Large Format Review - Business News

GMG, the world's leading color management solutions provider, and Roland DG, a leading worldwide provider of large format inkjet printers and printer/cutters for professional large format graphics, are excited to announce their global partnership, enabling special high quality packaging applications such as the production of color-accurate mockups on original substrates as well as proofing applications.

The strategic partnership comprises the development of a printer driver by GMG for the Roland VersaUV LEC-330 printer, which is supported by the GMG ColorProof proofing solution. GMG ColorProof and GMG FlexoProof/DotProof will be available shortly for the Roland VersaUV LEC-330 printer for high quality contone and halftone proofing applications. The GMG printer driver brings perfect color accuracy and repeatability on a wide range of substrates to the packaging market. Therefore, GMG customers can easily integrate the LEC-330 in their existing proofing workflows with GMG ColorProof. In the same way, Roland customers can maximize the performance of their large format printer.

The combination of the comprehensive capabilities of the LEC-330 with GMG's award winning proofing technology and high level of automation provides an unrivalled platform to produce cost-effective packaging proofing at a finished-product standard.

GMG ColorServer, the color management solution for color conversions, and SmartProfiler for the creation of color profiles as well as large format printer calibrations, are available for all Roland large format printers. This common solution allows users to achieve highest color accuracy, repeatability and color consistency for packaging mockups on original substrates. It is possible to print spot varnish, white ink, cut, crease and more on the actual output stock.

Tigerprint, the Hallmark UK subsidiary which produces greetings cards products exclusively for Marks & Spencer, produces color accurate prototypes on its LEC-330 using GMG ColorServer/SmartProfiler before they are printed in its Far East facilities. GMG set up profiles in advance in SmartProfiler for all the different substrates that Tigerprint uses, such as coated and uncoated stock. These profiles give the highest possible color accuracy and guaranteed repeatability. "This gives us the confidence that everything will match," says Senior Artwork Manager Chris Broadbent. "It is even feasible to produce the finished product on the LEC-330 and we are considering using it for short runs of 5-10 copies. Its ability to print on to the correct stock and on to die cut material makes this perfectly possible."

Stéphane Romano is Project Manager Packaging at Packpool, an agency for packaging design and printing with locations in Germany and Switzerland. He says: "For Packpool as a supplier of the packaging industry it is more and more crucial to provide customers with high-quality color accurate mock-ups or prototypes of the future product. The new Roland LEC-330 printing system and GMG ColorServer/SmartProfiler color management software enable us to very quickly help our customers see highest quality results before they start their marketing meeting, TV-spot or attend an exhibition. It doesn't matter which material we use for a mock-up - be it foil, aluminium or paper - the profiling and calibration technology of GMG makes it extremely easy."

The solution will be demonstrated at Ipex 2010 on both the GMG stand (Hall 9-E322) and the Roland stand (Hall 12-C140). The software solution will be available through the usual selected GMG and selected Roland channels worldwide.

"We are very pleased to work with Roland in this venture," says Paul Willems, CEO of GMG GmbH & Co. KG. "The partnership is a natural fit and the benefit to the packaging sector in particular is enormous. GMG's proofing products are second to none and their use with a high-end printer such as the Versa-UV LEC-330 is a winning combination."

Takafumi Shigenoya, Executive Officer, Product Marketing Department at Roland DG says: "The combination of the GMGColorServer/Smart Profiler with our VersaUV machines gives our existing users and new clients full access to the UV printers/cutters' unique capabilities and helps integrate them in their own packaging or labeling workflow."

At IPEX, Epson will showcase the accurate and flexible proofing and display printing capabilities of its award-winning Micro Piezo™ Stylus Pro digital inkjet printing technology for commercial and packaging applications in partnership with leading software RIP vendors.

Joining Epson on its stand (Hall 10 Stand C260) will be CGS, Compose, EFI, GMG, Graphic Republik, and Shiraz. These strategic industry software partners will demonstrate a range of local and remote proofing for offset, flexo, and gravure applications, plus display printing on Epson’s latest range of Stylus Pro inkjet digital printers: the new Epson Stylus Pro WT 7900 packaging proofing system, the A2 Stylus Pro 7900, the A0 Stylus Pro 9900 and the 64in wide Stylus Pro GS 6000.

-    Packaging proofing: the specialist CGS ORIS Color Tuner, EFI Color-XF, Graphic Republik/ISI Graphic System MaxPro and StarProof, and GMG ColourProof, FlexoProof XG and Dotproof XG packaging proofing RIPs will all demonstrate the proofing and mockup functionality of the new Epson Stylus Pro WT 7900 printer, which has been designed specifically to provide all the features important for highly accurate, contract-level, packaging proofing. The printer uses a 9-colour subset of  Epson’s UltraChrome HDR (High Dynamic Range) ink set to produce a wide colour gamut and accurate spot colours on a variety of flexible film, paper and metallic media (launched at Ipex). To deliver the high density white tints and accurate overlays important for packaging proof applications, Epson has developed a water-based white ink specifically for this printer – a world first.

-    Commercial and remote proofing: The CGS ORIS Colour Tuner, Compose/ISI Graphic System Star Proof, EFI Colour-XF and GMG ColourProof, Dotproof XG RIPs will show commercial and remote proofing on the Epson Stylus Pro 7900 and Stylus Pro 9900 printers. These RIPs provide many tools required to produce accurate proofs, including halftone, dot and spot colour proofing, Hexachome support, generic profile production, automatic colour matching, printer calibration, etc.

-    Display graphics: Shiraz will demonstrate its Signature software producing a range of display graphics on a range of media, including poster and backlit display graphics on the Stylus Pro WT9700; canvas-based fine art products on the Stylus Pro 9900; and eco-friendly signage on the Stylus Pro GS 6000 using new BioMedia material. BioMedia is a range of biodegradable and recyclable materials developed by G3S that give the look and durability of a laminated sheet but can biodegrade in under five years.

Claes Jeppsson, Senior Business Manager, LFP and LPF Solutions, Epson Europe, says, “In association with our software partners we are pleased to be showing the widest selection of proofing systems for the broadest range of print and packaging applications at IPEX. It’s a winning combination of leading RIP software, Epson inkjet printing technology, ink and substrates that delivers highly accurate, contract-level but cost-effective proofing solutions.”

Eastman Kodak Company today reported first-quarter earnings from continuing operations of $119 million, or $0.40 per share on a diluted basis, on sales of $1.933 billion. This represents a $479 million year-over-year earnings improvement and reflects a previously announced intellectual property transaction and significantly improved operating results across all of the company's key business segments.

Excluding the non-recurring intellectual property transaction, Kodak's first-quarter segment earnings improved by $69 million and digital earnings improved by $60 million. Additionally, cash generation before restructuring payments and the equivalent GAAP measure, cash used in operating activities, improved by more than $300 million during the first quarter. This performance was largely due to improved cash earnings and working capital. Cash received from intellectual property transactions was essentially the same year-over-year.

"Our first quarter performance is additional proof that our strategy is working and we continue to make progress toward our goals," said Antonio M. Perez, Chairman and Chief Executive Officer, Eastman Kodak Company. "I am particularly pleased with the performance of our core growth businesses -- Consumer Inkjet, Commercial Inkjet, Workflow Software and Solutions, and Packaging Solutions. Combined first-quarter revenue for these product lines grew by 14% and gross profits improved by more than $20 million. We also continue to make significant operational improvements in the rest of our digital businesses, including digital cameras and devices, image sensor solutions, electrophotographic solutions and prepress solutions. Our Film, Photofinishing and Entertainment business continues to deliver improved profitability, despite a challenging marketplace. We're off to a good start for 2010, and I am optimistic about the year."

First-quarter sales totaled $1.933 billion, an increase of 31% from $1.477 billion in the first quarter of 2009, including the $550 million intellectual property transaction and 3% favorable foreign exchange impact.

On the basis of U.S. generally accepted accounting principles (GAAP), the company reported first-quarter earnings from continuing operations of $119 million, or $0.40 per share on a diluted basis, compared with a loss from continuing operations on the same basis of $360 million, or $1.34 per share, in the year-ago period. Items of net expense that impacted comparability in the first quarter of 2010 totaled $137 million after tax, or $0.42 per share, primarily related to a loss on early extinguishment of debt, restructuring charges, and tax-related items. Items of net expense that impacted comparability in the first quarter of 2009 totaled $105 million after tax, or $0.39 per share, due primarily to restructuring charges and tax-related items. (Please refer to the attached Items of Comparability table for more information.)

Other first-quarter 2010 details:

- The company's first-quarter earnings from continuing operations, before interest expense, other income (charges), net, and income taxes were $389 million, an improvement of $725 million as compared with a loss on the same basis of $336 million in the year-ago quarter. This earnings improvement is composed of operational improvements, including productivity gains, and the impact of the non-recurring intellectual property transaction.

- Gross Profit was 41.1% of sales, as compared to 13.1% in the year-ago period. This increase in margin was driven by the non-recurring intellectual property transaction, continued productivity improvements, and favorable foreign exchange. Excluding the impact of the non-recurring intellectual property transaction, gross profit improved nearly five percentage points.

- Selling, General and Administrative (SG&A) expenses, on a GAAP basis, were $310 million in the first quarter, down 1%, from $313 million in the year-ago quarter.

- Research and Development expenses, on a GAAP basis, were $79 million in the first quarter, down $26 million, from $105 million in the year-ago quarter, as the company focuses research dollars on its core growth businesses.

- First-quarter 2010 cash generation, before restructuring payments, improved by $301 million, representing a usage of $456 million in the current quarter, compared with cash usage on the same basis of $757 million in the year-ago quarter. This corresponds to net cash used in continuing operations from operating activities on a GAAP basis of $471 million in the first quarter of 2010, compared with a net cash usage of $781 million in the first quarter of 2009. This improvement was primarily driven by reduced usage of working capital and higher cash earnings. Notably, cash received from intellectual property transactions was essentially the same year-over-year. As has been the case in previous years, the company expects to generate the majority of its cash flow during the second half of the year, consistent with its historic seasonal pattern.

- Kodak held $1.5 billion in cash and cash equivalents as of March 31, 2010, compared with $1.3 billion on the same date a year ago.

- The carrying value of the company's long-term debt stood at $1.3 billion as of March 31, 2010. This equates to total maturity value of debt of approximately $1.4 billion.

 

Segment sales and earnings from continuing operations before interest, taxes, and other income and charges (segment earnings from operations), are as follows:

- Consumer Digital Imaging Group first-quarter sales were $891 million, compared with $369 million in the prior-year quarter. First-quarter earnings from operations for the segment were $415 million, a $572 million increase over the year-ago quarter. This change in revenue and earnings is primarily due to the completion of the previously announced intellectual property transaction. Excluding the one-time impact to net sales of the intellectual property transaction, segment earnings improved by $22 million. This was driven by improved profitability in consumer inkjet systems, including a 27% revenue increase in consumer inkjet printer hardware and ink and lower costs, improved operating performance in digital cameras & devices and image sensor solutions, and reduced R&D expenses.

- Graphic Communications Group first-quarter 2010 sales were $611 million, a 1% increase from the first quarter of 2009. This revenue improvement was primarily driven by increased volumes of digital plates within prepress solutions and favorable foreign exchange offset by unfavorable price/mix. During the first quarter, the company shipped its first KODAK PROSPER Press, based on Kodak's Stream Inkjet technology, and expects to begin to recognize revenue from PROSPER Presses in the second half of 2010. First-quarter loss from operations for the segment totaled $22 million, a $38 million improvement compared with the year-ago quarter. This earnings improvement was primarily driven by improved operational performance, particularly within digital printing and prepress solutions, lower raw material costs, and favorable foreign exchange, partially offset by unfavorable price/mix across several product lines.

- Film, Photofinishing and Entertainment Group first-quarter sales were $431 million, a 14% decline from the year-ago quarter, consistent with continuing secular declines. First-quarter earnings from operations for the segment were $16 million, compared with earnings of $8 million in the year-ago period. The increase in earnings was driven by cost reductions across the segment and favorable foreign exchange, partially offset by increased raw material costs and industry-related declines in volumes.

 

2010 Outlook

For 2010, on a continuing operations basis, Kodak is targeting the following financial results:

- Segment earnings from operations of $350 million to $450 million on total company revenue of between $7.5 billion to $7.7 billion. This equates to GAAP earnings from continuing operations before interest expense, other income (charges), net and income taxes of $275 million to $375 million;

- 2010 GAAP earnings from continuing operations in the range of negative $150 million to negative $50 million, including the impact of the $102 million net charge for early extinguishment of debt, related to the company's recent financing transactions;

- Digital revenue growth of 5% to 9%, and overall revenue growth of 0% to 1%;

- Positive cash generation before restructuring payments, and, on a GAAP basis, net cash provided by continuing operations from operating activities of $50 million to $150 million;

- A year-end cash balance of $1.8 billion to $2.0 billion, after taking into account all cash actions, including modest debt payments due during 2010.

Electronics For Imaging, Inc., a world leader in customer-focused digital printing innovation, today announced its results for the first quarter of 2010. For the quarter ended March 31, 2010, the Company reported revenues of $110.8 million, compared to first quarter 2009 revenue of $96.1 million.

GAAP net loss was $(11.4) million or $(0.25) per diluted share in the first quarter of 2010, compared to GAAP net income of $26.7 million or $0.52 per diluted share for the same period in 2009.

Non-GAAP net loss was $(0.1) million or $(0.00) per diluted share in the first quarter of 2010, compared to non-GAAP net loss of $(4.3) million or $(0.08) per diluted share for the same period in 2009.

"Our product portfolio performed very well in the first quarter, with Inkjet growing 37% over the prior year and Fiery showing strong results during a normally seasonally weak period," said Guy Gecht, CEO of EFI. "Going forward, we expect new innovative products to maintain our growth momentum, as we remain focused on investing in innovation, helping our customers to be more competitive and profitable."

Separately, the Company announced that it has reached an agreement to purchase Radius Solutions, a leading provider of Print MIS applications for the packaging industry, an area that EFI is strategically targeting with its line of Jetrion printers. While the terms of the acquisition were not disclosed, the cash transaction is expected to be slightly accretive to full year 2010 results. The transaction is subject to various closing conditions.

The Company also announced that its Chief Financial Officer, John Ritchie, plans to leave the Company after the filing of the Company's Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2010 to pursue another opportunity.  The Company intends to appoint Gordon Heneweer, currently Vice President, Finance, as the Company's interim Chief Financial Officer.  The Company has initiated a search for a new CFO.

"I would like to extend my sincere thanks to John for his significant contribution to EFI over the past 10 years and wish him all the best in his new role," said Guy Gecht, CEO of EFI.

 

About our Non-GAAP Net Income and Adjustments

To supplement our consolidated financial results prepared under generally accepted accounting principles, or 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 to management and investors regarding non-cash expenses, significant recurring and non-recurring items that we believe are important to understanding our 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 that the exclusion of the items described below, for which the amounts and/or timing may vary significantly depending upon 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.

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, 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 project abandonment costs, asset impairment charges, certain legal settlements, our sale of certain real estate assets, and acquisition-related transaction costs and legal expenses.  Examples of these excluded items are described below:

Amortization of acquisition-related intangibles. Intangible assets acquired to date are being amortized on a straight-line basis.

Stock-based compensation expense is recognized in accordance with FASB Accounting Standards Codification, Topic 718, Stock Compensation.

 

Non-recurring charges and gains, including:

Restructuring related charges.  We have incurred restructuring charges as we reduce the number and size of our facilities and the size of our workforce.

Asset impairment costs consist of equipment and non-cancellable purchase orders incurred relating to a planned product that was cancelled and a facility closure.

Gain on sale of building and land. On January 29, 2009, we sold a portion of the Foster City, California campus for a final amount of $137.3 million to Gilead Sciences, Inc., resulting in a gain on sale of approximately $79.4 million as of March 31, 2009.

Acquisition-related transaction costs and legal expenses. In line with our previously disclosed acquisition strategy, we have identified targets for potential acquisition and have incurred expenses of $0.6 million related thereto in the first quarter of 2010.

Tax effect of these adjustments. After removing the non-GAAP items, we apply the principles of ASC 740, Income Taxes, to estimate the non-GAAP income tax provision in each jurisdiction in which we operate.

These non-GAAP measures are not in accordance with or an alternative for 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 in that 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.

Electronics For Imaging, Inc., a world leader in customer-focused digital printing innovation, today announced that it has reached an agreement to acquire Radius Solutions, a leading provider of Print MIS solutions for the packaging industry. Radius Solutions is a leading ERP/MIS software provider focused exclusively on the packaging and printing industry.

While the terms of the acquisition were not disclosed, the cash transaction is expected to be slightly accretive to full year 2010 results. The transaction is subject to various closing conditions.

"We are very pleased to add Radius to our growing portfolio of industry-leading software solutions targeted to the print industry," said Marc Olin, Sr. VP/GM APPS of EFI. "EFI's goal is to offer our customers a complete product portfolio that assists them from job creation to production, while allowing them to be more efficient and effective, and ultimately, more profitable. Radius allows us to bring this concept to the packaging market, which is one of the largest segments of the print market and an area of strategic focus for EFI, joining our Pace and Monarch MIS systems which are targeted to the display graphics and commercial print markets."

Radius Solutions will become part of the Advanced Professional Print Software (APPS) division of EFI. EFI intends to integrate a number of its award winning products including Fiery, VUTEk, Jetrion, Digital StoreFront, PrintFlow and Auto-Count, with the Radius product line. The Radius acquisition further strengthens EFI's growing product portfolio of software tools, UV Inkjet digital presses and inks, and MIS solutions for the packaging market, which is one of the largest printing markets in the world.

Radius Solutions is headquartered in Chicago, Illinois with direct operations in the United States and Europe. Radius brings many years of experience developing and deploying applications developed specifically to manage the unique needs of packaging and printing organizations. Radius has established itself as a leading provider of management information systems specifically designed to help flexible packaging, folding carton and label printers manage their operations.

"We are very excited to have Radius Solutions join the EFI family," said David Taylor, President and CEO of Radius Solutions. "Our ERP packaging software fits strategically within EFI's solutions portfolio. Our clients will gain a supplier with a global footprint and the additional resources of a tier one organization. I look forward to managing the Radius product line within their world class organization."

Nothing at all to do with large format printing, but we are all interested in what HP are up to, right?

HP and Palm, Inc. today announced that they have entered into a definitive agreement under which HP will purchase Palm, a provider of smartphones powered by the Palm webOS mobile operating system, at a price of $5.70 per share of Palm common stock in cash or an enterprise value of approximately $1.2 billion. The transaction has been approved by the HP and Palm boards of directors.

The combination of HP's global scale and financial strength with Palm's unparalleled webOS platform will enhance HP's ability to participate more aggressively in the fast-growing, highly profitable smartphone and connected mobile device markets. Palm's unique webOS will allow HP to take advantage of features such as true multitasking and always up-to-date information sharing across applications.

"Palm's innovative operating system provides an ideal platform to expand HP's mobility strategy and create a unique HP experience spanning multiple mobile connected devices," said Todd Bradley, executive vice president, Personal Systems Group, HP. "And, Palm possesses significant IP assets and has a highly skilled team. The smartphone market is large, profitable and rapidly growing, and companies that can provide an integrated device and experience command a higher share. Advances in mobility are offering significant opportunities, and HP intends to be a leader in this market."

"We're thrilled by HP's vote of confidence in Palm's technological leadership, which delivered Palm webOS and iconic products such as the Palm Pre. HP's longstanding culture of innovation, scale and global operating resources make it the perfect partner to rapidly accelerate the growth of webOS," said Jon Rubinstein, chairman and chief executive officer, Palm. "We look forward to working with HP to continue to deliver industry-leading mobile experiences to our customers and business partners."

Under the terms of the merger agreement, Palm stockholders will receive $5.70 in cash for each share of Palm common stock that they hold at the closing of the merger. The merger consideration takes into account the updated guidance and other financial information being released by Palm this afternoon. The acquisition is subject to customary closing conditions, including the receipt of domestic and foreign regulatory approvals and the approval of Palm's stockholders. The transaction is expected to close during HP's third fiscal quarter ending July 31, 2010.