April 16, 2008 - Modern Distribution Management

Day: April 16, 2008

Housing Starts Fall 11.9% From February

Privately-owned housing starts in March were at a seasonally adjusted annual rate of 947,000. This is 11.9% below the revised February estimate and 36.5% below the March 2007 rate, according to the U.S. Census Bureau and the Department of Housing and Urban Development.
 
Single-family housing starts in March were at a rate of 680,000; this is 5.7 percent below the February figure of 721,000. The March rate for units in buildings with five units or more was 247,000.
 
Year-to-Date Percent Change

Illinois Tool Works North American Sales Fall in 1Q

Illinois Tool Works Inc., Glenview, IL, reported 11.4% growth to $4.139 billion in the first quarter 2008. The increase was due to a 6.3% contribution from acquisitions and a 4.8% contribution from currency translation.
 
Organic growth was 0.4%, with international base revenues growing 4.6% and North American revenues falling 2.5%.
 
Overall profit of $303.6 million was down 24.6% from the year-ago period.

We are very pleased with our operating performance in the 2008 first quarter, especially in light of difficult end market conditions in North America and the modest slowing but still positive growth in international end markets," said David B. Speer, CEO. "We believe end markets will continue to be challenging in North America over the foreseeable ...

Manufacturing Sales Up in Canada in February

Source: Statistics Canada, www.statcan.ca
 
Sales of goods manufactured rose 1.6% to $50.1 billion in February, due in part to a gradual bounce-back by Canada's motor vehicle industry.

This marked the second successive increase in manufacturing sales, as manufacturers continued to make up ground lost after a tough December (-3.7%).

The volume of goods manufactured also improved in February. At 2002 prices, manufacturing sales rose 2.7% to $49.0 billion, following a 2.2% increase in January. Again, contributing to the boost in volumes produced were several automotive manufacturers who continued to ramp up production during the month.

Despite the consecutive increases, manufacturing sales were ...

NAHB Economist: Economy in ‘Mild Recession’

The chief economist for the National Association of Home Builders says the deepening slump in the U.S. housing markets has seriously eroded consumer sentiment" and pushed the economy into a mild recession.
 
"The worse-than-anticipated housing downturn, combined with systematic weakening of the labor market and rapidly rising energy and food prices, has taken a heavy toll on American consumers,"said NAHB's David Seiders. "It's now clear that we have entered what we anticipate will be a mild recession, running through the first half of this year, and there are substantial downside risks to this economic scenario."
 
Given the ongoing erosion in housing finance markets and buyer demand, Seiders has adjusted NAHB's official housing forecast to indicate continuing ...

Swagelok Acquires Coreflex

Swagelok Company, Solon, OH, has acquired Coreflex LLC, Bowie, MD, a manufacturer of hose products used mostly in semiconductor, biopharmaceutical, and other applications.

The Coreflex product line broadens the Swagelok Company's portfolio of hose products.

Swagelok is a developer and provider of fluid system solutions, including products, assemblies, and services for the research, instrumentation, pharmaceutical, oil and gas, power, petrochemical, alternative fuels, and semiconductor industries. Its manufacturing, research, technical support, and distribution facilities support a global network of more than 200 authorized sales and service centers in 57 ...

SKF Sales Up 8.5% in 1Q

SKF sales for the first quarter 2008 were up 8.5% in SEK, with 4.9% attributable to volume, 1% to structure, 3.8% to price and mix, and -1.2% to currency effects.
 
In the first quarter, sales in Europe were higher, in North America they were relatively unchanged and in both Asia and Latin America they were significantly higher.
 
For the Industrial Division and the Service Division sales in the first quarter were significantly higher and for the Automotive Division they were slightly higher.
 
The manufacturing level for the first quarter of 2008 was relatively unchanged compared to the fourth quarter 2007 and higher compared to the first quarter last year.
 
More details here. ...

Industrial Production Up 0.3% in March

Industrial production rose 0.3 percent in March after having dropped 0.7 percent in February. For the first quarter as a whole, output declined at an annual rate of 0.1 percent after edging up at a rate of 0.4 percent in the fourth quarter of last year.
 
Manufacturing production rose 0.1 percent in March. Factory output was held down by a large decline in the output of motor vehicles and parts; a shortage of motor vehicle parts that resulted from a strike at a parts manufacturer idled a number of motor vehicle assembly plants.
 
Outside of motor vehicles and parts, manufacturing production moved up 0.4 percent after having fallen 0.5 percent in February. In March, the output of mines increased 0.9 percent, and the output of utilities advanced 1.9 ...

IDG Board Recommends Accepting WESCO’s $130M Bid

Atlanta, GA-based Industrial Distribution Group's board of directors announced it was prepared to accept WESCO Distribution Inc.'s offer of $11.75 per share, or $130 million, and withdraw its recommendation of the pending acquisition by Platinum Equity. WESCO was the previously unnamed bidder in the war for the industrial distributor, which had $537 million in sales last year.
 
If the WESCO deal goes through, under the Platinum merger agreement, IDG would have to pay a 3% break-up fee. WESCO has agreed to reimburse the company for that fee.

WESCO Chief Financial and Administrative Officer Stephen Van Oss said IDG was a good fit for the company. Like IDG, WESCO also has a substantial integrated supply business.

IDG's small-site integrated supply ...

Current Economic Climate Ripe for Gaining a Strategic Advantage

A slew of economic indicators out this month don't portend well for the U.S. economy. Many economists are uttering the R" word, but it is noteworthy that many are preceding it with "mild."
 
An overview: While industrial production increased this month, for the quarter it fell slightly. Housing starts plummeted nearly 12% in March, and 37% from last year at this time. The Institute for Supply Management's monthly purchasing managers' report on manufacturing continues to indicate contraction in the sector. Oil prices continue to skyrocket, and prices at the pump are following suit. (Take this brief survey on the impact fuel costs are having on your business by clicking ...

Look Beyond Numbers in IDG Deal

UPDATE: IDG to Accept Luther King Capital Management Bid
UPDATE: WESCO Drops Bid for IDG 

WESCO's last-minute catch of Industrial Distribution Group is a good fit with its Bruckner Supply business, focused on integrated supply, together with its strong electrical distribution business into industrial accounts. It's also a good fit from a broader perspective in terms of where WESCO is positioned with international competitors in North American markets.

Most industry observers look at IDG's checkered ten-year history as a public company, specifically its sluggish earnings reports, and see an ...

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