2008 - Page 22 of 59 - Modern Distribution Management

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2008

SYSCO Sales Up 7.1% in Fiscal 2008

Companies, Free, Grocery & Foodservice Distribution, News, Subscriber Only, Top Distributor Sectors /

SYSCO Corp., Houston, TX, reported sales increased 7.1% in fiscal 2008 to $37.5 billion. Food cost inflation, as estimated by the change in cost in goods, was 6%.
 
Operating income for 2008 grew 10% over the prior year.
 
For the fourth quarter 2008, sales were up 5.4% to $9.7 billion. Operating income was up 9.7% to $559 million. Fourth-quarter profit was up to $334 million from $303 million in the prior-year period. Food cost inflation for the period was 6.2%.

More details …

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Illinois Tool Works to Divest Two Businesses

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

Illinois Tool Works Inc., Glenview, IL, announced that its board of directors has authorized a plan to divest its Decorative Surfaces segment consisting of the Wilsonart and related laminate businesses and the Click Commerce industrial software business.
 
Wilsonart was acquired in 1999 by ITW as part of the Premark International transaction. In 2007, the decorative surfaces segment had revenues of $1.2 billion. Wilsonart manufactures and distributes custom construction products for commercial, residential and renovation applications. Products include decorative laminate, solid surface, flooring, decorative materials, adhesives and custom edges. The group has 16 business units worldwide with the majority of revenues based in North America.
 
International …

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Lawson Products Agrees to Settlement in Kickback Scheme

Companies, Free, Legal Issues in Wholesale Distribution, News, Operations, Sales & Marketing, Subscriber Only /

Lawson Products, Inc., Des Plaines, IL, has agreed to pay $30 million in forfeiture and restitution in the case of sales agents who according to the government systematically provided nearly $10 million in illegal incentives to government employees to buy more products at higher prices for their employers.
 
The agreement brings to a close the government’s investigation of Lawson’s former customer loyalty programs. The agreement stipulates that a criminal case of mail fraud against the company will be dismissed in three years as long as Lawson abides by all terms and conditions,” according to the U.S. Attorney’s Office for the Northern District of Illinois.
 
“We are pleased to have reached this agreement with the U.S. Attorney’s Office, which enables us all to move …

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June Machine Tool Consumption Level with May

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

June U.S. manufacturing technology consumption totaled $360.43 million, according to the Association For Manufacturing Technology and the American Machine Tool Distributors’Association. This total, as reported by companies participating in the USMTC program, was level with May, and up 2% from the total of $353.40 million reported for June 2007. With a year-to-date total of $2,318.34 million, 2008 is up 15.3% compared with 2007.

These numbers and all data in this report are based on the totals of actual data reported by companies participating in the USMTC program.
 
I think everyone is excited that the underpinning for productivity in our economic growth -manufacturing technology equipment -continues to grow at double-digit rates through the second quarter,”said …

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Monthly Wholesale Trade: June 2008

Economic Trends, Research & Analytics, Subscriber Only /

Sales. June 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 $411.2 billion, up 2.8 percent from the revised May level and were up 17 percent from June 2007. The May preliminary estimate was revised upward $2.4 billion or 0.6 percent. June sales of durable goods were up 1.3 percent from last month and were up 9 percent from a year ago. Compared to last month, sales of computer and computer peripheral equipment and software were up 3.4 percent and sales of lumber and other construction materials were up 1.9 percent. Sales of nondurable goods were up 4.1 percent from last month and were up 24.3 percent from last year. Sales of …

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Pricing for Profitability

Management, Sales & Marketing, Strategy, Subscriber Only /

Implementing an effective pricing strategy can be one of the best ways to achieve better gross margin. This article outlines a pricing model developed by Texas A&M University's Supply Chain Systems Laboratory and provides a look at how some distributors are using it to update their pricing strategy.

About three years ago, F.W. Webb, a regional distributor of plumbing, heating, cooling and piping products, took a part of its legacy IT system and dedicated it to improving the customer and product information available to salespeople.

About a third of our prices were being set manually by salespeople,"says Lawrence Mohr, the distributor's now-retired senior vice president of information technology. "We needed a way to provide information to inside sales so …

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The Question of Outsourcing IT

Subscriber Only, Technology /

The decision to outsource any function is difficult because it requires the company give up some control over an aspect of its business. Because of its complicated nature, information technology is being considered more often for outsourcing. But what does outsourcing IT mean, and how does a distributor decide to do it? Here are the two very different answers that Strauss Paper Co. and Graybar found.
 
Six years ago, Patsy O’Grady had to make a decision: Was her role as chief information officer of Port Chester, NY-based Strauss Paper Co. to be an expert in the latest systems engineering concepts or an expert on technology as it relates to distribution?

With technology advancing at exponential rates, some companies are finding it more difficult for their …

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Commentary: Managing Process and Technology Transitions

Free, Subscriber Only, Technology /

The first two articles in this issue are indicators of how this industry is maturing. At the risk of oversimplifying, it wasn’t that long ago that success was often defined by getting orders translated accurately into invoices, then into envelopes in a timely fashion. A broken dot-matrix printer impacted cash flow! Pricing policy took shape in sales meetings, phone calls and split-second decisions on a case-by-case basis by each salesperson. When sales go up, get more order takers and processors to handle the increased volume. That model worked pretty well for many distributors until the downturn in the early part of this decade.

Today, more distributors are moving to electronic invoicing and ACH payments. Some dedicated niche applications, such as GPS-based delivery …

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Second Quarter Public Distributor Report

Management, Strategy, Subscriber Only /

About this report: This is the inaugural report of the MDM Public Distributor Report, provided on a quarterly basis to subscribers of Modern Distribution Management. The report is available online only.

Click here to download this report in pdf.

As distributors see more price increases from suppliers, they are faced with the challenge of keeping prices manageable to their customers while maintaining profitability.

In the most recent round of quarterly earnings calls, few distributors avoided the price discussion. Here’s how a sampling of public distributors in various sectors are approaching the issue.
 
Impact of Housing Decline
“We are kind of caught between a …

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MDM August 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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MDM News Digest 3815

Free, Subscriber Only /

Industrial Distribution Group Inc., Atlanta, GA, distributor of maintenance, repair, operating and production (MROP) products and integrated supply services to manufacturers and other industrial users, is now owned by an affiliate of Luther King Capital Management. We are delighted that the merger with Eiger (the affiliate of Luther King) has been successfully completed,”said Charles A. Lingenfelter, IDG’s president and CEO. “The consummation of this transaction enables us to focus our full attention on our customers and suppliers. We will be a more agile company with the ability to adapt more swiftly in response to market changes.”Before the merger agreement, Luther King owned 14.9 percent of IDG common stock.

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Beacon Roofing Supply Sales Up 6.1% in 3Q

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

Beacon Roofing Supply, Inc., Peabody, MA, reported sales increased 6.1% to $514.6 million in third quarter 2008 compared with the year-ago period. Organic growth was 5.9%.
 
Residential and non-residential roofing sales increased 12.4% and 7.4%, respectively, while complementary product sales declined 11.3%. Roofing product sales benefited from a rapid rise in prices during the third quarter as well as from strong re-roofing activity in storm-affected regions and continued strength in commercial roofing activity in most markets.
 
Complementary product sales continued to be hampered by the slowdown in new residential construction.
 
Profit for the third quarter was $18.3 million compared with $11.5 million in 2007, an increase of 59%. According to …

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Applied Industrial Sales Up 7.2% in 2008

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

Applied Industrial Technologies, Cleveland, OH, reported fiscal 2008 sales increased 3.7% to $2.1 billion from fiscal 2007. Profit rose 11% to $95 million.
 
In the fourth quarter, sales increased slightly to $529.7 million from the prior-year period. Profit was $24.4 million, down from $24.6 million last year.
 
While our financial performance was strong, we definitely saw the effect of a slowing economy during the second half of our fiscal year with only half of our top thirty industries showing positive growth,” said CEO David L. Pugh. “Our sales to the forest products industry and the transportation industry, historically strong markets for us, were especially soft.”
 
Applied has 459 facilities across North …

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Samuel, Son & Co. Creates Alliance with Mexican Distributor

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

Ontario-based Samuel, Son &Co. Inc. has signed a comprehensive strategic alliance agreement with Mexican distributor Grupo Villacero. Villacero will provide Samuel with processing, storage and logistics services from its offices, distribution and service center locations in Mexico, and Samuel will provide the same services to Villacero from its offices, distribution and service center locations in Canada and the U.S.
 
Julio C. Villarreal G., CEO of Grupo Villacero said: This strategic alliance will provide both companies new and important strengths and synergies to face in a highly competitive manner the consolidation and globalization of the steel market.”
 
Grupo Villacero is a group of companies focused on the transformation, processing, servicing, trading and …

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Cardinal Health Sales Up 5% in Fiscal 2008

Free, News, Pharmaceutical & Health Care, Subscriber Only, Top Distributor Sectors /

Dublin, OH-based drug distributor Cardinal Health, reported revenue for fiscal year 2008 improved 5% to $91 billion over the prior year. Profit was $1.3 billion, a 32% decrease from fiscal year 2007. Earnings for the year were negatively impacted by a $600 million expense to resolve securities litigation.
 
For the fourth quarter, sales were $22.9 billion, an increase of 3% in a year-over-year comparison. Profit was $326.6 million, a decrease of 64% from fourth quarter 2007.
 
The medical supply chain segment improved profit in the second half of the year, driven by double-digit growth in its core U.S. medical distribution business. Combined revenue for the Clinical Technologies and Services, and Medical Products and Technologies segments grew by 24% to $5.6 billion …

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Gardner Denver Acquires Distributor Best Aire

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

Gardner Denver, Inc. has acquired Best Aire, Inc., a distributor of compressed air and gas products serving the Ohio market through its headquarters in Millbury, OH. It has additional distribution operations in Kalamazoo, MI, and Indianapolis, IN.

Gardner Denver intends to increase its focus on aftermarket sales and service, including adding distribution channels, if necessary, to enhance our ability to better serve our end users worldwide,” said Barry L. Pennypacker, president and CEO of Gardner Denver. “I am very pleased to add Best Aire to Gardner Denver’s compressor operations in North America. This business provides a good base business in Ohio, Indiana, and Michigan that will allow for expansion of product lines and aftermarket parts and service to a critical …

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RBC Bearings Sales Up 15.7% in 1Q

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

RBC Bearings Inc., Oxford, CT, international manufacturer of precision plain, roller and ball bearings for the industrial, defense and aerospace industries, reported sales for first quarter were $92.4 million, an increase of 15.7% from the same period a year ago. Profit was $10.7 million, an increase of 8.7% in a year-over-year comparison.
 
First-quarter results include costs associated with the company’s expansion into large bearings, facility moving costs and disposal of fixed assets, and a loss on early extinguishment of debt. …

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International Wire Sales Down Slightly in 2Q

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

International Wire Group, Inc., Camden, NY, reported sales for the second quarter ended June 30, 2008, were $199.9 million, compared with to sales of $200 million for the same period 2007. Profit was $5.6 million, an increase of 30% over the prior year due primarily to higher operating income.
 
Sales for the first six months of 2008 were $406.4 million, an increase of 8.6% over the first half of 2007. Profit was $12.8 million, an increase of 54.6%.
 
Our operating results were enhanced by the favorable impact of our ongoing cost reduction initiatives, including our plant in Sherrill, NY, which became operational in late 2007, and the acquisition of Hamilton Products at the beginning of 2008,”said Rodney D. Kent, CEO. “We now look forward to the integration of the …

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Building Materials Holding Corp. Discontinues SelectBuild Florida Operations

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

Building Materials Holding Corp., San Francisco, CA, will discontinue operations at its wholly-owned subsidiary SelectBuild Florida over the next four months in an effort to better align costs with current market conditions.
 
The move comes a week after BMHC announced it was out of compliance with financial covenants for its current credit facility.
 
In light of the challenging homebuilding environment, we recognize the need to realign our business across the country to reflect local conditions,” said Stanley M. Wilson, president and COO. “The closure of the SelectBuild Florida facilities is in direct response to the challenging business environment in Florida. The Florida market has weakened considerably and we anticipate it will be some time before improvement is …

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Avnet Sales at $17.9B in Fiscal 2008, Up 14.5%

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

Phoenix, AZ-based Avnet, Inc. reported sales of $17.95 billion for fiscal year end 2008, up 14.5% over fiscal year 2007. Profit improved 27% to $499.1 million. Organic growth was 4.9% over the prior year.
 
For the fourth quarter ended June 28, 2008, sales were $4.68 billion, an increase of 10.4% over the same period the prior year. Profit was $144.1 million, up 15.6%.
 
CEO Roy Vallee said, In fiscal 2008, our focus on value based management and value creating M&A resulted in record financial results despite the challenging macro-economic forces impacting our markets.”
 
Avnet completed seven acquisitions in fiscal year 2008.
 
Electronics Marketing sales were up 10.8% to $2.73 billion in the fourth quarter, included positive impact from …

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