HP reports negative quarterly results

May 22, 2015

The OEM’s revenue, profits and sales all fell in the second quarter.hplogonew

HP announced its second quarter results, which included net revenue of $25.5 billion (€23.1 billion), a seven percent fall from the year before, as well as cash flow of $1.5 billion (€1.3 billion), a fall of 51 percent year-over-year, while net income fell 21 percent to $1 billion (€906 million). Despite these results, the OEM stated that its separation into two companies – HP Inc. and HP Enterprise – “remains on track”, with an expected cost to operations of around $400 million to $450 million (€362 million to €407 million).

In terms of product segments, printing revenue fell seven percent as hardware units fell four percent, and despite commercial hardware increasing by one percent, consumer hardware fell by six percent, and supplies revenue fell five percent. In other units, Personal Systems revenue fell by five percent, Enterprise Group revenue fell one percent, Enterprise Services revenue fell 16 percent and software revenue fell by eight percent.

Alongside the results, HP confirmed that Cathie Lesjak would become Chief Financial Officer (CFO) of HP. Inc., Tim Stonesifer CFO of HP Enterprise, Chris Hsu Chief Operating Officer at HP Enterprise, and Alan May Head of Human Resources at HP Enterprise.

The New York Times reported that sales “fell short” of analysts’ expectations, referring to the “shifting technology landscape” and the fact that HP’s businesses “have been battered over the last several years”. It added that while HP Inc. and Enterprise might “allow each entity to discover new opportunities and reduce costs”, investors are questioning “whether the split will slow HP’s production creation and sales […] and whether competitors will exploit customer confusion to seize market share”.

The newspaper also noted that “since announcing the plan to split, HP has reported declining profit”, and Edward Jones Analyst Bill Kreher commented that HP’s results “illustrated that the company continued to perform while revenue was getting hurt […] likely [the split] helps speed up decision making, but I still believe that the turnaround will continue to require not only solid execution but a lot of patience”.

Toni Sacconaghi, Analyst at Sanford C. Bernstein, added that while the earnings were “fine”, and the split “would give each entity a chance to pursue different financial strategies […] at the end of the day, the two halves would be essentially the same company with some additional costs. There’s no magic about cutting an apple in two. It’s still an apple in two pieces. It’s not going to become bigger overnight”.

CEO Meg Whitman stated of the results: “I’m pleased with where we ended the quarter, the continued success of our turnaround, and the progress we’re making on separation. Despite some tough challenges, we executed well across many parts of our portfolio, sustained our commitment to innovation, and delivered the results we said we would. HP is becoming stronger as we head into the second half of our fiscal year and separation in November.”

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Epson renews sponsorship with Manchester United

May 22, 2015

The OEM and the English Premier League football club will continue their partnership.

Manchester United footballers Robin van Persie, Radamel Falcao and Tyler Blackett

Manchester United footballers Robin van Persie, Radamel Falcao and Tyler Blackett

The global partnership, which began in November 2010 and was renewed in 2012, saw the OEM become the club’s Official Office Equipment Supplier, with stadium advertising, hospitality, printer provision and other benefits included in the deal. The renewal of the deal means that it will last until the end of the 2017/18 season, and is said to reflect “the success to date of the partnership”.

Epson stated that it has helped the OEM to “engage more with its customers in key markets and enhance its global brand awareness”, with the partnership said to “continue to play a key role in boosting its global profile and supporting business growth” for products including inkjet printers. Epson will continue to “benefit from stadium advertising rights and hospitality”, while Manchester United will continue to receive “core office and front-of-house printing and imaging equipment”.

The OEM added that although it and the club “compete in different environments”, it believes that the two “share a common commitment to continuous improvements in performance and innovation”, as well as being “indispensable part[s] of the community and the lives of customers and fans”.

Ian Cameron, Epson’s General Manager of Brand Communications, stated: “We are very excited to renew our global sponsorship agreement with Manchester United. The partnership to date has provided us with numerous benefits in key markets such as the office and emerging economies, and the renewal reiterates both organizations’ strong and ongoing commitment to excellence and to helping our customers to achieve their dreams.”

Richard Arnold, Manchester United’s Group Managing Director, added: “Manchester United is very proud of its partnership with Epson. Already a household name, the company has shown the innovation and determination to take this name further, breaking into new and emerging markets. We are happy to have played our part in this expansion, introducing its fantastic products to our global fanbase.

“An example of this is Epson’s innovative 3D projector commercial featuring Manchester United players, which has been seen by over 10 million people worldwide. This is the second time Epson has extended its relationship with the Club – demonstrating the value that partnering with Manchester United brings to both the Club and to the partner.”

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UK cartridge distributor switches to enterprise business

May 21, 2015

beta_logoBeta Distribution is moving towards storage and away from consumables.

Channel Web reported on Beta Distribution’s plans to switch focus to storage and enterprise, which it hopes will allow it to raise £200 million ($311 million/€279 million) in revenue by 2016. The company intends to “focus on the storage space” and eventually have this “account of half of its business by 2016”, with an eye on a “move towards the enterprise world”.

The company began as a calculator repair firm 30 years ago, and expanded into fax machines before focusing in the last 10 years on printers, toner cartridges and inkjet cartridges. This business has accounted for 75 percent of its offerings up until now, but Nigel Morris, Beta Distribution’s Marketing Director, stated that “we are now going through our latest transformation, which is moving away from transactional products like consumables into products based around data, storage and services associated with that”.

He added that “the best illustration I can give, is that four or five years ago, storage products were around five or six percent of our business – this year they will be 40 percent of the business”. The company expects the storage side to “account for around half” of its total business by the end of 2016, and has “enjoyed some sharp growth” recently, seeing revenues grow from £67.4 million ($104 million/€94 million) in 2009 to £158 million ($245 million/€220 million) this year.

In the past few weeks, Beta Distribution has signed up “a number of new vendors” including Exablox and Falconstor, both of which are focused on the storage market. Ricky Patel, Beta’s Enterprise Business Manager, commented that it is “looking to take on another vendor in the next quarter”, and its long term plan is to “bring on two or three vendors at a time, develop a plan, execute it with the target-market resellers and then go and create additional reseller partners”.

The storage focus will take in both backup and archive recovery, having already “nailed” commodity-based storage, with Patel stating that Beta will introduce “entry-level enterprise storage” for companies ranging from 250 to 4,000 employees. The company “does not have a warehouse of its own”, and Morris added that this is “one of the reasons we have been able to grow so fast […] we are a distributor who outsources our distribution capabilities”.

He concluded: “The benefit of that from our point of view is that if we decide to bring on a new range of products, like we are doing now, we simply ask DPD, who are our warehouse, to move the tape and make the room a bit bigger. It means we have been able to grow so fast, because we can bring on all these products without worrying about bricks and mortar.”

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Epson Malaysia’s sales up 31 percent in 2014

May 21, 2015

epsonThe OEM’s growth rate more than doubled compared with 2013, with its projector segment seeing sales increase 57 percent year-on-year.

Epson claims to have a 24.3 percent share of Malaysia’s projector market, and that 2014 was its 14th consecutive year as the world’s leading projector brand, according to Futuresource Consulting figures, Digital News Asia reported.

The company’s dot matrix printers have a 96 percent market share in Malaysia, with sales rising 32 percent year-on-year, while POS printer sales grew 54 percent in 2014, achieving a market share of 36 percent. Inkjet sales are reportedly rising 29 percent year-on-year, boosted by the growing popularity of the L-Series printer, which enjoyed a sales increase of 37 percent year-on-year.

Epson’s Malaysia division currently has 84 employees and 61 authorised service outlets across the country.

Shimizu Tomoya, Epson Malaysia’s Country Manager, said: “Our strong FY2014 performance comes on the back of 14 consecutive months of over-achieving sales targets – which underscores the incremental appeal of our brand and products. We will continue to build on our compact, energy saving and high precision core technologies to bring more innovative, versatile and reliable printing and imaging solutions to the Malaysian market.”

Danny Lee, General Manager of Sales and Marketing for Epson Malaysia, commented: “Our award-winning line of L-Series printers is ideally suited for office and business environments of all sizes. Not only does Epson offer the versatility of wirelessly printing from whatever device the user prefers, we are also successfully addressing the issue of cost management that is a priority in any business.”

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HP updates supplies partner programme again

May 20, 2015

hplogonewThe updated programme features requirements relating to original supplies sold online, including ensuring consumers are “not confused by advertising or information about alternative products”.

OPI (subscription) reported on the “next stage” of the Qualified Supplies Partner programme, the latest iteration of HP’s two-year revamp of its partner service. First announced in November 2013, the company stated that its distribution system would switch from “open” to “authorised”, adding that “we’re basically asking all of our reseller partners just to register with HP so we can know who they are”.

Major distributors have to be authorised by the OEM, and are required to apply for authorisation online with “pretty standard business information”. The main issue was that an authorised partner would invalidate its agreement with HP if it decides to resell HP products to a non-authorised reseller instead of the end-user – a big issue in terms of cartridge supply.

This was followed in April 2014 by the “Qualified” status update, where supplies partners were required to comply with new regulations and obtain “Qualified” status, or they would not be allowed to sell HP consumables. All “Authorised” resellers had to comply with “a compulsory set of new requirements”, which would give them “Qualified” partner status.

Any reseller that did not register by 1 November 2014 would “no longer be able to sell original HP ink and toner supplies”, with potential issues stemming from the authorisation of distributors in terms of who they can and can’t sell to under the terms of the authorisation. In addition to this, those who do not sign up and obtain “Qualified” status are unable to sell HP consumables.

The new update to the “Qualified” programme has reportedly been sent to US supplies resellers this week, with “Qualified Supplies 2.0” effective as of 1 November 2015. The next “phase” is said to contain the “same five fundamental criteria”, but there are reportedly “some new requirements relating to how HP Original supplies are sold online”.

The OEM stated that the update is “intended to significantly improve the HP supplies shopping experience online by ensuring customers are getting the most accurate product information when they search online and are not confused by advertising or information about alternative products. This is becoming critical because 75 percent of toner and 50 percent of ink shoppers begin their search online”.

In October 2014, HP said it would collect end user information via distributors and partners, who will have to provide this when placing orders, such as customer names and addresses. HP argued this would help support improvements in support and shipments, but reseller numbers have almost halved since the reforms were announced.

Finally, in March earlier this year, the OEM adjusted the programme again, stating that the updates are “designed to help partners capture immediate opportunities and position them for future growth”.

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Cartridge World opens office in One World Trade Centre

May 19, 2015

Master Franchisee Greg Carafello used to be based in the World Trade Centre before 9/11, and has now moved into the new building.

Greg Carafello outside One World Trade Centre

Greg Carafello outside One World Trade Centre

Cartridge World announced that Carafello, Master Franchisee for the North American arm of Cartridge World, has become the “first 9/11 business tenant to reopen his office in one of the most celebrated buildings in the country”. The move also meant Cartridge World is now “operating business out of One World Trade Centre”, which replaced the Twin Towers destroyed in the terrorist attacks 14 years ago.

Carafello moved into the new building on 1 May, having survived 9/11 and seen his operations “completely destroyed” as he had been based in the World Trade Centre. Carafello moved all operations to a location in New Jersey “later that same week” in 2001, with his business closing in 2004 before he “opened his first Cartridge World location”.

By 2014, he had become Master Franchisee for Cartridge World North America, and had “turned his one-store operation into 58 locations in four states”. He has now chosen to “reopen his office” in One World Trade Centre, which was recently completed.

Carafello stated: “The reopening of One World Trade Centre shows the perseverance of our great city, and moving our operations back into the building marks a very special day for us. I am thrilled to be back in the World Trade Centre; Cartridge World will flourish in this environment. The business energy is unlike anything I have ever felt.

“There are more than two million small businesses in New York. If we can help each one save $1,000 (€894) on printing, we’ll put $2 billion (€1.7 billion) back in their pockets.”

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Printerz Co. Ltd defaults on $8,500 payment?

May 15, 2015

ColorsphereIndia-based Colorsphere Exim, an international trader in empty cartridges, alleges that it is owed the money by South Korean group Printerz, for a shipment of cartridges they supplied in September 2014.

Ankit Goel, Director of Colorsphere, has been trying to contact the company owner, Sang Hyon Choe, since shipping the goods and sending the invoice in September, but has so far failed to get a response from the company. In January 2015, he  asked the Indian Embassy in South Korea to help, but they too were unsuccessful in reaching the company. Goel then contacted  The Recycler in March 2015 regarding the default amount of $8,500 (€7,583).

Neither the company or its owner have responded to our enquiries.

Have you traded successfully with this company or do you know if they have closed? Please contact The Recycler [email protected] if you have any news or information.

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Ricoh India expanding operations

May 15, 2015

The OEM’s subsidiary is aiming to “drive growth and increase its market share”.

Ricoh India's Manoj Kumar

Ricoh India’s Manoj Kumar

Daiji World and Decca Herald reported on Ricoh India’s Managing Director Manoj Kumar, who spoke about the company’s plans to “drive growth and increase its market share in products and services”. He noted that the company intends to invest Rs 500 crore ($78 million/€68 million) throughout this financial year, with the plan of “ramp[ing] up data centres and [opening] a tech centre”.

According to market analysts IDC, the company had a 28 percent share of the market in monochrome MFPs and 40 percent in colour in the first quarter of the year, and its revenue increased from Rs 300 crore ($47 million/€41 million) in 2012 to Rs 1,047 crore ($164 million/€144 million) in 2014. In turn, it is said to be “witnessing exponential growth with growing demand from corporate and government projects”. In the first nine months of the year, operations income grew 46 percent from Rs 694 crore ($109 million/€95 million) to Rs 1,010 crore ($159 million/€139 million).

The company has also installed data centres in Kolkata and Noida thanks to an investment of Rs 25 crore ($3.9 million/€3.4 million), and is set to “focus on the five industrial verticals” including education, healthcare, BFSI (banking, financial services and insurance), manufacturing and strategic business “for the next three years”. A recent deal with the country’s postal department as a system integrator for ICT will see Ricoh help “modernize” 129,000 post offices, and is worth Rs 1,370 crore ($215 million/€189 million), while two others deals were won to “install IT infrastructure” in Karnataka and Tamil Nadu.

Kumar stated: “We will invest Rs 500 crore this fiscal to expand our operations across the country […] to offer our range of IT products, solutions and software services to more enterprises in the private and government sectors. We are upbeat about our growth and increased visibility in the Indian market where IT services will be a growth engine in coming years.

“We have already streamlined an investment plan. Here we will take the investment amount to start a separate tech centre which hosts an experience zone (just started operations) and a B2C outlet to address growing demand from customers. We find Bengaluru as an ideal location to start the tech centre. We have already optimised the capacity of two data centres and there is need for additional investment taking into account the volume of business we are expecting from the government and other customers.”

He added: “We are expecting a fourfold increase for the coming three years, which means we will have to cross Rs 4,000 crore ($630 million/€554 million) by 31 March 2017. Here we are expected to make an annual growth rate of 55 to 60 per cent. I think our IT business will help us to register that much growth. We have already won 20 to 30 projects from the government. These are on different stages of development. We do hope to get into more business opportunities in the digital India campaign and smart city projects.”

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MSE wins channel award for remanufactured cartridges

May 13, 2015

MSE's Luke Goldberg informs attendees about the company at a BTA event it hosted in 2014

MSE’s Luke Goldberg informs attendees about the company at a BTA event it hosted in 2014

The remanufacturer was recognised by the BTA Channel dealer group for the second straight year.

The BTA (Business Technology Association) awarded MSE for the “second straight year” after giving the company the BTA Channel Choice Award for remanufactured cartridges in May 2014. The association emailed its dealer members “and a number of dealers outside of its membership” earlier in 2015 to get their votes for awards categories, asking dealers to “rate their primary- and secondary-line hardware vendors in key performance categories”.

The dealers were also asked to rate vendors in two additional categories, one of these being remanufactured cartridges. Ron Hulett, BTA President for 2014 and 2015, stated that the awards programme “provides dealers with a means of recognising and honouring those vendors that are most supportive of the dealer channel”.

He added that “through the years, we have honoured a number of deserving vendors for their outstanding product lines, exceptional levels of performance and dealer support. As one of our 2015 Channel’s Choice winners, we congratulate MSE and express our sincere thanks for its exceptional support of the BTA Channel”.

Luke Goldberg, Senior Vice President of Sales and Marketing for MSE, commented: “We are honoured that members of the BTA have selected us for this prestigious award two years in a row now. MSE is committed to providing a true alternative to OEM consumables and to continuing investment into technology, innovation, and engineering.

“We are now thrilled to support the market’s highest quality product with a class-leading suite of MPS and marketing solutions that we have no doubt will drive further value in the channel.”

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Kodak releases 1Q2015 figures

May 13, 2015

KodakEarnings amounted to $12 million, up from the total of $7 million recorded in 2014.

The $12 million (€10 million) figure signified a $21 million (€18 million) year-on-year comparative improvement, while continuing operations before income taxes improved to a $50 million (€44 million) shortfall, up from 2014’s first quarter loss of $60 million (€53 million).

Net losses were reported at $54 million (€48 million), increasing from $34 million (€30 million) in the first quarter of 2014, with the latter figure including $19 million (€16 million) in income from discontinued operations related to Kodak Alaris. Sales were registered at $427 million (€379 million), down $61 million (€54 million) or 13 percent from $488 million (€433 million) in the first quarter of 2014. The company says “adverse impacts of currency exchange and the expected declines in revenue from legacy products” has caused the shift, which “more than offset” the sales increases in Kodak’s key strategic products.

The Print Systems Division, Kodak’s largest, enjoyed first quarter sales of $254 million (€225 million), dropping $34 million (€30 million) or 12 percent, from $288 million (€256 million) in the 2014 first quarter. This was “driven by the impact of currency exchange and competitive industry pricing”. Revenue was raised to $13 million (€11 million) in the first quarter of 2015 from $12 million (€10 million) in the 2014 period, with “increases in aluminum costs and competitive pricing pressures […] more than offset by cost reductions and manufacturing productivity improvements”.

In turn, the Enterprise Inkjet Systems Division registered $39 million (€34 million) in sales for 1Q2015, a decrease of $9 million (€8 million) or 19 percent from 2014’s first quarter. The drop concurs with “an expected decline in revenues from legacy inkjet printing systems and the impact of currency exchange” in 1Q2014. Revenue was negative $13 million (€11 million) for the quarter, with negative $12 million (€10 million) in the first quarter of 2014.

Jeff Clarke, CEO of Kodak, said: “I am pleased with our first quarter performance and we are clearly seeing the benefits of our new divisional structure. Our continued progress in improving productivity and reengineering our cost structure, with $35 million in year-over-year operating expense savings in the first quarter, is reflected in the improved performance.”

He continued: “Our transition to sustained growth and profitability will become more evident in the second half of the year as we continue to drive revenue growth in key strategic products and leverage our improved operating performance.”

The results are the first to come under the OEM’s new corporate organisational structure, which came into operation at the beginning of 2015.


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