October 2008

84 Lumber Closes 20 More Stores

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

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 Pennsylvania-based company is describing the closings as market consolidations.”

The company now has 335 stores, down from …

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Stock Building Supply to Close 86 Branches

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

The company will close 86 branches, bringing the number down to 209. It will be leaving 16 markets in six states, while leaving a presence in 27 states. And Stock will reduce headcount by 3,000. About 8,700 employees will remain. Stock has cut about 55% of its work force since 2006, its peak.

The 86 branches to be closed represent about 25% of Stock’s revenue and 28% of its headcount.

The decision comes after a six-month review of the business.

Chip Hornsby, Group Chief Executive of Wolseley, said: With the ongoing …

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Avnet Sales Up in 1Q

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

Electronics distributor Avnet, Inc., Phoenix, AZ, reported sales of $4.49 billion for first quarter fiscal 2009 ended Sept. 27, 2008, representing an increase of 9.7% over the prior-year period and 7% excluding the impact of changes in foreign currency exchange rates.

Organic growth was up 0.9%.

Profit for first quarter fiscal 2009 was $92.8 million as compared with net income of $105.5 million for the first quarter last year.

Our September quarter continued a multi-quarter trend of muted organic growth rates as sluggish demand in several end markets persisted,” said Roy Vallee, CEO. “Although it is difficult to predict how macro conditions will impact tech demand over the next few quarters, we will continue to focus on achieving our …

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WESCO Sales Up 5.3% in 3Q

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

WESCO International, Inc., Pittsburgh, PA, distributor of electrical MRO products, construction materials and integrated supply services, reported sales in the third quarter 2008 were $1.62 billion, up 5.3% from the prior-year period. Profit was $66 million, down from $72 million in the prior-year period.

Stephen A. Van Oss, chief financial and administrative officer, said gains were driven primarily by strength in commercial construction and utility end markets.

We are very mindful of the extraordinary challenges being experienced in the financial industry and the anticipated spillover into the commercial end markets,” said Roy W. Haley, CEO. “We have taken a conservative approach to managing our overall cost structure while investing to expand our sales …

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Kennametal Organic Growth at 3% in 1Q

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

Kennametal Inc., Latrobe, PA, reported sales increased in the first quarter by 9% to $669 million. Organic sales growth was 3%. Profit was $35 million, flat from the previous quarter.

Our September quarter performance again demonstrates the effectiveness of our strategies to further balance Kennametal across geographies and end markets,” said President and CEO Carlos Cardoso. Cardoso also attributed the quarter’s results to a better geographic balance, with 54% of the company’s revenues coming from outside North America.

Metalworking Solutions &Services Group sales increased by 6% during the September quarter, driven primarily by favorable foreign currency effects which increased sales by 6 percent. Increased workdays added a further 2 percent which was offset by …

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Moog Acquires Berkeley Process Control

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

Moog Inc., East Aurora, NY, has acquired Berkeley Process Control, Inc., Richmond, CA, for $14 million. The acquisition expands Moog’s product offering.

Berkeley is a perfect addition because we believe its portfolio of products opens doors to new markets for high-performance motion control systems,”said Dave Fijas, group vice president and general manager of Moog Industrial Group, Americas.

Berkeley Process Control, Inc. holds several patents, among them its Autocalibration technology for improving the productivity and precision of equipment that processes semiconductor wafers.

Moog’s Industrial Group manufactures high performance motion control products combining electric, hydraulic, and hybrid technologies with expert consultative support …

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MAPI Manufacturing Index Drops in September

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

Fighting to stave off any prolonged damage from the current global economic crisis, manufacturers will face increasingly difficult challenges in the near term, according to the quarterly Manufacturers Alliance/MAPI Survey on the Business Outlook — September 2008, a leading indicator for the industrial sector.

The September 2008 composite index registered a drop to 48 from the 50 reported in the June 2008 report. At this level, the index indicates that overall manufacturing activity is expected to contract over the next three to six months. It should be noted, however, that the index measures the direction of change rather than the absolute strength of activity in manufacturing.

In line with other recent economic indicators, the index is at the lowest point …

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Alfa Laval Sales Grow 4% in 3Q

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

Sweden-based Alfa Laval AB, a manufacturer in heat transfer, centrifugal separation and fluid handling, reported sales of SEK 6.6 billion (US$843 million) for the third quarter ended Sept. 30, 2008, an increase of 4% over the same period 2007, excluding the impact of exchange rate variation. Profit increased 9% to SEK 1 billion (US$128 million).

For the nine months ended Sept. 30, 2008, Alfa Laval reported sales increased 14.5% to SEK 19.8 billion (US$2.5 billion) in a year-over-year comparison. Profit was SEK 2.9 billion (US$370.6 million), up 38% over the prior year.

Asia, Eastern Europe and Latin America accounted for 48% of the group’s order intake. North America had the strongest development, partly supported by acquisitions. …

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Arrow Electronics Sales Grow 7% in 3Q

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

Arrow Electronics Inc., Melville, NY, reported sales of $4.3 billion for the third quarter 2008, an increase of 7% over the same quarter 2007. Profit was $76.1 million, a decrease of 22.6%.

For the first nine months, Arrow reported sales of $12.7 billion, an increase of 9.5% over the first nine months of 2007. Profit declined 12.1% to $258.2 million.

The volatility in the world’s economies and the virtual shutdown of the credit markets made the third quarter especially difficult,” said William E. Mitchell, CEO. “There is no doubt that market conditions will continue to be challenging, and in response to the rapidly changing environment, we will make the appropriate and necessary decisions and adjustments to our business model to ensure continuing and profitable …

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An Opportunity for Distributors to Hire Talented Graduates

Free, Human Resources in Wholesale Distribution, Management, Operations, Strategy, Subscriber Only / MDM Staff

A recent survey by the National Association of Colleges and Employers puts the spotlight on employers’ hiring plans for the next year. NACE surveyed employers who had provided projections in August 2008. Compared with their earlier projections, employers expect to decrease hiring levels by 1.6%. In comparison to their actual hires from the Class of 2008, respondents expect to hire about 1.3% more graduates from the Class of 2009.

NACE’s executive director says that hiring plans are essentially flat, and that many employers are looking to cut back. In August about one-third of employers said they would trim their college hiring, but in the latest poll 52% said they were planning do so.

Manufacturing hiring expectations remained flat, while construction firms plan …

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McKesson Agrees to Sell Specialty Pharmacy Operations

Finance, Free, Mergers & Acquisitions, News, Pharmaceutical & Health Care, Subscriber Only, Top Distributor Sectors / MDM Staff

Walgreen Co., Deerfield, IL, has agreed to acquire Atlanta, GA-based McKesson Corp.’s specialty pharmacy operations, a business within McKesson’s Specialty division. The acquisition includes the McKesson specialty pharmacy in Pittsburgh, PA, and IVPCARE based in Frisco, TX, with operations in Torrence, CA, Wilmington, MA, and St. Louis, MO. Terms of the agreement were not disclosed.

The acquisition of McKesson’s specialty pharmacy operations offers the opportunity to grow our own specialty pharmacy business with preferred payor agreements,” said Stanley B. Blaylock, president of Walgreens Health Services. “This transaction will broaden access for patients and clients in the fast-growing oncology area and other specialty areas including multiple sclerosis, rheumatoid …

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MSC Industrial Direct Sales in Fiscal 2008 Grow 7.5%

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

MSC Industrial Direct Co., Melville, NY, distributor of metalworking and MRO supplies to industrial customers, reported sales in the fiscal year 2008 were $1.778 billion, up 7.5% from the prior year. Profit for the year was $196.2 million , up from $173.9 million in fiscal 2007.

We are pleased with our performance in the fiscal 2008 fourth quarter, which completed another very strong year for MSC,”said David Sandler, president and CEO. “During the quarter we strongly executed on our plan to gain market share from smaller, less well capitalized competitors that cannot offer the same combination of product breadth, customer service, and financial strength as MSC. Those attributes become even more important to customers, both large and small, during challenging economic times, …

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3M Sales Up 8.2% YTD

Companies, Free, News, Subscriber Only / MDM Staff

Diversified manufacturer 3M, St. Paul, MN, reported sales for the third quarter 2008 of $6.6 billion, up 6.2% from third quarter 2007. Profit was $991 million, versus $960 million in the prior-year period.

The company posted double-digit sales growth in its three largest businesses: Safety, Security and Protection Services, Health Care and Industrial and Transportation.

Segment trends were similar to the first half of 2008 with continued growth across the company’s international operations. 3M sales in Latin America increased 26% over last year, while Europe and Canada achieved 8% and 9% sales growth, respectively. Sales in Asia Pacific were down 1%, or up 13% excluding the impact of the transition underway in the company’s optical film business. …

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IDEX Acquires Semrock

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

IDEX Corp., Northbrook, IL, has acquired Semrock, Rochester, NY, provider of optical filters for biotech and analytical instrumentation in the life sciences markets. Semrock’s products are used in the biotechnology and analytical instrumentation industries.

Semrock has annual revenues of $21 million. Semrock will operate as a stand-alone business within IDEX’s Health and Science Technologies segment.

IDEX CEO Larry Kingsley said: The acquisition of Semrock extends our offerings to existing OEMs and provides us with significant access to new opportunities within the health and life sciences market. … Inclusive of the recent acquisitions of Richter, iPEK, IETG and Semrock, we are adding approximately $130 million of revenue and approximately $33 million of …

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The Difference a Few Months Can Make in the Steel Market

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

It’s amazing the difference a few months can make. In July, steel prices were rising daily and manufacturers like Posi Lock Pullers Inc. in Cooperstown, ND, couldn’t get a supplier to contract a price. As Dean Somerville, president of Posi Lock, told me then: They won’t even invoice our order until we have a truck there to pick it up.”(Read Pressures in the Steel Market.)

Now, the tables have turned. The rate at which prices are dropping has some steelmakers worrying they may drop below the break-even point of $650 per metric ton, as reported in the Wall Street Journal earlier this month. In fact, many …

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Precision Castparts Sales Up 5.9% in 2Q

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

Precision Castparts Corp., Portland, OR, reported sales in the second quarter fiscal 2009 were $1.82 billion from continuing operations, up 5.9% from a year ago. Profit from continuing operations was up 13.6%.

Investment Cast Products
Segment sales totaled $612 million in the second quarter, an increase of 15.2%. Contractual metal pass-through for the quarter comprised $23.8 million of these sales, compared to $23.3 million in the same period last year. Investment Cast Products saw robust aerospace demand during the quarter. This demand has been interrupted by the Boeing strike, is expected to pick up when the Boeing strike ends, and will further accelerate when the 787 moves into production.

The industrial gas turbine (IGT) business continues to grow …

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Anixter Organic Growth at 2% in 3Q

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

Anixter International Inc., Glenview, IL, distributor of communication products, electrical and electronic wire &cable, fasteners and other small parts, reported sales in the third quarter ended Sept. 26, 2008, were up 4% to $1.59 billion. Profit fell 5% to $61.7 million.

Organic growth in the third quarter was 2%.

While we experienced strength early in the third quarter, broader negative economic factors, especially in Europe, impacted sales activities late in the period,” said Robert Eck, president and CEO. “Despite these headwinds we still generated 2% organic growth, primarily driven by our initiatives to expand the company’s presence in the security solutions market and increase the geographic footprint of our electrical wire and cable business in …

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Bunzl Sales Increase 15%

Companies, Free, News, Operations, Paper Products & Packaging Distribution, Subscriber Only, Top Distributor Sectors / MDM Staff

U.K.-based Bunzl plc, the international distribution and outsourcing group, reported sales for the third quarter ended Sept. 27, 2008, increased 15% compared to the same period a year ago.

The increase is attributable to organic growth, acquisitions and currency exchange rates. Year-to-date, the company has announced acquisitions with total annualized revenue of £148 million (US$253 …

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Gates Corp. To Build Facility In Turkey

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

Gates Corp., Denver, CO., a wholly-owned subsidiary of Tomkins plc, will invest in a new power transmission facility in the Izmir Free Trade Zone in Turkey. The new plant will support the growing demand for oil pumps and tensioners in Europe.

Gates expects to break ground in the fourth quarter of 2008 and to be operational in early 2010. Gates plans on a workforce of over 100 associates by 2012. Gordon Hensley of Gates Corp. was named director of Powertrain -Europe to manage the site.

Gates Corp. manufactures industrial and automotive products, systems and components with operations in 25 countries. Gates is part of the Industrial &Automotive group of Tomkins plc, with revenue of $5.8 billion in 2007. …

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Eaton Corp. 3Q Sales Up 25%

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

Diversified industrial manufacturer Eaton Corp., Cleveland, OH, reported sales of $4.1 billion for the third quarter, an increase of 25% over the same period a year ago. Profit was $315 million compared to $258 million in 2007, an increase of 22%.

Sales growth in the quarter consisted of 4% from organic growth, 19% from acquisitions, and 2% from exchange rates.

The severe issues in world financial markets have started to impact markets for our products. While it is not possible to forecast with precision the prospective impact upon our end markets, prudence suggests anticipating a significant slowdown,”CEO Alexander M. Cutler said. “While our year-over-year end market growth in the third quarter was 2 percent, we anticipate fourth quarter growth in our end …

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October 2008

84 Lumber Closes 20 More Stores

Stock Building Supply to Close 86 Branches

Avnet Sales Up in 1Q

WESCO Sales Up 5.3% in 3Q

Kennametal Organic Growth at 3% in 1Q

Moog Acquires Berkeley Process Control

MAPI Manufacturing Index Drops in September

Alfa Laval Sales Grow 4% in 3Q

Arrow Electronics Sales Grow 7% in 3Q

An Opportunity for Distributors to Hire Talented Graduates

McKesson Agrees to Sell Specialty Pharmacy Operations

MSC Industrial Direct Sales in Fiscal 2008 Grow 7.5%

3M Sales Up 8.2% YTD

IDEX Acquires Semrock

The Difference a Few Months Can Make in the Steel Market

Precision Castparts Sales Up 5.9% in 2Q

Anixter Organic Growth at 2% in 3Q

Bunzl Sales Increase 15%

Gates Corp. To Build Facility In Turkey

Eaton Corp. 3Q Sales Up 25%

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