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Herff Jones Pricing & Profitability. June 14, 2010. History. In the diploma, announcement and invitation markets Competes with Jostens, Balfour, and Taylor (NRP) NP just earned business back that was lost to Smart in late 2008 due to price differential and service issues

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history
History
  • In the diploma, announcement and invitation markets
  • Competes with Jostens, Balfour, and Taylor (NRP)
  • NP just earned business back that was lost to Smart in late 2008 due to price differential and service issues
  • Although the business was returned this account remains extremely price sensitive
  • Envelope stock is sold direct to Royal Envelope (this analysis combines the two accounts for purposes
cy 2009 profitability
CY 2009 Profitability

Herff Jones & Royal Envelope

Total business:

Volume 1,050 MM LB

77% increase from 2008

2010 volume is 493,825# thru March

VM % 30%

GP % 3%

  • Note profitability numbers are based on actual costs for 76% of total volume, standard costs for the remainder, and current pricing for all items
smooth or vellum 66 85 76 85 cwt
Smooth or Vellum- $66.85 - $76.85/cwt

Sales & Item Information

Pricing Information

  • Text & Cover; smooth or vellum all plain edge
    • 925,458# in CY 2009
    • 426,652# in CY 2008
    • 421,572# in CY 2010 thru March
    • 29% VM
    • 5% GP
  • Price 01/2006 of $58.90
  • Price 05/2010 of $76.85
  • Pricing Activity since acquisition:
    • $2.00/cwt increase on 5/1/2010
    • ($5.10)/cwt decrease on 3/5/2009
    • $1.00/cwt increase on 1/1/2009
    • $19.05/cwt increase on 7/1/2007
    • $1.00/cwt increase on 4/1/2007

30% price increase since acquisition

swirl or linen finish some deckle edge 100 20 105 80 cwt
Swirl or Linen finish, some Deckle-Edge - $100.20 – $105.80/cwt

Sales & Item Information

Pricing Information

  • All text items with off-machine embossed finishes of Swirl or Linen. Some deckle-edge Items
    • 45,944# in CY 2009
    • 82,251# in CY 2008
    • 71,254# in CY 2010 thru March
    • 20% VM
    • -30% GP
    • Profitability numbers negatively effected by deckle-edge. Deckle-edge items returning a GP of -119% and VM of -27%
  • Price 07/2000 of $88.80
  • Price 05/2010 of $105.80
  • Pricing Activity since acquisition:
    • $4.00/cwt increase on 5/1/2010
    • $9.00/cwt increase on 1/1/2009
    • $3.00/cwt increase on 4/1/2007

18% increase since acquisition

parchment text cover some deckle edge 135 00 148 00 cwt
Parchment Text & Cover, some Deckle-Edge - $135.00 - $148.00/cwt

Sales & Item Information

Pricing Information

  • Parchment items. Some deckle-edge items
    • 30,849# in CY 2009
    • 24,007# in CY 2008
    • None in CY 2010 thru March
    • 38% VM
    • 10% GP
    • Deckle-edge items returning a GP of -48% and VM of 14%
  • Price 08/2001 of $114.00
  • Price 05/2010 of $135.00
  • Pricing Activity since acquisition:
    • $4.00/cwt increase on 5/1/2010
    • $15.00/cwt increase on 1/1/2009
    • $1.00/cwt increase on 4/1/2007

17% increase since acquisition

other deckle edge 125 90 129 90
Other Deckle-Edge - $125.90 - $129.90

Sales & Item Information

Pricing Information

  • Deckle-edge items with a vellum finish
    • 27,745# in CY 2009
    • 18,284# in CY 2008
    • None in CY 2010 thru March
    • 1% VM
    • -70% GP
  • Price 07/2000 of $114.60
  • Price 05/2010 of $129.90
  • Pricing Activity since acquisition:
    • $4.00/cwt increase on 5/1/2010
    • $10.30/cwt increase on 1/1/2009
    • $1.00/cwt increase on 4/1/2007

13% increase since acquisition

handmade embossed some with deckle edge 114 60
Handmade embossed, some with Deckle-edge - $114.60

Sales & Item Information

Pricing Information

  • Handmade embossed items. Some deckle-edge items
    • 3,058# in CY 2009
    • 33,659# in CY 2008
    • None in CY 2010 thru March
    • 35% VM
    • 7% GP
  • Price 07/2000 of $88.80
  • Price 05/2010 of $114.60
  • Pricing Activity since acquisition:
    • $12.80/cwt increase on 5/1/2010
    • $9.00/cwt increase on 1/1/2009
    • $3.00/cwt increase on 4/1/2007

28% increase since acquisition

stock purchases
Stock Purchases

Sales & Item Information

Pricing Information

  • Herff also purchased branded items (Starwhite, Sundance & UV Ultra II)
    • 17,146# in CY 2009
    • 9,350# in CY 2008
    • None in CY 2010 thru March
    • 58% VM
    • 38% GP
  • 40,000# List Price
cost savings options
Cost Savings Options
  • Furnish change recommendations:
    • Bright White Vellum change furnish that would positively effect formation
      • Effects 621,528# of the Vellum/Smooth Category
      • $0.80 - $0.90/cwt of savings
      • $4,972 - $5,594 annually
  • Cost of bad paper machine trim
    • Bright White Vellum typically runs short on PM and deckle requires a butt roll to be created and broked
      • Effects the same 621,528# from above furnish change
      • Improvement in trim to optimal sizes would reduce cost approximately $3.00/cwt
pricing proposal
Pricing Proposal
  • Fred/Brad/Dave Lemmers to complete
revised financials
Revised Financials
  • Dave Lemmers to Complete