Baldwin Technology Company, Inc.

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Baldwin Technology Company, Inc.

One Norwalk West
40 Richards Avenue
Norwalk, Connecticut 06854
(203) 838-7470
Fax: (203) 852-7040
Web site:

Public Company
Employees: 1,047
Sales: $244.1 million (1997)
Stock Exchanges: American
Ticker Symbol: BLD
SICs: 3555 Printing Trades Machinery and Equipment

With more than $244 million in sales in fiscal 1997, Baldwin Technology Company, Inc., is the leading manufacturer of accessories, controls, and material handling technology for the printing, publishing, and packaging industries worldwide. The companys products are designed to improve workplace productivity, improve print quality, reduce press down time, reduce paper waste, and reduce VOC emissions, especially in the cleaning process. The company has manufacturing, sales, and service facilities around the world, in the United States, China, Japan, Australia, Sweden, France, the United Kingdom, and Germany, and its sales are equally distributed across the Americas, Europe, and Pacific Asia. Customers include magazine and catalog printers, newspaper publishers, book and insert printers, and packaging houses.

Founding in 1918

Baldwin Technology was started in 1918 and remained a fairly small company until 1950. It was begun by ex-printer and press service technician William Gegenheimer in his garage in Baldwin, New York. He invented a device, the Baldwin Press Washer, that unlocked the potential of offset printing by reducing the time required to clean printing presses from hours to minutes. A patent was granted for The Baldwin Press Washer in 1927, and in 1929 the company moved to Brooklyn, New York.

Over the coming decades, Baldwins innovations would make offset lithography more efficient and profitable, accelerating the industrys growth and expanding its own market. Baldwin developed a reputation for listening to the needs of printers and developing innovative products to meet those needs.

Sales of $l Million in 1950

Baldwin began to expand its product line when Harold W. Gegenheimer, son of the founder, joined the company in 1950. Harold Gegenheimer was a press designer and engineering manager. Sales reached the $1 million mark in 1950, and during the 1950s the company began to license its products for manufacture abroad.

Harold Gegenheimer became president of the company in 1961, chairman in 1971, and chairman of the executive committee in 1982. He retired in 1986. In 1987 the Harold W. Gegenheimer Endowment was established at Rochester Institute of Technologys School of Printing Management and Sciences. The endowment would enable students and faculty to pursue field research into the technological challenges facing the printing industry.

Wendell Smith joined the company in the 1960s, and in 1966 the companys headquarters was moved to Stamford, Connecticut. Together with Gegenheimer, Smith helped grow the company by expanding its product lines further and penetrating international markets. In the 1960s overseas affiliates were set up. Baldwin Japan was established when the company entered into a joint venture agreement in Japan in 1968, and Baldwin Gegenheimer GmbH was established in 1971 with offices in Augsburg, Germany. Japan and Germany would become Baldwins strongest overseas markets.

In 1969 Baldwin began an aggressive program of acquisitions to expand its product lines. It acquired Korthe Engineering, which became the basis for Baldwins web break detection and protection product line. In 1971 Baldwin added a signature handling and stacking product line when it acquired Graphic Engineers. In 1974 it acquired Sun Chemical Co.s web control product line. In 1976 the Automatic Blanket Cleaner was introduced in Europe. Levimatic Packaging Systems was acquired in 1978, and in 1981 Baldwin acquired D&R Engineerings gluer product line.

Sales Exceed $50 Million in the 1980s

In the early 1980s Baldwin was generating sales of $40 to $50 million. Through acquisitions and internal growth, sales approached $200 million by 1990. In 1983 Baldwin received a patent for an improved version of its Automatic Blanket cleaner, and in the following year the product won the InterTech Award from the Graphic Arts Technical Foundation (GATF). The award was given for a product expected to have a significant impact on the printing industry over the next five years.

Baldwin incurred its first-ever loss in 1983, the result of losses at a computer software company, which was sold the next year, and a large investment in establishing a manufacturing plant in Ireland. That same year a management buyout established Wendell Smith and his group as owners of the company. Smith became chairman of the board, president, and CEO. The following year Baldwin returned to the black, reporting a small profit on sales of $46 million. In November 1984 the Baldwin Technology Company, Inc., was organized as a holding company to purchase the assets of Baldwin Technology Corporation and its wholly owned subsidiary, NB Technology Corporation (NBT). In March 1985 NBT was merged with Baldwin Technology Corporation, with Baldwin Technology Corporation surviving as a wholly owned subsidiary of Baldwin Technology Company. For FY1985 (ending June 30) Baldwin reported net income of $1.2 million on sales of $53 million. The next year net income improved to $1.9 million on sales of $61 million.

Going Public, 1987

Baldwin became a publicly traded company on January 15, 1987. The initial public offering raised approximately $10 million, which together with the companys record year in 1987 enabled it to pay off the $9 million in debt it had incurred during the management buyout of 1983. Sales improved dramatically to $75 million, while net income jumped to $3.2 million. Both were company records. Sales for 1988 were projected at $90 million. Following its IPO, Baldwin experienced a period of growing sales and income as well as new product development and a stronger market position.

Baldwin was enjoying strong demand for its products from European and Far Eastern markets as well as a slight improvement in the U.S. market, which had been flat in recent years. Growth in the overseas market was due in part to Baldwins becoming an increasingly important parts supplier to press manufacturers in Germany and Japan. The majority of the worlds sheet-fed presses were produced in those two countries.

Non-U.S. operations were starting to contribute significantly to operating income. In 1985, non-U.S. operations contributed only $580,000 to operating income, while in 1987 they contributed $6.7 million, with U.S. operations contributing $4.3 million to operating profits. Sales were about evenly divided between the United States and overseas markets. International sales would continue to become more important to Baldwin. In 1988, 59 percent of the companys profits and 69 percent of its sales came from Japan and Germany. Additional areas for international growth included France, the Soviet Union, and China.

Growth Through New Products and Acquisitions

In early 1987 Baldwin introduced a patented newspaper blanket cleaner (NBC) that operated at full press speed, eliminating the need for costly shutdowns to clean the press blankets. Baldwin also introduced an automatic signature bundler (ASB), which gathered high-speed press output to allow efficient handling in binding operations. The ASB solved a long-standing problem associated with high-volume, high-speed printing. It was aimed at directory and publications printers.

In late 1987 Baldwin acquired the Ultrasonic web break detection system from Beaudreau Electronic Inc, which detected web breaks. During the year Baldwin introduced a new family of newspaper press protection products and systems. These new on-press sensors and computer systems would guarantee that presses with the most complex web leads were fully protected from damage due to paper breaks.

For the past 25 years, Baldwin had enjoyed a compound annual growth rate of about 15 percent. The company was dependent on overall economic conditions and the changing levels of capital spending. For many customers, price was less of a consideration than such factors as a companys staying power, product quality, and level of customer support, areas in which Baldwin was strong.

Company Perspectives:

Printers and printing equipment manufacturers the world over rely on Baldwin bottom-line technology to improve quality and profitability in safe, innovative, and environmentally responsible ways. Baldwin accessory, control, and material handling equipment performs many tasks, among them providing spliced rolls of paper to the press; maintaining the best print chemistries; automatically cleaning key areas of the press; keeping paper webs perfectly aligned; drying, folding, cutting and gluing material as fast as it comes off the press; and counting, stacking, inserting, and bundling finished products. The unique breadth of our contribution to the graphic arts industry means Where theres printing, theres Baldwin.

Factors at work in the printing industry were also contributing to Baldwins growth. Advances in press technology were resulting in higher press speeds, which created a need for more and better accessories and attachments to reduce down time and paper waste and to lower other costs. According to a 1988 analysts report, Baldwin enjoyed a dominant 42 percent market share in press accessories and had room for growth in controls and material handling systems. Most of the companies competing against Baldwin were much smaller. Baldwins new product development program was characterized by one analyst as aggressive. In 1988 the company spent $1.9 million on research and $5.3 million on engineering and applications work. The company was spending about 10 percent of revenue on research and development efforts.

70th Anniversary, 1988

Sales for 1988 rose to $95.5 million, and net income nearly doubled to $6.1 million. It was the companys 70th anniversary. In October 1988 Baldwin announced plans to acquire the Kansa Corp, based in Emporia, Kansas. Kansa manufactured newspaper inserters, padding machines, and other equipment for newspaper and commercial printers worldwide. The acquisition was completed in early 1989 for $4.5 million in cash and 400,000 shares of common stock valued at $2.9 million. Baldwin also opened a new 30,000-square-foot facility in Naugatuck, Connecticut, devoted to manufacturing the companys growing line of fountain solution control products and the Accu Spray Dampener, a newly developed product used on double-width newspaper presses. Fountain solution control systems controlled the supply, temperature, cleanliness, chemical composition, and other characteristics of water used in offset printing.

During 1988 Baldwin entered the thermographic and forms handling equipment business with the acquisition of Ecamo, S.A., a French corporation, for $1.6 million. It acquired its U.S. counterpart, Specialized Printing Machinery (SPM), in 1990. These operating units served small printers, a segment that would be particularly hard hit during the economic recession of the early 1990s. In 1992 both units were put up for sale.

In Baldwins Pacific Asian market, company representatives attended ChinaPrint 88, a printing machinery exhibition, and made contacts with Chinese press manufacturers. A letter of intent was signed with China National Machinery and Equipment Import and Export Corporation and a proposed joint venture partner, Beijing Small Compressor Factory, to enter into a 75 percent company-owned joint venture for the manufacture of Baldwin products in the Peoples Republic of China.

In 1989 sales rose to $125.5 million, up 31.4 percent, and net income increased to $9.2 million, up 50.6 percent. Overall, the printing industry was continuing to expand into more sophisticated material handling as well as accessory and control equipment. Worldwide, printing was also continuing to grow. Baldwin Japan was the companys fastest-growing segment. It enjoyed a 51.1 percent increase in sales, mainly through existing product lines. In Europe, business grew by 29.8 percent, with the strongest segment being sheetfed presses. After four years of stable sales, business in the United States also grew through new product introductions. These included additions to Baldwins automatic blanket cleaners, web break detectors, rotary cutters, high-speed stackers, and other products. Baldwins 15 percent annual compound growth rate was outpacing the growth of the printing industry.

During the year Baldwin acquired the remaining 29.4 percent interest in its Japanese subsidiary. Enkel Corporation of Sweden was acquired for $10 million in cash and $12.3 million worth of stock. Enkel made machinery for splicing and handling huge rolls of paper for web printers and converters. Stobb, Inc., a manufacturer of stacker/bundlers based in Clinton, New Jersey, was acquired for $3.7 million, which included the assumption of $2.4 million in liabilities.

During 1989 Baldwin was reorganized into three geographic sectors based on the worldwide printing market: the Americas, Europe Consolidated (including Africa), and Asia Pacific. Each geographic sector would have its own product development, manufacturing, and marketing capabilities. The new regional structure was designed to help the company keep in close touch with its customers. During 1989 the company applied for 44 patents.

In 1990 Baldwins sales rose 45.8 percent to $183 million, and net income increased 31.4 percent to $12.1 million. While U.S. market conditions remained soft, the company was able to continue reporting record sales and income because of strong performance in its Asia Pacific and European regions. Each geographic segment of the businessEurope, the Americas, and Asia Pacificaccounted for about one-third of the companys sales. Business was also equally balanced between press manufacturers and printers. New product development was equally split between internal R&D and outside acquisitions.

Acquisitions in 1990 included Misomex AB of Stockholm, Sweden, and its North American subsidiary, Misomex of North America, Inc. The company was an international manufacturer of platemaking and other pre-press equipment for the printing industry. It was headquartered in Sweden and also had operations in Germany, Great Britain, and the United States. Baldwin completed the acquisition on July 27, 1990, for $44 million in cash. The acquisition was financed through bank loans. Other acquisitions included Specialized Printing Machinery, which became Baldwin SPM, the U.S. sales counterpart to Ecamo.

During 1990 Baldwin raised $24 million in capital through a sale of stock, and the companys geographic reorganization was completed. Trading companies were established in the different regions to facilitate the exchange of product ideas and make importing and exporting products easier. During the year operating subsidiaries were established in Hong Kong and Beijing, China. An Australian subsidiary was established in 1991.

In 1991 Baldwin achieved its eighth straight year of record sales through recent acquisitions. Sales were $221.3 million, up 21 percent, but net income declined 43 percent to $6.9 million. While the decline in net income was attributed to a sluggish economy, the increase in sales was due primarily to the acquisition of Misomex.

Recession, 1990s

In 1992 a severe recession in global printing markets continued to impede Baldwins financial performance. Sales rose one percent to $221.5 million. Income from continuing operations was $770,000, but the company took a special charge of $7.6 million for restructuring and discontinuing certain operations, resulting in a net loss of $6.9 million for the year. The recession was limiting the sales of new presses that might have been equipped with Baldwin products. The company was also experiencing intense pricing pressures that reduced and in some cases eliminated profitability on some products. Sales of new web presses, for example, were 50 percent below their 1989 level.

As a result of those recessionary conditions, Baldwins recent acquisitions, Ecamo, Enkel, and Misomex, had to be downsized and restructured. Ecamo and its U.S. sales operation Baldwin SPM were discontinued at a cost of $5.9 million. Both units lost $1.8 million in 1992. These losses were offset somewhat by a 16 percent increase in net sales for Baldwin Asia Pacific in spite of a 30 percent decline in the Japanese printing press and accessory market. In an effort to trim costs, the companys workforce was reduced to 1,148 in 1992, down from a high of 1,390 employees in July 1990.

With the effects of the recession wearing off, Baldwin reported net income from continuing operations of $3.8 million for 1993, up from $770,000 for 1992. However, net sales declined by 2.6 percent to $215.8 million in 1993 from $221.5 million in 1992. In 1992 the company took a charge of $7.7 million for discontinued operations, which resulted in a net loss of $7.0 million for the year. Worldwide, the printing market was still a difficult one, according to chairman Wendell Smith.

At the end of 1993, Gerald Nathe was elected president. Wendell Smith retained chairmanship of the board and the title of CEO. In 1994 net income was $4.1 million, an increase of nine percent over net income of $3.8 million for 1993. Net sales declined by eight percent to $198 million. Asian operations were hampered by a strong yen and weak economic conditions in Japan. Order rates in Europe were improving, and the North American market was showing signs of increased business activity.

In 1995 net income rose 37 percent to $5.7 million on record sales of $222.3 million. Baldwins financial performance reflected continuing economic recovery in the companys key markets. The company was in the process of acquiring the Acrotec group of companies, which was expected to add about ten percent to Baldwins sales. The Acrotec acquisition was completed in October 1995, and its German operations would be merged with Baldwin Gegenheimer GmbH.

In 1996 net income was $2.4 million on sales of $259.3 million. It was a year of mixed results. Net sales set a new record, up 17 percent, but net income fell short of expectations due largely to restructuring charges. While the Americas and Asia Pacific operations were strong, sales in Europe were disappointing. The German operation was being restructured.

Several streamlining measures were taken during the year. In the United States, two Baldwin Graphic Products operations were consolidated in a single facility in Shelton, Connecticut, and two separate facilities were closed in Stamford, Connecticut. In Europe, the acquisition of Acrotec allowed the company to combine three sales operations for accessories and controls in the United Kingdom into one location. Other operations moved into new locations in Malmo, Sweden, and Tokyo, Japan.

In April 1997 Baldwin divested its Misomex unit, which was acquired in 1990. In the face of strong competition and a difficult technology to master, Misomex consistently lost money. Once the company decided to sell the unit, its stock price began to rise to the $5 per share range. The sale of Misomex to Kaber Imaging Inc. of Hudson, New Hampshire, was completed in July 1997 for $4 million and the assumption of certain liabilities. In other moves, the company downsized its German workforce by 15 percent and merged two separate businesses there, reducing plant capacity by 25 percent.

In 1997 Baldwin changed organizationally from a geographic orientation to a product market orientation. It reorganized its operations management from three geographic regions into two business areas: the Graphic Products and Control Group (press accessories and controls) and the Material Handling Group (splicer, in-line finishing, inserter and stacker bundler product lines). Baldwin companies from around the world with similar products, markets, and customer bases were put into similar groups. The reorganization was expected to facilitate technology transfers between business units and to enable the company to provide better customer service and respond more quickly to market changes.

Improved Sales Forecast for 1998

For 1997 Baldwin reported a net loss of just under $38 million on sales of $244.1 million, which included a one-time charge of $42.4 million for the Misomex sale. However, changes implemented during the year resulted in positive growth figures toward the end of the fiscal year. The company also had a higher order backlog than at the end of 1996. Improved sales were forecast for 1998 in Europe and Japan, where markets were expected to emerge from a prolonged recession.

In April 1997 Wendell Smith resigned as chairman of the board. President and CEO Gerald Nathe was elected to succeed him as chairman. Nathe had joined Baldwin Technology in 1990 as president of Baldwin Americas. In 1993, he became president of Baldwin Technology Company Inc., while continuing to serve as president of Baldwin Americas, and in 1995 he was elected CEO.

For the future, Baldwin identified print-on-demand, or distributed printing, as a new opportunity to be exploited through joint ventures. It would involve shorter print runs and printing only in black and white. Baldwin Technology was working with manufacturers of electronic printing engines, such as IBM, OCE, and Xerox, to build this area.

In an April 1998 interview in the Wall Street Transcript, Nathe was optimistic regarding the growth of print throughout the world. He said that Baldwin was also looking at new markets, such as packaging and print-on-demand. Nathe noted, Packaging is a market thats changing to require more and more information on the package, and printing quality was becoming more important.

Among the trends Baldwin was watching was the rise of alternative media, to see whether they would replace printed material or generate the need for additional printed products. Software, for example, while it may displace some print products, requires additional catalogs, magazines, and manuals. Baldwin was also carefully monitoring the growth rate of printing in lesser developed countries, which was generally outpacing the overall growth rate of such countries.

Principal Subsidiaries

Baldwin Graphic Products; Baldwin Dampening Systems; Baldwin Web Controls; Baldwin Enkel Corporation; Baldwin In-Line Finishing; Baldwin Kansa Corporation; Baldwin Stobb; Baldwin Davlin Finishing Systems, Inc.; Baldwin Graphics Equipment Pty. Ltd. (Australia); Baldwin Japan Ltd.; Baldwin Printing Control Equipment (Beijing) Company, Ltd.; Baldwin Printing Controls Ltd. (Hong Kong); Baldwin France Sarl; Baldwin Grafotec GmbH (Germany); Baldwin UK Ltd.

Further Reading

Baldwin Earnings Triple in Third Quarter, Business Wire, May 6, 1998.

CEO Interview: Baldwin Technology Company Inc. (BLD), Gerald Nathe, Wall Street Transcript, April 20, 1998.

Dzikowski, Don, Norwalks Baldwin Technology on Rebound after Shedding Unit, Fairfield County Business Journal, September 29, 1997, p. 7.

Mastandrea, John, Market-Dominant Baldwin Looks at Foreign Opportunities, Fairfield County Business Journal, November 21, 1988, p. 1.

Oster, Helen P., Baldwin Reports Improved 1993 Earnings, Business Wire, August 26, 1993.

, Baldwin Reports Improved 1994 Earnings, Business Wire,August 22, 1994.

, Baldwin to Withdraw from Business Segment and Record Special Charge in Fourth Quarter, PR Newswire, June 25, 1992.

, Gerald A. Nathe Named Chief Executive Officer of Baldwin

Technology Co. Inc., Business Wire, October 18, 1995.

, Gerald A. Nathe Named President of Baldwin, Business Wire, August 5, 1993.

Troxell, Tom, Baldwin Tech Makes Mark with Major Printers, Intercorp, May 27, 1988, p. 36.

David Bianco

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