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2009

HD Supply to Receive $22M Payout from Home Depot

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

HD Supply, diversified wholesale distributor in the infrastructure and energy, maintenance, repair and improvement and specialty construction markets, has reached an agreement with The Home Depot, Atlanta, GA, related to post-closing purchase price adjustments from the sale of HD Supply in August 2007.
 
Home Depot sold HD Supply to three private equity firms for $8.5 billion, with the Home Depot retaining a 12.5% equity stake in the company.
 
Under the terms of the agreement, HD Supply will receive a payment of $22 million and other non-cash considerations.
 
"We are very pleased to have reached an agreement and to put this matter behind us," saidJoe DeAngelo, HD Supply’s Chief Executive Officer, …

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New Orders for Durable Goods Fall 2.6% in December

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

New orders for manufactured durable goods in December decreased $4.7 billion or 2.6% to $176.8 billion, the U.S. Census Bureau announced. This was the fifth consecutive monthly decrease and followed a 3.7% November decrease. Excluding transportation, new orders decreased 3.6%. Excluding defense, new orders decreased 4.9%.
 
Shipments
Shipments of manufactured durable goods in December, down five consecutive months, decreased $1.4 billion or 0.7% to $191.3 billion. This followed a 4.2% November decrease.
 
Unfilled Orders
Unfilled orders for manufactured durable goods in December, down three consecutive months, decreased $10.3 billion or 1.3% to $803.2 billion. This followed a 0.9% November decrease. …

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Advance Estimates: GDP Falls 3.8% in 4Q

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

Real gross domestic product — the output of goods and services produced by labor and property in the U.S. – decreased at an annual rate of 3.8% in the fourth quarter of 2008, (that is, from the third quarter to the fourth quarter), according to advance estimates released by the Bureau of Economic Analysis. In the third quarter, real GDP decreased 0.5%.
 
The Bureau emphasized that the fourth-quarter advance estimates are based on source data that are incomplete or subject to further revision by the source agency. The fourth-quarter “preliminary” estimates, based on more comprehensive data, will be released on Feb. 27, 2009.
 
The decrease in real GDP in the fourth quarter primarily reflected negative contributions from exports, …

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Some Not-So-Bad News

Free, Metals Service Centers, Subscriber Only, Top Distributor Sectors /

With the exception of a few strategic acquirers, it’s pretty rare these days that we hear about a distributor actually expanding in the U.S. But one metals distributor is doing just that.
 
Chicago-based metals distributor and processor Ryerson Inc. announced recently it will open two new service centers in Utah and Texas by the end of the first quarter 2009. What’s more, the Platinum Equity-owned distributor doubled its stake in Chinese venture VSC-Ryerson China Ltd from 40% to 80%. VSC-Ryerson had $160 million in 2008 sales.
 
It’s one piece of not-so-bad news after a slew of falling fourth-quarter and year-end results.
 
At the National Association of Wholesaler-Distributors annual meeting this week in Washington, D.C., I heard …

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Illinois Tool Works Sales Down 5.9% In 4Q

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

Illinois Tool Works Inc., Glenview, IL, reported fourth quarter sales of $3.68 billion, a decline of 5.9% from fourth quarter 2007.  Profit fell 50% to $233.8 million.
 
Organic sales declined 9.2% in the quarter due to further weakening in worldwide end markets, with North America decreasing 12.3% and international falling 6.2%. The strengthening U.S. dollar negatively impacted revenues by 4.5%, and acquisitions contributed 7.8% of growth in the fourth quarter.
 
For full-year 2008, operating revenues of $15.9 billion were 6.7% higher than full-year 2007. Base revenues declined 2.5% in 2008, with North America down 4.8% and international essentially flat for the year. Acquisitions and currency translation contributed 6.6% and 2.8%, respectively, to the 2008 …

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Timken Reports 4Q Loss Of $36.2M

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

The Timken Company, Canton, OH, reported fourth-quarter sales of $1.21 billion, a decline of 9.7% from the same period a year ago. The company recorded a loss of $36.2 million for the quarter, as compared to profit of $48.3 million in fourth quarter 2007.
 
For the entire year, Timken reported sales of $5.7 billion, an increase of 8% from 2007. Profit improved 21.6% to $267.7 million.
 
During the year, the company benefited from strong demand in global industrial markets, surcharges, pricing and currency, as well as acquisitions serving the aerospace and energy market sectors. Lower automotive demand partially offset these benefits.
 
"Our strategy to reposition the company for more diversified, profitable growth in industrial markets contributed to …

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Black & Decker 2008 Sales Down 7.2%

Free, News, Subscriber Only, Top Distributor Sectors /

The Black & Decker Corp., Towson, MD, reported sales for 2008 decreased 7.2% over 2007 to $6.1 billion. Profit was $293.6 million, down 43.3%.
 
For the fourth quarter ended Dec. 31, profit was $43.7 million, down 76.7% when compared with the fourth quarter of 2007. Sales decreased 17% to $1.4 billion, including a negative 4% impact from foreign currency translation.
 
In light of weak demand in the fourth quarter, the company reduced employment levels by about 1,200 positions.
 
Sales in the Power Tools and Accessories segment decreased 13% for the quarter and 10% for the year. In the U.S., sales decreased at a double-digit rate for the Industrial Products Group, reflecting slowing markets for both residential and commercial construction. In the …

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3M Reports Record 2008 Sales of $25.3B

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

St. Paul, MN-based 3M reported 2008 sales of $25.3 billion, up 3.3% from a year ago. Profit for 2008 was $3.5 billion, down 14.6%.
 
Fourth-quarter sales were $5.5 billion, a decrease of 11.2% from the same period a year ago. Profit was $536 million, a decrease of 37%.
 
3M drove record sales in 2008 despite a dramatic fourth-quarter economic downturn, said George W. Buckley, 3M president and CEO, “We are responding to lower demand with aggressive cost management and operational discipline. We streamlined our operations throughout 2008 and we will continue to optimize to protect against the downside throughout 2009. In addition, we plan to reduce capital expenditures by about 30 percent and aggressively attack working capital in order to …

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Kennametal 2Q Sales Decline 12%

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

Kennametal Inc., Latrobe, PA, reported second quarter sales of $569 million, a decrease of 12% from the same quarter a year ago. Profit was $15.7 million, down 68.7%.
 
For the first six months of fiscal year 2009, sales were down 1.6% to $1.23 billion. Profit was down 39.9% to $51.1 million.
 
"Kennametal has made solid progress in executing strategies to balance our businesses across served geographies and end markets. However, we are not immune to the rapid and significant global decline in industrial production that has taken place over the past few months," said President and CEO Carlos Cardoso. "As a result, we continue to take actions to reduce our costs and right size our business in line with current economic conditions while minimizing the …

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SKF Sales Up 8.2% in 2008

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

SKF reported sales of SEK63.4 billion (US$7.8 billion) for 2008, an increase of 8.2% over 2007 sales. Profit declined slightly to SEK4.74 billion (US$580 million).
 
For the fourth quarter, sales increased 8.2% while profit declined 25.9%.
 
"2008 was a very good year for SKF with record sales and profit. However market demand weakened considerably towards the end of the year. In the fourth quarter the automotive business continued to deteriorate and a negative trend was seen also for several industrial segments, said Tom Johnstone, president and CEO. SKF initiated actions to adapt its capacity and cost base globally to address this.”
 
The fourth quarter included expenses for restructuring activities and other one-time items …

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Industrial Manufacturers Expect Zero, Negative Growth in 2009

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

U.S.-based industrial manufacturers are expecting revenue growth to turn negative over the next 12 months, according to the fourth-quarter edition of the PricewaterhouseCoopers LLP Manufacturing Barometer. For the first time since the Barometer’s inception in the third quarter of 2003, more manufacturers are preparing for negative growth (33%) than those expecting positive revenue growth (25%). Meanwhile, another 34% are expecting zero growth.
 
In the year ahead, manufacturing executives anticipate a sharper year-to-year drop-off in revenues, down to an average of -2.4%. Just one year ago, survey respondents forecasted a mean revenue growth of +5.4%.
 
For the first time in the Barometer’s history, industrial manufacturers are …

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Praxair 4Q Sales Drop 4.8%

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

Praxair, Inc., Danbury, CT, reported profit of $200 million for the fourth quarter 2008, down 36.7% over fourth quarter 2007. Sales declined 4.8% to $2.4 billion.
 
For the full year of 2008, profit was $1.2 billion, a 2.9% improvement over 2007. Year-end sales were up 14.8% to $10.8 billion, primarily from new business, new plant start-ups and higher pricing.
 
Commenting on the results and business outlook, Chairman and Chief Executive Officer Steve Angel said, As we anticipated, volumes dropped dramatically in November and December as our customers in the electronics, chemicals and metals industries cut production in the face of falling commodity prices and weakening demand, said CEO Steve Angel. “Our outlook for 2009 is cautious as we expect …

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Small Distributors Look For Opportunity, Survival In Tough Economy

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

It’s not all doom and gloom in the industrial distribution world. According to the Nashville Business Journal, some companies are still finding opportunity. A new startup industrial distributor Alliance Distribution Partners LLC picked Gallatin, TN, to be its headquarters and will begin employing people immediately. (Full article can be read here.)

Though small – the company will employ 15 people initially, with expansion plans already in place to increase the workforce to 50 over the next two years – the move is a sign that there may still be opportunity for smaller distributors in certain markets. Of course, it’s yet to be seen whether the company …

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Evolving Sales Force and Process in 2009

Economic Trends, Electrical, Free, Management, Research & Analytics, Sales & Marketing, Strategy, Subscriber Only, Top Distributor Sectors /

Companies of all types have made tough cuts in the past two months, and have focused on tightening the ship for 2009. Every business activity has to have a clear ROI this year and many entrenched business models are coming under fire. In a survey of the MDM audience on profitability earlier this month, distributors indicate primary investment areas this year will be in new market development, online sales capabilities, and in outside sales activities.
 
While some people might think hybrids are the hope of the automotive industry, I think we will see distributors increasingly build more efficient hybrid sales models. Resource-guzzling outside salespeople won’t make the cut this year. Companies will get much more strategic about assembling a combination of online sales …

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Economic Forecast Places Start of Recovery in 2010

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

We all left the presentation by Institute for Trend Research’s Alan Beaulieu feeling more than a little pessimistic. This is not surprising, given that Beaulieu’s economic forecast did not see any sort of recovery until 2010. What’s more, he forecast that things would get worse before they get better.
 
He spoke at the National Association of Wholesaler-Distributors annual meeting going on this week in Washington, D.C.
 
Beaulieu forecast the recession we are in right now – though he admits that in some areas he didn’t foresee how bad it could get. The first half of his presentation was filled with a lot of doom and gloom, but the second half was more productive, focused on strategies to come out the other side of this recession …

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Economic Forecast Places Start of Recovery in 2010 Read More »

Airgas 3Q Sales Climb 7%

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

Airgas, Inc., Radnor, PA, a U.S. distributor of industrial, medical and specialty gases, and welding, safety and related products, today sales of $1.1 billion for the third quarter ended Dec. 31, 2008, an increase of 7% from the prior year. Profit grew 10.7% to $62.9 million.

"Our strategic products, which have favorable long-term growth profiles and represent about 40% of sales, posted 4% organic growth in the quarter," CEO Peter McCausland said.  "The second half of the quarter was characterized by widespread slowing across most of our customer segments, with relative strength in the medical, analytical, and food and beverage segments.
 
For the first nine months, sales increased 14.7% to $3.36 billion. Profit was $204.6 million, an …

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Crane Co. Reports $8.3M Loss For 4Q

Free, News, Subscriber Only, Top Distributor Sectors /

Crane Co., Stamford, CT, a diversified manufacturer of highly engineered industrial products, reported a fourth quarter 2008 net loss of $8.3 million, compared with fourth quarter 2007 net income of $45.2 million. Fourth quarter sales decreased 12% to $589.3 million, including a core business decline of 7%.
 
Profit for the full year 2008 was $135.2 million, compared to a loss of $62.3 million recorded for 2007. Total sales in 2008 were $2.6 billion, essentially flat with 2007 levels. Full year 2008 core business sales decreased $51.7 million.
 
In October 2008, Crane announced it would take steps to reduce costs that could result in a fourth quarter pretax charge of up to $25 million. In light of further deterioration in the U.S. and global economy and its impact on …

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Cooper Industries 4Q Profit Drops 38%

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

Cooper Industries, Ltd., Houston, TX, reported fourth quarter 2008 sales of $1.52 billion, down 1% from fourth quarter 2007. Profit decreased 38% to $111.1 million.
 
"As the quarter progressed, the credit crisis deepened with the economic deterioration in the U.S. and Europe spreading around the world. Cooper earlier announced its intention to reduce our work force by over 1,000 employees and to take a fourth quarter charge estimated to be in the range of $20 million to $22 million. As economic conditions deteriorated, we determined it was necessary to increase the reduction in work force to in excess of 2,200 employees globally and recorded a restructuring charge of $35.7 million," said Cooper Industries’ CEO Kirk S. Hachigian.
 
Sales for the twelve …

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United Stationers Will Eliminate 250 Positions

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

United Stationers Inc., Deerfield, IL, announced it would eliminate 250 positions – about 4% of its total workforce – in response to the challenging economic environment as it stays focused on maintaining its sound financial position and delivering strong cash flow.
 
About half of the position eliminations have been identified and will occur this week. The balance should be substantially completed by March 31. Management and non-management employees will be affected by these reductions.
 
"We have a committed and valued workforce, so it is with considerable reluctance that we are proceeding with a staffing reduction," said Richard W. Gochnauer, president and CEO. "This action is, however, a necessary response to current market …

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Bossard 2008 Sales Dip 5.8%

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

Swiss fasteners distributor Bossard Group reported sales for 2008 fell 5.8% to CHF 566 million (US$497.5 million). In local currency, the drop was 1.1%.
 
Preliminary figures show that profit results will outperform the results for 2007, despite the global economic …

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