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Von Hoffmann Corp. -- By the Book

January 2001

In the last three years Von Hoffmann Corp.—which now includes Von Hoffmann Press (the core educational book manufacturing operation); Von Hoffmann Graphics; Preface; H&S Graphics; and Precision Offset Printing—has swelled to 10 locations and more than 2,200 employees. The acquisitions are essentially twofold. The main thrust was to expand the product and service menu the company can offer to its educational publishing customers, while also making inroads into other markets.

Custom Printing, of Owensville, MO, and Frederick, MD; and Bawden Printing, of Eldridge, IA, were merged to create Von Hoffmann Graphics, the commercial printing branch. Von Hoffmann Graphics boasts products and services designed for the one- and two-color education and commercial markets.

Preface, of Schaumburg, IL, was acquired in 1998 for its cover-to-cover book design and editorial capabilities, including the securing of rights and permissions. Other prepress specialties include photo and art placement, and electronic page production.

H&S Graphics, of Rolling Meadows, IL, was tabbed in 1998 for its color prepress functions. H&S is largely dedicated to the education market. It uses CreoScitex and Barco CTP systems and recently added the Prinergy PDF workflow system. During the year 2000, approximately 50 percent of the over 250,000 pages produced there were CTP.

"We've spent a lot of money in updating DTP and CTP," Uhlenhop states as the company's initiative, which began four years ago and encompasses all the Von Hoffmann facilities. "We're heavily focused on CTP across the company."

Precision Offset, of Leesport and Dauberville, PA, was purchased in 2000 for its plastics printing specialty. The company has enjoyed long, successful strategic partnerships with education publishers, which has led to innovations in packaging, efficient production and higher quality products. Some of the cost-cutting and quality measures include packaging transparencies without slipsheets, saving costs of materials, labor and shipping; developing textbook inserts for binding without using staples or glue; introducing a static-free transparency material; and introducing recycled content polyester to the market as an ecologically responsible product.

New Hardware
Von Hoffmann has set out to solidify its newly fortified organization by investing $100 million in equipment upgrades during the past couple of years. It's an ongoing process that will carry into 2002 and beyond. It will serve to enhance the company's menu of 38 web presses (Goss and Timsons), 20 sheetfed presses (Heidelberg) and a dozen or so soft- and hard-cover binding lines (Muller Martini, McCain and Kolbus). Three more presses and another binding line are slated to be installed over the next 18 months.

The Owensville, MO, operation received an eight-unit Heidelberg M-1000B press and a Muller Martini NB3007 soft-cover line in the fall of 2000. The Eldridge, IA, facility is slated to install a four-unit Goss Mark 16 press next month and the Frederick, MD, plant will acquire a Timsons T48A press in July.

When it comes to binding lines, Von Hoffmann Press prefers a little creativity. It offers Smythe back sewn, McCain side sewn and its own VonBind unmilled adhesive binding, along with mechanical bindings such as spiral binding, Wire-O twin loop, semi-concealed Wire-O and plastic comb. Specialty juvenile bindings include side-sewn, saddle-stitched and side-wire paper cover.

Uhlenhop notes several changes have taken place recently in the U.S. book printing market—larger formats, larger pagination and drastically reduced run lengths. In the education niche, it is driven by the needs of individual states for custom products. According to Uhlenhop, many publishers are being asked to manufacture customized textbooks, opting for a more condensed version.

But while he believes that the market is growing in terms of units, the shorter press run lengths are burning up capacity in the marketplace. "In 2001, I predict that we'll see an increase of 10 percent in units over 2000, but much of the capacity in the marketplace is being absorbed by the fact that the shorter print runs take up a significant amount of capacity," he says.

On the commercial end, Bob Mathews, president of Von Hoffmann Graphics, reveals that reduced print runs are being motivated by publishers' desires to test markets without having to build a significant inventory. In the last three to four years, he has seen an annual 5 percent to 10 percent reduction in typical press runs, which, for Von Hoffmann Graphics, now averages around 7,000 for a soft-bound title.

Short runs not only consume capacity; projects also become time- and capital-intensive, and equipment makereadies are more involved. But one element that works to Von Hoffmann Graphics' advantage is the variety of markets it serves, particularly educational publishing, along with standardized testing for this market (the company is likely the leading producer of testing material in the country), government printing (it's the nation's third largest printer for the Government Printing Office) and trade books.

"The nice thing about Von Hoffmann Graphics is that we're not heavily populated in any one specific market," Mathews reveals. "On the trade end of the business, we don't compete in what I call the blockbuster market, where you have bestsellers with million-count runs. We try to focus on serving small- to medium-size trade publishers who are looking for a supplier that's quick to respond, and that doesn't have assets and capacity tied up in the production of those large, bestselling novels. Also, it helps that we treat these small and medium publishers like large customers."

Production cycles, along with print runs, have been reduced as well, as publishers find themselves needing to speed time to market. It has required Von Hoffmann to be more responsive than ever before, according to Uhlenhop.

To that end, Von Hoffmann uses CreoScitex Prinergy PDF-based digital workflow software for electronic file submission. To make the company more aerodynamic, systems integration (such as PRIMAC scheduling and job entry software) has enabled the respective Von Hoffmann facilities to be more compatible with one another.

The integration of Von Hoffmann has been noted quickly by its customers, who no longer feel the need to seek complementary services elsewhere. "I was visiting a customer last summer, and they were looking at three different sources to do one particular project," Uhlenhop says. "It had a number of pages—a four-color project complete with projection transparencies. As we talked, I told them that we had the ability to accept one purchase order for everything they needed. The job required work from our one- and two-color printing facilities, our four-color manufacturing plants, as well as the plastic printing site. They cut us one purchase order, and we gave them them a single invoice. As a result of that project, we now have 15 other products from that same client."

Competing technologies such as the Internet have yet to make a discernable dent in the markets that Von Hoffmann serves. According to CFO Peter Mitchell, new paperless educational media such as the World Wide Web have thus far forged complementary relationships, rather than cannibalized, market growth. One area, however, where he says the Internet has shown signs of a replacement nature is at the college level, where Websites—that support a specific institution or curriculum—have had a slight impact on the volume of printed course offerings.

No Substitute
"When we did our most recent acquisition—Precision Offset, which serves the plastic overhead transparency market—we found that the average teacher, especially in the el-hi environment, prefers this technology to help facilitate the learning process," Mitchell remarks. "Transparencies are highly functional and more interactive, in many ways, than a PowerPoint presentation in terms of engaging students in the learning process.

"There's no doubt that there is room for growth with the Internet, and we'll learn more about what it can offer and do," he adds. "But, to this point, it certainly hasn't demonstrated that it is a substitute for the educational textbook."

Likewise, Uhlenhop feels there is no substitute for taking care of Von Hoffmann's customers, as well as its employees, both of which he considers key in the company's long-term future.

"We want to continue to build a company that gives its employees an opportunity to grow. The culture of an organization is very important," he stresses. "We also want to grow our customer base. We like to pride ourselves on finding ways to manufacture a better book. We may not have all the answers, but we sure try."



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