PIA/GATF Ratios Show Printing Industry Profits Decreasing

PITTSBURGH, Pa.—Printing industry profits decreased slightly over the last year, according to the 2008 PIA/GATF Ratios reports. The sluggish economy and slowing print markets pulled down printers’ profitability during the last year (2007-08).

The average printer’s before-tax profit on sales was 3.1 percent during this past year. This was a decrease compared to 3.4 percent in the 2007 survey; it also is within the 3.0-3.4 percent range experienced from 1995 to 2001. This is the first decrease in profits in the last six years; at this rate the industry will earn approximately $5.4 billion in total profits over the course of the year.

Profit leaders (printers in the top 25 percent of profitability) saw profits decrease slightly to 9.7 percent as compared to 10.1 percent in the prior year. Despite the small decrease, profit as a percentage of sales for profit leaders remains at the same level it was at in the mid- to late-1990s. For all printers, the average profit of 3.1 percent equals the rate earned in 2001 before falling during and after the last recession.

According to PIA/GATF’s 2008 survey results, materials accounted for the largest single cost category for the typical U.S. printer, approximately 34.95 percent of sales. Paper alone consumed more than one-in-five sales dollars last year. Other major costs incurred by printers last year included factory payroll (25.13 percent of sales), factory expenses (16.97 percent of sales), administrative expenses (9.66 percent of sales), and selling expenses (8.97 percent of sales).

Total materials expenses decreased from 35.44 percent of sales in 2007 to 34.95 percent of sales in the 2008 survey. Printers spent slightly more on factory expenses in 2008 (16.77 percent of sales in 2007 vs. 16.97 percent in 2008). Selling expenses increased from 8.77 percent to 8.97 percent, while administrative expenses also crept up slightly for the second consecutive year, from 9.57 percent of sales in the 2007 survey to 9.66 percent percent of sales in 2008.

Sales-per-employee for all printers decreased to $146,247 (down only 0.30 percent from 2007 levels). For profit leaders, though, sales-per-employee increased from $155,161 in 2007 to $159,195 in 2008.

Additionally, sales-per-factory employee increased among all printers by more than $2,000 from 2007 figures and averaged $196,742 in 2008. For profit leaders, sales-per-factory employee increased by an even wider margin, growing from $203,317 in 2007 to $210,418 in 2008.

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