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Mail-Well Chairman & CEO Paul Reilly Comments on Growth Opportunities

Friday, February 07, 2003

Press release from the issuing company

February 7, 2003 -- (WhatTheyThink.com) -- Paul Reilly, Chairman and CEO of Mail-Well sees growth in their three main segments - envelopes, commercial printing and printed office products. With Mail-Well’s restructuring and divestiture program mostly complete, the company wants to differentiate with a broad product line. The comments were made in an interview published today by WhatTheyThink.com. Mail-Well began acquiring printing plants and expanding into new markets in the late 1980s. The rapid growth meant taking on a large amount of debt, and some observers questioned whether such "consolidators" could be successful under corporate leadership. The current downturn has not been kind to business, but Mail-Well is weathering the storm. Last year, the company exited the label business, consolidated its debt and closed a number of plants. With other changes, the company slimmed down from a high of 15,000 employees and 140 printing plants. Paul Reilly says direct mail is growing which effects their three main segments. “We see growth in all three industries. (Envelope, printing and printed office products). About half of our business is direct mail and the Direct Marketing Association predicts this business will grow 5% a year.” A major focus for Mail-Well is transactional printing. Reilly states that electronic bill payment will happen to a greater degree in the future, but not as quickly as the company originally forecasted. “Two years ago we assumed 25% of all consumer-to-business bills would be paid online by 2005, but today only 3 to 4% of bills are paid online. We will have some loss of market there but we expect this area to grow 1 to 2% over the next five years.” In commercial printing, Mail-Well is primarily in the highend part of the industry. Reilly believes this focus is less susceptible to inkjet or digital printing technologies. “We see the printing business growing at GNP or slightly below. In printed office products, we have a variety of different segments that will grow at half the GNP. All our markets are growing.” In 2001, after building their network, the company started communicating their “national” advantage to clients. Says Reilly, “We got lots of traction with that value proposition in office products. National accounts represent 40% of Printexcel's business. We got little or no traction on the print side-national accounts represent only 10 to 20% of our print business. It has to do with local control. Creative people want to do business in their own marketplace, and many high-end designers want to be close to press checks. There are strong relationships between print buyers, and printers and people with national accounts have a difficult time breaking that bond.” “Now we are looking at another value proposition-breath of product line. It's easier to differentiate ourselves with a broad product line than with multiple plants. Envelopes, commercial print, printed documents and labels is an easier product sell.” ------ Editor’s Note: Premium Access Members at WhatTheyThink.com can view the entire interview with Paul Reilly by visiting www.whattheythink.com. Topics Include: - Is the acquisition phase over - Managing a large sales force - Leaving New York - Guidelines and best practices - Value-added services - Overcapacity, seasonal flow of jobs and expensive equipment - Vision of Mail-Well for the future




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