May 2008 - Page 5 of 6 - Modern Distribution Management

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May 2008

Colfax Corp. Now Trading On NYSE

Colfax Corp., Richmond, VA, manufacturer in fluid-handling solutions, announced that its common stock has begun trading on the New York Stock Exchange under the ticker symbol CFX"following its initial public offering.
"The Colfax associates have worked hard to build a company that sets the standard in critical fluid-handling solutions around the world,"said John A. Young, president and CEO of Colfax. "I am proud of the accomplishments that have led us to this historic day in Colfax's 12-year history. It is an honor to be a NYSE-traded company."
Colfax Corp. manufactures positive displacement industrial pumps and valves used in global oil &gas, power generation, marine, naval and a variety of other industrial applications. Key product brands include, Allweiler, ...

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Haydon Enterprises Buys Kerk Motion Products

Waterbury, CT-based Haydon Enterprises, a Harbour Group company, has acquired Kerk Motion Products, Inc.
Kerk, Hollis, NH, designs and manufactures a line of high-precision motion control products that include lead-screw assemblies, slides, linear rails, and actuators.
Haydon is a designer and manufacturer of fractional horsepower linear actuators, lead screw assemblies, rotary stepper motors and hermetically sealed switches for niche- market applications. The company, founded in 1951, operates 11 facilities on three continents.
Haydon is part of Harbour Group, a privately owned company based in St. Louis, MO. Harbour Group and its operating companies are engaged in the manufacture and distribution of a wide variety of consumer and industrial ...

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Night & Day for M&A

I recently spoke with the three panelists who will be on the third annual MDM Distribution M&A 2008 Update call on May 22 -Brent Grover, Jim Miller and Jon Skelly. They all described how radically things have changed in less than 12 months in merger and acquisition activity in distribution. Here are a few quick takeaways from that call.
A year ago, financial buyers were driving the market with still-high EBITDA multiples and a lot of deal activity. Activity and pricing have dropped significantly in 2008. Debt markets have tightened, and private equity has its hands tied with very different capital structures. Strategic buyers could not compete a year ago with the multiples; this year they are competitive ...

Night & Day for M&A Read More »

Sonepar’s Plans for Hagemeyer

Sonepar USA plans to approach the integration of Hagemeyer's U.S. assets much like it does any other company it acquires, CEO Tony Burr tells MDM in a recent interview. It has a different customer base, predominantly, and a different market approach," he says. Sonepar has not yet acquired Dutch electrical distributor Hagemeyer's assets in North America, Asia-Pacific and select European markets from Paris-based Rexel, but the plan is to do so before the end of the year.
Sonepar's strategy is to leave acquired companies' trading names and management in place; with this operating structure, the distributor recognizes that distribution is largely a local business and that it is important to cater to local needs.
In Hagemeyer's case, "We'll find there will be some ...

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Milacron Sales Up in 1Q

Milacron Inc., Cincinnati, OH, supplier of plastics-processing technologies and industrial fluids, reported a net loss of $6.9 million in the first quarter ended March 31.
Sales in the quarter were $203 million, up from $190 million. The increase was due almost entirely to favorable currency translation effects, primarily the weakening of the dollar vis-à-vis the euro and other currencies. New orders in the quarter were also $203 million, and the backlog of $134 million remained at a healthy level.
We continue to make solid progress in reducing our product costs as well as our overall cost structure,"said Ronald D. Brown, CEO. "The results of these efforts are showing up in improved manufacturing margins and operating earnings, despite difficult market ...

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Emerson Organic Growth at 6% in 2Q

Emerson, St. Louis, MO, reported sales for the second quarter ended March 31, 2008 of $6 billion, an increase of 12%. Underlying sales increased 6% in the quarter, which excludes the impact of favorable foreign currency exchange rates (4%) and impact from acquisitions, net of divestitures (2%).
Strong international results led the growth, where sales increased by 10% on an underlying basis. Regional underlying sales growth included increases of 18% in both Asia and Latin America and 19% in Middle East/Africa. Underlying sales in the U.S. softened and were up 1%.
Process Management underlying sales grew 16%, led by strength in global energy sectors and continued project wins in a range of industries. Reported sales included a favorable 5% impact from ...

Emerson Organic Growth at 6% in 2Q Read More »

1Q Construction Spending 2.4% Below Last Year

Construction spending during March 2008 was estimated at a seasonally adjusted annual rate of $1,123.5 billion, 1.1% below the revised February estimate. The March figure is 3.4% below March 2007.
During the first three months of the year, construction spending was $241.6 billion, 2.4% below the the same period in 2007.
Private Construction
Spending on private construction was at a seasonally adjusted annual rate of $827.4 billion, 1.7% (±1.4%) below the revised February estimate of $842.0 billion. Residential construction was at a seasonally adjusted annual rate of $445.0 billion in March, 4.6% below the revised February estimate of $466.7 billion. Nonresidential construction was at a seasonally adjusted annual rate of $382.3 billion in ...

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Manufacturing Growth to Be ‘Marginal’ in 2008

Economic growth in the U.S. is sustainable throughout the remainder of 2008, say the nation's purchasing and supply executives in their spring 2008 Semiannual Economic Forecast. These projections are part of the forecast issued by the Business Survey Committee of the Institute for Supply Management.
Manufacturing Growth Marginal in 2008
Revenue to Increase 1%
Capital Investment to Increase 1%
Capacity Utilization at 78.6%
Non-Manufacturing Growth Sustainable in 2008
Revenue to Increase 2.7%
Capital Investment to Decrease 2.7%
Capacity Utilization at 85.9%
Manufacturing Summary
While 42 percent of respondents predict revenues to be 9.2 percent greater in 2008 than in 2007, the overall expected ...

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Albany International to Sell Filters Business

Albany International Corp., Albany, NY, has agreed to sell its global Albany Filtration Technologies business to All Filtration Technologies Australia Pty Ltd. for $45 million.
The buyer will acquire Albany's equity ownership of Albany International Applied Technology (Suzhou) Co., Ltd., as well as the remaining AFT business assets, most of which are in Australia.
The company also announced that it would consolidate its press and fiber cement operations in Gosford.
In addition, the company announced it would shut down its door manufacturing operation in West Gosford.
Albany International is a global advanced textiles and materials processing company with 6,100 employees worldwide. The company's core business is custom-designed fabrics ...

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Trelleborg to Buy NPC Inc

Trelleborg has agreed to buy NPC Inc., Milford, NH, with about 100 employees and sales of about $18 million.
This acquisition strengthens Trelleborg's position in pipe seals, primarily for new building and replacement in the infrastructure market. NPC Inc. specializes in large seals for such applications as drains and manholes.
NPC broadens our market presence, primarily in the North American market and, at the same time, provides an excellent complement to Trelleborg's existing range of pipe seals,"says Lennart Johansson, president of the Trelleborg Engineered Systems business area.
NPC is a portfolio company of American Capital Strategies Ltd.
The operations will be integrated with Trelleborg Engineered ...

Trelleborg to Buy NPC Inc Read More »

Survey: Industrial Manufacturers Pessimistic on Economy

In a recent survey by PricewaterhouseCoopers, the majority of U.S.-based industrial manufacturers said they are pessimistic about the prospects for the U.S. economy over the next 12 months, and most of the others said they are uncertain. Only 12% remain optimistic. Their overall uncertainty now includes the world economy where 21% say they are pessimistic and 41% say they are uncertain about the next 12 months.
Overall, U.S.-based industrial manufacturers will be readjusting to a slower-paced domestic economy for most of 2008, but with the continued strength of international sales, an uptick is anticipated as they move into the first months of 2009.
Key findings:
Optimism drops dramatically. Those optimistic about the 12-month outlook for the U.S. ...

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HD Supply White Cap Enters Minneapolis Market

HD Supply White Cap, Costa Mesa, CA, distributor of specialty hardware, tools and materials for large and medium-sized contractors, has entered the Minneapolis-St. Paul market with the opening of a 6,000-square-foot warehouse. 
The facility will serve many of White Cap's national industrial, commercial and residential customers by warehousing and distributing products such as tools, fasteners, accessories, abrasives, anchors, firestop, safety &consumables.
In addition to its foray into the Minneapolis-St. Paul market, White Cap recently expanded its footprint in Chicago, IL, and Kansas City. The company said it will continue to evaluate additional growth in the Midwest as part of its long-term growth strategy.
HD Supply White Cap is part of HD ...

HD Supply White Cap Enters Minneapolis Market Read More »

Interline Sales Down 2.1% in 1Q

Interline Brands, Inc., Jacksonville, FL, distributor and direct marketer of maintenance, repair and operations products, reported sales for the first quarter 2008 were down 2.1% from the prior-year period.
The current market environment has proven to be one of the more challenging in recent memory," said Michael Grebe, Interline's CEO. "While the first two months of the year were consistent with our initial expectations, revenues in March took an unexpected downturn in all three of our major end-markets. April results have improved, but market visibility still remains at a very low level."
Interline's facilities maintenance market, which comprised 68% of sales, grew 4.5% during the first quarter on an average daily sales basis. This growth was offset by ...

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Airgas Fiscal 2008 Sales Grow 25% to $4B

Airgas, Inc., distributor of industrial, medical, and specialty gases, welding, safety, and related products, reported sales in its fiscal 2008 were up 25% to $4 billion, with same-store sales growth of 7%.
Airgas made 18 acquisitions in fiscal 2008, adding more than $500 million in annualized revenue, including Linde's U.S. packaged gas business, which added $346 million.
These transactions helped us enhance our core business and extend our product lines, with acquisitions in packaged gases and welding products, safety products, ammonia, and refrigerants,"said CEO Peter McCausland.
Fourth quarter sales grew 27% from the prior year to $1.1 billion, with acquisitions contributing 17% of the growth. Total same-store sales increased 8% in the quarter, ...

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Manufacturing Contracts in April

Economic activity in the manufacturing sector failed to grow in April, say the nation's supply executives in the latest Manufacturing ISM Report On Business.
The manufacturing sector failed to grow in April as the PMI fell below 50 percent for the third consecutive month. Manufacturers are in a situation where both new orders and production are slowly declining, but prices continue to rise at highly inflationary rates, according to ISM.
Bright spots this month are the growth in the Backlog of Orders Index after six consecutive months of decline, continued strength in new export orders and a reduction in customers' inventories.
More details ...

Manufacturing Contracts in April Read More »

Home Depot to Cut Back Store Openings, Will Close 15 Stores

The Home Depot, Atlanta, GA, home improvement retailer, announced it would no longer pursue the opening of 50 U.S. stores in the pipeline -some will be delayed by as much as 10 years.
The company also reported it would close 15 underperforming U.S. stores, representing less than 1% of the company's store portfolio.
Closing a store is always a difficult decision because it affects both our people and our communities," said CEO Frank Blake. "But, as with our decision to slow future store growth, this is the right decision and will bring long-term benefits to our associates and to our shareholders. We put our real estate projects through a tight capital efficiency model.
"This model prioritizes locations that make the most efficient use of capital, ...

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BlueLinx Records Net Loss of $10.6M in 1Q

BlueLinx Holdings Inc., Atlanta, GA, distributor of building products, reported a net loss of $10.6 million for the first quarter 2008, compared with a net loss of $189,000 in the year-ago period.
Sales fell 25.1% to $716.8 million. The drop reflects a 28.1% decline in structural product sales and a 22.5% sales decline in specialty products.
Structural and specialty unit volumes declined 27.8% and 22.3%, respectively, from year-ago levels. The sales decline was mainly due to lower unit volumes in both structural and specialty products driven predominately by a 30.2% decline in housing starts relative to year ago ...

BlueLinx Records Net Loss of $10.6M in 1Q Read More »

Sandvik Sells Diamond Tool Unit

Sandvik has sold its diamond tools unit to Husqvarna. The acquired operation comprises production and sales of diamond tools and related machines for sawing, drilling and grinding.
Annual sales are SEK 65 million. The operation is based in Nora, Sweden and Vantaa, Finland.
The acquisition complements Husqvarna's product range for the construction industry and reinforces the group's position in the Nordic region.
Husqvarna is a producer of lawn mowers, chainsaws and portable petrol-powered garden equipment such as trimmers and blowers. The group is also a producer of diamond tools and cutting equipment for the construction and stone industries. Net sales in 2007 were SEK 33.3 ...

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Platinum Equity Buys Owens Corning’s Plants

Platinum Equity has completed the acquisition of Owens Corning's composite manufacturing plants in Battice, Belgium and Birkeland, Norway.
The plants manufacture and sell composite materials that are used to strengthen and lighten components and parts in the automotive, wind energy, electronics and consumer goods industries, among others.
Owens Corning sold the facilities to address regulatory concerns associated with its acquisition of Saint-Gobain's reinforcements and composite fabrics businesses.
Platinum will operate the plants as a standalone business with an eye toward growth both organically and through add-on acquisitions. The company's new name and other details of the transition will be announced as the transition ...

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