2008

Illinois Tool Works Sales Grow 10.5% in 2Q

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

Illinois Tool Works Inc., Glenview, IL, reported revenues grew 10.5% to $4.57 billion in the second quarter 2008. The increase is attributable to a 4.3% contribution from acquisitions and a 6.4% contribution for currency translation.

Overall base revenues were flat in the second quarter, with international base revenues growing 3% and North American base revenues declining 2%. Income from continuing operations increased 10% to $528.5 million.

By Sector
Worldwide base revenues for the Power Systems and Electronics segment grew 7.7%, with an 8.9% increase in welding base revenues and a 6.9% increase in base revenues for PC board fabrication.

Base revenues for the Polymers and Fluids segment increased 2.3% in the quarter, with North American …

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Reliance Steel & Aluminum Sales, Profit Grow in 2Q

Free, Metals Service Centers, News, Subscriber Only, Top Distributor Sectors / MDM Staff

Reliance Steel &Aluminum Co., Los Angeles, CA, reported sales in the second quarter 2008 were $2.1 billion, an increase of 10.5% over the same period in 2007. Profit increased 27.5% to $156.6 million.

For the first six months ended June 30, 2008, sales were $4 billion, and increase of 7.1% over the prior-year period. Profits increased 12.6% to $264 million.

David H. Hannah, CEO of Reliance said: The main reason for the increased earnings was higher carbon steel prices, which resulted in higher gross profit margins as we quickly passed through the increases to our customers. While we expected carbon steel pricing to continue upwards during the second quarter, the increases were larger than we had anticipated.”

In the third quarter, Hannah expects …

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Watsco Sales Up 8% in 2Q

Companies, Free, HVACR, News, Plumbing Products & PVF Distribution, Subscriber Only, Top Distributor Sectors / MDM Staff

Watsco, Inc., Coconut Grove, FL, reported revenues for the second quarter increased 8% to $510 million over the same period in 2007. Profit improved 7% to $26.1 million.

The revenue increase includes $62 million from 58 locations opened or acquired in the past 12 months.

Same-store sales declined 5%, reflecting a 4% decrease in sales of HVAC equipment, an 8% decline in other HVAC products and a 1% increase in commercial refrigeration products.

For the six months ended June 30, 2008, revenues increased 6% to $890 million, including $111 million from locations opened or acquired during the last 12 months. Gross profit for the period increased 7% to $229 million. Same-store sales declined 7% in the first six months.

Watsco is an …

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SKF Sales Up 7.4% in 2Q

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

SKF reported sales increased 7.4% to SEK16.1 billion (US$2.7 billion) for the second quarter of 2008. Sales for the first six months were up 8% to SEK31.7 billion (US$5.3 billion).

Profit was SEK1.4 billion (US$233 million). For the first six months, profit totaled SEK 2.7 billion (US$450 million).

The sales increase for the quarter was attributable to: volume, 6.2%; structure, 1.3%; price and mix, 4%; and currency effects, -4.1%. For the first six months, volume attributed 5.6%; structure, 1.2%; price and mix, 3.9%; and currency effects, -2.7%.

Sales were significantly higher in Europe, Asia and Latin America. Sales in North America were relatively unchanged. Manufacturing level for the quarter was slightly higher that the first quarter …

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Forecast: Manufacturing Sector Will Face ‘Significant Challenges’ in Near-Term

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

Mirroring the downturn in the overall U.S. economy, the manufacturing sector is expected to face significant challenges in the near-term according to the quarterly Manufacturers Alliance/MAPI Survey on the Business Outlook, an indicator for the industrial sector. The June 2008 composite index registered a drop to 50 from 57 as reported in the March 2008.

At this level, the index indicates that overall manufacturing activity is expected to remain flat 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.

While a variety of individual indexes is included in the survey, the business outlook index is a weighted sum of the …

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Applied Industrial VP: ‘Fluid Power is Big Growth Area’

Companies, Finance, Free, Mergers & Acquisitions, News, Power Transmission/Motion Control/Fluid Power, Subscriber Only, Top Distributor Sectors / Lindsay Young

Applied Industrial Technologies, Cleveland, OH, this week made one of its largest acquisitions in the U.S. fluid power market with an agreement to buy seven distribution businesses from Fluid Power Resource LLC. The purchase fits with Applied’s strategy to continue building out its fluid power unit, according to Warren E. Bud” Hoffner, who oversees Applied’s fluid power group.

“It’s just a great fit for Applied, and we’ve always thought that,” Hoffner told MDM. “FPR ran these companies as standalone firms in each local or regional market. That fits very well with how we’re structured.”

The last large acquisition Applied made in the U.S. fluid power market was Spencer Industries Inc., Kent, WA, a regional fluid power distributor with about $65 million in sales. …

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Canadian Manufacturing Sales Rise 2.7% in May

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

Current dollar manufacturing sales rose 2.7% to $51.4 billion in May. This was the largest increase since March 2007 and the fourth increase in five months.

Sales increased for 16 of 21 industries, representing 94% of total manufacturing sales. However, despite these gains, May’s sales remained below year earlier levels and well below the peak of $53.1 billion in March 2007.

Petroleum and coal products (+9.2%) accounted for almost half of the growth in manufacturing sales in May. Sales climbed to $7.7 billion, and have increased by almost 20% since March 2008. Rapidly rising prices accounted for most of this growth, as the price for petroleum and coal products increased by about 17% during the same …

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Will Inflation Bring Offshore Manufacturing Back to U.S.?

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

The recent cover story of IndustryWeek contends that some offshore manufacturing may return to the U.S. thanks to rising fuel prices and a weakened dollar, not to mention increased labor costs overseas. The magazine however was quick to say that it is too early to say definitively if this could happen on a large scale.

One logistics provider executive tells IndustryWeek that whether the U.S. becomes a “sourcing country” depends on the industry and the cost and bulkiness of the product. One supporting example provided in the feature: One manufacturer, Desa LLC, moved the company’s retail heating unit manufacturing operations back to the U.S. after the cost of shipping them from China to …

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Wolseley Profits Hit Hard in First 11 Months

Companies, Free, News, Subscriber Only / MDM Staff

UK-based Wolseley plc, distributor of plumbing and heating products to professional contractors and supplier of building materials, reported overall revenues were up 1% while profits were down 28% for the first 11 months ended June 30, 2008. Wolseley is the parent company of Ferguson and Stock Building Supply in the U.S.

The deterioration in some of our key markets continues and it is likely that conditions will get tougher still,”CEO Chip Hornsby said. “In these unprecedented circumstances, driving cost reduction, enhancing cash flow and closely managing the balance sheet remain key priorities.”

As a result of difficult market conditions, the distributor’s board recommended no final dividend payment to stockholders for 2008, a move that will result in a cash …

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Louisiana-Pacific Settles in Pricing Case

Building Materials/Construction, Free, Legal Issues in Wholesale Distribution, News, Operations, Subscriber Only, Top Distributor Sectors / MDM Staff

Louisiana-Pacific Corp., Nashville, TN, reached a settlement with building distributors that filed a class-action suit that included the manufacturer. The class-action, filed in 2006, claimed LP and five other manufacturers of Oriented Strand Board kept prices artificially high by conspiring to keep production low in times of high demand.

Under the terms of the agreement, LP will pay $44.5 million into an escrow account for direct buyers of the product. In addition, the company agreed to pay $2.3 million to indirect purchasers of OSB.

LP, which denies any wrongdoing, agreed to the settlement “to limit the risks and costs associated with at least two lengthy jury trials.”

The agreements are subject to court approval.

CEO Rick Frost said: …

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Wholesale Prices Jump 1.8% in June

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

Wholesale prices increased 1.8 percent in June, seasonally adjusted, the Bureau of Labor Statistics of the U.S. Department of Labor reported. This increase followed advances of 1.4 percent in May and 0.2 percent in April.

At the earlier stages of processing, prices received by producers of intermediate goods rose 2.1 percent in June after moving up 2.9 percent in the prior month, and the crude goods index increased 3.7 percent following a 6.7-percent gain in May.

Within finished goods, the index for energy goods climbed 6.0 percent in June after rising 4.9 percent in May. Prices for consumer foods increased 1.5 percent subsequent to a 0.8-percent advance in the previous month, and the index for finished goods other than foods and energy (core inflation) …

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Niantic Seal Buys Northeast Rubber Products

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

Niantic Seal Inc., Lincoln, RI, a subsidiary of The INSCO Group, has acquired Northeast Rubber Products, Inc., Framingham, MA, a distributor and fabricator of industrial rubber products.

The new entity will operate from its facility in Framingham, MA, doing business as Northeast Rubber Products, a division of Niantic Seal, Inc. Both business units are included in INSCO’s newly formed Performance Materials Group.

According to INSCO, the two companies have shared equal regional market presence in the seal and industrial rubber products market.

We view our new strategic alignment with Niantic Seal as an exciting growth opportunity for both entities,” said Mike Bacon, founder of Northeast Rubber Products. “Going forward, we will now offer a broader …

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Cummins-Wagner Agrees to Buy Siewert Equipment

Finance, Free, HVACR, Mergers & Acquisitions, News, Plumbing Products & PVF Distribution, Subscriber Only, Top Distributor Sectors / MDM Staff

Cummins-Wagner Co., Inc., Annapolis Junction, MD, a distributor of industrial process equipment and HVAC equipment in the mid-Atlantic region, has agreed to acquire Rochester, NY-based Siewert Equipment Co., Inc.

SECO employs 47 people, with branch offices in New York and Florida. SECO is a distributor/manufacturers’representative selling fluid process equipment and provides assembly, aftermarket service and engineered solutions.

The transaction is part of Cummins-Wagner’s business strategy of steady, manageable growth through market penetration and acquisition.

SECO employees will become part of Cummins-Wagner’s 100% Employee Stock Ownership Plan (ESOP).

Cummins-Wagner employs 115 …

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Eaton Sales Grow 32% in 2Q

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

Diversified industrial manufacturer Eaton Corp., Cleveland, OH, reported sales of $4.28 billion for second quarter 2008, 32% above the second quarter of 2007. Profit was $333 million, an increase of 35% over the same quarter in 2007.

Sales growth in the second quarter consisted of 19% from acquisitions, 8% from organic growth, and 5% from exchange rates.

Our businesses performed extremely well in the second quarter, generating strong sales growth and record profits. We were able to achieve these results despite the nearly 40% rise in oil prices during the quarter,” said Alexander M. Cutler, Eaton CEO.

“With 20% of our revenue from emerging countries and with continued strength in many of our product markets, we believe we are well-positioned to …

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Grainger Sales Grow 10% in 2Q

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

Chicago, IL-based Grainger reported sales of $1.8 billion for the second quarter ended June 30, 2008, up 10% over the second quarter 2007. Profit increased 8% to $113 million from the same quarter the prior year.

We are very pleased with the 10% sales growth in the quarter,” said Grainger President and CEO James T. Ryan. “We are making market share gains in a slowing economy.”

Daily sales increased 13% in April, 7 percent in May and 10% in June. For the quarter, sales were positively affected by price by 2 percentage points, foreign exchange by 1 percentage point, and by the timing of Easter, which also contributed 1 percentage point.

Grainger Branch-based Segment
Sales for this segment, which includes branch-based businesses in the U.S., …

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Air Liquide Expands in Middle East

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

Paris-based Air Liquide has acquired Pure Helium, a supplier of liquid and gaseous helium, helium-based mixtures and argon, based in India.

Air Liquide Senior Executive Vice President Pierre Dufour says the move strengthens the company’s position in the Middle East and opens other opportunities for expansion in the region.

Air Liquide, an international supplier of industrial and medical gases and medical services, plans to invest US$1 billion in the Persian Gulf region over the next five …

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Trade Service Corp., IDEA Don’t Renew Agreement

Free, News, Subscriber Only, Technology / MDM Staff

After extended negotiations, e-commerce organizations Trade Service Corp. and IDEA have mutually agreed not to renew their 10-year data-sharing agreement effective July 20, 2008. Both organizations serve the electrical distribution industry.

Trade Service partnered in the development of IDEA, initially licensing over 1.2 million SKUs. Trade Service shared its data with IDEA and provided weekly updates.

In its press release, IDEA said it has increased its capacity for data sourcing to immediately accommodate changes as a result of this decision. The organization said it remains a service-oriented, customer-centric organization serving the electrical channel manufacturers’ and distributors’ needs.”

“This is an exciting time for our company,” Trade …

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Steel Moves Leave Experts Scratching Their Heads

Free, Management, Metals Service Centers, Strategy, Subscriber Only, Top Distributor Sectors / Jenel Stelton-Holtmeier

On July 11, US Steel announced an increase of $40 per short ton on flat-rolled steel effective with September deliveries. In addition, AK Steel will be raising carbon steel prices by $50 per ton on September 1. These moves came just after analysts were starting to believe that U.S. prices may be hitting their peaks and preparing to level off.

It’s significant because it underscores the idea that Tom Balcerek, North American editor of Steel Business Briefing, expressed during my recent interview with him for our July 10 issue: A lot of experts are scratching their heads on where exactly this market will go in the next month or even the next year.

The one thing that is certain is that 2008 has been like no other year in the steel business. I asked each of the …

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Kennametal Taps New Chief for Metalworking Unit

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

Kennametal Inc., Latrobe, PA, has tapped a new chief for its Metalworking Solutions Services Group. Paul DeMand will take the position of president for the unit, which comprises about 60% of Kennametal’s overall revenues.

Before joining Kennametal, DeMand was senior vice president and division head of the Industrial Products Group at Johnson Electric, Ltd., Hong Kong. Before holding that position, he was vice president, Electro-Mechanical at Solectron Corp. in …

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RSC Buys American Equipment Rentals

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

RSC Equipment Rental, Inc., Scottsdale, AZ, the operating entity for RSC Holdings Inc., an equipment rental provider, has acquired American Equipment Rentals, Providence, RI.

Ned Graham, RSC’s senior vice president, Operations, said: The American business is a growth platform for us and its addition is consistent with our strategic initiative to grow.”

American is a provider of aerial equipment, forklifts and other rental equipment serving commercial construction contractors in Providence, RI, Woburn, MA, and New Britain, CT.

American has annual sales of about $19 million, of which nearly 90% are rental revenues.
Sellers were FST Equipment, LLC and AER Holding LLC.

RSC has a network of 468 rental locations across 38 states in the …

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Illinois Tool Works Sales Grow 10.5% in 2Q

Reliance Steel & Aluminum Sales, Profit Grow in 2Q

Watsco Sales Up 8% in 2Q

SKF Sales Up 7.4% in 2Q

Forecast: Manufacturing Sector Will Face ‘Significant Challenges’ in Near-Term

Applied Industrial VP: ‘Fluid Power is Big Growth Area’

Canadian Manufacturing Sales Rise 2.7% in May

Will Inflation Bring Offshore Manufacturing Back to U.S.?

Wolseley Profits Hit Hard in First 11 Months

Louisiana-Pacific Settles in Pricing Case

Wholesale Prices Jump 1.8% in June

Niantic Seal Buys Northeast Rubber Products

Cummins-Wagner Agrees to Buy Siewert Equipment

Eaton Sales Grow 32% in 2Q

Grainger Sales Grow 10% in 2Q

Air Liquide Expands in Middle East

Trade Service Corp., IDEA Don’t Renew Agreement

Steel Moves Leave Experts Scratching Their Heads

Kennametal Taps New Chief for Metalworking Unit

RSC Buys American Equipment Rentals

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