Editor’s Note: Joel Salus is a veteran of the reprographics industry and has long tracked its ups and downs. In this article he shares his observations about current repro sales vis-à-vis the AEC industry.
By Joel Salus
When I was very young in the reprographics industry, my boss said, “when our A/E/C customers are busy, we are busy, and when they are not, we are not.” So, at an early age, I began doing research to find statistics and other information that might, to at least some extent, explain why our sales numbers ended up where they ended up and to find other information that might help us predict forward sales trend/activity.
What I learned as years went by was that my boss was correct -- as A/E and Construction activity went up, our sales went up; in other words, our sales tracked A/E/C activity. That said, I don't think that works today (and hasn't worked that way for at least the past 15 years), and I think that is because of these reasons:
1) A, E and C firms adapting “digital document” processes that allow them to print less. (Note that I did not use the word “paperless,” I used the words “print less.”)
2) Municipalities going “all digital” with regards to their building permitting processes. No hard-copy plans required or allowed. Submit plans in digital format, only. (The City of San Diego, CA is a great example of that.)
3) Well, I'm certain there are other reasons, but my mind is drawing a blank at this moment in time.
And, an "oh by the way": Kevin Rowe's iPlanTables business has been growing year over year over year - and he does promote “paperless.” (Click here to read an APDSP article about Kevin’s business). For those of you who are too young to know who Kevin Rowe is, he was formerly one of the owners (and the COO) of Western Reprographics, one of the larger reprographics operations in the U.S., a multi-location business in Kansas and Missouri (purchased by ARC.)
I noticed, quite recently, a long-time reprographer posting on LinkedIn a post promoting the use of printed floorplan sheets for doing floor layouts, showing on a concrete floor at a construction project where the walls go and the dimensions of the walls. Print the plans wide or grand format and tape them to the concrete floor.
The question is, will that really be necessary or a valuable service in the future, considering that Dusty Robotics already has a robot-printer than prints directly on a floor and that HP will soon release its own product that does that (HP Site Print)? Truly paperless.
Which gets me to the tables in this article (see below). We all know what the “Great Recession” did to the reprographics industry. The question is, why, when the construction industry recovered, did not ARC's revenues recover….and recover proportionately? And, since the end of the Great Recession, why haven’t ARC’s revenues tracked construction activity? They used to!
I do acquisitions consulting work, and I've been doing that work for years. Because of that work, I speak to a lot of reprographers around the U.S. and some share their revenue (and profit) numbers with me. Takeaways from this:
1) 2022 revenues at some companies in our industry are still off from where they were pre Great Recession.
2) 2022 revenues at some companies are still off from where they were pre Covid.
The big question is, if continuing growth in the A/E/C industry isn't going to generate a commensurate volume of reprographics work, then where are the revenues of reprographics companies going to be as we move down the road?
A specific conversation I had with one specific reprographer (long-time owner/operator). “We used to run 500,000 sq ft per month on each of our 3 OCEs. Nowadays, we are running 250,000 sq ft per month combined on our 3 OCEs/HP PageWides.”
For those of you who like to benchmark your company’s revenues against ARC’s revenues, I’ve included a table that shows ARC’s revenues for the past four years. Click here to download a table that allows you to benchmark your data vs ARC.
Your comments - all comments - are welcome and appreciated!
Joel Salus, email: joel.salus@mac.com, cell: 917-822-4164
