XEROX EXECUTIVE SAYS COMPANY IS STICKING TO STRATEGY
Xerox’s interim CEO Steve Bandrowczak said Tuesday the company will stick to the strategy crafted by his predecessor John Visentin, who died June 28 of complications from an unspecified illness.
In its heyday the Xerox brand was synonymous with office life, but the Norwalk-based company has yet to come up with any breakthrough product or service for the internet era to rival its copiers and printers, despite generating an impressive tally of patents each year.
“We will honor John by continuing to execute across the four strategic initiatives he articulated,” Bandrowczak during a Tuesday morning conference call. “The same four strategic initiatives that have guided us since 2018 — optimize operations, drive revenue, monetize innovation, and focus on cash flow — are expected to lead to sustainable and long-term growth.”
Bandrowczak had been president and chief operating officer since 2018 under Visentin, who became CEO in May that year on the heels of a proxy battle and court standoff brought by activist investors Carl Icahn and Darwin Deason.
Icahn and Deason had objected to the Xerox board’s approval of former CEO Jeff Jacobson’s deal to sell the company for $6 billion to Fujifilm Holdings, a longtime corporate partner via the Fuji Xerox joint venture selling office systems in Asia.
Even as he fended off Fujifilm, Visentin instituted a restructuring plan called “Project Own It” to reduce Xerox costs through job cuts, outsourcing and simplifying its business on everything from technology to procurement. Then the COVID-19 pandemic hit, limiting the use of printers which generate some of Xerox’s revenue.
The pandemic also convinced Visentin to abandon his pursuit of another iconic American company — HP, whose board rejected repeat overtures by Xerox for a mammoth merger. Both Visentin and Bandrowczak worked for HP at points in their careers.
While Xerox is predicting a continuing return to offices for the balance of this year, it has yet to see revenue show any postpandemic bounce on a sustained basis. Xerox revenue ebbed $46 million in the second quarter to just under $1.75 billion, and the company recorded its second straight quarter of red ink, at $5 million in the second quarter on the heels of a $56 million loss between January and March.
After losing more than half their value in the first few month of the pandemic, Xerox shares clawed back some of those losses through March 2021, only to subside anew in the interval since. Shares traded at $16.30 on Tuesday afternoon, up 5 percent from the closing price on Monday.
On Tuesday, Bandrowczak said ongoing problems with supply chains have affected Xerox sales, describing customer demand as “strong” in his words.
But despite Xerox having the ability to raises prices on some of its product and services, inflation is prompting the company to seek additional savings internally through Project Own It, for which Bandrowczak took credit on Tuesday for designing. Xerox is on pace for more than $2.2 billion in savings under the program over five years since 2018.
Visentin had made it his mission to put Xerox onto a consistent upward trajectory for profits, while restoring the luster of its Xerox Palo Alto Research Center and its research campus in Webster, N.Y.
Xerox PARC produced a string of breakthrough technologies for the age of personal computers that the company did not capitalize on, to include the graphical user interface architecture that allows for “point-and-click” functionality using a computer mouse.
Bandrowczak highlighted the U.S. Navy’s purchase of a Xerox PARC-developed 3D liquid metal printer called ElemX for the U.S.S. Essex amphibious assault ship, the first such device in the fleet that can produce metal components as replacement parts.