March 2009 - Page 4 of 5 - Modern Distribution Management

March 2009

Suppliers to Automakers May Need Help, Too

We've been hearing the news for month: the U.S. Big Three automakers are in trouble. Suppliers to the automakers are also struggling.
 
According to a recent article at Forbes.com, even if the government bailouts succeed in heading off failure for Chrysler, GM and even Ford (though it says it doesn't need any bailout money yet), the industry may fail "from the bottom up" if suppliers don't receive help as well.
 
The author writes:
"With credit markets all but frozen, bankrupt suppliers wouldn't be likely to obtain debtor-in-possession financing to stay in business during bankruptcy reorganization. Instead, many would be forced to liquidate. That would put the carmakers in a jam, because they can't easily get the missing parts from ...

Suppliers to Automakers May Need Help, Too Read More »

DXP 4Q Same-Store Sales Climb 3.8%

DXP Enterprises, Inc., Houston, TX, reported sales for the fourth quarter ended Dec. 31, 2008, were $193.6 million, up 14.7% over fourth quarter 2007. Profit increased 22.8% to $7 million.
 
Excluding fourth quarter 2008 sales of $18.4 million from businesses acquired in 2007 and 2008, sales for the 2008 fourth quarter increased 3.8% from the 2007 fourth quarter.
 
For the full year 2008, sales improved 65.8% to $736.9 million. Profit was $25.9 million, an increase of 49.7% over 2007.
 
Our goal today is to create opportunities caused by a contracting economy by gaining market share at the expense of our competitors. It is easier to perform when times are good but I look forward to our ability to succeed in these challenging times, CEO David ...

DXP 4Q Same-Store Sales Climb 3.8% Read More »

January Wholesale Revenues Fall 2.9%

January 2009 sales of wholesalers were down 2.9% from December to $326.1 billion, and down 15.4% from January 2008. January sales of durable goods were down 6.5% from last month and down 17.3% from a year ago.
 
Compared to last month, sales of metals and minerals, except petroleum, were down 15.3% and sales of machinery, equipment, and supplies were down 10.8%. Sales of nondurable goods were up 0.3% from last month, but were down 13.7 percent from last year. Sales of chemicals and allied products were down 4.9% from last month, while sales of drugs and druggists' sundries were up 2.1%.
 
Inventories fell 0.7% from December but were up 1% from a year ago. End-of-month inventories of durable goods were down 1.3% but were up 4% from last January. ...

January Wholesale Revenues Fall 2.9% Read More »

Conference Board Employment Trends Index Falls Sharply

The Conference Board Employment Trends Index fell sharply in February. The index now stands at 91.0, decreasing 3.2% from the January revised figure of 94.0, and down 21.7% from a year ago.
 
Over the past year, the Employment Trends Index has declined faster than at any other time in its 35-year history, with the most severe decreases taking place since the Fall, said Gad Levanon, senior economist at The Conference Board. "As job losses persist, the drop in overall earnings makes a rebound in consumer spending unlikely for the next few months. The decline in employment will only moderate once companies anticipate some revival in domestic and global economic activity."
 
The 19-month-long decline in the Employment Trends Index is seen in all ...

Conference Board Employment Trends Index Falls Sharply Read More »

Lewis-Goetz Buys Transport Parts

Industrial distributor Lewis-Goetz and Company, Inc., Pittsburgh, PA, has acquired Transport Parts Incorporated, a Minneapolis-based distributor of industrial hose and accessories serving the transportation and industrial markets of Minnesota.
 
Our company continues to execute its long-term goal of consolidating the fragmented industrial rubber distribution channel in an effort to provide consistent products and services to customers throughout North America, said Jeff Crane, president and CEO of Lewis-Goetz. "This acquisition further extends the company's footprint into the northern Midwest markets of Wisconsin, Minnesota, Iowa and the Dakotas and will help us better serve existing customers in those ...

Lewis-Goetz Buys Transport Parts Read More »

Machine Tool Consumption Down in January

January U.S. manufacturing technology consumption totaled $94.95 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 59.2% from December and down 71.9% from the total of $338.00 million reported for January 2008.

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

There's no way or reason to try to sugar coat these numbers - they are the lowest since the program began in 1996, said Peter Borden, AMTDA president.  "While a few small pockets of activity have continued, most everyone ...

Machine Tool Consumption Down in January Read More »

Wolseley Looks to Exit Stock Building Supply Business

UK-based distributor Wolseley plc is once again looking to exit its U.S.-based Stock Building Supply operations with a deadline of Aug. 1, 2009.

Even after extensive cost-cutting measures last fall that included reducing headcount by an additional 3,000 and closing 86 branches, the business lost $246 million last year.
 
Stock Building Supply is heavily reliant on housing starts in the U.S., which declined from around 750,000 in Oct. 2008 to about 460,000 in January. Enough is enough, John Whybrow, chairman of the board, says in a Webcast on the Wolseley site. "We cannot go on with markets deteriorating like that."
 
Wolseley said it prefers a joint venture partner for the business, though closing Stock - the worst-case ...

Wolseley Looks to Exit Stock Building Supply Business Read More »

Latest Fed Beige Book: Economic Weakness Deepens

The Federal Reserve Board's latest Beige Book report was released this week, and the results are in line with reports from other agencies: the U.S. economy continued to deteriorate in January and February.
 
The report, a compilation of commentaries from each of the 12 Federal Reserve Districts, states that 10 of the 12 districts indicated weaker conditions or declines in economic activity, while Philadelphia and Chicago reported their regional economies remained weak.
 
Here's the overview: (Read the full report.)
 
Deterioration was broad-based, with only a few exceptions, including basic food production and pharmaceuticals. ...

Latest Fed Beige Book: Economic Weakness Deepens Read More »

Wolseley Confirms It’s Considering Issue of New Equity

Acknowledging press reports in recent months, UK-based building materials and plumbing/HVAC distributor Wolseley plc has confirmed that it has held "discussions to consider the merits of an issue of new equity."
 
"Any decisions will be communicated to shareholders through the appropriate channels at the appropriate time," Wolseley said in a press release.
 
London's Financial Times reported this week that hopes were high that Wolseley would unveil a 1.2 billion pounds rights issue (roughly US$1.5 billion).
 
Wolseley continues to be burdened by high debt levels. It recently announced its net debt had grown to 3 billion pounds (US$3.7 ...

Wolseley Confirms It’s Considering Issue of New Equity Read More »

Huttig 2008 Sales Drop 23.3%

Huttig Building Products, Inc., reported sales of $671 million for 2008, down 23.3% from 2007. The distributor of building materials recorded a year-end loss of $35.4 million, compared to a loss in 2007 of $8.2 million.
 
Sales decreased in all major product categories, attributable to continued significant decline in new housing activities. Wood products sales decreased 35%, while millwork sales declined 30%. The sales decline in building products (10%) was less than other segments as a result of new product initiatives put in place by the company.
 
Housing starts are expected to continue to be slow in 2009.
 
For the fourth quarter 2008, sales were $126 million, down 30% from fourth quarter 2007. A loss of $15.4 million was recorded for the quarter, ...

Huttig 2008 Sales Drop 23.3% Read More »

Wolseley’s Chip Hornsby: Realism, Fortitude Key In Today’s Times

Chip Hornsby, CEO of Wolseley plc, recently spoke at the National Association for Wholesaler-Distributors executive summit about Managing in Today's Turbulent Economic Environment. In his speech, he offered five concepts executives need to live by in order to address looming questions brought about by today's economic uncertainty.
 
Realism: Clearly identify problems for what they are and immediately assess them for the damage they potentially can cause.
 
Fortitude: "Do what has to be done to deal head-on with our business problems, no matter how unpleasant."
 
Proactivity: "Address issues early, directly, and often."
 
Perseverance: "See ...

Wolseley’s Chip Hornsby: Realism, Fortitude Key In Today’s Times Read More »

Warren Buffet Finds Reason to Be Hopeful in Annual Letter

Berkshire Hathaway Chairman Warren Buffet found reason to be optimistic in his 2008 annual letter to shareholders (released at the end of February and available here).
 
He uses a slew of graphic metaphors - "By year-end, investors of all stripes were bloodied and confused, much as if they were small birds that had strayed into a badminton game." - but threw in some optimism, reminding his shareholders that the country has "faced far worse travails in the past." Among those: two great wars, a dozen or so panics and recessions; virulent inflation leading to a 21½% prime rate in 1980; and the Great Depression, when unemployment was between 15% and 25% for ...

Warren Buffet Finds Reason to Be Hopeful in Annual Letter Read More »

Canadian Wholesale Revenues Fall 3.4% in December

Canadian wholesale sales declined 3.4% to $42.8 billion in December, the largest month-over-month decrease since August 2003, according to Statistics Canada. In terms of the volume of sales, wholesale sales fell 3.6%.

Canadian wholesalers sell to both the domestic and international markets, and are active importers and exporters. The decline in sales reflected both lower export demand for Canadian goods, a significant part of which flows through wholesale markets, and weaker sales in Canada.

In December, five out of seven sectors, which account for about two-thirds of wholesale sales, reported declines. The machinery and electronic equipment sector declined 4.5% in December. The automotive products sector declined 3.4% ...

Canadian Wholesale Revenues Fall 3.4% in December Read More »

Canadian Manufacturing Sales Fall 8% in December

Canadian sales declined 8.0% to $44.2 billion in December, reflecting almost equal decreases in both volume and price, according to Statistics Canada. This was the largest monthly percentage decline since the start of the current series in January 1992.
 
Constant dollar manufacturing sales, measured in 2002 prices, decreased by 4.4% in December.
 
By Sector
Declines were widespread in December, as sales fell in 20 of 21 manufacturing industries. The printing and related support activities industry recorded the only increase (+0.1%).
 
Manufacturing sales in the petroleum and coal products industry fell 18.4% to $4.4 billion. Sales have decreased by almost $3.8 billion ...

Canadian Manufacturing Sales Fall 8% in December Read More »

Construction Spending Falls 3.3% in January

Construction spending during January 2009 was estimated at a seasonally adjusted annual rate of $986.2 billion, 3.3% below the revised December estimate of $1,020.0 billion. The January figure is 9.1% below the January 2008 estimate of $1,085.4 billion.
 
Private Construction
Spending on private construction was at a seasonally adjusted annual rate of $682.6 billion, 3.7% below the revised December estimate of $709.0 billion.

Residential construction was at a seasonally adjusted annual rate of $291.5 billion in January, 2.9% below the revised December estimate of $300.3 billion. Nonresidential construction was at a seasonally adjusted annual rate of $391.0 billion in January, 4.3% below the revised December estimate of $408.7 ...

Construction Spending Falls 3.3% in January Read More »

Industrial Outlook: Just 1 of 24 Industries in Report Will Grow in 2009

The latest Manufacturers Alliance/MAPI U.S. Industrial Outlook forecasts that growth will occur in one of 24 industries covered in the report in 2009: aerospace products and parts. The reports says that 19 of the 24 industries is expected to expand in 2010, with housing starts growing by 84%.
 
Four industries will see negative change in 2009 and 2010, according to the outlook, with mining and oil and gas field machinery the weakest. That industry is expected to fall 13% in 2009 and 24% in 2010. Other declines are expected in domestic electronic computer equipment, private nonresidential construction, and electrical equipment.
 
Read the full report at

Industrial Outlook: Just 1 of 24 Industries in Report Will Grow in 2009 Read More »

Graybar & Other Wholesalers On Fortune’s Most Admired List

Fortune magazine's annual World's Most Admired Companies list is out.

Of any wholesaler-distributor, Graybar showed up the most. The electrical distributor ranked No. 1 in diversified wholesalers, but also found itself in the top 10 on several breakout lists, including management quality, long-term investment, financial soundness, quality of product and services, use of assets, people management and innovation.

(An interview with Graybar CFO Beatty D'Alessandro was featured in the Feb. 25, 2009, issue of MDM. Read it here.)

Foodservice distributor Sysco also made the financial ...

Graybar & Other Wholesalers On Fortune’s Most Admired List Read More »

Arrow Electronics To Name Long CEO

The board of directors of Melville, NY-based Arrow Electronics, Inc. will name Michael J. Long CEO at the company's annual meeting on May 1, 2009. Long will replace William E. Mitchell, who has held the post since 2003.
 
An 18-year veteran of Arrow, Mr. Long has served as president, COO and a director of the company since March 2008, with responsibilities for all of the company's business operations.
 
Mike's commitment to driving profitable growth and talent development and his outstanding record of achievement have been critical to Arrow's strong financial and market position, Mitchell said. "His solid leadership in our global operations and success in delivering on Arrow's strategic initiatives will ensure ...

Arrow Electronics To Name Long CEO Read More »

Manufacturing Contracts in February

The manufacturing sector contracted again in February, according to the latest Manufacturing ISM Report on Business from the Institute for Supply Management.
 
ISM reported: "Manufacturing continues to decline at a rapid rate ... While production has slowed its rate of decline, employment continues to fall precipitously. Prices continue to decline, but price advantages are not sufficient to overcome manufacturers' apparent loss of demand. Survey respondents appear generally pessimistic about recovery in 2009. Some express hope that the stimulus package will help their industry."
 
None of the 18 manufacturing industries in the survey reported growth.
 
A transportation equipment manufacturer said that customers are being cautious about ordering ...

Manufacturing Contracts in February Read More »

Allied Motion 2008 Sales Up 2%

Allied Motion Technologies Inc., Denver, CO, sales for 2008 of $86 million, an increase of 2% over 2007. Profit increased 21% to $2.9 million.
 
During the fourth quarter, sales were $17.6 million, down 17% from the prior year period. Profit was $280,000, compared to $648,000 during fourth quarter 2007.
 
While we were able to achieve continuous improvements in sales and profit through our third quarter, the economic downturn caught up to us in the fourth quarter resulting in a drop in sales and profit compared to last year and to the third quarter, CEO Dick Smith said. "We have and will continue to take actions to try and mitigate the adverse effects this economic downturn has on the Company. While the economy is down, we will continue to ...

Allied Motion 2008 Sales Up 2% Read More »

Register for full access

By providing your email, you agree to receive announcements from us and our partners for our newsletter, events, surveys, and partner resources per MDM Terms & Conditions. You can withdraw consent at any time.

Learn More about Custom Reports

Request a Market Prospector Demo

  • This field is for validation purposes and should be left unchanged.

Get the MDM Update Newsletter

Wholesale distribution news and trends delivered right to your inbox.

Sign-up for our free newsletter and get:

  • Up-to-date news in a quick-to-read format
  • Free access to webcasts, podcasts and live events
  • Exclusive whitepapers, research and reports
  • And more!