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Distribution Industry News Archives:
News from the week of March 13, 2006

BSA conference tables offer interesting opportunities
MSC to buy J&L Industrial from Kennametal
Grainger adds 39,000 products to 2006 catalog
Peer Bearing earns John Deere supplier awards
Magid Glove and Safety retains ISO certification
Channellock turns 120
BSA to host World Forum Panel
Grainger recognizes top suppliers

BSA conference tables offer interesting opportunities
The Bearing Specialists Association’s (BSA) Conference Tables Session at its 2006 Annual Convention, scheduled for April 22-25 at the Ritz-Carlton Sarasota in Sarasota, Fla., offers the only opportunity of its kind for distribution and manufacturing leaders to meet one-on-one in informal sessions to discuss issues of mutual interest.

Participants register for the Conference Tables Session online in advance of the Annual Convention, allowing all participants to plan for productive meetings.

The focus is on “problem resolution” rather than discussion. The key take away for all attendees is efficient, productive meetings within the framework of a larger, industry event.

For the first time at the 2006 Annual Convention, BSA distributors are invited to host a table at the Conference Tables Session. This table will offer four 15-minute meetings from 7:30-8:30 a.m. After a 15-minute break to reset the tables, the more familiar arrangement, where manufacturers host a table, will return with 30-minute appointments for distributors.

This addition supports another key element of BSA’s Strategic Plan, to promote networking among authorized distributors and invited manufacturers. Distributor tables are included in BSA’s online conference table signup system.

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MSC to buy J&L Industrial from Kennametal
Kennametal Inc. and MSC Industrial Direct Co. Inc. signed a definitive agreement to sell Kennametal's J&L Industrial Supply business for $349.5 million. The disposition of this unit is in line with the continued execution of Kennametal's strategy to concentrate on its core manufacturing businesses, according to a Kennametal press release. The J&L divestiture completes the company's planned exit from owned distribution and will allow Kennametal to build new and grow existing distributor relationships. This also presents an excellent opportunity for Kennametal to improve customer options by delivering its full range of products to customers through the strongest distribution partners, the company said.

The divestiture, which is expected to close in the second calendar quarter of 2006, (fourth fiscal quarter for Kennametal), remains subject to customary regulatory approval and negotiated conditions of closing. Goldman, Sachs & Co. is serving as financial advisor to Kennametal in this transaction.

"We are very pleased with this agreement and are confident that this divestiture, in alignment with our strategy, enables us to accelerate strategic growth plans as we build and manage our corporate portfolio of technologies," said Kennametal president and CEO, Carlos M. Cardoso. "J&L has been a great success story with a committed team that has consistently delivered strong growth and margins. Our goal was to find a partner for J&L that could accelerate its growth, add incremental value to customers, and be a good home for J&L employees. MSC is a great match and will be able to fully leverage J&L's capabilities. In turn, J&L will remain a major distributor of Kennametal product and an important strategic channel partner. MSC will have access to the Kennametal portfolio of brands, and the Kennametal brand will be marketed through MSC and J&L as the premier brand of indexable cutting tool products."

Headquartered in Southfield, Mich., with operations in the U.S. and the United Kingdom, J & L is a leading national specialty metalcutting and finishing distributor with fiscal year 2005 sales of $257.5 million. J & L provides its base of over 74,000 customers with an industry-leading offering of the top brands in metalworking.

MSC/J & L will be the exclusive national level distributor in the United States of the Kennametal and Hertel lines of carbide cutting tools, pursuant to a 5-year renewable distribution agreement. J & L services its customers through its 2,100-page catalog, its e-commerce portal and a sales force of approximately 140 associates. J & L’s senior management team will remain with the business following the acquisition, with Michael P. Wessner continuing in his current position as president of J & L Industrial Supply.

In a company press release, MSC said the acquisition is expected to be highly synergistic, creating significant cross-selling opportunities across the customer bases of both companies and generating cost reduction opportunities. In addition, the transaction will provide MSC with increased purchasing power in all areas of its business.

Commenting on the acquisition, David Sandler, president and CEO of MSC, stated, “This is an excellent strategic acquisition for MSC. We’ve always said that we’re not averse to the right acquisition, but that it had to be additive to our business so that the company performed better over the long term than it would have performed had we not made the acquisition. We firmly believe that this opportunity meets that significant hurdle rate. There are several major strategic reasons that drive this acquisition. J & L has a culture and business model that is similar to ours, and a highly successful management team with considerable experience and success in the direct mail business. J & L’s base of over 74,000 metalworking customers provides a significant revenue growth opportunity for MSC to sell our large selection of MRO supplies to them. We’ve been very successful in the past at using our metalworking expertise to penetrate our customers MRO spend. We expect to replicate this with the J & L customer base. J & L’s technical expertise and value added solutions in metalworking will benefit MSC’s customers. Combining the two companies increases our value basket and will allow us to leverage the best attributes of both companies across the combined customer base.”

Sandler continued, “MSC will also gain access to Kennametal brand carbide cutting tools. We expect to generate sales growth from the Kennametal line as we will sell it across the entire country, whereas J & L sales are concentrated in the Central U.S. An important strategic advantage will be the increased buying power of the combined business. This represents a significant margin opportunity for MSC. Lastly, the transaction expands our sales footprint, enhancing our presence in the Central U.S. and adding for the first time, a presence in Europe.”

Founded in 1941, MSC is one of the premier national suppliers of maintenance, repair and operations products and services. J&L Industrial Supply is a leading specialty metalworking distributor in North America, with a comprehensive product offering of metal cutting tools, abrasives, hand and power tools, precision measuring tools, work holding and tool holding products, machine tools and accessories used in metal cutting operations. The unit reported total annual sales of $257.5 million and operating income of $27.1 million in fiscal year 2005.

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Grainger adds 39,000 products to 2006 catalog
Grainger is adding more than 39,000 products to its new 2006 catalog launching April 3, 2006. The expansion brings the number of products offered through its catalog from 82,000 to more than 115,000.

The expanded offering consists of some 30,000 different fasteners such as screws, bolts and nuts and an additional 10,000 products spread across diverse product categories including electrical, cleaning, material handling, plumbing and ventilation.

To celebrate the announcement the company commissioned a large fastener sculpture by well-known Chicago sculptor Erik Blome. The sculpture is on display this week at Grainger's booth at the National Plant Engineering & Maintenance Show and Conference in Rosemont, Ill.

"Our customers count on us to be a one-stop shop for a broad selection of maintenance repair and operating supplies, enabling them to efficiently manage their facilities," said Michael Pulick, Grainger's vice president of product management. "We had a clear opportunity to bolster our offering, especially in fasteners. Today we are excited to announce that we are poised to handle even more of our customers' unplanned MRO needs."

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Peer Bearing earns John Deere supplier awards
Peer Bearing Co. earned recognition as a partner-level supplier for 2005 and was also named John Deere Supplier of the Year in the John Deere Achieving Excellence Program.

The partner-level status is Deere & Co.’s highest supplier rating. The Waukegan, Wis.-based company was selected for the honor in recognition of its dedication to providing products and service of outstanding quality as well as its commitment to continuous improvement.

PEER Bearing Co. is a supplier of agricultural bearings to John Deere’s worldwide operations. Suppliers who participate in the Achieving Excellence program are evaluated annually in several key performance categories, including quality, cost management, delivery, technical support and wavelength, which is a measure of responsiveness.

John Deere Supply Management created the program in 1991 to provide a supplier evaluation and feedback process that promotes continuous improvement.

"It is rare that a supplier receives partner-level status during the first year of John Deere’s Achieving Excellence program," said Chuck Donkle, product manager for Peer Bearing Co. "It is even more exceptional to be selected as a Supplier of the Year in only our second year at the partner-level."

PEER has developed several new bearing designs that have helped Deere improve reliability and reduce warranty claims. One of the engineering projects has resulted in a new seal design enabling both companies to apply for a joint patent.

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Magid Glove and Safety retains ISO certification
Magid Glove and Safety Manufacturing Company announced continued registration to ISO 9001-2000. Magid was recertified by Quality Systems Registrar Inc.

The ISO 9001-2000 is the most encompassing form of ISO 9000, a set of international quality standards and requirements that define the principles and good practices in manufacturing operations. This registration is recognized by customers worldwide looking to the International Organization for Standardization (ISO) for an independent evaluation of their suppliers’ quality management systems.

“I am proud that we have achieved this certification. Quality has always been number one at Magid,” said Russell Cohen, vice president. “This process reinforces what Magid has been doing for 60 years. We know that the ISO 9001-2000 re-certification confirms what Magid customers have come to expect, the highest quality and service.”

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Channellock turns 120
Channellock Inc. celebrated its 120th anniversary this year. Though 12 decades have passed since George B. DeArment founded the company in 1886, Channellock has remained steadfast in its commitment to its people and the community.

Today, Channellock is known for hand tools of high quality and craftsmanship. Since its inception as the Champion Bolt & Clipper Co., the company has also led the industry through innovation. In 1932, chief engineer Howard Manning developed and patented the tongue-and-groove plier, dubbed “Channellock” at the time. The company now offers more than 120 different types and sizes of hand tools, all bearing the company’s signature color.

“Our founder, George B. DeArment, great-grandfather of current president and CEO William S. DeArment, created a company that values people more than machines. Today, Channellock is an example of the American dream realized and offers a great case study in the free enterprise system,” says Scott Jonap, vice president of sales and marketing for Channellock. “We are dedicated to providing customers with the quality pliers and hand tools they’ve come to expect for the past 120 years and look forward to continuing our legacy for generations to come.”

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BSA to host World Forum Panel
The 2006 Annual Convention of the Bearing Specialists Association (BSA), scheduled for April 22-25 at the Ritz-Carlton Sarasota, Sarasota, Florida, will feature a World Forum Panel designed to educate BSA Convention attendees on how distribution functions in other parts of the world.

Participants will be:
• Mark Dixon, COO, WYKO Industrial Services Limited;
• Bill Dix, vice president international, The BC Bearing Group;
• Carl James, president and CEO, BDI;
• Dieter Kuetemeier, vice president and general manager distribution in North America, Barden/FAG/INA;
• Dan Muller, vice president of distribution management, The Timken Corporation; and,
• Leda Sabbagh, CEO, Rolamentos CBF Ltda.

Discussion topics will include logistics, business practices, human resources, and the role of governments in international trade. The World Forum Panel will be moderated by Peter Negri of the Jamaica Bearings Company Inc. BSA's Task Force on International Opportunities is chaired by Craig Faber of Miller Bearings Inc.

For additional BSA convention information, please go to www.bsaconventions.org.

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Grainger recognizes top suppliers
Grainger presented 28 top-performing suppliers with its prestigious Partners in Performance Supplier Award for 2005 in Itasca, Ill., at its annual supplier conference on March 9. Grainger presents the award to a select group of suppliers to recognize exceptional performance throughout the year.

"Grainger's suppliers play an important role in ensuring that our customers have access to a broad product offering," said Michael Pulick, Grainger's vice president of product management. "Every day we strive for new ways to learn and grow with our suppliers, benefiting both of our businesses. Our Partners in Performance awards ceremony gives us the opportunity to recognize suppliers who have demonstrated superior performance and are true role models within their industry."

Grainger's Partners in Performance Award recognizes suppliers that achieve excellence in several categories, including responsiveness, information integrity, on-time shipping and order fulfillment. These metrics help measure the ability of suppliers to ensure product is available across Grainger's distribution network. Grainger suppliers receive ratings throughout the year for their performance in each category. Approximately 2 percent of Grainger's 1,200 suppliers receive this award each year.

The winners for 2005 are: 3M Mexico S.A. de C.V.; Advance Transformer Company; Aearo Technology; Akro-Mils; Albion Industries LLC; Arrow Pneumatics Inc.; Brady Corporation; Bradley Corporation; E.R. Wagner Manufacturing Company; Elkay Sales Inc.; Enerpac; GRANE Transportation Lines Ltd.; Halsey Taylor; ITW Red Head; Justrite Manufacturing Company LLC; Lift-All Co. Inc.; Loctite Industrial Group; Mi-T-M Corporation; Motorola Inc.; Norgren Inc.; Nupla Corporation; Reelcraft Industries Inc.; Schneider Electric; Spectrum Brands Inc.; The M. K. Morse Company; Weiler Corporation; Wells Lamont Industry Group; Wiremold Legrand.

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