Money Talk: How Do You Stack Up After the Great Recession?

Article by STUART MARGOLIS, OCTOBER 1, 2013, appears on myprintresource.com

"HOW DO YOU STACK UP AFTER THE GREAT RECESSION?"

“Printing Industries of America has released its annual financial benchmarks for the print industry. Participating printing companies produced a profit of 2.7 percent on sales before taxes, generating even higher profits for the third year in a row.”

Within the article, the author says….

“The number of printers who reported losses in the current year was 29 percent of printers participating in the Ratio Study, down from the 33, 38, and 55 percent who reported losses in 2011, 2010, and 2009, respectively.”

Blog publisher’s comments:

The information in this article has to be interesting to reprographers, for it speaks to the huge difference in profitability between reprographics businesses and printing businesses.  In 1981, our company offered reprographics services and offset printing services.  Early the next year, our senior partner, Gary Rowley, made a very wise suggestion to his other partners; let’s exit the offset printing business and concentrate our time and energies on the reprographics business.  What a wise decision that proved to be, for our reprographics business took off …. and was very, very profitable, far more profitable than the typical/average offset printing business.

Link to complete article:

Money Talk: How Do You Stack Up After the Great Recession?

Eric Schmitz joins C2 Reprographics as VP of Sales

SOURCE: C2 (Press Release)

October 07, 2013 18:21 ET

Top Imaging Industry Executive Joins C2

COSTA MESA, CA--(Marketwired - Oct 7, 2013) - C2, Southern California's largest independent print and business solutions firm, has announced a new executive hire.

Eric Schmitz, Vice President of Sales, will lead the sales team at C2, with special emphasis on San Diego and Orange counties. Since 2007, he was president of Premier Reprographics in San Diego. Schmitz began his reprographics career in 1995, working for an Orange County firm and eventually presiding over its San Diego division, growing revenue from less than $1 million to more than $12 million.

"We are excited about Eric's energy, industry knowledge and most importantly of his passion for the customer. He is a perfect fit for our culture," commented C2 president and CEO Gary Crisp. "Eric has the ability to create and maintain long-term relationships in this industry. C2 has the ability to execute the service required to fulfill any commitment. It's a fantastic combination."

Schmitz is active in the Building Industry Association in both San Diego and Orange County. A Newport Beach native, he will helm the company's entire Southern California sales team.

Founded by Gary and Julie Crisp in 2002, C2 provides printing, imaging, and digital storage services to a variety of business types: legal and courtroom; architecture, engineering and contracting trades, and commercial business-to-business markets. Its divisions include C2 Color Studio, C2 Legal Solutions, C2 Business Solutions and C2 Reprographics divisions. C2 has 10 offices in Orange, Los Angeles and San Diego counties, and the Inland Empire. For more information, visit www.c2repro.com.

Quarterly Index of A/E/C reprographer sales revenues from "plans printed on paper”: Q3 2013 update

This is the 3^rd Quarter-2013 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”.

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 large-format size.

Here’s what we’ve been saying, nearly every past quarter:

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 distributing / sharing files) instead of printing and distributing "hard copy" plans.

If you want the pdf file that contains the Q3 2013 Repro PPoP Index, send an e-mail to joel.salus@mac.com.

Pitney Bowes Exits Management Services Business (...and the MPS business?)

Pitney Bowes Completes Sale of its Management Services Business to Apollo Funds for $400 Million

Wednesday, October 02, 2013

Press release from the issuing company

STAMFORD, Conn. - Pitney Bowes Inc. (NYSE:PBI) today announced the successful completion of the sale of Pitney Bowes Management Services for $400 million in cash to funds affiliated with Apollo Global Management, LLC (NYSE:APO) (together with its consolidated subsidiaries, “Apollo”). Proceeds from the sale of the business will be used principally to pay down debt.

Pitney Bowes Management Services becomes a standalone company which will operate under a new name to be determined by Apollo.

The sale of the Pitney Bowes Management Services business to funds affiliated with Apollo, which was announced July 30, 2013, allows Pitney Bowes to focus attention and resources on developing and delivering the highest value technology, innovative software and differentiated services in high value segments of the market, where the Company has distinctive advantage.

ADDITIONAL INFORMATION:

Pitney Bowes Management Services (PBMS) has become Novitex Enterprise Solutions, a stand-alone company. As an independent company, Novitex Enterprise Solutions is committed to serving your business by delivering innovative services and solutions that optimize business processes and drive value. For more information on how Novitex Enterprise Solutions can serve your business, please visit us at www.novitex.com.

So, you might ask, what did Appolo get for the $400 mil it paid to Pitney Bowes for the PBMS business?

To answer that question, I took a quick look at the PBI’s 2012 10K report, filed in early 2013, and, within that report, took a look at PBI’s business segment reporting breakdown.  First, you’ll see what PBI says about its “business segments.”  Below that, you’ll see PMBS’s Revenue and EBIT for 2012, 2011, and 2010. 

Business Segments

We conduct our business activities in seven reporting segments within two business groups, Small & Medium Business Solutions and Enterprise Business Solutions. The following tables show revenue and EBIT by business segment for 2012 , 2011 and 2010 . The IMS business, now reported as a discontinued operation, was previously included in our Mail Services segment. Segment EBIT, a non-GAAP measure, is determined by deducting from segment revenue the related costs and expenses attributable to the segment. Segment EBIT excludes interest, taxes, general corporate expenses not allocated to a particular business segment, restructuring charges, asset impairments and goodwill charges, which are recognized on a consolidated basis. Management uses segment EBIT to measure profitability and performance at the segment level. Segment EBIT may not be indicative of our overall consolidated performance and therefore, should be read in conjunction with our consolidated results of operations. Refer to Note 16 to the Consolidated Financial Statements for a reconciliation of segment EBIT to income from continuing operations before income taxes.

(BUSINESS SEGMENT): Management Services:

Amounts stated are “millions”

	Y/E Dec 31	Y/E Dec 31	Y/E Dec 31
	2012	2011	2010
Revenue	$921	$949	$999
EBIT	$55	$76	$93

Management Services revenue decreased 3% in 2012 to $921 million compared to $949 million in 2011 and EBIT decreased 28% to $55 million compared to $76 million in 2011 . The decline in revenue and EBIT was primarily due to lower document volumes, account contractions and reduced pricing on new business and contract renewals. Foreign currency translation had an unfavorable impact on revenue of 1%.

Management Services revenue in 2011 decreased 5% to $949 million compared to $999 million in 2010 . Foreign currency translation had a positive impact of 1% on revenue. EBIT decreased 18% to $76 million compared to $93 million in 2010 . The decrease in revenue and EBIT was primarily due to the full year impact of account contractions and terminations in the U.S. during 2010 and pricing pressure on new business and contract renewals.

3D Printers in Supermarkets?

Tesco, a major UK-based retailer with a significant market presence in Europe, plans to introduce 3D Printing Services at (at least some of) its stores.

Here’s a link to an article about that:

http://www.engineering.com/3DPrinting/3DPrintingArticles/ArticleID/6401/3D-Printers-in-Supermarkets.aspx

But, don’t look for 3D Printing Services at Tesco’s retail operations in the U.S.  Here’s a related story that talks about what looks will be Tesco’s exit from the U.S. market.

By Tom Hals

Mon Sep 30, 2013 3:33pm EDT

(Reuters) - Britain's Tesco Plc (TSCO.L) put its U.S. grocery store chain into bankruptcy on Monday as part of a plan to sell most of the 167 stores to a private equity firm led by billionaire Ron Burkle.

The bankruptcy ends the grand entrance onto the U.S. stage of Britain's biggest supermarket chain. When Tesco launched the chain in Arizona, California and Nevada in 2006, many expected the deep-pocketed company to quickly expand to challenge the dominant U.S. food retailer, Wal-Mart Stores Inc (WMT.N).

But Tesco jumped into the U.S. Southwest just as the region's sizzling real estate market began to cool, and the U.S. business never generated a profit, according to Bankruptcy Court documents.

Under the proposed sale, an affiliate of Tesco will lend Burkle's private equity firm Yucaipa Cos $120 million to help fund the takeover of the chain, Fresh & Easy Neighborhood Market Inc. Yucaipa anticipates acquiring and operating 150 stores.

Tesco has said the stores that are not sold will be closed. It has said about 4,000 jobs will be preserved out of 4,187 current employees.

A unit of Tesco will end up with a 22.5 percent stake in the Yucaipa affiliate that acquires the grocery store chain, according to documents filed in the U.S. Bankruptcy Court in Delaware.

The proposed sale to Yucaipa will serve as a leading bid in a court-supervised auction, which Fresh & Easy said it plans to hold on November 11. The company asked the court to schedule a hearing on November 13 to approve the sale.

Tesco spent $610 million in the first two years building the business, and sales eventually grew to $1.2 billion annually, according to court documents.

But the business was never able to support the top-of-the-market leases, and it was losing $22 million a month over the past year, according to the documents.

Bankruptcy will allow Fresh & Easy to reject or renegotiate leases that are no longer economical.

The company's biggest creditor is Tesco, which is owed $738 million. Tesco has taken a 1 billion pound (or $1.6 billion) writedown on the U.S. chain.

Fresh & Easy also owes $18.4 million to vendors.

The Chapter 11 bankruptcy filing comes as Tesco is in the midst of $1.6 billion turnaround plan. Once the envy of British retailers, Tesco has been hurt by falling profits, a costly retreat from the U.S. and Japanese markets, and revelations that horsemeat had been found in some meat products sold by Tesco and other retailers.

The case is In Re: Fresh & Easy Neighborhood Market Inc, U.S. Bankruptcy Court, District of Delaware, No. 13-12569.

(Reporting by Tom Hals in Wilmington, Delaware; Editing by John Wallace)