PIA Ratios Survey Shows Profits Up Slightly

PITTSBURGH—The printing industry as a whole reported profits of 1.8 percent in 2011, compared to 1.4 percent in 2010, according to the recently completed “2012–2013 Printing Industries of America Ratios Survey.” The sluggish economy and slowing print markets pulled down printers’ profitability in 2009 (-1.4 percent), but improving economic conditions helped the printing industry pick up steam and reverse the trends in 2010 (1.4 percent) and continued into 2011 (1.8 percent).

According to the survey, the average printer’s before-tax profit on sales was 1.8 percent over this past year. This was an increase compared to 1.4 percent percent in the 2011 survey (2010 fiscal year-end numbers); it is still below the 3.0-3.4 percent range experienced from 1995 to 2001.

This is the second increase in profits in the last three years. At this rate, the industry earned approximately $1.5 billion in total profits in 2011, which is above the $1.2 billion profit from the prior year.

Profit leaders—printers in the top 25 percent of profitability—saw profits increase slightly to 9.6 percent versus 9.5 percent in the prior year. This increase brings profit leaders almost to pre-recession profit levels. Prior to the recession, profit leaders reported profits in the 10.1-9.7 percent range.

For all printers, the average profit of 1.8 percent is slightly more than the rate earned in 2003, two years after the last recession.

According to the 2012 survey results (2011 fiscal year-end numbers), materials accounted for the largest single cost category for the typical printer—approximately 35.5 percent of sales. Total materials expenses increased slightly in 2011 from their previous level of 35.2 percent in 2010.

Paper alone consumed more than one-in-five sales dollars last year. Other major costs incurred by printers included factory payroll at 24.8 percent of sales (down from 24.9 percent in 2010), factory expenses at 17.6 percent of sales (down from 18.0 percent in 2010), and administrative and selling expenses at 19.6 percent of sales (up from 19.4 percent in 2010).

Sales per employee for all printers increased to $149,499, up 1.4 percent from 2010 levels of $147,436. Profit leaders sales per employee declined at a rate of 2.5 percent compared to 2010 to $160,873.

Additionally, sales per factory employee increased among all printers by more than $5,000 (or 2.6 percent) from 2010 figures and averaged $203,234 in 2011. For profit leaders, sales per factory employee declined from $222,480 in 2010 to $211,266 in 2011.