1999 Top Diemakers

Top diemakers push the $200 million sales envelope in the face of declining profit margins and projections for growth.

By David Luttenberger

Although the headlines herald a 7.2 percent increase to a record $193 million in sales during 1998, the top 25 diemakers' ledgers cry a different story.

On the surface, say die industry insiders, it was a good year. However, expectations of continued consolidation and potential or already-realized forced sell-offs of non-core business units are cause for concern among diemakers who, on average, posted net sales of nearly a half-million dollars more in 1998 than in '97. New Era Die, who was ranked fourth in 1998, dropped to 13th this year following the divesture of its rotary die manufacturing business. New Era President James LaBounty declined comment on issues specific to the move, other than to say that the sold business accounted for about 50 percent of New Era's total sales.

Compounded by such competitive measures as capital outlay for new technologies, startup costs for satellite manufacturing plants or distribution centers, and escalations in general operating and training costs, estimated '98 profit margins sunk 8.3 percent to 7.7 percent from 8.4 percent in 1997.

It appears some diemakers are undaunted by dips in margins, however, and are still prepared to spend to grow.

On average, annual growth projections were down 26 percent to 9.7 percent this past year. Conversely, on the high end, one diemaker projected up to 40 percent annual growth—60 percent higher than the overall industry high a year ago. Somewhat balancing the economies of scale, however, were two large diemakers who indicated "flat" growth. While confidentiality precludes naming those specific diemakers, it can be noted that both were in the top 10. Four diemakers, also among the 10 largest, said they expected "negative growth" in the coming year. The more aggressive projections all came from diemakers a bit farther down the list. All in all, it should be kept in perspective that 9.7 percent average growth in any industry is still considered very healthy.