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Commentary & Analysis

Cyril Scott, a CGX Company, Invests More than $10 Million Despite Economic Downturn By Cary Sherburne Published: April 26, 2011 Bold Move Positions Firm Well for Growth as Economy Recovers As we exit an economic period of what has seemed like doom and gloom for so many firms in the printing industry, with declining print volumes and many establishments closing, it is refreshing to hear about firms that are boldly investing in the future despite the economic situation - or perhaps because of it - rather than taking a wait-and-see approach. Cyril Scott, a CGX company, is one such firm that has invested more than $10 million in people, equipment and technology over the past couple Matt Coltharp, President, Cyril Scott years, including a top of the line web press, a new finishing system, and updated inkjet heads for personalization. We spoke with President Matt Coltharp to find out a bit more about the company’s strategy. The Cyril Scott Company was founded in 1959 as one of the first in-line finishing web printers. More than 40 years ago, the company printed its first bind-in order form envelope for famed LL Bean Company, and has built its business around innovating cost-saving methods of print production for its customers. This company culture and approach to the business is likely what attracted Consolidated Graphics to acquire the firm in December of 2007.

WTT: Matt, I notice that your web site features some pretty innovative pop-up cards, as well as gift cards and inline imaging for personalization. What else does the company produce and what attracted Consolidated Graphics to acquire the company? MC: Most Consolidated companies are sheetfed, digital, with a little bit of web. Acquiring Cyril Scott allowed Consolidated to enter the inline world of specialty printing, an ability they never had before. Our products go from roll to the mailstream or into a box for delivery, eliminating any offline binding. That was intriguing to them. We primarily focus on direct mail, along with gift cards, pop-up cards and other value-added techniques. We can do just about any type of perfing, die cutting, kiss cutting for removable stickers. One of the hottest commodities is loyalty products. Our customers have become experts at producing direct mail to their clientele. We have 36 personalization heads, with 16 of those being the newest Kodak Prosper S10 600 dpi digital technology. Marketers understand that the more personalized a piece is, the better demand they will have for the product. We can include a personalized URL, customer account number, and any number of other pieces of personalized data on the pieces we produce. Goss M500 web press print stations

WTT: Is this black & white primarily? MC: We have the ability to do any color in the PMS spectrum. If the customer wants their logo in traditional blue or red, we are able to do that on a daily basis. We do not offer full color. WTT: When did you become President of Cyril Scott? MC: April 1, 2008. It was a very tough time for the economy, which only got tougher, and it affected all industries.

WTT: That being the case, what prompted you to make these significant investments? MC: First and foremost, at Consolidated Graphics, we believe and are proud of the fact that we have good staying power in the market. Customers want to know they are doing business with a company that has national staying power. Being part of CGX is a value to customers, with our balance sheet and ability to acquire companies that have the right demographics for success, the right core values, and great employees. We knew the economy would recover, and we didn’t want to be figuring out then how to change our company. We wanted to be ahead of the game. This down economy was one of the most difficult times I have ever been through. But we wanted to make sure we had in place the best resources - mechanical, equipment and a top quality management team. We also hired experts that are part of our daily management team, and we have continued to drive quality through G7 certification and overall operational efficiency. WTT: What role does headquarters play in these types of decisions? MC: We have major support from headquarters. But the investment is about the return you are going to get and the justification about why you make that investment. Customers tell us their market is demanding personalization, the ability to adapt to get their message to market just in time. We can do that, and that helps them expand their markets and differentiate themselves among their competition. Kodak Prosper S10 print heads mounted on web press

WTT: Did you offer personalization prior to this latest series of investments? MC: Today we have 36 heads, and for the last seven years we have been a leader in personalization. The standard then was a 240 dpi resolution. We upgraded 16 of those to go to 600 dpi. Our differentiation is that in terms of anything after the presses, we are completely mobile from press to press. We can move 16 heads to a press if it needs that. When works comes in, we set press up for that specific job, which often requires multiple

heads for the front and back of the piece. We have our printing units and dryers, and then after the dryers, we have a series of turnbars. We mount a racking system with dryers and the Kodak heads, personalize the piece, then finish with ribbon slitting, plow folding, etc. We have the ability to put the heads anywhere on the press or in the finishing line. Some applications do require personalization before going into the first printing head, such as scratch-offs. WTT: Why do you view this as such a differentiator in the marketplace? MC: In most companies, especially with sheetfed presses, personalization is a completely separate function. You print, cut, fold, and then inkjet the name and address on top of it. The reason that what we do is so significant is that anyone can buy a digital press; but our quantities are in the millions, many times four or five million brochures with a gift card personalized to the recipient, and it needs to be in the recipient’s mailbox on the weekend for a sale that starts the next week. Sheetfed technologies would take you weeks to get that done. The client doesn’t give us weeks. WTT: How do you measure ROI on such a large investment? MC: In the end, it does come down to one thing: ROI. Most importantly, we have invested for the long term in technology and people We believe our sales are being positively impacted because of this technology. Customers want to know we can do the job right, at the best quality. Our customer base has proven over time that as we invest, they will continue to work with us. We help them grow and meet their objectives. Our investments help our customers differentiate themselves. Multilevel pull station, the nip point between auxiliary equipment that provides constant in-line tension

We don’t buy equipment because we think it will turn the business around. At Cyril Scott, we believe in our employees and the hard work they put forth over the years. They have the knowledge base to support these types of equipment investments. We are fortunate from that perspective, in the craftsmanship and quality we have here with G7 certification, and it makes a lot of sense. Also, our central location means that we are within 24 hours delivery of 85% of the U.S. population. In direct mail, timing is of the essence. We have on site postal verification to get things into the mailstream faster. WTT: What’s next at Cyril Scott? MC: Personalization is the key to our business, our lifeline. Our next step will be four-color variable imaging, probably this summer sometime. So the next technology we will be perfecting will be the full-color variable fusion technology, inline on a high-speed web, also with Kodak heads. WTT: Anything else you would like to add before we close? MC: I have been President here for three years, and before was at Garner Printing in Des Moines. I actually started out in the Consolidated Graphics training program in 1997, and I believe in that program more than you can ever know. We have had a wonderful opportunity to invest in our company in what has been the toughest of economic times. The support we have gotten from Mr. (Joe) Davis and the entire corporate backing of CGX for them to invest $10 million in our company in this economy has been amazing. We are proud of that story, our employees and our client base. We are very lucky to be in that position today.

Cary Sherburne is a well-known author, journalist and marketing consultant whose practice is focused on marketing communications strategies for the printing and publishing industries. Cary Sherburne is available for speaking engagements and consulting projects. To get more information contact us. Please offer your feedback to Cary. She can be reached at

Cyril-Scott Invests More Than $10 Million in Down Economy  

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