Performance Indicators Update: Gross Margin, EBITDA/Sales Improving

By Andrew Paparozzi
In May 5, 2010

As economic conditions continue to mend, many NAPL Performance Indicators participants are seeing improvement in their margins.

As the graph below shows, gross margin averaged 27.5% and EBITDA/sales averaged 8.6% during the six months ending in January 2010, up from 25.4% and 3.4%, respectively, during the six months ending last May. The recent improvement has lifted the 12-month moving average for gross margin to 26.6%, from 26.1% in September 2009, and for EBITDA/sales to 6.3%, from 5.1% over the same period.

However, it is important to note that these improvements are not representative of the overall printing industry, but rather of the select group of companies that choose to:

  • Understand the structural changes that are and will continue to affect our industry.
  • Prepare for the recovery by getting more efficient, competitive, and valuable to customers.
  • Take advantage of the recession to cut cost and build necessary infrastructure.
  • Embrace the lessons of recession.

As NAPL has long advised, because of structural change the recovery ahead will be reserved for companies that are best prepared for what our industry is becoming.(See the new rules of recovery in the NAPL State of the Industry: Strategic Perspective 2010.) Are you seeing signs of improvement? If you are, that’s great. If not, there’s no reason to panic: Recovery doesn’t reach everyone at the same time. But there is reason to ask yourself why not, because it could be an early warning that you may be left out of the coming recovery.

 

GM,EBITDA May10

Andrew Paparozzi

Epicomm's Andrew Paparozzi, Vice President/Chief Economist, is well-known for his accurate and thoughtful discussions on the economy and US commercial printing industry. A foremost author and speaker on economic business trends in the printing industry, Paparozzi heads Epicomm's Printing Economic Research Center.

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