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Commentary & Analysis

FREE: 2004 Top Ten

By Gail Nickel-

By WhatTheyThink Staff
Published: December 20, 2004

By Gail Nickel-Kailing, Senior WTT Editor December 20, 2004 -- We have reached the end of yet another year – where does the time go? And as people are wont to do, before we charge off into the next, we take a look at the past year to see what we can discover. Some things we will choose to repeat, some we will build on, and some we will learn to avoid – however, all in all, it was a very good year! Please note that some of the linked web pages may require Premium Access, and for those of you who are not subscribers, try the 15-day free trial and enjoy all the details behind the news. Mergers of Giants This past year had more than its share of big mergers, and those mergers came from all quarters of the industry. FedEx and Kinko’s combination crossed industries in a merger that not only prints documents but also delivers them. FedEx – one of the largest package carriers in the world – acquired Kinko's – copy shop to the world – to create a company with revenues over $23 billion. See FedEx Acquires Kinko's and FedEx and Kinko's – A New Frontier for the details of the deal; then read Dan Connors, EVP, Kinko's Discusses the Acquisition by FedEx for a personal perspective on the merger. The mega-merger of Donnelley Moore Wallace was finalized, and in The Courtship of Giants – RR Donnelley and Moore Wallace you can follow all the dance steps that resulted in the new company with revenues approaching $6.5 billion. Just as the final agreements were being signed, Moore Wallace suspended EVP/CFO Mark Hiltwein, for providing a misdated document to PricewaterhouseCoopers LLP in connection with an investigation they were conducting (see Moore Wallace Announces Suspension of CFO; RR Donnelley Comments). Remember your high school class ring? It probably came from Jostens, now merged with Von Hoffman and Arcade in a $2.2 billion deal with Marc Reich as the CEO (Jostens, Von Hoffmann & Arcade Combine in $2.2 Billion Deal: Marc Reisch to be CEO). Reich provided some personal insights in the merger in an exclusive interview at Marc Reisch Discusses the Jostens, Von Hoffmann and Arcade Marketing Deal. After an on-again off-again negotiation, the Deluxe Corporation finally won over NEBS – New England Business Service (Deluxe Corp. to Acquire New England Business Service) to create a company approaching $2 billion in revenue that will expand Deluxe’s non-check revenue, increase its product mix, provide more services to small business customers, and serve more customers. In a move that resulted in an entirely new company, Kodak created Kodak Versamark and brought together Scitex Digital Printing (Kodak Completes Acquisition of SDP; Renames Operation Kodak Versamark), NexPress Solutions, and Heidelberg Digital (Kodak to Acquire NexPress Solutions L.L.C. and Heidelberg Digital). The new company is headed up by industry leaders including Daniel Carp, CEO; Antonio Perez, President and COO; James Langley, President Graphic Communications Group; and Barb Pellow, Chief Marketing Officer and Vice President, Commercial Printing Group (Pellow Joins Kodak Commercial Printing Group: “It's About Building a Better Impression”). Creo For Creo, 2004 was a year of ups and downs. Creo’s move into consumables continued with the acquisition of a manufacturing facility in the U.S. (Creo Acquires U.S. Plate Manufacturing Facility - Spectratech), partnership with a plate manufacturer in China (Creo Partners with Plate Manufacturer in China to Supply Thermal Plates) and the release of its own processless plates (Creo Announces New Processless Printing Plates). By the end of the year, the company was defending its strategies, cutting its workforce (Creo to Cut 5% of Workforce, Targeting Annualized Savings of $24 Million), researching strategic alternatives to reduce costs or raise cash (Creo May Seek Buyer, Outlines Review of Strategic Alternatives), and facing a shareholder action intended to remove CEO Amos Michelson (Creo’s Shareholder Group Action – What’s Next?) Quebecor World For Quebecor World, 2004 was a year of worker action, consolidation, and a new corporate structure. Throughout the year both Quebecor World management and workers pointed fingers at each other regarding benefits and working conditions. For the details see these announcements: Workers Demand Affordable Healthcare And Secure Retirements; Workers Allege Company Violated Workers' Compensation Laws; Quebecor Denies Union Charges; Workers Say Quebecor Broke Promise to Respect Rights; Quebecor Denounces Union Harrassment and Deceptive Statements; OSHA Finds No Basis in Union Charges; U.S. Government Issues Complaint Against Quebecor; and Quebecor Denies Latest Allegations in Union Corporate Campaign. New CEO, Pierre Peladeau (Quebecor Gets New CEO, Pierre Karl Peladeau) implemented strategies that streamlined the corporate structure and cut jobs, both in the US and in Europe (Quebecor - New Streamlined Corporate Structure; Quebecor World closing U.S. plant, cutting 600 jobs; and Quebecor to Reduce UK Workforce). Heidelberg After spinning off the web division, acquired in 1988, and the digital division, established in 1999, the “new” Heidelberg refocused on sheet-fed offset printing presses, prepress systems, finishing equipment, and workflow systems. What's old is new again! Heidelberg's history with sheet-fed printing goes back more than 150 years, and they aren't about to stop now (Heidelberg Goes Back to its Roots: Interview with Niels Winther, President). While changing strategies, Heidelberg also changed presidents at Heidelberg USA. Niels Winther resigned and James P. Dunn took over the helm (Dunn Replaces Winther As Heidelberg USA President). Cenveo At the beginning of the year, Cenveo was Mail-Well; or you could just as well say at the end of the year, Mail-Well was Cenveo. A focus on customer needs and easy access to a broad selection of products and services drove a reorganization in 2003 and new name and corporate identity in 2004. According to the company, “the Cenveo name and logo are derived from the unique combination of the syllables ‘Cen' or center, and ‘Veo' which relates to vision and understanding.” See an exclusive interview with Paul V. Reilly, Mail-Well's Chairman, President and Chief Executive Officer at Mail-Well is now Cenveo: An Interview with Paul Reilly. Drupa 2004 For more than 50 years, since 1951, Drupa has been continually reinvented to showcase the latest technological developments. D rupa 2004 was the largest yet and attracted more than four hundred thousand visitors to the Düsseldorf. More than 1500 exhibitors demonstrated thousands of innovations ranging from robots to move paper rolls and printers capable of producing a five-meter wide image to a printer putting images on cookies. If it had anything to do with printing and related processes – it was at Drupa. To see 300 news items, 51 exclusive reports, a show guide and a collection of photos from the show go to http://members.whattheythink.com/home/drupa.cfm Patents and Intellectual Property Creo and New American Plantinotype – In February, Massachusetts Superior Court handed down a ruling against Creo in a lawsuit between Creo Americas and New American Plantinotype Company. The decision: Creo Americas (known as Scitex America at the time of the sale; Creo did not acquire the prepress division of Scitex until April of 2000) sought payment for printers and certain damages, and was awarded $212,095 from New American. New American filed counterclaims seeking damages against Scitex alleging that the company had misled New American about the capabilities of Scitex’ TelePress image transmission system, a crucial part of the remote printing system installed for the New York Times. New American was awarded triple damages, raising the award from $339,370 for its counterclaim to $1,018,110 plus costs and attorneys' fees. For more details see: Creo to Pay $1 Million to New American Plantinotype, and the New York Times. Books on Demand - Who would have thought that a patent with the innocuous title “System and method of manufacturing a single book copy” could become a heavy hammer hanging over the print-on-demand industry and all its practitioners? In March, a small Missouri company, On Demand Machine Corporation (ODMC), which never actually brought the system in question to market, won a $15 million suit against Amazon, Ingram, and Lightning Source for patent infringement regarding print-on-demand of books (A Patent for Books On Demand? An Inside Look at ODMC versus Lightning Source, Amazon & Ingram). Goss against TKS – Citing evidence that TKS used "a fraudulent price increase and secret $2.2 million rebate" to prevent one U.S. newspaper from purchasing Goss presses, and that TKS and its lawyers "attempted to destroy documents to conceal the secret rebates", U.S. District Court Judge Linda Reade issued an opinion in May upholding the $31.6 million judgment that Goss International won from TKS last December. That judgment followed a three week trial in federal court in Cedar Rapids, Iowa, in which the jury found that Tokyo Kikai Seisakusho, Ltd. and its U.S. subsidiary ("TKS") had systematically dumped TKS’s press equipment on the U.S. market with the intent to destroy or injure the U.S. printing press industry (Federal Court Upholds Goss $31.6 Million Judgment Against TKS). Agfa vs. Creo – In August, the U.S. District Court, District of Massachusetts, ruled that six Agfa patents for multi-cassette plate loaders for CTP systems, which Agfa had asserted against Creo, were unenforceable because Agfa intentionally deceived the US Patent and Trademark office when applying for and obtaining the patents. See Protecting Intellectual Property with Patents – Agfa vs. Creo for details. Quebecor World vs. RR Donnelley – In October, Quebecor World announced that they had filed suit in the Circuit Court of Cook County, Illinois against R.R. Donnelley & Sons Company and three former Quebecor World employees, seeking an injunction prohibiting Donnelley and the former Quebecor World employees from using or disclosing Quebecor World's trade secrets and other relief. Quebecor World intends to prosecute the action aggressively (Quebecor World Files Suit Against R.R. Donnelley). Association Action Merger of NPES and GAMIS – Many GAMIS member companies are also members of NPES. While these members have been happy with the research results they have gained from memberships in both organizations, the perception is that over time, research topics and the memberships have become more similar, and the costs of two programs have become increasingly difficult to bear in an environment of streamlined budgets and staffs. Both organizations also depend on volunteers, and their respective members find it difficult to participate fully in both organizations. Thus, it seemed to make sense to explore merging the two research organizations to lower administrative costs, reduce the time and expense burden on members and make more research available on an even more timely basis to a broader scope of membership (NPES and GAMIS: A Merger in the Offing?). NAQP/PII – In August, a kerfuffle surfaced after PrintImage International and Crouser & Associates both attempted to trademark the NAQP name at the same time. NAQP and the name “National Association of Quick Printers” had been abandoned when PrintImage International changed its name more than six years ago. The good news is that the two groups have sorted it all out and announced a mutually satisfactory resolution (How “NAQP” Nearly Turned Into a Four-Letter Word). People in the News Just a few of the many names in the news in 2004: John W. Seybold – the father of computer typesetting – passed away Frank Steenbergh was the 2004 RIT Cary Award Winner Quebecor World named Pierre Karl Peladeau as CEO Stephanie Streeter was named Banta Chairman Barb Pellow took the CMO position at Kodak Bowne Chairman/CEO Robert M. Johnson retired, the new CEO is Philip Kucera John Greco was chosen as President and CEO of the DMA James P. Dunn replaced Niels Winther as Heidelberg USA President Marc Reisch is now CEO of the Jostens, Von Hoffmann and Arcade combination Ron Daly resigned from Océ Tom Saggiomo succeeded Robert Stabler as head of Agfa Graphic Systems NA Thomas Quadracci is the new president at Quad/Graphics, and J. Joel Quadracci was named Chairman Martin Maloney was chosen as Executive Director of the Print Council Patricia Sorce is now the Chair of the RIT School of Print Media Frank Romano joined InfoTrends/CAP Ventures Tidbits of Interest As one goes about reviewing a year, some little bits of interest float to the top. Maybe it’s the accomplishment of something challenging, such as Heidelberg’s training center in Kabul Afghanistan (Heidelberg opens training center in Kabul, Afghanistan) or something unusual like printed Pringles now being sold by Procter and Gamble (Procter & Gamble to Print on Pringles, First-of-Its Kind Technology ). Or it’s “golly gee whiz” numbers like: By 2007, 239 Billion pages will be digitally printed in color MAN Roland installed the 1000 th PECOM system RJ Communications now has 100 million books in print Quad/Graphics awarded 349 college scholarships The 20,000 th Speedmaster has been delivered The 10,000 th Printmaster was sold And sometimes those items are just plain interesting… For example, in a great show of strength, the US Army displayed its mobile printing system at Graph Expo 2004 (U.S. Army Shows Mobile Printing Capability At Graph Expo 2004)! The display featured a U.S. Army Psychological Operations mobile printing team, using a system called the Deployable Print Production Center (DPPC), which consisted of a work shelter mounted on a Humvee towing an equipment trailer. The system, equipped with operating presses, is used to print various psychological operations leaflets, flyers, and communiqués for foreign audiences in the field. It was used in action most recently during Operation Iraqi Freedom. Now we know - print has once again claimed its place in the defense of the country! Have a great holiday and all the best for a happy and prosperous new year!



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