Hewlett Packard Company - 1/22/2009

HP Graphics Solutions Business Experiences Most Successful Year to Date in Fiscal 2008

HP today announced it has completed its most successful year in the graphic arts industry to date, building on 
increased sales activity, leads and interest from its first announcement of new-platform technologies in March, 
through the debut of those solutions at drupa in May, to subsequent fulfillment of sales in the months following 
the show.
 
HP's organizational unit serving this industry, the Graphics Solutions Business (GSB), made a series of significant 
announcements during 2008, including the integration of acquired assets from NUR Macroprinters and MacDermid 
ColorSpan, the unveiling of a new HP Inkjet Web Press and Latex Ink/Wide Scan platforms utilizing HP Scalable 
Printing Technology (SPT), and the announcement of a new HP SmartStream graphic arts workflow and 
next-generation HP Indigo digital press models.

During the year, HP has extended its market stance as the leading provider of digital color printing solutions to 
the graphic arts. For the HP Indigo business, worldwide page growth exceeded 30 percent year over year.

"HP exceeded its internal targets for the graphic arts industry in 2008 and is focused on continuing to help our 
customers grow in 2009," said Michael Hoffmann, senior vice president, Graphics Solutions Business, HP. "From 
installing an order for Consolidated Graphics that was the largest in HP Indigo history, to transforming the way 
inkjet will be used in signage, publishing and direct mail applications, HP GSB is now more than ever providing 
routes to profitability that make the most sense for our customers while highlighting our commitment to their success."

HP Indigo press sales help HP exceed targets for drupa 

The drupa 2008 trade show – the world's largest printing exhibition – highlighted the industry-leading innovations 
and customer successes coming from HP's Indigo, Inkjet High-speed Production Solutions (IHPS), Large Format 
Printing (LFP) and Specialty Printing Systems (SPS) divisions. HP exceeded its sales goals for drupa, with many 
of those revenue dollars related to 130 installations of the new HP Indigo 7000 Digital Press completed in the 
press's first three months of availability.

The HP Indigo 7000 Digital Press delivers 120 high-quality four-color A4-size pages per minute for customers in 
general commercial, direct-marketing, photo merchandise, and book and publications printing. For high-print 
volume customers, the HP Indigo 7000 offers a total cost of ownership that significantly increases the break-
even point of digital against conventional printing.(1)

Many of the HP Indigo orders for 2008 have been for multiple units – including HP's largest single digital press 
order, a record 36-press order from Houston-based Consolidated Graphics Inc. (CGX) at drupa.

Today, CGX is the largest user of HP Indigo presses worldwide and its new presses are fully integrated across 
multiple facilities throughout the world. Each press is calibrated utilizing the latest software for color matching.

The HP Indigo 7000, which has been installed at customer sites in 19 countries, is also being selected by print 
service providers (PSPs) opting to transition from traditional offset to digital production based on the press model's 
higher-volume capabilities, fast throughput, higher crossover points compared to offset, and greater workflow 
efficiency.

"The HP Indigo 7000 Digital Press extends our return on investment deeper into longer projects," said Brad 
Clarke, vice president of McCallum/DirectConnectGroup West, Seattle, one of the first companies in North 
America to purchase the HP Indigo 7000 Digital Press. "For variable print jobs it reduces the cost per unit
through faster runs. For static work it shifts the economic equation towards migration from offset."

Additional PSPs in North America that have invested in HP Indigo 7000 Digital Presses include:

RT Associates, a PSP specializing in marketing services, which installed two presses after seeing firsthand how 
the HP Indigo 7000 Digital Press delivered faster turnaround time and higher productivity as a participant in the 
press's beta program; 

White House Custom Colour, one of the leading digital providers for the professional photography industry, 
which installed four HP Indigo 7000 Digital Presses to augment productivity and meet increased customer 
demand for the high-quality greeting cards and photo specialty applications; 

Integrated Book Technology, a leading producer of scientific, technical and medical journals, scholarly monographs 
and educational materials, which purchased the press at drupa to take advantage of HP Indigo's exclusive 
capabilities for Pantone®-licensed spot-color printing, higher-speed one- and two-color printing, and compatibility 
with thinner and lighter-weight media; 

Tabs Direct, one of the largest direct-mail production companies in the United States, which installed two 
presses to transition more of the personalized communication it creates for nonprofits and financial services 
firms to color digital production; 

DataMart Direct Inc., one of the largest direct marketing production firms in Northern Illinois, which purchased 
an HP Indigo 7000 Digital Press at the Graph Expo trade show to increase productivity and meet increased 
customer demand for high-quality direct mail and marketing collateral applications; 

Advantage Mailing, a complete provider of direct-mail production services for marketers, which installed an 
HP Indigo 7000 Digital Press to gain a competitive advantage by providing fast turnaround, high-quality 
personalization and economical pricing; 

Frecklebox, a provider of personalized books, posters and custom-made gifts for children, which used its new 
press to create high-quality output with double productivity in light of increased demand expected during the 
holiday season; and 

Lifetouch, the largest employee-owned photography company in the world, which installed two HP Indigo 7000s 
to increase its ability to provide high-quality yearbooks with a quick turnaround time for preschools and schools. 

The winner is digital – HP Indigo sample surpasses offset and flexo in label competition 

HP Indigo presses also hold significant market share in the worldwide label and packaging converting industry, 
based on their ability to give label converters greater flexibility with run lengths as well as true offset quality with 
excellent color registration. In October, an HP Indigo-produced label for Tavern on the Green printed by 
Rochester, N.Y.-based Label World became the first digitally printed label to win best-in-show honors in the 
Tag & Label Manufacturers Institute's annual awards competition, a contest that judged more than 300 labels 
printed by flexo, offset and digital processes.

"Since we first installed our HP Indigo press three years ago, digital has become a fast-growing segment of 
our business," said John McDermott, president, Label World. "We've always appreciated the level of quality 
possible with HP Indigo technology and we're thrilled to be the first company to ever win this highly respected 
award with a digitally printed piece."

HP's product announcements in 2008 for the labels and packaging segment include the new HP Indigo 
WS6000 Digital Press, which prints at 98 feet per minute in four colors, doubling the level of productivity 
available with digital.(2) The press will be available in early 2009, and is already installed and operating at 
beta sites worldwide, including Innovative Labeling Solutions in Hamilton, Ohio.

Next-generation solutions and award-winning quality from HP Large Format Printing

New product announcements from the HP LFP division – including the HP Designjet L65500 Printer featuring 
HP Latex Ink Technology and the HP Scitex FB7500 UV-flatbed printer – generated significant interest 
throughout the year with a significant amount of sales leads generated at shows such as drupa and SGIA '08. 
In addition, HP Scitex customer Graphic Tech's family of companies received an unprecedented 18 SGIA 
Golden Image Awards at SGIA '08, including two awards for entries produced on the HP Scitex TJ8500 Printer: 
an André Schellenberg Award of Excellence in the Decals/Pressure Sensitive category and the People's Choice 
Award.

"We are thrilled to be the most decorated company at SGIA with 18 Golden Image Awards, two André 
Schellenberg awards and the coveted People's Choice Award," said Jim Blee, chief operations officer, Graphic 
Tech. "With the HP Scitex TJ8500 Printer, we were able to produce vivid, high-quality applications that 
exceeded the expectations of our customers and caught the eye of the SGIA judges."

HP also has extended its leadership in the UV roll-to-roll large-format printer segment, significantly expanding its 
installed base of HP Scitex XP series printers worldwide.

The respected line of HP Designjet printers for the professional photography, fine art and graphic design 
industries grew in 2008 with the introduction of the HP Designjet Z3200 Photo Printer, an innovative device 
that features HP DreamColor technologies – including an embedded spectrophotometer for easier media 
profiling and calibration – as well as a 12-ink print system featuring new HP 73 Chromatic Red ink.

Renowned photojournalist Thomas Hoepker of Magnum Photographers is among the many professionals using HP 
Designjet Z series printers to produce exhibits and sell their work. Today, Hoepker uses the HP Designjet Z3200 
Photo Printer to produce exhibition-quality prints he sells to fine art collectors who have rediscovered his work 
after a recent retrospective exhibit of his 50-year career.

"I see digital as a great improvement," said Hoepker. "The quality of the Z-series printers is really stunning,
and I have a new adventure and a new income stream."

Breaking new ground with high-speed continuous-feed inkjet

HP's new IHPS division unveiled the HP Inkjet Web Press, a new 30-inch-wide digital printing platform based on 
SPT that offers an unprecedented combination of print width, color quality, productivity and cost for graphic arts 
industry professionals in the direct mail, transactional and transpromotional printing, book publishing, and 
newspaper industries. In October, HP IHPS also announced a relationship with U.K.-based Timsons Ltd., the 
world's largest book press manufacturer, to develop a digital inkjet system for short- and medium-run book 
production. And, last month, O'Neil Data Systems, Los Angeles, received the very first HP Inkjet Web Press 
beta unit.

"We are excited to be at the forefront of digital technology with the installation of the new HP Inkjet Web 
Press and are confident that the high speeds and width of the HP Inkjet Web Press will transform the printing 
industry and ultimately replace many traditional offset printing applications," said James Lucanish, president, 
O'Neil Data Systems.

New SPS solutions and a 100-million milestone

SPT was also the basis of two new solutions from HP SPS during the year. HP SPS, which sells imaging systems 
to original equipment manufacturer (OEM) partners in the mail printing, package coding/product identification 
and CD/DVD duplication industries, has shown a new four-color imager for the mail market. In a demonstration 
of the imager at the recent Graph Expo trade show, HP printed personalized 600-dpi envelopes on an automated 
Pitney Bowes inserting line at speeds up to 600 feet per minute.

HP SPS also unveiled its new SPT-based HP Scanning Imager 1000 (SI-1000) for CD/DVD duplication that 
offers efficient ink usage and high-quality process-color printing at speeds up to three disks per minute. The 
HP SI-1000 has been incorporated into several high-end CD/DVD disc duplication devices, including the PF 
Pro automated disc printer from HP SPS OEM partner Microboards Technology, Minneapolis. One of 
Microboards' customers, Techware Distribution, uses multiple SI-1000-equipped PF Pro printers.

"With HP-equipped Microboards printers, people can come in and drop off their master artwork, grab a cup of 
coffee, and we do their duplication jobs while they wait," said Kevin Gabrik, vice president, Marketing, 
Techware. "And with the new PF Pro model, we're saving money on ink and improving efficiency. Basically, 
we're able to use less and get more output."

HP SPS also licenses a laser-imaging disc labeling technology, LightScribe Direct Disc Labeling, which offers 
consumers and businesses a simple, no-hassle way to burn professional-looking, silkscreen-quality labels on 
their CDs and DVDs using the same laser that burns data in a disc drive. In Q4 of 2008, HP SPS reached a 
significant milestone in its LightScribe business – the shipping of the 100 millionth LightScribe-enabled drive.

www.hp.com