Page 1

JULY 2017

VOLUME 24 NO. 7

Connecting People, Ideas and Products in the Document Imaging Industry since 1994

SELLER’S MARKET IS DRIVING THE M&A LANDSCAPE AMONG BIGGER PLAYERS

engage ‘n exchange

TOSHIBA TEC EXPANDS REACH BY LEVERAGING OPPORTUNITIES OFFERED BY TABS AND TGCS

Talent Acquisition Critical to Konica Minolta’s M&A Strategy A Call Center-When and Why Autonomy of Dealerships, Ability to Maintain Marquee Identity Entice Firms to Join Visual Edge Technology

SCOTUS Hands U.S. Remanufacturers a Big Win. So What?

Keep it Simple, Stupid – Why You Should Develop Sales Quotas

rvice Exc Se

Office Technology Service Excellence Award

PLATINUM LEVEL

inner •

PO Box 2240 Suite 729 Toluca Lake, CA 91610-0240 USA tel: 818-505-0022 fax: 818-505-9972 email: enx@pacbell.net www.enxmag.com

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m Awar inu

ence Plat ell

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ANNIVERSARY


NEW A3 Color MFP

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High-speed color printing for SMB and departments Shown with optional accessories

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New Opportunities. New Sales. New Profits. The new Epson WorkForce Enterprise WF-C20590 offers a unique way to increase your sales and attract new customers. Fully network and MPS compliant and with PrecisionCoreÂŽ Line Head Technology for high-speed printing and low energy use, the WF-C20590 can be installed with any 110V outlet. To learn more about our business products and how they can increase your sales, visit Epson.com/WorkForceEnterprise

RETHINK EPSON * Compared to best-selling A3 Color MFPs with MSRP of $41,000 or less. Competitive data gathered from manufacturer websites and third-party industry services as of Nov. 2016. PrecisionCore and WorkForce are registered trademarks and EPSON Exceed Your Vision is a registered logomark of Seiko Epson Corporation. Copyright 2017 Epson America, Inc.


C4012ND and C4062FX The power to perform, the color to impress

The all new proXpress color printer and MFP are built to handle the evolving needs of businesses. Specially formulated toner helps prints pop while high toner yields keep costs down. The powerful SmartUX platform gives users access to the ever-growing suite of productivity apps designed to take office productivity to the next level. To learn about pricing and availability or to join the winning team of Samsung Authorized Dealers call: 1-866-SAM4BIZ Š 2017 Samsung Electronics America, Inc. Samsung is a registered mark of Samsung Electronics Corp., Ltd. Specifications and designs are subject to change without notice. All other brand, product, service names and logos are trademarks and/or registered trademarks of their respective manufacturers and companies. Simulated screen images.


In This Issue

32

CHANNEL INSIGHT

Toshiba Tec Expands Reach by Leveraging Opportunities Offered by TABS and TGCS By Erik Cagle

26

28

46 6

www.enxmag.com | July 2017

16

STATE OF THE INDUSTRY Seller’s Market is Driving the M&A Landscape Among Bigger Players By Erik Cagle

26

M&A Talent Acquisition Critical to Konica Minolta’s M&A Strategy By Erik Cagle

28

MARKET INTELLIGENCE SCOTUS Hands U.S. Remanufacturers a Big Win. So What? By Charles Brewer

38

DEALER SPOTLIGHT Autonomy of Dealerships, Ability to Maintain Marquee Identity Entice Firms to Join Visual Edge Technology By Erik Cagle

42

SALES & MARKETING Keep it Simple, Stupid – Why You Should Develop Sales Quotas and One Way to Do It! By J. Mark DeNicola

46

SERVICE EXCELLENCE PLATINUM AWARD WINNER Despite Battling a Price-Driven Market, Function 4 Uses Service Excellence to Earn Star of Texas By Erik Cagle

50

SERVICE MANAGEMENT A Call Center—When and Why By Ken Edmonds

53 54

PRINTER TECH TIP By LaserPros

56

DISPLAY ADVERTISERS INDEX

TECHNICAL TIPS Xerox V80 Style: Rebuilding the Drum Cartridges By Britt Horvat

We Saw It In ENX Magazine


PRINT. REPLACE. REPEAT. No More Running out of Toner With Axess Auto Toner Fulfillment, we make cartridge replacement automatic for your customers

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Contact your CIG sales representative today 866.734.6548 | cloverimaging.com/axess-mps 725817A. Clover Imaging Group, Axess, and their logos are trademarks owned by Clover Technologies Group, LLC, and may be registered in the United States and other countries.


Contributors

Staff

CHARLES BREWER is the founder and president of Actionable Intelligence, the digital imaging industry’s leading market research firm. He was an editor for Inc. magazine and ComputerWorld during the 1990s, and more recently, the managing editor of The Hard Copy Supplies Journal. Mr. Brewer’s analysis is currently featured at his firm’s website, www.Action-Intell.com.

Susan Neimes Publisher & Managing Editor

J. MARK DeNICOLA, CPA/CGMA/CMA has served 24 years as the CFO and executive director, sales/marketing for Thermocopy, a Knoxville-based business technology company. His core disciplines include acquisition analysis, budgeting, management, new business development, sales management, and business start-ups. Mark has recently been recognized by Corporate Vision Magazine as their 2017 CFO of the Year – USA. He can be contacted at jmdenicola@thermocopy.com.

Erik Cagle

KEN EDMONDS is currently employed as a District Service Manager for a major copier manufacturer. He has an extensive background in the imaging business, having owned a successful dealership, serving as service manager for multiple dealerships, and as a Document Solutions Specialist for Sharp Electronics. He has more than 40 years of experience in the electronics and computer fields. For further information email him at Ken.Edmonds@CKE-Enterprises.biz.

Editorial Director

TECHNICAL ARTICLE CONTRIBUTOR

Ronelle Ingram Contributing Editor

BRITT HORVAT works for The Parts Drop, a company whose primary business is providing parts, supplies and information for Xerox brand copiers, printers and fax machines. You can find more information, including many of Britt’s past ENX articles on their website www.partsdrop.com.

Stay Connected Share Your Views

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www.enxmag.com | July 2017

Corporate Office

Susan Neimes - susan@enxmag.com Erik Cagle - erik@enxmag.com 10153 1/2 Riverside Drive, Suite 729 Toluca Lake, CA 91602 tel. 818-505-0022 • fax. 818-505-9972 ENX Magazine is published monthly by Affinity Business Communications, Inc. Any inquiries should be sent to: enx@pacbell.net or mailed to the corporate office. Copyright ©2017 by ENX Magazine printed in the U.S.A. All reproduction in whole or part is prohibited without written permission. Cover photo from depositphotos.com

We Saw It In ENX Magazine


YIELD IS...

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FOR FURTHER INFORMATION CONTACT CUSTOMER SERVICE TODAY Sales: 1 (818) 837-8100 | Tech Support: 1 (800) 466-0246 | Email: info@fgimaging.com | Website: www.fgimaging.com © 2001 – 2017, Mitsubishi Chemical Imaging Corporation dba Future Graphics. All rights reserved. Future Graphics is a distributor of compatible replacement parts for imaging equipment. None of Future Graphics’ products are genuine OEM replacement parts and no affiliation or sponsorship is to be implied between Future Graphics and any OEM. Trademarks and brand names are the properties of their respective owners and used for descriptive purposes only.


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All supplies & Parts available for prompt delivery! ENX Magazine | www.enxmag.com

All prices, rebates, and availability are subject to change without notice. Please call us to confirm.

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Copiers • Printers • MFPs • Faxes • Scanners E m a il: info @ n u w o rld in c.co m

Order Online! www.nuworldinc.com

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HL-L2340DW

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DCP-L2540DW

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2-Panel Electronic Color White Boards

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MP501SPF...............................$2275 MP2501SP...............................$1869 MP2554SP...............................$2855 SP 3600SF.............................BIG SALE! $50 REBATE! SP 3610SF.............................................. SP 4510DN............................................. $40 REBATE! SP 4510SF.............................................. $100 REBATE! SP 5200DN............................BIG SALE! SP 5210SR............................BIG SALE! $100 REBATE! SP 5300DN............................................. SP 5310DN............................................. $150 REBATE!

1279

$

MPC306SPF............................$1975 MPC2004.................................$2649 MPC2504.................................$3845

$75 REBATE! SP C250DN............................................. $30 REBATE! SP C340DN............................................. SP C342DN...........................BIG SALE! SP C440DN............................................. $100 REBATE! SP 5200S...............................BIG SALE! SP 5210SF.............................BIG SALE! SP C250SF.............................................. $125 REBATE! SP C252SF............................BIG SALE!

IMAGEPROGRAF

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SD375......80-100-130 sheets per minute SD440..............60-130 sheets per minute SD710..............60-135 sheets per minute

IPF 770 IPF 770MFP

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IPF PRO2000 IPF PRO4000/MFP IPF PRO2000MFP IPF PRO4000S/MFP 24-inch Large Format Printers

44-inch Large Format Printers

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$

Rebate (IPF 770)

CT-S801

300mm/s / 256K Mem.

CT-S601 Image shown: CT-S801

M605N/DN

LASERJET M506N.............................................................BIG SALE! LASERJET M506DN..........................................................BIG SALE! LASERJET M506X.............................................................BIG SALE! COLOR LASERJET M477FNW....................................$150 REBATE COLOR LASERJET M477FDN....................................$200 REBATE COLOR LASERJET M477FDW...................................$200 REBATE LASERJET M225DN..........................................................BIG SALE! LASERJET M402N........................................................$70 REBATE COLOR LASERJET M553N.........................................$120 REBATE COLOR LASERJET M553DN......................................$160 REBATE COLOR LASERJET M553X.........................................$240 REBATE COLOR LASERJET M452NW.....................................$150 REBATE COLOR LASERJET M452DN......................................$180 REBATE COLOR LASERJET M277DW........................................$80 REBATE

Digital Duplicators

• 30 pages per minute

SALE!

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DEAL!

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$

KX-CL400

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B&W AIO | 32ppm | Duplex | Wireless Network............

LASERJET PRINTERS & MFPS

PANAFAX UF-5500 PANAFAX UF-6200

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MONOCHROME & COLOR

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(IPF PRO2000) (PRO2000MFP) (IPF PRO4000) (PRO4000SMFP)

IPF680/685 24-INCH LARGE FORMAT PRINTERS.......$360/$400R IPF780/785 36-INCH LARGE FORMAT PRINTERS......up to $1100R IPF830/840/850 44-INCH LF PRINTERS..................up to $1625R IPF PRO6000S 60-INCH LF PRINTER...................$1300 REBATE IPF815MFP 44-INCH LARGE FORMAT PRINTER.....$2916 REBATE

Parts Order Hotline: 562.977.4949

All prices, rebates, and availability are subject to change without notice. Please call us to confirm.

Nuworld is not responsible for typographical errors or inaccurate specifications. Registered trademarks are properties of their respective owners.

NBS / ENX | July 2017


Since 1985

Your Prime Source T EL: 800.729.8320

FAX: 800.829.0292

INSTANT REBATE SALE! ALL INSTANT REBATE PROMOS ARE VALID THROUGH JUNE 30, 2017 TO CANON PREMIER PARTNERS OR WHILE SUPPLIES LAST!

• PRINT • COPY • SCAN • FAX

MF236N MF247DW MF249DW

85

65

$

$

MF414DW MF416DW

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MF419DW MF515DW

• PRINT • COPY • SCAN • 35ppm (419DW) • FAX • 42ppm (515DW) • 500 Shts + 100-Sht MPT • Duplex Versatility, W-Ntwrk Both models can only be sold to 3P Authorized Dealers!

Both models can only be sold to 3P Authorized Dealers!

125 135

$

$

REBATE

REBATE

MF414DW

MF416DW

LBP251DW LBP253DW

B&W Laser Duplex Printers with Wireless Network • 30ppm (LBP251DW) • 35ppm (LBP253DW)

$

75 125 $

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MF419DW

MF515DW

LBP312DN

B&W Laser Duplex Printer with Network • 45 pages per minute • 550 Sheets + 100-Sheet Multipurpose Tray

75

$

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60

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LBP251DW LBP253DW

• Up to 35 pages per minute • 256MB Memory • 500 Sheets + 50-Sheet MPT • Duplex Versatility • 33.6 Kbps Fax Super G3 (D1550)

125

$

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200 150 $REBATE

$

REBATE D1520

375 200 $REBATE

$

810CDN

820CDN

$

135 $150

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MF634CDW MF731CW

Color Laser Duplex Printer with Wireless Network • 28/28ppm (BW/Color) • 250 Sheets + 50-Sheet Multipurpose Tray

B&W Laser Duplex Printers with Network

210 175 $REBATE

$

REBATE

REBATE

LBP351DN LBP352DN

• 33.6Kbps • 19ppm Print (L100) • 26ppm Print (L190)

• Duplex (L190)

Image Shown: FAXPHONE L190

LBP654CDW

LBP351DN LBP352DN

Both models can only be sold to 3P Authorized Dealers!

120 165 $REBATE

MF733CDW MF735CDW

• 19/19ppm • SCAN (BW/Color) • FAX (MF634CDW) • 28/28ppm (BW/Color) (MF731CDW) • Wireless Network

• PRINT • COPY • SCAN • FAX

REBATE

$

FAXPHONE L100 MF634CDW FAXPHONE L190 MF731CW •• PRINT COPY LASER FAX BASED MFPS

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• 28/28ppm (BW/Color) • 1200 x 1200 dpi Resolution (Print) • 250-Sheet Cassette, 50-Sheet Multipurpose Tray • 50-Sheet Duplex DF • 1GB Memory (Copy/Print) • UFR II (Host-Based), PCL 5c/6, Adobe PS (MF735CDW) • Duplex, Wireless Network • 33.6 Kbps Fax Speed

D1550

MF810CDN MF820CDN

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LBP253DW can only be sold to 3P Authorized Dealers!

$

MF733CDW MF735CDW

D1520 D1550 • PRINT • COPY • SCAN • FAX

• 24ppm (MF236N) • 28ppm (MF247DW, MF249DW) • 600 x 600 dpi Resolution • 250-Sheet Cassette + 1-Sheet Multipurpose Tray • 512MB Memory (Copy/Print) • Duplex, Wireless Network (MF247DW, REBATE MF249DW) MF236N

• PRINT • COPY • SCAN • FAX

95

$

REBATE

70

$

$

75

REBATE

REBATE

L100

L190

LBP712DN

Color Laser Duplex Printer with Network • 40/40ppm (BW/Color) • 550 Sheets + 100-Sheet Multipurpose Tray

80

$

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All supplies & Parts available for prompt delivery! ENX Magazine | www.enxmag.com

All prices, rebates, and availability are subject to change without notice. Please call us to confirm.

Nuworld is not responsible for typographical errors or inaccurate specifications. Registered trademarks are properties of their respective owners.


Copiers • Printers • MFPs • Faxes • Scanners E m a il: info @ n u w o rld in c.co m

Order Online! www.nuworldinc.com

Blind Drop Shipping

Same Day Shipping

AUTHORIZED PRINTER

PARTNER PROGRAM ALL INSTANT REBATE PROMOS ARE VALID THROUGH JUNE 30, 2017 OR WHILE SUPPLIES LAST!

Award-Winning Samsung Products

CLX-8640ND / CLX-8650ND

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REBATE

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$305

$300 $500

Color Duplex, Copy, Print, Scan, Fax, Wireless Network • 19/19ppm (BW/Color) (C1860FW) • 27/27ppm (BW/Color) (C2670FW) SL-C2670FW

$70 REBATE

SL-M3370FD

B&W Duplex, Copy, Print, Color Scan, Fax, Network • 35 pages per minute • 250-Sheet Input Capacity • 50-Sheet ADF • 33.6 Kbps Fax

BIG SALE! CLP-775ND

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NBS / ENX | July 2017


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Erik Cagle

State of the Industry News Briefing

Seller’s Market is Driving the M&A Landscape Among Bigger Players

T

here’s an oft-repeated adage in the dealership community, as well as in general business, that the best time to sell is only when your company is ready to do so. There’s credence to that philosophy to be sure. But from a market perspective, the time to engage in merger and acquisition (M&A) activity is now. The document imaging industry has been experiencing a bull run the past few years, with industry consolidators, dealerships, private equity firms, and OEMs snapping up dealers at an impressive pace. At least two major influencers are indicating the time is nigh for companies seeking an exit strategy. A number of active buyers we canvassed indicated they are paying EBITDA (earnings before interest, taxes, depreciation, and amortization) multiples in the 3-6x range, which is extremely encouraging. More than one executive we surveyed characterized the current M&A landscape as a “seller’s market.” The second factor is timing. Annual GDP growth since the last recession ended has been in the 2 percent range. Most economists point out that in a recovery period there is usually a swell in the 3-7 percent range that generally leads to overconfidence in consumer spending and business investments, which can be triggers for another recession. Still, it bears noting that since 1900, there has not be a recessional recover period lasting longer than 10 years. The Great Recession ended sometime during the second half of 2009. That puts us at about eight years in recovery mode. History, it stands to reason, is our most accurate crystal ball for the future. Dealership owners are looking to exit for a number of reasons; most commonly, a lack of a succession plan and the desire to cash in on the rewards of, in some cases, decades of service. A common thread among the smaller performers is the inability to keep pace with larger competitors who have diversified into managed print and IT services. We surveyed a number of the industry’s most active M&A players to gauge where the market stands, examine their strategies, and provide insight as to what makes a prospective acquisition candidate ideal—or conversely, what types of dealers they seek to avoid.

16

www.enxmag.com | July 2017

DEX Imaging, Tampa, Florida

One of the largest independent dealerships in the country is DEX Imaging of Tampa, Florida, with annual revenue of $270 million. It is also one of the most active players on the M&A market. The dealer is coming off a 2016 in which it acquired six companies with revenues ranging from $2.5 million to $30 million. While it has added only one copier dealer in 2017 (Enoch Office of suburban Baltimore), DEX Imaging President Dan Doyle Jr. forecasted an active second half of the year, which he noted will carry into 2018.

CUSTOMERS ARE LOOKING FOR A LOCAL PRESENCE BUT WANT TO KNOW THAT THERE’S SOMEONE STRONG BEHIND THEM THAT’S GOING TO BACK UP THE PRODUCT AND HANDLE THEIR SERVICE NEEDS—NOT ONLY IN THE MARKET THAT YOU’RE IN, BUT PERHAPS IN A MARKET WHERE YOU DON’T HAVE PRESENCE. Dan Doyle Jr., DEX Imaging DEX Imaging focuses on the southeastern region, with Enoch being its northernmost holding. Doyle’s goal is to attain 30 percent market share in their existing markets. The company has had much success in realigning sales and management assets from acquisitions to help bolster various dealerships throughout the chain. “Now that we’ve established our own branches and our own culture, it’s a great time to do acquisitions and roll them into our existing branches,” noted Doyle, who benefits from the vast experience his father, Dan Sr., amassed while making deals for Danka 20 years ago.

We Saw It In ENX Magazine

continued on page 18


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Seller’s Market is Driving the M&A Landscape Among Bigger Players When evaluating a prospective buy, Doyle likes to get a strong feel for that company’s sales process. A strong service reputation is key, and DEX Imaging prefers to onboard quality sales reps and management. While Doyle likes to have the previous owner remain on board (depending on the deal) about half of them stay at least through the transition phase. Many of the dealers DEX Imaging negotiates with come to them via brokers, but Doyle also has a robust development staff that will perform “hot knocks” to solicit interest. Doyle points out that smaller dealers are under intense pressure from fellow dealers and manufacturer competition. “Smaller dealers realize it’s tough to compete in the industry today if you don’t have the size,” he said. “Customers are looking for a local presence but want to know that there’s someone strong behind them that’s going to back up the product and handle their service needs—not only in the market that you’re in, but perhaps in a market where you don’t have presence. You need to have some clout in order to do that.” DEX Imaging boasts a due diligence checklist that helps simplify the process and weed out companies that are not a fit. For example, IT services is not one of its targets, which eliminates prospects that are heavily into that specialty. Companies that have a high hardware margin through used equipment sales are also generally avoided, as it impacts margins on the service end. Doyle also likes to avoid uneven distribution in customer accounts and sales reps: too much reliance on a single customer or sales that emanate primarily from one or two reps can spell trouble down the road. DEX Imaging primarily relies on cash for its transactions, but it also has a sizeable credit facility when needed. Doyle utilizes a number of different formulas to create valuations that are crosschecked against each other to determine a fair market value. With all of the competition for available dealers, Doyle feels his company’s edge lies in the fact that it is not just fixated on the bottom line. “We’re the local guy doing the acquisitions, and we care about relationships and supporting the community,” he said, adding that DEX hopes to close the deal on at least half of the eight dealerships it is currently negotiating with before the end of the year.

Marco, St. Cloud, Minnesota

Private equity investments have added another wrinkle to the M&A landscape, particularly in the past five years. One jaw-dropping transaction saw Marco, the St. Cloud, Minnesota-based firm that has acquired 33 companies since 2005, obtained by Norwest Equity Partners (NEP) in the fall of 2015. While it may appear ironic to see an industry roll-up specialist sitting on the seller side of the M&A table, the NEP investment augmented Marco’s ability to continue its growth strategy. According to Jeff Gau, CEO of Marco, the company uses a combined strategy of acquired and organic growth, obtaining an average of five Midwest dealerships in the $5 million to $20 million range per year. Marco generally targets copier companies that lack IT services, as well as IT-based performers. Gau will 18

www.enxmag.com | July 2017

WE’VE COME TO LEARN THAT EVERYONE IS GOING TO HAVE THEIR BEST YEAR NEXT YEAR, THEY HAVE GREAT CUSTOMER SERVICE BUT CAN’T PROVE IT, THEY HAVE A GREAT CULTURE BUT CAN’T VALIDATE IT, THEY HAVE A BUILDING THEY WANT TO LEASE TO US FOR MORE THAN THEIR CURRENT RENT, AND THEY USUALLY HAVE TOO MANY TECHNICIANS TO SUPPORT THE REVENUE. Jeff Gau, Marco also give consideration to larger dealers, as well as firms outside of its geographic scope. In general, Marco shies away from prospects with business overly concentrated on a small cadre of customers. A severe chasm in the valuations between buyer and seller will put a quick end to negotiations, and Gau also distances himself from dealers whose primary base is segment 1 and 2 copiers. Cash flow is the primary mode of financing for Marco, which also uses traditional financing methods when necessary. Having NEP in its corner supporting the company’s assertive growth strategy has been critical to its success. In determining a prospects’ value, Marco evaluates contracted service revenue and EBITDA multiples. Targets with a viable managed services practice, such as IT, tend to improve their valuation. With such a rich history of closing deals under its belt, Marco’s M&A team has honed its ability to read between the lines when hearing prospect pitches. “We’ve come to learn that everyone is going to have their best year next year, they have great customer service but can’t prove it, they have a great culture but can’t validate it, they have a building they want to lease to us for more than their current rent, and they usually have too many technicians to support the revenue,” Gau said. “They also have sales challenges—they usually have one or two good sales people and several ‘up and comers,’ which is code for underperformers.”

DPOE, Elk Grove Village, Illinois

One dealer that has experienced an uptick in activity is Des Plaines Office Equipment (DPOE) of Elk Grove Village, Illinois. DPOE had been obtaining new companies every two to three years before enjoying a rush of five completed transactions in 2016, many of which transpired after DPOE ventured into Indiana on an opportunity that came out of nowhere, according to President and Owner Chip Miceli. Now, the company has expanded its reach into specialty items and even magazine printing. continued on page 20

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Seller’s Market is Driving the M&A Landscape Among Bigger Players

IT’S A SELLERS’ MARKET AND IT ALL DEPENDS ON HOW BADLY YOU WANT SOMEBODY. Chip Miceli, DPOE

“As long as it has to do with putting ink on paper, I’m probably involved,” Miceli joked. Miceli is wary of dealers that offer customers zero percent financing while putting their services up front in the deals, which is a costly liability. In those cases where he will move forward with the negotiations, Miceli will factor that into his offer. Buys contingent on real estate are also a huge turnoff. DPOE generally finances its deals with three-year loans via a rolling line of credit. Miceli uses EBITDA to establish a value on prospects, with 4x being the sweet spot, though he would consider 5x on the right deal. “It’s a sellers’ market and it all depends on how badly you want somebody,” he said. The string of five acquisitions has gone extremely well for DPOE. Several of the companies did not offer managed print services: when MPS was extended across those customer bases, DPOE was able to accelerate profits at those respective branches. But there have been bumps along the M&A trail. One hard lesson involved keeping several key employees as part of the agreement, but they did not mesh well with DPOE. Miceli will now only keep people who clear the one-on-one interview. “I couldn’t wait to get rid of them,” Miceli admitted. Following DPOE’s April acquisition of Diversified Marketing, Miceli envisions his company doing one or two more deals before the close of 2017. The ability to bring managed network services to his acquisitions will be critical, and obtaining more qualified IT experts will only fortify the company’s efforts. An office supplies company was among the core of five additions, but while Miceli notes that customers are buying less supplies, DPOE is in talks to obtain another supplies firm that would double DPOE’s supply revenue and enable Miceli to get better discounts from manufacturers.

Kelley Imaging Systems, Kent, Washington

One of the leading M&A players of the Pacific Northwest is Kelley Imaging Systems of Kent, Washington, which has annexed four companies since January of 2016. The most recent addition was Superior Business Equipment of Great Falls, Montana, a Canon dealership, which joined the fold in March. During 2016, Kelley onboarded Cascade Architectural & Engineering Supplies Co., a wide format and reprographics firm serving Portland and Seattle; Empire Office Machines, a Kyocera dealership in Spokane, Washington; and Imagine Solutions 20

www.enxmag.com | July 2017

for Business, a Toshiba and Samsung provider in Portland and Eugene, Oregon. Aric Manion, president of Kelley Imaging Systems, is always on the hunt for companies that boast a good reputation, and where the owners are looking to start the next chapter of their careers. “If the company has a poor reputation, the customer base is probably at great risk of leaving even before any acquisition,” he said. “We also have geographic strategy to cover Washington, Oregon, and Montana. In the beginning, we looked at smaller deals due to financing limitations, but now we have more capital options to go after larger prospects.” Aside from a prospect’s reputation, Manion is wary of companies that do not wish to furnish information regarding their financials, customer base, or contracts. That can indicate a lack of trust or, it stands to reason, provide grounds to suspect that an underlying issue may exist.

I SEE A LOT OF OPPORTUNITIES AVAILABLE IN THE TRADITIONAL COPIERS’ DEALER SPACE, BUT EVENTUALLY THIS WILL EVOLVE INTO THE IT COMPANIES NEEDING TO MERGE TO STAY COMPETITIVE Aric Manion, Kelley Imaging Systems From a financing standpoint, Manion pointed out that Kelley Imaging Systems enjoys solid relationships with its lenders, and owners are asked to carry some portion of the deal. When it comes to placing a price tag on prospects, Manion’s main valuations are based on machines in field (MIF) and recurring revenue. Kelley Imaging Systems has experienced “incredible growth and geographic expansion” from its Northwest expansion initiative, according to its president. Like his M&A contemporaries, Manion expects to see activity continue at a brisk pace during the course of the next two years. “I see a lot of opportunities available in the traditional copiers’ dealer space, but eventually this will evolve into the IT companies needing to merge to stay competitive,” he said.

Visual Edge Technology, Canton, Ohio

A little farther east is Canton, Ohio-based Visual Edge Technology, a holding company that seeks out high-performing dealers across a wide geographic range. Visual Edge has acquired six companies since the tail end of 2015. The most recent additions are TLC Office Systems of Houston and Netwise Resources of Indianapolis (check out this month’s Dealer Spotlight feature on Visual Edge). David Ramos, vice president of business planning, points out that Visual Edge differs from many of its competitors in that it does not traffic in distressed assets. It allows companies to operate independently, with the former owners remaining to manage continued on page 22

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Seller’s Market is Driving the M&A Landscape Among Bigger Players IF YOU SELL THROUGH DISTRIBUTION, THERE’S A HOPE AND A PRAYER STRATEGY THERE, WHEREAS WITH US, WE HAVE DIRECT INTERACTION AND A HIGH SUCCESS RATE WITH THE CUSTOMER, AND THAT PROVIDES A BASE OF BUSINESS THAT’S REALLY ATTRACTIVE. David Ramos, Visual Edge Technology their respective operations. But Ramos admits that his company keeps a watchful eye on the estimated 2,300 companies in the document imaging industry. So what does it take to make the grade with Visual Edge? Service operations are first and foremost. If a high percentage of a company’s operating income comes from service operations, underperformance in this area is sure to raise a red flag. “Every company has its weaknesses, they all have their peccadilloes,” Ramos said. “But that’s one area we have a very low threshold for tolerance on variations from benchmarks.” Visual Edge also uses a multiple of EBITDA when determining value, and Ramos points out that many of the companies the firm acquires are on the high end of the 3-6x range. A majority of those firms have sales ranging from $10 million to $99 million. Ramos forecasts an aggressive M&A landscape during the next two years, fueled by “aggressive groups with high appetites.” Visual Edge plans on being in the mix. “If you’re in private equity or venture capital and see an industry that runs at a 14-20 percent bottom line, and you’re in an industry—from a banking/lending perspective—you see all of these variations of companies, they see the stability and the cash that these companies throw off, and it’s very attractive to them,” Ramos noted. “With IT reseller hardware, there’s a lot of volatility and very low margin. If you sell through distribution, there’s a hope and a prayer strategy there, whereas with us, we have direct interaction and a high success rate with the customer, and that provides a base of business that’s really attractive. Our industry is consistent and cash rich.”

Oval Partners, San Francisco

A unique private equity/consolidation model within the industry has been launched by Oval Partners, located in San Francisco. The holding company—which started by partnering with Frank Gaspari, the owner of Flexprint, and has added Laser Options, Pro Copy, and Cannon IV—differs from most PE models in that owners who join the strategy reinvest a substantial portion of the sales proceeds back into the holding company, according to Dan Ruhl, partner. That gives the seller, who remains at the helm of his or her individual company, an equity interest 22

www.enxmag.com | July 2017

It’s Not Over When the Deal is Sealed: The Art of Integration

T

he due diligence is finished, all the contracts have been signed, and executives with both the buying and selling factions have posed for the traditional photos to accompany the press release announcing the deal. Pivotal synergies on both ends have created a sweetheart deal, as yet another dealership changes hands. It’s back to business as usual for both parties. Not so fast. The deal may be sealed, but the challenges of integration have only begun. Proper planning, or a lack thereof, will determine the outcome of the transaction, or at the very least, play a key role in determining how quickly the companies can come together and add multiple digits to the profit margin. “Systems, people, and customers are all important components of the business,” said Jeff Gau, CEO of St. Cloud, Minnesota-based Marco. “Even though we would like to think it will be business as usual, any time you have an ownership change, process changes follow. Change is great, as long as it is happening to someone else.” Getting out in front of the process with clear-cut instructions and a thorough overview of the new standards being implemented will help from a systems and linear workflow perspective. The roll-up specialists who have already been down this road are adept at planning for the implementation, and indeed, anticipating how their newest employees will react. “There are always integration issues, and we do our best to minimize them,” according to Dan Doyle Jr., president of Dex Imaging in Tampa, Florida. “A company’s way of doing business is like a fingerprint: none are the same. It can be a 30- to 120-day cycle for them to get comfortable with the new system. Some may be on OMD, and you’re switching them to e-automate, so there are challenges, but nothing you can’t get over.” The early stages of a completed deal are always a source of panic, Doyle said, with employees concerned about vacation days, benefits, and other terms of employment under the new ownership. But it’s not only the rank and file that have misgivings. When the previous owner shifts over to the new regime, he or she will have transition pains related to the transfer of control and a less autonomous role. “It’s a learning curve, but most get over it quickly,” Doyle related. “Within 30 to 60 days, most people become comfortable with the new system, but the bigger organizations may take 90 to 120 days.” Challenges also exist from a systems perspective, according to David Ramos, vice president of business develcontinued on page 24

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Seller’s Market is Driving the M&A Landscape Among Bigger Players WE OFFER A DIFFERENT SOLUTION. OWNERS THAT WANT LIQUIDITY, BUT ALSO WANT TO REINVEST AND STAY WITH THE BUSINESS HAVE THE UNIQUE OPPORTUNITY TO DO THAT WITH US. Dan Ruhl, Oval Partners in the holding company, which includes all businesses involved. All owners are in it together and have a complete alignment of interests. “As the owner of the holding company, you will see equity enhancement through synergies, purchasing leverage, and higher valuations as a larger company,” Ruhl explained. “In our model, the business owners share in the equity enhancement that is usually only seen by the private equity firm through consolidation. We enter the market giving owners a different alternative than staying on their own or selling. With us, the owner can take some chips off the table, keep their company name, continue to work with the people they have been working with, and have better exit options as a larger business.” Oval Partners values businesses as a multiple of proforma EBITDA, with adjustments to the 12-month trailing performance to pinpoint the proper value. If an owner is interested in better understanding the value of their business, Oval will provide quick feedback, Ruhl explained. “When the business is for sale, the biggest hurdle is valuation,” he said. “Many business owners see valuations of businesses that are much bigger than theirs and try to apply that valuation to their business. If both sides share similar goals and the culture fits, once you get beyond valuation, the transaction usually closes.” In the Oval model, the value matters for the sale of shares, as well as the reinvestment. “You are really negotiating two transactions,” Ruhl explained. Beyond valuation, it is critical that the private equity partner and dealer share the same vision for the business. It is also important that the individuals naturally get along and look forward to working together. Life is too short, Ruhl said, to partner with firms where the business or personal alignment does not exist. “It is a good time to think about liquidity if you are a dealer,” Ruhl said of the M&A landscape offered by PE, OEMs, and dealership roll-up models. “We offer a different solution. Owners that want liquidity, but also want to reinvest and stay with the business have the unique opportunity to do that with us.” Frank Gaspari, Flexprint 24

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opment for Visual Edge Technology of Canton, Ohio. Visual Edge, which only targets companies that are performing well, as opposed to distressed assets, also has a systems requirement: it only acquires companies that use e-automate business management software. Newcomers to the Visual Edge fold must also know (or learn) the ins and outs of Generally Accepted Accounting Principles (GAAP). “There are some things they have to change as far as how they count,” Ramos said. “We do change their chart of accounts from an integration, counting, and coding perspective relative to buckets. So there is a learning curve for the acquisition, but it won’t affect the customer or the sales force. It’s mainly systems integration. Most importantly from an integration perspective is one area of focus that we have at VET—we don’t disrupt the customer.” Ironically, a key aspect of integration is separation. Chip Miceli, president and owner of Des Plaines Office Equipment (DPOE), believes it’s critical to quickly determine how many positions can be eliminated in order to boost profitability, especially when it comes to consolidating in areas of redundancy. Service technicians and sales representatives bring much of the value in an acquisition, but administrative staff is generally one of the primary targets of job elimination. A post-acquisition cue that Miceli has picked up on involves maintaining a company’s corporate culture. In the past, Miceli aimed for uniformity of culture. But now, unless a new addition to the DPOE family is in need of a cultural makeover, he doesn’t want to impose a standard in this regard. “If you have a good culture going, why try to reinvent the wheel?” he said. ♦ Previously, the owner had the decision to stay in the business or sell. But now the owner has a third option, Ruhl noted. Stay in the business, take some chips off the table, and benefit from multiple liquidity events down the road as part-owner of a larger business. ♦

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Erik Cagle

M&A Briefing News

Talent Acquisition Critical to Konica Minolta’s M&A Strategy A Conversation with Sam Errigo

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he hunger to expand a dealership’s market footprint through merger and acquisition is not relegated to just dealer roll-up initiatives or private equity models. Original equipment manufacturers (OEMs) have exhibited a voracious appetite to expand by targeting independent dealerships in order to grow their geographic market footprint, while in some cases eliminating competitive alternatives. As OEMs wage war to grow their market share, they face the same challenges as that of dealership roll-ups in how they go to market in their M&A approach and differentiate themselves in the manner most enticing to prospective sellers. One OEM that has a multifaceted approach to their market expansion is Konica Minolta Business Solutions

Sam Errigo, Konica Minolta 26

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U.S.A. (Konica Minolta), which has ramped up its activities significantly in the past eight years.

M&A Strategy

Konica Minolta has historically focused its M&A energies in three areas: Managed IT Services, Enterprise Content Management (ECM)/Document Management, and the BTA channel. Since 2010, when it first embarked on adding Managed IT Services with the acquisition of All Covered, Konica Minolta has acquired more than 20 such providers, according to Sam Errigo, executive vice president of sales and business development. While Konica Minolta was drawing up its business strategy, IT Services was poised to be a critical strategic growth component that enabled the transformation from connected MFP devices to full integration across the entire enterprise. “From a synergistic standpoint, we knew there were close adjacencies in Managed IT Services to support and provide incremental value to our core business,” Errigo said. “We’ve branched out vertically to create practices in Managed IT Services for financial, health care, legal, and education, as our customers demand experts to advise them on the latest technology. Our Managed IT business model coupled with a diverse portfolio of services, allows us to support a wide range of customers, ranging from SMB all the way up to enterprise accounts. Our service offerings span hosted cloud, staff augmentation, managed service We Saw It In ENX Magazine

helpdesk support, project and application development, IT strategy and assessment, and security services. Managed IT Services will continue to be a big focus to activate our Workplace of the Future vision and expand our value to the customers we serve.” ECM/Document Management companies have been targets for acquisition over the last threeplus years at Konica Minolta. Particular areas of focus are organizations with SharePoint development expertise, and Hyland Software professional to support enterprise customers and integration skills for Document Management products like Square 9 and Prism to support the SMB space. “Core to our acquisition strategy for Managed IT and ECM is to acquire and retain top talent to help accelerate profitable revenue growth while delivering an exceptional customer experience,” Errigo added.

MANAGED IT SERVICES WILL CONTINUE TO BE A BIG FOCUS TO ACTIVATE OUR WORKPLACE OF THE FUTURE VISION AND EXPAND OUR VALUE TO THE CUSTOMERS WE SERVE.

Thorough Vetting

Konica Minolta takes a methodical approach to its vetting process. Companies that pass the initial financials due diligence are interviewed in person to get a better understanding of the company, its ownership, goals, expectations continued on page 27


regarding the acquisition and ultimate objectives (for example, whether the owners are planning to stay or exit the company). “Our business model has worked really well because we do the due diligence around the most critical elements, which are people and culture,” Errigo said. “If you get that right from the beginning, the business will continue to grow and foster. If it’s not done correctly, the business will almost assuredly disappear.”

Determining Prospect Value

Konica Minolta uses a number of formulas to determine a prospect’s value, including a discounted cash flow model, with adjusted EBITDA, and revenue makeup factored into the equation. The company evaluates upwards of 50 Managed IT companies in a year, and Errigo estimated that 1 in 10 prospects are a fit for their model. The due diligence team pre-qualifies potential acquisitions to ensure the business model and key areas of business growth are consistent with Konica Minolta’s growth and service delivery strategies. “We’re at a point where we’ve acquired some of the best managed providers in the U.S., and now we’re doing tuck-ins or strategic acquisitions that are expanding our services and vertical market capabilities,” Errigo noted. “We are still expanding our ECM business to achieve critical mass to support the growing need in Content Management. Our activity in this space is high to sync with our growth objectives.” Companies that have developed a niche product are enticing, as are resellers with a strong employee roster where Konica Minolta can add talent and bring new products and services to market, which it has done in both the managed IT and ECM spaces with SharePoint capabilities and development, and custom coding. “We look at what makes sense based on customer demand and our ability to scale the product or service on a national basis. This is a key component to drive proficiency and profit,” Errigo said. “SharePoint development has been an absolute home run for us, as we are staffed to support long- and short-term projects on a national basis.” The ongoing pursuit of investments in new technologies, coupled with ac-

quisitions, are the cornerstone of Konica Minolta’s transformative strategy, which includes becoming more of a services-led organization. Errigo cautioned that finding acquisitions that best match your company’s strategy, regardless of how long it takes, is a critical element of success. Acquiring for fast growth, coupled with a lack of strategic planning for business integration, will assuredly result in disappointment for both parties. “The key to our success is multifaceted, starting with our due diligence process, but ultimately we have honed our integration process to onboard our newly acquired companies in an efficient manner without disrupting business operations,” Errigo said. “The next 18-24 months are going to be very telling for the industry,” he added. “Technology is moving at an unbelievable rate and our customers expect us to keep pace to provide the most advanced technologies that deliver exponential benefit. In order to execute and align with a transformational strategy, an investment in human capital with technology experience is an absolute necessity. With the acceleration of IoT and mobile technology, the workplace landscape is changing quickly. Organizations that can respond to the demand will be the ultimate winners.

Talking Points

“When engaging with customers our conversations are not about multifunctional products or CPC, the conversation revolves around data security, cloud enablement, mobility and the management of information. These issues are top of mind for most business executives. Connecting a device on the customers’ network is one thing, but how it is secured, how you are integrating the workflow, and how you provide a cohesive ecosystem for that customer and deliver an unbelievable user experience will be paramount.” Konica Minolta’s Workplace of the Future vision includes integrating Man-

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aged IT Services, Managed Content Services, cloud-based application support, conference room management, mobile technology, security and Managed Print Services—the entire Internet of Things landscape—that will require a single provider to guide the convergence of this technology. “Organizations in the office equipment space that have invested in talent acquisition, acquired companies to expand their customer reach and have built a foundation to support the next generation of customer demand, I believe, will survive,” Errigo said. “Those who are clinging to hardware and maintenance annuities are going to be commoditized. That’s where you’ll see much more aggressiveness with mega dealers or OEMs buying up the base. Konica Minolta will continue to acquire in that BTA channel because we are bullish on the market and believe the investment we made can be leveraged across a broader set of customers. Dealers that are evaluating selling see a real opportunity for their employees and customers to grow due to our ability to deliver expanded technologies, services, resources and support all backed by infrastructure to absorb the ever changing market demands.

WITH THE ACCELERATION OF IOT AND MOBILE TECHNOLOGY, THE WORKPLACE LANDSCAPE IS CHANGING QUICKLY. ORGANIZATIONS THAT CAN RESPOND TO THE DEMAND WILL BE THE ULTIMATE WINNERS.

Survival of the Fittest

“The continued operation of business will be contingent upon the ability to differentiate the product or service offering, inclusive of talent makeup, coupled with the monetization of the offering-customer value. With the rapid acceleration of technology and the increasing demand for value-added technology providers, many existing businesses will need to make significant investments to keep pace or divest. The M&A path may allow for a quicker ramp if done correctly and also deliver the differentiation in the marketplace to bolster growth.” ♦ July 2017 | www.enxmag.com

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Charles Brewer

Market Intelligence News Briefing

SCOTUS Hands U.S. Remanufacturers a Big Win. So What?

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n May 30, the Supreme Court of the United State issued its muchanticipated decision in the Impression Products v. Lexmark International matter. In a nearly unanimous ruling, the high court found in favor of Impression Products, a small remanufacturer based in Charleston, West Virginia. The decision settled a couple of hotly-contested issues related to when a patent holder’s patent protections are exhausted. The SCOTUS decision represents a major win for US remanufacturers and restricts certain patent holder rights that remans—as well as others—had been fighting for years. The two issues disputed in the Impression Products v. Lexmark International case centered on whether there were circumstances that allowed US patent holders to retain their patent rights after the first authorized sale of a patentprotected product. First, the high court was asked to settle if a patent holder can put restrictions or conditions on a product, such as “single-use only,” and thereby retain patent

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rights after first sale. Second, the court was asked if a patentee retains its US patent rights after an authorized sale occurs outside of the US. In siding with Impression Products, the high court answered a resounding “no” to both questions.

The Legal Questions

To understand the issues at the center of Impression Products v. Lexmark International, we need to look at two earlier rulings from the US Court of Appeals for the Federal Circuit. Both decisions preserved a patentee’s protections after the first authorized sale of a patented product. In their 1992 Mallinckrodt v. Medipart ruling, judges on the federal appeals court found that patent holders retain certain protections on patented articles sold with a “lawful and clearly communicated” single-use/noresale restriction. In 2001, the appellate court once again sided with US patent holders in Jazz Photo Corp. v. International Trade Commission, finding that patent holders retain their patent rights on articles that are first sold abroad. Being on the wrong side of the Mallinckrodt and Jazz Photo decisions has had big implications for US remanufacturers like Impression Products. Over the years, various OEMs have based lawsuits on these rulings, which have been codified into rocksolid case law. More than one hardware manufacturer had used Mallinckrodt and Jazz Photo to successfully argue in US courts that they retained patent We Saw It In ENX Magazine

protections on empty ink and toner cartridges. By retaining these protections, the rulings impacted the remanufacturing industry’s access to its most vital raw material—empty cartridges. Lexmark based part of its Impression Products case on the Mallinckrodt decision, asserting that patents on its Return Program toner cartridges remained enforceable even after the first sale. Customers purchasing Return Program SKUs agree to return their spent cartridges to Lexmark and the OEM gives them a discount on the initial purchase price for the promised return. Lexmark successfully argued in lower courts that under Mallinckrodt, it retained its patent protections on Return Program SKUs because of the single-use/noresale restriction. If a third-party such as Impression Products remanufactured a Return Program cartridge, the patents on the cartridges were violated during the process thanks to Mallinckrodt. The Jazz Photo decision was based on the notion that US patents are only relevant and enforceable within the US. Because US patent laws end at the water’s edge, US patents are not exhausted if the first sale of a product occurs outside of the United States. Under Jazz Photo, Lexmark argued that it retained its patents on empty cores from cartridges first sold outside of the US. If these cores were returned to the US and remanufactured, as Impression Products had done, the remanufacturer infringed the OEM’s patents. continued on page 30


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SCOTUS Hands U.S. Remanufacturers a Big Win. So What? The Long Road to SCOTUS

The Impression Products v. Lexmark International case that would ultimately come before the U.S. Supreme Court began in 2010. At that time, Lexmark filed a patent-infringement suit in the U.S. District Court for the Southern District of Ohio against a number of companies marketing third-party supplies. Although Impression Products was not one of the companies named at that time: the original 2010 suit involved a total of 26 companies, including third-party supplies manufacturers and their distributors and channel partners. All of the firms eventually settled with Lexmark. The case remained open, however, because Lexmark’s suit included so-called unidentified “John Doe” defendants that the OEM planned to name in an amended complaint. In 2012, Lexmark sent letters to numerous third-party supplies firms accusing them of patent infringement by allegedly remanufacturing Return Program cartridges or cores sold outside of the US. The OEM offered the companies the choice of settling or being named defendants in an amended filing to the still-open case in the Ohio court. While dozens of companies settled with Lexmark, there were some holdouts. In 2013, Lexmark made good on its threat and filed an amended lawsuit naming the holdouts as defendants. Impression Products was among the firms named as a new defendant. Eventually, the new companies named in the case opted to settle with Lexmark—all except one, the West Virginian reman. This set the stage for the original Lexmark v. Impression Products case, which was heard in the Southern District of Ohio court in 2014. The court found in Lexmark’s favor on one key issue (that Impression Products infringed by selling remanufactured cartridges using empties first sold overseas, in which Lexmark retained its patent rights), and found in Impression Products’ favor on another (that Impression Products’ sale of remanufactured Return Program cartridges did not infringe Lexmark’s 30

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patents because Lexmark had exhausted its patent rights in these cartridges). Apparently, neither party was satisfied with the Ohio court’s split decision. In 2014, both companies appealed the decision to the US Court of Appeals for the Federal Circuit. In February 2016, the appellate court ruled in Lexmark’s favor and reaffirmed its Mallinckrodt and Jazz Photo decisions. Impression Products immediately appealed the decision. The Supreme Court agreed to hear Impression Products v. Lexmark at the end of last year.

IF IT SO CHOOSES, LEXMARK IS FREE TO FILE SUIT AGAINST ITS CUSTOMERS IF CARTRIDGES ARE NOT RETURNED AND THE RETURN PROGRAM AGREEMENT IS BREACHED CONTRACTUALLY, BUT NO CLAIMS CAN BE MADE UNDER PATENT LAW.

The Supremes Speak

Chief Justice Roberts wrote the opinion for the majority and he restated the two key questions involving patent exhaustion that I described earlier. The first question before the Supreme Court, he said, was “whether a patentee that sells an item under an express restriction on the purchaser’s right to reuse or resell the product may enforce that restriction through an infringement lawsuit.” The second question, according to the Chief Justice, was “whether a patentee exhausts its patent rights by selling its product outside the United States, where American patent laws do not apply.” Chief Justice Robert wrote that the court found “a patentee’s decision to sell a product exhausts all of its patent rights in that item, regardless of any restrictions the patentee purports to impose or the location of the sale.” Regarding the Return Program cartridges, Chief Justice Roberts wrote that “Lexmark exhausted its patent rights in these cartridges the moment it sold them.” He indicated, however, that under contract law Lexmark could put single-

use/no-resale restrictions on Return Program cartridges. If it so chooses, Lexmark is free to file suit against its customers if cartridges are not returned and the Return Program agreement is breached contractually, but no claims can be made under patent law. On the question of whether Lexmark retained its patent rights on products first sold overseas, the court said clearly and succinctly, “An authorized sale outside the United States, just as one within the United States, exhausts all rights under the Patent Act.” The Supreme Court’s opinion, delivered by Chief Justice John Roberts, was joined by Justices Anthony Kennedy, Clarence Thomas, Stephen Breyer, Samuel Alito, Sonia Sotomayor, and Elena Kagan. Justice Ruth Bader Ginsburg wrote an opinion concurring in part with the majority’s decision but also dissenting in part. Her dissension related to how the court reached its decision regarding foreign exhaustion of patent protections and indicated that she agreed with the appeal court’s decision. The court’s newest justice, Neil Gorsuch, did not take part in the case.

So What?

Inside—and outside—of the office imaging industry, the Supreme Court’s ruling is a big deal. Overturning Mallinckrodt and Jazz Photo at one fell swoop fundamentally changes US patent law. It’s truly bad news for OEMs. For at least a decade, lawyers for more than one hardware manufacturer have relied heavy on these decisions to successfully sue scores of aftermarket supplies firms for infringing OEM patents. Lexmark looks to be the biggest loser. The firm’s Return Program is unique to Lexmark, so losing the protections provided by Mallinckrodt will be especially painful. The firm’s supplies business will suffer additional ill effects from the Supreme Court’s ruling. Supplies revenue at Lexmark enjoyed a nice uptick as the company signed agreements with a multitude of US third-party supplies vendors back in and around 2012. Part of the settlements that I read required companies to stop selling

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continued on page 31


THOUGH STILL A BIG DEAL, THE RECENT SUPREME COURT RULING WILL NOT IMPACT THE INDUSTRY THE WAY IT COULD HAVE 10 OR 15 YEARS AGO. products that infringed Lexmark patents. Without Mallinckrodt and Jazz Photo, the availability of noninfringing Lexmark remans should grew smartly, and I bet companies that inked deals with the OEM will begin moving to these now non-infringing products. Though still a big deal, the recent Supreme Court ruling will not impact the industry the way it could have 10 or 15 years ago. If the initial decisions, especially Jazz Photo, had gone differently, that would have truly changed the game for US remanufacturers. Back then, the competitive landscape was very different than it is today. There were many more remanufacturers, and having access to a larger pool of empties would have made life easier for many of them. Moreover, because the price of empties is determined largely by core availability, the price of empties would have been lower. And of course not having to worry about lawsuits arising from Mallinckrodt and Jazz Photo would have lowered stress levels for many US remans. Today, US remanufacturers are coping with new challenges. OEMs have developed new means to retain share. MPS programs, smart chip technology, anti-clone firmware updates, and marketing programs aimed at promoting the use of original cartridges have all proven effective strategies for hardware manufacturers to protect their aftermarket business. In addition to facing new challenges from OEMs, US remanufacturers face new threats from non-OEM vendors that were not an issue 15 years ago. Rather than battling with domestic competitors, the last remaining US remans now must compete with low-priced imports

that are produced in factories with dirt-cheap fix costs that are not achievable in the US. Some of these foreign products are manufactured with little or no regard for OEM patents and are based on totally new cores rather than legitimately remanufactured from spent OEM cartridges. While I’m certain that the repeal of Mallinckrodt and Jazz Photo will bring down the pricing of empties, there is no way that the price of legitimate empties will drop so dramatically that cartridges remanufactured in the US will be able to compete with imported, infringing, new-build compatibles. In an ironic twist, it may be that the Supreme Court’s decision to overturn Mallinckrodt and Jazz Photo will actually hurt US remanufacturers. The aggressive stance that OEMs have taken on remanufactured cartridges based on cores from cartridges that were first sold overseas has helped the domestic remanufacturing industry. Some of the OEM suits resulted in restrictions being placed on the importation of infringing products from overseas. Many customers that had purchased cartridges legitimately remanufactured overseas turned to domestic remanufacturers to stay on the right side of the old patent law as well as face supply chain problems brought on by import restrictions. Without Jazz Photo, I suspect that many foreign factories will seek new opportunities in the US, which will put new pressures on domestic remanufacturers. It will be interesting to see how the Supreme Court’s ruling on Mallinckrodt and Jazz Photo plays out. For good or ill, the ruling is bound to be felt across the industry. ♦ We Saw It In ENX Magazine

July 2017 | www.enxmag.com

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Erik Cagle

Channel Insight News Briefing

Toshiba Tec Expands Reach by Leveraging Opportunities Offered by TABS and TGCS

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he 2017 LEAD (Learn, Engage, Act, Deliver) Conference provided its hosts, Toshiba America Business Solutions (TABS) and Toshiba Global Commerce Solutions (TGCS), a platform to not only provide an update on the overall organization and unveil some technologies they believe will enable them to stay two steps ahead of the competition, but also served to help clarify the company’s financial health in light of Toshiba Corporation’s challenges with its Westinghouse nuclear division. TABS and TGCS are part of Toshiba Tec Corporation (Toshiba Tec), a separate, associated company that is not wholly owned by Toshiba Corporation. Toshiba enjoyed a banner 2016 that included the launch of 23

Scott Maccabe during Lead 2017 Presentation

new products, which helped spark abundant growth in A3 and A4 product. However, LEAD served as the coming-out party for a trio of new offerings, led by the Elevate MFP user interface that includes vertical-specific functionality for eight different markets and features simplified operations for industry-specific tasks. ENX Magazine took the opportunity to sit down with Scott Maccabe, president and CEO of both TABS and TGCS, and Bill Melo, chief marketing executive for both entities—who provided insight as to the opportunities for dealers and end-users alike to expand beyond their current bases with an eye toward the future. Tell us about your career with Toshiba MACCABE: I’ve spent 16 years with Toshiba, having been involved with three different businesses associated with the Toshiba name. I started out with Toshiba corporate, running their computer storage business for about 12 years. Having been with the TABS organization for about three-and-a-half years, Toshiba Tec had a vision of leveraging and maximizing the synergies across the broader set of market opportunities between the print and retail industries. So we, as a management team, sat down and targeted out a strategy. Nearly two years ago, Toshiba Japan asked me to take on an additional role as president and CEO of the retail industry. I run the TGCS retail company worldwide as well as TERIS, the Toshiba

Tec retail company in Europe and Latin America. The charter in that vein is to integrate and merge the two individual retail companies into one global entity. Though TABS and TGCS have different elements of their market segments, there is significant opportunity and synergy that crosses both of those businesses. MELO: I will have been at Toshiba 15 years in September and have been in the document imaging business since 1989. After graduating from business school, I was at Ricoh for nine years, then Hitachi, and for a brief period at a startup called Imaging Portals, now MWA. I’ve been at Toshiba ever since. I also have dual responsibilities as chief marketing executive with TGCS as well as TABS. It’s been exciting to help bring some TABS business and imaging business to that sort of customer; likewise, to utilize some of the great talent that we have at TGCS to help our document imaging business as well. What were goals heading into the LEAD conference? How did the results match up with expectations? MACCABE: The last six months or so have been a period of turmoil for Toshiba Corporation. That’s been a bit of a noise and distraction issue within our businesses, because we carry the name Toshiba. Our dealers understand the difference between Toshiba Corporation and Toshiba Tec, especially on the imaging side, because they’ve been with continued on page 33

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Bill Melo during Lead 2017 Presentation

us for so long. Our dealers and partners on the retail side, who haven’t really been engaged in the relationship for a long time, didn’t understand the distinction. What we found over the course of the last six months is the need to have a more engaged communication with some of our retail partners and with our imaging partners’ end-users in particular. They saw headlines and didn’t know what was behind it. I think the general sessions, as well as one-on-one communication, proved that we were successful in getting that message across. This was also a significant opportunity for us to introduce this synergistic solution platform, because Toshiba Tec has been focused on rolling out, investing, and expanding the business solutions element of our company and moving further and further away from pure product play. During your opening remarks, you pointed out that Toshiba Tec’s stock has increased 29 percent in the last 12 months, while some of your biggest competitors are struggling. What are some of the factors behind Toshiba Tec’s market success? MACCABE: There are three influential factors. The first is diversity—Toshiba Tec is not a one-trick pony company. The vast majority of our business, greater than 85 percent, is split between our imaging and retail businesses. We also have our OEM business that’s tied to

additional development. The second factor is performance. The imaging business has been consistently performing well. I made the statement in public that TABS is the most profitable entity under Toshiba Tec. All of the companies were profitable. Our imaging business has continued to perform well, and our retail business has really turned the corner. TGCS is number one in the world for installed point-of-sale systems, but it’s a highly competitive business environment. Frankly, when we acquired the business from IBM, it was not profitable. During the course of the last three quarters, our retail business has shown growth, recovery, profitability, and operational efficiency. The third factor is the differentiator. The broader Nikkei market understood that there is a differentiation between Toshiba Tec and Toshiba Corporation. As Toshiba Corporation went down due to their issues with their nuclear business entity, Toshiba Tec—which is an associated company but not a wholly owned company—saw its valuation grow. Some of our competitors, particularly in the imaging space, have suffered because they’re not quite as diverse.

of dollars a year in the Walmarts of the world, it now affords us the opportunity to address their imaging print needs. We now have a collective service organization where we can go into accounts and leverage our installation, environmental identification, and maintenance service capabilities. We have more than 2,000 service providers that are company owned across both entities, just in the Americas. Additionally, one of the hottest areas in retail is digital signage. We’ve been leading in digital signage for several years and it’s really taken off in retail. MELO: One example of the synergy is we have a household name convenience retailer with tens of thousands of locations in the United States. They converted to a TABS printing customer by virtue of an opportunity that started on the TGCS services side. These retailers want fewer entities to deal with, so our service organization can do wall-to-wall service, whether it’s applications and infrastructure, computing systems, pointof-sales systems, or printers. We have a sales organization that can handle that with unified reporting and unified SLAs. Retailers want to pay for outcomes and

OUR IMAGING BUSINESS HAS CONTINUED TO PERFORM WELL, AND OUR RETAIL BUSINESS HAS REALLY TURNED THE CORNER. Scott Maccabe, president and CEO Tells us about the symbiotic cross-selling relationship between TABS and TGCS. MACCABE: We have a defined business strategy activity that relates on a tactical level, where our retail and our major account imaging organizations do joint strategic account reviews. Whereas on the imaging side, a majority of our business is in the small- to medium-business realm, and on the retail side almost all our business is on the upper one percent of the retail market segment. That allows us to reach up as well as down into a much broader collective market segment and customer opportunity base. The organizations are structured such that they’re compensated to help open doors. So where we do hundreds of millions

We Saw It In ENX Magazine

they want someone who’s going to be reliable. Some really dominant household names in the retail space—Home Depot, FedEx, and Brookstone—are buying into this idea of Toshiba as a source of multiple products and services, whether it’s digital signage, barcode printers, or point of sale. It’s become a really big competitive advantage for both companies and part of the synergy that T. Tec envisioned when making the acquisition of TGCS. Can you provide insight into the differences between your direct branches, as opposed to the dealer channel, and how they are taking advantage of these cross-selling opportunities? MACCABE: We have focused at the direct level with major customers, so our sales people are engaged directly with continued on page 34

July 2017 | www.enxmag.com

33


Toshiba Tec Expands Reach by Leveraging Opportunities Offered by TABS and TGCS ucts, we have a strong relationship with Lexmark. We found a way to work with them when we’re in a mixed-need environment, A3 and A4, to keep a balance for the growth of both platforms. MELO: Everyone loves Elevate. It was a very bold move to essentially refresh the entire product line in one shot. As a result, when we launched the product to such great results, we had a period where we couldn’t make them fast enough. Now that we’ve caught up, we’re running well above the industry average in terms of revenue and unit shipment growth. We hit a home run.

them. As part of our strategy, we’re now in the process of expanding the development of some new products that can be taken into the market via our partner base. Our strategy all along has been to bring a broader breadth of solutions to our partners across the board. Our retail organization has a limited set of partners and they focus on the high/medium space of retail. Our imaging partners focus on the small/medium space, which hasn’t been served by our retail company in the past. We see that as a significant opportunity to enhance our imaging partners’ depth: they can go beyond their current boundaries, and we have an opportunity to provide greater value. MELO: One of things we do well at TABS is enabling our channels to utilize our infrastructure. Our professional services consultants can use this superstructure upgrade with service, so it enables a dealer who is in a local marketplace to sell to a national account. With regard to enabling our partners to take advantage of the retail opportunities, it’s similar. Digital signage is a great example. One such example of a win is the Crazy Horse Memorial in South Dakota. That was brought to us by a dealer who identified a digital signage opportunity in their marketplace, and we dispatched our professional services along with 34

www.enxmag.com | July 2017

design and development teams to create a solution for the customer that a dealer actually wound up billing. They get top-line revenue, and we act as a subcontractor to them. That gives the dealer a new account that they can approach with other services. It can be managed on a local basis or converted into a national opportunity for digital signage, POS, etcetera.

During LEAD, Toshiba showcased a number of new products. Tell us about the differentiating factors they provide for dealers. MELO: The Elevate value proposition is really straightforward. Imagine as a reseller talking to a law firm, and asking them a simple question: “Do you, in your law practice, do the same thing as a hospital does?” Of course not. “Then why would you buy the same product that a hospital does when I can provide you one that is custom tailored to what you do as a lawyer?” Elevate makes everyday

EVERYONE LOVES ELEVATE. IT WAS A VERY BOLD MOVE TO ESSENTIALLY REFRESH THE ENTIRE PRODUCT LINE IN ONE SHOT. Bill Melo, chief marketing executive

Toshiba launched 23 new products in 2016, and both A3 color unit sales and A4 sales saw healthy increases. How did they surpass your expectations? MACCABE: When we develop these products, we engage many of our partners to get their feedback on everything ranging from the residual image of the product to its functionality. We feel we really designed and enhanced the products in a way that their functionality was so much more engaging, it really launched the products. We’ve been fortunate to be successful, particularly with our A3 solutions. On our A4 prod-

functions easier to do. It’s about using a product unique to your office, in a language that you speak, tied to business applications that you use. When we show it to people, lightbulbs go on. Our mission this year is to make sure every sales conversation starts off with that. When that conversation happens, we win 100 percent of the time. v360 is an educational program we provide free to our dealers. v360 starts with deep education in vertical markets, then goes on to the solutions that we offer to a specific vertical market, with a set of demand generation tools so that

We Saw It In ENX Magazine

continued on page 36


Toshiba Tec Expands Reach by Leveraging Opportunities Offered by TABS and TGCS THE NUMBER ONE THING IS TO BE CREATIVE, TO THINK OUTSIDE THE BOX, AND TO PUSH BOTH ORGANIZATIONS FROM A MARKETING, PRODUCT, AND VISION STANDPOINT. Bill Melo, chief marketing executive you can reach the customer, get in front of them, and have that conversation. And there are incentives, not only to the end user through lease subsidies or financial incentives, but also financial incentives to the sales rep so they can be encouraged to do the hard work and get in front of that customer. The E-STUDIO 4508LP is the second generation of product featuring erasable toner technology, which is unique to Toshiba. It’s now a hybrid model—it operates as a conventional black and white MFP, and with the push of a button, it can use erasable toner. The customer can have permanent documents done in conventional black and white, or if they want to reuse the paper and be environmentally conscious, they can have that option as well. It doesn’t require a separate erasing unit, whereas the previous generation did. Your goal is to help resellers thrive in all areas of your portfolio. What are the optimal areas for dealer growth? MACCABE: Internally, we’re cross-training our people on retail as well as cross-training retail on imaging. We want to take that forward to a large portion of our dealer base. We have a broad reach on our services ability, but we can’t cover every corner of the map. Our dealers, in partnership with us, have done a great job of filling in. That’s low-hanging fruit, being able to have them do wall-towall coverage. Some of our dealers today do IT support. That’s an opportunity across different market segments as well. Our goal is to offer an expanded, full breadth of services, including managed services and solutions. We hope that it’s going to be something that protects their future and expands their growth. One of the hottest topics today is how to transform business for the generational and technological changes. What have 36

www.enxmag.com | July 2017

you done in your organization to address those changes? MELO: On one hand, it’s diversifying our revenue streams and our dealers’ revenue streams with products and services that are not necessarily print related. Our digital signage offering and a lot of our workflow and security solutions help resellers to expand their customer relationships to non-print related services. Mobility is another factor: the younger you are, the more it would appear that a phone was attached to your hand at birth. So we’re doing a lot of things in regard to enhancing the mobile experience for print and scan. e-BRIDGE Print and Capture is a really terrific app that is free of charge to our users. The cloud is another generational solution, so a lot of our service offerings, data, etcetera, are available through the cloud to our resellers.

sent the company. We’re going to have a senior-level executive mentoring program for our millennials that are employed with the company. We have to keep Millennials interested in our business to create a business foundation that fosters a next generation of thought leadership. Both of you wear many hats. Can you point to one task that is the most important to your work? MACCABE: My most significant task is to really focus the efforts of our individual organizations on a cohesive, collective strategy. MELO: The number one thing is to be creative, to think outside the box, and to push both organizations from a marketing, product, and vision standpoint. One of my primary roles is to be the chief creative officer and leverage the direction Scott sets to find unique, innovative ways to get there. What are your goals for the balance of 2017 and the coming year? MACCABE: We’re going to grow and make money. It’s that simple. We have business strategy goals to chip away at market share and continue to build

WE HAVE BUSINESS STRATEGY GOALS TO CHIP AWAY AT MARKET SHARE AND CONTINUE TO BUILD ON OUR FOUNDATION OF SOLUTIONS FOR THIS YEAR. Scott Maccabe, president and CEO MACCABE: We’re really focused on developing products, solutions and applications that address the broader set of generational knowledge. We have Gen Xs, Millennials, and now Gen Zs. How they communicate and what they think about technology is different from older generations. We, as a company, have to internalize how we engage our own staff as well as our market opportunities. For our own staff, we use all forms of social media to communicate and reach a broader set of generations. We’re also investing in our people. We’re sending them to advanced CRM classes and engaged in advanced LinkedIn activities so they can utilize it to be able to appropriately repre-

on our foundation of solutions for this year. We will have very strong, on-point messaging of how we engage our market opportunities with our sales people, to deliver on the fact that we’re morphing into a broader solutions company that crosses different business domains and verticals. MELO: We need to grow revenue and units above the industry average. That’s a great measure of excellent performance. If the market is growing at X, we want to be percentage points above it. Our shareholders expect that of us. We have to make Elevate front and center, the beginning of every conversation. That is the differentiation and value that we offer. ♦

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Erik Cagle

DealerBriefing Spotlight News

Autonomy of Dealerships, Ability to Maintain Marquee Identity Entice Firms to Join Visual Edge Technology

M Michael Brigner, SVP Business Development

David Ramos, VP Business Planning and Analysis

38

any of the major M&A players in the office technology space would relish the opportunity to sneak a gander at the strategy of Visual Edge Technology, one of the industry’s leading holding company models. The privately held, Canton, Ohio-based roll-up specialist has annexed six highperforming businesses since the end of 2015 and shows no signs of slowing down. Since December of 2015, Visual Edge Technology has obtained a number of companies: WBS Technologies of Miami, California-based Image Source, Axion Business Technologies of Greater Boston, Premier Business Products of Detroit, Houston-based TLC Office Systems and, most recently, Netwise Resources of Indianapolis. Prior to that, the holding company facilitated the acquisition of Lexingtonbased LEXNET by one of its subsidiaries, Commonwealth Technology. Visual Edge Technology decided to enter the office solutions industry in 2004 as a company in the portfolio of New Enterprise Associates, out of Palo Alto, California. The strategic decision was made to set a course as one of the largest resellers in the office solutions industry, including managed print and IT services. Its collective of 11 core companies, with multiple branches, boasts sales in the hundreds of millions (Visual Edge Technology does not disclose actual sales volume). ENX Magazine spoke with Michael Brigner, senior vice president, and David Ramos, the recently-added vice president of

www.enxmag.com | July 2017

business planning, to discover why healthy and successful dealerships are choosing to align with Visual Edge Technology’s strategy. What does Visual Edge Technology pride itself on? BRIGNER: Our vision is to grow profitably through internal expansion as well as acquisitions. Our operating companies do that by demonstrating leadership and excellent performance in sales, marketing and service of the general imaging solutions business, as well as being heavily focused on the managed services provider business. If you look at our mission, it’s to supply innovative solutions and technology services that continually increase our customers’ productivity. We also continue to provide our employees with outstanding opportunities for their careers within our company. What do you look for in an acquisition? RAMOS: As we look to build out our national footprint, geography is one facet that we’re seeking. Secondly, we look at the market from the perspective of print volume and where it is coming from within each of those geographies. We also look at brand mix relative to which manufacturers we enter into relationships with. Finally, an important factor to our strategy is that we look for highly profitable companies. We are not in the business of buying distressed assets. BRIGNER: Another factor we look for is experienced, committed management teams. Our expectations, as well as We Saw It In ENX Magazine

that of our investors, is that the owners will remain in place for a period of time following the acquisition. Why would a company join Visual Edge when it’s already profitable? BRIGNER: The owners may be at a point where they want to take a large risk off the table so that they can diversify their risk instead of it being 100 percent in their bailiwick. They could reach a point where they want to be part of a larger group that provides access to capital so they can acquire larger companies, which they may not want to do on their own balance sheet. Although we look for owners to stay on, there is succession planning we can do with them over a short period of years, so they can work their way out of the business and at the same time take a large amount of cash off the table from a risk-diversity standpoint. How many prospective companies do you look at in a given year? RAMOS: There are close to 2,300 independent office equipment dealers in the US., from $100M plus in revenue down to sub-$10 million companies. We look at all of them. The selection process we go through encompasses who they are, what they do, their revenue, what brands they carry and how many employees they have. We look at everything from an analysis perspective. In addition to independent office equipment dealers, we also do extensive analysis into IT resellers, IT VARs, and managed service providers, because that’s continued on page 40


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Autonomy of Dealerships, Ability to Maintain Marquee Identity Entice Firms to Join Visual Edge Technology a big component to our focus going forward with our growth strategy. We are looking at the top 100 markets in the US relative to their overall traditional print potential and the subset of managed print services, as well as managed services. Why is your vetting process so successful? RAMOS: We focus considerably on the bottom line. We also look at the historical track record of producing to that bottom line. It’s not a big secret in the industry as to who the most successful companies are. It’s a pretty small community, even though the companies number in the thousands. It’s not hard to tell who is successful and who is not. BRIGNER: It goes back to a variety of variables, whether it’s the geographic area, the market positioning of companies, vendor and customer relationships, the experience and commitment of the management team, the reputation the group has within the community, and what their financials reflect, as well as their growth potential. All of those items can go into our vetting process. What I’m looking for when I talk to folks is not companies to join our strategy, but outstanding people and talent. That is what is really important— the owners, the people they have, and their dedication to building their business into that quality marquee it has become in their community. Earlier this year, Visual Edge acquired Houston-based TLC Office Systems and Netwise Resources of Indianapolis. What made these companies an ideal fit for your portfolio? BRIGNER: The geographic locations were excellent. When you look at the Business Process Improvement, they had excellent vendor relations. They were very profitable, well-run companies with outstandingly committed management teams. They had excellent reputations and reflected the growth in their marketplaces over the years. They were representing outstanding vendors, and they had high-quality service departments, which we saw reflected in the community when we visited with their customer base. Some folks would think this is a very sophisticated, challenging business, but it’s very simple 40

www.enxmag.com | July 2017

to determine whether companies are high quality. What is the value proposition that Visual Edge offers its dealerships? RAMOS: The top thing would be this: do they share the vision of what our strategy is in the short and long term? There’s a legacy component that is important to the companies we acquire. We do not change their marquee, do not disrupt their employees, do not change the makeup of the company. That’s very important to us. We don’t change how you go to market, how you sell, or what you sell from a brand perspective. These are principles the company worked hard to build. They have longstanding relationships with their employees and customers—that’s very important to them. We want that to continue. We make sure we create zero disruptions to the customer. I think that makes us an attractive option. Do your dealerships engage in cross-selling in order to provide a more comprehensive product and service portfolio? RAMOS: The presidents of the subsidiaries have the option and the access to do that, but it’s up to each president of each subsidiary. It’s pretty compelling that you have those options, but we don’t dictate that to them. What was your biggest challenge in the past year? BRIGNER: At my level, finding enough time to talk with all of the companies that asked us to come and review the mutual opportunity that could exist between us. That is one reason, among others, we have asked David to join us. The companies at the operating/ geographic level all continue to be challenged to grow their local business organically and making good decisions to expand options to their customer base. I think that challenge remains all the time, regardless of what is going on economically. With the continued shrinkage of the office technology dealer space, how is Visual Edge gaining an advantage against other dealer roll-up models? RAMOS: If you’re someone who spent 30-40 years building your business and you have longstanding relationships

with employees and customers, that legacy factor is something that gives us a competitive advantage. We still allow you to run your business the same way you did the last 30-40 years. BRIGNER: We make a concerted effort to look for excellent, high-quality owners and executives of companies that have strong employees and exhibit years of being well-run and want to continue that way. By joining our strategy, they gain several very important opportunities as owners. These are discussed under NDA when we visit with them. How do you view the industry changing in the future and what are you doing to adapt? RAMOS: The legacy core components to our business, which are traditional office equipment, parts, supplies, break/ fix, labor—those components, along with a trend in print overall, which is a mature market, are going to remain steady for the next five years. You’re not going to see a lot of volatility, barring any global calamities relative to the economy or global conflict. With print, we’re confident that the core legacies to our business and industry will remain steady. That being said, we need to change. We need to embrace diversification. It can be production print, and that’s a close, adjacent market to where I am in segments one through four. That’s possibly an area where we can make an investment and focus on production, because there’s ample opportunity for growth. It could be managed print services. If MPS is not 10 percent of your business, maybe that’s your first goal from a diversification standpoint. There’s some healthy growth data relative to forecasts for the SMB space for managed print. Getting into true managed services is a phenomenal opportunity. It’s a much bigger space than traditional office equipment, parts, and consumables. What are your goals for 2017 and beyond? BRIGNER: The short and long view is to continue to identify high-quality office solutions companies and managed services provider companies to join our strategy and continue to build upon our strategy. ♦

We Saw It In ENX Magazine


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J. Mark DeNicola

Sales Briefing & Marketing News

Keep it Simple, Stupid – Why You Should Develop Sales Quotas and One Way to Do It!

S

ales quotas always seem to be a hot topic, especially in any industry where revenue quotas are affixed to individual sales representatives and sales teams. I have read articles over the years that would seem to suggest that they are passé. Here’s the dictionary.com definition of quota: 1. the share or proportional part of a total that is required from, or is due or belongs to, a particular district, state, person, group, etc. 2. a proportional part or share of a fixed total amount or quantity. Do you find any part of that definition that is not applicable to modern day business plans? Of course not! How else can a manager measure the productivity of a sales representative unless there are defined expectations? I am sure there are many ways to set sales quotas, but this article is going to address in general the process we recently used to calculate equipment-and-solutions sales quotas for members of our sales team. Before we get into the process, I would like to outline several goals to keep in mind when setting quotas. They are as follows: 1. The quotas should take into consideration the state of the economy. 2. They should be achievable. 3. The assumptions that went into their development should be understood and explainable. 4. The total of all quotas should align with the overall business plan. The process we go through to set sales quotas is outlined below. We first go through this process for the entire sales team before we start fine tuning the quotas for each individual representative. This is to ensure the assumptions we make, especially for new placements and conversion rates of sold equipment, will align with the revenue goals required by the overall business plan. It also enables us to determine what additional resources may be required (such as sales representatives, vertical market development, marketing, new products and so on) to meet the revenue goals. The equipment revenue quotas are derived from three sources: lease expirations, sold machines in field, and expected new placements. The development of each source is explained separately.

a 95 percent conversion rate, so the part of quota attributable to lease upgrades is the gross revenue value of the lease net of any buyouts, multiplied by .95 (for 95 percent) as follows: Gross Lease Value: $500,000 Buyouts included: $25,000 Conversion rate: 95% Lease Expiration Quota: ($500,000 - $25,000) * .95 = $451,250

Lease Expirations

The first step in the process was to determine the total potential equipment sales (in number of boxes) for the sales representative’s counties. We calculated the potential using the Business Equipment Quota Index (BEQI). BEQI provides market potential (product demand) indices for the US market. The market potential by county is the product of the county index multiplied

The first and easiest step in the process is to look at the lease expirations that are to occur. We used a 1.5-year time frame, as we typically upgrade leases 6 months to a year before the lease term ends. The time frame for the 2017 quotas was the potential lease upgrades from January 1, 2017 to June 30, 2018. We have 42

www.enxmag.com | July 2017

Sold Equipment

The next step is to calculate a conversion rate of equipment sold, not leased, in the territory. There are several steps to this calculation. First, we calculated the average revenue value over the previous year of each machine sold by the segment of machine. We then produced a list of sold equipment, by segment, in the territory before a certain date. For 2017 quotas, we used an equipment sold date before January 1, 2010. Each segment of equipment is multiplied by the average revenue value to determine the total conversion value if 100 percent of that equipment is sold. This total is then multiplied by the expected conversion rate (we used 20 percent). The calculation is as follows:

Segment

Avg. Price

A3-1 A3-2 A3-3 A3-4 A3-5 A3-6 A4-1 A4-2 A4-3 A4-4 A4-5 BW Printer Color Printer Wide format

$2,000 $5,745 $7,893 $12,189 $24,731 $0 $1,565 $3,215 $2,707 $5,181 $0 $714 $1,223 $9,167 Total

Units

Revenue

1 9 8 8 1 0 6 3 5 4 3 5 8 0 61

$2,000 $51,705 $63,144 $97,512 $24,731 $0 $9,390 $9,645 $13,535 $20,724 $0 $3,570 $9,784 $0 $305,740

Conversion Rate 20% Sold MIF Quota $61,148

New Placements

We Saw It In ENX Magazine

continued on page 44


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Keep it Simple, Stupid – Why You Should Develop Sales Quotas and One Way to Do It! by the estimate of the total boxes to be sold in the United States. As an example, if the 2017 index for a county is 0.0003015, and the total estimated boxes to be sold in the US is 1,500,000, the calculation is as follows: 0003015 * 1,500,000 = 452 placement potential We then calculated our estimated market share in each of the counties. We export from our ERP system the historical equipment placements in the counties. We use a 5-year sales cycle and assumed the index did not change enough historically to statistically affect the results. This provides an average annual box placement. Assuming the total placements over 5 years was 500, the market share calculation is as follows: 500 / (5-year cycle * 452 annual placement potential) = 22% The placements were adjusted for any major account sales that are part of the major account overlay in our territories. If our market place goals are a 25 percent share, this account representative needed to increase the number of boxes placed by 3 percent. The calculation to determine the additional boxes required for year 2017 is as follows: 452 annual placement potential * 3% = 14 additional boxes We then multiplied the additional boxes by the average box revenue for A3 segments 1-4 and all A4 segments, less 20 percent (to account for heavy discounting when acquiring new accounts). The calculation is as follows: 14 * ($3,750 * .80) = $42,000 (New placement quota) 44

www.enxmag.com | July 2017

Total Equipment Quota

This sales representative’s equipment quota is: Lease upgrades: $451,250 Sold MIF: $61,148 New placements: $42,000 Total $554,400 (rounded)

Solutions Sales Quota

The quota for solution sales is based on the historical solutions revenue as a percentage of total equipment sales. For example, if solutions revenue in 2016 was 6 percent of total equipment sales, and we want a bump to 7 percent, we would multiply the sales representative’s equipment quota by 7 percent as follows: .07 * $554,400 = $38,800 (rounded) We would then expect a total of $593,200 (554,400 + 38,800) in equipment and solutions revenue from this sales representative in 2017. In conclusion, there is a high level of communication occurring between the sales representative and their manager during the development of each representative’s quota. We are firm believers in the sales representatives taking an active role in the process, and their involvement makes for personal responsibility and a high level of buy-in on the quota. And that idea about quotas being passé? Don’t believe it. Your good sales representatives want a quota, and quotas are vital to achieving your company’s revenue goals! ♦ We Saw It In ENX Magazine


Service Excellence Platinum Award Winner News Briefing

Office Technology Service Excellence Award

PLATINUM LEVEL

Despite Battling a Price-Driven Market, Function 4 Uses Service Excellence to Earn Star of Texas

I

f you think about it, quality service is to this generation of business what the Chevy Camaro was to 20-somethings from the 1980s: everyone claimed that they had it or were in the process of getting it. But the truth be known, few can deliver on such a bold promise. Bob Evans may not be driving an IROC-Z, but the president and CEO of Function 4--a dealership serving eastern Texas and parts of Oklahoma and Louisiana--knows that the technical service component is the bread-and-butter offering of any reputable firm. After all, the service department interacts with the customer base more than any other facet of his operation. It is the primary point of differentiation for the Texas-based dealership. The Houston market in particular has prompted Function 4 to evolve and adapt. Houston’s energy-based economy has been

hit hard in the past 18 months. Many companies have either gone out of business or tightened their belts with reduced staff and spending cuts. And Function 4 is not the only game in town when it comes to office technology offerings. “All the manufacturers are here and have direct offices, plus we have multiple dealers here,” Evans said of the competition. “Pricing pressure is really driving us down to the point where we had to get into additional businesses to be able to maintain margin and get closer to our customers. We had to add more value than just providing printor-copy-based product or being a lower cost provider.” Function 4’s ability to provide a full and effective service response the first time around, as opposed to just a promise that delivers little more than smoking tires, has enabled the company to earn this month’s BEI/ENX Ser-

Shown on the left is Roland Koennecke, Houston service manager, and Bob Evans, owner of Function 4.

vice Excellence Platinum Award. The company was created by the 2014 merger of Digitec Office Solutions (the Houston suburban branch) and Star Graphics of Beaumont, Texas. In October of that year, Office Equipment Center of Paris, TX, joined the fold. Since then the organization has added additional offices in Sherman, Texas, and Lake Charles, Louisiana. Function 4 has 87 employees across its network, with the three entities boasting 97 combined years of experience. Its geographic footprint services 31 counties in eastern Texas, five counties in southeast Oklahoma, and five parishes in southwest Louisiana. With $19 million in annual revenue, Function 4 offers printer and copier products from Kyocera, Konica Minolta, HP, and Sharp. It provides managed print services, software solutions, and consulting. Beginning this year, Function 4 unveiled a managed IT solution via Konica Minolta’s All Covered and the Continuum platforms. Software solution sales account for 5 percent of total revenue, while MPS is 10 percent of total revenue. Function 4 has enjoyed double-digit growth for its MPS and software solutions in the last year, with the Paris operation reaping double-digit growth in that location alone. Evans has added dedicated sales people to augment the software solutions, which has made a significant impact. The company has also embarked on a targeted marketing campaign to help identify vertical markets in which Function 4 can thrive. The new campaign continued on page 48

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We Saw It In ENX Magazine


Despite Battling a Price-Driven Market, Function 4 Uses Service Excellence to Earn Star of Texas involves marketing their MPS and software to selected targets within customer organizations, enabling the dealer to go deeper within existing accounts and yielding particularly successful forays within the health care sector and independent school districts. “I tell our folks all the time, we’re truly a customer focused company,” Evans noted. “It’s what we do, regardless of the product or solution we’re providing to the customer. The product and service is only as good as the service team implementing it. We focus our efforts on providing the best service, whether it’s break/fix on the MFP side, implementation at the beginning of the product or solution, getting the toner there on time, or billing correctly. We want the customer to be totally satisfied with all of the service that we provide.” Being customer focused has wide-ranging benefits, he added: “Because our techs do such a good job of providing quality service, our customers trust us and we have a very good rapport with them. It’s allowed us to go in and bring new products and services to our current base because they have been so happy with our service in our traditional MFP business. I think we’ll be able to continue to grow revenue within those customers.” Experience is a factor in Function 4’s success—of the 87 employees, Evans estimated roughly 30 percent have 10 or more years of experience with the company. The techs are empowered to make key decisions, while offering honest communication to both the customers and the dealership’s executives. While Evans’ goal is to provide prompt and effective service, getting the service call right the first time is the overarching objective. Responding to a request for service within the hour is of little use to the

customer if the machine isn’t repaired properly. The BEI program has validated Function 4’s efforts. Evans implemented the program five years ago while with Digitec Office Solutions, then applied it to the Beaumont and Paris facilities following the merger. The branches have improved their first call effectiveness (FCE) each year on the program, with Beaumont and Paris increasing from the low20s to the mid-50s. Sugar Land is in the mid-60s/high-70s range. In the process, Function 4 has increased efficiency by fixing the equipment the first time, having proper parts on hand, and reducing the number of callbacks. Service profit in Beaumont has jumped 12 percent in twoplus years to 49 percent, with the other facilities touching the mid-50s range. “We’ve done a better job servicing our customers, but it’s also had an impact on aligning us to be more profitable,” Evans said, noting the company’s goal is to reach an FCE in the mid-60s by year’s end. Customer feedback has been extremely positive. Function 4’s Net Promoter Score increased from 84.3 percent in 2014 to 94.2 percent in March of this year. The company sends out a survey following each service call that includes the Net Promoter Score question. When Function 4 isn’t graded at a 10 on performance satisfaction, an executive follows up with a phone call to determine how the dealership can improve on future visits. Evans reiterated that it is the quest to perform a total service call correctly the first time that drives Function 4, rather than focusing on response time as a main service deliverable. And while their response time is strong, it is the level of service that stands as the point of differentiation.

OTSEA Platinum award winners score in the top fifteen percent of all dealers evaluated. The evaluations are based on Call Back percentage, Hold for Parts percentage, MCBV (Mean Copies Between Visits) and Technician Grading. Tech Grading encompasses Time accountability and Time management along with individual HP, CB and MCBV rates. It also includes parts expense as it relates to parts CPC compared to world stats. “We enable and empower our service techs to achieve that goal,” he said. “They know we’re not going to pull [techs] off a job or call them and say ‘why are you on that call for so long?’ Customers see that, too. They know we’re going to do our best to repair that machine correctly the first time so we don’t have to come back again.” Function 4’s immediate goals include building its managed IT offering in order to become a full-service provider. In developing the new competencies, the dealer is changing its approach to sales. A different kind of conversation with customers will be required, with new skill sets and additional sales staff to facilitate holistic business conversations, as opposed to traditional copier/printer-box dialogues. Evans converted a sales person with high-level technical sales acumen to be the firm’s IT source-matter expert. “We’re a little behind on [IT],” Evans remarked. “We had to figure out whether to build it internally, find a partner, or go out and purchase a company. We opted for the partner route to learn the business and get more familiar with how to sell, implement, and provide those services. Being a Konica Minolta provider, we went with All Covered. We’re using them in the first couple of accounts to learn how to be a managed network service provider. Our ultimate goal is to purchase a company.” Moving forward, Function 4 is also focusing on augmenting its Lake Charles’ sales operation to expand the company’s presence in Louisiana while building the sales force there and in Sherman, TX. With the evolving business landscape and the continuing priccontinued on page 49

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ing pressure, particularly in the Houston market, Function 4 is banking on its additional products and services to maintain an edge on the competition. Raising the bar on technical service is obviously an organizational forte, as the comment cards from customers will attest. “Some of the customers write that the technician deserves a raise,” Evans said with a chuckle. “But most of the comments tell how our techs explained the issue and what they did to repair the machine. Not all techs from other companies will do that. I think our customers value that level of service.” ♦

About the Dealership: • President/CEO: Bob Evans • Service Managers: Roland Koennecke, Keith Watts, Sammy Tarrant. • Number of Techs: 23 • Number of Devices Serviced: 6,500 Why They’re a Platinum Award Winner • First-Call Effectiveness: 61% • Call Back Rate: 29% • Hold for Parts Rate: 10% • Ranking: 25th overall of the 194 dealers We Saw It In ENX Magazine

July 2017 | www.enxmag.com

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Ken Edmonds

Service Management News Briefing

A Call Center—When and Why

A

s a dealership increases service revenue and the number of technicians, they will reach a point where investing in a call center makes financial sense. The question that everyone struggles with is when.

Why Have a Call Center?

Your first thought may be “Why would a dealership want a call center?” There are two reasons: to save money and to make money. There are definitely costs associated with operating a call center, but these can be managed and the results can improve the company’s bottom line.

Reducing Cost

For a dealer that does not provide managed network services, the call center can help reduce unnecessary service calls. In many cases, a client calls in with an issue that can be resolved with telephone assistance. Some dealerships will send the call to a technician and let them resolve the customer’s issue. But as the number of technicians increases, along with the number of machines being supported, this process becomes less efficient. It relies on the technician being in a position to answer the client, and this will affect the calls in the queue and possibly delay the response to the client needing phone support. Resolving a client’s issue with phone support is definitely less expensive than sending a technician out to solve an issue that the client could have resolved. An effective call center employee should be able to resolve several issues every hour, while sending a field technician will typically require an hour or so. Depending on the number of calls resolved, the savings should be significant. 50

www.enxmag.com | July 2017

Generating Revenue

Many dealers fail to take advantage of their call center as a revenue source. Dealers often have call centers that help with printer driver installation, network troubleshooting, and other services that are not included in their service contracts. They may do this to provide good customer service, but they are losing revenue that they rightfully should earn. If you have any doubts about this, call Microsoft for help with an issue. One of the first things they request is a credit card number to bill for the support. They understand that having the necessary knowledge is valuable and they charge for it. This can be a hard conversation for the person working in the call center. They may not like telling a customer that they will be billed for this service. You should help the call-center worker understand that sending out a technician will be more expensive than resolving the issue over the phone. One way to address this problem is to let the customer know that they can purchase an add-on to the imager’s service contract. This add-on will cover help-desk support. If the customer agrees to purchase the add-on, waive the charge for the current call. This method minimizes customer frustration and increases recurring service revenue.

When to Start

The answer to this question depends on the type of organization you have. If you provide managed network services (MNS), then the call center should be part of the organization early on. The call center should be able to resolve many of your customer’s issues remotely. We Saw It In ENX Magazine

Remote problem resolution is imperative for providing good service in the MNS arena. Some dealers choose to outsource their MNS call center, and that may be a good choice if they are only doing network support. For dealers that support both MNS and MFP service, having the call center internally is probably a better choice. This allows the call center to service all of the clients. If IT support is outsourced, the initial call can be routed to your call center. If the problem is beyond the ability of your internal support, it can then be routed to the outsource company. For MFP dealers, the decision to create a help desk is more complicated. You might review the number of calls that your technicians close over the phone. As that number rises, and you have a need to add additional service personnel, evaluate the situation and see if hiring a call center person would be a better choice. Another possibility is to use a setup or shop technician as the initial resource for resolving customer issues over the phone. When that workload begins to demand a significant amount of the setup/shop technician’s time, it might be the right time to move forward with a call center.

Call Center Do’s and Don’ts Do

Make sure that the individual working the call center has the personality and desire to assist clients. The person on the call center will interact with most of your clients at one time or another, and the impression they make will have a huge impact on how your customers feel about your continued on page 52


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company. Think about your interactions with call center representatives and how they made you feel. Provide the designated employee the training they need to be effective. While they might not need the skills of a technician, they do need the skills to operate the equipment and help others do so over the phone. Make sure they have the necessary tools to help customers. For general MFP support, they will need equipment to walk through the steps with a client. If they are supporting MNS, they will need the ability to remotely access the customer’s computers to help install print drivers and troubleshoot issues. They will also need to have common software programs such as Adobe or Microsoft Office, etc., so they can walk through issues the customer might be having with the print driver. Make sure that the dispatcher has training on what types of calls should be routed to the call center. You should also make sure that there are appropriate call types so you can track the results of the call center.

www.enxmag.com | July 2017

Don’t

When evaluating the performance of the call center, understand that the only metric that matters is how often they resolve the issue. Hold time is annoying to customers, but even worse is having to call back multiple times to get an issue resolved. Do not allow the calls that are handled by the call center to affect the metrics of the technicians in the field. In some cases, the service management software may be configured to look at any call as a potential recall. When the issue is customer training, you do not want that to be mixed in with the service calls that are generated by an equipment failure.

An Important Decision

A call center is an important decision that can significantly improve your business. Take time to evaluate what you hope to accomplish. Take time to plan the implementation. Properly executed, you will have a tool to take your company to the next level. ♦

We Saw It In ENX Magazine


Printer Tech Tip

HP Color LaserJet Enterprise M552/M553/M577 Print Quality / Poor Transfer

L

PI has had a number of cases where a broken tab (or tabs) on the secondary transfer assembly which results in faded or washed out print on either right or left side of the page, or across the entire page in the case of both tabs broken. (Pic shown with both tabs correct/not broken) There are two locking mechanisms in the printer that secure these two tabs and pull the secondary transfer assembly tight against the transfer belt as the right door is closed. Example of “color band test” shown faded down right side from a printer that had the front tab broken: Secondary transfer assembly replacement #: RM2-0022 Duplex models, RM2-0090 Simplex models. This Printer Tech Tip is contributed by LaserPros (www.laserpros.com). Email any questions to marketing@laserpros.com We Saw It In ENX Magazine

July 2017 | www.enxmag.com

53


Britt Horvat

Technical Tips

Xerox V80 Style: Rebuilding the Drum Cartridges For: Xerox Versant 80 / 180 / 2100 / 3100

X

erox’s new Versant models are awesome full color multi-function copiers, and the drum cartridges are a testament to how well built these machines are. These cartridges are clearly designed for long lives, and they’re easy to repair or rebuild. You’re going to love them. The original drum cartridge part number was 13R674 (013R00674), but at the start of 2017 a new part number replaced the first one: 13R676 (013R00676). There are four of these cartridges in each machine, one for each color (K, C, M, Y, R1-R4) The stated yield is a rather optimistic at 348,000. Reports from the field say they rarely make it anywhere near that. I think 280-300 thousand is a more realistic expectation. Usually they fail because of copy-quality issues before the drum count actually comes up. The limiting factor seems to be the charge roller’s surface wearing out. The yield information is also clouded by the fact that the higher the number of average copies/prints per job, the longer the yield is extended. The stated yield is based on the machine running a minimum average of 26 pages

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Photo #1: Orientation

per job. If you average shorter copy/print jobs, the machine will call for new cartridges a lot sooner. The cartridge is pretty basic: an OPC drum (photoreceptor), charged by a PCR (charge roll), which gets cleaned by a foam cleaning roll. There is a drum cleaning blade and a nice solid plastic waste auger, which moves waste toner away through a waste-toner shutter when the toner leaves the cartridge. Finally, there is also a typical CRUM chip (Customer Replaceable Unit Monitor) which keeps track of the copy count. The foam cleaning roll is a bit different from those in earlier machine. Previously, machines had solid foam all the way across. But these newer ones have a spiral design to them, presumably to reduce the surface area in contact with the charge roll, thus reducing wear and increasing the yield. We Saw It In ENX Magazine

The parts for rebuilding the new rolls are just coming to light now, and by the end of the summer a complete rebuild kit should be ready to roll. Rebuilding these turns out to be refreshingly straight forward. The only tool you’ll need will be either a Philips head screwdriver or a 5.5mm nut driver.

PROCEDURE (to get oriented see photo #1)

1. Remove the front end Cover (1 screw). See photo #2. There is a ring-shaped fingerpull which will fall right off when the end cover is removed. Caution: once the end covers are off, the white plastic bushing for the front end of the waste auger is not captive, and can pop off and get lost if you don’t watch it. 2. Remove the rear end cover (See photo #’s 3-5, 1 screw). The CRUM Chip is found on continued on page 55


Photo #2: Front End

the underside of the rear end cover. It is held in place by a pair of clips which you’ll need to depress to slide the chip off. Here you’ll also find a ring-shaped finger catch which will now fall right off. 3. Remove the charge roller (PCR) assembly (2 screws from the left side). 4. You can now take the charge roller right out of its cradle bearings and the cleaning roll will also come right out.

5. Turn the cartridge on its left side and walk the front drum bearing/ clip off the end of the drum. Then walk the rear drum bearing/clip off of the rear end. Each of these bearing/clip pieces requires a little bit of jiggling to extract them straight off the ends of the cartridge. The rear one can be particularly stubborn (jiggle it up and down to walk it off the end). 6. Lift the drum out of its cradle (see photo #7) 7. Remove the drum cleaning blade (2 screws). 8. Save some of the toner to use later as starting powder for the new drum and blade. Then clean out the plastic cleaning auger (this is a huge improvement over earlier models which used metal springs as augers. I’m very happy to see an auger this sturdy). Take care not to damage the mylar recovery blade (seal blade) while you vacuum this area. 9. Reassemble the cartridge. Ideally, you should reassemble with a new

Photo #3: CRUM Chip Location

Photo #5: Rear End w/ Cover Removed (Below the Rear End Cover)

Photo #4: Rear End Cover

Photo #6: Front End (After Removing the Front End Cover) We Saw It In ENX Magazine

Photo #7: Front End Drum Bearing/Clip

Photo #8: Drum Cleaning Blade on Assembly

drum, charge roll, cleaning roll, blade, and CRUM chip. Note 1: Starting Powder - Make sure the drum and the edge of the cleaning blade have starting powder on them (or use the toner you recovered in the previous step as starting powder). After the drum and blade are back in place, rotate the drum several times by hand to make sure the drum rotates smoothly and easily and that the blade doesn’t get hung up. The blade should clean any starting powder off of the drum completely. After the drum is properly started, you can reinstall the charge corona assembly. Note 2: Greasing the Charge Roller – Clean off any old grease from the charge roll cradle bearings and apply fresh grease sparingly. Too much grease can migrate to other components in the cartridge and ruin the copy quality. Conductive grease is recommended here. Avoid getting grease on the black ferrite bead that is spring loaded against the rear end of the charge roll’s shaft. That black piece is the contact terminal for the charge. That’s all there is to it! Nice and simple. The Versants will eventually replace the entire line of DocuColor 250 style machines. It’s good to see they are their equal or possibly even better in some ways. Happy cartridge rebuilding everyone! Have a wonderful summer. ♦ July 2017 | www.enxmag.com

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We Saw It In ENX Magazine

July 2017 | www.enxmag.com

59


OPEN NOMINATIONS FOR THE 2017 ELITE DEALER AWARDS ARE YOU AN

ELITE DEALER? Nomination Deadline:

Sept 15, 2017

Are you an ELITE Dealer? Now Accepting Nomination for the

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ENX Magazine (www.enxmag.com) and ENX’s digital weekly The Week in Imaging are now accepting nominations for the 2015 Elite Dealer Awards.

Elite Dealer Nomination Form Available at www.enxmag.com

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ID# 75640 Konica Minolta bizhub PRESS C1060 A50V011000416 RADF; PF-707; Duplex; FS-532; Print; NIC; Scan; RU-508; B&W 342k Color: 774k

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866-817-8795 © 2017 - Supplies Wholesalers • All rights reserved. • Not responsible for typographical errors. Prices subject to change without notice.


You print one. We’ll plant one. Every time your printer reaches 8,333 pages, you’ve printed a tree’s worth of paper. Over time that’s a lot of trees, but we’re committed to eco innovation every step of the way. PrintReleaf Exchange is the world’s first technology platform offering cloud-based paper tracking and reforestation. It measures your paper consumption and every time you reach a tree’s worth of printed paper, a new tree will be planted on your behalf, keeping you at a paper-neutral footprint. Most importantly, it’s done automatically for you. Well, for all of us really. To learn more about how you can become PrintReleaf Certified, contact your Toshiba Sales Representative.

©Toshiba America Business Solutions, Inc. Electronic Imaging Division. All rights reserved.

ENX Magazine July 2017 Issue  

Connecting People, Ideas and Products in the Office Technology and Document Imaging Industry since 1994

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