STATE OF THE INDUSTRY - Far from Dead
The private companies range in size by annual revenues from less than $1 million to as much as $300 million. The commercial printing sales of the public companies range from as little as $50 million to around $1 billion or more for Mail-Well and the Quebecor/World Color Press commercial printing division.
The commercial printing segment is one of 17 printing segments defined by the U. S. Department of Commerce. The chart on this page lists the segments, together with our view of the largest competitors in the consolidated segments.
Leader of the Pack
Commercial printing is by far the largest of all printing segments with 1999 shipments of $102.7 billion, 786,224 employees and more than 38,000 firms. Commercial printing is the most fragmented of all the printing segments and, consequently, its demographics, performance and future are the most misunderstood.
- Printing and publishing, of which commercial printing is the largest segment, ranks fifth among all manufacturing employers with 1.558 million employees.
- Printing and publishing has been and continues as fertile ground for entrepreneurship with 1,478 new companies, employing 10,856 persons, founded in 1999.
- Commercial printing is a major purchaser of capital equipment, with $3 billion in capital equipment expenditures.
- Commercial printing will purchase more than $18 billion in paper this year.
- Commercial printing's profit leaders generate an average return on sales of 10.04 percent and an average return on equity of 24.75 percent. Our own analysis of the public printers with commercial printing operations indicates that they have generated sales growth since 1997 of 39.3 percent, are currently averaging EBITDA margins (return on sales) of 13.23 percent and EBITDA growth since 1997 of 30.5 percent.
Our analysis of the private commercial printers that we have represented over the past four years indicates even better results: sales growth since 1997 of 49.6 percent, with current average EBITDA margins of 14.51 percent and EBITDA growth since 1997 of 75.6 percent.