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1. INDUSTRY PROFILE 12/12/2011
Book Publishers
SIC CODES: 2731
NAICS CODES: 51113
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2. Industry Overview
The US book publishing industry consists of about 2,700 companies with combined annual revenue of about $25 billion.
Major companies include John Wiley & Sons, McGraw-Hill, Pearson, and Scholastic, as well as publishing units of large
media companies such as HarperCollins (owned by News Corp); Random House (owned by Bertelsmann); and Simon &
Schuster (owned by CBS). The industry is highly concentrated: the top 50 companies generate about 80 percent of
revenue.
COMPETITIVE LANDSCAPE
Demand for books is driven by demographics and is largely resistant to economic cycles. The profitability of individual
companies depends on product development and marketing. Large publishers have an advantage in bidding for
new manuscripts or authors. Small and midsized publishers can succeed if they focus on a specific subject or market.
The industry is capital-intensive: average annual revenue per worker is more than $320,000.
PRODUCTS, OPERATIONS & TECHNOLOGY
Publishers produce books for general reading (adult "trade" books); text, professional, technical, children's, and
reference books. Textbooks and adult trade books each account for about 25 percent of the market, professional books
20 percent, children's books 10 percent, and reference books 5 percent.
About 290,000 new books are published in the US every year. The number of non-traditional books -- on-demand titles
produced by reprint companies specializing in the public domain as well as self-publishers and "micro-niche" publications
-- has grown significantly in recent years.
Operations include acquiring content, managing relationships with authors, editing, designing books, manufacturing, and
marketing. Publishers acquire content by contracting with authors to produce new work, buying finished manuscripts
offered for sale, or acquiring the rights to existing content through licensing agreements. Publishers often have contracts
with authors for multi-book deals. The editorial staff usually specializes in a particular area. A large publisher may own
several "imprints" (brand names such as Penguin or Viking) or branded book series such as CliffsNotes, each with its
own editorial staff.
Editorial work on a book includes proofing and editing, acquiring illustrations, choosing fonts and paper, and design work
such as layout and cover art. Most publishers outsource printing and book binding to commercial printers, with the
cost of paper borne by the publisher. Large publishers operate their own warehouses from which they ship books as
needed.
Publishers or their parent companies often produce complementary products such as magazines, TV programs, films,
DVDs and videos, audiobooks, and toys.
Computer technology is essential in book publishing for creating and editing content and book design, printing,
managing inventory and distribution, and creating new electronic or other products. Publishers can use the same digital
sources in print, online, and for new products, such as on-demand publishing and customized books made-to-order. For
example, a college can select specific chapters for its own version of a textbook.
Electronic availability of the information from traditional books has so far been successful mainly with professional and
technical material, such as legal texts and subscriptions. Publishers offer this material both on the Internet and through
CDs or DVDs. But change is likely ahead. Electronic readers such as the Amazon Kindle spurred e-book sales in the
late 2000s. As a result, the e-book segment grew fastest among all book publishing segments in 2010, rising nearly
170 percent compared to a year earlier. Electronics giants like Apple also developed rival e-readers in an effort to grab
market share.
SALES & MARKETING
Book publishers sell mainly to wholesalers, retailers, school districts, colleges, libraries, businesses, and book clubs.
Publishers produce and sell newly created books (the "frontlist") and books that are reissued (the "backlist").
Publishers usually have a field sales force and a website for marketing and inquiries. Trade shows are an important
source of sales. Most large book publishers don't sell directly to consumers but conduct consumer advertising
campaigns. Major distributors are Baker & Taylor and Ingram Book Company.

3. Multi-faceted promotion and publicity campaigns are key marketing strategies for adult and children's trade books.
Tactics include in-store advertising, author readings, book signings, and posting a sample chapter online for free
access. High-profile or best-selling authors appear on national television shows.
In the children’s market, sales hinge primarily on price and quality, while brand-name marketing and licensing are
important. Marketing tie-ins that complement book sales include branded merchandise such as toys and video games.
Despite higher prices, interactive and audio books are popular.
Professional and technical books are advertised in industry trade magazines, industry or professional associations,
and direct mail.
In the public education market, publishers compete to win contracts with state and local school systems. Many states
buy textbooks through large contracts, on a statewide basis, each according to its own “adoption" cycle, which can span
five to seven years. In other states ("open territories"), school districts buy books independently. Publishers sell with a
direct sales force and by sending sample copies to teachers and government reviewers.
Because book stores have limited shelf space and constantly make way for new books, many books have only a short
sales period, which Internet retailers like Amazon that don't have inventory constraints can extend.
A major concern for publishers is determining how many copies of a book to print. Technical books may have just a
few thousand copies printed, while mass-market books are printed in the hundreds of thousands. Rarely, (like the Harry
Potter series) books sell in the millions. Books a retailer can't sell are usually returned to the publisher for full credit.
Returned books may be re-sold at highly discounted prices, or destroyed.
Publishers sell books with a suggested retail price that may be twice as high as their wholesale price but that is typically
discounted by retailers. Large retail book chains like Barnes & Noble routinely sell books at a 30 to 40 percent discount
from the list price. In recent years, list prices for adult trade hardcover books have been just under $30, while paperback
versions list for about $15. Mass market paperbacks sell at retail for less than $10. Prices for professional books and
college textbooks, on the other hand, are often over $50. E-book prices hover around $15.
Sales of used books have gained popularity in recent years as a cheaper alternative for some consumers. Retail
sales of used books online and in stores such as Half Price Books rose during the late 2000s recession, heating up
competition for new book sales.
FINANCE & REGULATION
Cash flow is highly seasonal in the consumer and education segments due to buying patterns. Consumer book sales
peak during the winter holidays; textbook sales coincide with school terms. Company borrowing tends to peak in
September or October, and is at its lowest in May. Publishers with multi-year contracts from state or local school systems
receive periodic payments.
Receivables can be fairly high, while inventory and warehousing operations are capital-intensive. Capital spending is
primarily for offices, computer equipment, software, and warehouse equipment.
Inventory turnover is usually rapid because inventories are, in effect, held by wholesalers and retailers, who return
what they can't sell. The high rate of returned books is an industrywide problem and can be up to 40 percent in some
categories. The high cost of handling and storing returned paperbacks led to the practice of returning only the front
covers. Obsolete books are common in technology and science. Publishers may hold a reserve equal to about 3 percent
of sales in anticipation of returned books.
Books have protection under copyright law. The copyright is usually in the author's name but is assigned to the publisher
in exchange for royalty payments.
INTERNATIONAL INSIGHTS
Many publishers produce foreign editions of successful US books, either in English or in foreign languages. The most
common method is to contract with a foreign publisher. For most publishers, however, foreign sales are relatively small.
REGIONAL HIGHLIGHTS
New York has the highest concentration of publishers in terms of revenue. California has the largest number of
publishers, but many are small.

4. The population of school-aged children will grow at different rates during the next decade, affecting demand for school
textbooks. From 2010 to 2030, the number of school-aged children is expected to grow 15 percent nationally, but
states such as New York, Michigan, and Ohio will likely see decreases of 2 to 4 percent.
HUMAN RESOURCES
Though highly educated, the professional staff at book publishers earn a relatively modest average hourly wage,
slightly higher than the national average. The industry's injury rate is negligible.
Industry Employment Growth
Bureau of Labor Statistics
Average Hourly Earnings & Annual Wage Increase
Bureau of Labor Statistics
Recent Developments
INDUSTRY INDICATORS
The spot price of crude oil, which indicates energy and ink prices paid by book publishing operations, rose 11.6 percent
in the week ending November 11, 2011, compared to the same week in 2010.
US retail sales for sporting goods, hobby, book, and music stores, a potential measure of demand for books, increased
6.1 percent in the first ten months of 2011 compared to the same period in 2010.
Total US revenue for book, directory and mailing list, and other publishers rose 2.6 percent in the second quarter of
2011 compared to the same period in 2010.
QUARTERLY INDUSTRY UPDATE
More Publishers Abandon Print Catalogs - Random House plans to drop its print catalog, joining the growing group

5. of publishers using digital catalogs exclusively. While publishers have been transitioning toward digital catalogs for
years, many had maintained print catalogs, as well. Not all publishers support the shift, although they concede digital
catalogs offer significant savings on production and shipping, as well as an arguably lower environmental footprint,
according to Publishers Weekly. In addition to Random House, HarperCollins and Hyperion have gone all-digital, and
Macmillan and Simon & Schuster both plan to complete their digital transition by spring 2012.
Business Challenges
CRITICAL ISSUES
Industry Sales Declining - Book sales in the US declined nearly 5 percent between 2009 and 2010, with adult fiction,
mass market paperbacks, and audio books among the hardest-hit segments, according to Nielsen BookScan. Book
publishers are facing threats from other sources of entertainment; a recent study by the National Endowment for the Arts
shows that just over half of adults read literature for entertainment. However, the explosion in electronic readers has
spurred a rise in e-book sales, which could offset declines in traditional categories.
Demand for Cheaper, Easily Available E-Books - Rising demand for electronic books that are cheaper to obtain and
easier to use presents a new challenge to publishers. The explosion in e-readers such as Amazon's Kindle device
indicate solid demand among consumers for new, low-cost content. However, publishers have been slow to meet that
demand; some claim low e-book prices eat into their margins. Publishers also are concerned over e-book sales of
backlist titles: authors have argued for higher royalties on backlist titles since they require no further investment to
generate sales.
OTHER BUSINESS CHALLENGES
Industry Consolidation - Taking advantage of economies of scale in production and marketing, a handful of large
book publishers have grown rapidly by acquiring smaller publishers. Larger publishers can more easily sell a full line of
books to big booksellers like Barnes & Noble, Borders, and Amazon. Smaller publishers have less marketing leverage.
Textbook Sales Depend on Government Budgets - Publishers that sell to public school systems and state higher
education institutions depend on state economies and local government budgets. When revenues are squeezed, states
and school boards can delay buying new books or the supplemental materials that are often an important source of
revenue. Textbooks account for about 25 percent of the book market.
Dependence on Large Buyers - Publishers may depend on a few large buyers. Particularly vulnerable are publishers
that compete for contracts in the states that represent about half of the nation’s school population that buy textbooks
through multi-year contracts statewide. Loss of a state contract can materially affect a publisher.
Professional Book Sales Depend on Customer Industries - Publishers of professional books depend on the health
of the industries that their books cover. Sales of business and investing books depend on the level of the stock market.
One such publisher, Bloomberg Press, exited the market in 2010.
Trends & Opportunities
BUSINESS TRENDS
More Titles - Although the overall volume of books sold has been relatively flat in recent years, the number of new book
titles published has steadily increased, suggesting that publishers can accept lower volume sales for individual titles
because the publishing process has become more cost effective. The number of new traditional titles published in the US
increased more nearly 35 percent between 2002 and 2009; new titles among non-traditional books, including public
domain reprints, self-publishers, and micro-niche publications, grew more than 180 percent between 2008 and 2009,
according to Bowker.
Greater Technology Use - Publishers use technology strategically and competitively for information and customer
service, especially in the education market. Book publishers invest in improving and expanding websites, electronic
media, and Internet use. For example, John Wiley & Sons invests in technology as a strategic differentiator: it offers
corporations and academic institutions multi-site licenses to access content online and from handheld devices and Web-
enabled mobile phones.
Copyright Piracy - The greater availability of books in electronic format has increased the ease of producing pirated

6. versions. Unauthorized foreign editions of US works are common. The Association of American Publishers estimates that
US publishers lose over $600 million a year due to copyright piracy.
Competition from Used Books - The Internet provides an easy way for consumers to re-sell used books, competing
with new book sales. On Amazon, for example, used books appear next to the postings of new copies of the same title;
eBay is another Internet forum for used book sales. Textbook publishers historically countered the used book threat by
updating content and issuing new versions regularly.
INDUSTRY OPPORTUNITIES
Internet Availability - Publishers make a large number of books available on the Internet through subscription services;
legal, scientific and other technical books are the most popular, with college textbooks a growing market. Unlike e-books,
these Internet versions aren't meant to be downloaded. John Wiley & Sons' online book revenue, coming primarily from
institutional library customers, grew 44 percent in 2010.
Electronic Books - Books that can be downloaded from the Web offer the industry a way to keep content current and
available, and to contain or decrease costs. The higher education market has proven particularly lucrative for e-book
sellers. Professors and students download the e-books to computers, specialized e-book readers, or other handheld
devices. The profit margins aren't as high, but printing and distribution costs are eliminated.
Custom Publishing - Buying books “by the chapter” occurs in the higher education market, and could expand to other
segments. Professors already customize textbooks by selecting specific chapters, but not whole books, to be made
available to students, typically via online channels. The same concept could apply to other types of books; for example,
a customer could choose to buy and print relevant chapters of a home improvement book.
Executive Insight
CHIEF EXECUTIVE OFFICER - CEO
Diversifying into New Product Lines and Services
Because the US book market is mature and relatively flat, many publishers seek to grow domestically and/or abroad
through acquisitions, mergers, or new businesses. McGraw-Hill works with local partners worldwide. It has acquired TV
broadcast stations in the US, and its Standard & Poor's business has expanded into information and media services, and
trade and business magazines.
Increasing Digital Content Products and Services
To increase revenue beyond hardcopy, publishers are delivering content digitally via hard media and the Internet. Digital
content is growing in popularity, but many companies continue to explore strategies to broaden their digital product
offerings. Of Scholastic’s fiscal 2010 Book Club revenue, for instance, nearly 70 percent came from products and
services sold or delivered via the Internet.
CHIEF FINANCIAL OFFICER - CFO
Identifying and Controlling Project Costs
A major challenge in the industry is to increase efficiencies and reduce costs in book development, production, and
delivery. Financial planning systems are increasingly being used by editors to more accurately predict and track the cost
of book projects. Outsourcing and offshoring printing functions are becoming more common.
Developing New Revenue Models
Financial analysis teams create business models for additional sources of revenue, such as subscriptions to textbook
updates, and packages that include books and multi-media products and services. Offering a product in multiple media
can significantly expand its market. Creating ancillary products for textbooks and merchandise for fiction works can
substantially increase project profitability.
CHIEF INFORMATION OFFICER - CIO
Enhancing Internet Access to Selected Digital Content
Most publishers are offering Web access to selected products. The Wiley Online Library (formerly Wiley InterScience)

7. website offers access to journals, major reference works, online books, laboratory manuals, databases, and a suite of
professional and management resources. Since its creation 10 years ago, the site has grown to offer access to more
than 4 million articles across 1,500 journals and 8,000 online books and reference works.
Supporting Online Book Sales
Statistics indicate that the Internet is becoming increasingly dominant in selling books. Nearly 60 percent of US Web
users buy books online, according to the Center for the Digital Future. Online merchant Amazon reported that it had
back-orders for 2.2 million copies of the final Harry Potter book before its publication.
HUMAN RESOURCES - HR
Retaining Key Editorial Personnel
In an industry with consolidation at the top and relatively flat revenue, competition for successful editorial executives is
fierce. A poor year can trigger reorganization and recruiting from competitors. HR professionals help executive
management understand what incentives appeal to high-level editors: top editors often cite broader editorial
responsibility and the opportunity to grow business as compelling reasons to stay in a job or take a new one.
Retraining for New Media and Technology
Publishers have gained much efficiency from computerized editorial and production processes, but upgrades and new
applications require retraining existing staff, and continuous education. Working in digital media often requires training
for process and workflow changes. Publishing is now largely computer-based, computer skills are important for
employment, and more training is developed and delivered online.
VP SALES/MARKETING - SALES
Promoting and “Selling” Authors
Brand – either the author’s or the publisher’s – is important in selling books. Publishers want an author to have a
“platform” (credentials and visibility) through newsletters, conferences, speeches, or previous books. HarperCollins
includes a speakers bureau, which helps authors reach expanded audiences. O’Reilly and Associates’ authors benefit
from the publisher’s respected brand for computer books.
Finding New Channels Beyond Bookstores
Getting shelf space in bookstores is harder, due to tighter inventory control, quicker returns, and chains’ proprietary
titles. Publishers seek to gain new retail and nonprofit channels, especially ones that won’t return books. Examples are
specialty/gift shops and galleries; book fundraisers for nonprofits; and book clubs, book fairs, and direct-to-consumer
catalogs.
Call Preparation Questions
EXECUTIVE INSIGHT
CEO: What challenges does the company see in expanding into new product lines and services?
McGraw-Hill has acquired TV stations, built foreign partnerships, and expanded into information and media services and
trade and business magazines.
CEO: What digital or online publishing opportunities is the company exploring?
To increase revenue beyond hardcopy, publishers are delivering content digitally via hard media and the Internet.
CFO: How successful are the company's efforts to control project costs?
Financial planning systems are used to more accurately predict and track project costs. Outsourcing and offshoring
printing functions are more common.
CFO: How does the company develop new revenue streams?
Financial analysis teams create new revenue-generating business models, such as subscriptions to textbook updates
and merchandise for fiction works.
CIO: What benefits has the company gained from offering online access to its products and services?

8. Most publishers are offering Web access to selected products.
CIO: How is the company challenged by selling books and related products and services on the Internet?
Nearly 60 percent of US Web users buy books online.
HR: What strategies or programs does the company use to retain editorial staff?
Competition for successful editorial executives is fierce; HR helps executive management understand what incentives
appeal to high-level editors.
HR: How does the company keep staff up-to-date on new publishing technology?
Since publishing is now largely computer-based, upgrades and new applications require retraining existing staff and
continuous education.
Sales: How does the company help authors gain exposure?
Publishers want an author to have a “platform” (credentials and visibility) through newsletters, conferences, speeches,
and/or previous books.
Sales: How is the company challenged by selling beyond traditional bookstore channels?
New channels include specialty/gift shops and galleries, book fundraisers for nonprofits, book clubs, and direct-to-
consumer catalogs.
CONVERSATION STARTERS
How have changes in book readership impacted company revenues?
Book sales in the US declined nearly 5 percent between 2009 and 2010, with adult fiction, mass market paperbacks, and
audio books among the hardest-hit segments, according to Nielsen BookScan.
How are publishers adapting to the rising demand for electronic books?
Rising demand for electronic books that are cheaper to obtain and easier to use presents a new challenge to publishers.
What strategies has the company used recently to grow revenues?
Taking advantage of economies of scale in production and marketing, a handful of large book publishers have grown
rapidly by acquiring smaller publishers.
What types of books available on the Internet are the most popular with the company's customers?
Publishers make a large number of books available on the Internet through subscription services; legal, scientific and
other technical books are the most popular, with college textbooks a growing market.
What advantages does the company see in offering downloadable products from the Internet?
Books that can be downloaded from the Web offer the industry a way to keep content current and available, and to
contain or decrease costs.
Has the company considered selling books "by the chapter" that can be downloaded from the Internet?
Buying books “by the chapter” occurs in the higher education market, and could expand to other segments.
QUARTERLY INDUSTRY UPDATE
To what extent has the company converted its catalogs and other marketing materials to digital formats?
Random House plans to drop its print catalog, joining the growing group of publishers using digital catalogs exclusively.
OPERATIONS, PRODUCTS, AND FACILITIES
What types of books does the company publish?
Publishers produce books for general reading (adult "trade" books); text, professional, technical, children's, and
reference books.
How many different book imprints (brands) does the company own?
Large publishers may own dozens of imprints.
How many new books does the company publish in a typical year?
In the US each year, around 290,000 new titles are published.
How many titles does the company have in print?
Some titles may sell well for many years.

9. What products other than books does the company produce?
Publishers also produce maps, pamphlets, and calendars. Education publishers produce tests and learning products.
To what extent does the company outsource printing and manufacturing?
Most publishers use independent printers and binders.
CUSTOMERS, MARKETING, PRICING, COMPETITION
What are the company’s largest markets?
Textbooks and adult trade books each account for about 25 percent of the market, professional books 20 percent,
children's books 10 percent, and reference books 5 percent.
What are the company’s major distribution channels?
Publishers use multiple channels, including wholesalers, independent book stores, book chains, mass merchants,
supermarkets, toy stores, and direct sales to school districts.
What are the company’s most profitable book imprints (brands)? Titles?
One top-selling consumer book (“title”) can produce large profits.
How does the company differentiate itself from its competitors?
A book publisher may focus on a specific market or subject matter.
What percentage of company revenue comes from new titles? What percentage from backlist (previously
released) titles?
Keeping inventory of backlist titles can be expensive, so companies tend to produce multiple printings to meet demand.
To what extent does the company have statewide textbook contracts? If so, when do they expire?
Many states have statewide contracts that can span a five to seven-year adoption cycle.
What is the range of suggested retail prices for the company's books?
Trade hardcover books generally sell for just under $30, paperbacks for $15, mass market books for less than $10.
REGULATIONS, R&D, IMPORTS AND EXPORTS
What products is the company developing?
Some publishers are producing e-books, on-demand books printed onsite at a retail establishment, or custom-publishing
whereby a customer selects which chapters of a book to buy.
To what extent does seasonality affect the company?
Cash flow is highly seasonal in the consumer and education segments due to buying patterns.
What impact do returned books have on the company?
The high rate of returned books is an industrywide problem, reaching up to 40 percent in some categories.
What are the company's criteria for producing foreign editions?
Many publishers produce foreign editions of successful US books, either in English or in foreign languages.
ORGANIZATION AND MANAGEMENT
How does the company hire, train, and retain workers?
Editors usually need expertise in a particular field.
Does the company use mainly a salaried or commissioned sales force?
Salaries are more common in the education market, commissions in the trade market.
If the company owns several imprints, how many have a separate editorial staff?
Publishers have pruned staff in recent years to become more efficient.
How many outside authors and illustrators does the company have contracts with?
Because producing a book may take several years, publishers need many authors to have a steady supply of new
books.
FINANCIAL ANALYSIS
How uneven is the company's cash flow?

10. Sales of trade and education books are highly seasonal.
How much does inventory change throughout the year? What are the peak inventory months?
Inventory varies depending on the segment of the market the publisher sells to.
How has the company’s pricing changed over the past few years?
Prices for trade books have been flat, but prices in some other segments have risen steadily in recent years.
How large a reserve does the company keep in anticipation of returned books?
Reserves may equal 3 percent of sales. In some segments, returns can be much higher.
What is the average collection period on receivables?
Receivables can be fairly high, while inventory and warehousing operations are capital-intensive.
How much does the company spend annually to upgrade its computer systems?
Computers are used extensively in publishing, from composition and editing to printing and inventory management.
BUSINESS AND TECHNOLOGY STRATEGIES
In which specific industry segments does the company foresee growth?
The education segment is expected to grow rapidly in some states.
What are the company’s growth strategies?
The industry is mature, with relatively flat revenue. Publishers have grown mainly through acquisitions.
How much demand does the company expect for electronic versions of books?
E-book sales have grown significantly in recent years.
How has the company utilized websites to sell directly to the public?
John Wiley & Sons' online book revenue, coming primarily from institutional library customers, grew 44 percent in 2010.
Financial Information
COMPANY BENCHMARK INFORMATION
NAICS: 51113
Data Period Last Update 2010
Small Company Data Sales < $1 Million
Table Data Format Mean
All Small Company
Company Count 5484 4863
Income Statement
Net Sales 100% 100%
Gross Margin 56.7% 54.5%
Officer Compensation 2.9% 3.4%
Advertising & Sales 3.0% 2.9%
Other Operating Expenses 46.6% 43.7%
Operating Expenses 52.4% 50.0%
Operating Income 4.3% 4.5%
Net Income 2.0% 2.2%

11. Balance Sheet
Cash 6.6% 6.8%
Accounts Receivable 19.7% 19.9%
Inventory 15.9% 17.0%
Total Current Assets 54.8% 56.9%
Property, Plant & Equipment 4.4% 4.8%
Other Non-Current Assets 40.8% 38.3%
Total Assets 100.0% 100.0%
Accounts Payable 10.4% 11.0%
Total Current Liabilities 29.4% 32.4%
Total Long Term Liabilities 25.9% 31.7%
Net Worth 44.7% 36.0%
Financial Ratios
(Click on any ratio for comprehensive definitions)
Quick Ratio 0.94 0.88
Current Ratio 1.86 1.76
Current Liabilities to Net Worth 65.8% 90.0%
Current Liabilities to Inventory x1.85 x1.90
Total Debt to Net Worth x1.24 x1.78
Fixed Assets to Net Worth x0.10 x0.13
Days Accounts Receivable 66 67
Inventory Turnover x3.00 x2.92
Total Assets to Sales 93.1% 93.7%
Working Capital to Sales 23.7% 23.0%
Accounts Payable to Sales 9.6% 10.2%
Pre-Tax Return on Sales 3.3% 3.6%
Pre-Tax Return on Assets 3.5% 3.8%
Pre-Tax Return on Net Worth 7.9% 10.6%
Interest Coverage x2.13 x2.30
EBITDA to Sales 7.3% 7.6%
Capital Expenditures to Sales 3.6% 3.8%
Financial industry data provided by MicroBilt Corporation - Use our Integra Financial Benchmarking Data for detailed Business Valuation and analysis data
from over 900 industries (SIC & NAICS) and 13 sales size ranges. 2010 data and historical data from 1998-2009 available by subscription or single report
purchase at www.microbilt.com/firstresearch.
ECONOMIC STATISTICS AND INFORMATION
Change in Producer Prices - Bureau of Labor Statistics

12. VALUATION MULTIPLES
Book Publishers
Acquisition multiples below are calculated using at least 3 private, middle-
market (valued at less than $1 billion) industry asset transactions completed
between 2/1998 and 6/2009. Data updated every six months. Last updated:
October 2011.
Valuation MVIC/Net MVIC/Gross
MVIC/EBIT MVIC/EBITDA
Multiple Sales Profit
Median Value 0.5 2.5 N/A N/A
MVIC (Market Value of Invested Capital) = Also known as the selling price,
the MVIC is the total consideration paid to the seller and includes any cash,
notes and/or securities that were used as a form of payment plus any interest-
bearing liabilities assumed by the buyer.
Net Sales = Annual Gross Sales, net of returns and discounts allowed, if any.
Gross Profit = Net Sales - Cost of Goods Sold
EBIT = Operating Profit
EBITDA = Operating Profit + Noncash Charges
SOURCE: Pratt's Stats™ (Portland, OR: Business Valuation Resources, LLC) To purchase more detailed
information, please either visit www.BVMarketData.com or call 888-287-8258.
Industry Forecast
The output of US book publishers is forecast to grow at an annual compounded rate of 3 percent between 2011 and
2016. Data Published: October 2011
Book Publishing Growth Evens

13. First Research forecasts are based on INFORUM forecasts that are licensed from the Interindustry Economic Research
Fund, Inc. (IERF) in College Park, MD. INFORUM's "interindustry-macro" approach to modeling the economy captures
the links between industries and the aggregate economy.
First Research Industry Growth Rating
The First Research Industry Growth Rating reflects the expected industry growth relative to other industries, based on
INFORUM's forecasted average annual growth for the combined years of 2010 and 2011. INFORUM forecasts were
prepared by the Interindustry Economic Research Fund, Inc.
Demand: Driven by demographics
Need product development and marketing skills
Risk: Low growth in some categories
First Research Industry Drivers
Changes in the economic environment that may positively or negatively affect industry growth.
Data provided by First Research analysts and reviewed annually.
Consumer Spending: Change in overall level of consumer spending on goods and services
Technology Innovation: Advances in science and technology, including information technology
Web Links & Acronyms
INDUSTRY WEBSITES
American Booksellers Association
Industry news.
Association of American Publishers
Posts weekly news.
Association of American University Presses
Information about electronic publishing initiatives.
Association of Canadian Publishers
Industry news.
BookWire
Annual industry volume and price statistics.

14. Publishers Weekly
Industry news.
The American Booksellers Foundation for Free Expression
Posts news about efforts for First Amendment protection.
GLOSSARY OF ACRONYMS
AAP - Association of American Publishers
BISG - Book Industry Study Group
NEA - National Endowment for the Arts
NRF - National Retail Federation
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