Guy Gecht, CEO of EFI

<![CDATA[EFI (Electronics for Imaging) is big, but relatively hidden because it is an OEM supplier.
EFI is one of the key suppliers for the printing business. Gecht says the printing industry has a well established pay-as-you-go business model. He points out that a bottle of Dom Perignon is $147, Chanel No. 5 sells for $1,471 a liter and $3,500 a liter for ink — a tank of ink sells for about $145,000. Printing is the fourth largest industry in the U.S. at $320 billion or three percent of GDP. It is just behind semiconductors and well behind the petroleum and auto industries.
There is a lot of evidence that demand is picking up, based on EFI’s business experience, Gecht says. Total page volume is still rising today, despite all this digital stuff. Digital technology has increased local printing. We no longer ask for brochures by mail, but download and print them ourselves. “Paper is the On and Off Ramp of the Information Superhighway.”
EFI sees printing opportunities in security, wireless and the “information lifecycle.” Reducing or controlling printing costs is the key to EFI’s business.
The security opportunity is in access control. Routing and printing permissions.
Wireless output, from handset to the enterprise.
Information Lifecycle — the integration of copier functionality and archival access.
Gecht says he is hearing that end-user customers want to work more directly with the provider of print infrastructure systems, indicating they need to spend more on branding and support in coming years.
Like Veritas, we looked at the downturn as an opportunity to differentiate ourselves from the competition. They did not lay off as many people as they might, lowering current margins, in order to be more prepared for growth. He says that as the company grows, it will grow profit more rapidly than revenue.
The company has $750 million in cash, is not looking for a large acquisition and is buying back $15 million in stock. The company compensates top performers with more stock and Gecht feels obligated to offset the dilution for shareholders.]]>