STOCKREPORTS		 Electronics for Imaging, Inc. Nasdaq Symbol EFII
19-JUL-97 Industry:
Computer (Software & Services)		 Summary: This company designs and markets products that enable high-quality color printing in short production runs.

Recent Price 52.88
52 Wk Range 52.88 - 29.31		 Yield Nil
12-Mo. P/E 37.5

Quantitative Evaluation:
Outlook (1 Lowest - 5 Highest)
5-
Fair Value
65.80
Risk
MEDIUM
Earn/Div Rank
NR
Technical Evaluation:
BULLISH since 06/94
Rel. Strength Rank (1 Lowest - 99 Highest)
84
Insider Activity
NA

Overview 14-JUL-97

EFII's Fiery Color Servers family integrates hardware and software technologies required to turn digital color copiers and desktop printers into high-quality color printers. First shipped in 1991, more than 50,000 Fiery Color Servers and Fiery Color Controllers have been sold and installed in leading corporations, advertising agencies, graphic design studios and print-for-pay businesses. The Fiery product lines have accounted for virtually all product revenues, which raises the concern that the company offers a limited product line. EFII has significant relationships with Canon, Digital Equipment, IBM, Eastman Kodak, Minolta, Oce, Ricoh and Xerox. Sales to Canon, Xerox, Ricoh and Minolta accounted for approximately 92% of 1996 revenues and about 84% of accounts receivable. The company has a pristine balance sheet, with no long term debt, healthy liquidity ratios, and high inventory turnover.

Valuation 14-JUL-97

EFII exceeded street expectations in the second quarter of 1997, as 46% revenue growth combined with gross margin improvement to push earnings up 63%. This growth is being driven by the expanded use of color technology in short production runs. Revenue growth has slowed somewhat from 1996, however, due to the increasing revenue base. Gross margins improved to 55% in the second quarter on a more favorable mix and lower component costs, and should remain stable at the mid-50% level for the rest of the year. However, future earnings growth will be somewhat restricted by marketing and R&D costs needed to keep EFII's technology on the cutting edge. Although earnings should grow 50% in 1997, with the shares trading at 25X our 1998 EPS estimate of $2.10, we view the stock as a market performer.

Key Stock Statistics

S&P EPS Est. 1997 1.70
P/E on S&P Est. 1997 31.1
S&P EPS Est. 1998 2.10
Dividend Rate/Share Nil
Shs. outstg. (M) 51.8
Avg. daily vol. (M) 0.625
Tang. Bk. Value/Share 5.24
Beta NA
Shareholders 300
Market cap. (B) $ 2.7
Inst. holdings 89%
Value of $10,000 invested 5 years ago:NA

Fiscal Year Ending Dec. 31

Revenue (Million $)
1997 1996 1995 1994 1993 1992
Q1 91.01 63.65 40.36 27.31 19.40 6.60
Q2 100.6 69.05 44.80 30.21 20.93 13.10
Q3 NA 75.12 48.50 32.58 23.10 16.70
Q4 NA 90.20 56.79 40.29 26.10 17.30
Year NA 298.0 190.4 130.4 89.53 53.70

Earning Per Share ($)
1997 1996 1995 1994 1993 1992
Q1 0.37 0.24 0.13 0.08 0.06 -0.01
Q2 0.41 0.25 0.15 0.09 0.06 0.06
Q3 E0.46 0.29 0.19 0.10 0.07 0.08
Q4 E0.46 0.36 0.23 0.15 0.08 0.06
Year E1.70 1.13 0.70 0.43 0.26 0.19

Dividend Data
Amount ($) Date Decl. Ex-Div. Date Stock of Record Payment Date
2-for-1 Jan. 23 Feb. 21 Feb. 10 Feb. 20 '97

Business Summary 14-JUL-97

Electronics for Imaging (EFII) was founded to develop innovative solutions to enable color desktop publishing. Its systems and software permit users to produce color documents easily, quickly and cost-effectively in the office on a range of peripheral devices

To provide desktop users with cost-effective, short-run color printing on a system that has sufficient memory and processing power to handle color images on a network, the company developed the Fiery Color Server, which enables a plain paper color copier to also function as a high performance color PostScript printer. Additionally, the company has developed and manufactures variations of the Fiery Color Servers for wide-format inkjet printers and Fiery Color Controllers, which are an embedded solution to enable color printing on desktop color laser printers. With over 50,000 units installed worldwide, Fiery Color Servers and Fiery Color Controllers are used by leading corporations, advertising agencies, graphic design studios, and print-for-pay businesses.

EFII has established distribution partnerships with leading color copier makers, including Canon, Kodak, Xerox, Minolta and Ricoh, and through certain Canon subsidiaries and dealers. EFII's strategy is to expand its product line by developing new and better equipment, seek additional relationships with key industry players and to further develop its existing relationships, and to leverage its expertise in color technology.

The company launched its first generation Fiery Color Server in August 1991 and by March 1995, introduced its third generation of the Fiery Color Server, the Fiery XJ. This new product line was designed to provide the fastest document processing time available in the short-run color printing industry. In 1996, EFII enhanced the XJ product line and launched the Fiery XJ+, which provides faster document processing times. Also in 1996, the company began shipping Fiery XJ printer controllers (marketed under the name Fiery XJe) to IBM, Canon and Digital. In October 1996, EFII announced the Fiery XJ-W, a controller for wide-format color printers. In December 1996, the company released the first Fiery SI, a stand-alone color server that combines Fiery qualities to print business documents.

In March 1997, EFII and Kinko's, a leading print-for-pay chain store business, signed a letter of intent to enter into a worldwide strategic technology alliance. Kinko's will purchase Fiery Controllers, and EFII will provide Kinko's with solutions designed specifically for its stores and help with sales and marketing efforts in providing digital output services.

International sales, primarily in Europe and Japan, accounted for about 51% of product revenue in 1996. R&D spending amounted to $22.4 million in 1996 (7.5% of sales), up from $12.9 million in 1995 (6.8%).

Capitalization

Long Term Debt: None (6/97).
Options: To buy 6,085,438 shs. at $4.89 to $25.80 a sh. (12/96).

Per Share Data ($)
1996 1995 1994 1993 1992 1991 1990 1989 1988 1987
Tangible Bk. Val. 4.84 3.28 2.37 1.90 1.24 -0.13 NA NA NA NA
Cash Flow 1.23 0.79 0.49 0.30 0.23 0.04 NA NA NA NA
Earnings 1.13 0.71 0.43 0.26 0.19 0.03 NA NA NA NA
Dividends Nil Nil Nil Nil Nil Nil NA NA NA NA
Payout Ratio Nil Nil Nil Nil Nil Nil NA NA NA NA
Prices - High 44 1/8 25 1/8 7 3/8 5 5/8 6 NA NA NA NA NA
- Low 13 3/8 6 3 3/8 3 1/2 3 1/4 NA NA NA NA NA
P/E Ratio - High 39 36 17 22 32 NA NA NA NA NA
- Low 12 9 8 13 17 NA NA NA NA NA

Income Statement Analysis (Million $)
1996 1995 1994 1993 1992 1991 1990 1989 1988 1987
Revs. 298 191 130 89.5 53.7 16.4 NA NA NA NA
Oper. Inc. 95.3 56.5 33.5 20.6 9.2 0.7 NA NA NA NA
Depr. 5.5 3.4 3.1 1.9 1.5 0.6 NA NA NA NA
Int. Exp. Nil NM NA NA NA NA NA NA NA NA
Pretax Inc. 97.2 58.6 33.3 20.6 8.8 0.8 NA NA NA NA
Eff. Tax Rate 36% 36% 36% 38% 25% 19% NA NA NA NA
Net Inc. 62.2 37.5 21.3 12.8 6.6 0.6 NA NA NA NA

Balance Sheet & Other Fin. Data (Million $)
1996 1995 1994 1993 1992 1991 1990 1989 1988 1987
Cash 72.0 46.0 107 79.5 45.2 3.0 NA NA NA NA
Curr. Assets 287 188 130 99 54.8 4.6 NA NA NA NA
Total Assets 299 195 135 104 58.5 6.5 NA NA NA NA
Curr. Liab. 50.0 30.5 21.9 15.7 11.1 6.6 NA NA NA NA
LT Debt Nil NM Nil Nil Nil 1.6 NA NA NA NA
Common Eqty. 249 164 114 88.3 47.4 -1.7 NA NA NA NA
Total Cap. 249 164 114 88.3 47.4 -0.1 NA NA NA NA
Cap. Exp. 10.7 4.5 2.8 3.2 3.2 1.6 NA NA NA NA
Cash Flow 67.7 40.9 24.4 14.6 8.1 1.2 NA NA NA NA

Curr. Ratio 5.7 6.2 5.9 6.3 4.9 0.7 NA NA NA NA
% LT Debt of Cap. Nil NM Nil Nil Nil NM NA NA NA NA
% Net Inc.of Revs. 20.9 19.7 16.3 14.2 12.3 3.8 NA NA NA NA
% Ret. on Assets 25.2 22.7 17.5 14.6 17.1 NA NA NA NA NA
% Ret. on Equity 30.1 27.0 20.8 17.5 NM NA NA NA NA NA

Data as orig. reptd.; bef. results of disc. opers. and/or spec. items. Per share data adj. for stk. divs. as of ex-div. date. E-Estimated. NA-Not Available. NM-Not Meaningful. NR-Not Ranked.

Office--2855 Campus Drive, San Mateo, CA 94403. Tel--(415) 286-8600. Fax--(415) 286-8544. Website--http://www.efi.com Chrmn--E. Arazi. Pres & CEO--D. Avida. Dirs--E. Arazi, D. Avida, G. Cogan, I. Federman, J.L. Gassee, T. I. Unterberg. Transfer Agent & Registrar--First National Bank of Boston. Incorporated--in Delaware in 1988. Empl-- 431. S&P Analyst: Jim Corridore


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