The quarterly statements of three of the country's largest printers all included one-time charges associated with restructuring efforts as the companies work to bring costs down in what is called "challenging economic times" by Quebecor, "challenging markets" by Donnelley and "a very difficult economy" by Banta. The printers are confronting not only sluggish demand but severe pricing pressures as well.
"We won't take work at any price," vowed David Boles, COO of Quebecor World North America. Despite being the primary printer for such bestsellers as Harry Potter and the Order of the Phoenix and Living History, Boles said the U.S. book group "was unable to offset the impact of pricing and volume reductions" in the second quarter. The company has been cutting its U.S. workforce, although Boles noted that Quebecor will spend C$12.8 million to convert its Dubuque, Iowa, plant to specialize in textbook printing. The move was made in part because of a new contract signed with McGraw-Hill.
At Banta, educational book printing sales were down in the second quarter, compared to a year ago. And company executives said that while some business will move into the third quarter, educational publishing sales will be disappointing in 2003 compared to last year.
Donnelley reported that net sales in its book group fell 4.6% in the quarter, to $169.7 million. The company also announced that it has begun a search for a new CEO to replace William Davis, who announced late last month that he plans to retire.