Last week we started hearing rumblings about EFI having to restate its earnings. Generally, when that happens it has a very negative effect on the stock. Here is what we have that is official.
Electronics for Imaging, Inc. today (August 24th) announced that the Company received a notification letter from Nasdaq stating that the Company is not in compliance with Nasdaq listing rule 5250(c)(1), which requires timely filing of reports with the U.S. Securities and Exchange Commission. The August 18, 2017 letter was sent as a result of the Company’s delay in filing its Quarterly Report on Form 10-Q for the period ending June 30, 2017 (the “Form 10-Q”), which was due August 9, 2017, as previously reported in the Company’s Form 12b-25 filed with the SEC on August 10, 2017.
The Nasdaq notice has no immediate effect on the listing or trading of the Company’s common stock on the Nasdaq Global Select Market. Under the Nasdaq rules, the Company has 60 days from the date of the notice either to file the Form 10-Q or to submit a plan to Nasdaq to regain compliance with Nasdaq’s listing rules. If a plan is submitted and accepted, EFI could be granted up to 180 days from the Form 10-Q’s due date to regain compliance.
Found on EFI News
On August 23, 2017 Lundin Law PC, a shareholder rights firm, announced the filing of a class action lawsuit against Electronics for Imaging, Inc. for possible violations of federal securities laws between February 22, 2017 and August 3, 2017, inclusive (the ”Class Period”). Investors who purchased or otherwise acquired shares during the Class Period were advised they should contact the firm prior to the October 10, 2017 lead plaintiff motion deadline. No class has been certified in the above action yet.
According to the Complaint, throughout the Class Period, Electronics for Imaging made false and/or misleading statements and/or failed to disclose: that the Company was improperly recognizing revenue; that the Company’s disclosure controls and procedures were not effective; that the Company’s internal control over financial reporting were not effective; and thus, the Company’s public statements were materially false and misleading at all relevant times. Upon release of this news, shares of Electronics for Imaging decreased in value materially, which caused investors harm according to the Complaint.
This is a company that we have long admired as they have been leaders in the development of the digital press and a big contributor to the success of industrial printing. Their products are well known, particularly the Fiery frontends found on so many MFPs and digital presses. EFI is deeply imbedded with virtually every A3 manufacturer except Toshiba and Kyocera.
Last week we reached out to EFI and asked for an explanation as to how the news is impacting the operation of company and their ability to continue to support just about everyone in our industry. We have yet to hear back and will do our best to keep you posted as soon as we do.
Scott, CJ and I will be attending Print 17 on Sunday September 10 and have scheduled visits with EFI in their booth and will also be attending their press conference.
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