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Strategies & Market Trends : Rande Is . . . HOME -- Ignore unavailable to you. Want to Upgrade?

To: Kevin Shea who wrote (11771)	9/8/1999 11:20:00 AM
From: Joe Smith	Read Replies (1) \| Respond to of 57584

11:02 IMF SAYS HIGH U.S. SHARE PRICES POSE RISK TO GLOBAL FINANCIAL MARKETS - REUTERS. 11:02 IMF SAYS U.S., EUROPEAN C/A IMBALANCES COULD POINT TO WEAKER DOLLAR VS. EURO - REUTERS. 11:02 IMF SAYS U.S. STOCK PRICES VULNERABLE TO 'SHOCKS' - DOW JONES.

To: Kevin Shea who wrote (11771)	9/8/1999 11:32:00 AM
From: Joe Smith	Respond to of 57584

The offering was reduced to 3M because of poor market timing. From IMGX SEC.......... <TABLE> <S> <C> EFFICIENCY We shorten the time required for customers to order printed business materials and allow customers to modify, proof and order their printed business materials from their desktops, eliminating the need to send markups and proofs to and from the printer. CONTROL AND SCALABILITY From the password-protected Online Printing Center, authorized customer employees can individually modify, proof, procure and manage a wide variety of printed business materials within the centralized parameters and preset rules established by the customer. In addition, the ImageX.com system is scalable, meaning it has the ability to handle increasing order volume without compromising system integrity and performance. </TABLE> 3 <TABLE> <S> <C> ACCURACY The ImageX.com system allows users to enter, proof, update and maintain their information online. We believe the ImageX.com system reduces errors associated with data reentry, typesetting and the use of outdated document versions. SINGLE-SOURCING We provide a wide range of printed business materials through our network of approximately 30 commercial printing vendors and two facilities that we own. STREAMLINED We provide our commercial printing vendors with print-ready MANUFACTURING files that are routed directly to their printing systems. Our system eliminates typesetting and certain pre-press manufacturing steps. As a result, we believe our system reduces the opportunity for errors to occur in the manufacturing process. </TABLE> we have customers such as Amazon.com, Bell Atlantic Mobile, CB Richard Ellis, CIBC World Markets, Donaldson, Lufkin & Jenrette, Merck & Co. and Visio. These customers accounted for 26% of our 1998 pro forma revenues. We derive our revenue primarily from the sale of printed business materials. We price our products competitively, but we do not strive to be the lowest-price provider. In addition to the price for each printed item, we also typically receive revenue from customers for construction of their Online Printing Center, setup of each printed item and monthly site maintenance. For the typical customer, these additional fees total less than $5,000 TO OBTAIN NEW CUSTOMERS, WE MUST OVERCOME LONG-STANDING CUSTOMER RELATIONSHIPS AND LONG SALES CYCLES. Many of the potential customers that we pursue through our direct sales process have long-standing business relationships and personal ties with their existing printers, which they are reluctant to disrupt. Customers are also often reluctant to change their existing ordering and production processes to take advantage of our Internet-based printing services. To successfully sell our products, we generally must educate our potential customers on the use and benefits of our system, which can require significant time and resources. Consequently, we must incur substantial expenses in acquiring new customers and converting them to the ImageX.com online system. The period between initial contact and the purchase of our products through our online system is often long and subject to delays associated with the lengthy approval and competitive evaluation processes that typically accompany a customer's decision to change its outsourcing relationships. For typical customers, the sales cycle takes between two to twelve weeks, but for large customers, the sales cycle may require more than one year. See "Business--Sales and Marketing." IF WE ARE UNABLE TO COMPETE SUCCESSFULLY AGAINST PRINTING COMPANIES OR FUTURE BUSINESSES OFFERING INTERNET-BASED PRINTING SERVICES, OUR BUSINESS WILL FAIL. The market for printed business materials is intensely competitive. We compete primarily with local and regional printers, which are either independent or owned by print industry consolidators. The U.S. commercial printing industry is highly fragmented, with over 30,000 local and regional commercial printers operating nationwide in 1998. These local and regional printers typically have significant excess production capacity. Therefore, they compete aggressively for business printing orders in the markets they serve. Traditional commercial printers often have long-standing relationships with customers. We face substantial challenges in convincing businesses to consider alternatives to their traditional printers. In addition, printers typically have extensive local sales forces that regularly canvass and solicit businesses in the areas they serve. Commercial printers compete primarily on product pricing, product and service quality and, to a lesser extent, on innovation in printing technologies and techniques. To attract new customers and retain our existing customers, we must compete effectively in each of these areas. We also face substantial competition from printing services brokers--companies that contract with businesses to select and procure printing services from a variety of printers. Brokers are able to offer customers a relatively wide variety of products and services, and are often able to obtain favorable pricing for their customers by soliciting bids from a variety of printers. Like local and regional printers, printing services brokers often have long-standing customer relationships and extensive local direct sales forces.