Toshiba financial issues update

– Notified shareholders that it now expects to report a net loss of $1 billion dollars by end of fiscal year (3/30/18)

o Includes taxes related to upcoming sale of its NAND memory chip manufacturing division

o This means it expects to end the year in a negative net worth for a second year in a row, putting more pressure on the Tokyo Stock Exchange to delist it

– Toshiba’s brass held a shareholders meeting in Tokyo, Japan

o CEO, Satoshi Tanaka, bowed deeply during tense shareholders’ meeting and apologized “sincerely” over the need to sell off the profitable NAND division, which is responsible for 1/4th of the company’s revenue, as reported in Nikkei Asian News

§ “I once again apologize from the bottom of my heart for causing our stakeholders so much trouble and concern”

o “I cannot believe what the executives are saying about turning the company around”; stated one stockholder who attended the meeting.

o “They all look smart and eloquent.  I wonder if they knew about the losses at Westinghouse (nuclear division) years ago.  It is still not clear if the memory chip sale will be done by March and they could not give us a clear answer on what would happen if it was unsuccessful.  That is worrying.”; stated Masayuki, former Toshiba employee.

o “It is really bad.  Executives never give us clear answers at these meetings.  They just do what big shareholders and the banks tell them to do.  I regret that they have to sell the chip division. It is really bad but there was no choice if the banks told them to sell it.  What is at issue is the company’s governance”; stated Ken Futoo, former Toshiba employee.

o “I came to listen to the president to find out why Toshiba, which used to be a great company, is now in this trouble.”; stated Nobuko Kaneko, a school teacher.

o (Toshiba originally started in 1875 as the Tokyo Shibaura Electric Company, a telegraph factory)

– Reuters News Service is reporting that Toshiba is “considering various measures in case the $18 billion sales of its chip unit does not close by end of its fiscal year”

o The sale of the division to Bain Capital is opposed by Western Digital, which sought an injunction with the International Court of Arbitration

§ Western Digital CEO Steve Milligan stated that he expects courts to make a ruling early in 2018

o Could trigger a delisting

o “Nothing has been decided, but it is true that we are considering potential measures”; stated CEO Satoshi Tsunakawa

o “might ask its banks for debt-to-equity swaps”; stated Kentaro Harada of SMBC Nikko Securities

o “Reports say that it is a 50-50 situation with legal issues..”; stated a shareholder

o “Even if Toshiba Memory (NAND division) is sold, employees are leaving Toshiba”

o “reforming the company’s work climate will not be enough to revive it”

– Toshiba announced it will but executive roles to reduce costs

o Will cut its total number of executive officers from 23 to 15 on 11/1/17

o Yasuo Naruke, president of the NAND division resigned

– Announced it will increase the number of personnel working on IoT (internet of things) research & development by 50% to 1500 engineers by 2020

o Hopes to have IoT related revenue of $2.6 billion by 2019

Ninestar hires new CEO for Lexmark div

– David Reeder, former CEO, left company unexpectedly in June of this year

– Company announced that Rich Geruson was hired as new CEO

– Previously was CEO of Phoenix Technologies, maker of optimization software for laptops, tablets and PCs (no experience with MFPs and printers)

– Reporting to Geruson will be:

o Brock Saladin = SVP and CRO

o Allen Waugerman = SVP and CTO

Xerox reports on its Q3 earnings

– Total revenue down 5.9% to $2.5 billion

o North American revenue down 5.7% to $1.514 billion

o Sales of hardware (printers, MFPs, PPS, etc.) down 9.1% to $521 million

§ Color laser MFP units up 23%

 A4 color MFPs up 23%

 A4 b/w MFPs up 25%

 Total revenue from A4 unit hardware is down

 Midrange MFP revenue down from $362 million to $224 million

§ Production print revenue down from $108 million to $97 million

 b/w laser MFP units down 11%

 B/w production print systems down 32%

 Color production print systems down 2%

o Post sales revenue (service and supplies) down 4.8% from $2.056 billion to $1.976 billion

o MPS revenue up from $835 million to $853 million

§ Enterprise contracts down 11%

– Net income down 2% to $179 million

– Operating margin down 0.4 points to 12.2%

– Announced it will again scale back investment in R&D

Xerox investors sell off more stock

– Cornerstone Capital Management Holdings announced it sold 275,743 shares of Xerox

– Achmea Investment Management announced it sold 226,821 shares

Xerox claims solution success

– Reports that it now has 500,000 installs worldwide of solution applications installed into its ConnectKey equipped MFPs

– Increase of 66% since launch on 3/29/17

– (includes launch of the Kno2 healthcare connector)

Xerox authorizes dealer for PPS hardware

– Announced that it has authorized Loffler Companies, a multi-line dealer, headquartered in Minneapolis, MN, to sell and service the Versant line of production color laser systems


Fujifilm to make new digital color press

– Fujifilm, which makes most of the product sold by Xerox, announced it will launch a new production color laser engine, code-named “Iridesse”

– Cut sheet device with top speed of 120ppm

Uses 6 OPC drums and 6 toner stations, offering traditional cyan, magenta, yellow and black, plus two more color choices

o Initial optional toners include; gold, silver and clear

o White toner to be available in future

– Will start offering to customers in Asia in November, 2017

o (unknown when Xerox will launch in the U.S. and what it will be named)

– Expected base MSRP may be as low as $440,000

o (Xerox currently markets the iGen5 150, a 137ppm color press with base MSRP of $875,000)

Fujifilm to launch smartphone printer

– Now shipping the Fuji Instax Share SP-3 SQ mobile color printer

– Lets users print up to 9 photos that are 3”x3” each

– Takes 13 seconds per print

– Can print 160 images on single battery charge

– Uses thermal technology, rather than inkjet or laser toner

– The special paper sells for box of 10 sheets for $14

Foxconn wants Sharp to make cell phones

– Economic Daily News newspaper is reporting that Foxconn (aka Hon Hai Precision of Taiwan) wants its Sharp division to transform into “one of the largest smartphone makers on the planet”

– May hire as many as 4,000 employees to create, test, manufacture, distribute and promote contemporary smartphones

– Luo Zhongsheng of Sharp was cited as saying as initial focus for smartphone sales would be in China

Samsung brings Apple back to court

– In 2012, a federal court ordered Samsung to pay Apple more than $1 billion in damages for infringing on Apple’s smartphone patents

– This was reduced to $400 during appeals court decisions

– Now, Judy Lucy Koh, of the U.S. District Court for Northern California, ruled that a new trial must be held to reassess the damage amount

Survey shows which verticals print most

– Print Audit, a managed print software firm, recently published results of research showing the average amount of pages print per day by employee, based on the vertical they work in:

o Legal vertical = 79 per day

o Healthcare = 37 per day

§ The U.S. Department of Labor projects that an additional 2.3 million people will be working in healthcare by 2026

o Accounting = roughly 35 per day

o Finance = roughly 20 per day

o Education = 20 per day

o Government = just under 20 per day

o Manufacturing = roughly 15 per day

o Professional services = just under 15 per day

o Transportation = just over 10 per day

o Retail = roughly 10 per day

o Hi-Tech = just under 10 per day

– 27% of color pages coming from printing email and web pages

– 43.98% of total spend is on color pages

– 20% of all pages are duplexed

Epson rolls out ink replacement program

– Launched “ReadyInk” ink cartridge replacement service for its MFPs and printers

– After acquiring the Epson device, the end user registers for the ReadyInk service and installs an agent on their PC that monitors their ink usage

– When it runs low on ink, the Epson dealer that sold the device receives a notification, so that they may sell their customer more ink

New study shows print usage

– Two Sides published results of study of 10,000 consumers

– 74% of 18-24 year olds are worried they spend too long using electronic devices

– 69% believe they need to switch off and turn back to print to “detox” from digital overload

– 62% will increase how much news they consume for free online in future

– 63% feel printed news allows for deeper understanding of stories

– 76% worry about fake news online

– 63% use ad blockers online

– 43% admit that seeing a printed ad would be more likely to influence their actions

Canon loses lawsuit against non-OEM

– The Federal Court of Justice in Karlruhe, Germany ruled against Canon in a lawsuit against two companies who were allegedly infringing on Canon patents when remanufacturing toner cartridges for HP LaserJet printers and MFPs

– Canon had sued Carsten Weser and KMP PrintTechnik over its “dongle gear” patent

– This frees the companies to continue making the non-OEM low cost cartridges

– Other non-OEM suppliers expected to benefit from this ruling include Armor, Artech, Pelikan, Zephyr Aster, X-Com and Softrade.


Canon reported earnings for 3rd quarter

– Total sales up 27.7% to 994.5 billion yen

o includes all divisions (i.e. cameras, video cams, etc.) and most of growth is attributed to acquisition of Toshiba Medical

– Gross profit up 28% to 482.2 billion yen

– Operating expenses up 19.4% to 401.8 billion yen

– Total revenue in the “Office Business” division up 8.1% to 444.3 billion yen

o Operating profit up 47.3% to 42.1 billion yen

o Total sales of office MFPs is flat

§ Increase in sales of color MFPs

§ Increase in sales of desktop laser printers (most sold under HP LaserJet name)


Docuware sponsors World Cup skier

– The document management software company, headquartered in Germany, announced it will sponsor Lena Durr during the FIS Ski World Cup season 2017/2018

– She will ski in slalom and downhill events with goal to reach the 2018 Olympics to be held in Pyongchang, South Korea

– She will wear the Docuware logo on her helmet, cap and headband.

Kodak continues downward on revenue

– Article in Digital Journal magazine

– Most likely that stock will decline below $4 in next 12 months

– Current market capitalization is only $272 million

– Total revenue has declines 8.5% during 2nd quarter of 2017

– Margin declined by 20.5%

– Using up cash at a rate of $62 million per year

– Print systems is 62% of total

Dealer acquisition activity

– Impact Networking, a Konica Minolta, Kyocera and DocuWare dealer headquartered in Lake Forest, Illinois, announced it has acquired Lance Allen Document Solutions (LADS) of Los Angeles, CA

o LADS is authorized for Kyocera, Xerox and Muratec and had 600 customers

o Impact now has 15 locations across Illinois, Wisconsin and Los Angeles, CA

– ImageNet Consulting, headquartered in Oklahoma City, Oklahoma, announced it has acquired Progressive Business Equipment in St. Louis, Missouri, a dealer of Xerox, Ricoh, Lexmark, HP and Laserfiche products

o ImageNet, a dealer for Konica Minolta, Ricoh, Canon, Lexmark, HP and Laserfiche, now has locations in Oklahoma, Texas, Florida, New Mexico, Colorado and Missouri

Treeno Software authorizes dealer

– Treeno Software, maker of document management solution software, announced it has authorized Kelley Imaging Systems as a new dealer

– Kelley has offices in Washington, Oregon, Montana and Idaho

HPE to restructure again

– Hewlett Packard Enterprise (no relation to HP Inc.) had its CEO Meg Whitman announce new restructuring plan to reduce costs

– Will be implemented through 2020

– Hopes to save $1.5 billion through reduction of size of workforce, real estate consolidation and business process improvements

o Did not specify how many employees will be impacted

– Will invest $700 million into operational and R&D 

Epson published earnings for Q2

– Total revenue up 24% to 272.5 billion yen

– Profits down 7.8% to 11.3 billion yen

– Most of revenue growth due to success of ink tank color inkjet MFPs

Hon Hai reports Sharp’s quarterly earnings

– Sharp (a division of Hon Hai Precision of Taiwan, aka Foxconn) reported last quarter’s numbers

– Net profit of $177 million

– Forecasts total profit of 69 billion yen for the year

– Credits the growth of profit to h2 sales of displays to makers of smartphones and tablet PCs

Print production software revenue growth

– Research N Reports published latest study on spend on print production workflow software

– Will maintain a CAGR (cumulative annual growth rate) of 14% by 2022

– Will grow to over $18.7 billion per year

EFI reports its quarterly earnings

– Total revenue up 1% to $248.4 million

– Net income down 89% to $1.9 million

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