July 2009 - Page 2 of 6 - Modern Distribution Management

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July 2009

Sealed Air Corp. Second Quarter Sales Down 20%

Leave a Comment / Top Distributor Sectors, Subscriber Only, News, Gases & Welding Equipment, Free /

Sealed Air Corp., Elmwood Park, NJ, reported second quarter 2009 sales of $1.03 billion, down 20% from the prior year period. Profit declined 3% to $60.5 million.

Year to date, sales were $2.01 billion, down 18% from second quarter 2008. Profit decreased 4% to $118.6 million.

Food Packaging segment second quarter sales decreased 14% to $449 million. Operating profit was $62 million in the quarter, about 10% higher than the prior.

Food Solutions' second quarter sales decreased 15% to $220 million, primarily a result of lower unit volumes in Europe due to reduced meat consumption attributable to economic conditions. Operating profit was $22 million in the quarter, 22% higher than prior year.

Second quarter sales in the Protective Packaging segment decreased 28% to $282 ...

Sealed Air Corp. Second Quarter Sales Down 20% Read More »

Timken Reports $64.5M Loss in 2Q

Leave a Comment / Top Distributor Sectors, Subscriber Only, Power Transmission/Motion Control/Fluid Power, News, Free /

The Timken Company, Canton, OH, reported sales of $828.9 million for the second quarter of 2009, a decrease of 46% over the same period a year ago. The manufacturer of power transmission products recorded a loss of $64.5 million for the term, compared with profit of $88.9 million a year ago.

"The combination of a slow economy and inventory reduction throughout the supply chains we serve continues to curb demand for our products. We're now seeing evidence that our customers' inventory destocking activities may go longer and deeper than we expected," said James W. Griffith, president and CEO. "We have decreased manufacturing output in response to lower demand and are on track in our efforts to right-size the company."

For the first half of 2009, sales were $1.79 billion, down 40% ...

Timken Reports $64.5M Loss in 2Q Read More »

How to Plan When Uncertainty Rules

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With the latest round of earnings reports, I've been noticing a few terms being used repeatedly in each company's outlook: uncertain, unclear, unknown. That uncertainty can make it difficult to choose the best way to respond to current economic conditions. You can always cut costs and improve efficiencies, but how can you tell if the choices you make now will be the best for the future when you can't even glimpse the future?

In the latest issue of the Deloitte Review, authors Dwight Allen, Mark Klein and Craig Muraskin take on this question in their article What Next? Business in 2010 and Beyond." They write:

"The wrong answer is to adopt nebulous strategies in the hope of succeeding regardless of what happens."

While broad, generic responses can improve your chances of ...

How to Plan When Uncertainty Rules Read More »

Latin American Manufacturing Forecast to Decline 7.7% in 2009

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Manufacturing production plummeted in Latin America during the first quarter of 2009, accelerating a freefall that began in late 2008, and will remain weak throughout the year before improving in 2010, according to the Manufacturers Alliance/MAPI Latin America Manufacturing Outlook, a bi-annual analysis that examines the latest trends and provides a near-term forecast for 16 major industries.

The report focuses on Latin America's three largest economies- Brazil, Argentina, and Mexico- as these countries are responsible for more than 80% of the manufacturing output in the region. MAPI forecasts that overall manufacturing output in Latin America will decline 7.7% in 2009, a significant drop from 0.9% growth forecast in the December 2008 report. The report anticipates, however, ...

Latin American Manufacturing Forecast to Decline 7.7% in 2009 Read More »

Lawson Products Sales Decline 25.3% in Second Quarter

Leave a Comment / Top Distributor Sectors, Subscriber Only, News, Free, Companies /

Lawson Products, Inc., Des Plaines, IL, a distributor of services, systems and products to the MRO and OEM marketplaces, reported sales for the second quarter of 2009 of $95 million, down 25.3% from the prior year period. Profit was $1.8 million, compared to a loss of $29.7 million in the second quarter 2008.

Sales for the six month period ended June 30, 2009, were $194.4 million, a decrease of 23.2% from the prior year period. The company reported a net loss of $4.1 million in the first six months of 2009, compared to a loss of $25.3 million in the first six months of 2008.

"We are beginning to see positive results from the cost reduction initiatives we implemented over the last several months," said Thomas Neri, president and CEO. "Beyond our cost initiatives, we are working hard ...

Lawson Products Sales Decline 25.3% in Second Quarter Read More »

A.M. Castle Posts $5.5M Loss in 2Q

Leave a Comment / Top Distributor Sectors, Subscriber Only, News, Free, Building Materials/Construction /

A. M. Castle & Co., Franklin Park, IL, a global distributor of specialty metal and plastic products, reported second quarter sales of $195.1 million, down 50.9% from second quarter 2008. The company posted a loss of $5.5 million for the quarter, compared to profit of $11.3 million the prior year.

Year-to-date, sales were $447.3 million, down 43.4% from the first half of 2009. Loss for the period was $5.0 million, down from profit of $25.1 million.

"We continue to look for indications of economic recovery. We have seen a few positive signs in some of the macroeconomic trends. We recognize that we still have a long road ahead of us," said Michael Goldberg, CEO and president. "At this point, our customers overall expect destocking to abate in the second half of 2009 compared to the ...

A.M. Castle Posts $5.5M Loss in 2Q Read More »

Anixter Second Quarter Sales Decline 25%

Leave a Comment / Top Distributor Sectors, Subscriber Only, News, Free, Electrical, Companies /

Anixter International Inc., Glenview, IL, a global distributor of communication products, electrical and electronic wire & cable, fasteners and other small parts, reported second quarter sales of $1.2 billion, a decline of 25% from second quarter 2008. Organic sales were down 19%. The company posted a loss of $89.8 million for the period, compared to profit of $1.7 million the prior year.

Year-to-date, sales were $2.5 billion, a decline of 19% from 2008. Loss for the first six months was $64.1 million, compared to profit of $120.8 million the prior year.

Sales declines were experienced in all end-markets, as well all geographic segments. Reduced sales volumes, lower copper prices and foreign exchange contributed to the declines. ...

Anixter Second Quarter Sales Decline 25% Read More »

Crane Co. Sales Down 21% in Second Quarter

Leave a Comment / Top Distributor Sectors, Subscriber Only, News, Free /

Crane Co., Stamford, CT, a diversified manufacturer of highly engineered industrial products, reported second quarter sales of $545.5 million, down 21% from second quarter 2008. Profit declined 53% to $27.8 million.

The company eliminated 270 positions during the quarter, bringing total headcount reductions to 1,900, or 16%, since year end 2007. Additional reductions are expected in the second half of the year.

Year-to-date, sales were $1.1 billion, down 20% from 2008. Profit declined 52% to $51.1 million.

Segment Results
Sales in the Aerospace & Electronics segment declined 11% during the second quarter to $147 million, a result of significant declines in demand in the Aerospace Group. Demand in Electronics improved slightly during the period.

Engineered Materials ...

Crane Co. Sales Down 21% in Second Quarter Read More »

Hexcel Corp 2Q Sales Drop 22.9%

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Hexcel Corp., Stamford, CT, reported sales for the second quarter of 2009 were $277.3 million, 22.9% lower than second quarter 2008. Profit declined 37.1% to $16.8 million.

Year-to-date, sales were $584.6 million, down 17% from the first half of 2008. Profit was down 19.4% to $40.2 million.

"While we have limited ability to influence short term sales, we are focused on what we can control: our own cost structure, operational efficiency and cash flow," CEO David Berges said. "This quarter we continued to reduce headcount, controllable costs, capital expenditures and inventories."

In the Industrial segment, sales of $64.8 million for the second quarter of 2009 were down 24.5% in actual dollars (15.6% in constant currency) over last year due primarily to wind energy and automotive ...

Hexcel Corp 2Q Sales Drop 22.9% Read More »

Timken May Sell Needle Roller Bearings Business

Leave a Comment / Top Distributor Sectors, Subscriber Only, Power Transmission/Motion Control/Fluid Power, News, Mergers & Acquisitions, Free, Finance /

The Timken Company, Canton, OH, is in advanced discussions regarding the potential sale of its Needle Roller Bearings Business. In a press release, the company said: "There can be no assurance that a definitive agreement will be reached, nor that a sale, which would be subject to certain closing conditions, will be completed."

Timken, a manufacturer of power transmission products, had sales of $5.7 billion in 2008, and operations in 26 ...

Timken May Sell Needle Roller Bearings Business Read More »

Saint-Gobain Sales Fall 15.5% in First Half of 2009

Leave a Comment / Top Distributor Sectors, Subscriber Only, News, Free, Chemicals & Plastics Distribution, Building Materials/Construction /

The Saint-Gobain Group, Courbevoie, France, reported sales for the first half of 2009 were €18.7 billion (US$26.6 billion), down 15.5% from the first half of 2008. Profit declined 88.1% to €128 million (US$182.2 million).The group saw negative organic growth of 15.5% for the period.

All of the group's business sectors posted declines.

The continued decline of both construction and industrial markets in the US and Western Europe, as well as in most Asian and emerging countries, contributed to the steep declines in Building Distribution and Construction Products.

Sales in the Construction Products segment declined 15.3% on a like-for-like basis. Increased prices failed to offset the continuing fall in sales volumes, particularly in Interior Solutions, which fell ...

Saint-Gobain Sales Fall 15.5% in First Half of 2009 Read More »

Wolseley Announces Plans for Further Business Closures

Leave a Comment / Top Distributor Sectors, Subscriber Only, Plumbing Products & PVF Distribution, News, HVACR, Free, Companies, Building Materials/Construction /

UK-based Wolseley plc, distributor of plumbing and heating products to professional contractors and supplier of building materials, reported revenues from continuing operations were down 1.5% - down 16% on a constant currency basis - to £13.25 billion (US$21.86 billion). Trading profit from continuing operations was down 47%.

The company has completed its review of the Central and Eastern European markets, and has decided to focus on countries in that region where it has built sufficient scale, established leading market positions and can deliver an appropriate financial return. As a result, Wolseley decided to sell its Belgium, Slovakin and Czech Republic businesses. It will retain a presence in Switzerland, Austria, Luxembourg, Denmark, Holland and Italy.

Action also has ...

Wolseley Announces Plans for Further Business Closures Read More »

Conditions Ripe for Better Pricing

Leave a Comment / Subscriber Only, Strategy, Management /

Brent Grover of Evergreen Consulting recently spoke with MDM about the importance of the concepts outlined in his latest book, "Strategic Pricing for Distributors: Tools and Rules for Building Higher Margins." Grover writes that strategic pricing can result in an increase of 200 or more basis points (2 percentage points) of gross margin percentage. "It's far more dramatic than slashing the staff or reducing sales commissions," he tells MDM. This article looks at why now is a good time to implement a new pricing strategy and analyzes the importance of two key aspects: the sales team and technology.

Grover's book, written as part fable featuring the fictitious Mahoning Distributors, and part practical guide, was released by the National Association of Wholesaler-Distributors ...

Conditions Ripe for Better Pricing Read More »

Commentary: The Fear Factor in Change

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Here at MDM we are in the midst of implementing some positive changes in how we do business. We are especially excited about one in particular, which we will be revealing to you in the next couple of months.

Our operations are different from a distributor's - MDM is a part of Gale Media, which is a specialized publishing and research business - but through our work, we are reminded of the challenges that come with change. Undoubtedly, these challenges transcend industry lines.

While we hope the ROI will be positive, there is only so much a business can control. And that's the fear factor in change.

But it's also exciting and provides a great opportunity for the company. We recognize the only way to continue growing is to make this investment of time and energy. We feel like ...

Commentary: The Fear Factor in Change Read More »

Economic Update: Is Recovery On the Way?

Leave a Comment / Subscriber Only, Research & Analytics, Economic Trends /

This is the first of a new monthly feature compiling the latest economic indicators to provide a more holistic view of the state of the economy.

The long climb to economic recovery may be beginning as a variety of economic indicators posted more positive results in May and June.While not all of the indicators posted positive results, many of those remaining negative declined at a slower rate. Though the outlook for recovery is still uncertain, many economists view these shifts as signs that the U.S. economy is heading into recovery phase with growth possible in 2010.

With the current recession in its nineteenth month, it is already longer and more widespread than the recessions in 1990-1991 and 2000-2001, according to Nouriel Roubini of the RGE Monitor, an economic analysis ...

Economic Update: Is Recovery On the Way? Read More »

Monthly Wholesale Trade: Sales and Inventories for May 2009

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May 2009 wholesale revenues were $311.3 billion, up 0.2 percent from the revised April level, but down 19.9 percent from the May 2008 level. The April preliminary estimate was revised upward $1.4 billion or 0.4 percent. May sales of durable goods were down 0.2 percent from last month and were down 23 percent from a year ago. Sales of metals and minerals, except petroleum were down 8.1 percent for last month, while motor vehicle and motor vehicle parts and supplies were up 4.4 percent. Sales of nondurable goods were up 0.5 percent from last month, but were down 17.2 percent from last year. Sales of petroleum and petroleum products were up 4.6 percent from last month and sales of drugs and druggists' sundries were up 1.4 percent.
Inventories
Total inventories were $402.2 ...

Monthly Wholesale Trade: Sales and Inventories for May 2009 Read More »

Inflation by Commodity Group: Second Quarter 2009

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These select product groups provide a snapshot of inflation trends based on the Producer Price Index from the U.S. Bureau of Labor Statistics. Second quarter 2009 is compared with second quarter 2008, second quarter 2009 with first quarter 2009.

The product groups in this report:

Abrasives
Adhesives & Sealants
Cutting Tools & Accessories
Hand & Edge Tools
Fasteners
Power-Driven Hand Tools
Ball & Roller Bearings
Mechanical Power Transmission Equipment
Valves, Except Fluid Power
Pumps, Compressors & Equipment
Electrical Machinery/Equipment
Industrial Material Handling Equipment
Industrial Gases
Welding Machinery/Equipment
Fluid Power Equipment
Plumbing Fixtures & Fittings
Hardware
Sanitary Paper Products
Plastic Resins & ...

Inflation by Commodity Group: Second Quarter 2009 Read More »

Distribution Financial Metrics and Trading Multiples: 2Q

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This table highlights key financial metrics and trading multiples for 28 publicly traded distributors in the industrial and building products industries up to June 30, 2009. Download this data below. Also find graphic illustrating median EBIDTA multiples for the same distribution companies.

These materials, prepared by Robert W. Baird & Co. for MDM, are for informational purposes ...

Distribution Financial Metrics and Trading Multiples: 2Q Read More »

Builders FirstSource Sales Down 37.8% in Second Quarter

Leave a Comment / Top Distributor Sectors, Subscriber Only, News, Free, Building Materials/Construction /

Dallas, TX-based Builders FirstSource, Inc., supplier and manufacturer of structural and related building products for residential new construction in the U.S., reported sales for the second quarter ended June 30, 2009, were $175.5 million, down 37.8% from $282.3 million in the prior-year period. Sales volume dropped 33%. Builders FirstSource noted a gain from multifamily and light commercial sales.

The net loss for the quarter was $22.6 million.

The severity and prolonged nature of the housing downturn has forced substantial capacity reduction within our industry. Several of our largest competitors filed for bankruptcy protection during the quarter, and we were forced to make the tough decision to discontinue our Ohio operations," said CEO Floyd Sherman. "This decision was not ...

Builders FirstSource Sales Down 37.8% in Second Quarter Read More »

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