February 2008 - Page 4 of 5 - Modern Distribution Management

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February 2008

Thomas & Betts Sales Up 14% in 2007

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

Thomas &Betts Corp., Memphis, TN, had sales of $2.1 billion for the full-year 2007, up 14.4% over 2006. Net earnings from continuing operations were $183.7 million.
 
Thomas &Betts completed four acquisitions in the year.
 
The 14.4% year-over-year sales growth was driven by solid demand in industrial and commercial markets and, to a lesser extent, price increases. Acquisitions contributed 6% to the sales increase.
 
The fourth-quarter sales increased 24% to $602.4 million. Acquisitions contributed 16% to the overall sales growth. Core growth was due to volume gains in industrial markets. Net earnings from continuing operations were $48.7 million. …

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PT/MC Sales Growth Slowing

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

The Power Transmission Distributors Association (PTDA) reported that distributors and manufacturers in North America experienced overall growth in sales in 2007. Confidence in the market (as measured on a scale of 1 to 10 with 10 being most optimistic) has eroded slightly, holding a current neutral position between 5.0 and 5.8 versus a range of 5.1 to 6.6 at year-end 2006.
 
While still in the positive, growth in sales of PT/MC products is definitely slowing. Following three years of double-digit growth, U.S. distributors’saw a 6.8 percent increase in PT/MC product sales in 2007. The annualized sales-to-inventory ratio for 2007 was up to 7.6, compared to 7.3 in 2006.
 
Canadian distributors also continued to experience growth in PT/MC sales, again at a …

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Grainger Responds to Allegations of Overcharging the Government

Companies, Facilities Maintenance (MRO), Free, Legal Issues in Wholesale Distribution, News, Operations, Subscriber Only, Top Distributor Sectors /

Chicago-based Grainger responded to a complaint filed in U.S. District Court in Eastern Wisconsin alleging the distributor had overcharged the U.S. government as well as illegally relabeled products manufactured in non-trade agreement countries so they could be sold to the U.S. government.
 
Grainger said in a press release that it will meet with the Justice Department to address the issues brought up in the complaint, which was recently unsealed by the U.S. Department of Justice. “The company takes this allegation seriously,” Grainger said. “Although Grainger believes the company has fully complied with its contract, it intends to carefully review the allegations to ensure it meets its obligations to its …

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Setting a Retirement Date

Management, Strategy, Subscriber Only /

It's not easy to grasp the idea of a retirement date, says Evergreen Consulting's Brent Grover in the MDM Audio Conference, Succession Planning: Leaving Your Business Better."This is very long-range planning,"he says.

Grover went through the same thing in 1982. At that time, he was working in the family's distribution business founded by his grandfather. The second generation needed to set a retirement date.

Grover compared the situation to a Patek Philippe watch ad: "Their advertisement says that you never actually own one, you merely look after it for the next generation."

Some companies operate that way, and "live"to pass the company on to the next generation. "I was fortunate that I came from a family that did plan,"Grover says.

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MDM Interview: The Role of the Master Distributor

Companies, Operations, Paper Products & Packaging Distribution, Subscriber Only, Top Distributor Sectors /

United Stationers, with sales approaching $5 billion, is a master distributor of business, foodservice and janitorial supplies, and recently moved into the industrial space with the purchase of ORS Nasco, a master distributor of industrial supplies with sales of close to $300 million.


MDM recently sat down with United Stationers’CEO Dick Gochnauer to talk about United’s recent move into the industrial sector, as well as what the company is seeing in the various market segments it serves. United Stationers has recently embarked on a journey to expand its e-commerce capabilities with its distributor customers.

It also plans to spread best practices from its core competency -office products distribution -into other segments: JanSan (served by its …

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New No-Match Regs Protect Employers

Human Resources in Wholesale Distribution, Legal Issues in Wholesale Distribution, Operations, Subscriber Only /

U.S. Immigration and Customs Enforcement (ICE) recently announced new regulations to help employers take proper steps when they learn that worker authorization information in their files is incorrect and to protect themselves from civil or criminal sanctions for knowingly employing unauthorized workers.

Since the passage in 1986 of the Immigration Reform and Control Act, employers have had to verify the identity and work authorization of all individuals, by completing an I-9 form within three days after the start of their employment. Most employers are familiar with the I-9 form, and verify work authorization by a driver's license or other form of photo identification and a social security card.

It is unlawful for employers to hire a person not …

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Monthly Wholesale Trade: Sales & Inventories December 2007

Economic Trends, Research & Analytics, Subscriber Only /

Sales. December 2007 sales of merchant wholesalers, except manufacturers’sales branches and
offices, were $376.6 billion, down 0.7 percent from the revised November level and up 10.6 percent from December 2006, said the U.S. Census Bureau. The November preliminary estimate was revised downward $1.1 billion or 0.3 percent. December sales of durable goods were down 2.0 percent from last month, but were up 1.6 percent from a year ago. Compared to last month, sales of electrical and electronic goods were down 4.3 percent and sales of computer and computer peripheral equipment and software were down 4.0 percent. Sales of nondurable goods were up 0.4 percent from last month and were up 19.3 percent from last year.

Inventories. Total inventories of merchant …

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Craig Riley Joins Modern Distribution Management Team

Free, Subscriber Only /

Craig Riley has joined Modern Distribution Management as Associate Publisher to help grow MDM’s online information and education services focused on wholesale distribution. The move follows a year when MDM saw its weekly e-newsletter base grow 35 percent, and its daily Web site traffic increase 50 percent.

Riley has more than 20 years of publishing and sales experience, most recently as publisher of Industrial Distribution magazine. Riley will have responsibility for working with MDM’s existing online marketing partners and for developing MDM’s online advertising and sponsorship programs internationally.

Our online offerings are focused to help wholesale distribution executives stay informed and ahead of the curve,”said Tom Gale, MDM publisher and president of …

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MDM February 10, 2008

Subscriber Only /

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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Wholesale Revenues Rise 9.2% in 2007

Economic Trends, Research & Analytics, Subscriber Only /

Wholesaler-distributor revenues were $4.316 trillion last year, up 9.2 percent from 2006, unadjusted for seasonal variations. Wholesale revenues for durable goods were up 5 percent, and nondurable goods sales were up 13 percent.

Here’s the breakdown in sales by sector for 2007:

Automotive……………………………….. 2%           
Furniture…………………………………… 8%           
Lumber………………………………….. -13%           
Apparel…………………………………… 5%
Prof. Equipment…………………………. …

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Commentary: Master distribution evolves with shifting markets

Perspective, Research & Analytics, Subscriber Only /

The role of master distribution has shifted significantly. That’s why we wanted to understand more clearly why United Stationers diversified with the acquisition of ORS Nasco in December.
 
Dick Gochnauer addresses (see page 1 interview) how United adds value in two places: marketing and logistics. Different forms of support services have evolved to fill these two needs in highly fragmented and consolidating markets. These include buying/coop/marketing groups, master wholesalers, hybrid catalog/master distributors, independent logistics providers (CoLinx in power transmission) and joint ventures between manufacturers (PTPlace.com). There’s a mix of competition and cooperation across all these entities.
 
Distributors and manufacturers have leveraged these tools to …

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MDM News Digest 3803

Free, Subscriber Only /

HD Supply, Orlando, FL, will not move forward with its deal to sell its HVAC business to Watsco, Coconut Grove, FL, HD Supply spokeswoman Erica Crosling confirmed to MDM. The potential sales of the HVAC business to Watsco was always dependent up on a transaction that was beneficial for our customers and associates, and maximized value for the company,”Crosling said. “After carefully weighing the options and taking these concerns into consideration, we have decided to retain and grow our HVAC business.”More
ProBuild Holdings, Denver, CO, supplier of building materials to professional contractors, has finalized its purchase of substantially all of the assets of Atlanta, GA-based HD Supply …

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Beacon Roofing Supply Core Sales Fall 12.2% in 1Q

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

Beacon Roofing Supply, Inc., Peabody, MA, reported sales were up 4.8% to $398.4 million in the first quarter 2008 ended Dec. 31, 2007. The increase was due to $64.7 million in acquired sales.
 
Organic growth was down 12.2%, caused by declines of 18.9% and 15.2% in residential roofing and complementary product sales, respectively, with non-residential roofing sales in existing market down just 0.1%.
 
Profit for the quarter was $5.2 million, a decline of 40.5% from the prior-year …

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ProBuild Buys Jasper Lumber

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

ProBuild Holdings, Denver, CO, supplier of building materials to professional contractors, has acquired North Atlanta-based Jasper Lumber Company.
 
The Jasper purchase follows closely on the heels of ProBuild’s acquisition of HD Supply’s Lumber and Building Material business, which operates as Williams Bros. Lumber in Atlanta.
 
Jasper Lumber comprises a lumber yard, truss and millwork manufacturing facility in Kennesaw and a lumber distribution business located in Cumming.
 
Jim Cavanaugh, ProBuild South region president, said: This acquisition, along with the previously announced acquisition of HD Supply’s LBM operation, positions us well to serve all segments of the Atlanta market.”  
 
ProBuild has made 12 …

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Saint-Gobain Abrasives Buys Moyco

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

Saint-Gobain Abrasives, Worcester, MA, has acquired Moyco Precision Abrasives, Inc. of Montgomeryville, PA.
 
From a single manufacturing facility, Moyco makes coated abrasive products for lapping, grinding and polishing. Moyco products are used in a broad range of applications. The company has 45 employees.
 
We are very excited about this acquisition and the technology Moyco brings to the Saint-Gobain Abrasives business,”said Mark Rayfield, vice president and general manager, Saint-Gobain Abrasives North America. “The Moyco business and technology complements our recent investment in fine grit capacity, and adds depth to our product line for automotive and many other markets.”
 
Saint-Gobain Abrasives makes a range of abrasives products, such as bonded …

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Total Deal Value in Transport, Logistics Down in 2007

Finance, Free, Mergers & Acquisitions, News, Subscriber Only /

Total transportation and logistics deal volume reached a 20-year high with 1,291 deals in 2007, toppling the prior record reached in 2006, according to Intersections, PricewaterhouseCoopers’quarterly report on M&A in the global transportation and logistics industry.
 
Despite the record number of deals, total deal value in 2007 experienced a significant drop to $83 billion, down from the 20-year high of $164 billion set in 2006. This was due in part to several large deals announced in 2006, including competing bids for a passenger air target and the proposed acquisition of another passenger air target, however all but one bid was eventually withdrawn.
 
The prevalence of large deals announced during 2006 also led to a decline in the average deal size between 2006 …

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Legrand Posts 10.5% Sales Jump in 2007

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

French electrical supplier Legrand reported sales were up 10.5% in 2007, with profit up 67%.
 
Recent acquisitions added 3.6% in growth, and variations in exchange rates, mainly the euro vs. the dollar, had a negative impact of 1.8%. In the past three years, Legrand has acquired 15 companies, including six in 2007, representing annual sales of more than half a billion euros.
 
In 2008, Legrand has announced the acquisition of PW Industries, a U.S. firm specialized in ceiling cable tray systems for commercial and industrial sectors. In 2007, PW Industries reported sales of $32 million.
 
In the U.S. and Canada, Legrand posted a 4.2% increase in sales in the second half of 2007 for a full-year increase of 1.6%. This reflected the continuation of moderate …

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Regal Beloit Sales Up 11.3% in 2007

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

Regal Beloit Corp., Beloit, WI, reported sales for 2007 were up 11.3% to $1.8 billion, including $129.7 million from acquired businesses. Profit was $118.3 million, a 7.8% increase.
 
For the fourth quarter ended Dec. 29, 2007, sales were $474.7 million from $366.6 million in the same period in 2006.
 
In the Electrical segment, sales increased 32.9% during the fourth quarter. Included in the results for the quarter were $101.4 million of sales attributable to acquired businesses Fasco, Jakel, Alstom and Morrill.
 
Sales in the HVAC business, which continued to be impacted by the challenging conditions of the residential HVAC end market, decreased 8.5% from the fourth quarter of 2006.
 
Sales of generators increased 13.5%, paced by a 27.3% …

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Rexnord Core Sales Growth at 11% in 3Q

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

Rexnord LLC, diversified producer of power transmission and water management products, reported sales for the third quarter were $449.1 million, an increase of 58.6% over the prior-year quarter. Consolidated core sales growth was 10.9%.
 
Power transmission sales were $334 million; core sales growth was 11.1%. Water management sales were $115.1 million; core sales growth was 10.2%.
 
For the first nine months of fiscal 2008, Rexnord had 9.5% core sales growth, with sales of $1.3 billion. PT sales in the first nine months were $969.7 million, an increase of 11.5%, driven by strength in power transmission end markets of mining, energy, aggregates and aerospace.
 
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