January 25, 2007 - Modern Distribution Management

January 25, 2007

Case Study: Preempting Problems

Company Snapshot

  • One distribution center and five branches, based in Livonia, MI.
  • Number of employees: 58
  • Key products: Bearings and power transmission

We strive to be problem-solvers in the marketplace by providing end-user training. It's a service the customer values and one that our competition can't easily duplicate. It adds real value to what we offer and helps us build stronger relationships with our end users.

More than eight years ago we began receiving requests from customers for maintenance-related training. We viewed these requests as opportunities for us to grow our business.

We sat down with those customers to determine the specific areas where they needed …

Case Study: Preempting Problems Read More »

Letter to the Editor: What’s Home Depot’s Growth Strategy?

Dear Editor:



I would like to disagree with MDM’s editorial on Home Depot (MDM Jan. 10, 2007) – on several levels.



1) The job of company management, within certain limits, is to maximize shareholder value. HD stock was over $43 in 2000. According to the inflation calculator provided (on the Web) by the Bureau of Labor Statistics, that adjusts (for inflation) to about $50 in 2006. I would guess it will adjust another dollar higher in 2007 money, so make it $51.


Essentially, HD paid Bob Nardelli more than $450 million over six years to go backwards. The spending power of the money invested in HD stock by shareholders who bought the stock the day he was named Big Cheese DECLINED. You cite Nardelli’s accomplishments. If he’s not responsible for …

Letter to the Editor: What’s Home Depot’s Growth Strategy? Read More »

Monthly Wholesale Trade: November 2006

Sales. November 2006 sales of merchant wholesalers, except manufacturers’ sales branches and offices, after adjustment for seasonal variations and trading-day differences but not for price changes, were $331.3 billion, up 1.0% from the revised October level and were up 7.9% from the November 2005 level. November sales of durable goods increased 1.2% from last month and were up 7.7% from a year ago. Compared to last month, sales of motor vehicle and motor vehicle parts and supplies were up 5.0% and sales of electrical and electronic goods increased 2.9 %. November sales of nondurable goods were up 0.7% (+/-0.7%) …

Monthly Wholesale Trade: November 2006 Read More »

Commentary: Don’t Look in the Rear-View Mirror

As the lead article in this issue illustrates, the inflation threat largely driven in 2005 by energy price hikes has moderated, particularly the last few months of the year. Wholesale prices rose 1.1 percent in 2006, compared to 5.4 percent in 2005. But wholesale prices except food and energy – the core inflation rate – moved up 2 percent in 2006 following a 1.4 percent gain in 2005.


Distributors need to look more closely at the stats in their own sectors, as there are a lot of mixed signals. Materials for durable manufacturing increased 13 percent in 2006; prices for materials/components for construction increased 4.3 percent.


But as these pages pointed out (Adam Fein article in Nov. 10, 2006 MDM), distributors really need to watch steroid revenue growth produced …

Commentary: Don’t Look in the Rear-View Mirror Read More »

MDM News Digest 3702

Apollo Management, which also recently invested in Rexnord, has made an investment in Bradco Supply Corp., a roofing distributor based in Avenel, NJ. Bradco has more than 150 branches in the U.S. Bradco founder Barry Segal says the investment is a great opportunity to significantly grow the company.” More …

Global fastener distributor The Wurth Group, based in Germany, recorded 12 percent sales growth in fiscal 2006 to 7.74 billion euro, or US$9.9 billion. Outside of Germany, sales increased by 11.8 percent to 4.62 billion euro, or US$5.96 billion. Profit grew by 16.5 percent overall.

MDM News Digest 3702 Read More »

Inflation Softens in 2006

Click here for charts showing inflation by product group – 16 products, including tools, fasteners, machinery/equipment, fluid power, and others, are displayed in this document.

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This is an overview of wholesale price inflation trends in the past year for commodities in industrial and construction channels. Overall, core inflation rose 1.1 percent in 2006 -a significant slowdown from 2005. But the Federal Reserve still sees inflation as a potential threat in the next year, albeit at lower levels.

Thanks to a slowdown in energy price increases, wholesale prices rose 1.1 percent in 2006, in contrast to the 5.4 percent rise in 2005, the Bureau of …

Inflation Softens in 2006 Read More »

Distribution Financial Metrics and Trading Multiples

This table highlights key financial metrics and trading multiples for 30 publicly traded distributors in the industrial and building products industries. Download the pdf in this article to see the data. Also find graphic illustrating median EBIDTA multiples for the same distribution companies.



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These materials,&nbsp ; prepared by Robert W. Baird & Co. for MDM are for informational purposes …

Distribution Financial Metrics and Trading Multiples Read More »

MDM January 25, 2007

This is the pdf of this issue of Modern Distribution Management. Apply the full $24.95 pay-per-view cost toward an annual subscription (within 30 days of purchase), which includes two issues a month plus access to more than six years of online archives and market data. Call 1-888-742-5060 or email info@mdm.com to …

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