Overview
Overall, sales of new printing equipment increased modestly in 2007. 2008 sales are projected to remain fairly stable. Digital printing and integrated computer controls have each revolutionized the printing industry, substantially improving both productivity and quality. It is still not fully appreciated what effect digital printing will have on longer run equipment.
In the past, rises and falls in the demand for printing has been closely tied to the overall economy. When the economy is robust, the need for printed materials increases, with more companies advertising. In contrast, poor economic conditions will have an adverse effect. Although the economy is in a downturn, the sheet fed market has not been affected as significantly as it has in the past. This is due, in part, to the upcoming national elections. Election years typically have a positive effect on the sheet fed industry as political parties, candidates, and special interest groups use print media to support election efforts.
Drupa 2008 is the largest printing exhibition in the world. The exhibition is held every four years in Düsseldorf, Germany. The exhibition is significant in the fact that many of the major industry players will unveil new equipment and technology at that time. Typically Original Equipment Manufacturers will see a spike in sales during the exhibition and in the year that follows.
Sheet fed printing equipment offers several advantages over larger web printing equipment:
- The flexibility to be used for smaller custom jobs and longer production runs
- The equipment is more compact, occupying less production area
- The equipment is easier to move
- Lower initial investment and access to a larger number of potential customers
Industry Condition – Average
Commodity Tracker
- Producer Price Index – Paper Products
Paper is the highest cost raw material used in the printing industry. The ability to control scrap is essential to profitability and is one of the factors that continue to drive printers to newer equipment. In times like today when paper prices are rising quickly, printing companies must be diligent about factoring higher costs into new quotations and recovering costs on long-term contracts through surcharges, if possible. Otherwise, margins will get squeezed and have a significant effect on the profitability of the company.
New Equipment Demand
- Large format presses (40" wide) with 6+ colors and sophisticated computer controls
- New equipment automation will reduce make-ready and waste drastically
Overview
Demand for late model presses was steady in 2007. With economic conditions deteriorating, the supply of used printing equipment is expected to increase. This will present an opportunity for healthy companies to upgrade their capabilities with newer equipment, but will contribute to an oversupply of older presses resulting in declining used pricing. Presently, demand is greatest for presses built by premier manufacturers like Heidelberg (Germany), MAN Roland (Germany), and Komori (Japan) that have at least six color capacities. The condition of the printing units and the number of printing impressions continue to be user dependent conditions that greatly influence used values. Buyers of used equipment expect to see presses equipped with certain accessories, the absence of which can have a disproportional negative effect on both value and marketability. Many Asian and South American countries are buying a significant amount of older sheet fed presses, generally at a low cost. These presses are typically too old or costly to operate in the U.S.
Used Equipment Values – Fair
- Supply of used equipment – Stable
- Demand for used equipment – Stable
Liquidation Monitor
- Recent bankruptcy filings
- Ziff Davis Media Inc. filed on March 5, 2008
- Quebecor (web printing) filed on January 21, 2008
Secondary Market Value Indicators
AccuVal Machinery Index Methodology |
Trend Lines
Methodology of Statistical Analysis
In every industry segment measured by AccuVal, data regarding transactions of similar assets is collected on a global basis, organized by their key attributes, and analyzed to identify trends in the marketplace. These transactions are generated by tracking thousands of sales annually which generate hundreds of thousands of transactions. This information becomes part of the world's largest database of transaction information and is analyzed using a proprietary asset management platform called "Asset Intelligence."
To create the trend line, transactions are grouped by asset type. The sales are further consolidated within asset types based on the frequency of occurrence within a range of sales prices. This refined group of more homogenous sales determines the basket of transactions used to define market trends for a specific asset type. These sales are the most common assets in that category and are within the highest frequency of sales prices occurring in the asset class being studied.
These items are further studied and categorized based on their specific attributes. These attributes may include things such as age and other key factors impacting the specification of an asset such as the weight capacity of a lift truck or the tonnage of a stamping press.
These sales are then run through a regression model to normalize the sales price based on age and the other attributes considered in the data set. Regression analysis in its simplest form finds the best fit for the relationship of all of the variables considered. The standard errors of the regression coefficients are used to then normalize the sales prices and account for differences in the variables or specifications of each asset. The normalized sales prices occurring within each quarter are then converted to a quarterly index based on calendar quarters.
Once the normalized sales price is obtained for each calendar quarter, this information is plotted on a graph over time. A three-period moving average is computed from these data points to reduce the impact of variances in the basket of goods sold in each quarter.
Lastly, the data over the last four periods is further analyzed and used to plot the most current trend line. This analysis produces the estimates of the anticipated percentage of change in value for the asset category in the next two periods.
Factors Influencing Value & Marketability
- Age – 5 years or less is best
- Condition of the printing cylinders
- Impression count
- Obsolescence – Rapid depreciation due to technology changes
- Equipped with the "right" press accessories
- Integrated coaters and UV dryers
Valuation Monitor
AccuVal routinely provides appraisal, consulting, and asset management services to the
Printing industry and to the
Paper industry supplying the primary raw material.
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Representative Clients Our Associates Have Served
Success Stories
- Company Secures $100 Million in Financing, Loan Supported by AccuVal's Valuation of Tangible Assets
- Hundreds of Valuations, Representing Hundreds of Millions of Dollars in Asset Values, for Small and Mid-sized Sheet Fed Printing Companies
- Successful National and International Dispositions of Surplus Printing Equipment
- View all Success Stories
Champion Industries, Inc.
Hess Print Solutions, formerly D.B. Hess Company 
Beresford Box Company Inc