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IPA Releases Industry Economic Trend Analysis

Press release from the issuing company

Edina, MN-October 19, 2007-IPA, The Association of Graphic Solutions Providers, has released its 2007 Annual Economic Study. The study provides a detailed analysis of economic conditions and industry trends and includes comparative financial ratios and statistics of companies specializing in offering prepress, printing and creative management services. The report compares data for the "Profit Leaders"  (defined as those within the upper 25 percent) as a percent of sales to that of the Lower 75%, to all respondents, and to companies based on sales volume. The study is segmented by repeat participants-to allow for trend analysis-as well as by sales volume. New this year is a section examining survey results based on primary services provided.
Some key findings in this year's study indicate:
- Companies providing primarily printing services were less profitable than those primarily providing prepress services or creative/advisory/management services.
- Profit leaders continue to dramatically outperform other respondents based on EBITDA as a percent of sales-39 percent for the profit leaders compared to 9.7 percent for the lower 75 percent, and 17 percent for all respondents. Among sales volume groupings, companies with sales up to $5 million reported the highest EBITDA as a percent of sales-24.4 percent.
- Sales growth continues to decline. For repeat participants, sales growth has fallen from 3.2 percent in 2004 to 1.4 percent in 2005 to -0.3 percent in 2006.
- Repeat participants in the study have become more liquid and less leveraged over the last few years as measured by the current ratio (liquidity measure) and total debt to equity (leverage measure).
According to Steve Bonoff, IPA president, "The IPA Economic Study is the only report of its kind examining how companies with premedia as a core service offering are achieving profitability. This study helps graphic solutions providers evaluate their own performance relative to that of similar companies in order to improve profitability and identify new business and performance opportunities."
The 2007 IPA Economic Study was provided free-along with a personalized company analysis-to all companies that participated in the study. The report is available to non-participating IPA members at a cost of $200 and to non-members for $400.
The complete study can be purchased at http://www.ipa.org/econ