Keeping a Date With Success

Robert Marvin relies heavily on computers and cellular phones in his job, but the stock market analyst reverts to pen and paper when keeping track of where he is going and what he has to do.

“The hand-held computers are useful for phone numbers, but if you go into a meeting, you can’t use them to write your schedule or take notes,” he said. “It’s next to impossible.”

He’s also one of several analysts who have become enamored with an Fullerton company that has become a major player in the datebook market. Marvin, an analyst with Seidler Companies Inc. in Los Angeles, has been touting the stock of Day Runner Inc., which manufactures and markets organizers and personal planners.

The company, which has posted hefty profit increases in seven of the last eight years, has become a Wall Street favorite. The company’s stock more than doubled in the last year, making Day Runner one of the top performers among Orange County stocks.

Much of the gain came after the company’s earnings easily surpassed analysts’ estimates in the fiscal first quarter ended Sept. 30. The stock shot up from $19.75 per share on Oct. 20 to close at $34.50 at the end of the year.

“A year ago, it was sitting there and I was just scratching my head,” wondering why the stock hadn’t done better, said analyst William Gibson of the Irvine-based Cruttenden Roth securities firm.

The company’s chairman and chief executive said he also had been puzzled about investors’ lack of interest. “We think that the company’s stock has been undervalued,” said Mark A. Vidovich. “We are doing exactly what we have been doing the last 10 years.”

*

In a world that depends increasingly on high-tech bits and bytes, Day Runner executives say their success can be traced to the company’s effort to find new ways to keep consumers using ink and lead.

For the executive who wants a comprehensive planner, the company offers a $99 leather-bound Pro Business System that includes a calendar, address book, “task delegation” pages and a section for recording mileage, among other features. For the more frugal customer, Day Runner markets a smaller vinyl bound Classic Personal Organizer with fewer features. Day Runner products come in 35 different combinations of colors and fabrics.

While most of their sales are to business people, the maker of day planners is moving to lock up the next generation of customers. In June, Day Runner will introduce colorful planners for youngsters, featuring the Tasmanian Devil, Bugs Bunny, Mickey Mouse and other cartoon characters.

Day Runner recently signed licensing agreements with Warner Bros. Inc. and Walt Disney Co. to produce planners and organizers for students. Day Runner officials said the entertainment giants had pursued the Fullerton manufacturer for more than a year.

“We realized that nobody was marketing to junior high school students,” Vidovich said.

The new student planners, which are scheduled to hit store shelves in June, include assignment calendars, exam grade charts and mathematics reference guides.

*

Many Orange County schools are encouraging students to use datebooks in planning their academic calendars. At Lakeside Middle School in Irvine, students are asked to donate $3 for a student organizer manufactured by a Day Runner competitor, Premier School Agendas Inc. Lakeside officials said that the remaining $1.50 cost for the organizer is paid from the school’s budget.

“We are trying to teach kids early to plan for short- and long-term projects and homework assignments,” said Lakeside’s principal, Tony Ferruzzo.

He said parents are asked each Wednesday to sign their child’s organizer to encourage more communication between home and school. “The feedback from parents has been outstanding,” Ferruzzo said.

In addition to carving out new markets, analysts credit Day Runner with protecting its original turf.

“They have come to dominate the organizer products on the retail level,” said analyst Marvin. “A lot of other companies have tried to penetrate the market but have had little or no success.”

Day Runner’s profits surged 20% to $8 million for fiscal 1995, buoyed largely by the company’s sales with office product dealers, such as Office Depot and Staples, as well as with major discount retailers Wal-Mart, Kmart and Target.

The company does have competition in the mail-order day planner business from Day-Timers Inc. in East Texas, Pa. Another competitor, Franklin Quest Co. of Salt Lake City, concentrates on offering bulk sales to corporations.

Day Runner, like a lot of companies, had its problems in the early years. As late as 1987, six years after it was founded, the company reported a loss of $2 million. Vidovich, who was hired in 1986, said the company could barely make its payroll.

The company then decided to change its marketing strategy, giving priority to placing its products on the shelves of major discount retail chains rather than stationery stores and department stores.

“Early on, I decided that [the planner] was a productivity tool and not a fashion item,” Vidovich said.

Analysts say the company’s products now occupy 75% of the shelf space for planners and organizers in retail stores.

In a concession to computer fanatics, Day Runner does offer personal planner software, but executives quickly point out that they don’t believe computer datebooks and planners have much potential for future growth.

“That’s just a tiny portion of our sales,” insists Judy Tucker, vice president of corporate development.

Bloomberg Business News contributed to this report.

(BEGIN TEXT OF INFOBOX / INFOGRAPHIC)

Running to Profits

After a string of increasingly successful years, Day Runner Inc. has blasted off. Its stock has nearly doubled during the last six months. A look at the company and its financial picture:

* Day Runner at a Glance

Headquarters: Fullerton

Business: Personal organizers

Chairman/CEO: Mark A. Vidovich

Manufacturing sites: Fullerton and Tijuana, Mexico

Employees: 800

Market: Nasdaq

Soaring Stock

(BEGIN TEXT OF INFOBOX / INFOGRAPHIC)

Weekly closing stock prices:

July

7: $17.50

14: 17.25

21: 17.00

28: 19.00

Aug.

4: 17.13

11: 16.38

18: 19.00

25: 19.50

Sept.

1: 19.31

8: 19.75

15: 20.00

22: 19.25

29: 18.50

Oct.

6: 20.13

13: 19.75

20: 19.75

27: 22.25

Nov.

3: 25.25

10: 25.25

17: 24.13

24: 26.25

Dec.

1: 29.25

8: 30.63

15: 32.00

22: 32.75

29: 34.50

Friday’s close: $33.25

(BEGIN TEXT OF INFOBOX / INFOGRAPHIC)

Sales and Earnings

Since 1990, Day Runner’s sales have increased by nearly 300% while net income has followed suit, increasing almost 250%. Sales and net income in millions:

* Sales

1990: $ 30.7

1991: 45.0

1992: 61.0

1993: 71.4

1994: 97.0

1995: 121.8

* Net Income

1990: $2.3

1991: 2.9

1992: 3.6

1993: 4.3

1994: 5.9

1995: 8.0

Source: Day Runner, Dow Jones; Researched by JANICE L. JONES/Los Angeles Times