Reprographics 101

(more than you ever wanted to know about the reprographics industry)

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  • Vistaprint shares PLUNGE

    On July 28th, after the stock market closed, Vistaprint NV released its results for its fiscal Q4 2011 and for its full-year-ended June 30, 2011.

    Q4 Revenues were up over the same period one year earlier and beat analyst estimates. ($208.8 mil vs. $205.8 mil)

    Q4 net income was $14.4 mil, up from $11.7 mil one year earlier.

    In my opinion, not bad results, considering the lack of strength in the overall economy.

    However, at the same time Vistaprint released its results, it lowered guidance – for future revenues and earnings – below estimates previously issued by analysts, and I guess that’s what caused Vistaprint’s price-per-share to plunge.

    And “plunge” is, most definitely, the operative word, for Vistaprint’s share price fell from $ 42.40 to $ 26.70 in just one day!

    That’s a stunning plunge!

    ARC will report its Q2 2011 results on August 4th, after the market closes. For those of you who own ARC stock, keep your fingers crossed that ARC has some good news in its report.


  • “Life After Reprographics” – Mark Sirangelo

    Mark Sirangelo was the first (non-reprographer, non-owner) President of ReproCAD. Subsequent to ReproCAD, Mark held positions with Rowley-Scher Reprographics (first as Executive Vice President, then, later on, as President.) Mark’s come a long, long way since his stints in the reprographics industry!

    Mark is the Chairman of the Commercial Space Flight Federation.

    Mark Sirangelo is also the Chairman of Sierra Nevada Space Systems, a leading producer of satellites, propulsion systems and space sub-systems and is also the Executive Vice President of Sierra Nevada Corporation, a billion dollar aerospace and defence firm.

    Mr Sirangelo was the Chairman & CEO of SpaceDev, Inc., prior to its merging with Sierra Nevada Corporation. Prior to SpaceDev, he was the CEO of the QuanStar Group, an advanced technology commercialisation and investment company that identified promising technology companies and actively assisted in their growth. In addition to QuanStar, Mr Sirangelo founded and acted as Chairman and CEO of a major global communications firm, was an officer in an international investment bank and was an entrepreneurial managing partner in high growth technology design firm.

    Mr Sirangelo’s board memberships include being the Chairman of the Commercial Spaceflight Federation, the founding Chairman of the Center for Space Entrepreneurship, the California Space Authority, the National Center for Missing & Exploited Children and the International Centre for Children.

    Corporate and personal awards include the Defense Industry’s Fast Track 50, Deloitte’s Fast Track 500, NASA/Space Foundation’s Technology Hall of Fame, Ernst &Young’s Entrepreneur of the Year and Inc. Magazine’s top 200 companies. Mr Sirangelo holds Doctorate, MBA and Bachelor of Science degrees, has been scientifically published, and has served as an officer in the US Military.

  • Quick Profile – BW Reprographics, LLC – a “full-service” reprographics company operating in the New York – New Jersey market area

    BW Reprographics was founded around the time that Louis Frey Co was dissolved in Chapter 7 Bankruptcy proceeding.

    From the September 2003 Issue of “Repro Report Weekly”…..

    “A Closer Look at New York’s Newest: BW Reprographics”

    There’s an old adage that says, “the acorn doesn’t fall far from the tree.” It’s an apt description for many in our familial industry, but it’s simply not ambitious enough for 20-year repro veteran Bruce Wiener. Responsible for sales and customer service satisfaction for the majority of his 20-plus years with Louis Frey Co., Wiener is proud of the solid revenue growth and loyal customer relationships developed on his watch. He has, however, wondered if there might be a better way. A better way to do what? A better way to serve today’s customers, whose demands are quite different than they were 10-20 years ago.

    As a leader in the facilities management field, with numerous sites estab- lished over the years, Wiener saw an opportunity to leverage the industry’s technological advancements and in early 2003 launched BW Reprographics LLC in the heart of the Big Apple.

    “It’s important to utilize the latest customer driven technologies when you begin without a structured legacy and determine how they can best position you for the future,” Wiener says. “Obviously the biggest challenge to setting a business in motion is cultivating clients and giving them a reason to move with you. When you have a 20-year history in a city like New York, and you’ve dealt with thousands of people, the name recognition is a huge asset. But in the end, you’re doing what everyone does: knocking on doors, creating added value and giving 110 percent everyday.

    BW Repro has more than met the challenge. Building from the ground-up with the support of loyal customers and colleagues, Wiener opened a 3,000-sq. ft. facility near the Empire State Building and Penn Station. He has started producing numerous client orders, secured some FMs and, because many architects and engineers have migrated across the river over the last couple of years, is opening a second location in suburban New Jersey.

    “It’s very exciting,” Wiener says. “Each location will be fully equipped with the best hardware out front to serve the customers’ imaging needs and the best systems software in the back office to improve client communication.”

    Specifically, BW Repro is investing in cost-capture technology, Internet connectivity and other processes that cutting edge firms are using to convert from manual to automated digital workflow and improve their communications.

    “In order to provide the best technology solutions, we have already established alliances with leading providers of document management software and reprographic systems to optimize our clients’ communications management efforts,” Wiener says. “We will also use technology, such as online communication and billing software packages, which will integrate with our clients’ document management and IT infrastructure to provide seamless and real- time management.”

    Wiener’s aim is to provide BW Repro’s customers both high quality reproductions and “advancing values” – and by the latter he means “services that will help customers excel in their own business.”

    “By concentrating on keeping our backroom operations streamlined and highly motivated, we will be able to provide our clients with a winning equation,” he says. Highest quality output plus progressive document support systems and superior value – this is the ‘new math’ that many reprographic clients are asking for.”

    The equation extends to forming key alliances with companies that share a comparable vision and service ethic.

    “In today’s environment, you need to be efficient, and for me that means having core professionals and forming the proper alliances. As I see it, your best alliances start with a strategic partner with an excellent product and a responsive support team, but there also has to be the sense that they’re on the same page and are equally committed to adding value to your client.”

    In addition to operating the two commercial shops, BW Reprographics LLC will also be extremely active in the FM arena, an area Wiener helped pioneer several years before it became a widespread practice.

    “These key ingredients – quality, dependability and continuous improvement – are even more critical in the facilities management environment,” Wiener explains. “The ongoing value of FM services is changing rapidly. Reprographic firms must recognize this value and be proactive in advancing their abilities for the customer.”

    Joel’s comment (actually, a question): Is BW Reprographics still “independent”, still owned by Bruce Weiner?

  • Quick Proflle – Tri-State Reprographics, Pittsburgh, PA

    I thought I knew all of the reprographics companies active in the Pittsburgh, PA market, but I guess not. Today, I came across Tri-State Reprographics, and, based on the history I read, they are a long-standing, well-established player in the Pittsburgh market area. George Marshall, grandson of the original founder, is the third-generation of the Marshall family to lead the company. Tri-State is full-service reprographics firm.

    History

    It was 1942, when the newly introduced mercury vapor lamp was revolutionizing the blueprinting industry by enabling consistent exposures and speeds, that Jacob B. Marshall founded Tri-State Blueprinting, now know as Tri-State Reprographics. 805 Liberty Avenue was the first location of Tri-State and Jacob’s first printing job was a WWII airstrip being designed by the newly formed Michael Baker Engineers.

    Robert Marshall, Jacob’s son, joined his father in the business in 1949. By 1956 Robert had moved to a leadership role in the company and moved the company to a new larger location at 237 Fifth Avenue. It was there, through his dedication and knowledge, that Tri-State Blueprinting increased its capabilities and services.

    By the time the 1970’s rolled around, Tri-State was well prepared to participate in the growth that took place during Pittsburgh’s Renaissance, and the company grew. Construction projects including the Medical Center of Beaver County, Sewickley Valley Hospital, Allegheny General Hospital, Magee Women’s Hospital, USX Tower, One Oxford Center, PPG Place and One Mellon Bank Center all contributed to Tri-State Blueprinting’s prosperity.

    Tri-State Reprographics’ current president, George Marshall, joined the business in the late 1970’s. Picking up the reins like his father and grandfather before him, George led Tri-State into new growth during the 1980’s. In 1982, Tri-State Reprographics moved to 911 Penn Avenue and continued to participate in the growth of Pittsburgh through such projects as the Vista Hotel and Federated Towers of Liberty Center, CNG Tower and Fifth Avenue Place.

    Tri-State Blueprinting continued to establish itself as an industry leader by providing the reprographics needs of Allegheny County’s largest ever construction project, the Midfield Terminal for the new Pittsburgh International Airport. George Marshall met the challenge of outputting enormous volumes of printing in a timely manner, by introducing an on-site printing facility. In concert with the other contractors working on the job, Tri-State was able to serve the project’s reprographics requirements by implementing this on-site facility management program.

    At the same time, Tri-State continued to seek leading edge technology and partnered with C4 to provide a national digital network serving the needs of the industry as it moved to computer aided drafting and design. Tri-State Blueprinting was the first in the area to offer large format digital color output and top quality color plotting and graphics for the AEC and advertising industries.

    At Tri-State Reprographics, we never rest in our commitment to remain on the leading edge as we continue to reach out, diversify and grow. Our primary purpose is to build upon our existing foundation. Quality, service and competitiveness are what we offer. We hope to be considered the best — we want to be a true value to our customers.

  • No more politically oriented posts on this blog

    Yesterday, I put up a politically-oriented post, and, today, I decided to pull it down.

    The question that some of you might ask is, “why did Joel pull down that post?”

    For two reasons:

    a) the “headline” of this blog states the following….

    Reprographics 101 (more than you ever wanted to know about the reprographics industry)…..

    Facts and opinions related to the reprographics business and the reprographics industry as well as articles and information related to the A/E/C industry served by reprographers. This blog is intended for reprographers, for vendors who sell to reprographers and for analysts and investors who are interested in learning more about the reprographics industry.

    b) after I put up that post, one of my blog-visitors (Tom T) submitted this comment:

    “Stick to repro commentary…please don’t go there with political commentary.”

    That’s not all that Tom T said, but the rest of what he said has no bearing on my decision to pull down the post.

    But, Tom T was right. The stated purpose of this blog is to deal with facts and opinions about the reprographics business and industry – and to share issues that affect the reprographics business and industry, and, because that’s the stated purpose of this blog, I’ve decided that I must stick with that, for making comments about things that are not germane is, well, an inappropriate use of this blog. I will likely start a politically-oriented blog of my own, but, if I do, that blog will be completely separate from Reprographics 101.

  • US revises down recovery rate

    It would certainly be nice if “they” would keep the number straight the first time they issue them!

    July 29, 2011

    US revises down recovery rate

    By Robin Harding (of ft.com – that’s the “Financial Times”) in Washington

    A dramatic set of revisions to US growth data on Friday have revealed that the economy is recovering more slowly than previously thought from a much deeper recession.

    The Bureau of Economic Analysis said that the economy grew at an annualised rate of only 1.3 per cent in the second quarter and revised down its estimate of first-quarter growth to only 0.4 per cent from 1.9 per cent.

    But it also made annual revisions to its data that showed the recession of 2008 and 2009 was much worse than previously thought. Growth in 2008 was revised down to minus 0.3 per cent from flat while 2009 growth was revised down to minus 3.5 per cent from minus 2.6 per cent.

    “For the recession as a whole, gross domestic product declined by 5.1 per cent rather than 4 per cent as previously reported, far and away the steepest economic decline since World War Two,” said William Seyfried, professor of economics at Rollins College.

    The revisions mean that the sluggishness of the recovery is even more alarming. The economy would normally be expected to bounce back faster from a deeper recession, simply because there was more spare capacity to put back to work.

    The revisions imply that the jobs market has been a much better guide to the true health of the economy than the initial growth numbers. The unemployment rate has remained stuck at 9.2 per cent, not far below its 10.1 per cent peak.

    That reflects an economy that was $134bn smaller at the end of 2010 – almost a full percentage point – than the BEA had previously thought. The biggest reason for the revision was a large cut in the BEA’S estimate of consumption.

    Looking forward, the data send mixed signals about whether the economy can bounce back strongly in the second half, as many economists forecast.

    Consumption contributed only a 10th of a percentage point to growth in the second quarter, but that reflected a surge in oil prices and disruption to car supplies because of the earthquake in Japan, factors that should be reversed in the third quarter.

    Business investment was encouragingly robust, contributing 0.7 percentage points to second-quarter growth, and there were hints that construction activity has hit bottom.

    But government spending subtracted 0.2 percentage points from growth and that would have been even worse had it not been for strong defence expenditures. As the spending cuts under discussion in Congress bite, government is likely to knock even more off growth in the second half.

    The danger now is that the economy has weakened to a point that will become self-reinforcing, with consumers and businesses so doubtful about the recovery that they further reduce their spending, undermining any rebound.

    The economic weakness means that the timing for a possible debt limit shock could not be worse, and if there is another quarter of disappointment from the labour market, there are likely to be renewed calls for the Federal Reserve to step in with further monetary stimulus.

  • Article on AIA's web-site about Non-residential non-recovery and, later on, expected recovery

    I just noticed this article on the AIA’s web-site. I do not know the date that this article was published.

    No Recovery Expected for Nonresidential Building this Year,

    But Growth Projected for 2012

    Commercial sector to lead industry into recovery

    By Kermit Baker, Hon. AIA
, AIA Chief Economist

    An uneven economic recovery, hesitancy on the part of lenders to finance construction projects, the weak financial position of governments at all levels, and rising costs of key building material commodities are all conspiring to restrain a recovery in the nonresidential construction sector. The AIA Consensus Construction Forecast panel is projecting a decline of 5.6 percent this year in nonresidential spending for buildings, followed by a modest recovery of 6.4 percent in 2012. Because these predictions come on the heels of a more than 20 percent downturn in the overall nonresidential building sector last year, and a more than 30 percent drop in spending on commercial buildings, this year’s and next year’s expected declines are quite modest in comparison.

    Commercial facilities—office, retail, and hotel—are expected to see a more significant decline ( 6.5 percent) this year, but also a stronger recovery (almost 12 percent) next year. Spending on the construction of manufacturing facilities is expected to see a steep decline this year of almost 16 percent, followed by a relatively modest rebound of 8 percent. The traditionally more stable institutional sector is expected to fall just over 3 percent this year, and then offset this decline with a 4 percent increase in 2012.

    The economic recovery continues to disappoint

    While the 2008–2009 economic downturn was certainly severe, this recovery has still been unusually weak. In prior post-WWII recoveries, the U.S. economy averaged more than 6 percent growth (inflation adjusted) in the first year of a recovery, and more than 4 percent in the second. In the first year of this recovery, growth was only 3 percent, and when figures for the second quarter of this year are released, it’s likely that the second year gains will be below the first year. This modest level of growth is not too surprising given that the economy lost an additional half million jobs during the first year of the recovery, and gained just over one million during year two. At present, there are almost seven million fewer payroll positions in our economy than when the recession began in early 2008.

    With such slow growth, most businesses and institutions do not feel the need to expand their facilities, although spending on renovations to existing facilities has remained quite strong. For example, McGraw-Hill Construction reports that nonresidential construction awards for new buildings and additions declined 43 percent between 2008 and 2010, while awards for building alterations declined less than 2 percent over this period.

    Unstable home prices, unusually severe weather conditions, rising energy costs, concern over growing debt, and the rising national unemployment rate (up from 8.8 percent in March to 9.2 percent in June) have made consumers extremely nervous. Both the University of Michigan Consumer Sentiment Index and Conference Board Consumer Confidence Index have fallen since the beginning of the year. Business confidence has not fared much better. Moody’s Economy.com reports that business confidence has fallen significantly from March, as the recent slowdown in the economy has many businesses worried that 2011 will generate significantly slower growth than anticipated.

    Falling business confidence is becoming more of an issue internationally, which could impact construction levels and demand for design services in regions that have seen rapid growth in recent years. Moody’s Economy.com survey of global business confidence shows a dramatic decline since the beginning of the year in the Asia/Pacific index, largely due to the continuing problems from the Japanese earthquakes. But even the fast-growing Chinese economy seems to have stalled a bit recently. In contrast, the business confidence index for South America has been trending up this year, and the European index is holding its own, in spite ongoing government debt issues in Greece, Ireland, Spain, and Portugal. Solid business confidence in Germany, the largest European economy, has largely offset concerns in other areas.

    Regional patterns emerging

    As the construction markets begin to recover, some areas of the country are performing better than others. Though national construction employment is at almost exactly the same level as a year ago, 23 states have reported increases in construction payrolls over this period. Somewhat surprisingly, Michigan leads the pack with a 5.2 percent increase in construction payrolls over the past 12 months. Seven other states–Hawaii, Texas, Tennessee, Oklahoma, Kansas, North Dakota, and Illinois—and the District of Columbia have seen gains of 3 percent or more. At the other end of the spectrum, Nevada and Rhode Island have each lost 10 percent or more of their construction payrolls over the past year, with Georgia not far behind.

    The Federal Reserve Board monitors economic conditions for each of its 12 districts, and its report from early June was that nonresidential markets were beginning to show some improvement, in contrast to the still-stalled residential sector. From the report: “Nonresidential real estate leasing markets have been generally stable, while construction activity has remained very subdued. Loan demand was steady to stronger in most districts, especially in the commercial and industrial sector, and widespread improvement was reported in credit quality.”

    In terms of conditions in specific districts: “Commercial leasing markets showed modest signs of improvement in the Richmond and San Francisco districts. Boston and Dallas noted some firming in property sales markets, but Kansas City reported declines in prices for office buildings. Nonresidential construction, though widely reported to be at very low levels, rose modestly in the Boston, Chicago, Minneapolis, and Dallas districts, though Chicago noted that public sector projects are becoming smaller. Cleveland observed a pickup in industrial and high-end commercial development, but [also saw] a pullback in healthcare-related projects. Richmond reported some pockets of strength in the retail market. More broadly, contacts in a number of districts expressed a general sense of optimism about the outlook for the second half of 2011.”

    Construction commodity prices remain volatile

    In spite of a still-depressed construction sector, material prices remain unusually volatile, with some recent increases. Overall, prices for construction commodities have increased 7.5 percent over the past year, just slightly higher than the 7.3 percent overall increase in wholesale prices. In the overall wholesale price index, energy costs have been the main culprit. Without food and energy prices factored in, the overall index rose by just over 2 percent. However, price volatility in the construction sector certainly extends beyond energy costs. Steel, copper, and aluminum prices have all increased 10 percent or more over the past year, offsetting price declines for lumber and many concrete products. Some analysts feel that price pressures for construction commodities are shifting. According to Ken Simonson, chief economist of the Associated General Contractors of America, “The noise has died down over diesel, steel, and copper prices. Now the attention has shifted to asphalt, plastic, roofing, and insulation.”

    Momentum is beginning to shift in the nonresidential construction sector, but even after the markets begin to recover, there is a long climb to get back to the levels enjoyed before the recession. Home building generally creates demand for nonresidential facilities, so the extremely weak housing recovery is not generating much demand for new projects. Job growth also is a key factor in creating need for new buildings, and, like home building, an employment recovery has not gotten underway to any significant degree. All of this points to a fairly modest expansion in the nonresidential building sector once growth resumes in late 2011 or early 2012.

    *With the release of this update of the AIA Consensus Construction Forecast, all construction spending figures are presented in current (non-inflation adjusted dollars). Prior reports were presented in real (inflation-adjusted) terms.

  • Gotta clean out the inventory of unsold homes before the housing market can begin any meaningful recovery!

    And, doing that will, at best, continue to be difficult, considering that financing is still difficult for many to get approved for, considering that closing costs (title insurance, appraisal costs and lender fees) have increased, and considering that lenders’ “short sale” processes are absolutely, completely, stunningly STUPID. Certainly, it is very difficult for most people to purchase a new home if they cannot sell their existing home.

    I’ve copied into my Google Docs library, for your reading pleasure, an article that appeared on CNBC.com, yesterday, that said that, although home sales increased in June, contract cancellations have increased dramatically. The 2.4% increase in “pending” home sales is so tiny it’s hardly meaningful. And, “existing” home sales declined.

    Here’s a link to access that article:

    http://tinyurl.com/3e3lkw8

    Housing Statistics

    Pending Home Sales

    June Index: 90.9
    Monthly: Up 2.4%
    Yearly: Up 19.8%

    Existing-Home Sales

    June Index: 4.77 mil.
    Monthly: Down 0.8%
    Yearly: Down 8.8%

    I’ve said, many times in previous articles on this blog, that, in order for the reprographics industry to have a chance to recover and grow, there has to be a recovery underway in the residential housing market. When will we begin to see a recovery in the residential housing market? Your guess is as good as mine. And, our guesses are just as good as the opinions that have been put forth by so-called economics and finance experts.

    Have I shared with you my short-sale experience? I don’t recall. But, bear with me as I do that. A couple of years ago, I put in an offer on a short-sale property. The owner of that property (a 2 BR / 2 BA condo in So. Florida), who lived in Oregon and was a realtor in Oregon, had purchased that condo, as an investment, only one year before he attempted to get out from under it. He paid around $763,000 for that condo and mortgaged it to the hilt (1st trust and 2nd trust, so two loans, not just one.) My “short-sale” offer was $360,000 cash. That offer went to the lenders right after I submitted it and it was accepted by the “seller.” It took about 6 months before the lender responded. They did not counter my offer, but, instead, said that it was a bit too low, that I should raise my offer and resubmit. I raised my offer to $375,000, but, a few weeks later (not days later, but weeks later) got the same answer as before, “raise the offer somewhat and we’ll reconsider.” Finally, after screwing around with this for 8 months, I withdrew my offer.

    One year later, that condo went to foreclosure and the bank took back the property. They listed that property with a realtor at, get this, $257,000! I’m not kidding you. JFC, is that not completely stupid! And, keep in mind that the lenders, in this case, were JP Morgan Chase and B of A.

  • Some reprographers continue to consolidate operations and close stores, but others are expanding and adding locations

    Not long after they departed from NGI (our former company that was based in the Tampa Bay Area), two former NGI’ers – George Soliman and Alex Prieto – partnered up to open New Age Reprographics.

    After starting the business, about three years ago, in a location on MacDill Avenue, Tampa, FL, they moved to a larger, more visible location on Kennedy Blvd, Tampa, FL

    And, just today, I learned that they’ve expanded their operations – across Tampa Bay – to downtown St Petersburg, FL. Apparently, they’ve opened their new St Pete location one block away from ARC’s downtown St Pete location.

    I hope there’s enough business to go around!

    Best wishes to Alex and George on the opening of their new St Pete location.

    New Age Reprographics LLC

    146 2nd ST N Suite #110 St Petersburg, FL 33701

    Phone: (727) 388-4494

    3642 W Kennedy Blvd Tampa, FL 33609

    Phone: (813) 426-3272

    http://www.newagerepro.com

  • How’s your “recovery” going?

    In an e-mail I received on July 18th …..

    FYI – lots of ___ cuts last Friday and today; double dip recession is hitting.

    In an e-mail I received on July 25th …..

    I have confirmed that two more ___ locations in _____ are closing at the end of this week. Can we find out if this is a national trend?

    In an e-mail I received on July 28th …..

    Heard they were more layoffs this week. This time at least one was a Production Center Manager in _____. They are closing 3 out of the 5 stores in __ _____. Layoff’s were ________, and, reportedly, they are closing 50 stores around the country.