Tuesday, May 10, 2011

Good News in Print Consumables: Good News for the USPS?

In its First Quarter 2011 earnings announcement, Presstek, a manufacturer of printing equipment that serves the needs of shorter run printers, just provided the Postal Service another indication that improvement in advertising mail revenue may have legs.  

The positive indication came from the growth of consumables used on installed Presstek equipment.  In the press release, Presstek Chairman, President and Chief Executive Officer Jeff Jacobson stated, "The sale of consumables accelerated during the latter part of the quarter, providing us with our highest quarterly total revenue performance in four quarters."  In the conference call he indicated that the growth in consumable sales has continued through April and the first week in May.

Presstek is even seeing improvements in its equipment sales.  Mr Jacobson said,""In addition, we have seen an increased level of equipment sales activity during the early part of the second quarter of 2011, and expect to report both sequential and year-over-year equipment revenue growth for the quarter."  The growth in the sale of printers indicates that printers have begun to feel sufficiently confident in their business to begin making significant capital investments.

Presstek's conference call included a note of caution regarding the growth of mail printed by smaller printers.   Presstek noted that  finding capital remains a business impediment for smaller printers.   These companies are more reliant on bank loans and bank lending remains tight.

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