EFI has posted record figures for Q2 with interest in its Nozomi inkjet printer for corrugated printing prompting the company to revise expectations of revenue from this development for the full year.
The company has been under controlled installations, expecting to ship seven machines in the current third quarter and eight in Q4, through will be building ten machines to carry over into 2019. This will also exploit under used capacity for producing its ceramic tile printer and prepare for the introduction of a second machine to be based around the Nozomi single-pass inkjet concept. This is provisionally called Bolt and will be for textile printing.
However, this round up of information was swamped by the announcement that Guy Gecht, CEO for almost 19 years, will be stepping down and that the process for replacing him is already underway. He had planned to step down last year, but the company’s annus horibillis made that inappropriate. The company had to restate figures after discovering certain accounting related matters, and received a notification from Nasdaq after publication of quarterly figures was delayed.
Now with the figures pointing in the right direction, Gecht has been able to step down, having kept the board fully informed of his intentions he told analysts last week, adding that the quarterly call might be his last as CEO. The average lifespan of a CEO in the largest US companies is around seven years and in a study of tenure of the Top 500 companies, only 64 had been in place for longer than 15 years. He has been an effective front man, delivering lively presentations, staging fireside chats with fellow CEOs at the hugely popular Connect event in Las Vegas each January and having a politician's touch with the family owned businesses that have been the core of EFI's customers.
Gecht’s first years were marked by acquisitions: Printcafe for MIS in 2003, entering large format with Vutek in 2005 and labels with Jetrion in 2006. It added ceramic tile production in 2012 with the acquisition of Cretaprint, forming the basis for its development of the Nozomi corrugated board printer. There will be other developments in packaging, but without details being specified.
This will help the company achieve the long anticipated shattering of the $1 billion barrier. Gecht says the company is returning to its historical 10% pa growth rate. This has slowed in recent years, from $883 million in 2015 rising to $992 million in 2016 and static in 2017 at $993 million in revenues.
As well as Nozomi, the introduction of the McKinley platform for large format printers will start recovering market share in the display print market. The first product the H3 was well received at Fespa and will ship from Q3.
In Q2 revenue from inkjet rose to 156.4 million ($141.7 million); from productivity to $41.6 million ($339.1 million) and fell for Fiery to $63.0 million ($66.3 million) bringing the total revenue to $261.1 million ($247.0 million).
A decline in sales in Europe was more than offset by growth in the Americas and Asia. The company generated $31 million in cash which will be in part used for a share buyback when circumstances allow.
He will be a hard act to follow, not least because Gecht was a skilled presenter and advocate for the business.
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