M&A Activity -- Expect a Surge in Mergers

The end game is to match press capacity with the needs of print buyers to adjust price levels to obtain more desirable profit margins. Most capital expenditures during this era will be for faster, high-capacity equipment to replace older, slow, unproductive equipment. Mail-Well announced, in its recent quarterly earnings report, its intention to spend $25 million during 2004 mostly for new presses that can replace two older presses. This capex strategy, of course, reduces variable expense by eliminating factory labor.