PAPER FEED
Printers Posted Solid Gains in Sales; Many See Turnaround Sticking
By JENNIFER BELLANTONIO
Orange County’s largest commercial printers have spent the past few years battling a tough market as budget-conscious clients continued to cut costs.
But things are looking better.
The largest 30 printers in Orange County saw an 8% gain in revenue to $540.4 million in the past year, according to this week’s Business Journal list. Most reporting periods were for the 12 months ended March 31.
The period marked the first uptick for the printers after a couple of years of declines,last year’s list had a 1% decline for the top 30 companies. Meanwhile, Orange County employment fell 1% to 2,557 workers.
There’s some optimism in the industry.
“In the Web printing market we serve, we’re seeing that the economy has picked up quite a bit in advertising sales, which is increasing the sales for our advertising publications,” said Todd Nelson, president of No. 1 Trend Offset Printing Services Inc. in Los Alamitos. “It’s very robust right now. We haven’t seen this for a couple of years.”
But challenges remain and others aren’t as bullish on the industry as Nelson.
“I see another hard year in front of us,” said Steven Ard, president of No. 14 Meridian Graphics Inc. in Tustin.
Among the issues are high workers’ compensation and healthcare costs, and the number of printing and graphics companies competing for business.
“The printing industry has not had the demand in recent years to match the available supply,” said Craig Evans, director of sales and marketing at No. 7 ColorGraphics in Tustin.
Industry experts predict “only moderate growth” in printing revenues,3% to 5%,in the next one or two years, said Doug Grant, president of No. 16 Westamerica Graphics Corp. in Foothill Ranch.
“Although this is up from recent years, there is still a lot of excess capacity in our market,” Grant said. “There will probably be more consolidation and strategic acquisitions, as printers and related graphics providers seek to improve production efficiencies and expand their service offerings.”
In all, 16 companies reported sales increases in the period. Five posted decreases and three others saw no change. The Business Journal made six estimates for companies that declined to report sales figures.
Factoring out those estimates, sales at the 24 companies reporting fell 3%.
Trend Offset again led the pack with a 15% jump in sales to $120 million, versus a year earlier.
Trend has increased its OC plant in the past two years by about 50,000 square feet to a total of 400,000 square feet.
The company made a number of improvements to its printing technology, which contributed to a 13% drop in OC employees to 554 in the past year.
“We’ve embraced technology to have more of an efficient operation so we don’t need as many people,” Nelson said. “We’ve been able to gain profits and volume with a more efficient facility.”
But Trend is planning to add about 25 to 30 new jobs this year to run a new big format magazine press,the Heidelberg Sunday 2000,it bought for $10 million, Nelson said.
“We feel very comfortable with this region and marketplace so we’re going ahead with this investment,” Nelson said. “We’ll be fully operational by next January. We’ve been pre-awarded some contracts for it.”
At No. 2 was R.R. Donnelly & Sons Co. in Irvine, which debuted on the list after buying former No. 2 Moore Wallace Inc. in February.
The company declined to disclose sales or return calls for comment. The Business Journal estimated R.R. Donnelly’s sales at $50 million for the period.
No. 4 Creative Press Inc. in Anaheim moved up two notches with $28.3 million in sales, a 31% jump. OC workers were up 14% to 89.
No. 5 Irvine-based The Dot Printer Inc. saw a 12% increase in sales to $26.6 million for the year ended Dec. 31.
President Bruce Carson said the printer has been “working harder” and has seen a “general pickup in business” in the latter half of 2003.
“There’s been some consolidation in OC,” Carson said. “Some (businesses) have gone away. Some have merged. That’s helped those of us who are left.”
But Carson said that business is “still very spotty” and “erratic.”
No. 6 Creel Printing Company of California Inc. in Costa Mesa posted a 2% jump in sales to $24.5 million. The company bolstered its OC staff by 10% to 88 workers.
Larry Burnette, Creel’s vice president of operations, said additions were made in the bindery and sheet-fed departments.
“The only big change this year is the upgrading of our computer-to-plate equipment and proofing equipment,” Burnette said. “We are also exploring replacing our 110-ton water chill system for one that uses approximately 60% less electricity, which should save over $40,000 in electricity costs per year.”
Meanwhile, No. 7 ColorGraphics saw an 8% increase in sales to $23.1 million.
“We stay keenly focused on partnering with our customers,” Evans of ColorGraphics said. “When we help our customers’ business prosper, their advertising requirements increase.”
Along with No. 4 Creative Press, the list’s biggest percentage gainers included No. 22 Westates Automotive Promotions in Buena Park, which saw a 41% sales increase to $8.1 million; and Meridian Graphics, which posted a 26% gain to $12 million.
Meridian’s Ard said the company picked up “new accounts and new sales people.”
The company, which recently invested up to $3 million on a new printing press, also bolstered its OC staff by 21% to 64.
Ard said as competitors have gone through layoffs, he’s been able to hire quality workers.
“The word has been out for a while that we’re busy and when people get laid off they give us a call,” he said. “It’s been our hardest thing to find quality people. As other shops shrink, it’s been a real bright spot.”
Two companies dropped off this year’s list: former No. 17 Prime Mover in Irvine and last year’s No. 23 Morrison & Burke Inc. in Anaheim. Both went out of business.
Two newcomers debuted on the list: No. 29 Burnett Engraving Co. in Anaheim, which reported sales of $2 million in the period, and No. 30 Studio Two Printing in Lake Forest, which posted $1.5 million in sales.
Figures provided by both companies were unchanged from a year earlier.
