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4imprint Says Orders Down 80%

As the largest distributor in the promotional products market, 4imprint’s performance can be a bellwether for the industry.

4imprint (asi/197045), the largest distributor by revenue in the North American promotional products industry, said Tuesday, April 7 that its daily order counts have been down 80% in recent weeks as a result of economic disruption tied to the coronavirus pandemic.

David Seekings

David Seekings, CFO, 4imprint

As a result, the publicly traded UK-headquartered company, whose main operations are in Oshkosh, WI, reported that it will not be paying a dividend in May as planned. Not paying the dividend will result in 4imprint being able to keep an additional $16 million in-house. The company said it already had more than $50 million in cash balances at the end of the first quarter of 2020.

“4imprint remains in a strong financial position, with significant liquidity available to weather the storm and emerge in a favorable position,” the company said in a statement.

As the largest distributor in promo, 4imprint’s fortunes can serve as a kind of bellwether for the industry’s overall fortunes. The firm’s precipitous drop in orders appears to be representative of the experience of many in the industry, recent ASI research would indicate.

4imprint said that coronavirus-driven social distancing practices and mandates in play in the United States and the United Kingdom have caused the precipitous decline in orders. Those practices and mandates have led to widespread business closures, event cancellations and related disruptions. Prior to March 10, when sales started to nosedive, 4imprint’s daily order counts for 2020 were up 13% over 2019.

“We anticipate that this limited level of activity is likely to continue until these restrictions begin to be lifted and economic activity starts to improve,” 4imprint said. “Although our locations in Oshkosh, WI and Manchester, UK are closed, the business is running and we are able to provide service to our customers through an expanded ‘work from home’ capability.”

4imprint noted that discretionary costs are being tightly controlled. This includes “radically” re-shaping its marketing/advertising efforts to create a “mix that is appropriate to current circumstances in terms of both type and cost, but equally provides a firm platform to take full advantage of improving conditions when they occur.”

Given the uncertainty over how and when the COVID-19 pandemic will resolve, 4imprint said it is providing no guidance on its projected financial performance for 2020.

4imprint generates the vast majority of its revenue in North America. In 2019, the company’s North American sales were nearly $839.3 million – up 17% over 2018. Combining that tally with global sales (the U.K. and Ireland), 4imprint’s total revenue last year was $860.84 million, also about a 17% rise over 2018. Similarly, after-tax profit leapt more than 21% year over year to $42.71 million.