July 2009 - Page 2 of 6 - Modern Distribution Management

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July 2009

Timken Reports $64.5M Loss in 2Q

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

The Timken Company, Canton, OH, reported sales of $828.9 million for the second quarter of 2009, a decrease of 46% over the same period a year ago. The manufacturer of power transmission products recorded a loss of $64.5 million for the term, compared with profit of $88.9 million a year ago.

"The combination of a slow economy and inventory reduction throughout the supply chains we serve continues to curb demand for our products. We’re now seeing evidence that our customers’ inventory destocking activities may go longer and deeper than we expected," said James W. Griffith, president and CEO. "We have decreased manufacturing output in response to lower demand and are on track in our efforts to right-size the company."

For the first half of 2009, sales were $1.79 billion, down 40% …

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On Invoice Add-Ons and Special Price Records

Free, Strategy, Subscriber Only /

Fuel, freight, and energy charges are some of the many items distributors are discovering some customers are willing to pay for. The key word is “some.”

Brent Grover, author of the new book, "Strategic Pricing for Distributors: Tools and Rules for Building Higher Margins," recently spoke with MDM about his new book for the latest issue, and he says that the key for any add-on to an invoice is to do it in customer segments that are least likely to resist those charges. "It’s not a matter of being tough and putting in an across-the-board change," he says. Distributors should not want to lose a customer due to an add-on charge.

"The ability to recover outbound freight charges is a big profit lever for distributors," …

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Park-Ohio Sales Down 42% in 2Q

Free, News, Subscriber Only, Top Distributor Sectors /

Park-Ohio Holdings Corp., Cleveland, OH, announced sales for the second quarter were $163.4 million, down 43% from second quarter 2008. Profit declined 42.1% to $3.3 million.

Year-to-date, sales were $344.7 million, down 38% from the same period of 2008. The company recorded a net loss for the first six months of 2009 of $2.2 million, compared to profit of $9.2 million in the same period of 2008.

Park-Ohio is a provider of supply management services and a manufacturer of highly engineered products. …

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Park-Ohio Sales Down 42% in 2Q Read More »

New Orders for Durable Goods Fall in June

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

New orders for manufactured durable goods in June decreased $4.1 billion or 2.5% to $158.6 billion, according to the U.S. Census Bureau. This decrease followed two consecutive monthly increases including a 1.3% May increase. Excluding transportation, new orders increased 1.1%. Excluding defense, new orders decreased 0.7%.

Shipments of manufactured durable goods in June, down eleven consecutive months, decreased $0.3 billion or 0.2% to $168.3 billion. This was the longest streak of consecutive monthly decreases since the series was first published on a NAICS basis in 1992 and followed a 2.6% May decrease.

Unfilled orders for manufactured durable goods in June, down nine consecutive months, decreased $6.6 billion or 0.9% to $740.1 billion. This followed a 0.3% May decrease. …

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New Orders for Durable Goods Fall in June Read More »

Praxair Sales Fall 26% in 2Q

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

Praxair, Inc., Danbury, CT, reported sales for the second quarter 2009 were $2.13 billion, down 26% from the prior year same period. Profit declined 14.3% to $299 million.

For the first six months of 2009, sales were $4.26 billion, down 23.1% from the first half of 2008. Profit decreased 10.2% to $589 million.

"Challenging economic conditions persisted globally in the quarter, resulting in overall volumes on par with the first quarter," CEO Steve Angel said. "We have begun to see pockets of sequential improvement in Asia and South America, where economic activity appears to be reacting positively to fiscal and monetary stimulus programs. In Europe and North America, the overall industrial environment remains very weak, although volumes appear to have stabilized."

In North …

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Anixter Second Quarter Sales Decline 25%

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

Anixter International Inc., Glenview, IL, a global distributor of communication products, electrical and electronic wire & cable, fasteners and other small parts, reported second quarter sales of $1.2 billion, a decline of 25% from second quarter 2008. Organic sales were down 19%. The company posted a loss of $89.8 million for the period, compared to profit of $1.7 million the prior year.

Year-to-date, sales were $2.5 billion, a decline of 19% from 2008. Loss for the first six months was $64.1 million, compared to profit of $120.8 million the prior year.

Sales declines were experienced in all end-markets, as well all geographic segments. Reduced sales volumes, lower copper prices and foreign exchange contributed to the declines. …

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Anixter Second Quarter Sales Decline 25% Read More »

A.M. Castle Posts $5.5M Loss in 2Q

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, reported second quarter sales of $195.1 million, down 50.9% from second quarter 2008. The company posted a loss of $5.5 million for the quarter, compared to profit of $11.3 million the prior year.

Year-to-date, sales were $447.3 million, down 43.4% from the first half of 2009. Loss for the period was $5.0 million, down from profit of $25.1 million.

"We continue to look for indications of economic recovery. We have seen a few positive signs in some of the macroeconomic trends. We recognize that we still have a long road ahead of us," said Michael Goldberg, CEO and president. "At this point, our customers overall expect destocking to abate in the second half of 2009 compared to the …

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A.M. Castle Posts $5.5M Loss in 2Q Read More »

Crane Co. Sales Down 21% in Second Quarter

Free, News, Subscriber Only, Top Distributor Sectors /

Crane Co., Stamford, CT, a diversified manufacturer of highly engineered industrial products, reported second quarter sales of $545.5 million, down 21% from second quarter 2008. Profit declined 53% to $27.8 million.

The company eliminated 270 positions during the quarter, bringing total headcount reductions to 1,900, or 16%, since year end 2007. Additional reductions are expected in the second half of the year.

Year-to-date, sales were $1.1 billion, down 20% from 2008. Profit declined 52% to $51.1 million.

Segment Results
Sales in the Aerospace & Electronics segment declined 11% during the second quarter to $147 million, a result of significant declines in demand in the Aerospace Group. Demand in Electronics improved slightly during the period.

Engineered Materials …

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Hexcel Corp 2Q Sales Drop 22.9%

Free, News, Subscriber Only, Top Distributor Sectors /

Hexcel Corp., Stamford, CT, reported sales for the second quarter of 2009 were $277.3 million, 22.9% lower than second quarter 2008. Profit declined 37.1% to $16.8 million.

Year-to-date, sales were $584.6 million, down 17% from the first half of 2008. Profit was down 19.4% to $40.2 million.

"While we have limited ability to influence short term sales, we are focused on what we can control: our own cost structure, operational efficiency and cash flow," CEO David Berges said. "This quarter we continued to reduce headcount, controllable costs, capital expenditures and inventories."

In the Industrial segment, sales of $64.8 million for the second quarter of 2009 were down 24.5% in actual dollars (15.6% in constant currency) over last year due primarily to wind energy and automotive …

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Hexcel Corp 2Q Sales Drop 22.9% Read More »

Wolseley Announces Plans for Further Business Closures

Building Materials/Construction, Companies, Free, HVACR, News, Plumbing Products & PVF Distribution, Subscriber Only, Top Distributor Sectors /

UK-based Wolseley plc, distributor of plumbing and heating products to professional contractors and supplier of building materials, reported revenues from continuing operations were down 1.5% – down 16% on a constant currency basis – to £13.25 billion (US$21.86 billion). Trading profit from continuing operations was down 47%.

The company has completed its review of the Central and Eastern European markets, and has decided to focus on countries in that region where it has built sufficient scale, established leading market positions and can deliver an appropriate financial return. As a result, Wolseley decided to sell its Belgium, Slovakin and Czech Republic businesses. It will retain a presence in Switzerland, Austria, Luxembourg, Denmark, Holland and Italy.

Action also has …

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Saint-Gobain Sales Fall 15.5% in First Half of 2009

Building Materials/Construction, Chemicals & Plastics Distribution, Free, News, Subscriber Only, Top Distributor Sectors /

The Saint-Gobain Group, Courbevoie, France, reported sales for the first half of 2009 were €18.7 billion (US$26.6 billion), down 15.5% from the first half of 2008. Profit declined 88.1% to €128 million (US$182.2 million).The group saw negative organic growth of 15.5% for the period.

All of the group’s business sectors posted declines.

The continued decline of both construction and industrial markets in the US and Western Europe, as well as in most Asian and emerging countries, contributed to the steep declines in Building Distribution and Construction Products.

Sales in the Construction Products segment declined 15.3% on a like-for-like basis. Increased prices failed to offset the continuing fall in sales volumes, particularly in Interior Solutions, which fell …

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Saint-Gobain Sales Fall 15.5% in First Half of 2009 Read More »

Timken May Sell Needle Roller Bearings Business

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

The Timken Company, Canton, OH, is in advanced discussions regarding the potential sale of its Needle Roller Bearings Business. In a press release, the company said: “There can be no assurance that a definitive agreement will be reached, nor that a sale, which would be subject to certain closing conditions, will be completed.”

Timken, a manufacturer of power transmission products, had sales of $5.7 billion in 2008, and operations in 26 …

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Timken May Sell Needle Roller Bearings Business Read More »

Distribution Financial Metrics and Trading Multiples: 2Q

Economic Trends, Research & Analytics, Subscriber Only /

This table highlights key financial metrics and trading multiples for 28 publicly traded distributors in the industrial and building products industries up to June 30, 2009. Download this data below. Also find graphic illustrating median EBIDTA multiples for the same distribution companies.

These materials, prepared by Robert W. Baird & Co. for MDM, are for informational purposes …

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MDM July 25, 2009

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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 seven years of online archives and market data. Call 1-888-742-5060 or email info@mdm.com to …

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MDM July 25, 2009 Read More »

Inflation by Commodity Group: Second Quarter 2009

Economic Trends, Research & Analytics, Subscriber Only /

These select product groups provide a snapshot of inflation trends based on the Producer Price Index from the U.S. Bureau of Labor Statistics. Second quarter 2009 is compared with second quarter 2008, second quarter 2009 with first quarter 2009.

The product groups in this report:

Abrasives
Adhesives & Sealants
Cutting Tools & Accessories
Hand & Edge Tools
Fasteners
Power-Driven Hand Tools
Ball & Roller Bearings
Mechanical Power Transmission Equipment
Valves, Except Fluid Power
Pumps, Compressors & Equipment
Electrical Machinery/Equipment
Industrial Material Handling Equipment
Industrial Gases
Welding Machinery/Equipment
Fluid Power Equipment
Plumbing Fixtures & Fittings
Hardware
Sanitary Paper Products
Plastic Resins & …

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Inflation by Commodity Group: Second Quarter 2009 Read More »

Monthly Wholesale Trade: Sales and Inventories for May 2009

Economic Trends, Research & Analytics, Subscriber Only /

May 2009 wholesale revenues were $311.3 billion, up 0.2 percent from the revised April level, but down 19.9 percent from the May 2008 level. The April preliminary estimate was revised upward $1.4 billion or 0.4 percent. May sales of durable goods were down 0.2 percent from last month and were down 23 percent from a year ago. Sales of metals and minerals, except petroleum were down 8.1 percent for last month, while motor vehicle and motor vehicle parts and supplies were up 4.4 percent. Sales of nondurable goods were up 0.5 percent from last month, but were down 17.2 percent from last year. Sales of petroleum and petroleum products were up 4.6 percent from last month and sales of drugs and druggists’ sundries were up 1.4 percent.
Inventories
Total inventories were $402.2 …

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Monthly Wholesale Trade: Sales and Inventories for May 2009 Read More »

Commentary: The Fear Factor in Change

Free, Management, Perspective, Strategy, Subscriber Only /

Here at MDM we are in the midst of implementing some positive changes in how we do business. We are especially excited about one in particular, which we will be revealing to you in the next couple of months.

Our operations are different from a distributor’s – MDM is a part of Gale Media, which is a specialized publishing and research business – but through our work, we are reminded of the challenges that come with change. Undoubtedly, these challenges transcend industry lines.

While we hope the ROI will be positive, there is only so much a business can control. And that’s the fear factor in change.

But it’s also exciting and provides a great opportunity for the company. We recognize the only way to continue growing is to make this investment of time and energy. We feel like …

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Conditions Ripe for Better Pricing

Management, Strategy, Subscriber Only /

Brent Grover of Evergreen Consulting recently spoke with MDM about the importance of the concepts outlined in his latest book, "Strategic Pricing for Distributors: Tools and Rules for Building Higher Margins." Grover writes that strategic pricing can result in an increase of 200 or more basis points (2 percentage points) of gross margin percentage. "It’s far more dramatic than slashing the staff or reducing sales commissions," he tells MDM. This article looks at why now is a good time to implement a new pricing strategy and analyzes the importance of two key aspects: the sales team and technology.

Grover’s book, written as part fable featuring the fictitious Mahoning Distributors, and part practical guide, was released by the National Association of Wholesaler-Distributors …

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Conditions Ripe for Better Pricing Read More »

Economic Update: Is Recovery On the Way?

Economic Trends, Research & Analytics, Subscriber Only /

This is the first of a new monthly feature compiling the latest economic indicators to provide a more holistic view of the state of the economy.

The long climb to economic recovery may be beginning as a variety of economic indicators posted more positive results in May and June.While not all of the indicators posted positive results, many of those remaining negative declined at a slower rate. Though the outlook for recovery is still uncertain, many economists view these shifts as signs that the U.S. economy is heading into recovery phase with growth possible in 2010.

With the current recession in its nineteenth month, it is already longer and more widespread than the recessions in 1990-1991 and 2000-2001, according to Nouriel Roubini of the RGE Monitor, an economic analysis …

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Economic Update: Is Recovery On the Way? Read More »

Black & Decker Sales Fall 27% in Second Quarter

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

The Black & Decker Corp., Towson, MD, reported sales fell 27% in the second quarter 2009 to $1.2 billion. Profit was $38.3 million, down from $96.7 million in the prior-year period. The company reported extremely weak" demand in its end-markets for the quarter.

Sales in the company’s Power Tools and Accessories segment fell 21% in the second quarter. U.S. Industrial Products Group sales fell 30% due to declines in both the residential and non-residential areas.

Sales increased at a high single-digit rate in the U.S. Consumer Products Group, with strong shipments of lawn and garden products and the new Porter-Cable line outweighed decreases in other categories.

European sales decreased 30%, similar to the first-quarter trend, with a particularly sharp decline in Eastern Europe. …

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Black & Decker Sales Fall 27% in Second Quarter Read More »

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