EFI announced its postponement of its second quarter preliminary results. The delay was to allow EFI “to complete an assessment of the timing of recognition of revenue”.
Following the announcement, the stock lost 45%. At the end of last Friday, it closed at US$26.05, down from US$47.66. According to MarketWatch, this was EFI’s four-year low.
At the time of this reporting, the share price has since recovered to US$29.40.
In the press release announcing the postponement, EFI added that: "The assessment is related to certain transactions where a customer signed a sales contract for one or more large format printers and was invoiced, and the printer(s) were stored at a third party in-transit warehouse prior to delivery to the end user.”
The company’s Audit Committee has ordered an independent review to the issue and engaged independent professionals to help in the review. The company expects to “report a material weakness in internal control over financial reporting related to this matter”.
EFI will release another announcement for the new date and time for the distribution of earnings information of the second quarter of 2017.