April 2009 - Page 3 of 6 - Modern Distribution Management

April 2009

Slightly Down is the New Up

The Industrial Supply Association Conference & Trade Fair took place earlier this week. I moderated a panel session, The View from Wall Street on Industrial Markets, with Walter Liptak, security analyst for Barrington Research Associates, Chicago, IL, and Holden Lewis, Industrial Equipment Analyst for BB&T Capital Markets Equity Research, Richmond, VA. They gave the industry insiders in that room (standing room only) a view from the investment side on strengths, weaknesses and trends.
Sometimes the truth hurts, and their analysis of a range of macro trends, end-use markets and outlook for the near-term was not pretty. That said, some of the data gave a glimmer of hope on top of the recent positive signs that we could near the bottom of this cycle and see a ...

Slightly Down is the New Up Read More »

Grainger Hosting Green Events For Earth Day

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

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%

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 ...

Crane Co. 1Q Sales Fall 18% Read More »

Alfa Laval Sales Decline 10%

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. ...

Alfa Laval Sales Decline 10% Read More »

Eaton Sales Down 20% In 1Q

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 ...

Eaton Sales Down 20% In 1Q Read More »

Flowserve Buys Swiss Manufacturer

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 ...

Flowserve Buys Swiss Manufacturer Read More »

Chicago Fed National Activity Index Edges Down in March

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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Striking a Balance Between Long- and Short-Term Plans

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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March Housing Starts Fall 10.8% From February

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 ...

March Housing Starts Fall 10.8% From February Read More »

Motion Industries Sales Fall 16% in 1Q 2009

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 ...

Motion Industries Sales Fall 16% in 1Q 2009 Read More »

ITW Records $39M Loss in 1Q

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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Parker Hannifin 3Q Sales Down 26.3%

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 ...

Parker Hannifin 3Q Sales Down 26.3% Read More »

Bunzl Sales Increase 18%

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 & ...

Bunzl Sales Increase 18% Read More »

ITT Agrees To Buy German Manufacturer

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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Canadian Manufacturing Sales Up 2.2% in February

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 ...

Canadian Manufacturing Sales Up 2.2% in February Read More »

Myers Industries Sales Fall 24% in 1Q

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 ...

Myers Industries Sales Fall 24% in 1Q Read More »

Kimberly-Clark Buys Jackson Safety

Kimberly-Clark Corp., Dallas, TX, has acquired Jackson Products, Inc., a privately held safety products company headquartered in Fenton, MO. Jackson Products, Inc., also known as Jackson Safety, is a provider of welding safety products, personal protective equipment and work zone safety products.
 
"The acquisition of Jackson Safety is consistent with our global business plan strategy to accelerate growth of high-margin workplace solutions," said Jan Spencer, president of Kimberly-Clark Professional. "Jackson Safety brings a wealth of strengths to Kimberly-Clark's Professional business, including an outstanding product portfolio and a highly experienced sales force."
 
Tom Burns, current president and CEO of Jackson Safety, will continue to lead ...

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Industrial Production Falls 1.5% in March

Industrial production fell 1.5 percent in March after a similar decrease in February. For the first quarter as a whole, output dropped at an annual rate of 20.0 percent, the largest quarterly decrease of the current contraction. At 97.4 percent of its 2002 average, output in March fell to its lowest level since December 1998 and was nearly 13 percent below its year-earlier level.
 
Production in manufacturing moved down 1.7 percent in March and has registered five consecutive quarterly decreases. Broad-based declines in production continued; one exception was the output of motor vehicles and parts, which advanced slightly in March but remained well below its year-earlier level.
 
Outside of manufacturing, the output of mines fell 3.2 ...

Industrial Production Falls 1.5% in March Read More »

Latest Beige Book Shows Some Signs of Stability

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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