1. The Greater Milwaukee Graphic Arts Association Niall Power, President & CEO Printing Industries of Wisconsin November 21, 2006

2. U.S. Print Industry Printing is one of America's five largest manufacturing industries Average growth in print industry is 2-3% per year 1.1 million people work in the print industry; approx. 55,000 establishments 2005: sales were - $165.5 billon 2006: projected sales - $170 billion 2007: projected sales - $175 billion Statistics from PIA/GATF Economic Research Department.

3. State of Wisconsin − Print Industry Printing is one of Wisconsin’s largest manufacturing Industries with 1,040 establishments state-wide Wisconsin is ranked the 7 th largest print market in the U.S. Wisconsin print sales exceed $7.4 billion Wisconsin employs 46,000 people in print jobs Wisconsin’s print segment: Informational Periodicals, newsletters, newspapers, books, directories, technical documentation, financial, legal, and transactional Promotional Catalogs, direct marketing, advertising, promotional Packaging Packaging and labels Product Stationary and envelopes, Internal and forms, wallpaper, wrapping paper, greeting cards, paper plates, etc.

4. Print Sales in Wisconsin 1999 = 6.03 billion 2000 = 6.53 billion 2001 = 6.23 billion 2002 = 6.05 billion 2003 = 6.25 billion 2004 = 6.85 billion 2005 = 7.37 billion Statistics taken from PIA/GATF Print Market Atlas 1999 - 2006

5. What’s Next? “ Assessing Print Markets in 2006 & 2007” 2006 growth in economy is at 3-3.5% 2007 growth in economy to be at 3-4% Growth in printing shipments 2006, 2.5%; 2007, 3% Loss of 800 plants per year for the next two years Loss of 20,000 employees per year for the next two years Profit percentage to remain the same

6. Traditional Printing volume is declining. Printers need to adapt to the changing market place and the needs of customers.

7. Print Trends Increased complexity of print products Industry expects high levels of personalization 1:1 Marketing − mass market with demographics 4/C variable data print; death of 1C mail; latest generation in the market Color and personalization visually convey emotion, mood, quality Personalized, targeted covers, onserts, inserts, wraps Full color pictures, illustrations, logos, maps Micro quantities 4/c versioning for demographic binding

8. Print Trends Comments from Frank Romano (Professor Emeritus, Rochester Institute of Technology) “Printers can no longer just be printers; they must master the channels through which print is delivered” “Integrating print and marketing provides a value add that transcends price” “Mail is the major expansion area for printers today. Digital printing is a key enabler” “Today, all production services printers used before print were integrated into the print company--so why would we not integrate services that come after print?” Mailing technologies/strategies that drive complex print products

9. Print Trends Digital is where the growth is Hybrid is coming on strong Toner and ink jet to achieve 30% of all print by 2012-2015 Need to innovate with technology Eventually, JDF (job definition format) and integrated production workflows will be a given

10. “Digital Printing Futures” 20,000 units, 40ppm and faster shipped By 2010, penetration of all printing industry user categories will be over 90% Digital only firms to increase from 626 in 2000 to 10,845 in 2010 Expect sheet size to increase Volume to come from offset due to : Shorter runs Tighter schedules Distribute and print Frank Romano, Professor Emeritus, RIT

11. U.S. Printing Market Share Predictions 2005 2012-2015 Litho45%33% Gravure15%11% Flexo21%20% Screen3%2% Digital12%30%

12. Trends in Perfect Binding Clear Trends Automation of the complete gathering-binding system Re-engineering of the gathering section New engineering developments in spine preparation technology The rise of PUR and other new adhesives New trends in book assembly Development of system for the “on-demand” market

13. Adding Value through Specialty Finishing’s Mailing and fulfillment services are being adopted by many To grow, the printer must have influence on the design of the product Traditional printers wish to rely on finishing houses Digital printers want to bring it inside

14. Price Increase and the Impact on the Industry Price is going up across the board for ink, paper and chemicals Raw material costs have risen significantly Energy and overall business costs continue to rise Health insurance to rise 8-10% per year Is the printer and customer willing to compromise on quality for price?

15. Working Smarter “The only way to make money in the printing business is to do work a little better, finish it a little more promptly, and make fewer blunders than others.” Charles Francis 1917 Reduction of overall cost of manufacturing Reduction of cycle times Straight through processing Integrated production processes

16. Working Smarter Need to focus on: Makeready times Run speed Waste numbers Rework and spoilage

17. Hiring Trends Labor: Future of hiring The New Skill Set is scientific, computer-literate, mathematically, mechanically inclined Computer literate Problem solving skills Electrical/Mechanical backgrounds Color profiling tools/print by numbers (computerization of print) Mentoring skills Good work ethic Team oriented – engaged & active, working together for continual improvement