Reprographics 101

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  • Bankruptcy Count Approves Sale of Nova Blue to ABC Imaging

    This post is a brief follow-up to previous posts on this blog about Nova Blue Reprographics’ Chapter 11 Bankruptcy case.

    On Friday, October 14th, 2011, we did an “update” post on Nova Blue’s Chapter 11 Bankruptcy matter, and, at the beginning of that day’s post, we said this…..

    “First, I want to mention that I would not be surprised, one bit, if one of the larger DC-area reprographics companies makes an offer to purchase the assets (and goodwill and customer list) of Nova Blue Reprographics and, subsequently, completes that offer, which would require the consent of the Trustee of this case as well as approval from the Bankruptcy court. Given the competitive landscape in the reprographics industry in the Washington, DC Metro area, I would think that ABC Imaging would take a look at acquiring Nova Blue Repro, and I think that would apply to ARC as well. And, maybe NRI would have an interest in looking at Nova Blue Repro. My own personal opinion is that, if Nova Blue Repro is acquired, the most likely acquirer would be ABC Imaging.”

    If you want to look back at the complete post we did on October 14th, you can find that post at this link:

    Further on Nova Blue Reprographics Chapter 11 Bankruptcy

    Okay, now for a “flash update” – Breaking News!!!

    While I do not know if ABC Imaging has, by now, actually completed the purchase of Nova Blue (meaning, completed the purchase of the assets of Nova Blue, Inc. and Nova Blue Reprographics, Inc.), I do know, by virtue of a filing associated with Nova Blue’s BK case, that the Bankruptcy Court Judge did, on December 6th, approve the “as modified” Purchase & Sale Agreement, which was originally filed with the BK court on November 4th, 2011.

    After Nova Blue went into Chapter 11, the court appointed a “Trustee” to operate Nova Blue, meaning that Nova Blue’s long-time owner, Dick Bartlett, was, apparently, no longer the “principal operator” of Nova Blue after the Trustee was appointed.

    On November 4th, the Trustee submitted a motion to the BK court, “moving” to sell Nova Blue (its assets) pursuant to a Purchase & Sale Agreement submitted by ABC Imaging. Subsequent to that motion, three objections were filed. But, subsequent to that, the objections were either satisfied or overruled. The Purchase & Sale Agreement was somewhat modified, and it is the “modified” Agreement that was approved by the BK Court Judge on December 6th.

    At the conclusion of today’s post, I’m going to post the Purchase & Sale Agreement documents I was able to download, but please note that the documents I’m going to provide you links to are the P&SA as originally proposed. I think the modifications to the initial agreement were minor, or, as some might put it, inconsequential.

    What did the BK Court approve? – – – well, here it is …..

    The sale of Nova Blue’s assets for a purchase price of $430,000 CASH (per the “modified” agreement.) Nice to know that a reprographer has that much cash sitting around!

    Under the P&SA, what does ABC Imaging get for its $430,000? – – – well …..

    1) Nova Blue’s assets, free and clear of any encumbrances.

    2) The right to assume the leases on Nova Blue’s locations (I’m not sure which locations are involved or how many there are; I think there are two locations involved).

    3) A business generating this much in sales (these sales numbers come from the “Monthly Operating Reports” filed with the BK Court over the last few months):

    Jun 2011 $122,028

    Jul 2011 $105,567

    Aug 2011 $139,017

    Sep 2011 $126,351

    Oct 2011 $121,916

    Okay, if we do a simply “annualization” of these sales numbers, that means that ABC Imaging will likely (or hopes to) pick up approximately $1.45 million in sales for the purchase price of $430,000. At a purchase price of $430,000, ABC would be paying a price of approximately 29% of sales. Note that, in a post we put up on the blog, this morning, about ARC and Service Point, those companies are currently valued at 48.94% and 16.34% of sales, respectively.

    Let’s take another stab at evaluating the $430,000 purchase price. If ABC does pick up $1.475 million in incremental annual sales and is able to earn a 15% profit on those incremental sales, or approximately $221,000 in incremental net income, that outcome would yield ABC Imaging an ROI (annual return on investment) of approximately 51% on its $430,000 investment. Not too shabby, huh?!

    Again, while I do know that the BK Court approved the deal that ABC Imaging and the Trustee negotiated, I do not know if ABC has actually completed the deal. I have contacted an officer of ABC Imaging for comment, and I’ll let you know, by later post, what I hear.

    These documents are now posted in my Google Docs library (click on links provided to access the documents) (please note, these were the documents filed with the BK Count on November 4th; these documents may have been subsequently modified!):

    – TRUSTEE’S MOTION FOR ORDER (A)AUTHORIZING AND APPROVING ASSET PURCHASE AGREEMENT; (B) AUTHORIZING THE SALE OF ASSETS OF THE ESTATE, FREE AND CLEAR OF CERTAIN LIENS, CLAIMS, INTERESTS AND ENCUMBRANCES; AND (C) AUTHORIZING THE ASSUMPTION AND ASSIGNMENT OF EXECUTORY CONTRACTS AND UNEXPIRED LEASES.

    http://tinyurl.com/cw9jaff

    – AGREEMENT FOR PURCHASE OF CERTAIN BUSINESS ASSETS

    http://tinyurl.com/d4a8jyp

    – LETTER TO THE BANKRUPTCY TRUSTEE FROM DICK BARTLETT (this is a very interesting letter!)

    http://tinyurl.com/857vy5n

    – PROPOSED COVENANT NOT TO COMPETE

    http://tinyurl.com/79cm4o2


    Finally, I’d like to say……

    a) if ABC actually completes the deal, best wishes to Medi and ABC Imaging for success with the deal

    b) to Dick Bartlett, best wishes for good health and happiness

    —–

    Source of documents: pacer.gov

  • Bankruptcy Count Approves Sale of Nova Blue to ABC Imaging

    This is a preliminary post to “break the news”.

    Further details to follow.

  • CALTRANS Bid Procurement for Legal Photocopying Services

    In October 2011, Caltrans (the California Department of Transportation) posted bid results for a “legal photocopying” services bid procurement. I don’t have a copy of the bid document, but I did find the bid results, just this morning. Note the range of bids, from low to high. Quite a gap between the lowest bid and the highest bid!

    If you want detailed information about the bid results, you’ll have to contact Caltrans. (When requested detailed bid-results information, always request copies of each bid so that you can see “unit prices” bid for each line item.)

    This verbiage appears at the top of the “bid results” page:

    “Bid results shown below are preliminary pending review and verification of applicable bid requirements such as: small business preference, dvbe/dbe/good faith effort, licensing, bonding, qualifications, etc.; contracts will be awarded to the lowest responsive, responsible bidders, unless stated otherwise in the invitation for bid/request for proposals. The bid opening results will be posted as soon as possible to this webpage. The time thursday afternoon. Please be patient as the bid results should be posted between 6:00 a.m. and 12:00 p.m. every wednesday and friday. Thank you.”

    BID RESULTS – 10/06/2011

    Contract # 42A8459

    Legal Photocopying Services

    Bidders

    Small Business Preference Claimed

    Total Bid

    Century Sun and Solar

    Yes

    $1,068,266.00

    Sacramento, CA

    Knox Services

    No

    $1,738,676.25

    San Diego, CA

    AJ Reprographics

    No

    $1,770,453.00

    Los Angeles, CA

    Ace Attorney Services, Inc.

    Yes

    $2,541,329.25

    Los Angeles, CA

    C2 Reprographics

    Yes

    $6,434,555.00

    Costa Mesa, CA

    This information was found at this web-site address:

    http://caltrans-opac.ca.gov/contract.htm

  • City of Phoenix, AZ – Bid for Reprographics Services (Low- bidder recommended for award)

    On October 15, 2011, we did a post about this procurement on Reprographics 101.

    This morning, I found the results of the bid, and, below, you’ll find the City Purchasing Department’s recommendation for aware.

    Note that eight bids were submitted. In its award recommendation, the City did not list all of the vendors who submitted bids; only the top three (the three lowest) bids are listed. If you want to review all of the bids that were submitted and want to know the unit prices bid by all bidders for all line items, you will need to request that information by sending a letter to the City’s purchasing department. If you want to be an “educated” bidder, knowing only the “total bids” is useless; in order to be a truly educated bidder, you must do the homework necessary to determine the unit prices that were bid for each line item by each bidder, and, to get that information, you need to communicate your request for documents and information to the Purchasing Department!

    Recommendation Date: November 30, 2011

    ITEM: CITYWIDE IFB 12-057 REPROGRAPHIC SERVICES – REQUIREMENTS CONTRACT

    Report of eight bids received by the Procurement Division on October 21, 2011 to provide the various City departments with Reprographic Services, on an as- needed basis, during a two (2) year contract period, beginning on or about, January 1, 2012 and ending December 31, 2013.

    Reprographic services are necessary to reproduce documents outside of the City of Phoenix capabilities.

    Following is a tabulation of the lowest, responsive and responsible bids received:

    Name of Bidder

    Total Bid

    Perkinson Reprographics, Inc.*

    $10,500.92

    dba PRI Graphics

    Phoenix, AZ

    AZ Overland Blueprint

    $11,221.52

    Phoenix, AZ

    Thomas Reprographics, Inc.

    $11,249.80

    Phoenix, AZ

    It is recommended by the Deputy Finance Director that the bid of Perkinson Reprographics, Inc., as asterisked, be accepted as the lowest, responsive and responsible bidder. Authorization is also requested for the City Controller to disburse funds over the life of the contract.

    Financial Impact: The estimated expenditures for the initial two (2) year contract will be approximately $102,000.00, excluding tax, based on historical trends. Estimated annual expenditures are based on revised estimated annual quantities for Departments Citywide. The unit price is in proportion to the total bid price award. Actual usage of this contract may be higher or lower depending on need and budgeted funds. Funds are available in various Departments’ budgets.

    Employment Impact It is estimated that this contract will create or maintain 1 private sector job.

    Option to Extend Provisions of the agreement include an option to extend the contract up to three (3) additional years, in one-year increments, which will be exercised by staff if considered in the City’s best interest to do so.

  • Share Prices and Market Caps – Service Point Solutions (SPS) vs. American Reprographics Company (ARC) (an update to a previous post)

    We did a post on August 6, 2011 on Reprographics 101 to share these same numbers as of August 5, 2011, so today’s post is “simply” an updated comparison.

    At current share prices (as of December 11, 2011) ….. if you bought 100% of SPS, it’d be like paying a purchase price equivalent to approximately 13.55% of annual sales revenues, or, if you bought 100% of ARC, it’s be like paying a purchase price equivalent to approximately 47.67% of annual sales revenues.

    I know, I know, I know … both have debt and debt is a consideration, but I’m too lazy to look back at SPS’s debt picture.

    But, still, I can remember “the days” in the reprographics business where you could purchase reprographics companies for 50% of Sales Revenues – and sometimes for less than that. But, as time went on, some reprographics companies sold for more than 100% of Sales. There was a time when ARC, itself, was valued at more than 250% of Sales.

    Referring to the table below:

    I’ve “estimated” full-year 2011 sales for both SPS and ARC simply by dividing their 9 month sales by 3, then multiplying that number by 4. A simple “annualization” if you will. Please note, however, that ARC, historically, has lower sales in Q4 than in earlier quarters, so I do think (and have previously projected) that ARC’s full-year 2011 sales will come in somewhat less than the number shown in the second table. As to SPS’ sales, SPS’ Q4 2011 sales will benefit from the Holmbergs acquisition completed earlier in the year, but SPS’ Q4 numbers have not been particularly strong in the past and “some say” that Europe is now in a recession, so that, too, may have a negative affect on SPS’ full-year 2011 sales vs. the “estimate” in table 2.

    When I did the comparisons in August 2011, the Euro/Dollar exchange rate was around 1.43. Now, the Euro/Dollar exchange rate has fallen to around 1.33. Since I convert Euros to USD for the comparisons, SPS’ numbers are proportionately less because of the decline of the Euro against the Dollar.

    Figures in table are in $USD

    Euro/USD exchange rate 1.43

    From blog post on 8/6/11

    ($USD / mil)

    ($USD / mil)

    SPS

    ARC

    Sales – first half 2011

    $158.09

    $216.09

    multiplier (to annualize)

    2

    2

    Estim Sales – full year 2011*

    $316.18

    $432.18

    Closing share price – 08/05/11

    $0.47

    $4.58

    Market Capitalization – 08/05/11

    $51.67

    $211.51

    Market Cap as a %age of Sales

    16.34%

    48.94%

    Figures in table are in $USD

    Euro/USD exchange rate 1.34

    For blog post on 12/12/11

    ($USD / mil)

    ($USD / mil)

    SPS

    ARC

    Sales – 1st 9 mo’s 2011

    $216.13

    $320.88

    multiplier (to annualize)

    1.333

    1.333

    Estim Sales – full year 2011*

    $288.10

    $427.73

    Closing share price – 12/11/11

    $0.351

    $4.41

    Market Capitalization – 12/11/11

    $39.04

    $203.90

    Market Cap as a %age of Sales

    13.55%

    47.67%

  • City of Cambridge, MA, Reprographics Services Bid

    On October 17, 2011, I did a post on Reprographics 101 to let you know that the City of Cambridge MA would likely be issuing a bid for reprographics services in the near term.

    And, this morning when I did some Google-searching, I did find that the City did, recently, issue its bid document.

    City of Cambridge MA Bid for Reprographics Services

    Reprographics Services – File No. 5687

    Bids due on Thursday, December 22nd, 2011, 10:00 a.m.

    Contact Information:

    City of Cambridge, Purchasing Department

    795 Massachusetts Avenue, Room 303

    Cambridge, MA 02139

    Purchasing Agent: Cynthia Griffin

    Phone 617-349-4310

    Fax 617-349-4008

    Bid document can be downloaded off of the City’s web-site, www.cambridgema.gov

    Reprographers, I took just a few minutes to look though the list of services that bidders are asked to bid on, and, folks, this bid document is one of the worst ones that I’ve come across in the past few years. This City, home to MIT and Harvard no less, appears be quite backwards; one wonders if the purchasing department did any homework, at all, on the services it needs and how to appropriately describe the services it needs. Here are some of the line items and my comments about each.

    – Diazo blackline prints

    How many reprographers in the Boston/Cambridge area still offer diazo printing services, and, even if any of them do, why in the world is this service even necessary in this day and age?

    – Photographic mylar with wash-off emulsion

    What !!!!!

    – Output from electronic Macintosh file to bond/vellum large-format max.width dimension 36”

    One price per sq ft for bond and vellum. Maybe they should have included mylar in this line item as well!

    – Docutext printing from MAC electronic file black & white printing

    Well, I know they meant to say “Docutech”, but, even if they got that right, brand names have no business being included in any line-item description.

    – Banners and signage Color Output 30” wide x per sq ft (no specific media mentioned)

    How in the world is anyone supposed to provide a unit price for this line item without an understanding of the media-type required?

    _____

    Joel’s final comments on this Bid document:

    This Bid document is a perfect example of bids in the past that used to make me cringe, literally! Fraught with inaccurate (or, worse, stupid) line item descriptions and services that are obsolete. Shame on the City’s Purchasing Department for not reaching out to area reprographics vendors for assistance and guidance in updating/revising/modernizing the City’s bid procurement for reprographics services. And, shame on Boston area reprographers for not educating the City’s purchasing department on current reprographics technology and services!

    I’ve uploaded a copy of the bid document to my Google-Docs library; here’s the link:

    http://tinyurl.com/dyrqn5h

  • RFP for Reprographics from Detroit Regional Convention Center Facility Authority

    Detroit Regional Convention Facility Authority (DRCFA)

    1 Washington Blvd, Suite 401

    Detroit, MI 48226

    Phone: 313-877-8777

    Currently OPEN DRCFA RFP/RFQ projects:

    RFP-RM-Reprographics

    Bids are due on December 20, 2011, 2:00 PM,

    at Cobo Center, One Washington Blvd., Detroit, MI 48226

    Sorry, but I was unable to locate the RFP document. If you are interested in obtaining the RFP document, contact DRCFA at phone number above.

  • Cushing’s web site is outstanding; Reprographers, how does your web site compare?

    This morning, I visited Cushing & Co’s web-site to see what’s new with Cushing & Co.

    I’ve mentioned, previously on Reprographics 101, that Cushing & Co is one of the oldest (continuing) reprographics companies in the industry. But, in spite of their age (Cushing & Co was founded in 1929), there’s nothing “old” about Cushing & Co’s manner of presenting the company to the public.

    In addition to visiting Cushing & Co’s web-site, I also visited their Blog. I found this article from November 11th:

    _______

    “Website Redux”

    BY CATHIE CUSHING DUFF, ON NOVEMBER 11TH, 2011

    It’s an exciting day around Cushing! We are getting ready to re-launch our website with our very own Cross Media Marketing campaign. What we have learned about these new concepts is extremely energizing and the climate around here is definitely heating up – despite cold winds and a few flurries.

    Our Website has really gone through generations of change – from a static billboard about the business to a digital brochure about the company to a rudimentary tool for customers to upload work to our shop, and now to an interactive means of communicating with our market, disseminating information about emerging technologies and services while serving as a gateway to our production areas. What was once as novelty – getting an email through the website – is now a many-times-a-day occurrence. People inquire about services, pricing and jobs while we download job confirmations, information on best practices for best results, and highlights of what goes on at Cushing. It is not static anymore!

    Come on over and see what is happening. I am especially excited about the Marketing Campaign!! I will keep you posted about how that works for us. It has been a while since something felt like fun in this business climate and we intend to share that feeling.

    _____

    Cushing & Co’s slogan – “THE ONE TO COPY” – has a dual meaning to me: First, it means that they are a leader in their business and customers will benefit from doing business with them; Second, if you are a reprographer and your web-site is “a bit challenged” (or worse, simply awful), you’d do well to “copy” Cushing & Co’s web-site for your company. (Well, not exactly, for there are copyrights to consider, but you get my drift). Cushing & Co’s web-site does a marvelous job explaining everything they do. They’ve obviously spent ton of time, not to mention a very significant effort, at detailing out all they do. In addition, the use of graphics is nothing short of superb.

    I’ve always counseled (both associates and friends) to “look at your marketing materials and manner of presenting your company as though you were a customer” – in other words, look at your business through “their” (customers’) eyes. After all, it is they (customers) that you want to educate and impress. Cushing & Co’s web-site does that and does it extremely well!

    If you would like to explore Cushing & Co’s web-site, here’s a link:

    www.cushingco.com

    Oustanding!

  • Service Point Solutions issues Q3 2011 Results Report

    First, here’s a link to the Spanish-language-version of the report, which I found on Service Point’s web-site (www.servicepoint.net), in the Financial Results section of the Spanish version of the web-site. If you read Spanish, this is all you’ll need to review Service Point’s Q3 2011 results.

    http://tinyurl.com/cnaoydt

    Second, note that SP did not issue an English-language-version of the Q3 2011 report. But, I did make an attempt to create an English-language version, using Google Translate. Keep in mind that Google Translate does not do a perfect job, but I think the translated version will suffice for most of you.

    Third, here’s first page of the Q3 2011 report; this is the Google-Translation of the narrative on that page:

    (please note that the term “BDI” means “Net Income”)

    Service Point’s sales amounted to EUR 162.5 million at September 2011, 5% higher than the same period in 2010.

    The consequence of this increase and control operating costs, EBITDA has moved up to 10.7 million euros, up 38% over the first nine months of 2010.

    A level EBIT reached 3.1 million euros, compared to losses of 0.7 million euros a year earlier, representing an increase of 3.8 million euros.

    The BDI showed an improvement of 1.7 million euros compared to 2010, reducing losses of 6.3 billion euros to 4.7 billion euros.

    Holmbergs acquisition in Sweden was completed May 1, integrated into the consolidated since that time. Has been established at the beginning the year, total sales would have amounted to Service Point 166.8 million euros and EBITDA of 11.1 million euros in the first nine months.

    Despite an extremely weak economic environment since July, the third quarter has had a favorable behavior for Service Point. The data show that the operating income growth has accelerated during the third quarter; improved sales by 6.7%, EBITDA increased to EUR 1.7 million, and the EBIT increased to EUR 1.9 million over the same period last year.

    The company expects a positive trend during the fourth quarter in line with its annual progress report and highlighted in relative terms against the same period in 2010, due to a high level of ongoing projects, the smooth running of the business of photo-albums featuring prominent positive seasonality and continuous control operating expenses to achieve annual sales of 220 to 223 million euros.

    Fourth, here’s the Google-Translation English-language version of the Q3 2011 report. Again, keep in mind that the translation may be a bit screwy (and may be inaccurate!). You can’t click on this Internet-address to bring up the translated version; I think you need to copy this Internet-address into your browser window in order to bring up the translated version. If that doesn’t work, you can always go to Google Translate and create your own English-language-version of the report.

    file:///Users/jsatpmp/Desktop/SPS%20Google-translated%20version%20of%20SPS%20Q3%202011%20Results%20ES_SPS3T2011.html

  • Sidoti upgrades American Reprographics Co (ARC) to a "buy" rating

    One of Sidoti’s financial analysts participates in the quarterly “earnings calls” ARC hosts after each quarter’s results are released.

    Found, this afternoon, on the web-site of localizedusa.com …..

    American Reprographics Company (ARC) Shares Upgraded to a “Buy” Rating by Sidoti Analysts

    Posted by LUSA Staff on Dec 9th, 2011

    American Reprographics Company (NYSE: ARC) was upgraded by equities research analysts at Sidoti from a “neutral” rating to a “buy” rating in a research note issued to investors on Friday.

    Separately, analysts at Zacks Investment Research (had) upgraded shares of American Reprographics Company from an “underperform” rating to a “neutral” rating in a research note to investors on Tuesday, October 11th.

    American Reprographics Company (ARC) is a reprographics company in the United States providing business-to-business document-related services that typically include document management, document distribution and logistics, and print-on-demand. The Company’s primary market is the architectural, engineering and construction industry (AEC) industry. It also provides these services to companies in non-AEC industries, such as aerospace, technology, financial services, retail, entertainment, and food and hospitality. As of December 31, 2009, the Company operated 272 reprographics service centers, including 259 service centers in 208 cities in 38 states throughout the United States and the District of Columbia, seven reprographics service centers in Canada, one in United Kingdom and a business venture company in China with five locations. It services approximately 138,000 active customers.

    Shares of American Reprographics Company traded up 8.94% during mid-day trading on Friday, hitting $4.51. American Reprographics Company has a 52 week low of $3.08 and a 52 week high of $10.50. The stock’s 50-day moving average is $4.30 and its 200-day moving average is $5.29. The company has a market cap of $208.5 million.