Southeastern: A World of Change, GrowthApril 2013 By Erik Cagle, senior editor
In less than a year, Southeastern will be celebrating its 90th year in business. Call it deja vu or history repeating itself, but President and CEO Don Mader likes to point out the many similarities between what his Stuart, FL-based company experienced not long ago and the remarkably similar business conditions encountered by Southeastern's founder, Dr. Edwin Menninger, shortly after debuting the firm.
Dr. Menninger cut his teeth on a newspaper he founded called the Florida Developer, and leveraged what would prove to be one of many real estate booms in the Sunshine State. As with all booms, there must be a bust, and the good doctor also had to deal with The Great Depression and World War II. But both founder and company endured.
Fast forward to 2001, when Mader became president of Southeastern Printing. The state was again enjoying a land boom, and by the time he acquired the company in 2004, the economy had recovered. "Business was fantastic," Mader observes, "and the boom was like gangbusters."
Then came 2008 and 2009, ushering in the nation's second most crippling economic slump in history. And, while it wasn't world war, the United States was still highly engaged in what was proving to be an expensive battle, in lives and in dollars, on two fronts. The boom turned to bust.
Change was inevitable, but Mader—like Dr. Menninger—was all too aware of the need to keep evolving, to add and subtract where needed, with only one constant: Continuing to serve the needs of the customer. Sure, it sounds trite and too simplistic, but Mader gets to add 90 candles to his company's anniversary cake, while many of his competitors have come and gone, washed into the ocean with other doomed booms and failed business models.
It's tough to argue with the numbers. Southeastern, which boasts 230 employees and five locations (Stuart, Palm City and Boca Raton, FL; Naperville, IL; and Tyrone, PA) registered sales of $47 million in 2012. That figures projects to be in the $60 million range this year buoyed by a pair of critical acquisitions.
How They Roll(fed)
Southeastern operates in two primary product theaters: packaging (specifically labels) and commercial printing. It has a strong foothold producing rollfed beverage labels, of which it will churn out five billion this year. Mader maintains that it is essential, as an independent competitor in the packaging market, to have a singular focus in order to be a leader.
The company takes a different tact with the commercial end, constantly evolving to address client needs. Products range from marketing collateral, direct mail, brochures and publications for verticals that include manufacturers, utilities, health care, travel, nonprofits and education, to name a few. Recent equipment and business acquisitions have helped grow the company into trending areas such as wide-format, personalized URLs, variable data and digital storefronts (more on them later).
Life is good for Southeastern; so good, in fact, that in mid-January, Mader broke out the cake and champagne a year early to celebrate. The actual occasion was the rebranding of the company, from Southeastern Printing to Southeastern, with the tag line "Complexity Made Simple." According to Mike McGuire, account executive, the move was a by-product of a cultural revolution that had been developing for the past couple of years.
"We wanted to change the thinking of the employees—get everybody on the same team, thinking the same way, strategizing the same way and possessing the same values," McGuire notes. "Once we started establishing that, it lent itself to the rebranding. This seemed like the right time to do it because of the changes we were making internally. Business has changed and we've become more than just a printer."
The changes that transpired at Southeastern in 2012 alone are staggering and do, indeed, change the makeup of this not-just-a-printing company. Leading the winds of change:
• A new Blue Water Editions gallery and creative wide-format printing studio debuted in Port Salerno, FL, in May. This gave Blue Water, a 19-year-old fine arts printing and graphics concern co-located with Southeastern, room to breathe and showcase the works of 15 artists featured there. Sharing the fine arts location is a creative wide-format imaging offering, which provides specialty products to complement its litho client base, notes Jason Leonard, director of wide-format imaging.
"We've invested in some pretty unique equipment, such as direct substrate UV printing, which allows for a higher quality product than most of our competitors are offering," he says. "We recently invested in high-speed, eco-solvent printing, which allows us to be very competitive in the marketplace with large runs of banners and posters, in a very environmentally responsible manner."
Headlining the wide-format digital division is a Mimaki JFX-1631 UV curable flatbed inkjet printer. Southeastern also boasts two Roland FJ 540 wide-format printers, a 12-color Canon ImagePROGRAF iPF 9000 inkjet machine and an eight-color Epson Stylus Pro 9880 inkjet unit.
"We've really focused on doing more with campaigns that our clients are using," Leonard adds. "We are very much in a consultative selling process where we look at the campaign, and match it to very unique processes and substrates to offer more and allow them to stand out that much further. When you add in diecutting and routing, it gives us an extensive array of finishing to offer cooler products."
• Southeastern bolstered its label division with the opportunistic acquisition of, essentially, a greenfield roll-fed beverage label manufacturer in Tyrone, PA (near Penn State University). The business, situated in a 150,000-square-foot facility, was purchased from Diversapak Packaging and was rechristened Core Label.
The deal, from start to finish, was fortuitous. Mader was about to take his family on a Mexican vacation when the phone rang with a deal he couldn't let pass by.
"It turned into a fantastic opportunity for us, as they had recently installed new, modern equipment," Mader remarks. "Before we closed on the facility, we had multi-year contracts signed with some of the largest beverage companies in the country. From a capital investment standpoint, we were in there for pennies on the dollar for what it would take to greenfield an operation. It adds tremendous capacity and provides us an opportunity to go after larger brands with that capacity. It's turning out to be the most successful acquisition the company has ever made."
• Before 2012 drew to a close, Southeastern tested the M&A waters again by closing on a deal to acquire commercial printing specialist SCP Graphics of Boca Raton, FL. A newly-formed entity, SEP Communications, was created, with 24-year SCP President Marty Harris becoming a partner in the business.
SCP, a former division of Miami-based National Litho, provides digital and sheetfed printing, fulfillment and advertising premiums. As SEP Communications, Harris and her team will act as the strategic selling arm of Southeastern, with a focus on generating Web-to-print programs for clients.
According to Harris, SCP and Southeastern had embarked on talks to join forces back in 2007, but a deal couldn't be hammered out and Harris' firm joined National Litho. As the years went by, Harris focused more and more on online-related services, particularly online storefronts, with high-level marketing executives wanting to take more control of their brands.
"When we finalized the deal, Southeastern had not launched its new brand yet," Harris notes. "It was a perfect opportunity to introduce their new brand and the fact that we were coming on board to push other companies and our clients' brands into the next level. We can do that through creative services, copywriting and storefronts for both print and advertising premiums, as well as cross-channel campaigns, direct mail, kitting and fulfillment. You name it, we completely handle marketing campaigns for our customers, from concept to result, all backed by analytics.
"Having all the equipment under one roof here is perfect. We don't have to depend on anyone else to get things done."
Mader notes that Southeastern had hired a consultant and tried to create a strategic selling arm back in 2007. It failed, he says, primarily because his company's core strength was manufacturing as opposed to being a marketing services provider.
"We are a world-class manufacturer, a one-stop solution," Mader says. "We can produce PURLs and personalized direct mail, and execute those offerings flawlessly. But, we weren't the right company to be out there advising companies about their branding needs or offering marketing solutions, because we're manufacturers. We went into a shell on that aspect.
"We got together with Marty Harris and saw her expertise in those areas. Marty and her team really comprehend what it takes to make a strategic sale. Her team presents to the CMOs, CFOs and CEOs of companies. Marty will go in with her team of domain experts—be it experts in creative, digital wide-format, direct mail or Web-to-print storefronts—and become the strategic selling arm of Southeastern."
In all, Southeastern has made seven acquisitions in the last 10 years, some of which are smaller tuck-ins, but the SCP and Core Label acquisitions are destined to be game changers. Mader feels some of the best deals, however, are the ones not made. The present economy is a dangerous one in which to be overpaying for an acquisition, and Mader feels his disciplined, seasoned M&A team has a knack for reading the current market and is confident it will continue to deliver on opportunities to add tuck-ins and other types of deals with firms that fit with Southeastern, both product- and culture-wise.
Getting With the Program
On the environmental front, Southeastern has taken aggressive steps to implement a Green Ink program that provides customers with environmentally friendly production materials and processes. According to Joanie Lotze, marketing manager, department managers are urged to eliminate excess use of raw materials and develop energy conservation practices.
"One of the most powerful tools we generate from our Green Ink program is our environmental benefits statement," Lotze says. "We've invented a way of producing a report for our clients, summarizing their environmental savings. This statement gives our customers a quantifiable report, which substantiates a stronger impact in their client's eyes."
The commercial pressroom at Southeastern is dominated by Heidelberg gear; two six-color Speedmaster CD sheetfed offset presses (a 40˝ and a 28˝) are joined by a 10-color, 40˝ perfector. A six-color, 20˝ Speedmaster SM 52 with coater was recently added, while an Epson eco-solvent printer was being installed at press time. Another addition includes a Duplo slitter/cutter/creaser for business cards, with further investments planned to bring the former SCP and Southeastern on the same page in terms of a Web-to-print software platform.
One of the measuring guides Southeastern uses to gauge the success of its company is in the feedback it receives, not only from customers, but the industry as well, particularly the awards it has garnered in printing contests on both the state and national levels. In 2012, Southeastern captured a "Benny" award in the Premier Print Awards for the "Best Annual Report." It was the fifth time in the past five years that Southeastern had grabbed a "Benny" in the Best of Category, and the printer has won literally dozens of other awards through PIA and hundreds from the Printing Association of Florida (PAF).
"It's a testament to the quality and the kind of people we have working here at Southeastern," Lotze says.
Growth is not relegated to acquisitions; Mader points out that Southeastern's M&A to organic growth rate is 50-50. Prospecting is a popular tool for Southeastern, which uses a sales contest and humorous YouTube videos to really elevate everyone's game to the next level. Toss in Marty Harris and her team's strategic marketing services selling, the vast potential offered by wide-format printing, and the nimbleness Mader can offer as owner/operator, and Southeastern is armed to continue its string of 12 consecutive years of profitability.
"It's people working hard and having a good time," Harris concludes. "If you can't have a good time, what's the point?" PI