MDM Staff, Author at Modern Distribution Management

Reliance Steel Agrees to Buy Clayton Metals

Reliance Steel & Aluminum Co., Los Angeles, CA, has agreed to acquire Clayton Metals, Inc., Wood Dale, IL.
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Clayton Metals specializes primarily in the processing and distribution of aluminum, stainless steel and red metal flat-rolled products, custom extrusions and aluminum circles through its metals service center locations in Wood Dale, IL; Cerritos, CA; High Point, NC and Parsippany, NJ.
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Clayton Metal's sales for the 12 months ended Dec. 31, 2006, were about $123 million. Current management is expected to remain in place.
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Reliance Steel & Aluminum Co. is one of the largest metals service center companies in the U.S. Through a network of more than 180 locations in 37 states and Belgium, Canada, China and South Korea, the company ...

June 20, 2007

Finance

Home Depot: Selling Supply Not an Easy Decision

Home Depot CEO Frank Blake said Wednesday that selling HD Supply in pieces would have been&nbsp ; time-consuming and&nbsp ; distracting, with an added cost of separating the businesses. An IPO would have resulted in a multiple discount relative to the sale of the entire business.
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This was not an easy decision," Blake said about the announcement Tuesday that Home Depot would sell its $12 billion wholesale division in its entirety for $10.3 billion to a group of three private equity firms. "(HD Supply chief) Joe DeAngelo and his team have built a world-class operation over the last few years. We gave careful consideration to a number of options, including holding onto the business."
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The three private equity firms buying HD Supply for roughly 10X-12X EBITDA are ...

June 20, 2007

Economic Trends

Housing Starts Down From April

The U.S. Census Bureau and the Department of Housing and Urban Development jointly announced the following new residential construction statistics for May 2007:
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Building Permits
Privately-owned housing units authorized by building permits in May were at a seasonally adjusted annual rate of 1,501,000. This is 3% above the revised April rate of 1,457,000, but is 21.7% below the revised May 2006 estimate of 1,918,000.
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Single-family authorizations in May were at a rate of 1,056,000; this is 1.8% below the April figure of 1,075,000. Authorizations of units in buildings with five units or more were at a rate of 379,000 in May.
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Housing Starts
Privately-owned housing starts in May were at a seasonally adjusted annual rate of ...

June 19, 2007

Free

Actuant Reports 22% Sales Increase

Actuant Corporation, Milwaukee, WI, reported sales of $385 million for the third quarter ended May 31, 2007, up 22% over the same period a year ago. Net earnings were $29.6 million, about the same as a year ago.
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The Industrial Segment generated double-digit core sales growth while the Actuation Systems Segment reported a year-over-year sales decline due to prior-year convertible top launches and the North American heavy duty truck pre-buy.
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Sales for the nine months ended May 31, 2007 were $1.069 billion, or 22% higher than the $877 million in the comparable prior-year period. Excluding the impact of foreign currency rate changes and sales from acquired businesses, core sales increased ...

June 19, 2007

Finance

Eaton Buys Pulizzi Engineering

Diversified industrial manufacturer Eaton Corporation, Cleveland, OH, has acquired Pulizzi Engineering, a manufacturer of AC power distribution, AC power sequencing, redundant power and remote-reboot power management systems. Pulizzi Engineering had 2006 sales of $12 million and is in Santa Ana, CA.
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Eaton Corporation is a diversified industrial manufacturer with 2006 sales of $12.4 billion. ...

June 19, 2007

Economic Trends

Profits for Electrical Distributors Rise Sharply in 2006

Profits for electrical distributors in 2006 rose sharply to the highest level since 1993, reaching a median of 3.7%, according to the National Association of Electrical Distributors in its annual Performance Analysis Report (PAR).
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The 3.7% figure represents the third consecutive year of sharp rises in profit margins, compared to medians of 2.9% in 2005, 2.1% in 2004, and 1.3% in 2004. Among a select group of high profit" distributors, the 2006 profit margin was almost twice as high at 7.3%.
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Accompanying the increased profits were 2006 median sales increases of 17.4%, also the highest in a decade, and higher than the 11.1% increase recorded in 2005.
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The report's author, Dr. Al Bates of Profit Planning Group in Boulder, CO, cautioned that a ...

June 18, 2007

Sales & Marketing

Timken Raises Prices on Bar, Tubing Products

The Timken Company, Canton, OH, has increased prices on double and triple thermal treated product, effective with shipments from Jan. 1, 2008. Bar product prices will increase by $50 a ton, and tubing product prices will go up by 10%.
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Prices on as-rolled and single thermal treated products are not affected.
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Timken is a $5 billion manufacturer operating in 26 countries and 25,000 ...

June 18, 2007

Economic Trends

Canadian Manufacturing Shipments Down in April

Following a strong gain in March, Canadian manufacturing shipments edged down in April. Shipments decreased by&nbsp ; 0.6% to an estimated&nbsp ; $49.7&nbsp ; billion.
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Excluding the motor vehicle parts and accessory industries, manufacturing shipments increased&nbsp ; 1% in April.
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At&nbsp ; 1997&nbsp ; prices, shipments rose&nbsp ; 0.5% to&nbsp ; $45&nbsp ; billion. The constant dollar measurement takes price fluctuations into account. This was the fifth volume advance in six months.

Shipments declined in&nbsp ; 12&nbsp ; of&nbsp ; 21&nbsp ; manufacturing industries, which represent about&nbsp ; 51% of total output.
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Shipments of non-durable goods increased for the third consecutive month in April, rising&nbsp ; 0.7% to&nbsp ; $22.5&nbsp ...

June 18, 2007

Finance

Report: HD Supply Final Bids Due Today

Bloomberg News has reported that two groups of private equity firms are prepared to submit final bids&nbsp ; of $10 billion&nbsp ; for Home Depot's wholesale business, HD Supply. They are: Bain Capital LLC, Carlyle Group and Clayton Dubilier & Rice Inc.; and the pairing of&nbsp ; Thomas H. Lee Partners LP and CCMP Capital Advisors LLC.

Final bids are apparently due Friday. This report is similar to that reported by MDM&nbsp ; in early March.

Clayton Dubilier & Rice is the most recognizable among the teams in the distribution world, as it most recently invested in global electrical distributor Rexel Inc., and recently <a ...

June 15, 2007

Economic Trends

Industrial Production Unchanged in May

Industrial production was unchanged in May after a smaller revised increase of 0.4 percent in April. Output in the manufacturing sector edged up 0.1 percent in May, and mining output moved up 0.5 percent after declining 0.6 percent in April.
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At 112.7 percent of its 2002 average, overall industrial production for May was 1.6 percent above its year-earlier level. The rate of capacity utilization for total industry fell 0.2 percentage point, to 81.3 percent, a level 0.3 percentage point above its 1972-2006 average.
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Market Groups
The output of consumer goods decreased 0.2 percent in May after having risen 0.8 percent in April. The production of consumer durables edged down 0.1 percent in May, and the output of nondurables fell 0.3 percent. ...

June 15, 2007

Economic Trends

Wholesale Prices Rise 0.9% in May

The Producer Price Index for Finished Goods increased 0.9 percent in May, the Bureau of Labor Statistics of the U.S. Department of Labor reported. This advance followed a 0.7-percent rise in April and a 1.0-percent increase in March.

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The index for finished goods excluding foods and energy moved up 0.2 percent in May after remaining unchanged in April. At the earlier stages of processing, prices received by producers of intermediate goods increased 1.1 percent in May after advancing 0.9 percent a month earlier, and the crude goods index turned up 2.0 percent following a decline of 1.5 percent in April.
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Among finished goods, the index for consumer goods less foods and energy moved up 0.3 percent in May after inching down 0.1 percent in the previous ...

June 14, 2007

Finance

US Electrical Services Acquires Pioneer Electric Supply

US Electrical Services, LLC, Exton, PA, has acquired Pioneer Electric Supply, Beltsville, MD.

Pioneer has been supplying the needs of electrical contractors in greater Washington, DC for almost 16 years.&nbsp ; The company focuses primarily on large and small new construction and renovation projects.&nbsp ;
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Pioneer will join four other area USESI-owned locations in the area.

By joining Electrical Wholesalers, we are able to compliment our strong project job capabilities with EW's impressive warehousing and logistics capabilities.&nbsp ; Our customers and employees both benefit in a big way," said Jeff Bacon, who along with all Pioneer employees, will remain with the business.

"Pioneer has a great team, a great history of strong customer ...

June 14, 2007

Technology

Ingram Micro to Buy DBL Distributing Inc. for $96M

Technology distributor Ingram Micro Inc., Santa Ana, CA, has agreed to buy DBL Distributing Inc., Scottsdale, AZ, a distributor of consumer electronics accessories and related products with 2006 sales of nearly $300 million. The purchase price is $96 million.

The deal strengthens Ingram Micro's position in a higher-margin niche of the consumer electronics market. Ingram Micro reported $31 billion in fiscal 2006 annual sales, and overall gross margin of 5.4%.

The Consumer Electronics Association estimates the consumer electronics market at $155 billion in 2007, with the accessories market at $11 billion. The industry is forecast to grow at 7% in 2007 following a 13% growth rate in 2006. An industry analyst told MDM the sub-category of consumer electronics accessories is ...

June 13, 2007

Free

RBC Bearings Sales Up 11.5% in 2007

RBC Bearings Incorporated, Oxford, CT, an international manufacturer of highly-engineered precision plain, roller and ball bearings for the industrial, defense and aerospace industries, reported sales for the fiscal year ended March 31, 2007, were $306.1 million, an increase of 11.5% from the prior year. Profit was $28.5 million, up 128% from the year before.
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Sales in the fourth quarter 2007 were $81 million, an increase of 7% from the same period a year ago. Profit was $6.7 million, compared with $6 million a year ago. ...

June 12, 2007

Economic Trends

Machine Tool Consumption Up 8.7% YTD

April U.S. manufacturing technology consumption totaled $281.54 million, according to The Association For Manufacturing Technology and the American Machine Tool Distributors'Association. This total, as reported by companies participating in the USMTC program, was down 27.2% from March, but up 2.2% from the total of $275.43 million reported for April 2006. With a year-to-date total of $1,259.09 million, 2007 was up 8.7% compared with 2006.

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

Strength in the oil field and auto sectors has brought increased demand in the Central region of the country," said John B. Byrd III. "Through April this region has the greatest increase in ...

June 12, 2007

Free

Barnes Distribution Opens Shanghai Sourcing Center

The Barnes Distribution business segment of Barnes Group Inc. has opened an international sourcing center in Shanghai, China. The international sourcing center is in the Xujiahui District in Shanghai, the commercial capital of China.

China has a well-established supplier base for key products such as fasteners, electrical components, and various transportation product lines. The Shanghai sourcing center will complement Barnes' previously established sourcing center in Taiwan.

Our continued efforts to service our customers as effectively and efficiently as possible will be enhanced with the opening of the international sourcing center in Shanghai," said Idelle K. Wolf, President, Barnes Distribution. "Our presence in Shanghai will provide a competitive edge for Barnes ...

June 11, 2007

Economic Trends

Canadian 1Q Capacity Utilization Edges Up 1Q

Canadian industries slightly increased the use of their production capacity during the first quarter of&nbsp ; 2007, halting four consecutive quarters of decline.

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Capacity utilization edged up from&nbsp ; 82.4% in the fourth quarter of&nbsp ; 2006&nbsp ; to&nbsp ; 83.0%. This level was&nbsp ; 3.0&nbsp ; points below the rate posted in the fourth quarter of&nbsp ; 2005, before the quarterly drops observed in&nbsp ; 2006.
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The industrial capacity utilization rate is the ratio of an industry's actual output to its estimated potential output. For this release, rates have been revised back to the first quarter of&nbsp ; 2005&nbsp ; to reflect the revised source data.
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Production rose slightly in the large manufacturing sector, but capacity use ...

June 11, 2007

Free

HD Supply Downsizes Plans in South Carolina

HD Supply, The Home Depot's wholesale division, is cutting back on plans to grow in Charleston, SC. HD Supply's lumber and building materials unit announced this week it will open a warehouse for contractors in North Charleston, according to the Charleston Post and Courier.
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The project replaces a larger one the company was planning. The location will be in an existing 65,000-square-foot building on five acres near Interstate 26.
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The scrapped project was to include a new lumber distribution center and manufacturing plant on 51 acres off of U.S. Highway 78, the paper reported.

In February, Home Depot announced it was considering strategic alternatives for HD Supply, including a possible sale or IPO. Home Depot has also - like other building ...

June 11, 2007

Finance

Mayer Electric Buys Southeast Supply

Mayer Electric Supply Inc. has acquired Southeast Supply in Calhoun, Ga., as its 58th branch, the Birmingham Business Journal reported.
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Mayer Electric Supply is a distributor of electrical equipment and supplies, lighting, factory automation, tools and communications. Mayer serves eight states in the ...

June 11, 2007

Economic Trends

Industrial Producer Prices Up 2.4% in Euro Area

The industrial producer price index rose by 0.4% in the euro area in April 2007. In March, prices increased by 0.3%.

In April 2007, compared with April 2006, industrial producer prices gained 2.4% in the euro area.

The highest monthly increases were registered in Bulgaria and Greece (1.9%) and Denmark (1.8%). Decreases were recorded in the United Kingdom (-0.8%), Slovakia (-0.3%) and Belgium (-0.1%).

The highest year-over-year increases were recorded in Luxembourg (8.7%), Hungary (8%), Bulgaria (7.9%)&nbsp ; and Lithuania (7.3%). A decrease was registered in Denmark.

For more on European economic statistics, including industrial production, price indexes, construction output and industrial orders,&nbsp ; visit the MDM ...

June 11, 2007

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