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2009

Lawson Products 1Q Sales Down 21%

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

Lawson Products, Inc., Des Plaines, IL, a distributor of services, systems and products to the MRO and OEM marketplaces, reported sales for the first quarter of 2009 were $99.4 million, down 21% year-over-year.  The company recorded a loss of $5.9 million for the quarter, compared to a profit of $4.4 million a year ago.
 
Restructuring charges and additional costs related to the settlement of the investigation by the U.S. Attorney’s Office for the Northern District of Illinois, totaled $6.5 million in 2009 and $1.3 million in 2008.
 
"While the global economic recession continues to impact our business, we remain committed to making aggressive cost decisions that will better position Lawson to emerge as a stronger company than it was when we entered …

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United Stationers Sales Fall 10% In 1Q

Companies, Free, News, Operations, Paper Products & Packaging Distribution, Subscriber Only, Top Distributor Sectors /

United Stationers Inc., Deerfield, IL, reported sales of $1.12 billion for the first quarter of 2009, down 10% from first quarter 2008.  Profit fell 36.6% to $13.5 million.
 
Continued weakness in the economy contributed to reduced sales in all product categories with the exception of janitorial/breakroom, which remained at last year’s level. The company previously announced it would be eliminating 250 positions.
 
While we are encouraged by some recent trends, we expect markets to remain weak in the near term and are planning accordingly,” said Richard W. Gochnauer, president and CEO. “On a more positive note, the economy has generated renewed interest among customers and suppliers around utilizing United’s …

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Arrow Electronics Sales Down 15% In 1Q

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

Arrow Electronics, Inc., Melville, NY, reported first quarter 2009 sales of $3.42 billion, down 15% from the prior year period. Profit declined 69% to $26.7 million.
 
 We executed well in the first quarter, despite the persistent backdrop of global economic uncertainty and turbulence, with sales and earnings per share in line with our expectations, CEO William E. Mitchell said. “We achieved our targeted level of cost reductions, and reduced expenses at a faster rate than the decline in sales. However, we cannot ignore the fact that economies around the world are still struggling with recessionary conditions, and this will continue to have an impact on our business.”
 
Global enterprise computing solutions (ECS) sales of $1.07 billion …

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Praxair 1Q Sales Fall 20%

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

Praxair, Inc., Danbury, CT, reported sales of $2.1 billion for the first quarter of 2009, 20% below first quarter 2008 sales. Profit declined 5.5% to $290 million.
 
Demand appears to have stabilized, but at a lower level, with overall volumes down 12% versus the prior year. However, we have not yet seen meaningful signs of recovery and we are therefore cautious regarding our outlook for the remainder of the year, said CEO Steve Angel.
 
Based on the current macroeconomic environment, Praxair expects sales for the full year of 2009 to be in the area of $9 billion. Full-year capital expenditures are expected to be in the area of $1.4 billion, supporting the construction of 42 on-site production plants under contract which will come on-stream in 2009 …

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GDP Falls at Rate of 6.1% in 1Q

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

Real gross domestic product – the output of goods and services produced by labor and property
located in the U.S. – decreased at an annual rate of 6.1 percent in the first quarter of 2009, (from the fourth quarter to the first quarter), according to advance estimates released by the Bureau of Economic Analysis. In the fourth quarter, real GDP decreased 6.3 percent.
 
The Bureau emphasized that the first-quarter advance estimates are based on source data that are incomplete or subject to further revision by the source agency. The first-quarter “preliminary” estimates, based on more comprehensive data, will be released on May 29, 2009.
 
The decrease in real GDP in the first quarter primarily reflected negative contributions …

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New Orders for Durable Goods Down 0.8% in March

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

New orders for manufactured durable goods in March decreased $1.3 billion or 0.8 percent to $161.2 billion, the U.S. Census Bureau announced in its advance report. This was the seventh decrease in the last eight months and followed a 2.1 percent February increase. Excluding transportation, new orders decreased 0.6 percent. Excluding defense, new orders also decreased 0.6 percent.
 
Shipments of manufactured durable goods in March, down eight consecutive months, decreased $3.0 billion or 1.7 percent to $175.0 billion. This followed a 0.8 percent February decrease.
 
Unfilled orders for manufactured durable goods in March, down six consecutive months, decreased $11.2 billion or 1.4 percent to $760.3 billion. This followed a 1.6 percent February decrease. …

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Survey: Slight Uptick in Optimism Among Industrial Manufacturers

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

The first quarter edition of the PricewaterhouseCoopers LLP Manufacturing Barometer reported a slight uptick in economic optimism among U.S.-based industrial manufacturers with 16% of executives polled expressing optimism about the U.S. economy over the next 12 months, up 11 points from the previous quarter. More than half the respondents (55%) remain pessimistic about the U.S. economy, which is an improvement from the 70% who were pessimistic last quarter.
 
Anxieties over international prospects remain high amidst the global recession, as 98% of manufacturers marketing abroad agree that the global economy declined in Q1. International sales turned increasingly negative in the first quarter, with more than half (60%) of respondents reporting decreased international sales from …

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Analyze Customer Needs and the Resources You Need to Meet Them

Free, Sales & Marketing, Subscriber Only /

Mike Emerson and Mike Marks of Indian River Consulting Group recently presented "Sales Force Compensation: Best Practices in Tough Times" in a free MDM Webcast sponsored by Sage. Emerson wrote a followup article for MDM, Align Selling Resources to the Market. In the article, published in the April 25, 2009, issue of MDM (found here), he encourages distributors to take a closer look at their customer base to determine what type of sales resource is appropriate for each customer based on that customer’s needs.

For example, customers that require assistance when selected products need active involvement, while those that use internal capabilities to select products need passive involvement on the part of the distributor. …

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IDEA, Affiliiated Distributors Start Pilot Program

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

IDEA, an electrical industry owned eCommerce service provider, and Affiliated Distributors, a wholesale buying and marketing group, announced plans to begin a pilot program under which IDEA will assist A-D members with recommendations on improving their synchronization processes.
 
IDEA had been working with four A-D members over a 60-day period to help both organizations define the scope of the program – which is exclusive to A-D for the 2009 calendar year. IDEA will introduce the program industry-wide after an A-D pilot program is completed.
 
"A-D is very pleased to join forces with a partner who is committed to synchronization within the electrical channel. Leadership from both organizations understands that in a globally competitive economy, …

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Timken Company 1Q Sales Fall 33%

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

The Timken Company, Canton, OH, reported sales of $960.4 million for first quarter of 2009, a decrease of 33% over the same period a year ago. First-quarter profit was $0.9 million, compares with profit of $84.5 million for first quarter 2008.
 
It’s now clear that the impact of the recession on the demand for our products will be deeper and longer lasting than we anticipated. In the short term, we are managing the company with a heightened emphasis on cash flow, said James W. Griffith, president and CEO. “At the same time, we are taking actions to structure the company for profitability, even at current levels of demand, including efforts to strengthen our portfolio while improving the competitiveness of our manufacturing base.” …

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BlueLinx Agrees To End Supply Agreement With Georgia-Pacific

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

BlueLinx Holdings Inc., Atlanta, GA, a distributor of building products in North America, has agreed to terminate the Master Purchase, Supply and Distribution Agreement between BlueLinx Corp. and Georgia-Pacific LLC, effective April 27, 2009. Georgia-Pacific previously announced its intention to end the agreement in May 2010.
 
In exchange for BlueLinx’s agreement to cancel the agreement earlier, Georgia-Pacific will pay $18.8 million.
 
BlueLinx will continue to distribute Georgia-Pacific building products, but the early termination of the agreement also provides BlueLinx the opportunity to pursue strategic relationships with other suppliers and customers previously prohibited. …

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Chicago Fed Midwest Manufacturing Index Falls 2.4% In March

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

The Chicago Fed Midwest Manufacturing Index fell 2.4% in March, to a seasonally adjusted level of 82.0 (2002 = 100). Revised data show the index decreased 0.4% in February, to 84.0.
 
The Federal Reserve Board’s industrial production index for manufacturing fell 1.7% in March. Regional output in March was down 23.2% from a year earlier – lower than the 14.9% decrease in national output.
 
The region’s steel sector output dropped 5.5% in March after falling 4.3% in February. The nation’s steel output was down 3.8% in March. Regional steel output dropped 34.1% from its March 2008 level, and national steel output fell 24.2%.
 
The Midwest’s machinery sector output also declined 5.5% in March after moving down 4.9% in February. …

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Atlas Copco Organic Sales Fall 17% In 1Q

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

Swedish manufacturer Atlas Copco reported sales of MSEK 16,577 (US$2 billion) for the first quarter of 2009, down 3% from the prior year term. Organic sales were down 17%. Profit fell 42% to MSEK 1,378.
 
Since October 2008, headcount has been reduced by 3,800 and is likely to be reduced by around 1,200 more during the coming quarters.
 
The economic situation still makes the outlook very uncertain. Demand is however expected to remain weak in most industries and regions and stay around the current level. …

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Atlas Copco Organic Sales Fall 17% In 1Q Read More »

Keeping Layoffs to a Minimum

Features, Human Resources in Wholesale Distribution, Management, Operations, Strategy, Subscriber Only /

Wholesaler-distributors are searching far and wide for ways to cut costs without cutting people. Here is a look at how some distributors have approached the process.
 
When business began to soften in November for W.P. & R.S. Mars Co., Bloomington, MN, the industrial distributor began preparing for a rough 2009. Then sales plummeted in January, and executives in the company knew some serious decisions had to be made.
 
The management team was pulled together to brainstorm ways to reduce expenses that wouldn’t involve layoffs. Our employees are so important to us that we wanted to make cuts in every area before we considered reducing our staff, says controller Beth Ahrens.
 
A desire to avoid layoffs is common among …

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Commentary: Now is the Time to Act

Free, Management, Perspective, Strategy, Subscriber Only /

The past few weeks, with a few economic indicators going up here and there, have given many distributors a glimmer of hope that we might be near the trough of the business cycle.
 
For distribution executives, this is the toughest part of the cycle. The difficult decisions made on the way down are not easy, but the bottom line often does the deciding; conserving cash is king. Few distributors and manufacturers have avoided layoffs; indeed some have cut their work force for the first time in decades.
 
It’s always possible to be too conservative, but this downturn has redefined what that means. Markets are volatile. A day of strong orders is followed by a day when phones are quiet. It’s impossible to forecast effectively to start the rebuilding process. …

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Align Selling Resources to the Market

Features, Sales & Marketing, Subscriber Only /

For distributors who have had to implement reductions to their sales force, there is a legitimate concern that as the number of salespeople go down, so will revenues. A three-step process exists to help mitigate these potential effects.
 
One question many distributors are asking is, How can I reduce costs without losing sales?
 
The answer: “Align your selling resources more closely with the market.”
 
Achieving this is not simple, but a proven three-step process for doing so does exist. The steps: Segment customers, utilize effective sales management practices, and ensure incentive structures are in alignment. This article will discuss the importance of each step and illustrate how the outcomes from each will enhance …

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Genuine Parts Company: Cost Cuts a ‘Balancing Act’

Companies, Electrical, Operations, Paper Products & Packaging Distribution, Subscriber Only, Top Distributor Sectors /

The four business units of Genuine Parts Co. – Automotive, Electronics, Industrial and Office Products – have drafted detailed and specific cost reduction plans, which each have implemented, according to Thomas Gallagher, CEO, in the company’s latest conference call on its first quarter 2009 results.
 
But as we saw the business decelerating even more in Industrial and Electrical, they had built contingency plans to take more costs out, which they have been working on, and they continue to refine the contingency planning to try to catch up with the declining revenue, he said.
 
But the company is cautious of not cutting too much. “It’s a balancing act,” says CFO Jerry Nix. “We don’t want to go so far that …

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MDM News Digest 3908

Subscriber Only /

Grainger, Chicago, IL, reported first quarter sales of $1.5 billion, down 12 percent from first quarter 2008. Profit decreased 16 percent to $96 million. As part of cost reduction plans announced in February, the company reduced headcount by 200 employees and incurred severance expense of $5 million in the first quarter. The company is on track to meet headcount reductions of 300-400 this year. More
Grainger hosted 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 …

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MDM April 25, 2009

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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Inflation by Commodity Group: First 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. First quarter 2009 is compared with first quarter 2008, first quarter 2009 with fourth quarter 2008.
 
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 …

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Inflation by Commodity Group: First Quarter 2009 Read More »

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