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8-K - FORM 8-K - ELECTRONICS FOR IMAGING INC | d251441d8k.htm |
Long-Term Financial Model
Long-Term Financial Model
Vincent Pilette
CFO
Exhibit 99.1 |
What
Do You Need to Know? What Do You Need to Know?
We Have Been Delivering on the Growth Opportunities
We Have Been Delivering on the Growth Opportunities
Great momentum going into Q411
Seven consecutive quarters of double-digit revenue growth
Four consecutive quarters of double-digit operating margin
Reiterating Q4 outlook of $155-160M revenue and $0.31-0.34 EPS
Solid revenue growth drivers
Plethora of new product introductions in 2
nd
half of 2011
Three tuck-in acquisitions closed in 2011
Record recurring revenue, ink and software maintenance
Multiple drivers of profit growth
Inkjet gross margin back to 40% driven by high quality products
APPS gross margin expansion as a result of higher sales volume
OPEX efficiencies driving towards business target of 40-44% of revenue
Active capital management
Working capital improvements, growing cash from operations
Increased funnel of acquisitions and stock buy-back strategy
2
This information speaks as of the date hereof and is not subject
to update. |
EFI
Total Addressable Market EFI Total Addressable Market
Addressable Market is Growing at High-Single Digit
Addressable Market is Growing at High-Single Digit
Segments
Estimated
Market
CAGR
(11-14)
Digital Controllers
Medium/high-end Controllers
$1.8B
$0.5B
3-5%
Print Production Software
Creative Software
Offset workflow
Print MIS
Production
Print MIS
Packaging
Web-to-Print
Other
$5.0B
$0.3B
$0.3B
$0.3B
4-5%
4-5%
~8%
S/WF Digital Printers
SWF Printer Ink
WF Printer Ink
$1.3B
10-12%
Labeling Digital Printers
Digital Printer ink
Conversion-ready Analog
$0.7B
13-15%
(1) SOURCE: I.T. Strategies,
Info-Trends, EFI business intelligence
Today, EFIs direct
addressable market
amounts to $3.5B growing
at ~8% CAGR
#1 market share in high-
end controllers
#1 market share in
business automation
software for commercial
printers
Plethora of new product
introductions in Inkjet
3
(2) The 2011E information speaks as of the date hereof and is not subject to
update. |
Historical Revenue Trend & FY 2011 Estimate
Historical Revenue Trend & FY 2011 Estimate
Revenue Mix is Changing and Recurring Revenue is Growing
Revenue Mix is Changing and Recurring Revenue is Growing
4
Two years of double-digit
revenue growth, on track to
pass record year (2007)
Driving revenue mix and
diversification of portfolio
Recurring revenue growing
at 11% CAGR (07
11),
43% of non-Fiery revenue,
23% of total revenue
(1) 2011E based on Q411 midpoint of companys outlook (Revenue of
$155-160M and non-GAAP EPS of $0.31-0.34). (2) The 2011E
information speaks as of the date hereof and is not subject to update.
~
~
~
3
2
1 |
Non-GAAP Gross Margin % Trend
Non-GAAP Gross Margin % Trend
Expanding Gross Margin While Diversifying Gross Profit Sources
Expanding Gross Margin While Diversifying Gross Profit Sources
5
(1) 2011E based on Q411 midpoint of companys outlook (Revenue of
$155-160M and non-GAAP EPS of $0.31-0.34). (2) Non-GAAP
numbers have been adjusted to exclude certain items. See GAAP to non-GAAP reconciliation and our use of non-GAAP information.
(3) The 2011E information speaks as of the date hereof and is not subject to
update. |
Cost
Structure Trend Cost Structure Trend
Lowering Spend as % of Revenue
Lowering Spend as % of Revenue
OPEX efficiencies driving towards lower % of revenue
OPEX balance between technology investment and direct sales capacity
Infrastructure savings leading to higher % of innovation and variable spend
6
(2) Non-GAAP numbers have been adjusted to exclude certain items. See
GAAP to non-GAAP reconciliation and our use of non-GAAP information.
(1) 2011E based on Q411 midpoint of companys outlook (Revenue of
$155-160M and non-GAAP EPS of $0.31-0.34). (3) The 2011E
information speaks as of the date hereof and is not subject to update. |
Non-GAAP P&L
Non-GAAP P&L
Returning to Historical Operating Profit Margin Performance
Returning to Historical Operating Profit Margin Performance
2007
2007
2008
2008
2009
2009
2010
2010
2011E
2011E
Revenue
YoY %
$621M
+10%
$560M
-10%
$401M
-28%
$504M
+26%
$586M
+16%
GM %
58.5%
57.1%
53.0%
53.8%
~56%
OPEX
% of Rev
$285M
46%
$278M
50%
$230M
57%
$235M
47%
~$263M
~45%
OP
% of Rev
$78M
12.6%
$42M
7.5%
($18M)
(4.5%)
$36M
7.1%
~$66M
~11%
EPS
$1.19
$0.74
($0.22)
$0.59
$1.08
2011 return to double
digit operating profit
margin
Moving towards
sustainable profit drop
rate of ~25%+ on
annual basis
2011E OP and EPS
growth > 80% YoY
driven by gross margin
improvement and
increased spend
productivity
7
(1) 2011E based on Q411 midpoint of companys outlook (Revenue of
$155-160M and non-GAAP EPS of $0.31-0.34). (3) The 2011E
information speaks as of the date hereof and is not subject to update. (2)
Non-GAAP numbers have been adjusted to exclude certain items. See GAAP to non-GAAP reconciliation and our use of non-GAAP information. |
Balance Sheet Optimization
Balance Sheet Optimization
Growing Cash from Operations
Growing Cash from Operations
Key
Balance
Sheet
Figures
Q307
Q308
Q309
Q310
Q311
Total
Cash
&
Investments*
$550M
$202M
$270M
$207M
$203M
YTD Cash Flow from
Operations
% of Revenue
$54M
12%
$25M
6%
($26M)
--
$19M
5%
$43M
10%
Working Capital (Days)
52.5
63.7
80.7
61.0
59.2
Accounts Receivable
(net)
$97M
$97M
$80M
$86M
$91M
DSO
56.5
61.4
72.5
61.0
57.2
Net Inventory
$37M
$48M
$44M
$45M
$47M
Inventory Turns
7.0
5.3
4.5
5.5
5.4
Total Assets
$1,199M
$865M
$731M
$685M
$720M
* Excludes $56.9 million long term restricted investments
8 |
Capital Allocation Strategy
Capital Allocation Strategy
Continued focus on cash generation
(~1 x OP on annual basis)
Use
of
cash:
the
Board
and
Management will continue to evaluate
options, including:
-
M&A-
strengthening our existing segments,
with accretive deals
-
Continue to
reduce the shares of common
stock outstanding
-
Accumulate cash
Currently
we
are
not
focused
on:
-
Transformative acquisition
-
Dividend
9
The 2011E information speaks as of the date hereof and is not subject to
update. |
Non-GAAP Long-Term Financial Model
Non-GAAP Long-Term Financial Model
Targeting 12-15% Operating Profit Margin
Targeting 12-15% Operating Profit Margin
2011
LT Model
L-T Growth
Gross
Margin
OPEX
Op Margin
Fiery
GDP+
66% -
68%
Inkjet
10% -15%
~ 40%
APPS
10% -
20%
> 70%
Total
~ 10%
55%-
57%
40%-
44%
12%-
15%
53-55%
40-44%
10-14%
~10%
2010 LT model
10
Raising long term APPS
revenue growth target to
10-20% YoY
Raising EFI long-term GM
rate to 55-57% driven by
APPS GM expansion and
revenue mix
Raising EFI long-term
operating profit margin
range to 12-15% of revenue
1
1
2
2
3
3
The 2011E information speaks as of the date hereof and is not subject to
update. 6-10%
6-10%
GDP+
66-68%
~40%
67-69%
2010 LT model
2010 LT model
2010 LT model |
Appendix
Appendix |
About our Non-GAAP Net Income
About our Non-GAAP Net Income
and Adjustments
and Adjustments
This information speaks as of the date hereof and is not subject
to update.
12 |
Q3
2011 Results Summary Q3 2011 Results Summary
.
This information speaks of the date hereof and is not subject to
update.
$M
Q3 2011
Q2 2011
% Change
Q3 2010
% Change
NON-GAAP
Revenue
147.3
$
141.2
$
4%
129.0
$
14%
Operating Profit
16.5
14.1
17%
11.1
49%
Operating Profit %
11.2%
10.0%
1.2 pts
8.6%
2.6 pts
Net Income
11.6
11.3
3%
10.7
8%
EPS
0.25
$
0.23
$
9%
0.23
$
9%
GAAP
GAAP Net Income
6.1
3.6
69%
13.4
(54%)
GAAP EPS
0.13
$
0.07
$
86%
0.29
$
(55%)
Non-GAAP numbers have been adjusted to exclude certain items. See GAAP to
non-GAAP reconciliation and our use of non-GAAP information.
13 |
Reconciliation of GAAP to Non-GAAP
Reconciliation of GAAP to Non-GAAP
This information speaks of the date hereof and is not subject to update.
Non-GAAP numbers have been adjusted to exclude certain items. See our description of
our use of non-GAAP information. 14
GAAP to Non-GAAP Reconciliation ($M)
Q110
Q210
Q310
Q410
FY10
Q111
Q211
Q311
FY11 YTD
GAAP
Net Income (Loss)
(11.4)
(2.5)
13.4
8.0
7.5
6.2
3.6
6.1
16.0
EPS
(0.25)
$
(0.06)
$
0.29
$
0.17
$
0.16
$
0.13
$
0.07
$
$0.13
0.33
$
ADJUSTMENTS
COGS: Excess Solvent Inventories &
End of Life Purchases
-
2.3
-
-
2.3
-
-
-
$
-
COGS: Stock Based Compensation Expense
0.3
0.3
0.3
0.2
1.0
0.2
0.4
0.7
$
1.3
OPEX: Stock Based Compensation Expense
3.7
3.0
4.6
3.6
14.9
5.0
6.7
4.6
$
16.2
OPEX: Amortization of Identified Intangibles
2.9
2.9
3.4
3.2
12.4
3.4
3.0
2.3
$
8.7
OPEX: Acquisition-Related Transaction Costs
0.6
0.5
0.1
-
1.2
0.6
0.2
0.7
$
1.6
OPEX: Change in Fair Value of
Contingent Consideration
-
-
-
-
-
-
-
1.5
$
1.5
OPEX: Restructuring and Other
2.0
1.0
1.0
0.3
4.3
1.4
0.4
0.6
$
2.3
OI&E: Gain on Sale of Minority Investment
in a Privately-Held Company
-
-
-
-
-
-
-
(2.9)
$
(2.9)
Tax Effect of Non-GAAP Adjustments
1.7
(3.4)
(12.0)
(2.0)
(15.7)
(3.3)
(3.0)
(2.0)
$
(8.3)
NON-GAAP
Non-GAAP Net Income (Loss)
(0.1)
$
4.0
$
10.7
$
13.3
$
27.9
$
13.5
$
11.3
$
11.6
$
36.4
$
Non-GAAP EPS
-
$
0.09
$
0.23
$
0.28
$
0.59
$
0.28
$
0.23
$
$0.25
0.75
$ |
Share Count & Non-GAAP EPS
Share Count & Non-GAAP EPS
Non-GAAP numbers have been adjusted to exclude certain items. See GAAP to
non-GAAP reconciliation and our use of non-GAAP information.
15 |