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By Kevin Keane, IAPHC CEO Things we've wondered about We had a nice chat with Jon Broviak at the recent IAPHC Convention in Rochester, New York and learned one firm's view of price points in the digital versus analog world. At quantities of 1 - 700 the Indigo E-Print is the answer; at volumes of 700 - 15,000 the Heidelberg DI is the answer; at volumes over 15,000 the Heidelberg Speedmaster is the solution. Indigo NV has seen increased sales of late, revenues were up 39% in the second quarter, but the firm still posted a second quarter loss and as a result, its stock price is nearing its all time low at 3 5/8. Meanwhile Xeikon's revenues were up 78% along with margins and profits, but reflective perhaps of the Asian flu, its stock price is off $10 from its yearly high of $28. Things we learned while looking up something else The head of the T. Rowe Price Small Cap Value Fund is high on a firm known as Optical Coating Laboratory. Turns out the firm has a joint venture subsidiary called Flex Products which designs optically variable pigment, also known as security ink. The ink changes color as it is viewed from different angles. The ink is used on currencies in more than fifty countries, in the US it is used on $50 and $100 denominations. The ink works so well in discouraging counterfeiting that the US recently printed more than 2 billion of $20 bills using the ink. However, the September issue of Smart Money magazine says the new $20 to be introduced at the end of the month, looks like play money to the uninitiated. The magazine also says there was $136,205,241 in fake US currency worldwide. Now that's precision! Creeping e-mail and other digital lessons From the Associated Press comes news that MIT's Sloan School of Management has decided that beginning this month there is only one way to apply to the prestigious school -- online! Meanwhile syndicated columnist Mark Stevens wrote in recent column about the impact of the Internet: "Increasing numbers of customers and prospects -- especially those of the younger generation -- are disinterested in printed forms of promotional material. They make little or no time to read brochures, fliers and the like. Because they are more inclined to seek information and to communicate digitally, having a Web site that illustrates what your business does and how it can help them may be the only effective way to get your message across. This transition from print to electronic communications, which started at a crawl several years ago, is accelerating exponentially. Everyday, more of the people you want to reach are turning to the Internet as their primary source of information." Biff! Bop! POW! to the Printing Sector Fund If there was a printing/graphic arts sector fund in the mutual fund industry it would be bleeding a very bright shade of red at the moment. Consider: the American Depositary Receipts of Singapore based Asia Pulp and Paper, Ltd., are off almost 50% from when we first mentioned it in TMN some months ago, it's now trading under $7.00. PressTek is down to the $8.00 range; so is Danka. Imation is still searching for the proper role in our industry --this month Imation announced that it will begin selling Intergraph's workstations. Unisource is undertaking a massive restructuring that will cost 1,500 jobs and cut the firm's dividend as well -- it is also trading around $8.00. EFII is closing on its yearly lows. Ikon announced a large third quarter loss that will result in a restructuring and a suspension of the firms aggressive acquisition plans for at least the next nine months. Printware is under $3.00. Syquest is at .56 cents a share. Ouch! Danka's new release of August 13 was revealing. Delays in integrating the Eastman Kodak photocopier business acquired in 1996 and a change in the compensation plan which resulted in low morale in the ranks of the firm's sales force were among the reasons cited by Danka's CEO Dan Doyle for the company's difficulties. All of which is not to say that some firms aren't doing nicely thank you. Scitex seems to on a genuine rebound thanks especially to its Digital Printing products; PrimeSource Corporation is doing well in sales and profits; and Xerox is doing very well. And the folks are MailWell aren't backing off at all, having announced the acquisition of McLaren, Morris and Todd, Ltd., a Mississauga Ontario based label printer on August 10. The last item underscores the continuation of the consolidation trend. Master Graphics of Memphis, Tennessee plans to acquire Golden Rule Printing of Huntsville, Alabama. Printing Arts America of Westport Connecticut intends to acquire AIM Riverside Press in Pompano Beach, Florida. And one of the publicly traded consolidators, Consolidated graphics ordered another 12 40" Komori Lithrone presses, part of the $50 million dollar Komori order signed by Consolidated in 1996 and prima facie evidence of why firms consider consolidation -- volume purchasing. A last item of acquisition interest has an element of the sentimental -- AGFA Gevaert acquired the venerable typography company Monotype. All things change.... Our thanks to John Kohnke for his continued provision of many of the items we cover in Tuesday Morning News. Your submissions would be welcome! EDSF Award of Excellence Dr. John Leininger, Seventh District Governor, passes along the news that August 31st is the deadline for nominations for The Electronic Document Systems Foundation 1998 Excellence in Education awards. EDSF seeks to recognize higher education programs around the world that are innovative and benefit the industry and the public at large. If you would like us to fax you a copy of the Call for Nominations please let us know, or contact jcmowlds@aol.com
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