NAGASA - The Compass -Fall 1998

• Chairman's Column
• Partnering to be Focus of Forum 99
• Past, Present, Future
• Study Focus
• NAGASA and GATF Team up for Training Institute
• Guide to Buying a Computer System
• Calendar of Events
• NAGASA Exhibits at IPEX

1998 Financial Ratios Study of Dealers and Resellers

According to statistics reported by the 43 companies participating in the recently released NAGASA 1998 Financial Ratios of Dealer and Resellers Survey, overall net profits as a percent of sales declined from 2.96% in 1996 to 1.88% in 1997. Gross margins declined from 18.10% in 1996 to 17.7% in 1997. Operating expenses as a percent of sales increased to 17.56% from 16.55% the previous year. Equipment dealers reduced their operating expenses as a percent of sales to 23.04%, slightly below the 23.49 percent reported in 1996. Although a smaller number of companies responded to the survey — which is based on year-end 1997 data — this year, total sales represented was higher than in the last study — or $1,239,600,000 compared to $994,400,000.

According to the study, which was compiled by Donlin & Stephens, P.S.C., industry consolidation will continue. Now is the time for owner-managed dealerships to develop comprehensive business plans to position their companies for future sale or to enhance their current financial position and future performance to meet the increasing competition within the graphic arts marketplace. Of the 50 dealerships that responded to the survey last year, seven were acquired by larger firms and two others did not respond due to acquisitions made by them of other dealerships. Survey information includes respondent profiles and general industry trends, as well as information specific to supplies dealers with over $10 million in sales, supplies dealers with less than $10 million in sales, and equipment dealers. The 19-page study is free to NAGASA member participants. Members who did not participate may purchase the study for $95; non-members may purchase a copy for for $155. Order via the NAGASA web site at www.nagasa.org or call 202-328-8441.