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Mail-Well--The "Mail Man" Speaks

September 1999
Gerald F. Mahoney, chairman and CEO of Mail-Well, is particularly pleased with the margin improvements in each of the company's businesses so far this fiscal year. Mail-Well's 1999 second quarter showed a sales increase of 25 percent—to $439 million—from the same period a year ago. Second quarter net income of $15 million increased 33 percent from the same quarter last year. No doubt, Mail-Well is having a strong year.

"We are particularly pleased with the margin improvements in each of our businesses," Mahoney said at the time the news of Mail-Well's second quarter was announced.

"The second quarter demonstrates the continued success we have had in improving profitability; second quarter operating margins increased to 8.9 percent from 7.1 percent last year. In particular, the envelope restructuring initiatives continue as planned and are delivering the results we anticipated."

A bullish second quarter was not the only factor pleasing Mahoney. A new accounts receivable securitization facility was successfully syndicated in the second quarter, which increased the company's borrowing capacity by another $50 million. The company also successfully completed four acquisitions in the second quarter, which included three commercial printers:

Direct Graphics, Sidney, OH; Forman Lithograph, San Francisco; and Avon Behren Printing, San Antonio. The label manufacturer acquired was Design Mark Industries, located in Wareham, MA.

Recently, Mahoney, who was gracious and accommodating despite his overwhelming schedule, addressed topics ranging from Quebecor's recent acquisition of World Color to Mail-Well's embrace of digital technologies, including a recent investment in Hagen's HagenOA open architecture management software, to the giant's thoughts on future acquisitions.

PI: Describe Mail-Well today.

Mahoney: Mail-Well has a revenue run rate of almost $2 billion from operations in four different segments of the printing industry, nearly double what it was just two years ago. The first and fastest growing segment is general commercial printing. We believe that we are the largest commercial printer in North America, with more than $800 million in sales.

Our second segment is envelopes. We are the largest envelope manufacturer in the world, with sales of almost $800 million. Our third product line is labels for the food, beverage and spirits industries. These labels include both glue-applied and pressure-sensitive labels. We believe we are the second largest supplier to this market, with sales in excess of $200 million. Our final segment is what we call printing for distributors. This $200 million business includes forms, pressure-sensitive labels, envelopes, printing and many other printed documents sold through a distributor network. We are the largest supplier to this $4.5 billion market.


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