Financial printers are now far, far more than just printers. Over the last two decades, as the SEC and issuers started going paperless, financial printers recast themselves as proponents of new technologies for corporate filings and deal-making.
David Shea, Bowne
‘Clients are holding on to documents longer and coming to us later in the cycle, so we may be down to hours instead of days – that’s a challenge for the industry,’ says David
Shea, president and chief operating officer of Bowne. ‘We’ve created a global composition network so we can work locally or, if we’re overloaded, we can distribute the job to our network and then bring it back to the client in a timely and seamless fashion.’
The trend, both in the US and globally, is toward more electronic distribution of documents, says Shea, though it’s unclear how far issuers will take electronic delivery. ‘We’ve put the technology in place for more selective print-on-demand capability,’ he explains. ‘We assist our clients in the editing, formatting and distribution of the documents – either printed or electronic – as well as filings to the SEC. Print distribution
is really the last piece. And it’s the easiest piece.’
Services and products such as virtual deal rooms are just part of the new push into technology, Shea adds. The greatest transformation is the financial printer becoming more of a consultancy-based service provider.
John Waterlow, Corporate Mailing Matters
John Waterlow, head of financial sales for London-based Corporate Mailing Matters, says regulatory changes are having the most significant impact on the business. The UK’s new Company Law Review, expected to be approved later this year, will move financial reports toward more digital distribution.
‘At the moment you get paper unless you’ve requested electronic distribution, and that would be reversed,’ he notes. ‘The companies with the largest shareholder bases are pushing for this, as they’ll see the biggest savings. But people have very different ideas about the consequences. It’s not clear what shareholders want. What is clear is that, five to ten years out, there will be far more electronic distribution than print.’
Waterlow also says new electronic formats such as XBRL are being embraced, allowing more information to be extracted more easily from company web sites than from PDFs. ‘This is reducing the demand for print runs of documents, too,’ he says. ‘You are also seeing the SEC relaxing rules for foreign issuers, which reduces the amount of print distribution.’
As companies focus more on the digital side of publishing, Waterlow believes financial printers are reequipping themselves with better technology to improve quality and make it all more affordable. ‘This is especially important, as reports and accounts are becoming more of a commercial document,’ he explains. ‘Companies are spending more of their budgets on the electronic side.’
David Wade and Steve Grandis, Doremus
‘With the increased public scrutiny that CFOs and IROs face today, the pressure is much greater for increased disclosure, plainer English and greater accuracy, all in a shortened timeframe,’ says Steve Grandis, executive vice president of Doremus in New York. ‘As a financial printer, all that pressure flows downhill to us. In response, we’ve moved to a desktop and digital environment that allows us to respond faster.’
Doremus can now offer on-demand printing: if a firm wants 500 books one day, and another 50 a few days later, Doremus can deliver. ‘A financial printer with printing presses alone can’t do that without great cost,’ Grandis notes.
The company recently partnered with press release newswire PrimeZone Media Network to expand its offerings. ‘We offer one-stop shopping to clients, from typesetting and Edgar filing to printing and distribution, all in electronic format,’ says Doremus
president David Wade.
As for new formats like XBRL, Wade thinks it’s too early to commit, given the costs and limited use. ‘Web access delivery of IR documents will be another big trend,’ he predicts. ‘At least it will cause shorter print runs, which gets you back to the digital environment. You also have new rules on electronic access for proxies. Virtual data rooms are perfect for things like tracking who has logged in to review the proxy.’
Klaus Rainer Kirchhoff, Kirchhoff Consult
‘Clients today want more consultancy than just pure design,’ says Klaus Rainer Kirchhoff, chairman of the German financial printing company Kirchhoff Consult. ‘We have analysts with CFAs who can help companies on US Gaap, for example, and we have analysts for international accounting standards. This is what clients want – analysts to work closely with CFOs on content.’
Electronic formats are another major trend, Kirchhoff adds, noting that the German investment community wants more efficiency in annual reports, especially the internet version. ‘People want more on the pages, and they want better navigation,’ he says. ‘But digital versions are much less developed in Germany. What most companies have are PDFs on their web sites, and they’re not especially good. Only a few companies, generally the international ones, have a specialized digital version. These are more user-friendly and navigable.’
Kirchhoff sees the German market exhibiting a greater demand for digital publishing, but German companies are still slow to embrace newer types of financial communications. ‘It will take a few more years for the interest to grow significantly,’ he concedes. ‘But this is the trend. International investors use the internet more to get quick information, and with these digital versions of reports, you can offer this flexibility and be more up to date.’
Mike Schlanger, Merrill Corporation
‘Sarbanes-Oxley is affecting everything,’ says Mike Schlanger, New York regional vice president at Merrill Corporation. ‘Many of the rule changes have forced companies to put more time and attention into routine disclosure, and that has shortened timelines.
‘For example, more and more companies wait until the last few days to file their 10K or 10Q, so less time is allowed to manage the documents and prepare for filings than in the past.’
Among new services offered by some financial printers is the virtual deal room, which ‘has changed the practice of M&A transactions,’ Schlanger says. ‘In terms of integrating two
companies following a merger, virtual deal rooms are extremely helpful – fully searchable down to the page, rather than by PDF, for example.’ The problem with PDF is that you can’t isolate individual words or numbers.
Of course the greatest change on the horizon is the move from paper to electronic proxy materials as recently proposed by the SEC. The implications for financial printers are obvious, but what about issuers?
‘Every company needs to determine the character of its shareholder base and make sure it is responding to the needs of that base in terms of delivery,’ Schlanger says. ‘IR folks need to discuss the best way to address their shareholder communications.’
