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A Fascinating Look at the State of the Printing Industry

Printing now happens in many places and increasingly is done in-house on a network. That trend, coupled with the impact of the Web on the distribution of information, has taken a toll on Doc's buddies in the commercial printing industry. That's why an article by my friend and excellent writer Cary Sherburne at the Web site What They Think really caught my eye. It's an interview with the Executive VP of Mergers and Acquisitions, Jim Cohen, at Consolidated Graphics (CGX), one of the largest commercial printers in the country.
Written by Doc , Contributor on

Printing now happens in many places and increasingly is done in-house on a network. That trend, coupled with the impact of the Web on the distribution of information, has taken a toll on Doc's buddies in the commercial printing industry. That's why an article by my friend and excellent writer Cary Sherburne at the Web site What They Think really caught my eye. It's an interview with the Executive VP of Mergers and Acquisitions, Jim Cohen, at Consolidated Graphics (CGX), one of the largest commercial printers in the country.

The comments from Jim paint what I think is a pretty realistic picture of the state of the commercial printing industry in the United States. The outlook is both good and bad: Those printers who survive will do okay, but quite a few will continue to fail. The statistics are sobering. Here's just a glimpse into a fascinating article:

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Jim Cohen, Executive VP of Mergers and Acquisitions, CGX

WTT: Jim, how has CGX weathered the current economic storm, and what steps has the company taken to prepare for a different future?

JHC: We've been beaten up just like everyone else, but because of our strong balance sheet we are weathering the storm and will be well positioned when the economy begins to improve. On a relative basis, we are doing better than a lot of folks in the industry. For example, last quarter revenues were down 15% from the same quarter a year ago. But many of the companies I am looking at today have revenues that are down 25-50%. So on a relative basis, I shouldn't complain too much. Our cash flow is still strong, but many of the companies in our industry today are experiencing negative cash flow. The environment out there is brutal.

WTT: What about the market as a whole?

JHC: If you looked at the number of traditional commercial print companies in 2001 before 9/11, not including companies printing phone books, newspapers or magazines, there were 50,000 printing companies. Then after 9/11, that whittled down to about 35,000 commercial printing companies by 2003. I am hearing that when this recession corrects itself, we will go down to about 20,000 companies. I am not sure where the data came from or whether it is right, but from what we see here, most of the companies we are looking at today probably won't be around a year from now if we or someone else doesn't buy them. The other interesting thing is the lag that exists in any recovery. What I mean by that is that we will see printing companies continue to fail even a few years after the recovery begins.

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