Presstek Takes ABDick Integration to Next Level

By Cary Sherburne, Senior WTT Editor

August 9, 2005 -- On Monday, August 8th, Presstek announced the next step in the execution of its integration plan for ABDick. The company will be closing the ABDick office facility in Niles IL, centralizing substantially all of ABDick’s operational functions at its Hudson NH headquarters. The company expects this move to increase its cost savings from the previously-announced annualized run rate of $7 million to $8.5 million.

WhatTheyThink spoke with Presstek President & CEO Ed Marino to get his perspective on this move, and what’s next for Presstek.

WTT: Ed, thank you for taking the time to speak with us. Can you tell our readers what factors played into this decision to close the Niles facility?

EM: This is not a new plan or a change of direction, but rather, a continuation of the execution of our integration plan. The real story is not that we are closing the Niles facility. This is something that could reasonably be expected in the normal course of business when you do an acquisition like this. The real story is that we will retain the ABDick brand, but will now operate as a single entity. That means that we are going to treat what used to be the ABDick wholly owned subsidiary as a Presstek business unit. The purpose of doing this is to streamline our operation for a more efficient delivery system.

WTT: Can you explain what you mean by that?

EM: Susan McLaughlin is still president of ABDick, and ABDick is Presstek’s customer-facing business unit. We will be moving some functions, like distribution and financial transaction processing, under Hudson management so that the ABDick business unit can focus its efforts on the customer and not have those efforts diluted by having to manage back office and logistics functions as well. Managing those parts of the business is a big undertaking. This consolidation means ABDick management will recapture a significant amount of time each week, and their time and attention can now be 100% focused on the customer. This is just another example of our transition to a market-driven, customer focused company.

WTT: How many people will be impacted?

EM: This initiative will affect as many as 100 people.

WTT: What timeframes are you looking at?

EM: We do not expect to complete this transition until the end of 2005 or early 2006.

WTT: Do you own or lease the Niles facility?

EM: It is leased.

WTT: You talked about retaining the ABDick brand. Many of the new products in the ABDick portfolio now carry the Presstek brand. How does the ABDick brand fit in?

EM: Products that are developed and manufactured by Presstek will carry the Presstek brand. But there are a lot of products that are branded ABDick, and the business unit is still known as ABDick. The sales and service staff will have the ABDick logo on their business cards. The ABDick brand has been around for well over 100 years, and has quite a bit of brand equity. There are thousands of loyal customers who identify the brand with the reliable products and services around which they have built their businesses. We want to leverage that brand equity and protect those valuable relationships.

WTT: Will there be any change in the inside or outside sales force, or the service force?

EM: No. Where they are located, who they serve, and how they serve will remain the same. But they will get more management attention and support than was possible to provide in the past.

WTT: You indicated you will be relocating the inside sales force currently in Niles to another Chicago area location. What exactly are the responsibilities of inside sales?

EM: They are primarily responsible for sales of consumables and service contracts. The group consists of about 25 to 30 people and reports to ABDick’s Vice President of Sales, Emile Tabassi, so that there is a common reporting structure for the entire sales force, whether they are inside sales or outside sales. They are also the primary customer interface when users of our online store, shop.abdick.com, need to speak to a live representative at ABDick. We will also selectively maintain other customer facing operations in the Chicago area.

WTT: What impact, if any, will this have on the customer and existing customer relationships?

EM: It will only have a positive impact because their points of contacts will remain unchanged but there will be increased resources available to support their needs. This initiative does not touch the customer-facing part of the equation at all.

WTT: What programs are planned for the displaced personnel?

EM: Based on the consolidation schedule, all employees will have a reasonable window to prepare for job transition and we will help them with that. When we closed our manufacturing facility in Rochester, New York, we had an intensive program to help employees find new jobs, and we had very good success with it. We are planning a similar program in Niles. We will be conducting transitional outplacement services, including workshops for all employees to help them with resumé techniques and interview skills. In Rochester, that was a five-week series of educational events. We also reached out to local companies, and in Rochester we were very successful. We not only brought companies in to post positions and conduct interviews, but we also put together a resume book organized by discipline and did a mailing to many local companies. We will follow a similar process for the affected employees in Niles, and we will be keeping a full-time HR staff there until the transition work is completed.

WTT: Ed, thank you for speaking with us. Is there anything else you would like to add before we close?

EM: Yes. While these types of actions are always difficult from a personal, cultural and organizational perspective, we believe the end result will be better customer and market focus for the company, and it will make our operations much more efficient. That means that we will be able to continue to strengthen the company and position ourselves for continued growth. We still have some work to do, the integration effort is ongoing, and we will continue to execute on our plan.

For more information, visit www.presstek.com

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This Interview was conducted by Cary Sherburne. She can be reached via email at cary@sherburneassociates.com, online at www.sherburneassociates.com and by telephone at 603-430-5463.

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