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NAQP Owners Conference: You Gotta Be There!
By Karen Hall - Monday September 10, 2012
If you haven’t yet made plans to attend this year’s NAQP Owners Conference (October 4-6 in Chicago), you’d better get on the ball with your travel plans. You certainly don’t want to miss it. Click here to sign up. I know, I know…the economy is still tough, there’s a lot going on in your business, and you’re too busy by half. That’s precisely why you need to be there. Print owners need to shake out the cobwebs. You need to be reminded every now and again that you are not just another employee in your shop. You are the leader; the one who makes the decisions and who is responsible for success or failure of your company. Once a year, you have the opportunity to take advantage of the educational sessions and the peer... -
Succession Planning Overview for Owners of Print and Graphics Communications Companies
By John Hyde - Wednesday September 5, 2012Succession planning is a huge challenge facing owners in the printing and graphics communications industry, and, as head of the NAPL Mergers and Acquisitions advisory team, it’s an issue that comes through our offices at NAPL on a frequent basis, but in a context that some may consider surprising. Family-owned small businesses dominate the landscape of the printing and graphics communications industry. Many were founded by veterans in the post World War II era or by their baby boomer children. The next generation can be found in numerous companies that have been reinvented as the industry is being “redefined” (borrowing the phrase from my NAPL colleague, Andy Paparozzi). For these folks, succession planning is often the elephant... -
Advice on Debt Financing for Growth
By John Hyde - Tuesday August 21, 2012
Debt financing for the five 10 percent of print and graphics communications companies that are growing is not overly difficult to obtain in the current climate (summer, 2012). Banks, leasing companies, and asset-based lenders all have their doors open for good borrowers. This means that owners are "doing it themselves" without outside assistance from consultants. When the owners of an NAPL client sought our input on their proposed financing last week, it occurred to me that some of these points may be relevant to other NAPL member-clients. The following eight points are only applicable to "healthy" companies seeking financing to support customer growth; they are not applicable to "turnaround" situations or for cases in which equity... -
Labels: Adding Value to Packaging
By Jules Lejeune - Monday August 20, 2012
by Jules Lejeune, managing director FINAT The evolution of supply and demand for self-adhesive labels is not just a matter of collecting and interpreting industry statistics and quantitative indicators. Especially in the last three to five years, macro-economic factors such as the twin crises of bank credit and sovereign debt, and the associated volatilities, have distorted the picture of underlying longer-term trends and developments. What are these underlying trends? How is the label industry positioned in the context of the broader packaging industry? What is driving demand for labels in comparison to alternative decoration technologies? What is the label printer’s share of the total added value created along the supply chain? How... -
Recommended Key Points for "Second M&A Date" Involving Two "Treading Water" West Coast Companies
By John Hyde - Monday August 13, 2012
By John Hyde An NAPL client on the West Coast is in "early stage" discussions with another print and graphics communications company about a possible strategic acquisition. Semantics about "acquisition" or "merger" are familiar terrain for these kind of exploratory talks, but both companies are "treading water", so the question of "who is buying who" is the 800-pound gorilla in the room. The first introduction via phone went well, and the parties are planning to meet in person as a "second date". I've been asked to provide "talking points" to help the client prepare. Here are my suggestions for this situation: "The most important outcome from this "Second Date" meeting is to gain better understanding of consolidation savings and... -
6 Key Considerations in Defining Compensation for Former Owner Who Becomes Part of the Acquirer's Organization
By John Hyde - Friday July 6, 2012
By John Hyde A critical component of many M&A transactions in the printing and graphics communications industry is to define the role/compensation for the former owner(s) who is becoming part of the acquiring company. I'm not referring to the so-called "transition period." Rather, I am referncing the numerous cases in which the former owner or the partners are becoming valued employees of the acquiring company, whether in sales, operations, finance, etc. My perspective is that the compensation needs to reflect these 6 considerations: Affordability Fair market rate for services regardless of ownership or employee status Incentive and upside opportunity Lifestyle (what has he or she become accustomed to, including the value... -
How Business Valuation Becomes an M&A Offer
By John Hyde - Thursday June 21, 2012
As an M&A advisor to owners and senior managers of print and graphics communications companies, I'm often asked how we come up with an offer. In other words, how does a business valuation translate into "price" and "structure" in the Term Sheet stage of the process? My colleagues and I at the NAPL M&A Advisory team usually start an assessment with the NAPL "State of the Industry Report" which is even more important than the financial statements. Simply, is the company a "leader" (as defined in Andy Paparozzi's research) or is it "treading water" or just being "milked"? You probably know by now that a high "price" and favorable "structure" with mostly cash at closing is reserved for "leaders." From an analysis perspective, we value the... -
You Are Only as Good as Your Worst Employee
By Debra Thompson - Monday June 18, 2012
“You are only as good as your worst employee.” I heard this from one of the attendees during a recent seminar. I thought it was so appropriate. There are many shops out there that will never be as good as what the owner desires, because they continue to put up with underachievers or bad-attitude employees. Even though finding a replacement for this type of individual is a top concern for owners throughout the nation right now, these employees must be addressed. • The first recommendation is to “Coach Your Underachievers.” • The second recommendation is to “Get Rid of Them.” Underachievers come in every shape, size, educational background and ethnic group. The only thing they have in common is that they are not living... -
Why Net Income Doesn't Mean Cash
- Monday June 18, 2012
Just because you made a profit doesn’t mean you created that much cash. Many of us find that out at tax time. Now some know why this is, but many don’t. So disregard if you know. However, if you’ve wondered about it, then let me share a few “whys” with you. If we buy something for $100 and sell it for $400, we have $300 in gross income. Take away $100 for wages and $100 for overhead like rent and utilities; then we are left with $100 of net income (commonly called profit). Now why isn’t the $100 net income the same as $100 in cash in the bank? Depreciation is the most common difference. Ignore Section 179, bonus deprecation and the IRS mandated MACRS (Modified Accelerated Cost Recovery System) for a moment, and consider... -
Working with GPO Successfully and Profitably Requires Expert Know How
- Wednesday June 13, 2012
by Deborah Snider, Senior Vice President, e-LYNXX Corporation Working with the United States Government Printing Office (GPO) to supply the federal government with printing is very different from working with private sector commercial accounts. Fundamentally, GPO is contrarian to everything printers know about selling customers. With commercial printing, printers large and small learn how to treat customers. Selling is requisite to gaining new business. Relationships are paramount. Pricing is based on what the customer is willing to pay. And when it comes to minor disagreements, the customer is always right, and if the relationship is sufficiently deep, even the cost for fixing the problem can end up in the next job. GPO is...