Treasure Chest Advertising Company, Inc. History
Baltimore, Maryland 21201
Telephone: (410) 528-9800
Fax: (410) 528-9288
Sales: $1.1 billion (1998)
NAIC: 323110 Commercial Lithographic Printing; 541860 Direct Mail Advertising
TC Advertising is the nation's leader in producing high impact targetable advertising insert programs and circulation building products such as Sunday comics, TV magazines, Sunday magazines, and special supplements. With our electronic prepess capabilities and comprehensive products and services, we develop effective and powerful advertising inserts. TC Advertising delivers the vast resources of one of the world's largest offset printers. Our substantial coast-to-coast production capacity gives customers cost savings resulting from considerable efficiencies of scale, fast turnaround times even with the largest orders and tightest deadlines, consistently high quality even on multi-plant runs due to the uniformity of systems, and dependable upgraded materials. Key Dates:
- Paul and Bob Milhous start a weekly shopper called Treasure Chest of Values in Glendora, California.
- The company purchases its first new printing press.
- Revenues reach $100 million.
- Revenues surpass $500 million.
- Company is acquired by Big Flower Holdings, Inc., then known as Big Flower Press Holdings, Inc.
- TC Advertising moves its executive offices from Glendora to Baltimore, Maryland.
- Big Flower stockholders approve the merger of Big Flower with BFH Merger Corp., an affiliate of Thomas H. Lee Company and Evercore Capital Partners LP.
Treasure Chest Advertising Company, Inc. (TC Advertising), is the leading supplier in the United States of advertising inserts, newspaper supplements, and other advertising products and services for publishers and advertisers. With more than 20 production facilities located across the United States, TC Advertising produces more than 20 billion ad inserts every year and serves nearly 700 major clients nationwide. Its major markets include general retail, drugstore, grocery, home improvement, and specialty retail. TC Advertising also prints TV magazines, special supplements, Sunday magazines, and Sunday comics that newspapers use to build circulation. As a subsidiary of Big Flower Holdings, Inc., TC Advertising works with other Big Flower companies to provide clients with a complete range of advertising solutions and communications services.
Rapid Growth: 1967-93
Founded in 1967, Treasure Chest Advertising Company, Inc., began in Glendora, California, as a small weekly shopper called the Treasure Chest of Values. It was started by two brothers, Paul and Bob Milhous, who bought a used printing press to publish the retail advertising circular. By 1974 revenues were $20 million. During the year the company purchased its first printing press, and from 1974 to 1989 the company grew rapidly. Sales reached $100 million in 1980.
By 1988 TC Advertising had captured 14 percent of the $3.5 billion commercial printing business in the United States. The company's strategy was to locate its production plants near major markets, in order to better service retailers and provide them with a faster turnaround.
While the firm was national in scope, it was more focused on the western United States. Three of its printing plants were located in California, and the firm's market share exceeded 20 percent in the West. In addition to circulars, it printed supplements such as Sunday comics and television magazines for publications such as the Los Angeles Times and the Baltimore Sun.
A major factor in the company's success was how it managed new printing technologies. It was quick to adopt electronics, using automated printing processes and computer-controlled inking systems. In addition, the firm pioneered new formats for advertising circulars.
In 1989 the company launched the Quality Improvement Process (QIP), which was based on the philosophy of quality management pioneer Dr. W. Edwards Deming. The QIP program formalized TC Advertising's commitment to continuous improvement. It enabled the company to maintain the highest standards and to educate its employees and customers about the latest techniques in print production and advertising.
In 1989 sales passed the half-billion mark, rising to around $550 million. The company owned 15 printing facilities and was the largest printer of retail advertising circulars in the United States. It had 3,400 employees and 25 sales offices.
Expansion Under Big Flower: 1993-99
In 1993 TC Advertising's revenues were $761 million. That year it was acquired by Big Flower Holdings, Inc., then known as Big Flower Press Holdings, Inc. As part of Big Flower, TC Advertising benefited from collaboration with its affiliated companies, Laser Tech Color, Webcraft, Inc., and Columbine JDS.
Laser Tech Color, also known as The LTC Group, was an industry leader in supplying outsourced, digital premedia, content management, and multimedia and Internet services.
Webcraft, Inc. was a market leader in direct marketing services, including highly personalized direct mail, database management, commercial games, and fragrance samplers. Columbine JDS, finally, offered a variety of automation systems for electronic media advertising. It was a leading provider of computer-based systems that managed the placement of broadcast advertisements, programming material, and sales information data for television stations, radio stations, broadcast and cable networks, and direct broadcast satellite services.
TC Advertising expanded in 1994 with the strategic acquisitions of both Retail Graphics, headquartered in Dallas, Texas, and KTB Associates, located in Saugerties, New York. The acquisition gave TC Advertising a total of 17 printing plants, three of which were from the Retail Graphics acquisition. Retail Graphics had an estimated $91.8 million in sales in 1993.
Toward the end of 1995 TC Advertising moved its executive offices from Glendora to Baltimore, Maryland. The move brought TC Advertising closer to the majority of its customers and plants, as well as nearer to its parent company, which was headquartered in New York City. Revenues for fiscal 1995 (ending June 30) were nearly $900 million, nearly doubling over the previous two years.
Big Flower continued to make acquisitions on behalf of its operating companies. In October 1996, Printco, Inc., in Greenville, Michigan, joined the TC Advertising family. In October 1997, Riverside County Publishing Company (RCPC) in Riverside, California, and First Western Graphics in San Leandro, California, were acquired. With two printing facilities, RCPC added to TC Advertising's production capacity on the West Coast. The company was an experienced printer of advertising inserts for retailers and had revenues of approximately $130 million.
In 1995 TC Advertising began developing its proprietary Target Reach marketing solution tool in association with ReachAmerica, Inc., a software development and database marketing company. Target Reach was a proprietary database information system that enabled advertisers to customize their insert advertising to match the demographic characteristics of more than 20,000 newspaper delivery zones in the top 300 markets in the United States. Target Reach was launched in 1997, and in 1998 Big Flower acquired ReachAmerica, Inc. Through Target Reach, TC Advertising was able to combine sophisticated database marketing techniques with the ability to produce full-color, high-impact advertising inserts.
The acquisition of Reach America, Inc., added to TC Advertising's resources through software development and database marketing. Advertising solutions offered by TC Advertising began with identifying and locating the optimal target audience and ended with the delivery of high-impact advertising and marketing materials into the customers' hands.
Another new program that ReachAmerica brought to TC Advertising was Newspaper MarketReach, which enabled newspaper sales representatives to better serve local businesses through advertising and direct-mail services. Newspaper MarketReach offered complete end-to-end marketing solutions for both publishers and advertisers.
In 1999 TC Advertising's parent, Big Flower Holdings, Inc., began exploring ways to recapitalize. In June it announced that it had reached an agreement with Thomas H. Lee Co., a Boston-based private equity firm, and Evercore Partners, a provider of strategic and financial advisory services. Under the terms of the agreement, a new entity, BFH Merger Corporation, was to be formed by Lee and Evercore for the purpose of recapitalizing Big Flower at $1.9 billion. The agreement was approved by shareholders in November 1999.
TC Advertising's capabilities were further expanded when Big Flower acquired AdOut, a provider of newspaper outsourcing capabilities, in August 1999. Based in Van Nuys, California, AdOut was the largest newspaper advertising production company in the United States. It had expertise in designing and producing retail and classified display ads for newspapers and advertisers. It was the first and only company to successfully outsource the advertising prepress workflow of multiple metropolitan newspapers. The acquisition expanded AdOut's access to newspaper clients and gave TC Advertising the chance to offer a broader range of advertising solutions.
Positioned for the Future
In October 1999 the sales office and production plant in Salt Lake City, Utah, moved into a new facility that doubled press capacity to more than 100,000 square feet with seven presses. The facility also included an in-house digital photography studio operated by The LTC Group. In addition to printing, the company's services included consumer and media research, electronic premedia, freight and transportation, and database marketing. The company was positioned to take advantage of the growth in Internet advertising and electronic commerce, having invested in at least one Internet advertising agency and offering a program, SecureTran Virtual Retailing, to deliver secure, high-volume Internet transactions to retailers.
Principal Competitors:Quebecor Printing (USA) Corp.; R.R. Donnelley & Sons Co.; Schawk Inc.
- Henderson, Barry. 'KC's Treasure Chest Printer Buys Dallas Printer,' Kansas City Business Journal, August 5, 1994, p. 18.
- Jacobs, Chip. 'Treasure Chest: Printer Captures Nation's Newspaper Insert Niche,' Los Angeles Business Journal, February 5, 1990, p. S42.
- 'Treasure Chest Advertising Inc.,' Baltimore Business Journal, January 26, 1996, p. S25.
Source: International Directory of Company Histories, Vol. 32. St. James Press, 2000.