C. Clint Bolte & Associates

The strongest showing in seven years, nearly 300 including 68 first timers, gathered at the Wild Horse Pass Resort outside Phoenix for the annual PIA/GATF Presidents' Conference March 4-8. On the reservation and therefore owned by the Indians, the resort showcased Indian heritage in an educational and most entertaining manner.

This Indian lore and culture suggested an unexpected theme for this conference and print leaders of the future in two illustrations. In the mid-19th century the small dessert river was dammed up upstream of this reservation by settlers who wanted the water for themselves. In planning the resort only a few years ago, the architects wanted to resurrect parts of this Gila River, actually more like a creek, as part of their scenic streamside oasis in the dessert. Now actually manmade, this stream is bringing back the dormant dessert flora and fauna to its natural abundant state. Part of the entertainment for the gala dinner evening was native American Indians representing different tribes performing historic dances including a difficult hoop dance. The stories these performers relayed to the audience, while humorous, clearly demonstrated skill and a profound pride in their ancestral heritage and culture. An appropriate analogy would be "for printers to jump through hoops for their customers they need more than skill but also knowledge of and profound appreciation for their corporate culture accompanied by an engaging sense of humor." Ok, maybe that's a stretch.

PIA/GATF economist Dr. Ron Davis presented the print markets for 2006-2008. Last year was the fourth in a row for print growth and expansion at +2.5% while the GDP grew 3.3%. Ink on paper was up 1.5%, toner-digital print grew 4.5% and ancillary services climbed 3.5%. Profitability was up as printing price increases were up 2% and productivity accounted for another gain of 3%. The near future is expected to be a slowdown with the GDP up 1.5% in 2007 and +2.5% in 2008. The total print shipments in these two years should lag these projections and will be totally attributed to the digital print and ancillary services growth as ink-on-paper will be flat. Continued productivity gains and cost controls will be essential as these inflationary pressures are forecast; +4% wages, +5% paper, +7% health care and +7% energy.

In a later breakout presentation Davis used the Financial Ratio Studies results of the past decade to illustrate that the profit leaders, which are the top quartile, have averaged 9.6% before tax profits on sales while the industry as a whole has been only 2.6%. When the profit leaders' numbers are removed from the industry averages, the rest of the industry according to Davis become "profit challengers." Typically the leaders are 10 times the profits of the challengers except for the last two years, both solid recovery years, when the leaders delivered 45 times the profits of the rest of the industry. Or stated another way, for the last five years the profit leaders, or the top 25% of the printing industry, have generated all of the profits attributed to the industry! The haves are definitely outpacing the have-nots.

"Sixty new firms among the 200 contributors to PrintPAC in 2006 helped raise $102,000 for the industry federal lobbying efforts," noted PIA/GATF Vice President and head lobbyist Lizbeth Lyons. PrintPAC disbursed $155,000 to pro-print/pro-business House/Senate candidates in 29 states with an election success rate approaching 75% in the last election. PrintPAC hosted a silent auction FUN-draiser at the President's Conference, which netted $17,000 to support the industry political advocacy initiatives on Capital Hill. And just as importantly, according to Ms. Lyons, "It increased the base of contributors," who will be receiving PrintPAC's e-newsletter entitled IMPrint. Providing timely information on legislation being considered and voted upon, this is a quick and easy reminder to constituency so they can contact their legislators promptly voicing their own opinions on which way their elected officials should cast their ballots.

Noted printers formed a panel at a general session to present Crossroads Decisions that have proven critical to their futures. Marty Anson, President and owner of Baltimore's Bindagraphics, described a strategic acquisition his firm made in 2005. After 27 years of growth and profitability, Bindagraphics, the largest trade bindery in the Mid-Atlantic States "fell off the cliff in 2001," remarked Anson. Annual sales fell from $18 to 12 million from '01 to '03, which unfortunately happen to coincide with the firm taking on $5 million in debt for expansion in both equipment and building. The firm weathered this storm, returned to profitability and then received a call about an all or nothing bankruptcy sale of a specialty packaging printer in Buffalo, New York.

This firm, Colad, had sales of $27 million in the late 1990s when their largest client Walmart chose to buy these same book covers and back-to-school supplies from China. The firm was awash in red ink and lost sales and yet because Buffalo was such a depressed labor market, their employee base did not abandon ship. Anson bought the firm en toto at auction for $7 million despite the fact that he knew nothing about printing. During the due diligence process he contacted his key mid-Atlantic printer clients to assure that they would see no competitive threat in this specialty acquisition several hundred miles away.

His current bank insisted upon personal guarantees for this new debt load, as they were uncomfortable carrying Bindagraphics during the '01 cliffhanger. He switched banks for the entire corporation without a hitch.

Some of the post deal surprises that he had to deal with were postponed maintenance expenses of $80,000, unknown sales bonuses promised, and vendors who wanted to jack up prices to recover earlier losses. The bonuses came as the result of increased sales so he paid them. Rather than brow beat the western New York vendors, he called his Baltimore suppliers to begin shipping supplies to Buffalo. Free enterprise brought that issue back in line. A delightful surprise was the $2.3 million in financial incentives available from the New York state government over the first ten years of new ownership.

Mr. Anson acknowledged that he would never have made this strategic acquisition at his age if it had not been for having three sons in the business with him. They were ready and able to take on more challenges.

Rochester, New York's Cohber Press President Eric Cohber described his firm's crossroad decision. Celebrating its 75th year in business and third generation of family management, Cohber Press had been a successful technology driven business with the adage, "build it and they will come." This worked until the late 1990s when they installed digital printing and variable data capability and then realized they were on the bleeding edge of technology. A strategic planning process in 2003 changed the firm to one focused on "customer intimacy" and client data driven. They acknowledged the need to hire consultants along with key personnel from outside the printing industry, such as data management professionals. They now have a stronger management team with distinct profit and loss statements for each different key corporate division.

One of the premier strategic planning documents unique to the printing industry for the past 30 years has been the PIA/GATF Technology Forecast. Containing 64 articles contributed by 66 different experts, this 2007 publication was reviewed for the first time at this conference. PIA/GATF President Michael Makin and Research & Technology Vice President Dr. Mark Bohan highlighted many of the sections of the book while two leading printers offered their experiences and observations.

Management Information Systems are considered absolutely critical to achieving sustained profitability in this industry. The two consultants, Don Goldman and Bill Lamparter, who wrote that MIS section estimate that only 60% of the industry have properly installed MIS capability with only a third of those firms having the most current versions of the software offered by their chosen vendors. A full 40% of the industry utilizes little to no MIS capability.