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Jul 1, 1997 12:00 AM
The big get bigger, claims the old adage, and no where is that more apparent that in the printing industry. As we look at this year's Top 100+ listing, there are no real surprises. R.R. Donnelley still dominates, followed by Quebecor, Moore, Deluxe and World Color. No surprise there.
However, it is interesting to note that the companies with the highest sales increases from 1995 to 1996 tended to attribute their growth to acquisitions. Take World Color, for example. With a 23 percent increase in sales during the last year, the giant printer boasts acquisitions of Ringier America in June of 1996 and Shea Communications in April of 1996.
Other leaders in the acquisitions market are Mail-Well, who purchased Shepard Poorman Communications during the fourth quarter of 1996, and Quebecor, who picked up American Signature in February of 1997, the Petty Company in March of 1997 and Sayers Communications in October of 1996. Quebecor 1996 figures in our listing do not include American Signature or Petty Co., both of whom are not included in this year's list. For the record American Signature was ranked 27 in 1996 with $300 million in sales, and the Petty Company was ranked 48 in 1996 with sales of $133.8 million.
Ranking 6 in our 1997 listing is Big Flower Holdings, who enjoyed a significant jump in 1996 sales versus 1995 sales due to the acquisitions of Printco, Scanforms, Pacific Color Connection, Digital Color Systems Ltd. and Digital Dimensions.
Other notable rapid-growth printers in the Top 100+ include St. Ives, Consolidated Graphics and book printer Landoll. In addition, we welcome several new printing companies to this year's listing. Among them are insert-specialist Great Western Publishing, publication and commercial printer Times Printing in small Random Lake, WI, Champion Industries, DEC International and E&D Web, Inc., located in the Chicago suburbs.
Even as new companies join the Top 100+ listing, others move off the rankings, either through acquisition or other strategic moves.
Shade/Allied, for example, who ranked 58 in 1996 was sold to American Pad & Paper in February 1997. Shade's offices were subsequently closed in May of this year. In addition, Lancaster Information Group now is included under Cadmus Communications listings, who acquired the company in May of 1996.
The Vernon Company, ranked 104 in 1996, has changed its strategic direction and is now outsourcing all printing.
Then, too, there are other changes. Groupe Interweb Inc., ranked 74, was listed under the name of Interweb Printing Group last year. NCR Systemedia Group, number 19, was listed under the name of AT&T Systemedia in 1996.
Sales figures for Canadian companies are shown in U.S. dollars and have been converted at the rate of $.7331 compared to U.S. dollars.
Given that the current GDP growth rates are hovering in the 2.5 to 3.0 percent range, the urge to acquire remains strong. Large firms, as can be seen in this year's listing, are the most aggressive in spearheading this type of merger and consolidation.
"Joining forces is necessary to gather muscle in order to be competitive," explains Dr. Joseph Webb, president of Strategies for Management (Harrisville, RI). "If your firm has not been performing well financially, a merger may look attractive because you can consolidate some of your resources."
During the past five years, the top 25 spots in our listing have been filled by many of the same firms, with only slight changes in ranking throughout the years. But it is wise to keep in mind that a company can remain financially healthy only if its growth exceeds the growth of the economy. "If a printer's yearly sales increase is less than three or four percent, it's only keeping even and not getting ahead," stresses Webb.
In light of these issues, what lies ahead for the Top 100+ printing companies? Perhaps more of the same, especially acquisitions. But keep your eyes on the up-and-comers. There could be some surprises next year.
For more information, please refer to the charts on pages 40, 41 and 42 of the July 1997 American Printer.