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2/7/2011

Saratoga Technologies awarded 2010 Business of the Year by Business Journal

Tri-Cities, TN/VA (February 7, 2011) - Saratoga Technologies named 2010 Business of the Year by The Business Journal.  Read the full Business Journal article below.

2010 Business of the Year

When The Business Journal first called David Temple, president of Saratoga Technologies to discuss the fact that Saratoga was in the running for Business of the Year, we found that he was ouf the country for two weeks.  Many small business owners in the Tri-Cities would have had to think long and hard about whether they could afford to leave the building for two weeks in the economy of 2010.  But that's how business has been for Saratoga.  Good.  The company's bottom and top lines rose again in 2010, a year after Saratoga made the Inc. 5000 (No. 2989) with 71 percent sales growth for the three previous years.  While other companies were cutting staff, selling out or failing outright, Saratoga continued its trend of growth through acquisition.  The obvious question for Temple, once we caught up with him was, "How did you do that?" Temple's answer, in so many words:  He never stopped thinking big.

Saratoga management has always been willing to take strategic risks to grow, even when others thought the risks were too great.  "We have been very focused on achieving our vision and mission," Temple says.  "But what makes that so important is that our original vision and mission was big enough.  Thinking back, many laughed at the vision and mission and thought we were crazy.  Well maybe we weren't so crazy."

Saratoga's aggressive growth strategy was on full display as 2010 ended.  On December 14, the firm announced the purchase of Abingdon, Va.-based Office Computer Professionals.  Two weeks later Saratoga announced the completion of its merger with East Tennessee Business Machines, under which ETBM has moved its operations into Saratoga's Johnson City offices.  "Some people are skittish about growth through acquisition," says Allan Walters, senior vice president.  "They see it as just throwing money around.  But we have a very specific strategy in which what we're doing makes perfect sense.

"We don't just acquire companies," says Walters.  "We bring their people on board.  That's key.  We want the owners, the principals to come in."

"Think of it from their perspective.  Let's say they're running a successful five-person business.  Well, at that level, it's hard to grow.  You get bogged down in running the business and have less and less time to actually do the things you love to do in the first place.  Most people in our business are tech people.  We unburden them from those administrative tasks."

Walters says that by taking that weight off the key players in an acquired company, Saratoga frees those individuals up to spend seven or eight hours a day working on their core competencies, rather than an hour and a half, with the rest of the day tied to a desk.  "We buy good companies.  Often they're doing very well on their own.  We just take those burdensome tasks off their backs so they can do even better."

There's another level of profitability that these acquisitions bring, says Walters.  "By bringing in these new companies, we're also bringing in their client lists.  So we have new clients that might be able to benefit from all the other products and services we have.  So we've opened up our entire portfolio of products to a whole new client base.  And all those products and services are being presented to the clients by the same reps that they already have a good relationship with."

So Saratoga has been able to add personnel while most companies have been cutting, says Temple.  "We have continued to add staff and now have around 65.  During the past tough economy we have been fortunate to not have to reduce our numbers at all."

David Temple"Our culture is very different from most companies and it is important for any new employee to very quickly assimilate themselves into it," adds Temple.  "We are always looking for competent staff who are prepared to take responsibility as opposed to defer for decisions.  As we have grown this has become a very significant challenge and being able to add great quality staff is key to continued growth."

That growth is tightly managed and targeted, says Temple.  And the growth strategy has changed as technology has changed, though the mission and vision of the company have remained steady.  "To a large degree our original mission is now only able to start being fully realized as technology has caught up, specifically in the whole area of cloud computing."

To date, about 70 percent of Saratoga's revenues have come from the company's networking solutions division.  A little less than ten percent have come from copier/printer.  But the company is looking to the cloud for its next wave of growth.

With that being the case, the firm's most recent acquisitions have come in the field of printer solutions.  "The paradigm shift is cloud technology," says Walters.  "People pay a monthly fee and get the effects of software and servers and services like a utility.  We're embracing that model.  But what a cloud can't replace is a piece of paper.  People still want to hit 'print.'"

Most of Saratoga's areas of service have already matured in the marketplace.  That is to say, IT costs, personnel, asset management, maintenance, software and the like are all fairly well optimized.  But in 2010, the company went all-in on the printing side of the business, buying printer/copier sales and service companies to expand its own portfolio.

"Printing is the last place where people waste thousands of dollars without even knowing it," says Walters.  "Most people don't manage their printing.  They may have a closet full of toner.  That's money out of their cash flow that's just sitting in a closet doing nothing.  So there's a great opportunity to save money if printing is managed effectively.  It's one of those places where we can make a lot of money and the client can save a lot off money at the same time.  They no longer buy printers, toner and supplies.  We include hardware, installation, maintenance, toner, everything but paper and power."  Saratoga monitors every printer remotely from its offices in order to see that maintenance is performed on a just-in-time basis.

Allan Walters"This isn't something where the ROI is spread out over six year or some extended timeframe," says Walters.  "Printing management is a way to save our clients money today."

So it should have come as no surprise on January 19 when Saratoga announced its acquisition of Kingsport-based copier company Clear Impressions, marking the third copier company acquisition for Saratoga and the nineteenth overall acquisition since 2001.

Terry Larkin, owner and founder of Clear Impressions echoes the sentiments of Temple and Walters have expressed about such deals.  "The copier business is changing and is becoming more about technology and printing solutions than about equipment.  I wanted to join a full service technology company so I could continue to offer my customers more solutions.  Saratoga was the obvious choice with all that they offer and they have a great team of people that I will be a part of."

Following the Clear Impressions deal, Saratoga is an authorized dealer and repair center for HP, Sharp and Xerox printers, copiers and MFPs.  The entire staff of Clear Impressions will join Saratoga.  "They will be a natural fit and a welcomed addition to our printer and copier business division," says Temple.

It's important to note that the company's success in 2010 wasn't entirely due to growth, says Walters.  "Actually our profitability rose more than our sales in 2010.  More people made do with older equipment in the down economy.  So we did more service calls, even though we sold less new product.  The higher margins on service relative to sales meant we actually were more profitable."

And at Saratoga, as at most businesses, discipline played a key role as well, says Temple.  "I have always believed in professional leadership which as much as possible needs to look into the future and then adjust for now.  Our business plan process identified the likelihood of a tough economy and our planning then took that into account.  Some very specific actions were taken like not to over extend ourselves and so we have been fortunate to never have had the need for debt."

"Our financial independence and strength has allowed us to continue to grow and to ensure success.  In addition a strong focus on our customers and their needs including zero tolerance for anything but the highest level of service.  We have also spent the past 12 months looking at our own internal systems so as to find better, more productive ways to service our customers at even higher levels."

Still, in the end, says Temple, "Growth will continue to be our focus in 2011, both by organic and acquisition growth.  We are well set for the future and look forward to an ever improving economy."

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