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| Revenue growth of this SBU has lagged the industry
in recent years. A longer sell cycle, specialty applications, and the need
for systems integration have argued for a dedicated sales force, which is
now being established. In addition, low-margin business was eliminated in
2001 during the Company's restructuring. The focus for this SBU will be
on selling integrated solutions, such as that described earlier for automating
package labeling. Margins improved consistently during the restructuring period, reflecting a better business mix and lower manufacturing costs brought on by improved utilization. SMARTworks.com, Inc. This SBU, a wholly owned subsidiary established in July 2000, enables sellers and buyers of print and other office supplies to transact business efficiently over the Internet. In addition, its solutions enable its users to manage purchases to minimize errors, missed deadlines, and obsolescence, which can be significant for printed materials. SMARTworks provides services to other Strategic Business Units, principally Document Management. Document Management's sales representatives and customers use SMARTworks' application to manage the ordering and control of printed documents. SMARTworks also markets its services through other third-party channels and directly to its customers. Current SMARTworks customers number 750, with a total of 73,000 users. |
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This start-up operation has invested heavily in the development of its application, internal infrastructure, and more recently its marketing and direct sales. SMARTworks grew out of an internal support function where it was a very effective tool in support of the sale of documents, which accounts for its high usage but low external revenue. The focus for this SBU is to broaden its application and increase sales to third-party customers. Operating expenses are expected to level off in 2002. ENVIRONMENTAL MATTERS The Company has been named as one of a number of potentially responsible parties at several waste disposal sites, none of which has ever been Company owned. The Company's policy is to accrue for investigation and remediation at sites where costs are probable and estimable. At this writing, there are no identified environmental liabilities that are expected to have a material adverse effect on the operating results, financial condition, or cash flows of the Company. |
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Standard Register |
