Despite the tighter business conditions, the California-based print manufacturer is set to pay down debt by redeeming outstanding bonds.

The company, which has also outlined changes to its board of directors, reported a loss of $5.4m (£2.7m) for the quarter ended 31 March 2008, using Generally Accepted Accounting Principles (GAAP). This compared with a net profit of $2.1m for the same period in 2007.

Revenues for the period were $136.6m, down from $147.8m last year, but the cost of revenues dipped by less than $100,000 to $59.4m.

The operating expenses were broadly in line with 2007 costs, except for a dip in general and administrative costs from $20.5m to $13.2m. This was largely offset by one-off restructuring and severance costs of $5.5m.

Chief executive of EFI, Guy Gecht, said its Fiery business – the print server and controller division – had performed better than expected but acknowledged problems elsewhere in the company, particularly in the inkjet division.

"Challenging economic conditions in the US resulted in growth rates in our inkjet business below our expectations," Gecht said.

"Despite this environment, our inkjet businesses still grew a robust 11% over the prior year, fuelled by approximately 20% growth in international markets. We expect to see continued sequential improvement in both our Fiery and inkjet businesses during the current quarter."

The company also announced it would exercise its right to redeem the $240m principal amount of its outstanding 1.50% Convertible Senior Debentures along with any interest due. The bonds, which were due in 2023, will be called 2 June this year.

This would reduce the number of shares used in the calculation of earnings per share by approximately 9.1 million shares effective as of the redemption date.

Joining the board of directors is Richard Kashnow, former chairman, chief executive and president of Raychem, and Thomas Georgens, president and chief operating officer of NetApp.

Christopher Paisley, dean's executive professor of Accounting and Finance at Santa Clara University's Leavey School of Business, is not planning to stand for re-election to the EFI board of directors at the company's next annual meeting of stockholders, expected to be held on 20 May this year.

With the addition of Kashnow and Georgens, and Paisley's departure, EFI's board of directors will consist of seven members, five of whom are independent.