Crowds of Motivated Buyers Flock toGRAPH EXPO® and CONVERTING EXPO®

INSIDE:

Chairman’s Perspective...............2

Printing Industry Celebrates theLife of Harold Gegenheimer ........3

View from McCormick PlaceGRAPH EXPO® and CONVERTINGEXPO® in Pictures........................4

NPES First-Half 2006 data shows strong growth for equipment ..............................7

News and Notes ..........................8

comparing ourselves to ourcompetitors and show howwe differentiate.”

An atmosphere of keeninterest in profitable tech-nologies permeated the crowd,and translated into sustainedsurges of buying activity inmany vendors’ booths. “Wewere extremely busy here; inthe first day of the show, wesigned 16 contracts. Theresponse has been phenome-

Volume XXV, Number 11 November 2006 newsT H E A S S O C I A T I O N F O R S U P P L I E R S O F P R I N T I N G , P U B L I S H I N G A N D C O N V E R T I N G T E C H N O L O G I E S

nal,” said Susan Baines,Marketing CommunicationsManager at Komori AmericaCorp. “We do this every yearbecause our setup allows print-ers to see the entire workflowprocess, from file creation tobindery, in one location. Wehave been meeting customerswho weren’t on our radarscreen and who we probablywould not have had anopportunity to talk with had

The huge crowds of industryprofessionals who con-

verged on McCormick Place inmid-October for GRAPH EXPO®

and CONVERTING EXPO® wereremarkable not only for theirnumbers or their active interestin buying new technologies.

They also typified an extra-ordinary transition in theprinting, publishing andconverting industry. Fromshops large and small, theseprofessionals came to Chicagonot just to learn about newtechnologies but to choosethe new tools they will use toprovide lucrative services fortheir customers now.

“They’re getting it,”commented John Kaufman, Vice President/Marketing and

Business Development atPunch Graphix Americas,parent company ofbasysprint and Xeikon.“We don’t have to come inand explain everything fromthe ground up any more.Before, they were strugglingwith the concept, but nowthey understand whatvariable printing is all about.Now we can actually start

continued on page 6

Thomas SaggiomoNPES ChairPresident, Agfa Graphics NAFTA

Be Careful What You Wish ForIn the weeks

and monthsleading up toGRAPH EXPO2006, the anticipa-tion and specula-tion on whatwould happenwas intense.Would anyoneshow up? Wouldthey be real buy-

ers or just tire kickers? What would be the quality andbusiness level of the visitors that attended the show?

In the vendor community, all bets had been placedand for the most part the wagers were big. Despite anincreasingly competitive marketplace where everycost is being scrutinized, the marketing gurus deliveredcompelling exhibits inviting current and potentialcustomers to visit and sample the wares. The statistics

chairman’s perspectivetell the story: GRAPH EXPO 2006 was the largestnational show in our industry since the year 2000.Vendor commitment was robust with over 440,000square feet of exhibitor space and 630 individualexhibitors on the show floor.

Day 1, Sunday October 15: Kick-off time was10:00AM. Unbelievable as it seemed only hours before,everything was in place, equipment running, carpetingperfectly positioned, and gleaming signage every-where. Despite the Sunday afternoon “footballsyndrome,” traffic was better than expected andexhibitors were feeling enthusiastic.

Days 2/3, Monday and Tuesday October 16/17:These were the touchdown days! Traffic was strong allday on Monday and for most of Tuesday. Business wasbrisk, as I observed full stands and busy people.

Day 4, Wednesday October 18: The potentialleaders of our industry were out in full force. Studentswere visible in the halls observing technology andsnapping up as many posters as possible. Meanwhilethose final deals were being transacted.

In addition to our success on the show floor, anoth-er strong indicator was the robust participation in ourseminars and educational programs. This year, 1400individuals joined us to become better informed about

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technology and our industry in general. Many ofthem signed up to attend multiple seminars.

So what was hot on the show floor? Listeningto a number of industry pundits, the messagewas clear: Whether in the hardware or softwaredomain, it was all about efficiency and productivi-ty, customer intimacy and quality. Most agreethat there remains a big business in our industryand an opportunity for profits, but only to thesmart companies.

The old adage “be careful what you wishfor” was in full play during the show. I arrivedfrom Europe on Sunday and spent the next fourdays and nights non stop with customers andcolleagues. Where else except at GRAPH EXPOcould you take one domestic plane ride and meetmore customers in four days then you could meetin four months?

Finally, a word of thanks is in order for every-one at GASC, NAPL, NPES, and PIA/GATF for thegreat effort in making GRAPH EXPO 2006 aroaring success.

P.S.…if you visited the GASC sales office at theshow you would have seen brisk activity for 2007space – a foreshadowing of good things to come.

NPES comes to you: Programs are set for a series of RegionalMembership Meetings slated for January 2007 – and a PrinterPanel will headline the bill at each event. With the help of ourregional industry counterparts at PIA/GATF, all-star teams ofprinting company leaders are being engaged to dialogue withNPES members on industry topics of critical mutual concern.

“NPES members are extremely interested in issues aroundthe relationship between customers and suppliers,” says NPESPresident Ralph Nappi. “Panels like these are always thehighest rated features on the program at our conferences,because they give our members an insider’s view into marketforces driving their customers’ businesses. We do our utmostto foster dialogue between printing company executives andleaders from the vendor community, as the payoff can beextremely beneficial for both.”

The regional meetings will also spotlight effective sellingstrategies for the industry, as presented by Carl Henry, a

consultant who focuses on helping company owners and salesmanagers identify and motivate sales talent for maximumperformance. With over 23 years experience in sales andcustomer service training, Carl has taught his Modern SalesSystem to thousands of sales professionals around the world.

Rounding out the agenda will be updates on the latest MarketData findings from NPES and PRIMIR, and a report on theAssociation’s new Strategic Planning initiatives. The meetingswill include a full luncheon and run from 8:30 to 2:30 p.m. inthe following regions:

January 17: ChicagoJanuary 19: New York/Northern New JerseyJanuary 24: Long Island/ConnecticutJanuary 26: Columbus, Ohio

Information on meeting venues and registration will soon beposted at www.npes.org.

Printer Panels to Highlight Series ofNPES Regional Meetings in January

On October 4, noted pioneer of the printingindustry and former NPES President Harold W.Gegenheimer died at the age of 95. Over thecourse of his career, Gegenheimer built a longrecord of service to the printing industry, throughpersonal endeavors and support of industryorganizations. He served as President of NPESfrom 1977-1979 and his efforts led to thejoint founding of the Graphics ArtsShow Company in 1982 byNPES, NAPL and PIA.

“Harold was one of theinnovators and leaders ofour industry,” commentedRalph Nappi, NPESPresident. “He built alegacy that even todaymakes ours a thrivingindustry. We are indebt-ed to his service andmourn his loss.”

Gegenheimer, a 70-year industry contributor,invented the convertibleoffset perfecting press, afeature used by most pressmanufacturers that allows forone or more colors to be printedon both sides of paper with just onepass through. Many consider it one ofthe major print innovations of the past 60years. Many of his other inventions have beenattributed to the great postwar growth of offsetprinting, as press speeds and color print qualityimproved, and web and sheetfed printingexpanded.

For Harold Gegenheimer, the graphics artsindustry was much more than a career. It was hislifelong passion. In 1918, his father Williamfounded the Baldwin Company which rebuiltoffset presses in a small, garage-like buildingnear the family home in Baldwin, Long Island.The company soon became one of thepre-eminent manufacturers of printing pressaccessories and controls.

Harold joined Baldwin after graduating fromGeorgia Tech in 1933 with a degree in mechanicalengineering with athletic and scholastic honors.In 1937, he left to work for the next 15 years inother print-related organizations where he

became involved in press design, product develop-ment and general management. Gegenheimerrejoined Baldwin in 1951, overseeing thedevelopment of such inventions as the Automix,Balcontrol and Automatic Cloth Blanket Cleaners.He retired as chairman of Baldwin in 1983. Since1986, he has served as Chairman Emeritus.

Gegenheimer was recognized for hislifetime service with a number of

industry honors. In 1982, hereceived the Robert F. Reed and

GATF’s Society of Fellows’Award for his contributionsto the technical develop-ment of the graphiccommunications indus-tries and the Byron G.Culver Award presentedat Rochester Institute ofTechnology for hiscontributions to graphicarts education. RITnamed him “Graphic

Arts Man of the Year” in1983. In 1993, the board of

directors of NPES recognizedhim by creating two service

awards in his name. He served aschairman of the Graphic Arts

Technical Foundation's National Scholar-ship Trust Fund, and later as GATF’s Society ofFellows Chair from 1993-1995. He was elected toGeorgia Tech’s Engineering Hall of Fame in 1995,and later that year endowed the development ofan annual Lecture Series on Innovation at hisalma mater. In 1996, he received GATF’s Award ofExcellence for Education and Training in Industry.In 1997, he was honored with the SoderstromAward in recognition of his many contributionsto the industry’s advancement.

A memorial service will be held on Saturday,November 11 at 2:00 pm at MysticCongregational Church, East Main Street, Mystic,CT, 06355. A reception and celebration of Harold’slife will follow at his home in Mystic, 7 EldridgeStreet. His family has asked that in lieu of flowers,a donation be made to the scholarshipestablished in his name at Print and GraphicsScholarship Foundation (PGSF), (412) 259-1740,or (800) 910-4283.

NPESGegenheimerAwardsPresented toClark, BaldwinTechnologies

Gerald Clark, Director of Sales forGraphics Microsystems,and BaldwinTechnologies Companyreceived the 2006 Harold W. Gegenheimerindividual and corporateAwards for IndustryService at the NPESannual conferenceNovember 6 in Ponte Vedra Beach,Florida.

The awards, named after the former NPESPresident and ChairmanEmeritus of BaldwinTechnology Company,recognize qualities which HaroldGegenheimer stood for – a lifelong commitment to technical innovation,sound management, support for educationand research and working for the good of the whole industry.The winners receiveplaques, and NPES will contribute scholarships in the name of Mr. Clark andBaldwin TechnologiesCompany to the Print andGraphics ScholarshipFoundation.

Printing Industry Celebrates theLife of Harold Gegenheimer

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Large crowds of visitors assembledin McCormick Place’s GrandConcourse each morning awaitingthe show’s opening at 10 a.m.

Members of the U.S. Army’sDeployable Print Center tooka break from their owndemonstration duties on theshow floor to appreciate adisplay of image quality inthe Wide Format Pavilion.

Jennifer Deming of Adobe Systemsgave hands-on demonstrations ofthe company’s creative solutions.

With a multitude of vendorsrunning offset and digitalpresses on the floor, hard copycomparisons took center stage.

Representing the future of ourindustry, many teachers andstudents visited to check out thelatest advances – including thisgroup of obviously “pumped up”graphic communications studentsfrom Clemson University.

Visitors with a critical eye hoveredintently over large-scale output inthe HP booth.

The team at PrintableTechnologies gave in-depthpersonal demonstrations of theirworkflow wares many timesduring the course of the show.

The seminar program was verywell attended, with over 1400visitors registering to take one,two, or even more of the 70-plusseminars offered.

Jeff Hayzlett, Chief MarketingOfficer for Kodak’s GraphicCommunications Group, deliveredthe keynote address to teachers atPIA/GATF’s EducationConference.

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we not been here.”“We were packed every single

day at our booth, and I evenhad to bring in extra boothstaff,” said Jill Worthen, LargeFormat Trade Show Manager forHewlett-Packard Company.“We also had a lot of sales. A lotof people who come to thisshow make it a point to visitthe Wide Format Pavilion,which is beneficial for us.”

At MitsubishiLithographic Presses,Business DevelopmentCoordinator Mitch Dudekexpressed satisfaction with theshow’s results and the qualityof leads generated, adding that“Being here creates a brandawareness so that people knowthat you’re in the marketplaceand you’re a viable, quality,service-oriented supplier.”

At the bustling EastmanKodak booth, LenChristopher, Director ofSegment Marketing andBusiness Development attrib-uted some of the excitementnot only to broader adoption ofdigital printing but more inter-est in hybrid approaches thatmix digital with conventionaloffset – a trend that was certain-ly on center stage at the show.“Not many customers were ask-

ing for the hybrid approacheven a few years ago, becausethey did not really considerthat they could do it,” he said.“Now they see that they can doit, and it has become a muchstronger and practical businessproposition.”

Along with workflow andmanagement information sys-tems, variable digital printingwas one of the key technologiesidentified by the “Must See’ems” selection committee as a

vital shaper of both the showand the industry. With thosetrends highly visible at theshow, a host of new productsmade their debuts not in avacuum, but as parts of anincreasingly integrated strategy.

“It’s pretty clear what clientssee in the results from theseprograms,” said Michael C.Aumann, Executive VicePresident/Sales and Marketingat Streamfeeder, referring tohighly personalized direct mailcommunications enabled byvariable data printing. “If youreceive a kit and it’s just amarketing piece, it has somevalue. But if the marketingpiece is selected specifically foryou, all of a sudden this pack-age gains a lot more value.”

FOR A NUMBER OF THEprinters shopping at GRAPH

EXPO and CONVERTINGEXPO, investments being madeon the show floor were keyedto make maximum use of “thelast 90 feet” of the productionprocess, when finished printproducts go out the shop doorand into the mail.

While a dazzling array ofpostpress solutions were dis-played at larger vendor exhibitssuch as Goss International,Bowe Bell + Howell, andHeidelberg, enthusiasm forthis trend cascaded nicely downto smaller niche-orientedvendors. “The digital printingrevolution has revitalized ourmarket segment,” commentedMichael Venittelli, VicePresident of Sales at MBMCorporation, a provider ofadvanced finishing solutions.MBM launched a new tabletopfolder and reintroduced abusiness card slitter at thisyear’s show. “We’re seeing areal upswing in the market,”he added.

Technifold USA, anothersmall finishing firm exhibitingat the show, was very pleasedwith their performance. “Thiswas our fourth year here inChicago and we’ve consistentlydone very well,” said AndrePalko, President. “The ROI atthis show was excellent – it paidfor itself in the first two days!”

WHILE SALES WERE ON THEtop of exhibitors’ minds, manycompanies left the show withmore than just orders.Education was plentiful too.Heather Perkerson,Marketing CommunicationsManager at MacDermidPrinting Solutions, sawGRAPH EXPO and CONVERT-ING EXPO as an importanteducational opportunity.“This is a great place to seewhat new technologies andproducts are being developed.

It’s fascinating to see wherethe industry is going andcheck-out emerging markets.”

Brian Brack, Presidentand CEO of Globe-TekCorporation, agreed. “Theshow for me is more than justabout selling. I come here tolearn what our customers’needs are and go back home todetermine how we can addressthose needs. I leave Chicagowith a refined business strategyin mind for the coming year.”

Seminar attendance at theshow was extremely strong,with 1,400 individuals regis-tered for 70-plus educationalsessions and, in many cases,even two or more. Meanwhileat the EXECUTIVE OUTLOOK®conference a day before theshow’s opening, NPES VicePresident William K. “Kip”Smythe reported the prelimi-nary findings of a study nowbeing completed by the PrintIndustries MarketingInformation and ResearchOrganization (PRIMIR), high-lighting the dramatic rise ofnon-print or “ancillary” serviceswithin the industry.

CLEARLY, GRAPH EXPOand CONVERTING EXPOdemonstrated that offeringservices with strong, provenROI performance is a major keyto print’s future success. Whilemuch of the dialogue betweenprinters and vendors on theshow floor revolved aroundthe potential business returnpromised by new technologies,industry experts agree that akey driver of success is the factthat printers are engaging infundamental strategic discus-sions with their own clients –discussions in which they werenot involved before – enablingboth parties to build strong,mutually profitable relation-ships in the process.

GRAPH EXPO continued from page 1

“The show for me is more thanjust about selling. I come hereto learn what our customers’needs are and go back home todetermine how we can addressthose needs.” –Brian Brack, President and

CEO of Globe-Tek Corporation

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The data is finally in:findings for the first half

of 2006 are pointing to a strongupswing in sales of printingequipment. Shipments totaled$1.317 billion for the first halfof 2006, a 28.8 percent increaseover the same period in 2005.This follows a good 2005 inwhich equipment shipmentswere level with 2004, but up23 percent over 2003, whichwas the low point year forequipment sales in well overa decade.

The equipment data dis-cussed here includes prepress,press and postpress/binderyequipment sales and is collectedthrough the NPES market dataprogram. This is actual datareported by NPES membersand it is believed to representapproximately 85 percent oftotal equipment market in theU.S. If this trend continuesthrough the balance of the year,this will be the best year ourmembers have experiencedsince 1998, as the data in Figure1 illustrates.

A quick look at some of theequipment categories showsthat sheet-fed press sales haveled the industry growth at awhopping 70 percent increaseover first half 2005.

On the heels of an extremelywell attended GRAPH EXPO inChicago and based on manydiscussions with members on

the show floor, we believe thatthe second half will be strongtoo; however it will be difficultto maintain a 29 percentgrowth pace. But even if thegrowth rate slows somewhat,2006 will probably hit thebooks as one of the best yearsin the last decade for sales ofequipment.

Can we expectthis to last?

Regardless of what thegrowth rate turns out to be, thisis great news for our members.But you have to ask the ques-tion, can we maintain industrysales levels of $2.5 billion peryear? This may be a challengefor a few reasons. First, webelieve there was significantpent-up demand from over fiveyears of declines in printingvolume. Since printing saleswere down, printers were notbuying. Now that printingindustry sales volumes havereturned to 2000 levels,coupled with the fact thatthe equipment offerings ofNPES members are moreproductive than ever, printersare upgrading to take advantageof efficiency improvements thisnew technology provides.How long will this surge frompent-up demand last?

Secondly, consolidationcontinues unabated in theprinting industry, whichequates to fewer customers forour members. Coupled withthe resultant surge in used

equipment on the market,this makes it tough to sell newequipment to those printersleft in a shrinking marketplace.Finally, printing equipmentsales are cyclical and generallyfollow the rise and fall in GDP.The U.S. economy is doing well,but lower growth is forecast forthe coming years.

Graphic ArtsSupplies

The first six months of dataon supplies show that ship-ments are about level whencompared to 2005. In a marketthat has been experiencingtechnological substitution formany years, level isn’t all thatbad (see Figure 2). The productsthat constitute the Graphic ArtsSupplies data include graphic

NPES First-Half2006 data shows strong growth for equipment

Product type Growth 1st half

Platesetters +2.5%Sheetfed presses +70.6%Web-fed presses +6.1%Cutters -8.1%

$3,000

$2,500

$2,000

$1,500

$1,000

$500

$0

$2,500,000

$2,000,000

$1,500,000

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Figure 1

US Printing Equipment Shipments($ Millions)

1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006*

*2006 Contains estimates. NOTE: Includes Canadian shipments for Pressroom Equipment (except sheetfed presses). Also includes Bindery Estimates (1996-Present)

Figure 2

Graphic Arts Supplies($ Thousands)

1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006*

$2,361 $2,313$2,455 $2,441 $2,485

$2,337

$2,085

$1,790

$2,200 $2,221

$2,635

$1,922,958 $1,925,509 $1,960,053$1,785,924

$1,613,415$1,464,230

$1,344,770 $1,264,036$1,175,700 $1,122,984 $1,195,204

arts film, lithographic plates,conventional and digitalproofing materials and therelated chemistry. As readers arewell aware, prepress workflowonce encompassed many stepsinvolving phototypesettingpaper, graphic arts film, a plateor plates and conventionalproofs. Today, that workflowhas been streamlined to gofrom the computer to the plateor directly to the press manytimes without a conventionalor digital proof. This has hada dramatic impact on thedollar volume of consumablematerials sold in the industry,which peaked at $1.96 billion in1998 and today stands at about$1.2 billion…a loss of nearly$800 million in yearly revenue!

Looking at the individualproduct groupings within the

continued on next page

NPES News is published monthly by the Marketing andCommunications team at NPES.

Managing Editor:Doug Sprei (703) 264-7215

Correspondents:John McKeonMarisa PreussRekha RatnamKip Smythe

Circulation:Darcy Harris (703) 264-7200

The Association for Suppliers of Printing, Publishing and Converting Technologies

1899 Preston White DriveReston, VA 20191 USA(703) 264-7200e-mail: npes@npes.orgwww.npes.org

news and notesNEW INDUSTRY REPORTS AVAILABLE FROM SLOAN PRINTING INDUSTRY CENTER

Back in 2001, Rochester Institute ofTechnology (RIT) was selected by the Alfred P.Sloan Foundation to become one of its SloanIndustry Centers. The Sloan Printing IndustryCenter is a joint program of the RIT School ofPrint Media within the College of Imaging Artsand Sciences and RIT's College of Business,emphasizing Sloan’s long-standing tradition ofapplying a broad multidisciplinary approach toindustry investigations and findings.

As an industry partner of the Sloan PrintingIndustry Center, NPES has exclusive access to theCenter’s findings through its research monographpublications. The Center recently published aset of new monographs for 2005. These areavailable to NPES member companies as abenefit from NPES’s sponsorship of the PrintingIndustry Center.

The new research monographs include:

A Comparative Study of the Environmental Aspects of Lithographic and Digital Printing Processes

An Investigation into Papers for Digital Printing

Formulation and Implementation of Environmental Strategies: A Comparison Between U.S. and German Printing Firms

Media Distribution in the Printing Industry

New Skills for DAM and Variable Data Printing Services: Is the Printing Industry Prepared?

Sourcing of Corporate Print: Three Case Studies

The New Medium of Print: Material Communication in the Internet Age

Utilization of E-Commerce by Commercial Printing Companies

Variation in Premedia Color and the Potential Automation of Imaging Tasks

To obtain these valuable reports, contactNPES Vice President Kip Smythe atksmythe@npes.org or (703) 264-7220.

8

Graphic Arts Supplies data, film continuesits long-term downward trend at -17.4percent for the first half 2006. Evenrecording film used in imagesetters isdown over 16 percent this year. Thisshould be no surprise as non-film basedworkflows continue to be implementedrapidly by printers of all types and sizes.Offpress (conventional) proofing productsare also down 6.1 percent for the first half.A strong indication that the move todigital proofing and even soft proofing hasnot abated. Of course the bright spot inthe supplies market is in the plate arenawhere we see growth of almost 2 percentfor the first half 2006. But this “aggregate”total masks the interesting dynamicsgoing on beneath the surface betweenanalog and digital plates. Presensitized(analog) plates were down over 25 percentwhile direct-to-metal (digital) plates wereup 9.1 percent. The message is clear; theall-digital workflow continues to be rapidlyadopted by the industry.

How can you monitorthis trend yourself?

On an overall basis, the first half of2006 has been extremely positive for ourmembers and the industry. With a strongGRAPH EXPO behind us, we can lookforward to the first half trend continuingthrough the year. How long this trendcontinues remains unclear however.

If we told you that you could get data like this for over 160 product

categories every month for free, wouldyou believe it? It’s true. The NPESMarket Data Program collects and

disseminates market totals for these andother products on a monthly basis to

participating member companies. If youwould like to receive this data too, allyou need to do is commit to provideyour data through our confidential,

legally monitored program. This armsyou with the information to see changesin the marketplace and make informedbusiness decisions to help your businesssucceed in a challenging marketplace.

To learn more, contact RekhaRatnam at (703) 264-7231

for details.

2006

2007

Save the Dates!

PRIMIR Fall MeetingNovember 13-16Tampa, Florida

Market Data MeetingNovember 16Tampa, Florida

PAMEXNPES Trade Mission and Exhibit

December 10-14Mumbai and Bombay, India

NPES Regional MeetingsJanuary 17: Chicago

January 19: New York/New JerseyJanuary 24: Long Island/Connecticut

January 26: Columbus, Ohio

PRINT OUTLOOK®

NPES Spring BoardPRIMIR Meetings

March 26-29Chicago, Illinois