In 1999, Ennis expanded into the point-of-purchase display advertising market by acquiring Adams McClure, at the time a $23 million firm headquartered in Denver. Today, Adams McClure offers a variety of point-of-purchase and promotional printing items, including signage, static-cling labels, shelf-talkers and more for one of its larger accounts, a national convenience store chain. In fiscal year 2002, Ennis' Promotional Solutions Group, which comprises multiple facilities including Adams McClure, had sales of approximately $73 million.
In 2000, Ennis expanded its product line further by acquiring Brooklyn Park, Minn.-based financial forms manufacturer Northstar Computer Forms, which had sales of more than $45 million in 1999. Today, Ennis' Financial Solutions Group, which had sales of approximately $50 million in 2002, prints more than 5 billion lines of MICR code annually and is a leader in negotiable documents, internal bank forms and security documents.
"Market studies indicate the traditional business forms market is declining--there's no denying that," Walters says. "In our situation, we've found the falloff isn't as dramatic as these studies show. That's why we're also investing in this industry." In November 2002, Ennis completed its acquisition of Columbus, Kan.-based traditional business forms manufacturer Calibrated Forms Company Inc., which had 2001 sales of more than $40 million. According to Ennis, the acquisition improves its competitiveness in the long run market and provides the firm with the opportunity to establish relationships with Calibrated Forms Company's distributor accounts. In 1998 and 1999, Ennis also increased its penetration of the South Texas region by acquiring traditional forms manufacturers FMI, a Houston firm, and American Forms Inc., a San Antonio firm.
Ennis plans to continue its diversification through product development. For example, the manufacturer is assessing the sales potential of several products requested by its distributor base. These products include internally developed products as well as existing industry products not currently offered by Ennis.
"If the current industry trends continue, there will be continued consolidations and reductions in the number of players in both the manufacturing and distribution channels," Walters says. "The biggest determinant in the industry, if the current trends continue, is the continued shrinkage of the traditional business forms market. It will remain a very large segment of the total print industry itself."
Insightful Move: Broadening product and service offerings
Company: Advanced Systems & Forms Inc.
Principals: Phil Schmidt, president; Jim Beebe, vice president
Founded: 1971
Location: Livonia, Mich.
Employees: 13
Like other document pros, Phil Schmidt knows the industry isn't the same as it was several years ago. "Forms are going away," says Schmidt, president of Advanced Systems & Forms Inc., a 32-year-old distributorship in Livonia, Mich. For the past few years, the distributorship has provided one client with 5,000 24-page, 4-color brochures annually. "This year they ordered 2,000 brochures and 3,000 CDs," Schmidt says. It isn't hard to figure out that 3,000 CDs at 50 or 60 cents apiece aren't worth as much as 3,000 brochures at $2.50 apiece, he says.
Like other distributorships, Advanced Systems & Forms has responded to the changing market by adding to its product and service mix. Approximately five years ago, the distributorship began promoting its warehousing and distribution services and soon landed the business of a fluid power firm that distributes pumps, valves and gauges. The client has 55 branches in the United States and Canada. It wanted Advanced Systems & Forms to handle the distribution of its literature, including 1,500 instruction manuals, price lists and parts lists provided by more than 100 fluid power manufacturers nationwide, to its branches and customers in the United States and Canada. Advanced Systems & Forms prints approximately 5 percent of the literature, but warehouses and distributes 100 percent of it. The client now requests approximately 5 to 20 releases each day via fax, but soon it will be able to request releases via Advanced Systems & Forms' web site.
During the last five years, Advanced Systems & Forms also has delved more into commercial printing. In 1995, commercial printing accounted for approximately 45 percent of the distributorship's sales; today, it accounts for approximately 70 percent. The company offers brochures, catalogs, fliers, newsletters, post cards, presentation folders and more. As the distributorship became more involved in commercial printing, it began using FTP services to receive artwork from clients and submit it to manufacturers. "It's very fast and very efficient for transferring large files for 4-color work," Schmidt says.
Technology also has allowed Advanced Systems & Forms to streamline its customer communications and order processes. Like others at his firm, Schmidt uses email to communicate with customers at least 20 to 30 times per day. "With some of our customers, it's the only way we can communicate with them," he says. Customers also can log on to the distributorship's web site to submit orders, request quotes, view proofs and more.
During the next five years, Advanced Systems & Forms will continue adding new products and services to meet clients' changing needs, Schmidt says. Ideally, he would like to hire a few tech-savvy staffers who can support the distributorship's sales staff and evaluate new software and technologies.
Schmidt says the industry will see additional mergers and acquisitions during the next five years, especially among manufacturers hurt by the decline of business forms. He also predicts distributors and manufacturers will partner more to provide end users with better solutions. "There will be more joint sales calls where manufacturers go in and find solutions that distributors might not think of," he says. "There's going to have to be a lot more sharing between distributors and manufacturers for both of us to be successful."
Insightful Move: Embracing new technology
Company: Forms Management Data Systems Inc.
Principal: Ross Barker, president
Founded: 1979
Location: Reno, Nev.
Employees: 16
Five years ago, Ross Barker didn't know the first thing about the internet. "I was congratulating myself on probably being able to ride out my career without having to involve myself with it," says Barker, DMIA's 1989-1990 president and president of Forms Management Data Systems Inc. (FMDS), a 24-year-old management software supplier in Reno, Nev.
At the time, FMDS offered a DOS-based distributor management system, but no e-commerce capabilities. "Sales were frozen because people weren't interested in a DOS system," Barker says. "We had to make a decision: Did we want to take a risk and spend the time and the money to move forward into new technology, or did we want to stay status quo?"
In 1999, FMDS introduced its fully integrated, 32-bit, Windows®-based Quantum 2000 distributor operations management system--one of the best-selling distributor management systems in the industry. It includes inventory management, order entry and accounting capabilities that allow distributors to handle their accounts payable, accounts receivable, invoicing, general ledger, contact management and forms management functions. After client inquiries, FMDS enabled Quantum 2000 to interface with GoldMine® and ACT!™ contact management software; StarShip™ Shipping Software; and software from Minneapolis-based e-procurement provider Four51 Inc. The interface with Four51 allows distributors to download orders into Quantum 2000 to generate invoices, create purchase order histories, create release histories and more. "Today our sales are at an all-time high," Barker says.
In 2000, FMDS unveiled its Quantum Net® e-commerce module. Quantum Net allows end users to run usage reports; request proofs; place orders; select shipping destinations; and custom imprint business cards, letterhead and other items. The system also includes administrative tools that allow end users' purchasing departments to add additional users, monitor orders companywide, control payment options, specify maximum dollar amounts per order, run customized reports, view estimated run-out dates, limit which employees or branches can order certain items or view certain reports, and more. FMDS doesn't charge distributors user fees for each transaction or dictate which manufacturers they must use.
