~~Table~~UNITED ~~of Contents~~STATES

~~UNITED~~SECURITIES ~~STATES~~AND EXCHANGE COMMISSION

~~SECURITIES~~Washington, ~~AND~~D.C. ~~EXCHANGE COMMISSION~~ 20549

~~Washington,~~FORM ~~D.C. 20549~~ 10-K

~~FORM~~(Mark ~~10-K~~ One)

~~(Mark~~þ ~~One~~ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

☒For ~~ANNUAL~~the ~~REPORT~~fiscal ~~PURSUANT~~year TOended ~~SECTION~~December 31, ~~13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934~~2018

~~For the~~¨ ~~fiscal~~TRANSITION ~~year~~REPORT ~~ended~~PURSUANT ~~December 31,~~TO ~~2017~~SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

☐Commission ~~TRANSITION~~File ~~REPORT~~Number: ~~PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934~~000-18805

~~Commission~~ELECTRONICS ~~File~~FOR ~~Number:~~IMAGING, ~~000-18805~~ INC.

~~ELECTRONICS~~(Exact ~~FOR~~name ~~IMAGING,~~of ~~INC.~~registrant as specified in its charter)

(Exact name of registrant as specified in its charter)



Delaware		94-3086355
(State or other Jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

Delaware		94-3086355
(State or other Jurisdiction of incorporation or organization)		(I.R.S. EmployerIdentification No.)

6750 Dumbarton Circle, Fremont, CA 94555

~~6750~~(Address ~~Dumbarton~~of ~~Circle,~~principal ~~Fremont,~~executive CAoffices) ~~94555~~(Zip Code)

(~~Address of principal executive offices~~650) ~~(Zip Code)~~ 357-3500

(~~650)~~Registrant’s ~~357-3500~~telephone number, including area code)

~~(Registrant’s~~Securities ~~telephone~~registered ~~number,~~pursuant ~~including~~to ~~area code~~Section 12(b) of the Act:

Securities registered pursuant to Section 12(b) of the Act:



Title of Each Class		Name of Exchange on which Registered
Common Stock, $.01 Par Value		The Nasdaq Stock Market LLC

Title of Each Class		Name of Exchange on which Registered
Common Stock, $.01 Par Value		The NASDAQ Stock Market LLC

Securities registered pursuant to Section 12(g) of the Act: None

~~Securities~~Indicate ~~registered~~by ~~pursuant~~check tomark ~~Section 12(g)~~if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the ~~Act: None~~ Securities Act. Yes þ No ¨

Indicate by check mark if the registrant is anot ~~well-known~~required ~~seasoned~~to ~~issuer,~~file asreports ~~defined~~pursuant into ~~Rule~~Section 13 ~~405~~or Section 15(d) of the ~~Securities~~ Act. Yes ☒¨ No ☐ þ

Indicate by check mark ifwhether the registrant is(1) has ~~not~~filed all reports required to ~~file~~be ~~reports~~filed ~~pursuant~~by to Section 13 or ~~Section~~ 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days. Yes ☐ þ No ☒ ¨

Indicate by check mark whether the registrant ~~(1)~~ has ~~filed~~ ~~all~~submitted ~~reports~~electronically and posted on its corporate Web site, if any, every Interactive Data File required to be ~~filed~~submitted byand ~~Section 13~~posted orpursuant ~~15(d)~~to Rule 405 of ~~the~~Regulation ~~Securities~~S-T ~~Exchange~~(§ ~~Act~~232.405 of ~~1934~~this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to ~~file~~submit ~~such reports)~~ and ~~(2) has~~post ~~been subject to~~ such ~~filing requirements for the past 90 days~~files). Yes ☒ þ No ☐ ¨

Indicate by check mark ~~whether~~if ~~the~~disclosure ~~registrant~~of ~~has~~delinquent ~~submitted~~filers ~~electronically~~pursuant ~~and~~to ~~posted~~Item 405 onof ~~its~~Regulation ~~corporate~~S-K ~~Web~~(§ ~~site,~~229.405 ifof ~~any,~~this ~~every~~chapter) ~~Interactive~~is ~~Data~~not ~~File~~contained ~~required~~herein, toand bewill ~~submitted~~not ~~and~~be ~~posted~~contained, ~~pursuant~~ to ~~Rule~~the ~~405~~best of ~~Regulation S-T~~registrant’s (§knowledge, ~~232.405~~in ofdefinitive ~~this~~proxy ~~chapter)~~or ~~during~~information ~~the~~statements ~~preceding~~incorporated 12by ~~months~~reference ~~(or~~in ~~for~~Part ~~such~~III ~~shorter~~of ~~period~~this ~~that~~Form ~~the~~10-K ~~registrant~~or ~~was~~any ~~required~~amendment to ~~submit~~this ~~and~~Form ~~post such files)~~10-K. ~~Yes ☒ No ☐~~ þ

Indicate by check mark ifwhether ~~disclosure~~the ofregistrant ~~delinquent filers~~is ~~pursuant~~a tolarge ~~Item 405~~accelerated offiler, ~~Regulation~~an ~~S-K~~accelerated (§filer, ~~229.405~~a ofnon-accelerated ~~this~~filer, ~~chapter)~~a issmaller ~~not~~reporting ~~contained herein~~company, ~~and~~or ~~will~~an ~~not~~emerging begrowth ~~contained,~~company. toSee the ~~best~~definitions of ~~registrant’s~~“large ~~knowledge~~accelerated filer”, in“accelerated ~~definitive~~filer”, ~~proxy~~“smaller ~~or information~~reporting ~~statements~~company”, ~~incorporated~~and by"emerging ~~reference~~growth company" in ~~Part~~Rule 12b-2 ~~III~~ of ~~this~~the ~~Form~~Exchange ~~10-K or any amendment to this Form 10-K~~Act. ☐

~~Indicate~~Large ~~by check mark whether the registrant is a large~~ accelerated filer, anþ ~~accelerated~~Accelerated filer, a¨ ~~non~~Non-accelerated filer, or¨ aSmaller ~~smaller~~ reporting company. ~~See~~¨ ~~the~~Emerging ~~definitions~~growth ~~of “large accelerated filer”, “accelerated filer” and “smaller reporting~~ company” ~~in Rule 12b-2 of the Exchange Act.~~ ¨

~~Large~~If ~~accelerated~~an ~~filer~~emerging ☒growth ~~Accelerated~~company, ~~filer~~indicate ☐by ~~Non-accelerated~~check ~~filer~~mark ☐if ~~Smaller~~the ~~reporting~~registrant ~~company~~has ☐elected ~~Emerging~~not ~~growth~~to ~~company~~use ☐the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

IfIndicate ~~an emerging growth company, indicate~~ by check mark ifwhether the registrant ~~has~~is ~~elected~~a ~~not~~shell tocompany ~~use~~(as ~~the~~defined ~~extended~~in ~~transition~~Rule ~~period for~~12b-2 ~~complying with any new or revised financial accounting standards provided pursuant to Section 13(a)~~ of the Exchange Act). ☐ Yes ¨ No þ

~~Indicate~~The byaggregate ~~check mark~~market ~~whether~~value of the ~~registrant~~voting isand anon-voting ~~shell~~common ~~company~~stock ~~(as~~held ~~defined~~by innon-affiliates ~~Rule~~computed ~~12b-2~~by ofreference to the ~~Exchange~~price ~~Act). Yes ☐ No ☒~~at which the common stock was last sold on June 29, 2018 was $1,431,471,129*

The ~~aggregate~~number ~~market~~of ~~value~~shares outstanding of the ~~voting~~registrant’s ~~and non-voting~~ common stock, ~~held~~$.01 ~~by non-affiliates~~par ~~computed~~value byper ~~reference~~share, toas ~~the~~of ~~price at which the common stock was last sold on June~~February 3022, ~~2017~~2019 was $242,~~168~~642,108,942 * 184.

~~The number of shares outstanding of the registrant’s common stock, $.01 par value per share, as of February~~ ~~28,~~DOCUMENTS ~~2018~~INCORPORATED ~~was~~BY ~~45,007,892.~~ REFERENCE

~~DOCUMENTS~~Portions ~~INCORPORATED~~of BYthe ~~REFERENCE~~definitive Proxy Statement to be delivered to stockholders in connection with the 2019 Annual Meeting of Stockholders are incorporated by reference into Part III hereof.

* Based on the last trade price of the registrant’s common stock reported on The Nasdaq Global Select Market on June 29, 2018, the last business day of the registrant’s second quarter of the 2018 fiscal year.

~~Portions of~~Electronics ~~the~~For ~~definitive~~Imaging, ~~Proxy Statement to be delivered to stockholders in connection with the 2018 Annual Meeting of Stockholders are incorporated by reference into Part III hereof~~Inc.

*Table ~~Based on the last trade price~~ of ~~the registrant’s common stock reported on The NASDAQ Global Select Market on June 30, 2017, the last business day of the registrant’s second quarter of the 2017 fiscal year.~~ Contents



		Page No.
PART I
ITEM 1	Business	3
ITEM 1A	Risk Factors	19
ITEM 1B	Unresolved Staff Comments	36
ITEM 2	Properties	36
ITEM 3	Legal Proceedings	36
ITEM 4	Mine Safety Disclosures	37

PART II
ITEM 5	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	37
ITEM 6	Selected Financial Data	40
ITEM 7	Management’s Discussion and Analysis of Financial Condition and Results of Operations	41
ITEM 7A	Quantitative and Qualitative Disclosures about Market Risk	67
ITEM 8	Financial Statements and Supplementary Data	68
ITEM 9	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	127
ITEM 9A	Controls and Procedures	127
ITEM 9B	Other Information	130

PART III
ITEM 10	Directors, Executive Officers and Corporate Governance	130
ITEM 11	Executive Compensation	130
ITEM 12	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	130
ITEM 13	Certain Relationships and Related Transactions, and Director Independence	131
ITEM 14	Principal Accountant Fees and Services	131

PART IV
ITEM 15	Exhibits and Financial Statement Schedules	131
ITEM 16	Form 10-K Summary	134
Signatures		135

PART I
ITEM 1	Business	1
ITEM 1A	Risk Factors	21
ITEM 1B	Unresolved Staff Comments	40
ITEM 2	Properties	41
ITEM 3	Legal Proceedings	42
ITEM 4	Mine Safety Disclosures	43
PART II
ITEM 5	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	43
ITEM 6	Selected Financial Data	46
ITEM 7	Management’s Discussion and Analysis of Financial Condition and Results of Operations	49
ITEM 7A	Quantitative and Qualitative Disclosures about Market Risk	92
ITEM 8	Financial Statements and Supplementary Data	95
ITEM 9	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	165
ITEM 9A	Controls and Procedures	165
ITEM 9B	Other Information	170
PART III
ITEM 10	Directors, Executive Officers and Corporate Governance	171
ITEM 11	Executive Compensation	171
ITEM 12	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	171
ITEM 13	Certain Relationships and Related Transactions, and Director Independence	172
ITEM 14	Principal Accountant Fees and Services	172
PART IV
ITEM 15	Exhibits and Financial Statement Schedules	172
ITEM 16	Form 10-K Summary	175
Signatures		177
Exhibit index
EXHIBIT 10.16 EXHIBIT 12.1
EXHIBIT 21 EXHIBIT 23.1
EXHIBIT 31.1
EXHIBIT 31.2
EXHIBIT 32.1
EXHIBIT 101

~~Table~~FORWARD-LOOKING ~~of Contents~~STATEMENTS

~~FORWARD~~Certain of the information contained in this Annual Report on Form 10-~~LOOKING~~K, ~~STATEMENTS~~including, without limitation, statements made under this Part I, Item 1, “Business,” Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and Part II Item 7A, “Quantitative and Qualitative Disclosures about Market Risk,” which are not historical facts, may include “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (“Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (“Exchange Act”), and is subject to risks and uncertainties and actual results or events may differ materially. When used herein, words such as “address,” “anticipate,” “believe,” “consider,” “continue,” “develop,” “estimate,” “expect,” “further,” “goal,” “intend,” “may,” “plan,” “potential,” “project,” “seek,” “should,” “target,” “will,” variations of such words, and similar expressions as they relate to the Company or its management are intended to identify such statements as “forward-looking statements.” Such statements reflect the current views of the Company and its management with respect to future events and are subject to certain risks, uncertainties, and assumptions. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, the Company’s actual results, performance, or achievements could differ materially from the results expressed in, or implied by, these forward-looking statements. Important factors that could cause the Company’s actual results to differ materially from those included in the forward-looking statements made herein include, without limitation, those factors discussed in Item 1, “Business,” in Item 1A, “Risk Factors,” and elsewhere in this Annual Report on Form 10-K and in the Company’s other filings with the Securities and Exchange Commission (“SEC”), including the Company’s most recent Quarterly Report on Form 10-Q and Current Reports on Form 8-K, and any amendments thereto. The Company assumes no obligation to revise or update these forward-looking statements to reflect actual results, events, or changes in factors or assumptions affecting such forward-looking statements.

~~Certain~~PART ~~of the information contained in this Annual Report on Form 10-K, including, without limitation, statements made under this Part~~ I, Item 1, “Business,” Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and Part II Item 7A, “Quantitative and Qualitative Disclosures about Market Risk,” which are not historical facts, may include “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (“Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (“Exchange Act”), and is subject to risks and uncertainties and actual results or events may differ materially. When used herein, words such as “address,” “anticipate,” “believe,” “consider,” “continue,” “develop,” “estimate,” “expect,” “further,” “goal,” “intend,” “may,” “plan,” “potential,” “project,” “seek,” “should,” “target,” “will,” variations of such words, and similar expressions as they relate to the Company or its management are intended to identify such statements as “forward-looking statements.” Such statements reflect the current views of the Company and its management with respect to future events and are subject to certain risks, uncertainties, and assumptions. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, the Company’s actual results, performance, or achievements could differ materially from the results expressed in, or implied by, these forward-looking statements. Important factors that could cause the Company’s actual results to differ materially from those included in the forward-looking statements made herein include, without limitation, those factors discussed in Item 1, “Business,” in Item 1A, “Risk Factors,” and elsewhere in this Annual Report on Form 10-K and in the Company’s other filings with the Securities and Exchange Commission (“SEC”), including the Company’s most recent Quarterly Report on Form 10-Q and Current Reports on Form 8-K, and any amendments thereto. The Company assumes no obligation to revise or update these forward-looking statements to reflect actual results, events, or changes in factors or assumptions affecting such forward-looking statements.

~~PART~~References Ito “EFI,” the “Company,” “we,” “us,” and “our” mean Electronics For Imaging, Inc. and its subsidiaries, unless the context indicates otherwise.

~~References~~Item 1: ~~to “EFI,” the “Company,” “we,” “us,” and “our” mean Electronics For Imaging, Inc. and its subsidiaries, unless the context indicates otherwise.~~ Business

~~Item 1: Business~~ Overview

~~Filings~~EFI is a world leader in customer-centric digital printing innovation focusing on the transformation of the printing, packaging, ceramic tile decoration, and textile industries from the use of traditional analog based printing to digital on-demand printing. EFI was incorporated in Delaware in 1988 and commenced operations in 1989. Our initial public offering of common stock was completed in 1992. Our common stock is traded on The Nasdaq Global Select Market under the symbol EFII. Our corporate headquarters are located at 6750 Dumbarton Circle, Fremont, California 94555.

We ~~file~~offer ~~Annual~~a ~~Reports on Form 10~~wide-K,range ~~Quarterly~~of ~~Reports~~products ~~on Form 10-Q, Current Reports on Form 8-K, proxy statements,~~ and ~~other~~services ~~documents~~for ~~with~~industrial ~~the~~digital ~~SEC under the Exchange Act~~printing. ~~The~~Our ~~public~~products ~~may read~~ and ~~copy~~services ~~any~~are ~~materials~~grouped ~~that~~in ~~we file with~~ the ~~SEC~~following atcategories: ~~the~~Industrial ~~SEC’s Public Reference Room at Room 1580~~Inkjet, ~~100 F Street,~~Productivity ~~N.E.~~Software, ~~Washington,~~ D.C. 20549. The public may obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330. The SEC also maintains an internet website that contains reports, proxy statements, information statements, and ~~other information regarding issuers, including EFI, that file electronically with the SEC~~Fiery. ~~The public can obtain any documents that we file with the SEC at http://www.sec.gov.~~

WeProducts ~~also make available free of charge through our internet website (http://www.efi.com) our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, proxy statements,~~ and if applicable, amendments to those reports filed or furnished pursuant to the Exchange Act as soon as reasonably practicable after we electronically file such material with, or furnish it to, the SEC. None of the information on our website is incorporated by reference into our reports filed with, or furnished to, the SEC. Services

~~General~~Industrial Inkjet

~~EFI~~Our ~~was~~Industrial ~~incorporated~~Inkjet inproducts ~~Delaware~~address inthe ~~1988~~high-growth ~~and~~industrial ~~commenced~~digital ~~operations~~inkjet inmarkets ~~1989~~where significant conversion of production from analog to digital inkjet printing is occurring. ~~Our~~The ~~initial~~Industrial ~~public~~Inkjet ~~offering~~operating segment consists of ~~common~~our ~~stock~~VUTEk ~~was~~super-wide ~~completed~~and inwide ~~1992.~~format ~~Our~~display ~~common~~graphics, ~~stock is~~Nozomi ~~traded~~corrugated onpackaging ~~The~~and ~~NASDAQ~~display, ~~Global~~Reggiani ~~Select~~textile, ~~Market~~and ~~under~~Cretaprint ~~the~~ceramic ~~symbol~~tile ~~EFII.~~decoration ~~Our~~and ~~corporate~~building ~~headquarters~~material ~~are~~industrial ~~located~~digital atinkjet ~~6750 Dumbarton~~printers; ~~Circle~~digital ultra-violet ("UV") curable, ~~Fremont~~light emitting diode ("LED") curable, ~~California~~ceramic, ~~94555.~~water-based, thermoforming, and specialty inks, as well as a variety of textile inks including dye sublimation, pigmented, reactive dye, acid dye, pure disperse dye, water-based dispersed printing ink, and

1 3

~~Table~~coatings; ofdigital ~~Contents~~inkjet printer parts; and professional services. Printing surfaces include paper, vinyl, corrugated, textile, glass, plastic, aluminum composite, ceramic tile, wood, and many other flexible and rigid substrates.

WeDisplay ~~are~~Graphics. aOur ~~world~~display ~~leader~~graphics inproducts ~~customer~~consist of super-~~centric~~wide ~~digital~~format ~~printing~~VUTEk ~~innovation~~printers ~~focused~~(including onh-series, ~~the~~HS-series ~~transformation~~and GS/LX-series, ) and roll-to-roll product families (including r-series). Our new VUTEk hybrid LED printer h-series debuted in October 2018 when we launched VUTEk h3 which offers maximum throughput of ~~the printing~~up to 74 boards per hour. In January 2019, ~~packaging~~we launched VUTEk h5, ~~ceramic~~our ~~tile~~newest ~~decoration~~higher-speed, ~~and~~premium-quality ~~textile~~hybrid ~~industries~~flatbed/roll-to-roll ~~from~~super-wide ~~the~~format ~~use~~LED ofprinter, ~~traditional~~which ~~analog~~can ~~based~~run ~~printing~~up to ~~digital~~109 onboards per hour and offers eight-~~demand~~color and optional four-color printing. modes plus white, as well as an up to nine-layer print capability.

Our ~~products~~HS ~~include~~series ~~industrial~~of ~~super~~high-~~wide~~speed ~~and wide format display graphics, corrugated packaging and display, textile, and ceramic tile decoration digital inkjet~~ printers ~~that~~are ~~utilize~~alternatives ~~our~~to ~~digital~~analog ~~ink,~~presses ~~industrial~~used ~~digital~~by ~~inkjet~~high ~~printer~~volume ~~parts,~~graphic producers and ~~professional~~are ~~services;~~based ~~print~~on ~~production~~pin & ~~workflow,~~cure ~~web-to-print,~~printing ~~cross-media marketing,~~technology. ~~fashion~~In ~~design~~2018, ~~and~~we ~~business~~launched ~~process~~the ~~automation~~HS125 ~~solutions;~~F4 and ~~color~~HS ~~printing~~100 ~~digital~~F4 ~~front~~inkjet ~~ends~~presses (for “~~DFEs~~Fast Graphics”) ~~creating an on~~out-~~demand~~of-home ~~digital~~applications ~~printing~~of ~~ecosystem.~~hybrid ~~Our~~flatbed/roll ~~ink includes digital ultra~~super-~~violet~~wide ~~(“UV”)~~format ~~curable,~~products. ~~light~~The ~~emitting~~two ~~diode~~new ~~(“LED”)~~printers ~~curable,~~reconfigure ~~ceramic,~~the ~~water-based,~~eight ~~thermoforming, and specialty~~ ink, aschannels ~~well as a variety~~ of ~~textile~~the ~~ink~~VUTEk ~~including~~HS ~~dye~~series ~~sublimation,~~platform ~~pigmented,~~in ~~reactive~~a ~~dye,~~CMYK ~~acid~~x ~~dye,~~2 ~~pure disperse dye~~setup, ~~water-based~~efficiently ~~dispersed~~addressing ~~printing~~the ~~ink,~~need ~~and~~for ~~coatings. Our award~~cost-~~winning~~effective ~~business~~production ~~process~~on ~~automation~~banners, ~~solutions~~billboards, ~~are~~building ~~integrated~~wraps ~~from creation to print~~ and ~~are~~similar ~~vertically integrated with our industrial digital inkjet printers and products produced by the leading production digital color page printer manufacturers that are driven by our Fiery DFEs~~applications.

~~Our~~VUTEk ~~product portfolio includes industrial~~ super-wide ~~and wide~~ format ~~digital~~roll-to-roll ~~inkjet~~printers ~~products~~include ~~(“Industrial~~advanced ~~Inkjet”)~~material ~~including~~handling ~~VUTEk~~features ~~display~~such ~~graphics~~as ~~super~~in-~~wide~~line cutting and ~~wide~~slitting. ~~format,~~In ~~Nozomi corrugated packaging~~2018, ~~Reggiani~~we ~~textile,~~launched ~~Cretaprint~~the ~~ceramic~~VUTEk ~~tile~~3r+ ~~decoration~~ and ~~building~~5r+ ~~material industrial~~LED ~~digital inkjet printers and ink; print production workflow, web~~roll-to-~~print,~~roll ~~cross-media marketing~~printers, ~~Optitex~~which ~~textile two-dimensional~~print ~~(“2D”)~~at ~~and~~speeds ~~three-dimensional~~up ~~(“3D”)~~to ~~computer aided fashion design (“CAD”) applications~~4,896 ~~and~~square ~~business~~feet ~~process~~per ~~automation software (“Productivity Software”)~~hour, ~~which~~with ~~provides~~resolutions ~~corporate~~up ~~printing,~~to ~~packaging~~1,200 ~~corrugated packaging~~dpi, ~~publishing,~~ and ~~mailing~~incorporate and fulfillment solutions for the printing and packaging industry; Fiery DFEs (“Fiery”), including the FreeFlow Print Server DFE, and Generation Digital print and fabric design software. Our integrated solutions and award7-~~winning~~picoliter ~~technologies are designed to automate print and business processes, streamline workflow, provide profitable value~~Ultra-~~added~~Drop ~~services, and produce accurate digital output~~technology.

~~Products~~Our wide format display graphics products consist of roll-to-roll, flatbed, and ~~Services~~hybrid product families for the entry-level and mid-range industrial digital inkjet printer market. In 2018, we launched a new 3.2-meter Pro 32r wide format roll-to-roll LED printer providing a more competitive and economical, all-in-one, production-level printer, delivering up to 5,000 square meters per month. In 2017, we launched our wide format Pro 24f flatbed and Pro 16h LED hybrid printers.

~~Industrial~~Corrugated ~~Inkjet~~Packaging and Display. Our first single pass, ultra-high-speed LED industrial inkjet corrugated packaging press, Nozomi C18000, debuted in 2017. It is a revolutionary cost-effective solution for the corrugated, paper packaging, display printing, and other markets as it produces on-demand and just-in-time customized campaigns with direct to substrate printing as well as proofs on demand. In 2018, we announced new Nozomi print capabilities including a white ink feature and updated corrugated production workflow. With the new white ink feature, packaging converters can create impressive photographic images and vivid colors directly on brown kraft liner board.

Our ~~Industrial~~VUTEk ~~Inkjet~~display ~~products~~graphics address the high-growth industrial digital inkjet markets where significant conversion of production from analog to digital inkjet printing is occurring. The Industrial Inkjet operating segment consists of our VUTEk super-wide and wide format ~~display graphics~~, and Nozomi corrugated packaging and display, ~~Reggiani textile, and Cretaprint ceramic tile decoration and building material~~ industrial digital inkjet printers; ~~digital~~incorporate UV“cool ~~curable,~~cure” LED curable, ceramic, water-based, thermoforming, and specialty ink, as well as a variety of textile ink including dye sublimation, pigmented, reactive dye, acid dye, pure disperse dye, water-based dispersed printing ~~ink, and coatings; digital inkjet printer parts; and professional services~~technology. ~~Printing~~LED ~~surfaces include~~technology ~~paper,~~uses ~~vinyl,~~less ~~corrugated,~~heat ~~textile,~~than ~~glass,~~the ~~plastic,~~traditional ~~aluminum~~curing ~~composite,~~process ~~ceramic~~resulting ~~tile,~~in ~~wood,~~increased ~~and~~uptime ~~many other flexible~~ and ~~rigid~~greater ~~substrates~~reliability.

~~Customer Base~~Textile. Our ~~industry-leading~~textile ~~VUTEk display graphics super-wide and wide format UV, LED, and thermoforming~~ industrial ~~digital~~ inkjet ~~printers~~products ~~and~~consist ~~ink are used by commercial photo labs, large sign shops, graphic screen printers, specialty commercial printers, and digital and billboard graphics providers serving the out-~~of~~-home~~ advertising and industrial specialty print segments by printing banners, signage, building wraps, flags, point of purchase and exhibition signage, backlit displays, fleet graphics, photo-quality graphics, art exhibits, customized architectural elements, billboards, thermoplastic decoration, and other large graphic displays. We launched the Nozomi single-pass industrial digital inkjet platform in 2017, which is sold to the corrugated, paper packaging, display graphics, and other markets. We sell EFI hybrid, roll to roll, and flatbed UV wide format graphics printers and ink to the industrial digital inkjet display graphics printer market. We sell Reggiani ~~textile digital inkjet printers~~ and ~~textile~~VUTEk ~~ink~~FabriVU toproduct the display graphics soft signage market and textile contract printers serving major textile brand owners and fashion designers, the home furnishings market, as well as the global printed textile industryfamilies. ~~We sell Cretaprint ceramic tile decoration and building material digital inkjet printers and ceramic digital ink to the ceramic tile and building materials manufacturing industries.~~

2Reggiani industrial inkjet textile printers address the full scope of advanced textile printing with versatile printers suitable for dye sublimation, pigmented, reactive dye, acid dye, pure disperse dye, and water-based dispersed printing ink. Reggiani is at the forefront of digital printing as an alternative to either analog printing or single color (dyed) garments. Reggiani provides an overall solution for the entire textile printing process from yarn treatment to fabric printing and finishing for a wide variety of substrates and applications (fashion, home textile, sportswear, signage, automotive, and outdoor).

~~Table~~A significant driver for the adoption of ~~Contents~~digital textile printing is the growth of “fast fashion,” which is a term used by fashion retailers to express the need for designs to move quickly from the runway to the retailer to capture current fashion trends. The digital textile printing market has also benefited from sports apparel with short run production quantities, closer geographic proximity to end-use markets, and environmental awareness, as digital printing has a significantly lower environmental footprint than analog production, consuming less water, and generating less waste.

~~Our~~We ~~VUTEk~~demonstrated ~~display~~our ~~graphics~~new ~~super-wide~~Reggiani ~~and~~BOLT ~~wide~~textile ~~format,~~printer ~~and~~in ~~Nozomi~~November ~~corrugated~~2018. ~~packaging~~It ~~and~~is ~~display industrial~~an ~~digital~~advanced ~~inkjet~~ultra-high-speed ~~printers~~digital ~~incorporate~~single-pass ~~“cool~~printer ~~cure”~~with ~~LED~~the ~~printing~~potential ~~technology.~~to ~~LED~~revolutionize ~~technology~~the ~~uses~~textile ~~less~~printing ~~heat~~market, ~~than~~designed ~~the~~to ~~traditional~~provide ~~curing~~users ~~process~~with ~~resulting~~high ~~in increased~~ uptime and ~~greater~~ reliability., ~~Energy~~outstanding ~~assessments~~performance, ~~conducted~~superior ~~by the~~printing ~~Fogra~~uniformity ~~Graphic~~and ~~Technology~~accuracy, ~~Research~~long ~~Association~~print ~~have~~head ~~shown~~life ~~that~~and ~~our~~minimal ~~super-wide~~maintenance ~~format~~needs. ~~printers~~We ~~with~~anticipate ~~LED~~commercially ~~curing~~releasing ~~can~~this ~~reduce~~product ~~energy~~in ~~consumption by up to 82% when compared with printers that use conventional mercury arc lamps, as well as enabling printing on thinner and heat sensitive substrates~~2019.

Super-wide Format. We launched next generation printer models and new finishing modules of our high-speed, high-resolution super-wide format industrial digital inkjet printers in 2017, 2016, and 2015, as well as new super-wide format industrial digital inkjet roll-to-roll printers in 2017 and 2016. 4

~~Our~~In HS2018 ~~series~~we oflaunched ~~printers~~the ~~are alternatives~~COLORS toand ~~analog~~POWER ~~presses~~industrial ~~used~~digital bytextile ~~high~~inkjet ~~volume~~printers. ~~graphic~~The ~~producers~~COLORS ~~and~~printer ~~are~~offers ~~based~~12 oncolor ~~pin & cure~~ printing ~~technology.~~for ~~We launched~~ the ~~HS125~~most ~~Pro~~accurate ~~digital~~color ~~inkjet~~reproduction ~~printer~~ in ~~2016,~~our ~~which~~product isline aand ~~3.2~~vivid ~~meter~~colors ~~hybrid flatbed/roll-fed printer that prints~~ on ~~flexible~~a ~~and~~variety ~~rigid~~of ~~materials~~textiles. upThe toPOWER ~~two~~printer ~~inches~~features ~~thick~~our ~~utilizing~~recirculating ~~UltraFX~~ink ~~Technology~~system ~~that~~which ~~enhances~~increases ~~the~~inkjet ~~visual~~head ~~impact~~life ofand ~~the~~our ~~printed~~ink ~~image~~recovery ~~and~~system that reduces ~~the~~overall ~~appearance~~ink ~~of unwanted visual artifacts~~consumption.

~~The~~Our ~~GS/LX~~VUTEk ~~family~~FabriVU oftextile ~~super-wide~~printers ~~format~~are ~~industrial~~specialty ~~digital~~hybrid ~~inkjet~~flatbed/roll-fed printers ~~offers~~that ~~the~~produce ~~highest~~digitally ~~quality~~printed infabrics, asoft ~~super-wide~~signage, ~~format. The~~or LXdeep ~~models~~draw ~~incorporate~~thermoformed ~~LED~~and ~~technology~~other custom applications. We launched the 3.24M ~~meter~~FabriVU ~~hybrid~~340i ~~flatbed/roll-to-roll LX3 Pro digital inkjet printer~~ in ~~2015,~~2018 which ~~prints~~features onin-line ~~flexible~~sublimation ~~and rigid~~for ~~materials~~direct up to ~~two~~textile ~~inches~~signage ~~thick~~printing ~~utilizing~~in ~~UltraFX~~a ~~Technology.~~single ~~The~~step, ~~LX3~~eliminating isthe ~~well~~need ~~suited~~ for running the ~~point-of-purchase~~textile ~~printing~~in ~~environment.~~a ~~Our~~heat ~~GS3250LX~~press ~~and~~after ~~GS2000LX offer smaller drop sizes and more precise control~~printing.

~~The~~Ceramic ~~H/QS~~Tile ~~family~~Decoration. ofOur ~~super-wide~~Cretaprint ~~format~~ceramic ~~industrial~~tile ~~digital~~decoration inkjet printers ~~offers~~are ~~high~~utilized ~~quality~~by ~~and productivity for~~ the ~~mid-range~~ceramic ~~market~~tile ~~in a super-wide format. The two meter H2000 Pro printer provides a more affordable entry point into high-end production printing for signage~~ and ~~graphics~~building ~~companies~~material ~~with~~manufacturing ~~the option to add features as their business grows~~industries. ~~H2000 Pro users can run flexible, rigid, and sheet media up to two inches thick.~~

~~VUTEk~~In ~~super-wide~~2018, ~~format~~we ~~industrial~~launched ~~digital~~Cretaprint ~~inkjet~~C5 ~~roll-to-roll~~and ~~printers include~~D5 ~~advanced~~models ~~material~~which ~~handling~~feature ~~features~~the ~~such~~new ase•D5 ~~in-line~~print ~~cutting~~head that optimizes printer performance by assuring better alignment and ~~slitting~~higher throughput speeds. In 2017, we launched the ~~VUTEk~~Cretaprint 3rC4 ~~and~~Twin, 5rfeaturing ~~LED roll-to-roll~~a ~~printers,~~dual ~~which~~ print athead ~~speeds~~approach with up to ~~4,896~~four ~~square~~double ~~feet~~print ~~per~~bars ~~hour,~~and ~~with~~widths ~~resolutions~~ up to ~~1,200 dpi, and incorporating~~ 0.7~~-picoliter~~ ~~Ultra-Drop technology~~meters. InWe ~~2016,~~also we launched the ~~Quantum~~Cretaprint ~~LXr~~P4 ~~3.5~~in ~~and~~2017 ~~5.2~~featuring ~~meter~~up ~~LED roll-~~to~~-roll~~ ~~printer,~~12 ~~which~~print isbars, ~~an alternative~~1.4 tometer ~~latex~~print ~~printers~~widths, ~~featuring 7-picoliter imaging~~ and resolution upof to360 ~~1,200~~ dpi.

~~Corrugated Packaging and Display~~Ink. InOur ~~2017,~~ink weprovides ~~launched the Nozomi C18000 single-pass industrial digital inkjet platform. The Nozomi C18000 is~~ a ~~1.8~~recurring ~~meter,~~revenue ~~single~~stream ~~pass,~~generated ~~high~~from ~~speed~~sales ~~LED industrial digital inkjet corrugated packaging press for the corrugated, paper packaging, display printing, and other markets that prints up~~ to 75our ~~linear~~existing ~~meters~~customer ~~(246~~base ~~linear~~of ~~feet)~~installed ~~per minute~~printers.

~~Label Printing.~~VUTEk Onprinters ~~November 1~~primarily use digital UV and LED curable ink, ~~2017~~although ~~(“Effective~~our ~~Date”)~~solvent weink ~~entered~~printers ~~into~~remain ain ~~Support~~use ~~Services~~in ~~and~~the ~~License~~field. ~~Agreement~~We ~~(“Agreement”)~~were first to market with ~~Xeikon,~~digital ~~N.V.~~UV ~~(“Xeikon”),~~curable ~~which~~ink isincorporating a“cool ~~division~~cure” ofLED ~~the~~technology ~~Flint~~for ~~Group headquartered~~use in ~~Luxembourg.~~high-end ~~Pursuant~~production tosuper-wide, ~~the~~wide ~~Agreement~~format, weand ~~provided~~corrugated ~~Xeikon~~packaging ~~access~~and todisplay ~~the~~digital ~~Jetrion~~inkjet ~~customer~~printing ~~list,~~systems. ~~which~~We ~~enabled~~sell ~~Xeikon~~a tovariety ~~sell~~of ~~Jetrion~~third ~~printers~~party ~~and~~branded ~~re-sell~~textile ink to users of our UVtextile ~~and~~digital ~~LED~~inkjet ~~label~~printers, ~~ink.~~including ~~Xeikon~~dye ~~will purchase~~sublimation, UVpigmented, ~~and~~reactive ~~LED~~dye, ~~label~~acid ~~ink~~dye, ~~exclusively~~water-based ~~from~~dispersed usprinting ink, and ~~resell~~coatings. toWe ~~both~~launched our ~~current~~internal ~~customer~~formulation ~~base~~of asour ~~well~~reactive asdye ~~new~~ink ~~Xeikon~~in ~~inkjet customers~~2016. WeIn ~~will~~2016, ~~not~~we ~~sell~~introduced ~~Jetrion~~our ~~printers~~soluble ~~for~~salt-based ~~four~~ceramic ~~years~~digital ~~after~~ink ~~the Effective Date~~formulation.

~~Wide~~Rialco ~~Format.~~Limited ~~Our~~(“Rialco”), ~~EFI~~which ~~hybrid~~we ~~flatbed/roll-to-roll~~acquired ~~and dedicated~~in ~~roll-to-roll~~2016, ~~entry~~supplies ~~level,~~dye ~~overflow,~~powders and ~~specialty~~color ~~production~~products UVfor ~~wide~~the ~~format~~textile, digital ~~inkjet printers are developed~~print, ~~manufactured,~~ and ~~marketed~~other todecorating ~~the entry-level and mid-range industrial digital inkjet printer market~~industries. InRialco’s ~~2017,~~pure wedisperse ~~launched~~dyes ~~our~~are ~~wide~~particularly ~~format~~important ~~Pro~~in ~~24f~~the ~~flatbed~~manufacture ~~and~~of ~~Pro 16h LED hybrid roll~~high-~~to-roll~~quality /dye ~~flatbed~~sublimation ~~printers.~~inkjet ~~The~~ink ~~Pro~~for ~~24f~~textile ~~LED~~applications, ~~flatbed~~which ~~wide~~is ~~format~~a ~~printer~~key ~~utilizes~~growth aarea ~~moving~~in ~~gantry~~the ~~and~~global amigration ~~vacuum~~from ~~system~~analog to ~~hold~~digital ~~media~~print. ~~stationary~~Rialco’s ontechnical aand ~~flat~~commercial ~~surface. This~~capabilities ~~wide~~benefit ~~format~~the ~~printer~~Industrial ~~has~~Inkjet asegment 32in ~~square-foot~~the ~~bed~~sourcing, ~~prints~~specification, inand ~~four~~purification ~~colors~~of ~~plus~~high ~~white~~quality ~~ink,~~dyes and isexpand ~~appropriate~~our ~~for~~research, ~~specialty~~development, ~~applications~~and upinnovation base to 2develop ~~inches~~ink ~~thick.~~for our markets.

3Label Printing. We entered into a Support Services and License Agreement (“Agreement”) with Xeikon, N.V. (“Xeikon”), a division of the Flint Group, in November 2017. Pursuant to the Agreement, we provided Xeikon access to the Jetrion customer list, which enabled Xeikon to sell Jetrion printers and re-sell our UV and LED label ink. Xeikon will purchase UV and LED label ink exclusively from us and resell to both our current customer base as well as new Xeikon inkjet customers over the four-year term of the Agreement. We cannot sell Jetrion printers during the four-year term of the Agreement.

~~Table~~Customer Base. Our industry-leading VUTEk display graphics super-wide and wide format UV, LED, and thermoforming industrial inkjet printers and inks are used by commercial photo labs, large sign shops, graphic screen printers, specialty commercial printers, and digital and billboard graphics providers serving the out-of-home ~~Contents~~advertising and industrial specialty print segments by printing banners, signage, building wraps, flags, point of purchase and exhibition signage, backlit displays, fleet graphics, photo-quality graphics, art exhibits, customized architectural elements, billboards, thermoplastic decoration, and other large graphic displays. Our Nozomi single-pass industrial digital inkjet platform and ink are sold to the corrugated, paper packaging, display graphics, and other markets. We sell our hybrid, roll-to-roll, and flatbed UV wide format graphics printers and ink to the industrial digital inkjet display graphics printer market. We sell Reggiani textile digital inkjet printers and textile ink to the display graphics soft signage market and textile contract printers serving major textile brand owners and fashion designers, the home furnishings market, as well as the global printed textile industry. We sell Cretaprint ceramic tile decoration and building material digital inkjet printers and ceramic ink to the ceramic tile and building materials manufacturing industries.

The Pro 16h LED hybrid wide format printer prints up to 29 square meters per hour in four colors plus white ink up to 2 inches thick We launched our wide format H1625 SD 1.6 meter hybrid roll-to-roll /flatbed printer in 2015. The H1625 SD utilizes thermoforming ink, which enables sign makers and printing companies to print directly onto thermoplastic sheet materials, which can then be formed into deep draw, high elongation parts while retaining hue and opacity. We launched our wide format H1625 RS printer in 2015, which prints 1.6 meter widths directly to 3M reflective media in roll, sheeted, and mounted to rigid forms. The H1625 includes LED technology enabling printing on a broad range of substrates, including media that cannot withstand the high-heat drying or curing methods used in other inkjet platforms. 5

~~Textile.~~Our ~~Reggiani~~primary industrial digital inkjet ~~textile~~ printers ~~address the full scope of advanced textile printing with versatile printers suitable for pigmented, reactive dye, acid dye,~~ and ~~water-based~~their ~~dispersed~~related ~~printing~~features ~~ink.~~are ~~Reggiani~~summarized ~~is at the forefront of digital printing~~ as an alternative to either analog printing or single color (dyed) garments. Reggiani provides an overall solution for the entire textile printing process from yarn treatment to fabric printing and finishing for a wide variety of substrates and applications (fashion, home textile, sportswear, signage, flooring, automotive, and outdoor). follows:

A significant driver for the adoption of digital textile printing is the growth of “fast fashion,” which is a term used by fashion retailers to express the need for designs to move quickly from the catwalk to the retailer to capture current fashion trends. The digital textile printing market has also benefitted from sports apparel with short run production quantities, closer geographic proximity to end-use markets, and environmental awareness.



Printer Type	Models	Capabilities	Application Examples
VUTEk super-wide format	h3 and h5	Offers maximum throughput of up to 74 and 108 boards per hour for h3 and h5, respectively	Super-wide format banners, signage, building wraps, flags, point of purchase and exhibition signage, backlit displays, fleet graphics, photo-quality graphics, art exhibits, customized architectural elements, billboards, and thermoplastic decoration.

	HS, GS/LX, H/QS, and FabriVU Series printers EFI and 3M(R) co-branded Digital UV and LED, and thermoforming UV ink	Printing widths of 2 to 5 meters; up to two-inch thickness; 6, 7, and 8 colors, plus white and greyscale; up to 2400 dpi; flexible and rigid substrates; 1.8-meter and 3.4-meter wide aqueous-based soft signage printer models with speeds up to 500 square meters per hour; UV curable, LED “cool cure,” aqueous, and thermoforming digital UV inks

VUTEk super-wide roll-to-roll	VUTEk 3r and 5r, Quantum series, Q series, and Flex series printers Quantum LED curable ink Matan UV curable ink MatanFlex stretchable ink	Speeds up to 455 square meters per hour Printing widths of 3 to 5 meters; up to two-inch thickness; 4, 7, and 8 colors, plus white and greyscale; up to 1200 dpi; flexible and rigid substrates; UV curable and LED “cool cure” ink	Fleet graphics, traffic signage, labels, tags, decals, membranes, license plates, and sign printing

EFI wide format	EFI Pro hybrid and flatbed EFI H1625 LED 3M ink SD thermoforming ink 32R roll-to-roll	Speeds up to 207 square meters per hour (flatbed) and 91 square meters per hour (hybrid), up to 1200 dpi, 4 colors plus white and greyscale, up to two-inch thickness, flexible and rigid substrates, UV curable, and LED “cool cure” ink	Wide format indoor and outdoor graphics with photographic image quality. Entry-level and mid-range markets. Overflow and specialty markets

Nozomi	EFI Nozomi C18000	High-quality, high-speed digital LED printing up to 75 linear meters per minute on substrates up to 1.8 meters wide	Corrugated packaging and merchandise display printing

Reggiani textile	Reggiani textile printers Dye sublimation, pigmented, reactive dye, acid dye, and water-based dispersed printing ink	Speeds up to 325 square meters per hour. Substrates from ultra-light to heavy, up to 2400 dpi; dye sublimation, pigmented, reactive dye, acid dye, and water-based dispersed printing ink	Contract printers serving major textile brand owners and fashion designers. Textile soft signage market. Global printed textile industry

Cretaprint ceramic tile decoration	Cretaprint C4, C4 twin, and C5; Cretaprint P4, D4, and D5; Cretaprint M4 and SOL; Cretaprint ink	Single chassis accommodates up to 8 print bars. 1,000 customizable settings controlling printer widths up to 1.4 meters, speed, direction, and discharge.	Ceramic tile industry Construction materials industry

Cretaprint building materials	Cubik building materials	Cubik: printing width up to 1.8 meters print speed up to 75 linear m/min, up to 8 printing bars	Construction materials industry

~~Reggiani~~Productivity industrial digital inkjet textile printing systems use water-based ink and advanced streamlined automation that provide a total solution for textile businesses. The TOP digital inkjet textile printer is a fast throughput machine that can be used with reactive, acid, disperse, dye sublimation, and pigmented ink. The Essetex 2 meter wide washing box is the ideal system for knitted and light fabrics, particularly where print washing is beneficial for delicate textiles and for post-dyeing of printed cloth. The NEXT printer prints on fabrics and paper using the same ink set with a 1.8 meter beltless digital printing system and offers simplified material handling, a compact footprint, and a lower acquisition cost, making it an ideal entry-level textile printing production device. Software

InTo ~~2017,~~provide weour ~~launched~~customers ~~the~~with ~~5.2~~solutions ~~meter VUTEk FabriVU printer, which runs at speeds up~~ to ~~455~~manage ~~square~~and ~~meters~~streamline ~~per~~their ~~hour~~printing inand ~~resolutions~~packaging ~~up to 1~~operations,~~200~~ ~~dpi. In 2017,~~ we ~~also~~have ~~launched~~developed ~~the Flexy and Vogue industrial digital textile printers. The 1.8 meter Flexy printer offers our Dynaplast sticky belt~~ technology, ~~printing~~that ~~with~~enhances ~~up to 2,400 dpi resolution with a speed of 400 square meters per hour. The Vogue printer includes new~~ printing ~~software,~~workflow ~~integrated environmental sensors~~ and amakes ~~new~~ printing ~~server,~~and ~~with~~packaging 16operations ~~print~~more ~~heads~~powerful, ~~up to 2~~productive,~~400~~ ~~dpi resolution~~cost-effective, and ~~printing~~easier up to ~~325 square meters per hour~~manage. InMost ~~2016,~~of weour ~~launched~~software ~~the~~solutions ~~1.8~~have ~~and~~been ~~3.4 meter~~developed ~~VUTEk~~with ~~FabriVU~~the ~~super-wide~~express ~~format~~goal ~~industrial~~of ~~digital~~automating ~~inkjet~~print ~~soft~~processes ~~signage printers, which utilize water-based sublimation ink~~ and ~~are~~streamlining ~~manufactured~~workflow invia ~~our~~open, ~~Reggiani~~integrated, ~~facility. The 1.8~~ and ~~3.4~~inter-operable ~~meter~~products, ~~FabriVU printers offer print speeds up to 464 square meters per hour at 600 dpi and resolution up to 2~~services,~~400~~ ~~dpi~~ and ~~utilize water-based sublimation ink~~solutions.

~~Ceramic~~The ~~Tile~~Productivity ~~Decoration. Our~~Software ~~Cretaprint~~operating ~~ceramic~~segment ~~tile~~consists ~~decoration~~of ~~digital~~a ~~inkjet~~complete ~~printers~~set ~~are~~of ~~utilized~~productivity bysoftware ~~the~~suites ~~ceramic~~that ~~tile~~enable efficient and ~~building~~automated ~~material~~end-to-end ~~manufacturing~~business and production workflows for the print and packaging industries. ~~The~~These ~~ceramic~~productivity ~~tile~~software ~~decoration~~suites ~~market~~also isprovide ~~transitioning~~tools ~~from~~to ~~analog~~enable revenue growth, efficient scheduling, and optimization of processes, equipment, and personnel. Customers are provided the financial and technical flexibility to ~~digital~~deploy ~~inkjet~~locally ~~printing~~within ~~technology~~their business or to be hosted in the cloud. The productivity software suites address all segments of the print industry and consist of the: (i) Packaging Suite, with Radius at its core, for tag & label, cartons, and flexible packaging businesses; (ii) Corrugated

In 2017, we launched the Cretaprint C4 Twin, featuring a dual print head approach with up to four double print bars with widths up to 0.7 meters. We also launched the Cretaprint P4 in 2017 featuring up to 12 print bars, 1.4 meter print widths, and resolution of 360 dpi. We launched the Cretaprint D4 in 2016, which features up to 12 print bars, and gives users the ability to incorporate a full range of ceramic ink and digital print effects. We also launched the Cretaprint M4 and M4 SOL printer platforms in 2016, which allow customers to print on larger tile sizes up to 1.2 meters wide and offers enhanced imaging quality with variable-drop grayscale imaging. The Cretaprint M4 SOL is a soluble salt inkjet printer. 6

4Packaging Suite, with Corrugated Technologies, Inc. ("CTI") at its core, for corrugated packaging businesses, including corrugated control capability; (iii) Enterprise Commercial Print Suite with Monarch at its core, for enterprise print businesses; (iv) Publication Print Suite, with Monarch or Technique at its core, for publication print businesses; (v) Midmarket Print Suite, with Pace at its core, for medium size print businesses; (vi) Quick Print Suite, with PrintSmith Vision and essential capabilities of Digital StoreFront at its core, for small printers and in-plant sites; and (vii) Value Added Products, available with the suite and standalone, such as web-to-print, e-commerce, cross media marketing, warehousing, fulfillment, shop floor data collection, and shipping to reduce costs, increase profits, and offer new products and services to their existing and future customers. We also provide Optitex textile two-dimensional (“2D”) and three-dimensional (“3D”) computer aided fashion design (“CAD”) applications, which facilitate increased efficiency in the textile and fashion industries. Optitex markets integrated 2D and 3D CAD software that shortens the design cycle, reduces our customers’ costs, and helps accelerate the adoption of fast fashion.

~~Table~~Our enterprise resource planning and collaborative supply chain business process automation software solutions are designed to enable printers and print buyers to improve productivity and customer service while reducing costs. Web-to-print applications for print buyers and print producers facilitate web-based collaboration across the print supply chain. Customers recognize that business process automation is essential to improving their business practices and profitability. We are focused on making our business process automation solutions the global industry standard. We provide consulting and support services, as well as warranty support for our software products. We sell annual full-service maintenance agreements with each license that provide warranty protection from date of ~~Contents~~shipment, and Software as a Service ("SaaS") subscriptions. The sale and renewal of annual maintenance agreements and SaaS agreements provide us with recurring revenue streams.

WeEscada ~~launched~~Innovations ~~the~~Limited ~~Cretaprint~~and C4Escada Systems, Inc. (collectively, “Escada”), which iswe ~~our~~acquired ~~next~~in ~~generation~~2017, ~~ceramic~~offer ~~tile~~the ~~decoration~~corrugated ~~digital~~packaging ~~inkjet~~market ~~printer~~corrugator control systems, in ~~2015.~~which ~~Electronics~~provide comprehensive control and ~~ink~~traceability ~~systems~~for ~~were~~the ~~upgraded~~entire tocorrugation ~~maximize~~process. ~~accuracy~~The acquisition of Optitex Ltd. (“Optitex”) in a2016 ~~broad~~expanded ~~range~~our ofpresence ~~production~~in ~~conditions.~~the ~~The~~digital ~~Cretaprint~~inkjet C4textile ~~printer~~printing ~~allows~~workflow market through the ~~use~~synergy of ~~different~~Optitex ~~print~~technology ~~heads~~with ~~and~~the Reggiani digital ~~applications~~inkjet ontextile ~~the~~printer ~~same machine~~business.

InNew ~~2017,~~Version weReleases ~~launched~~and ~~the~~Product ~~Cubik~~Offerings. ~~printer~~Integration ~~for~~among ~~the~~our ~~building~~software ~~materials~~offerings ~~industry,~~is ~~offering~~achieved upthrough end-to-end 8automation ~~print~~including ~~bars,~~certified ~~with~~workflows aand ~~printing~~synchronized ~~width~~releases upacross tomultiple ~~1.8~~products ~~meters~~afforded ~~and~~by aour ~~print speed~~Productivity ~~up to 75 linear m/min~~Suite. ~~The~~Integration ~~Cubik printer can apply a variety~~ of ~~decoration~~our ~~effects~~software toproduct ~~building~~offerings ~~materials, supporting both short run and variable prints as well as high volume runs.~~ provides:

~~Ink.~~• ~~Our~~Out-of-the-box, ~~ink provides a recurring revenue stream generated from sales~~ end-to-end ~~our~~optimized ~~existing customer base of installed printers.~~ workflows;

~~VUTEk~~• ~~printers~~Certified ~~primarily~~integration ~~use digital UV~~ and LED curable ink, although our solvent ink printers remain in use in the field. We were first to market with digital UV curable ink incorporating “cool cure” LED technology for use in high-end production super-wide, wide format, and corrugated packaging and display digital inkjet printing systems. We sell a variety of third party branded textile ink to users of our textile digital inkjet printers, including dye sublimation, pigmented, reactive dye, acid dye, water-based dispersed printing ink, and coatings. We launched our internal formulation of our reactive dye ink in 2016. In 2016, we introduced our soluble salt-based ceramic digital ink formulation and we introduced AquaEndure acqueous ink, which is a water-based inkjet ink that will be used across many of our printers in the future. automation;

We• ~~acquired~~Global ~~Rialco~~visibility ~~Limited~~that ~~(“Rialco”)~~makes ineffective ~~2016, which supplies dye powders~~ and ~~color~~proactive ~~products~~decision ~~for~~making ~~the~~possible; ~~textile, digital print,~~ and other decorating industries. Rialco’s pure disperse dyes are particularly important in the manufacture of high-quality dye sublimation inkjet ink for textile applications, which is a key growth area in the global migration from analog to digital print. Rialco’s technical and commercial capabilities benefit the Industrial Inkjet operating segment in the sourcing, specification, and purification of high quality dyes and expand our research, development, and innovation base to develop ink for the signage, ceramic, and packaging markets.

5• a solid modular, flexible, and scalable software foundation supporting product and customer diversification.

~~Table~~New versions have been released for each of ~~Contents~~our significant software components and new product offerings have resulted from strategic business acquisitions, which are described under “Growth and Expansion Strategies” below.

~~Our~~The ~~industrial~~Packaging ~~digital~~Suite ~~inkjet~~includes ~~printers~~22 certified workflows that provide unprecedented levels of business and ~~their~~production ~~related~~automation ~~features~~geared ~~are~~toward folding carton, tag and label, and flexible package converting environments. Enhancements integrate Radius software, intelligent estimating and planning with iQuote software, automated planning optimization with Metrix software, and key third party software such as ~~follows:~~the Esko Automation Engine.

Printer Type	Models	Capabilities	Application Examples
Nozomi	EFI Nozomi C18000	High-quality, high-speed digital LED printing up to 75 linear meters per minute on substrates up to 1.8 meters wide	Corrugated packaging and merchandise display printing
VUTEk super-wide format	HS, GS/LX, H/QS, and FabriVU Series printers EFI and 3M(R) co-branded Digital UV and LED, AquaEndure aqueous, and thermoforming UV ink	Printing widths of 2 to 5 meters; up to two inch thickness; 6, 7, and 8 colors, plus white and greyscale; up to 2400 dpi; flexible and rigid substrates; 1.8-meter and 3.4-meter wide aqueous-based soft signage printer models with speeds up to 500 square meters per hour; UV curable, LED “cool cure,” aqueous, and thermoforming digital UV inks	Super-wide format banners, signage, building wraps, flags, point of purchase and exhibition signage, backlit displays, fleet graphics, photo-quality graphics, art exhibits, customized architectural elements, billboards, and thermoplastic decoration.
VUTEk super-wide roll-to-roll	VUTEk 3r and 5r, Quantum series, Q series, and Flex series printers Quantum LED curable ink Matan UV curable ink MatanFlex stretchable ink	Speeds up to 455 square meters per hour Printing widths of 3 to 5 meters; up to two inch thickness; 4, 7, and 8 colors, plus white and greyscale; up to 1200 dpi; flexible and rigid substrates; UV curable and LED “cool cure” ink	Fleet graphics, traffic signage, labels, tags, decals, membranes, license plates, and sign printing
EFI wide format	EFI Pro hybrid and flatbed EFI H1625 LED 3M™ ink SD thermoforming ink	Speeds up to 107 square meters per hour (flatbed) and 91 square meters per hour (hybrid), up to 1200 dpi, 4 colors plus white and greyscale, up to 2 inch thickness, flexible and rigid substrates, UV curable, and LED “cool cure” ink	Wide format indoor and outdoor graphics with photographic image quality. Entry-level and mid-range markets. Overflow and specialty markets
Reggiani textile	Reggiani textile printers Dye sublimation, pigmented, reactive dye, acid dye, and water-based dispersed printing ink	Speeds up to 325 square meters per hour Substrates from ultra-light to heavy, up to 2400 dpi; dye sublimation, pigmented, reactive dye, acid dye, and water-based dispersed printing ink	Contract printers serving major textile brand owners and fashion designers Textile soft signage market Global printed textile industry
Cretaprint ceramic tile decoration	Cretaprint C4 and C4 twin; Cretaprint P4 and D4; Cretaprint M4 and SOL; Cretaprint ink; and	Single chassis accomodates up to 8 print bars.1,000 customizable settings controlling printer widths up to 1.4 meters, speed, direction, and discharge.	Ceramic tile industry Construction materials industry
	Cubik building materials	Cubik: printing width up to 1.8 meters print speed up to 75 linear m/min, up to 8 printing bars

The Corrugated Packaging Suite was enhanced with the acquisition of Escada in 2017, a leading provider of corrugator control systems for the corrugated packaging market. The Enterprise Commercial Print Suite includes improvements in inventory and purchasing, support for Digital StoreFront web-to-print services, stronger customer relationship management tools including the ability to add attachments to forms and expanded reporting capabilities and extended capabilities in dynamic estimating and planning. The Midmarket Print Suite includes web-to-print, cross-media marketing, estimating, scheduling, accounting, and fulfillment applications.

6Enhancements include easier access to quotes, improved estimating, and more advanced filtering tools to drive efficiency in job estimating and production. Product-specific applications unique to the super-wide format print space, such as fleet and vehicle wraps, point-of-purchase signage and outdoor graphics. The Quick Print Suite includes a cloud-based platform for in-plant and quick print operations to reduce the customer deployment and maintenance burden.

~~Table of Contents~~7

~~Productivity~~The ~~Software~~Optitex Collaborate Application was released in early 2017 and is driven by cloud-based textile design technology that enables instant sharing among pattern makers, designers, and print teams for faster and more accurate apparel prototyping. In 2018, we launched the Optitex 3D Design Illustrator, a plug-in tool that allows designers the freedom to validate and customize 3D garments in Adobe® Illustrator®. This helps designers to visualize 3D garments, with accurate proportion and scaling, and customize the garment’s fabric, texture, print patterns and graphic placement without waiting for a printed sample.

ToWe ~~provide~~have ~~our~~established ~~customers~~a ~~with~~new ~~solutions~~e-commerce toplatform ~~manage~~specifically ~~and~~for ~~streamline~~fabric ~~their~~soft ~~printing~~signage ~~operations,~~production ~~we have developed technology that enhances printing workflow and makes printing~~ operations ~~more powerful, productive, cost-effective,~~ and ~~easier to manage~~ink. ~~Most~~The ofon-line ~~our~~ordering ~~software~~technology ~~solutions~~offers ~~have~~a ~~been~~new ~~developed~~level ~~with the express goal~~ of ~~automating~~turnkey ~~print~~flexibility ~~processes~~for ~~and~~increasingly ~~streamlining~~popular ~~workflow~~fabric ~~via~~graphics ~~open~~applications, ~~integrated~~including outdoor, ~~and interoperable~~trade ~~products~~show, ~~services,~~ and ~~solutions.~~point-of-purchase displays.

~~The~~Our ~~Productivity~~primary ~~Software operating segment consists of a complete~~ software ~~suite~~offerings that enables efficient and automated end-to-end business and production workflows for the print and packaging industry. This Productivity Suite also provides tools to enable revenue growth, efficient scheduling, and optimization of processes, equipment, and personnel. Customers are ~~provided~~summarized the financial and technical flexibility to deploy locally within their business or to be hosted in the cloud. The Productivity Suite addresses all segments of the print industry and consists of the: (i) Packaging Suite, with Radius at its core, for tag & label, cartons, and flexible packaging businesses; (ii) Corrugated Packaging Suite, with CTI at its core, for corrugated packaging businesses, including corrugated control capability using EFI Escada; (iii) Enterprise Commercial Print Suite with Monarch at its core, for enterprise print businesses; (iv) Publication Print Suite, with Monarch or Technique at its core, for publication print businesses; (v) Midmarket Print Suite, with Pace at its core, for medium size print businesses; (vi) Quick Print Suite, with PrintSmith Vision and essential capabilities of Digital StoreFront at its core, for small printers and in-plant sites; and (vii) Value Added Products, available with the suite and standalone, such as web-to-print, e-commerce, cross media marketing, warehousing, fulfillment, shop floor data collection, and shipping to reduce costs, increase profits, and offer new products and services to their existing and future customers. We also market Optitex fashion CAD software, which facilitates fast fashion increased efficiency in the textile and fashion industries. follows:

Customer Base. We sell the Packaging Suite to the label, cartons, and flexible packaging industry; the Corrugated Packaging Suite to the corrugated packaging industry; the Enterprise Commercial Print Suite to large and multi-national commercial print businesses; the Publication Print Suite to publication and direct mail print businesses; the Midmarket Print Suite to medium size commercial print businesses, display graphics providers, and government printing operations; the Quick Print Suite to small printers and in-plant printing operations; Value Added Products including Digital StoreFront and DirectSmile to customers desiring e-commerce, web-to-print, and cross-media marketing solutions; and Optitex to the leading fashion brands and manufacturers.



Software Suite	Description	Users
Packaging Suite: with Radius at its core	Business and production workflows for tag & label, cartons, and flexible packaging companies	All users with a production facility associated with the sales, item specification, production, material purchasing, billing and shipping of packaging related products

Corrugated Packaging Suite: with CTI at its core, including corrugated control capability using EFI Escada	Business and production workflows for corrugated board and packaging manufacturers	Administration, sales, production and logistics employees producing corrugated sheets and/or corrugated boxes

Enterprise Commercial Print Suite; with Monarch at its core	Business and production workflows for Enterprise commercial print businesses, (offset, digital, large format, direct mail, specialty printing and shipping / logistics companies)	Front office sales, management and finance and shop floor production, inventory controllers, mailing and logistics employees involved in the production of various commercial print products

Publication Print Suite: with Monarch or Technique at its core	Business and production workflows for Publication Print companies (books and periodicals)	Sales, contract administrators, production planners and shop floor personnel associated production of books, catalogs, magazines, and periodicals

Midmarket Print Suite: with Pace at its core	Business and production workflows for mid size Print companies (including commercial, digital, display graphics, in-plant, and print for pay printing companies; government printing operations)	Business & Production personnel, e.g., sales, estimators, customer service, production schedulers, finance and floor personnel & logistics

Quick Print Suite: with PrintSmith Vision and essential capabilities of Digital StoreFront at its core	Hosted and modular, web-enabled digital printing and business management	Owners, managers, sales, estimators, customer service and accounting

Value Added Products	Web-to-print, e-commerce, cross media marketing, imposition solutions, warehousing, fulfillment, shop floor data collection, and logistics	Marketing professionals, production planners, production floor staff, warehouse and inventory managers, shipping and logistics

Optitex Textile 3D Design Software	Development and production software that builds patterns, visualize in 3D, streamlines marker making and cut order workflow, and cloud-based applications for show case design	Leading fashion brands, fashion retailers, and manufacturers in commercial and apparel industries

Our enterprise resource planning and collaborative supply chain business process automation software solutions are designed to enable printers and print buyers to improve productivity and customer service while reducing costs. Web-to-print applications for print buyers and print producers facilitate web-based collaboration across the print supply chain. Customers recognize that business process automation is essential to improving their business practices and profitability. We are focused on making our business process automation solutions the global industry standard. We provide consulting and support services, as well as warranty support for our software products. We typically sell an annual full-service maintenance agreement with each license that provides warranty protection from date of shipment. The sale and renewal of annual maintenance agreements provide a recurring revenue stream. Fiery

~~The acquisition~~Fiery ofproducts ~~Escada~~include ~~Innovations~~(i) stand-alone ~~Limited~~Digital ~~and~~Front ~~Escada~~Ends ~~Systems~~("DFEs"), ~~Inc.~~which ~~(collectively~~are ~~“Escada”)~~connected ~~provides~~to ~~corrugator~~digital ~~control~~printers, ~~systems~~copiers, ~~for~~and ~~the~~other ~~corrugated~~peripheral ~~packaging market~~devices, ~~which~~(ii) embedded ~~provide~~DFEs ~~comprehensive control~~ and ~~traceability~~design-licensed ~~for~~solutions ~~the~~used ~~entire corrugation~~in ~~process.~~digital ~~The~~copiers ~~acquisition~~and ofmulti-functional ~~Optitex~~devices, ~~Ltd.~~ (~~“Optitex”~~iii) optional insoftware ~~2016~~integrated ~~expanded~~into our ~~presence~~DFE insolutions ~~the~~such ~~digital~~as ~~inkjet~~Fiery ~~textile~~JobMaster, ~~printing~~Graphics ~~market~~Arts ~~through~~Package, ~~the~~and ~~synergy~~Color ofProfiler ~~Optitex~~(iv) Fiery ~~technology~~Self ~~with~~Serve, ~~the~~our ~~Reggiani~~self-service ~~digital~~and ~~inkjet~~payment ~~textile~~solution, ~~printer business. Optitex markets integrated 2D~~ and 3D(v) stand-alone ~~CAD~~ software-based ~~that~~solutions ~~shortens~~such ~~the~~as ~~design cycle, reduces~~ our ~~customers’~~proofing ~~costs,~~ and ~~accelerates~~textile ~~the adoption of fast fashion~~solutions.

New Version Releases and Product Offerings. Integration among our software offerings is achieved through the end-to-end automation including certified workflows and synchronized releases across multiple products 8

7Fiery and FFPS DFEs. Our Fiery segment consists of Fiery and the FreeFlow Print Server business (“FFPS”), which was acquired from Xerox Corporation (“Xerox”) in January 2017. DFEs transform digital copiers and printers into high performance networked printing devices for the office, commercial, and industrial printing markets. We have direct relationships with several leading printer manufacturers with whom we work closely to design, develop, and integrate Fiery DFE and software technology to maximize the capability of each print engine. The printer manufacturers act as distributors and sell Fiery products to end customers through reseller channels. End customer and reseller channel preference for the Fiery DFE and software solutions drives demand for Fiery products through the printer manufacturers.

~~Table~~In 2018, we launched two new Fiery DFEs, the Color Controller E-85A and E-45A, driving Ricoh ProTM C7200X Series production printers. The new Fiery DFEs include powerful tools to make expert color adjustments, plus job make-ready and automation enhancements. We also launched a new Fiery proServer Premium DFE technology in 2018 offering faster processing on individual jobs for EFI super-wide format printers. The Fiery NX Pro was launched in 2017, which provides faster views of ~~Contents~~job status and easier device management. The Fiery FS300 Pro was launched in 2017 with enhanced functionality with throughput up to 2,400 ppm.

~~afforded~~Software byOptions ~~our~~for ~~Productivity~~DFEs. ~~Suite~~Fiery ~~consisting~~Command ofWorkStation ~~the~~6.0 ~~Packaging~~job ~~Suite,~~management ~~Corrugated~~interface ~~Packaging~~software ~~Suite,~~was ~~Enterprise~~released ~~Commercial~~in ~~Print~~2017 ~~Suite~~featuring automated job presets, ~~Publication~~faster ~~Print~~job ~~Suite~~searching capabilities, ~~Midmarket~~new ~~Print~~user ~~Suite~~interface, ~~Quick~~advanced ~~Print Suite~~tools for printing multi-bank and bleed-edge tabbed documents, and ~~Value~~the ~~Added~~Home ~~Products.~~integrated ~~Integration~~interface, ofwhich ~~our~~is ~~software~~a ~~product~~new ~~offerings~~feature that provides: at-a-glance status information for all connected Fiery servers and a snapshot of key print production statistics.

•Fiery ~~Out-~~Workflow Suite is an integrated set of~~-the-box~~ Fiery products, ~~end-~~including Fiery Central, Fiery JobFlow, and Fiery JobMaster, among others, to~~-end~~ ~~optimized~~deliver ~~workflows;~~a fully integrated workflow from job submission and business management to scheduling, preparation, and production.

•In ~~Certified~~January ~~integration~~2019, we launched our new Fiery FS350 software which further enhances graphic design productivity and ~~automation;~~versatility. Fiery Navigator is a cloud-based digital printing business intelligence tool for digital production presses that was first launched in 2016. Fiery Navigator provides printers with more insight into their production data to optimize resource allocation, ensure compliance with operating procedures, and make equipment decisions by capturing key operational data points and displaying production analytics in a comprehensive, customizable dashboard.

•Fiery ~~Global~~Self ~~visibility~~Serve is a leading solution of self-service and payment solutions that ~~makes~~allows ~~effective~~service providers to offer access to business machines including printers, copiers, computers, internet access, fax machines, and ~~proactive~~photo ~~decision~~printing ~~making~~kiosks ~~possible;~~from mobile phones, iPad®, and USB drives. The M600 kiosk is a flexible and scalable system, which addresses demands for printing from any mobile device as well as from popular cloud storage services, and accepts credit cards, campus cards, and cash cards at the device, thereby eliminating the need for coin-operated machines.

•Standalone ~~Solid~~Software ~~modular~~Solutions. Our standalone Fiery software solutions include Fiery XF and Generation Digital Solutions, ~~flexible~~Inc. (“Generation Digital”). Fiery XF is an interface for the management, layout, and ~~scalable~~editing of digital print jobs. The 2017 acquisition of Generation Digital strengthens our fast fashion offerings, with design software ~~foundation~~for ~~supporting~~the ~~product~~textile and ~~customer~~fashion ~~diversification~~industries. The Generation Digital textile design workflow is marketed under the name Fiery DesignPro and combines with our Fiery textile DFEs and Reggiani digital textile printers linking textile design and production.

New versions have been released for each of our significant software components and new product offerings have resulted from strategic business acquisitions. New product offerings that have resulted from strategic business acquisitions are described under “Growth and Expansion Strategies” below. 9

~~The Packaging~~Our ~~Suite~~DFE ~~includes~~platforms, 22primary ~~certified~~printer ~~workflows~~manufacturer ~~that provide unprecedented levels of business and production automation geared toward folding carton~~customers, ~~tag~~ and ~~label,~~end ~~and~~user ~~flexible package converting~~ environments. ~~Enhancements~~are ~~integrate~~summarized ~~Radius software,~~as ~~intelligent estimating and planning with iQuote software, automated planning optimization with Metrix software, and key third party~~ follows:

~~software such~~Platform asPrinter ~~the~~Manufacturers ~~Esko~~or ~~Automation~~Customers ~~Engine.~~User ~~The~~Environments ~~Corrugated~~Fiery ~~Packaging~~and ~~Suite~~FFPS ~~was~~external ~~enhanced~~DFEs ~~with~~Xerox, ~~the~~Ricoh, ~~acquisition~~Canon, ofKonica ~~Escada~~Minolta, ~~Innovations~~Fuji ~~Limited~~Xerox, ~~and~~Sharp, ~~Escada~~Kyocera ~~Systems~~Document Solutions, ~~Inc.~~RISO, ~~(collectively~~Landa, ~~“Escada”)~~and inOki ~~2017~~Data Print for pay, acorporate ~~leading~~reprographic ~~provider~~departments, ofgraphic ~~corrugator~~arts, ~~control~~advertising ~~systems for~~agencies, ~~the~~and ~~corrugated~~transactional ~~packaging~~& ~~market.~~commercial ~~The~~printers ~~Enterprise~~Fiery ~~Commercial~~embedded ~~Print~~DFEs ~~Suite~~and ~~includes~~design-licensed ~~improvements~~solutions inCanon, ~~inventory~~Xerox, ~~and~~Konica ~~purchasing~~Minolta, ~~support~~Kyocera ~~for~~Document ~~Digital~~Solutions, ~~StoreFront~~and ~~web-to-~~Sharp Office, print ~~services~~ for pay, ~~stronger~~and ~~customer~~quick ~~relationship~~turnaround ~~management~~printers ~~tools~~Fiery ~~including~~Central, ~~the~~Fiery ~~ability~~Navigator, toFiery ~~add~~Workflow ~~attachments~~Suite toCanon, ~~forms~~Konica ~~and~~Minolta, ~~expanded~~Kyocera ~~reporting~~Document ~~capabilities~~Solutions, ~~and~~Ricoh, ~~extended~~Sharp, ~~capabilities~~Xerox inCorporate ~~dynamic~~reprographic ~~estimating~~departments, commercial printers, and ~~planning.~~production ~~The~~workflow ~~Midmarket~~solutions ~~Print~~Fiery ~~Suite~~Self ~~includes~~Serve ~~web-to-print~~Canon, ~~cross-media~~FedEx ~~marketing~~Office, ~~estimating~~Konica Minolta, ~~scheduling~~Ricoh, ~~accounting~~Staples, ~~and~~Xerox ~~fulfillment~~ExpressPay ~~applications.~~self-service ~~Enhancements~~and ~~include~~payment ~~easier~~solutions ~~access~~for toretail ~~quotes,~~copy ~~improved~~and ~~estimating~~print stores, ~~and more~~hotel ~~advanced~~business ~~filtering~~centers, ~~tools~~college tocampuses, ~~drive~~and ~~efficiency~~convention incenters ~~job~~Production ~~estimating~~Inkjet and ~~production.~~Proofing ~~Product-specific~~software: ~~applications~~ColorProof ~~unique~~XF, toPro, ~~the~~Fiery ~~super-wide~~XF, ~~format~~Fiery ~~print space~~proServer, ~~such~~textile asDigital ~~fleet~~color proofing and ~~vehicle~~inkjet ~~wraps~~production print solutions offering fast, ~~point-of-purchase~~flexible ~~signage~~workflow, power, and ~~outdoor~~expandability; ~~graphics.~~creation ~~The~~and ~~Quick~~design ~~Print~~of ~~Suite~~prints, ~~includes~~patterns, aand ~~cloud-based~~color ~~platform~~palettes ~~for~~Digital, ~~in-plant~~commercial and ~~quick~~hybrid ~~print~~printers, ~~operations~~prepress toproviders, ~~reduce~~publishers, ~~the~~creative ~~customer deployment~~agencies and ~~maintenance~~photographers, ~~burden.~~ceramic ~~The~~tile, ~~Optitex~~decoration, ~~Collaborate~~and ~~Application~~super-wide ~~was~~& ~~released~~wide informat ~~early~~print ~~2017~~providers; fashion and istextile ~~driven~~designers byFiery ~~cloud-based~~DesignPro ~~textile~~Designers ~~design~~of ~~technology~~fashion, ~~that~~textile, ~~enables~~fabric, ~~instant~~wallpaper, ~~sharing~~and ~~among~~other pattern-based ~~makers,~~material Independent designers, fashion and ~~print~~textile ~~teams~~manufactures, ~~for faster~~ and ~~more~~ ~~accurate~~textile ~~apparel prototyping.~~ printers

8Sales, Marketing, and Distribution

~~Table~~We have assembled, internally and through acquisitions, an experienced team of ~~Contents~~technical support, sales, and marketing personnel with backgrounds in color reproduction, digital pre-press, image processing, business process automation systems, networking, and software and hardware engineering, as well as market knowledge of the sectors we serve. We expect to continue to expand the scope and sophistication of our products and gain access to new markets and channels of distribution by applying our expertise in these areas.

~~Our~~Industrial ~~primary software offerings include:~~ Inkjet

Software Suite	Description	Users
Packaging Suite: with Radius at its core	Business and production workflows for tag & label, cartons, and flexible packaging companies	All users with a production facility assocated with the sales, item specification, production, material purchasing, billing and shipping of packaging related products
Corrugated Packaging Suite: with CTI at its core, including corrugated control capability using EFI Escada	Business and production workflows for corrugated board and packaging manufacturers	Administration, sales, production and logistics employees producing corrugated sheets and/or corrugated boxes
Enterprise Commercial Print Suite; with Monarch at its core	Business and production workflows for Enterprise commercial print businesses, (offset, digital, large format, direct mail, specialty printing and shipping / logistics companies)	Front office sales, management and finance and shop floor production, inventory controllers, mailing and logistics employees involved in the production of various commercial print products
Publication Print Suite: with Monarch or Technique at its core	Business and production workflows for Publication Print companies (books and periodicals)	Sales, contract administrators, production planners and shop floor personnel associated production of books, catalogs, magazines, and peridicals
Midmarket Print Suite: with Pace at its core	Business and production workflows for mid size Print companies (including commercial, digital, display graphics, in-plant, and print for pay printing companies; government printing operations)	Business & Production personnel, e.g., sales, estimators, customer service, production schedulers, finance and floor personnel & logistics
Quick Print Suite: with PrintSmith Vision and essential capabilities of Digital StoreFront at its core	Hosted and modular, web-enabled digital printing and business management	Owners, managers, sales, estimators, customer service and accounting
Value Added Products	Web-to-print, e-commerce, cross media marketing, imposition solutions, warehousing, fulfillment, shop floor data collection, and logistics	Marketing professionals, production planners, production floor staff, warehouse and inventory managers, shipping and logistics
Optitex Textile 3D Design Software	Development and production software that builds patterns, visualize in 3D, streamlines marker making and cut order workflow, and cloud-based applications for show case design	Leading fashion brands, fashion retailers, and manufacturers in commercial and apparel industries

Our Industrial Inkjet products are sold primarily through our direct sales force, augmented by some select distributors. We entered the corrugated inkjet printer market with the introduction of our Nozomi digital inkjet corrugated printer in 2017. We are leveraging our existing display graphics sales team together with dedicated packaging specialists and participation in corrugated packaging trade shows in most major markets around the globe. The market for corrugated digital printers is new and our team will also be building market demand for this approach as well as selling our printers.

9Textile digital printing is an alternative to either analog printing or dyed garments. Widespread adoption of digital textile printing depends on the willingness and ability of businesses in the printed textile industry to replace their existing analog printing systems with digital printing systems. The adoption of digital textile printing is dependent to some extent on the growth of “fast fashion,” and has also benefited from sports apparel with shorter production runs, closer geographic proximity to end-use markets, and environmental awareness. A key element of our inkjet textile printing growth strategy is to market digital inkjet printing systems to contract printers that serve major textile brand owners and fashion designers. We have a dedicated team of textile sales and support personnel located in geographies around the world and leverage a select group of distributors and agents in a number of markets to augment our capabilities.

~~Table~~The ceramic tile industry has undergone a shift from southern Europe (e.g., Spain and Italy) to the emerging markets of ~~Contents~~China, India, Brazil, and Indonesia. As a result, we operate a Cretaprint sales and support center in Foshan, Guangdong,

~~Fiery~~ 10

~~Our Fiery brand consists of Fiery and the FreeFlow print server business (“FFPS”)~~China, ~~which~~in ~~was~~addition recently acquired from Xerox Corporation (“Xerox”) that transform digital copiers and printers into high performance networked printing devices for the office, commercial, and industrial printing markets. Once networked, Fiery-powered printers and copiers can be shared across workgroups, departments, the enterprise, and the internet to ~~quickly~~our ~~and~~facilities ~~economically~~in ~~produce high-quality color products~~Spain. WeFoshan ~~have~~is ~~direct~~home ~~relationships with several leading printer manufacturers. We work closely together~~ to ~~design, develop, and integrate Fiery DFE and software technology to maximize~~ the ~~capability~~largest concentration of ~~each~~ceramic ~~print~~tile ~~engine. The printer~~ manufacturers ~~act~~in ~~as distributors and sell Fiery products to end customers through reseller channels~~China. ~~End customer and reseller channel preference for the Fiery DFE and software solutions drives demand for Fiery products through the printer manufacturers.~~

~~Fiery~~We promote our Industrial Inkjet products ~~are~~through ~~comprised~~public ~~of (i) stand-alone~~relations, ~~DFEs~~direct ~~connected~~mail, toadvertising, ~~digital~~promotional ~~printers~~material, ~~copiers~~trade shows, and ~~other~~ongoing ~~peripheral~~customer ~~devices,~~communication ~~(ii) embedded~~programs. ~~DFEs~~The ~~and~~majority ~~design-licensed~~of ~~solutions~~sales ~~used~~leads infor ~~digital~~our ~~copiers~~inkjet ~~and~~printer ~~multi-functional~~sales ~~devices,~~are ~~(iii) optional~~generated ~~software~~from ~~integrated~~trade ~~into~~ shows, including our ~~DFE~~recent ~~solutions~~20th ~~such~~EFI asConnect ~~Fiery~~User ~~Central~~Conference ~~and~~held ~~Graphics~~in ~~Arts~~January ~~Package,~~2019 ~~(iv) Fiery~~in ~~Self~~Las ~~Serve~~Vegas, NV, at which our ~~self-service~~management and ~~payment~~sales ~~solution,~~force interacted with existing and ~~(v) stand-alone~~potential ~~software-based~~customers ~~solutions~~directly ~~such~~to asdemonstrate certain products and help customers understand our ~~proofing~~product capabilities through workshops, ~~textile~~exhibits, and ~~scanning~~keynote ~~solutions~~speeches.

~~Fiery~~Productivity and FFPS DFEs. The Fiery NX Pro was launched in 2017, providing faster views of job status and easier device management. The Fiery FS300 Pro was launched in 2017, enabling enhanced functionality with throughput up to 2,400 ppm. The latest Fiery proServer features a highly advanced FAST (Fiery Accelerated System Technology) HyperRIP engine for quick file processing on super-wide hybrid, flatbed, and roll-to-roll printers. The new FS300 features supported by the Fiery NX Premium hardware station include the ability to over-print up to 127 spot colors per page. The Fiery XB DFE was released in 2016 incorporating a scalable high-volume blade server technology for high speed inkjet presses processing at 100 meters per minute of 1.8 meter wide corrugated boards or in excess of 13,000 sheets per hour. The Fiery FS200 Pro DFE was released in 2015 incorporating higher speed processing, expanded color offerings, shop automation, and connectivity. Software

~~Fiery~~Our XFenterprise ~~6.3~~resource isplanning ~~a DFE~~ and ~~color~~collaborative ~~management~~supply ~~workflow~~chain ~~for~~business ~~super-wide~~process ~~and~~automation ~~wide~~software ~~format~~solutions ~~printing~~within ~~and~~our ~~proofing,~~Productivity ~~featuring~~Software ~~real~~portfolio ~~WYSIWYG~~are ~~tiling~~primarily ~~preview, the Fiery~~sold ~~Dynamic~~directly ~~Smoothing~~to ~~function,~~end ~~and~~users ~~the~~by ~~Fogra~~our ~~Process~~direct ~~Standard~~sales ~~Digital~~force. ~~The~~An ~~Fogra~~additional ~~Graphic~~distribution ~~Technology Research Association~~channel ~~establishes~~for ~~process~~our ~~standards~~Productivity ~~for~~Software ~~the~~products ~~digital~~is ~~printing~~through ~~industry.~~sales ~~Fiery~~by ~~proServer~~authorized isdistributors, adealers, ~~DFE~~ and ~~color~~resellers ~~management workflow~~who ~~for~~in turn sell the ~~super-wide~~software ~~format~~solutions ~~and~~to ~~ceramic~~end ~~tile~~users ~~decoration~~either ~~digital~~stand-alone ~~inkjet~~or ~~printer~~bundled ~~market.~~with other solutions they offer.

~~Fiery~~We ~~proServer~~have 7distribution agreements with some of these channel partners, including Canon, Konica Minolta, Ricoh, Xerox, Esko, and Veritiv (formerly xpedx).0 ~~was~~There ~~released~~are a number of small private resellers of our business process automation software in ~~2015~~different ~~and~~geographic ~~processes complex~~regions ~~vector~~throughout ~~data~~the upworld towhere ~~seven~~a ~~times~~direct ~~faster~~sales ~~than~~force ~~its~~is ~~predecessor~~not cost-effective. ~~Fiery~~We ~~proServer~~sell isOptitex ~~compatible~~directly ~~with~~to ~~540~~the ~~super-wide,~~leading ~~wide~~fashion ~~format,~~brands and ~~ceramic~~manufacturers ~~printers~~through ~~from~~a ~~numerous~~direct ~~major~~sales ~~manufacturers.~~force and distribution channels consisting of authorized distributors, dealers, and resellers.

~~In 2017, we acquired certain assets comprising the FFPS business from Xerox. The FFPS business manufactures and markets the FFPS DFE, which previously competed with our~~ Fiery ~~DFEs and is now included in our Fiery operating segment.~~

~~Software~~The ~~Solutions.~~primary ~~Fiery~~distribution ~~Command~~channel ~~WorkStation~~for ~~6.0 job~~our ~~management~~Fiery ~~interface~~products ~~software~~is ~~was~~through ~~released~~our indirect ~~2017~~relationships ~~featuring~~with ~~automated~~several ~~job~~leading ~~presets,~~printer ~~faster~~manufacturers. ~~job~~We ~~searching~~work ~~capabilities,~~closely ~~new~~together ~~user~~to ~~interface~~design, ~~advanced~~develop, ~~tools~~and ~~for~~integrate ~~printing~~Fiery ~~multi-bank~~DFE and ~~bleed-edge~~software ~~tabbed~~technology ~~documents,~~to ~~and~~maximize the ~~Home~~capability ~~integrated~~of ~~interface, which~~each isprint aengine. ~~new~~The ~~feature~~printer ~~that~~manufacturers ~~provides~~act ~~at-a-glance~~as ~~status~~distributors ~~information~~and ~~for~~sell ~~all~~Fiery ~~connected~~products to end customers through reseller channels. End customer and reseller channel preference for our Fiery ~~servers~~DFE and asoftware ~~snapshot~~solutions ofdrives ~~key~~demand ~~print~~for ~~production~~Fiery ~~statistics.~~products through the printer manufacturers.

~~Fiery~~Our ~~Workflow~~relationships ~~Suite~~with isthe anleading ~~integrated~~printer ~~set~~and ofcopier ~~Fiery~~industry ~~products~~companies are important to our business and we have established relationships with Canon, ~~including~~Seiko ~~Fiery~~Epson, ~~Central~~Fuji Xerox, ~~Fiery~~Kodak, ~~JobFlow~~Konica Minolta, ~~and~~Kyocera ~~Fiery~~Document ~~JobMaster~~Solutions, ~~among~~Landa, ~~others~~OKI Data, Ricoh, Riso, Sharp, Toshiba, and Xerox. These relationships are based on business relationships that have been established over time. As of December 31, 2018, our agreements generally do not require them to ~~deliver~~make aany ~~fully integrated~~future ~~workflow~~purchases from ~~job~~us. ~~submission~~They are generally free to purchase and ~~business~~offer ~~management~~products from our competitors, or build their own products for sale to ~~scheduling~~the end customer, ~~preparation~~or cease purchasing our products at any time, ~~and~~for ~~production.~~any reason, or no reason.

Fiery ~~Navigator~~Self Serve is aour ~~cloud~~self-~~based~~service ~~digital printing~~and ~~business~~payment ~~intelligence~~solution ~~tool~~that ~~for~~is ~~digital~~sold ~~production~~to ~~presses~~Canon, ~~that~~FedEx ~~was~~Office, ~~launched~~Konica inMinolta, ~~2016.~~Ricoh, ~~Fiery~~Staples, ~~Navigator~~and ~~provides~~Xerox. ~~printers~~Fiery ~~with~~Self ~~more~~Serve ~~insight~~is ~~into~~also ~~their~~marketed ~~production~~to ~~data~~college tocampuses ~~optimize~~and libraries.

10We sell our proofing products primarily to authorized distributors, dealers, and resellers who in turn sell the solutions to end users either stand-alone or bundled with other solutions they offer. Primary customers with whom we have established distribution agreements include Canon, Epson, Xerox, and Heidelberg. We sell color matching, color palette creation, and print design software to the fashion industry. There can be no assurance that we will continue to successfully distribute our products through these channels.

~~Table~~Growth ofand ~~Contents~~Expansion Strategies

~~resource~~The ~~allocation,~~growth ~~ensure~~and ~~compliance~~expansion ~~with~~of ~~operating~~our ~~procedures~~revenue will be derived from (i) product innovation through internal development efforts or business acquisition, ~~and~~(ii) increasing ~~make~~market ~~equipment~~coverage ~~decisions~~through byinternal ~~capturing~~efforts ~~key~~or ~~operational~~business ~~data~~acquisition, ~~points~~(iii) expanding the addressable market, and ~~displaying~~(iv) establishing ~~production~~enterprise ~~analytics~~coherence inand aleveraging ~~comprehensive, customizable~~industry ~~dashboard~~standardization.

Fiery Self Serve. is a leading provider of self-service and payment solutions that allows service providers to offer access to business machines including printers, copiers, computers/internet access, fax machines, and photo printing kiosks from mobile phones, iPad®, USB drives, and cloud accounts such as Google Drive TM Dropbox. The M500 is a flexible and scalable system, which addresses demands for printing from any mobile device as well as from popular cloud storage services, and accepts credit cards, campus cards, and cash cards at the device, thereby eliminating the need for coin-operated machines. The M500 integrates with campus identification card systems and campus card solutions such as CBORD, Odyssey, and Blackboard. Self-Serve AdminCentral is a cloud-based management system for the M500 product. 11

~~Generation~~Product ~~Digital~~Innovation. ~~The~~We ~~2017~~achieve ~~acquisition~~product ofinnovation ~~Generation~~through ~~Digital~~internal ~~strengthens~~research ~~our~~and ~~fast~~development ~~fashion offerings~~efforts, ~~with design~~as ~~software~~well ~~for~~as ~~the~~by ~~textile~~acquiring ~~and~~businesses ~~fashion~~with ~~industries.~~technology ~~The~~that ~~Generation~~is ~~Digital~~synergistic ~~textile~~with ~~design~~our ~~workflow~~product ~~combines~~lines ~~with~~and may be attractive to our ~~Fiery~~customers. ~~textile~~We ~~DFEs~~expect to continue to expand and ~~Reggiani~~improve ~~digital~~our ~~textile~~offerings ~~printers~~of ~~linking~~new ~~textile~~generations ~~design~~of ~~and~~products ~~production,~~ to our customers.

~~Our~~We ~~DFE~~have ~~platforms~~established relationships with many leading distribution companies in the graphic arts and commercial print industries such as Nazdar, ~~primary~~3M, and Veritiv, as well as significant printer ~~manufacturer~~manufacturing ~~customers~~companies including Xerox, Ricoh, Canon, and ~~end~~Konica ~~user~~Minolta. ~~environments~~We have also established global relationships with many of the leading print providers, such as R.R. Donnelley, FedEx Office, and Staples. These direct sales relationships, along with dealer arrangements, are important for our understanding of the end markets for our products and serve as ~~follows:~~a source of future product development ideas. In many cases, our products are customized for the needs of large customers yet maintain the common intuitive interfaces that we are known for around the world.

~~Platform~~Increasing ~~Printer~~Market ~~Manufacturers~~Coverage. orWe ~~Customers~~are ~~User~~increasing ~~Environments~~our ~~Fiery~~market ~~and~~coverage ~~FFPS~~through ~~external~~penetration ~~DFEs~~of ~~Canon,~~our ~~Fuji~~sales ~~Xerox, Konica Minolta, Kyocera Document Solutions, Landa, Ricoh, RISO, Sharp, Toshiba, Xerox Print for pay, corporate reprographic departments, graphic arts, advertising agencies,~~ and ~~transactional~~distribution ~~& commercial printers Fiery embedded DFEs and design-licensed solutions Canon~~networks, ~~Epson,~~expansion ~~Fuji~~into ~~Xerox,~~emerging ~~Intec,~~markets ~~Kodak,~~in ~~Konica Minolta~~China, ~~Kyocera Document Solutions~~India, ~~Oki~~Latin ~~Data,~~America ~~Ricoh, Sharp, Toshiba, Xerox Office, print for pay,~~ and ~~quick~~Asia ~~turnaround~~Pacific ~~printers Fiery Central~~(“APAC”), ~~MicroPress Fiery Navigator Fiery Workflow Suite Canon, Konica Minolta, Kyocera Document Solutions, Ricoh, Sharp, Xerox Corporate reprographic departments, commercial printers,~~ and ~~production~~acquisitions ~~workflow~~that ~~solutions~~are ~~Fiery~~synergistic ~~Self~~with ~~Serve~~our ~~Canon,~~other ~~FedEx~~businesses ~~Office,~~such ~~Konica~~as ~~Minolta,~~the ~~Ricoh,~~Generation ~~Staples,~~Digital ~~Xerox ExpressPay self-service~~ and ~~payment~~Escada ~~solutions~~acquisitions. ~~for~~The ~~retail~~Generation ~~copy~~Digital ~~and~~textile ~~print~~design ~~stores,~~workflow ~~hotel~~is ~~business~~integrated ~~centers,~~with ~~college~~our ~~campuses,~~Fiery ~~and~~textile ~~convention~~DFEs ~~centers Production Inkjet~~ and ~~Proofing~~Reggiani ~~software:~~digital ~~ColorProof~~textile ~~XF,~~printers ~~Pro,~~linking ~~Fiery XF, Fiery proServer,~~ textile ~~Digital~~design ~~color proofing~~ and ~~inkjet~~ production. ~~print~~Escada ~~solutions~~offers ~~offering~~the ~~fast,~~corrugated ~~flexible~~packaging ~~workflow,~~market ~~power,~~corrugation ~~and~~control ~~expandability; creation and design of prints~~systems, ~~patterns,~~which ~~and~~provide ~~color~~comprehensive ~~palettes~~control ~~Digital, commercial~~ and ~~hybrid~~traceability ~~printers,~~for ~~prepress~~the ~~providers,~~entire ~~publishers,~~corrugation ~~creative~~process ~~agencies~~ and ~~photographers,~~can ~~ceramic~~ensure ~~tile,~~better ~~decoration,~~quality ~~and~~corrugated ~~super-wide~~materials &are ~~wide~~consumed ~~format~~by ~~print~~our ~~providers;~~Nozomi ~~fashion~~digital ~~and textile designers~~printers.

~~Sales~~Expanding the Addressable Market. We are expanding our addressable market by extending into new markets within each of our operating segments. Further growth in the addressable markets for Industrial Inkjet, ~~Marketing~~Productivity Software, and ~~Distribution~~Fiery has been driven by our integration of the production workflow among these operating segments. Growth in the addressable market for corrugated packaging has resulted from our new Nozomi printer and we expect our new Bolt textile printer to expand our addressable market in textile production.

WeEstablishing ~~have~~Enterprise ~~assembled,~~Coherence ~~internally~~ and ~~through~~Leveraging ~~acquisitions,~~Industry anStandardization. ~~experienced~~Our ~~team~~goal ofis ~~technical~~to ~~support,~~offer ~~sales,~~best ~~and~~in ~~marketing~~class ~~personnel~~solutions ~~with~~that ~~backgrounds~~are ~~in color reproduction, digital pre~~inter-~~press,~~operable ~~image processing, business process automation systems, networking,~~ and ~~software~~conform ~~and~~to ~~hardware~~open ~~engineering~~standards, aswhich ~~well~~will asallow ~~market~~customers knowledge of enterprise printing, packaging, graphic arts, fulfillment systems, cross-media marketing, imposition solutions, textile printing, fashion design, ceramic tile decoration, building materials and nonconventional materials, and commercial printing. We expect to ~~continue~~configure ~~to expand~~ the ~~scope and~~most ~~sophistication~~efficient ofsolution ~~our~~for ~~products~~their ~~and~~business ~~gain~~by ~~access~~establishing toenterprise ~~new~~coherence ~~markets~~ and ~~channels~~leveraging ofindustry ~~distribution by applying our expertise in these areas~~standardization.

11We establish coherence across our product lines by designing products and platforms that provide a consistent “look and feel” to the end user. Cross-product coherence creates higher productivity levels as a result of shortened learning curves. The integration that end users can achieve using our products for all of their digital printing and imaging needs leads to a lower total cost of ownership. Open architecture utilizing industry-established standards to provide interoperability across a range of digital printing devices and software applications ultimately provides end users with more choice and flexibility in their selection of products with advantages when a customer selects an EFI product as part of that architecture. For example, integration between our cloud-based Digital StoreFront application, our Pace business process automation application, and our Fiery XF Production Color RIP including integration to our Fiery or VUTEk product lines, is achieved by leveraging the industry standard Job Definition Format. Our Productivity Suite has taken this integration further through end-to-end automation including certified workflows and synchronized releases across multiple products consisting of our Packaging Suite, Corrugated Packaging Suite, Enterprise Commercial Print Suite, Publication Print Suite, Midmarket Print Suite, Quick Print Suite, and Value Added Products.

~~Table~~Recent ofBusiness ~~Contents~~Acquisitions. We achieve product innovation through internal research and development efforts, as well as by acquiring businesses with technology that is synergistic with our product lines and may be attractive to our customers. We also acquire businesses to expand our market coverage and customer base.

~~Industrial Inkjet~~ 12

~~Our~~Recent ~~Industrial~~business ~~Inkjet~~acquisitions ~~products~~ are ~~sold~~summarized ~~primarily~~as ~~through our direct sales force augmented by some select distributors. Any interruption of either of these distribution channels could negatively impact us in the future. See Item 1A~~follows: ~~Risk Factors—We rely on our distribution channels to ensure sales growth.~~

We entered the corrugated inkjet printer market with the introduction of our Nozomi digital inkjet corrugated printer in 2017. We are leveraging our existing display graphics sales team together with dedicated packaging specialists and participation in corrugated packaging trade shows in most major markets around the globe. The market for corrugated digital printers is new and our team will be building market demand for this approach as well as selling our printers. See Item 1A: Risk Factors—If we fail to continue to introduce new products that achieve market acceptance on a timely basis, we will not be able to compete effectively and we will be unable to increase or maintain net revenue and gross margins.



Year	Acquired Business	Acquired Product Line or Customer Base
2018	None

2017	FFPS	FFPS servers and customer base
	CRC Information Systems (“CRC”)	North America print MIS customer base
	Generation Digital	Software for textile and fashion designers
	Escada	Machine control for corrugated packaging systems

2016	Rialco	Dye powders and color products for digital printing and industrial manufacturing
	Optitex	Integrated 3D design software

~~Textile~~We ~~digital~~intend ~~printing~~to iscontinue ~~an alternative~~ to ~~either~~make ~~analog~~strategic ~~printing~~acquisitions ~~or dyed garments. Widespread adoption of digital textile printing depends on the willingness and ability of businesses~~ in the ~~printed~~future ~~textile~~that ~~industry~~support toour ~~replace~~product ~~their~~innovation, ~~existing~~market ~~analog~~coverage, ~~printing systems~~ and ~~dyed~~total ~~garments~~addressable ~~with~~market ~~digital~~expansion ~~printing systems~~strategies.

The adoption of digital textile printing is dependent to some extent on the growth of “fast fashion,” and has also benefitted from sports apparel with shorter production runs, closer geographic proximity to end-use markets, and environmental awareness. A key element of our inkjet textile printing growth strategy is to market digital inkjet printing systems to contract printers that serve major textile brand owners and fashion designers. Backlog

~~The~~Although ~~ceramic~~we ~~tile~~obtain ~~industry~~firm ~~has~~purchase ~~undergone~~orders afrom ~~shift~~our ~~from~~significant ~~southern Europe~~printer ~~(e.g.~~manufacturer customers in our Fiery operating segment, ~~Spain~~these ~~and~~customers ~~Italy)~~typically do not issue such purchase orders until 30 to ~~the~~90 ~~emerging~~days ~~markets~~before shipment. The non-linear nature of ~~China,~~our ~~India,~~Industrial ~~Brazil,~~Inkjet and ~~Indonesia.~~Productivity AsSoftware aoperating ~~result,~~segments weresults ~~operate~~in alimited ~~Cretaprint~~customer ~~sales~~contracts and ~~support~~purchase ~~center~~orders inthat ~~Foshan,~~are ~~Guangdong,~~not ~~China~~shipped at the end of the period, inwhich ~~addition~~are tonot ~~our~~material ~~facilities~~and inare ~~Spain~~not a meaningful indicator of future business prospects. ~~Foshan~~See isalso ~~home~~Note to4 ~~the largest~~- ~~concentration~~Revenue of ~~ceramic~~Notes ~~tile~~to ~~manufacturers~~Consolidated inFinancial ~~China.~~Statements for additional discussion.

WeSignificant promote our Industrial Inkjet products through public relations, direct mail, advertising, promotional material, trade shows, and ongoing customer communication programs. The majority of sales leads for our inkjet printer sales are generated from trade shows. There were approximately 1,300 attendees from 37 countries at our 2017 EFI Connect User Conference, which generates leads for the Industrial Inkjet and Productivity Software operating segments and generates end user demand for the Fiery segment. We promoted our Cretaprint products, including the new P4 and C4 Twin, at the 2017 Ceramics China tradeshow in Guangzhou. Relationships

InWe ~~2016~~have established and continue to build and expand relationships with the leading printer manufacturers and distributors of digital printing technology to benefit from their products, wedistribution ~~entered~~channels, ~~into~~and anmarketing ~~agreement~~resources. Our customers include domestic and international manufacturers, distributors, and sellers of digital printers. We work closely with athe ~~third~~leading ~~party~~printer manufacturers to develop solutions that ~~facilitates~~incorporate ~~our~~leading ~~European customers’~~technology ~~equipment~~and ~~financing~~work optimally in conjunction with their products. The ~~agreement~~top ~~provides~~revenue-generating printer manufacturers, that we sold products to in 2018, in alphabetical order, were Canon, Fuji Xerox, Konica Minolta, Kyocera, Landa, OKI Data, Ricoh, Sharp, Toshiba, Seiko Epson, and Xerox Document Solutions. Because sales of our printer and copier-related products constitute a significant portion of our Fiery revenue and there are a limited number of printer manufacturers producing copiers and printers in sufficient volume to be attractive customers ~~with~~for ~~new~~us, ~~leasing~~we ~~opportunities~~expect to continue to depend on a relatively small number of printer manufacturers for ~~EFI’s~~a ~~industrial~~significant ~~digital~~portion ~~inkjet~~of ~~printers~~our revenue in ~~many~~future ~~European~~periods. ~~countries~~Revenue from these leading printer manufacturers was 22%, 26%, and 28% of our consolidated revenue, during 2018, 2017, and 2016, respectively.

~~Productivity~~We ~~Software~~customarily enter into development and distribution agreements with our significant printer manufacturer customers. These agreements can be terminated under a range of circumstances and often on relatively short notice. The circumstances under which an agreement can be terminated vary from agreement to agreement and there can be no assurance that these significant printer manufacturers will continue to purchase products from us in the future, despite such agreements. Our agreements generally do not commit such customers to make future purchases from us. They could decline to purchase products from us in the future and could purchase and offer products from our competitors, or develop their own products for sale to the end customer. We recognize the importance of, and strive to maintain, our relationships with the leading printer manufacturers. Relationships with these companies are affected by a number of factors including, among others: competition from other suppliers, competition from their own internal development efforts, and changes in general economic, competitive, or market conditions including changes in demand for our products, changes in demand for the printer manufacturers’ products, industry consolidation, or fluctuations in currency exchange rates. There can be no assurance that we will continue to maintain or build the relationships we have developed to date.

~~Our~~We ~~enterprise~~have ~~resource~~a ~~planning and~~continuing ~~collaborative~~relationship ~~supply~~pursuant ~~chain business process automation software solutions within our Productivity Software portfolio are primarily sold directly~~ to ~~end~~a ~~users~~license byagreement ~~our~~with ~~direct~~Adobe ~~sales~~Systems, ~~force~~Inc. An(“Adobe”). ~~additional~~We ~~distribution~~license ~~channel~~PostScript® ~~for~~software ~~our~~from ~~Productivity Software~~Adobe ~~products~~for isuse ~~through~~in ~~sales~~many ~~to a mix~~ of ~~distribution~~our ~~channels~~Fiery ~~consisting~~solutions ofunder ~~authorized~~the ~~distributors,~~OEM ~~dealers,~~Distribution and ~~resellers~~License ~~who~~Agreement ~~in turn sell the software solutions to end users either stand-alone or bundled with other solutions they offer.~~

We have distribution agreements with some customers, including Canon, Konica Minolta, Ricoh, Xerox, Esko, and Veritiv (formerly xpedx). There are a number of small private resellers of our business process automation software in different geographic regions throughout the world where a direct sales force is not cost-effective. 13

Weentered ~~have~~into ~~established~~in September 2005, as amended from time to time. Under our agreement with Adobe, we have a ~~new~~non-exclusive, enon-~~commerce~~transferable ~~platform~~license ~~specifically~~to ~~for~~use ~~fabric~~the ~~soft~~Adobe ~~signage~~deliverables ~~production~~(including ~~operations~~any ~~and~~software, ~~ink~~development tools, utilities, software development kits, fonts, drivers, documentation, or related materials). The ~~on-line~~scope ~~ordering~~of ~~technology~~additional ~~offers~~licensing aterms ~~new~~varies ~~level~~depending on the type of ~~turnkey~~Adobe ~~flexibility~~deliverable. ~~for~~Our ~~increasingly~~agreement ~~popular~~with ~~fabric~~Adobe ~~graphics~~was ~~applications,~~amended ~~including~~on ~~outdoor~~February 1, ~~trade show~~2018, ~~and~~to ~~point-of-purchase~~automatically ~~displays~~renew annually. The agreement can be terminated by either party upon 120 days prior written notice. All royalties due to Adobe under the agreement are payable within 45 days after the end of each calendar quarter.

12Each Fiery solution requires page description language software provided by Adobe, which is a leader in providing page description software. Adobe’s PostScript® software is widely used to manage the geometry, shape, and typography of hard copy documents. Adobe can terminate our current PostScript® software license agreement without cause. Although to date we have successfully obtained licenses to use Adobe’s PostScript® software when required, Adobe is not required to, and we cannot be certain that Adobe will, grant future licenses to Adobe PostScript® software on reasonable terms, in a timely manner, or at all. In addition, to obtain licenses from Adobe, Adobe requires that we obtain quality assurance approvals from them for our products that use Adobe software. If Adobe does not grant us such licenses or approvals, if the Adobe licenses are terminated, or if our relationship with Adobe is otherwise materially impaired, we would likely be unable to sell products that incorporate Adobe PostScript® software. If that occurred, we would have to license, acquire, develop, or re-establish our own competing software as a viable alternative for Adobe PostScript® software and our financial condition and results of operations could be significantly harmed for a period of time.

~~Table~~Our industrial inkjet printers require inkjet print heads that are manufactured by a limited number of ~~Contents~~suppliers. If we experience difficulty obtaining print heads, our inkjet printer production would be limited. In addition, we manufacture UV curable, textile digital, and ceramic digital ink for use in our printers and rely on a limited number of suppliers for certain pigments and other components used in our ink. Our ink sales would decline significantly if we were unable to obtain the pigments and other components when needed.

WeCorporate ~~sell~~Responsibilities ~~Optitex directly to the leading fashion brands~~ and ~~manufacturers~~Environmental ~~through a direct sales force and distribution channels consisting of authorized distributors, dealers, and resellers.~~ Sustainability

~~Fiery~~We have taken steps to reduce the environmental impact of our operations and products and to promote sustainability. Our efforts include the following:

~~The~~• ~~primary~~Transitioning ~~distribution~~from ~~channel~~chemical-based ~~for~~to ~~our~~water-based ~~Fiery products is through our direct relationships with several leading printer manufacturers~~inks. We ~~work~~have ~~closely together~~expended toconsiderable ~~design,~~resources ~~develop,~~in ~~and~~the ~~integrate~~development ~~Fiery~~of ~~DFE~~water-based inks and ~~software~~printers ~~technology~~that tocan ~~maximize~~use ~~the capability of each print engine~~them. ~~The~~We ~~printer~~have ~~manufacturers~~introduced ~~act~~new aswater-based ~~distributors~~printers and ~~sell~~inks ~~Fiery~~and ~~products~~are todeveloping ~~end~~additional ~~customers~~products ~~through~~using ~~reseller~~water-based ~~channels~~technology. ~~End customer~~ ~~and~~These ~~reseller~~printers ~~channel~~can ~~preference~~reduce ~~for~~emissions ~~our~~from ~~Fiery~~the ~~DFE~~curing ~~and~~process ~~software~~which ~~solutions~~would ~~drives~~otherwise ~~demand~~result ~~for~~in ~~Fiery~~greenhouse ~~products through the printer manufacturers~~gases.

~~Although~~• ~~end~~Transitioning ~~customer~~printer ~~and~~ink ~~reseller~~curing ~~channel~~technology ~~preference~~from ~~for~~mercury ~~Fiery~~vapor ~~products~~UV ~~drives~~lamps ~~demand, most Fiery revenue relies on these significant printer manufacturers/distributors~~ to ~~integrate~~LED ~~Fiery~~UV ~~technology~~lamps. ~~into~~Our ~~the~~display ~~design~~graphics and ~~development~~corrugated ofprintres ~~their~~offer ~~print~~LED ~~engine~~"cool ascure" ~~described above~~technology. ~~See~~LED ~~Item 1A:~~technology ~~Risk~~uses ~~Factors—We~~less doheat ~~not~~than ~~typically have long-term purchase commitments with~~ the ~~printer manufacturer~~traditional ~~customers~~curing ~~that~~process ~~purchase~~resulting ~~our~~in ~~Fiery~~increased ~~DFE~~uptime and ~~software~~greater ~~solutions~~reliability. ~~They~~Energy ~~have~~assessments inconducted by the ~~past~~Fogra ~~reduced~~Graphic orTechnology ~~ceased,~~Research ~~and~~Association ~~could~~have atshown ~~any~~that ~~time~~our insuper-wide ~~the~~format ~~future~~printers ~~reduce~~with orLED ~~cease,~~curing tocan ~~purchase~~reduce ~~products~~energy ~~from~~consumption ~~us,~~by ~~thereby~~up ~~harming~~to ~~our~~82% ~~operating~~when ~~results~~compared ~~and business. Our relationships~~ with ~~the~~printers ~~leading~~that ~~printer~~use ~~and~~conventional ~~copier~~mercury ~~industry~~arc ~~companies~~lamps.Transition ~~are~~to ~~among~~LED ~~our~~UV ~~most~~lamp ~~important~~curing ~~assets.~~also Wehas ~~have~~the ~~established~~additional ~~relationships~~benefits ~~with~~of ~~leading~~reducing ~~printer~~ozone ~~and~~created ~~copier~~during ~~industry~~the ~~companies,~~curing ~~including~~process ~~Canon,~~as ~~Seiko~~well ~~Epson,~~as ~~Fuji Xerox,~~the ~~Kodak,~~ability ~~Konica~~to ~~Minolta,~~use ~~Kyocera~~thinner ~~Document~~substrates. ~~Solutions,~~The ~~Landa,~~use ~~OKI~~of ~~Data,~~thinner ~~Ricoh,~~substrates ~~Riso~~reduces ~~Global~~the ~~Network,~~material ~~Sharp,~~load ~~Toshiba,~~used ~~and~~in ~~Xerox.~~the ~~These~~overall ~~relationships~~image ~~are~~and ~~based~~the onsubstrate ~~business~~thickness ~~relationships~~by ~~that have been established~~ over ~~time.~~30% ~~Our~~compared ~~agreements generally do not require them~~ to ~~make~~standard ~~any~~mercury ~~future~~UV ~~purchases~~lamp ~~from~~systems. usIn ~~as of December 31~~addition, ~~2017.~~use ~~They~~of ~~are~~LED ~~generally~~UV ~~free~~lamps toin ~~purchase~~our ~~and~~printers ~~offer~~reduces ~~products~~the ~~from~~amount ~~our~~of ~~competitors,~~landfill orwaste ~~build~~because ~~their~~LED ~~own~~UV ~~products~~lamps ~~for~~generally ~~sale~~last toabout ~~the~~16,000 ~~end~~hours ~~customer~~before replacement, orwhereas ~~cease~~mercury ~~purchasing~~vapor ~~our products~~UV atlamps ~~any~~typically ~~time,~~only ~~for~~last ~~any~~about ~~reason,~~1000 orhours nobefore ~~reason~~replacement.

~~Fiery~~• ~~Self~~Reggiani ~~Serve~~Sustainability Initiatives. Our textile business is a worldwide provider of complete solutions for the textile market, with a focus on the development of sustainable processes. All our ~~self~~industrial printers can be used with a complete range of water-~~service~~based ~~and~~inks. ~~payment~~In ~~solution~~2010, ~~that~~we isundertook ~~sold~~a certification process as a commitment to ~~Canon,~~our ~~FedEx~~customers ~~Office,~~in ~~Konica Minolta~~order to offer eco-sustainable processes guaranteed by “Green Label” certification issued by the Association of Italian Textile Machinery Manufacturers, ~~Ricoh~~a private non-profit association. EFI Reggiani’s innovations are the result of extensive research targeted to improve productivity and quality, ~~Staples~~optimize the textile manufacturing process, and ~~Xerox~~reduce energy and water consumption, as well as environmental impact. ~~Fiery~~For ~~Self~~example, ~~Serve~~our TERRA pigment solution is ~~also~~a ~~marketed~~unique toin-line ~~college~~polymerization ~~campuses~~process ~~and~~for ~~libraries.~~faster, greener printing that eliminates the need for steaming or washing on

We sell our proofing products primarily to authorized distributors, dealers, and resellers who in turn sell the solutions to end users either stand-alone or bundled with other solutions they offer. Primary customers with whom we have established distribution agreements include Canon, Xerox, and Heidelberg. We sell color matching, color palette creation, and print design software to the fashion industry. There can be no assurance that we will continue to successfully distribute our products through these channels. 14

~~Growth~~direct-to-textile ~~and~~applications. ~~Expansion~~As ~~Strategies~~a result, users can achieve superior printing results while using less time, water and energy.

~~The~~We ~~growth~~are ~~and~~committed ~~expansion of~~to ~~our~~sustainable ~~revenue~~business ~~will~~practices beand ~~derived~~products ~~from~~and ~~(i) product~~will ~~innovation~~continue ~~through~~our ~~internal development~~ efforts orto ~~business~~proactively ~~acquisition,~~evaluate ~~(ii) increasing~~any ~~market~~potential ~~coverage~~changes ~~through~~that ~~internal~~will ~~efforts~~benefit ~~or business acquisition, (iii) expanding~~ the ~~addressable market, and (iv) establishing enterprise coherence and leveraging industry standardization~~environment.

Product Innovation. We achieve product innovation through internal research and development efforts, as well as by acquiring businesses with technology that is synergistic with our product lines and may be attractive to our customers. We expect to expand and improve our offerings of new generations of Industrial Inkjet products, including super-wide and wide format, textile, corrugated packaging and display, and ceramic tile decoration industrial digital inkjet printers. We expect to expand and improve our Productivity Software offerings, including new product lines related to digital printing, graphic arts, fulfillment systems, cross-media marketing, image personalization, workflow, packaging, 3D textile design, print management, and building materials. Employees

WeAs ~~have~~of ~~established relationships with many leading distribution companies in the graphic arts and commercial print industries such as Nazdar~~December 31, 3M2018, ~~and Veritiv,~~we ashave ~~well~~approximately ~~as significant printer manufacturing companies including Xerox~~3,400 ~~Ricoh,~~full ~~Canon,~~time ~~and Konica Minolta~~employees. ~~We have also established global relationships with many of~~

13Research and Development

~~Table~~As of ~~Contents~~December 31, 2018, 1,200 of our 3,400 full-time employees were involved in research and development. We believe that development of new products and enhancement of existing products are essential to our continued success. We intend to continue to devote substantial resources to research and new product development, as well as improvements to existing products. New platforms and ink formulations will continue to be developed for our Industrial Inkjet products as the industry accelerates its transition from analog to digital technology, from solvent-based printing to UV curable ink printing, and adopts digital textile printing due to the growth of “fast fashion.” We are developing new software applications designed to maximize work flow efficiencies and meet the needs of the graphic arts, packaging, and commercial print professions, including business process automation, web-to-print, e-commerce, cross-media marketing, imposition, proofing solutions, and 3D textile CAD applications. We are developing products to support additional printing devices including high-end color copiers and multi-functional devices. We have research and development sites in numerous U.S. locations, as well as in India, Europe, Israel, the United Kingdom (“U.K.”), Brazil, and Canada. Substantial additional expense is expected to be required to complete and bring to market products that are currently under development.

the leading print providers, such as R.R. Donnelley, Donnelley Financial Solutions, FedEx Office, and Staples. These direct sales relationships, along with dealer arrangements, are important for our understanding of the end markets for our products and serve as a source of future product development ideas. In many cases, our products are customized for the needs of large customers, yet maintain the common intuitive interfaces that we are known for around the world. Manufacturing

~~The~~We ~~development~~are ofleveraging efficiencies in our ~~Productivity~~worldwide ~~Suite~~digital ~~provides~~inkjet ~~tools~~printer tomanufacturing ~~facilitate~~operations ~~customer~~by ~~revenue~~centralizing ~~growth,~~certain ~~efficient scheduling~~aspects of our product manufacturing. Our VUTEk display graphics super-wide, wide format industrial hybrid and ~~optimization~~flatbed ofinkjet ~~processes~~printers were primarily manufactured in our Meredith, ~~equipment~~New Hampshire facility until March 2018. Starting in April 2018, ~~and~~we ~~personnel~~began to manufacture these printers in our new facility in Manchester, New Hampshire. ~~Customers~~In ~~are~~2016, ~~provided~~we ~~the~~transferred ~~financial~~VUTEk ~~and~~roll-to-roll ~~technical~~printer ~~flexibility~~production to ~~deploy~~our ~~locally~~Rosh ~~within~~Ha’Ayin, ~~their~~Israel, ~~business~~facility, orour FabriVU textile digital inkjet printer production to beour ~~hosted~~Bergamo, inItaly, ~~the~~facility, ~~cloud.~~and certain wide format industrial digital inkjet printers to our Castellon, Spain, facility.

~~Increasing~~We ~~Market~~utilize ~~Coverage.~~subcontractors Weto ~~are~~manufacture ~~increasing~~ our ~~market~~Fiery ~~coverage~~products ~~through~~and, ~~penetration~~to ofa lesser extent, our ~~sales~~super-wide and ~~distribution~~wide ~~networks,~~format ~~expansion into~~industrial ~~emerging~~printers. ~~markets~~These insubcontractors ~~China,~~work ~~India,~~closely ~~Latin~~with ~~America~~us ~~and~~to ~~Asia~~promote ~~Pacific~~low ~~(“APAC”),~~cost and ~~acquisitions~~high ~~that~~quality ~~are~~while ~~synergistic~~manufacturing ~~with~~our products. Subcontractors purchase components needed for our ~~other~~products ~~businesses~~from ~~such~~third asparties. We are dependent on the ~~Generation~~ability ~~Digital~~of ~~and~~our ~~Escada~~subcontractors ~~acquisitions.~~to ~~The~~produce ~~Generation~~the ~~Digital~~products ~~textile~~we ~~design workflow~~sell. isAlthough ~~integrated~~we ~~with~~supervise our ~~Fiery~~subcontractors, ~~textile~~there ~~DFEs~~can ~~and~~be ~~Reggiani~~no ~~digital~~assurance ~~textile~~that ~~printers~~such ~~linking~~subcontractors ~~textile~~will ~~design~~perform ~~and~~efficiently ~~production~~or effectively. ~~Escada~~We ~~provides~~have ~~corrugator~~outsourced ~~control~~our ~~systems~~Fiery ~~for~~production ~~the~~with ~~corrugated~~Avnet, ~~packaging~~Inc. ~~market~~(“Avnet”), ~~which~~formulation ~~provide~~of ~~comprehensive~~ceramic ~~control~~ink to two subcontractors, and ~~traceability~~ ~~for~~formulation of textile ink to third party branded suppliers, with the ~~entire~~exception ~~corrugation~~of ~~process~~reactive dye textile ink, which we formulate in our Bedford, U.K. facility.

~~Expanding~~Should ~~the~~our ~~Addressable~~subcontractors ~~Market.~~experience Weinability ~~are~~or ~~expanding~~unwillingness ~~our~~to ~~addressable~~manufacture ~~market~~or ~~by extending~~deliver ~~into~~our ~~new~~products, ~~markets~~then ~~within each of~~ our ~~operating~~business, ~~segments~~financial ~~such~~condition, asand ~~textile~~operations ~~digital~~could ~~inkjet~~be ~~printing,~~harmed. ~~textile~~Since 3Dwe ~~design,~~generally ~~ceramic~~do ~~tile~~not ~~decoration,~~maintain ~~thermoplastic pre~~long-~~decoration,~~term ~~image~~agreements ~~personalization, imposition~~with ~~solutions,~~our ~~various~~subcontractors ~~cloud-based~~and ~~software~~such ~~solutions,~~agreements ~~self-service~~may ~~and~~be ~~payment~~terminated ~~solutions,~~with ~~and~~relatively ~~mobile~~short ~~printing.~~notice, ~~Further~~any ~~growth~~of inour ~~the~~subcontractors ~~addressable~~could ~~markets~~terminate ~~for~~their ~~Industrial~~relationship ~~Inkjet,~~with ~~Productivity~~us ~~Software,~~ and/or ~~Fiery~~enter ~~has~~into ~~been~~agreements ~~driven~~with by our ~~integration~~ ofcompetitors ~~the~~that ~~production~~might ~~workflow~~restrict ~~among~~or ~~these~~prohibit ~~operating~~them ~~segments.~~from ~~Growth~~manufacturing inour ~~the~~products ~~addressable~~or ~~market~~could ~~for~~otherwise ~~corrugated~~lead ~~packaging~~to ~~and~~an ~~building~~inability ~~materials~~or ~~has~~unwillingness ~~resulted~~to ~~from~~fill our ~~new~~orders ~~Nozomi~~in ~~and~~a ~~Cubik~~timely ~~products~~manner or at all.

~~Establishing~~Our ~~Enterprise~~VUTEk ~~Coherence~~roll-to-roll ~~and~~super-wide ~~Leveraging~~format ~~Industry~~industrial ~~Standardization~~printers are manufactured in a single location in our Rosh Ha’Ayin, Israel facility. Our ~~goal~~Reggiani istextile toindustrial ~~offer~~printers ~~best~~are manufactured in ~~class~~a ~~solutions~~single ~~that~~location ~~are interoperable~~in our Bergamo, Italy facility. Our Cretaprint ceramic tile decoration and ~~conform~~Nozomi tocorrugated ~~open~~packaging ~~standards~~printers are manufactured in a single location in our Castellon, ~~which~~Spain ~~will~~facility. ~~allow~~Our ~~customers~~UV tocurable ~~configure~~and ~~the~~LED ~~most~~curable ~~efficient~~digital ~~solution~~ink ~~for~~that ~~their~~is ~~business~~used byin ~~establishing~~our ~~enterprise~~display ~~coherence~~graphics super-wide and ~~leveraging~~wide-format ~~industry~~industrial ~~standardization~~digital inkjet printers are formulated in a single location in our Ypsilanti, Michigan facility. Our

We establish coherence across our product lines by designing products and platforms that provide a consistent “look and feel” to the end user. Cross-product coherence creates higher productivity levels as a result of shortened learning curves. The integrated coherence that end users can achieve using our products for all of their digital printing and imaging needs leads to a lower total cost of ownership. Open architecture utilizing industry-established standards to provide interoperability across a range of digital printing devices and software applications ultimately provides end users with more choice and flexibility in their selection of products. For example, integration between our cloud-based Digital StoreFront application, our Pace business process automation application, and our Fiery XF Production Color RIP including integration to our Fiery or VUTEk product lines, is achieved by leveraging the industry standard Job Definition Format. Our Productivity Suite has taken this integration further through end-to-end automation including certified workflows and synchronized releases across multiple products consisting of our Packaging Suite, Corrugated Packaging Suite, Enterprise Commercial Print Suite, Publication Print Suite, Midmarket Print Suite, Quick Print Suite, and Value Added Products. 15

14reactive dye ink that is used in our textile digital inkjet printers is formulated in a single location in our Bedford, U.K., facility.

~~Table~~Most components used to manufacture our printers and ink are available from multiple suppliers, except for inkjet print heads, branded textile ink, and certain key ingredients (primarily pigments and photoinitiators) for our digital UV curable ink. Although typically in low volumes, many key components are sourced from single vendors. If we were unable to obtain the print heads currently used, we would be required to redesign our printers to use different print heads. If we were unable to obtain the branded textile ink or the components required for our digital ceramic, digital textile, or digital UV curable inks, we would have to qualify other sources, if possible, or reformulate and test the new ink formulations. In our Industrial Inkjet facilities, we use hazardous materials to formulate digital UV curable, digital textile, and ceramic digital ink, as well as store internally formulated and third-party ink. The storage, use, and disposal of ~~Contents~~those materials must meet the requirements of various environmental regulations.

~~Recent~~Significant ~~Business~~components ~~Acquisitions.~~necessary Wefor ~~achieve~~manufacturing ~~product~~our ~~innovation~~products ~~through~~are ~~internal~~obtained ~~research and~~from ~~development~~a ~~efforts,~~sole assupplier ~~well~~or asa bylimited ~~acquiring~~group ~~businesses~~of ~~with technology that is synergistic with our product lines and may be attractive to our customers~~suppliers. We ~~also~~depend ~~acquire~~largely ~~businesses~~on tothe ~~expand~~following ~~our~~sole ~~market coverage~~ and ~~customer~~limited ~~base.~~source ~~The~~suppliers ~~impact~~for of our ~~business~~components ~~acquisitions on product innovation, market coverage,~~ and ~~addressable~~manufacturing ~~market during 2017, 2016, and 2015 is summarized as follows~~services:

Year	Acquired Business	Acquired Product Line or Customer Base
2017	Free Flow Print Server (“FFPS”)	FFPS servers and customer base
	CRC Information Systems (“CRC”)	North America customer base
	Generation Digital Solutions, Inc. (“Generation Digital”)	Software for textile and fashion designers
	Escada Innovations Limited and Escada Systems, Inc. (collectively, “Escada”)	Corrugated packaging systems
2016	Rialco Limited (“Rialco”)	Dye powders and color products for digital printing and industrial manufacturing
	Optitex Ltd. (“Optitex”)	Integrated 3D design software
2015	Reggiani Macchine SpA (“Reggiani”)	Textile digital inkjet printers
	Matan Digital Printers (“Matan”)	Super-wide format digital inkjet printers
	Corrugated Technologies, Inc. (“CTI”)	Corrugated packaging software
	Shuttleworth Business Systems Limited and CDM Solutions Limited (collectively, “Shuttleworth”)	European customer base



Supplier		Components
Intel		Central processing units (“CPUs”); chip sets
Toshiba		Application-specific integrated circuits (“ASIC”) & inkjet print heads
Open Silicon		ASICs
Altera		ASICs & programmable devices
Tundra		Chip sets
Avnet		Electric components, Contract manufacturing (Fiery)
Adobe		PostScript® (Fiery and Productivity Software)
Dell Electronics		Contract manufacturing (FFPS)
HCL Technologies		Sustaining engineering (FFPS)
Third party branded: DuPont, Huntsman, Sensient		Textile ink
Ink pigment and component suppliers		Ink pigments, photoinitiators, and other components
Columbia Tech		Inkjet sub-assemblies
Schneider Electric		Inkjet electrical sub-assemblies
Phoseon		LED lamps
Shenzhen Runtianzhi Tech		Inkjet sub-assemblies
Seiko		Inkjet print heads
Xaar		Inkjet print heads
Ricoh		Inkjet print heads
Kyocera Mita		Inkjet print heads
Progress Software		Monarch and Radius operating system
Printable		Digital StoreFront modular offering
Enabling Technologies Ltd		Sensor interface and electronics

We ~~will~~generally ~~continue~~do tonot bemaintain ~~acquisitive~~long-term inagreements ~~the~~with ~~future~~our incomponent ansuppliers. ~~opportunistic~~We ~~way~~primarily ~~supporting~~conduct business with such suppliers largely on a purchase order basis. If any of our ~~product~~sole ~~innovation,~~or ~~market~~limited ~~coverage~~source suppliers were unwilling or unable to supply us with the components for which we rely on them, ~~and~~ ~~total~~we ~~addressable~~may ~~market~~be ~~expansion~~unable ~~strategies.~~to continue manufacturing our products utilizing such components.

~~Backlog~~ 16

Although we obtain firm purchase orders from our significant printer manufacturer customers in our Fiery operating segment, these customers typically do not issue such purchase orders until 30 to 90 days before shipment. The non-linear nature of our Industrial Inkjet and Productivity Software operating segments results in customer contracts and purchase orders that are not shipped at the end of the year, which are not material and are not a meaningful indicator of future business prospects. Competition

~~Significant Relationships~~Competition in our markets is significant and involves rapidly changing technologies and frequent new product introductions. To maintain and improve our competitive position, we must continue to develop and introduce new products and features on a timely and cost-effective basis to keep pace with the evolving needs of our customers and the product offerings of our competitors. We believe the principal competitive factor affecting our markets is the market acceptance rates for new printing technology.

WeIndustrial have established and continue to build and expand relationships with the leading printer manufacturers and distributors of digital printing technology to benefit from their products, distribution channels, and marketing resources. Our customers include domestic and international manufacturers, distributors, and sellers of digital printers. We work closely with the leading printer manufacturers to develop solutions that incorporate leading technology and work optimally in conjunction with their products. The top revenue-generating printer manufacturers, that we sold products to in 2017, in alphabetical order, were Canon, Fuji Xerox, Konica Minolta, Kyocera Document Solutions, Landa, OKI Data, Ricoh, RISO Global Network, Seiko Epson, Sharp, Toshiba, and Xerox (“leading printer manufacturers”). Because sales of our printer and copier-related products constitute a significant portion of our Fiery revenue and there are a limited number of printer manufacturers producing copiers and printers in sufficient volume to be attractive customers for us, we expect to continue to depend on a relatively small number of printer manufacturers for a significant portion of our revenue in future periods. Inkjet

15Our super-wide and wide format industrial digital inkjet printers compete with printers produced by Agfa, Durst, Canon, Hewlett-Packard (“HP”), Inca, Mimaki, Roland, and Mutoh throughout most of the world. There are also Chinese and Korean printer manufacturers in the marketplace, but their products are typically sold in their domestic markets and are not currently perceived as viable alternatives in most other markets, given product quality and more limited after-sales service and support. Our UV and LED curable ink is sold to users of our UV industrial inkjet printers, which have advanced quality control systems to ensure that correct color and non-expired ink is used to prevent damage to the printer. This results in most ink used in our printers being sold by us. While third party ink is available, its use may compromise the printer’s quality control system and also voids certain provisions of our printer warranty and service contracts. Our Nozomi corrugated packaging digital inkjet printers compete with printers offered by Barberan, Durst, HP, and Sun Automation.

~~Table~~Our Reggiani industrial digital inkjet textile printers compete with Dover, Durst, Mimaki, Roland, Epson, Konica Minolta, Robustelli, Atexco, Shenzhen Homer Textile, Kornit, Ricoh, and Digital Graphics. Competitive digital inkjet textile printers are manufactured in Italy, Japan, China, and smaller emerging markets such as Indonesia. Key competitors driving digitalization of ~~Contents~~the textile printer market include Dover and Kornit. Reggiani also competes with other digital inkjet textile printing technologies including pre-washing and post-washing printing techniques.

~~Revenue~~Our ~~from~~Cretaprint ~~the~~ceramic ~~leading~~tile ~~printer~~decoration ~~manufacturers~~digital ~~was~~inkjet ~~26%,~~printers ~~28%,~~compete ~~and~~with ~~33%~~ceramic oftile ~~our~~decoration ~~consolidated~~printers ~~revenue~~manufactured in Spain (KERAjet), ~~during~~Austria ~~2017~~(Durst), ~~2016~~Italy (Technoferrari, Projecta, Intesa, and ~~2015~~System), ~~respectively.~~China ~~Although~~(Flora, ~~end~~Hope, ~~customer~~Meijia, and ~~reseller~~Teckwin), ~~channel~~and ~~preference for~~smaller ~~Fiery~~emerging ~~products~~competition ~~drives~~in ~~demand,~~other ~~most~~markets ~~Fiery~~such ~~revenue~~as ~~relies~~Indonesia. onThe ~~the~~ceramic ~~leading~~tile ~~printer~~industry ~~manufacturer~~has /experienced ~~distributors~~a torelocation ~~integrate~~from ~~Fiery~~southern ~~technology~~Europe ~~into~~to the ~~design~~emerging ~~and~~markets ~~development~~ of ~~their~~China, ~~print~~India, ~~engines.~~Brazil, ~~Accordingly~~and Indonesia, ifamong weothers. ~~experience~~Competition ~~reduced~~in ~~sales~~the orChinese ~~lose an~~market ~~important~~consists ~~printer~~of ~~manufacturing~~small ~~customer,~~Chinese weceramic ~~will~~tile ~~have~~decoration ~~difficulty~~digital ~~replacing~~inkjet ~~the~~printers ~~revenue~~and ~~with~~European ~~sales~~manufacturers tothat ~~new~~are orreducing ~~existing~~prices ~~customers~~to gain market share.

WeProductivity customarily enter into development and distribution agreements with our significant printer manufacturer customers. These agreements can be terminated under a range of circumstances and often on relatively short notice. The circumstances under which an agreement can be terminated vary from agreement to agreement and there can be no assurance that these significant printer manufacturers will continue to purchase products from us in the future, despite such agreements. Our agreements generally do not commit such customers to make future purchases from us. They could decline to purchase products from us in the future and could purchase and offer products from our competitors, or develop their own products for sale to the end customer. We recognize the importance of, and strive to maintain, our relationships with the leading printer manufacturers. Relationships with these companies are affected by a number of factors including, among others: competition from other suppliers, competition from their own internal development efforts, and changes in general economic, competitive, or market conditions including changes in demand for our products, changes in demand for the printer manufacturers’ products, industry consolidation, or fluctuations in currency exchange rates. There can be no assurance that we will continue to maintain or build the relationships we have developed to date. See Item 1A: Risk Factors—We do not typically have long-term purchase commitments with the printer manufacturer customers that purchase our Fiery DFE and software solutions. They have in the past reduced or ceased, and could at any time in the future reduce or cease, to purchase products from us, thereby harming our operating results and business. Software

WeOur ~~have~~Productivity aSoftware ~~continuing relationship pursuant to a license agreement with Adobe Systems~~segment, ~~Inc.~~which ~~(“Adobe”),~~includes ~~as amended. We license PostScript® software from Adobe for use in many of~~ our ~~Fiery~~business ~~solutions~~process ~~under~~automation, ~~the~~cloud-based ~~OEM~~order ~~Distribution~~entry and ~~License~~order ~~Agreement~~management ~~entered~~systems, ~~into~~cross inmedia ~~September 2005~~marketing, asand ~~amended~~imposition ~~from~~solution ~~time~~systems tofaces ~~time. Under~~competition ~~our~~from ~~agreement~~software ~~with~~application ~~Adobe,~~vendors wethat ~~have~~specifically atarget ~~non-exclusive, non-transferable license to use~~ the ~~Adobe~~printing ~~deliverables~~and ~~(including~~packaging ~~any~~industries. ~~software,~~These ~~development~~vendors ~~tools,~~are ~~utilities, software~~typically ~~development kits~~small, ~~fonts,~~privately-owned ~~drivers, documentation, or related materials)~~companies. ~~The~~We ~~scope~~also offace ~~additional~~competition ~~licensing~~from ~~terms~~larger ~~varies~~vendors ~~depending~~that oncurrently ~~the~~offer, ~~type~~or ofare ~~Adobe~~seeking ~~deliverable.~~to ~~Our~~develop, ~~agreement~~business ~~with~~process ~~Adobe~~automation ~~was~~printing ~~amended~~products onincluding ~~February 1~~HP, ~~2018~~Epicor, ~~to automatically~~and ~~renew annually~~SAP. ~~The~~We ~~agreement~~face ~~can~~competition befrom ~~terminated~~Oracle, bySAP, ~~either~~Kiwiplan, ~~party~~and ~~upon~~Heidelberg ~~120~~in ~~days prior written notice. All royalties due to Adobe under~~ the ~~agreement~~packaging ~~are~~software ~~payable within 45 days after the end of each calendar quarter~~market.

~~Each~~Our ~~Fiery~~Optitex ~~solution~~3D ~~requires~~CAD ~~page description language~~ software ~~provided~~competes bywith ~~Adobe~~Lectra, ~~which~~Assyst, ~~is a leader in providing page description software. Adobe’s PostScript® software is widely used to manage the geometry~~CLO, ~~shape~~Browzwear, and ~~typography of hard copy documents~~Gerber. ~~Adobe~~Optitex ~~can~~provides ~~terminate~~2D ~~our~~CAD ~~current PostScript®~~design ~~software license agreement without cause. Although to date we have successfully obtained licenses to use Adobe’s PostScript® software when required, Adobe is not required to,~~ and we3D ~~cannot~~CAD bevisualization ~~certain that Adobe will, grant future licenses to Adobe PostScript® software on reasonable terms,~~ in athe ~~timely~~same ~~manner, or at all~~application. ~~In addition~~Therefore, tothe ~~obtain~~CAD ~~licenses~~information ~~from~~and ~~Adobe, Adobe requires that we obtain quality assurance approvals from them for our products that use Adobe software. If Adobe does not grant us such licenses or approvals, if~~ the ~~Adobe~~3D ~~licenses~~information are ~~terminated,~~tightly ~~or if our relationship with Adobe is otherwise materially impaired, we would likely be unable to sell products that incorporate Adobe PostScript® software~~integrated. ~~If that occurred~~Furthermore, wethe ~~would~~incremental ~~have~~learning tocurve license, acquire, develop, or re-establish our own competing software as a viable alternative for Adobe PostScript® software and our financial condition and results of operations could be significantly harmed for a period of time. See Item 1A: Risk Factors—We license software used in most of our Fiery products and certain Productivity Software products from ~~Adobe~~using ~~and~~2D ~~the~~to ~~loss~~using of3D ~~these~~is ~~licenses would prevent shipment of these products~~minimal.

Our industrial inkjet printers require inkjet print heads that are manufactured by a limited number of suppliers. If we experience difficulty obtaining print heads, our inkjet printer production would be limited. In addition, we Fiery

16The principal competitive factors affecting the market for our Fiery solutions include customer service and support, product reputation, quality, performance, price, and product features such as functionality, scalability, ease of use, and ability to interface with products produced by the significant printer manufacturers. Although we have direct relationships with each of the leading printer manufacturers and work closely with them to integrate Fiery DFE and software technology into the design and development of their print engines to maximize their quality and capability, our primary competitors for stand-alone color DFEs, embedded DFEs, and design-licensed solutions are these same leading printer manufacturing companies. They

~~Table of Contents~~17

~~manufacture~~each UVmaintain ~~curable~~substantial ~~and~~investments ~~ceramic digital ink for use~~ in ~~our~~research ~~printers~~ and ~~rely~~development. onSome ~~a limited number~~ of ~~suppliers~~this ~~for~~investment ~~certain~~is ~~pigments~~targeted ~~used~~at inintegrating ~~our~~products ~~ink.~~and ~~Our~~technology ~~ink~~that ~~sales would decline significantly if~~ we ~~were~~have ~~unable~~designed toand ~~obtain~~some ~~the pigments when needed. See Item 1A: Risk Factors—We depend on a limited group~~ of ~~suppliers~~this ~~for~~investment ~~key~~is ~~components~~targeted inat ~~our~~developing products. ~~The~~and ~~loss~~technology ofthat ~~any~~compete ofwith ~~these suppliers, the inability of any of these suppliers to meet~~ our ~~requirements,~~Fiery ~~or delays or shortages of supply of these components could adversely affect our business~~brand.

~~Human~~We ~~Resources~~ are the largest third party DFE developer, although our market compared with DFEs developed internally by the leading printer manufacturers, since we primarily focus on production printers, rather than office or consumer printers, is small. We believe that our advantages include continuously advancing technology, short time-to-market, brand recognition, end user loyalty, sizable installed base, number of products supported, price driven by lower development costs, and market knowledge. We intend to continue to develop new DFEs with capabilities that meet the changing needs of the printer manufacturers’ product development road maps. Although we do not directly control the distribution channels, we provide a variety of features as well as unique “look and feel” to the printer manufacturers’ products to differentiate our customers’ products from those of their competitors. Ultimately, we believe that end customer and reseller channel preference for the Fiery DFE and software solutions drives demand for Fiery products through the printer manufacturers.

AsIntellectual ofProperty December 31, 2017, we employed 3,366 full time employees. Approximately 989 were in sales and marketing (including 416 in customer service), 442 were in general and administrative, 706 were in manufacturing, and 1,229 were in research and development. Of the total number of employees, 1,485 employees were located in the Americas (primarily the U.S. and Brazil) and 1,881 were located outside of the Americas. Rights

~~Research~~We rely on a combination of patent, copyright, trademark, and ~~Development~~trade secret laws; non-disclosure agreements; and other contractual provisions to establish, maintain, and protect our intellectual property rights. Although we believe that our intellectual property rights are important to our business, no single patent, copyright, trademark, or trade secret is solely responsible for the development and manufacturing of our products.

~~Research~~We ~~and~~are ~~development~~currently ~~expense~~pursuing ~~was~~patent ~~$157.4,~~applications ~~$151.4,~~in ~~and $141.4 million for~~ the ~~years ended December 31, 2017, 2016, and 2015, respectively~~U. ~~As of December 31, 2017, 1,229 of our 3,366 full-time employees were involved in research and development~~S. ~~We believe that development of new products~~ and ~~enhancement~~certain offoreign ~~existing~~jurisdictions ~~products are essential~~ to ~~our~~protect ~~continued~~various ~~success~~inventions. WeOver ~~intend~~time, towe ~~continue to~~have ~~devote~~accumulated ~~substantial~~a ~~resources~~portfolio toof ~~research~~patents ~~and~~issued ~~new~~in ~~product~~these ~~development~~jurisdictions. We ~~expect~~own toor ~~continue~~have torights ~~make significant expenditures~~ to ~~support research and development in~~ the ~~foreseeable~~copyrights ~~future.~~of ~~New platforms and ink formulations will continue to be developed for Industrial Inkjet print technologies and ceramic tile decoration as~~ the ~~industry~~software ~~accelerates~~code ~~its~~in ~~transition~~our ~~from~~products ~~analog to digital technology, from solvent-based printing to UV curable ink printing,~~ and ~~adopts~~rights ~~digital textile printing due~~ to the ~~growth~~trademarks ofunder ~~“fast~~which ~~fashion.”~~our Weproducts are developing new software applications designed to maximize work flow efficiencies and meet the needs of graphic arts and commercial print professions, including business process automation, web-to-print, e-commerce, cross-media marketing, imposition, proofing solutions, and 3D textile CAD applicationsmarketed. We ~~are developing products to support additional printing devices including high-end color copiers and multi-functional devices. We~~ have ~~research~~registered ~~and~~certain ~~development~~trademarks ~~sites~~ in 15the U.S. ~~locations,~~and ascertain ~~well~~foreign asjurisdictions ~~in India, Europe, Israel, the United Kingdom (“U.K.”), Brazil,~~ and ~~Canada.~~will ~~Substantial~~continue ~~additional expense is required~~ to ~~complete~~evaluate ~~and~~the ~~bring~~registration toof ~~market~~additional ~~products~~trademarks ~~that~~as ~~are currently under development~~appropriate.

~~Manufacturing~~Certain of our products include intellectual property licensed from our customers. We have also granted and may continue to grant licenses to our intellectual property, when and as we deem appropriate.

WeFinancial ~~are~~Information ~~leveraging~~about ~~efficiencies~~Foreign inand ~~our worldwide~~Domestic ~~digital~~Operations ~~inkjet printer manufacturing operations by centralizing super-wide format textile digital inkjet printer production in Italy~~ and ~~transferring~~Export ~~production of super-wide format roll-to-roll digital inkjet printers to Israel to leverage the lower cost platform in this manufacturing facility.~~ Sales

WeSee ~~utilize~~Note ~~subcontractors~~3 to– ~~manufacture our Fiery products and~~Segment, ~~to a lesser extent~~Geographic, ~~our super-wide~~ and ~~wide~~Major ~~format~~Customer ~~industrial~~Information ~~digital inkjet printers. These subcontractors work closely with us to promote low cost~~ and ~~high~~Note ~~quality~~17 ~~while~~– ~~manufacturing~~Income ~~our~~Taxes ~~products. Subcontractors purchase components needed for our products from third parties. We are dependent on the ability~~ of ~~our~~Notes ~~subcontractors~~ to ~~produce~~ ~~the~~Consolidated ~~products~~Financial ~~we sell~~Statements. ~~Although~~See wealso ~~supervise~~Item ~~our~~1A: ~~subcontractors,~~Risk ~~there~~Factors ~~can~~– ~~be no assurance that such subcontractors will perform efficiently or effectively.~~ We ~~have~~face ~~outsourced~~risks ~~our~~from ~~Fiery~~currency ~~production~~fluctuations ~~with Avnet, Inc. (“Avnet”), formulation of ceramic ink to two subcontractors,~~ and ~~formulation~~We offace ~~textile~~risks ~~ink~~from ~~to third party branded suppliers, with the exception of reactive dye textile ink, which we formulate in~~ our ~~Bedford,~~international Uoperations.~~K. facility.~~

~~Should~~Available our subcontractors experience inability or unwillingness to manufacture or deliver our products, then our business, financial condition, and operations could be harmed. Since we generally do not maintain long-term agreements with our subcontractors and such agreements may be terminated with relatively short notice, any of our subcontractors could terminate their relationship with us and/or enter into agreements with our competitors that might restrict or prohibit them from manufacturing our products or could otherwise lead to an inability or Information

17Our Internet address is www.efi.com. We make the following filings available free of charge through our Investor Relations website (ir.efi.com): our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, proxy statements, and, if applicable, amendments to those reports filed or furnished pursuant to the Exchange Act as soon as reasonably practicable after we electronically file such material with, or furnish it to, the SEC. The information contained, or referred to, on our website is not part of this annual report or any other report that we file with, or furnish to, the SEC unless expressly noted.

~~Table~~We offile ~~Contents~~Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, proxy statements, and other documents with the SEC under the Exchange Act. Such reports, proxy statements and other documents are available on the SEC website (www.sec.gov).

unwillingness to fill our orders in a timely manner or at all. See Item 1A: Risk Factors—We are dependent on a limited number of subcontractors, with whom we do not have long-term contracts, to manufacture and deliver products to our customers. The loss of any of these subcontractors could adversely affect our business. 18

~~Our VUTEk~~Item 1A: ~~display~~Risk graphics super-wide format industrial digital inkjet printers are primarily manufactured in a single location in our Meredith, New Hampshire facility. In 2016, we transferred VUTEk roll-to-roll printer production to our Rosh Ha’Ayin, Israel, facility, our FabriVu textile digital inkjet printer production to our Bergamo, Italy, facility, and certain wide format industrial digital inkjet printers to our Castellon, Spain, facility. Factors

WeIf ~~have encountered difficulties in hiring and retaining adequate skilled labor and management because Meredith is not located in a major metropolitan area. In 2016,~~ we ~~entered~~fail into a six-year lease with Bank of Tokyo—Mitsubishi UFJ Leasing & Finance LLC (“BTMU”) whereby a 225,000-square foot manufacturing and warehouse facility is under construction in Manchester, New Hampshire, related to ~~our~~continue ~~super-wide and wide format printer business in the Industrial Inkjet operating segment, which is scheduled~~ to beintroduce ~~completed in the first half of 2018. The~~ new ~~manufacturing~~products ~~center~~that ~~will~~achieve ~~allow~~market ~~consolidation~~acceptance ofon ~~operations into~~ a ~~single~~timely ~~facility and include research & development~~basis, ~~manufacturing,~~we ~~warehousing,~~will ~~training,~~not ~~and~~be ~~service for~~able ~~super-wide~~to ~~and~~compete ~~wide format printers~~effectively, ~~along with worldwide sales~~ and ~~marketing~~we ~~management~~will ~~for~~be ~~our~~unable ~~broader~~to ~~portfolio~~increase ofor ~~industrial~~maintain ~~digital~~net ~~inkjet~~revenue ~~printers~~ and ~~presses~~gross margins.

~~Our~~We ~~VUTEk~~operate ~~roll-to-roll super-wide format industrial digital inkjet printers are manufactured~~ in a ~~single~~highly ~~location~~competitive inand ~~our~~quickly ~~Rosh~~changing ~~Ha’Ayin, Israel facility~~environment. Our ~~Reggiani~~future ~~textile~~success ~~industrial~~depends ~~digital~~in ~~inkjet~~large ~~printers~~part ~~are~~upon ~~manufactured~~our inability ato ~~single~~identify ~~location~~demand intrends ~~our~~and ~~Bergamo,~~quickly ~~Italy~~develop ~~facility.~~or ~~Our~~acquire, ~~Cretaprint~~and ~~ceramic~~manufacture ~~tile decoration~~ and ~~Nozomi~~ ~~corrugated~~sell, ~~packaging~~products ~~digital~~that ~~inkjet~~satisfy ~~printers~~these ~~are~~demands ~~manufactured~~ in a ~~single~~cost-effective ~~location~~manner. inIn ~~our~~order ~~Castellon,~~to ~~Spain~~differentiate ~~facility.~~our ~~Our~~products UVfrom ~~curable~~our ~~and~~competitors’ ~~LED~~products, ~~curable~~we ~~digital~~must ~~ink~~continue ~~that~~to isinvest ~~used~~ in ~~our~~research ~~display~~and ~~graphics~~development. ~~super-wide~~For ~~and~~example, ~~wide-format~~we ~~industrial~~need ~~digital inkjet~~a ~~printers~~broad ~~are~~product ~~formulated~~portfolio inand ahave ~~single~~identified ~~location~~gaps insuch ~~our~~as ~~Ypsilanti,~~those ~~Michigan~~we ~~facility.~~are ~~Our~~currently ~~reactive~~experiencing ~~dye~~in ~~ink~~the ~~that~~high-end isof ~~used~~Display inGraphics, ~~our~~and ~~textile~~are ~~digital~~committing ~~inkjet~~substantial ~~printers~~resources isto ~~formulated~~develop innew aproducts ~~single~~to ~~location~~strengthen in our ~~Bedford,~~product Uportfolio.~~K.,~~ ~~facility.~~

~~Most~~Successfully ~~components~~predicting ~~used~~demand totrends ~~manufacture~~is ~~our printers and ink are available from multiple suppliers~~difficult, ~~except for inkjet print heads, branded textile ink,~~ and ~~certain~~ ~~key~~it ~~ingredients~~is ~~(primarily~~very ~~pigments~~difficult ~~and photoinitiators) for our digital UV curable ink. Although typically in low volumes, many key components are sourced from single vendors. If we were unable~~ to ~~obtain~~predict the ~~print~~effect ~~heads~~introducing ~~currently~~any ~~used,~~new ~~we would~~products bewill ~~required~~have toon ~~redesign~~ our ~~printers~~existing toproduct ~~use different print heads~~sales. IfWe wewill ~~were~~also ~~unable~~need to ~~obtain~~respond ~~the~~effectively ~~branded~~to ~~textile~~new ~~ink~~product orannouncements ~~the~~by ~~pigments required for~~ our ~~digital~~competitors UVand ~~curable~~quickly ~~ink,~~introduce ~~we would have to qualify other sources, if possible,~~ or ~~reformulate and~~enhance ~~test~~competitive ~~the new ink formulations~~products. InAny ~~our~~delays ~~Industrial~~in ~~Inkjet~~product ~~facilities,~~development ~~we use hazardous materials to formulate digital UV curable~~ and ~~ceramic digital ink~~introduction, asor ~~well~~product asintroductions ~~store~~that ~~internally~~do ~~formulated~~not ~~and~~meet ~~third-party~~broad ~~ink.~~market ~~The storage~~acceptance, ~~use,~~or ~~and~~unsuccessful ~~disposal~~launches of ~~those~~ ~~materials~~new ~~must~~product ~~meet~~lines, ~~the~~could ~~requirements~~result ~~of various environmental regulations.~~ in:

~~See~~• ~~Item 1A:~~loss ~~Risk~~of ~~Factors—If we are not able to hire and retain skilled employees, we may not be able to develop and manufacture products,~~ or ~~meet~~delay ~~demand for our products,~~ in arevenue ~~timely fashion; We manufacture super-wide~~ and wide format industrial digital inkjet printers and formulate UV curable, LED curable, and reactive dye ink primarily in single locations. Any significant interruption in the manufacturing process at these facilities could adversely affect our business; We depend on a limited group of suppliers for key components in our products. The loss of ~~any~~market ~~of these suppliers, the inability of any of these suppliers to meet our requirements, or delays or shortages of supply of these components, could adversely affect our business~~share; ~~and We may be subject to environmental-related liabilities due to our use of hazardous materials and solvents.~~

18• negative publicity and damage to our reputation and brands;

~~Table~~• a decline in the average selling price of ~~Contents~~our products;

~~Significant~~• ~~components~~adverse ~~necessary~~reactions ~~for~~in ~~manufacturing~~ our ~~products~~sales ~~are~~channels, ~~obtained~~such ~~from~~as areduced ~~sole~~online ~~supplier~~product visibility, or ~~a limited~~loss ~~group~~ of ~~suppliers.~~a Wesales ~~depend largely on the following sole and limited source suppliers for our components and manufacturing services:~~ channel;

~~Supplier~~• ~~Components~~product ~~Intel Central processing units (“CPUs”)~~returns; chip sets Toshiba Application-specific integrated circuits (“ASIC”) & inkjet print heads Open Silicon ASICs Altera ASICs & programmable devices Tundra Chip sets Avnet Adobe Contract manufacturing (Fiery) PostScript® (Fiery and Productivity Software) Dell Electronics Contract manufacturing (FFPS) HCL Technologies Sustaining engineering (FFPS) Third party branded Textile ink (DuPont, Huntsman, Sensient) Ink pigment suppliers UV curable ink pigments and photoinitiators Columbia Tech Inkjet sub-assemblies Schneider Electric Inkjet electrical sub-assemblies Phoseon LED lamps Shenzhen Runtianzhi Tech Inkjet sub-assemblies Seiko Inkjet print heads Xaar Inkjet print heads Ricoh Inkjet print heads Kyocera Mita Inkjet print heads Progress Software Monarch and Radius operating system Printable Enabling Technologies Ltd Digital StoreFront modular offering Sensor interface and electronicsor

We• ~~generally~~failure do not maintain long-term agreements with our component suppliers. We primarily conduct business with such suppliers largely on a purchase order basis. If any of our sole or limited source suppliers were unwilling or unable to ~~supply~~recover usamounts ~~with the components for which we rely on them, we may be unable to continue manufacturing our products utilizing such components~~invested.

~~The~~We ~~absence~~face ofcompetition ~~agreements~~in ~~with many of~~ our ~~suppliers~~Industrial ~~also~~Inkjet ~~subjects~~and usProductivity toSoftware ~~pricing~~operating ~~fluctuations,~~segments which is a factor we believe is partially offset by the desire of our suppliers to sell a high quantity of components. Many of our components are similar to those used in personal computers; consequently, the demand and price fluctuations of personal computer components could ~~affect~~cause ~~our component~~downward ~~costs.~~pressure In the event of unanticipated volatility in demand for our products, we may be unable to manufacture certain products in quantities sufficient to meet end user demand or we may hold excess quantities of inventory due to their long lead times. We maintain an inventory of components for which we are dependent on ~~sole~~prices ~~or limited source suppliers~~ and of components with prices that fluctuate significantly. We cannot ensure that at any given time we will have sufficient inventory to enable us to meet demand for our products, which would harm our financial results. See Item 1A: Risk Factors—We depend on a limited group of suppliers for key components in our products. The loss of ~~any~~market ~~of these suppliers, the inability of any of these suppliers to meet our requirements, or delays or shortages of supply of these components could adversely affect our business~~share.

~~Competition~~We operate in highly competitive markets in our Industrial Inkjet and Productivity Software segments.

~~Competition~~• inOur ~~our~~super-wide ~~markets~~and iswide ~~significant and~~format ~~involves~~industrial ~~rapidly~~inkjet ~~changing~~products ~~technologies~~compete against several companies that market industrial inkjet printing systems based on electrostatic, drop-on-demand, and ~~frequent~~continuous ~~new~~drop-on-demand ~~product~~inkjet ~~introductions.~~and Toother ~~maintain~~technologies and ~~improve~~printers ~~our~~utilizing ~~competitive~~UV ~~position~~curable ink, weincluding ~~must~~Agfa, ~~continue~~Durst, toCanon, ~~develop~~HP, ~~and~~Inco, ~~introduce~~Mimaki, Roland, and Mutoh;

19• Our Reggiani industrial inkjet textile printers compete with printers offered by Dover, Durst, Mimaki, Roland, Epson, Konica Minolta, Robustelli, Atexco, Shenzhen Homer Textile, Kornit and Digital Graphics;

~~Table~~• ofOur ~~Contents~~Cretaprint ceramic tile decoration inkjet printers compete with ceramic tile decoration printers manufactured in Spain, Austria, Italy, Brazil, China, and smaller emerging competitors in other markets such as Indonesia;

~~new~~• ~~products~~Our ~~and~~Productivity ~~features~~Software onoperating asegment ~~timely~~faces ~~and~~competition ~~cost-effective~~from ~~basis~~software toapplication ~~keep~~vendors, ~~pace~~which ~~with~~include ~~the~~many ~~evolving~~small ~~needs~~private ofcompanies, ~~our~~that ~~customers.~~specifically Wetarget ~~believe~~ the ~~principal~~printing ~~competitive~~industry, ~~factor~~as ~~affecting~~well ~~our~~as ~~markets~~larger isvendors ~~the market~~that ~~acceptance~~currently ~~rates~~offer, ~~for~~or ~~new~~are seeking to develop, business process automation printing ~~technology~~products. Competitors include HP, Epicor and SAP; and

~~Industrial~~• ~~Inkjet~~Our packaging software market faces competition from Oracle, SAP, SolarSoft, and Heidelberg, and our Optitex 3D CAD software competes with Lectra, Assyst, CLO, Browzwear, and Gerber.

~~Our~~Some ~~super-wide~~of ~~and~~our ~~wide~~competitors ~~format~~have ~~industrial~~greater ~~digital~~resources ~~inkjet~~to ~~printers~~develop ~~compete~~new ~~with~~products ~~printers produced by Agfa, Durst, Canon, Hewlett-Packard (“HP”), Inca, Mimaki, Roland,~~ and ~~Mutoh~~technologies ~~throughout most of the world. There are Chinese~~ and ~~Korean~~market ~~printer~~those ~~manufacturers in the marketplace~~products, ~~but~~as ~~their~~well ~~products are typically sold in their domestic markets and are not currently perceived~~ as ~~viable~~acquire ~~alternatives~~or ~~in most~~develop ~~other~~critical ~~markets.~~components ~~Our~~at UVlower ~~and LED curable ink is sold to users of our UV industrial inkjet printers~~costs, which ~~have~~would ~~advanced~~provide ~~quality~~them ~~control~~with ~~systems~~a tocompetitive ~~ensure that correct color and non-expired ink is used to prevent damage to the printer~~advantage. ~~This~~ ~~results~~Our incompetitors ~~most~~could ~~ink used in our printers being sold by us. While third party ink is available, its use may compromise the printer’s quality control system and~~ also ~~voids~~exert ~~certain~~downward ~~provisions~~pressure ofon ~~our printer~~product ~~warranty~~pricing ~~and~~to ~~service~~gain ~~contracts.~~market ~~Our Nozomi corrugated packaging digital inkjet printers compete with printers offered by Barberan, Durst, HP, and Sun Automation~~share.

~~Our~~For ~~Reggiani industrial digital inkjet textile printers compete with Dover~~example, ~~Durst,~~the ~~Mimaki,~~local ~~Roland,~~competitors ~~Epson,~~in ~~Konica~~the ~~Minolta,~~Chinese ~~Robustelli,~~and ~~Atexco,~~Korean ~~Shenzhen~~markets ~~Homer Textile,~~are ~~Kornit~~developing, ~~Ricoh~~manufacturing, and ~~Digital~~selling ~~Graphics.~~inexpensive ~~Competitive~~printers ~~digital~~mainly ~~inkjet~~to ~~textile~~the ~~printers~~local ~~are~~markets ~~manufactured~~and in ~~Italy,~~the ~~Japan,~~ceramic ~~China~~tile decoration market, ~~and~~small ~~smaller~~Chinese ~~emerging~~ceramic ~~markets~~tile ~~such~~decoration asdigital ~~Indonesia.~~inkjet ~~Key~~printer ~~competitors~~manufacturers ~~driving~~and ~~digitalization~~European ofmanufacturers ~~the~~have ~~textile~~been ~~printer~~reducing ~~market include~~prices ~~Dover~~to ~~and~~gain ~~Kornit~~market share. ~~Reggiani~~We also ~~competes~~face ~~with~~competition ~~other~~from ~~digital~~existing ~~inkjet~~conventional ~~textile~~and ~~printing~~digital ~~technologies~~inkjet ~~including pre~~super-~~washing~~wide and ~~post-washing~~wide format printing ~~techniques.~~methods,

Our Cretaprint ceramic tile decoration digital inkjet printers compete with ceramic tile decoration printers manufactured in Spain (KERAjet), Austria (Durst), Italy (Technoferrari, Projecta, Intesa, and System), China (Flora, Hope, Meijia, and Teckwin), and smaller emerging competition in other markets such as Indonesia. The ceramic tile industry has experienced a relocation from southern Europe to the emerging markets of China, India, Brazil, and Indonesia. Competition in the Chinese market consists of small Chinese ceramic tile decoration digital inkjet printers and European manufacturers that are reducing prices to gain market share. In addition to our facility in Spain, we operate a Cretaprint sales and support center in Foshan, Guangdong, China, which is home to the largest concentration of ceramic tile manufacturers in China. 19

~~Productivity~~including ~~Software~~screen printing and offset printing and Reggiani faces competition from other digital inkjet textile printing technologies including pre-washing and post-washing printing techniques.

~~Our~~We ~~Productivity~~face ~~Software operating~~strong ~~segment, which includes our business process automation, cloud-based order entry and order management systems, cross media marketing, and imposition solution systems faces~~ competition ~~from~~for ~~software application vendors that specifically target the~~ printing ~~industry.~~supplies ~~These~~such ~~vendors~~as ~~are~~ink ~~typically~~and ~~small,~~we ~~privately-owned~~have ~~companies.~~experienced Wesupply ~~also~~issues ~~face~~in ~~competition~~ink ~~from larger vendors that currently offer~~production, orwhich ~~are~~may ~~seeking~~limit toour ~~develop,~~growth ~~business process automation printing products including HP, Epicor, and SAP. We face competition from Oracle, SAP, Kiwiplan, and Heidelberg~~ in ~~the~~ink ~~packaging software market~~sales.

~~Our~~We ~~Optitex~~compete ~~3D CAD software competes~~ with ~~Lectra,~~independent ~~Assyst,~~manufacturers ~~CLO, Browzwear, and Gerber. Optitex provides 2D CAD design and 3D CAD visualization~~ in the ~~same~~ink ~~application.~~market ~~Therefore,~~consisting ~~the~~of ~~CAD~~smaller ~~information~~vendors, ~~and~~as ~~the~~well 3Das ~~information~~larger ~~are~~vendors ~~tightly~~such ~~integrated.~~as ~~Furthermore,~~DuPont ~~the~~Digital ~~incremental~~Printing ~~learning curve~~and ~~from~~Sun ~~using 2D to using 3D is minimal~~Chemical.

~~Fiery~~Our UV curable ink is sold to users of our super-wide and wide format UV industrial inkjet printers, which have advanced quality control systems to ensure that correct color and non-expired ink is used to prevent damage to the printer. This results in most ink used in our super-wide and wide format printers being sold by us. While third party ink is available, its use compromises the printer’s quality control system and voids most provisions of our printer warranty and service contracts. Nevertheless, we cannot guarantee we will be able to remain the principal ink supplier for our super-wide and wide format UV industrial inkjet printers. We could experience an overall price reduction within the ink market, which would also adversely affect our gross profit.

~~The~~We ~~principal~~sell ~~competitive~~both ~~factors~~our ~~affecting~~own ~~the~~inks ~~market~~and ~~for~~third party branded textile ink to users of our ~~Fiery~~textile ~~solutions~~inkjet ~~include~~printer. ~~customer~~We ~~service~~offer a strong value proposition with our own and ~~support,~~third ~~product~~party ~~reputation,~~branded ~~quality~~inks, ~~performance, price,~~but ~~and~~cannot ~~product~~guarantee ~~features~~that ~~such~~we aswill ~~functionality,~~be ~~scalability,~~the ~~ease~~primary supplier of ~~use,~~textile ~~and~~ink ~~ability~~ to ~~interface~~the ~~with~~users ~~products~~of ~~produced~~our byprinters ~~the~~as ~~significant~~these ~~printer~~branded ~~manufacturers.~~inks are available on the market.

20Our solvent-based ceramic ink is sold to users of our ceramic tile decoration inkjet printers. The ceramic ink market is generally an open system for ink and therefore customers may change between suppliers. Although we are focused on developing this recurring revenue stream, we cannot guarantee that we will become the primary supplier of ceramic ink to the users of our printers.

~~Table~~In addition, we have recently experienced supply issues, primarily in China, where we saw changes in tariff structure, price increases in ink components, and short supplies of ~~Contents~~ink components due to reduced production levels at a number of suppliers, which limited the amount of ink we could manufacture. Although we are working to increase purchases from new sources for ink components, we may not be able to supply the same volume of ink as we have historically and may lose market share to our competitors, thereby limiting our growth in ink sales.

~~Although~~If ~~we have direct relationships with each of~~ the ~~leading~~market printer manufacturers and work closely with them to integrate Fiery DFE and software technology into the design and development of their print engines to maximize their quality and capability, our primary competitors for ~~stand-alone~~digital ~~color~~textile ~~DFEs,~~printing ~~embedded~~does ~~DFEs,~~not ~~and~~develop ~~design-licensed~~as solutions are these same leading printer manufacturing companies. They each maintain substantial investments in research and development. Some of this investment is targeted at integrating products and technology that we have designed and some of this investment is targeted at developing products and technology that compete with our Fiery brand. Our acquisition of certain assets of the FFPS business from Xerox may mitigate this competition from one of our Fiery customers. We are the largest third party DFE developeranticipate, although our market compared with DFEs developed internally by the leading printer manufacturers is small. We believe that our advantages include continuously advancing technology, short time-to-market, brand recognition, end user loyalty, sizable installed base, number of products supported, price driven by lower development costs, and market knowledge. We intend to continue to develop new DFEs with capabilities that meet the changing needs of the printer manufacturers’ product development roadmaps. Although we domay not ~~directly~~be ~~control~~able ~~the distribution channels, we provide a variety of features as well as unique “look and feel”~~ to ~~the~~grow ~~printer manufacturers’ products to differentiate~~ our ~~customers’~~digital ~~products~~inkjet ~~from~~textile ~~those~~printing ~~of their competitors~~business. ~~Ultimately, we believe that end customer and reseller channel preference for the Fiery DFE and software solutions drives demand for Fiery products through the printer manufacturers.~~

~~Intellectual~~If ~~Property~~the ~~Rights~~global printed textile industry does not broadly accept digital printing as an alternative to either analog printing or single color (dyed) garments, our revenue may not grow as quickly as expected. Widespread adoption of digital textile printing depends on the willingness and ability of businesses in the printed textile industry to replace their existing analog printing systems and single color (dyed) garments with digital printing systems. The adoption of digital textile printing is dependent to some extent on the growth of “fast fashion.”

WeA ~~rely~~key onelement aof ~~combination~~our ofdigital ~~patent,~~inkjet ~~copyright,~~textile ~~trademark,~~printing ~~and~~growth ~~trade~~strategy ~~secret~~is ~~laws;~~to ~~non-disclosure~~market ~~agreements;~~digital ~~and~~inkjet ~~other contractual~~printing ~~provisions~~systems to ~~establish,~~contract ~~maintain,~~printers ~~and~~that ~~protect~~serve ~~our~~major ~~intellectual~~textile ~~property~~brand ~~rights~~owners and fashion designers. ~~Although~~If weleading ~~believe~~textile ~~that~~brand ~~our~~owners ~~intellectual~~and ~~property~~fashion ~~rights~~designers are ~~important~~not convinced of the benefits of digital inkjet textile printing or if there is a significant reduction in the popularity of printed textiles, especially those that are customized or personalized, among the consumers to ~~our~~whom ~~business~~such brand owners and fashion designers cater, noor ~~single~~if ~~patent~~these businesses decide that digital inkjet printing processes are less reliable, ~~copyright~~less cost-effective, ~~trademark~~lower quality, or ~~trade~~otherwise ~~secret~~less issuitable ~~solely responsible~~ for their commercial needs than analog printing processes and single color (dyed) garments, then the ~~development~~market for digital textile printers and ~~manufacturing~~software ofmay not develop as we anticipate and we may not be able to grow our ~~products.~~inkjet textile printing business.

We are currently pursuing patent applications in the U.S. and certain foreign jurisdictions to protect various inventions. Over time, we have accumulated a portfolio of patents issued in these jurisdictions. We own or have rights to the copyrights to the software code in our products and the rights to the trademarks under which our products are marketed. We have registered certain trademarks in the U.S. and certain foreign jurisdictions and will continue to evaluate the registration of additional trademarks as appropriate. 20

~~Certain~~We ofdo ~~our~~not ~~products~~typically ~~include~~have ~~intellectual~~long-term ~~property~~purchase ~~licensed~~commitments ~~from~~with ~~our~~the ~~customers.~~printer Wemanufacturer ~~have~~customers ~~also~~that ~~granted~~purchase and ~~may~~resell ~~continue to grant licenses to~~ our ~~intellectual property,~~Fiery ~~when~~DFE and assoftware wesolutions. ~~deem~~They ~~appropriate.~~have ~~For~~in athe ~~discussion~~past ofreduced ~~risks~~or ~~relating~~ceased to ~~our~~purchase ~~intellectual~~products ~~property~~from us, ~~see~~and ~~Item 1A:~~could ~~Risk~~at ~~Factors—We~~any ~~may~~time bein ~~unable~~the tofuture ~~adequately~~reduce ~~protect~~or ~~our~~cease ~~proprietary~~to ~~information~~purchase ~~and~~products ~~may~~from ~~incur~~us, ~~expenses~~thereby toharming ~~defend~~ our ~~proprietary~~operating ~~information~~results and business.

~~Financial~~Although ~~Information~~end ~~about~~customer ~~Foreign~~and reseller channel preference for Fiery DFE and ~~Domestic~~software ~~Operations~~solutions drives demand, most Fiery revenue relies on printer manufacturers to integrate Fiery technology into the design and ~~Export~~development ~~Sales~~of their print engines. We have established direct relationships with several leading printer manufacturers and work closely with them to design, develop, and integrate Fiery DFE and software technology to maximize the capability of their print engines. These manufacturers act as distributors and sell Fiery products to end customers through reseller channels. A significant portion of our revenue is, and has been, generated by sales of our Fiery DFE and software solutions to a relatively small number of leading printer manufacturers. Our reliance on revenue from the leading printer manufacturers was 22%, 26%, and 28% of our consolidated revenue, during 2018, 2017, and 2016, respectively. Because sales of our Fiery products constitute a significant portion of our revenue and there are a limited number of printer manufacturers producing printers in sufficient volume to be attractive customers for us, we expect that we will continue to depend on a relatively small number of printer manufacturers for a significant portion of our Fiery revenue in future periods. Accordingly, if we lose or experience reduced sales to one of these printer manufacturer customers, we will have difficulty replacing that revenue with sales to new or existing customers.

~~See~~With ~~Note~~the ~~14—Segment~~exception ~~Information~~of certain minimum purchase obligations, ~~Geographic~~we ~~Regions~~typically do not have long-term volume purchase contracts with our significant printer manufacturer customers, ~~and~~including ~~Major~~Konica ~~Customers~~Minolta, Ricoh, and ~~Note~~Canon, ~~11—Income~~and ~~Taxes~~they ofare ~~the~~not ~~Notes~~obligated to ~~Consolidated~~purchase ~~Financial~~products ~~Statements~~from us. ~~See~~ ~~also~~Accordingly, ~~Item 1A:~~our ~~Risk~~printer ~~Factors—We~~manufacturer ~~face~~customers ~~risks~~could at any time reduce their purchases from us or cease purchasing our ~~international~~products ~~operations~~altogether. In the past, these printer manufacturer customers have elected to develop products on their own for sale to end customers, incorporated technologies developed by other companies into their products, and have directly sold third party competitive products, rather than rely solely or partially on our products. We ~~face~~expect ~~risks~~that ~~from~~these ~~currency~~printer ~~fluctuations~~manufacturer customers will continue to make such elections in the future.

~~Item 1A:~~Many ~~Risk~~of ~~Factors~~the products and technologies we are developing require that we coordinate development, quality testing, marketing, and other tasks with these printer manufacturers. We cannot control their development efforts or the timing of these efforts. We rely on these printer manufacturers to develop new printer and copier solutions, applications, and product enhancements that utilize our Fiery DFE technologies and software solutions in a timely and cost-effective manner. Our success in the DFE industry depends on the ability of these printer manufacturers to utilize our technologies to develop the right solutions with the right features to meet ever changing customer requirements and responding to emerging industry standards and other technological changes.

IfBecause weour ~~fail~~printer tomanufacturer ~~continue~~customers toincorporate ~~introduce~~our ~~new~~products into products ~~that~~they ~~achieve~~manufacture ~~market~~and ~~acceptance~~sell, onany decline in demand for copiers or laser printers or any other negative developments affecting our major customers or the computer industry in general, including reduced end user demand, would likely harm our results of operations. Certain printer manufacturer customers have experienced serious financial difficulties in the past, which led to a ~~timely~~decline ~~basis~~in sales of our products. If any significant customers face such difficulties in the future, weour ~~will~~operating ~~not~~results could be ~~able~~ toharmed ~~compete~~through, ~~effectively~~among other things, decreased sales volume, write-off of accounts receivable, and wewrite-off ~~will~~of beinventories ~~unable~~related to ~~increase~~products orwe ~~maintain~~have ~~net~~manufactured ~~revenue~~for ~~and~~these ~~gross~~customers’ ~~margins~~products.

WeEconomic ~~operate~~uncertainty inhas anegatively ~~highly~~affected ~~competitive~~our ~~and quickly~~business ~~changing environment. Our future success depends~~ in ~~large~~the ~~part~~past ~~upon our ability to identify demand trends~~ and ~~quickly~~may ~~develop~~negatively oraffect ~~acquire, and manufacture and sell, products that satisfy these demands in a cost-effective manner. In order to differentiate~~ our ~~products~~business ~~from our competitors’ products, we must continue to increase our focus and capital investment~~ in ~~research~~the ~~and development~~future. ~~For~~

21Our revenue and profitability depend significantly on the overall demand for information technology products that enable printing of digital data, which in turn depends on a variety of macro- and micro-economic conditions. In addition, revenue growth and profitability in our Industrial Inkjet operating segment depends on demand and spending for advertising and marketing products and programs, which also depends on a variety of macro-and micro-economic conditions.

~~Table~~Uncertainty about current global economic conditions poses a risk as our customers may delay purchases of ~~Contents~~our products in response to tighter credit, negative financial news, and/or declines in income or asset values. For example, during the fourth quarter, we experienced many of our customers delaying spending on capital equipment and software as they became

example, we have committed substantial resources expressed in both man-hours and financial investment to the development of our Nozomi single-pass industrial digital inkjet platform, which was launched in the third quarter of 2017, for the corrugated, paper packaging, display printing, and other related markets. We have invested significantly in the research and development, sales and marketing, and manufacturing processes required to successfully launch this product. While we have sold a limited number of printers, we are unable to predict the actual level of demand for this product because Nozomi is a new product. If this product is not successful in the market, then our consolidated financial position and results of operations could be materially impacted. 21

~~Successfully predicting~~increasingly ~~demand~~concerned ~~trends~~about isthe ~~difficult,~~economic environment. Any financial turmoil affecting the banking system and itfinancial ismarkets ~~very~~and ~~difficult~~the topossibility ~~predict~~that financial institutions may consolidate or terminate their activities have resulted in a tightening in the ~~effect~~credit ~~introducing~~market, a ~~new~~low ~~product~~level ~~will~~of ~~have~~liquidity onin ~~existing~~many ~~product~~financial ~~sales~~markets, and extreme volatility in fixed income, credit, currency, and equity markets. WeThere ~~will~~could ~~also~~be ~~need~~a tonumber ~~respond~~of ~~effectively~~follow-on toeffects ~~new~~from ~~product~~a ~~announcements~~credit bycrisis on our ~~competitors~~business, ~~and~~including ~~quickly introduce~~insolvency ~~competitive~~of ~~products.~~key ~~Any~~suppliers ~~delays~~resulting in product ~~development~~delays; ~~and~~inability ~~introduction,~~of orcustomers ~~product~~and ~~introductions~~distributors ~~that~~to doobtain ~~not~~credit ~~meet~~to ~~broad~~finance ~~market~~purchases ~~acceptance,~~of orour ~~unsuccessful~~products ~~launches~~and/or ofcustomer ~~new~~and ~~product~~distributor ~~lines,~~insolvencies; ~~could~~increased ~~result~~difficulty in: managing inventories; and other financial institutions negatively impacting our treasury operations.

•Economic ~~loss~~uncertainty remains in the European countries due to uncertainty associated with Brexit, uncertainty in Spain related to Catalonia, and uncertainty in Italy related to significant public debt and uncollectible loans in the banking system, among other considerations. We have no European sovereign debt investments. Our European debt investments consist of ornon-sovereign ~~delay~~corporate debt securities of $4.5 million, which represents 10% of our corporate debt instruments (4% of our short-term investments) as of December 31, 2018. European debt investments are with corporations domiciled in ~~revenue~~the northern and ~~loss~~central European countries of Netherlands, Sweden, and France. We do not have any short-term investments with corporations domiciled in the higher risk “southern European” countries (i.e., Italy, Spain, and Portugal). We believe that we do not have significant exposure with respect to our money market ~~share;~~and corporate debt investments in Europe, although we do have some exposure due to the interdependencies among the European Union countries.

•Economic ~~negative~~conditions ~~publicity~~ and ~~damage~~regulatory changes leading up to and following the United Kingdom’s likely exit from the European Union could have a material adverse effect on our ~~reputation~~business and ~~brands;~~results of operations.

•There remains significant uncertainty about the process for and the impacts of the U.K.'s leaving the European Union, typically referred to as Brexit. While the full effects of Brexit will not be known for some time, Brexit could cause disruptions to, and create uncertainty surrounding, our business and results of operations. The most immediate effect has been significant volatility in global equity and debt markets and currency exchange rate fluctuations. Ongoing global market volatility and a ~~decline~~deterioration in economic conditions due to uncertainty surrounding Brexit, could significantly disrupt the ~~average~~markets ~~selling~~in ~~price~~which ofwe operate and lead our ~~products;~~customers to closely monitor their costs and delay capital spending decisions.

•The ~~adverse~~effects ~~reactions~~of inBrexit ~~our~~will ~~sales~~depend ~~channels~~on any agreements the U.K. makes to retain access to E.U. markets, ~~such~~either asduring ~~reduced~~a ~~online~~transitional ~~product~~period ~~visibility~~or more permanently. The measures could potentially disrupt the markets we serve and may cause us to lose customers and employees. In addition, Brexit could lead to legal uncertainty and potentially divergent national laws and regulations as the U.K. determines which E.U. laws to replace or ~~loss~~replicate ofas awell ~~sales~~as ~~channel;~~potential import duties for the products we produce in the U.K. and export to the European Union.

•We ~~product~~have ~~returns;~~significant orcustomers and operations in the U.K. and any of these effects of Brexit could adversely affect our business, results of operations and financial condition.

•Our ~~failure~~business, toresults ~~recover~~of ~~amounts~~operations, ~~invested~~and financial condition may be negatively impacted by conditions abroad, including local economies, political environments, fluctuating foreign currencies, shifting regulatory schemes, and the imposition of tariffs.

~~The~~A ~~market~~significant ~~for~~amount of our ~~super-wide~~revenue is generated from operations outside the U.S. We expect that sales outside of the U.S. will continue to represent a significant portion of our total revenue. We maintain significant operations and ~~wide~~acquire ~~format~~or ~~industrial~~manufacture ~~digital inkjet~~many ~~printers~~of isour ~~extremely~~products ~~competitive~~and/or their components outside the U.S. Our future revenue, costs, and results of operations could be significantly affected by changes in each country’s economic conditions, foreign currency exchange rates relative to the U.S. dollar, political conditions, trade protection measures, licensing requirements, local tax issues, capitalization, and other related legal matters. If our future revenue, costs, and results of operations are significantly affected by economic conditions abroad, our results of operations and financial condition could be negatively impacted. Specifically, the deceleration of the economy in China has negatively impacted, and may continue to negatively impact, our results of operations as our customers in China reduce their spending. The Chinese government continues to rebalance the country’s economic model with tightening real estate and environmental regulation.

~~Our~~In ~~super-wide and wide format industrial digital inkjet products compete against several companies that market industrial digital inkjet printing systems based on electrostatic~~addition, ~~drop-on-demand,~~we ~~and~~work ~~continuous drop-on-demand~~with ~~inkjet,~~some ~~and~~suppliers ~~other~~located ~~technologies~~in ~~and~~China ~~printers utilizing UV curable ink including Agfa, Durst, Canon, HP, Inca, Mimaki, Roland, and Mutoh. Certain competitors have greater resources~~ to ~~develop~~obtain ~~new~~certain ~~products~~components ~~and~~for ~~technologies~~our ~~and market those~~ products,. asThe ~~well~~United asStates ~~acquire~~government orhas ~~develop~~recently ~~critical~~announced ~~components~~import attariffs ~~lower~~on ~~costs,~~goods ~~which~~manufactured ~~would~~in ~~provide them with a competitive advantage~~China. ~~They~~These ~~could~~tariffs, ~~also~~depending ~~exert downward~~upon ~~pressure~~the ~~on product pricing to gain market share.~~

Reggiani industrial digital inkjet textile printers address the full scope of advanced textile printing with versatile printers suitable for water-based dispersed, acid, pigment, and reactive dye printing ink. Our Reggiani textile printers compete with printers offered by Dover, Durst, Mimaki, Roland, Epson, Konica Minolta, Robustelli, Atexco, Shenzhen Homer Textile, Kornit, and Digital Graphics. Competitive digital inkjet textile printers are manufactured in Italy, Japan, China, and smaller emerging markets such as Indonesia. Reggiani also competes with other digital inkjet textile printing technologies including pre-washing and post-washing printing techniques. 22

~~The~~ultimate ~~local~~scope, ~~competitors in~~duration ~~the Chinese~~ and ~~Korean~~how ~~markets~~they are ~~developing~~implemented, ~~manufacturing,~~could ~~and~~negatively ~~selling~~impact ~~inexpensive~~our ~~printers~~business ~~mainly~~by continuing to ~~the~~increase ~~local~~our ~~markets~~costs and by making our products less competitive. ~~Our~~We ~~ability~~may not be able to ~~compete~~pass ~~depends~~such increased costs on ~~factors~~to ~~both~~our ~~within~~customers. ~~and~~In addition, any changes to suppliers outside of China may increase our ~~control,~~costs ~~including~~and could impact the ~~price~~global competitiveness of our products. We sell U.S. origin products in the Chinese market and any tariffs on U.S. goods imposed by the Chinese government, ~~performance~~depending upon the ultimate scope, duration and ~~acceptance~~ ofhow they are implemented, could negatively impact our ~~current~~business ~~printers~~by ~~and~~making ~~any~~our products weless ~~develop~~competitive in ~~the~~that ~~future~~market.

We ~~also~~ face ~~competition~~risks from ~~existing~~currency ~~conventional and digital inkjet super-wide and wide format printing methods, including screen printing and offset printing~~fluctuations. ~~Our competitors could develop new products, with existing or new technology, that could be more competitive in our market than our printers.~~

~~The~~Given ~~market~~the ~~for~~significance of non-U.S. sales to our ~~ceramic~~total ~~tile~~revenue, ~~decoration~~we ~~digital~~face ~~inkjet~~a ~~printers~~continuing isrisk ~~very~~from ~~competitive~~the fluctuation of the U.S. dollar versus foreign currencies. Although the majority of our receivables are invoiced and collected in U.S. dollars, we have exposure from non-U.S. dollar-denominated sales (consisting primarily of the Euro, British pound sterling, and Chinese renminbi). We have a substantial number of international employees and facilities, resulting in material operating expenses denominated in foreign currencies. We have exposure from non-U.S. dollar-denominated operating expenses in foreign countries (primarily the Euro, British pound sterling, Israeli shekel, and Indian rupee).

~~Our~~We ~~Cretaprint~~can ~~ceramic~~benefit ~~tile~~from ~~decoration~~or ~~digital~~be ~~inkjet~~adversely ~~printer~~affected ~~competes~~by either a weaker or stronger U.S. dollar relative to major currencies worldwide with ~~ceramic~~respect ~~tile~~to ~~decoration~~our ~~printers~~consolidated ~~manufactured~~financial instatements. ~~Spain~~Accordingly, ~~Austria,~~we ~~Italy,~~can ~~Brazil, China,~~benefit from a stronger U.S. dollar due to the corresponding reduction in our foreign operating expenses translated into U.S. dollars and ~~smaller~~at ~~emerging~~the ~~competitors~~same time we can be adversely affected by a stronger U.S. dollar due to the corresponding reduction in ~~other~~foreign ~~markets~~revenue ~~such~~translated into U.S. dollars. From time to time we have hedged our operating expense exposure in Indian rupees. We did not have any foreign currency derivative contracts designated as cash flow hedges as of December 31, 2018.

22We hedge balance sheet remeasurement exposures using forward contracts not designated for hedge accounting treatment with notional amounts of $191.8 million as of December 31, 2018. Forward contracts not designated as hedging instruments consist of hedges of Australian dollars, British pounds sterling, Canadian dollars, Chinese renminbi, Euro, Israeli shekel, and Japanese yen. Please refer to Note 11 – Derivatives and Hedging of Notes to Consolidated Financial Statements for further information.

~~Table~~As of ~~Contents~~December 31, 2018, we had not entered into hedges against any other currency exposures, but we may consider hedging against movements in other currencies in the future. Our efforts to reduce risk from our international operations and from fluctuations in foreign currencies or interest rates may not be successful, which could harm our financial condition and operating results.

~~Indonesia.~~We ~~The~~face ~~ceramic~~risks ~~tile industry has experienced relocation~~ from southern Europe to the emerging markets of China, India, Brazil, and Indonesia. Competition in the Chinese market consists of small Chinese ceramic tile decoration digital inkjet printers and European manufacturers that are reducing prices to gain market share. In addition to our ~~facility~~international ~~in Spain, we operate a Cretaprint sales and support center in Foshan, Guangdong, China, which is home to the largest concentration of ceramic tile manufacturers in China~~operations.

~~Our~~We ~~ceramic~~are ~~tile~~subject ~~decoration~~to ~~imaging~~certain ~~competitors~~risks ~~are~~because ~~a mix~~ of ~~large,~~ medium, and small ceramic tile decoration printer manufacturers, which are primarily privately-owned. Our competitors could develop new products, with existing or new technology, that could be more competitive in our ~~market~~international ~~than~~operations ~~our ceramic tile decoration digital inkjet printers.~~ including:

We• ~~face~~restrictions ~~strong~~on ~~competition~~our ~~for~~ability ~~printing~~to ~~supplies~~access cash generated by international operations, especially in China and Brazil, due to restrictions on the repatriation of dividends, distribution of cash to shareholders outside such ascountries, ~~ink.~~foreign exchange control, and other restrictions;

We• ~~compete~~security ~~with~~concerns, ~~independent~~such ~~manufacturers~~as inarmed ~~the~~conflict ~~ink~~and ~~market~~civil ~~consisting~~or ofmilitary ~~smaller~~unrest, ~~vendors~~crime, aspolitical ~~well~~instability, asand ~~larger~~terrorist ~~vendors such as DuPont Digital Printing.~~ activity;

~~Our~~• UVcustomer ~~curable~~credit ~~ink is sold to users of our super-wide and wide format UV industrial inkjet printers~~risk, ~~which~~especially ~~have advanced quality control systems to ensure that correct color and non-expired ink is used to prevent damage to the printer. This results~~ in ~~most~~emerging ~~ink~~or ~~used~~economically inchallenged ~~our super-wide and wide format printers being sold by us. While third party ink is available~~regions, ~~its~~with ~~use~~accompanying ~~compromises~~challenges ~~the printer’s quality control system and voids most provisions of our printer warranty and service contracts. Nevertheless, we cannot guarantee we will be able~~ to ~~remain~~enforce ~~the principal ink supplier for~~ our ~~super-wide~~ ~~and~~legal ~~wide~~rights ~~format~~should UVcollection ~~industrial~~issues ~~digital inkjet printers. We could experience an overall price reduction within the ink market, which would also adversely affect our gross profit.~~ arise;

We• ~~sell~~changes ~~third~~in ~~party~~governmental ~~branded~~regulation, ~~textile~~including ~~ink~~labor toregulations, ~~users~~and of our ~~textile~~inability ~~digital~~or ~~inkjet~~failure ~~printer.~~to Weobtain ~~offer~~required aapprovals, ~~strong value proposition with our third party branded ink~~permits, ~~but~~ ~~cannot~~or ~~guarantee~~registrations ~~that~~could weharm ~~will~~our beinternational ~~the~~and ~~primary~~domestic ~~supplier~~sales ofand ~~textile~~adversely ~~digital~~affect ~~ink to the users of~~ our ~~printers~~revenue, asbusiness, ~~these~~and ~~branded ink are available on the market.~~ operations;

~~Our~~• ~~solvent-based~~violations ~~ceramic digital ink is sold to users~~ of ~~our~~governmental ~~ceramic~~regulation, ~~tile~~including ~~decoration~~labor ~~digital~~regulations, ~~inkjet~~could ~~printers.~~result ~~The~~in ~~ceramic~~fines ~~ink market is generally an open system for ink~~ and ~~therefore~~penalties, ~~customers~~including ~~may~~prohibiting ~~change~~us ~~between~~from ~~suppliers.~~exporting ~~Although~~our weproducts ~~are~~to ~~focused~~one onor ~~developing~~more ~~this recurring revenue stream~~countries, weand ~~cannot~~could ~~guarantee~~materially ~~that~~adversely weaffect ~~will become the primary supplier of ceramic digital ink to the users of~~ our ~~printers.~~ business;

If• ~~the~~trade ~~market~~legislation ~~for~~in ~~digital~~either ~~textile~~the ~~printing~~U.S. ~~does~~or ~~not~~other ~~develop~~countries, such as wea ~~anticipate~~change in the current tariff structures, weexport ~~may~~compliance ~~not~~laws, beor ~~able~~other totrade ~~grow~~policies, could adversely affect our ~~digital~~ability ~~inkjet~~to ~~textile~~sell ~~printing business.~~or manufacture in international markets;

If the global printed textile industry does not broadly accept digital printing as an alternative to either analog printing or single color (dyed) garments, our revenue may not grow as quickly as expected. Widespread adoption of digital textile printing depends on the willingness and ability of businesses in the printed textile industry to replace their existing analog printing systems and single color (dyed) garments with digital printing systems. The adoption of digital textile printing is dependent to some extent on the growth of “fast fashion.” 23

A• ~~key~~adverse ~~element~~tax ofconsequences, ~~our~~including ~~digital~~imposition inkjet textile printing growth strategy is to market digital inkjet printing systems to contract printers that serve major textile brand owners and fashion designers. If leading textile brand owners and fashion designers are not convinced of ~~the~~withholding ~~benefits of digital inkjet textile printing~~ or ifother ~~there~~taxes ison apayments ~~significant~~by ~~reduction in the popularity of printed textiles~~subsidiaries, ~~especially~~ ~~those that are customized or personalized, among the consumers to whom such brand owners~~ and fashion designers cater, or if these businesses decide that digital inkjet printing processes are less reliable, less cost-effective, lower quality, or otherwise less suitable for their commercial needs than analog printing processes and single color (dyed) garments, then the market for digital textile printers and software may not develop as we anticipate and we may not be able to grow our inkjet textile printing business.

23• some of our sales to international customers are made under export licenses that must be obtained from the U.S. Department of Commerce (“DOC”) and certain transactions require prior approval of the DOC or other governmental agencies.

~~Table~~We incur additional legal compliance costs associated with our international operations and could become subject to legal penalties in foreign countries if we do not comply with local laws and regulations, which may be substantially different from those in the U.S. In many foreign countries, particularly those with developing economies, it may be common to engage in business practices that are prohibited by U.S. regulations such as the Foreign Corrupt Practices Act of ~~Contents~~1977, as amended. Although we have implemented policies and procedures designed to ensure compliance with these laws, there can be no assurance that all of our employees, contractors, and agents, as well as outsourced business operations, including those based in or from countries where practices that violate such U.S. laws may be customary, will not take actions in violation of our policies. Furthermore, there can be no assurance that employees, contractors, and agents of acquired companies did not take actions in violation of such laws and regulations prior to the date they were acquired by us, although we perform due diligence procedures to endeavor to discover any such actions prior to the acquisition date.

We ~~face~~license ~~strong~~software ~~competition~~used in most of our Fiery products and certain Productivity Software ~~operating~~products ~~segment~~from Adobe and the loss of these licenses would prevent shipment of these products.

~~Our~~We ~~Productivity~~are ~~Software~~required ~~operating~~to ~~segment,~~obtain ~~which~~separate ~~includes~~licenses ~~our~~from ~~business~~Adobe ~~process~~for ~~automation,~~the ~~cloud-based~~right ~~order~~to ~~entry~~use ~~and~~Adobe ~~order~~PostScript® ~~management,~~software ~~cross~~in ~~media marketing~~each copier or printer model that uses a Fiery DFE, and ~~imposition~~other ~~solution~~Adobe ~~systems~~software ~~faces~~for ~~competition~~certain ~~from~~Productivity ~~software~~Software ~~application~~products. ~~vendors~~Although ~~that~~to ~~specifically~~date ~~target~~we ~~the~~have ~~printing~~successfully ~~industry.~~obtained ~~These~~licenses ~~vendors~~to ~~are~~use ~~typically~~Adobe ~~small~~PostScript ® and ~~privately-owned~~other ~~companies.~~Adobe Wesoftware ~~also~~when ~~face~~required, ~~competition~~Adobe ~~from~~is ~~larger vendors~~not required to, and we cannot be certain that ~~currently~~Adobe ~~offer~~will, orgrant ~~are~~future ~~seeking~~licenses to ~~develop,~~Adobe ~~business~~PostScript® ~~process~~and ~~automation~~other ~~printing~~Adobe ~~products~~software ~~including~~on HPreasonable terms, ~~Epicor~~in a timely manner, ~~and~~or ~~SAP~~at all. WeTo ~~face~~obtain ~~competition~~licenses from ~~Oracle~~Adobe, ~~SAP,~~Adobe ~~SolarSoft~~requires that we obtain quality assurance approvals from them for our products that use Adobe software. Although to date we have successfully obtained such quality assurance approvals from Adobe, ~~and~~we ~~Heidelberg~~cannot be certain they will grant us such approvals in the ~~packaging~~future. ~~software~~If ~~market.~~Adobe ~~Our~~does ~~Optitex~~not ~~3D CAD~~grant ~~software~~us ~~competes~~such ~~with~~licenses ~~Lectra,~~or ~~Assyst~~approvals, ~~CLO,~~if ~~Browzwear~~the Adobe licenses are terminated, ~~and~~or ~~Gerber.~~if ~~There~~our ~~can~~relationship beis nootherwise ~~assurance~~materially ~~that~~impaired, we ~~will~~would ~~continue~~likely be unable to ~~advance~~sell ~~our~~products ~~technology~~that ~~and~~incorporate ~~products~~Adobe PostScript ® or ~~compete~~other ~~effectively~~Adobe ~~against~~software ~~other~~and ~~companies’~~our ~~product~~financial ~~offerings.~~condition and results of operations would be significantly harmed.

We domanufacture ~~not typically have long~~super-~~term~~wide ~~purchase~~and ~~commitments~~wide ~~with~~format ~~the~~industrial ~~printer~~digital ~~manufacturer~~inkjet ~~customers~~printers ~~that~~and ~~purchase~~formulate ~~our~~UV ~~Fiery~~curable, ~~DFE~~LED curable, and ~~software~~reactive ~~solutions.~~dye ~~They have~~ink in ~~the~~single ~~past~~locations. ~~reduced~~Any orsignificant ~~ceased,~~interruption ~~and could at any time~~ in the ~~future~~manufacturing ~~reduce~~process orat ~~cease,~~these tofacilities ~~purchase~~could ~~products~~adversely ~~from~~affect ~~us, thereby harming~~ our ~~operating results and~~ business.

~~Although~~Our ~~end~~VUTEk ~~customer~~hybrid super-wide and ~~reseller~~wide ~~channel~~format ~~preference~~industrial ~~for~~digital ~~Fiery~~inkjet ~~DFE~~printers ~~and~~are ~~software~~primarily ~~solutions~~manufactured ~~drives~~in ~~demand,~~a ~~most~~single ~~Fiery~~location ~~revenue~~in ~~relies~~our onManchester, ~~printer~~New ~~manufacturers~~Hampshire ~~to integrate~~facility. ~~Fiery~~Our ~~technology~~VUTEk ~~into~~roll-to-roll ~~the~~super-wide ~~design~~format ~~and~~industrial ~~development~~digital ofinkjet ~~their~~printers ~~print~~are ~~engines.~~manufactured Wein ~~have~~a ~~established~~single ~~direct~~location ~~relationships~~in ~~with~~our ~~several~~Rosh ~~leading~~Ha’Ayin, ~~printer~~Israel ~~manufacturers~~facility. ~~and~~Our ~~work~~FabriVU ~~closely~~and ~~with~~other ~~them~~Reggiani toindustrial ~~design,~~digital ~~develop,~~inkjet ~~and~~textile ~~integrate~~printers ~~Fiery~~are ~~DFE~~manufactured ~~and software~~in ~~technology~~a tosingle ~~maximize~~location ~~the~~in ~~capability~~our ofBergamo, ~~their~~Italy ~~print engines~~facility. ~~These~~Our ~~manufacturers~~Cretaprint ~~act~~ceramic astile ~~distributors~~decoration and ~~sell~~Nozomi ~~Fiery~~corrugated ~~products~~packaging todigital ~~end~~inkjet ~~customers~~printers ~~through~~are ~~reseller~~manufactured ~~channels.~~in Aa ~~significant~~single ~~portion~~location ofin our ~~revenue is~~Castellon, ~~and~~Spain ~~has~~facility. ~~been,~~We ~~generated~~formulate ~~by sales of~~ our ~~Fiery~~UV ~~DFE~~curable and ~~software~~LED ~~solutions~~curable todigital aink ~~relatively~~that ~~small~~is ~~number~~used ofin ~~leading~~our ~~printer~~display ~~manufacturers.~~graphics ~~Our~~super-wide ~~reliance~~and onwide-format ~~revenue~~industrial ~~from~~digital ~~the~~inkjet ~~leading~~printers ~~printer~~in ~~manufacturers~~a ~~was~~single ~~26%,~~location ~~28%,~~in ~~and 33% of~~ our ~~consolidated revenue~~Ypsilanti, ~~during~~Michigan ~~2017, 2016, and 2015, respectively~~facility. ~~Because~~We ~~sales~~formulate of our ~~Fiery~~reactive ~~products~~dye ~~constitute~~ink athat ~~significant~~is ~~portion~~used ofin our ~~revenue~~textile ~~and~~digital ~~there~~inkjet ~~are a limited number of printer manufacturers producing~~ printers in ~~sufficient~~a ~~volume~~single tolocation bein ~~attractive~~our ~~customers~~Bedford, ~~for us~~U.K., wefacility. ~~expect~~Any ~~that we~~significant ~~will~~interruption ~~continue~~in tothe ~~depend~~manufacturing onprocess aat ~~relatively~~any ~~small number~~ of ~~printer~~these ~~manufacturers~~facilities ~~for~~could aaffect ~~significant~~the ~~portion~~supply of our ~~Fiery revenue in future periods. Accordingly~~products, ifour weability ~~lose or experience reduced sales~~ to ~~one~~meet ofcustomer ~~these printer manufacturer customers~~demand, ~~we will~~and ~~have~~our ~~difficulty~~ability ~~replacing that revenue with sales~~ to ~~new~~maintain ormarket ~~existing customers~~share.

~~With~~We ~~the~~are ~~exception~~developing ofcontingency ~~certain~~plans ~~minimum~~utilizing ~~purchase obligations, we typically do not have long-term volume purchase contracts with~~ our ~~significant~~manufacturing ~~printer~~facilities ~~manufacturer~~in ~~customers,~~multiple ~~including~~locations ~~Konica Minolta, Ricoh,~~ and ~~Canon,~~the ~~and~~capabilities ~~they~~of ~~are~~certain ~~not~~contract ~~obligated~~manufacturers ~~to purchase products from us. Accordingly, our printer manufacturer customers could at any time reduce their purchases from us or cease purchasing our products altogether. For example,~~ in ~~2017,~~the ~~two~~event of ~~our~~a significant ~~printer~~interruption ~~manufactures purchased less inventory from us and this reduction may occur~~ in ~~2018~~the ~~and future~~manufacturing ~~years,~~process ~~which~~at ~~could~~any ~~impact~~of ~~revenue~~the ~~from~~aforementioned ~~our Fiery segment~~facilities. InUntil ~~the~~those ~~past,~~plans ~~these~~are ~~printer manufacturer customers have elected to develop products on their own for sale to end customers~~complete, ~~incorporated~~disruptions ~~technologies~~in ~~developed~~the bymanufacturing ~~other~~process ~~companies~~at ~~into their~~any ~~products,~~of ~~and have directly sold third party competitive products, rather than rely solely or partially on~~ our ~~products.~~sole Wesource ~~expect~~internal ~~that~~facilities ~~these~~could ~~printer~~adversely ~~manufacturer~~affect ~~customers will continue to make such elections in the future, although~~ our ~~acquisition~~ ~~of the FFPS~~ business ~~partially mitigates this risk with respect to one of these leading printer manufacturer / distributors~~.

Many of the products and technologies we are developing require that we coordinate development, quality testing, marketing, and other tasks with these printer manufacturers. We cannot control their development efforts or the timing of these efforts. We rely on these printer manufacturers to develop new printer and copier solutions, applications, and product enhancements that utilize our Fiery DFE technologies and software solutions in a timely and cost-effective manner. Our success in the DFE industry depends on the ability of these printer manufacturers to utilize our technologies to develop the right solutions with the right features to meet ever changing customer requirements and responding to emerging industry standards and other technological changes. 24

24We depend on a limited group of suppliers for key components in our products. The loss of any of these suppliers, the inability of any of these suppliers to meet our requirements, or delays or shortages of supply of these components, could adversely affect our business.

~~Table~~Certain components necessary for the manufacture of ~~Contents~~our products are obtained from a sole supplier or a limited group of suppliers. These include CPUs, chip sets, ASICs, and other related semiconductor components; inkjet print heads for our industrial inkjet printers; branded textile ink; and certain key ingredients (primarily pigments and photoinitiators) for our digital UV curable ink. We generally do not maintain long-term agreements with our component suppliers and conduct business with such suppliers largely on a purchase order basis. If we are unable to continue to procure these sole or limited sourced components from our current suppliers in the required quantities, we will have to qualify other sources, if possible, or redesign our products. If we were unable to obtain the branded textile ink or the pigments required for our digital UV curable ink, we would have to qualify other sources, if possible, or reformulate and test the new ink formulations. These suppliers may be concentrated within similar industries or geographic locations, which could potentially exacerbate these risks. We cannot provide assurance that other sources of these components exist or will be willing to supply us on reasonable terms or at all, or that we will be able to design around these components. Any unavailability, delays, or shortages of these components or any inability of our suppliers to meet our requirements, could harm our business.

Because ~~our~~the ~~printer~~purchase ~~manufacturer~~of ~~customers~~certain ~~incorporate~~key ~~our~~components ~~products~~involves ~~into~~long ~~products~~lead ~~they~~times, ~~manufacture~~in ~~and~~the ~~sell, any~~event ~~decline~~of unanticipated volatility in demand for ~~copiers~~our orproducts, ~~laser~~we ~~printers~~have orin ~~any~~the ~~other~~past ~~negative~~been, ~~developments~~and ~~affecting~~may ~~our~~in ~~major~~the ~~customers~~future orbe, ~~the~~unable ~~computer~~to ~~industry~~manufacture certain products in ~~general,~~a ~~including~~quantity ~~reduced~~sufficient ~~end~~to ~~user~~meet current demand. Further, ~~would~~as ~~likely~~has ~~harm~~occurred ~~our~~in ~~results~~the ofpast, ~~operations.~~in ~~Certain~~the ~~printer manufacturer~~event ~~customers~~that ~~have~~anticipated ~~experienced~~demand ~~serious~~does ~~financial~~not ~~difficulties~~materialize, inwe ~~the~~may ~~past,~~hold ~~which~~excess ~~led~~quantities toof ainventory ~~decline~~that incould ~~sales~~become ofobsolete. ~~our~~To ~~products.~~meet Ifprojected ~~any~~demand, ~~significant~~we ~~customers~~maintain ~~face~~an ~~such~~inventory ~~difficulties~~of incomponents ~~the~~for ~~future,~~which ~~our~~we ~~operating~~are ~~results~~dependent ~~could~~on besole ~~harmed~~or ~~through, among~~limited ~~other~~source ~~things,~~suppliers ~~decreased~~and ~~sales~~components ~~volume,~~with ~~write-off~~prices ofthat ~~accounts~~fluctuate ~~receivable~~significantly. As a result, ~~and~~we ~~write-off~~are subject to risk of ~~inventories~~inventory ~~related~~obsolescence, towhich ~~products~~could weadversely ~~have~~affect ~~manufactured~~our ~~for~~operating ~~these customers’~~results ~~products.~~and financial condition.

~~Economic~~Market ~~uncertainty~~prices ~~has~~and ~~negatively~~availability ~~affected~~of certain components, particularly memory subsystems and Intel-designed components, which collectively represent a substantial portion of the total manufactured cost of our ~~business~~products, have fluctuated significantly in the past. ~~and~~Such ~~may~~fluctuations ~~negatively~~could ~~affect~~have a material adverse effect on our ~~business~~operating inresults ~~the~~and ~~future~~financial condition including reduced gross profit.

~~Our~~We ~~revenue~~are ~~and~~dependent ~~profitability depend significantly~~ on ~~the~~a ~~overall~~limited ~~demand~~number ~~for information technology products that enable printing~~ of ~~digital data~~subcontractors, ~~which~~ inwith ~~turn~~whom ~~depends~~we ongenerally ado ~~variety~~not ofhave ~~macro~~long-term ~~and micro-economic conditions. In addition~~contracts, ~~revenue~~to ~~growth~~manufacture and ~~profitability~~deliver inproducts to our ~~Industrial~~customers. ~~Inkjet~~The ~~operating~~loss ~~segment~~of ~~depends~~any onof ~~demand~~these ~~and~~subcontractors ~~spending~~could ~~for~~adversely ~~advertising~~affect ~~and~~our ~~marketing products and programs, which also depends on a variety of macro-and micro-economic conditions~~business.

~~Uncertainty~~We ~~about~~subcontract ~~current~~with ~~global~~other ~~economic conditions~~companies ~~poses~~to amanufacture ~~risk~~certain ~~as our customers may delay purchases~~ of our products inand ~~response~~we togenerally ~~tighter~~do ~~credit,~~not ~~negative~~have ~~financial~~long-term ~~news,~~agreements ~~and/or~~with ~~declines~~these ~~in income or asset values~~subcontractors. ~~Any~~While ~~financial~~we ~~turmoil~~closely ~~affecting~~monitor ~~the~~our ~~banking~~subcontractors’ ~~system~~performance, ~~and~~we ~~financial~~cannot ~~markets and~~be ~~the~~assured ~~possibility~~ that ~~financial~~such ~~institutions~~subcontractors ~~may~~will ~~consolidate~~continue orto ~~terminate~~manufacture ~~their~~our ~~activities~~products ~~have resulted~~ in a ~~tightening~~timely inand ~~the~~effective ~~credit~~manner. ~~market~~In the past, a ~~low~~weakened ~~level~~economy ofled ~~liquidity~~to inthe ~~many~~dissolution, ~~financial markets~~bankruptcy, ~~and~~or ~~extreme~~consolidation ~~volatility~~of insome ~~fixed~~of ~~income,~~our ~~credit~~subcontractors, ~~currency,~~ ~~and~~which ~~equity~~decreased ~~markets.~~the ~~There~~available ~~could be a~~ number of ~~follow-on~~subcontractors. ~~effects~~If ~~from~~the aavailable ~~credit~~number ~~crisis~~of onsubcontractors ~~our~~were ~~business,~~to ~~including~~decrease ~~insolvency~~in ofthe ~~key~~future, ~~suppliers~~it ~~resulting~~is inpossible ~~product~~that ~~delays;~~we ~~inability~~would ofnot ~~customers~~be ~~and distributors~~able to ~~obtain~~secure ~~credit~~appropriate subcontractors to ~~finance~~fulfill ~~purchases of~~ our ~~products~~demand ~~and/or~~in ~~customer~~a ~~and~~timely ~~distributor~~manner, ~~insolvencies;~~or ~~increased~~at ~~difficulty~~all, inparticularly ~~managing~~if ~~inventories;~~demand ~~and~~for ~~other financial institutions negatively impacting~~ our ~~treasury~~products ~~operations~~increases.

~~Although~~The ~~economic~~existence ~~uncertainty~~of ~~has~~fewer ~~recently~~subcontractors ~~abated~~may inreduce ~~Europe,~~our ~~uncertainty~~negotiating ~~remains in the “southern European” countries (primarily Italy~~leverage, ~~Spain,~~thereby ~~and Portugal)~~potentially ~~due~~resulting ~~to uncertainty~~ in ~~Spain~~higher ~~related~~product tocosts. ~~Brexit~~Financial ~~and~~problems ~~Catalonia~~resulting ~~and uncertainty~~ in ~~Italy related to significant public debt and uncollectible loans in~~ the ~~banking~~inability ~~system. We have no European sovereign debt investments. Our European debt investments consist~~ of ~~non-sovereign~~our ~~corporate~~subcontractors ~~debt~~to ~~securities~~make ofor ~~$6.6 million,~~ship ~~which represents 8% of~~ our ~~corporate~~products, ~~debt~~could ~~instruments~~harm ~~(4% of~~ our ~~short-term~~business, ~~investments)~~operating ~~at December 31~~results, ~~2017. European debt investments are with corporations domiciled in the northern~~ and ~~central~~financial ~~European~~condition. ~~countries~~If ofwe ~~Netherlands,~~change ~~Sweden~~subcontractors, ~~and~~we ~~France.~~could Weexperience dodelays ~~not have any short-term investments with corporations domiciled~~ in ~~the higher risk “southern European” countries (i.e.~~finding, ~~Italy~~qualifying, ~~Spain,~~ and ~~Portugal).~~commencing Webusiness ~~believe~~with ~~that~~new wesubcontractors, dowhich ~~not~~would ~~have~~result ~~significant~~in ~~exposure~~delayed ~~with~~delivery ~~respect~~of to our ~~money~~products ~~market~~ and ~~corporate~~potentially ~~debt investments in Europe, although we do have some exposure due to~~ the ~~interdependencies~~ ~~among~~cancellation ~~the~~of ~~European~~orders ~~Union~~for ~~countries.~~our products.

~~Since~~We ~~Europe~~have isoutsourced ~~composed~~our ofFiery ~~varied~~production ~~countries~~with ~~and~~Avnet, ~~regional~~FFPS ~~economies,~~production ~~our~~with ~~European~~Dell, ~~risk~~FFPS ~~profile~~sustaining ~~is somewhat~~engineering ~~more~~with ~~diversified~~HCL, ~~due~~ceramic toink ~~the~~formulation ~~varying~~with ~~economic~~subcontractors ~~conditions~~in ~~among~~China ~~the~~and ~~countries.~~Italy, ~~Approximately~~and ~~32%~~formulation of ~~our~~certain ~~receivables~~textile ~~are~~ink with ~~European~~third ~~customers~~party asbranded ofsuppliers. ~~December 31,~~Certain ~~2017.~~Industrial OfInkjet ~~this~~sub-assemblies ~~amount,~~and ~~30%~~wide offormat ~~our~~printer ~~European~~products ~~receivables~~are ~~(10%~~manufactured ofin ~~consolidated gross~~the ~~receivables)~~U.S. ~~are~~and inChina. ~~the~~Should ~~higher~~our ~~risk~~manufacturers ~~southern~~experience ~~European~~any ~~countries~~inability, ~~(mostly~~or ~~Italy~~unwillingness, ~~Spain~~to manufacture or deliver our products, ~~and~~then ~~Portugal)~~our ~~and~~business, ~~Ireland~~financial condition, ~~which~~and ~~are~~operations ~~adequately~~could ~~reserved~~be harmed. Since we generally do not maintain long-term agreements with our manufacturers, any of our manufacturers could enter into agreements with our competitors that might restrict or prohibit

Our business, results of operations and financial condition may be negatively impacted by conditions abroad, including local economies, political environments, fluctuating foreign currencies, and shifting regulatory schemes. 25

Athem ~~significant~~from ~~amount~~manufacturing of our ~~revenue~~products isor ~~generated~~could ~~from~~otherwise ~~operations outside~~lead ~~the~~to ~~U.S.~~an ~~Approximately~~inability ~~$505.3~~to ~~(51%),~~fill ~~$491.7~~our ~~(50%),~~orders ~~and~~in ~~$408.9~~a ~~(46%) million~~timely ofmanner. ~~revenue~~In ~~for~~such ~~the years ended December 31~~event, ~~2017,~~we ~~2016,~~may ~~and~~not ~~2015,~~be ~~respectively,~~able ~~shipped~~ to ~~locations~~find ~~outside~~suitable ~~the Americas~~replacements, ~~primarily~~in towhich ~~Europe,~~case ~~Middle East,~~our financial condition and ~~Africa~~operations ~~(“EMEA”)~~would likely be harmed.

25We may face increased risk of inventory obsolescence, excess, or shortages related to our Industrial Inkjet printers and ink.

~~Table~~We procure raw materials and internally manufacture our super-wide format, textile, and ceramic tile decoration industrial inkjet printers and formulate digital UV curable and reactive dye ink based on our sales forecasts. If we do not accurately forecast demand for our products, we may produce or purchase excess inventory, which may result in our inventory becoming obsolete. We might not produce the correct mix of ~~Contents~~products to match actual demand if our sales forecast is not accurate, resulting in lost sales. If we have excess printers, ink, or other products, we may need to lower prices to stimulate demand.

~~and~~Our ~~APAC.~~ink Weproducts ~~expect~~have ~~that sales outside of the U.S. will continue to represent~~ a ~~significant~~defined ~~portion~~shelf ~~of our total revenue~~life. WeIf ~~maintain~~we ~~significant~~do ~~operations~~not ~~and~~sell ~~acquire or manufacture many of~~ our ~~products~~ ~~and/or~~ink ~~their~~before ~~components outside~~ the ~~U.S.~~end ~~Our future revenue, costs, and results~~ of ~~operations~~its ~~could~~shelf ~~be significantly affected by changes in each country’s economic conditions~~life, ~~foreign~~it ~~currency~~will ~~exchange~~have ~~rates relative~~ to ~~the~~be ~~U.S. dollar,~~written ~~political conditions, trade protection measures, licensing requirements, local tax issues, capitalization, and other related legal matters~~off. IfWe ~~our~~have ~~future~~also ~~revenue,~~experienced ~~costs,~~UV ~~and~~curable ~~results~~ink ofshortages ~~operations~~in ~~are~~the ~~significantly~~past ~~affected by economic conditions abroad, our results of operations~~ and ~~financial~~may ~~condition~~continue ~~could~~to beexperience ~~negatively~~such ~~impacted.~~shortages ~~Specifically,~~in the ~~deceleration~~future. ofUV ~~the~~curable ~~economy~~ink inshortages ~~China~~may ~~has~~require ~~negatively~~that ~~impacted,~~we ~~and~~incur ~~may~~additional ~~continue~~costs to ~~negatively~~respond ~~impact, our results of operations. The Chinese government continues~~ to ~~rebalance~~increased ~~the~~demand ~~country’s economic model with tightening real estate~~ and ~~environmental~~overcome ~~regulation.~~such shortages.

WeIf ~~face~~we ~~risks from~~are ~~currency~~not ~~fluctuations~~able to hire and retain skilled employees, we may not be able to develop and manufacture products, or meet demand for our products, in a timely fashion.

~~Given~~We ~~the~~depend ~~significance~~on ofskilled ~~non-U.S.~~employees, ~~sales~~such toas ~~our~~software ~~total~~and ~~revenue~~hardware engineers, wequality ~~face~~assurance ~~a continuing~~engineers, ~~risk~~chemists, ~~from~~chemical ~~the~~engineers, ~~fluctuation~~and ofother ~~the~~technical ~~U.S.~~professionals ~~dollar~~with ~~versus~~specialized ~~foreign currencies~~skills. ~~Although~~We ~~the~~are ~~majority~~headquartered ofin ~~our~~the ~~receivables~~Silicon ~~are~~Valley ~~invoiced~~and have research and ~~collected~~development employees in facilities in 15 U.S. ~~dollars,~~locations. weWe also have ~~exposure~~research ~~from~~and ~~non-U.S. dollar-denominated~~development ~~sales~~employees ~~(consisting~~in offacilities ~~the~~in ~~Euro~~India, ~~British pound sterling~~Europe, ~~Brazilian real~~Israel, ~~Chinese~~the ~~renminbi~~U.K., ~~Israeli shekel~~Brazil, and ~~Australian dollar)~~Canada. WeCompetition ~~have~~has ahistorically ~~substantial~~been ~~number~~intense among companies hiring engineering and technical professionals. In times of ~~international~~professional ~~employees~~labor imbalances, ~~resulting~~it has in ~~material~~the ~~operating~~past ~~expenses denominated~~and is likely in ~~foreign~~the ~~currencies.~~future, Weto ~~have~~be ~~exposure~~difficult ~~from~~to ~~non-U~~locate and hire qualified engineers and technical professionals and to retain these employees.S. ~~dollar-denominated~~There ~~operating~~are ~~expenses~~many intechnology ~~foreign~~companies ~~countries~~located ~~(primarily~~near our corporate offices in the ~~Euro,~~Silicon ~~British~~Valley ~~pound~~and ~~sterling,~~our ~~Chinese~~operations ~~renminbi,~~in ~~Israeli~~India ~~shekel, Indian~~that ~~rupee,~~may ~~Brazilian~~attempt ~~real,~~to ~~and~~hire ~~Australian~~our ~~dollar)~~employees.

WeThe ~~can~~movement ~~benefit~~of ~~from~~our orstock beprice ~~adversely~~may ~~affected~~also byimpact ~~either~~our aability ~~weaker or stronger U.S. dollar relative~~ to ~~major~~ ~~currencies~~hire ~~worldwide~~and ~~with~~retain ~~respect to our consolidated financial statements~~employees. ~~Accordingly,~~If we ~~can~~do ~~benefit~~not ~~from~~offer acompetitive ~~stronger~~compensation, ~~U.S. dollar due to the corresponding reduction in our foreign operating expenses translated into U.S. dollars and at the same time~~ we ~~can~~may not be ~~adversely~~able ~~affected by a stronger U.S. dollar due~~ to ~~the~~recruit ~~corresponding~~or ~~reduction~~retain inemployees, ~~foreign~~which ~~revenue~~may ~~translated~~have ~~into~~an ~~U.S.~~adverse ~~dollars.~~effect Weon ~~hedge~~ our ~~operating~~ability ~~expense~~to ~~exposure~~develop products in ~~Indian~~a ~~rupees.~~timely ~~The~~fashion, ~~notional~~which ~~amount~~could ofharm our ~~Indian~~business, ~~rupee cash~~financial ~~flow~~condition, ~~hedge~~and ~~was~~operating $3results.~~9 million at December 31, 2017.~~

~~Forward~~We ~~contracts~~rely ~~not~~on ~~designated~~our asdistribution ~~hedging~~channels ~~instruments~~to ~~consist~~ensure ofsales ~~hedges of British pounds sterling, Brazilian real, Israeli shekel, Japanese yen, Chinese renminbi, and Euro-denominated intercompany balances with notional amounts of $144~~growth.~~5 million;~~ Brazilian real, British pounds sterling, Australian dollar, Israeli shekel, and Euro-denominated trade receivables with notional amounts of $44.4 million; and hedges of British pounds sterling, Indian rupee, Israeli shekel, and Euro-denominated other net monetary assets with notional amounts of $46.6 million at December 31, 2017. These forward contracts are not designated for hedge accounting treatment since there is a natural offset for the remeasurement of the underlying foreign currency denominated asset or liability.

AsThe ofleading ~~December 31,~~printer ~~2017~~manufacturers, wewhich ~~had~~comprise ~~not~~the ~~entered~~majority ~~into~~of ~~hedges~~the ~~against~~customer ~~any~~base ~~other~~in ~~currency~~our ~~exposures,~~Fiery ~~but~~operating wesegment, ~~may~~are ~~consider~~typically ~~hedging~~large ~~against~~profitable ~~movements~~customers inwith ~~other currencies~~little incredit ~~the~~risk ~~future~~to us. Our ~~efforts~~Productivity toSoftware ~~reduce~~and ~~risk~~Industrial ~~from~~Inkjet ~~our~~operating ~~international~~segments ~~operations~~sell ~~and~~primarily ~~from~~through ~~fluctuations~~a indirect ~~foreign~~sales ~~currencies~~force, oraugmented ~~interest~~by ~~rates~~some ~~may~~select ~~not~~distributors, beto ~~successful,~~a ~~which~~broader ~~could~~base ~~harm~~of ~~our~~customers ~~financial~~than ~~condition~~Fiery. ~~and~~Any ~~operating~~interruption ~~results.~~of these distribution channels could negatively impact us in the future.

WeSuccessfully ~~face~~managing ~~risks~~the interaction of our direct and indirect channel efforts to reach various potential customer industries for our products and services is a complex process. For example, in response to our direct sales strategies or for other business reasons, our current distributors may choose to represent our competitors in place of us. In addition, from time to time we grant concessions to some of our ~~international~~distributors ~~operations~~and allow them to return previously purchased products. Accordingly, reserves for estimated returns and exchanges are recorded as a reduction of revenues upon applicable product shipment, and are based upon our historical experience. Our reliance upon indirect distribution methods may reduce visibility to demand and pricing issues, and therefore make forecasting more difficult and, to the extent that returns exceed estimates, our revenues and operating results may be adversely affected.

~~We are subject to certain risks because of our international operations as follows:~~ 26

•The ~~restrictions~~sales oncycle for our ~~ability~~products tois ~~access~~long ~~cash generated by international operations, especially in China~~ and ~~Brazil,~~we ~~due~~may toincur ~~restrictions~~substantial onnon-recoverable ~~the~~expenses ~~repatriation~~or ofdevote ~~dividends,~~significant ~~distribution~~resources ~~of cash~~ to ~~shareholders~~sales ~~outside~~that ~~such~~do ~~countries,~~not ~~foreign~~occur ~~exchange~~when ~~control, and other restrictions;~~anticipated.

•Potential ~~security~~or ~~concerns~~existing customers, ~~such~~particularly aslarger ~~armed~~enterprise ~~conflict~~customers, generally commit significant resources to an evaluation of available products and ~~civil~~require orus ~~military~~to ~~unrest,~~expend ~~crime~~substantial time, ~~political~~effort ~~instability,~~and money educating them as to the value of our products and ~~terrorist~~services. ~~activity;~~Sales of our products to these customers often require an extensive education and marketing effort.

26We could expend significant funds and resources during a sales cycle and ultimately fail to win the customer. Our sales cycle for all our products and services is subject to significant risks and delays over which we have little or no control, including:

~~Table~~• ofour ~~Contents~~customer’s budgetary constraints;

• ~~customer~~the ~~credit~~timing ~~risk,~~of ~~especially in emerging or economically challenged regions, with accompanying challenges to enforce~~ our ~~legal~~customers’ ~~rights~~budget ~~should~~cycles ~~collection~~and ~~issues~~approval ~~arise~~processes;

• ~~changes in governmental regulation, including labor regulations, and~~ our ~~inability~~customers’ orwillingness ~~failure~~ to ~~obtain~~replace ~~required~~their ~~approvals,~~current ~~permits,~~print ~~or registrations could harm our international and domestic sales and adversely affect our revenue, business, and operations~~solutions;

• ~~violations~~our ofneed ~~governmental~~to ~~regulation,~~educate ~~including~~potential ~~labor~~customers ~~regulations,~~about ~~could~~the ~~result~~uses ~~in fines~~ and ~~penalties,~~benefits ~~including~~of ~~prohibiting us from exporting~~ our products ~~to one or more countries,~~ and ~~could materially adversely affect our business~~services; and

• ~~international~~the ~~labor~~timing ~~regulations~~of ~~may be substantially different than~~ the ~~regulations~~expiration weof ~~are~~our ~~accustomed~~customers’ tocurrent inoutsourcing ~~the~~agreements ~~U.S.,~~for ~~which~~similar ~~may~~products ~~negatively impact labor efficiency~~ and ~~workforce relations;~~services.

•If ~~trade~~our ~~legislation~~sales incycles ~~either~~lengthen unexpectedly, they could adversely affect the ~~U.S.~~timing of our revenues or ~~other~~increase ~~countries~~costs, ~~such~~which asmay acause ~~change~~fluctuations in ~~the~~our ~~current~~quarterly ~~tariff~~revenues ~~structures,~~and ~~export~~results ~~compliance~~of ~~laws~~operations. Finally, orif ~~other~~we ~~trade~~are ~~policies~~unsuccessful in closing sales of our products after spending significant funds and management resources, our operating margins and results of operations could be adversely ~~affect~~impacted, ~~our~~and ~~ability~~the toprice ~~sell~~of orour ~~manufacture~~common instock ~~international~~could ~~markets;~~decline.

•Our ~~adverse~~revenue ~~tax~~for ~~consequences,~~a ~~including~~particular ~~imposition~~period ofis ~~withholding~~difficult orto ~~other~~predict, ~~taxes~~and ona ~~payments~~shortfall byin ~~subsidiaries,~~revenue ~~and~~may harm our operating results.

•Our ~~some~~revenue offor ~~our~~a ~~sales~~particular quarter is difficult to ~~international~~predict, ~~customers~~especially ~~are~~in ~~made~~light ~~under~~of ~~export~~a ~~licenses~~challenging ~~that~~and ~~must~~inconsistent global macroeconomic environment and related market uncertainty. Our revenue may grow at a slower rate than in past periods or decline on a year-over-year basis. Our ability to meet financial expectations could also be ~~obtained~~adversely ~~from~~affected if the Unonlinear sales pattern seen in some of our past quarters recurs in future periods.S We have experienced periods of time during which bookings have exceeded shipments or manufacturing issues have delayed shipments, leading to nonlinearity in shipping patterns. ~~Department~~In addition to making it difficult to predict revenue for a particular period, nonlinearity in shipping can increase costs, because irregular shipment patterns result in periods of ~~Commerce~~underutilized ~~(“DOC”)~~capacity and ~~certain~~periods ~~transactions~~in ~~require~~which ~~prior~~overtime ~~approval~~expenses ofmay be incurred, as well as in potential additional inventory management-related costs. In addition, to the ~~DOC~~extent orthat ~~other~~manufacturing ~~governmental~~issues ~~agencies~~and any related component shortages result in delayed shipments in the future, and particularly in periods in which our contract manufacturers are operating at higher levels of capacity, it is possible that revenue for a quarter could be adversely affected if such matters occur and are not remediated within the same quarter.

WeThe ~~incur~~timing ~~additional~~of ~~legal~~large ~~compliance~~orders ~~costs~~can ~~associated~~also ~~with~~have ~~our~~a ~~international~~significant ~~operations~~effect ~~and~~on ~~could~~our ~~become subject~~business toand ~~legal~~operating ~~penalties~~results infrom ~~foreign~~quarter ~~countries~~to ifquarter, weprimarily doin ~~not~~the ~~comply~~United ~~with~~States ~~local laws~~ and ~~regulations, which may be substantially different from those~~ in ~~the~~emerging Ucountries.S. InFrom ~~many~~time ~~foreign~~to ~~countries~~time, ~~particularly~~we ~~those~~receive ~~with~~large ~~developing~~orders ~~economies,~~that ithave ~~may~~a ~~be common~~significant toeffect ~~engage~~on inour ~~business~~operating ~~practices~~results ~~that~~in ~~are~~the ~~prohibited~~period byin ~~U.S.~~which ~~regulations such as~~ the ~~Foreign~~order ~~Corrupt~~is ~~Practices~~recognized ~~Act of 1977,~~ as ~~amended~~revenue. ~~Although~~The wetiming ~~implement~~of ~~policies~~such ~~and~~orders ~~procedures~~is ~~designed~~difficult to ~~ensure compliance with these laws~~predict, ~~there~~and ~~can~~the ~~be no~~timing ~~assurance that all~~ of ~~our~~revenue ~~employees,~~recognition ~~contractors, and agents, as well as outsourced business operations, including those based in or~~ from ~~countries where practices that violate~~ such ~~U.S.~~orders ~~laws~~ may beaffect ~~customary,~~period ~~will~~to ~~not~~period ~~take~~changes ~~actions~~ in ~~violation of~~revenue. ~~our~~As ~~policies.~~a ~~Furthermore~~result, ~~there~~our ~~can~~operating beresults nocould ~~assurance~~vary ~~that~~materially ~~employees,~~from ~~contractors,~~quarter ~~and~~to ~~agents~~quarter ofbased ~~acquired~~on ~~companies~~the ~~did~~receipt ~~not take actions in violation~~ of such ~~laws~~orders and ~~regulations~~their ~~prior~~ultimate torecognition ~~the~~as ~~date they were acquired by us, although we perform due diligence procedures to endeavor to discover any such actions prior to the acquisition date~~revenue.

Inventory management remains an area of focus. We ~~license~~have ~~software~~experienced ~~used~~longer than normal manufacturing lead times in ~~most~~the ofpast ~~our~~which ~~Fiery~~have ~~products and~~caused ~~certain~~some ~~Productivity~~customers ~~Software~~to ~~products~~place ~~from~~the ~~Adobe~~same order multiple times within our various sales channels and to cancel the ~~loss~~duplicative orders upon receipt of ~~these~~the ~~licenses~~product, ~~would~~or ~~prevent~~to ~~shipment~~place orders with other vendors with shorter manufacturing lead times. Such multiple ordering (along with other factors) or risk of ~~these~~order cancellation may cause difficulty in predicting our revenue and, as a result, could impair our ability to manage parts inventory effectively. In addition, our efforts to improve manufacturing lead-time performance may result in corresponding reductions in order backlog. A decline in backlog levels could result in more variability and less predictability in our quarter-to-quarter revenue and operating results. In addition, when facing component supply-related challenges, we have increased our efforts in procuring components in order to meet customer expectations which in turn contributes to an increase in purchase commitments. Increases in our purchase commitments to shorten lead times could also lead to excess and obsolete inventory charges if the demand for our products is less than our expectations.

We are required to obtain separate licenses from Adobe for the right to use Adobe PostScript® software in each copier or printer model that uses a Fiery DFE, and other Adobe software for certain Productivity Software products. Although to date we have successfully obtained licenses to use Adobe PostScript ® and other Adobe software when required, Adobe is not required to, and we cannot be certain that Adobe will, grant future licenses to Adobe PostScript® and other Adobe software on reasonable terms, in a timely manner, or at all. To obtain licenses from Adobe, Adobe requires that we obtain quality assurance approvals from them for our products that use Adobe software. Although to date we have successfully obtained such quality assurance approvals from Adobe, we cannot be certain they will grant us such approvals in the future. If Adobe does not grant us such licenses or approvals, if the Adobe licenses are terminated, or if our relationship is otherwise materially impaired, we would likely be unable to sell products that incorporate Adobe PostScript ® or other Adobe software and our financial condition and results of operations would be significantly harmed. 27

27We plan our operating expense levels based primarily on forecasted revenue levels. These expenses and the impact of long-term commitments are relatively fixed in the short term. A shortfall in revenue could lead to operating results being below expectations because we may not be able to quickly reduce these expenses in response to short-term business changes.

~~Table~~Any of ~~Contents~~the above factors could have a material adverse impact on our operations and financial results.

WeGrowing ~~manufacture~~market ~~super-wide~~share ~~and~~in ~~wide~~the ~~format~~Productivity ~~industrial~~Software ~~digital inkjet printers~~ and ~~formulate~~Industrial UVInkjet ~~curable, LED~~operating ~~curable,~~segments ~~and~~increases ~~reactive~~the ~~dye~~possibility ~~ink~~that inwe ~~single~~will ~~locations.~~experience ~~Any~~increased ~~significant~~bad ~~interruption~~debt inexpense ~~the~~and ~~manufacturing~~increased ~~process~~accounts ~~at these facilities could adversely affect our business~~receivable.

~~Our~~Many of ~~VUTEk~~the ~~super-wide~~Productivity Software and ~~wide~~Industrial ~~format~~Inkjet ~~industrial~~customers are smaller and potentially less credit worthy than the leading printer manufacturers that purchase from our Fiery segment. Our ceramic tile decoration digital inkjet ~~printers~~customer ~~are~~base is primarily ~~manufactured~~located in ageographic ~~single~~regions, ~~location~~which inhave ~~our~~recently ~~Meredith~~been subject to economic challenges, ~~New~~including ~~Hampshire facility.~~southern InEurope ~~2016~~(primarily Spain and Italy) and emerging markets in APAC. Furthermore, if we ~~transferred~~increase ~~VUTEk~~the ~~roll-to-roll~~percentage ~~printer~~of ~~production~~Productivity Software and Industrial Inkjet products that are sold internationally, it may be challenging to enforce our ~~Rosh~~legal ~~Ha’Ayin,~~rights ~~Israel,~~should ~~facility~~collection issues arise. In addition, many of our ~~FabriVu~~Industrial ~~textile~~Inkjet ~~digital~~customers ~~inkjet~~are ~~printer~~requesting ~~production~~ extended payment terms, and we have been granting them on a limited basis in response to our ~~Bergamo,~~competitors ~~Italy,~~offers. ~~facility~~Due to these and other factors, growing Industrial Inkjet and ~~certain~~Productivity ~~wide~~Software ~~format~~market ~~industrial~~share ~~digital~~may ~~inkjet~~cause ~~printers~~us to ~~our~~experience ~~Castellon,~~an ~~Spain,~~increase ~~facility.~~in bad debt expense and an increase in days sales outstanding (“DSOs”).

~~Our~~DSOs ~~VUTEk~~increased ~~roll-to-roll~~during ~~super-wide~~the ~~format~~year ~~industrial~~ended ~~digital~~December 31, ~~inkjet~~2018, ~~printers~~compared ~~are~~with ~~manufactured~~December 31, ~~in a single location in our Rosh Ha’Ayin~~2017, ~~Israel~~primarily ~~facility.~~due ~~Our~~to ~~Reggiani~~higher ~~industrial digital~~DSO ~~inkjet~~across ~~textile printers are manufactured in a single location in~~ our ~~Bergamo~~businesses, ~~Italy~~except ~~facility.~~for ~~Our~~Fiery ~~Cretaprint ceramic tile decoration~~ and ~~Nozomi~~the ~~corrugated~~textile ~~packaging digital inkjet printers are manufactured in a single location in our Castellon, Spain facility~~market. We ~~formulate~~calculate ~~our~~DSO UVby ~~curable~~dividing ~~and~~net ~~LED~~accounts ~~curable~~receivable ~~digital~~at ~~ink~~the ~~that~~end isof ~~used~~the inquarter ~~our~~by ~~display~~revenue ~~graphics~~recognized ~~super-wide~~during ~~and~~the ~~wide-format~~quarter, ~~industrial~~multiplied ~~digital~~by ~~inkjet~~the ~~printers~~total indays ~~a single location~~ in ~~our~~the ~~Ypsilanti~~quarter, ~~Michigan~~which ~~facility. We formulate our reactive dye ink that~~ is ~~used in our textile digital inkjet printers in~~ a ~~single~~measure ~~location in our Bedford, U.K., facility. Any significant interruption in the manufacturing process at any~~ of ~~these facilities could affect~~ the ~~supply~~relationship ~~of our~~between ~~products,~~sales ~~our ability to meet customer demand,~~ and ~~our~~accounts ~~ability to maintain market share~~receivable.

WeAcquisitions ~~are~~may ~~developing~~result ~~contingency plans utilizing our manufacturing facilities~~ in ~~multiple~~unanticipated ~~locations~~accounting ~~and~~charges ~~the~~or ~~capabilities~~otherwise ofadversely ~~certain~~affect ~~contract~~our ~~manufacturers~~results ~~in the event~~ of aoperations ~~significant~~and ~~interruption~~result in ~~the~~difficulties ~~manufacturing~~assimilating ~~process~~and atintegrating ~~any~~operations, ofpersonnel, ~~the~~technologies, ~~aforementioned facilities. Until those plans are complete~~products, ~~disruptions~~ inand ~~the~~information ~~manufacturing~~systems ~~process at any~~ of ~~our~~acquired ~~sole source internal facilities could adversely affect our business~~businesses.

We ~~depend~~seek onto adevelop ~~limited group~~new oftechnologies ~~suppliers~~and ~~for~~products ~~key~~from ~~components~~both ininternal ~~our~~and ~~products~~external sources. ~~The~~We ~~loss~~have ofalso ~~any~~purchased ofcompanies ~~these~~and ~~suppliers,~~businesses for the ~~inability~~primary purpose of ~~any~~acquiring their customer base. As part of ~~these~~this ~~suppliers~~effort, towe ~~meet~~have ~~our~~in ~~requirements~~the past made, orand ~~delays~~will orlikely ~~shortages~~continue ofto ~~supply~~make, acquisitions of ~~these~~other ~~components,~~businesses. ~~could~~Acquisitions ~~adversely~~involve ~~affect~~numerous ~~our~~risks, ~~business.~~ including:

~~Certain~~• ~~components~~difficulties ~~necessary~~integrating ~~for the manufacture of our products are obtained from a sole supplier or a limited group of suppliers. These include CPUs~~operations, ~~chip sets~~employees, ~~ASICs~~technologies, ~~and other related semiconductor components; inkjet print heads for our super-wide and wide format~~products, ~~corrugated~~information ~~packaging~~systems, ~~textile,~~ and ceramic tile decoration industrial digital inkjet printers; branded textile ink; and certain key ingredients (primarily pigments and photoinitiators) for our digital UV curable ink. We generally do not maintain long-term agreements with our component suppliers and conduct business with such suppliers largely on a purchase order basis. If we are unable to continue to procure these sole or limited sourced components from our current suppliers in the required ~~quantities,~~focus weof ~~will~~management ~~have to qualify other sources~~attention, ~~if possible~~time, or redesign our products. If we were unable to obtain the branded textile ink or the pigments required for our digital UV curable ink, we would have to qualify other sources, if possible, or reformulate and ~~test~~effort the new ink formulations. These suppliers may be concentrated within similar industries or geographic locations, which could potentially exacerbate these risks. We cannot provide assurance that other sources of these components exist or will be willing to ~~supply~~accomplish ussuccessful on reasonable terms or at all, or that we will be able to design around these components. Any unavailability, delays, or shortages of these components or any inability of our suppliers to meet our requirements, could harm our business. integration;

~~Because~~• ~~the~~information ~~purchase~~systems ~~of certain key components involves long lead times, in the event of unanticipated volatility in demand for our products, we have in the past been, and~~ may ~~in the future~~ be, ~~unable~~inadequate to ~~manufacture~~operate ~~certain products in a quantity sufficient to meet demand. Further, as has occurred in~~ the ~~past,~~business inof the ~~event~~acquired ~~that~~company ~~anticipated~~until ~~demand does not materialize,~~ we ~~may hold excess quantities of inventory that could become obsolete. To meet projected demand, we maintain an inventory of components for which we~~ are ~~dependent~~able ~~on sole or limited source suppliers and components with prices that fluctuate significantly. As a result, we are subject~~ to ~~risk~~integrate ofthe ~~inventory~~acquired ~~obsolescence,~~business ~~which~~into ~~could adversely affect~~ our ~~operating~~information ~~results~~technology ~~and financial condition.~~ system;

~~Market~~• ~~prices~~integration ~~and~~of ~~availability~~acquired ~~of certain~~business ~~components,~~into ~~particularly~~our ~~memory~~information ~~subsystems~~system ~~and~~may ~~Intel-designed~~be ~~components~~delayed, which ~~collectively~~may ~~represent~~limit aour ~~substantial~~ability ~~portion~~to ofmanage the ~~total~~acquired ~~manufactured~~business ~~cost~~and ofimplement ~~our~~financial ~~products,~~and operational controls;

28• information systems may be poorly maintained by the acquired business;

~~Table~~• risk of ~~Contents~~entering markets in which we have little or no prior experience, or entering markets where competitors have stronger market positions;

~~have~~• ~~fluctuated~~possible ~~significantly~~write-downs inof ~~the~~impaired ~~past. Such fluctuations could have a material adverse effect on our operating results and financial condition including reduced gross profit.~~ assets;

We• ~~are~~changes ~~dependent~~in onthe afair ~~limited~~value ~~number~~ of ~~subcontractors,~~contingent ~~with whom we generally do not have long-term contracts, to manufacture and deliver products to our customers. The loss of any of these subcontractors could adversely affect our business.~~ consideration;

We• ~~subcontract~~possible ~~with~~restructuring ~~other companies to manufacture certain~~ of ~~our~~ ~~products~~personnel and we generally do not have long-term agreements with these subcontractors. While we closely monitor our subcontractors’ performance, we cannot be assured that such subcontractors will continue to manufacture our products in a timely and effective manner. In the past, a weakened economy led to the dissolution, bankruptcy, or ~~consolidation~~leased of some of our subcontractors, which decreased the available number of subcontractors. If the available number of subcontractors were to decrease in the future, it is possible that we would not be able to secure appropriate subcontractors to fulfill our demand in a timely manner, or at all, particularly if demand for our products increases. facilities;

~~The~~• ~~existence~~potential ofloss ~~fewer subcontractors may reduce our negotiating leverage, thereby potentially resulting in higher product costs. Financial problems resulting in the inability~~ of ~~our~~key ~~subcontractors~~employees to make or ship our products, could harm our business, operating results, and financial condition. If we change subcontractors, we could experience delays in finding, qualifying, and commencing business with new subcontractors, which would result in delayed delivery of ~~our products and potentially~~ the ~~cancellation~~acquired ~~of orders for our products.~~ company;

We• ~~have outsourced~~possible ~~our~~overruns ~~Fiery~~(compared ~~production~~to ~~with~~expectations) ~~Avnet,~~relative FFPS production with Dell, FFPS sustaining engineering with HCL, ceramic ink formulation with subcontractors in China and Italy, and formulation of certain textile ink with third party branded suppliers. Certain Industrial Inkjet sub-assemblies are manufactured by subcontractors. Should our subcontractors experience any inability, or unwillingness, to ~~manufacture~~the orexpense ~~deliver~~levels ~~our products, then our business, financial condition,~~ and ~~operations~~cash ~~could~~outflows ~~be harmed. Since we generally do not maintain long-term agreements with our subcontractors, any~~ of ~~our~~the ~~subcontractors~~acquired could enter into agreements with our competitors that might restrict or prohibit them from manufacturing our products or could otherwise lead to an inability to fill our orders in a timely manner. In such event, we may not be able to find suitable replacement subcontractors, in which case our financial condition and operations would likely be harmed. business;

We• ~~may~~adverse ~~face~~reactions ~~increased~~by ~~risk of inventory obsolescence~~customers, ~~excess~~suppliers, or ~~shortages~~parties ~~related~~transacting tobusiness ~~our~~with ~~Industrial~~the ~~Inkjet~~acquired ~~printers~~company ~~and~~or ~~ink.~~ us;

We• ~~procure~~risk raw materials and internally manufacture our super-wide and wide format, textile, and ceramic tile decoration industrial digital inkjet printers and formulate digital UV curable and reactive dye ink based on our sales forecasts. If we do not accurately forecast demand for our products, we may produce or purchase excess inventory, which may result in our inventory becoming obsolete. We might not produce the correct mix of ~~products~~negatively toimpacting ~~match~~stock ~~actual~~analyst ~~demand if our sales forecast is not accurate, resulting in lost sales. If we have excess printers, ink, or other products, we may need to lower prices to stimulate demand.~~ ratings;

~~Our~~• ~~ink~~potential ~~products~~litigation ~~have~~or aany ~~defined~~administrative ~~shelf~~proceedings ~~life.~~arising Iffrom weprior dotransactions ~~not~~or ~~sell~~prior ~~the~~actions ~~ink before the end~~ of ~~its shelf life, it will have to be written off. We have also experienced UV curable ink shortages in~~ the ~~past~~acquired ~~and may continue to experience such shortages in the future. UV curable ink shortages may require that we incur additional costs to respond to increased demand and overcome such shortages.~~ company;

If• weinability ~~are not able~~ to ~~hire~~protect ~~and retain skilled employees, we may not be able to develop and manufacture products,~~ or ~~meet~~secure ~~demand~~technology ~~for our products, in a timely fashion.~~ rights;

We• ~~depend~~possible onoverruns ~~skilled~~of ~~employees,~~direct ~~such~~acquisition ~~as software~~ and ~~hardware~~integration ~~engineers,~~costs; ~~quality assurance engineers, chemists, chemical engineers,~~ and ~~other technical professionals with specialized skills. We are headquartered in~~

29 28

~~Table~~• ofequity ~~Contents~~securities issued in connection with acquisitions may be dilutive to our existing stockholders unless mitigating actions are taken such as treasury stock purchases; alternatively, acquisitions made entirely or partially for cash reduce cash reserves.

~~the~~Mergers ~~Silicon Valley~~ and ~~have~~acquisitions ~~research~~of ~~and~~companies ~~development~~are ~~employees~~inherently ~~in facilities in 15 U~~risky.S. ~~locations.~~ We ~~also~~cannot ~~have~~provide ~~research~~assurance ~~and~~that ~~development~~previous ~~employees~~or infuture ~~facilities~~acquisitions inwill ~~India,~~be ~~Europe,~~successful ~~Israel,~~or ~~the U.K.,~~will ~~Brazil,~~not ~~and~~harm ~~Canada.~~our ~~Competition~~business, ~~has~~operating ~~historically been intense among companies hiring engineering and technical professionals. In times of professional labor imbalances~~results, itfinancial ~~has in the past and is likely in the future~~condition, toor bestock ~~difficult to locate and hire qualified engineers and technical professionals and to retain these employees~~price. ~~There are many technology companies located near our corporate offices in the Silicon Valley and our operations in India that may attempt to hire our employees.~~

~~Our VUTEk printers are manufactured at our Meredith, New Hampshire facility, which is not located in a major metropolitan area.~~ We ~~have~~face ~~encountered difficulties~~risks inrelating ~~hiring~~to ~~and~~the ~~retaining~~potential ~~adequately~~impairment ~~skilled~~of ~~labor~~goodwill and ~~management at this location. We have entered into a six~~long-~~year~~lived lease with BTMU whereby a 225,000 square foot manufacturing and warehouse facility is under construction in Manchester, New Hampshire, related to our super-wide and wide format industrial digital inkjet printer business in the Industrial Inkjet operating segment, which is scheduled to be completed in the first half of 2018assets.

~~The~~We ~~movement~~complete ofa ~~our~~review ~~stock~~of ~~price~~the ~~may~~carrying ~~also~~value ~~impact~~of our ~~ability~~goodwill toand ~~hire~~long-lived assets annually and, ~~retain~~based ~~employees.~~on Ifa wecombination doof ~~not~~factors ~~offer~~(i.e., ~~competitive~~triggering ~~compensation~~events), we may ~~not~~ be ~~able~~required to ~~recruit~~ orperform ~~retain employees, which may have~~ an ~~adverse~~interim ~~effect on our ability to develop products in a timely fashion, which could harm our business, financial condition, and operating results~~analysis.

WeGiven ~~rely~~the uncertainty of the economic environment and its potential impact on our ~~distribution~~business, ~~channels~~there can be no assurance that our estimates and assumptions regarding the duration of any economic downturn, or the period or strength of any subsequent recovery, made for purposes of our goodwill impairment testing as of December 31, 2018 will prove to ~~ensure~~be ~~sales~~accurate ~~growth~~predictions of the future. If our assumptions regarding forecasted revenue or gross profit rates are not achieved, we may be required to record goodwill impairment charges in future periods relating to any of our reporting units, whether in connection with the next annual impairment testing in the fourth quarter of 2019 or prior to that, if an interim triggering event were to occur. It is not possible to determine if any such future impairment charge would result or, if it does, whether such charge would be material. No goodwill impairment foreshadowing events have occurred as of December 31, 2018.

During the fourth quarter of 2017, management approved a plan to sell approximately 31.5 acres of land and two related manufacturing buildings located in Meredith, New Hampshire (“Meredith facility”). The ~~leading~~fair ~~printer~~value ~~manufacturers~~of the Meredith facility, ~~which~~based ~~comprise~~on expected sales proceeds less cost to sell, was estimated to be less than the ~~majority~~carrying amount of the ~~customer~~assets. ~~base~~As a result, we incurred an impairment loss of approximately $0.9 million in our ~~Fiery~~consolidated ~~operating~~results ~~segment~~of operations for the year ended December 31, ~~are~~2017. ~~typically~~During ~~large~~the ~~profitable~~year ~~customers with~~ended ~~little~~December ~~credit~~31, ~~risk~~2018, towe ~~us.~~sold ~~Our~~one ~~Productivity~~of ~~Software~~the buildings and ~~Industrial~~associated ~~Inkjet~~land ~~operating~~but ~~segments~~the ~~sell~~remaining ~~primarily~~building ~~through~~and aland ~~direct~~continue ~~sales~~to ~~force~~be held-for-sale as of December 31, ~~augmented~~2018. byIn ~~some~~the ~~select~~fourth ~~distributors~~quarter of 2018, we updated our analysis of the expected sales proceeds less cost to asell, ~~broader~~and ~~base~~recognized an additional impairment charge of ~~customers~~$0.3 ~~than~~million ~~Fiery~~on the remaining Meredith facility. ~~Any~~We ~~interruption~~may ~~of these~~be ~~distribution~~required ~~channels~~to ~~could~~record ~~negatively~~additional ~~impact~~impairment uscharges inor a loss on sale if the ~~future~~sales proceeds for the remaining Meredith facility do not meet our expectations. We may also need to record impairment charges if we decide to sell or dispose of other long-term assets.

~~Growing~~We ~~market~~are ~~share~~currently insubject ~~the~~to ~~Productivity~~securities ~~Software~~lawsuits and ~~Industrial~~we ~~Inkjet operating~~may ~~segments~~be ~~increases~~subject to similar or other litigation in the ~~possibility~~future, ~~that~~which wemay ~~will~~divert ~~experience~~management’s ~~increased~~attention ~~bad~~and ~~debt~~have ~~expense~~a material adverse effect on our business, financial condition, and ~~increased~~results ~~accounts~~of ~~receivable~~operations.

~~Many~~The market price of our common stock declined significantly following our August 3, 2017 announcement concerning our assessment of the ~~Productivity~~ ~~Software~~timing of recognition of revenue and ~~Industrial~~the ~~Inkjet~~effectiveness ~~customers~~of ~~are~~our ~~smaller~~current and ~~potentially~~historical ~~less~~disclosure ~~creditworthy.~~controls ~~Our~~and ~~ceramic~~internal ~~tile~~control ~~decoration~~over ~~digital~~financial ~~inkjet~~reporting. Subsequently ~~customer~~in ~~base~~August, isa ~~primarily~~purported ~~located~~class inaction ~~geographic~~lawsuit ~~regions~~was filed alleging, ~~which~~among ~~have~~other ~~recently~~things, ~~been~~that ~~subject~~we toand ~~economic challenges~~certain ~~including~~of ~~southern~~our ~~Europe~~officers ~~(primarily~~violated ~~Spain~~federal securities laws by making allegedly false and ~~Italy)~~misleading statements concerning our financial reporting, revenue recognition, internal controls, and ~~emerging~~disclosure ~~markets~~controls inand ~~APAC~~procedures, prior to our August 2017 announcement. ~~Furthermore,~~The ifplaintiffs weseek ~~increase~~unspecified ~~the~~monetary ~~percentage~~damages on behalf of ~~Productivity~~the ~~Software~~putative class and ~~Industrial~~an ~~Inkjet~~award ~~products~~of ~~that~~costs ~~are~~and ~~sold~~expenses, ~~internationally~~including attorney’s fees. In addition, itlater ~~may~~in beAugust 2017, ~~challenging~~a ~~to enforce~~shareholder ~~our~~derivative ~~legal~~complaint ~~rights~~was ~~should~~filed ~~collection~~alleging, ~~issues~~among ~~arise.~~other ~~Due~~things, tothat ~~these~~certain of our officers and ~~other~~directors ~~factors,~~had ~~growing~~breached ~~Industrial~~fiduciary ~~Inkjet~~duties and ~~Productivity~~had ~~Software~~been ~~market~~unjustly ~~share~~enriched ~~may~~and ~~cause~~had usmade toallegedly ~~experience~~false anand ~~increase~~misleading instatements ~~bad~~concerning ~~debt~~our ~~expense~~financial reporting, revenue recognition, internal controls, and disclosure controls and procedures. The complaint alleges that the Company has suffered damages and seeks an ~~increase~~unspecified inamount ~~days~~of ~~sales outstanding~~damages, ~~(“DSOs”).~~restitution, and declaratory and other relief.

~~DSOs~~We ~~increased~~cannot ~~during~~predict the ~~year~~outcome ~~ended~~of ~~December 31,~~these ~~2017~~lawsuits, ~~compared~~and ~~with~~we ~~December 31,~~may ~~2016,~~be ~~primarily~~subject ~~due~~ to ~~increased~~ ~~Industrial~~other ~~Inkjet~~similar ~~and~~litigation ~~Productivity~~in ~~Software~~the ~~revenue~~future. asMonitoring aand ~~percentage~~defending ofagainst ~~consolidated~~legal ~~revenue~~actions, ~~sales~~whether ~~with~~or ~~extended~~not ~~payment terms~~meritorious, ~~and~~is ~~a non~~time-~~linear~~consuming ~~sales~~for ~~cycle~~our ~~resulting~~management inand ~~significant~~detracts ~~billings~~from atour ~~the end~~ability ofto ~~the~~fully ~~quarter.~~focus ~~Industrial~~our ~~Inkjet~~internal ~~and~~resources ~~Productivity~~on ~~Software~~our ~~were~~business ~~73%~~activities. In ofaddition, ~~consolidated~~we ~~revenue~~may ~~during~~incur ~~the~~substantial ~~year~~legal ~~ended~~fees ~~December 31,~~and ~~2017,~~costs ~~compared~~in connection with ~~72%~~litigation. ~~and~~Although ~~66%~~we ofmaintain ~~consolidated~~insurance ~~revenue~~coverage, ~~during~~recovery ~~the~~could ~~years~~be ~~ended~~denied ~~December 31,~~or ~~2016~~prove ~~and~~to ~~2015, respectively~~be insufficient. We ~~calculate~~are ~~DSO~~not bycurrently ~~dividing~~able ~~net~~to ~~accounts~~estimate ~~receivable~~the atpossible ~~the~~cost ~~end~~to ofus from the ~~quarter~~currently bypending ~~revenue~~lawsuits, ~~recognized~~and ~~during~~we ~~the~~cannot ~~quarter,~~be ~~multiplied~~certain byhow ~~the~~long ~~total~~it ~~days~~may intake ~~the~~to ~~quarter,~~resolve ~~which~~these ismatters aor ~~measure~~the possible amount of ~~the~~any ~~relationship~~damages ~~between~~that ~~sales~~we ~~and~~may ~~accounts receivable.~~be required to

30 29

~~Table~~pay. We have not established any reserves for any potential liability relating to these or future securities lawsuits. It is possible that we could, in the future, incur judgments or enter into settlements of ~~Contents~~claims for monetary damages. A decision adverse to our interests on these actions could result in the payment of substantial damages and could have a material adverse effect on our business, results of operations, and financial condition. In addition, the uncertainty of the currently pending lawsuits could lead to more volatility in our stock price.

~~Acquisitions~~We ~~may~~are ~~result~~subject into ~~unanticipated~~numerous ~~accounting~~federal, ~~charges~~state, ~~or otherwise adversely affect our results of operations~~ and ~~result~~foreign inemployment ~~difficulties~~laws ~~assimilating~~ and ~~integrating~~may ~~operations,~~face ~~personnel,~~claims ~~technologies,~~in ~~products,~~the ~~and~~future ~~information~~under ~~systems~~such ~~of acquired businesses~~laws.

We ~~seek~~are subject to ~~develop~~numerous ~~new~~federal, ~~technologies~~state, and ~~products~~foreign employment laws and from ~~both~~time ~~internal~~to time face claims by our employees and ~~external~~former ~~sources.~~employees Weunder ~~have~~such ~~also~~laws. ~~purchased~~There ~~companies~~are ~~and~~no ~~businesses~~material ~~for~~claims ~~the~~pending ~~primary purpose~~or ofthreatened ~~acquiring~~against ~~their~~us ~~customer~~under ~~base.~~federal, Asstate, ~~part~~or offoreign ~~this~~employment ~~effort~~laws, but we ~~have~~cannot be sure that material claims under such laws will not be made in the ~~past~~future ~~made~~against us, ~~and~~nor ~~will~~can we predict the likely ~~continue~~impact toof ~~make~~any such claims on us, ~~acquisitions~~or ofthat, ~~other~~if ~~businesses.~~asserted, we would be able to successfully resolve any such claims without incurring significant expense.

~~Acquisitions~~We ~~involve~~may ~~numerous~~be ~~risks,~~unable ~~such~~to ~~as:~~adequately protect our proprietary information and may incur expenses to defend our proprietary information.

•We ~~difficulties~~rely ~~integrating~~on ~~operations~~copyright, ~~employees~~patent, ~~technologies~~trademark, ~~products~~and trade secret protection, ~~information~~in ~~systems~~addition to nondisclosure agreements, licensing, and ~~the~~cross-licensing ~~required~~arrangements ~~focus~~to establish, maintain, and protect our intellectual property rights, all of ~~management~~which ~~attention~~afford only limited protection. We have patents and pending patent applications in the U.S. and various foreign countries. There can be no assurance that patents will issue from our pending applications or from any future applications, ~~time~~or that, if issued, any claims allowed will be sufficiently broad to protect our technology. Any failure to adequately protect our proprietary information could harm our financial condition and ~~effort~~operating results. We cannot be certain that any patents that have been, or may in the future be issued to ~~accomplish~~us, ~~successful~~or ~~integration;~~which we license from third parties, or any other proprietary rights will not be challenged, invalidated, or circumvented. In addition, we cannot be certain that any rights granted to us under any patents, licenses, or other proprietary rights will provide adequate protection of our proprietary information.

•Many ~~information~~countries in which we derive revenue do not have comprehensive and highly developed legal systems, ~~may~~particularly bewith ~~inadequate~~respect to ~~operate~~ the ~~business~~protection of ~~the~~intellectual ~~acquired~~property ~~company~~rights, ~~until~~which, weamong ~~are~~other ~~able~~things, tocan ~~integrate~~result ~~the~~in ~~acquired~~a ~~business~~prevalence ~~into~~of infringing products and counterfeit goods in certain countries, which could harm our ~~information~~business ~~technology~~and ~~system;~~reputation.

•As ~~integration~~different areas of ~~acquired~~our business ~~into~~change or mature, from time to time we evaluate our ~~information~~patent ~~system~~portfolio ~~may~~and bedecide ~~delayed~~to either pursue or not pursue specific patents and patent applications related to such areas. Choosing not to pursue certain patents, ~~which~~patentable applications, and failing to file applications for potentially patentable inventions, may ~~limit~~harm our ~~ability~~business by, among other things, enabling our competitors to ~~manage~~more ~~the~~effectively ~~acquired~~compete ~~business~~with ~~and~~us, ~~implement~~reducing ~~financial~~potential claims we can bring against third parties for patent infringement, and ~~operational~~limiting ~~controls;~~our potential defenses to intellectual property claims brought by third parties.

•Litigation ~~information~~has ~~systems~~been, and may continue to be, ~~poorly~~necessary ~~maintained~~to bydefend and enforce our proprietary rights. Such litigation, whether or not concluded successfully, could involve significant expense and the ~~acquired~~diversion ~~business;~~of our attention and other resources, which could harm our financial condition and operating results.

•We ~~risk~~face ofrisks ~~entering~~from ~~markets~~third inparty ~~which~~claims weof ~~have~~infringement ~~little~~and orpotential ~~no prior experience, or entering markets where competitors have stronger market positions;~~litigation.

•Third ~~possible~~parties ~~write-downs~~have claimed in the past, and may claim in the future, that our products infringe, or may infringe, their proprietary rights. Such claims have resulted in lengthy and expensive litigation in the past and could have a similar result in the future. Such claims and any related litigation, whether or not we are successful in the litigation, could result in substantial costs and diversion of ~~impaired~~our ~~assets;~~resources, which could harm our financial condition and operating results. Although we may seek licenses from third parties covering intellectual property that we are allegedly infringing, we cannot assure that any such licenses could be obtained on acceptable terms, if at all.

~~• changes in the fair value of contingent consideration;~~30

•We ~~possible~~are ~~restructuring~~subject to risk of ~~personnel~~loss due to fire or ~~leased~~earthquakes, ~~facilities;~~floods, or other natural disasters.

•We ~~potential~~use flammable materials in the digital UV curable and ceramic digital ink formulation process; therefore, we may be subject to risk of loss resulting from fire. We maintain insurance policies to cover losses caused by fire, including business interruption insurance. If one or more of ~~key~~our ~~employees~~facilities is damaged or otherwise ceases operations as a result of ~~the~~fire, ~~acquired~~it ~~company;~~would reduce our digital UV curable and ceramic digital ink manufacturing capacity, which may reduce revenue and adversely affect our business.

•Our ~~possible~~corporate ~~overruns~~headquarters, ~~(compared~~including toa ~~expectations)~~significant ~~relative~~portion toof our research and development facilities, are located in the ~~expense~~San ~~levels~~Francisco ~~and~~Bay ~~cash~~Area, ~~outflows~~which is known for seismic activity. This area has also experienced flooding in the past. Many of the ~~acquired~~components necessary for our products are purchased from suppliers based in areas that are subject to risk from natural disasters, including the San Francisco Bay Area, China, and Japan. A significant natural disaster, such as an earthquake, flood, tsunami, hurricane, typhoon, or other business; interruptions due, for example, to power shortages and other interruptions have harmed our business, financial condition, and operating results in the past and could do so again in the future.

•We ~~adverse~~may ~~reactions~~be bysubject ~~customers,~~to ~~suppliers,~~environmental-related orliabilities ~~parties~~due ~~transacting~~to ~~business~~our ~~with~~use ~~the~~of ~~acquired~~hazardous ~~company~~materials orand ~~us;~~solvents.

•Our business operations involve the use of certain hazardous materials at certain of our locations. We formulate UV curable, reactive dye, and ceramic ink at certain locations and store UV curable, ceramic, solvent, and thermoforming ink, as well as a variety of textile ink including dye sublimation, pigmented, reactive dye, acid dye, and water-based dispersed printing ink at certain locations. Our outsourced partners in China and Italy formulate our ceramic solvent-based ink. The solvents used in ceramic digital ink formulation have low volatility and flammability by design. As a result, ceramic digital ink poses less environmental risk compared with true solvent ink. We launched internal formulation of ~~negatively~~reactive ~~impacting~~dye ~~stock~~ink ~~analyst~~during ~~ratings;~~2016 at our facility in Bedford, U.K. Reactive dye is a water-based dye.

•The hazardous materials and solvents that we use are subject to various governmental regulations relating to their transfer, handling, packaging, use, and disposal. We store ink at warehouses worldwide, including Europe, China, Israel, the U.K., and the U.S., and shipping companies distribute ink at our direction. We face potential ~~litigation~~liability for problems such as large spills or ~~any~~fires ~~administrative~~that ~~proceedings~~may ~~arising~~arise ~~from~~at ~~prior~~ink ~~transactions~~manufacturing orlocations. ~~prior~~While ~~actions~~we customarily obtain insurance coverage typical for this kind of ~~the~~risk, ~~acquired~~such ~~company;~~insurance may not be sufficient. If we fail to comply with these laws or an accident involving our ink waste or chemicals occurs, or if our insurance coverage is not sufficient, then our business and financial results could be harmed.

•Future ~~inability~~sales toof ~~protect~~our orproducts ~~secure~~could ~~technology~~be ~~rights;~~limited if we do not comply with current and future environmental and chemical content regulations.

•We ~~possible~~believe ~~overruns~~that our products are currently compliant with RoHS, WEEE, REACH, and other regulations for the European Union as well as with China RoHS and other applicable international, U.S., state, and local environmental regulations. We monitor environmental compliance regulations to ensure that our products are fully compliant prior to the implementation of ~~direct~~any ~~acquisition~~potential new requirements. However, new unforeseen legislation could require us to re-engineer our products, complete costly analyses, or perform supplier surveys, which could harm our business and ~~integration~~negatively impact our financial results. We could also incur additional costs;, sanctions, and liabilities in connection with non-compliant product recalls, regulatory fines, and exclusion of non-compliant products from certain markets.

•Environmental ~~equity~~regulations ~~securities~~and ~~issued~~their enforcement have tightened in ~~connection~~China, which has resulted in the closure of facilities without notice. Although such closures have not occurred with ~~acquisitions~~respect to our suppliers, the unexpected shutdown of supplier factories in China may beimpact ~~dilutive~~our tosupply of raw material for digital inkjet ink. Some of our ~~existing~~ceramic ~~stockholders~~printing ~~unless~~customers ~~mitigating~~in ~~actions~~China ~~are~~have ~~taken~~experienced ~~such~~plant asclosures ~~treasury~~due ~~stock~~to ~~purchases;~~stricter ~~alternatively~~environmental enforcement, ~~acquisitions~~which ~~made~~has ~~entirely~~impacted orour ~~partially~~sales ~~for~~of ~~cash~~ceramic ~~will~~ink ~~reduce~~and ~~cash~~may ~~reserves~~impact our sales in the future.

Mergers and acquisitions of companies are inherently risky. We cannot provide assurance that previous or future acquisitions will be successful or will not harm our business, operating results, financial condition, or stock price. 31

WeOur ~~face risks~~products ~~relating~~may contain defects, which are not discovered until after shipping, which could subject us to ~~the~~warranty ~~potential~~claims ~~impairment~~in excess of ~~goodwill~~our ~~and~~warranty ~~long-lived assets~~reserves.

Our products consist of hardware and software developed by ourselves and others, which may contain undetected defects. We ~~complete~~have ain ~~review~~the past discovered software and hardware defects in certain of our products after their introduction, resulting in warranty expense and other expenses incurred in connection with rectifying such defects or, in certain circumstances, replacing the ~~carrying~~defective ~~value~~product, which may damage our relationships with our customers. Defects could be found in new versions of our ~~goodwill~~products ~~and long-lived~~after ~~assets~~commencement ~~annually~~of commercial shipment and, ~~based~~any onsuch defects could result in a ~~combination~~loss or delay in market acceptance of ~~factors~~such (iproducts and thus harm our reputation and revenue.~~e.,~~ ~~triggering~~Defects ~~events~~in our products (including defects in licensed third-party software) detected prior to new product releases could result in delays in the introduction of new products and the incurrence of additional expense, wewhich ~~may~~could beharm ~~required~~our tooperating ~~perform~~results. anWe ~~interim~~generally ~~analysis~~provide a thirteen-month hardware limited warranty commencing upon installation for certain Industrial Inkjet printers, which may cover both parts and labor. Our Fiery DFE limited warranty is 12 to 15 months.

~~Given~~Our ~~the uncertainty~~standard ofwarranties ~~the~~contain ~~economic~~limits ~~environment~~on damages and ~~its~~exclusions, ~~potential~~including ~~impact~~but onnot ~~our~~limited ~~business~~to alteration, ~~there~~modification, ~~can~~misuse, bemishandling, noand ~~assurance~~storage or operation in improper environments. While we recorded an accrual of $12.8 million at December 31, 2018, for estimated warranty costs that ~~our~~are ~~estimates~~estimable and ~~assumptions~~probable ~~regarding~~based ~~the~~on ~~duration~~historical experience, we may incur additional costs of ~~any~~revenue ~~economic~~and ~~downturn,~~operating orexpenses if our warranty provision does not reflect adequately the ~~period~~cost to resolve or repair defects in our products or if our liability limitations are declared enforceable, which could harm our business, financial condition, and operating results.

31Actual or perceived security vulnerabilities in our products could adversely affect our revenue or costs.

~~Table~~Maintaining the security of ~~Contents~~our software and hardware products is an issue of critical importance to our customers and for us. There are individuals and groups who develop and deploy viruses, worms, and other malicious software programs that could attack our products. Although we take preventive measures to protect our products, and we have a response team that is notified of high risk malicious events, these procedures may not be sufficient to mitigate damage to our products. Actual or perceived security vulnerabilities in our products could lead some customers to seek to return products, reduce or delay future purchases, or purchase competitive products. Any actual security vulnerabilities in our products could require us to incur additional costs to eliminate the vulnerabilities. Customers may also increase their expenditures to protect their computer systems from attack, which could delay or reduce purchases of our products. Any of these actions or responses by customers could adversely affect our revenue.

~~strength~~System ~~of any subsequent recovery~~failures, ~~made for purposes of our goodwill impairment testing at December 31, 2017 will prove to be accurate predictions of the future. If our assumptions regarding forecasted revenue~~ or ~~gross~~system ~~profit rates are not achieved~~unavailability, wecould ~~may~~harm ~~be required to record additional goodwill impairment charges in future periods relating to any of~~ our ~~reporting units, whether in connection with the next annual impairment testing in the fourth quarter of 2018 or prior to that, if an interim triggering event were to occur~~business. ~~It is not possible to determine if any such future impairment charge would result or, if it does, whether such charge would be material. No foreshadowing events have occurred as of December 31, 2017.~~

~~During~~We ~~the~~rely ~~fourth~~on ~~quarter~~our ofnetwork ~~2017~~infrastructure, ~~management~~internal ~~approved~~and aexternal ~~plan~~technology tosystems ~~sell approximately 31.5 acres of land~~ and ~~two~~websites ~~related~~for ~~manufacturing~~our ~~buildings~~operations, ~~located~~development, ~~in Meredith~~marketing, ~~New Hampshire (“Meredith facility”). The fair value of the Meredith facility~~support, ~~based~~and ~~on expected~~ sales ~~proceeds~~activities. ~~less~~These ~~cost~~systems toare ~~sell,~~also issubject ~~estimated~~ to bepotential ~~less~~disruptions ~~than~~and ~~the carrying~~acts ~~amount~~ of ~~the assets~~vandalism. AsAny aevent ~~result,~~that wecauses ~~incurred~~failures anor ~~impairment~~interruption ~~loss of approximately $0.9 million~~ in our ~~consolidated~~hardware ~~results~~or ofsoftware ~~operations~~systems ~~for~~could ~~the~~harm ~~year~~our ~~ended December 31~~business, ~~2017.~~financial Wecondition, ~~may~~and beoperating ~~required to record additional impairment charges if the sales proceeds for the Meredith facility do not meet our expectations~~results. ~~We may also need to record impairment charges if we decide to sell or dispose of other long-term assets.~~

WeOur ~~are~~business ~~currently~~could ~~subject to securities lawsuits and we may~~ be ~~subject~~adversely toimpacted ~~similar or other litigation~~ in the ~~future,~~event ~~which~~of ~~may divert management’s attention and have~~ a ~~material~~failure ~~adverse~~of ~~effect~~our oninformation ~~our~~technology ~~business,~~infrastructure ~~financial~~or ~~condition,~~adversely ~~and~~impacted ~~results~~by ofa ~~operations.~~successful cyber-attack.

~~The~~We ~~market~~have ~~price~~experienced ofcyber-security threats, threats to our ~~common~~information ~~stock declined~~technology ~~significantly~~infrastructure ~~following~~and ~~our~~unauthorized ~~August 3,~~attempts ~~2017~~to ~~announcement~~gain ~~concerning~~access to our ~~assessment~~sensitive ofinformation. ~~the~~Prior ~~timing~~cyber-attacks ofdirected ~~recognition~~at ofus ~~revenue~~have ~~and~~not ~~the~~had ~~effectiveness~~a ofmaterial ~~our~~impact ~~current~~on ~~and~~our ~~historical~~business ~~disclosure~~or ~~controls~~financial ~~and~~results; ~~internal~~however, ~~control~~this ~~over~~may ~~financial reporting. On~~not ~~August 10,~~continue ~~2017,~~to abe ~~purported~~the ~~class~~case ~~action~~in ~~lawsuit~~the ~~was~~future. ~~filed~~Cyber-security ~~alleging,~~assessment ~~among~~analyses ~~other~~undertaken ~~things,~~by ~~that~~us wehave identified and ~~certain~~prioritized ofsteps to enhance our ~~officers~~cyber-security ~~violated~~safeguards. ~~federal~~We ~~securities~~are ~~laws~~in bythe ~~making~~process ~~allegedly~~of ~~false~~implementing ~~and~~these ~~misleading~~recommendations. ~~statements~~Nevertheless, ~~concerning~~there ~~our financial~~can ~~reporting,~~be ~~revenue~~no ~~recognition,~~assurance ~~internal~~that ~~controls,~~we ~~and~~will ~~disclosure~~adequately ~~controls~~protect ~~and~~our ~~procedures,~~information ~~prior~~or tothat ~~our~~we ~~August 3,~~will ~~2017~~not ~~announcement.~~experience ~~The~~any ~~plaintiffs~~future ~~seek~~successful ~~unspecified~~attacks. ~~monetary~~Due ~~damages~~to onthe ~~behalf~~evolving nature of security threats, the ~~putative~~impact ~~class~~of ~~and~~any anfuture ~~award~~incident ~~of costs~~cannot ~~and~~be ~~expenses~~predicted, ~~including~~and ~~attorney’s~~we ~~fees. In~~may ~~addition,~~be onrequired ~~August 22,~~to ~~2017,~~expend asignificant ~~shareholder~~additional ~~derivative~~resources ~~complaint~~to ~~was~~modify ~~filed~~our ~~alleging~~cyber-security protective measures, ~~among~~to ~~other~~investigate ~~things~~and ~~that~~remediate ~~certain~~vulnerabilities ofor ~~our~~other ~~officers~~exposures ~~and~~or ~~our~~to ~~directors~~make ~~had~~required ~~breached~~notifications. ~~fiduciary~~In ~~duties~~addition, ~~and had~~we ~~been~~may ~~unjustly~~be ~~enriched~~subject to litigation and ~~had~~financial ~~made~~losses. ~~allegedly~~These ~~false~~costs ~~and~~related ~~misleading~~to ~~statements~~cyber ~~concerning~~or ~~our~~other ~~financial~~security ~~reporting,~~threats ~~revenue~~or ~~recognition,~~disruptions ~~internal~~may ~~controls,~~not ~~and~~be ~~disclosure~~fully ~~controls~~insured ~~and~~or ~~procedures. The~~indemnified ~~complaint~~by ~~alleges~~other ~~that~~means. ~~the~~Occurrence ~~Company~~of ~~has suffered~~any ~~damages~~of ~~and~~these ~~seeks~~events ancould ~~unspecified~~adversely ~~amount~~affect ofour ~~damages~~operations, ~~restitution~~the services we provide to our customers, ~~and~~our ~~declaratory~~financial ~~and~~results ~~other~~or ~~relief.~~our reputation; or such events could result in

We cannot predict the outcome of these lawsuits and we may be subject to other similar litigation in the future. Monitoring and defending against legal actions, whether or not meritorious, is time-consuming for our management and detracts from our ability to fully focus our internal resources on our business activities. In addition, we may incur substantial legal fees and costs in connection with litigation. Although we maintain insurance coverage, recovery could be denied or prove to be insufficient. We are not currently able to estimate the possible cost to us from the currently pending lawsuits, and we cannot be certain how long it may take to resolve these matters or the possible amount of any damages that we may be required to pay. We have not established any reserves for any potential liability relating to these or future lawsuits. It is possible that we could, in the future, incur judgments or enter into settlements of claims for monetary damages. A decision adverse to our interests on these actions could result in the payment of substantial damages and could have a material adverse effect on our business, results of operations, and financial condition. In addition, the uncertainty of the currently pending lawsuits could lead to more volatility in our stock price. 32

Wethe ~~are~~loss ~~subject~~of tocompetitive ~~numerous~~advantages ~~federal,~~derived ~~state,~~from our research and ~~foreign~~development ~~employment~~efforts ~~laws~~or ~~and~~other ~~may~~intellectual ~~face~~property ~~claims~~or inearly ~~the~~obsolescence ~~future~~of ~~under~~our ~~such~~products ~~laws.~~and services.

WeOur ~~are~~stock ~~subject~~price tohas ~~numerous~~been ~~federal,~~volatile ~~state,~~historically and ~~foreign~~may ~~employment~~continue ~~laws and from time~~ to ~~time~~be ~~face claims by our employees and former employees under such laws~~volatile. ~~There are no material claims pending or threatened~~

32The market price for our common stock has been and may continue to be volatile. During the twelve months ended December 31, 2018, the price of our common stock as reported on The Nasdaq Global Select Market ranged from a low of $23.01 to a high of $35.62. We expect our stock price to be subject to fluctuations as a result of a variety of factors, including factors beyond our control. These factors include:

~~Table~~• ofactual ~~Contents~~or anticipated variations in our quarterly or annual operating results;

~~against~~• usability ~~under~~to ~~federal,~~initiate ~~state,~~ or ~~foreign~~complete ~~employment~~stock ~~laws,~~repurchase but we cannot be sure that material claims under such laws will not be made in the future against us, nor can we predict the likely impact of any such claims on us, or that, if asserted, we would be able to successfully resolve any such claims without incurring significant expense. programs;

We• ~~may~~announcements beof ~~unable~~technological toinnovations ~~adequately~~or ~~protect~~new ~~our~~products ~~proprietary~~or ~~information~~services ~~and~~by ~~may incur expenses to defend~~ our ~~proprietary~~competitors ~~information.~~or by us;

We• ~~rely~~announcements onrelating ~~copyright, patent, trademark, and trade secret protection, in addition~~ to ~~nondisclosure~~strategic ~~agreements~~relationships, ~~licensing~~acquisitions, and cross-licensing arrangements to establish, maintain, and protect our intellectual property rights, all of which afford only limited protection. We have patents and pending patent applications in the U.S. and various foreign countries. There can be no assurance that patents will issue from our pending applications or from any future applications, or that, if issued, any claims allowed will be sufficiently broad to protect our technology. Any failure to adequately protect our proprietary information could harm our financial condition and operating results. We cannot be certain that any patents that have been, or may in the future be issued to us, or which we license from third parties, or any other proprietary rights will not be challenged, invalidated, or circumvented. In addition, we cannot be certain that any rights granted to us under any patents, licenses, or other proprietary rights will provide adequate protection of our proprietary information. investments;

~~Many~~• ~~countries~~announcements inby ~~which~~our wecustomers ~~derive~~regarding ~~revenue~~their dobusinesses ~~not~~or ~~have comprehensive and highly developed legal systems, particularly with respect to~~ the ~~protection of intellectual property rights, which, among other things, can result in a prevalence of infringing~~ products ~~and counterfeit goods~~ in ~~certain countries,~~ which ~~could harm~~ our ~~business~~products ~~and~~are ~~reputation.~~ included;

As• ~~different~~changes ~~areas~~in offinancial ~~our~~estimates ~~business change~~ or mature, from time to time we evaluate our patent portfolio and decide to either pursue or not pursue specific patents and patent applications related to such areas. Choosing not to pursue certain patents, patentable applications, and failing to file applications for potentially patentable inventions, may harm our business by, among other ~~things,~~statements enabling our competitors to more effectively compete with us, reducing potential claims we can bring against third parties for patent infringement, and limiting our potential defenses to intellectual property claims brought by ~~third~~securities ~~parties.~~ analysts;

~~Litigation~~• ~~has~~any ~~been,~~failure ~~and may continue~~ to ~~be,~~meet ~~necessary~~security toanalyst defend and enforce our proprietary rights. Such litigation, whether or not concluded successfully, could involve significant expense and the diversion of our attention and other resources, which could harm our financial condition and operating results. expectations;

We• ~~face~~changes ~~risks~~in ~~from~~the ~~third~~securities ~~party~~analysts’ ~~claims~~rating of ~~infringement~~our ~~and potential litigation.~~ securities;

~~Third~~• ~~parties~~terrorist ~~have~~attacks ~~claimed in the past,~~ and ~~may claim in~~ the ~~future,~~affects ~~that~~of ~~our~~military ~~products~~engagements ~~infringe,~~ or ~~may~~natural infringe, their proprietary rights. Such claims have resulted in lengthy and expensive litigation in the past and could have a similar result in the future. Such claims and any related litigation, whether or not we are successful in the litigation, could result in substantial costs and diversion of our resources, which could harm our financial condition and operating results. Although we may seek licenses from third parties covering intellectual property that we are allegedly infringing, we cannot assure that any such licenses could be obtained on acceptable terms, if at all. disasters;

We• ~~may~~commencement ~~be subject to risk~~ of ~~loss~~litigation ~~due~~or toadverse ~~fire~~results ~~because~~of ~~certain~~pending ~~materials we use in our ink formulation process are flammable.~~ litigation;

We• ~~use~~changes ~~flammable materials~~ in the ~~digital~~financial UVperformance ~~curable~~ and/or ~~ceramic~~market ~~digital~~valuations ~~ink formulation process; therefore, we may be subject to risk~~ of ~~loss~~other ~~resulting~~software ~~from~~and ~~fire.~~high ~~The~~technology ~~risk~~companies; of fire associated with these materials cannot be completely eliminated. We own certain facilities that manufacture or warehouse our ink, which increases our exposure to such risk. We maintain insurance policies to cover losses caused by fire, including business and

33• changes in general economic conditions.

~~Table~~Because of ~~Contents~~this volatility, we may fail to meet the expectations of our stockholders or of securities analysts from time to time and the trading price of our securities could decline as a result. The stock market has experienced significant price and volume fluctuations that have particularly affected the trading prices of equity securities of many high technology companies. These fluctuations have often been unrelated or disproportionate to the operating performance of these companies. Any negative change in the public’s perception of high technology companies could depress our stock price regardless of our operating results.

~~interruption~~Our ~~insurance.~~stock Ifrepurchase ~~one~~program orcould ~~more~~affect ~~of these facilities is damaged or otherwise ceases operations as a result of fire, it would reduce~~ our ~~digital~~stock UVprice ~~curable~~ and ~~ceramic~~add ~~digital ink manufacturing capacity, which may reduce revenue and adversely affect our business~~volatility.

~~The~~In ~~location~~November ~~and~~2015, ~~concentration~~our board of directors authorized $150 million for the repurchase of our ~~facilities~~outstanding ~~subject~~common usstock. This authorization was scheduled to ~~risk~~ expire on December 31, 2018. On September 11, 2017, the board of ~~earthquakes~~directors approved the repurchase of an additional $125 million for our share repurchase program commencing September 11, ~~floods~~2017 and ending December 31, or2018. ~~other~~At ~~natural~~that ~~disasters~~time, $28.8 million remained available for repurchase under the 2015 authorization. The 2017 authorization thereby increased the repurchase authorization to $153.8 million of our common stock. As of December 31, 2018, we have completed purchases of $275 million under our authorized stock repurchase program which expired at the end of 2018.

~~Our~~Any ~~corporate~~repurchases ~~headquarters,~~pursuant ~~including~~to aour ~~significant~~stock ~~portion~~repurchase ofprogram could affect our ~~research~~stock price and ~~development facilities,~~add ~~are~~volatility. ~~located~~There incan ~~the~~be ~~San~~no ~~Francisco~~assurance ~~Bay~~that ~~Area,~~repurchases ~~which~~will isbe ~~known~~made ~~for~~at ~~seismic~~the ~~activity~~best possible price. ~~This~~Potential ~~area~~risks ~~has~~and uncertainties also ~~experienced~~include, ~~flooding~~but inare not necessarily limited to, the ~~past.~~amount ~~Many~~and timing of ~~the~~future ~~components~~stock ~~necessary~~repurchases ~~for~~and ~~our~~the ~~products~~origin ~~are~~of ~~purchased~~funds ~~from~~used ~~suppliers~~for ~~based~~such inrepurchases. ~~areas~~The ~~that~~existence ~~are subject~~of toa ~~risk~~stock ~~from~~repurchase ~~natural~~program ~~disasters~~could ~~including~~also ~~the~~cause ~~San~~our ~~Francisco~~stock ~~Bay~~price ~~Area,~~to ~~China,~~be ~~and~~higher ~~Japan.~~than Ait ~~significant~~would ~~natural~~be ~~disaster,~~in ~~such~~the asabsence anof ~~earthquake,~~such ~~flood,~~a ~~tsunami,~~program ~~hurricane,~~and ~~typhoon,~~could orpotentially ~~other~~reduce ~~business~~the ~~interruptions~~market ~~due,~~liquidity for ~~example,~~our tostock. ~~power shortages~~Depending on market conditions and other ~~interruptions~~factors, ~~have~~these ~~harmed~~repurchases ~~our~~may ~~business,~~be ~~financial~~commenced ~~condition,~~or ~~and~~suspended ~~operating~~from ~~results~~time into ~~the~~time. ~~past~~Any ~~and~~such suspension could docause sothe ~~again~~market inprice ~~the~~of ~~future.~~our stock to decline.

WeOur profitability may be ~~subject~~affected toby ~~environmental-related~~unanticipated ~~liabilities~~changes ~~due~~in to our ~~use~~tax ofprovisions, ~~hazardous~~the ~~materials~~adoption ~~and~~of ~~solvents~~new U.S. or foreign tax legislation, or exposure to additional income tax liabilities.

~~Our~~We ~~business~~are ~~operations~~subject ~~involve~~to ~~the~~income ~~use~~taxes ofin ~~certain~~the ~~hazardous materials at eight locations~~U.S. ~~We formulate UV curable, reactive dye,~~ and ~~ceramic~~many ~~ink~~foreign atcountries. ~~four locations~~Intercompany ~~and~~transaction ~~store~~pricing UVcan ~~curable,~~impact ~~ceramic,~~our ~~solvent,~~tax ~~and~~liabilities. ~~thermoforming~~We ~~ink,~~are aspotentially ~~well~~subject asto atax ~~variety~~audits ofin ~~textile~~various ~~ink~~countries ~~including dye sublimation, pigmented, reactive dye, acid dye,~~ and ~~water-based~~tax ~~dispersed~~authorities ~~printing~~may ~~ink~~disagree atwith ~~eight locations. We formulate and market ceramic solvent-based ink at~~ our ~~facility~~tax ~~in Ypsilanti~~treatments, ~~Michigan.~~including ~~The~~intercompany ~~solvents~~pricing ~~used~~or inother ~~ceramic digital ink formulation have low volatility by design. As a result~~matters, ~~ceramic~~and ~~digital~~assess ~~ink~~additional ~~poses less environmental risk compared with true solvent ink~~taxes. We ~~launched~~regularly ~~internal~~review ~~formulation~~the oflikely ~~reactive dye ink during 2016 at our facility in Bedford, U.K. Reactive dye is a water-based dye.~~

The hazardous materials and solvents that we use are subject to various governmental regulations relating to their transfer, handling, packaging, use, and disposal. We store ink at warehouses worldwide, including Europe, China, Israel, the U.K., and the U.S., and shipping companies distribute ink at our direction. We face potential liability for problems such as large spills or fires that may arise at ink manufacturing locations. While we customarily obtain insurance coverage typical for this kind of risk, such insurance may not be sufficient. If we fail to comply with these laws or an accident involving our ink waste or chemicals occurs, or if our insurance coverage is not sufficient, then our business and financial results could be harmed. 33

~~Future~~outcomes ~~sales~~ of these audits to determine whether our ~~products~~tax ~~could~~provisions are sufficient. However, there can be ~~limited~~no ifassurance that we dowill ~~not~~accurately ~~comply~~predict ~~with~~the ~~current~~outcomes ~~and~~of ~~future~~these ~~environmental~~audits, and ~~chemical~~the ~~content~~final ~~regulations.~~assessments of these audits can have a material impact on our net income (loss).

WeOur ~~believe~~effective ~~that~~tax ~~our~~rate ~~products~~in ~~are~~the ~~currently~~future ~~compliant~~may be impacted by changes in the mix of earnings in countries with ~~RoHS~~differing statutory tax rates, ~~WEEE~~changes in the valuation of deferred tax assets and liabilities, ~~REACH~~changes in tax laws, ~~and~~new ~~other~~information ~~regulations~~discovered ~~for~~during the ~~European~~preparation ~~Union~~of asour ~~well~~tax asreturns, ~~with~~deemed ~~China~~repatriation ~~RoHS~~of foreign earnings, and ~~other applicable~~enactment ~~international,~~of future U.S., ~~state~~and foreign tax legislative initiatives, ~~and~~such ~~local~~as ~~environmental~~tax ~~regulations.~~reform Welegislation ~~monitor~~(“2017 ~~environmental~~Tax ~~compliance~~Act”) ~~regulations~~enacted toon ~~ensure~~December 22, ~~that~~2017 ~~our~~in ~~products~~the ~~are~~United ~~fully~~States ~~compliant~~(“U.S.”) ~~prior~~or tomulti-jurisdictional ~~the~~actions ~~implementation~~to ofaddress ~~any~~“base ~~potential~~erosion ~~new~~and ~~requirements.~~profit-shifting” ~~However,~~by ~~new unforeseen~~multinational ~~legislation~~companies. ~~could~~The ~~require~~Organisation usfor toEconomic reCo-~~engineer~~operation ~~our~~and ~~products~~Development, ~~complete~~or ~~costly analyses~~OECD, orissued ~~perform~~a ~~supplier~~series ~~surveys,~~of ~~which~~reports ~~could~~on ~~harm~~October 5, ~~our~~2015 ~~business~~recommending ~~and~~changes ~~negatively~~to ~~impact~~numerous ~~our~~well-established ~~financial~~tax ~~results~~principles. WeMany ~~could also~~countries ~~incur~~are ~~additional~~beginning ~~costs,~~to ~~sanctions,~~implement ~~and~~legislation ~~liabilities~~to inalign ~~connection~~their ~~with~~international ~~non-compliant~~tax ~~product~~rules ~~recalls,~~with ~~regulatory~~these ~~fines,~~recommendations. ~~and~~These ~~exclusion~~actions ofcould ~~non-compliant~~adversely ~~products~~impact ~~from certain~~our ~~markets.~~effective tax rate.

~~Environmental~~The ~~regulations~~2017 ~~and~~Tax ~~their~~Act ~~enforcement~~may ~~have~~significantly ~~tightened~~impact inour ~~China~~tax liabilities, ~~which~~current ~~has~~business ~~resulted~~deductions, inand the ~~closure of facilities without notice~~U. ~~Although~~S. ~~such~~taxation ~~closures~~of ~~have~~income ~~not~~earned ~~occurred~~by ~~with respect to~~ our ~~suppliers,~~foreign ~~the~~subsidiaries. ~~unexpected~~Many ~~shutdown~~ of ~~supplier~~the ~~factories~~provisions insignificantly ~~China~~differ ~~may~~from ~~impact~~prior ~~our supply of raw material for digital inkjet ink~~U.S. ~~Some~~tax oflaw ~~our~~resulting ~~ceramic printing customers~~ in ~~China~~changes ~~have experienced plant closures due~~ to ~~stricter~~tax ~~environmental~~reporting ~~enforcement, which has impacted our sales of ceramic ink~~ and ~~may~~potentially ~~impact~~increasing ~~our~~tax ~~sales~~liabilities ~~in the future~~incurred.

34In December 2017, the 2017 Tax Act was enacted, which included a broad range of changes impacting businesses, including corporate tax rates, business deductions, and international tax provisions. Many of the provisions significantly differ from previous U.S. tax law.

~~Table~~The 2017 Tax Act also will also significantly impact current and future tax liabilities including, but not limited to the reduction of ~~Contents~~the U.S. federal corporate tax rate from 35% to 21%, a minimum tax to address base erosion and profit shifting from the U.S., the elimination of U.S. federal income taxes on dividends from foreign subsidiaries, a new tax on global intangible low-tax income (“GILTI”), a limitation of deductible interest expense, and the repeal of the domestic production activity deduction. There are additional limitations imposed on the deductibility of certain executive compensation, the use of foreign tax credits to reduce U.S. income tax liabilities, and the utilization of net operating losses generated after December 31, 2017. Final regulations have not been issued to interpret many provisions of the 2017 Tax Act. These regulations, when issued, may have an adverse effect to our financial results.

~~Our~~We ~~products~~ may ~~contain~~not ~~defects,~~have ~~which~~the ~~are~~ability ~~not~~to ~~discovered~~raise ~~until~~the ~~after~~funds ~~shipping,~~necessary ~~which~~to ~~could~~settle ~~subject~~conversions ~~us to~~of ~~warranty~~our ~~claims~~0.75% inConvertible ~~excess~~Senior ofNotes ~~our~~due ~~warranty~~2019 ~~reserves~~(“2019 Notes”) and 2.25% Convertible Senior Notes due 2023 (“2023 Notes” and together with the 2019 Notes, the “Notes”) in cash, repay the Notes at maturity, or repurchase the Notes upon a fundamental change.

~~Our~~In ~~products~~September ~~consist of hardware and software developed by ourselves and others~~2014, ~~which~~we ~~may contain~~completed ~~undetected~~a ~~defects.~~private Weplacement ~~have~~of in$345 million ~~the~~principal ~~past~~amount ~~discovered software and hardware defects in certain~~ of ~~our~~2019 ~~products~~Notes ~~after their introduction, resulting in warranty expense~~ and ~~other expenses incurred~~ in ~~connection~~November ~~with rectifying such defects or~~2018, ~~in certain~~we ~~circumstances,~~completed ~~replacing~~a ~~the~~private ~~defective~~placement ~~product,~~of ~~which~~$150 ~~may~~million ~~damage~~principal ~~our~~amount ~~relationships~~of ~~with~~the ~~our~~2023 ~~customers~~Notes. ~~Defects~~Holders ~~could be found in new versions~~ of ~~our~~the ~~products~~Notes ~~after~~will ~~commencement~~have ofthe ~~commercial~~right ~~shipment~~to ~~and~~require ~~any~~us ~~such~~to ~~defects~~repurchase ~~could~~all ~~result~~or in a ~~loss~~ orportion ~~delay in market acceptance~~ of ~~such~~their ~~products~~Notes ~~and~~upon ~~thus~~the ~~harm~~occurrence ~~our~~of ~~reputation~~a ~~and~~fundamental ~~revenue.~~change ~~Defects~~at ina ~~our~~repurchase ~~products~~price ~~(including~~equal ~~defects in licensed third-party software) detected prior~~ to ~~new~~100% ~~product~~of ~~releases~~the ~~could~~principal ~~result~~amount ~~in delays in the introduction~~ of ~~new products and~~ the ~~incurrence~~Notes ofto ~~additional~~be ~~expense~~repurchased, ~~which~~plus ~~could~~accrued ~~harm~~and ~~our~~unpaid ~~operating~~interest, ~~results.~~if ~~We generally provide a thirteen-month hardware limited warranty commencing upon installation for certain Industrial Inkjet printers~~any, ~~which may~~as ~~cover~~described ~~both~~in ~~parts~~Note ~~and~~12 ~~labor.~~– ~~Our~~Debt ~~Fiery~~of ~~DFE~~Notes ~~limited warranty is 12~~ to 15Consolidated ~~months.~~Financial Statements.

~~Our~~Upon ~~standard~~conversion ~~warranties~~of ~~contain~~the ~~limits~~Notes, onwe ~~damages~~will ~~and~~be ~~exclusions, including~~required ~~but~~to ~~not~~make ~~limited~~conversion topayments ~~alteration,~~in ~~modification~~cash, ~~misuse,~~unless ~~mishandling,~~we ~~and~~elect ~~storage~~to ordeliver ~~operation~~solely inshares ~~improper~~of ~~environments.~~our ~~While~~common westock ~~recorded~~to ansettle ~~accrual~~such ~~of $16.3 million at December 31~~conversion, ~~2017,~~as ~~for~~described ~~estimated~~in ~~warranty~~Note ~~costs~~12–Debt ~~that~~of ~~are estimable~~Notes ~~and~~to ~~probable~~Consolidated ~~based~~Financial onStatements. ~~historical experience~~Moreover, we ~~may~~will ~~incur~~be ~~additional~~required ~~costs~~to ofrepay ~~revenue~~the ~~and~~Notes ~~operating~~in ~~expenses~~cash ifat ~~our~~their ~~warranty~~maturity, ~~provision~~unless ~~does~~earlier ~~not~~converted ~~reflect~~or ~~adequately~~repurchased. ~~the~~However, ~~cost~~we tomay ~~resolve~~not orhave ~~repair~~enough ~~defects~~available incash ~~our products~~ or ifbe ~~our~~able ~~liability limitations~~to ~~are~~obtain ~~declared~~financing ~~enforceable,~~when ~~which~~the ~~could~~Notes ~~harm~~are ~~our~~to ~~business~~be repurchased, ~~financial condition~~converted, ~~and~~or ~~operating~~at ~~results~~their maturity.

~~Actual~~The orconditional ~~perceived~~conversion ~~security vulnerabilities~~feature inof ~~our~~the ~~products~~Notes, ~~could~~if triggered, may adversely affect our ~~revenue.~~financial condition and results of operations.

~~Maintaining~~In the ~~security~~event ofthe ~~our~~conditional ~~software~~conversion ~~and~~feature ~~hardware~~of ~~products~~the Notes is antriggered, ~~issue~~holders of ~~critical~~ ~~importance~~Notes towill ~~our~~be ~~customers~~entitled ~~and~~to ~~for~~convert ~~us.~~the ~~There~~Notes ~~are~~at ~~individuals~~any ~~and~~time ~~groups~~during ~~who~~specified ~~develop~~periods ~~and~~at ~~deploy~~their ~~viruses,~~option. ~~worms,~~If ~~and~~one ~~other~~or ~~malicious~~more ~~software~~holders ~~programs~~elect ~~that~~to ~~could~~convert ~~attack~~their ~~our~~Notes, ~~products.~~unless ~~Although~~ we ~~take~~elect ~~preventive measures~~ to ~~protect~~satisfy our ~~products,~~ ~~and~~conversion weobligation ~~have~~by adelivering ~~response~~solely ~~team~~shares ~~that is notified~~ of ~~high~~our ~~risk~~common ~~malicious events~~stock, ~~these~~we ~~procedures~~would ~~may not~~ be ~~sufficient~~required to ~~mitigate~~settle ~~damage~~all ~~to our products. Actual~~ or ~~perceived~~a ~~security~~portion ~~vulnerabilities~~of inthe ~~our~~conversion ~~products~~obligation ~~could~~through ~~lead~~the ~~some~~payment ~~customers to~~of ~~seek to return products~~cash, ~~reduce~~which orcould ~~delay~~adversely ~~future~~affect ~~purchases,~~our ~~or purchase competitive products~~liquidity. ~~Customers~~Even ~~may~~if ~~also~~holders ~~increase~~do ~~their~~not ~~expenditures~~elect to ~~protect~~convert their ~~computer systems from attack~~Notes, ~~which~~we could ~~delay~~be orrequired ~~reduce~~under ~~purchases~~applicable ofaccounting ~~our~~rules ~~products.~~to ~~Any of~~reclassify ~~these~~all ~~actions~~ or ~~responses~~a byportion ~~customers~~of ~~could~~the ~~adversely affect our revenue.~~

~~System failures, or system unavailability, could harm our business.~~ 34

Weoutstanding ~~rely~~principal onof ~~our~~the ~~network~~2023 ~~infrastructure,~~Notes ~~internal~~as ~~and~~a ~~external~~current ~~technology systems and websites for our operations~~liability, ~~development,~~which ~~marketing,~~would ~~support,~~result ~~and sales~~in ~~activities.~~a ~~These~~material ~~systems~~reduction ~~are also subject to potential disruptions and acts~~ of ~~vandalism. Any event that causes failures or interruption in~~ our ~~hardware~~net orworking ~~software systems could harm our business, financial condition, and operating results~~capital.

~~Our~~The ~~business~~accounting ~~could~~method befor ~~adversely~~convertible ~~impacted~~debt insecurities ~~the~~that ~~event~~may ofbe asettled ~~failure~~in ofcash ~~our~~(such ~~information~~as ~~technology~~the ~~infrastructure~~Notes) orcould ~~adversely~~have ~~impacted~~a bymaterial aeffect ~~successful cyber-attack.~~on our reported financial results.

WeFinancial ~~have~~Accounting ~~experienced~~Standards ~~cyber~~Board ~~security~~(“FASB”) ~~threats~~ASC 470-20, ~~threats~~Debt with Conversion and Other Options, requires us to ~~our~~separately ~~information~~account ~~technology~~for ~~infrastructure~~the liability and ~~unauthorized~~equity ~~attempts~~components toof ~~gain access~~the toNotes ~~our~~that ~~sensitive~~may ~~information.~~be ~~Prior~~settled ~~cyber-attacks~~entirely ~~directed~~or atpartially usin ~~have~~cash ~~not~~upon ~~had~~conversion in a ~~material~~manner ~~impact~~that onreflects our ~~business~~non-convertible ordebt ~~financial~~interest ~~results;~~rate. ~~however~~Accordingly, ~~this~~the ~~may~~equity ~~not~~component ~~continue~~of tothe beNotes ~~the~~is ~~case~~included in ~~the~~additional ~~future.~~paid-in ~~Cyber~~capital ~~security~~within ~~assessment~~stockholders’ ~~analyses~~equity ~~undertaken by~~in usour ~~have~~Consolidated ~~identified~~Balance Sheet and ~~prioritized~~the ~~steps~~value toof ~~enhance~~the ~~our~~equity ~~cyber~~component ~~security~~is ~~safeguards.~~treated Weas ~~are~~original inissue ~~the~~discount ~~process~~for purposes of ~~implementing~~accounting ~~these~~for ~~recommendations.~~the ~~Nevertheless,~~debt ~~there~~component ~~can~~of bethe noNotes. ~~assurance~~As ~~that~~a result, we ~~will~~are ~~adequately~~required ~~protect~~to recognize non-cash interest expense in our ~~information~~Consolidated orStatement ~~that~~of ~~we will~~Operations ~~not~~in ~~experience~~current ~~any~~and future ~~successful~~periods ~~attacks.~~as ~~Due~~a toresult of the ~~evolving~~amortization ~~nature~~ of ~~security~~the ~~threats,~~discounted ~~the~~carrying ~~impact~~value of ~~any~~the ~~future~~Notes ~~incident~~to ~~cannot~~their beprincipal ~~predicted,~~amount ~~and~~over wetheir ~~may~~term. beWe ~~required~~will toreport ~~expend~~lower ~~significant~~net ~~additional~~income ~~resources~~(loss) because ASC 470-20 requires interest to ~~modify~~include both the current period’s amortization of the original issue discount and the Notes’ non-convertible interest rate. This could adversely affect our ~~cyber~~future ~~security protective~~consolidated ~~measures~~financial results, the trading price of our common stock, and the trading price of the Notes.

35Under certain circumstances, in calculating earnings per share, convertible debt instruments (such as the Notes) that may be settled entirely or partially in cash are accounted for utilizing the treasury stock method. The effect of the treasury stock method is that the shares of common stock issuable upon conversion of the Notes, if any, are not included in the calculation of diluted earnings per share except to the extent that the conversion value of the Notes exceeds their principal amount. Under the treasury stock method, diluted earnings per share is calculated as if the number of shares of common stock that would be necessary to settle such excess were issued, if we elected to settle such excess in shares. We cannot be sure that accounting standards will continue to permit the use of the treasury stock method in the future. If we are unable to use the treasury stock method in accounting for the shares issuable upon conversion of the Notes, if any, then our diluted consolidated earnings per share would be adversely affected.

~~Table~~Our ofdebt ~~Contents~~obligations may be a burden on our future cash flows and cash resources.

On January 2, 2019, we entered into a credit agreement (the “Credit Agreement”) which provides for revolving commitments of up to ~~investigate~~$150 million (including up to $10 million for swing line loans and ~~remediate~~up ~~vulnerabilities~~to or$25 ~~other~~million ~~exposures~~for letters of credit). The Credit Agreement also contains a feature permitting us, subject to certain requirements, to arrange with lenders for additional revolving commitments or term loans for up to ~~make~~an ~~required~~aggregate ~~notifications~~of $50 million. InAs ~~addition~~of December 31, 2018, we ~~may~~had be$345 ~~subject~~million toprincipal ~~litigation~~amount outstanding of the 2019 Notes and ~~financial~~$150 ~~losses~~million principal amount outstanding of the 2023 Notes. ~~These~~Our ~~costs~~ability ~~related~~to repay the principal of, to ~~cyber~~ pay interest on or ~~other~~to ~~security~~refinance ~~threats~~our indebtedness, or ~~disruptions~~to ~~may~~make ~~not~~cash bepayments ~~fully~~in ~~insured~~connection orwith ~~indemnified~~any byconversion of the Notes depends on our future performance, which is subject to economic, financial, competitive, and other ~~means~~factors beyond our control. ~~Occurrence~~Our ofbusiness ~~any~~may ofnot ~~these~~continue ~~events~~to ~~could~~generate ~~adversely~~cash ~~affect~~flow ~~our~~from operations, in the ~~services~~future sufficient to service our debt and make necessary capital expenditures. If we ~~provide~~are unable to ~~our~~generate ~~customers~~such cash flow, ~~our~~we ~~financial~~may ~~results~~be orrequired ~~our reputation;~~to adopt one or more alternatives, such ~~events~~as ~~could~~selling ~~result~~assets, inrestructuring ~~the~~debt, ~~loss~~or ofobtaining ~~competitive~~additional ~~advantages~~equity ~~derived~~capital ~~from~~on terms that may be onerous or highly dilutive. Our ability to refinance our ~~research~~indebtedness will depend on the capital markets and ~~development~~our ~~efforts~~financial orcondition ~~other~~at ~~intellectual~~such ~~property~~time. orWe ~~early~~may ~~obsolescence~~not be able to engage in any of ~~our~~these ~~products~~activities ~~and~~or ~~services~~engage in these activities on desirable terms, which could result in a default on our debt obligations.

WeOur ~~identified~~Credit ~~material~~Agreement ~~weaknesses~~contains inrestrictions ~~our~~that ~~internal control over financial reporting as of December 31, 2017 and 2016, and the occurrence of these or any other material weaknesses~~ could ~~have~~limit ~~a material adverse effect on~~ our ~~ability~~flexibility ~~to report accurate financial information~~ in aoperating ~~timely~~our ~~manner~~business.

~~As described~~Our inCredit ~~“Item~~Agreement ~~9A,~~contains ~~Controls~~various ~~and~~covenants ~~Procedures”, our management concluded~~ that wecould ~~had~~limit ~~material weaknesses in~~ our ~~internal~~ability ~~control over financial reporting as of December 31, 2017 and 2016 related~~ to ~~operational~~engage ~~changes,~~in ~~which~~specified ~~may impact~~types revenue recognition, insufficient staffing levels, and inventory valuation practices at our Italian manufacturing location. Therefore, we did not maintain effective internal control over financial reporting or effective disclosure controls and procedures, both of ~~which~~transactions ~~are~~under ~~requirements~~certain ~~of the Exchange Act, as of that date~~conditions. AThese ~~material~~covenants ~~weakness~~could islimit ~~a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of~~ our ~~annual~~ability or interim financial statements will not be prevented or detected on a timely basis. Following the identification of the material weaknesses, management implemented remediation plans, which were ongoing as of December 31, 2017. Because there was insufficient time as of December 31, 2017, to ~~demonstrate that the new controls implemented as part of the remediation plan were operating effectively as of that date~~, ~~management~~among ~~concluded~~other ~~that the material weaknesses described in “Item 9A, Controls and Procedures”, still existed as of December 31, 2017.~~ things:

~~The~~• ~~remedial~~incur ~~measures~~additional we are undertaking may not be adequate to prevent future misstatements or avoid other control deficiencies or material weaknesses. The effectiveness of our internal control over financial reporting is subject to various inherent limitations, including cost limitations, judgments used in decision making, assumptions about the likelihood of future events, the soundness of our systems, the possibility of human error, and the risk of fraud. Moreover, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions and the risk that the degree of compliance with policies or procedures may deteriorate over time. Because of these limitations, there can be no assurance that any system of disclosure controls and procedures or internal control over financial reporting will be successful in preventing all errors or fraud or in making all material information known in a timely manner to the appropriate levels of management. debt;

~~Our~~• ~~stock~~create ~~price has been volatile historically and may continue to be volatile.~~ liens;

~~The~~• ~~market~~make ~~price~~certain ~~for our common stock has been and may continue to be volatile. During the twelve months ended December 31~~investments, ~~2017~~acquisitions, ~~the~~loans ~~price~~and of our common stock as reported on The NASDAQ Global Select Market ranged from a low of $25.54 to a high of $51.15. We expect our stock price to be subject to fluctuations as a result of a variety of factors, including factors beyond our control. These factors include: advances;

• ~~actual~~sell assets or ~~anticipated~~enter ~~variations~~into insale ~~our~~and ~~quarterly~~leaseback ~~or annual operating results~~transactions;

• ~~ability~~pay todividends ~~initiate~~or make distributions or ~~complete~~make ~~stock~~other ~~repurchase~~restricted ~~programs~~payments;

• ~~announcements~~prepay ofother ~~technological innovations or new products or services by our competitors or by us~~indebtedness;

• ~~announcements~~engage ~~relating~~in tocertain ~~strategic~~transactions ~~relationships,~~with ~~acquisitions, or investments~~affiliates; and

~~• announcements by our customers regarding their businesses or the products in which our products are included;~~35

• ~~changes~~amend incertain ~~financial~~charter ~~estimates~~documents orand ~~other~~material ~~statements~~agreements byrelating ~~securities~~to ~~analysts;~~other indebtedness.

36A breach of any of these covenants could result in a default under the Credit Agreement. In the event of a default under the Credit Agreement, the lenders could elect to declare all amounts outstanding to be immediately due and payable. If our lenders accelerate the repayment of borrowings, we may not be able to repay our debt obligations. If we were unable to repay amounts due to the lenders under our credit facility, those lenders could proceed against the collateral granted to them to secure that indebtedness.

~~Table~~Certain provisions contained in our amended and restated certificate of ~~Contents~~incorporation, our amended and restated bylaws, and under Delaware law could delay or impair a change in control.

•Certain ~~any~~provisions ~~failure~~in our amended and restated certificate of incorporation and amended and restated bylaws could have the effect of rendering more difficult or discouraging an acquisition of the Company deemed undesirable by our board of directors. Our amended and restated certificate of incorporation allows the board of directors to ~~meet~~issue ~~security~~preferred ~~analyst~~stock, ~~expectations;~~which may include powers, preferences, privileges, and other rights superior to our common stock, thereby limiting our stockholders’ ability to transfer their shares and may affect the price they are able to obtain. Our amended and restated bylaws do not allow stockholders to call special meetings and include, among other things, procedures for advance notification of stockholder nominations and proposals, which may have the effect of delaying or impairing attempts by our stockholders to remove or replace management, to commence proxy contests, or to effect changes in control or hostile takeovers of the Company.

•As a Delaware corporation, we are subject to Delaware law, including Section 203 of the Delaware General Corporation Law, which imposes restrictions on certain transactions between a corporation and certain significant stockholders. These provisions could also have the effect of delaying or impairing the removal or replacement of management, proxy contests, or changes in control. Any provision of our amended and restated certificate of incorporation and amended and restated bylaws that has the ~~securities~~effect ~~analysts’~~of ~~rating~~delaying or impairing a change in control of the Company could limit the opportunity for our ~~securities;~~stockholders to receive a premium for their shares of our common stock and could affect the price that certain investors may be willing to pay for our common stock.

•Item 1B: ~~terrorist~~Unresolved ~~attacks~~Staff ~~and the affects of military engagements or natural disasters;~~Comments:

~~• commencement of litigation or adverse results of pending litigation;~~None.

•Item 2: ~~changes in the financial performance and/or market valuations of other software and high technology companies; and~~Properties

•Our ~~changes~~corporate and Fiery segment headquarters is located in ~~general~~Fremont, ~~economic~~California ~~conditions~~where we currently own approximately 119,000 square feet of space. We lease 16.9 acres (736,166 square feet) of land from the City of Manchester in New Hampshire and we lease 225,000 square feet of manufacturing and office space in Manchester, NH consisting of our display graphics operations and manufacturing facility. The lease is for a six-year term with MUFG Americas Capital Leasing & Finance, LLC (“MUFG”), formerly Bank of Tokyo – Mitsubishi UFJ Leasing & Finance LLC ("BTMU").

~~Because~~We ofown ~~this~~and ~~volatility,~~lease weadditional ~~may~~facilities ~~fail~~throughout ~~to meet~~ the ~~expectations~~United ~~of our~~States ~~stockholders or of securities analysts from time to time~~ and ~~the~~various ~~trading~~international ~~price~~locations, ofincluding, ~~our~~but ~~securities~~not ~~could~~limited ~~decline~~to, asBelgium, aChina, ~~result.~~Germany, ~~The~~India, ~~stock~~Israel, ~~market~~Italy, ~~has~~Netherlands, ~~experienced~~Spain, ~~significant price~~ and ~~volume fluctuations that have particularly affected~~ the ~~trading prices~~United ~~of equity securities of many high technology companies~~Kingdom. These fluctuations have often been unrelated or disproportionate to the operating performance of these companies. Any negative change in the public’s perception of high technology companies could depress our stock price regardless of our operating results.

~~The~~In ~~value~~2018, land and one building we owned in Meredith, NH were sold for $1.1 million that was held-for-sale as of ~~our~~December ~~investment~~31, ~~portfolio~~2017. isThe ~~subject~~second building and related land we own in Meredith, NH continue to ~~interest~~be ~~rate volatility.~~classified as held-for-sale on the Consolidated Balance Sheet as of December 31, 2018.

We ~~maintain~~believe anthat ~~investment~~our ~~portfolio~~current offacilities ~~fixed~~are ~~income~~adequate ~~debt~~to ~~securities~~meet ~~classified~~our asongoing ~~available-for-sale~~needs, ~~securities.~~and Asthat, aif ~~result,~~we ~~our~~require ~~investment~~additional ~~portfolio~~space, iswe ~~subject~~will tobe ~~counterparty~~able ~~risk~~to ~~and~~obtain ~~volatility~~additional iffacilities ~~market~~on ~~interest~~commercially ~~rates~~reasonable ~~fluctuate~~terms.

We attempt to limit our exposure to interest rate risk by investing in securities with maturities of less than three years; however, we may be unable to successfully limit our risk to interest rate fluctuations. This may cause volatility in our investment portfolio value. 36

WeItem 3: ~~are~~Legal ~~partially self-insured for certain losses related to employee medical and dental coverage. Our self-insurance reserves may not be adequate to cover our medical and dental claim liabilities.~~ Proceedings

We ~~are~~may ~~partially~~be ~~self-insured~~involved, ~~for~~from ~~certain~~time ~~losses~~to ~~related~~time, toin ~~employee~~a ~~medical~~variety ~~and~~of ~~dental~~claims, ~~coverage~~lawsuits, ~~excluding~~investigations, ~~employees~~or ~~covered~~proceedings byrelating ~~health~~to ~~maintenance organizations.~~contractual Wedisputes, ~~generally~~securities ~~have~~laws, aintellectual ~~stop~~property ~~loss~~rights, ~~deductible~~employment, ofor ~~$0.5 million~~other ~~per~~matters ~~enrollee.~~that Wemay ~~have~~arise ~~accrued~~in athe ~~contingent~~normal ~~liability~~course of $0business.~~9 million~~ asWe ofassess ~~December 31,~~our ~~2017,~~potential ~~which~~liability isin ~~not~~each ~~discounted, based upon examination~~ of ~~historical trends,~~these ~~historical~~matters ~~actuarial~~by ~~analysis,~~using ~~our~~the ~~claims~~information ~~experience,~~available ~~total~~to ~~plan~~us. ~~enrollment~~We ~~(including~~develop ~~employee~~our ~~contributions),~~views ~~population~~on ~~demographics,~~estimated ~~and~~losses ~~other~~in ~~various~~consultation ~~estimates. Although~~with weinside doand ~~not~~outside ~~expect~~counsel, ~~that~~which weinvolves ~~will~~a ~~ultimately~~subjective ~~pay~~analysis ~~claims significantly~~of ~~different~~potential ~~from~~results ~~our~~and ~~estimates,~~various ~~self-insurance~~combinations ~~reserves,~~of ~~net~~appropriate ~~income~~litigation ~~(loss),~~ and ~~cash~~settlement ~~flows~~strategies. ~~could~~We beaccrue ~~materially~~estimated ~~affected~~losses from contingencies if ~~future~~a ~~claims~~loss ~~differ~~is ~~significantly~~deemed ~~from~~probable ~~our~~and ~~historical~~can ~~trends~~be ~~and~~reasonably ~~assumptions~~estimated.

~~Our~~For ~~stock~~a ~~repurchase~~description ~~program~~of ~~could~~our ~~affect~~significant ~~our~~pending ~~stock~~legal ~~price~~proceedings, please see Note 13 – Commitments and ~~add~~Contingencies ~~volatility.~~of Notes to Consolidated Financial Statements.

~~In November 2015, our board of directors authorized $150~~Item million for the repurchase of our outstanding common stock. This authorization expires December 31, 2018. On September 11, 2017, the board of directors approved the repurchase of an additional $125 million for our share repurchase program commencing September 11, 2017. At that time, $28.8 million remained available for repurchase under the 2015 authorization. The 2017 authorization thereby increased the repurchase authorization to $153.8 million of our common stock. As of December 31, 2017, $109.4 ~~million~~: ~~remained~~Mine ~~available~~Safety ~~for repurchase under this authorization.~~ Disclosures

~~Any~~Not ~~repurchases pursuant to our stock repurchase program could affect our stock price and add volatility~~applicable. There can be no assurance that repurchases will be made at the best possible price. Potential risks and uncertainties also include, but are not necessarily limited to, the amount and timing of future stock repurchases and the origin of funds used for such repurchases. The existence of a stock repurchase program could also cause our stock price to

37PART II

~~Table~~Item 5: Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of ~~Contents~~Equity Securities

beOur ~~higher~~common ~~than~~stock ithas ~~would~~traded beon inThe ~~the~~Nasdaq ~~absence~~Global ofSelect ~~such~~Market a(formerly ~~program~~The ~~and~~NASDAQ ~~could~~National ~~potentially~~Market) ~~reduce~~under the ~~market~~symbol ~~liquidity~~EFII ~~for~~since ~~our stock. Depending on market conditions and other factors~~October 2, ~~these repurchases may be commenced or suspended from time to time~~1992. ~~Any such suspension could cause the market price of our stock to decline.~~

~~Our~~As ~~profitability~~of ~~may~~February ~~be affected~~1, by2019, ~~unanticipated~~there ~~changes~~were in100 ~~our~~stockholders ~~tax~~of ~~provisions~~record, ~~the~~excluding ~~adoption~~a substantially greater number of ~~new~~“street ~~U.S.~~name” holders or ~~foreign~~beneficial ~~tax~~holders ~~legislation~~of our common stock, orwhose ~~exposure~~shares toare ~~additional~~held ~~income~~of ~~tax~~record ~~liabilities.~~by banks, brokers, and other financial institutions.

We ~~are~~did ~~subject~~not todeclare ~~income~~or ~~taxes~~pay incash ~~the~~dividends ~~U.S.~~on ~~and~~our ~~many~~common ~~foreign~~stock ~~countries.~~during ~~Intercompany~~2018 ~~transaction~~and ~~pricing can impact our tax liabilities~~2017. We ~~are~~anticipate ~~potentially subject~~that towe ~~tax~~will ~~audits~~retain inall ~~various~~available ~~countries~~funds ~~and~~for ~~tax~~the ~~authorities~~repayment ~~may~~of ~~disagree with~~ our ~~tax~~indebtedness ~~treatments,~~and ~~including~~the ~~intercompany~~operation ~~pricing~~of orour ~~other matters~~business, and ~~assess~~we ~~additional~~do ~~taxes.~~not Weplan ~~regularly~~to ~~review~~pay ~~the~~any ~~likely~~cash ~~outcomes~~dividends ofin ~~these~~the ~~audits~~foreseeable tofuture. ~~determine whether~~We ~~our~~believe ~~tax~~that ~~provisions~~the ~~are~~most ~~sufficient.~~strategic ~~However,~~uses ~~there~~of ~~can~~our becash noresources ~~assurance~~include ~~that~~business weacquisitions, ~~will~~strategic ~~accurately~~investments ~~predict~~to ~~the~~gain ~~outcomes~~access ofto ~~these~~new ~~audits~~technologies, ~~and~~repurchases ~~the~~of ~~final~~shares ~~assessments~~ of ~~these~~our ~~audits~~common ~~can~~stock, ~~have~~and aworking ~~material impact on our net income (loss)~~capital.

~~Our~~Equity ~~effective~~Compensation ~~tax~~Plan rate in the future may be impacted by changes in the mix of earnings in countries with differing statutory tax rates, changes in the valuation of deferred tax assets and liabilities, changes in tax laws, new information discovered during the preparation of our tax returns, deemed repatriation of foreign earnings, and enactment of future U.S. and foreign tax legislative initiatives, such as tax reform legislation (“2017 Tax Act”) enacted on December 22, 2017 in the United States (“U.S.”) or multi-jurisdictional actions to address “base erosion and profit-shifting” by multinational companies. The Organisation for Economic Co-operation and Development, or OECD, issued a series of reports on October 5, 2015 recommending changes to numerous well-established tax principles. These recommendations, if adopted by various OECD countries in which we do business, could adversely affect our effective tax rate. Information

~~The~~Information ~~2017~~regarding ~~Tax~~our ~~Act~~equity ~~will have~~compensation aplans ~~broad~~may ~~range~~be ~~impact~~found onin ~~our~~Note ~~tax~~15 ~~liability,~~– ~~current~~Stock-based ~~business~~Compensation ~~deductions,~~ and ~~the~~Other ~~U.S.~~Employee ~~taxation~~Benefits of ~~income~~Notes ~~earned~~to byConsolidated ~~our~~Financial ~~foreign~~Statements ~~subsidiaries.~~and ~~Many~~Item 12 – Security Ownership of ~~the~~Certain ~~provisions~~Beneficial ~~significantly~~Owners ~~differ~~and ~~from~~Management ~~current~~and ~~U.S.~~Related ~~tax~~Stockholder ~~law~~Matters ~~resulting~~of inthis ~~changes~~Annual toReport ~~tax reporting~~on Form 10-K and ~~potentially~~is ~~increasing~~incorporated ~~tax~~herein ~~liabilities~~by ~~incurred~~reference.

On December 22, 2017, the 2017 Tax Act was enacted, which includes a broad range of changes affecting businesses, including corporate tax rates, business deductions, and international tax provisions. Many of the provisions significantly differ from current U.S. tax law. The enactment of the 2017 Tax Act requires companies to recognize the effects of changes in tax law and rates on deferred tax assets and liabilities and the retroactive effects of changes in tax laws in the period in which the new legislation is enacted in accordance with Accounting Standards Codification (“ASC”) 740, Income Taxes. These effects of changes in tax law are recorded as a discrete item and part of tax expense or benefit in continuing operations, regardless of the category of income or loss to which the deferred taxes relate. 37

InRepurchases ~~accordance with SEC Staff Accounting Bulletin (“SAB”) 118, we determined that measurement~~ of ~~certain~~Equity income tax effects can be reasonably estimated at December 31, 2017, and we recorded a $27.5 million charge in the fourth quarter of 2017 as a provisional estimate. While we have calculated a reasonable estimate of the impact of the U.S. tax rate reduction and the amount of the deemed repatriation transition tax, we are still gathering additional information to refine and finalize our calculation of the impacts on our U.S. deferred tax assets and liabilities, the deemed repatriation transition tax, and other provisions associated with the 2017 Tax Act. Changes to these estimates and provisional amounts may affect our financial results. Securities

~~The~~Our ~~2017~~stock ~~Tax~~repurchases ~~Act~~during ~~also will also significantly impact~~ the year ~~ending~~ended December 31, 2018, ~~including,~~were ~~but~~as ~~not~~follows limited to the reduction of the U.S. federal corporate tax rate from 35% to 21%, a minimum tax to address base erosion and profit shifting from the U.S., the elimination of U.S. federal income taxes on dividends from foreign subsidiaries, a new tax on global intangible low-tax income (~~“GILTI”),~~in athousands ~~limitation~~except ofper ~~deductible~~share interest expense, and the repeal of the domestic production activity deduction. There are additional limitations imposed on the deductibility of certain executive compensation, the use of foreign tax credits to reduce U.S. income tax amounts):



Fiscal month	Total number of shares purchased ⁽¹⁾	Average price paid per share		Total number of shares purchased as part of publicly announced plans ⁽¹⁾	Approximate dollar value of shares that may yet be purchased under the plans ⁽²⁾
January 2018	174	$	30.03	174	$	104,199
February 2018	229	28.12		224	97,890
March 2018	211	28.07		209	92,019
April 2018	154	27.93		138	88,168
May 2018	47	28.53		45	86,878
June 2018	170	34.01		169	81,117
July 2018	176	34.01		176	75,142
August 2018	219	31.18		200	68,333
September 2018	297	35.92		279	58,921
October 2018	350	31.34		348	48,005
November 2018	1,513	27.62		1,457	8,004
December 2018	317	26.06		307	4
Total	3,857	29.43		3,726

~~Table~~(1) The difference between total number of ~~Contents~~shares purchased and total number of shares purchased as part of publicly announced program is the shares withheld by us to satisfy any tax withholding obligations incurred in connection with the vesting of restricted stock units ("RSUs").

~~liabilities~~(2) On September 11, ~~and~~2017, the ~~utilization~~board of ~~net~~directors ~~operating~~approved ~~losses~~$125.0 ~~generated~~million ~~after~~for our share repurchase program in addition to the $150.0 million previously authorized in November 2015. At that time, $28.8 million remained available for repurchase under the 2015 authorization. The 2017 authorization thereby increased the repurchase authorization to $153.8 million. This authorization commenced on the date of approval and expired December 31, ~~2017~~2018. ~~These~~Under ~~changes~~this inpublicly ~~tax~~announced ~~law~~program, ~~may~~we ~~affect~~repurchased ~~both~~3.7 ~~our~~million ~~financial~~shares ~~results~~for ~~and~~an ~~our~~aggregate ~~taxes~~purchase ~~paid~~price of $109.4 million during the year ended December 31, 2018.

We may not have the ability to raise the funds necessary to settle conversions of our 0.75% Convertible Senior Notes due 2019 (“Notes”) in cash, repay the Notes at maturity, or repurchase the Notes upon a fundamental change. 38

InComparison ~~September 2014, we completed a private placement~~ of ~~$345 million~~ ~~principal~~Cumulative ~~amount~~Total ofReturn ~~Notes.~~among ~~Holders~~Electronics ofFor the Notes will have the right to require us to repurchase all or a portion of their Notes upon the occurrence of a fundamental change at a repurchase price equal to 100% of the principal amount of the Notes to be repurchasedImaging, ~~plus accrued and unpaid interest~~Inc., ifNASDAQ ~~any~~Composite, ~~as described in Note 7—Convertible Senior Notes, Note Hedges,~~ and ~~Warrants~~NASDAQ ofComputer ~~the~~Manufacturers ~~Notes to Consolidated Financial Statements.~~ Index

~~Upon~~The ~~conversion~~stock ofprice ~~the~~performance ~~Notes,~~graph webelow ~~will~~includes beinformation required toby ~~make~~the ~~conversion~~SEC ~~payments~~and inshall ~~cash,~~not ~~unless~~be wedeemed ~~elect~~incorporated toby ~~deliver~~reference ~~solely~~by ~~shares~~any ofgeneral ~~our~~statement ~~common~~incorporating ~~stock~~by toreference ~~settle such conversion, as described~~ in ~~Note~~this ~~7—Convertible~~Annual ~~Senior~~Report ~~Notes,~~on ~~Note~~Form ~~Hedges,~~10-K ~~and~~into ~~Warrants~~any offiling under the ~~Notes~~Securities toAct ~~Consolidated~~or ~~Financial~~under ~~Statements.~~the ~~Moreover~~Exchange Act, weexcept ~~will be required~~ to ~~repay~~ the ~~Notes~~extent inthe ~~cash~~Company atspecifically ~~their~~incorporates ~~maturity,~~this ~~unless~~information ~~earlier~~by ~~converted or repurchased. However~~reference, weand ~~may~~shall not ~~have~~otherwise ~~enough~~be ~~available~~deemed ~~cash~~soliciting material or befiled ~~able~~under tothe ~~obtain~~Securities ~~financing~~Act ~~when~~or the ~~Notes~~Exchange ~~are~~Act, or subject to bethe ~~repurchased,~~liabilities ~~converted,~~of orSection 18 atof ~~their~~the ~~maturity.~~Exchange Act.

The ~~conditional~~following ~~conversion~~graph ~~feature~~compares cumulative total returns based on an initial investment of $100 in our common stock to the ~~Notes,~~NASDAQ ifComposite ~~triggered~~and the NASDAQ Computer Manufacturers Index. The stock price performance shown on the graph below is not indicative of future price performance and only reflects the Company’s relative stock price for the five-year period ending on December 31, ~~may~~2018. ~~adversely~~All ~~affect~~values ~~our~~assume ~~financial~~reinvestment ~~condition~~of dividends and ~~results~~are calculated at December 31 of ~~operations.~~each year.

In the event the conditional conversion feature of the Notes is triggered, holders of Notes will be entitled to convert the Notes at any time during specified periods at their option. If one or more holders elect to convert their Notes, unless we elect to satisfy our conversion obligation by delivering solely shares of our common stock, we would be required to settle all or a portion of the conversion obligation through the payment of cash, which could adversely affect our liquidity. Even if holders do not elect to convert their Notes, we could be required under applicable accounting rules to reclassify all or a portion of the outstanding principal of the Notes as a current liability, which would result in a material reduction of our net working capital. 39

~~The~~Item 6: ~~accounting~~Selected ~~method~~Financial ~~for convertible debt securities that may be settled in cash (such as the Notes) could have a material effect on our reported financial results.~~ Data

~~Financial Accounting~~The ~~Standards~~following ~~Board~~table ~~(“FASB”)~~summarizes ~~ASC~~selected ~~470-20,~~consolidated ~~Debt~~financial ~~with~~data ~~Conversion~~as of and ~~Other Options, requires us to separately account~~ for the ~~liability~~five ~~and~~years ~~equity~~ended ~~components~~December 31, of2018. ~~the~~This ~~Notes~~information ~~that~~should ~~may~~ be ~~settled entirely~~read ~~or partially~~ in ~~cash~~conjunction ~~upon~~with ~~conversion in a manner that reflects our non-convertible debt interest rate. Accordingly~~Item 7, ~~the equity component of the Notes is included in additional paid-in capital within stockholders~~“Management’s ~~equity~~Discussion ~~in our Consolidated Balance Sheet~~ and ~~the~~Analysis ~~value~~ of ~~the~~Financial ~~equity~~Condition ~~component~~and isResults ~~treated as original issue discount for purposes~~ of ~~accounting for the debt component of the Notes. As a result, we are required to recognize non-cash interest expense in our Consolidated Statement of~~ Operations” ~~in current~~ and ~~future periods as a result of~~ the ~~amortization~~audited ofconsolidated ~~the~~financial ~~discounted~~statements ~~carrying value~~and ofrelated ~~the~~notes ~~Notes to their principal amount over their term~~thereto. WeFor ~~will~~a ~~report~~more ~~lower~~detailed ~~net~~description, ~~income~~see ~~(loss)~~Part ~~because~~II, ~~ASC~~Item 7, ~~470-20 requires interest to include both the current period~~“Management’s ~~amortization~~Discussion ~~of the original issue discount~~ and ~~the~~Analysis ~~Notes’ non-convertible interest rate. This could adversely affect our future consolidated financial results, the trading price~~ of ~~our~~Financial ~~common~~Condition ~~stock,~~ and ~~the~~Results ~~trading price~~ of ~~the Notes~~Operations. ”

~~Under certain circumstances, in calculating earnings per share, convertible debt instruments~~ (~~such as the Notes) that may be settled entirely or partially~~ in ~~cash are accounted for utilizing the treasury stock method. The effect of the treasury stock method is that the shares of common stock issuable upon conversion of the Notes~~thousands, ~~if any, are not included in the calculation of diluted earnings per share~~ except ~~to the extent that the conversion value of the Notes exceeds their principal amount. Under the treasury stock method, diluted earnings~~ per share ~~is calculated~~ amounts):



	For the years ended December 31,
	2018			2017			2016		2015		2014
Operations ⁽¹⁾
Revenue	$	1,015,021		$	993,260		$	992,065	$	882,513	$	790,427
Gross profit	$	498,573		$	506,456		$	508,165	$	457,430	$	429,737
Income from operations ⁽²⁾	$	19,686		$	27,547		$	55,819	$	54,689	$	53,439
Net income (loss) ^{(2) (3)}	$	(971	)	$	(15,345	)	$	44,949	$	32,199	$	33,714
Net income (loss) per basic common share	$	(0.02	)	$	(0.33	)	$	0.96	$	0.68	$	0.72
Net income (loss) per diluted common share	$	(0.02	)	$	(0.33	)	$	0.94	$	0.67	$	0.70
Shares used in basic per-share calculation	44,429			46,281			46,900		47,217		46,866
Shares used in diluted per-share calculation	44,429			46,281			47,797		48,150		48,406

	As of December 31,
	2018			2017			2016		2015		2014
Financial Position
Cash, cash equivalents, and short-term investments	$	411,401		$	319,042		$	459,741	$	497,367	$	616,732
Working capital ⁽⁴⁾	212,131			456,668			549,668		584,782		666,405
Total assets	1,499,034			1,458,001			1,478,929		1,448,246		1,297,422
Convertible senior notes, net ^{(4) (5)}	118,688			318,957			304,484		290,734		277,670
Stockholders’ equity	726,108			781,311			826,015		822,902		788,689

~~Table~~(1) Includes acquired company results of ~~Contents~~operations beginning on the date of each acquisition (there were no acquisitions during the year ended December 31, 2018). See Item 1 – Business for a summary of recent acquisitions.

as(2) ifIncome ~~the~~from ~~number~~operations ofand ~~shares~~net ofincome ~~common~~(loss) ~~stock~~includes ~~that would be necessary to settle such excess were issued, if we elected to settle such excess in shares. We cannot be sure that accounting standards will continue to permit~~ the use of the treasury stock method in the future. If we are unable to use the treasury stock method in accounting for the shares issuable upon conversion of the Notes, if any, then our diluted consolidated earnings per share would be adversely affected. following:

Certain provisions contained in our amended and restated certificate of incorporation, our amended and restated bylaws, and under Delaware law could delay or impair a change in control.



	For the years ended December 31,
	2018			2017		2016		2015			2014
Amortization of identified intangibles	$	45,291		$	47,339	$	39,560	$	26,510		$	20,673
Stock-based compensation expense	45,281			26,532		31,826		34,071			36,061
Restructuring and other costs	13,581			7,562		6,731		5,731			6,578
Revenue recognition and accounting review costs ⁽⁶⁾	1,888			6,443		—		—			—
Litigation settlement expenses	99			436		1,027		584			897
Change in fair value of contingent consideration ⁽⁷⁾	(21,486		)	6,472		6,939		(2,135		)	(3,810		)
Acquisition-related transaction costs	1,193			2,058		2,241		5,494			1,501
Total charges, net of recoveries	$	85,847		$	96,842	$	88,324	$	70,255		$	61,900

~~Certain~~(3) ~~provisions~~Net inincome ~~our~~(loss) ~~amended~~includes ~~and restated certificate of incorporation and amended and restated bylaws could have~~ the effect of rendering more difficult or discouraging an acquisition of the Company deemed undesirable by our board of directors. Our amended and restated certificate of incorporation allows the board of directors to issue preferred stock, which may include powers, preferences, privileges, and other rights superior to our common stock, thereby limiting our stockholders’ ability to transfer their shares and may affect the price they are able to obtain. Our amended and restated bylaws do not allow stockholders to call special meetings and include, among other things, procedures for advance notification of stockholder nominations and proposals, which may have the effect of delaying or impairing attempts by our stockholders to remove or replace management, to commence proxy contests, or to effect changes in control or hostile takeovers of the Company. following:

As a Delaware corporation, we are subject to Delaware law, including Section 203 of the Delaware General Corporation Law, which imposes restrictions on certain transactions between a corporation and certain significant stockholders. These provisions could also have the effect of delaying or impairing the removal or replacement of management, proxy contests, or changes in control. Any provision of our amended and restated certificate of incorporation and amended and restated bylaws that has the effect of delaying or impairing a change in control of the Company could limit the opportunity for our stockholders to receive a premium for their shares of our common stock and could affect the price that certain investors may be willing to pay for our common stock. 40

~~Item 1B:~~• ~~Unresolved~~Tax ~~Staff~~charge ~~Comments:~~of $27.5 million during the year ended December 31, 2017, and a tax benefit of $1.2 million in the year ended December 31, 2018, resulting from the enactment of the 2017 Tax Act and our accounting under SAB 118.

~~None~~• Net tax benefits of $3.6, $3.5, $16.6, $7.4, and $2.9 million for the years ended December 31, 2018, 2017, 2016, 2015 and 2014, respectively, resulting from the release of previously unrecognized tax benefits due to the expiration of U.S. federal, state, and foreign statutes of limitations.

40• Tax benefit of $3.1 million during the year ended December 31, 2014 resulting from the increased valuation of intangible assets for Brazilian tax reporting.

~~Table~~(4) In September 2014, we completed a private placement of ~~Contents~~$345 million principal amount of the 2019 Notes. These notes contained rights to convert the note principal into common stock under certain circumstances. The notes mature on September 1, 2019. They were previously classified as long-term debt through December 31, 2017 but are classified as current debt on the Consolidated Balance Sheet as of December 31, 2018. See further information in Note 12 – Debt of Notes to Consolidated Financial Statements.

~~Item 2:~~(5) ~~Properties~~In November 2018, we completed a private placement of $150 million principal amount of the 2023 Notes. These notes contained rights to convert the note principal into common stock under certain circumstances. See further information in Note 12 – Debt of Notes to Consolidated Financial Statements.

(6) As of December 31, 2017, our management concluded that we ~~owned~~had ormaterial ~~leased~~weaknesses ain ~~total~~our ofinternal ~~approximately~~control ~~1.7 million~~over ~~square~~financial ~~feet~~reporting ~~worldwide~~related to revenue recognition practices and the valuation of certain textile printer inventories. The ~~following~~review ~~table~~of ~~sets~~our ~~forth~~revenue ~~the~~recognition ~~location~~practices and valuation of textile printer inventories required that we expend significant management time and incurred significant accounting, ~~size~~ legal, and ~~use~~other expenses of ~~our~~$1.9 ~~principal~~and ~~facilities~~$6.4 ~~(square~~million ~~footage~~in the years ended December 31, 2018 and 2017, respectively, to investigate and remediate these material weaknesses. Please see Item 9A for management's report on internal control over financial reporting as of December 31, 2018 in ~~thousands):~~which we concluded that the material weaknesses had been remediated.

Location	SquareFootage		Leased orOwned	Operating Segment	Principal Uses
Fremont, California (6750 Dumbarton Circle)		119	Owned	Corporate & Fiery	Corporate offices, design engineering, product testing, sales, marketing, customer service
Fremont, California (6700 Dumbarton Circle)		59	Leased	Fiery	Administrative offices, design engineering, product testing
Manchester, New Hampshire		225	Leased *	Industrial Inkjet	Manufacturing (VUTEk), design engineering, sales, customer service
Bergamo, Italy		168	Leased	Industrial Inkjet	Manufacturing (Reggiani textile printers), design engineering, sales, customer service
Meredith, New Hampshire		163	Owned **	Industrial Inkjet	Manufacturing (Industrial Inkjet printers), design engineering, sales, customer service
Castellon, Spain		127	Leased ***	Industrial Inkjet	Manufacturing, (Cretaprint), administrative, design engineering, sales, customer service
Bangalore, India		118	Leased	All	Administrative, design engineering, customer service, software engineering
Ypsilanti, Michigan		106	Leased	Industrial Inkjet	Manufacturing (digital UV & ceramic ink), design engineering, sales, customer service
Ossipee, New Hampshire		53	Leased	Industrial Inkjet	Warehouse (90% dedicated space - fixed fee)
Eagan, Minnesota		44	Owned	Fiery & ProductivitySoftware	Administrative, design engineering, customer service, software engineering
Belmont, New Hampshire		40	Leased	Industrial Inkjet	Warehouse
Brussels, Belgium		39	Leased	Industrial Inkjet	Sales, Industrial Inkjet demonstration center
Laconia, New Hampshire		34	Leased	Industrial Inkjet	Warehouse
Tempe, Arizona		32	Leased	Fiery & ProductivitySoftware	Manufacturing, (Fiery), distribution, customer service
Bradford, UK		32	Owned	Industrial Inkjet	Manufacturing (dye powders and color products for Industrial Inkjet printers), design engineering, sales, customer service
Rosh Ha’Ayin, Israel		31	Leased	Industrial Inkjet	Manufacturing (Industrial Inkjet printers), design engineering, sales, customer service
Norcross, Georgia		29	Leased	Fiery & ProductivitySoftware	Design engineering, sales, customer service, quality assurance, and software engineering
Ratingen, Germany		27	Leased	Fiery & ProductivitySoftware	Software engineering, sales, customer service
Schiphol-Rijk, The Netherlands		19	Leased	Industrial Inkjet	EMEA corporate offices, sales, support services
Pittsburgh, Pennsylvania		18	Leased	ProductivitySoftware	EPS corporate offices, design engineering, sales
Shanghai, China		16	Leased	Industrial Inkjet	APAC corporate offices, Industrial Inkjet demonstration center
Rosh Ha’Ayin, Israel		14	Leased	ProductivitySoftware	3D textile design and production
San Diego, California		12	Leased	ProductivitySoftware	Software engineering, sales, customer service
Foshan, China		10	Leased	Industrial Inkjet	Administrative, sales, customer service
Richmond Hill, Ontario, Canada		10	Leased	Fiery	Design engineering, sales, customer service

⁽⁷⁾

Many of our acquisitions include contingent consideration based on future financial performance of the acquired business against targets established in the acquisition agreements. We estimate the fair value of this contingent consideration at the acquisition date and record the amount as part of the initial purchase accounting. Over time, as new information becomes available concerning the acquired business's actual and projected performance against the targets, the fair value of the contingent consideration is periodically updated resulting in a charge, or credit to general and administrative expenses in the Consolidated Statements of Operations. These non-cash charges and (credits) are presented on this line item to provide additional information about fluctuations in our operating and net income (loss) by period.

*Item 7: WeManagement’s ~~entered~~Discussion ~~into a six-year lease with BTMU whereby a 225,000 square foot manufacturing~~ and ~~warehouse~~Analysis ~~facility~~of isFinancial ~~under~~Condition ~~construction in Manchester, New Hampshire, related to our super-wide~~ and ~~wide~~Results ~~format industrial digital inkjet printer business, which is scheduled to be completed in the first half~~ of ~~2018.~~Operations

The ~~lease~~following ~~commenced~~discussion onand ~~August 26,~~analysis ~~2016.~~should Webe ~~leased~~read ~~16.9~~in ~~acres~~conjunction ofwith ~~land~~the ~~related~~audited toconsolidated ~~this~~financial ~~manufacturing~~statements and ~~warehouse~~related ~~lease.~~notes ~~See~~thereto ~~Note 15—Property~~included ~~and~~in ~~Equipment,~~this ~~net,~~Annual ofReport ~~the~~on ~~Notes~~Form ~~to Consolidated Financial Statements~~10-K.

**All ~~During~~assumptions, anticipations, expectations, and forecasts contained herein are forward-looking statements within the ~~fourth~~meaning ~~quarter~~of Section 27A of ~~2017~~the Securities Act and Section 21E of the Exchange Act that involve risks and uncertainties. Forward-looking statements include, ~~management~~among ~~adopted~~others, athose statements including words such as “address,” “anticipate,” “believe,” “consider,” “continue,” “develop,” “estimate,” “expect,” “further,” “goal,” “intend,” “may,” “plan,” to“potential,” ~~sell~~“project,” ~~approximately~~“seek,” ~~31.5~~“should,” ~~acres~~“target,” “will,” variations of ~~land~~such words, and ~~the~~similar ~~related~~expressions. ~~manufacturing~~Our ~~building~~actual ~~located~~results incould ~~Meredith,~~differ ~~New~~materially ~~Hampshire~~from those discussed here. ~~Assets~~For ~~previously~~a ~~recorded~~discussion ~~within~~of ~~Property~~the ~~and~~factors ~~equipment~~that could impact our results, ~~net~~readers are referred to Item 1A, ~~with~~“Risk aFactors,” ~~net~~in ~~book~~Part ~~value~~I of ~~$5.1~~this ~~million~~Annual ~~have~~Report ~~been~~on ~~reclassified~~Form 10-K and to ~~assets~~our ~~held~~other ~~for~~reports ~~sale~~filed inwith ~~our~~the ~~Consolidated~~SEC, ~~Balance~~including ~~Sheet~~the asCompany’s ofmost ~~December~~recent 31Quarterly Report on Form 10-Q and Current Reports on Form 8-K, ~~2017~~and any amendments thereto. We do not assume any obligation to update the forward-looking statements provided to reflect events that occur or circumstances that exist after the date on which they were made.

*** Includes an additional 65,000 square feet expansion of our ceramic tile decoration industrial digital inkjet printer manufacturing and warehouse facility in Castellon, Spain, which was completed during January 2018. The expansion was built and fully financed by the lessor. We do not have any obligations related to this additional space other than rent payments that commenced upon completion of construction.41

41Results of Operations

~~Table~~Consolidated results of ~~Contents~~operations are summarized as follows (in thousands):

In addition to the facilities listed above, we leased 49 additional domestic and international regional operations and sales offices, excluding facilities that have been fully reserved and subleased, and we own an additional international sales office building. We believe that our facilities, in general, are adequate for our present needs. We do not expect that we would experience difficulties in obtaining additional space at fair market rates, if the need arose.



	Year Ended December 31,											Year Ended December 31,
	2018			2017			Change					2017			2016			Change
							Amount			Percent								Amount			Percent
Revenue	$	1,015,021		$	993,260		$	21,761		2	%	$	993,260		$	992,065		$	1,195		—	%
Cost of revenue	516,448			486,804			29,644			6	%	486,804			483,900			2,904			1	%
Gross profit	498,573			506,456			(7,883		)	(2	)%	506,456			508,165			(1,709		)	—	%
Operating expenses:
Research and development	159,941			157,358			2,583			2	%	157,358			151,395			5,963			4	%
Sales and marketing	183,498			173,697			9,801			6	%	173,697			169,042			4,655			3	%
General and administrative	76,576			92,953			(16,377		)	(18	)%	92,953			85,618			7,335			9	%
Amortization of identified intangibles	45,291			47,339			(2,048		)	(4	)%	47,339			39,560			7,779			20	%
Restructuring and other	13,581			7,562			6,019			80	%	7,562			6,731			831			12	%
Total operating expenses	478,887			478,909			(22		)	—	%	478,909			452,346			26,563			6	%
Income from operations	19,686			27,547			(7,861		)	(29	)%	27,547			55,819			(28,272		)	(51	)%
Interest expense	(20,169		)	(19,505		)	(664		)	3	%	(19,505		)	(17,716		)	(1,789		)	10	%
Interest income and other income, net	1,604			4,088			(2,484		)	(61	)%	4,088			545			3,543			*
Income before income taxes	$	1,121		$	12,130		$	(11,009	)	*		$	12,130		$	38,648		$	(26,518	)	(69	)%

~~Item 3: Legal Proceedings~~ ___________

We* ~~may~~Percentage benot involved, from time to time, in a variety of claims, lawsuits, investigations, or proceedings relating to contractual disputes, securities laws, intellectual property rights, employment, or other matters that may arise in the normal course of businessmeaningful. We assess our potential liability in each of these matters by using the information available to us. We develop our views on estimated losses in consultation with inside and outside counsel, which involves a subjective analysis of potential results and various combinations of appropriate litigation and settlement strategies. We accrue estimated losses from contingencies if a loss is deemed probable and can be reasonably estimated.

As Out-of-Period ~~December 31, 2017, we are subject to the matters discussed below.~~ Adjustments

~~Matan~~As ~~Digital~~discussed ~~Printing~~more ~~Ltd~~fully in Note 1 – The Company and Summary of Significant Accounting Policies of Notes to Consolidated Financial Statements, during the year ended December 31, 2017, we recorded out-of-period adjustments related to certain bill and hold transactions, which decreased revenue by $3.4 million, decreased gross profit by $0.5 million, and increased net loss by $0.3 million (~~“MDG”)~~or ~~Matter~~$0.01 per diluted share).

~~EFI~~Consolidated acquired Matan in 2015 from sellers (the “2015 Sellers”) that acquired MDG from other sellers in 2001 (the “2001 Sellers”). The 2001 Sellers have asserted a claim against the 2015 Sellers and Matan asserting that they are entitled to a portion of the 2015 Sellers’ proceeds from EFI’s acquisition. The 2015 Sellers dispute this claim and have agreed to indemnify EFI against the 2001 Sellers’ claim. Revenue

~~Although~~Consolidated werevenue ~~are~~grew ~~fully~~by ~~indemnified~~$21.8 ~~and~~million weor do2% ~~not~~in ~~believe~~the ~~that~~year itended isDecember ~~probable that we will incur a loss~~31, it2018 ~~is reasonably~~compared ~~possible~~to ~~that~~the ~~our~~year ~~financial~~ended ~~statements~~December ~~could~~31, be2017, ~~materially~~reflecting ~~affected~~growth ~~by the unfavorable resolution~~ of ~~this~~6% ~~matter.~~in ~~Accordingly~~Industrial Inkjet, it7% isgrowth ~~reasonably~~in ~~possible~~Productivity ~~that~~Software, weand ~~could incur~~ a ~~material~~decrease ~~loss~~of 10% in ~~this~~Fiery ~~matter~~revenues. WeSales ~~estimate~~in the ~~range~~Americas ofgrew ~~loss~~by ~~to be~~3%, ~~between~~sales ~~one~~in ~~dollar~~EMEA ~~and~~declined ~~$10.~~by 1 ~~million.~~%, Ifand wesales ~~incur a loss~~ in ~~this~~APAC ~~matter,~~increased ~~it will be offset~~ by a9% ~~receivable~~in ofthe anyear ~~equal~~ended ~~amount~~December ~~representing~~31, a2018 ~~claim~~compared ~~for~~to ~~indemnification against~~ the ~~escrow~~year ~~account~~ended ~~established~~December in31, ~~connection with the Matan acquisition~~2017.

~~Purported~~Consolidated ~~Class Action~~revenue ~~Lawsuit~~grew by $1.2 million or less than 1% in the year ended December 31, 2017 compared to the year ended December 31, 2016, reflecting growth of 1% in Industrial Inkjet, 3% growth in Productivity Software, and a decrease of 4% in Fiery revenues. Sales in the Americas decreased by 2%, while sales in EMEA and APAC both increased by 3% in the year ended December 31, 2017 compared to the year ended December 31, 2016.

OnWe ~~August 10,~~completed ~~2017,~~our aacquisitions ~~putative~~of ~~class~~FFPS, ~~action~~Generation ~~was~~Digital, ~~filed~~CRC, ~~against the Company~~ and ~~its~~Escada ~~two named executive officers~~ in the ~~United~~year ~~States~~ended ~~District~~December ~~Court for the District of New Jersey~~31, ~~captioned Pipitone v~~2017. ~~Electronics For Imaging, Inc., No. 2:17~~Post-~~cv-05992~~acquisition ~~(D.N.J.)~~revenue ~~and a first amended complaint~~ was ~~filed on February~~$27.1 ~~20,~~million ~~2018.~~in ~~The~~2017 ~~complaint~~related ~~alleges,~~to ~~among~~these ~~other~~four ~~things,~~acquisitions. ~~that~~We ~~statements~~completed byour ~~the~~acquisitions ~~Company~~of Rialco and ~~its~~Optitex ~~officers~~in ~~about~~ the ~~Company’s~~year ~~financial~~ended ~~reporting,~~December ~~revenue recognition~~31, ~~internal~~2016. ~~controls,~~Post-acquisition ~~and~~revenue ~~disclosure~~was ~~controls and procedures were false or misleading~~$19.8 million ~~The~~in ~~complaint~~2016 ~~seeks~~related anto ~~unspecified~~these ~~amount~~two of damages, interest, attorneys’ fees, and other costs, on behalf of a putative class of individuals and entities that purchased or otherwise acquired EFI securities from February 22, 2017 through August 3, 2017acquisitions.

At this time, we do not believe it is probable that we will incur a material loss in this matter. However, it is reasonably possible that our financial statements could be materially affected by an unfavorable resolution of this matter. Because this matter is in the preliminary stages, we are not yet in a position to estimate the amount or range of reasonably possible loss that may be incurred. 42

~~Shareholder~~Revenue ~~Derivative~~by ~~Lawsuit~~Operating Segment

OnWe ~~August 22,~~manage ~~2017,~~our abusiness ~~shareholder derivative complaint was filed~~ in ~~the~~three ~~Superior~~operating ~~Court~~segments ~~of the State of California for the County of Alameda captioned Schiffmiller v. Gecht, No. RG17873197. The complaint makes claims derivatively and on behalf of the Company~~ as ~~nominal defendant against the Company’s named executive officers and directors for alleged breaches of fiduciary duties and unjust enrichment, and alleges, among other~~ follows:

42Industrial Inkjet, which consists of super-wide and wide format display graphics, corrugated packaging and display, textile, and ceramic tile and building material industrial digital inkjet printers; digital UV curable, LED curable, ceramic, water-based, and thermoforming and specialty ink, as well as a variety of textile ink including dye sublimation, pigmented, reactive dye, acid dye, pure disperse dye, water-based dispersed printing ink, and coatings; digital inkjet printer parts; and professional services.

~~Table~~Productivity

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