Group 5 Michael Phong Ho Kameliya Doncheva Jessie Xin Wei

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

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

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

Computer Peripherals Industry Market Capitalization: 39 billion Typical profit margin: 5.0% Zebra is in the top five of the industry by market capitalization Printronix’s market capitalization is 89 million

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

Financial Data Printronix $ in thousand, expect per share data

Financial Data (Cont’) Printronix $ in thousand, expect per share data

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

Benefit (why China) Free Trade Zone Lower costs — Supply 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

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

Future Outsourcing Target Vietnam Thailand Eastern Europe Africa (still considering)

Printronix’s Case Printronix had outsourced the manufacturing of its proprietary ribbons to China. Ribbons are super critical for Printronix’s 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.

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

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