Print
Solutions June 2006
Cover
Story
TOP 100 Distributors
2005
Sales
Distributor
Sales Continue to Increase
Positive
growth during FY 2005 was largely
spurred by mergers and acquisitions.
by
LaShell Stratton
In
Brief
The
2006 Top 100 list reflects an
average annual sales growth of
11.3 percent for FY 2005, the
first double-digit growth in years.
The increase was largely caused
by mergers and acquisitions.
For
the fifth year in a row, the Top
100 distributors continued to
increase their annual sales numbers,
even managing to bring about an
overall double-digit growth the
likes of which has not been seen
since before 9/11.
To
increase sales, many distributors
implemented e-commerce solutions,
hired and reorganized staff within
their sales, CSR and IT divisions,
embraced partnerships with manufacturers
and more aggressively sought new
vendors. Their efforts paid off.
For fiscal year 2005, top distributors
tallied an overall average of
11.3 percent sales increase compared
to 8.9 percent in 2004 and only
7.8 percent in 2003. The last
recorded double digit annual growth
for the Top 100 Distributors list
was during FY 2000, when distributors
showed an average sales growth
of 12.6 percent.
However,
sales figures show that a substantial
part of FY 2005 growth may
be more the result of strategic
mergers and acquisitions than
improved sales and marketing.
For example, Smart Source LLC,
New York City, which did not appear
on the Top 100 list last year,
reported a 305 percent increase
in sales this year over last,
part of which was due to its acquisition
of InfoGraphix Inc. The distributor
reported that InfoGraphix contributed
$11,900,000 to its total FY 2005
sales. Other distributorships
that acquired or merged with another
company within the last 12 months
that experienced sales growth
during FY 2005 include the following:
•
American Solutions for Business,
Glenwood, Minn., which acquired
Health Print Ltd.
•
Quality Resource Group, Hamel,
Minn., which acquired Professional
Business Products
• One Point Inc. (formerly
Forms Plus Inc.), Scranton, Pa.,
which acquired Deemers, The Office
People
• Vintage Printing and Distribution
Services, Louisville, Ky., which
acquired Fan Holdings LLC
• Thompson Print Solutions,
San Antonio, Texas, which acquired
Altman Direct Mail
• Prograde Inc., Cincinnati,
which acquired Prescott-Ellen
• MHC Companies Inc., Burnsville,
Minn., which merged with Gulf
Coast Data Supply
• Peregrine Corporation,
Monroe, La., which merged with
Ruston Office Supply
• Riley Barnard & O’Connell
Business Products Inc. (RB&O),
St. Louis, acquired the SSM Health
Care in-house digital print center.
At press time, RB&O announced
that it had acquired SWM Inc.,
Maryland Heights, Mo., which also
appears on the Top 100 list. The
two distributors’ combined
annual sales of about $17.8 million
would have placed RB&O at
No. 23 on the Top 100 list and
the company would have had sales
growth of approximately 86 percent.
The
companies that showed the highest
sales in product areas such as
paper-based forms, commercial
printing, cut sheets, labels and
tags, and promotional products
had overall average sales increases
also, continuing the positive
trend for FY 2005. Those that
ranked in the top 10 among paper-based
form sellers scored an average
5.5 percent sales growth; among
commercial print sellers, an increase
of 38.9 percent, and among cut
sheet sellers an increase of 8.5
percent. The top 10 labels and
tag sellers saw an average increase
of 6.6 percent, and among promotional
products sellers there was an
average sales increase of 35.1
percent.
Another
significant change in the list
was the total sales in two highly
lucrative product categories:
commercial printing and promotional
products. Last year the 10 distributors
with the highest commercial printing
sales reported combined sales
of $311,213,000 and those with
the highest promotional product
sales reported a total of $297,025,000.
But for FY 2005 those totals dropped
to $207,082,882 in commercial
printing and $132,110,275 in promotional
products. The significant drop
in combined sales in those categories
may be explained by the absence
this year of two large distributors,
WorkflowOne, Dayton, Ohio, and
Innerworkings LLC, Chicago. Last
year Workflow reported $137 million
in commercial printing sales and
$40 million in promotional product
sales. Innerworkings reported
$79.6 million in commercial printing
sales and $8.7 million in promotional
product sales that same year.
However, this year #1-ranked Workflow
Management Inc., which acquired
The Relizon Company and is the
parent company of WorkflowOne,
declined to give sales breakdowns
by product categories or subsidiaries.
Nor did Innerworkings submit sales
figures for this year’s
Top 100 list. The company recently
acquired Graphography Limited
LLC and is awaiting Securities
and Exchange Commission approval
of its IPO registration, submitted
in May.
Distributors
who aggressively sold commercial
printing enjoyed 39 percent sales
growth last year.
