IMAGINE! PRINT SOLUTIONS — EXCEEDING CHALLENGE

Seven years, in the grand scheme of things, is not a long time. But change doesn’t need a prolonged period to be felt keenly.

In 1998, Challenge Printing, of Eden Prairie, MN, was a 40˝ sheetfed general commercial printer. That company is long gone; no longer exists. And, without diversification, Imagine! Print Solutions may never have taken its place.

That’s not to say that companies whose specialty is general commercial offset printing are doomed to becoming one-trick ponies. But Bob Lothenbach, president and founder of Imagine!, had no interest in waiting around to find out if business as usual could provide a viable future.

”We diversified as a business before it became the fashionable thing to do,” Lothenbach states.

Virtually all traces of Challenge Printing are gone—the name, its former home and its status as a general commercial printer. In its place is the new name; a startlingly beautiful, new 400,000-square-foot facility in Shakopee, MN; and a very large-format (VLF) sheetfed offset press.

Perhaps most important is Lothenbach’s vision that diversification could not just forge a viable platform for the company’s future, but continue to spur the remarkable annual growth that has become a hallmark of Imagine! Print Solutions’ balance sheet. The growth rate would be termed unprecedented if not for the fact that it happens virtually every year—an average of 42 percent since the company’s inception in 1988.

“Our ability to serve customers across many product lines has been a significant reason for our growth,” Lothenbach says. “Couple this with an aggressive sales team and a workforce that is passionate about being the best at what they do and you have the ingredients of our recipe for success.”

The organization has made breathtaking strides since Lothenbach started Bob’s Printing (later called Challenge) in 1988 out of his garage, boasting one borrowed press and a bankroll of two grand. A past Minnesota state Entrepreneur of the Year, he has guided the now 530-member company to roughly $98 million in sales for 2005.

Diversification is the key that allowed Lothenbach to think outside of the garage, and later, beyond the commercial realm into narrow web flexographic work, as well as the commercial sheetfed UV market. Imagine! Print Solutions has, since 1998, struck a balance between commercial work, package printing and specialty printing. The company’s five national print segments are point-of-purchase (P-O-P), packaging, UV printing, commercial and flexography.

Imagine! Print Solutions’ customer base includes the retail, manufacturing, insurance, financial and healthcare sectors, along with agency work. On the product end, P-O-P consists of displays, posters, hang tags, danglers, maps and signage up to 81˝. On the UV side is plastic signage and premiums, static clings and holographic prints. Software, CDs and cosmetics are among the packaging solutions, while commercial work includes brochures, posters, booklets, cards and pocket folders. Flexo labels and coupons round out the company’s diverse offerings.

Recent Metamorphosis

The most visible changes have happened only in the last year, particularly the name change and move into the new facility in January of 2005. The company had consisted of three plants totaling 250,000 square feet, but its fragmented nature was impractical and, as the growth continued, in need of consolidation for the sake of added capacity.

“We had to shuttle product between three buildings and, although we got very good at it, this added time and costs in the manufacturing process,” notes Jim Gustafson, vice president of operations for Imagine! Print Solutions.

“The impact on employee morale and teamwork has been very positive. Having all of the team members in one building, where they can see their internal customer, has had a strong impact on creating a closer-knit work group.”

This isn’t your grandfather’s printing shop—once owned by telecommunications specialist ADC, the facility features 32-foot-high ceilings and has witnessed more than $50 million worth of enhancements. Nestled on 29 acres, the building is expandable up to 650,000 square feet.

Timing was everything in this acquisition, as Imagine! grabbed the building for 17 cents on the dollar.

Not everything was packed up and transported to the new building. The Challenge Printing name served the company well, but with a new home and a growing diversity of product and service offerings, Lothenbach sought a moniker that preached expanding limits of the imagination.

Given the other changes, notes CFO Joe Hanneman, the time was right to usher in a whole new era for the company. “It became a natural for us to re-market and re-energize ourselves with a name that we felt fit our growth and the future of the company,” he says. “We felt that if we announced and marketed the name change correctly, we would be fine. It was embraced wholeheartedly by our customers, employees and prospects.”

Lothenbach hasn’t been afraid to take any chances, and the decision to move into the very large-format sheetfed printing realm hasn’t exactly backfired. The company first ventured into the big time in 2001 with a seven-color, 64˝ KBA Rapida 162 with coater.

But last February, Imagine! made headlines when it garnered the distinction of being the first North American printer to install a six-color, 81˝ KBA Rapida 205 press equipped with UV capabilities.

“We found more and more of our existing customers were asking the question, ‘What is the biggest size you can print?’ “ points out Chris Bixler, vice president of sales. “We proceeded to survey our customer base, as well as conduct research into the very large-format print markets. We saw that the demand was definitely there.”

According to Bixler, makereadies are highly efficient on the new press, contrasting the three- to four-hour setup times on other older large-format presses. From a product standpoint, Imagine! can now produce bigger, high impact P-O-P/P-O-S signage on various substrates, including plastics and synthetic materials up to 48 mil.

The 81˝ sheetfed press is easily the centerpiece of a $17 million capital expenditure project for 2004-05. Imagine! has also picked up a pair of Rapida 105 presses, an 88˝ Perfecta cutting system, as well as peripheral finishing equipment such as mounting machines and diecutters.

Imagine! plans on remaining nimble with its plan to enter three specific print markets in the next two years. Lothenbach wouldn’t comment on any specifics, out of competitive considerations, but naturally will allow his customer base and the market to guide his decision making.

Not Done Yet

Imagine! Print Solutions is taking other steps to remain ahead of the competitive curve. In breaking its workflow process into business units, Imagine! aligns its internal experts with its five core manufacturing markets. This creates advancement opportunities for employees and also helps attract the best available talent—the success enjoyed by Imagine! allows it to be highly selective in hiring new teammates. The specialization also makes for a better customer experience and, in the end, an improved final product.

“Continuously improving quality is a constant theme at Imagine!, and we are also working at bolstering our e-commerce suite of customer services, namely Retail Campaign Management and Commitment Ordering Management. Using technology- and customer-specific solutions has yielded much success,” says Chris White, senior vice president of sales.

And, despite its Herculean growth spurts over the last eight years, Lothenbach insists that being the biggest doesn’t always equate to being the best. He’s more concerned with emphasizing the latter.

“We define our success by the success of our customers and employees,” Lothenbach remarks. “If our customers grow with us and our people reach their goals, then Imagine! is successful.

“Our future plans are written in pencil, not ink,” he continues. “We will continue to be instinctive and flexible in our decisions, with the ultimate goal of always improving the employee and customer experience. Be the best, not the biggest. Growth is a byproduct of all these other ingredients.”