EFI has broken the $1bn sales mark for the first time with its year-end 2018 results, which were only marred by declines in income and revenue from a “difficult” final quarter.
Year-on-year, the manufacturer reported a 5% decline in revenue for Q4 from its record 2017 closing quarter. The final stretch of 2018 brought in $257m (£196m), which met the upper limits of EFI’s own shortfall predictions, released earlier in January, which were attributed to delayed customer investment due to weakening economic conditions.
Overall revenue for the year came in 2% up on 2017, taking EFI over the billion-dollar mark to $1.015bn (£772.5m) for the first time.
Inkjet continued to take up the greatest portion of the company’s business, bringing in 60% of total revenue at $607.5m, while its productivity software business’ share remained steady at 16% with $168.3m and the Fiery DFE offering saw a slight decline in business share from 27% to 24% with revenue of $239.2m.
“While it was a difficult Q4 for us, there were a number of important milestones reached during the year,” said chief financial officer Marc Olin.
“Our Nozomi launch, while generating a little less than we expected for the full year at $66m in revenue, exceeded our target when we started the year and was the biggest product launch in the history of the company.
“We were able to build a significant business within a year of the launch of the product and have established EFI as the clear leader in the industry with the highest market share. I am extremely proud of the many hours of hard work from teams across all of EFI that supported this launch and drove our success.”
Chief executive Bill Muir, who joined EFI in October to replace departing chief Guy Gecht following his resignation announcement in July, stressed that slowdown across Q4 2018 and the predicted limitations of Q1 will see payoff later in the year.
Muir described Q1 2019 as a “low point in this transition year” that would rally around the outlook for EFI’s Nozomi inkjet products and the recently-launched Reggiani Bolt textile printer. He predicted growth in revenue and earnings per share (EPS) for the full year.
Q1 2019 is expected to bring in $215-225m in revenue across the company, with high single- to low double-digit percentage declines in inkjet and productivity software year-on-year, while Fiery revenue is expected to stay flat.
“I had shared from the beginning that it was EFI's technology that brought me to the company,” Muir said. “My confidence and my excitement about the innovation and the opportunity ahead has only grown over the past few months.
“To that end, with my 100th day at EFI now under my belt, I began rolling out a series of initiatives to drive value for our customers and EFI. Many of these are multi-quarter initiatives, but we're off to a solid start.”
Key initiatives that EFI began at the back-end of 2018 to encourage growth this year included a supply chain review which identified savings for reinvestment in the business, and a focus on the manufacturer’s product development cycle to identify waste in the process and improve the efficiency and robustness of R&D.
Olin added: “We are at the start of a next chapter of EFI. We have a lot of work to do, but the underlying strength of our company, our products, our people and our customers are as strong as they've ever been. And while it will take a little time, I am confident we can return to the revenue and profit growth we’ve achieved in the many years of our history.”
With the results published for an audience of American investors yesterday (30 January), EFI opened on NASDAQ with shares at $24.99 before closing in the evening at $25.62.