Log In | Become a Member | Contact Us


Leading printing executives into the future

Connect on Twitter | Facebook | LinkedIn

Featured:   European Coverage     Production Inkjet Analysis     Industry Economic Snapshot

Printing Industy Blog

Vertis goes bankrupt again

By Adam Dewitz
Published: November 18, 2010

Vertis has announced it that it will “embark on final step in capital restructuring; files voluntary pre-packaged plan of reorganization to complete previously announced plan” — the company is going bankrupt again to cut $700 million of debt.

A voluntary, pre-packaged Chapter 11 filing aims at reducing the company’s total debt by approximately 60 percent, or $700 million, lowering interest costs and increasing liquidity.

GE Capital has committed a $200 million debtor-in-possession revolving credit facility that Vertis will use to fund operations during bankruptcy.

Vertis filed Chapter 11 in July 2008 while closing a merger with American Color Graphics. The merger was finalized in October 2008.

 

Discussion

By Chuck on Nov 19, 2010

I think they should change their name to Treasure Chest Advertising. That's probably the problem: branding. People think they are an auto parts maker, and no one knows they sell print.

Hmm, actually, maybe they should try selling auto parts?

 

By Barbara on Nov 19, 2010

When they merged with American Color, 90% of the New Management team was made up of Vertis. It was explained to us (I was an American Color Manager let go) that they felt that the Vertis Regime was best suited for paving the way, yeah, right down the toilet again.

 

By dan on Nov 19, 2010

In the mean time, many other, better run printing operations take it on the chin again as they help finance Vertis's poorly run operation...that is, we are paying higher costs from those vendors who again have to take losses because of poorly run operations.

Vertis will lower there prices to customers/prospects just to keep them in business hurting better run companies. This is driving prices down further without the hope of reasonable profit!

 

By David on Nov 19, 2010

WEBCRAFT was a company and a brand that Vertis acquired.

Webcraft was a leader and built a charisma that was all about innovation, entrepreneurship, large capacity, problem solving and more in the Graphic Communications space.

Akin to Southwest Bell taking on the AT&T name at the time of it's acquisition, the name "Webcraft" could have served as a platform on which to build and leverage the rest of the enterprise from being an ordinary commodity print provider.

 

By Paul on Nov 19, 2010

Wow, how many of us have read about the printer that just wouldn’t let the ship go down. The truth is its real hard to kill a printing plant or an organization like Vertis.

The problem is in the mean time the printers that are doing business right, with the right management team, the right production team, the right customer base, we are the ones that really hurt.

Because the guy with the sinking ship will cut the price to the bone and then some, he thinks he’s going to be able and pull the ship to shore and save them all by cutting the prices. All along the right guys then don’t receive the job because customers are price sensitive these days, and in the long run, the guy will still sink the ship and the right guy will still be in business because the customer will come back to him, but the damage is done, the paper, ink and equipment guys take it on the chin, and they raise the prices again because they have to pass on the cost of the sinking ship.

What should happen is GE Capital should evaluate Vertis, really look at the cost of doing business and what that will truly cost. I have yet, to see a sinking ship be raised. The only time I did was with the right team purchasing the sinking ship, or a merger and the right team (management and production) is brought in to fix the BIG problems.

 

By Dave on Dec 03, 2010

Paul,
The surviving printers should band together & dictate to their vendors that if you are foolish enough to sell products/services to these guys (Vertis) we will not do business with you! It's the foolish unsecured creditors/vendors who keep these guys going!
It's extremely difficult to print w/out paper,plates and ink! The banks and investment firms get their $ 1st when they auction off the assets!

 

By Pansy Morrison on Dec 24, 2010

When they merged with American Color, 90% of the New Management team was made up of Vertis. It was explained to us (I was an American Color Manager let go) that they felt that the Vertis Regime was best suited for paving the way, yeah, right down the toilet again.

 

By Bill Fischer on Dec 30, 2010

It is abosultely appalling that Vertis is allowed to do business. Did Judge Gropper, who presided over the Vetis Bankruptcy filing due research on how Vertis operates & the devastion of pricing marhgins & venor pricing that has resulted from this train wreck company named Vertis Communications??? I wholeheardtly agree that us printers should band together & boycott & vendor who sells their product to Vertis.

Paper prices have increased over 50% since March, however, we cannot pass on price increases due to all our clients holding us over a barrel knowing that if we try to give a price increase they will call Vertis in to beat the price increase back!!!

In addition, since the economy is so bad, clients that would print with our company remain at Vertis due to their rock bottom pricing. This is TOTAL CRAP!!!

 

By William Dean on Dec 13, 2011

Don't be too surprised if they go into bankruptcy a third time very soon. Despite shedding nearly $700MM in debt, a year later this company is still hemorrhaging cash.

After rumored attempts to pump and dump their small packaging group to another well known packaging prepress company turned futile, inside reports are the company will soon be announcing another round of deep layoffs and plant closures. The packaging group appeared to be one of the few groups inside the organization showing some signs of life but apparently not enough to feed the beast called Vertis.

Despite small wins in the insert and direct mail side, the payouts due to mistakes, waste and mismanagement have cut deep into profits. Predictions are the somewhat successful stand alone digital wide format group in Irvine will be sold soon to raise cash and the New Year will bring more job cuts and possible plant closures on the print side.

With Baltimore headquarters being nothing more than a ghost town, it’s not clear how much leaner the senior management of this company can get without toppling over from lack of leadership. With the CEO already having his golden parachute and a $2MM 6,969 square foot home in Scottsdale purchased in January last year and paid in cash, the writing is on the wall.

 

By Aaron Creighton on May 31, 2012

Vertis, sadly, is a victim of the same thing many companies are. They have shareholders who forgot about long term, stable investing and went, instead, with "short term, pull every ounce of profit out now so I can get out quick" investing. It has been understood for a very long time that if a company fails to invest money in capital improvements, their factory will fail. Another place they have gone wrong is that they allowed bankers to have operational control of the business. That's a rookie mistake. Then, to save money, they laid off the sales force and the folks who drive efficiencies. Vertis should be used in MBA programs as an example of what not to do in business. The leadership of that company has fallen prey to all of the up-coming new experiments being taught in business school rather than allowing people who understand the print and advertising business run it. As far as I am concerned, Vertis is a shining example of exactly what is wrong with business in these days. Problem is, that also makes them a perfect example of what is tearing down our country. Henry Ford, when asked why he paid his employees so much, answered, (and I paraphrase), this way, they have enough money to buy the products they build. Vertis has taken the opposite stand which is, "every penny saved is ten dollars earned". That philosophy only works if you are aiming to tear the company down piece by piece.
Vertis fired it's real leadership a long time ago. They are not trying to lead the industry, they are not even capable of being a player in the industry. Their leadership is incompetent. I suggest that customers go with a company who actually knows how to run a printing company.

 

Post a Comment

To post a comment Log In or Become a Member, doing so is simple and free

 

WhatTheyThink's Printing Industry Blog

The blog features commentary, opinion and updates from our editors, contributors and guests.

 

Become a Member

Join the thousands of printing executives who are already part of the WhatTheyThink Community.

Copyright © 2014 WhatTheyThink. All Rights Reserved