April 2009 - Page 3 of 6 - Modern Distribution Management

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April 2009

Snap-On Sales Decline 20.6% In 1Q

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

Snap-on Inc., Kenosha, WI, a global manufacturer of tools, diagnostics, equipment, software and service solutions for professional users, reported sales of $572.6 million for the first quarter of 2009, down 20.6% from the prior year. Profit declined 38.5% to $34.8 million.
 
Commercial & Industrial Group segment sales were $259.8 million, down 27.2% from 2008 levels. Excluding $33.6 million of unfavorable currency translation, year-over-year sales declined 17.7% primarily due to continued lower sales of professional tools in Europe and decreased sales of equipment worldwide.
 
Snap-on Tools Group segment sales of $242.4 million in the quarter declined 16.2%; organic sales declined 10.7%.
 
Diagnostics & Information Group segment sales declined …

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Grainger Hosting Green Events For Earth Day

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

Grainger, Lake Forest, IL, a distributor of facilities maintenance supplies, will host green educational events to honor Earth Day in 25 markets across the country focused on helping businesses and institutions garner the knowledge and tools needed to maintain and operate more sustainable and energy-efficient facilities. The educational events are in conjunction with the launch of an online green product catalog that provides customers easy access to more than 3,300 environmentally responsible products.
 
“Businesses are looking to navigate the many definitions of “green” to ultimately find ways to maintain and operate their facilities more efficiently and cost-effectively, without taxing our environmental resources,” said Deb Oler, …

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SKF Sales Fall 4.8% In 1Q

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

Swedish manufacturer SKF reported sales declined 4.8% to SEK 14.8 billion (US$1.7 billion) in the first quarter of 2009. Profit fell 69.6% to SEK 394 million (US$46.2 million).
 
 We saw a very significant drop in our sales volumes in the first quarter and reduced our manufacturing level even more, said Tom Johnstone, president and CEO.  “Looking at the second quarter we expect to see a similar level of decline in volume year on year as we saw in the first quarter. However, we can see that the speed of decline sequentially is reducing which indicates that demand may be leveling out".
 
The decrease of 4.8% in net sales for the quarter, in SEK, was attributable to: volume -26.9%, structure 1.4%, price/mix 7.1% and currency effects …

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Crane Co. 1Q Sales Fall 18%

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

Diversified manufacturer Crane Co., Stamford, CT, reported first quarter sales of $555.1 million, down 18% from the first quarter of 2008. Profit declined 51.8% to $23.3 million.
 
First quarter 2009 sales decreased $123.7 million, or 18%, including a core business decline of $107.8 million (16%) and unfavorable foreign currency translation of $49.3 million (7%), partially offset by an increase in sales from acquired businesses of $33.3 million (5%).
 
 While our sales and earnings declined significantly from our record first quarter 2008 results, our earnings were in line with our expectations, said Eric C. Fast, president and CEO.
 
Excluding two acquisitions in 2008, headcount has been reduced by 1,600 people, or 13%, since year end …

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Alfa Laval Sales Decline 10%

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Sweden-based Alfa Laval reported sales increased 10% to SEK 6.9 billion (US$809 million) in the first quarter 2009. In constant dollars, sales decline 4.8%. After taxes, profit was SEK 764 million (US$89.7 million).
 
Acquisitions completed during the first quarter are expected to contribute SEK 600 million to annual sales.
 
Second quarter demand is anticipated to be in line with or somewhat lower than the first quarter 2009. …

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Eaton Sales Down 20% In 1Q

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

Diversified industrial manufacturer Eaton Corp., Cleveland, OH, first quarter were $2.8 billion, 20% below the same period in 2008. The company recorded a loss of $50 million for the quarter.
 
Our first quarter results reflect the impact of the severe downturn in many of our end markets and the expenses associated with personnel reductions made in the first quarter, CEO Alexander M. Cutler said. “Weaker than expected markets were partially offset by lower than originally anticipated severance expense. The lower severance expense was primarily due to the length of time it has taken to conclude severance plans in several countries.”
 
Sales for the Electrical Americas segment were $859 million, down 6% from 2008. Excluding acquisition …

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Flowserve Buys Swiss Manufacturer

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

Flowserve Corp., Dallas, TX , a provider of flow control products and services for the global infrastructure markets, has acquired privately owned CALDER AG, a Swiss Company, to expand the products and advanced technologies it offers to the growing global desalination markets. Terms of the transaction were not disclosed.
 
CALDER AG specializes in the design, engineering and supply of energy-recovery equipment and related proprietary technologies for the reverse osmosis process used in desalination plants. Energy-recovery equipment is critical technology within reverse osmosis that captures and reuses waste energy, which significantly lowers net energy consumption.
 
Global water desalination needs are growing very rapidly due to the demands of continued …

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March Housing Starts Fall 10.8% From February

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

Privately-owned housing starts in March were at a seasonally adjusted annual rate of 510,000, 10.8% below the revised February estimate of 572,000 and 48.4% below the March 2008 rate of 988,000, according to the U.S. Census Bureau and the Department of Housing and Urban Development.
 
Single-family housing starts in March were at a rate of 358,000; this is unchanged from February. The March rate for units in buildings with five units or more was 116,000.
 
By region, housing starts in the Northeast were down 41.7% from March 2008; in the Midwest, they were down 24.4%. Starts dropped 48% in the South, and the West experienced a decrease of 67.3%.
 
Permits
Privately-owned housing units authorized by building permits in March were at a seasonally …

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Striking a Balance Between Long- and Short-Term Plans

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Current economic conditions have impacted the way businesses think about doing business, according to a recent article and survey found in The McKinsey Quarterly.
 
The article, Strategic planning: Three tips for 2009,” warns businesses against abandoning strategic planning for survival mode, because eventually the crisis will end.
 
Focusing solely on the recession is a mistake for two reasons, according to the piece:
 
First, market trends are already established, and managers and executives should continue to focus on those for long-term business planning.
 
Second, fixation on the economy itself creates tunnel vision that could …

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Chicago Fed National Activity Index Edges Down in March

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

The Chicago Fed National Activity Index was -2.96 in March, down slightly from -2.82 in February. All four broad categories of indicators continued to make negative contributions to the index in March.
 
The three-month moving average, CFNAI-MA3, increased to -3.27 in March from -3.57 in the previous month. March’s CFNAI-MA3 suggests that growth in national economic activity was well below its historical trend. With regard to inflation, it indicates little inflationary pressure from economic activity over the coming year.
 
Employment-related indicators made a large negative contribution of -1.27 to the index in March after contributing -1.29 in the previous month. Total nonfarm payroll employment declined 663,000 in March, after decreasing 651,000 in February; …

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Myers Industries Sales Fall 24% in 1Q

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Myers Industries, Inc., Akron, OH, reported sales for the first quarter ended March 31, 2009, were $190.1 million down from $249.3 million in same period a year ago – a decrease of 24%.
 
Pricing, product mix and development of sales in industrial, agriculture, horticulture and other markets helped to mitigate the impact of lower demand in Material Handling and Lawn and Garden segments, according to Myers.
 
Distribution markets remained soft from the slowdown in vehicle and tire service, due to the continued decline in miles driven and depressed auto sales. Auto and Custom Segment sales continued to be adversely affected by the severe downturn in original equipment markets.

Myers Industries, Inc. is an international manufacturer of polymer products …

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Canadian Manufacturing Sales Up 2.2% in February

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

Canadian manufacturing sales increased 2.2% to $42.9 billion in February, the first increase since July 2008, according to Statistics Canada. Motor vehicle and motor vehicle parts industries in Ontario were behind most of the gains in February, following widespread slowdowns and shutdowns in January.

Excluding motor vehicles and parts and accessories, manufacturing sales edged down 0.2%, the seventh monthly decline in a row.

Constant dollar manufacturing sales, which are measured in 2002 prices, rose 2.6% to $39.4 billion in February. This was the first increase in constant dollar sales since September 2008.

At the industry level, sales in 9 of 21 manufacturing industries increased …

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Parker Hannifin 3Q Sales Down 26.3%

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Parker Hannifin Corp., Cleveland, OH, a manufacturer of motion and control technologies, reported sales of $2.3 billion for its fiscal year 2009 third quarter ended March 31, down 26.3% from the same quarter a year ago. Profit declined 79.1% to $53.4 million. Results include expenses related to legal proceedings associated with the company’s Parker ITR subsidiary, which were largely offset by an ITR related net tax benefit.
 
"Third quarter results reflect the impact of the global recession," CEO and President Don Washkewicz said. "Weakness in customer order trends that began in the second quarter continued through the third quarter across almost all markets.
 
The company has already implemented a series of cost-reduction measures, including …

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Motion Industries Sales Fall 16% in 1Q 2009

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

Genuine Parts Company, Atlanta, GA, reported sales in the first quarter ended March 31, 2009, were down 11% to $2.4 billion from the prior-year period. Profit was $89.2 million, a decrease of 28%.

By group:

  • The Automotive Group: 7% decrease
  • S.P. Richards (office products): 7% decrease
  • Motion Industries (industrial): 16% decrease
  • EIS (electrical): 25% decrease.

Genuine Parts expects the effects of the economic slowdown to persist for "several more …

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ITW Records $39M Loss in 1Q

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Illinois Tool Works Inc., Glenview, IL, sales in the first quarter of 2009 were $2.9 billion, a decline of 24% from the first quarter of 2008. The manufacturer recorded a loss of $39 million for the period.
 
Due to further weakening in first quarter worldwide end markets, base revenues declined 23.3% versus the year ago period, with North America decreasing 26.7% and international falling 19.5%. Currency translation negatively impacted revenues 7.3% and acquisitions contributed 6.6% in the quarter.
 
"The 2009 first quarter represented historic challenges for our company as end markets continued to weaken in North America, Europe and Asia-Pacific," CEO David B. Speer said. "As a result, we continued to take aggressive restructuring actions that we …

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Bunzl Sales Increase 18%

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London, UK-based Bunzl plc, an international distribution and outsourcing group, reported sales for the three months ended March 28, 2009, increased 18% over the same period a year ago.
The positive impact of exchange and acquisitions, new customer wins and additional business gained with existing customers contributed to the increase. Underlying revenue was marginally down due to the impact of deteriorating macroeconomic conditions across international markets, particularly in the UK & …

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ITT Agrees To Buy German Manufacturer

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

ITT Corp., White Plains, NY, has agreed to acquire Laing GmbH of Germany, a privately held producer of energy-efficient circulator pumps primarily used in residential and commercial plumbing and heating, ventilating and air conditioning systems. Once completed, the acquisition will reflect the company’s continued strategic focus on satisfying the market’s growing demand for energy efficiency and lower life-cycle costs.
 
Laing is headquartered in Remseck, Germany, with operations in Germany, Hungary, the United States and Japan. The company employs approximately 500 people worldwide and generated 2008 global revenues of €30 million ($40 million U.S.). Upon completion of the acquisition, Laing will be fully integrated into ITT’s Residential and Commercial …

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A. M. Castle Announces Additional Cost-Cutting Measures

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

A. M. Castle & Co., Franklin, Park, IL, a global distributor of specialty metal and plastic products and services, announced a series of cost reduction initiatives amid continued challenges in the global economy and the metals market. The additional cost reduction measures include reduced work weeks and furloughs, suspension of the Company’s 401(k) contributions, and executive salary cuts of at least 10% resulting in a total cash compensation reduction of approximately 20%.
 
In March, the company announced its intention to reduce 2009 operating expenses by at least $45 million. With the latest additions to its cost management efforts, a $65 million operating expense reduction in 2009 is expected, a reduction of over 20%.
 
The company also announced plans to …

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Green Opportunities in the Stimulus Package

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The stimulus package passed in February is about more than just shoring up business-as-usual organizations, says Pembroke Consulting’s Adam Fein. Fein identified more than $15 billion that has been allocated to enhance or create green projects on the state and federal level – a significant increase over previous funding. For example, state energy programs will receive $3.1 billion dollars – a funding jump of 70% over 2008.
 
This new funding can be a boon for distributors, particularly those that service the electrical and homebuilding/renovation sectors. Money will flow into projects for weatherization – anything from rewiring to insulation – and for improving the smart grid.
 
States and municipalities are still trying …

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Latest Beige Book Shows Some Signs of Stability

Economic Trends, Free, Research & Analytics, Subscriber Only /

While the latest Beige Book reports from the Federal Reserve Banks indicate that the economy remained weak or contracted further before April 6, five of the 12 Districts noted that the pace of decline was moderating. Several Districts reported signs that activity in some sectors was stabilizing.
 
The report is a compilation of conditions across all 12 Federal Reserve Districts in the U.S.
Here’s an overview of the report:
 
Manufacturing activity weakened across a broad range of industries in most Districts, with only a few exceptions. Cleveland noted some leveling off, and the New York and Dallas Districts reported demand was beginning to bottom out following steep declines.
 
Residential real estate markets continued to be weak. Home …

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