State of the Industry (SOI): Analyze This
The year may be young, but the media has been busy keeping print suppliers and distributors abreast of major developing issues.
The United States Postal Service (USPS) ended the first three months of its 2012 fiscal year (Oct. 1 - Dec. 31, 2011) with a crippling net loss of $3.3 billion. In an effort to stay solvent, the USPS has proposed to consolidate 200-plus processing facilities. The proposed move would reduce operating costs by $2.6 billion annually and result in a net savings of $2.1 billion, while jeopardizing 35,000 Postal Service jobs.
Eastman Kodak and its U.S. subsidiaries filed voluntary petitions for Chapter 11 business reorganization in the U.S. Bankruptcy Court for the Southern District of New York. The company is phasing out its dedicated capture devices business (e.g., digital cameras, pocket video cameras and digital picture frames), shifting its focus to digital printing.
And by now everyone has heard the surprising reports of Cenveo agreeing to sell its Forms and Business Documents Group—including the Printegra and PrintXcel brands—to Midlothian, Texas-based Ennis. The divestiture of the group, which closed on February 10, will allow Cenveo to focus on its core operations, according to Chairman and CEO Robert G. Burton, Sr. Meanwhile, Ennis is pleased to be able to expand its growing number of capabilities, remaining poised for continued success.
What does it mean for the "little guys" when a major acquisition occurs between two printing powerhouses? Increased market share or are they on borrowed time awaiting their own liquidation auction? Time will tell.
The Printing Industries of America (PIA) recently released a special report, "A Planning Guide for 2012-2013," to better prepare print suppliers and distributors for the future. Current research shows the economy is projected to continue its slow recovery from the recession.
"While a return to recession is always possible, especially since the recovery has been slow, the most likely scenario is for economic growth of more than 3 percent over the next two years," said Dr. Ronnie H. Davis, PIA senior vice president and chief economist. "The largest unknown, of course, is the outcome of the national elections of 2012 and their impact on federal tax and spending policies both over the short and long term."