Reprographics 101

When I checked these numbers a few minutes ago (mid-morning, 6/3/11):

Staple’s stock is off 28.55%, year-to-date

ARC’s stock is up 14.36% year-to-date

This morning, I found an interesting article that contained comments by Staples’ CEO about possible “consolidation” in the office supply market space.

While “reprographics” and “office supplies” are very different businesses, there are certain similarities, and the businesses of both industries are certainly affected by “ups and downs” in the economy. I’m posting this article (about Staples’ CEO’s comments) because I’m planning to do a separate post, later on, about “exit strategies” for reprographers.

Here’s the article I mentioned……

Staples CEO Sees Office Supply Consolidation To ‘Two Or Less’

First Published Friday, 3 June 2011 01:56 pm – © 2011 Dow Jones

By Maxwell Murphy

Of DOW JONES NEWSWIRES

NEW YORK -(Dow Jones)- The head of Staples Inc. (SPLS) said the weak office-supply sector will ultimately consolidate, as the three large chains become “two or less,” and he called troubled smaller rivals Office Depot Inc. (ODP) and OfficeMax Inc. (OMX) a “natural pairing.”

Ron Sargent, Staples chairman and chief executive, also lamented that its nearly 1,600 U.S. stores can’t sell Apple Inc.’s (AAPL) popular products because Apple won’t sell them to Staples. Apple products are sold at Staples stores in Canada and elsewhere internationally, where Apple has the need for Staples’ distribution channel, and the executive expressed hope its U.S. stores would one day sell the iPad and other Apple wares.

Office Depot and OfficeMax would have an easier time securing approval for a merger from the Federal Trade Commission than would Staples if it tried to buy one of those two outfits, Sargent said Friday morning at a Sanford C. Bernstein conference. The FTC is often reticent to approve mergers that turn three rivals into two, on the grounds that consumers would be harmed, but Sargent said players like W.B. Mason, Amazon.com Inc. (AMZN) and others make the sector much more competitive than just the three chains.

Sargent acknowledged the seeming glut of office-supply stores in the U.S., but said there are still a handful of markets where Staples has no presence and wants to enter. Combined, the three chains have over 3,600 stores in the U.S.

Staples has hundreds of leases coming up for renewal in the coming years, and Sargent said it would be aggressive in either securing lower rents or moving larger stores to smaller locations, as its larger stores typically have several thousand square feet more than is optimal. As it opens stores selectively in new markets, it will also close stores in markets where it has too many.

For example, Sargent pointed to Augusta, Maine, which has two Staples, the result of a move to block the entry into the market of OfficeMax. He indicated that the two stores do more business than just one, but suggested that two is too many and one will be closed.

Office suppliers have struggled as consumers and businesses rein in spending and governments cut budgets. The already slim margins have been compressed by price cutting, a war many say can’t be won by Office Depot or OfficeMax against bigger and better operator Staples.

Staples shares plunged last month, and roiled its competitors, by reporting disappointing fiscal-first-quarter result and lowering its forecast for the year. Office Depot and OfficeMax have struggled mightily, with Office Depot posting 13 consecutive quarters of year-over-year sales declines and OfficeMax reporting a similar slide in 13 of the past 14 quarters, with the one positive quarter showing only the slightest of gains.

Shares of Staples were off fractionally at $16.31, while Office Depot and OfficeMax were down 2.0% and 1.5%, respectively, in Friday morning trading. Staples is down 28.5% since the beginning of the year, while Office Depot has fallen 26.3% and OfficeMax has plunged 58.7% in that time.

-By Maxwell Murphy, Dow Jones Newswires; 212-416-2171; maxwell.murphy@dowjones.com

The following is an excerpt from an article, authored by Adam Samson of Fox Business News, published on the web at 8:31 this morning…the title of the article was….

“Futures Slide on Disappointing Payroll Data”

As of 8:31 a.m. ET, Dow Jones Industrial Average futures were down 117 points to 12,121, S&P 500 futures slipped 13.4 points to 1,299 and Nasdaq 100 futures fell 26 points to 2,300.

The state of the economic recovery has been a major theme in recent trading sessions. A flurry of disappointing economic data released this week has sparked concern that the recovery that seemed robust late last year might be hitting a soft patch.

The monthly non-farm payroll report is considered an important gauge of the health of the labor market and the broader economy. The number of non-farm payrolls increased by 54,000 in May, far shy of analysts’ estimates of a gain of 150,000. The unemployment rate unexpectedly ticked higher to 9.1% from 9% the prior month, higher than the 8.9% Wall Street forecast.

Many economists blame two factors for the sudden downshift in the pace of recovery: high energy prices and disruption to the automotive sector caused by the tsunami and earthquake that devastated Japan in March.

Fears of a slowdown have taken a toll on Wall Street, with the blue chips shedding more than 300 points in the last two sessions. Indeed, if the Dow doesn’t tack on 193 points on Friday it will be headed to its first five-week losing streak since 2004.

Joel’s comments:

Analysts were expecting an increase of 150,000 jobs (non-farm jobs) for May, but the number came in at 54,000. Goes to show you how much the analysts know!

As to the “two factors” that “many economists” blame for the sudden downshift in the pace of the “recover” (a “so to speak” recovery, I might add) – high energy prices and the tsunami/earthquake in Japan – I disagree that those are the two main factors. Continuing problems in the real estate economy in the U.S. are the driving force behind the slowing pace of the economy. We’ve got to get the real estate industry (A/E/C, residential and non-residential) back on track. And, tight credit conditions are exacerbating the problem. The Fed made it cheap for banks to borrow, but lenders are still very discriminating and tight-fisted; lenders are, in effect, sitting on the money. And, our elected officials have yet to figure out how to legislate a fix to the lending problem. Before the crisis, lending was way too lax. Now, rules are being discussed (and are probably already in effect) that would make lending way too tight. We have a tendency in the U.S. of going to one extreme, then, when we find that that extreme is stupid and that it caused a big problem (the crisis), we reverse course and head for the complete opposite extreme! Common sense cries for finding an answer in the middle.

We are still in the situation where half of the country’s financial analysts are predicting a continuing “up-trend” in the U.S. stock market and where the other half are predicting the exact opposite. And, these idiots get paid for their guesses. Which are just as good as my guesses (and I don’t get paid for mine.)

Which are just as good as my guesses (but, I don’t get paid for mine.)

Finally, here’s another article I just found; the guy who wrote this article is one of the financial experts who believes strongly that the current downslide in the market is simply a minor blip and that the market will recover in a very, very robust way…….

10 Reasons the Dow Will Hit 20,000

SMARTMONEY JUNE 2, 2011, 2:33 P.M. ET

James Altucher on why the Dow will soar.

“The market fell like a brick on Wednesday (June 1^st). People can’t handle any piece of bad news without saying “this is the big one.” We have visceral memories of May through July 2010, just a year ago. We have visceral memories of 2008, when it seemed like no end was in sight. Nobody wants to be caught trying to catch that knife with their mouths like in a circus act. You get cut up that way, and the blood isn’t pretty.

But it’s not going to happen. Even God took one day to rest. The market every now and then needs a day or two to rest. Maybe even more than a day or two.

But over the next 12 to 18 months I expect to see Dow 20,000.

Here are some reasons:

1) QE2 has not started. WHAT? You might say? I thought not only has it started last November, it’s about to end? Not true at all. Federal stimulus takes 6 to 18 months before even one dollar hits the U.S. economy in a meaningful way. So expect that $600 billion or more to start hitting toward the end of 2011.

2) Then why is the market going up? One major reason is because we are in the third administration of George W. Bush. The tax cuts got extended. This signaled that Barack Obama was going to pay lip service to his constituents while still keeping an eye on the stock market. The guy wants to get re- elected, after all.

3) Multiplier effect. Once the stimulus hits the economy, it’s not just $600 billion. It’s probably more like $3 trillion. How come? Because when you buy that coffee with $1 at the local deli, what does that deli guy do with it? He buys a newspaper? And then that guy buys a donut. The multiplier effect is up to 10X. To be honest, I’m more worried about a bubble in 2013 then I am worried about a economic slowdown.

4) Nonfinancial companies are at their highest cash levels ever. Almost $2 trillion dollars. They were hoarding the cash just in case bad times were going to happen again. Guess what? They didn’t. But what good is that? Well

5) They are spending it. Stock buy-backs are at their highest levels in history. Let me tell you the rule of every market on the planet that we learned in Economics 101: Price is ruled by supply and demand. Demand has been down for the past two years. But that’s OK, supply is now going to start going down right when demand picks up. $2 trillion is a lot of supply of shares to scoop up.

6) What about unemployment? Well, according to the Bureau of Labor Statistics, temp workers are at levels not seen since before 2009. Companies hire temp workers first before they hire full-time workers. That happens in every recession in history.

7) Corporate profits are at their highest levels ever. Did you know this is the first recession in history where cash levels in corporate America increased quarter- over-quarter every single quarter of the recession? And now profits are at their highest ever. Analysts expect S&P 500 earnings to come in at $95 next year. What if (as usual) they are too conservative and the number comes in at $100. Slap in a 20x multiple (could happen when the stimulus kicks in), and we have

8) Major stocks are dirt cheap. Apple (AAPL) trades for 12 times forward earnings and has $65 billion in cash and no debt in the bank. Microsoft (MSFT) trades for around 10 times forward earnings. Intel (INTC) trades for around 8 times forward earnings. These are high market-cap companies. By the way, all the major indices are market-cap weighted. So if the big guys go up, the indices go up. All of these big guys can easily double or triple.

9) Innovation. Barely a year ago the iPad came out. Now what’s the number of people who have iPads? 20 million? 10 Read 10 Unusual Things I Didn’t Know About Steve Jobs.

10) Major demographic changes are occurring that are going to affect stocks for the next 25 years. What are they? Check my article here next week. Or, perhaps more importantly, follow me on twitter where I engage in ongoing discussions on these things. Follow me!

The fight never stops between the bulls and the bears. Last summer was personally grueling for me. The market was falling on worries of Greece, an economy the size of Rhode Island, and every day it seemed a new blogger was using this as an excuse to write a blog specifically trashing me. It’s usually a bad idea to personally attack someone to get your point across. It’s never really necessary, and it’s lazy and bad writing. And yet, my kids would Google their last name, and there would be post after post insulting me personally for my opinions.

The market is up some 25% since then. My feeling for the next year is similar: BRING IT ON.”

Well, I discovered a very interesting group of businesses, all involved in the “procurement” and “print management” space.

e-LYNXX is the main company……….

e-LYNXX offers a competitive procurement procedure – that is patented* to allow clients to save 25% to 50% by obtaining margin prices from their own quality suppliers. 

Savings are computed based on comparison to historical prices or, at client option, to average of other competitive bids received. 

References are furnished to qualified parties. e-LYNXX offerings provide powerful procurement opportunities. 



e-LYNXX operates three different divisions……

AVS Technology™ licenses the patented* automated vendor selection procedure for use in procuring all specification defined goods and services, including print, textiles, machined parts, etc. (Licenses are required for system developers, providers and end users of ERP, e-procurement and other automated procurement systems.) 



American Print Management® provides web-based print procurement system, print procurement services, recommended best practices and a license for use of the patented* automated vendor selection procedure, that together reduce the costs of direct mail, marketing materials, commercial print, publications, packaging, labels and all other procured print – while ensuring quality and service. (Client stakeholders include CFO, CMO and other high level decision makers with fiduciary responsibility to cut costs.)

Government Print Management® offers U.S. GPO bid services and effective strategies. Successful GPO suppliers have relied for more than 35 years on our exclusive GPO bid services, experience and know-how. (Clients include many of the top 50 GPO contractors and hundreds of printers and others who are part of the GPO print supply chain.)

Here’s what’s said about the division that offers U.S. GPO (folks, that’s the United States Government Printing Office) bid services:

Government Print Management®

U.S. GPO bid services and effective strategies

WHO WE ARE

We are your strategic business growth partner.

Government Print Management revolutionizes the way that print suppliers prospect and compete in the GPO market, enabling them to dramatically improve their sales and profitability. For more than 35 years, we have built long-term, successful partnerships with hundreds of print suppliers resulting in significant, measurable improvements to their revenue and income. We have a proven history of success in offering our GPO bid services and working with our clients in winning contracts with the U.S. Government Printing Office (GPO).

We have participated in millions of awarded projects and have enabled our clients to win billions of dollars of profitable business. We offer exclusive GPO bid services coupled with the expertise, technology and analytics to make your print operation succeed in the GPO market.

WHAT WE DO

We enable improvement of your bottom line.

Government Print Management assists commercial print, direct mail and print marketing suppliers to win profitable print jobs from the U.S. Government Printing Office (GPO). We are a full-service business partner that offers GPO bid services and manages the details required to build and sustain sales volume and profitability. We offer the GPO bid services, expertise and complete spectrum of support services required to position our clients for success and execute on the opportunities.

Clients benefit from our exclusive capabilities which include:

• Exclusive GPO bid services

• A comprehensive electronic system for obtaining, categorizing and disseminating all available GPO bid solicitations, amendments, results and histories

• Unmatched domain expertise and insight gained over a 35-plus year history of working daily with GPO and other government entities

• Expert legal staff committed to representing clients, negotiating specification changes and change order requests and ensuring 21-day payment of invoices

The largest database of its kind containing a 20+ year repository of GPO job specifications and bid results

HOW WE DO IT

We facilitate your success in a complex government marketplace.

The processes, procedures and insight required to succeed with the GPO can be intimidating and are more complex than those presented by the commercial sector. We employ the most experienced team in the industry and understand better than anyone the intricacies and nuances of doing business with GPO print procurement.

We offer professional GPO bid services, navigate the red tape and manage all details essential to achieving profitable sales. First, we obtain all available GPO bid solicitations and carefully analyze each prospective opportunity to identify those that fit your unique equipment and production requirements. We work with you to win these GPO contracts through a tailored program specific to your strategic priorities and fiscal requirements. Through our full-service approach, we assist you in targeting, pricing and submitting bids to GPO that are appropriate, competitive and complete.

We enable our clients to effectively apply a targeted contribution pricing strategy. By receiving those solicitations through our exclusive GPO bid services that meet production requirements and capabilities, our clients are able to competitively bid GPO projects which fill otherwise unused production capacity.

And, finally, here’s a recent Press Release that was issued by “Government Print Management”…..

Government Print Management Clients Win GPO Print Jobs: May 18 -24, 2011

Press release from the issuing company, May 26, 2011

CHAMBERSBURG, PA – From May 18, 2011, through May 24, 2011, the U.S. Government Printing Office (GPO) awarded 103 one-time print jobs to 33 print supplier clients of Government Print Management. The total value in new business for the clients was $330,480. These print suppliers won new business as a result of collaboration with Government Print Management in not only obtaining GPO solicitations that fit their production and schedule requirements, but in gaining an appropriate quality level rating as well as historical pricing information essential to winning the jobs without leaving excess money on the table. The top 10 job winners (in alphabetical order) were:

• C.R.T. Printing, Santa Fe Springs, California

• Darby Printing, Atlanta, Georgia

• Gateway Press, Inc., Louisville, Kentucky

• GRC Enterprises, Inc., Warrenton, Virginia

• Husky Envelope Products, Walled Lake, Michigan

• KD8 Enterprises, Centerville, Utah

• KDM Products, Carpentersville, Illinois

• Monarch Litho, Inc., Montebello, California

• Solo Printing, Inc., Miami, Florida

• West Shore Printing & Distribution Corporation, Mechanicsburg, Pennsylvania

Government Print Management, exclusively endorsed by Printing Industries of America (PIA), provides significant improvement to profitability through increased revenues driven by higher optimization of equipment and production capacity. The firm provides goal-oriented representational services, safe and proven advice and counsel, and the tools requisite to helping clients win jobs in government print markets that increase profitability. Services include interpreting job specifications, preparing paper work, cutting red tape, managing the bid process and change order negotiation, as well as invoice preparation and 21-day collection. 



”Clients get fast access to GPO solicitations, immediate response from our expert services team, information from our exclusive historical database of GPO job and market information, and are able to win work profitably,” said Deborah Snider, senior vice president of e-LYNXX Corporation and division president of Government Print Management.

Press release from the issuing company

Friday, June 03, 2011

CHICAGO – InnerWorkings, Inc., a leading provider of managed print and promotional solutions today announced an enterprise print management agreement with Morningstar, Inc., a leading provider of independent investment research.

Under the agreement,

InnerWorkings will provide outsourced print procurement and print management services for Morningstar, including direct mail, charts and commercial printing. InnerWorkings will assign a team of print production managers to be based at Morningstar’s headquarters in Chicago to work with its product marketing groups.



“Morningstar has experienced tremendous growth over the past several years, and we believe we’re ideally suited to address its ever-expanding and complex print production requirements,” said Marc Collins, senior vice president of enterprise solutions, InnerWorkings. “We will leverage our proprietary technology to maximize cost savings opportunities for Morningstar, and introduce reporting capabilities that greatly enhance the company’s ability to monitor and adjust its spending on print production.”



Scott Cooley, chief financial officer for Morningstar, said, “InnerWorkings’ business model resonates with us because of its objectivity and transparency. By gaining access to its network of 8,000 certified suppliers, we’ll save time and money.”

Press Release found on PLP’s web-site:

May 16, 2011

Service Point Solutions, S.A. (www.servicepoint.net) (ticker: SPS.MC) has signed an agreement with PLP Digital Systems, Inc., a leading vendor of workflow and business intelligence for construction information management. This agreement will allow Service Point to maximize the group’s operational efficiency in its AEC and infrastructure lines of business, and offer new innovative digital services to its customers.

Under this agreement, PLP will supply the technology for Service Point in all group subsidiaries. PLP’s OpCenter solution will provide Service Point with a leading edge platform that increases the transparency and accountability necessary to implement new digital business models.

The OpCenter platform integrates with market leading hardware devices and software applications to provide streamlined workflow and market intelligence in real time. This will allow Service Point to easily distribute, share and track work across its global network.

According to Joan Carles Peiro, COO of Service Point Solutions, “The partnership with PLP allows us to achieve maximum operational efficiencies across the group, providing rich analytical tools to continually improve our production processes.”

John Cronin, CEO of PLP says “We are excited to be working closely with Service Point to upgrade their operations to meet the demands of their new digital, ecommerce- business models.”

About PLP

For more than 20 years, PLP Digital Systems (www.plp.com) has powered the information that powers construction. PLP’s software solutions and world-class customer support help its partners produce and manage the construction information critical to their customers’ projects. PLP works with construction information managers around the world to improve their profitability by decreasing operating costs and by creating new revenue opportunities.

About Service Point Solutions

Service Point Solutions (www.servicepoint.net) is a leader in document and information management. It is present in a broad spectrum of industries, including architecture, engineering, construction, finance, public and education segments. It employs 2,400 people across ten countries (the UK, US, Spain, Germany, Netherlands, Belgium, Norway, Hong Kong, France and Sweden) via a network of 128 service points worldwide and 794 facilities management programs. Headquartered in Spain, SPS is listed on the Madrid and Barcelona stock exchanges (ticker: SPS.MC).

I just noticed on Google Finance that the yield on a 3 month treasury bill is now down to .01%.

3 Month

0.01%

Given the trend, it might well be that the yield will go down to -.01%, (yes, MINUS) meaning that we’ll end up paying to have our funds invested in what’s, supposedly, the world’s safest short-term financial instrument.

I know, that will not happen. But, still, these are very interesting times for investors.

We’ve done eight previous posts on “Reprographics 101” about Florida Reprographics’ Chapter 11 Bankruptcy. If you want to review those earlier posts, enter “Florida Reprographics” in the search window on this blog.

Our last article/post about FR’s BK matter was published on May 10^th, 2011.

This morning, I accessed pacer.gov to see if there have been any additional filings in this matter since the last time I looked on May 10^th, and I did find a filing, on May 11^th, that contained the “confirmation order”, meaning that the “Reorganization Plan, as Modified” was confirmed by the Bankruptcy Court Judge.

Here’s a link you can click-on to read the complete document, if you really want to do that:

http://tinyurl.com/3hdboxa

Here’s a quick look at the title of the document; you also see the “order” issued by the judge:

UNITED STATES BANKRUPTCY COURT MIDDLE DISTRICT OF FLORIDA TAMPA DIVISION

In re: FLORIDA REPROGRAPHICS, INC.,

Case No.: 8:10-bk-28642-MGW Chapter 11

ORDER CONFIRMING MODIFIED PLAN OF REORGANIZATION UNDER CHAPTER 11 OF THE UNITED STATES BANKRUPTCY CODE FOR FLORIDA REPROGRAPHICS, INC. DATED AS OF FEBRUARY 24, 2011

DONE and ORDERED at Tampa, Florida on May 11, 2011

MICHAEL G. WILLIAMSON

United States Bankruptcy Judge

Joel’s comment:

When reviewing the document, I did not find anything I did not expect to find, except for paragraph 4. Evidently, this particular issue was orally argued / discussed during the plan confirmation hearing.

(4) Treatment of Class 5 Unsecured Claim of Christopher W. Charles. As announced in open court at the Confirmation Hearing, the allowed Class 5 unsecured claim of Christopher W. Charles in the amount of $625,191.49 (Claim No. 15) will not participate in the Plan distribution to Class 5 creditors.

This means, I guess, that Chris isn’t going to participate in distributions to unsecured creditors. But, personally, I think this is a moot point anyway ….for, based on the operating reports filed so far, I don’t see how FR is ever going to generate sufficient funds to pay the company’s unsecured creditors.

PRESS RELEASE issued by ReproMAX

Cathie Cushing Duff was awarded the first annual Mike Duff Award at the ReproMAX 2011 Spring Executive Conference in Las Vegas.

The Mike Duff Award is the highest individual recognition offered by ReproMAX. It is awarded to an individual who generously gives their time and talent to improve the value of their membership and the organization.

For more than thirty years, the members of ReproMAX have shared the common belief that reprographic companies can become more effective, successful, and profitable by pooling knowledge and resources. No one embodied that belief more than Mike Duff. Cathie Cushing Duff’s consistent efforts epitomize the spirit of ReproMAX’s inaugural award.

“I was genuinely shocked and enormously flattered to receive this honor. I am gratified to think that some of the experiences I shared with Mike—and my father and brother—have rubbed off on me. I can only hope that all our colleagues will enjoy the same satisfaction that he did in leaving the playing field better than he found it,” said Cushing.

Duff strongly believed that through sharing and learning everyone would benefit and become smarter, stronger and more competitive. He passionately believed that the industry should be populated by many companies working together to develop new techniques and advance new technologies. He knew that we could learn more from enthusiastically working together with other members in the industry than from any school; and he often proved it. His leadership and initiative in developing services for ReproMAX companies is an inspiration for the premise that we function as partners with our clients, anticipating needs and solving problems.

There is no better way to remember his contribution than to recognize other members who generously give their time and talent to improve the value of their membership. It would please him greatly to know that he could be the inspiration for another person to take up where he left off and improve the industry.

Joel’s comments:

First, I’d like to congratulate Cathie on winning this award. She’s one of those rare treasures in the reprographics industry, a person who has given much to many.

The entire Cushing family is cut from the same mold, and an excellent mold that proved to be. If there was a reprographer HALL of FAME, I can think of at least four Cushing family members who would be installed in that shrine – Cathie Cushing Duff, Mike Duff (RIP) Joe Cushing and, last but certainly not least, one of my all time favorite industry “guys”, Jack Cushing (RIP.)

Found in the “Circuit Court Judgments” (Duval County) of the Jacksonville Business Journal, May 27 – June 2 edition:

PLAINTIFF: A-B Distributors, Inc. vs. DEFENDANTS: Reprographic Systems, Inc / Juanita B. Catsulis / Robert J. Collins, (address not shown), $115,185.00, plaintiff, case #2010 CA 002876, 05/06/11

A-B Distributors also does business under the name A-B Properties. A-B Distributors, Inc. is, apparently, the landlord of Reprographics Systems, Inc.

$115,185.00 is a whopper of a judgment.

I was unable to locate a web-site for Reprographic Systems.

When I was with NGI, RSI was one of our competitors.

Reprographic Systems Inc

5149 Sunbeam Rd

Jacksonville FL 32257

904-731-1760

Category: Document & Records Services 
Sub Category: Blueprinters