Distribution Industry News Archives
News from the week of Jan. 12, 2004

Sanders Tools and Supplies names new president, COO
IBC signs Marshall E. Campbell Co.
Stanley Works completes acquisition of CST/Berger
Danaher revises Q4 outlook upward
NetPlus Alliance celebrates increasing success
A-D adds Merrill Lynch BFS as new service provider
MCF wins Carrier UTC contract
American Eagle Award entries due by Jan. 31
Kennametal IPG joins Prophet 21's Trading Partner Connect
Lawson Products names new director
Precision Industries names senior VP of national accounts
Hubbard Supply acquires Kendall Electric Supply
Applied sees sales, income rise in second fiscal quarter
Kaman Industrial Technologies names VP of finance
Machine tool consumption soars in November
3M to acquire Swedish PPE supplier
Timken offers new products to Mexico over PTplace.com
MSC Industrial Direct posts first quarter gains
PT/MC distributors see sales decline in November
Fastenal gives Saint-Gobain Abrasives top vendor award
J&L Industrial Supply wins sales training award
Hughes Supply reaffirms earnings guidance, offers shares

Sanders Tools and Supplies names new president, COO
The board of directors of Sanders Tools and Supplies Inc. appointed Sue Koehler president and chief operations officer, effective Jan. 5, 2004.

Koehler has more than 20 years of experience with Sanders Tools and Supplies, including serving as vice president and general manager since its reacquisition in April 2002. Having worked in conjunction with Hunt Taylor, the retiring president of Sanders Tools and Supplies, Koehler acquired a strong background in operations, information technology and industrial distribution. Her leadership and administrative skills, merged with her background, will provide the company with strong management and direction in the future.

Also effective Jan. 5, Brad Wentz was appointed vice president of sales for the company.

Wentz has been employed by Sanders Tools and Supplies for the past 11 years. He was hired as a territory manager in 1993 covering the central Illinois manufacturers. He was promoted to the Peoria, Ill., branch sales manager in 2002. Prior to his employment with the company, Wentz was employed by Bay State Abrasives for 18 years.

John Spinoso will continue as CEO of Sanders Tools and Supplies. Hunt Taylor will also maintain his employment, serving as an industrial consultant exclusively to STS.

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IBC signs Marshall E. Campbell Co.
IBC added the Marshall E. Campbell Co. as a member of its IndustrialSupplyPlus group of industrial supply distributors.

The Marshall E. Campbell Co. of Port Huron, Mich., was founded in 1880 and has now been owned by three generations of the Campbell family who purchased the company in 1932. 

The Marshall Campbell Company is a supplier of industrial supplies, cutting tools, abrasives, machine tool and equipment, electrical supplies and fluid power products. The company has a facility in Port Huron and Saginaw, Mich. A third will open in Lapeer, Mich., in the coming weeks.

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Stanley Works completes acquisition of CST/Berger
The Stanley Works completed the acquisition of Wateska, Ill.-based Chicago Steel Tape Co. and certain related assets and affiliated companies that are collectively known as CST/Berger.

CST/Berger designs and manufactures laser and optical leveling and measuring equipment. Its products include laser and optical surveying, leveling and alignment tools, surveyor supplies and accessories that are sold principally in the Specialty Tools and Fasteners Distributors Association channel in the U.S., as well as specialty surveyors' and contractors' supply distributors.

"The addition of CST/Berger is a clear strategic win for us," said Stanley Works executive vice president and tools group president Joseph J. DeAngelo. "Our measuring business already includes global market leadership in tape rules; now it is much better positioned to serve professional customers with the addition of CST/Berger's measuring devices. This important acquisition also advances the objective of increasing the portion of our company's revenues generated in favored markets, those with higher inherent growth and profitability."

Management expects the acquisition to be immediately accretive to earnings and to generate a return that covers Stanley's cost of capital in the first year of ownership. Integration plans have been developed and will begin to be implemented immediately. Stanley financed the $62 million cash purchase with existing cash resources and commercial paper facilities.

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Of the 17 percent increase, revenues from existing operations are expected to account for about 6 percent of the increase over the same period in 2002, exceeding previous estimates of a 2 percent to 4 percent increase. 

Danaher defines revenue growth from existing operations as revenue increases over the comparable prior period, excluding revenue attributable to currency gains and losses as well as businesses acquired subsequent to the comparable prior period.

The current Thomson Financial First Call consensus range for the company's fourth quarter earnings is 91 cents to 95 cents per share. This does not include the previously announced 9 cents per share gain the company expects to record in the fourth quarter related to curtailment of its cash balance pension plan in the United States. 

Adding the 9 cents per share gain to the consensus range would result in a revised range of $1.00 to $1.04 per share. The company expects that earnings for the quarter will meet or slightly exceed the upper end of this revised range.

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A-D adds Merrill Lynch BFS as new service provider 
Merrill Lynch Business Financial Services became a new service provider for all Affiliated Distributors (A-D) affiliate members, effective Jan. 5.

Rocco Vernisi Jr., a Merrill Lynch financial advisor and certified financial manager in Philadelphia, will manage the A-D relationship.

Merrill Lynch is one of the world's top financial management and advisory companies, with offices in 33 countries and total client assets of approximately $1.4 trillion.

Product benefits for A-D affiliates include:
• free cash management account with line of credit;
• free online banking;
• free EE sweep of operating account cash to interest-bearing money market funds;
• no target balances in operating accounts; and
• 0.25 percent interest rate reduction on BFS standard pricing for lines of credit and term loans.

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NetPlus Alliace celebrates increasing success
A little more than a year since its inception, buying group NetPlus Alliance signed up 130 distributors, 71 manufacturers and 15 business services suppliers, proving its business model of targeting small to medium-sized distributors is attractive to distributors and manufacturers.

Founded in September 2002, NetPlus Alliance aims to pool the collective purchasing power of industrial and contractor supplies distributors to secure better pricing and significant rebate programs for these distributors, while increasing market penetration for member manufacturers.

According to NetPlus Alliance founder Dan Judge, the dynamics of an industry undergoing dramatic consolidation coupled with a tight economy has put incredible pressures on all in the industrial distribution marketplace, but particularly, small to mid-sized distributors.

“In lean times, the smaller players tend to get hit the hardest and have less chance for recovery,” Judge said. “NetPlus Alliance was formed specifically to help these distributors get on even ground so they can better compete and experience relief from extreme profit margin pressures. And, it helps manufacturers grow in an area that has been hard to develop in a cost-effective manner.”

NetPlus Alliance's current membership enrollment is 35 percent higher than Judge projected in the initial business plan. Collectively, distributor members represent more than $1 billion in sales, operating in 41 states in more than 230 locations. Company sizes range from $500,000 to $50 million in sales. Judge said that by the end of March, NetPlus Alliance hopes to have more than 200 distributors and 100 suppliers on its rolls.

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MCF wins Carrier UTC contract
Full-service hardware distributor and manufacturer Military and Commercial Fasteners Corp. (MCF) was awarded the fastener/hardware contract for Carrier UTC's Athens, Ga., production facility.

Along with providing the vendor-managed inventory for all of Carrier's fastener/hardware requirements, MCF will also provide logistical services for Carrier, including bulk warehousing services.

MCF expanded its warehouse capabilities by adding an additional 40,000-square-foot facility in Athens and increased its staffing. MCF will be pursuing additional sales growth in this region.

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American Eagle Award entries due by Jan. 31
Entries for the 2003-2004 American Eagle Award Program are due by Jan. 31, 2004. The entry form, which is contained in the American Eagle brochure, was mailed to all Industrial Supply Manufacturer Association members in November, or can be obtained by clicking here.

Members of ISMA can enter with just one unique or innovative program in any one of the following categories:
• local community involvement;
• employee enrichment and involvement;
• environmental improvement and conservation efforts;
• community/corporate educational commitment.

Winners of the prestigious American Eagle Awards will be announced at the Spring 2004 Convention and will receive extensive publicity and exposure throughout the year. Every company that submits an entry will also be recognized at the convention. The manufacturer, distributor and industrial representative that have the best overall programs will each receive a cash prize of $1,000 and a magnificent crystal sculpture.

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Kennametal IPG joins Prophet 21's Trading Partner Connect
Cutting tool manufacturer Kennametal IPG joined Prophet 21's Internet trading network Trading Partner Connect, which streamlines the commerce process between distributors, manufacturers/suppliers and end-users, thereby increasing sales and improving customer service while reducing operating costs.

"Trading Partner Connect makes it easy for distributors to do business with us," said Ty Taylor, Kennametal IPG vice president of sales. "It minimizes the number of steps our customers must take to generate and transmit orders and make sales."

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Lawson Products names new director
Lawson Products Inc. elected Lee S. Hillman to its board of directors. Hillman is president of Liberation Investment Advisory Group, former chairman and CEO of Bally Total Fitness Holding Corp. and former executive vice president and chief financial officer of Bally Entertainment Corp., which merged with Hilton Hotels Corp. in December 1996.

Prior to his career in the Bally organization, Hillman was an audit partner with Ernst & Young.

In September, 2003, Hillman was elected as an independent member of the board of directors and chairman of the audit committee of HealthSouth Corp.

Hillman was elected to fill a vacancy created by the retirement from the board of Bernard Kalish. Kalish was affiliated with Lawson Products for 47 years and retired as chairman and CEO in 1999.

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Precision Industries names senior VP of national accounts
Industrial distributor Precision Industries named Maurice Turner senior vice president of national accounts. Turner will work with Precision’s national accounts team in the development of branch distribution business.

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Hubbard Supply acquires Kendall Electric Supply
Hubbard Supply Co. extended its geographic reach to the west side of the state with the acquisition of the Kendall Industrial Supply Division of Kendall Electric Inc. The division currently operates out of locations in Battle Creek, Benton Harbor and Traverse City. The deal was finalized Jan. 1, giving Hubbard a statewide presence as a full-line industrial distributor.

“Established in 1865, Hubbard Supply Co. historically has had strong ties to the automobile industry. While maintaining these previous alliances, the firm has sought to broaden its outreach and serve a greater portion of Michigan’s industrial base”, said Bob Fuller, company president. “Michigan has been good to us and we want to be good to Michigan.”

He added: “We have developed strong long-term customer relationships by way of commodity management and integrated supply programs. This was a logical next step for us. It is a win-win situation. We have evolved proven core competencies in this sector of industrial manufacturing, which we can now take to new markets and new customers.”

Hubbard’s largest vendors are Kimberly-Clark, Norton, Loctite, Talbot, Greenfield, Snap-On, Craftsman and Weiler.

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Applied sees sales, income rise in second fiscal quarter
Applied Industrial Technologies generated second fiscal quarter net sales of $359.8 million, compared to net sales of $355.7 million during the same period last year.

Net income reached $5.1 million, or 26 cents per share, in the second quarter compared to $3.9 million, or 20 cents per share, the year before.

For the first two quarters of its fiscal year, Applied reported net sales of $720.9 million vs. $723.7 million in the prior-year period.

The company posted net income of $10 million, or 51 cents per share, for the period compared to $7.8 million, or 40 cents per share, the year before.

"We continue to show good attention to detail in driving efficiencies in our operations," said Applied chairman and CEO David L. Pugh. "The discipline we have instilled should serve us well when the economic recovery reaches the MRO buyers. If the manufacturing sector continues on its current path, we should begin to see the benefits in our fourth quarter."

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Kaman Industrial Technologies names VP of finance
Kaman Industrial Technologies appointed Roger S. Jorgenson vice president of finance. He will report to president T. Jack Cahill.

Jorgensen will have responsibility for all of the company's financial functions, including analysis, planning and achievement of the company's overall financial plans. Jorgensen will also be responsible for implementing strategies and tactics to achieve growth through acquisitions and business development.

Jorgensen, who has 27 years of corporate financial experience, previously served as vice president and controller of Ingersoll-Rand's Torrington division, which was recently acquired by the Timken Co.

"We are pleased to bring Roger into Kaman Industrial Technologies," said Cahill. "His business understanding, gained through years of financial, accounting and operating experience, will provide strong leadership for our operations."

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Machine tool consumption soars in November
November U.S. machine tool consumption totaled $210.3 million, up 34.8 percent from October and up 54.7 percent from $135.9 million reported for November 2002, according to the American Machine Tool Distributors' Association (AMTDA) and the Association For Manufacturing Technology (AMT). T

With a year-to-date total of $1.8 billion, 2003 is down 8.5 percent compared to the same period in 2002.

These numbers and all data in this report are based on the totals of actual data reported by companies participating in the United States Machine Tool Consumption (USMTC) program.

"The stars are aligned for a steady manufacturing recovery in 2004. Economic data and anecdotal evidence indicate monetary and tax policy is having the impact many hoped for in the manufacturing community," said AMTDA president Ralph J. Nappi. "But a fragile recovery it may be unless Congress makes a genuine effort at dealing with the increasing costs for business and consumers in areas like health care and frivolous litigation."

U.S. machine tool consumption is also reported on a regional basis for five geographic break-downs of the United States.

November machine tool consumption in the Northeast rose to $25.1 million, up 23.3 percent from October's $20.3 million and up 40 percent compared to November of the previous year. The year-to-date total of $234 million was down 18.7 percent from the comparable figure for 2002.

Southern machine tool consumption in November stood at $19.9 million, down 12.9 percent from October's $22.8 million and down 29.3 percent from the figure for November 2002. With a year-to- date total of $345.2 million, 2003 is running 5.1 percent higher than 2002 at the same time.

At $88.7 million, November machine tool consumption in the Midwest was up 33.9 percent from October's $66.3 million, and 80.6 percent higher than November a year before. Year-to-date 2003 consumption rose to $722.6 million, 4.4 percent less than 2002 at the same time.

With a November total of $62.2 million, Central region machine tool consumption was up 115.5 percent from October's $28.9 million and 148.8 percent higher than the total for November 2002. The year-to-date total of $325.2 million was 13.5 percent less than the comparable figure a year earlier.

November machine tool consumption in the West totaled $14.5 million, down 18.6 percent from October's $17.8 million, and down 8.8 percent compared to November a year ago. The year-to-date total of $169.7 million was off 21.6 percent compared to 2002 at the same time.

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"Combining Hornell's strong products and technology for eye, face and respiratory protection in welding applications with our full spectrum of health and safety products enhances our business and will accelerate 3M's growth in the global safety market," said 3M occupational safety and health division vice president Mike Kelly.

Hornell's Speedglas brand auto-darkening filter welding helmets and Adflo brand respiratory protection equipment broaden 3M's offering and increase its access to a fast-growing segment in the welding industry. Auto-darkening filters detect light from the welding arc and virtually instantly reduce the visible light that reaches welders' eyes and filters harmful infrared and ultraviolet light. Demand for auto-darkening filter helmets continues to grow as welders seek new technologies to increase safety and productivity.

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Timken offers new products to Mexico over PTplace.com
The Timken Co. extended its Torrington, Fafnir and Kilian products to authorized Timken distributors in Mexico via The Timken Store at www.PTplace.com. This bilingual site now provides authorized distributors quick access to an even broader range of friction management solutions online.

"The acquisition of The Torrington Company has brought many exciting opportunities to both The Timken Co. and our distributors," said vice president of distribution management Daniel E. Muller. "We have in place an aggressive e-business strategy that positions us to compete in the global marketplace. Timely access to product information can make all the difference to bringing value to our customers.

"In mid-2003, we announced the availability of these new product brands online to our authorized U.S. industrial distributors," he said. "The increase in online ordering indicates the success of this initiative. Making these brands available online to our authorized Mexican distributors makes it possible for them to increase their efficiency and effectiveness in the marketplace, and that positions us for mutual profitable growth."

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MSC Industrial Direct posts first quarter gains
Maintenance, repair and operations (MRO) products distributor MSC Industrial Direct Co. Inc. reported fiscal first quarter 2004 net sales of $222.8 million, up from net sales of $210.7 million during the same period a year ago.

Net income for the period reached $16.5 million, or 24 cents per diluted share, compared to $12.5 million, or 19 cents per diluted share, during the first quarter last year.

"Our business continues to fire on all cylinders," said MSC president and chief operating officer David Sandler. "During the quarter, we saw sales from our manufacturing customers increase for the first time since the second quarter of fiscal 2003. We are encouraged by this growth and have also seen other signs that this market is beginning to firm. I'm also pleased with the results of our diversification program, as we had continued strong sales growth from the non-manufacturing sector. "

For the second quarter of fiscal 2004, MSC expects revenues of between $227 million and $233 million and diluted earnings per share of between 24 cents and 26 cents.

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PT/MC distributors see sales decline in November
U.S. distributors’ year-to-date sales of PT/MC products decreased 0.1 percent in November compared to sales for January through November 2002, according to the Power Transmission Distributors Association's (PTDA) latest trend data for distributors and manufacturers of power transmission/motion control (PT/MC) products.

Sales fell 11.5 percent from the previous month and were down 2.5 percent compared to November 2002.

Days sales in accounts receivables increased 9.4 percent over October 2003 and grew 8.5 percent compared to the same month last year. Annualized inventory turnover in November was 7.2 turns, compared to 7.2 turns in 2002.

For November, the confidence level of U.S. distributors fell to 5.3 on a 10-point scale.

U.S. manufacturers’ sales of PT/MC products dropped 10.4 percent in November compared to sales for January through November 2002.

Sales were down 0.4 percent from the previous month and fell 7.7 percent compared to November 2002. Compared to October, sales of mounted bearings, unmounted bearings and positioning systems/linear motion products increased. Sales of standard industrial motors, variable speed drives, gear products, mechanical drives systems and other PT products, clutches and brakes, and shaft couplings decreased.

Year-to-date orders of PT/MC products from U.S. manufacturers dropped 9.9 percent compared to 2002. November orders remained flat compared to October, but shrunk 2.8 percent compared to November 2002. Annualized inventory turnover in November was 10 turns, compared to 8.4 turns in 2002.

For November, the confidence level of U.S. manufacturers rose to 5.4 on a 10-point scale.

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Fastenal gives Saint-Gobain Abrasives top vendor award
The Fastenal Company recently gave Saint-Gobain Abrasives the “Best in Class” vendor award in the abrasives category, as part of the company’s annual recognition program.

Fastenal is a distributor of the full line of Saint-Gobain Abrasives’ Norton and Merit abrasive brands for the welding, industrial and construction markets. Saint-Gobain Abrasives received a similar award last year.

All Fastenal vendors are eligible for the annual awards, which are based on five factors: product, merchandising, technical support, training and sales support. The top vendors are also reviewed for total purchases/sales volume; commitment to training/field support; purchase-order-to-shipment lead-time/order fulfillment; growth over prior year; terms and conditions; and support of Fastenal (being a customer as well as a supplier).

“This award recognizes the efforts that our sales managers and sales organization have deployed over the past year,” said Saint-Gobain Abrasives’ national sales manager of industrial markets David Dodd. “We have also gotten fine support from customer service, inside sales, logistics and distribution. Our continued efforts are paying off.”

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J&L Industrial Supply wins sales training award
Metalworking distributor J&L Industrial Supply won the 2004 Progressive Distributor Sales Training Excellence Award. This is the fifth straight year the magazine singled out one industrial distributor for its devotion to sales training. 

Over the past year, the Livonia, Mich.-based distributor spent 8,300 hours and more than $335,000 on a variety of training efforts. The company's comprehensive training program educates field salespeople, customer service representatives and telephone salespeople from multiple U.S. branches. J&L employs full-time in-house trainers and also works closely with metal cutting experts from a broad base of suppliers.

“We’re very pleased about winning the Progressive Distributor Sales Training Excellence Award,” said corporate sales trainer Gail Magdowski. “A lot of people at J&L Industrial Supply are involved in our training efforts, and this shows that their hard work has paid off.”

To read the complete story on J&L Industrial Supply from the January/February issue of Progressive Distributor, click here.

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Hughes Supply reaffirms earnings guidance, offers shares
Hughes Supply Inc. reaffirmed its diluted earnings per share guidance for its fiscal year ending Jan. 30 of between $2.38 and $2.42.

In addition, Hughes set strategic annual earnings per share growth goals of between 15 percent and 20 percent for the next three years and believes that its earnings per share for the fiscal year ending Jan. 28, 2005, will be toward the high end of that growth range.

Hughes Supply also announced a public offering of 6 million shares of its common stock under the company's existing $400 million universal shelf registration statement.

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