Year in Review -- 2005 All About Bob

By Erik Cagle

Senior Editor

It is virtually impossible to ignore the impact Robert (Bob) Burton had on the printing industry in 2005. Given his relentless pursuit of two companies this past year, it was almost a given that Burton would enter 2006 at the helm of some printing business.

But let's not get ahead of ourselves. In the final analysis, 2005 will be viewed as a year marked by triumph, tragedy and transactions, not to mention some unexpected twists and turns. Which fits us to a T. While the news wasn't always positive, a silver lining—a moral or a lesson could usually be found. Here's a snapshot glance of the past 12 months.

Joel Quadracci, son of Quad/Graphics founder Harry V. Quadracci, was named president and COO of the company starting the first of this year. Thomas Quadracci retained his CEO status, but added the chairman's post.

A sad chapter in printing history was finally closed when electrician Daniel Pelosi was found guilty of second degree murder in the 2001 slaying of Ted Ammon, the former non-executive chairman of the then-Moore Corp. The trial took eight weeks in late January, and Pelosi was sentenced to 25 years to life in prison.

Drama Unfolds on TV

Later in the year, Lifetime channel aired a tele-movie portraying the often stormy relationship between Ammon and his wife, Generosa. She married Pelosi three months following her ex-husband's murder, but that marriage didn't last long. Shortly after separating from Pelosi, Generosa Ammon died of breast cancer in 2003.

Eastman Kodak drew a lot of whistles with the announcement that not only was it buying out Sun Chemical's 50 percent share of Kodak Polychrome Graphics (KPG) for $817 million, but it would also shell out $980 million for Creo Inc. The latter deal ended Burton's quest to take control of Creo, but it wasn't the last time the printing industry would hear from Burton in 2005.

In the industry's largest acquisition in 2005, Consolidated Graphics acquired a former competitor, Kelmscott Communications, for an undisclosed figure. The seven-company Kelmscott chain, which had reported sales of $110 million, was ranked 53rd on the 2004 Printing Impressions 400.

In a sign of things to come, Cenveo Inc. announced that Paul Reilly, its chairman, president and CEO, had resigned but would remain until the company found his successor. And even then, little had been settled.

Brown Printing, the pride of Waseca, MN, was brimming with the news that it had approved a 150,000-square-foot expansion project that would take three years and $55 million to accomplish. Before the year was out, Tom Engdahl—its president and CEO—would be inducted into the Printing Impressions/RIT Printing Industry Hall of Fame.

Speaking of expansions, Fuji Photo Film dedicated $100 million toward the augmentation of its Greenwood, SC, facility. The investment was geared toward starting a new plate line for the production of pre-sensitized digital plates.

Big changes were taking place at Challenge Printing, which ushered in a very-large format (VLF) six-color, 81˝ KBA Rapida 205 sheetfed press for its brand-new 425,000-square-foot facility in Skakopee, MN. Following the moves, the company changed its name to Imagine! Print Solutions.

Both Burton and Cenveo proved they were not going to let the balance of the year pass quietly. Having lost the battle in taking over Creo to Eastman Kodak, Burton turned his attention toward the Englewood, CO-based Cenveo.

In early April, Burton filed notice with the Securities and Exchange Commission (SEC) that Burton Capital Management owned 10.6 percent of Cenveo's outstanding stock. He also asked the company to install him as the next chairman and CEO but, when Cenveo balked, the battle was on. A September 14 meeting was scheduled to determine the printing company's future leadership.

As expected, after several years of steady rates, the U.S. Postal Service announced it was filing a rate increase request to help satisfy its civil service escrow payment. The increase was due to take effect in January 2006.

Williamson Printing of Dallas made headlines when it fired up what was reportedly the largest Heidelberg Speedmaster SM 102 press in the world. The 40˝ SM 102 12P+LX boasted 12 printing units plus coaters, as well as the capability to print six colors on both sides of the sheet. The press also featured a CutStar roll-to-sheet feeder, for the ability to run web stock or precut sheets.

Sheetfed Refocus

Montreal-based Quebecor World announced it was seeking to sell off roughly a dozen general commercial sheetfed plants in the United States and Canada. The printer had determined that these facilities, which handled mostly spot work and accounted for only a small fraction of its overall business, did not fit in with its core book, catalog and publication concentrations.

In June, James Malone was named the new CEO of Cenveo, a term that would last about as long as that of William Henry Harrison. Malone was a "turnaround specialist" whose Qorval LLC financial and business restructuring firm had landed him at the helm of companies including Mail Contractors of America. Malone defended the move, saying it was unhealthy for the company to "drift" for a prolonged period without leadership.

Postal reform took a step closer to becoming reality when the Bush Administration agreed to seek alternative sources for funding the military service portion of postal retirees, as opposed to making rate payers cover the cost. But it hardly proved to be an unrolling of the red carpet, as future events—namely several natural disasters—diverted the attention of Congress and left reform legislation in a holding pattern as 2005 drew to a close.

Getting Hot in Here

As the summer heated up, so did the industry news. Regis Delmontagne announced his retirement, effective at year's end, following nearly 30 years of printing industry association involvement. His resume included the leadership of organizations such as NPES The Association for Suppliers of Printing, Publishing and Converting Technologies, and the Graphic Arts Show Co. (GASC). Ralph Nappi was later named as Delmontagne's replacement.

September brought the much-awaited PRINT 05 & CONVERTING 05 to the McCormick Place in Chicago, which drew a reported 62,000 people over the course of a week. During the annual Gold Ink Awards & Hall of Fame gala, Brown Printing's Engdahl joined Roy Grossman (Sandy Alexander), Michael Marcian (Corporate Press) and Donald Samuels (Pictorial Offset) as 2005 inductees into the Printing Impressions/RIT Printing Industry Hall of Fame.

With the chances of defeating Burton in the September 14 proxy battle slim, Cenveo acquiesced only days before the start of PRINT 05 and welcomed the former Moore Corp. and World Color chief aboard as its new chairman and CEO.

Malone, meanwhile—who became CEO on June 22 and chairman of the board on August 29-was gone from the company by September 9.

But the fall of 2005 also brought the hurricane season and a number of immense storms, including Katrina, Rita and Wilma, that wrought havoc on the Florida Keys and the Gulf Coast states. Katrina left most of New Orleans under water, and 140 area printing shops suffered the storm's wrath. The public and private sector dug deep to donate hundreds of millions of dollars to aid in the area's recovery, a process that would take months.

M&A Making Noise

A relatively quiet RR Donnelley made a huge splash with the announcement it had acquired Spencer Press of Wells, ME, an $83.5 million catalog and mailer specialist. Spencer ranked 66th on the 2004 Printing Impressions 400.

After choosing not to continue printing TV Guide when the venerable publication abandoned its digest format—citing an unwillingness to invest in the needed equipment—S. Rosenthal & Co. of Cincinnati opted to shut down its printing operations in the Queen City and shift all of its manufacturing to its Tennessee plant. The decision to cut ties with the magazine, which it had printed for 50 years, cost the company $23 million in annual sales and 120 jobs.

As the year drew to a close, EarthColor Inc. announced it had acquired fellow New York metro printer Applied Printing Technologies, a $45 million a year performer, in one of 2005's largest East Coast deals.

Quebecor World also followed through on its plan to divest non-core sheetfed and specialty printing operations in the United States and Canada with the announcement it had shed the targeted plants in two management buyouts. The breakaway companies became Grafikom and MATLET Group in deals worth a combined $114 million.

What does 2006 hold in store for the industry? Will Burton resurrect Cenveo? Will printers continue installing VLF sheetfed presses? Which companies will grow, and who will fold up tent?

We can only hope that 2006 is as interesting as its predecessor. Stay tuned.

In Memoriam

The following is a list of some members of the printing industry who passed away during 2005:

Bruno Asmann, 37, MAN Roland product manager

Terry Bell, 62, former ColorGraphics vice president

Mike Bruno, 94, lithographic pioneer

H. Howard Flint III, 66, retired CEO of Flint Ink

Carl Lock, 67, former PI publisher

Stephen Marcus, 73, Mars Graphic Services founder

Harris Margolis, 76, financial expert

Peter Marchant, 57, Unimac Graphics press operator

Frank Motter, 77, founder of Motter Printing Press