Repeat Business
1. The Champion
Dean Truitt, chief executive officer of Dayton, Ohio-based WorkflowOne, is not letting any industry obstacles stand in the way of his company's success. The proof is in the big list as WorkflowOne continues to hold the top position.
Over the last year, the company improved its financial earnings. Adjusted EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) increased by 27 percent, margins were up 58 percent and unlevered cash flow increased by 49 percent.
Truitt attributes this uptick to transformation efforts. For the past two years, the WorkflowOne team has been transforming its business to position the company to thrive in the future and to better serve customers. Specifically, WorkflowOne's focus has been on improving its customer service model, changing its sales go-to-market approach, increasing the efficiency of its national manufacturing and distribution network, growing partnerships with strategic trade printers and eliminating waste.
"Our industry is undergoing gut-wrenching change and successful printing companies must continuously and quickly adapt. It starts with clearly understanding today's customer needs and anticipating future needs," Truitt explained. "Additionally, understanding how your strengths map to customer requirements and clearly defining who you want to be. While at the same time, we need to protect the traditional business as it declines, but build and scale the new to address the future."
Looking ahead, WorkflowOne plans to finish what it started. In its quest to drive profitable growth, the company will adopt a team-based, customer centered go-to-market approach. New, innovative solutions and value-added services will be introduced, and significant improvements will be made to information systems and customer facing technologies.
Even in the midst of exciting change, Truitt acknowledged the difficulties defining the last year. For instance, WorkflowOne experienced a decline in revenue reporting annual sales of $662 million compared to the previous year's earnings of $949 million.
In addition to a troubling economy, traditional thinking and time prove to be the enemy. "The print world is being turned upside down and it is not returning to how it was. Digital printing is cannibalizing traditional print. Paper is being replaced by electronic media such as electronic books, iPads, the Internet, social media, electronic statements and electronic medical records," he said.
Truitt continued, "Declining demand is driving excess capacity and margin pressures. Customers are demanding it faster, cheaper and with more service. Change is coming rapidly, but there is time."
Nevertheless, Truitt remains optimistic for 2011—anticipating moderate revenue growth and continued earnings improvement. The company recently made a surprising step to refinance its debt and restructure its balance sheet when WF Capital Holdings, the parent company of Workflow Management, which operates principally through its division WorkflowOne, filed voluntary petitions for reorganization under Chapter 11 of the U.S. Bankruptcy Code on Sept. 29. WF Capital also filed a proposed plan of reorganization that provides for full payment to all creditors and the continuation of WorkflowOne's business in the normal course. The ultimate goal of this action is to guarantee WorkflowOne establishes a more competitive foundation in the long-term.
Will these efforts prove to be enough for WorkflowOne to stay on top? Find out next year.
2. Heavy Hitter
Chicago-based InnerWorkings, a global provider of managed print and promotional solutions, holds on to the number-two position on this year's top 100 distributors list.
Led by CEO Eric D. Belcher, the company reported an impressive total annual sales figure of $400.4 million. Established in 2001, InnerWorkings currently employs 698 employees and has 23 locations.
According to its website, the company's services include:
• Print Procurement
• Fulfillment and Logistics
• On-Site Support
• Warehousing
• Workflow Solutions
• International Sourcing
• Economic Audit
• Creative Design
For more information, visit www.inwk.com.
3. Mission Possible
Greg Muzzillo, founder of Cleveland-based Proforma, along with his wife Vera Muzzillo, CEO, have an ongoing mission: to grant the dreams of their current business owners, while recruiting more business owners to join the Proforma family. The mission's success looks quite promising.
Clinching the number-three spot on the top 100 distributors list, Proforma has substantially grown its sales over the last year. "Not only are we ahead of our 2009 figures, but our sales are currently nearly 20 percent higher than 2008. This tremendous growth shows the dedication of our distributor members and stability of the Proforma system," noted Greg Muzzillo.
To stay on the right track, Proforma offers access to world-class support tools and resources to each of its members. For instance, the company recently unveiled the Simplified Selling System to drive more qualified leads to its owners on a more regular basis. "This system stresses the importance of education and training and resource utilization, and features the new sales automation marketing program with success rates of more than 60 percent," said Greg Muzzillo.
In addition, Proforma owners benefit from a host of marketing materials, including marketing campaigns and collateral. In July, the company released its sales automation program featuring Proforma Pete, Re:Pete and Three:Pete. This series of three multi-dimensional mailings was aimed at opening doors and securing appointments for owners.
Proforma's quest doesn't end here. Big projects are in the works for 2011.
"The final preparations are underway on our innovative technology platform, PROvision. We've devoted significant resources to this software in order to create another competitive advantage in the industry. When the platform launches, it will streamline our owners' business processes, making their business more efficient and more effective," explained Greg Muzzillo.
He added, "We're also developing a comprehensive professional training and development program to encourage continued education and growth. This program will establish owners as the expert for their clients, resulting in sustained business growth. We'll continue to encourage our owners to position themselves as a full service marketing resource and give them the tools they need to support this positioning."
The Muzzillos had one final piece of advice: Don't be a product pusher. Sell solutions and provide value. They believe this is crucial for anyone looking to survive in the country's current economic standing.
Greg Muzzillo concluded, "Clients want to work with distributors who offer more than just a catalog of products. They want to work with somebody who makes their jobs easier. When you do this, you don't have to compete on price."
4. American Dream
Larry Zavadil, founder, president and CEO of Glenwood, Minnesota-based American Solutions for Business (ASB), isn't mincing words when it comes to discussing the successes of his business.
"We rose from the ashes like a phoenix," Zavadil said.
And he's not just talking smack. Even in this crummy economy, and with the company's revenue dipping by more than $77 million, it managed to retain its number-four spot on Print Professional's top 100 distributors list by bringing in $183.2 million in revenue this year.
"The last two fiscal years have been the most challenging we have ever experienced," Zavadil said. "Starting with the economic downturn, financial institution restrictions, and ending with industry-upheaval, which was coupled with American's struggle of implementing an ERP computer system that replaced five legacy systems. During 2009, I evaluated the industry options available for American and came to the same conclusion I did in January 1981 when American started. Every one of American's competitors has some positives, but only American has the American Dream. Our culture and philosophy are unique and were worth fighting for to save."
American's turnaround started in December 2009 when its information technology and customer service departments began managing the new ERP system to handle and process orders and invoicing in a timely fashion. Starting in January, ASB stabilized its monthly run rate for revenue and began to "right-size" its operation expenses.
By March, Zavadil explained the company implemented a debenture program, a self-funding vehicle, to help address its accounts payable issue with vendors. Through the support and belief in the American model along with the unique opportunity for a return of 8 percent to 10 percent, many sales associates, employees, community members and vendors helped the company raise over $3.4 million, which was all used for vendor payables.
"Along with this many of our large vendors, with whom we've had a long history with, offered extended terms for our prompt pay discounts," he noted.
These factors allowed the company to return to profitability in July.
In addition, American restructured the board of directors and its management team in its home office. And, ASB implemented sales leadership, advisory and steering committee teams to improve and enhance communication between the sales associates in the field and the home office.
What's next? ASB's priority for next year is getting back to making the business about people.
"American's success has been in creating and managing relationships," Zavadil said. "Technology has become such a big part of the business world, but it doesn't replace people. With our ERP system stabilized, we will continue to fine tune this tool to continue putting us ahead of our competitors in the marketplace."
Zavadil summed it up like this: "Over our almost 30-year history, the last two years have been the most trying and difficult. That being said, once the decision was made to save the American business model and pursue the American Dream, American was once again way ahead of the curve."
5. In the Forefront
Having a diverse network speaks volumes. Print Professional's fifth-ranked distributor, Batavia, Ohio-based Kaeser & Blair (K&B), can attest to this.
The company is proud of its K&B Dealer Group consisting of 2300 Authorized Dealers and plans to increase this number in the immediate future with the help of its attractive record.
Throughout its 86-year history under Kaeser ownership, K&B has fostered a reputation for paying suppliers on time, earning the company a 5A1 commercial credit rating. This subsequently brings additional pricing benefits to K&B that are able to be passed on to its customers. Furthermore, the company has never enforced a "single economic layoff of a single employee." Over the last year, K&B reinvested in computer and communications systems and a new order management system, upgraded its websites and built back the business that went "missing" in 2009, according to Gregg Emmer, chief marketing officer, vice president.
Emmer went on to elaborate K&B's top priorities for 2011. "We are actively working to bring additional experienced specialty advertising sales professionals to K&B. We have a financially sound company where people consistently earn more and have no worry about the financial strength of the distributor they work with," he said. "We are also quite focused on helping small and medium printing companies and print brokers add promotional products/specialty advertising as a strong profit center."
K&B also will continue to combat what Emmer believes is a growing area of concern in the promotional specialties portion of the printing industry. "Offshore companies selling directly to end-buyer customers in the United States via the Internet gives the appearance of being more economical. When product testing, product liability, record keeping and poor performance and quality enter the picture, customers regret going this route. But by that time, it is too late to start over and budgets have been spent."
However, the company tries to educate its dealers and their customers to avoid disappointment or lost funds.
While next year remains a mystery, one thing that is certain is K&B's no-nonsense approach. "We tell our story in a straightforward and honest way. We quote real numbers and don't try to misrepresent that our total volume is from sales of anything but our stated product," Emmer asserted.