Reprographics 101

Per Press Release issued, this morning, by Service Point Solutions:

Service Point Solutions’ equity issue oversubscribed by 112%

18 April 2011. – The Free Allotment and Preemptive Subscription Period ended on 12 April. The additional subscription period has been underway since 13 April and will run until the 19th.

Based on provisional, non-definitive information provided by the placement agent, between the exercise of freely allocated and preemptive subscription rights and the additional shares subscribed to so far, 35,118,220 shares have been subscribed to for an aggregate par value of €21,070,932.00 (of which, €13,871,696.90 corresponds to the cash offering and €7,199,235.10 to the scrip issue), 95.53% of the total offering.

In addition, as notified in a significant event filing dated 31 March 2011, Otus Capital Management has committed to buying to 6,329,114 SPS shares during the third round of the equity offering for €2,500,000, subject to the terms and conditions of the Securities Note and the availability of unsubscribed shares following the first two subscription periods. Including the Otus commitment, total demand stands at €16,371,696.93.

At the Extraordinary General Meeting held in Barcelona on 21 February, the company’s shareholders approved an equity offer (partial scrip issue) for an aggregate €14.5 million.

Judging by the provisional and non-definitive figures, at the date of filing this significant event notice, demand for shares to date represents 112.74% of the total equity issue.

This equity raise will serve to reinforce the company’s capital structure and the proceeds will be used (i) to fund organic business growth (€8.5mn), including priority development of the online business, and (ii) to close the Holmbergs acquisition (remaining €6mn).

Service Point Solutions (www.servicepoint.net) is a leading provider of document management and digital printing solutions. It is present in a broad spectrum of industries, including the AEC, finance, public and education segments, servicing over 30,000 B2B customers. It employs 2,207 people across nine countries (the UK, US, Spain, Germany, Netherlands, Belgium, Norway, France and Sweden) via a network of 133 service points worldwide and 816 facilities management programs, while the GlobalGrafixNet platform provides it with an even broader international reach. Its presence in the online business is growing rapidly and already accounts for 6% of revenue. SPS is headquartered in Spain and listed on the Madrid and Barcelona stock exchanges (ticker: SPS.MC).

For further information: Service Point Solutions, S.A.

Pablo Divasson del Fraile pablodivasson@servicepoint.net Tel +34 93 5082400 / Fax +34 93 5082442

Joel’s comment:

Looks like SPS’ equity raise will be successful. However, I feel compelled to say that these have to be some pretty “ballsy-gutsy” investors. My SWAG projection is that SPS will report a bottom-line loss for Q1 2011 and a bottom-line loss for full-year 2011. SPS reported a loss last year, and, quite frankly, I don’t see how they are going to climb into the green this year.

First, refer to the post I did, earlier this morning, about the B&B project (“Ocasocerro”) that a former Tampa Bay Area architect (Chuck Knight) designed and built in Costa Rica.

Second, ELIGIBILITY: Only one entry per person! And, only “reprographers” are eligible to enter this contest. (Okay, I will allow “financial analysts” who follow and report on ARC to enter this contest.) By “reprographers”, I mean; a) anyone who currently owns a reprographics company or who currently works for a reprographics company, or b) anyone who previously owned a reprographics company or who previously worked for a reprographics company within the past two years (from today). You must meet either of these “qualifications” to be eligible to enter the contest. If, after the contest is over, you are no longer working for a reprographics company (in other words, you sold your company or got laid off), that does not matter; you will still earn the prize. Remember, only one entry per person!

Third, the PRIZE: Reimbursement of up to $200.00 on a three day or longer stay at “Ocasoserro” B&B in Costa Rica. After you win the contest, make your reservation (choose any available room you want to stay in), go to Costa Rica, stay at the B&B, pay your bill, then send me a copy of your paid bill, signed by one of the owners of the B&B (Chuck or Debbie Knight), and I will then send you a check to reimburse you for two nights of your stay, reimbursement limited to $200.00. Your stay at the B&B must take place and end before January 10^th, 2012.

Fourth, the CONTEST: Guess ARC’s (American Reprographics Company’s) stock price as of the close of the market on May 15^th, 2011. Send me an e-mail with your “price-per-share” guess. When you e-mail me with your guess, you must provide your full name and the name of the reprographics company you own, work for, used to own, or used to work for.

Fifth, how the WINNER will be determined: The person who submits the price-per-share guess – that is closest to the closing stock price of ARC on May 15^th, 2011 – will be the winner of the contest. In the case of a tie, there will be a “coin-toss” to determine the one winner. I will be the one to toss the coin.

Sixth, the DEADLINE for your guess: You must submit your guess by 4:00 pm on May 7^th, 2011. Guesses submitted after that time and day will not be eligible for consideration.

The name of the Prize Winner will be announced on this blog on May 16^th, 2011.

Disclosure: this contest has not been sanctioned, nor is it sponsored, by the owners of Ocasoserro B&B. But, they have been made aware of the contest.

Further details: Just to let you know, I’ve vacationed in Costa Rica. It’s a beautiful country to visit. Friendly people, excellent food and wonderful beaches and rain forests. There’s also excellent golf courses, deep-sea fishing and scuba diving. When I stayed in Costa Rica, I stayed at the Marriott Resort near Jaco Beach. Room cost me $250 per night (not including any food.) Had a very laid-back, relaxing time. But, not much of a view from my room (I overlooked the entry of the hotel, because I was too cheap to get a room with a view of the ocean.) If you want stunning views from your room, stay at Ocasoserro!

http://www.ocasocerro.com

Very interesting “human interest” story in the St Petersburg (FL) Times, Sunday April 18^th. This story is about an Architect (Chuck Knight), formerly with LDDI Architects (Lyman Davidson Dooley Inc) – LDDI’s Tampa office – who, with his wife (Debbie Knight), decided to quit the rat race and build a Bed & Breakfast and home in Costa Rica.

The story reads like a novel – their initial plan, the obstacles they encountered along the way, the financial difficulties they experienced, the odds they faced, etc.

After reading the article, I’m ready to go to their B&B in Costa Rica to chill out and relax. Now, all I have to do is convince my wife that Costa Rica should be on our travel map!

Here’s a link to the story:

https://docs.google.com/viewer?a=v&pid=explorer&chrome=true&srcid=0B81al4kFAU9JNTA0ZmZlYzUtYmYxNy00NTU4LWIxZmYtYWQyMDJkYzE4OTZj&hl=en&authkey=CIXfjoAD

Here’s the web-site address of their B&B:

www.ocasocerro.com

I looked through all of the photos that are on web-site. I think Chuck and Debbie Knight, the owners, did a fabulous job. The rooms are incredibly warm and inviting. The views must be spectacular. And, why am I not surprised that an Architect created such a beautiful project?

Check it out!

p.s. Even though I was in the reprographics business in Tampa from 1997 to 2007, I don’t remember ever meeting Chuck Knight or visiting Lyman Davidson Dooley’s offices in Tampa. I don’t think that LDDI was an NGI customer. Perhaps my memory is incorrect.

Here’s a link to the bid document the University’s Purchasing Department released:

https://docs.google.com/viewer?a=v&pid=explorer&chrome=true&srcid=0B81al4kFAU9JMjQyNTU4ZjYtMGU1NC00NGE3LWFkZDUtNjE1NDllMTA4Y2Mx&hl=en&authkey=CMaPq-4C

I’ve pulled the “blue” table from the bid document. Right after, that I added a second table, the one in “black”.

	information disclosed in the RFP:
		FY 09-10		FY 08-09	FY 07-08	FY 06-07	FY 05-06
	Sales ($)	$171,845		$189,495	$200,665	$202,663	$216,518
	Volume*	4,113,500		4,737,396	5,016,616	5,066,590	5,412,946
	Info added by Joel:
	avg revenue-per-copy		$0.0418	$0.0400	$0.0400	$0.0400	$0.0400
	avg monthly volume		342,792	394,783	418,051	422,216	451,079

In the bid document, the University’s Purchasing Department describes the primary reason for “bidding out” the University’s document services requires. Here’s that description:

“The University of Wisconsin-La Crosse is seeking to enter into a local service agreement for printing services. The in-house Document Services unit will be closing on May 27, 2011 after the retirement of two long-term full-time employees. Given the age of the equipment and the high costs of equipment replacement, the University is looking at alternative ways of providing printing services to the UW-La Crosse community.”

Literal translation: the University has two long-term employees working at its internal copy/print center who are receiving high wages and hefty, expensive benefits. Additional translation: Apparently, the University’s Purchasing Department has not done the homework necessary to determine the actual current cost of operating the internal copy/print center, and, instead, is going to outsource the University’s document services requirements, regardless of the cost the University (and Wisconsin’s taxpayers) will incur because of the decision to outsource rather than continue to do the work internally.

I’m clueless as to why the Purchasing Department included “Sales” (Revenue) information in the Bid document. If that’s the total that the internal copy/print center charged to “customers”, then, inasmuch as most of the customers are departments within the University and inasmuch as the revenues are based on “unit prices” internally established (in other words, a self-generated price list, which was probably created without regard to a true understanding of, nor calculations of, “real cost”, then how are the “Sales” numbers relevant to this bid or to the University’s decision to outsource or not outsource? If the University wanted to increase the “Sales” (revenue) number, then all that would need to be done is “raise the unit prices.” Hell, I could do that in less than an hour. But, that’s not really relevant, is it? “Cost” is the “relevant” factor for a government agency.

To go, on, the Bid document contains a schedule that bidders are required to complete to show their “unit prices” for various copy/print/finishing services. The schedule is stupid. It does not enable a completely “objective” determination of “who the low bidder is.”

In spite of that fact, here’s what the Bid document says about the “Award” method:

AWARD:

“Awards will be made to the lowest responsive, responsible bidder. Responsibility is determined at the time bids are evaluated, using criteria which may include: previous performance; equipment available and operable in the bidder’s plant to satisfactorily handle the type and volume of work being bid; production, technical, and supervisory personnel; experience in type of work bid; location of the plant; delivery of proofs; extra time required for delivery, and ease of communication with printer.”

To that I say, “gobbledygook”….. WTF does that mean?

Lastly, here’s the e-mail that I just sent off to the person in the University’s Purchasing Department identified as the contact for this Bid procurement:

From: joel salus

Date: April 16, 2011 10:14:22 AM EDT

To: hyzer.gera@uwlax.edu

Subject: RFB #UWL-710

I reviewed the above referenced bid document.

You’ve published the volume the internal document-services department has done the past few years (I suspect that’s the volume of “prints/copies”), and you’ve published the “annual sales”. I have no clue why you published the “annual sales” numbers. All those are – are “made up” numbers – determined by the “unit prices” your internal document services department is using to price jobs. All that would have to be done to increase “sales” would be to increase prices. But that’s not even important, since the University is a public entity; all that’s really important is, “what was the University’s “cost of operation.” So, my larger question is, has your department actually done the homework that’s necessary to determine the “total cost” of the internal document-services copy/print center?

As to the matter of the bid document ….. On the schedule of services (where bidders are to insert their unit prices for those various services), there isn’t a column for “estimated quantities” of those services. That being the case, how in the world is the University going to be able to objectively evaluate who the “low bidder” is?

I’ve studied bids of this type for many years, and in bids of this type (copying, printing and related services) there are generally (almost always) five “columns” included in the “services” bid schedule:

a) a column that contains a clear description of “the service” (one line for each service)

b) a column that clearly defines the “unit of measure” that bidders are supposed to base their unit price bid on,

c) a column that contains the “estimated quantity” of each service,

d) a column that bidders are to use to insert their “unit price” for each service

e) a column that bidders use to show the “total estimated cost” of each service (this column is the “by-product” of column c) x column d).

After bidders have inserted their unit prices and have calculated and inserted the “line item” totals, they then “add up” column e), to arrive at a “grand total” for their bid.

If you follow the above described procedure, then the Purchasing Department can make a “purely objective” decision as to “who the low bidder is.” And, if you don’t follow this procedure, then the Purchasing Department’s determination of “who the low bidder is” will be subjective. That (evaluating the low bidder on a subjective, rather than an objective basis) is the wrong way to determine the “low bid” vendor for a procurement of this nature (for commodity services.)

I have one further comment to make. Whoever made the decision to discontinue the University-self-operated copy/print center and, instead, outsource the requirements to an off-site printing/copying vendor, should have his/her head examined. That decision was stupid. It says in the bid document that the reason why the University has chosen this method is because of two high-paid, long-term employees. To bidders, that means, “overpaid” and “high benefits”. If you want to cut the cost of a University-self-operated copy/print center, then all the University has to do is to either reduce the pay and benefits to those who are already working at the center, or to terminate the current employees and hire two new employees at lower pay and lower benefits than are currently being paid to the two current employees. That isn’t rocket-science. In addition, the “high cost” of new equipment – that’s actually funny. Based on the “volume” the University-self-operated copy/print center has been doing, the University should easily be able to cost-justify the “lease” or “rental” of new copy/print equipment for the University’s “document services” copy/print center. Any “reprographer” who’s totally honest with you would tell you what I’m telling you. if the University does decide to “outsource” its copy/print requirements, I’d be willing make a substantial bet that the University’s “total cost” for outsourcing will be as much as 2x greater than the University’s current cost for the copy/print center. How do I know that? Well, for over 10 years, my company operated, as a sub-contractor for a prime-contractor, the Hillsborough County Government Central Copy Center. Prior to that, the County self-operated its own copy/print center. The County NEVER did the homework to determine exactly what its costs were. The County’s people were too lazy to attempt the math. And, a consultant convinced the County that they should outsource the copy/print center … let a “private contractor” handle it. So, that’s what the County did. For years, the County’s Purchasing Department and Communications Department have been “touting” that their decision to outsource is saving hundreds of thousands of dollars. That is simply not true. I should now. I was one of the owners of the reprographics company that got the contract. We made a small fortune …. because of the ignorance of the County.

I understand that your Governor would like to reduce the State’s expenses and that he would prefer to privatize certain functions normally handled internally. As a taxpayer, I, too, would like to see the expense of government reduced. But, as to the University’s document requirements, it is an absolutely dumb decision, cost-perspective-wise, to ‘privatize and outsource’ the University’s document services requirements. I hope the people in your department are not lazy. Do the math! Determine exactly what it is it currently costing, determine what it will cost if you right-size your costs and acquire equipment and continue to do everything internally, and then compare that with the cost of outsourcing (the “total bids that vendors submit to you.) If your department is not willing to do the “homework” that should be done prior to committing the University’s document services requirements to an outsource vendor, then shame on your department. One of the reasons why the cost of government is out of control is because people in government Purchasing Departments aren’t willing to do the homework they should be doing. I encourage you to make your department an example for how things should be, and can be, done in a responsible, professional, “cost-concerned” manner!

Sincerely yours,

Joel Salus, C.P.A.

joel.salus@mac.com

Well, for those of you who haven’t yet found “glassdoor.com”, I’d like to introduce you to “glassdoor.com”.

Interesting site that contains “reviews” of companies by employees who work for (or, maybe used to work for) the companies.

I’ve copied into this post “links” to reviews posted by employees who work for (or, maybe, who used to work for) four of the largest reprographics companies, ABC Imaging, American Reprographics (ARC), Thomas Reprographics and NRI (the latter, also known as National Reprographics Inc.)

ABC Imaging has the most (as well as the most recent) reviews, and most of the reviews are, well, let’s put it this way, “not kind.”

http://www.glassdoor.com/Reviews/ABC-Imaging-Reviews-E224605.htm

http://www.glassdoor.com/Reviews/American-Reprographics-Reviews-E16051.htm

http://www.glassdoor.com/Reviews/Thomas-Reprographics-Reviews-E142232.htm

http://www.glassdoor.com/Reviews/National-Reprographics-Reviews-E23940.htm

Joel’s comments:

I realize that most of the visitors to Reprographics 101 are owners and senior managers of reprographics companies. I’ve done nothing, at all, to publicize the existence of Reprographics 101 to the “rank and file.” In spite of the fact that “employees” (and, I prefer to refer to rank and file workers as “team members” instead of “employees”) are unlikely to ever read this post, I’m going to direct my comments to “team members” and not to the owners or senior managers of reprographers.

So, to the non-owners / non-senior managers who work for reprographers, i.e., to the rank-and-file “team members” who work for reprographers….

If you haven’t yet figured out that the reprographics industry is, and has been, experiencing “depression-like” conditions – for at least 3 years by now, if not longer – then “wake up”, it is not a pretty situation. If you are still employed, you are lucky to be employed. Stop whining and complaining; that will do you no good. If you don’t like working for a reprographics company or in the reprographics industry, then leave it! Anyone who accepts employment with a company – no matter what position you are in – has an obligation to (and your owner and senior managers expect you to) give your job 100%. If you aren’t willing to give 100%, you don’t deserve to have a job. Whining and complaining on a site such as “glassdoor.com” is counter-productive. If customers of your company read the negative reviews you post and those customers are influenced to leave your company because of what you wrote, that could not only cost you your job, but could cause your fellow non-owner, non-senior managers to lose their jobs. If you consider your fellow team members to be not just co-workers, but friends as well, do you really want to be the reason for your friends to lose their jobs? I was formerly an “owner” and a “senior manager”, but, before I earned those positions, I, like you, was a rank-and-file team member. When I was in that position, we went through some very difficult times (recession back around 1973-4). We did not get any raises, and, in fact, I got a pay cut. That did not affect my work ethic or my care and concern about my employer’s business. I always gave 100% (frankly, I think more than 100%), because I felt that that was my obligation. Frankly, I felt a debt of gratitude to the owner of the company because he gave me an opportunity to work for his company, and my debt of gratitude was no less even when business conditions required the company to reduce benefits and wages. If you want to whine and complain, do that directly with your owner(s) and/or senior managers. Let them know how you feel, but I urge you to voice your concerns in a positive, not negative, way. I have ALWAYS felt, and I seriously doubt that anyone would ever be able to change my thinking about this, that it is a privilege to have a job; having a job is not “a right.” If you don’t like the position you are in and cannot get your company to move you into a position you like better, and/or if you do not like the company you work for, then “move on” to a new job and a new employer. As to the owners/senior managers of the company you are working for, if you are jealous of what they have (their fancy cars, their fancy homes – and even second and third homes), realize that there is huge risk to being in business – it is not uncommon for their entire “net worth” to be at risk (loan guarantees, etc.) and, besides that, jealousy, to me, is the one of the absolute worst character traits anyone could have. Running/managing a company during a period of “depression-like” conditions is not easy, nor is it fun. If you think owners get any joy, whatsoever, out of cutting jobs, you’re nuts! Most of the owners I know (in the reprographics industry) care a great deal about their rank-and-file team members. For them, it is an absolutely heart-wrenching decision to have to cut jobs, to have to cut wages and to have to scale back or eliminate benefits. But, during “depression-like” conditions, that has to be done. If that is not done, then the company won’t survive, and, when that happens, everyone loses their job. To sum this up; if you don’t like it, leave it, but leave it in a positive way – don’t burn bridges; if you have concerns, express those concerns directly to your owners/senior managers. While you are employed, give your job 100%; you owe that to your fellow team members, to the owners you work for and to yourself.

Joel

Friday, April 15, 2011

Press release from the issuing company

ARC, the nation’s leading provider of reprographics services and technology, today announced that March sales were consistent with sales in January and February, indicating first quarter revenues to be in the range of $105 to $107 million. While the quarterly sales figure was not unexpected, revenue from construction project printing in March was lackluster. Given that March is typically an indicator of annual revenue from the non-residential construction segment, management expects a difficult year for core business sales. As a result, ARC announced that it is further restructuring its operations and management to reduce costs and strengthen growing segments of its business.

“Revenue for the quarter was in line with our projections, but sales from construction project printing remain challenged,” said K. “Suri” Suriyakumar, Chairman, President and CEO of ARC. “On the other hand we see exciting signs of growth in the Global Services and MPS segments of our business, and many of these AEC customers are beginning to hire. Our increased market share should drive our core business substantially as project work returns later in the year. With recent improvements in unemployment and vacancy rates, I think it is clear that an upturn is on its way.”

Management announced that, given current market conditions, the Company is reducing the number of its branches in several local markets, while maintaining its extensive presence in major metropolitan areas, a feature of the Company that has been critical to its success. At the same time ARC’s operational management is being restructured to address the decline in core business sales and the growth in new segments such as Global Services, MPS, Color and Technology Services. Company restructuring will continue throughout the second quarter, with anticipated annualized savings of more than $14 million.

Among the most significant management changes planned for the year is the consolidation of the corporate finance function into the Company’s corporate headquarters in Walnut Creek, California. Since its inception, ARC’s operations and finance offices have been decentralized in keeping with its historical management structure. The consolidation reflects the evolving centralization of ARC management and will foster a closer relationship between the finance and operations teams to address continuing economic challenges and an ongoing industry technology transition.

Jorge Avalos, ARC’s Vice President and Corporate Controller, will be relocating to the Walnut Creek office and leading the consolidated financial accounting operations of the Company. Mr. Avalos has also been appointed Chief Accounting Officer of the Company. Mr. Avalos joined the Company in 2006 taking on increasing levels of responsibility throughout his career at ARC. Prior to joining the Company, Mr. Avalos was an Assurance Manager for PriceWaterhouseCoopers, and the Corporate Controller for Vendare Media (later merged with Epic Media Group), an online advertising network and social media company.

Jonathan Mather, ARC’s CFO, has chosen not to relocate to Northern California and will instead retire from the Company to remain close to his family and community in the Los Angeles-area. Mr. Mather will assist the finance team in relocating to Walnut Creek, and assist Mr. Suriyakumar in the engagement of a new CFO.

“When Jonathan joined us in 2006 after his tenure at NETGEAR, one of the stipulations of his employment was that his offices would remain close to his home in Southern California. While recognizing the necessity of the corporate office consolidation, he has chosen to remain in Los Angeles and we respect his decision,” said Mr. Suriyakumar. “Jonathan has been the driving force behind the success of the finance function here at ARC over the past four and a half years. We are happy to have his good counsel and guidance throughout the transition, and we wish him well in his future endeavors.”

ARC management will maintain its traditional quiet period leading up to the formal announcement of its first quarter results on May 3, 2011.

If a company cuts approximately 250 employees right after the end of Q1 2011, what does that say about its as-yet-unannounced Q1 2011 results and its feelings about business in near-term, forward quarters?

The larger, looming question, I think, is how deep can you cut and still put forth a maximum customer-service and quality effort on behalf of your customers? Do you reach a point where cutbacks begin to negatively affect performance?

And, what’s your “business model” when it comes to sales efforts? Do your sales managers and sales reps report to production people who do not have experience in sales nor a clue about how to go about market and account sales strategy? Do you now only sell price? If your sales are still trending lower, when you expected them to stabilize or slightly increase, is that trend only because demand is off, or is some of the problem attributable to how your company is managing and directing its sales efforts?

On Friday December 10, 2010, I did a post on the blog that talked about the changes at my former company (NGI) since the company was purchased by ARC in mid December 2007 and to acknowledge the contributions made by former NGI-ers.

Another four months have passed since that post, and I’m now going to “update” that post to reflect additional changes and to say a few things about the most recent “departees”. To make it easier to write today’s post, I’ve copied the December 10^th post into this one; anything newly added (today) appears in red type.

Please note that the article below mentions the name, “NGI”. On January 1st, 2011, ARC changed the name of our former company, NGI, to ARC.

From FRIDAY, DECEMBER 10, 2010 (updated April 13, 2011)

NGI (National Graphic Imaging) – acknowledgements

Next week will mark the 3rd anniversary of ARC’s purchase of NGI (National Graphic Imaging), and, wow, there have been a lot of changes in the ranks since NGI became an ARC-owned company.

ARC purchased NGI one month after the recession started, but who knew then that the recession had started and who had any idea that the A/E/C industry and the Reprographics industry would be impacted as harshly as what’s happened because of the “Great” Recession.

NGI (National Graphic Imaging) was sold to ARC in December 2007. NGI was a powerhouse operation in Florida, with operations in Tampa, Orlando, Jacksonville, Ocala and plans to establish operations in South Florida. NGI also conducted operations in Atlanta. Even though ARC owned operations in Florida and Georgia before ARC acquired NGI, NGI was, evidently, a key target for ARC. Sometime after ARC acquired NGI, NGI absorbed into its operations the other ARC owned brands in NGI’s Florida markets, including TRS (Tampa, St Pete, Clearwater) and Orlando Reprographics (Orlando.) Not long after ARC acquired NGI, Greg Williams, President of NGI assumed the role of President of ARC’s Florida operations, including T-Square in South Florida.

As that saying goes, “that was then and this is now”, times have changed. Today, NGI is predominately managed by ex Ridgway’s employees (Ridgway’s is another reprographics enterprise ARC purchased, several years before ARC purchased NGI.) All of NGI’s senior management team (with the exception of Martha Korman, former CEO of NGI and who is now a member of ARC’s Global Accounts team) are gone from NGI and ARC.

I would like to stop for a minute to acknowledge the former senior management team of NGI, the management team that created a powerhouse operation in Florida. Without the tireless efforts and dedication of this management team, NGI would not have become a powerhouse operation in Florida. None of the following people are still working for NGI or ARC:

Greg Williams – President & Chief Operating Officer

Craig Bell – Chief Technology Officer

Craig Hubbard – Chief Financial Officer

David Fitz – Controller

Tina Rodriguez – Assistant Controller

Pete Vassos – Vice President, Production/Customer Service Operations

Bob Paschal – Vice President, Sales & Marketing

Danny Kane – General Manager of Imaging Products Group (IPG), division of NGI

Nino Sibilla – Service Manager of Imaging Products Group (IPG), division of NGI

About Tina – you couldn’t meet a nicer person than Tina Rodriguez. A highly competent accountant. Whenever I had any questions about our numbers, Tina was always quick and accurate with the answers. The kind of person that you want in your accounting operations.

About Nino – one of the many excellent decisions our former President/COO, Greg Williams, made was the decision to recruit Nino to join the NGI team. Nino was brought on board to found our “equipment and service” business, which was called “Imaging Products Group / IPG”. Nino, who formerly worked for OCE’s service team before joining NGI’s team, was an outstanding contributor to NGI’s growth and success. Whenever you “put” Nino in front of an important customer, you knew that the feedback from the customer was going to be excellent! His technical knowledge was absolutely superb, and his customer relationship skills were, simply put, “off the charts.”

I would further like to acknowledge the fantastic contributions made by other former members of the NGI team, people who are no longer with NGI or ARC, for these were the people who operated “on the front lines” and made it all happen:

Former NGI Sales team members who are no longer with NGI or ARC:

Esther Leonard (Tampa)

Marie Mosely (Tampa)

Maureen Michel (Orlando)

Terri Davis (Jacksonville)

JD Loudermill (Jacksonville)

Collin Zucharelli (Atlanta)

About JD – JD was an absolute delight to work with. A true “veteran” of the reprographics wars. One of our customers in Jacksonville, Jack Diamond, was referred to as the “Mr. Jacksonville” of the Architecture community. That being the case, then JD was the “Mr. Jacksonville” of the Reprographer community. I don’t think that there was anyone in the Jacksonville A/E/C community who did not know and like JD Loudermill and who did not respect the efforts JD made on their behalf. It is good to have sales team members who are “advocates” for customers, and JD was certainly that type of sales team member. A towering 6’ 8” tall, JD always stood out in any crowd, not necessarily because of his height (I always felt like a midget when standing next to JD), but because of his outgoing, friendly personality. During my years with NGI, I made quite a number of sales calls with JD and was always amazed at how fond customers (and even prospects!) were of JD. I don’t know how you replace someone like JD.

Former Production Center Managers who are no longer with NGI or ARC:

Alex Prieto (Tampa Westshore)

Reggie Jackson (Atlanta)

Eric Cardona (Orlando)

Danny Landon (Jacksonville)

Rob Faiella (St Petersburg)

Randy Faiella (Tampa Downtown)

And, Program Managers who are no longer with NGI or ARC:

Dave Shives (Color Program Manager, NGI)

And, of course, I can’t forget to acknowledge the fantastic contributions made by other members of the NGI team who are still with NGI:

NGI Sales team members who are still with NGI:

Dave Powers (Orlando)

JD Loudermill (Jacksonville) (gone from NGI in April 2011, see above)

Production Center Managers who are still with NGI:

Robert Posada (Ocala)

And, Program Managers who are still with NGI:

Craig Sterner (FM Operations Manager)

As you can see, very few of the “core of NGI’s team” are still with NGI. Time marches on. Changes happen.

This post authored by Joel Salus, former Senior Vice President and Chief Business Strategist (aha!) at NGI

I’m certainly “a bit behind the times” on this one (and that’s an understatement, for sure.) But, nevertheless, I thought this might be of interest to those of you who are following ARC’s MPS business development initiatives and for those of you who follow “people and players” in the MPS “sub-industry” / space.

In the spring of 2010, through some industry-related research I was doing at the time, I found that a gentleman by the name of “Dennis Gorgolinski” had joined ARC’s “global solutions” team as an “executive director”. At least that’s what appeared, back then, in his profile on LinkedIn. What I found to be of interest about Dennis was the experience he had in the MPS space, prior to joining ARC.

However, it wasn’t until today that I learned that Dennis Gorgolinski is no longer on ARC’s team; evidently, he joined Ricoh’s MPS team in September 2010. Which means that his career with ARC must have been very brief. And, perhaps that’s why, when you visit LinkedIn now, there’s no mention, whatsoever, that Dennis was previously employed by ARC.

Here’s Dennis’ current profile on LinkedIn:

Dennis Gorgolinski

Manager of Professional Services

Ricoh U.S.

Public Company; RICOH; Information Technology and Services industry

September 2010 – Present (8 months)

Director, National Accounts

OfficeMax

Public Company; OMX; Retail industry

January 2009 – February 2010 (1 year 2 months)

VP Sales West

WorkflowOne

Privately Held; 1001-5000 employees; Printing industry

July 2004 – December 2008 (4 years 6 months)

So, as you can see, there’s a “gap” in Dennis’ “past employment” on LinkedIn – a gap from March 2010 to August 2010. I think that Dennis was with ARC during that “gap” period.

I also found this on the Internet:

Reprographics company exec lists 4BD home for $1.199M by Carrie Reed, published June 16, 2010 (this article was published on sf.blockshopper.com)

Dennis Dean Gorgolinski and Catherine Anne Gorgolinski have listed for sale a four-bedroom, three-bath home at 562 Skiff Circle in Redwood City for $1.199 million. The 1,770-square-foot house was built in 1969 in Redwood Shores. Mr. Gorgolinski is the global solutions executive director at American Reprographics Co., the leading reprographics company in the United States. He formerly worked as national accounts director at OfficeMax, a sales vice president at WorkflowOne and a sales director at Relizon. He received a B.S. in marketing from San Jose State University.

Back on April 2010, when I first found that Dennis had joined ARC’s team, I had an e-mail exchange with a friend, about Dennis and about ARC’s MPS initiatives. I’d like to share that e-mail exchange with you:

Timeframe reference: April 2010

First, from me to xxxx (commenting on his/her most recent article about ARC):

“Hi xxxx,

“Lovely” weekend in Budapest – started out with T-shirt weather, but ended up needing a jacket (got colder and windy.)

I think I now know why you mentioned “managed print services” in your most recent write-up about ARC. Perhaps during your discussions with Suri and Jonathan you heard one of them mention the name, Dennis Gorgolinski?

I don’t recall reading any articles, in the past or near term present, other than the most recent write-up you did, where people have referred to ARC as being in the “managed print services” business. The term, “FM“, is always mentioned, but not “managed print services.”

Doing some industry research, a week or so ago when I was home in the U.S., I came across Dennis’ name on Linked-in, and saw his title and job description …. and prior work history. “Sounds like” he is a fairly recent addition to ARC’s Sales Management ranks; I did not see any ARC press releases that mentioned him, nor did I see any articles on ARC’s blog that mentioned him; given his “rank”, I would think they’d at least like to say he’s now with ARC.

As you can see by the pdf file that’s attached, Dennis was with Office Max for about a year, and, before that, was with WorkForce One. Never having heard of WorkForce One before, I read up a bit about them – they are, evidently, a fairly good-sized player in the “managed print services” industry. (Another one of the sub-industries under the Greater Printing & Graphics Industry master heading; they even have their own association.) I guess ARC brought Dennis in, in part, to build ARC as a player in that (the MPS) business??? (in addition to his role of guiding the Global Solutions Sales team?).

The MPS Industry is a large one with very large players, such as HP, Xerox, OCE, Adare, Gilmore, etc., etc., etc. Basically, they sometimes provide printing equipment and manage that (fleet management, similar to FM’s) and sometimes they “simply” manage the document management and printing and distribution needs of a client …. and, in doing so, will sometimes form relationships with “remote” printers. For example, we are doing printing and distribution in Russia for a U.S. “managed print services” provider/vendor for the provider/vendor’s clients in the U.S. who need to distribute printed documents in Russia. (We receive the digital files, then print, then handle distribution/delivery.)

Certainly, I have no way of knowing if if ARC, in hiring Dennis, is going to get heavily involved in MPS. I would think so, but what do I know, anyway? He certainly has the necessary exposure to, and background and experience in, that segment of the industry.”

Then, from xxxx to Joel:

“Joel:

Great to hear from you. I was wondering what you thought of our latest report on the reprographics industry. I’ve never been to Budapest, but I hear great things about it. Definitely on my list of places to go.

ARC management brought up their “managed print services” during my most recent conversation with Suri. I don’t know much about Dennis Gorgolinksi, but based on his background and his profile in Linkedin, it certainly seems like he would be the guy to spearhead the company’s efforts in managed print services. I see no reason as to why ARC can’t be a major player in that space given their scale and technology platform. I don’t know if they’re going to develop their own tech platform specifically for this product or they will license it from another vendor. I know of a few software platforms out there.”

Then, from Joel to xxxx:

“ARC CERTAINLY has the reach, size and scope …. and a software development / technology development company (Mirror Plus)…. to make a push into the MPS space, but that is a space occupied by equipment manufacturers as well. I’m going to sit back and watch what ARC does in that space. [If you Google “managed print services” (if you have not already done that), you will find lots of information about that sub-industry].

Okay, that’s it, just wanted to mention this to you. Just food for thought.”

To close out this article, just a couple of comments.

First, when I first learned that Dennis Gorgolinski had joined ARC’s Global Solutions team as an Executive Director – and given his previous background and experience in the MPS space with WorkFlowOne and Office Max – it was my expectation that Dennis would have a positive impact on ARC’s MPS initiatives. I certainly don’t know why Dennis did not “stick” with ARC or whether the decision to leave ARC was his decision or ARC’s decision. He was barely there long enough to have any type of impact.

Second, I wish Dennis good luck and success with Ricoh.

This is the 1^st Quarter 2011 update to the index of the U.S.A. A/E/C reprographics industry’s sales revenues of “plans-printed-on-paper”.

The A/E/C Repro PPoP Index …..

This index does not attempt to track “total sales” of A/E/C reprographers. It attempts to track only sales of “plans printed on paper,” which, traditionally and even nowadays, is the core (main) revenue generator for all A/E/C reprographers.

And, by “plans printed on paper”, I mean A/E/C “plans”, large-format, b/w and color, unbound or bound, full-size, half-size, whatever l/f size.

There will be a recovery in the A/E/C industry and thereby in the A/E/C reprographics industry. However, some are saying that even though there will be a recovery in the A/E/C industry, the recovery of sales revenues from “plans printed on paper” may not mirror the A/E/C industry’s recovery, since some are expecting (I guess I should say, some are saying) that revenues from printing plans on paper are being negatively impacted by customers distributing CD’s (or files) instead of distributing “hard copy” plans.

For this index, Q1 2006 is the ground-zero (base) point.

YR– 2006—–2007—–2008—– 2009—–2010——2011

Q1– 1.00——-1.09——-1.10——0.65——0.55—–0.65

Q2– 1.06——-1.18——-0.98——0.65——0.60

Q3– 1.08——-0.97——-0.85——0.57——0.60

Q4– 0.89——-0.93——-0.64——0.49——0.58

A NOTE OF CAUTION TO PEOPLE WHO’VE BEEN FOLLOWING THIS INDEX! THE EFFECTS OF AN ACQUISITION (BY A SUPPLIER/VENDOR) HAVE SLIGHTLY DISTORTED – TO THE UPSIDE – THE INDEX FOR Q4 2010! KEEP THAT IN MIND WHEN YOU “PONDER” THE INDEX NUMBERS.

Regarding the above comment, on April 6, 2011, when we posted the index reading for Q1 2011, we retroactively adjusted downward the index reading for Q4 2010; this to make an adjustment for the effect of an acquisition. We originally posted an index reading of .63 for Q4 2010. We’ve just adjusted that index reading to .58.

(This index is based on A/E/C Repro Vendor sales to A/E/C Reprographers)