EFI Reports All-Time Record Revenue for the Second Quarter of 2013

EFI Reports All-Time Record Revenue for the Second Quarter of 2013

Revenue of $180M up 10% as More Customers Turn to EFI for a Competitive Edge

FOSTER CITY, Calif., July 18, 2013 (GLOBE NEWSWIRE) -- Electronics For
Imaging, Inc. (Nasdaq:EFII), a world leader in customer-focused digital
printing innovation, today announced its results for the second quarter of
2013.

For the quarter ended June 30, 2013, the Company reported record revenue of
$180.3 million, up 10% compared to second quarter 2012 revenue of $163.9
million. Second quarter 2013 non-GAAP net income was $18.3 million or $0.38
per diluted share, compared to non-GAAP net income of $14.2 million or $0.30
per diluted share for the same period in 2012. GAAP net income was $9.4
million or $0.20 per diluted share, compared to $7.0 million or $0.15 per
diluted share for the same period in 2012.

For the six months ended June 30, 2013, the Company reported revenue of $351.7
million, up 9% year-over-year compared to $324.0 million for the same period
in 2012. Non-GAAP net income was $34.0 million or $0.71 per diluted share,
compared to non-GAAP net income of $28.3 million or $0.60 per diluted share
for the same period in 2012. GAAP net income was $17.8 million or $0.37 per
diluted share, compared to GAAP net income of $13.2 million or $0.28 per
diluted share for the same period in 2012.

"We could not have been more delighted with the record results the EFI team
delivered in the second quarter as our product innovation continues to drive
demand across our three segments," said Guy Gecht, CEO of EFI. "We look to
maintain this momentum into the third quarter as customers increasingly turn
to EFI to make their businesses more competitive."

EFI will discuss the Company's financial results by conference call at 2:00
p.m. PDT today. Instructions for listening to the conference call over the Web
are available on the investor relations portion of EFI's website at
www.efi.com.

About EFI

EFI™ (www.efi.com) is a worldwide provider of products, technology, and
services leading the transformation of analog to digital imaging. Based in
Silicon Valley with offices around the globe, the company's powerful
integrated product portfolio includes digital front-end servers; superwide,
wide-format, label, and ceramic inkjet presses and inks; production workflow,
web-to-print, and business automation software; and office, enterprise, and
mobile cloud solutions. These products allow users to produce, communicate and
share information in an easy and effective way, and enable businesses to
increase their profits, productivity, and efficiency.

Safe Harbor for Forward Looking Statements

Certain statements in this press release are forward-looking statements within
the meaning of Section 27A of the Securities Act of 1933, as amended, and
Section 21E of the Securities Exchange Act of 1934, as amended. Statements
other than statements of historical fact including words such as "anticipate",
"believe", "estimate", "expect", "consider" and "plan" and statements in the
future tense are forward looking statements. The statements in this press
release that could be deemed forward-looking statements include statements
regarding EFI's strategy, plans, expectations regarding its revenue growth,
product portfolio, productivity, future opportunities for EFI and its
customers, and any statements or assumptions underlying any of the foregoing.

Forward-looking statements are subject to certain risks and uncertainties that
could cause our actual future results to differ materially, or cause a
material adverse impact on our results. Potential risks and uncertainties
include, but are not necessarily limited to, unforeseen expenses; the
difficulty of aligning expense levels with revenue; management's ability to
forecast revenues, expenses and earnings; any world-wide financial and
economic difficulties and downturns; adverse tax-related matters such as tax
audits, changes in our effective tax rate or new tax legislative proposals;
the unpredictability of development schedules and commercialization of
products by the leading printer manufacturers and declines or delays in demand
for our related products; changes in the mix of products sold; the uncertainty
of market acceptance of new product introductions; intense competition in each
of our businesses, including competition from products developed by EFI's
customers; challenge of managing asset levels, including inventory and
variations in inventory levels; the uncertainty of continued success in
technological advances; the challenges of obtaining timely, efficient and
quality product manufacturing and supply of components; litigation involving
intellectual property rights or other related matters; our ability to
successfully integrate acquired businesses; the uncertainty regarding the
amount and timing of future share repurchases by EFI and the origin of funds
used for such repurchases; the market prices of EFI's common stock prior to,
during and after the share repurchases; any disruptions in our operations, the
difficulty to retain employees, and additional expenses that we may incur as a
result of our relocation from the Foster City campus; the compliance with the
new requirements regarding the "conflict minerals," if they are found to be
used in our products, and any other risk factors that may be included from
time to time in the Company's SEC reports.

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 six months ended June 30, 2013 and 2012 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    Six Months Ended
                                  June 30,              June 30,
                                                                
                                  2013       2012       2013       2012
                                                                
Revenue                            $180,298 $163,901 $351,657 $323,957
Cost of revenue                    82,315    74,109    159,814   146,498
Gross profit                       97,983    89,792    191,843   177,459
Operating expenses:                                              
Research and development           32,092    30,227    63,159    61,126
Sales and marketing                34,512    32,234    67,248    63,151
General and administrative         13,343    11,154    27,041    24,056
Amortization of identified         4,946     4,631     9,873     8,815
intangibles
Restructuring and other            1,235     1,167     3,137     2,250
Total operating expenses           86,128    79,413    170,458   159,398
Income from operations             11,855    10,379    21,385    18,061
Interest and other expense, net    (422)     (1,325)   (3,346)   (755)
Income before income taxes         11,433    9,054     18,039    17,306
Provision for income taxes         (2,009)   (2,049)   (253)     (4,067)
Net income                         $9,424   $7,005   $17,786  $13,239
                                                                
Fully Diluted EPS calculation                                    
Net income                         $9,424   $7,005   $17,786  $13,239
Net income per diluted common      $0.20    $0.15    $0.37    $0.28
share
Shares used in diluted per share   48,254    47,814    48,149    47,599
calculation



Electronics For Imaging, Inc.
Reconciliation of GAAP Net Income to Non-GAAP Net Income
(in thousands, except per share data)
(unaudited)
                                                                 
                                      Three Months Ended  Six Months Ended
                                      June 30,            June 30,
                                                                 
                                      2013      2012      2013      2012
                                                                 
Net income                             $9,424  $7,005  $ 17,786 $ 13,239
Amortization of identified intangibles 4,946     4,631     9,873     8,815
Stock based compensation – Cost of     382       235       851       533
revenue
Stock based compensation – Research    1,671     1,260     3,538     2,824
and development
Stock based compensation – Sales and   947       858       1,835     1,614
marketing
Stock based compensation – General and 2,798     2,413     6,218     4,462
administrative
Restructuring and other                1,235     1,167     3,137     2,250
General and administrative:                                       
Acquisition-related transaction costs  672       372       691       824
Change in fair value of contingent     (544)     (1,404)   (806)     (1,404)
consideration
Insurance litigation settlement        —        (250)     —        (250)
Sublease income related to our         (997)     —        (1,717)   —
deferred property sale
Depreciation expense related to our    410       —        820       —
deferred property sale
Interest and other expense, net:                                  
Interest expense related to our        611       —        1,491     —
deferred property sale
Relocation expenses related to         34        —        110       —
deferred property sale
Tax effect of non-GAAP adjustments     (3,302)   (2,101)   (9,789)   (4,558)
Non-GAAP net income                    $ 18,287 $ 14,186 $ 34,038 $ 28,349
                                                                 
Non-GAAP net income per diluted common $0.38   $0.30   $0.71   $0.60
share
Shares used in per share calculation   48,254   47,814   48,149   47,599

                                                        
                                                        
Electronics For Imaging, Inc.                            
Condensed Consolidated Balance                           
Sheets
(in thousands)                                           
(unaudited)                                              
                                                        
                                    June 30,             December 31,
                                    2013                 2012
                                                        
Assets                                                   
Cash and cash equivalents            $290,010           $283,996
Short-term investments               63,550              80,966
Accounts receivable, net             129,262             135,110
Inventories                          63,099              58,343
Other current assets                 87,959              74,877
Total current assets                 633,880             633,292
Property and equipment, net          119,360             86,582
Goodwill                             222,398             219,383
Intangible assets, net               72,333              80,244
Other assets                         60,768              55,397
Total assets                         $1,108,739         $1,074,898
                                                        
Liabilities & Stockholders' equity                       
Accounts payable                     $70,973            $63,446
Deferred proceeds from property      181,981             180,216
transaction
Accrued and other liabilities        120,671             119,174
Income taxes payable                 4,616               7,562
Total current liabilities            378,241             370,398
Imputed financing obligation         11,000              —
Contingent and other liabilities     9,284               17,742
Deferred tax liabilities             6,629               6,210
Long term taxes payable              33,807              29,755
Total liabilities                    438,961             424,105
Total stockholders' equity           669,778             650,793
Total liabilities and stockholders'  $1,108,739         $1,074,898
equity
                                                        
Note: In accordance with ASC 805, we revised previously issued financial
information to reflect adjustments to the accounting for business acquisitions
as if they occurred on the acquisition date. Accordingly, we have increased
goodwill and accrued and other liabilities by $1.1 million at December 31,
2012 to reflect opening balance sheet adjustments related to our acquisitions
of Cretaprint, OPS, and Technique.

                                                             
                                                             
Electronics For Imaging, Inc.                                 
Condensed Consolidated Statements of Cash                     
Flows
(in thousands)                                                
(unaudited)                                                   
                                                             
                                             Six Months Ended
                                             June 30,
                                             2013             2012
                                                             
Cash flows from operating activities:                         
Net income                                   $17,786        $13,239
Adjustments to reconcile net income to net                    
cash provided by operating activities:
Depreciation and amortization                 14,343           13,110
Deferred taxes                                (7,714)          1,281
Tax benefit (release) from employee stock     2,474            (367)
plans
Excess tax benefit from stock-based           (2,637)          (495)
compensation
Stock-based compensation                      12,442           9,433
Provisions for inventory obsolescence        2,361            2,122
Provisions for bad debts and sales-related    2,169            199
allowances
Contingent consideration payment related to   (618)            —
business acquired
Other non-cash charges and adjustments        627              1,494
Changes in operating assets and liabilities   444              (21,636)
Net cash provided by operating activities*    41,677*          18,380
                                                             
Cash flows from investing activities:                         
Purchases of short-term investments           (17,781)         (28,542)
Proceeds from sales and maturities of         34,513           36,193
short-term investments
Purchases, net of proceeds from sales, of     (27,324)         (3,801)
property and equipment
Businesses purchased, net of cash acquired    (4,533)          (44,533)
Proceeds from notes receivable of acquired    —               5,216
businesses
Net cash used for investing activities        (15,125)         (35,467)
                                                             
Cash flows from financing activities:                         
Proceeds from issuance of common stock        7,906            15,041
Purchases of treasury stock                   (17,838)         (9,456)
Repayment of acquired business debt           (1,620)          (6,666)
Contingent consideration payments related to  (9,998)          (252)
businesses acquired
Excess tax benefit from stock-based           2,637            495
compensation
Net cash used for financing activities        (18,913)         (838)
                                                             
Effect of foreign exchange rate changes on    (1,625)          (308)
cash and cash equivalents
Increase (decrease) in cash and cash          6,014            (18,233)
equivalents
Cash and cash equivalents at beginning of     283,996          120,058
year
Cash and cash equivalents at end of period    $290,010       $101,825
                                                             
                                                             
* If we excluded $5.5 million of taxes paid related to the sale of our
corporate headquarters facility, then our net cash provided by operating
activities would be $47.2 million for the six months ended June 30, 2013

                                                                
                                                                
Electronics For Imaging, Inc.                                    
Revenue by Operating Segment and                                 
Geographic Area
(in thousands)                                                   
(unaudited)                                                      
                                                                
                                  Three Months Ended    Six Months Ended
                                  June 30,              June 30,
                                                                
Revenue by Operating Segment       2013       2012       2013       2012
Industrial Inkjet                  $88,003  $79,820  $168,306 $154,912
Productivity Software              28,509    25,722    56,238    49,791
Fiery                              63,786    58,359    127,113   119,254
Total                              $180,298 $163,901 $351,657 $323,957
                                                                
Revenue by Geographic Area                                       
Americas                           $100,516 $82,725  $194,414 $164,906
EMEA                               49,984    51,560    100,030   106,686
APAC                               29,798    29,616    57,214    52,365
Japan                              5,815     7,867     13,034    14,819
APAC, ex Japan                     23,983    21,749    44,180    37,546
Total                              $180,298 $163,901 $351,658 $323,957
                                                                

                About our Non-GAAP Net Income and Adjustments

Use of Non-GAAP Financial Information

To supplement our condensed consolidated financial results prepared in
accordance with 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 regarding
non-cash expenses and significant recurring and non-recurring items that we
believe are important to understanding 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 the exclusion of the items described below,
for which the amounts and/or timing may vary significantly depending on 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.

Use and Economic Substance of Non-GAAP Financial Measures

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 and
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 acquisition-related transaction
expenses and the costs to integrate such acquisitions into our business,
changes in the fair value of contingent consideration, corporate headquarters
relocation expenses, and imputed interest expense and depreciation, net of
accrued sublease income, related to the sale of our corporate headquarters
facility and related land.

These excluded items are described below:

  *Recurring charges and gains, including:

    *Amortization of acquisition-related intangibles. Intangible assets
      acquired to date are being amortized on a straight-line basis.
      Post-acquisition non-competition agreements are amortized over their
      term.
    *Stock-based compensation expense recognized in accordance with ASC 718,
      Stock-based Compensation.

  *Non-recurring charges and gains, including:

    *Restructuring and other consists of:

      -- Restructuring charges incurred as we consolidate the number and size
      of our facilities and, as a result, reduce the size of our workforce.
      -- Acquisition-related executive deferred compensation costs, which are
      dependent on the continuing employment of a former shareholder of an
      acquired company, are being amortized on a straight-line basis.
      -- Expenses incurred to integrate businesses acquired during the periods
      reported and anticipated acquisitions.

    *Acquisition-related transaction costs associated with businesses
      acquired during the periods reported and anticipated transactions.

    *Changes in fair value of contingent consideration. Our management
      determined that we should analyze the total return provided by the
      investment when evaluating operating results of an acquired entity. The
      total return consists of operating profit generated from the acquired
      entity compared to the purchase price paid, including the final amounts
      paid for contingent consideration without considering any
      post-acquisition adjustments related to changes in the fair value of the
      contingent consideration. Because our management believes the final
      purchase price paid for the acquisition reflects the accounting value
      assigned to both contingent consideration and to the intangible assets,
      we exclude the GAAP impact of any adjustments to the fair value of
      acquisition-related contingent consideration from the operating results
      of an acquisition in subsequent periods. We believe this approach is
      useful in understanding the long-term return provided by our
      acquisitions and that investors benefit from a supplemental non-GAAP
      financial measure that excludes the impact of this adjustment.

    *Imputed net expenses related to sale of building and land. On
      November1, 2012, we sold the 294,000 square foot building located at
      303 Velocity Way in Foster City, California, which serves as our
      corporate headquarters, along with approximately fouracres of land and
      certain other assets related to the property, to Gilead Sciences, Inc.
      for $179.7 million. We will continue to use the facility for up to one
      year for which rent is not required to be paid. This constitutes a form
      of continuing involvement that prevents gain recognition. Until we
      vacate the building, the proceeds from the sale will be recognized as
      deferred proceeds from property transaction on our condensed
      consolidated balance sheet, which is currently $182.0 million, including
      imputed interest costs. Imputed interest expense and depreciation of
      $1.0 million, net of accrued sublease income and capitalized interest,
      has been accrued as of June 30, 2013.

    *Expenses incurred during the period related to the upcoming relocation
      of our corporate headquarters facility.
      
    *Pursuant to a settlement executed in April 2012, we received an
      additional $0.3 million in insurance proceeds, net of legal fees and
      costs, related to our previously disclosed settlement of the shareholder
      derivative litigation concerning our historical option granting
      practices.

  *Tax effect of non-GAAP adjustments

    *After excluding the items described above, we apply the principles of
      ASC 740, Income Taxes, to estimate the non-GAAP income tax provision in
      each jurisdiction in which we operate.

    *To facilitate comparability of our operating performance between 2013
      and 2012, we have excluded the following from our non-GAAP net income:

      -- Tax charge of $0.3 million resulting from the filing of tax returns
      by foreign subsidiaries for periods prior to their acquisition by EFI
      for the six months ended June 30, 2013.
      -- Tax benefit of $3.2 and $0.2 million from the retroactive renewal of
      both the 2012 U.S. federal research and development tax credit and
      certain international tax provisions, respectively, on January2, 2013,
      for the six months ended June 30, 2013. The tax benefit for these items
      had been previously recognized in our non-GAAP net income for the year
      ended December 31, 2012
      -- Interest expense accrued on prior year tax reserves of $0.1 million
      for the three months ended June 30, 2013 and 2012, respectively, and
      $0.2 million for the six months ended June 30, 2013 and 2012,
      respectively, as well as other tax benefits of $0.3 million for the
      three and six months ended June 30, 2013.

Usefulness of Non-GAAP Financial Information to Investors

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 or earnings per diluted share
prepared in accordance with GAAP. Non-GAAP financial measures have limitations
as 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.

CONTACT: Vincent Pilette
         Chief Financial Officer
         EFI
         650-357-3500
        
         Investor Relations:
         JoAnn Horne
         Market Street Partners
         415-445-3235

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