More information about IDTX
I just found this information on another Stock-Forum. It's seems like
this information are from a newsletter. Well, I don't like newsletters
but the information they provide are quite good.
Wide format printing (defined as printing on surfaces greater than 17
inches wide) for retail consumers is a market estimated at US$9.7
billion and is expected to grow to US$18 billion by the year 2000. The
market for software applications used in wide format printing is
expected to grow 40 to 45 percent over the next 5 years. International
Digital Technology Inc. (IDTX - OTC BB) is a full-service supplier to
the wide-format print industry and has all the necessary ingredients for breakaway growth; including, a strategic partnership with Hewlett
Packard (HP); proprietary software that reduces printing time; a
patented coating technology for canvas, plastic, fabric and vinyl; a
complete customer service solution; and a strong management team and
advisory board including one of the founders of Mail Boxes Etc., Anthony (Tony) DeSio.
INTERNATIONAL DIGITAL TECHNOLOGY INC. (IDTX)
IDTX Symbol: IDTX (OTC BB)
Price at September 16/98: $2.56
Shares Outstanding: 16.1 million approx.
Public Float: 4 million approx.
Investor Relations Contact: Bruce Rosenberg 1-760-806-9760
4idtec.com
email: investors@4idtec.com
INTERNATIONAL DIGITAL TECHNOLOGIES
To date there have been two fundamental problems encountered for users
of wide format printers. First, users are required to buy individual
hardware and software components from different sources and integrate
them. The second problem is that wide format printers are often too
costly and time consuming especially for single prints and short runs.
IDTX offers a one-source solution for hardware and software. The IDTX
solution is efficient, easy to use and cost effective.
IDTX designs, develops and markets software and hardware products for
the wide-format printing industry. IDTX's software provides a leading
solution in wide format imaging for "scan and print" applications. The
company's operating philosophy can be characterized by two words: focus and speed. The company has focused all its efforts on wide format, digital-imaging and is considered an industry leader. The company's solutions are faster than its competitors, and large complementary companies (e.g. Hewlett Packard) have recognized the quality of the company's products and services and have entered into strategic partnerships with IDTX.
COMPANY FUNDAMENTALS:
Over the past few years, IDTX has built up its product and service
offerings and has become a full service provider to the wide format
printing industry. The company appears well positioned to grow as the
industry grows and is ready to break ahead of its competitors. IDTX went public in early August and sales for the first month were $305,000.
Estimated revenues for September are $420,000. Estimated revenues for
the remainder of 1998 (including September) and for all of 1999 are
almost $2.6 million and $18 million respectively.
IDTX is an exciting company that offers an end-to-end wide format
printing solution that includes systems, materials and fulfillment
(finished output) if needed. The company integrates third-party
computer, printer and scanner hardware with its proprietary one-time
scan and print, digital color management software. The end result is
IDTX's ability to provide its end-user and distributor customers - who
most often have short-run production requirements - a near "plug and
play" wide format print solution that allows for one-step digital
scanning and fast printing on surfaces up to 60 inches wide and almost
any length.
Over the past five years, wide format printing firms have had to
overcome two major hurdles:
1) A requirement to buy various individual hardware and software
components from numerous sources and then integrate these items
themselves
2) A need for design and layout professionals to spend time printing and re-printing outputs to finally get the desired color printing.
IDTX has overcome both problems by integrating industry standard
computer equipment and developing what is known as IDT imaging Software.
This proprietary technology links third-party hardware and software with its own print-and-scan and Raster Image Processor (RIP) software. The advantages of this system are the efficiencies, ease of use and
cost-effectiveness. This system automatically matches the input color to the output color, thus drastically reducing setup time for users.
Software
IDTX has developed a printing system that is revolutionizing the wide
format printing industry. The system is driven by IDTX's RapidColor RIP software. RapidColor contains two main components, "scan and print" software for importing and printing images from scanning, stored files, CD-ROMs or the Internet (Printing usually occurs within 6 seconds regardless of file size). The second component is a page description language designed for HP wide format printers that offers quick color matching of inputs and outputs with high-speed printing from within any Window's application software package. Hewlett Packard has approved the use of RapidColor RIP for use with its printers and HP currently uses it to demonstrate its printers to prospective buyers.
Recently, Computer City approved IDTX's RapidColor RIP for resale
through 60 of its retail outlets. IDTX anticipates sales of 200 copies
per month by the end of this fiscal year.
The IDTX printing system facilitates almost instantaneous printing. An
image is scanned, sent to the printer and printing begins in less than 6 seconds (as opposed to 30 minutes with other systems). Since the
colors/images are automatically and accurately matched to those in the
original image, it is no longer necessary to readjust the colors during the print process. Also, the ink on the finished product is completely dry when it comes out of the printer.
Hardware Reselling and Leasing
As part of its complete wide format printing solution, IDTX has become
an approved special business partner for HP's large format printers and is an authorized reseller. For every system that IDTX sells this creates a contact point and an opportunity to sell media products, while increasing the awareness of the company's software and its performance capabilities.
Although a relative newcomer to the large format printer market, HP
already controls approximately 20% of actual installed systems and HP
expects to increase their market share to nearly 60% within the next
five years. (Source: IT Strategies) HP does not sell directly to the
end-user, and consequently, resellers should benefit handsomely as HP's market share grows. IT Strategies has said, "It is not if Hewlett
Packard will be a dominant force in the wide format printing industry,
but when."
IDTX has been awarded the VIP Gold Graphic designation (the highest
qualification given to resellers) by Hewlett Packard's Ink Jet division.
This gives IDTX the ability to buy HP products at considerable
discounts. HP considers IDTX a co-marketing partner and the two
companies have joined forces to pitch turnkey wide format printing
packages to larger clients.
In May 1998, IDTX established a US$500,000 line of credit from Hewlett
Packard's Ink Jet Division in order to launch an innovative printer
rental program - the first in the industry. The growth of the rental
program will be fueled by additional financial assistance from HP in the form of increasing the line of credit too as much as US$5 million.
IDTX's market opportunity in printer sales is very significant. A recent study by I.T. Strategies estimates revenue for wide format digital color printer sales will reach $362 million in 1998 and grow to $465 million by 2000. The IDTX sales force is well positioned to take advantage of this opportunity - collectively they are responsible for selling nearly 10% of all the installed wide format printers in the United States.
OTHER PRODUCTS AND SERVICES:
IDTX currently has some other potential profit centers with some large
opportunities...
Consumables Marketing
Consumables comprise sales of media substrates and inks for use by large format printers. With 50 to 60% profit margins, consumable sales can represent a significant profit center. There is currently a large base of customers for media substrates. To appreciate the potential business, Encad, an IDTX competitor, had ink and media sales of $1 million in 1993 and grew to $30 million by 1997. IDTX does not manufacture its own media substrates and ink. Rather, the company purchases inks and printing substrates from a variety of manufacturers. Media substrates used with the IDTX system include artist canvas, vinyl, paper, foil, mylar, tyvek, sign cloth, polyfilms and other specialized printing surfaces.
IDTX has obtained a patent for coatings of vinyl, plastics and canvas
permitting ink-jet printing. The patent has forty claims that cover
broad, substantial and diverse aspects of IDTX's inventions in this
area. National Graphics, Inc. (NGI), a strategic partner of IDTX, is
responsible for coating media substrates to IDTX's specifications.
HP has endorsed the exclusive use of three kinds of IDTX coated media
for use with HP Design Jet printers - use of unapproved media
invalidates the HP printer warranties. A fourth (artist's canvas) is
currently under review. In addition, the Company is working with HP to
approve other media substrates currently not covered by printer
warranties.
Digital Art Production
The Company produces wide format photo specialty products for delivery
to customers. The principal product is wide format artist canvas prints designed to hang on the wall as paintings. Such canvas prints are typically created from customer generated copy such as a photo,
transparency or slide. The company believes this market segment has
great potential. The company's opinion is based on success of some of
IDTX's competitors in this area. The company plans to pursue this line
of business and to develop significant customer markets. In June 1998,
the company signed an agreement with Konica Quality Photo Inc., a
subsidiary of Konica International Inc. for point of purchase (POP) and catalog sales through Konica photo processing outlets. Konica has 7,000 outlets nationwide consisting mostly of independent retailers and regional chains which offer Konica film processing. The company plans to develop distribution through other retailers amongst the 73,000 photo-processing drop off points in the U.S. There are also 20,000 frame shops and 135,000 portrait photographers in the United States that the company will target. It is anticipated that first phase of the rollout to frame shops and photographers will be in October of this year.
Franchise Imaging Centers
IDTX, together with Photo Now Ltd., a large European photo shop, is
testing franchised imaging centers in five U.K. retail locations. Based on very promising results, a subsidiary of IDTX, Photo Arts Inc., has filed a franchise registration application in the U.S. Photo Arts intends to begin franchising in the U.S. in the fourth quarter of 1998.
IDTX has retained Anthony DeSio, a founder of Mail Boxes Etc., as a
consultant and Chairman of the Advisory Board to assist in developing
the franchise program.
OVERALL MARKET:
Information Technology Strategies believes the "print on demand"
(digital printing) market, which forms less than 10% of today's US$70
billion North American printing industry, will double by the year 2000.
A logical consequence of the growth of the "print on demand" industry is the accelerated growth of related market niches.
Growth is being fueled by the market's increasing desire for customized, large color graphics, significant advances in short-run printing and desktop publishing technologies as well as the need to develop printing systems that improve traditional performance and reduce printing costs. The most compelling market driver is the increased productivity and convenience today's wide-format printers bring to the workplace by offering practical, fast and highly affordable solutions to short-run printing needs.
Users benefiting from this revolution cover a broad and growing
spectrum, ranging from technical designers or architects in the
computer-aided design (CAD) market to graphic designers at ad agencies, design firms, service bureaus, print shops and photo labs.
Although other manufacturers (e.g. Encad, Xerox ColorgraphX, etc.)
currently offer turnkey, wide format printing packages, IDTX enjoys a
technological lead in the "scan and print" market and is particularly
well-suited for short-run, quick turn-around production. The company's
coating patent also differentiates IDTX's media products from the other market players. The company plans to continue to enhance the speed and color-matching features of its proprietary software in order to position the software as a leading off-the-shelf "scan and print" solution for entry-level users.
STRATEGIC PARTNERS:
Hewlett Packard
Although HP is a relative newcomer to the wide format printer market, it already controls about 20% of the installed market. Realizing the
benefits of IDTX's sophisticated digital imaging and printing systems
and solutions, HP's worldwide printing division, headquartered in Spain, reached an agreement with IDTX to market IDTX's Rapid Color RIP software solution to a variety of markets. IDTX is an approved, special business partner for selling and renting Hewlett-Packard's large format printers and accessories and has negotiated exclusive "special" pricing for targeted accounts. This strategic relationship provides IDTX with access to vital vertical markets.
National Graphics, Inc.
NGI has supplied a full line of photographic papers, films and chemistry to reprographic firms, graphic art houses, screen printers and sign shops for more than 20 years. NGI, with current sales in excess of US$32 million, serves as the company's coating and printing center - canvas and vinyl are coated according to IDTX's patented formulation.
Beyond Digital Imaging, Inc.
BDI serves as a strategic fulfillment center for large orders. Wide
format printing projects are completed by BDI at one of its locations
and shipped to the end customer.
MANAGEMENT:
Robert Thomas Hughes, President of IDTX, developed IDTX's systems and
technologies. A true entrepreneur, Mr. Hughes has over 20 years of
experience launching new products, gaining market share and winning
strategic name recognition for each company and its products and
services. Prior to founding IDTX, Hughes was CEO of Hughes Printing and Imaging, a large format RIP software company and reseller of Hewlett Packard large format printers. Prior to founding Hughes Printing and Imaging, he was CEO of Triton Digital Imaging, which marketed proprietary software RIP and operated as a reseller of Encad wide format printers. Hughes has a BA degree in Public Administration from California State University at Long Beach and an MA in Public
Administration from the University of Southern California.
Anthony DeSio, Chairman of the Advisory Board, has an extensive
background in the development of new businesses. As a founder of Mail
Boxes Etc., he is credited with growing the company's sales to over $50 million and is considered one of North America's most successful
business and franchise entrepreneurs.
Hiram French, Chief Operating Officer, has been in wide format printing since the inception of the industry. He has over 25 years senior management experience in early stage and fast growth companies based entirely in the fields of computer graphics and the graphic arts. Mr. French holds a B.Sc. in Aeronautical Engineering from Texas A&M University, and attended Northeastern University in Boston for graduate business studies.
Bruce Rosenberg, Vice President, General Counsel and Secretary has over twenty years experience as a corporate counsel and manager. From 1988 to 1998 he was Vice President and General Counsel and Secretary of Mail Boxes Etc., where he headed up the legal department. Mr. Rosenberg has a BE degree from Cooper Union, an MS from the University of Illinois, and a JD from the Catholic University of America.
Blaine Roberts, Director and Vice President Production was formerly
President of Memories on Canvas, a production and marketing house
devoted to developing the consumer market for large format photo
specialty products. The company was acquired by IDTX in 1998. Mr.
Roberts has a BA in Economics from the University of Southern
California, an MA from Ohio State University in ustrial/Organizational Psychology, and an MA from the University of California at Irvine in Social Sciences.
Gary Rogers, Vice-President of Software Development, has served as
president of R9 Corporation for the last four years. R9 provides
software and management services in the areas of computer graphics and
image processing. Prior to working at R9, Mr. Rogers was Manager
Software Development for AGE Logic, a custom developer for large
original equipment manufacturers such as Novell. He has a Ph.D. -
Computer Systems from the State University of New York.
Wade Stevenson, Executive Vice-President of Sales, has managed the sales and marketing for IDTX for over 3 years. Prior to joining IDTX, Mr. Stevenson worked for a service company and assisted with development and sales of large format digital ink jet printing. |
