Business

Electronics For Imaging, Inc., a world leader in customer-focused digital printing innovation, today announced its results for the first quarter of 2010. For the quarter ended March 31, 2010, the Company reported revenues of $110.8 million, compared to first quarter 2009 revenue of $96.1 million.

GAAP net loss was $(11.4) million or $(0.25) per diluted share in the first quarter of 2010, compared to GAAP net income of $26.7 million or $0.52 per diluted share for the same period in 2009.

Non-GAAP net loss was $(0.1) million or $(0.00) per diluted share in the first quarter of 2010, compared to non-GAAP net loss of $(4.3) million or $(0.08) per diluted share for the same period in 2009.

"Our product portfolio performed very well in the first quarter, with Inkjet growing 37% over the prior year and Fiery showing strong results during a normally seasonally weak period," said Guy Gecht, CEO of EFI. "Going forward, we expect new innovative products to maintain our growth momentum, as we remain focused on investing in innovation, helping our customers to be more competitive and profitable."

Separately, the Company announced that it has reached an agreement to purchase Radius Solutions, a leading provider of Print MIS applications for the packaging industry, an area that EFI is strategically targeting with its line of Jetrion printers. While the terms of the acquisition were not disclosed, the cash transaction is expected to be slightly accretive to full year 2010 results. The transaction is subject to various closing conditions.

The Company also announced that its Chief Financial Officer, John Ritchie, plans to leave the Company after the filing of the Company's Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2010 to pursue another opportunity.  The Company intends to appoint Gordon Heneweer, currently Vice President, Finance, as the Company's interim Chief Financial Officer.  The Company has initiated a search for a new CFO.

"I would like to extend my sincere thanks to John for his significant contribution to EFI over the past 10 years and wish him all the best in his new role," said Guy Gecht, CEO of EFI.

 

About our Non-GAAP Net Income and Adjustments

To supplement our consolidated financial results prepared under generally accepted accounting principles, or GAAP, we use non-GAAP measures of net income and earnings per diluted share that are GAAP net income and GAAP earnings per diluted share adjusted to exclude certain recurring and non-recurring costs, expenses and gains.

We believe that the presentation of non-GAAP net income and non-GAAP earnings per diluted share provides important supplemental information to management and investors regarding non-cash expenses, significant recurring and non-recurring items that we believe are important to understanding our financial and business trends relating to our financial condition and results of operations.  Non-GAAP net income and non-GAAP earnings per diluted share are among the primary indicators used by management as a basis for planning and forecasting future periods and by management and our board of directors to determine whether our operating performance has met specified targets and thresholds. Management uses non-GAAP net income and non-GAAP earnings per diluted share when evaluating operating performance because it believes that the exclusion of the items described below, for which the amounts and/or timing may vary significantly depending upon the Company's activities and other factors, facilitates comparability of the Company's operating performance from period to period.  We have chosen to provide this information to investors so they can analyze our operating results in the same way that management does and use this information in their assessment of our business and the valuation of our Company.

We compute non-GAAP net income and non-GAAP earnings per diluted share by adjusting GAAP net income and GAAP earnings per diluted share to remove the impact of recurring amortization of acquisition-related intangibles, stock-based compensation expense, as well as restructuring related and non-recurring charges and gains and the tax effect of these adjustments.  Such non-recurring charges and gains include project abandonment costs, asset impairment charges, certain legal settlements, our sale of certain real estate assets, and acquisition-related transaction costs and legal expenses.  Examples of these excluded items are described below:

Amortization of acquisition-related intangibles. Intangible assets acquired to date are being amortized on a straight-line basis.

Stock-based compensation expense is recognized in accordance with FASB Accounting Standards Codification, Topic 718, Stock Compensation.

 

Non-recurring charges and gains, including:

Restructuring related charges.  We have incurred restructuring charges as we reduce the number and size of our facilities and the size of our workforce.

Asset impairment costs consist of equipment and non-cancellable purchase orders incurred relating to a planned product that was cancelled and a facility closure.

Gain on sale of building and land. On January 29, 2009, we sold a portion of the Foster City, California campus for a final amount of $137.3 million to Gilead Sciences, Inc., resulting in a gain on sale of approximately $79.4 million as of March 31, 2009.

Acquisition-related transaction costs and legal expenses. In line with our previously disclosed acquisition strategy, we have identified targets for potential acquisition and have incurred expenses of $0.6 million related thereto in the first quarter of 2010.

Tax effect of these adjustments. After removing the non-GAAP items, we apply the principles of ASC 740, Income Taxes, to estimate the non-GAAP income tax provision in each jurisdiction in which we operate.

These non-GAAP measures are not in accordance with or an alternative for 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 or earnings per diluted share prepared in accordance with GAAP.  Non-GAAP financial measures have limitations in that they do not reflect certain items that may have a material impact upon our reported financial results.  We expect to continue to incur expenses of a nature similar to the non-GAAP adjustments described above, and exclusion of these items from our non-GAAP net income and non-GAAP earnings per diluted share should not be construed as an inference that these costs are unusual, infrequent or non-recurring.

EFI, a world leader in customer-focused digital printing innovation, wrapped up another information-packed Connect users' conference last week, welcoming more than 500 customers to the Wynn Las Vegas. The 11th Connect conference enabled leaders from around the world to attend more than 120 educational sessions, test drive the latest EFI products, voice their opinions at user group meetings, hear thought-provoking speakers, and network with peers.

"This year's event saw a 50 percent increase in registrations over last year, and the mood was very upbeat," said Frank Mallozzi, senior VP of worldwide sales and marketing, EFI. "It was great to talk to and mingle with industry leaders who are focused on strengthening their companies to ensure they are in a position to lead the economic turn-around. We are pleased to have closed many deals at the event across our product portfolio."

"EFI Connect is probably the most informative industry conference I attend," said Glenn Huish, CTO at BelAire Displays, which uses Pace, VUTEk and Colorproof XF solutions. "The amount of personal interaction I get with key members of the EFI team, as well as the other conference attendees, is beyond any other event I've been to. This year I was literally in conversation every moment I wasn't listening to a speaker, from the moment I sat down for breakfast every day, to the time I collapsed every night, only to do it all over again the next day."

The full portfolio of EFI solutions was on display in the Connect lab. The latest versions of EFI's print MIS, web-to-print, proofing, and workflow offerings were showcased, along with Fiery controller and software solutions. For the first time, a special Fiery "basics" training track was among the educational sessions. The Jetrion 4830, Rastek T660, VUTEk GS3200 and VUTEk GS5000r printers were running throughout the conference, and drew large crowds of onlookers and interested customers. The conference also featured exhibits of the latest printing technologies from 18 industry leaders.

Along with longer educational sessions and additional user group meetings, for the first time this Connect included a live auction with over 20 items up for bid, ranging from software add-ons and packages to consulting and training opportunities. A portion of the auction proceeds went to The Print and Graphics Scholarship Foundation (PGSF).

Nothing at all to do with large format printing, but we are all interested in what HP are up to, right?

HP and Palm, Inc. today announced that they have entered into a definitive agreement under which HP will purchase Palm, a provider of smartphones powered by the Palm webOS mobile operating system, at a price of $5.70 per share of Palm common stock in cash or an enterprise value of approximately $1.2 billion. The transaction has been approved by the HP and Palm boards of directors.

The combination of HP's global scale and financial strength with Palm's unparalleled webOS platform will enhance HP's ability to participate more aggressively in the fast-growing, highly profitable smartphone and connected mobile device markets. Palm's unique webOS will allow HP to take advantage of features such as true multitasking and always up-to-date information sharing across applications.

"Palm's innovative operating system provides an ideal platform to expand HP's mobility strategy and create a unique HP experience spanning multiple mobile connected devices," said Todd Bradley, executive vice president, Personal Systems Group, HP. "And, Palm possesses significant IP assets and has a highly skilled team. The smartphone market is large, profitable and rapidly growing, and companies that can provide an integrated device and experience command a higher share. Advances in mobility are offering significant opportunities, and HP intends to be a leader in this market."

"We're thrilled by HP's vote of confidence in Palm's technological leadership, which delivered Palm webOS and iconic products such as the Palm Pre. HP's longstanding culture of innovation, scale and global operating resources make it the perfect partner to rapidly accelerate the growth of webOS," said Jon Rubinstein, chairman and chief executive officer, Palm. "We look forward to working with HP to continue to deliver industry-leading mobile experiences to our customers and business partners."

Under the terms of the merger agreement, Palm stockholders will receive $5.70 in cash for each share of Palm common stock that they hold at the closing of the merger. The merger consideration takes into account the updated guidance and other financial information being released by Palm this afternoon. The acquisition is subject to customary closing conditions, including the receipt of domestic and foreign regulatory approvals and the approval of Palm's stockholders. The transaction is expected to close during HP's third fiscal quarter ending July 31, 2010.

Avery Dennison Corporation  today announced preliminary, unaudited first quarter 2010 results.

"We are off to an encouraging start in 2010," said Dean A. Scarborough, chairman, president and CEO of Avery Dennison. "First-quarter volumes increased and organic sales growth was solid in all regions, particularly emerging markets. We're especially pleased with the increased demand benefiting our Pressure-sensitive Materials and Retail Information Services segments. Increased operating leverage has driven gross profit margin well above pre-recession levels despite lower volumes."

"Going forward, we're more confident about a modest economic recovery," Scarborough said. "We expect raw material inflation to be a challenge throughout the year and we are taking pricing actions accordingly. We are playing aggressive offense, increasing investment in marketing and business development, while continuing to deliver productivity improvements to help fund long-term, profitable growth."

For more details on the Company's results, see the Company's supplemental presentation materials, "First Quarter 2010 Financial Review and Analysis," posted at the Company's Web site at www.investors.averydennison.com, and furnished under Form 8-K with the SEC.

 

First Quarter 2010 Results by Segment

All references to sales reflect comparisons on an organic basis, which exclude the impact of acquisitions, foreign currency translation, and the impact of an extra week in the first quarter of 2009. All references to operating margin exclude the impact of restructuring, asset impairment charges, and other items.

 

Pressure-sensitive Materials (PSM)

- Roll Materials sales growth was led by strength in emerging markets, and mid single-digit growth in Europe and North America. Sales grew low double-digits in the Graphics and Reflective Products division.

- Operating margin increased due to higher volume and the benefits from restructuring and o'ther initiatives to drive productivity.

 

Retail Information Services (RIS)

- Sales growth reflected increased demand, due in part to significant inventory destocking that occurred among apparel retailers in the first half of 2009.

- Operating margin expanded due to increased volume and the benefit of restructuring and other productivity initiatives.

- RIS continues to introduce new products and value-added services to increase its share of this large market, while reducing fixed costs and streamlining its operations.

 

Office and Consumer Products (OCP)

- The decline in sales reflected weak end-market demand and changes in customer programs, partially offset by the impact of inventory destocking in the first quarter of 2010 compared to that in the first quarter of 2009.

- Operating margin declined due to increased spending related to customer programs, as well as higher investment in consumer promotions and marketing.

 

Other specialty converting businesses

- Sales growth primarily reflected increased demand for products for automotive applications, which was down sharply in the first quarter of 2009.

- The improvement in operating margin reflected increased volume and the benefit of restructuring and productivity actions.

 

Consolidated Items and Actions

- In the fourth quarter of 2008, the Company began a restructuring program to reduce costs across all segments of the business. The Company is on track to achieve its goal of $180 million in annualized savings by mid-2010. In the first quarter of 2010, the Company delivered approximately $25 million in incremental savings from these actions, net of transition costs.

- The adjusted tax rate in the first quarter was approximately 22 percent, representing the high end of the expected range for the full-year rate.

 

2010 Outlook

In the Company's supplemental presentation materials, "First Quarter 2010 Financial Review and Analysis," the Company provides a list of factors that it believes will contribute to its 2010 financial results. Based on the factors listed and other assumptions, the Company expects reported revenue growth of 5 to 7 percent, and Adjusted (non-GAAP) Earnings Per Share of $2.50 to $2.80. The Company estimates Free Cash Flow in 2010 of $300 to $350 million.

 

The NEC’s halls were once again alive to the sound of deal-making, where visitors came to take in the latest product launches and the many show features and opportunities. The show was a resounding success giving weight to the renewed optimism in the market. Building on the success of last year, Sign & Digital UK affirmed its place as the premier visual communications show in the UK. With the show aisles active with movers and shakers from the industry, the volume of business done at the show was testament to the optimism and opportunities this market offers.

Rudi Blackett, event director comments: “This year’s show played a vital role in helping to generate business and move the industry forwards and we were delighted to play host to many new products and showcase demonstrations of a wide range of products and services. I would like to give a big thank you to all of our exhibitors and visitors alike, who contributed to the success of Sign & Digital UK 2010.”

Many exhibitors were delighted with the show’s attendance and the flow of visitors interested in learning more about their products and actually placing orders at the event.

Mimaki’s exclusive distributor, Hybrid Services, enjoyed unprecedented sales in the week of the show, with orders placed across all market sectors and key products selling out. John de la Roche, Hybrid’s national sales manager, said “we’re in the fortunate position of having our April and May order books absolutely full. Our resellers had an excellent show and we’re working hard to fulfill the machine orders as quickly as we can.”

John Clements of Boldscan had this to say about the show “we were delighted once again with very good attendance numbers at this year’s Sign & Digital UK show, where we introduced several new products and handed out over 750 of our new Product Guides. The Show remains our flagship event for launching new products and introducing our new product guide each year and has once again delivered for us as promised.”

Similar sentiments were echoed by James Carpenter, managing director at Doro Tape UK Ltd, “We have been coming to Sign & Digital UK, or Sign UK in its former life, for the best part of 20 years now. I have always found the show to be of paramount importance in serving as a shop window on the industry, a job that it does better than anything else out there. As usual the show has been very well organised, and we have seen fantastic levels of footfall to the stand.”

Ivaylo Vladimirov, project manager at Mouse PS comments, “Having exhibited at Sign & Digital UK 2010 for the first time, we found it to be a fantastic show that provided a great many opportunities for making new business contacts. We have come here specifically to build our brand and reputation with sign making companies in the UK, and have taken considerable steps to achieving this aim.”

Dean Carpenter from Laserite summed up the success of the show “We had an excellent show this year. For each of the three show days we had a steady stream of good quality enquiries, some of which have already resulted in sales of our Lotus laser systems. Bookings for our on-site demo vehicle are the highest that they have ever been.  We’ve already re-booked for 2011’’

Visitors to the show were also impressed. Mark Gordon, owner of Flash Signs commented, “This is my third time visiting the show, and this year I am here specifically to source a digital printer. One of the standout things for me at the 2010 show has been the significantly increased number of new products at the show, and as a result of my visit, I will definitely be buying in the coming months.”

Alan Caddick, marketing manager for the show adds, “There were numerous features that received great feedback from visitors, such as the Manchester United competition sponsored by Hybrid Services, the Grafityp F1 wrapping competition, the incredible wealth of new product launches, the Adobe and Corel seminars, the new Signmakers Workshop, as well as the Ibiza Angels at the massage zone. We are already planning our features programme for 2011 and would welcome any suggestions as to what visitors would like to see at the event.’’

Sign & Digital UK 2010 overall attendance, subject to audit, was 6,114 with over 5,500 of these being unique visitors.

Visitors came from a wide range of companies including: Adidas Group, Arcadia UK, Augustus Martin, Balfour Beatty, Bezier, Birmingham City Council, British Airways, Butterfield Signs, C3 Imaging, Cadbury, Carillion, Cornwall Signs, Ebbsfleet Screenprinters, Fastsigns, Fenwick, Hampshire County Council, Harrisons Signs, Harrods, Hawes Signs, IKEA, JC Decaux, Legoland, Linney Group, Manchester Airport, McKenzie Clark, Network Rail, Ringway Signs, Service Graphics, Sign A Rama, Signs Express, St Ives, TTC Signs and West Midland Fire Service.

Over 30 stands have already been booked, with many more to follow in the coming weeks, for next year’s show which is being held on 12-14 April 2011, in Halls 17&18 at the NEC, Birmingham…Already booked include the likes of William Smith, Graphtec, IGS, Plex Display, Ultima Displays, Signwaves, Inktec Europe, Expand International, Mouse PS, Global Erecting Sign Services, Fairfield Displays & Lighting, Laserite, and ITC who took the opportunity to get in early and secure prime stand positions for this very popular annual event.

For further information on exhibiting at Sign & Digital UK 2011, visit the show website www.signanddigitaluk.com or email This email address is being protected from spambots. You need JavaScript enabled to view it.

 

Ipex 2010 has reached almost full capacity with more than 75 new international suppliers signing up to exhibit in the last couple of months, adding a total of 1,300 square metres to the overall floorplan. The latest companies to confirm their attendance include Adobe, Brandtjen & Kluge, Grafitek International, Timsons, Impression Technology, XMPIE, Tarrant Machines, ROI Distribution, Rotatek and Rotometrics and Technique MIS. For the first time, there will also be a Taiwanese Pavilion, including the following companies: Chens Asia, Chenchin Ironworks, Li Sheng, Yii-Lee, TAMI, Unisuntop.

Located in Hall 9, the Ipex 2010 organisers have also reignited the successful Springboard feature, following enquiries from smaller firms. The Springboard feature offers a low-cost option for small innovative companies who want to exhibit for the first time and who previously found the cost of exhibiting to be prohibitive. Launched in 2006, the spur to attract small firms had come from visitors.

Says Trevor Crawford, Ipex 2010 Event Director: “This last minute influx of international additions to the floorplan suggests a new tide of industry optimism and demonstrates the importance that these exhibitors place on Ipex as the major global ideas and buying event in 2010.

“We’re delighted with the event’s progress and development. Ipex is a truly international show, featuring over 1,000 exhibiting companies from more than 40 countries, providing visitors with an unrivalled opportunity to see the current and future shape of our industry and plan their investment decisions accordingly. Visitors can expect to see major technology advances with exhibiting companies committed to demonstrating working machinery on the showfloor.”

This year’s show will once again set the scene for the launch of a number of innovative new hardware, software and consumables. The industry’s leading suppliers are set to inspire crowds with the latest developments spanning the whole pre-press, printing and finishing spectrum. A comprehensive list of new product launches at Ipex can be found on the Ipex website www.ipex.org/new

“Historically, Ipex is the arena in which printing industry suppliers unveil new products and technologies to the marketplace, reinforcing both the ever-increasing pace of technological advances and Ipex’s important standing within the global exhibition calendar”, continues Trevor Crawford.

The wave of pre-registrations to date also signposts towards a successful Ipex 2010. Visitors from over 150 countries have pre-registered to date, with 21% from Europe, 9% from Asia, and 10% from Middle East and Africa.

Pre-registration for all those wishing to attend Ipex 2010 is now available via www.ipex.org/register and will result in free entry and a £30 saving off the entrance fee, access to exclusive pre-show news and highlights as well as free fast-track entry to the show.