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New investment bank analyst commentary suggests QXO will have to increase its current bid for Beacon to fend off alternative suitors, but others say additional are unlikely.
Profit fell 68 percent in the third quarter, to $19.8 million.
Growth in industrial supplies and janitorial/breakroom categories offset by declines in technology and furniture.
Organically, Industrial and Transportation segment sales grew 3.3 percent in the quarter.
Acquisitions contributed 3.9 percent to 4.6 percent sales growth in the quarter.
Profit rose 23.6 percent to $39.8 million.
Engineered Materials segment sales grew 7 percent.
Profit for the Swedish manufacturer was SEK 849 million (US$128 million).
Core revenue growth for Cooper was 6.7 percent.
Net loss for the company was $13.6 million.
Sysco also completed the purchase of the distribution arms of Ireland-based Keelings’ Foodservice.
Pittsburgh, PA-based McClure-Johnston Co. has annual sales of $85 million.
Genuine Parts Co. sales increased 3 percent in the quarter.
Alan Beaulieu examines the impact of the election on the economy in 2013.
O.K.I. has nine locations in the U.S., plus operations in Canada and the UAE.
Undeployed capital, attractive financing and lessened desire to go public contributing to the pickup in activity.
Ongoing weakness in international markets affects Parker Hannifin’s first-quarter results.
North American organic growth for Bunzl was 2%, due to tougher comparisons year-over-year.
Air Products volume and acquisitions were offset by stronger dollar and lower energy pass-through.
Upcoming conference goes outside of the box to help distributors think differently about their businesses.
Acquisition is part of a strategy to enhance IBM services and software capabilities at Avnet.
July 2007 sales of merchant wholesalers, except manufacturers’sales branches and offices, after adjustment for seasonal variations and trading-day differences but not for price changes, were $359.0 billion, up 0.8 percent from the revised June level and were up 7.2 percent from the July 2006 level. The June preliminary estimate was revised downward $0.7 billion or 0.2 percent.
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July sales of durable goods were virtually unchanged from last month and were up 4.3 percent from a year ago. Compared to last month, sales of lumber and other construction materials were down 3.2 percent. July sales of nondurable goods were up 0.1 percent from last month and were up 10.0 percent from last year. Sales of drugs and druggists’ sundries were up 1.4 percent from last month.
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The industrial product group listed here – Hoists – represented a market in 2006 of $495.3 million, according to estimates by Industrial Market Information, Minneapolis.
These charts show the top ten industries, by SIC code, consuming these products; and the 2006 end-user consumption of these groups sorted by the nine government market …
July U.S. manufacturing technology consumption totaled $271.37 million, according to AMT – The Association for Manufacturing Technology and AMTDA, the American Machine Tool Distributors’  ; Association. This total, as reported by companies participating in the USMTC program, was down 22.0% from June, and down 9.5% from the total of $300.01 million reported for July 2006. With a year-to-date total of $2,254.79 million, 2007 was up 5.3% compared with 2006.
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These numbers and all data in this report are based on the totals of actual data reported by companies participating in the USMTC program.
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Typically July and August produce fewer orders relative to other months during the year as a result of the reduction of hours worked and partial plant closings,” said …
To gauge the effect of economic trends on distributors, MDM tapped two economists to gain a snapshot of current economic conditions. MDM spoke with Alan Beaulieu of the Institute for Trend Research (603-226-9331, www.ecotrends.org), and Bill Dunkelberg of the National Federation of Independent Businesses.
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What is the state of the economy?
Alan Beaulieu: The U.S. economy is in better shape than most people think it is. We have largely absorbed a significant blow in the form of the downturn in the housing market.
It is not hard to imagine that in past decades this would have sent us into a recession, but this time we have taken the hit” and are continuing to grow, albeit at a noticeably slower pace. To put this in context, the decline in …
During an economic slowdown, a siege mentality” is understandable but not always productive, says Steve Deist of Indian River Consulting Group. Though many industries are still seeing growth, some -including the housing industry -are struggling. This is a timely excerpt from a piece by Deist on how to turn a downturn into a strategic opportunity.
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No. 1 Focus on the Other Guys
Customers, employees, competitors and suppliers are facing many of the same challenges you are. Many are probably playing defense and are reluctant to make long-term commitments. They likely have reduced expectations of performance in profitability and sales growth.
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Commit to sustained and improved customer service. …
July 2007 sales of merchant wholesalers, except manufacturers’sales branches and offices, after adjustment for seasonal variations and trading-day differences but not for price changes, were $359.0 billion, up 0.8 percent from the revised June level and were up 7.2 percent from the July 2006 level. The June preliminary estimate was revised downward $0.7 billion or 0.2 percent.
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July sales of durable goods were virtually unchanged from last month and were up 4.3 percent from a year ago. Compared to last month, sales of lumber and other construction materials were down 3.2 percent. July sales of nondurable goods were up 0.1 percent from last month and were up 10.0 percent from last year. Sales of drugs and druggists’ sundries were up 1.4 percent from last month.
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Source: Statistics Canada
Construction intentions cooled down in July as the value of building permits declined, halting two months of record-setting performances. Municipalities issued building permits worth  ; $6.2  ; billion, down  ; 11.3% from  ; $6.9  ; billion in June.
Still, July was one of only a handful of months in which permits exceeded the $6-billion mark.
At  ; $6.9  ; billion in both May and June, the total value of permits was at its highest level on record.
Losses occurred in both the residential and non-residential sectors. The value of residential permits fell  ; 6.3% to  ; $3.8  ; billion, with declines in both the single-family and multiple-family components.
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While there will likely be significant deceleration in manufacturing growth in 2007, the second quarter showed signs of resiliency, and 2008 looms as an improvement, according to the MAPI Quarterly Industrial Outlook, a report that analyzes 27 major industries.
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Manufacturing industrial production expanded at a 3.9 percent annual rate in second quarter 2007, far better than the weak 0.8 percent in the first quarter. For the year as a whole, though, the report predicts that manufacturing production growth will decelerate from the 4.7 percent recorded in 2006 to 2 percent growth in 2007, before rebounding to 2.9 percent growth in 2008.
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An improvement in manufacturers’ exports in most industries and the end of an inventory drawdown explains the bounce back in …
Economic activity in the manufacturing sector expanded in August, say the nation’s supply executives in the latest Manufacturing ISM Report On Business.
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Viewed from the manufacturing sector, the overall economy continues to grow at a significant rate, according to ISM. In comparing August to July, the rate of growth in manufacturing was slightly less but expansion continues, although at the slowest pace in the past five months.
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Both the New Orders Index and the Production Index are encouraging for continuing growth as we head toward the fourth quarter of 2007, ISM reports.
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See details <a href=/databank/ism0807.html" ...
Labor productivity -defined as output per hour -increased 4.3% in wholesale trade in 2006, according to the U.S. Bureau of Labor Statistics.
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From 1987 to 2006, labor productivity increased at the following average annual rate: 3.5% in wholesale trade.
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2005-2006 Change in Wholesale Trade
Output per hour grew 4.3%, as output increased 6.6% and hours advanced 2.2%.  ; Labor productivity rose 5.1% in durable merchant wholesalers (NAICS 423) and increased 2.7% in nondurable merchant wholesalers (NAICS 424).
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Labor productivity rose in 15 of the 19 detailed wholesale trade industries in 2006, as output …
Residential investment continued to drag on GDP growth in the second quarter, according to the latest estimates by the Bureau of Economic Analysis.
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Real gross domestic product -the output of goods and services produced by labor and property located in the U.S. -increased at an annual rate of 4% in the second quarter of 2007, according to preliminary estimates.
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In the first quarter real GDP increased 0.6%.
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These GDP estimates are based on more complete source data than were available for the advance estimates released last month. In the advance estimates, the increase in real GDP was 3.4%.
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The increase in the second quarter reflects positive contributions from personal consumption expenditures (PCE) for services, exports, …
Source: Statistics Canada
In July, falling prices for metals and the strength of the Canadian dollar drove the prices of manufactured products down for a third consecutive month, while a jump in crude oil prices pushed raw materials prices upward.
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From June to July, prices charged by manufacturers, as measured by the Industrial Product Price Index (IPPI), fell  ; 0.7% following two consecutive monthly declines. The drop in prices essentially reflects lower prices for primary metal products, motor vehicles and other transportation equipment, as well as chemical products. However, higher prices for petroleum and coal products, and lumber and other wood products tempered the decline in the IPPI.
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The weeks leading up to closing the deal on HD Supply has all the stuff for some kind of bizarre reality TV show that would even trump the Donald. The 18-percent reduction in the final price tag for HD Supply raises potential flags for distributors on a number of levels. Let’s explore a few.
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All three panelists at our Distribution M & A audio conference in May agreed that the M & A market was even hotter in 2007 than the year before, but that we might be nearing the end of a strong ride. Did the bell just ring? That large a discount reflects a combination of factors; the easy ones are the downturn in residential construction and the credit crunch. There were a number of internal factors that we won’t know …
As the trend of private label among distributors grows, it's important to recognize the legal risks associated with this strategy. If products are sourced from overseas, as many are, wholesalers may end up carrying the ultimate blame or responsibility in a number of situations.
The information provided here is from a National Association of Wholesaler-Distributors legal brief. The brief can be found at NAW's Web site, www.naw.org.
Product Liability
In the U.S., any seller of a private-label or manufacturer-branded product is liable for losses, injury or damage caused by the defective product under strict tort liability.
Normally, a wholesaler-distributor in a U.S. suit will bring the manufacturer of a defective product into the case …
This marine supplies distributor implemented a Warehouse Management System at its single warehouse, significantly cutting shipping errors and improving data collection and sales trend analysis.
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Lorenz & Jones Marine Distributors Inc., Ankeny, IA, believes in its Warehouse Management System so much that it uses it as a tool to bring in new customers.
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The distributor invites prospective customers to the 50,000-square-foot warehouse, places a Radio Frequency terminal in their hands, and lets them pick orders. The demonstration illustrates how easy it is to be directed to the right products.
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Potential customers are sometimes wary because they have had problems with suppliers that regularly shipped the wrong products or the wrong …
In the face of continuing weakness in the housing sector, growth in the U.S. economy is expected to be slower than previously anticipated, according to a new Manufacturers Alliance/MAPI quarterly report.
The Manufacturers Alliance/MAPI Quarterly Economic Forecast forecasts that inflation-adjusted GDP growth, 3.3 percent in 2006, will slow to 1.9 percent in 2007 before regaining some strength, rising to 2.5 percent in 2008.
The housing downturn will likely be more severe, more widespread, and last longer than most analysts expected,” said Daniel J. Meckstroth, Manufacturers Alliance/MAPI Chief Economist. “… Manufacturing is buttressed, however, by somewhat better prospects in the trade sector. Exports are expected to perform well in relation to imports and …
Even if you don’t intend to add private label products to your product mix today, pay attention to what competitors are doing and how they position private label against your manufacturer brands.
As our lead article in this issue points out, private label really took off in consumer packaged goods when the industry consolidated. As retailers created national footprints, they gained the scale to effectively build out private label programs.
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And it certainly requires a certain amount of scale to support the investment into private label – to source, develop and market effectively while not damaging your current lines.
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In distribution channels, it’s important to note that it’s not just the national chains that are building private label brands. …
The industrial product group listed here – Power Tools – represented a market in 2006  ; of $1.8 billion, according to estimates by Industrial Market Information, Minneapolis, MN.  ;
These charts show the top ten industries, by SIC code, consuming these products; and the 2006 end-user consumption of these groups sorted by the nine government market …
The co-author of a new book on private label spoke with MDM recently about how wholesaler-distributors and manufacturers can learn from trends in consumer packaged goods markets.
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On either the distributor or the manufacturer side, there is no magic bullet” for dealing with the emergence of private-label products, says Nirmalya Kumar, co-author of a new book on the subject, Private Label Strategy: How to Meet the Store Brand Challenge (Harvard Business School Press).
For a distributor, private label requires a difficult balancing act between the needs of customers and those of branded suppliers. For the manufacturer, the emergence of private label in a category requires a strong brand strategy at the end-user without alienating the distributors it …
Source: Statistics Canada
Wholesale sales in Canada grew only slightly in June (+0.2%), as increased sales of other products” were largely offset by a decrease in the automotive sector. Excluding the automotive sector, sales grew  ; 0.6%.
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Wholesale sales for the second quarter were down for the first time in nearly four years. This contraction was largely attributable to the automotive sector.
In June, increases were observed in the “other products” sector (+2.8%), the machinery and electronic equipment sector (+1.0%) and the farm products sector (+6.0%). These advances, however, were partially offset by contractions in the automotive sector (-1.6%) and the personal and household goods sector (-0.8%).
In constant prices, …
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