Dear visitor to my blog-site,
So, far, my blog-site has been visited by people from 38 states in the U.S. (This, according to Google Analytics reports.)
But, that also means that my blog-site has not received visitors from 12 states in the U.S.
If you have reprographer-friends in any of these (‘missing”) states, please tell them about my blog-site:
Vermont
Rhode Island
West Virginia
Mississippi
Arkansas
New Mexico
South Dakota
Wyoming
Montana
Idaho
Alaska
Hawaii
What else would you expect from a very smart management team?
Given the tremendous fall-off in ARC’s stock price since 2007, many ARC employees, who were granted options to purchase ARC stock when ARC’s stock prices were much higher than the price-per-share ARC was recently trading at, are holding options that are “under water.” The term “under water” means that the option-to-exercise price-per-share is greater than the current trading price-per-share. In other words, would anyone (in their right mind) really want to purchase stock (via an option or otherwise) at a price that is higher than the stock is worth? Would you want to pay $25 for a stock that’s trading at $5? (If you said, “yes,” then please call me, as I have some GE stock I’d like to unload for “only” $25 per share.)
When stock options are under water – and, even worse, far under water – that isn’t a great incentive for those who hold stock options, especially employees who hold stock options.
So, what Suri did (and, I would imagine, the ARC Board of Directors had to sign-off on this) was to come up with a plan that would allow ARC-employee stock-option holders to exchange their under-water stock options for new stock options that are not under water. Great move – this gives terrific incentive for ARC-employee stock option holders to do everything they can – go at it full-bore so to speak, to improve ARC’s performance, both now and in the future.
Not all public companies take this sort of action. Some don’t do it because an exchange of this nature causes dilution to outside (non-insider) investors who own ARC stock. But, in ARC’s case, I don’t think the dilution effect will be much, and, besides, if ARC employees who take advantage of this exchange offer push very hard on ARC’s behalf and ARC’s numbers improve, they won’t be the only ones who win; ARC’s outside shareholders will, over time, win as well.
Without question, it can be very demoralizing when you see fellow team members, people you worked side-by-side with for years, terminated from the business because of a recession. The Tender Offer (stock-option exchange offer) will help, at least somewhat, to counter some of the bad news that ARC’s employees have had to deal with. This Tender Offer does show that the ARC management team “has heart.”
Finally, in the Tender Offer document filed with the SEC, ARC set May 21, 2009 as the date the exchange offer will take place (unless revised or amended). I’m wondering about the timing of that event. In April, ARC issued this press release ….. “The news release announcing the first quarter 2009 results will be disseminated on May 7, 2009 after the market close.” Two weeks after ARC releases its Q1 2009 results, the price-per-share will be set for the stock-option exchange offer, based on the price-per-share ARC is then trading at. If ARC’s Q1 2009 results disappoint large shareholders (institutional share holders and mutual funds shareholders), will that drive down the price of ARC stock? If that happens, the option-price-per-share will be set at lower dollar amount than would otherwise be the case if the stock price is driven higher by ARC’s Q1 2009 results. If I were an ARC employee benefiting from the exchange offer, I would want to see my option price-per-share set at a lower amount rather than at a higher amount, of course!
I was in Europe the past couple of weeks, returning home to the U.S. on Saturday night. This morning (Tuesday), I got up early and drove eighteen blocks to my favorite breakfast hangout in St Petersburg, FL. After breakfast, I drove down Central Avenue to the little office I maintain (for my consulting practice) in a high-rise office building in downtown St Pete.
While driving down Central Avenue, I noticed that a new sign, “NGI”, had replaced a “TRS” sign that’s been hanging over a reprographics center in downtown St Pete for probably 20 years, if not longer.
That new sign, the “NGI” sign, brought a big smile to my face.
In 1995, when I was thinking about coming out of retirement after having been out of the reprographics industry for approximately 8 years (we sold our first reprographics company in 1988), I wrote a business plan for a “new-age” reprographics business. After completing the business plan, I sat there thinking, “what name should I give this new business? I don’t want to use “reprographics” in the name, because the new business would be a digital-based enterprise, and I can’t just use the word “imaging” next to a name, because “imaging” could be confused with an MRI center” (you know, the people that do brain scans, bone scans, etc.) So, after haggling back and forth with myself, I came up with the name I liked the best – “National Graphic Imaging – NGI”.
NGI did not become a reality until a few years later. After completing the business plan, I shelved it. I had taken a job as the Director of Business Development for a large-format color enterprise with 8 offices around the U.S. And, after that, I accepted a job as COO of T-Square (based in Miami, FL.)
In late 1997, October actually, I joined a Tampa Bay Florida-based reprographics enterprise (a business that was founded by Nick Korman, Martha Korman and Greg Williams.) At the time I joined the Tampa-based enterprise, it was operating under three different names; Bay Reprographics was the name of the Tampa operating company, Central Reprographics was the name of the Orlando operating company, and Coastal Reprographics was the name of the Jacksonville operating company. Not long after joining this enterprise, I voiced an opinion to my associates that, if we were going to successfully brand the business – make our business instantly recognizable across all of our markets (present and future) – that we needed to transition the business to “one name” instead of using three different names. If my memory serves me accurately, we began the transition to “one name” in 1998 – and the “one name” we selected to use was, yes, you probably guessed it, National Graphic Imaging – NGI. Several years later, we dropped the full name and simplified things, going with just NGI (with the exception that whenever I generated proposals, I continued to use the full name and the initials.)
NGI was sold to ARC in mid-December 2007. Several years prior to that, ARC acquired Tampa-based TRS. TRS’ original full name was “Tampa Reprographics Service”. (TRS was founded by Jack Dunn out of Detroit; he also owned Dunn Blue in the Detroit, MI area.) During 2008, ARC merged TRS into NGI; NGI became the surviving ARC operating company in the Tampa Bay Area. About that same time, Orlando Reprographics was also merged into NGI (in Orlando.)
Anyway, to bring this long-winded story to a conclusion, my drive down Central Avenue this morning brought a smile to my face because the NGI name – which I came up with while working on a business plan years before I became a member of a Florida reprographics operation – is now “up in lights” in downtown St Petersburg.
Last week, I was given a heads-up that Greg Williams of NGI was very recently appointed ARC’s Regional President for ARC-Florida operations. That means that Greg, one of NGI’s founders, will be running ARC’s “Florida-statewide” business; that also means that T-Square, the Miami-based enterprise ARC purchased two years ago, and one of the oldest companies in the reprographics industry in the U.S., is now under Greg’s management. It remains to be seen, however, if T-Square’s name will be changed to NGI. But, if T-Square’s name is, now or eventually, changed to NGI, that, of course, will bring another smile to my face.
This information was obtained from an article on Reuters.com
Finally, some positive news about the AIA’s ABI Index!
….NEW YORK (Reuters) – A leading indicator of U.S. nonresidential construction activity jumped in March to its best level since August 2008, an architects’ trade group said on Wednesday (April 22, 2009)
The Architecture Billings Index rose more than 8 points to 43.7 last month, marking the second consecutive monthly improvement, according to the American Institute of Architects. The index has not crossed above 50, a level that indicates improving demand, since January 2008.
All four geographic regions tracked by the group remained below 50, as did all four construction subsectors. But a measure of inquiries for projects rose 7 points to 56.6, its third consecutive monthly increase.
“The fact that inquiries for new projects increased is encouraging, but it will likely be a few months before we see an improvement in overall billings,” AIA Chief Economist Kermit Baker said. “This news should be viewed with cautious optimism.”
The AIA’s Billings Index, which began in 1995, is considered a measure of construction activity nine to 12 months in the future.
Nonresidential construction includes commercial and industrial facilities like hotels and office buildings, as well as institutions like schools and hospitals.
UNFORTUNATELY, THAT GOOD NEWS IS OFFSET BY BAD NEWS. Google “Southeast Construction News”, April 2009 issue, and read about the decline in signed-contracts for Construction Projects in the Southeastern U.S., 2009 vs. 2008. Not a pretty picture / outlook for the current year.
As of March 24th, Google Analytics captured and reported the following activity information about visitors to Reprographics 101, my blog-site:
Reprographics 101 has been visited by 280 “unique” visitors.
Reprographics 101 has been visited by people from 20 different countries.
Reprographics 101 has been visited by people from 37 different states in the U.S.A.
I think the numbers have jumped up (are skewed) considerably simply because I posted an article about OCE’s new PlotWave 300 large-format digital monochrome multifunction system. Apparently, people are using search engines to find information about that new OCE system and, somehow, they are getting my blog address. Given the number of countries reported to me by Google as visitors, I doubt that some of the people who’ve made it to my blog can actually read what’s on the blog (not everyone reads English, you know.)
My retired ex-partner, John Scher Zeller (JZ), whose grandfather founded Max Scher Blueprinting around 1922, wrote what you’ll read below in recent e-mail to one of our “younger” ex-associates who is younger than John and I. When John first started in the blueprinting business, his company was still doing ‘real’ blueprinting.
Okay, without further adieu, here’s what JZ wrote:
“OK – guys a quick “lesson”. A real blueprint machine did not use ammonia. The diazo process using ammonia to develop image came after the “actual blueprint” machine. The blueprint machine created blue prints – blue background with a white line. The diazo process was the opposite – white background with a blue line or black line. The actual blueprint machine was a wet process – the original was placed on a continuous roll of paper. Once the paper was exposed to the original it went through peroxide, then through potash, then through water rinse, then through a dryer similar to a car wash mechanism and went to a rear roll. Someone would cut the paper off the roll and then hand trim the prints. Specifications were run the same way and hand trimmed to 8.5 x 11.
We (Max Scher Blueprinting) had one customer who insisted on getting actual blueprints until around 1976-7 or thereabouts. We told that customer that it was no longer practical to keep the machine running for just them. They converted with no fuss and we had the job of somehow pulling out a big fu..ing machine that had been in one spot since 1940 with all kinds of chemical residue stuck to that sucker. It took a while but we got it out. After that, I heard there were only 2 or 3 “real” blueprinting machines left, east of the Mississippi – one in NY and one somewhere in the mid-west.
Diazo (printing), which gets its name from diazominium salt, came after “real” blueprinting. The name of the Ozalid company and the “ozalid” process was formed by taking diazo and reversing it and adding an L to make a “word”.”
BlogAuthor’s note: Can you imagine, nowadays, getting a hospital job that has 600 large-format drawings and 2,000 pages of specs for 40 sets and having to run that job using the “real” blueprinting process of bygone days? Wow, that would be a mess and a hassle. John, thank you for the article for the blog.
For reprographers who want to know what’s going on in the Architecture business, service-demand-wise, I’m providing a link to the most recent (March 2009) Press Release from the AIA’s Economics guys about the February Architectural Billing Index (ABI). The ABI is supposed to reveal trends in demand for Architecture services – and many follow the ABI to forecast future construction activity. Here’s the link:
http://www.aia.org/press/releases/AIAB078896
The ABI is updated once monthly.
From time to time, I read on-line publications from the Architecture Industry, just to see what’s going on in their world. What’s going on in their world, of course, affects the Reprographics Industry.
If you go to the Architectural Record’s site (see link at end of this post), and then select this article …..
Layoffs Sweep Architecture Profession as Economy Worsens
December 29, 2008
….. at the end of that article you will see a bunch of comment posts; here are some examples of the comment posts (not a pretty picture) …. (There are 8 pages of comment posts; it will take you a while to read all the way through the 8 pages of comment posts on the Architectural Record site)
Anonymous wrote:
SmithGill has laid off 50% of its staff since December 2008. They have been factory style group layoffs that are very inpersonal and offer very little severance. It’s too bad that that place eats you up and spits you out much like SOM.
3/7/2009 12:05 PM CST
Anonymous wrote:
I am the success story that young interns dream to be. I was one of the top design talents in my class many years ago. I have 30 years of experience as an architect in top end single family homes. I have been through it all from being a department head over 30 architects in the late 80s, working for myself through much of the 90s, heading architecture for a builder, and most recently heading architecture for an interior design firm in Beverly Hills. We let most of our small staff of interior designers and architects go in the last year. I thought that I was “too big to fail” but in my early 50’s find myself out on the street again. This time I didn’t it see it coming. It came fast and hard. I know I am good. I know that I love my work when things are right. I don’t know if I can recover again.
2/4/2009 5:56 PM CST
Anonymous wrote:
Johnson Fain, in Los Angeles, laid off more than 50% of their architectural staff. They were a firm of roughly 120 a little more than a year ago, now they are a firm about 50.
2/4/2009 2:49 PM CST
HERE IS THE LINK TO THAT ARTICLE:
http://archrecord.construction.com/news/daily/archives/081229layoffs.asp
A couple of previous posts talked about the contest I’m running and about how to enter the contest.
In order to enter the contest, you must E-MAIL me your guess at ARC’s Q1 2009 Sales.
Do not post your guess as a “comment” to a post. That is not an acceptable way of entering the contest.
Do not give me your guess at ARC’s stock price. This contest is about guessing ARC’s Q1 2009 Sales.
THANK YOU.
Deadline for entering the contest is May 1, 2009.
It’s that damn “double-whammy” effect.
It’s not only awful that reprographers have experienced (and are continuing to experience) a downturn in business due to the messy economy, but customers of reprographers – A&E firms – are experiencing that downturn as well. In addition to business being down, reprographers are now also facing collections problems, given the fact that their customers – the A&E firms – are having difficulty collecting from some of their clients. That’s the double-whammy effect.
How many times, over your years in the reprographics business, have you heard you’re A&E customers say, “sorry, I can’t pay you until I get paid by my clients”…?
Today, General Growth Properties, one of the largest mall and shopping center developers in the U.S. (if not in the entire world), declared Chapter 11 Bankruptcy today. In the court filing, General Growth was required to reveal its 100 largest “unsecured” creditors. Not surprisingly, there were 12 A&E firms on the top 100 unsecured creditor list. (This is not exactly the type of “top list” that anyone would ever want to be on!)
A&E FIRMS ON GGP’S “TOP 100” UNSECURED CREDITOR LIST:
SB ARCHITECTS, SF, CA, $651,000
WOOD ROGERS, INC., SACRAMENTO, CA, $491,000
CARTER BURGESS, INC., FT WORTH, TX, $400,000
TORTI GALLAS AND PARTNERS, INC., SILVER SPRING, MD $245,000
CALLISON ARCHITECTURE, INC. SEATTLE, WA, $205,000
DUANY PLATER-ZYBERK & CO, MIAMI, FL, $199,000
PERKOWITZ + RUTH ARCHITECTS, COSTA MESA, CA, $163,000
ABMB ENGINEERS, INC., BATON ROUGE, LA, $162,000
ANBE ARUGA & ISHIZU ARCHITECTS, HONOLULU, HI, $135,000
SCHNACKEL ENGINEERS, INC. OMAHA, NE, $128,000
LAND DESIGN, CHARLOTTE, NC, $112,000
CARROLL ASSOCIATES ARCHITECTS LTD, PALATINE, IL, $92,000
These aren’t the only A&E firms that were hit by GGP’s bankruptcy. Given the nature of GGP’s development business, it is very likely that countless other A&E firms, in many parts of the U.S., are also owed significant amounts by GGP. In one sense, those firms were lucky – they did not make the “top 100” list!
One final note. Our very first customer showed up in the top 100 list. When my father in-law (Gus) founded (1963) Silver Spring Blueprinting (which later became part of Rowley-Scher Reprographics), his first customer was a firm that then went by the name of Cohen & Haft – Architects and Planners (later known as CHK and, at one time, as CHHKK.) In fact, the senior partner of that firm (Jack) helped my father-in-law establish his blueprinting company; Jack loaned him the money to buy his first diazo machine. Many years later, Jack and his other partners retired, and a new management team took over CHK; John Torti, who is an architect, and Tom Gallas, who is a C.P.A. At that time, the firm adopted a new name, Torti Gallas & Partners. I hope that the $245,000 TG&P has exposed does not negatively impact TG&P’s employees (some of whom I still know, even after all these years) or TG&P’s reprographers. I’m pretty sure that ABC Imaging is the reprographer serving TG&P.
Reprographics 101 