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Monthly Financial Wrap-Up

7 Dec, 2004 By: Mike Dudek imageSource

Monthly Financial Wrap-Up

Each month we track changes in stock values of major public players in the
imaging industry. Seven of the 11 stocks we have been tracking have appreciated
the first two months with Adobe at +22 percent and Global at +20 percent leading
the pack. Both of these stocks appreciated 26 percent last year. Danka’s stock
has declined 20 percent and IKON has declined 6 percent in two months. Last year
these stocks appreciated 57 percent and 64 percent respectively. The total
market capitalization of these companies at November 30, 2004 is $164 billion;
an increase of 4 percent from September 30, 2004.

Latest Industry Developments

Global Imaging Systems: Announced the acquisition of Stewart Industries, a
$30 million a year Savin dealer with five locations in New Jersey. The
acquisition represents Global’s 18th core company acquisition. Terms of the
transaction were not disclosed.  Global has acquired over $150 million in
revenue this fiscal year, surpassing its $60 million to $100 million objective.

Xerox: Predicted future growth in revenue, earnings and shareholder value.
Xerox expects revenue to grow 3 percent in 2005 and 5 percent in 2006 with
earnings growth ranging from 15 percent to 20 percent. The company expects
revenue from color to grow at 20 percent per year and indicated that their
revenue per color page is five times black & white revenue per page.  Production
printing customers print an average of 400,000 pages per month on Xerox’s iGen3

HP: Announced its fourth quarter earnings achieving record quarterly revenue
of $21.4 billion, which represents an 8 percent growth over the prior year with
earnings per share growth of 32 percent. Full year revenue increased 9 percent
to $80 billion with EPS growth of 39 percent.  During the year, HP repurchased
$3.3 billion of their shares. Imaging and printing revenue for the quarter
totaled $6.5 billion, an increase of 5 percent.  HP shipped 14 million printers
in the quarter, the highest volume ever. In addition, supply revenue grew 8

Oce: Announced the reorganization of its sales department of the Digital
Document Systems division in the U.S. to reflect specialization in key market
segments. Daniel S. Powell was appointed senior vice president of sales for the
Digital Document Systems division of Océ North America. Michael J. Roberts will
be vice president of sales for Corporate and Commercial Accounts, Robert M.
Berman will be vice president of sales for Graphic Arts, Bryan W. Beauchamp will
be vice president of sales for the Public Sector, and John H. Forbes will be
vice president of Alternate Channels. Dominic Caputo will be vice president of
Strategic Accounts. Powell said the restructuring is a final step in Oce’s goal
of being a solutions-focused, market segmented sales organization. The new
organization, he said, will streamline our delivery of the company’s solutions
to the marketplace.

 Tech Data: Although this column does not typically report on Tech Data, the
provider of document imaging and printer solutions is a major player in the
business. The company reported third quarter results of $4.8 billion, an
increase of 8.6 percent from $4.4 billion in the third quarter a year ago and an
increase of 4.2 percent from the second quarter of the current fiscal year.

On a regional basis, net sales in Europe increased 12.7 percent and in the
Americas increased 3.9 percent over the third quarter a year ago. Net sales in
Europe increased 4.9 percent, and in the Americas increased 3.3 percent compared
to the second quarter of the current fiscal year. Net income for the third
quarter totaled $37.8 million. Net sales for the nine-month period ended October
31, 2004, was $14.2 billion, an increase of 13.5 percent from $12.5 billion in
the nine-month period ended October 31, 2003. The outlook for the fourth quarter
ending January 31, 2005, excluding any restructuring, is expected to be in the
range of $5.15 billion to $5.30 billion. Net income is expected to be in the
range of $42 million to $45 million.

ITEX: We are very excited to announce that Mike Dudek will be appearing at
imageSource’s ITEX convention at the Las Vegas Convention Center from February
3-4, 2005 to speak about his favorite topic—mergers and acquisitions.

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