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September 11, 2013Global Channel Partners Summit

EXPAND PRODUCTION OPPORTUNITIES WITH CUTTING, ROUTING AND LASER TECHNOLOGIES

EVERY super-wide-format digital printer NEEDS a digital finishing solution in order to maximize his profitability via accurate and on-time finishing with minimum cost

In today's marketplace, there are many companies that offer devices to perform the cutting of complex shapes, but which type of technology is the best for your business; which offers quick ROI, functionality within existing workflows and the chance for differentiation in crowded markets?

Selling such solutions allows a distribution channel to help its printer clients to maximize their opportunities and increase their profitability

PRESENTATION SUMMARY

Specialty Graphics are different

The “Harley” problem

UV Printer Market and Differences

Samples of the Specialty Graphics needing finishing

Printers’ Comments

The value of Finishing and Automated Workflow

Distortions necessary to account for in finishing

Discussion of available RIPs, Printers and Finishers and what you can get for each price point.

Conclusion

GRAPHICS ARE DIFFERENT

They can’t be sold without Finishing They’re labor intensive, at best, with variable

results Large prints are really hard to cut smoothly by hand,

worse for fabric Materials can now cost more than labor Design files don’t accurately represent the

distortion evident in the final print Faster grand format printers make finishing

automation all the more necessary There are only a very limited number of digital

finishing companies that don’t print, unlike the services readily available for offset finishing.

THE HARLEY DAVIDSON PROBLEM

Three dies were yielding 30% scrap Low, average and high humidity made more shape changes than only 3

dies could handle

The screen print shop manager asked if X-Y cutting tables could be used with a camera system for achieving less scrap and being able to meet Harley’s gas tank and fender graphic needs.

From this need came the first vision enhanced cutting system from MGE in the 1999 time frame – i-cut™

In 2002, with grand format digital printing hitting its stride, use of these systems for digital graphics took off.

WHERE IS FINISHING MOST NEEDED?

The largest area for growth is in printed fabrics. These tend to be up to 10ft. Wide and typical jobs may be20 ft. in length. Hand cutting is not satisfactory.

One user has indicated that a job that took 28 hours with a manual hot knife was completed in 45 minutes on a 10 X 20 ft. laser cutting table.

The second largest growth area is for companies buying faster and larger grand format printers who need both speed and added width, plus operating efficiency.

Lastly, new printers who are buying their first grand format printer and need a reasonable, yet high quality finisher are still growing in the marketplace.

See Chart on next Slide

6

Product Type

2010 Sales 2015 Sales 5 Year Growth

COMMENTS

HEUVR2R>$300k

281 440 57% Fabric Growth

HEUVFB>$125k

424 663 56% Cut/Route Growth

LEUVFB <$125k

1,551 2,429 57% Needs an ~ $100k Finisher

UV PRINTER MARKET GROWTH

Between Zund and Kongsberg, alone, approximately 1,000 flatbed digital finishers worldwide are being sold per year, mostly alongside the High End UV Flatbed (HEUVFB) printers. These are sold primarily to the High End UV Flatbed buyers

Per the prior chart, the Low End UV Flatbed (LEUVFB) printers are selling at 4X the rate. This would indicate a latent need for 4X the units or roughly 4,000 per

year with North America probably representing 1/5 of the market or 800 units/year in 2015

At least 100 systems per year are being sold into the fabric finishing marketplace – HEUVR2R users

With these varying needs, it is no wonder there are so many choices for finishers available for your consideration depending upon what you print!

But be careful to evaluate your complete needs and the finisher’s ability to meet them

PRINTER MARKET GROWTH – CUTTER NEEDS

WHAT KINDS OF GRAPHICS ARE

WE TALKING ABOUT?

Rolled vinyl and semi rigid plastics

Rolled fabric

Rigid boards, plastics and composites

Foams of varying densities and thicknesses

Banner Material

More …

TYPICAL GRAPHICS – POP/SMALL SIGNS

CAN BE FLEXIBLE OF RIGID

TYPICAL GRAPHICS – DECALS/LABELSTHAT ARE THROUGH OR KISS CUT

KISS CUTTING OF VINYL

TYPICAL GRAPHICS – LARGER RIGID MATERIALS

TYPICAL ROUTED GRAPHICS

TYPICAL POINT OF PURCHASE DISPLAYS

15

LASER CUTTING OF RIGID MATERIALS INSTEAD OF ROUTING

Smart-X

LASER CUTTING OF GRAPHICS

KissCut Vinyl

LASER CUTTING OF NON-PRINTED

Gaskets

LASER AND/OR KNIFE CUTTING

Fabric for Clothing

FABRIC SIGNAGE – LASER OR ROTARY CUTTER USED FOR FINISHING

Laser Cutting of many

materials doesn’t require

hemming…

FOAM CUTTING

Laser, Knife and Routing can all be used

depending upon type of foam

NESTED MATERIALS ALL IN PLACE AND IN SUPER SIZES CAN BE HANDLED BY ALL

5 to1 20% attachment rate will grow with increasing printing speeds = new bottlenecks in finishing = more cutters sold

digital presses sold in 2012 – 80% replacing older, slower printers = increasing the demand for

finishing thru-put

price for high-end digital press – Good fit for faster and wider cutters with multiple tool capabilities

$100,000-$200,000

Medium priced presses –

Perfect fit for new Digital

CuttersThat Do More for

lower prices

6,000

$200,000 - $2,000,000

Market Drivers

FINISHING BENEFITS

What are some of the driving factors to buying a digital finisher?

What do Printers have to say?

How can we look at their results from the positive influence of finishing workflow inside their marketing and the production processes?

GRAPHICS ARE DIFFERENT

The alternatives cost more: Hand cutting and then laminating Sabre saw and saw horses

One cutting table customer noted that a job that took 5 men 3 days by hand, was completed in 1 day with 2 men. 13 man days saved – over $650 in cost Typical system costs $2,000-$3,000 per month on a 5

year lease

The quality improvement is significant as well

You do the math

ARE ERRORS VISIBLE?

The Human eye Can see errors in the order of 1/1000 (.001) of an inch

Errors at the edge of a graphical shape cause under cut and over cut edges, as well as potentially cutting off important parts of the image

Even digital print causes errors large enough to be visible if not corrected

PRINTER COMMENTS

Richard Rudolph-Tango Graphics/EXL Prints: The bank made me run with a printer and no cutter for a year to prove I

could pay back the printer loan. Within 60 days of bringing in a cutter/router, we went from plenty of

available capacity to 50 hours per week use per machine because we never had to turn down a job.

We wouldn’t be in business today if we didn’t have it. It is a “tool of the trade” that no printer should be without.”

It ensures a cleaner job than before and all cut lines are straighter. The system actually pays for itself in under a week of use per month, but it

is worth much more to the business.

PRINTERS’ COMMENTS

• Ron Clark (Ben Franklin Press) • Guy Ladd (Reprographic Technologies)

“I can’t understand anybody buying a flat bed printer and not pairing it with a flat bed digital die cutter”

PRINTER COMMENTS

Jim Sullivan (BrandBoxx):

Our i-cut digital finishing system allowed us to:

capture over $200,000 in gross profit in year one that previously was spent outsourcing finishing work,

add over $400,000 in top line sales that we wouldn’t have received without i-cut’s capabilities and

save between $115,000 and $230,000 in real cost from spoiled work.”

MAJOR FABRIC PRINTER

Using a laser cutter, we have saved 7 employees per machine shift and we no longer have sewers waiting around to get work.

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BENEFITS / JUSTIFICATIONDIGITAL FINISHING AUTOMATION

Reduce labor expense

Increase production capacity

Improve quality / reduce spoilage

Eliminate subcontracting

Maintain control / shorten lead times

Capture additional business with expanded capabilities

Never turn down a job!

A SERVICE BUREAU STORY

DICON was a cutting service bureau in Southern WI for over 8 years.

By tracking all jobs, they were able to confirm a scrap level of well under 2% consistently regardless of how the jobs were printed.

They proved that a profit could be made with digital finishing when closing DICON, developed a “cloud-based” product that ensures digital finishing users can estimate accurately to ensure their jobs stay profitable

When customers reached between $2,000 and $3,000 a month in finishing, plus their shipping expenses, they bought a cutting system and never looked back, using DICON only for overloads.

WHAT TECHNOLOGIES SHOULD YOU BE CONSIDERING

Vision Systems RIPs Laser/Knife/Router Finishers Workflow

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TYPICAL VISION CAPABILITIES AVAILABLE IN THE MARKETPLACE

Controller based – Position & Rotation MultiVision, OptiScout, Zund

CutCenter, Esko i-cut, Mvision and others – Position, rotation and Compensation – some better at graphics longer than the table and non-linear errors than others

How many register marks are enough?Buyer beware: What will the next job you need to finish

require for accurate cutting?

PRINTER RIPS THAT HANDLE WORKFLOW

3M Graphic Maker

Caldera

Colorburst

ColorGate

Durst/Dice

Efi

Ergosoft

EskoArtwork

Gerber

Mimaki

Onyx

SAI/Scanvec

Wasatch

PRINTERS THAT WORK WITHIN THE RIP WORKFLOWS

Agfa

DYSS

Durst

Gerber

HP/Colorspan,Indigo &Scitex/NUR

Matan

Mimaki

Mutoh

Oce/Fuji

Sericol/Inca

Teckwin

Rastek/VUTEk/efi

Finishing Market Overview

$150K

$100K

$75K

$100K $200K $400K $600K

Finisher

Printers

$50K

$200K

$1MIL

The Goal: Most printers see themselves as printers first, and don’t want to spend more for a finishing solution than their printer cost. The market should allow them to choose a cutter/finisher for every speed and quality level they require - all working the same way

One Common Workflow - Many

Choices

Printer

CUTTERS/ROUTERS/LASERS THAT WORK WITHIN THE WORKFLOW

Anderson (Q-KUT)AXYZCielleDYSSEskoArtwork/KongsbergEurolaserGerberHanter TechnologyKern LaserMCT/Blackman & White

MecanumericMimakiMulticamTeckwinTrotecVytek LaserZundMore

TYPICAL SMALL FORMAT CUTTER

PRICED UNDER $100K

Zund S3

TYPICAL SMALL FORMAT LASER

SMALL LASERS PRICED UNDER $100K

Trotec Speedy 500

TYPICAL ROUTER

ROUTERS PRICED UNDER $75K, UP TO $100K

AXYZ Camtech Router

TYPICAL CUTTER/ROUTER

TYPICALLY COST BETWEEN $100K AND $225K

Zund G3

TYPICAL LASER

TYPICALLY COST BETWEEN %75K AND $150K

Kern Laser Cutter/Engraver

TYPICAL LASER/CUTTER

TYPICALLY COST ABOVE $275K

Eurolaser 3XL 3200 with Laser and Zund Tangential Cutting knives, but no Routing

TYPICAL GRAND FORMAT

LASER/CUTTER/ROUTER

TYPICALLY COST $225K AND UP

MCT/Blackman & White MasterCut™ (up to 5M wide X up to 40M long or more) can have both laser on one side of beam and cutter tools and/or router on the other side

NEW MCT CUTTER/ROUTER /LASER

VALUE PRICE POINT OF UNDER $135K IN 5X10 FORMAT TO $210K IN 10X10 FORMAT WITH LASERTO MATCH THE MAXIMUM PRINTER BUYERS’ NEEDS

MCT/BW introduces new

Versa-Tech™ Cutter/Router/Laser

With sizes of 1.6M, 2.0M and 3.2M

Wide by 3.2M long

cutting areas

One system that does it all!

PRINTER (PSP) CONCLUSION

You have many choices for finishingChoose ones that give you the most

opportunity for growth and profitability and make sure that the manufacturer also understands your workflow needs!

BUT CHOOSE DIGITAL FINISHING TO MAXIMIZE BOTH YOUR PROFIT AND

GROWTH

DISTRIBUTOR CONCLUSION

Pick the finishing product company that gives you:

the best breadth of product, Has a good relationship with its

customers, and works with a distribution partner

as a true partner, not just as another outlet

CONTACT INFORMATION

Steve Aranoff

VP Business Strategy & Distribution

MCT, Inc. (Mikkelsen Converting Technology, Inc.)

700 W. Virginia St., #B110

Milwaukee, WI

Cell: 928-300-8757

Office: 928-282-4173

Fax: 775-254-5768

Skype: steve.aranoff