Reprographics 101

I think I mentioned in one of my early posts (around the time I began my blog-site) that the “reprographics” business is different from the “printing” business. One of those differences, and this has long been a key difference between the reprographics industry and the printing industry, is “profitability”. Simply put, it has long been known (by the owners in the reprographics industry) that reprographics companies are, pound for pound, more profitable, than printing companies.

I began my career in the reprographics business. A few years after I got involved in what was then a small family business, I decided to expand our reprographics company’s business to include “offset printing” services. What did I know, anyway? Why not try something new? What, me worry? (Note that “digital” was not yet a word used in the Printing & Graphics Industry way back then.) So, we bought a couple of offset presses, a platemaker and the rest of the “stuff” that one needs to be in the offset printing business. (All of that proved to be a minor headache, but, whatever, I was young and had a ton of energy.)

Although it was not difficult to grow the offset printing part of our company’s business, it proved to be a real drain on focus and time, and the money (profitability) was not worth the aggravation. Later on, shortly after we completed what was a “key merger” transaction (at which time I acquired two partners, Gary Rowley and John Scher Zeller), our senior partner, Gary Rowley (a very astute business person and, still today, I have not yet met anyone – in the industry – who has the sales and marketing sense and prowess that he had), suggested to us that we discontinue our offset printing operations – – so that we could focus all of our time and efforts on growing our then rapidly growing reprographics business. Instead of simply discontinuing our offset printing operations, we sold them. That was nice, gave us some extra cash to invest in our reprographics business. Okay, enough of the old-time nostalgia crap.

ARC just reported its April-June 2009 QTR results. ARC is “primarily” a reprographics company (yes, I know, it also has technology offerings, including software and services.)

Consolidated Graphics recently reported its April-June 2009 QTR results. CGX is “primarily” an offset printing company.

Both ARC and Consolidated Graphics have grown by acquisition (roll-up) and by internal growth.

Both have taken on debt to leverage growth.

Key differences, however, are:

1) Pound for pound, ARC is more profitable than CGX (gross profit-wise and pre-tax-income-wise)

2) ARC’s Total Net Sales declined 29% from the QTR one year earlier. In spite of that significant percentage decline in sales, ARC remains profitable. CGX’s Total Net Sales declined around 21% from the QTR one year earlier. And, that decline pushed CGX into a loss position.

3) Check out the comparative Gross Profit percentages of the two companies – huge difference in GP’s. Check out the comparative Pre-Tax Income percentages of the two companies – huge difference in Pre-Tax Profit percentages.

4) This comparison should also give comfort to ARC shareholders that ARC’s management team is doing an outstanding job, so far, managing the business through a very difficult recession.

Sorry, but I’ve not yet figured out how to cut and paste tables into my blog-site post window. So, the numbers below will be bit difficult to read.

American Reprographics (Symbol: ARP)
June Qtr June Qtr
2009 2008

Total Net Sales 131,054 100.0% 184,941 100.0%
Cost of Sales (81,899) 62.5% (105,853) 57.2%
Gross Profit 49,155 37.5% 79,088 42.8%
SG&A Expense (30,039) (39,499)
Amortization of Intangibles (2,914) (2,813)
Income from Operations 16,202 12.4% 36,776 19.9%
Other (Expense) Income 38 43
Interest Expense (5,836) (6,559)
Pre-Tax Income 10,404 7.9% 30,260 16.4%

Net Sales June Q 2008 184,941
Net Sales June Q 2009 131,054
Sales decline YOY 53,887
Sales decline %age 29.1%

Consolidated Graphics (Symbol: CGX)
(Reformatted to fit my presentation)
(Amortization of Intangibles is included in SG&A expense line item)
Consolidated Graphics
June Qtr June Qtr
2009 2008
Total Net Sales 225,861 100.0% 285,194 100.0%
Cost of Sales (181,032) 80.2% (214,554) 75.2%
Gross Profit 44,829 19.8% 70,640 24.8%
SG&A Expense (44,004) (50,681)
Amortization of Intangibles *
Income from Operations 825 0.4% 19,959 7.0%
Other (Expense) Income 54 (5)
Interest Expense (2,484) (4,211)
Pre-Tax Income (Loss) (1,605) -0.7% 15,743 5.5%

Net Sales June Q 2008 285,194
Net Sales June Q 2009 225,861
Sales decline YOY 59,333
Sales decline %age 20.8%

Okay, so now you know why “us” in the reprographics industry have long been glad that we weren’t in the offset printing business.

Recently, I had the opportunity to get together with the CEO of a large engineering firm. His firm is not completely “nationwide,” but it is one of the larger firms in the U.S. (and they have operations outside the U.S. as well, although the substantial bulk of their business is in the U.S.)

Getting to the gist of his comments about the Fed’s Stimulus Plan and its effect on the transportation engineering and construction business (not his exact words, I’m paraphrasing), what’s happening is that Stimulus funding is being used to fund transportation projects that were already ready to get underway, construction-wise. These projects were already designed (meaning already printed, whether printing was done in an FM environment or outsourced), but on hold for construction until funding was available. Stimulus funding made funds available, so these projects are be released for construction. MY COMMENT ABOUT THIS: THIS DOES NOT PROVIDE ANY BENEFIT TO REPROGRAPHERS. AND, IF MANY OF THE PROJECTS, NOW BEING PUT INTO CONSTRUCTION, WERE ALREADY DESIGNED, THEN THIS DOES NOT PROVIDE MEANINGFUL RELIEF TO ENGINEERING FIRMS WHO DO TRANSPORTATION ENGINEERING PROJECTS.

One of the biggest problems reprographers faced as the current recession began – and was then exacerbated by the calamity that hit the financial/lending community around the time Lehman Brothers was let fail – was the virtual “shutdown” of lending (financing available) to non-residential developers. When funding dries up, projects dry up. When projects dry up, Architects (and their Engineering consultants) feel that – and feel that in a big way. The same exact thing happens to reprographers; that’s the “trickle-down” effect when the real estate development community hits the skids, for whatever reason. Real estate developers are in the driver’s seat. When they can’t get money, they won’t and don’t build. When office and retail vacancy rates rise – which is, of course, what happens when companies cut jobs and when consumers don’t spend as much money at retail as they did before, development dries up. That’s what our reprographics community is experiencing, beyond the tremendous fall-off in residential development. Perhaps some of the Fed’s Stimulus funding (our taxpayer dollars) should go towards relaxing the money-financing-lending environment – forcing lenders to lend to developers who are still in a position to go forth with projects.

I invite your opinions!

Can business conditions in the reprographics industry get any worse than they were during the first six months of 2009?

Although many in the financial world are already beginning to say that, U.S.-economy-wise, the worst of the recession is behind us and that the beginning of the recovery appears to be not too far ahead of us, it has long been history that recovery in the A/E/C reprographics business lags recovery in the general economy.

Take a look at these numbers, reported in (or extrapolated from) ARC’s financials just released for Q2 2009 and for the First Half of 2009, compared to ARC’s 2008 numbers

For Q1 2009, compared to Q1 2008:
ARC’s revenues from “reprographics services” were down 29.98%
ARC’s revenues from “facilities management” were down 9.09%
ARC’s revenues from “equipment and supplies” were down 16.54%
and, ARC’s total revenues were down 25.59%

For Q2 2009, compared to Q2 2008:
ARC’s revenues from “reprographics services” were down 33.26%
ARC’s revenues from “facilities management” were down 20.22%
ARC’s revenues from “equipment and supplies” were down 8.75%
and, ARC’s total revenues were down 29.14%

Comments and Conclusions:

From an industry-wide, historical perspective, 2nd quarter revenues are typically higher than 1st quarter revenues. Running contrary to typical, ARC just reported Q2 2009 total revenues at $131,054, compared to Q1 2009 revenues at $139,483. (Remember to add 000 to all $ amounts.)

The deterioration of ARC’s revenues from “reprographics services” accelerated from Q1 to Q2, comparatively speaking:
Q1 2009 vs. Q1 2008 saw a decline of 29.98%
Q2 2009 vs. Q2 2008 saw a decline of 33.26%
Wow, an unbelievable 33% decline in reprographics services sales, year over year.

The deterioration of ARC’s revenues from “facilities management” accelerated from Q1 to Q2, comparatively speaking:
Q1 2009 vs. Q1 2008 saw a decline of 9.09%
Q2 2009 vs. Q2 2008 saw a decline of 20.22%
The “doubling” of the percentage decline in FM revenues was caused (this, of course, is only my personal opinion about this) by:
(a) A/E firms have downsized (fewer employees, fewer FM users, lower FM revenues), and
(b) lower levels of design activity at A/E firms, due to fewer new projects and a drop-off from projects that were on the boards, but which, by now, are over and done with. (I believe this also links up to the decline in the ABI Index (the Architectural Billing Index.)

ARC’s revenues from “equipment and supplies”, the latter being ARC’s least significant revenue segment, did not decline from Q1 to Q2, comparatively speaking:
Q1 2009 vs. Q1 2008 saw a decline of 16.54%
Q2 2009 vs. Q2 2008 saw a decline of “only” 8.75%
Apparently, the Q2 sales level is “bottom”; not expected to decline much further than it already has.

And, the “bright side,” ……….., if there is one ………….,

(1) In spite of VERY challenging business conditions, ARC continues to earn a profit. That, in spite of the fact that total sales were down 29.14% (Q2 2009 vs. Q2 2008)
(2) In spite of VERY challenging business conditions, ARC continued to generate positive cash flow and free cash flow and managed to pay-down long-term debt.
(3) If ARC’s management team is doing a great job weathering this “perfect storm” recession, will not stockholders be rewarded when ARC finds its way out of the recession?

Congratulations to ARC’s management team (and entire team) for another incredible quarter in the most challenging economic environment the reprographics industry has faced since the early part of the Great Depression.

When I was in the reprographics business full time, I made it a habit to follow government bidding activity for procurements for reprographics services. To me, the importance of following government bidding activity is that it helps one determine the “low” end of pricing action in a local market. While competitors like to keep their “lowest” prices secret (between them and their larger customers), prices bid to government agencies are easily accessible by anyone who wants to see who bid and what each bidder bid.

Understanding pricing in your market is essential (at least I think it is!)

Now that I am not working in the reprographics industry in the U.S. (I’m not permitted to do that), I only have a passing interest in government bidding activity – – – simply an interest in following the action (old habits are hard to break) – – – which means that, from time to time, I will check on who’s bidding what.

In a recent competition for reprographics services for Pinellas County Schools, and this procurement supports the construction and renovation program for that county school system, there was (evidently) a heated competition for the procurement, several Tampa Bay area reprographers submitted bids. If I were still in the business in the Tampa Bay Area, I would have requested the details of each bidder’s bid. But, since my interest is “light”, I only took the time to look at the winning bidder’s detailed bid.

Florida Reprographics (of Tampa) was the awarded vendor. Two year contract. If you want to view the detailed bid that FR submitted, go to this web address:

http://www.pinellas.k12.fl.us/purch/BIDS/Bid_Results/Finalawards/09-226pr529tab.pdf

Florida Reprographics bid $.04 per sq ft for large-format black & white digital bond paper prints. That price was less than the successful bid the last time this same procurement was bid. And, for the previous procurement, the price that was bid was less than the successful bid 3 years before that.

As a matter of fact (this, since I know the history of this procurement pretty well), the price FR bid for large-format b/w bond prints is the same price that was bid for diazo prints (bluelines/blacklines) several years (I think about 9 years) ago.

I am SO OLD that I can remember when reprographics firms charged cheap prices for diazo blueline and blackline prints, but charged fairly high prices for large-format “digital” bond prints, that service, at that point, was considered a “premium” service.

In the reprographics marketplace and regarding unit prices for different services, what starts high always eventually comes down. I can remember when we charged $3.50 per copy for an 8 1/2 x 11 color copy. I can remember when we charged $18 per sq ft for large-format color poster prints. I can remember when we got $1.00 and $1.50, respectively, for large-format black & white xerographic plain bond and vellum copies. Heck, I can even remember when we got $4.00 per sq ft to plot b/w on mylar.

The point being is that it is a given that prices (for any individual reprographics service) always trend down over time.

On the other hand, how many of you (reprographers) have incurred price increases for plain bond paper since the recession first began to set in? The paper industry (the industry that manufactures and converts) large-format bond paper could easily be described as an “oligopoly.” When only a few firms are involved in manufacturing something, prices generally increase when any one of the manufacturers announces a price increase. In other words, one starts it, then the others climb on the bandwagon. And, they all benefit.

Since the this damn recession began:
1) have your prices for large-format b/w printing services trended up or down?
2) have your paper costs (for large-format bond paper) trended up or down?

If prices (charged) are trending down and prices (paid) are trending up, that’s an awful thing, especially when volumes are substantially reduced.

Well, the previous post, I will admit, was a bit “gloomy”, so, now, I’d like to post something that’s “good news.”

Several friends of mine in the reprographics industry – and friends who are knowledgeable about the GC business – are saying that, because of the recession, more GC’s are pursuing more jobs than ever before. A few years ago (prior to the beginning of the bust-cycle), it was not uncommon for GC’s to be selected (to do a project) by “negotiation” (between the Owner and one or few GC’s) rather than be selected by “hard-bid.” But, now that the construction business is down hard, and very hard in some markets in the U.S., owners are taking advantage of that by using the “hard-bid” process – the theory being that GC’s are very hungry and, if there are lots of GC’s bidding to do a project, the cost of that project will be less, since there will be heightened competition amongst the GC’s.

So, how does this affect reprographers? Well, the more GC’s who go after a project, the more sets that need to be printed (provided that CD’s are not replacing printed sets!). I’ve heard some friends say that some projects are being pursued by tens of GC’s. One friend said that one project had 40 or so GC’s participating in the bid process. So, while there may be far fewer projects out for bid, the fact that more GC’s are pursuing more jobs and the fact that Owners are more likely (than before) to use the”hard-bid” process, this situation hopefully brings a bit of sunshine to the reprographer community.

While doing some research, I came across an interesting article about a “paperless” construction project. Egads, a “paperless” construction project? What’s that all about? The reprographics industry is in a recession because the real estate development industry is in a recession; everyone knows that. Reprographics revenues are down. Significantly, in some areas of the country.

The questions most (in the reprographics industry) are asking are; when we do see a recovery, will the reprographics industry revert (i.e., recover) to what is was before the recession began; and will the industry’s revenues rebound to what they were (and beyond)?

I don’t know anyone who has a working crystal ball. (If I did, I’d be buying lottery tickets with that person’s help.) But, in spite of that – the impossibility of accurately predicting the future – one must at least attempt to predict what the future will be, for how else could you come up with a multi-year strategic plan for your business? ….. does it make sense to have no strategic plan?

Predicting the future (???)….

1) The article I’ve posted below profiles a 150+ year old Construction company that attempted (using Bluebeam software products), and, apparently completed, what they refer to as a “paperless” construction project. Does “paperless” mean “no printing?” Or, if it did not mean “no printing,” was printing substantially reduced? If either was the case, then why would a reprographer promote and sell Bluebeam software products? (Visit Kal Blue’s web-site, as an example of one reprographer promoting and selling Bluebeam products.)

2) What negative effect, if any, will the “wide-spread” use of BIM have on the reprographics business? I posted an extensive article, recently, about that subject. It will take years before BIM becomes standard practice in the A/E/C community. It is likely, given the advantages a GC could have if a GC uses a BIM model during the precon/estimating process and, afterwards, during construction, that GC’s will embrace BIM before most A/E firms do. But, when BIM technology is in wide-spread use, will not that eliminate the need for substantial quantities of prints for GC’s and their subs? Will not they use the “database” within BIM to do estimating?

3) What negative effect, if any, are “on-screen” / “on-line” computer estimating processes having, or will they in the future have, on reprographics? Are customers ordering fewer printed sets of plans because of computer estimating capabilities? Will this trend continue; will this trend increase in pace?

4) In the past, reprographers got orders to print sets of “plans and specs”. And, in the reprographics industry’s heyday, lots of orders for lots of printed sets. Nowadays, some GC’s (and others) are ordering and distributing plans and specs on CD’s instead of ordering and distributing plans and specs in hard-copy (i.e., printed.) What negative effect, if any, has this transition had on reprographer revenues?

5) Some A/E and GC customers are apparently inclined to distribute “files” (containing plans and specs) directly to project participants. For those firms who handle their project documents in that manner, they are no longer the “single source” of a “mass print order.” What would have been a “mass print order” becomes a series of smaller orders from the individual firms who received a set of files, provided that the individual firms need hard-copy prints. What negative effect, if any, does this manner of document distribution have on reprographers.

6) Electronic Permitting? – The City of Atlanta recently initiated an end-to-end digital plan submission process through ProjectDox ePlan software (referred to on the City’s web-site as ePlans.) “Atlanta is one of the first cities in the Southeast to implement a complete online solution for construction and land-use plan approval, in what is to become a nation-wide technology standard for building and planning departments.” Firms who apply for permits submit files, rather than submitted printed sets of plans. What effect will this type of business model have on reprographers?

7) And, finally (at least this is all I can come up with for now), what will happen, “reprographically speaking”, if and when flexible, portable, large-screen displays are used to review plans instead of printed plans being distributed? (This relates to an earlier post I did about technology like the Amazon Kindle reader.)

So, what have I missed? Am I way off base, on base?

I invite those who read this article to post their thoughts (“comments”) on this subject – “what factors are going to negatively or positively influence the future of reprographics revenues?”

Okay, here’s the article about the “paperless” construction project:

William A. Berry & Son Announces Paperless Construction Project Results
— Bluebeam PDF Revu used to eliminate 42,000 pages of paper and 1,557 lbs of CO2
Pasadena, CA (June 16, 2009)

Today, construction management firm William A. Berry & Son, Inc. (Berry) announced impressive results in its quest for a paperless project. Using Bluebeam PDF Revu, Berry, project architect Perkins+Will and all sub-contractors electronically redlined over 42,000 pages of construction documents in PDF – making the project almost completely paperless. By reviewing these documents electronically, the team reduced the project’s carbon footprint by 1,557 lbs of CO2. Based on this exceptional achievement in sustainable communication, Berry is applying for a LEED Innovation & Design Credit from the United States Green Building Council (USGBC).

Berry achieved this milestone by deploying Bluebeam PDF Revu, a PDF creation, markup and editing solution, to the entire project team working on the Overlook Center. Berry managed the core and shell construction, and is currently managing the fit out of this 100,000 square foot building in Waltham, MA.

Developed by Bluebeam Software, Revu was selected due to its specialized features for architecture, engineering and construction (AEC) professionals. Unlike other redlining tools, Bluebeam PDF Revu includes industry standard markups and takeoffs, an exclusive Tool Chest for storing custom annotations, a drawing comparison feature, integrated tracking and tablet PC compatibility. Combined, these features enabled all project documents –submittals, RFIs, punch lists and more – to be reviewed and redlined in a light-weight, universal file format. “Bluebeam was instrumental in helping us review and respond to project documents electronically,” said Jay Bradley, Project Manager at Perkins+Will. “We found that Bluebeam was an essential part of streamlining and simplifying the construction administration process. The inherent simplicity of utilizing Bluebeam
technology was key in helping achieve a cost effective, time sensitive, and sustainable solution to our daily work output.”
To ensure project-wide adoption, Berry and Bluebeam collaborated to train its staff, the Perkins+Will architectural team and sub-contractors on best practices for PDF markup and editing. As a result, Berry created a blueprint for paperless workflows that is being replicated on all of its future projects. “Bluebeam PDF Revu helped us transform the way we manage project communication and its unique tools for AEC allowed us to design an electronic workflow that is scalable,” said Jake Chace, Senior Project Manager at William A. Berry & Son. “We’re already using this process on current green building projects to
eliminate paper usage and distribution, and hope that the example we’ve set will be recognized by the USGBC.”
“The paperless project has been the holy grail of the construction industry,” said Richard Lee, CEO of Bluebeam Software. “Berry has proven that it is possible to go virtually paperless and engineer an electronic workflow that can be duplicated using Bluebeam technology. By recognizing paperless workflows in the LEED standard, the USGBC can incentivize green builders to follow Berry’s lead in process sustainability, and affect real and significant change industry wide. Using Berry’s results as an example, we estimate that the USGBC would be responsible for the reduction of over 25 million tons of CO2 emissions annually.”

Berry has submitted a LEED Silver application for the Overlook project and is currently awaiting notification from the USGBC.
About William A. Berry & Son, Inc. Founded in 1857, William A. Berry & Son, Inc. is one of the nation’s oldest construction companies. A top-ranked construction management firm by such leading publications as ENR, Building Design & Construction and Modern Healthcare, Berry has an extraordinary portfolio of institutional and corporate construction projects throughout the Northeast.

I received this article from Mahil Maurice, a very smart young man who works for ARC. I think he is the “Product Manager” for ARC’s “ishipdocs” technology product, which ARC began selling (I think through its PlanWell team) around the time of the IRGA Convention. I think the article Mahil authored is thought provoking. (A company I’m associated with has already signed up for the ishipdocs service.)

“Traditional ‘print-pack-ship’ Model vs. Digital File Transfer, Cloud Printing, Printing-as-a-Service (PaaS) Model”

Author: Mahil Maurice

A common denominator for a Reprographer to serve a construction project is to have a local presence. In the past, this has allowed the small to midsize reprographer (and, of course, larger regional-markets-reprographers) to enjoy steady revenue streams generated from printing services in “the reprographer’s” local AEC market (or regional markets.) However with the economy in a recession and the housing industry in turmoil, local projects have dried up, resulting in significant drop in revenue streams for local reprographers. The last 18 months have seen a steady decline in revenue in the Reprographics Industry, and, for some, that decline in revenue has been considerable.

Given what’s going on in the economy at large (and, not just in the U.S., but worldwide), one cannot safely assume that lucrative print revenues are not a thing of the past, especially when one considers another looming factor, if not a rapidly increasing trend – Digital File technologies – which are contributing to declining reprographics revenues.

Most Reprographers continue to work in the traditional “Print, Pack & Ship,” Model and generally have enjoyed additional revenues from the “analog shipping component” of printed documents. However, with digital file transfer capabilities, end users (i.e., reprographers’ customers!) can now send files digitally to a required location, completely bypassing the local printer, and, in most cases, allow the destination party (other reprographers’ customers) to worry about the printing and distribution component. Companies such as YouSentIt, LeapFile and several others have point-to-point digital document distribution facilities serving many AEC customers. This has further eroded revenue streams for local and regional reprographers and poses a serious on-going, if not future, threat, as Digital File Transfer technologies become more widely used.

The combination of a bad economy, design and construction industry woes, and disruptive technologies are posing a serious threat to the traditional Reprographic Model and the “Print, Pack & Ship,” Model.

The Reprographics industry is in an evolving paradigm calling for a change in Business Model. In the future, successful companies (we might also refer to them as “survivors”) will be the ones that see the future and put in place the elements to meet the changes head on. Positioning your company to take advantage of what the future holds will be the key to your success, if not the reason for your survival. A common denominator to execute on the new Business Model is being a fully viable digital shop, one with a highly effective, e-commerce based, Digital File Transfer capability – and a network of qualified partners (print/distribution partners) to work with.

AT&T is a good example of a company that evolved from being a leading player in the telephony long distance market to a provider of a Broadband, Cable, Wireless and Telephony. They became a one stop shop for all consumer communications needs. They had challenging times in the late 90s while losing a significant share of their core product (long distance) however quickly mapped a path for the future and built the model to get there. Today they are reaping the benefits of a wireless and cable infrastructure and competing with wireless carriers and supporting products such as the iPhone.

The Reprographics industry needs to do the same – and think beyond the “traditional” Print-Pack-Ship Business Model!

The good news is business is no longer limited to local areas, given the ever increasing globalization of the world economy. This brings with it a wealth of opportunities for the Reprographics Community. Architects and Engineering companies are actively seeking projects outside of their traditional locales, including internationally. Therefore, a reprographer is now, and this will likely accelerate in the future, expected to manage documents and transfer content in a faster manner to a destination – a destination not in the reprographer’s market or region. Things that a forward-thinking reprographer needs to capitalize on – 1) increasing shipping revenues and margins; this is done by eliminating the traditional shipping provider and keeping that revenue in the reprographer’s business by digitally shipping, 2) introducing document management services , including document transfer to other partner-reprographers.

While the opportunity presents itself, where’s the infrastructure to serve a global market or the money for a reprographer to build such an infrastructure?

How can a small to medium size or even a regional reprographer or printer afford to build a massive printing network to serve the global market? So how does a local reprographer expand and stay viable??

This is where Cloud-Printing and Printing-as-a-Service (PaaS) come into play. Each of these concepts promote a global solution that permits a reprographer to have a global footprint – without having to build the infrastructure, the technology and also not spend on maintenance of a network.

A Global footprint would enable a Print Partner in New York City to digitally ship a document to a Print Partner in Beijing China and have it printed and delivered locally. This allows the two print partners to enjoy 100% of the revenues while delivering the documents in a Simple, Faster and Green manner.

Some Key Findings and Recommendations

• Per Gartner, 52% of CIOs are reporting flat IT budgets for 2009.
• There is no massively scalable IT infrastructure available for Cloud Printing today.
• Organizations will benefit from Cloud Printing because it allows them to simply purchase the print and not spend on hardware and software.
• Reprographers and Print Service Providers will benefit from Cloud Printing by gaining access to IT infrastructure that enables them to solicit global businesses without having to invest in the necessary infrastructure.
• Reprographers and Print Service Providers must actively evaluate implementing Cloud Printing and attempt to partner with companies that have the scalable infrastructure to support Cloud Printing.

ARC recently introduced ishipdocs (www.ishipdocs.com), a web-based software- as-a-service. which promotes Cloud Printing. This important technology product allows Reprographers and Print Partners to subscribe to the service for a marginal monthly fee and permits the Print Partners to send digital documents to each other and get them printed and delivered locally. iShipdocs technology permits all revenues from shipping, printing and delivering to be shared by the Print Partners.

ishipdocs allows Reprographers and Print Partners to instantly have a Global Footprint without having to spend on infrastructure, software and maintenance costs and enables them to enjoy the many benefits of reaping revenues from business they never had, or might have had to give up. Now the Reprographers and the Print Partners can go after any business, knowing very well they can boast a Global Footprint and get past the many barriers that prevents them from doing so today.

Suddenly we have a local player with a Global Foot print to facilitate a job – anywhere in world – thus positioning itself to combat the disruptive technologies, the dried up local market, and introduce new global based services without having to spend a dime on infrastructure and software, the essence of Cloud Printing and Printing-as-a-Service (PaaS).

“A Kindle Rival for Business People” – this short article, authored by Brad Stone, appeared in the NY Times Technology section on Monday, June 1st. The article says that Plastic Logic, a 10 year old company founded by two Cambridge (MA) professors, is working on devices with E-INK reading screens on thin, flexible plastic displays. Apparently, their first “reader” product, which is about the same size as the new jumbo-size Kindle DX, will be on the market early in 2010. “Users can change pages with a flick of the finger.”

I sent Plastic Logic a letter suggesting that it would be nice if they developed an E-INK reader that had an image size of 18” x 24”. (That would allow one to “read” ½-size 36” x 48” CAD drawings, ½-size 30” x 42” CAD drawings and ½-size 24” x 36” CAD drawings.)

I doubt that we will see an A/E/C E-INK READER in my lifetime, but it is certainly fun to think about the possibilities!

In a different article on another day, there was an announcement that E-INK, the Massachusetts company that developed E-INK reader technology, has agreed to be sold to a Taiwanese-based technology company.

I visited the PEiR Group blog-site this morning. On April 28th, there was a post on that site that talked about a reprographer in Cincinnati who provided a digital camera system (service?) for a large construction project in that city. That post was interesting (at least it was to me!)

While doing some research, late one evening a couple of years ago (when I was still at NGI), I “discovered” a company that does that (active camera, accessible on-line, for construction project sites) for a living.

If you go to this web-address, you can see a real-live demonstration of how OX BLUE’s system works.

http://clarkconstruction.oxblue.com/clarkhuntsmoot/

By the way, I find it amusing when people say that they or others “discovered” something. Take for example, when people say that Christopher Columbus discovered the Americas. There were already people living in the “new lands” that Chris “discovered” and, that being the case, he didn’t really discover the Americas, did he? Perhaps all of the history books should be revised to say that Chris was the first European “visitor” to the Americas, rather than the “discoverer”?

This is an update on previous posts about ARC’s stock.

In one of my previous posts, I suggested that there are at least two ways to make money in the reprographics business: (1) earn money from owning a profitable reprographics company, (2) earn money by owning a piece of another reprographics company (if you buy low and sell for more than you paid for it, of course.) In another previous post, when ARC’s stock price was at $2.68 per share, I said “it does feel like ARC’s stock is definitely undervalued.”

For anyone who bought 20,000 shares of ARC stock (NYSE: ARP) when ARC fell to $2.54 per share, which happened several weeks ago, those 20,000 shares, at the price per-share ARC closed at ($8.15) on Friday May 8th, were worth $112,200 more. (Investment $50,800, Value $163,000, Increase in value $112,200.)

How much did your reprographics company earn you in the past two months? Would you have earned more than that had you bought ARC at $2.54 per share?

Never ceases to amaze me how the stock market works. ARC reported, on Thursday this past week, that its Sales were off around 25%, Q1 2008 vs. Q1 2009. And, in spite of that, ARC’s stock price surged well ahead of where the stock has been trading this year. Does that mean that investors believe that the worst is over?