Michael Phong Ho

1

• Group 5
• Michael Phong Ho
• Kameliya Doncheva
• Jessie Xin Wei

2
Leadership Team

• Robert A. Kleist
• President, Chief Executive Officer and Director
• Founded Printronix in 1974.
• George L. Harwood
• Joined Printronix in October 1988 as
• Senior Vice President, Finance Chief
• Financial Officer
• C. Victor Fitzsimmons
• Joined Printronix in September 1985.
• Currently Senior Vice President for
• Worldwide Manufacturing Operations

3
Company Background

• Headquartered in Irvine, California
• Manufacturing Facilities Mexico, Singapore,
  Holland and Irvine
• Supplier base Asia and North America,
  increasingly in China
• 27 Sales and Support Locations Serve users in
  the Americas, Europe, Middle East, Asia Pacific
  and Africa

4
Products and Services

• Line Matrix Printing (Impact Printers)
• MP2 RFID Printers and Solutions
• Thermal Bar Code Label Printers
• LaserLine Continuous Form Laser Printers
• Software Solutions
• RJS Scanners and Verifiers
• Supplies Parts
• Sales Service, Training Programs and Technical
  Support

5
Computer Peripherals Industry

• Market Capitalization 39 billion
• Typical profit margin 5.0
• Zebra is in the top five of the industry by
  market capitalization
• Printronixs market capitalization is 89 million

6
Major Competitors

• Zebra Technologies Corporation
• Founded in 1969, Illinois
• 700 million annual sales
• Solutions are used by 90 of Fortune 500 and
  global 2000 company
• TallyGenicom, LP
• Tally AG was founded in 1948, Germany
• Merged with Genicom in August 7, 2003
• Privately owned company
• 156 million annual sales

7
Financial DataPrintronix

• in thousand, expect per share data

8
Financial Data (Cont)Printronix
2006 2005 2004

• in thousand, expect per share data

9
Outsourcing Strategy

• Began many years ago but grew fast in last decade
  
• Most of manufacturing work outsourced
• Will hedge currencies where appropriate
• Teleconference videoconference communication
• Supplier selection is important -- ISO companies
  preferred

10
Benefit (why China)

• Free Trade Zone
• Lower costsSupply and Labor
• Yuan is pegged to US dollar
• Asia market is growing
• China is a fast growing market, and sourcing
  there opens the door to doing business in the
  local market and currency.
• Resources are readily available

11
Problems

• Lead Times
• Singapore ships directly to Asia markets quickly
• Shipment takes 3-5 weeks from Singapore to USA
  Holland, where Americas and EMEA customers are
  served from.
• Defective products are repaired locally in the
  USA and Holland, or replacement product must be
  shipped from Singapore.
• Forecasting of demand is crucial
• Communication
• Language barriers
• Time zone differences
• Cultural differences

12
Future Outsourcing Target

• Vietnam
• Thailand
• Eastern Europe
• Africa (still considering)

13
Printronixs Case

• Printronix had outsourced the manufacturing of
  its proprietary ribbons to China.
• Ribbons are super critical for Printronixs
  competitive advantage
• Moved manufacturing to Mexico to allow quick
  focus on design and process issues, and to be
  able to build and ship just in time to the
  Americas.
• Lesson learned Do not outsource parts critical
  for business, particularly if the design and/or
  processes are not mature with high quality
  levels.

14
Conclusion

• Outsourcing is essential today
• Printronix gains from lower cost resources such
  as skilled workers and materials in outsourcing
• Everybody is doing outsourcing to lower costs and
  enhance competitive advantage

15
Q/A