share capital and 28.05% of the Shares.

Q4 marks company's return to profitability and cash generation, delivering $0.05 of non-GAAP EPS

Foster City, Calif. - Electronics For Imaging, Inc., a world leader in customer-focused digital printing innovation, today announced its results for the fourth quarter of 2009. For the quarter ended December 31, 2009, the Company reported revenues of $114.0 million, compared to fourth quarter 2008 revenue of $135.3 million.

GAAP net loss was $(3.4) million or $(0.07) per diluted share in the fourth quarter of 2009, compared to a GAAP net loss of $(104.5) million or $(2.03) per diluted share for the same period in 2008.

GAAP net loss was $(2.2) million or $(0.04) per diluted share for the twelve months ended December 31, 2009, compared to a GAAP net loss of $(113.4) million or $(2.16) per diluted share for the same period in 2008.

Non-GAAP net income was $2.3 million or $0.05 per diluted share in the fourth quarter of 2009, compared to non-GAAP net income of $6.7 million or $0.13 per diluted share for the same period in 2008.

Non-GAAP net loss was $(10.7) million or $(0.22) per diluted share for the twelve months ended December 31, 2009, compared to non-GAAP net income of $41.2 million or $0.74 per diluted share for the same period in 2008.

"Our results continue to show improvement as we delivered 13% sequential revenue growth driven by a strong rebound in our Fiery business posting 26% quarter over quarter growth. In addition, we delivered on our commitment to return to profitability and generate cash in the fourth quarter," said Guy Gecht, CEO of EFI. "As we look to 2010, we will be focused on profitable growth while continuing to provide the print industries' most innovative technology."