April 2007 - Page 2 of 4 - Modern Distribution Management

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April 2007

13 Lawson Products Sales Agents Accused in Kickback Scheme

Companies, Free, Legal Issues in Wholesale Distribution, News, Operations, Subscriber Only, Top Distributor Sectors /

Thirteen sales agents for Lawson Products, Des Plaines, IL, have been indicted on federal fraud charges. The sales agents are accused of paying kickbacks totaling $140,000 to employees of some of their customers, including suburban municipalities, school districts, a federal agency, a non-profit organization and private businesses.

They disguised kickbacks as purchasing incentives, according to the Chicago U.S. Attorney’s office. In return, the sales agents allegedly obtained higher sales commissions based on greater volume and prices.

Eleven of the defendants were charged in six separate cases in Chicago, while two additional cases were filed in Dayton, OH, and Philadelphia, PA. All of the cases involve commissioned sales agents for Lawson Products, Inc., or its …

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Commentary: Channel Conflict Appears When Visibility Disappears

Management, Perspective, Sales & Marketing, Strategy, Subscriber Only /

Channel dynamics, as our lead article explores, have arguably never been more complex or more fluid. One of the core concepts as this article came together was the need to have a clear line of visibility from manufacturer to end-user customer. With so many variables at play, visibility seems to be one of the few constants.

Channel conflict appears when clarity disappears, whether in communication, policies, discount structures or behaviors. There is no right answer, yet there are great examples of consistent and clear approaches that are working.

Ten years ago, the hot issue was how integrated supply was radically altering traditional channel relationships. Power was shifting to the customer. The redundancies and inefficiencies of traditional channels were ripe for …

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Anixter Sales Grow 24% in 1Q

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

Anixter International Inc., Glenview, IL, distributor of communication products, electrical and electronic wire & cable and a distributor of fasteners and other small parts, reported sales of $1.33 billion in the first quarter 2007, up 24% from the same period last year. Profit was up 71% to $53.6 million.
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Sales for the quarter include $33.6 million from the acquisitions of IMS Inc. in May 2006 and MFU Holdings S.p.A. in October 2006.
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Sales in the first quarter grew at a year-over-year organic rate of 19%.
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Anixter reported seeing strong larger project business, especially in data center builds in the enterprise cabling market and energy/natural resources customers within the electrical wire and cable market. Anixter …

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Pentair 1Q Sales Buoyed by Foreign Markets

Free, News, Subscriber Only, Top Distributor Sectors /

Pentair, Inc., Golden Valley, MN, sales increased 5% in the first quarter 2007 to $808 million from the first quarter of 2006. Profit was flat from the same period a year ago.

Pentair reported challenges due to slowing North American residential housing starts and headwinds in the electronic markets, as well as consolidation in the telecommunication industry.

The Water Group delivered strong year-over-year sales performance with sales of $555 million, up 7% over the same period last year. Organic sales growth, excluding the Jung Pump acquisition, was 5%.

Continued growth in China and in emerging markets in Asia-Pacific as well as continued success in penetrating markets in Europe and the Middle East contributed to Water’s overall growth. Sales …

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Thomas & Betts Sales Up 7.4% in 1Q

Electrical, Free, HVACR, News, Plumbing Products & PVF Distribution, Subscriber Only, Top Distributor Sectors /

Electrical and HVAC manufacturer Thomas & Betts Corporation, Memphis, TN, reported sales increased 7.4% in the first quarter 2007 to $474.6 million. Price increases to offset higher material and energy costs and volume improvements contributed to the sales increase. Profit was down slightly from the prior-year period.
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Thomas & Betts reported that demand remains positive in industrial and utility markets and is starting to strengthen in commercial construction markets.
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Electrical segment sales were $389.2 million in the first quarter, up 8.8% compared to the first quarter 2006. Electrical segment earnings were $64.9 million in the quarter, up 11.4% compared to the first quarter 2006. As a percent of sales, segment earnings were 16.7%.
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Rexel Reports Flat Growth in North America

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

Paris-based electrical distributor Rexel Inc. reported sales of 2.576 million euro (US$3.509 billion) in the first quarter 2007, up 31% from the same period last year. Growth was 5.9% on a comparable basis.
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Rexel saw double-digit organic growth in Europe and Asia-Pacific, with flat sales in North America.
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Sales in the U.S. grew 1.1%. The West Coast, Florida and Mid-Atlantic regions, where Rexel has higher exposure to residential activity, were hit by the decline of residential and related commercial construction projects. The South Central and Southern regions, where industrial activity is stronger than construction, fueled organic growth. Industrial and automation equipment posted growth of 4.5% for the quarter.
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Canada saw growth of 2.5% …

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WESCO 1Q Sales Up 15%

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

WESCO International Inc., Pittsburgh, PA, distributor of electrical MRO products and construction materials, reported sales of $1.45 billion in the first quarter 2007, up 15% from the same period a year ago. Sales from the acquisition of Communications Supply Corp., purchased in the fourth quarter 2006, were about $160 million.
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Profit was $48.2 million, up from $44.5 million in the same period a year ago.
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Core electrical sales rose 2%, while sales at CSC added 13% to consolidated sales revenue.
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WESCO had 2006 sales of $5.3 …

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SKF Group Sales Grow 8% in 1Q

Free, News, Power Transmission/Motion Control/Fluid Power, Subscriber Only, Top Distributor Sectors /

SKF reported sales of SEK 14,371 million (US$2.131 billion) in the first quarter 2007, up 8.1%. Profit was up by 4.9%.
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SKF reported that sales were significantly higher in Europe and Asia. Sales in North America were relatively unchanged and sales in Latin America were higher.
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The market demand for SKF’s products and services in the second quarter of 2007 is expected to be higher. The demand is expected to be higher in Europe and Latin America, significantly higher in Asia and relatively unchanged in North America. The demand is expected to be higher in the Industrial and Service Division and slightly higher in the Automotive Division. …

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Housing Starts Down 23% Year-Over-Year

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

Building Permits
Privately-owned housing units authorized by building permits in March were at a seasonally adjusted annual rate of 1,544,000, according to the U.S. Census Bureau and the Department of Housing and Urban Development. This is 0.8 percent (& plusmn; 1.0%) …

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Sandvik Buys UK Manufacturers

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

Sandvik, Stockholm, Sweden, has agreed to buy Extec Screens and Crushers Ltd., based in Birmingham, UK.
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Sandvik has also agreed to buy Fintec Crushing and Screening Ltd., Belfast, UK.
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Extec and Fintec, respectively, are manufacturers of mobile crushing and screening equipment, including consumables and services to the international construction industry.
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Extec employs 450 people and had sales of 1800 MSEK (US$266.4 million) in 2006. It has manufacturing facilities in Birmingham and Northern Ireland as well as sales and service facilities in Australia, the U.S. and Germany.
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Fintec employs 325 people and had sales of 560 MSEK (US$82.9 million) in 2006.
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Sandvik is a global industrial group focused on tools for …

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Illinois Tool Works Sales Up 14% in 1Q

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

Illinois Tool Works Inc., Glenview, IL, reported sales increased 14% in the first quarter 2007, and profit went up 10%. Revenue was $3.76 billion.
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The increase came from strong results in international end markets tempered by slowing growth in a number of North American end markets. Total company base revenues grew 1%, with international base revenues increasing 8.9% and North American revenues declining 3.5%. Acquisitions added 10.7% to first-quarter revenues.
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North American Engineered Products first quarter revenues were slightly negative as base revenues declined 6.5% and acquisitions added 6.7%. Base revenues declined principally as a result of end market weakness in the residential construction and Detroit 3 automotive markets as well as a slowing across …

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Applied Industrial Sales Grow 5% in 3Q

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

Applied Industrial Technologies, Cleveland, OH, reported sales increased 4.8% to $521.1 million in the third quarter 2007 ended March 31, 2007. Profit was up 14%.
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For the nine-month period ended March 31, sales were up 6.4% to $1.486 billion. Profit was up 21%.
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With more than 440 facilities and 4,600 employee-associates across North America, Applied Industrial Technologies is an industrial distributor that offers more than 2 million parts to MRO and OEM customers.&nbsp ; For its fiscal year ended June 30, 2006, Applied posted sales of $1.9 billion.&nbsp …

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Home Depot Launches Eco Options Line

Free, News, Sales & Marketing, Subscriber Only /

The Home Depot, Atlanta, GA, has launched its Eco Options program in the U.S. Eco Options is a classification that allows customers to easily identify products that have less of an impact on the environment.
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The Home Depot has identified more than 2,500 Eco Options products, including all-natural insect repellents, cellulose insulation, front-load washing machines, organic plant food and vegetables in biodegradable pots. The array of Eco Options also includes compact fluorescent light bulbs, programmable thermostats and certified wood.
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Products with the Eco Options label are either eco friendly by definition, such as solar lights that use natural power, or have met certain environmental performance criteria verified by Scientific Certification Systems, an …

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Air Liquide Buys Engineering Firm

Finance, Free, Gases & Welding Equipment, Mergers & Acquisitions, News, Subscriber Only, Top Distributor Sectors /

Air Liquide, Paris, France, has acquired the engineering firm Lurgi, which is owned by Global Engineering Alliance, based on an equity value of 550 million euros, equivalent to an enterprise value of 200 million euros.
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The acquisition accelerates the growth of the Large Industries World Business Line, strengthening Air Liquide’s position in hydrogen markets and providing access to Coal to Lquid and Coal to Chemicals sectors.
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With nearly 1,300 employees and total sales of around 850 million euros in 2006, Lurgi, a German-based company, produces hydrogen and synthesis gas to biofuel production processes. Lurgi’s main engineering centers are situated in Germany, Poland, United States, India and South Africa.
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Air Liquide has five Engineering …

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Becker Electric Buys Eastgate Electric

Electrical, Finance, Free, Mergers & Acquisitions, News, Subscriber Only, Top Distributor Sectors /

Becker Electric Supply, Dayton, OH, has purchased Eastgate Electric Supply Inc., Richmond, IN. The acquisition adds three new offices and 25 employees, the Dayton Business Journal reported.
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Becker now has 12 branches in Ohio, Indiana, Kentucky and …

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Actuant Acquires Dutch Manufacturer

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

Actuant Corporation, Milwaukee, WI, has acquired T.T. Fijnmechanica B.V. for $20 million.
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Headquartered in Roermond, The Netherlands, TTF supplies products and systems for use in the bridge building, infrastructure and heavy lifting markets. Products include wedges, anchor heads, multi-strand jacks, and heavy lifting systems. TTF generated $10 million in sales in 2006, and has 30 employees.
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TTF will operate within Actuant’s Enerpac business, which is part of Actuant’s Industrial Segment.
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Actuant is a diversified industrial company with operations in more than 30 countries. The Actuant businesses focus on highly engineered position and motion control systems and branded hydraulic and electrical tools and supplies. Actuant has sales of …

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Global Industrial Show Highlights Innovation

Research & Analytics, Subscriber Only, Top Distributor Sectors /

Tuesday, April 17. I’m finishing my second day at the Hannover Fair in Hannover, Germany. In its 60th year, it is a collection of 13 industrial trade fairs at one site. The scale and scope of this global event is amazing, humbling and exhausting. That’s from someone who sometimes feels like half of life is spent at trade shows and conferences. Manufacturers, distributors and customers may in fact be consolidating, but this week is proof that the world of industrial products remains extremely fragmented. First impressions: I did not know there were so many manufacturers of electric motors, bearings, seals, and a long list of other products. The robotics and factory automation systems on display are simply incredible in terms of the combination of software with a range of …

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Grainger Sales Up 9% in 1Q

Companies, Facilities Maintenance (MRO), Free, News, Subscriber Only, Top Distributor Sectors /

Grainger, Chicago, IL, reported sales of $1.5 billion in the first quarter, up 9% from the first quarter 2006. Profit increased 18% to $102 million.
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Daily sales increased 8% in January, 10% in February and 9% in March. The company’s sales were positively affected by 1 percentage point for strong sales of seasonal products and negatively affected by 1 percentage point as the company unwinds low-margin contracts for automotive and integrated supply customers.
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Sales in the branch-based segment in the U.S., Mexico and China increased 10% in the first quarter. Daily sales grew by 9% in January, 11% in February and 11% in March.
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Sales in the U.S. were up 10%. The strongest sales growth in the U.S. came from government customers followed by …

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Eaton Posts 5% Sales Gain in 1Q

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

Diversified industrial manufacturer Eaton Corporation, Cleveland, OH, reported an increase in sales of 5% in the first quarter 2007 to $3.2 billion. Profit was $234 million, up 15%.
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Sales growth in the first quarter included 1% from organic growth, 2% from acquisitions, and 2% from higher foreign exchange rates. End markets declined slightly more than 1% in the quarter, driven by the decline in the NAFTA heavy-duty truck market.
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Eaton reported it anticipates a decline of 3-4% in its end markets in 2007, due to the decline in the NAFTA heavy-duty truck market.
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Eaton saw weaker conditions in the first quarter in the North American markets for residential electrical equipment and hydraulics.
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Sales for the Electrical segment …

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Inflation Up 1% in March

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

The Producer Price Index for Finished Goods increased 1.0 percent in March, seasonally adjusted, the Bureau of Labor Statistics of the U.S. Department of Labor reported. This advance followed a 1.3 percent rise in February and a 0.6-percent decrease in January. The index for finished goods excluding foods and energy, or core inflation, was unchanged in March after moving up 0.4 percent in February.
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At the earlier stages of processing, prices received by producers of intermediate goods increased 1.0 percent in March following a 1.1-percent advance a month earlier, and the crude goods index rose 3.2 percent after climbing 8.9 percent in February.
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Among finished goods, the index for consumer goods less foods and energy edged up 0.1 percent in March following a …

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