FOR IMMEDIATE RELEASE
November 2004

A ‘Clear and Positive Trend toward Increased Sales’ Evidenced by SGIA’s 2004 Operating Ratio Study

FAIRFAX, VA - An average sales volume of $5.235 million per participating company in 2003-2004 - compared to $4,967 million in 2001-2002 - indicates a clear and positive trend toward increased sales in the specialty graphic imaging industry, according to data collected, compiled and analyzed in the industry’s latest Operating Ratio Study (ORS) conducted by the Specialty Graphic Imaging Association.

SGIA’s Operating Ratio Study provides an exhaustive summary of the operating and financial performance of industry businesses in the USA and Canada, enabling professional imagers to use this information to answer critical business questions.

Over 80% of all responding firms reported their plants are devoted to greater than 70% screen printing, while greater than one-in-four now report having a portion of their plants devoted to digital printing.

The Association’s 2004 ORS shows that, once again, smaller companies have been more profitable than larger firms.

“Companies with $500,000 to $1 million in sales tended to be the most profitable based on their earnings before taxes as a percent of sales,” notes Al Anderson, SGIA’s Vice President for Education and Management Services. “Companies doing $1-$2 million in sales had the next highest level of earnings before taxes as a percent of sales.”

Participating printers from the U.S. and Canada submitted confidential income and balance sheet information to Industry Insights, Inc. (Columbus, OH), an independent consulting firm. Characteristics of the participating firms were identified by sales volume and product specialty. The majority of respondents (24%) did $4 to $8 million in sales and specialized in decals (34%), textiles (30%), signage, posters and displays (26%).

Based on the data collected, “typical” industry performances were calculated using a composite operating statement and balance sheet for each line item covered. Data are presented for six sales volume categories and four predominant business activity groups.

Major survey findings indicate that:

• Based on earnings to assets, industry profitability is up slightly from two years ago. At 6.5% return on assets, this slight increase stopped a steady decline in this ratio figure since 1995.
• Materials cost fell a full 2% (to just under 34%) from its high point in 2001.
• Return on equity fell from 21.1% in 2001 to 20.1% in 2003.
• Earnings to sales reversed its downward trend since 1995.
• Administrative expense rose half a percentage point, while interest expense fell to 1.2% in 2003, breaking the upward trend in recent history for this expense category.
• Asset productivity increased slightly; inventory productivity fell substantially.

“Translated into meaningful operating and financial ratios, these data provide industry companies with the criteria to compare and evaluate their firms’ operating expenses,” explains Anderson. “A major value of SGIA’s ORS is found in its use to determine a company’s relative performance in specific business activity areas.”

Companies returning completed survey forms received a free PDF copy of the 2004 Operating Ratio Study summary report. Non-participating SGIA member companies can purchase the report for $49. The report is also available to companies not yet affiliated with the Association, at a cost of $125.

SGIA Is Leading a New Generation of Imaging Professionals-“Specialty imaging” comprises digital imaging, screen printing and the many other imaging technologies SGIA members use, including those they’ll tap in the future. These are the imaging processes and technologies employed to create new products and to enhance existing products including point-of-purchase displays, signs, advertisements, garments, containers, and vehicles.

For more information about SGIA’s 2004 ORS, please contact Al Anderson at SGIA headquarters: 10015 Main Street, Fairfax, VA 22031-3489 USA. Telephone: 888.385.3588 E-mail: alan@sgia.org.

SGIA ( Specialty Graphic Imaging Association)
10015 Main Street
Fairfax, VA 22031-3489
Phone: 888-385-3588
E-Mail: alan@sgia.org
Website URL: www.sgia.org