Progressive Distributor - Distribution industry news archives

Distribution Industry News Archives:
News from the week of July 12, 2004

Baldor Electric boosts sales, earnings in Q2
Industrial production declines in June
Barnes Distribution sees sales, profit climb in Q2
Sales jump during Q2, first six months for Eaton
Dixon Valve & Coupling opens new distribution center
PTDA: Year-to-date sales continue growth trend
Applied Industrial Technologies names M&A chief
WESCO names new executives
ERB Industries joins IBC IndustrialSupplyPlus
Former Motion Industries executive honored by PTDA
MSC Industrial Direct posts third quarter gains
Machine tool consumption climbs in May
Fastenal's sales, earnings surge in second quarter
Columbus McKinnon launches new Web site
Lawsuit hits Smith International's Q2 bottom line
Lincoln Electric owns stake in Chinese welding businesses

Baldor Electric boosts sales, earnings in Q2
Baldor Electric Co. recorded second quarter net sales of $163.7 million, up from $138.5 million during the second quarter of 2004. Net earnings jumped to $8.5 million, or 25 cents per share, compared to $6 million, or 18 cents per share, during Q2 2004.

For the first two quarters of the year, net sales increased to $316.5 million, up from $275.9 million in the prior-year period. Net earnings reached $15.9 million, or 48 cents per share, compared to $12.2 million, or 36 cents per share, the year before.

"Our sales have now increased over the prior quarter for seven consecutive quarters," said John McFarland, Baldor president and CEO. "Compared to the prior year, this is the largest increase since first quarter 1998. Additionally, incoming orders are strong, and we expect to end the year with record sales."

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Industrial production declines in June
Industrial production decreased 0.3 percent in June after increasing 0.9 percent in May, according to the Federal Reserve. The gain in May was 0.2 percent point less than originally reported.

At 116.2 percent of its 1997 average, output was 5.6 percent higher than its level in June 2003. Capacity utilization for total industry slipped to 77.2 percent. The rate was 3.2 percent above its value in June 2003 but was 3.9 percent below its 1972-2003 average.

Manufacturing output edged down 0.1 percent in June; the overall factory operating rate declined 0.2 percent, to 76 percent.

The production of durable manufacturing goods was unchanged in June. The production of computer and electronic products climbed 1.5 percent in June and 21.4 percent (annual rate) for the quarter as a whole. Output in the aerospace and miscellaneous transportation equipment industry, which posted a third consecutive monthly gain, rose 0.6 percent. The production of machinery rose 0.7 percent.

"If you discount the volatile auto manufacturing sector, manufacturing production actually rose by 0.1 percent thanks to healthy gains in machinery, primary metals, computers, aerospace production and other sectors," said National Association of Manufacturers president Jerry Jasinowski. "The manufacturers I talk to directly continue to report a strong manufacturing recovery."

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Barnes Distribution sees sales, profit climb in Q2
Barnes Distribution generated second quarter 2004 net sales of $107.1 million, compared to net sales of $104.7 million during the second quarter of last year. Operating profit reached $5.1 million vs. $4.9 million during the prior-year period.

For the first six months of the year, Barnes Distribution reported net sales of $213.6 million, compared to net sales of $198.5 million the year before. Operating profit reached $9.4 million, compared to $8.1 million during the first six months of 2003.

Barnes Distribution's parent company Barnes Group Inc. recorded second quarter net sales of $252 million, compared to net sales of $229.6 million the year before. Second quarter net income reached $11.3 million, or 47 cents per diluted share, vs. net income of $9.7 million, or 46 cents per diluted share during 2003.

During the first two quarters of 2004, Barnes Group reported net sales of $499.2 million, compared to net sales of $448.3 million in 2003. The company saw net income climb to $20.9 million, or 88 cents per diluted share, during the period, compared to net income of $17.1 million, or 83 cents per diluted share, during the first six months of 2003.

"We essentially completed the integration of Kar Products in May, within 15 months of the acquisition, creating an organization that is among the 20 largest industrial distributors in North America," said Edmund M. Carpenter, Barnes Group president and CEO. "With the integration behind them, the team at Barnes Distribution is redoubling their efforts to improve customer service and efficiency, and specifically to address vendor-related supply constraints for fasteners and other steel-related products. We are aggressively working with both current vendors and alternative suppliers to minimize the impact to our customers going forward."

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Sales jump during Q2, first six months for Eaton
Diversified industrial manufacturer Eaton Corp. reported second quarter net sales of $2.4 billion, up from net sales of $2 billion during the second quarter of 2003. Net income reached $161 million, or $1.03 per share, up from net income of $93 million, or 64 cents per share, the year before.

For the first six months of the year, Eaton generated net sales of $4.6 billion, up from net sales of $4 billion in the prior-year period. Net income increased to $295 million, or $1.88 per share, up from net income of $165 million, or $1.14 per share, during the first two quarters of 2003.

"We are very pleased with our second quarter, which came in above the high end of our guidance," said Alexander M. Cutler, Eaton chairman and CEO. "Sales growth in the quarter of 19 percent consisted of 3 percent from acquisitions, 2 percent from exchange rates, and 14 percent from organic growth. Our organic growth was made up of 9 percent growth in our end markets and 5 percent growth from outgrowing our end markets."

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Dixon Valve & Coupling opens new distribution center
Dixon Valve & Coupling Co. opened a new distribution center in Tampa, Fla., making the complete family of Dixon products available locally from a centrally located facility.

The distribution center includes 7,000 square feet of space and will house some 15,000 different parts and components from Dixon's family of companies. The new space, located in Sabal Industrial Park in Tampa, offers a central location with better customer access.

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PTDA: Year-to-date sales continue growth trend
In May, U.S. distributors’ year-to-date sales of power transmission/motion control (PT/MC) products increased 7.9 percent compared to sales for January through May 2003, according to May trend data released by the Power Transmission Distributors Association (PTDA).

Sales decreased 7 percent from the previous month and rose 7.9 percent compared to May 2003.

Days sales in accounts receivables went up 7.4 percent over April 2004 and increased 1 percent compared to the same month last year. Annualized sales-to-inventory ratio in May was 8.5, compared to 7.9 in 2003.

For May, the confidence level of U.S. distributors rose to 6.2 on a 10-point scale.

U.S. manufacturers’ May sales of PT/MC products increased 7.3 percent compared to sales for January through May 2003. Sales went up 0.1 percent over the previous month and climbed 13.7 percent compared to May 2003.

Compared to April, sales of unmounted bearings, gear products, and clutches and brakes rose. Sales of mounted bearings, standard industrial motors, variable speed drives, positioning systems/linear motion products, shaft couplings, and mechanical drive systems and other PT products dropped.

Year-to-date orders of PT/MC products from U.S. manufacturers grew 11.6 percent compared to 2003. May orders decreased 4 percent from April and climbed 17.9 percent compared to May 2003. Annualized sales to inventory ratio in May was 10.1, compared to 7.5 in 2003.

For May, the confidence level of U.S. manufacturers increased to 5.7 on a 10-point scale.

To view the May trend data charts, click here.

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Applied Industrial Technologies names M&A chief
Applied Industrial Technologies named Todd A. Barlett vice president of acquisitions and global business development. Barlett will report to Bill L. Purser, president and chief operating officer.

Previously, Barlett was Applied's vice president of global business development. Effective immediately, he will assume responsibility for all corporate merger and acquisition activity. Concurrently, Barlett will also continue to oversee Applied Industrial Technologies Ltd. (Canada); Applied Mexico, S.A. de C.V.; and Rafael Benitez Carrillo Inc. of Puerto Rico.

"As our vice president of global business development, Todd played a major role in developing our businesses outside of the U.S.," Purser said. "He helped us acquire good quality companies in these markets, and that experience makes him the ideal person to lead our M&A efforts. He has the right blend of people skills and business acumen to continue to make our efforts in this vital area a success."

"Applied's growth strategy remains a mix of internal growth through sales expansion and external growth through acquisitions," Barlett said. "We will continue to focus our efforts on evaluating acquisitions as we build long-term shareholder value."

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WESCO names new executives
WESCO International Inc. hired John Engel for the new role of senior vice president and chief operating officer. Engel will immediately assume full responsibility for WESCO's branch-based distribution operations and related headquarters and field-support functions.

Engel has an engineering degree from Villanova and an MBA from the University of Rochester. His work experience includes significant operations, marketing and general management roles with General Electric, Allied Signal/Honeywell, PerkinElmer and Gateway.

"John is a high-energy individual who has developed a reputation as an agent for change and operational improvement," said Roy W. Haley, WESCO chairman and CEO. "He has had great experience working with large and demanding organizations. John has an excellent blend of strategy and performance management skills. His hands-on management style and certain recent responsibilities, including international marketing and sales development, low-cost country sourcing, and operational cost outsourcing, will be quite valuable to WESCO's continuous improvement initiatives."

In a separate announcement, WESCO promoted Steve Van Oss, currently vice president and chief financial officer to senior vice president and chief financial and administrative officer. Van Oss, who joined WESCO in 1997, now has responsibility for all of WESCO's finance and accounting, business development, human resources, information technology, legal and other administrative and support departments.

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ERB Industries joins IBC IndustrialSupplyPlus
IBC added ERB Industries Inc. as a preferred supplier to the IndustrialSupplyPlus division of IBC.

ERB Industries provides the industrial and construction markets with a wide selection of personal protective equipment. Its emphasis is on hard hats, protective eyewear, respiratory, hearing and safety apparel.

Founded in 1956, this employee owned-company is divided into two primary divisions: ERB Safety focuses on hard hats and eye protection; Fame Fabrics manufacturers work apparel, such as work aprons and high visibility garments.

With primary manufacturing facilities located in Woodstock, Ga., and Jasper, Ga., ERB Industries serves domestic and international markets.

“ERB is the type of supplier that enhances the value proposition needed to compete in today’s industrial market," said Rich Poole, IBC vice president of marketing. "Their emphasis on quality, service and technology, along with a wide breadth of products, provides our members an opportunity to distinguish themselves in such a competitive marketplace.”

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Former Motion Industries executive honored by PTDA
Motion Industries announced that Ralph Buntyn was recently given the distinction of Honorary Life Member of the Power Transmission Distributors Association (PTDA), according to Bill Stevens, Motion Industries' president and CEO.

This designation is given to a select group of PTDA members who distinguished themselves through a long tenure of service and volunteerism to the association.

Ralph Buntyn, the former senior vice president of marketing with Motion Industries, retired at the end of 2003 after completing more than 42 years of service with the company. Buntyn served in many leadership roles for PTDA throughout his career, including positions on committees, task forces and at the organization's annual meetings.

His committee/task force involvement with PTDA included the Industry Relations Committee (2000-2003), the Strategic Planning Task Force (2000), the International Committee (1998-2000), and the Total Quality Management Task Force (1993-1997).

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MSC Industrial Direct posts third quarter gains
MSC Industrial Direct Co. Inc. reported fiscal third quarter net sales of $255.3 million, up from net sales of $215.6 million during the same quarter the year before.

Net income also jumped in the third quarter to $23.9 million, or 34 cents per diluted share, up from $13.2 million, or 19 cents per diluted share, during Q3 2003.

For the first nine months of its fiscal year, MSC generated net sales of $708.6 million, up from $635.9 million during the same period in 2003.

The company recorded nine-month net income of $58.9 million, or 85 cents per diluted share, up from net income of $38.4 million, or 57 cents per diluted share, the year before.

"As we move into the final quarter of fiscal 2004, we will build on the momentum we've generated throughout the year and remain confident in our continued ability to execute on our strategy, gain share and grow in all of our markets," said MSC chairman and CEO Mitchell Jacobson. "Overall, our customers appear to be purchasing with more confidence, and we continue to grow sales across our customer base."

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Machine tool consumption climbs in May
May U.S. machine tool consumption totaled $224.3 million, up 9.9 percent from April and up 54.2 percent from $145.4 million reported for May 2003, according to the American Machine Tool Distributors' Association (AMTDA) and the Association For Manufacturing Technology (AMT).

With a year-to-date total of $1 billion, 2004 is up 46.1percent compared with 2003.

"The manufacturing sector's confidence in the direction of our national economy continues to grow," said Ralph J. Nappi, president of the American Machine Tool Distributors' Association. "May machine tool consumption builds upon a six-month trend of strong capital investments made by U.S. manufacturers. All indications point to continued investment for the rest of the year despite the machine tool industry's recent challenges of product supply."

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

Northeast machine tool consumption in May stood at $33.5 million, down 2.7 percent compared to April's $34.5 million, but up 74.8 percent compared to last May. With a year-to-date total of $150.1 million, 2004 is 68.5 percent ahead of 2003 at the same time.

Southern machine tool consumption totaled $25.7 million in May, down 4.2 percent from the $26.8 million in April, but up 13 percent compared to May a year ago. The year-to-date total of $142.1 million was 0.2 percent higher than the comparable figure a year ago.

With a May total of $98.8 million, machine tool consumption in the Midwest was 20.6 percent higher than April's $81.9 million and 63.8 percent higher than the total for May 2003. The $436 million year-to-date consumption total was 52.2 percent ahead of the total at the same time in 2003.

Machine tool consumption in the Central region in May totaled $43 million, up 23.3 percent compared to April's $34.8 million and up 46.8 percent compared to May a year ago. At $188.9 million, the year-to-date total was 53.7 percent higher than the comparable figure for 2003.

Totaling $23.4 million, Western machine tool consumption was off 10.6 percent in May compared to April's $26.1 million. But, it was up 67.4 percent compared to the previous May. The year-to-date total of $124.2 million puts this year 71.2 percent ahead of 2003 at the same time.

The United States Machine Tool Consumption (USMTC) report, jointly compiled by the two trade associations representing the production and distribution of manufacturing technology, provides regional and national U.S. consumption data of domestic and imported machine tools and related equipment.

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Fastenal's sales, earnings surge in second quarter
Fastenal Co. reported second-quarter net sales of $310.1 million, up from net sales of $249.1 million during the second quarter in 2003. Net earnings also increased to $56.2 million, or 46 cents per share, compared to $21.9 million, or 29 cents per share, during Q2 a year ago.

For the first six months of the year, Fastenal said net sales hit $594.3 million, up substantially from net sales of $485 million the year before. Net earnings jumped to $63 million, or 83 cents per share, during the first six months of 2004, compared to $41 million, or 54 cents per share, in 2003.

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Columbus McKinnon launches new Web site
To support its multi-brand growth strategy, Columbus McKinnon launched its new Web site at www.cminternational.com. The company hopes to provide users and prospects located throughout the world immediate contact with distributors, regional managers and its international sales office in Amherst, N.Y.

The home page features a color-coded map to help users locate a distributor in their region with just a few clicks. From this site, interested parties can connect directly to the Columbus McKinnon de Mexico S. A. de C. V. and Columbus McKinnon do Brazil Ltda. Web sites for information in the language of their country. Additionally, links to the domestic pages featuring items such as sales bulletins, product specifications and maintenance manuals are easily accessed from the home page.

“In order to provide users with a comprehensive view of our diverse product offering, we decided to develop a detailed site highlighting the items internationally marketed by Columbus McKinnon distributors," said Craig Johnston, managing director of Columbus McKinnon's international sales division. "The new Web site provides users with flexibility depending on the depth of their product, service and maintenance needs.”

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Lawsuit hits Smith International's Q2 bottom line
The previously announced outcome of a patent infringement case in which a jury in federal district court in Tyler, Texas, awarded Halliburton damages of $24 million will have a direct impact on second quarter earnings for Smith International Inc.

Although Smith International plans to pursue all options available in response to this verdict, including possible settlement, it expects to record provisions for losses and other litigation-related costs during the second quarter of 2004.

The inclusion of these charges is expected to reduce second quarter earnings per share by approximately 20 cents.

However, as disclosed in Smith International’s press release on June 25, a judgment has not been entered in the drill bit patent infringement case and could ultimately exceed the amount of the jury verdict accrued by the company.

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Lincoln Electric owns stake in Chinese welding businesses
Lincoln Electric Holdings Inc. completed previously announced transactions to acquire controlling interests in three welding businesses in China.

With completion of the transactions, Lincoln owns the majority of a welding equipment manufacturing facility currently under construction in the Baoshan district of Shanghai. Lincoln holds a similar stake in two welding consumables operations: a flux-cored wire facility also located in Baoshan and a stick electrode factory in northern China.

"The announcement today is the result of a successful and focused strategy for Lincoln to secure a leading position in the growing market for arc welding products in China," said Anthony A. Massaro, Lincoln's chairman. "Our majority position in these businesses will help expand our platform in China and widen our distribution network through an established organization and structure."

Chairman Tai Long Chou of Kuang Tai Metal Industrial Co. Ltd. and Singapore-based Tenwell Development Pte Ltd., a member of the Kuang Tai Group, are Lincoln's current partners in the Chinese joint ventures and will retain minority stakes in the businesses.

"Our strong business relationship with our joint venture partners in China has been an important part of our successful investment in the world's leading growth market for welding products and has contributed to help accomplish our growing position. We look forward to continuing our successful venture as we expand Lincoln's market share in the region," said Massaro.

Annual sales of between $50 million and $60 million are expected for the acquired Chinese entities, in addition to revenues from another welding consumables facility in which Lincoln currently holds a 48 percent stake. This manufacturing operation, jointly owned with Tenwell and Kuang Tai, had 2003 revenues of approximately $65 million and maintains a leading position in the MIG wire market in China.

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