Reprographics 101

Interesting article found on guardian.uk.com. Article authored by Mark Sweney on May 23, 2011…

“Google eyes digital display market”

Having conquered classified search, Google is targeting display advertising – a move that makes media companies nervous

Neal Mohan is known as Google’s $200bn man. Mohan, vice-president of display advertising products at the US technology giant, has been tasked with emulating the company’s unrivalled success with online search in the digital display market.

The $200bn (£123bn) figure, he says, is a forecast of the potential size the global digital display ad market could reach. He, and the digital display sector – currently worth about $24bn annually – have a long way to go. But the opportunity is clear.

Broadcasters, print media companies and marketing services groups such as WPP also have an eye on digital display as a potentially lucrative revenue source to offset declining offline advertising income. So they can be forgiven for shuddering at Google’s display ambitions, given the way the company’s search business dominates the digital classified market.

Sir Martin Sorrell, WPP chief executive, has labeled Google a “frenemy”, due to both the threat and the opportunity it represents, while former ITV chief executive Michael Grade decided not to sit on the fence, preferring the term “parasite”.

Mohan defends Google against such criticism, trotting out the company line that it is in the technology not the media business sector. “We don’t own inventory, we are not a media company. We can’t execute unless [ad agencies, advertisers and publishers] buy into it and adopt it,” he says.

By helping to grow the digital display market, Google would be giving media companies a leg-up as well, he says. “I truly believe that $200bn is the opportunity. We think there is a tremendous opportunity not just for Google but for the [media] industry.”

However, altruism aside, Google has its own obvious motivation for eying up the digital display market. In 2010 Google made revenues of $30bn, with display estimated to have contributed just $2.5bn.

Last year in the UK, Google’s second largest market, the total display advertising sector grew by a staggering 27.5% year-on-year to £1bn while search grew just 8%, albeit to £2.35bn, with much of it lining the US company’s pockets. Enders Analysis reckons that Google UK made £100m in display advertising last year – a small sum compared with total net UK revenues of £1.53bn, but a 65% year-on-year rise.

“If you look at growth patterns and the fact that video is one of the drivers of display advertising – Google owns YouTube – there are plenty of reasons why Google might want to increase its footprint,” says Adam Smith, futures director at media buying agency network Group M. “Display advertising also influences search, and sales, much more than it is given credit for. It makes sense for Google’s overall model.”

Mohan, who joined Google in 2008 when it made the $3.1bn acquisition of DoubleClick that marked its entry into the display ad market, argues it can overcome a “big barrier” in the sector to the mutual benefit of all parties. “The world is extremely fragmented, with the proliferation of devices, mobile apps and websites, there is infinite fragmentation,” he says. “A lot of media dollars are destroyed through fragmentation and inefficiency, there is a lot of wastage and campaigns are less effective. Our approach is how to be an end-to-end platform in the market.”

Mohan believes Google can offer a technology-driven solution to the inefficiencies inherent in the $170bn-a-year global TV advertising market, with many airtime sales decisions made by “two guys in suits” negotiating deals six months before the commercials they are haggling over will be broadcast. This potential alternative would draw on Google’s experience with online search – a one-stop digital shop that agencies could use to buy ad space across different devices, in real time, basing their decisions on constant feedback on viewing behaviour.

Media buying agencies fiercely guard their relationships with clients and some fear being cut out of the loop if the sort of digital technology advocated by Mohan allows media owners to deal directly with advertisers. But Lyndell Bartley, digital display director at media agency PHD, is unfazed by Google’s ambitions. “I don’t see it as a threat to media agencies,” she says. “Any display network that can boast of reaching more than 80% of the global online population represents an opportunity for those seeking to influence the behaviours of that audience.”

Mohan argues that a lot of the negative talk about Google’s ambitions in the display sector, such as that it aims to turn the TV airtime trading market into an online auction, is misinformed. “It is not just an automated system where you hit the button and it does its thing,” he says. “A lot of stuff is said generally in the market [but] when I’ve had conversations with publishers with TV and video content they want a platform that can extract value. When it actually comes down to a conversation with the person responsible for revenue they say ‘Google, what can your technology do’.”

It looks as if the media industry is about to find out.

On May 9^th, we did a post with the title, “Service Point Solutions is Back in the Black”, which was the same title that SPS used for its Press Release on May 9^th about its Q1 2011 results.

Here’s what we said at the outset of that post…..

RESULTS FOR Q1 2011

Joel’s comment: “Speaking in $USD dollars” (and based on the EURO/USD exchange rate this morning), Service Point Solutions earned a whopping $92,147 bottom line profit on sales of $78,757,100. (Should I have used the term “ekes out” instead of the word, “whopping”? Well, all kidding aside, a profit – any profit – is better than a loss!)

By now, SPS has posted its Q1 2011 results on its web-site. You can click on this link to access that document:

http://tinyurl.com/3btvszu

SPS reported higher sales in Q1 2011 than it did for Q1 2010. (That was not the case for ARC; ARC’s Q1 2011 sales were less than its sales in Q1 2010.) But, in spite of the fact that SPS reported higher qtr over qtr sales (Q1 2011 vs. Q1 2010), SPS’ gross profit was lower in 2011 than it was in 2010.

In the Q1 2011 report, SPS says this….

“Strategic revenue diversification by Service Point and the priority focus placed on the online channel mitigated the lingering weakness in the AEC segment.”

On a head-to-head comparison basis, SPS is not directly comparable to ARC, because ARC’s sales are much more heavily reliant on sales of reprographics services to firms in the A/E/C industry than is the case with SPS’ sales. And, as reprographers in the U.S. are aware, the A/E/C industry has not yet shown evidence of a recovery, and that situation is, of course, putting a damper of sorts on ARC’s recovery (and growth) picture. Economists who follow and report on A/E/C activity in the U.S. market, and, in particular, on “construction” activity in the U.S. market, are mixed in their predictions for the remainder of 2011.

Right after the close of Q1 2011, SPS – finally resurrecting its acquisition activities after being out of that activity for a couple of years – completed (on April 30, 2011) the acquisition of Holmberg’s, a Sweden-based reprographics company with operations in Sweden and Denmark. Holmberg’s is a well-known, well-established, old-line company, so I’ve been informed by friends who are knowledgeable about the reprographics business and industry in Europe. I would not be at all surprised if SPS announced at least one more acquisition – in Scandinavia – before the end of 2011. I say that because SPS previously stated, during the mid-part of 2010, that it was investigating several acquisition opportunities in Europe, pointing out Scandinavia in particular.

In its Q2 2011 results report, SPS indicated that, for Holmbergs, SPS paid a purchase price of 4.35x Holmberg’s 2010 EBITDA. As to the payment of the purchase price (and, I did not see the actual purchase price disclosed in the report), the owner(s) of Holmbergs received a) 5 mil Euro in cash, b) an unspecified number newly-issued shares of SPS stock, and c) an earnout tied to EBITDA growth.

In a previous statement about Holmbergs, SPS said, to the best of my recollection, that Holmbergs had more than 1 mil Euro in cash. I don’t know if SPS acquired Holmberg’s cash when SPS acquired Holmbergs, but I suspect that was the case, since SPS made a point of mentioning Holmberg’s cash on more than one occasion. If SPS did acquire Holmberg’s cash, then that did have an inflating-effect on the purchase price SPS paid for Holmbergs.

As to the EBITDA multiple that SPS paid for Holmbergs, if we used that same exact EBITDA multiple, 4.35, to compute a purchase price value for SPS itself, based on “annualizing” SPS’ Q1 2011 EBITDA (which was 4.70 mil Euro), that would compute a purchase price value of 77.7 mil Euro for SPS.

Per the chart I found on the Bolsa (Spanish) stock exchange for SPS shares, SPS’ shares closed at .385 Euro on May 20, 2011 and the chart reflected an overall “market capitalization” of 42.8 mil Euro for SPS on that date. (Market cap is “price per share” x “number of shares outstanding.”)

So, compare the 77.7 mil Euro number to the 42.8 mil Euro number. I think this means that Service Point management values SPS’ business – and Holmberg’s business – at higher values than investors value SPS itself. As SPS makes further progress the remainder of 2011, I would think we should see an improvement in SPS’ stock price.

Considering SPS’ stock price and market cap on May 20, 2011, and if we annualized SPS’ Q1 2011 (on that basis, annualized sales would be approximately 220 mil Euro), SPS was valued at around 19.5% of “sales.”

Based on ARC’s stock price and market cap on May 22, 2011 (per Google Finance) and considering ARC’s 2010 total sales, ARC is (currently) valued at round 91.6% of “sales” (trailing annual sales.)

In the above comparisons, I realize that I’ve not used the exact same dates. But, the main point I’m trying to make is that, comparatively speaking, SPS, for some reason, is valued at a much lower number than ARC is, when you compare ARC’s “sales” to ARC’s “market cap” and SPS’ “sales” to SPS’ “market cap.” And this is despite the fact that ARC lost money in Q1 2011 whereas SPS earned a profit in Q1 2011. Perhaps ARC’s significantly higher valuation is simply a matter of ARC being on the NYSE and SPS being on the Bolsa (Spanish) Stock Exchange? Admittedly, I’m not smart enough to figure out why there’s such a big difference in valuations. SPS’ current stock price (.385 Euro) and overall market cap looks low to me.

SPS’ U.S. division (subsidiary) contributed 407,000 Euro (approximately $578,000 USD at an exchange rate of 1.42) to SPS’ overall EBITDA in Q1 2011. In a previous post I speculated that SPS’ sales in the U.S. were greater than $42 mil (USD) prior to the recession and prior to the departure of SPS’ former U.S. division CEO , Mark DiPasquale. (Mark is now the CEO, and along with Jane Simmons, also ex of SPS’ US division, one of the two founders of Archimedia Solutions Group.)

I encourage you to read SPS’ entire Q1 2011 results report, since, in that report, SPS provides a list of its current and forward growth initiatives.

While researching job opportunities on the Internet, I came across a help-wanted ad from a fairly large regional General Contractor for a “planning coordinator.”

What I found interesting about this help-wanted advertisement is that the ad provided a detailed listing of responsibilities required to be handled by the person hired for this position and that many of the responsibilities that were listed are very much related to “document management, printing, distribution and “planroom” services offered by reprographers. “Someone said” that understanding what GC customers go through, what their internal people have to do, goes a long, long way towards “being a truly informed” reprographer.

Evidently, this position is part of this GC’s “PreConstruction Services / Estimating” team.

Job Title: Planning Coordinator

Position Description: Planning Coordinator duties and responsibilities include:

Daily:

 Solicit and track subcontractor qualification information and maintain subcontractor database

 Assist with tracking historical data

 Assist with archiving projects that were not awarded

 Maintain and update Estimating Manual

 Will function as estimating receptionist, answer calls for Estimators, set up meetings, etc.

Weekly / Monthly / As Needed:

 Assist Estimator and marketing with online planroom updates

 Attend estimating meeting and take minutes of estimating meeting

 Publish and distribute Planning Schedule

 Organize and maintain Planning Library and plan room

Per Bid:

 Preparing drawings for pick up by subcontractors

 Prepare drawings for shipping to subcontractors, order drawings from reprographics company

 Distribute documents to bid Team

 Prepare estimate binders with tabs for all estimators for bid review

 Prepare Bid Packages in Prolog

 Maintain and update bidding website (DL) with plans, specs and addenda, create certain bidding documents

 Get electronic copy of drawings and making sure plan room is orderly

 Distribute faxes on bid day

 Solicit subcontractors & suppliers for bids and assure adequate coverage of bidders

 Add new info to Prolog as shown on returned bid invites

 Track, log and distribute all bids on bid day

 After bid file all documents in file cabinets

Qualifications:

 Candidate must have intermediate skills in Microsoft Word and Excel along with OST (will train if needed) Adobe PDF, Outlook and Timberline.

 Must be highly motivated to complete critical repetitive tasks without oversight.

 Must have good written and verbal communications skills and be willing to make lots of phone calls.

 Requires excellent organizational skills and attention to detail

 Maintain project objectives professionally, efficiently, safely and proactively.

 Understand, adhere to and support company policies & procedures and professional performance standards within the specified parameters of the company.

 Working knowledge of general employment practices/regulations essential to be an active team player, and successful professional.

 Work with numbers accurately to review project budgets, materials and time schedules.

 Proactively return customer related calls, e-mails, inquiries etc. daily before end of business day.

 Maintain appropriate documentation and organization of applicable files, records and correspondence.

 Help establish a positive working environment with regular communication and feedback.

This morning, I found an RFP for “Reprographics Services” issued by the City of Charlotte (NC) in March 2011.

The proposals submitted in response to this RFP have already been evaluated, and it looks like the City selected two reprographics firms to provide services. I’m not sure that the City selected two firms, but that’s what it looks like, based on the “selection” sheet I looked at on the Internet. The selection sheet lists these two firms:

Duncan Parnell (a ReproMAX member company)

and

Richa Graphics (an independent reprographer that I never heard of before); I visited Richa’s web-site and found that they offer a pretty cool e-planroom service, and here’s some info “about” Richa, as per Richa’s web-site:

Richa Graphics History (www.richa.com)

It began in 1985 when Suresh (Sam) Vyas opened the doors to Richa in a small street level office at 203 North Tryon Street in Uptown Charlotte. Business grew as Suresh became more well known amongst local architects and engineers for his reliable service and dedication to meeting their needs. Richa Graphics moved next door to a second level space above a fashion shop and then again around the corner to our current location at 204 North Tryon.

Today Richa’s Uptown location occupies the entire three level building on North Tryon, offering full service digital printing, reproduction and finishing services to many of Charlotte’s leading businesses.

In 1998 we opened our second location in South End’s prestigious design center of the Carolina’s. Presently we are located in our own building at 231 East Tremont Avenue.

As the business grew over the years, Richa’s services and staff have grown as well. Pushpa Moolchandani joined Richa in 1988, and today she is the company’s Chief Operating Officer and runs our operation. In 1991, Kathryn Rohera, joined the Richa Team and is Vice President for Sales and Marketing and Color Graphics Specialist.

We have become the leader in Digital Printing and Reproduction Services in Charlotte. Visit one of our three locations today and see how Richa can help you with all of your printing and copying needs.

By the way the name “RICHA” stands for the hymn’s from the Hindu scriptures “The Veda’s” – Sources of knowledge and it is the name of Suresh (Sam) and Rita’s daughter after which the company was named.

Thanks 
Sam

The City did not publish the proposals prospective vendors submitted; not even the “pricing pages.” However, If you are the type of reprographer who is always interested in learning how other reprographers are proposing and how they are pricing their services (in other words, if you are not a know-it-all), then I encourage you to contact the City of Charlotte to request copies of the proposals that were submitted. Generally, proposals submitted by prospective vendors to a government-sector agency are considered “documents in the public domain” and, thusly, anyone can request copies be sent to them. All ya gotta do is ask! Reviewing proposals submitted by other reprographers is one way of sharpening your own personal proposal development skills.

Here’s a brief synopsis of the City’s objective for this RFP competition:

The City of Charlotte (City) plans to contract with one or more firms (Firms) to provide reprographic services. The City is seeking Firms whose combination of experience and expertise will provide timely, cost-effective and quality reprographic services to the City.

OVERVIEW

The Engineering & Property Management department (E&PM) is involved in the design of various projects, such as roads, sidewalks, neighborhood improvements, storm water improvements, and new buildings such as Fire and Police Stations. When a design has been completed and is ready to go to construction, E&PM issues solicitations to contractors to bid on these projects.

On past projects, E&PM has typically printed a pre-determined number of construction plan sheet sets and accompanying bid manuals and made them available at the Government Center for sale to interested parties. A certain number of sets were set aside for internal use and for various plan rooms, such as CAGC. Often the number of sets produced was either too high or too low compared to the actual number of sets needed.

In order to decrease waste and enhance efficiency, the City has been exploring the use of reprographic service providers and digital plan rooms and would now like to move forward by selecting one or more Firms to provide the following services:

a. Maintaining a digital plan room

b. Providing copies of bid packages on-demand in digital and paper format

c. Maintaining published lists of bidders of record and issuing Addenda for various projects

d. Providing plan sheet scanning services

You can click-on this link to access a complete copy of this RFP:

http://tinyurl.com/3j7tcwx

Evidently, the City issued one Amendment, to respond to Questions, and you can read the Amendment, which covers Q & A’s, by clicking on this link:

http://tinyurl.com/42428lt

First, from news about existing home sales for April 2011:

US home sales fell in April (2011), as tight credit hindered buyers

The pace of (existing) home sales fell by nearly a percentage point in April, even as the inventory of properties for sale remains large.

One major obstacle to sales activity is tight credit conditions for potential buyers, said the National Association of Realtors (NAR), which released the sales numbers Thursday.

Other problems include high unemployment and weakness in home prices, which has made some home shoppers wary of buying when prices may be poised to drop further.

Second, an interesting article I found about the housing market:

The article you’ll next see was written around January 2011. Keep that in mind as you read through the article. See if anything the author said, several months ago, has borne out.

This article came from http://www.csmonitor.com/, and the author of the article was Mark Trumbull, Staff Writer at csmonitor.com.

Home prices fall again: Eight keys to the housing market future.

US home prices fell 1 percent in November compared with the previous month, according to a widely followed 20-city index released by Standard & Poor’s Tuesday. It’s the latest sign that, five years after home prices peaked, the housing market remains an important weak link in the economy. Still, housing experts say 2011 could be a pivotal year when home prices bottom out and a more stable environment begins to emerge. Here’s a look at the key issues.

1. Is it going to be a buyer’s or a seller’s market?

The big picture is pretty simple and familiar: America has an excess supply of homes on the market, due to an ongoing surge of loan defaults and foreclosures.

Spring is often a busy season for home sales, as is the fall, with families trying to find new digs as one school year winds down or as another one begins. But that doesn’t mean buyers will outnumber sellers.

“It’s still a buyer’s market,” says Maria Peña-Morales, who manages a team of real estate agents at RE/MAX Ranch and Beach in San Diego. Still, she characterizes home prices in her region as starting to firm up rather than falling as they were in 2008.

Nationwide, buyers can find plenty of good opportunities, and it’s also a good climate for investors to buy homes with the aim of earning rental income.

2. Where are home prices expected to be?

Home prices are showing weakness, falling in the latest report of Standard & Poor’s Case-Shiller indexes for major cities. Eight of the 20 cities are actually at their lowest point so far in the down cycle that began in 2006.

That doesn’t necessarily mean prices will keep falling through the spring and beyond. Forecasts vary from steep losses in home values to very modest gains in 2011.

In December, the National Association of Realtors predicted that the national median sales price for previously owned homes will rise 0.6 percent in 2011 and 2.4 percent in 2012. That view, shared by some other private-sector economists, hinges on the notion that an improving jobs market will be boosting buyer demand and confidence.

Others are more pessimistic. Forecasters at the investment firm Morgan Stanley, for instance, while having a relatively positive outlook for the overall economy, see home prices falling by 10 percent this year before hitting bottom. Many analysts expect more modest declines, with Moody’s Analytics calling for a 5 percent fall in home prices in 2011, and a 0.6 percent gain in 2012.

NAR chief economist Lawrence Yun says prices are very difficult to forecast, because they can easily overshoot on the way up or down. In his view, the “bubble” that existed in many markets has been removed, judging by current ratios of home prices to the cost of rental properties or to personal incomes.

3. What factors hold the key to price changes?

Many factors play a role, but perhaps the biggest ones in 2011 will be jobs, interest rates, and foreclosures. The more people can get jobs, the more potential home buyers there are. That buoys the confidence of employed people, too, because they will be less worried about losing jobs. The job market is widely seen as improving, but how strongly is an open question.

Mr. Yun says he expects the economy to add 2 million new jobs this year, or about 167,000 per month – positive but not a rip-roaring pace given the roughly 8 million jobs lost during the recession. The big question is whether the lift from an improving economy will be offset by two negative factors, the drag of rising mortgage rates and the glut of distressed properties for sale.

4. Are there some regions of the country where the market is better than others?

The recession brought weakness to nearly all metro areas in the United States, but not in equal degrees. Some are now seeing prices rise. Yun pegs Washington, D.C., as America’s strongest housing market, thanks in part to being “stimulus central,” with lots of government contracts creating jobs.

Price indexes from the Federal Housing Finance Agency show that some hard-hit states are stabilizing faster than others. California home prices have fallen less during the past year (1.5 percent) than the national average (3.2 percent). By contrast, the biggest price drops in the past year have occurred in other “bust” states – Florida, Arizona, Nevada, and Georgia – along with Idaho, South Carolina, and Oregon.

5. Where are mortgage rates expected to go?

Higher. Because rates fell to such an unusual low near 4 percent (as the Federal Reserve worked to stop the real estate meltdown), up is pretty much the only direction they can go. To economists, the big question is how much and how fast will mortgage rates rise. It won’t necessarily be a large or rapid increase in 2011. Many forecasts call for roughly 5 percent interest on the typical 30-year fixed-rate loan. By 2012, rates may jump to 5.5 percent or even 6.5 percent, economists say.

Economists see rising rates as putting downward pressure on home values because people can’t afford to bid as much, but at first, rising rates may boost demand for homes a bit, as buyers seek to lock in good deals.

6. If I am a home seller what should I be watching most closely?

Tune in more closely than ever to “comps” – comparable homes that have sold in your area, says Ms. Peña-Morales. That can help guide you toward a reasonable listing price.

Although many real estate analysts expect sales activity and prices to be stronger in 2012 than in 2011, Michael Maloney, a sales-team leader in Richmond, Va., for Keller Williams Realty, cautions would-be sellers against thinking that by waiting they’ll be able to sell at a much better price. In his view, the realistic scenario in many markets involves a slow recovery, not a quick return to 2006 levels.

7. If I am a prospective buyer what should I be watching most closely?

Keep an eye on mortgage rates. When they’re ticking up, a borrower’s purchasing power is headed down.

Weigh the option of buying a distressed property carefully. A bank-owned home or “short sale” property (in which the seller’s bank agrees to take a loss) can be a bargain. But getting it can be a long and potentially frustrating process, housing experts say. Self-education and persistence is needed to see it through. Deals can fall apart at the last minute. And the home may need more than the usual share of fix-ups.

Whether you’re after a distressed property or not, the low prices and interest rates mean that “there’s never been a better time to buy,” Mr. Maloney says.

8. How easy will it be to get a mortgage during the spring market?

Interest rates may be very attractive, but by other measures credit is not “easy.” People with strong credit scores and money for a 10 percent down payment can get loans, but bank standards for mortgages still haven’t eased up in response to an improving economy.

It’s not hard to see why banks are wary, given the uncertainty about home prices and the high rates of default on loans issued before 2009. But some economists say the pendulum has swung too far from loose to tight.

“We believe home sales could actually be 15 percent higher than what we have recently experienced,” if credit conditions were more normal, says Yun of the NAR.

If lending conditions improve, that could increase demand for homes even if interest rates are rising.

“Autodesk‘s (ADSK) fiscal 2012 first-quarter results were solid, driven by strong demand for the company’s recently launched suites of solutions. We plan to increase our fair value estimate. For the quarter, revenue of $528 million increased 11% year over year, reflecting double-digit growth across all divisions except architecture, engineering, and construction, which accounts for about 30% of the company’s revenue. Management attributed the disappointing performance in the AEC segment to weakness in the infrastructure solutions division and expects the upcoming introduction of infrastructure design suites to stem the weak performance. Nonetheless, the year-to-date trend of the Architecture Billings Index–a leading indicator of nonresidential construction activity in the United States–continues to forecast persistently weak commercial construction activity. Operating margins of nearly 15% improved about 4 percentage points year over year, reflecting the end of restructuring charges and lower marketing and sales expenses as a percentage of revenue. Going forward, we believe Autodesk’s increasing number of industry- and product-specific suites will be an important growth driver for the company. First, suites command higher average selling price points. Second, by combining the functionality of previously isolated products into a single solution, the company should increase the stickiness of its products.”

I’ve had a lot of spare time the past few months, and inasmuch as I have no hobbies (other than Reprographics 101) and inasmuch as I don’t play golf or tennis, my spare time has pretty much been devoted to reading articles, and listening to videos, about the economy in the U.S. Many of those articles (and videos) were about the A/E/C industry, but most of those articles (and videos) were about the broader economy in the U.S., and, in particular, about the “recovery” mode the U.S. has been in, since the “great recession” ended in June 2009.

As to the idea that the recession ended in June 2009 (or at anytime subsequent to that), here’s a brief clip from an article (dated September 2010) that I found on the Internet:

It’s official: The Great Recession that started in late 2007 is over, the eggheads who crunch numbers at the National Bureau of Economic Research say.

In fact, it ended in June of last year, they insist.

Tell that to the millions of Americans still looking for work, losing their homes and sinking into poverty in record numbers.

“I think these people are ostriches with their heads stuck in the ground!” said Judith Berdy, 62, a former education administrator from Roosevelt Island.

Berdy, who has been job-hunting for three years, ran out of benefits last spring and is barely getting by.

“For some people [the recession is over]; for some, it isn’t. For the small-timers, it ain’t,” said Dominique Alexander, 27, waiting on line at the Varick St. unemployment office.

Alexander, who has an 8-month-old baby at home in East Harlem, has been out of work since losing his construction job a year and a half ago.

Nowadays, many people, especially those who have the attention span of a gnat, use Twitter to keep up to date on what’s going on in the world, so, because I’d like Twitter-erers (or, should I refer to them simply as “twits”?) to listen to the points I’m going to make in the rest of this post, I’ve decided to make my points in numbered-outline-form; but, sorry, the points won’t necessarily be limited to 140 characters. (Frankly, I don’t know how anyone can really learn anything, in depth, from a 140- character message, but, whatever….)

Before you read the following numbered-list, keep in mind that my training in Economics is pretty much limited to the three or four Econ courses I took in college and to the independent research I’ve done over the years about recessions and recoveries (and, as to the latter, I’ve gone through several recessions, given that I’m, ugh, 64 years old.)

Nonetheless, after reading lots of articles by, and listening to lots of videos of, Economists (real Economists), I’m convinced that most Economists know about as much as I do – which is “not much” – about recessions and recoveries, most recent “recession” and current “recovery” included.

Based on my research, my points and opinions are:

1. The U.S. recovery cannot take hold – in any meaningful way – until the construction industry participates in a meaningful way.

2. As reprographers are well aware, there are two primary parts to the construction industry, a) Residential and b) Non-Residential; a meaningful recovery in both parts has to happen in order for the construction economy as a whole to provide any meaningful lift to a recovery in the overall U.S. economy. It’s been two years since the “technical end” of the recession, and, as of yet, we have yet to see any meaningful improvement in either Residential or Non-Residential Construction. The Residential Construction Industry is mired in a depression – home prices are still falling in some areas of the U.S., foreclosures are still happening in large numbers in several areas of the U.S., and “sales” are very adversely affected by what’s still a very high unemployment rate and by tightened credit. If you don’t have a job, you can’t buy a home, unless you have the wherewithal to pay cash. If you defaulted on your mortgage (short sale or foreclosure), good luck at being able to qualify for a mortgage on another home. [Our country has a habit of “overcorrecting” after we’ve had a problem. Prior to the crash caused by sub-prime loans, just about anyone (who moved, and I’m speaking about movement in terms of “jello”, not relocation) could get financing for a house or a condo. Now, after the problem, lending institutions have gone completely to the opposite side of the spectrum; it’s very hard to qualify for a mortgage, comparatively speaking.] Financing is still difficult for commercial real estate development projects. Vacancy rates are still high for many types of non-residential real estate. Stimulus spending, which, for about two years, helped stimulate public-sector non-residential construction projects (transportation projects in particular), is now on the decline. Local (state, county and city) governments are strapped for funds – don’t expect a surge in local government-sector construction projects anytime soon. (As we speak, Florida’s Governor is looking at slicing out of the current, proposed state budget a significant amount of funding the legislature just approved for new construction at Florida college campuses.)

3. It is likely that the U.S. will soon begin reducing troop levels in Afghanistan and that same thing has already begun to happen in Iraq. Unless there’s another fiasco soon to take hold elsewhere (and it’s impossible to predict that sort of thing), the defense spending part of the U.S. budget will decline over the next couple of years. That’s going to cause job losses in that part of the U.S. market (both public and private sector jobs.)

4. Many economists, the past couple of months, have made downward revisions to forward GDP growth. It’s been reported that GDP was positive in Q1 2011, but that it came in at less than GDP growth in 2011. Sounds to me like the economy is struggling. Companies such as Staples, Cisco, HP, and many others who’ve recently reported their Q1 2011 earnings, are forecasting slower growth for the rest of 2011, slower growth than they previously forecast. Even Walmart is concerned, given high gas prices expected to have an adverse impact on its lower-income customers. If the U.S. economy does experience slower growth, is it not possible that we’ll tip over and experience another recession? Even though most economists do not believe that will happen, it certainly could happen.

5. I listened, yesterday morning, to an economist on Bloomberg radio (Sirius-XM satellite radio, and I’m addicted to Bloomberg) talking about job growth – he said that temporary employment has recently declined, said that often (in the past) led to a fall off in permanent employment. Said that 250,000 new jobs per month may decline, temporarily, to 175,000 per month (or thereabouts) Even job growth of 250,000 per month is not sufficient to spur a very meaningful recovery. New unemployment claims are still in the neighborhood of 400,000 monthly.

6. Seniors now make up a considerable portion of the U.S., and I’m speaking about “retired” (or unemployed seniors). Those who saved money and had CD’s and Savings accounts were previously (before the Fed stepped in and artificially brought down interest rates) earning 4-5% interest. Now they are lucky to earn 1-2% interest on cash. In short, seniors are increasingly “pressed”, budget-wise, since their income has fallen considerably. Don’t look for seniors to help the U.S. “spend” its way out of this recession. (Ooops, sorry, I forgot, the recession ended two years ago.) The Fed will continue its policy of keeping interest rates low; looks like that’ll be the case until at least sometime mid 2012. If the Fed tightens up earlier, that will exacerbate problems in the residential real estate market. Interest rates for business loans (for established businesses) are reportedly low, but is that really true and how easy (or how difficult) is it to get a business loan? And, if small businesses aren’t expanding, why, anyway, would they need to borrow more money?

7. The stock market appears to be due for a correction. Since bottoming in March 2009. On October 12, 2007, the S&P 500 was at 1,562. From there, it sharply declined to 684 on March 6, 2009. Since then, and with the exception of a few occasional downturns, the S&P 500 has increased, and it hit 1364 on April 29, 2011. “I’ve been told” (and have read articles that say that) the stock market moves based on “anticipation.” If the market has moved up “in anticipation” of a steadily recovering and growing economy, will the market, at some point in the not too distant future, begin moving “south” based on expectations that the recovery is stalling? Companies who release earnings results that aren’t meeting estimates or who are releasing reduced forward guidance, are not being treated very kindly by the market. (HP’s stock, CSCO’s stock, Staple’s stock, The Gap’s stock, just to name a few, have taken considerable hits the past month or two.) If you ask 50 high-profile, “knowledgeable” finance guru’s where the market is headed over the next 6 months, 25 will likely tell you that the market is headed for a correction (i.e., headed “south”), and the other 25 will likely tell you not to worry, that the market is going to continue going up for well into the future. So much for the “experts.” LINKEDIN’s public debut was stunning. Went as high as $120 per share the day it began trading (yesterday). But, an opinion released by Morningstar Research, this morning, says that Morningstar has assigned a $27 “fair value.” This morning, one of the Bloomberg guys said that what happened to LINKEDIN’s stock is an indication of a bubble. Bubble’s burst. Large-cap companies that pay decent dividends are doing well, and have been doing very well this year. But, as their share prices have gone up, yields are coming down. Perhaps demand for large-cap stocks is an indication that “big” investors are moving money into safer buckets?

Okay, that was a lot of mumbo-jumbo – meaningless, worthless commentary. But, I’m not yet done. I’m going to make some predictions. Predictions that will likely be well off the mark, but given the predictions I’ve heard experts make, it appears to me that they pretty much use the same prediction method I use, which is the SWAG method.

My predictions (and you know where I just pulled these out of):

1. On December 31, 2011, the S&P 500 will be between in the 1,150 to 1,200 range. (Today, it’s right around 1,334.)

2. On December 31, 2011, the average interest rate for a 30-year fixed mortgage will be 5.50% (zero points.) (Today, Bankrate.com reports that the current average interest rate is 4.77% (zero points, 20% down)

3. On December 31, 2011, the yield on the 30-year U.S. Treasury bond will be 4.85%. (Today, Google Finance reports that the current yield on the 30-year U.S. Treasury bond is 4.31%.)

4. On December 31, the Euro/USD exchange rate will be $1.31. (Today, Google Finance reports the Euro/USD exchange rate at $1.415.)

5. For the full-year 2011, ARC’s “U.S.” Sales will come in at right around $384 mil. (In an article on this blog on March 10, 2011, we included a table that showed ARC’s “U.S.” Sales at $676.7 mil for 2008, at $473.4 mil for 2009, and at $404.5 mil for 2010.) Please note that these numbers exclude ARC’s sales in countries outside the U.S. And, please note that my prediction for ARC’s “U.S.” Sales are based on “organic” sales; and I point that out because ARC may decide to acquire a few companies during the 2011 year, and there’s no way for me to guess at what “acquired” sales ARC may end up adding to its U.S. Sales.

6. ARC’s stock price will be $8.20 on December 31, 2011.

7. The AIA ABI Index – for May, June, July, August, September, October, November and December (2011), will be above 50 in four of those months and equal to or below 50 in four of those months. (Up down, up down.)

8. The NAHM Home Builder’s sentiment index will be 20 in the month of November 2011 (number for Nov will be reported in Dec.)

9. The U.S. GDP number for year 2011 will come in at +2.4% (for the full year 2011).

10.The officially reported U.S. Unemployment number reported in December 2011 will be 8.8%.

If you read this entire post, congratulations, you managed to completely waste at least 20 minutes today. You should find better things to do with your time!

This should prove to be a real time-saver for reprographers who use Salesforce.com and who want to “one-step” scan into Salesforce copies of proposals, quotes, contracts, etc.

See information at this web-site:

http://www.sfscan.com/

Think about this – if Nuance is paying $157 milion for Equitrac, then how much would ARC’s AbacusPCR business segment be worth if it were a standalone company? And, for that matter, how much is SepiaLine worth?

Article found on a blog at www.theorangerag.com/

Takeover time ahoy ! Nuance to acquire Equitrac

by Charles Christian on Wed 11 May 2011

Nuance Communications (which in recent years has been buying up everything that is not nailed down although the eCopy and Dragon Dictation businesses are probably its best known products in the legal market) has announced an agreement under which Nuance will acquire Equitrac Corporation, a leading provider of print management and cost recovery software.

The acquisition expands Nuance’s document imaging portfolio, adding Equitrac’s print management products to Nuance eCopy ShareScan scanning and workflow solutions, and to Nuance OmniPage, PaperPort and PDF Converter Professional desktop applications. The addition of Equitrac also strengthens Nuance’s global channel partnerships with multifunction printer (MFP) vendors, including Canon, Xerox, Konica Minolta, Ricoh and HP – each of whom currently sell both Equitrac print management and Nuance eCopy scanning solutions through their dealers or as part of their Managed Print Services (MPS) portfolios.

“Equitrac expands our ability to provide our customers and MFP partners with solutions that deliver even higher levels of cost savings and office productivity,” said Robert Weideman, senior vice president & general manager of the Nuance Document Imaging Division. “Equitrac delivers proven value in healthcare, financial, legal and educational organizations, and provides secure print capabilities to desktop and mobile global office workers. This complements Nuance’s strengths in mobile and office productivity, and aligns well to Nuance’s key verticals, especially healthcare.”

“There’s a long history of customers selecting Equitrac as their MFP print management solution and Nuance eCopy as their MFP scanning solution. From day one, the combination of Nuance and Equitrac delivers the best of scanning and best of print management to our customers and partners worldwide,” said Michael Rich, president & CEO, Equitrac Corporation. “Even better, Nuance’s leadership in speech recognition, healthcare solutions and intelligent touch-screen interfaces provide a fertile ground for innovations that promise to deliver breakthrough increases in cost savings and office productivity.”

Under the terms of the agreement, consideration for the transaction is $157 million (£96m) in cash. The transaction is expected to close late in the fourth quarter of Nuance’s fiscal year 2011, ending September 30, 2011. Nuance expects the acquisition in fiscal 2012 to add between $58 million and $60 million in non-GAAP revenue; $27 million and $29 million in GAAP revenue after adjusting revenue lost to purchase accounting; non-GAAP earnings between $0.04 and $0.05; and a GAAP loss between $(0.05) and $(0.06).

Article author’s comment: Equitrac was one of the founders of the cost recovery business, with its dedicated terminals becoming a regular addition to photocopiers in law firms from the mid-1980s onwards. However in later years it has seen Copitrak win much of its traditional business outside the US and more recently was wrong-footed by the shift away from dedicated hardware terminals to embedded systems, with companies like nQueue Billback taking the lead in product innovation. Michael Rich deserves credit for reinventing Equitrac and preventing what could have been a train wreck when the hardware bubble burst and we now wait to see what Nuance will do with the business.

Today, shares on LinkedIn (LNKD) began trading on the NYSE, marking LinkedIn’s debut as a publicly-held company.

I just looked at LinkedIn’s stock price and saw that LinkedIn was trading at around $108.00 per share!

An incredibly stunning debut!

At that price, LinkedIn’s valuation (market cap) is (around) $10.3 billion! (figures are “per” Google Finance).

LinkedIn’s Sales Revenues, full-year 2010, $ 243 million

LinkedIn’s Earnings, full-year 2010, $ 15.4 million

Wow, that’s a market-cap valuation of 42.4x Sales!

(Market-cap divided by trailing full-year annual sales)

I just compared that number to Google’s number:

At Google’s current share price, $532.00, Google’s current market-cap is “only” $171.5 billion.

That’s a valuation of “only” 5.85x Sales.

Google’s Sales Revenues, full-year 2010, $ 29.3 billion

Google’s Earnings, full-year 2010, $ 8.5 billion

_________________________________

Did I do this math correctly?

Will LinkedIn’s shares continue to rise from here?

Or, will LinkedIn’s shares decline to reflect a more “modest” valuation?