July 2008 - Modern Distribution Management

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July 2008

DXP Enterprises Sales in First Half at $356.3M

DXP Enterprises, Inc., Houston, TX, reported sales for second quarter ended June 30, 2008, increased 120.1% to $187.8 million from the second quarter of 2007. Profit was $6.4 million, an increase of 86.5% from the same period a year ago.
 
Businesses acquired in 2007 and 2008, including Precision Industries, contributed $76.1 million to second quarter sales.
 
Sales for the six months ended June 30, 2008, were $356.3 million, an increase of 110.9% from the first of 2007. DXP reported income for the sale period of $11.8 million, an increase of 65.3%. Organic sales for the fist half of 2008 increased 22.3% from 2007.
 
DXP Enterprises, Inc. is a distributor of products focused on pumping, integrated supply and ...

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Eaton Buys Indian Engine Valves Business

Eaton Corp., Cleveland, OH, has acquired the engine valves business of Indian company Kirloskar Oil Engines Ltd.
 
Through this acquisition, we will be able to use our global resources to meet the needs of the domestic Indian customer base and provide support to our customers around the world,"said Joseph P. Palchak, CEO -Automotive Group. "In addition, Kirloskar's new facility in Ahmednagar, India, provides Eaton with a first-class valve facility, expansion opportunities and an experienced workforce."
 
The engine valves business of Kirloskar Oil Engines Ltd. employs 500 people in India and had 2007 sales of $5 million. The business designs, manufactures and sells intake and exhaust valves for diesel and gasoline engines.
 
Eaton is a diversified ...

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Huttig Building Products Sales Decline 18% in 2Q

Huttig Building Products, Inc., St. Louis, MO, a domestic distributor of millwork, building materials and wood products, reported a net loss of $2.5 million for the second quarter ended June 30, 2008. Huttig reported a profit of $1.1 million for the same quarter 2007. Sales were $195.4 million in the second quarter, a decline of 18% from the same period a year ago.
 
Sales continued to be impacted by the persistent weakness in the new housing starts.
 
In this challenging environment, we continue to focus on controlling expenses, improving operating efficiencies, reducing inventories, generating cash, and gaining market share," said Jon Vrabely, president and CEO. "Our 2008 second quarter sales decline of 18%, year-over-year, is well below the 30% decline in housing ...

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United Rentals Sales Fall 13.6% in 2Q

Greenwich, CT-based United Rentals, Inc. reported second quarter 2008 sales of $831 million, a decrease of 13.6% from second quarter 2007. Rental revenue accounted for $621 million. Profit was $37 million, a decline of 44.8%.
 
For the first half 2008, revenue declined 10.9% from 2007 levels to $1.6 billion. Profit was 22.7% lower at $75 million.
 
The decreases primarily reflect lower gross profit in a softening equipment rental environment as well as the previously disclosed $14 million after-tax provision relating to the SEC inquiry. ...

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Parker Hannifin Sales for 2008 Grow 13.3%

Parker Hannifin Corp., Cleveland, OH, manufacturer of motion and control technologies and systems, reported sales for the fourth quarter ended June 30, 2008, were $3.3 billion, an increase of 13.3% over fourth quarter 2007. Profit was $252.6 million, 16.3% more than the same period a year ago.
 
For the 2008 fiscal year, the company reported sales of $12.1 billion, an increase of 13.3% over 2007. Profit increased 14.4% to $949.5 million, compared to the prior year. Organic sales growth was 4.8% for the year.
 
Despite challenging economic conditions, our continued focus on the core goals of the Win Strategy has enabled us to consistently produce record results for our shareholders,"said CEO and President Don Washkewicz. "Our sales growth also demonstrates the ...

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Advance Estimates: U.S. GDP Rises 1.9% in 2Q

Real gross domestic product -the output of goods and services produced by labor and property in the U.S. -increased at an annual rate of 1.9% in the second quarter of 2008 (from the first quarter to the second quarter), according to advance estimates released by the Bureau of Economic Analysis. In the first quarter, real GDP increased 0.9 percent.
 
The Bureau emphasized that the second-quarter advance" estimates are based on source data that are incomplete or subject to further revision by the source agency (see the box on page 3). The second-quarter "preliminary" estimates, based on more comprehensive data, will be released on Aug. 28, 2008.

More details ...

Advance Estimates: U.S. GDP Rises 1.9% in 2Q Read More »

Rexel Organic Growth at 2.3% in 2Q

Paris-based Rexel reported sales of €3.7 billion (US$5.7 billion at current exchange rate) for the second quarter 2008, an increase of 27.3% over the same period 2007. The company reported organic growth of 2.3%. Profit was €196.9 million (US$306.5 million), compared with a reported loss of €30.1 million (US$46.9 million) a year ago.
 
For the first six months ended June 30, 2008, sales were €6 billion (US$9.4 billion), an increase of 12.9% from the same period a year ago. Profit increased 72.1% to €259 million (US$403.9 million).
 
Rexel experienced organic growth in all three geographic zones for the first half of 2008. In Europe, sales increased 2.3%, led by strong performance in Scandinavia and Germany. North America posted a 0.5% ...

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Legrand Sales Up 3.4% in First Half 2008

France-based electrical manufacturer Legrand reported sales for the first half of 2008 were up 3.4% from the same period last year. Profit was up 19%.
 
In the U.S. and Canada, sales were down 4.1%. In France sales rose 2.6%. Italy says rose 3.2%. In the rest of Europe, sales were up 2.1%, with firm growth in Eastern Europe, particularly Russia and Romania.
 
Sales growth was in the double digits in China, Thailand, Brazil and Chile. It topped 30% in India, Egypt and Peru.
 
Legrand's performance in the first half of 2008 further illustrates our resilience and capacity to keep step with change. Amid difficult economic conditions, we reported growth in sales excluding currency effects of close to 7% and achieved margins on a par with those for the first ...

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Grainger Buys Stake in Indian Distributor

Grainger, Lake Forest, IL, distributor of broad line facilities maintenance products, has bought a 49.9% stake in Asia Pacific Brands India Ltd., based in India.
 
Grainger paid $5.4 million; at the same time, the company matched a $1.1 million capital infusion with its joint venture partner intended to help grow the business.
 

India was chosen for expansion because it is large, fragmented and growing rapidly, Bonnie McIntyre, Grainger's vice president for International Market Development, told MDM. Asia Pacific Brands has a well established infrastructure in the market, making it an ideal candidate for Grainger's entrance.
 
We're leveraging Grainger's strengths in supply chain management, product breadth, and superior customer service in emerging ...

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Electroindustry Business Index Slips in June

The National Electrical Manufacturer Association's Electroindustry Business Confidence Index (EBCI) for current North American conditions slipped to 37.5 in June, a decline of 10.5 points from a month ago.
 
The index has trailed the 50-point threshold -a level indicative of deteriorating industry conditions -in each month since November 2007.  Over that period, index values have moved in a relatively tight range between 27.3 and 48.
 
Meanwhile, the EBCI for future North American conditions extended its modest rebound to a second month as the index climbed 5.5 points. That performance came on top of the 2.5 point gain seen from April to May.
 
Despite these recent signs of life though, June's reading, at 37.5, continues to paint a dour picture of ...

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BlueLinx Sales Fall 22.9% in 2Q

BlueLinx Holdings Inc., Atlanta, GA, a distributor of building products in North America, reported sales for the second quarter ended June 28, 2008, were $835 million, a decline of 22.9% from the same period a year ago. Profit totaled $6.6 million, an increase of 22.2% over second quarter 2007.
 
The decline in revenue reflects a 26% drop in structural product sales and a 20% sales decline in specialty product sales from the year ago period.
 
For the six months ended June 28, 2008, BlueLinx reported a net loss of $4 million on revenues of $1.55 billion, compared with profit of $5.2 million on revenues of $2.04 billion a year ago.
 
While we are pleased with our results, we expect the current housing market downturn to continue through 2009," said Howard ...

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Timken Sales Up 14% in 2Q

The Timken Company, Canton, OH, reported sales of $1.54 billion in the second quarter of 2008, an increase of 14% over the same period a year ago. Profit improved 60% to $88.9 million from second quarter 2007.
 
Strong sales in global industrial markets offset the impact of weaker North American automotive demand. During the quarter, the company benefited from its capacity-expansion initiatives, as well as the favorable impact of pricing, surcharges and currency.
 
For the first half of 2008, sales were $2.97 billion, an increase of 13% from the same period in 2007. Profit for the first six months of 2008 was $173 million, up 33.5% over the same period a year ago.
 
Segment Results
The Bearings and Power Transmission Group had second-quarter ...

Timken Sales Up 14% in 2Q Read More »

International Sales Remain Strong for Industrial Manufacturers

International sales remained the bright spot for industrial manufacturers in a recent survey by PricewaterhouseCoopers LLP. International sales in the second quarter 2008 remained strong for those who sell abroad, increasing for 66% of respondents in the firm's quarterly Manufacturing Barometer. International sales projections for the next 12 months increased slightly to 38% of revenue, three points higher than both the prior quarter and the second quarter 2007.
 
However, of those industrial manufacturers selling abroad, almost two-thirds are either pessimistic (27%) or uncertain (36%) about the world economy over the next 12 months, an increase from 22% a year ago.
 
Overall, pessimism and uncertainty about the domestic and world economies reached a five-year high ...

International Sales Remain Strong for Industrial Manufacturers Read More »

Linde Canada Acquires P&B Industrial Sales

Linde Canada, Mississauga, Ontario, a member of The Linde Group, has acquired P&B Industrial Sales Inc., a Sudbury, Ontario-based distributor of welding gases and equipment.

P&B was a privately owned company that has been in business since 1992, serving customers ranging from small to mid-sized manufacturers and fabrication shops in Sudbury and the surrounding areas.

P&B's employees, some of whom have over 30 years of experience with welding gases and equipment, bring expertise coupled with strong customer relationships in the Sudbury area. They will make an excellent addition to our already strong team in that region,"said Chris Ebeling, vice president and general manager, Linde Canada.

Linde Canada is a supplier of gases, welding equipment and safety ...

Linde Canada Acquires P&B Industrial Sales Read More »

Crane Co. Sales Up 5% in 2Q

Crane Co., Stamford, CT, a diversified manufacturer of industrial products, reported second quarter 2008 sales of $693.5 million, an increase of 5% over second quarter 2007. Second quarter profit was $59 million, a 29% increase from the prior year period.
 
The increase in sales includes a 1% growth in core business, 1% benefit from acquisitions and divested businesses, and a favorable foreign currency translation.
 
For the first six months, sales were $1.37 billion, an increase of 6% over the first six months 2007. Profit was $107.4 million, a 20% increase from the prior year same ...

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Charlotte Winnelson Opens Kitchen and Bath Showcase

Charlotte Winnelson Co., Charlotte, NC, has opened the Win Kitchen and Bath Showcase where contractors and their customers, as well as architects and designers, can view and see in action the latest items for homes and businesses.
 
Charlotte Winnelson is associated with WinWholesale Inc., a national wholesale distributor serving Charlotte and the surrounding area. The 3,500-square-foot showroom also provides cabinetry and countertops.
 
We created the showroom as a one-stop shop for kitchen and bath needs in new construction and remodeling,"said Steve Technik, Charlotte Winnelson president.
 
Among the many products in the showroom are 53 working displays of faucets, sinks, toilets, whirlpool tubs, a steam unit, showerheads and fireplaces that allow ...

Charlotte Winnelson Opens Kitchen and Bath Showcase Read More »

A.M. Castle Sales Up 6.6% in 2Q

A. M. Castle &Co., Franklin Park, IL, a distributor of specialty metals and plastic products, reported sales for second quarter ended June 30, 2008, were $397.1 million, an increase of 6.6% from second quarter 2007. Profit was $11.3 million, down 30.7% from the prior year.
 
Overall demand in our key strategic end-markets remained solid during the second quarter of 2008,"said Michael Goldberg, president and CEO of A. M. Castle. "In particular, we saw continued healthy demand from our heavy equipment and oil and gas end-markets, and when combined with increasing tons sold per day and higher prices for certain products, we experienced solid revenue growth compared to the prior year. However, significant material cost increases for carbon products pressured our margins resulting ...

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Survey: Middle-Market M&A Professionals Frustrated With Market

The latest survey of middle-market merger professionals by the Association for Corporate Growth (ACG) and Thomson Reuters reveals frustration with the current M&A environment, but cautious optimism for the next six months.
 
According to the ACG-Thomson Reuters Mid-Year 2008 DealMakers Survey, the percent of middle market mergers and acquisitions professionals who say the current M&A environment is good or excellent has dropped to 43% from 93% 12 months ago. The figure was 72% in December 2007. 
 
The more than 500 investment bankers, private equity professionals, corporate development executives, lawyers, accountants and business consultants polled say the greatest obstacle to M&A activity is the weak economy (45%).
 
According to Thomson Reuters, ...

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Lean: It’s About the Little Things

Lean operation -finding ways to reduce costs and increase efficiency by improving internal processes -is not a new concept. Companies, starting with Toyota, began exploring the idea more than half a century ago, according to the Lean Enterprise Institute. But it wasn't until the 1980s that most U.S. manufacturers began recognizing how the process could help them. And it's taken roughly 20 years for many distributors to follow suit.
 
Chuck Cohen, president of Benco Dental, attributes the hesitancy of U.S. companies to embrace lean operations on the simple fact that we are a Big Gulp society"-we're looking for the one thing that will slake our thirst instead of realizing that the best results may actually come in smaller packages.
 
"We have to stop asking ourselves ...

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Building Materials Holding Corp. In Danger of Breaching Loan Covenants

San Francisco, CA-based Building Materials Holding Corp. announced it is out of compliance with financial covenants under its current credit facility, based on preliminary evaluation of its financial results for the second quarter ended June 30, 2008.
 
The company has been in discussions with lenders to address the default and prevent disruption to business operations. BMHC expects it will reach an agreement on a temporary waiver of covenants to preserve liquidity and an amendment to the credit facility that will better reflect current market conditions.
 
Continuing weakness in the residential housing market has troubled the provider of building materials and construction services for the past year, leading to facility closures in California and Arizona. Employee ...

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