New Presstek CEO “Bullish On the Industry, Excited to Be at Presstek”

By Cary Sherburne, Senior WTT Editor

May 24, 2007 -- In an unexpected move on May 10th, Pressek announced that Edward J. Marino, its President & CEO for the past five years, would be leaving the company to “pursue other opportunities.” Replacing Marino is Jeff Jacobson, an industry veteran who ran Kodak Polychrome Graphics for many years prior to its acquisition by Kodak.  Jacobson left Kodak effective April 30, 2007, where he was Chief Operating Officer of Kodak’s Graphic Communications Group prior to his departure.  WhatTheyThink connected with Jacobson to learn what he has planned for Presstek in his new role there.

WTT:  Jeff, congratulations on your new role.  What is your understanding of why Ed Marino left Presstek?

JJ:  I was not involved in any of the discussions between Ed and the Board.  We all think Ed is a first class individual and we wish him well, as John Dreyer indicated in the press release and in the quarterly earnings call following Ed’s departure.

WTT:  What made you leave a position at Kodak, where you managed more people and had much greater revenues?

JJ:  Leaving Kodak was totally independent from joining Presstek.  As Kodak announced in mid-March, when Kodak acquired the remaining 50% of KPG, I agreed to come on board and drive the integration of the six companies that ultimately made up the Graphic Communications Group.  But I always made it clear that it was my desire to become a CEO again.

WTT:  Why did you join Presstek?

JJ:  To me - and you know me pretty well - it is all about opportunity.  My original plan was to take some time off and explore two avenues - running a multibillion dollar company or taking on a company that I thought was probably not fulfilling its potential.  I chose the latter and took on Presstek, which is currently at $275 million in annual revenues. I believe that we can build it into what the Board and I think it can be. That is an exciting prospect. Plus, it is in an industry that I am passionate about.

WTT:  What have you learned from your Kodak/KPG experiences that will be relevant to your role at Presstek?

JJ:  The five years I spent as the CEO of KPG were, up until now, the best five years of my career.  We took a business that was significantly financially challenged, was having significant service issues and lacked strategic direction, and we turned it into one of the most profitable companies in the industry.  The Kodak acquisition was a natural evolution.  KPG was pursuing a certain course and Kodak decided it needed another leg to its strategic stool.  It just made a lot of sense.  In the two years following the acquisition, we significantly improved the profitability of the combined entities and achieved the three-year acquisition synergy targets in just a two-year period. So those seven years will be very valuable experience as I take on the leadership role at Presstek.

WTT:  Where do you see Presstek in five years? What is your vision for the company?

JJ:  Presstek has tremendous technology, a channel which not many in this industry have, and the ability to create an end-to-end, all-encompassing relationship with its customers.   I certainly have a vision for where I would like to lead the company, but since I have only been on board for five business days, I believe it would only be fair to work the vision through with my team and my Board.  However, if you look at the last company of which I was the CEO, I believe you will get a pretty good picture of where I would like to take the company.

WTT:  I understand you have had a relationship with the company’s current Chairman, John Dreyer, for some time.  Tell us about that.

JJ:  My relationship with John Dreyer is a very unique one that spans well over a decade, from the time I was first the president of the U.S. and Canada in the old KPG, and even predating that from the Polychrome days.  John was building Pitman and creating the largest distribution channel in the U.S. I respected his passion for the industry, love for the customer, and service orientation. John Dreyer today is 69 years old and has an unparalleled work ethic.  We always talked about the opportunity to work together but had never done that,.  I think it will be fun to work with John and the Board to build the Presstek team into what we believe it can be.

WTT:  What are your top three priorities for Presstek out of the gate?

JJ:  If you limit me to just three, it would be to significantly increase the revenues, cash flow and profitability; to expand the company’s portfolio and global reach; and to build an industry leader.

WTT:  What is your most important message to Presstek employees as you begin your work?

JJ:  That has been the most fun.  When I joined Presstek, I told our employees:
           

1. I am extremely excited to be the CEO of Presstek.
2. Be passionate about everything you do.
3. We will build an industry winner…not because I say so, but we will do it through hard work, bold goal setting, and excellent execution.
4. Success in business is about commitment and accountability.
5. The digital press evolution is attempting to emulate offset…we are offset!
6. We have untapped channels which are ours to develop.
7. We have a diverse consumables business in which we can participate with our customers on an end-to-end basis.
8. We live for our customers.
9. And as you have heard me say before, “Shoot for the moon, because even if you miss (which we will not), we will still be among the stars!”

WTT:  Do you plan significant restructuring of the company?

JJ:  It is our goal to significantly improve the profitability of our company, to significantly increase our revenues, and to deliver high quality and a broad product portfolio.  Companies should always assess all aspects of their operations and act accordingly to achieve their goals.

WTT:  From an operational point of view, where do you see opportunities to improve profitability? 

JJ:  Again, I do not want to pre-empt the conversations that I will be having with the team.  However, one of the best ways to improve the profitability is to increase our sales.  Today, the majority of our sales are in the U.S. and the UK.  We need to sell to more countries that do not start with a “U,” although we also want to sell more to the current “U’s” and new “U’s.”

WTT:  How important will Europe be to your overall growth strategy? 

JJ:  Europe is the largest print market in the world and will be very important, as will the U.S., Asia, Australia, and Latin America.  We love all the continents, although I do not know if we will do much in Antarctica!

WTT:  How well would you say you know Presstek?

JJ:  I learned a long time ago to never assume you know too much. But one thing I do know is that there is never as good a view of a business as when you are the CEO.  I remember before I became the CEO of KPG, I had been running the Americas.  I knew my business as well as I could.  But even though I was a corporate officer, it was not until I became the CEO that I realized, on a relative basis, how little I knew about the other operations.  Unless you live, eat and breathe it, get into the manufacturing operations and the technology groups, meet with the diverse customer base in every part of the world, you truly cannot know the operation in the way you need to know it to drive a company. I have only been on board for five days, but I will tell you that I have had the opportunity to learn more about this business in five days than any other business I have been involved in. 

WTT:  Can you meet your revenue goals organically or will you need to use acquisitions? 

JJ:  Maybe a better question is, what is the right mix of acquisitions and organic growth?  I will take the next 90 or so days to get into every aspect of the business.  I want to meet our customer base.  The team and I will go through our operational opportunities, our growth opportunities, and certainly our financial business model.  Obviously, we will then discuss that with our Board.  At this time, it would be premature to speculate on any acquisitions.

WTT:  With first Jeff Cook and then you coming to Presstek from Kodak, is there a plot afoot?  Is Presstek going to be acquired by Kodak?

JJ:  Those two hires were unrelated. However, knowing that Jeff Cook had joined Presstek as the CFO made becoming the CEO of the company even more attractive to me. We have worked together previously and enjoyed success as a team.

WTT:  Do you have plans to forge new strategic partnerships? 

JJ:  We will agree upon our strategic vision and then we will determine what we will do as our core competencies and what partnerships we will have to complete our strategy.  I have always believed in having great partners. All companies need to do that; no one can afford to do everything.

WTT:  Presstek has said that its DI presses are perfectly positioned for the sweet spot in the market, short runs of 250 to 10,000 impressions.  Will that be enough to sustain and grow the business? 

JJ:  I believe the current DI product line is in a perfect position.  Where else can a customer go to get short runs in a digital workflow with offset quality?  Digital companies are attempting to emulate offset.  We are offset.  As I mentioned before, we have so many untapped markets. And our DI presses are like the old Maytag washing machines - they don’t break down.  If you consider that we are predominantly a U.S. business today with a UK piece and mainly in the small printer market segment, we can expand upwards and there so many parts of the world we haven’t touched.  I believe the DI product line offers a sustainable business for Presstek.

WTT:  What do you see the printing industry looking like in five to ten years, and what will be Presstek’s role in that? 

JJ:  As you know, I have always been bullish on this industry.  I have yet to see the demise of print that some pundits have predicted.  Based on recent reports, I believe Rupert Murdoch, with his bid for Dow Jones, would agree with me.  The industry will continue to evolve, and those who can provide the best and most differentiated services to their customers will win.  As I said during my keynote speech at last year’s Web Offset Conference, print is essential and will remain essential.  There is no sign of any technology, in my opinion, which can replace print.  There will obviously be more versioning and variability.  Direct mail is still the largest advertising spend at approximately 20%.  It has been and will continue to be about demonstrating to the advertising community that print is a large part, if not the largest part, of the overall marketing communications mix.  Like everything else, it is about return on investment and cost per piece.  Print stacks up very well, and I believe our technology stacks up very well.  As with any company I run, Presstek will structure itself based upon the needs of the marketplace and its role will be about aligning itself to meet the needs of the marketplace.

WTT:  Jeff, thanks for taking the time to speak with us.  We will check back with you in a few months to see how things are going.

Cary 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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