Incorporated: 1964 as Paris Business Forms, Inc.
Sales: $57.4 million (1996)
Stock Exchanges: NASDAQ
SICs: 2678 Stationery, Tablets & Related Products; 2761 Manifold Business Forms; 2771 Greeting Cards; 5044 Office Equipment; 5045 Computers & Computer Peripheral Equipment & Software; 6719 Offices of Holding Companies, Not Elsewhere Classified
Paris Corporation is a holding company with, in 1997, two operating companies of its main subsidiary manufacturing business forms, including computer paper and cut-sheet products. Another line, including business cards, greeting cards, and stationery, is targeted to the small-office and home-office user. Paris markets these products, plus software and other document-management solutions, to a variety of wholesalers and retailers. Formed in 1992, a joint venture with Xerox Corp. was distributing office supplies under the Xerox name to food and drugstore retailers and wholesalers. Paris did very well during the 1980s but has found the 1990s to be a much more difficult business environment as its core products have lost demand because of changes in printing technology.
Paris Business Forms in the 1980s
The company was incorporated as Paris Business Forms in 1964. Dominic P. Toscani, a lawyer, became its president in 1972. Under Toscani, Paris Business Forms became very much a family enterprise. In 1982 his wife, Nancy, was the company’s secretary, Dominic P. Toscani, Jr., was operations manager, and another son, Gerard, was sales and marketing manager. The company had net income of $34,000 that fiscal year (the year ended September 30, 1982) on net sales of $10.5 million and had a long-term debt of $4 million. As the nation emerged from the severe recession of the early 1980s, the company’s fortunes began to rise. Paris Business Forms had net income of $1.4 million on net sales of $22.5 million in fiscal 1985 and net income of $2.4 million on net sales of $26.9 million in fiscal 1986. The long-term debt had fallen to $657,000 in 1985 and was only $695,000 in fiscal 1986.
In 1986 Paris Business Forms was producing continuous sheets of forms of standard size and uniform format, continuous computer forms customized to meet the specific needs of the end user, and customized (individual) forms. The continuous sheets and forms accounted for 72 percent of the company’s sales that year. Typically, these were used for computer-generated reports and documents, including checks, invoices, purchase orders, and airline tickets.
Paris Business Forms bought the paper and produced the forms at a company-owned plant in Burlington, New Jersey, where it also maintained its headquarters. It was marketing its products through about 800 independent distributors, mainly on the East Coast, and to agencies of the federal government, which accounted for 13 percent of sales that year. Other end users included brokers, banks, insurance companies, and hospitals. The firm had three salesmen to call on distributors and four trucks and a delivery van to deliver its products in New York and Pennsylvania.
Paris Business Forms was leasing a sales office and distribution center in Orlando, Florida, in 1986, and it sold a warehouse in Croydon, Pennsylvania that year. In March 1986 the company went public, securing net proceeds of $4 million by selling nearly one-fifth of the outstanding shares of common stock at $7.50 a share. Following the public offering, Toscani— president, chairman, and treasurer—and Frank A. Mattei, a Philadelphia orthopedic surgeon who became a director the following year, each owned about one-third of the stock. Another seven percent was owned by the Caritas Foundation, a nonprofit institution founded by Toscani and administered by his brother, a priest.
Paris Business Forms continued to grow rapidly in the ensuing years, serving about 1,100 distributors in 1987 and about 1,500 in 1988. A warehouse was added to the Burlington property in 1988. By the end of fiscal 1989 Paris was selling to about 1,700 distributors. Net sales that year reached $48.7 million, even though the federal government no longer was a significant customer. Net income came to $2.9 million, and the long-term debt also was $2.9 million. The company began distributing cash dividends to its stockholders in 1988. It was listed on Forbes’ annual list of the 100 top small businesses in 1989.
In 1987 Paris Business Forms opened a division to sell turnkey, nonfranchised units of a quick-print and desktop-publishing operation known as Fast Forms Plus. At the end of fiscal 1988 there were 13 of these outlets, of which the company owned three—in Burlington; Marlton, New Jersey; and Clear-water, Florida. There were 19 by the end of the following year, of which the company owned units in Burlington and Tampa, Florida. By 1991, however, the firm no longer was engaged in this line of business.
Changes and Challenges of the 1990s
By the end of fiscal 1991 Paris Business Forms was a $60-million-a-year business, serving some 2,300 distributors, some of which were in the south, southwest, and midwest, as well as along the eastern seaboard. The Burlington facility had been expanded and was now divided into separate plants for stock and customized forms. A custom forms plant was leased in Fort Worth, Texas in 1990, and the company also acquired a separate Fort Worth building the same year to produce stock computer paper for sale to customers in the Midwest, Southwest, and Mexico. The firm also had added self-mailers to its product line and was beginning to sell directly to retailers, such as Office Depot, Inc., which took about one-third of its stock computer paper in 1993.
Despite its added volume, the net income of Paris Business Forms slipped to $460,000 in fiscal 1991, compared with $2.4 million the previous year, and the company discontinued its dividend. In fiscal 1992 profit improved only slightly, to $712,000, on sales of $61.8 million. Paris was beginning to experience severe competition from printing companies selling forms directly to retailers and also from a general loss of business as many firms began producing their own business forms. In addition, the company was slow to switch to forms accommodated by the laser and ink-jet printers that were replacing dot-matrix and high-speed impact ones. In fiscal 1993 sales volume dipped to $50.2 million, and the firm lost $998,000. Company stock traded for as low as $1.62 a share that year.
Paris Business Forms made some important changes in the early 1990s. It bought a Jacksonville, Florida plant in 1992 for $1.3 million (counting improvements made) to print stock computer paper. The company sold this plant, however, in 1995 for only $1.05 million. It closed the Fort Worth plant it owned in 1993 and sold it in 1994, replacing it with a leased facility, also in Fort Worth. (The Fort Worth plant it leased had been vacated in 1993.) In December 1992 Paris invested $333,000 in a development-stage joint venture with Xerox Corp. to produce and market office products under the Xerox name.
In fiscal 1994 Paris Business Forms returned to the black but earned only $429,000 on sales of $57.9 million. The following year was much better, however; the company had net income of $3.5 million on net sales of $64.9 million. Rising prices for its products accounted for the hike in revenues, despite a 30 percent drop in volume for computer-paper forms, in part because of paper shortages. Fiscal 1996, however, was the company’s worst year yet. Net sales dropped to $57.4 million, and the company incurred a net loss of $3.4 million. In its annual report, Toscani said paper prices had started to decline while the company was caught with a large amount of high-priced inventory. He also cited an ongoing decline in demand for continuous-forms paper products.
Paris Business Forms continued to make major changes in its operations during this period. In fiscal 1995 it became a holding company, transferring substantially all of its operating assets and liabilities to Paris Business Products, Inc., a newly formed subsidiary. The holding company, which became Paris Corporation in January 1996, retained the Burlington plant and cash and near-cash investments. The new subsidiary had a Texas operating corporation, Paris Business Forms, Inc., and a newly formed Florida corporation, Paris Business Products, Inc., as its own subsidiaries. PBF Corp., a Delaware corporation, was a subsidiary that owned the parent company’s trademarks.
Signature Corporation, the joint venture with Xerox to distribute office products to the food and drugstore markets, began shipping products in July 1993 and quickly proved a success. Sales doubled in both 1995 and 1996, with the number of stores served increasing from 550 to 6,800—about 13 percent of the total number of food and drugstore outlets in the United States. Paris Corporation held a 44 percent share in this corporation. The Xerox product line consisted of consumables such as binders, indexes, file folders, fax paper, and writing pads; organizers, made from a see-through material, that were designed for document storage; and a ten-item line of papers for desktop laser and ink-jet printer use.
By 1996 Paris Corporation also had introduced Burlington, a retail line specifically targeted to the small-office and home-office markets. Paris’s retail line of products was designed to capitalize on ink-jet and laser printer capabilities with offerings such as business cards, greeting cards, and stationery for these small-office and home-office needs. Also a new line was Documents Now, a software package distributors could use to produce short-run custom checks for end users. The distributors also could choose to sell the software, toner, and check stock to customers. Paris was helping distributors lease laser printers as part of the package. Other software modules were being added for production of software-compatible forms, gift certificates, and other documents. The company’s on-demand software was being tested by major quick printers, a new market for Paris.
During 1995-96 Paris also introduced a sheet-fed document scanner sold primarily through wholesale clubs, national retailers, and computer stores. “Imaging is becoming a bigger part of [forms management],” Tom Baglio, vice-president of sales and management, told Form, a trade magazine. “Our product allows smaller businesses and the people within bigger corporate businesses such as secretaries and administrative assistants to scan in and file [documents] on their PC.” The company was expanding its product line to include other models. In recent years, said Baglio, senior managers had been brought in to build a new network of suppliers, including overseas manufacturers of its scanners. The firm also contracted with major computer companies to buy old circuit boards, which were recycled into the office products sold through Signature.
Paris Corporation in 1996-97
During fiscal 1996 Paris Corporation’s Burlington and Fort Worth plants still produced continuous forms designed to run on dot-matrix and high-speed impact printers, but it was changing its focus to the development and sale of value-added and custom-cut sheet products used on laser and ink-jet printers. Prefed, punched, lined cut sheets, high-quality printing cuts, collated sets, colored cuts, and novelty-cut products had recently been introduced. By 1997 all production was to be allocated to cut-sheet products, as compared with 40 percent in fiscal 1996.
Paris Corporation was marketing not only these products of its own manufacture but also paper-handling products for small offices and home offices, computer-based printers and scanners, office products, and on-demand software through retail superstores and about 2,500 independent dealers in the United States and Canada. Office Depot, Inc. accounted for more than 24 percent of the company’s stock computer-paper shipments in fiscal 1996.
Paris had entered into a distribution agreement with Seiko Instruments, Inc. to sell a label printer product through selected markets in the United States. It contracted with Microtek, Inc. to private-label manufacture a scanner product with opticalrecognition software capability, and with another Taiwanese company, Asco Products, Inc., to provide a variety of products, such as a private-label paper folder. Paris also was working closely with Touch-It Corp., a producer of heat-sensitive envelopes, folders, and note pads that change color when touched, and Compu-Notes, Inc., a producer of clipboards, binders, and address books made from recycled circuit boards. The company maintained more than 20 warehouse shipping points throughout the United States.
Through midyear, Paris Corporation was faring poorly in 1997. After nine months of the fiscal year, net sales had fallen nine percent from the same period in 1996, to $40.2 million. The loss in revenue was attributed to decreased average selling prices for continuous stock forms. The company’s net loss, however, had decreased 27 percent, to $1.6 million. The lower loss reflected improved gross margins due to greater labor efficiencies and capacity utilization and also to a reduced need for investment in new-product marketing and research and development.
In November 1996 Mattei owned or controlled 34 percent of the company’s stock. Toscani and his wife owned or controlled 27.9 percent; the Caritas Foundation, 9.7 percent; and FMR Corp., 6.4 percent. The company had no long-term debt.
Paris Business Forms, Inc.; Paris Business Products, Inc.; PBF Corporation.
“Companies of the ’90s,” Focus, January 3, 1990, p. 70.
“New Directions,” Form, January 1997, p. 48.