Aided by the accuracy that only hindsight offers, Robert Kleist, Printronix Inc.'s president and chief executive, quickly recites the problems that sent the successful computer-printer maker tumbling last year for the first time in its 12-year history.
First, he explains, sales tailspinned throughout the entire computer industry. With fewer new computers generating information, the world needed fewer new printers to transfer the data to paper.
Then, the Irvine-based company was hit by the costly realization that its recent acquisition was unable to provide the hot, new personal computer printers it had been counting on.
Finally, an embarrassed Kleist admits, Printronix missed the target on laser printers--the only bright spot in the industry's otherwise miserable year--by failing to develop a product for the personal computer user, the major customer for the latest breakthrough in printers.
"It's not as simple as it was at one time," says Kleist, 57, a direct but soft-spoken engineer who was one of Printronix's six founders. "Before, we grew on our unique technology, but now that's not good enough."
Turbulence in Industry
The problems at Printronix--the problems that caused the world's 10th largest printer maker to lose $11.7 million in its fiscal 1986 on sales of $131.8 million and to lay off one-third of its employees since 1984--offer clear evidence that the turbulence that has run rampant through the rest of the high-tech industry has finally hit the printer makers.
As with other high-tech products, when the age of specialization and miniaturization dawned on the printer market, many manufacturers were caught unaware and were unable to respond quickly.
"Printronix has always been strong in the old, mainstream printer market," says Donna Wheatley, market analyst for Dataproducts Corp. in Woodland Hills, one of Printronix's chief rivals. "But, now, the mainstream printer market has been replaced by several markets, and each needs a specialized machine."
Wheatley counts her own company among the victims of the changing market. Dataproducts lost a record $27 million in its 1986 fiscal year and has laid off nearly one-third of its workers since 1984.
By the time companies were able to respond to the market shifts, analysts say, they ran into the deep high-tech sales slump of 1985.
"Everyone got caught off guard," says Joel Housman, a market analyst with Robertson, Colman & Stephens, a San Francisco brokerage.
Path Touted by Analysts
However, Printronix's recent responses, including a push to diversify its limited product line and expand its international presence, appear to be following exactly the prescriptions offered by Housman and other analysts.
Kleist says that after posting an operating loss in the quarter that ended last month, the company should be profitable for the remainder of the year. Analysts are predicting sales of $150 million for the year, with profits of about $5 million.
"To make money in the printer business, it's not enough to own one printer technology," explains David Glidewell, an analyst with Dataquest Inc., a high-tech industry research firm in San Jose. "A company has to adapt to the total electronic environment, and that means offering a wide range of products that meet more sophisticated needs."
Late last month, Printronix took what it believes is its most important step towards meeting the new market demands by unveiling eight new products, its largest-ever product introduction. Among the printers shown were new laser and serial printers designed to work with personal computers.
"We've achieved our objective," Kleist said just two days after the products were shown at an industry trade show in Las Vegas. "But it was very costly and took longer that we ever thought."
Business wasn't always that difficult.
For a long time, all printer makers had to do was produce a reliable machine that could handle the high volumes of information being transferred from a computer to paper, either in a data-processing department or on a factory floor. The machines, all fairly large and expensive, were basically noisy, cumbersome workhorses that few office workers even saw.
Then came the personal computer.
Instead of durable printers to serve entire departments or, even, entire companies, this new marketplace needed models that could hook up to the single-user desk-top computer.
Instead of big machines that would be sold to data-processing professionals by a manufacturer's trained sales force, the personal computer marketplace needed products that could be sold to everyday businessmen, housewives and students by retail clerks.
Need for Cheap Printers
And instead of machines that cost up to $200,000, this marketplace needed printers cheap enough to be considered a consumer electronics item.
For old mainstay printer companies like Printronix, the change was revolutionary.