Performance in the standalone colour server market suffered due to a drop in demand from the firms OEMs. And sales of its black-and-white digital solutions fell by almost 75%. Revenue for the three months to 31 March was down 41% to 57.3m ($82.9m), while net income was down almost 80% to 1.38m.

The firm identified five factors hurting demand: weak economic conditions; restructuring and staff cutbacks among OEMs, especially in Europe; a lack of new products coming onto the market from OEMs; a slowdown in office purchases; and delays in internal product developments.

But EFI views the Xerox iGen3 as an opportunity to increase sales. Xerox recently announced it had shipped its 5,000th DocuColor 2000 and we shipped over 4,000 front-ends, said chief financial officer Joe Cutts. The iGen3 is an opportunity for upgrades for the 2000 users.

EFI also has 110m in cash, down from 132m at the end of 2001, and Cutts said: Cash is a very valuable competitive tool. We are engaged in a couple of discussions about small acquisitions.

Story by Gordon Carson