Feedback

Subscriber Login

MDM Premium Content  What's this?
Close
Subscribe today to access MDM's premium content with two issues a month of timely and to-the-point content for the busy wholesale distribution executive. Here's what you get:
  • Analysis of distribution trends
  • Interviews with industry leaders
  • Quarterly Public Distributor Report
  • Quarterly Inflation by Commodity Group Report
  • Market and economic data analysis
  • Access to the best online research tool in distribution

And much more! Learn more

login close
Forgot Your Password?
For more precise results try using quotation marks ("") around your search terms. See more search tips.
subscribe_yellow Lock in savings now before June 1 rate increase!
renew_blue


 

Home » PT/MC distributors' profit margins varied widely in 2002

PT/MC distributors' profit margins varied widely in 2002

July 25, 2003
More about:  Power Transmission/Motion Control/Fluid Power Distribution
The Power Transmission Distributors Association (PTDA) recently announced the results of its 2003 PT Distributor Performance Report (based on 2002 data). Revealing the profit challenges and opportunities in the power transmission/motion control (PT/MC) industry, the report suggests that the typical PTDA distributor continues to produce only adequate profits, while the most successful firms use a business model that produces superior performance.
With respect to the bottom line, the pre-tax profit margin for typical power transmission/motion control distributors was 0.6 percent in 2002, compared to 0.7 percent in 2001. Meanwhile, high-profit firms recorded margins of 3.0 percent in 2002, as compared to 3.2 percent in 2001.


Typical and high profit PT/MC distributors ...

Text Size
Email Print Reprints
The Power Transmission Distributors Association (PTDA) recently announced the results of its 2003 PT Distributor Performance Report (based on 2002 data). Revealing the profit challenges and opportunities in the power transmission/motion control (PT/MC) industry, the report suggests that the typical PTDA distributor continues to produce only adequate profits, while the most successful firms use a business model that produces superior performance.
With respect to the bottom line, the pre-tax profit margin for typical power transmission/motion control distributors was 0.6 percent in 2002, compared to 0.7 percent in 2001. Meanwhile, high-profit firms recorded margins of 3.0 percent in 2002, as compared to 3.2 percent in 2001.


Typical and high profit PT/MC distributors differentiated themselves in terms of sales volume in 2002. While typical PTDA distributors experienced a decline of 1.9 percent in 2002, high profit distributors reported a 2.1% gain in sales growth.


High-profit firms reported a pre-tax return on assets (ROA) of 9.3 percent, while the typical PT/MC distributor reported ROA of only 1.6 percent.


As documented in the report, high profit firms seldom perform better on all critical profit variables (CPVs). Instead, the sum of their performance on these CPVs ' sales per employee, gross margin percentage, operating expense percentage, inventory turnover, average collection period ' produces higher overall results.


High profit firms generally have larger sales volumes than typical firms. Combined with superior performance on many critical profit variables, the result is improved operating performance. Total operating expenses as a percent of net sales was 23.3 percent for high-profit firms, compared to 25.6% for typical firms.


The PT Distributor Performance Report is a compilation of operational statistics from 56 PTDA members throughout North America. This valuable resource examines five-year distributor performance trends in return on investment, income statement, gross margin-related expenses, balance sheet, financial ratios, asset productivity ratios, growth and cash sufficiency ratios, operations profile and employee productivity ratios.

Print Email Reprints
Use the form below to leave a comment

MDM Digital

Executive Briefing: May 2012Critical Profit Drivers
in Distribution
Al Bates, Profit Planning Group, speaks frankly about the most important factors to driving profit. Watch now.
iPad users: click here to view.		 Economic Update April 2012 Economic Update:
Behind the Moderation
MAPI Economist Cliff Waldman discusses some of the factors behind the slowing economic recovery. Watch now.
7 Minutes With7 Minutes With ...
Bell Electrical Supply
CEO Burt Schraga discusses the importance of building a strong culture in his organization. Watch now.		 More Audio and Video Features from MDM:

  • MDM Podcast

Think About It:
Back to the Basics

We all forget the basics sometimes. Todd Youngblood shares his recent reminder of that fact.

Listen now.

Learn more or subscribe to the Think About It podcast.

  • Featured

USAbrasives-100-for-trifecta

U.S. Abrasives Market Demand Report

This report provides a three-dimensional view into estimated market size, customer segment potential and customer size demographics for the U.S. Abrasives Market.

These three data slices give you deep insight into total market potential and your market share by both customer type and size for the U.S. and all 50 states.

Learn more about the U.S. Abrasives Market Demand Report

Training Resources

Current Issue   Inventory Management   MDM_Special_Report_ecommerce   Benchmarks and Best Practices

Featured Article: What AmazonSupply.com Means for Independent Distributors

$34.95

Buy now >>

Inventory Management Best Practices with Jon Schreibfeder: DVD + Book

$119.00

Buy now >>

The State of E-Commerce and Catalogs in Distribution

$44.95

Buy now >>

Benchmarks & Best Practices: The Answer Book for Growth-Minded CFOs & Controllers

$249.00

Buy now >>
Job Board
Title Company Location
Digital Strategy Manager Border States Electric Fargo North Dakota
Risk Manager Border States Electric Fargo ND
Purchasing Manager PCA SKIN Scottsdale, AZ
BUSINESS DEVELOPMENT MANAGER Graybar Electric Company Denver, CO
INDUSTRIAL OUTSIDE SALES REPRESENTATIVE Graybar Electric Company Phoenix, AZ
General Manager Applied Industrial Technologies Norfolk, VA
Rubber Specialist Applied Industrial Technologies Baltimore, MD
View ALL Wholesale Distribution Job Listings

Industry Topics

Distribution Trends RSS

Economic Trends RSS

Distribution Management & Strategy RSS

Distribution Interviews RSS

Distribution Operations Strategy RSS

Distribution Technology RSS

Distribution & Manufacturing Acquisitions RSS

Distribution Case Studies RSS

Distribution Sales & Marketing RSS

MDM Premium

May 10, 2012  

MDM May 10, 2012, Cover Image

Amazon Makes Its Move

Uncover Unexpected Cross-Selling Opportunities

10 Ways to Measure the Success of Channel Partnerships

subscribe now View Table of Contents >>
Subscribers: Log-in
View Previous Issues


MDM Calendar

Strategic Planning for Distributors

June 7, 2012 - June 7, 2012

Featured Products

answer book for CFOs and Controllers

Benchmarks & Best Practices: The Answer Book for Growth-Minded CFOs & Controllers

Reviews (0)
 
Price: $249.00
An ultra practical idea-guide that gives an inside look at how leading companies are dealing with some of today's toughest financial and business management challenges.
Distribution Landscape Report - 2011

2011 MDM Market Leaders and Distribution Landscape Report

Reviews (0)
 
Price: $295.00
The ideal resource for anyone that wants to get a quick overview of the distribution landscape and the top players in major sectors! Includes the 2011 Distribution M&A Special Report.
B-to-B Online Marketing Toolkit Cover

The B-to-B Online Marketing Toolkit:
A Step-by-Step Plan for Distributors and Manufacturers to Leverage Online Marketing for Bottom Line Results

Reviews (0)
 
Price: $249.00
The 2011 Edition of this valuable marketing tool provides a step-by-step plan for leveraging Online Marketing to produce Bottom-Line Results. Bulk pricing available.


tech directory: start your search here

 

Top10_MDMcallout
GetMyFreeReport


Sponsored Links