October 2008

SKF to Move Seals Production from Illinois to Other Facilities

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

SKF announces plans to transfer the manufacturing of automotive seals products from its facility in Elgin, IL, to other SKF seals factories in Mexico and the U.S. SKF said that the consolidation was necessary to remain competitive in the U.S. automotive market.

The consolidation process is expected to take place over 12 months and will affect about 160 employees out of 430 employees at the Elgin …

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Automotive Decline in August Hurts Canada Wholesale Revenues

Free, News, Subscriber Only / MDM Staff

Source: Statistics Canada

A significant decline in the automotive sector brought to an end a string of five consecutive monthly increases in wholesale sales in August, which dropped 1.5% to $45.7 billion in current dollars. Sales excluding the automotive products sector rose 0.5%.

After removing the impact of price changes, sales in volume terms were 3.3% lower.

Sales of automotive products fell 11.7% in August to $7.0 billion, offsetting the gains over the two previous months. A 13.2% decline in motor vehicle sales was behind most of the drop, while sales of motor vehicle parts and accessories fell 5.8%. Much of the decline in motor vehicle sales can be attributed to slowing demand for larger …

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Applied Industrial Same-Store Sales Down Slightly in 1Q

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

Applied Industrial Technologies, Cleveland, OH, reported sales for the first quarter ended Sept. 30, 2008, were up 4.9% to $543.9 million. Profit was down to $22.5 million from $24.4 million last year.

Same-store sales in the U.S. were slightly down primarily due to weak housing and automotive markets. These decreases were offset by sales increases from recent acquisitions and by growth in Applied’s Canadian business.

Our sales slowed in the quarter as we saw mixed demand within the industries we serve,” said David L. Pugh, Applied’s CEO. “Housing-related and transportation markets have slowed considerably, while energy-related markets have continued to show strength. Primary metals and food production markets are still strong for us as …

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U.S. Market Analysis: Bearings MRO

Market Analysis, Research & Analytics, Subscriber Only, Top Distributor Sectors / MDM Staff

The industrial product group listed here – Bearings MRO – represented a market in 2007 of $4.1 billion, according to estimates by Industrial Market Information, Minneapolis. These charts show the top ten industries, by SIC code, consuming these products; and the 2007 end-user consumption of these groups sorted by the nine government market …

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MDM October 25, 2008

Subscriber Only / MDM Staff

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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MDM October 25, 2008 Read More »

Credit Crunch in the Channel

Economic Trends, Research & Analytics, Subscriber Only / Lindsay Young

Credit has been virtually frozen since unprecedented turmoil hit Wall Street and major banks this month. Here’s what it means for distributors, manufacturers and deal-making.

The construction industry has been hit hard by the severe downturn in the housing market and the 160 member companies that make up the AMAROK Drywall Distributor Network are no exception. While a number of distributors are holding their own, others have seen business fall off so much that they have struggled to cover overhead.

Strike two: When builders started to file for bankruptcy and were unable to pay their subcontractors, the distributors’receivables fell off dramatically. Receivables have improved, but the distributors are now facing a third strike: the …

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Commentary: Beware the Sound Bites

Free, Management, Perspective, Strategy, Subscriber Only / Tom Gale

Alan Greenspan has gone from irrational exuberance in his description of the stock market boom of the 1990s to a once-in-a-century”credit tsunami in 2008. The subject lines of my Wall Street Journal news alerts daily look increasingly like tabloid magazine headlines -“Dow Plunges!”But as we are seeing, wait a day and the news is reversed.

Sometimes a wake-up call is healthy; panic never is. Anyone who experienced the media’s lack of understanding and coverage of the last recession at the beginning of this decade have a large and healthy degree of skepticism about what we see on TV and read in newspapers about the current crisis. But the reality gap is at its greatest right now. Fear and speculation are driving sound bites about how bad it might get.

As the lead …

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Pricing Software Grows in Distribution

Research & Analytics, Sales & Marketing, Subscriber Only, Technology / Lindsay Young

This article looks at the growing market for pricing software in distribution.

For many distributors, managing inventory through software was a significant shift in how they viewed the strategic use of technology. Next up: Pricing.

Thanks to economic uncertainty and volatile costs, pricing is top of mind for many distributors right now as a strategy to preserve and expand gross margin. "The way I think of it is this: In the old days, distributors learned how to manage their inventory using computer systems," says Tim Reynolds, president of Tribute Inc., a software provider to fluid power and hose distributors that also provides a pricing function. "If you have 20,000 SKUs, you can't do it in …

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MDM News Digest 3820

Free, Subscriber Only / MDM Staff

Wolseley plc, UK-based distributor of plumbing and heating products and building materials, reported it would not sell Stock Building Supply but instead extensively restructure the U.S. building materials distributor. More

84 Lumber has announced 20 more store closings, according to the Pittsburgh Tribune-Review. The building materials distributors closed nine stores a few weeks ago. The company now has 335 stores, down from 400. More

Cummins-Wagner Co., Inc., Annapolis Junction, MD, a distributor of industrial process equipment and HVAC equipment in the Mid-Atlantic region, has acquired Rochester, NY-based Siewert …

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Monthly Wholesale Trade: August 2008

Economic Trends, Research & Analytics, Subscriber Only / MDM Staff

August 2008 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 $404.9 billion, down 1.0 percent from July, but up 13.4 percent from August 2007, the U.S. Census Bureau reported. The July preliminary estimate was revised downward $1.7 billion or 0.4 percent. August sales of durable goods were down 1.5 percent from last month, but were up 5.5 percent from a year ago. Compared to last month, sales of hardware, and plumbing and heating equipment and supplies were down 6.5 percent and sales of lumber and other construction materials were down 5.2 percent. Sales of nondurable goods were down 0.6 percent from last month, but were up 20.7 percent from last year. Sales …

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State of the Distribution Software Industry, Part 3: The Growing Role of the Internet

Free, Research & Analytics, Subscriber Only, Technology / Jenel Stelton-Holtmeier

This is part of a series looking at the distribution software industry. This article examines the role the Internet is playing in driving change in the way distributors do business.

In the last decade, the Internet has been one of the key drivers of technology development.

The Internet is the backbone today for anybody that’s in distribution, anybody in the supply chain and supply chain execution,”Rod Winger, Epicor’s director of product marketing. “You could not do what we do today without the Internet.”

e-Commerce
The emphasis on having information available anytime from anywhere has been a driving force behind many companies’moving into the realm of e-commerce, doing business with suppliers and …

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Atlas Copco Sees Organic Growth of 13% for 3Q

Free, News, Subscriber Only, Top Distributor Sectors / MDM Staff

Swedish supplier Atlas Copco reported sales of MSEK 18,440 (US$2.3 billion) for the third quarter ended Sept. 30, 2008, up 12% over the prior year. Profit for the period was MSEK 2,432 (US$308 million), an increase of 29%. The company benefited from organic growth of 13%.

The company experienced growth in all geographic regions, even though the rate of growth is beginning to experience moderation. Demand for mining equipment remained strong across all markets.

Demand for all products is expected to decrease in the coming months as the construction markets in North America and Western Europe continue to be weak. …

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Black & Decker 3Q Profit Drops 18%

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

The Black &Decker Corp., Towson, MD, reported profit for the third quarter of 2008 was $85.8 million, as decrease of 18% in a year-over-year comparison. Sales declined 4% for the quarter to $1.6 billion.

Sales for the first nine months ended Sept. 30, 2008, dropped 4% to $4.7 billion. Profit for the period declined 24.4% to $249.9 million.

In the Power Tools and Accessories segment, sales decreased 6% for the quarter, driven by weak demand for housing-related and discretionary goods in the U.S. and deteriorating economic conditions in Europe. Sales for the segment increased in Canada, Asia and Latin America.

Third quarter sales in the Hardware and Home Improvement segment decreased 13%.

The Fastening and Assembly Systems segment saw …

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Air Liquide Sales Up 10.4% In 3Q

Free, Gases & Welding Equipment, News, Subscriber Only, Top Distributor Sectors / MDM Staff

Paris-based Air Liquide reported third quarter 2008 sales grew 10.4% to €3.2 billion (US$4.1 billion), as compared to the same period the prior year. Excluding negative currency exchange impact, sales grew 13.1%.

Sales in the Gas and Services segment, the company’s largest segment, increased 11% to €2.8 billion (US$3.6 billion). …

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Saint-Gobain Sales Up For First Nine Months

Building Materials/Construction, Chemicals & Plastics Distribution, Free, News, Subscriber Only, Top Distributor Sectors / MDM Staff

The Saint-Gobain Group, Courbevoie, France, reported sales €33.4 billion (US$43.1 billion) for the first nine months of 2008, an increase of 2.5% from the prior year same period. The group saw organic growth of 2.8%.

All of the Group’s business sectors saw a rise in like-for-like sales over the first nine months of 2008.

The residential construction market in the U.S. benefited from a momentary rebound in renovation businesses related to siding and roofing products. In western Europe, business tailed off in the third quarter with a deceleration in volumes in most countries and a recession taking hold and intensifying in Spain and the UK. Overall, demand related to industrial output and capital spending remained steady in both Europe and the U.S. …

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Airgas 3Q Sales Increase 15%

Companies, Free, Gases & Welding Equipment, News, Subscriber Only, Top Distributor Sectors / MDM Staff

Airgas, Inc., Radnor, PA, a U.S. distributor of industrial, medical and specialty gases, and welding, safety and related products, reported sales for the second quarter ended Sept. 30, 2008, were $1.2 billion, up 15% from the prior year. Profit increased 44% to $72.8 million.

Sales for the first six months of the fiscal year increased 18.5% to $2.3 billion, in a year-over-year comparison. Profit was $141 million, up 38.5%.

Acquisitions contributed 7% to the quarterly increase, and total same-store sales grew 8%, with gas and rent up 12% and hardgoods up …

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Airgas 3Q Sales Increase 15% Read More »

Builders FirstSource Reports 3Q Loss

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

Builders FirstSource, Inc., Dallas, TX, reported a net loss of $18.9 million on sales of $288.3 million for the third quarter ended Sept. 30, 2008. These results compare to a net loss of $12.0 million on sales of $413.9 million for the same period the prior year.

Our industry is facing unprecedented times. Annualized housing starts in September 2008 fell to 817 thousand units, the lowest level since 1958 based on currently available data from the U.S. Census Bureau. Additionally, the credit markets supporting mortgages and commercial lending were virtually frozen at the end of the quarter as a result of the financial crisis affecting our country. This contraction in lending could further damage already weak housing conditions,” said Floyd Sherman, CEO. …

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Timken Expands Service To Wind Market

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

The Timken Company, Canton, OH, plans to expand production capacity at its Tyger River facility in Union, SC, to serve the wind energy market. The investment is part of a strategy to strengthen Timken’s position in serving growing global demand for highly engineered large-bore bearings that will help customers harness wind power.

Timken expects demand for large-bore bearings used in main-rotor shafts and gear drives in wind turbines to grow rapidly in the coming years as reliance on renewable energy increases. The Tyger River investment will allow the company to serve demand from North American customers and provide expanded capability to produce prototypes in support of new wind-turbine programs.

Expansion work at Timken’s Tyger …

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Snap-On Inc. 3Q Sales Up

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

Snap-on Inc., Kenosha, WI, manufacturer of tools, diagnostics, equipment, software and service products for professional users, reported sales of $697.8 million for the third quarter of 2008, an increase of 17.1% over the prior year. Profit improved 32.8% to $54.6 million.

For the nine months ended Sept. 27, 2008, sales were $2.2 billion, an increase of 4.2% over the same period a year ago. Profit increased 43.7% to $178.1 million.

The Commercial &Industrial Group segment sales were $338.1 million, up 3.1% from the prior year. Excluding $12.4 million of currency translation, sales declined $2.2 million year-over-year as continued growth in emerging markets, contributions from increased sales of power tools, higher sales of tools, kits and tool storage …

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Timken Sales Up 18% in 3Q

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

The Timken Company, Canton, OH , reported record third-quarter sales of $1.48 billion, an increase of 18% over the same period a year ago. Profit was $130.4 million, compared to $41.2 million for third quarter 2007.

The company benefited from the favorable impact of surcharges, pricing and currency, as well as acquisitions that serve the aerospace and energy market sectors. Strong sales in global industrial markets largely offset the impact of weaker automotive demand.

Our strategy of shifting our portfolio toward more attractive global industrial markets is clearly delivering results,”said James W. Griffith, Timken’s president and chief executive officer. “While the economy today is unsettled, we still see strong demand for our products from aerospace, …

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Timken Sales Up 18% in 3Q Read More »

October 2008

SKF to Move Seals Production from Illinois to Other Facilities

Automotive Decline in August Hurts Canada Wholesale Revenues

Applied Industrial Same-Store Sales Down Slightly in 1Q

U.S. Market Analysis: Bearings MRO

MDM October 25, 2008

Credit Crunch in the Channel

Commentary: Beware the Sound Bites

Pricing Software Grows in Distribution

MDM News Digest 3820

Monthly Wholesale Trade: August 2008

State of the Distribution Software Industry, Part 3: The Growing Role of the Internet

Atlas Copco Sees Organic Growth of 13% for 3Q

Black & Decker 3Q Profit Drops 18%

Air Liquide Sales Up 10.4% In 3Q

Saint-Gobain Sales Up For First Nine Months

Airgas 3Q Sales Increase 15%

Builders FirstSource Reports 3Q Loss

Timken Expands Service To Wind Market

Snap-On Inc. 3Q Sales Up

Timken Sales Up 18% in 3Q

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