EFI has released its financial figures for its fourth quarter ending 31 December 2017, which show revenues up slightly by 1 percent to $269.2 million over the same quarter from the previous year. There was an overall net loss according to generally accepted accounting practices, or GAAP, of $25.4 million, which is particularly disappointing given that EFI made a net income of $19.9 million for the same period in 2016. Cash flow from operating activities was $8.9 million, down 86% compared to $65.2 million during the same period in 2016.
The year-end figures are broadly on a par with the Q4 results, with revenue of $993.3 million, up 0.1% year-over-year compared to $992.1 million for the same period in 2016. GAAP net loss was $14.4 million or $(0.31) per diluted share, compared to GAAP net income of $44.9 million or $0.94 per diluted share for the same period in 2016. Cash flow from operating activities was $51.3 million, down 58% compared to $121.0 million during the same period in 2016.
Much of the damage seems to come from a slump in revenue for the Fiery software, down 13 percent year on year to $61m with EFI forecasting a further 20 percent decline for the next quarter. This is inevitable given that we’re seeing a slowdown in the dry toner printer market including some inkjet presses replacing dry toner, which accounts for much of the demand for Fiery servers.
On the other hand, the industrial inkjet and productivity software segments reported modest growth with more optimistic forecasts for the next quarter. In particular EFI has put a great deal of effort into its Nozomi corrugated press and this is likely to start generating profits over the next year or so.
However, these figures are hardly the “record revenue” trumpeted by EFI’s press release but I guess that’s marketing for you. Guy Gecht, EFI’s CEO, commented: “We look this quarter as our first step in re-establishing a consistent track record and regaining credibility after the missteps of the past year.”
He added: “We still have a lot to do. We are doubling down on investment in our growth areas, providing expanded sales coverage, increasing the pace of new product development, and growing our services organization, among other initiatives. We’re also making organizational and personal changes and continue to add experienced talent at all levels.”
Gecht was also upbeat about Fujifilm’s proposed takeover of Xerox, and its consequent restructuring of the Fuji Xerox division, noting: “We view this deal as a good opportunity for us to do more with the new Xerox, and we will certainly propose to Xerox that as a first step, we extend the strategic arrangement we have regarding our production deals with partnership to the Fuji-Xerox territories, something we were unable to do in the past given the dynamics of this joint venture.”