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Group 5 Michael Phong Ho Kameliya Doncheva Jessie Xin Wei

Group 5 Michael Phong Ho Kameliya Doncheva Jessie Xin Wei. Leadership Team. Robert A. Kleist President, Chief Executive Officer and Director Founded Printronix in 1974. George L. Harwood Joined Printronix in October 1988 as Senior Vice President, Finance & Chief

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Group 5 Michael Phong Ho Kameliya Doncheva Jessie Xin Wei

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  1. Group 5 Michael Phong Ho Kameliya Doncheva Jessie Xin Wei

  2. Leadership Team Robert A. Kleist President, Chief Executive Officer and Director Founded Printronix in 1974. George L. Harwood Joined Printronix in October 1988 as Senior Vice President, Finance & Chief Financial Officer C. Victor Fitzsimmons Joined Printronix in September 1985. Currently Senior Vice President for Worldwide Manufacturing Operations

  3. Company Background • Headquartered in Irvine, California • Manufacturing Facilities: Mexico, Singapore, Holland and Irvine • Supplier base: Asia and North America, increasingly in China • 27 Sales and Support Locations: Serve users in the Americas, Europe, Middle East, Asia Pacific and Africa

  4. Products and Services • Line Matrix Printing (Impact Printers) • MP2 RFID Printers and Solutions • Thermal Bar Code Label Printers • LaserLine Continuous Form Laser Printers • Software Solutions • RJS Scanners and Verifiers • Supplies & Parts • Sales Service, Training Programs and Technical Support

  5. Computer Peripherals Industry • Market Capitalization: 39 billion • Typical profit margin: 5.0% • Zebra is in the top five of the industry by market capitalization • Printronix’s market capitalization is 89 million

  6. Major Competitors • Zebra Technologies Corporation • Founded in 1969, Illinois • $700 million annual sales • Solutions are used by 90% of Fortune 500 and global 2000 company • TallyGenicom, LP • Tally AG was founded in 1948, Germany • Merged with Genicom in August 7, 2003 • Privately owned company • $156 million annual sales

  7. Financial DataPrintronix $ in thousand, expect per share data

  8. Financial Data (Cont’)Printronix $ in thousand, expect per share data 2006 2005 2004

  9. Outsourcing Strategy • Began many years ago but grew fast in last decade • Most of manufacturing work outsourced • Will hedge currencies where appropriate • Teleconference & videoconference communication • Supplier selection is important -- ISO companies preferred

  10. Benefit (why China) • Free Trade Zone • Lower costs—Supply and Labor • Yuan is pegged to US dollar • Asia market is growing • China is a fast growing market, and sourcing there opens the door to doing business in the local market and currency. • Resources are readily available

  11. Problems • Lead Times • Singapore ships directly to Asia markets quickly • Shipment takes 3-5 weeks from Singapore to USA & Holland, where Americas and EMEA customers are served from. • Defective products are repaired locally in the USA and Holland, or replacement product must be shipped from Singapore. • Forecasting of demand is crucial • Communication • Language barriers • Time zone differences • Cultural differences

  12. Future Outsourcing Target • Vietnam • Thailand • Eastern Europe • Africa (still considering)

  13. Printronix’s Case • Printronix had outsourced the manufacturing of its proprietary ribbons to China. • Ribbons are super critical for Printronix’s competitive advantage • Moved manufacturing to Mexico to allow quick focus on design and process issues, and to be able to build and ship just in time to the Americas. • Lesson learned: Do not outsource parts critical for business, particularly if the design and/or processes are not mature with high quality levels.

  14. Conclusion • Outsourcing is essential today • Printronix gains from lower cost resources such as skilled workers and materials in outsourcing • Everybody is doing outsourcing to lower costs and enhance competitive advantage

  15. Q/A

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