January 2007 - Page 2 of 3 - Modern Distribution Management

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January 2007

Fastenal Sales Up 18.8% in 2006

Building Materials/Construction, Companies, Fasteners, Free, News, Subscriber Only, Top Distributor Sectors /

The Fastenal Company, Winona, MN, reported sales for the year ended Dec. 31, 2006, were $1.8 billion, an increased of 18.8% over 2005. Profit increased 19.3% to $199,038.


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Sales for the fourth quarter ended Dec. 31, 2006, were $448,729, an increase of 16.8% over the same period last year. Profit increased 16.4% to $45,570.


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In 2006, Fastenal opened 245 new sites, representing an increase in stores of 14%. Fastenal operated 2,000 sites on Dec. 31. Employees grew to 7,174, up 12.2% from 2005.


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Details here.

Related Links:
Fastenal 3Q Sales Up 16.9% …

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Industrial Production Rises 3% in 2006

Economic Trends, Free, News, Research & Analytics, Subscriber Only /

Industrial production rose 0.4% in December after a decrease of 0.1% in November. Output in November was previously estimated to have advanced; weaker data for a number of industries, particularly steel, led to the downward revision.


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For the fourth quarter as a whole, industrial production decreased 0.5% (annual rate). In the manufacturing sector, output increased 0.7% in December, and most major industry groups registered gains.


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The output of utilities fell 2.6%, the result of relatively mild temperatures during the month, while the output of mines moved up 0.8%.


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Over the 12 months ending in December, total industrial production increased 3.0%, to a level that was 112.4% of its 2002 average, and total …

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Rexel Posts 11% Organic Sales Growth in 2006

Companies, Electrical, Free, News, Subscriber Only, Top Distributor Sectors /

Rexel reported sales for fiscal 2006 at 9.3 billion euro, or $12.1 billion, up 26% from 2005, and up 11.1% on a comparable basis (same scope of consolidation, exchange rates and business days).


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In North America, Rexel sales reached $5.2 billion, up 12.2% on a comparable basis from last year. Sales for the fourth quarter were $1.62 billion, up 4% from the same period a year ago on a comparable basis.


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Sales in Europe reached $5.9 billion for the year. Operations there posted double-digit growth.


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Overall, sales for Rexel in the fourth quarter were $3.5 billion.


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CEO Jean-Charles Pauze said that the performance, in part, reflects increases in …

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ElkCorp Receives Second Buyout Offer

Building Materials/Construction, Finance, Free, Mergers & Acquisitions, News, Subscriber Only, Top Distributor Sectors /

ElkCorp, Dallas, TX, manufacturer of roofing and building products, has received another offer to purchase all of ElkCorp’s outstanding shares for $42 a share by an affiliate of Building Materials Corporation of America.


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The special committee and board of directors, consistent with its recently announced merger agreement with The Carlyle Group, will review the offer and make a recommendation to ElkCorp’s shareholders.


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On January 16, 2007, ElkCorp announced that it has entered into an amended merger agreement with Carlyle, under which Carlyle commenced an offer to acquire all of ElkCorp’s outstanding shares for $40.50 per share. The revised Carlyle tender offer represents a $2.50 increase over the $38.00 price per share provided in the …

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SKF Acquires Preventive Maintenance Company

Fasteners, Finance, Free, Mergers & Acquisitions, News, Power Transmission/Motion Control/Fluid Power, Subscriber Only, Top Distributor Sectors /

SKF has acquired the Preventive Maintenance Company Inc., Elk Grove Village, IL. PMCI has 70 employees with annual sales of about $10 million.


PMCI is in Predictive Maintenance services for industrial customers in the pulp and paper, metals, food, automotive and other industries. The PMCI acquisition strengthens SKF in reliability services, condition monitoring products and maintenance strategies.


The integration of PMCI into the SKF Group has just started.

Related Links:
 SKF Group Sales Grow 8.3% in First Half
SKF to Buy Austrian Industrial Seals Co.

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Applied Industrial Sales Up 4% in 2Q

Companies, Free, News, Subscriber Only, Top Distributor Sectors /

Applied Industrial Technologies, Cleveland, OH, reported sales increased 4% in the second quarter 2007 to $472.36 million. Profit grew 21% to $18.5 million.


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For the six months ended Dec. 31, 2006, sales increased 7% to $964.9 million from $899.3 million in the same period last year. Profit was up 23% to $39.7 million.


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Applied CEO David Pugh said: Although our sales growth was softer than we expected, we believe the economic outlook suggests continued growth through our fiscal year.&nbsp ; We are actively managing our business and are working to keep costs in line with the slower pace of the economy. Based on the current state of the industrial economy, and with six months of results under our belt, we now expect our year-end sales to …

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Apollo Management Takes Stake in Bradco Supply

Building Materials/Construction, Finance, Free, Mergers & Acquisitions, News, Subscriber Only, Top Distributor Sectors /

Apollo Management, which also recently invested in Rexnord, has made an investment in Bradco Supply Corp., a roofing supply distributor based in Avenel, NJ. Bradco has more than 150 branches in the U.S.


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We are happy for the relationship with Apollo, said founder Barry Segal. In a short period of time we have become comfortable with the chemistry and we see this as a great opportunity to significantly grow the company.”


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Apollo is a private equity, debt and capital markets investor with offices in New York, London and Los Angeles.


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More Breaking …

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Nov. Power Transmission/Motion Control Sales Up 10.7% YTD

Economic Trends, Free, News, Power Transmission/Motion Control/Fluid Power, Research & Analytics, Subscriber Only, Top Distributor Sectors /

In November, U.S. distributors’ year-to-date sales of power transmission/motion control products climbed 10.7% as compared to sales for January through November 2005, according to the latest November trend data released by the Power Transmission Distributors Association. Sales fell 3.6% over the previous month and were up 7.8% as compared to November 2005.


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Days sales in accounts receivables rose 1.3% as compared to October 2006 and increased 2.9% as compared to the same month last year.&nbsp ; Annualized sales to inventory ratio in November was 8.3, compared to 7.9 in 2005.


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For November, the confidence level of U.S. distributors decreased to 6.2 from 6.3 in October on a 10-point scale.


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Canadian distributors’ …

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Wholesale Prices Rise 1.1% in 2006; 0.9% in December

Economic Trends, Free, News, Research & Analytics, Subscriber Only /

Wholesale prices rose 1.1% in all of 2006, in contrast to the 5.4% rise in 2005, the Department of Labor reported. The government attributed the slower rate of advance to the index for finished energy goods, which fell 2% in 2006 after climbing 23.9% a year earlier. Otherwise, wholesale prices except foods and energy moved up 2% in 2006 following a 1.4% gain in 2005.


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At the earlier stages of processing, prices received by intermediate goods producers increased 2.8% in 2006 compared with an 8.6% advance in the preceding year, while the crude goods index declined 2.4% after moving up 21.1% in 2005.


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Wholesale prices rose 0.9% in December, seasonally adjusted. The rise follows a 2% advance in November and a 1.6% decline in October. At the …

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More Management Changes at Home Depot

Free, News, Subscriber Only /

The Home Channel News reports that more management changes are expected at The Home Depot following CEO Bob Nardelli’s resignation this month.


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Already, Harvey Seegers, president of Home Depot Direct, was replaced by Steve Skinner, who will oversee the online and catalog division. Skinner had worked under Seegers previously.


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John Campi, the senior vice president for global sourcing and vendor management, resigned as well. He will be replaced by Brian Robbins, HCN reported.


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Both Seegers and Campi came over to HD with Nardelli from GE.

When Nardelli left, Joe DeAngelo, HD Supply chief, was promoted to Chief Operating Officer, giving him more retail …

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Wurth Grows 12% in 2006

Fasteners, Free, News, Subscriber Only, Top Distributor Sectors /

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


Profit grew by 16.5% overall.


In 2006, Wurth grew its staff by 8.2%, and its sales representatives by 5.6% to 29,020 worldwide.


The Wurth Group also expanded to Mongolia in 2006, bringing the group to 83 countries.


Related Links:
Wurth Service Supply Reports 28.5% Sales Increase in 2005

More Breaking …

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Ferguson Buys $148M Plumbing Distributor

Finance, Free, HVACR, Mergers & Acquisitions, News, Plumbing Products & PVF Distribution, Subscriber Only, Top Distributor Sectors /

Ferguson has acquired Cal-Steam Supply Inc., a distributor of plumbing products with 10 locations in the San Francisco Bay area. Cal-Steam had sales of $148.6 million in the year ended Dec. 31, 2005.


Ferguson’s parent company, Wolseley, says the acquisition will benefit from its new Stockton, CA, distribution center to be completed later this year.


Ferguson has also acquired Guntersville Fabrication and Sprinkler Co. Inc. and Guntersville Pipe and Supply. Guntersville distributors and fabricates fire protection systems with three locations in the Southeast. It serves Ohio, Florida, Georgia and Louisiana.


Guntersville had sales of $31.5 million in the year ended Oct. 31, 2006.

Related Links:

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U.S. Wholesale Revenues Up 1% from October

Economic Trends, Free, Research & Analytics, Subscriber Only /

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% (+/-0.5%) from the revised October level and were up 7.9% (+/-1.2%) from the November 2005 level. The October preliminary estimate was revised upward $0.4 billion or 0.1%. November sales of durable goods increased 1.2% (+/-0.8%) from last month and were up 7.7% (+/-1.8%) from a year ago.&nbsp ;


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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%) …

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Construction to Moderate in 2007

Building Materials/Construction, Economic Trends, Research & Analytics, Subscriber Only, Top Distributor Sectors /


Overall U.S. construction in 2007 is forecast to slow from previous levels, thanks to a downturn in residential building, according to recent reports. But nonresidential construction should stay relatively strong in the new year, with institutional and commercial building leading the way.


McGraw-Hill Construction reports total construction starts will drop 1 percent in 2007. Housing starts will fall 5 percent, with both single and multifamily housing taking a hit.


A large backlog in unsold homes suggests home construction may be slow to turn around, but most analysts expect declines to moderate in 2007, according to the Fed. Housing demand may also improve in 2007.


McGraw-Hill reports that retail construction will decline as housing starts slow. Retail …

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Commentary: HD Supply Strategy Bigger Than One Guy

Free, Management, Perspective, Strategy, Subscriber Only /

Hype and speculation tend to follow an industry consolidator. The announcement last week that Home Depot CEO Bob Nardelli was ousted from his position over pay issues and lagging stock gains generated an inordinate amount of buzz. Some even claimed it is a repudiation of the Home Depot model itself and its relatively recent strategy to aggressively grow the wholesale distribution division.


Hardly. All we know versus a week ago is that HD has $210 million less to fund acquisition activities that instead went to Mr. Nardelli’s severance package (Wouldn’t you like to be chastised like that?). Now that will really slow the acquisition pace of HD Supply….


What’s lost in the shock value of the pay deal is that Home Depot’s net income in the most recent quarter, ended …

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MDM News Digest 3701

Free, Subscriber Only /

Strategic Distribution, Inc., Bristol, PA, has agreed to be bought out by Platinum Equity in a deal worth $30 million. The deal stipulates that Strategic Distribution will merge with Project Eagle Holding Corp. and Project Eagle Merger Corp., each a Platinum Equity portfolio company. Strategic reported revenues of $136.9 million in 2005 and a net loss of $3.4 million. Platinum Equity has been busy in the industrial sector, recently buying Textron Fastening Systems for $630 million and PNA Group Inc., a $1.2 billion processor and distributor of steel products. More …

Kennametal Inc., Latrobe, PA, has agreed to acquire Federal Signal …

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MDM Inflation Index: November 2006

Economic Trends, Research & Analytics, Subscriber Only /

Modern Distribution Management’s November Inflation Index, which measures a cross-section of industrial supplies, was up 0.20% from the previous month, and up 4.04% from November 2005.

Summary of&nbsp ; MDM Inflation Index for the past 12 months:

November 2006 Index 266.5
October 2006 Index 265.9
September 2006 Index 265.6
August 2006 Index 265.2
July 2006 Index 264.0
June 2006 Index 263.0
May 2006 Index 262.1
April 2006 Index 262.1
March 2006 Index 262.1
Febuary 2006 Index 261.2
January 2006 Index 260.2
December 2005 Index 258.1
November 2005 Index&nbsp ; 256.1


Please click below on Related Document to view a detailed calculation of the&nbsp ; MDM Inflation Index for November 2006, listing the ten …

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MSC Keeps Eye on ISM Index

Companies, Economic Trends, Research & Analytics, Subscriber Only /

MSC Industrial Direct Inc., Melville, NY, said in a recent conference call with investors that it has seen a slowdown in revenue growth in the past few months.


We’re mindful of the ISM index and its historic correlation to our growth rate, CEO David Sandler said of the Institute for Supply Management’s monthly manufacturing report. While we believe a number of marketing and sales initiatives will moderate its impact … it is apparent that three to six months of ISM weakness has modestly affected our revenue growth and will probably continue to do so in the next couple of quarters if past experience proves out.”


Still, thanks in part to its acquisition of J & L Industrial Supply last year from Kennametal, the industrial MRO distributor recorded an increase in sales …

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MDM January 10, 2007

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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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