March 2007 - Page 2 of 4 - Modern Distribution Management

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March 2007

Monthly Wholesale Trade: Sales and Inventories for January 2007

Sales. January 2007 sales of merchant wholesalers, except manufacturers'sales branches and offices, after adjustment for seasonal variations and trading-day differences but not for price changes, were $333.4 billion, down 0.9 percent from the revised December level, but were up 6.2 percent from the January 2006 level. The December preliminary estimate was revised downward $0.5 billion or 0.2 percent. January sales of durable goods were virtually unchanged from last month, but were up 5.7 percent from a year ago. January sales of nondurable goods were down 1.8 percent from last month, but were up 6.7 percent from last year.

Inventories. Total inventories of merchant wholesalers, except manufacturers'sales branches and offices, after ...

Monthly Wholesale Trade: Sales and Inventories for January 2007 Read More »

Commentary: Fill the Information and Service Vacuum

Many if not most distributors measure product fill rates, and often report to customers in order to document their value. But how many distributors measure information fill rates? How well do you meet customer information needs, from a speed and quality standpoint?

A recent panel discussion on changes in distribution touched on a key observation. An astute panel member observed that velocity is a critical skill for a distributor today. Some may argue that hasn't changed. Customers have always demanded high fill rates and on-time deliveries. But there is a difference.

Velocity is defined by speed and direction. Direction is all about how your company is positioned to meet customer needs. Customers expect and demand fast when it comes to logistics and product delivery. But ...

Commentary: Fill the Information and Service Vacuum Read More »

MDM News Digest 3706

Beacon Roofing Supply, Inc., Peabody, MA, has agreed to acquire North Coast Commercial Roofing Systems, Inc., a Twinsburg, OH-based distributor of commercial roofing systems and related accessories, with 16 locations in eight U.S. states. North Coast gives Beacon with its first locations in three states: New York, Ohio and West Virginia. North Coast had sales of about $253 million for the fiscal year ended March 31, 2006. Beacon had sales of $1.5 billion in 2006.More ...
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January U.S. manufacturing technology consumption totaled $297.48 million, according to the American Machine Tool Distributors'Association and The Association For Manufacturing Technology. This total, as reported by ...

MDM News Digest 3706 Read More »

U.S. MARKET ANALYSIS: Adhesives & Sealants

Adhesives & sealants represented a market in 2005 of $2.3 billion, according to estimates by Industrial Market Information, Minneapolis. These charts show the top ten industries, by SIC code, consuming these products; and the 2005 end-user consumption of these groups sorted by the nine government market regions. ...

U.S. MARKET ANALYSIS: Adhesives & Sealants Read More »

Value Lessons from HD Supply

Value Lessons from HD Supply
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What's the value of a $12-billion distribution roll-up of a couple dozen companies, roughly doubling in size the past two years, consisting of a highly diversified portfolio of both branch-based and catalog models, in more than half a dozen product categories?
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Rumors are floating $9-11 billion as a potential price. With HDS estimated EBITDA somewhere around $1 billion, that puts the valuation in the range of 9-11X EBITDA. Home Depot paid around 12X EBITDA for Hughes Supply a year ago. But this is definitely a seller's market. HD may feel some Wall Street pressure to jettison the unit quickly, but it also is in the catbird seat. As reported by the Financial Times and

Value Lessons from HD Supply Read More »

Stock Building Supply Buys Albuquerque Door

Stock Building Supply, Raleigh, NC, has acquired Albuquerque Door, previously owned by Orepac Building Products. Albuquerque Door assembles pre-hung exterior and interior doors, distributes vinyl windows, and manufactures specialty architectural millwork items for national and custom builders in the Albuquerque and Santa Fe markets.

The company operates from one location in Albuquerque; the acquisition adds approximately 50 associates to the Stock family. All senior management, including manager Carolyn Kidd, will remain with the company.

Stock Building Supply now operates 321 locations in 34 states, with reported sales of $5.3 billion for the fiscal year 2006. Stock Building Supply is a subsidiary of Wolseley plc of Theale, England, which had sales in fiscal ...

Stock Building Supply Buys Albuquerque Door Read More »

Lab Supply Distributor VWR Exploring Strategic Options

VWR International, Inc., West Chester, PA, a distributor to the global research laboratory industry, announced that Goldman Sachs & Co. and Banc of America Securities LLC have been retained to explore strategic options for VWR.
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VWR is owned by Clayton, Dubilier & Rice, which bought the company from Merck KGaA of Germany for $1.65 billion in April 2004.
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John Ballbach, president and CEO of VWR, said, "As this process moves forward, we remain committed to maintaining our strong relationships with our customers and suppliers and to the continued growth of our business."
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The company does not expect to disclose further developments regarding the process until the review of strategic options has been completed.
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VWR International ...

Lab Supply Distributor VWR Exploring Strategic Options Read More »

Graybar Sales Grow 16.6% in 2006

Graybar, St. Louis, MO, reported sales of $5.009 billion in 2006, up 16.6% from last year. Profit was $57 million, more than double the year before.
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Growth in the electrical market increased 16.6%. Electrical sales were strong in the construction sector. Sales in the comm/data market rose 17% year-over-year.
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In an SEC filing, Graybar attributed the increase in sales to demand in the electrical and communications/data markets. Also, copper-based products, mainly wire and cable, went up in price in the past year, positively impacting sales.
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Profit growth was attributed to double-digit growth in gross margin, coupled with attention to controlling expenses. Graybar also reported productivity gains as a result of the company's new technology ...

Graybar Sales Grow 16.6% in 2006 Read More »

January Wholesale Revenues Down 0.9% From Dec.

January 2007 sales of merchant wholesalers, except manufacturers' sales branches and offices, were $333.4 billion, down 0.9% from the revised December level but up 6.2% from January 2006.
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January sales of durable goods were virtually unchanged from last month, but were up 5.7% from a year ago. Sales of metals and minerals, except petroleum, were up 4.4% from last month.
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January sales of nondurable goods were down 1.8% from last month, but were up 6.7% from last year.
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Total inventories were $396.7 billion at the end of January, up 0.7% from last month and up 9.2% from a year ago. End-of-month inventories of durable goods increased 1.1% from December and were up 9.3% from last January. Compared to last month, inventories of motor vehicle and ...

January Wholesale Revenues Down 0.9% From Dec. Read More »

Wholesale Prices Advance 1.3% in February

The Producer Price Index for Finished Goods advanced 1.3 percent in February, seasonally adjusted, the Bureau of Labor Statistics of the U.S. Department of Labor reported. This increase followed a 0.6-percent decline in January and a 0.9-percent rise in December. At the earlier stages of processing, the intermediate goods index turned up 1.1 percent after falling 0.7 percent in the previous month, and prices for crude goods climbed 8.9 percent following a 6.3-percent decrease in January.
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Among finished goods in February, the index for energy goods moved up 3.5 percent compared with a 4.6-percent drop a month earlier. The rate of increase for consumer foods prices accelerated to 1.9 percent in February from 1.1 percent in January. Excluding prices for foods and ...

Wholesale Prices Advance 1.3% in February Read More »

Illinois Tool Works Sales Up 15% in 1Q ’07

Illinois Tool Works Inc., Glenview, IL, reported revenues increased 15% in the three months ended Feb. 28, 2007. About 2% was from base revenues, 11% from acquisitions, and 2% as a result of translation and other items.
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Organic growth benefited from strong demand from international end markets; however, North American end markets continued to show signs of moderating growth or declines.
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By segment, growth was 5% in engineered products/North America; 20% engineered products/International; specialty systems/North America; 22% specialty systems/International.
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ITW is a $14.1 billion diversified manufacturer of highly engineered components and industrial systems and consumables. The company is in 49 ...

Illinois Tool Works Sales Up 15% in 1Q ’07 Read More »

HD Supply Ship About to Sale

While countless offices in this country have the NCAA Men's Basketball Championship pool sapping the life out of productivity this week, I'm guessing there are at least a few pools estimating the date of sale for Home Depot Supply. I don't know what the Vegas odds are, but the probability is close to 100 percent in my book that we see a deal happen. Here's why I think it will be sooner rather than later.

Home Depot CEO Frank Blake said that it was important to determine a course of action for HD Supply so that the company didn't have a foot on the dock and a foot on the boat, as MDM reported on the company's refocus on retail.

Let's get out the spyglass and look at that statement. If ...

HD Supply Ship About to Sale Read More »

ABC Supply Sales Grow 15% in 2006

ABC Supply, building products distributor based inBeloit, WI , reported record sales of $2.99 billion for fiscal 2006, a 15% increase from 2005, the Home Channel News reported. The company reported profit of $200 million, up 14%.

ABC Supply has more than 350 branches in 45 states andWashington, D.C.

...

ABC Supply Sales Grow 15% in 2006 Read More »

Machine Tool Consumption Up 31% Year-Over-Year

January U.S. manufacturing technology consumption totaled $297.48 million, according to the American Machine Tool Distributors' Association and The Association For Manufacturing Technology. This total, as reported by companies participating in the USMTC program, was down 9.8% from December, but up 30.9% from the total of $227.23 million reported for January 2006.

These numbers and all data in this report are based on the totals of actual data reported by companies participating in the USMTC program.

While early forecasts for 2007 have suggested it is unlikely that growth in our industry's sales will surpass the results of 2006, January has made an impressive start, says John J. Healy, AMTDA president. Results were well above year-ago levels in almost every ...

Machine Tool Consumption Up 31% Year-Over-Year Read More »

Bossard’s U.S. Sales Dampen Global Growth

Fastener distributor Bossard's sales dampened the group's overall global revenues in 2006. Sales in the dropped 9.5% from 2005. Bossard attributed the decline to falling demand from larger customers -which comprise 50% of the company's overall sales.

Overall, the Bossard Group sales were up 8.7% to CHF 560 million (Swiss francs), and 7.6% in local currency. Translated, sales were roughly US$458 million for the year. Asia saw the largest growth rate, at 42%. sales doubled, and the had a sales increase of 56.6%. sales were up 29.8%.

Bossard saw sales in Central Europe grow 15.5% to CHF 300 million (US$245 million, Euro 186 million). All European countries reported double-digit growth rates. was up 13.1%, Scandinavia up 12%, up 13.8% and Eastern Europe up 38%.

Bossard’s U.S. Sales Dampen Global Growth Read More »

Timken Closes Brazil Facility

The Timken Company, Canton, OH, will close its production facility in Sao Paolo, Brazil, by the end of the year. Timken will maintain a sales, marketing and warehousing presence in Brazil to meet the needs of customers and distributors.

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Timken will support its future growth in the Brazilian market with its global manufacturing resources, along with new warehousing operations and a network of 35 distributors located in Brazil.

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The closure of the facility in Brazil is part of Timken's ongoing efforts to improve the performance of its Automotive Group. The company previously announced a restructuring initiative in 2005 and a workforce reduction in 2006, which are on track to deliver expected savings of approximately $40 million and $35 million, ...

Timken Closes Brazil Facility Read More »

Owens Corning, Saint Gobain Merge Reinforcements Businesses

Owens Corning and Saint-Gobain have agreed to merge Owens Corning's Reinforcements Business and Saint-Gobain's Reinforcements and Composites Business (a part of the entity known as Vetrotex) into a new company that will be named OCV Reinforcements.

On July 27, 2006, Owens Corning and Saint-Gobain jointly announced that they were in discussions to merge their respective reinforcements and composites businesses, creating a global company in reinforcements and composite fabrics products, with worldwide revenues of $1.8 billion (1.5 billion) and 10,000 employees.

The agreement stipulates that the joint-venture will be owned 60% by Owens Corning and 40% by Saint-Gobain. After a minimum of four years, Saint-Gobain will have the option to sell its stake to Owens Corning, and ...

Owens Corning, Saint Gobain Merge Reinforcements Businesses Read More »

ISCO Buys Fraser Mining and Industrial Supply

ISCO Industries, Louisville, KY, distributor and supplier of polyethylene (HDPE) piping products, has purchased Fraser Mining and Industrial Supply Company in Mansfield, TX.


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“Fraser Mining and Industrial Supply has fostered an excellent reputation across Texas and the south central United States, especially in service to the mining industry. With the similarities in our product lines and emphasis on HDPE, this move provides us with a location in the north Texas area, while giving us a strong presence in the Texas mining market, said Jimmy Kirchdorfer, president of ISCO Industries.


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ISCO also has nearby stocking and sales facilities in the Houston, Texas and Tulsa, Oklahoma areas.


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Fraser Mining and Industrial ...

ISCO Buys Fraser Mining and Industrial Supply Read More »

Beacon Buys $253M North Coast Commercial Roofing

Beacon Roofing Supply, Inc., Peabody, MA, has agreed to acquire North Coast Commercial Roofing Systems, Inc., a Twinsburg, OH-based distributor of commercial roofing systems and related accessories, with 16 locations in eight U.S. states.

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North Coast has branches in Ohio, Illinois, Indiana, Kentucky, Michigan, New York, Pennsylvania and West Virginia. There is minimal overlap with Beacon's existing locations.

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North Coast gives Beacon with its first locations in three states: New York, Ohio and West Virginia. North Coast employs 197 associates and had sales of about $253 million for the fiscal year ended March 31, 2006.

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It will operate as a separate region under the North Coast name.

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Beacon ...

Beacon Buys $253M North Coast Commercial Roofing Read More »

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