MDM News Digest 3624 - Modern Distribution Management

MDM News Digest 3624

job openings, lower profit gains and fading inventory investment trimmed the National Federation of Independent Business Small-Business Optimism Index a point to 99.7 in November (1986=100). Although job openings declined five points to 22 percent, that component of the index remained at historically high levels, and job-creation plans climbed while inflationary pressures edged slightly upward. More than half of the owners surveyed hired or tried to hire one or more employees, unchanged from October, but still one of the highest expansion readings. During the next three months, 18 percent plan to create new jobs, while only 6 percent plan reductions. Job-creation plans are positive in all industries.

In September, U.S. distributors’ year-to-date sales of power transmission/motion control products rose 10.9 percent as compared to sales for January through September 2005, according to the latest Power Transmission Distributors Association report. More …

capacity utilization for total industry held steady at 81.8 percent.  More …

October U.S. manufacturing technology consumption totaled $368.62 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 9.9 percent from September, but up 41.4 percent from the total of $260.60 million reported for October 2005. Year-to-date, 2006 was up 27.9 percent compared with 2005. More …

The Timken Company, Canton, OH, has sold its Latrobe Steel subsidiary in Latrobe, PA, to a group of investors led by the Watermill Group, Hicks Holdings and Sankaty Advisors for $215 million in cash. Timken says the divestment will allow it to invest in “key industrial markets that have the potential to generate greater value for our shareholders over time.” Latrobe Steel manufactures and distributes specialty steel for the aerospace, high speed, and tool and die markets. In 2005, Latrobe Steel sales were about 7 percent of the company’s overall sales.  More …

Motion Canada
, a division of Birmingham, AL-based Motion Industries, Inc., distributor of industrial maintenance, repair, and operation (MRO) replacement parts, has opened a new branch in Sudbury, Ontario. Motion Canada operates 54 locations in nine Canadian provinces.

Stanley Works, New Britain, CT, has agreed to buy HSM Electronic Protection Services Inc. from private investors for $545 million in cash. The purchase will open a new business unit for Stanley, Stanley Convergent Security Solutions, which include its existing electronic access control and systems integration as well as commercial monitoring. The new unit is expected to generate annual revenues of $600 million. More …

The Home Depot, Atlanta, GA, has received notice from investment firm Relational Investors LLC that at HD’s next annual meeting it plans to encourage HD to evaluate the “strategic direction of the company, the performance of management, and strategic alternatives for the company.” Relational is run by investor Ralph Whitworth, who has pushed for changes at other companies he has a stake in. Relational owns roughly 0.6% of HD outstanding common stock. In a letter to CEO Bob Nardelli, Whitworth wrote that HD’s board of directors is presented with “enormous responsibility and opportunity to reverse the company’s inferior stock performance experienced since 2000. We attribute this performance to deficient strategy, operations, capital allocation and governance.” More …


The Home Depot has agreed to buy The Home Way, China’s first home improvement retailer. The Home Way has 12 stores in six Chinese cities. The Chinese home improvement market is valued at nearly $50 billion and has been growing at a compounded annual rate of 20%, according to HD.  More …


Weyerhaeuser Company, a forest products company with sales of $22.6 billion in 2005, says that demand for wood products is “very weak,” and that it plans to close, curtail or restrict its softwood lumber, engineered lumber and structural panels operations across North America. Downtime and restricted operating postures have already been undertaken at about 70 percent of Weyerhaeuser residential wood products facilities.


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US Electrical Services, LLC, Exton, PA, (USESI) will acquire Danlar Lighting and Distribution and Lade Electric Supply, Inc., both in the Atlanta, GA, metropolitan area. Danlar supplies materials to contractors, home builders, and electricians. Lade recently expanded its warehousing capacity to accommodate its growing stock sales business and has opened a new branch in Suwanee, GA. “Lade and Danlar are a great first step in establishing USESI in the Southeast USA,” said Richard Worthy, president and CEO of USESI. “This market is important to our business and I am confident that (they) will increase their footprint via new branch openings throughout Georgia…” More …

Samuel, Son & Co., a steel distributor in Ontario, Canada, will buy Portland-based global manufacturer ESCO Corp.’s stainless-steel distribution business, The Engineered Metals Group. EMG is a distributor of commodity, processed and engineered stainless steel products in the Western U.S. The operation will be renamed Samuel, Son & Co. Engineered Metals Group. The purchase is expected to provide Samuel a strong basis for further geographic and product-line expansion in the Western U.S. and to better serve national accounts. The acquisition brings the number of Samuel locations in the U.S. and 107 in North America. More …

Beacon Roofing Supply, Inc., Peabody, MA, reported sales in 2006 reached $1.5 billion, an increase of 76.4 percent from $850.9 million in 2005, thanks to strong growth by acquisition. Organic growth was 14.7 percent, and the acquired companies contributed the remaining sales increase. Profit was $49.3 million in 2006, compared with $32.9 million in 2005. Beacon’s product groups are residential roofing, non-residential roofing and complementary building products. It saw increases in all three groups. More …

ElkCorp, Dallas, TX, a manufacturer of premium roofing and building products, has agreed to be acquired by private equity firm The Carlyle Group for $1 billion in cash, including the assumption of $173 million of debt. In a separate agreement, Carlyle has agreed to partner with Hood Companies, Inc. and its subsidiary Atlas Roofing Corporation, a manufacturer of commercial and residential roofing products. Carlyle expects to merge Elk and Atlas. More …

Canadian factory shipments hit their lowest level in nearly two years in October, mainly because of falling petroleum prices and a slowdown in the food and transportation equipment sectors. Canadian manufacturers shipped goods worth an estimated $47.7 billion, down 0.1 percent from September. While the rate of decline has eased, shipments have fallen for three consecutive months. Falling prices have been a major factor in the decline in shipment value. Year-to-date volume of shipments fell 1.5 percent to October. Durable goods however rose a small 0.8 percent thanks to a strong showing in machinery.  More …

U.S. industrial production rose 0.2 percent in November and was revised down in October to show no change from its September level. At 112.3 percent of its 2002 average, the index for total IP in November was 3.8 percent above its year-earlier level. Manufacturing production increased 0.3 percent in November after two previous months of declines and was boosted by a sharp increase in the production of motor vehicles and parts. Elsewhere in manufacturing, production was, on net, unchanged. The rate of

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