News from the week of May 5, 2008
Manufacturing
productivity increases
05/07/08 -- The nation’s manufacturing productivity increased 4.1
percent in the first quarter of 2008 as output decreased 0.3 percent and
hours worked dropped 4.2 percent (seasonally adjusted annual rates).
This 4.2 percent hours decrease reflected a 2.8 percent decline in
durable goods hours and a 6.6 percent drop in hours worked in nondurable
goods industries. Productivity rose 2.3 percent in durable manufacturing
and 7.0 percent in nondurable manufacturing.
The hourly compensation of
all manufacturing workers increased 6.7 percent during the first quarter
of 2008 and real hourly compensation rose 2.3 percent, according to the
Bureau of Labor Statistics.
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Airgas earnings up 47 percent
05/06/08 --
Airgas reported quarterly net earnings grew 47 percent to $64.2 million,
or 76 cents per diluted share, compared to $43.7 million, or 54 cents
per diluted share, in the prior year. Fourth quarter sales grew 27
percent from the prior year to $1.1 billion, with acquisitions
contributing 19 percent of the growth. Total same-store sales increased
8 percent in the quarter, with hardgoods up 4 percent and gas and rent
up 11 percent.
"Despite a slowing economy,
our strategic product categories, which focus on the healthcare,
research, environmental, and food and beverage markets, posted 11
percent organic growth in the quarter," said Airgas chairman and CEO
Peter McCausland. "Our energy and infrastructure construction customers
remain strong. Rising export activity and strength in U.S.
infrastructure projects are also helping many of our core industrial
customers, offsetting the economic slowdown. We continue to grow
profitably, as the operating margin in the quarter expanded to 12.1
percent, an improvement of 120 basis points over last year."
The company made 18
acquisitions in fiscal 2008, adding more than $500 million in annualized
revenue. Sales in fiscal 2008 increased 25 percent to $4 billion, with
same-store sales growth of 7 percent.
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Interline Brands reports drop
in sales
05/06/08 --
Interline Brands said its sales for the first quarter of 2008 decreased
2.1 percent over the comparable 2007 period. Earnings per diluted share
were 27 cents for the quarter, down 7 percent from earnings per diluted
share of 29 cents in the same period last year.
Sales for the quarter were
$289.1 million, a 2.1 percent decrease over sales of $295.4 million in
the comparable 2007 period. Interline's facilities maintenance market,
which comprised 68 percent of sales, grew 4.5 percent during the first
quarter on an average daily sales basis. This growth was offset by
continued weakness in the pro contractor and specialty distributor
end-markets. The pro contractor end-market, which comprised 20 percent
of sales, declined 15.2 percent in the quarter. The specialty
distributor end-market, which comprised 12 percent of sales, declined
12.6 percent for the quarter.
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Emerson reports 12 percent sales gain
05/06/08 --
Emerson announced net sales for the second quarter of $6.0 billion, an
increase of 12 percent compared with $5.4 billion in the prior year.
Earnings from continuing operations increased 21 percent to $598
million, or 75 cents per share. This represents an increase of 23
percent in earnings per share from the 61 cents in the same period last
year.
“Emerson’s strong
performance for the second quarter and first half of 2008 clearly
demonstrates our continued ability to execute, even in a tougher
economic environment,” said chairman, CEO and president David N. Farr.
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Milacron posts loss
05/06/08 --
Milacron Inc. reported a net loss of $6.9 million, or $1.76 per diluted
share, in the first quarter ended March 31. This compared to a net loss
in the first quarter of 2007 of $10.8 million, or $2.68 per share, which
included $2.4 million in restructuring charges.
Boosted by operating
efficiencies from restructuring and other cost-cutting measures, first
quarter manufacturing margins rose to 19.0 percent from 18.7 percent a
year ago. As a result, Milacron generated positive operating earnings of
$1.5 million as opposed to an operating loss of $2.0 million in the
first quarter of last year.
Sales in the quarter were
$203 million, up from $190 million. The increase was due almost entirely
to favorable currency translation effects, primarily the weakening of
the dollar compared to the euro and other currencies.
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News from the week of April 28, 2008
Barnes Distribution reports slight
sales gain
Barnes Distribution reached sales of $141.0 million in the first quarter
of 2008, an increase of approximately 1 percent over the first quarter
of 2007. However, organic sales decreased $5.1 million, or approximately
4 percent. The company said the lower organic sales were due to softness
in transportation-related and manufacturing markets in North America,
“and sales force disruption in the United States and the United
Kingdom.”
The sales force disruption
referred to a decrease in salespeople as a result of the company’s
Project Catalyst organizational and operational initiatives announced in
2007.
Operating profit for the
quarter increased approximately 12 percent to $7.0 million and resulted
in an operating margin improvement of 0.4 percentage points to 4.9
percent. “This improvement is attributable to the favorable impact of
Project Catalyst initiatives in North America. These initiatives are
improving value pricing and sales productivity, and contributed to a net
reduction in distribution costs,” the company said.
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Kaman Industrial Technologies increases
sales
Kaman Industrial Technologies reported operating income for the first
quarter of 2008 of $9.1 million, compared to $8.7 million in the first
quarter of 2007. Sales were $182.2 million, compared to $173.4 million
in the first quarter of 2007. The increase in sales is primarily due to
the ramp up of national account business, as well as strong demand in
the food and beverage, mining, chemical and paper markets.
“[Kaman Industrial
Technologies] increased both its revenue and operating profits despite
weakness in certain sectors of the economy and increased expenses
associated with supporting our national account initiative,” said Neal
J. Keating, chairman, president and CEO.
“An important step for us in
expanding our geographic reach was the purchase of Industrial Supply
Corporation, which occurred early in the second quarter. ISC brings a
strong reputation for customer service, a very experienced management
team and gives us a stronger presence in the important Virginia and
North Carolina markets," he added.
Kaman Corp. had total nets
sales in the quarter of $285.8 million compared to $266.5 million in the
first quarter of 2007.
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Home Depot to close 15 stores
The Home Depot announced it will close 15 stores and also abandoned
plans to open 50 U.S. stores that have been the pipeline, in some cases
for more than 10 years. The store closings will impact 1,300 employees.
Store managers and assistant store managers at the 15 locations will be
offered other store management positions within the organization. The
company will work to place the rest of the associates in other
comparable store positions where available.
The closing stores represent
less than 1 percent of the company's existing store portfolio.
"Closing a store is always a
difficult decision because it affects both our people and our
communities," said Frank Blake, chairman and CEO. "But, as with our
decision to slow future store growth, this is the right decision and
will bring long-term benefits to our associates and to our shareholders.
We put our real estate projects through a tight capital efficiency
model. This model prioritizes locations that make the most efficient use
of capital, reduce cannibalization and drive higher returns. By building
fewer stores, in the best locations, and making sure our existing stores
are profitable, our company will be in a much stronger competitive
position."
The store locations include
three stores in Wisconsin, two each in Indiana, New Jersey, and Ohio,
and single stores in Kentucky, Louisiana, Minnesota, New York, North
Dakota and Vermont.
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Construction spending drops
The U.S. Census Bureau announced that construction spending during March
2008 was estimated at a seasonally adjusted annual rate of $1.12
trillion, 1.1 percent below the revised February estimate of $1.13
trillion. The March figure is 3.4 percent below the March 2007 estimate
of $1.16 trillion.
During the first 3 months of
this year, construction spending amounted to $241.6 billion, 2.4 percent
below the $247.4 billion for the same period in 2007.
Spending on private
construction was at a seasonally adjusted annual rate of $827.4 billion,
1.7 percent below February, while public construction spending was
$296.2 billion, 0.6 percent above the revised February estimate of
$294.5 billion.
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Manufactured durable
goods orders down
New orders for manufactured durable goods in March decreased $0.7
billion or 0.3 percent to $212.2 billion, according to the U.S. Census
Bureau. This was the third consecutive monthly decrease and followed a
0.9 percent February decrease. Excluding transportation, new orders
increased 1.5 percent. Excluding defense, new orders increased 0.3
percent.
Shipments of manufactured
durable decreased $0.8 billion or 0.4 percent to $210.1 billion. Click
here
for more details.
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EnPro Industries posts sales gain
EnPro Industries reported record quarterly sales and segment income in
the first quarter of 2008, as sales grew by 14 percent over the first
quarter of 2007 to $283.1 million. Net income in the quarter was $13.2
million or 61 cents a share, compared to $12.3 million or 56 cents a
share a year ago.
"We are pleased by the
results of the first quarter," said Steve Macadam, president and chief
executive officer. "They reflect the sound condition of most of our key
markets, and they underscore the effectiveness of our strategies and the
strength of the performance culture at EnPro."
The sales increase reflects
the contributions of acquisitions and the strength of the company's
international markets. Acquisitions, combined with increased activity in
certain of the company's markets, added about 9 percentage points of the
increase in sales while foreign exchange contributed about 5 percentage
points.
Sales in the Sealing
Products segment improved by about 7 percent to $123.6 million. The
segment's sales benefited from higher demand for Garlock's products from
power generation and other energy-related markets and from steel and
mining markets.
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Regal Beloit’s sales up 28.1 percent
Regal Beloit Corporation reported a net sales increase of 28.1 percent
to $536.3 million from $418.7 million in the first quarter of 2007.
Included in reported sales are $111.9 million of sales from four
acquisitions completed late in 2007. In the Electrical segment, sales
increased 31.2 percent, while sales in the Mechanical segment increased
1.0 percent from the prior year period. From a geographic perspective,
China-based sales increased by 33.1 percent. Sales to regions outside of
the United States were 25.6 percent of total sales, compared to 19.2
percent for the first quarter of 2007.
The gross profit margin for
the first quarter of 2008 was 22.8 percent, compared to 23.2 percent
reported for the first quarter of 2007.
“Given the difficult
residential markets and raw material cost environments, we are quite
pleased with our results for the first quarter. New products, continuous
improvement in execution, and our geographic diversification are driving
solid results," said Henry W. Knueppel, chairman and CEO.
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MSA records 18 percent sales increase
MSA announced that net sales for the first quarter of 2008 were $266.3
million compared with $225.9 million for the first quarter of 2007, an
increase of $40.4 million, or 18 percent. Net income for the first
quarter of 2008 was $16.0 million, or 45 cents per basic share, compared
with $16.1 million, or 45 cents per basic share, for the same quarter
last year.
Sales in the company's North
American segment increased 19 percent to $23.7 million, primarily in the
fire service market. Sales in the International segment improved by $9.3
million, or 19 percent, primarily in South Africa, Latin America, and
Australia.
"I am very pleased with our
first quarter growth in sales and incoming orders for the North American
fire service market," said William M. Lambert, MSA president and COO.
"As we have previously reported, our sales to the North American fire
service market were depressed during the latter part of 2007 as a result
of delays in the availability of federal government funding to fire
departments and the transition to new SCBA standards
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Grainger authorizes stock repurchase
Grainger has authorized the repurchase of up to an additional 10 million
shares of the company's outstanding common stock. The repurchased shares
will be available for general corporate purposes. As of March 31, 2008,
the company had approximately 77 million shares of common stock
outstanding.
Since 1984, Grainger has
repurchased more than 59 million shares of stock on a split-adjusted
basis, reducing the number of shares outstanding by more than 31
percent.
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Husqvarna buys Sandvik Nora AB
Husqvarna has acquired the diamond tools business of Sandvik Nora AB,
previously called Hagby Asahi AB. The Swedish company has annual sales
of about $704 million.
The acquisition complements
Husqvarna's product range for the construction industry and reinforces
the group's position in the Nordic region.
"Hagby has a strong market
position in Sweden and Finland, says Anders Ströby, head of Husqvarna
Construction Products. “Synergies will be achieved with our existing
operation in terms of production and distribution. In addition, Hagby's
floor-grinding machines complement our existing international product
offering."
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Lawson reports sales decline
Lawson Products said its first-quarter net sales were $125.0 million, a
decrease of $4.7 million or 3.6 percent from the comparable prior year
quarter. Net income for the quarter was $4.4 million, compared to net
income of $4.6 million in the first quarter of 2007. Diluted income per
share was 51 cents, compared to 54 cents per share a year ago.
"Although the first quarter
2008 sales performance did not meet our expectations, we managed to meet
our operating income objective," said Thomas Neri, president and CEO.
Sales were impacted negatively by service level disruptions at the
company's Reno, Nev., distribution center that began in the fourth
quarter of 2007 and extended into early 2008. Although service levels
returned to normal levels by the end of the first quarter 2008, sales
results for the first quarter were impacted.
Gross profit margins for the
quarter of 58.6 percent were slightly higher compared to 58.5 percent
gross profit margins in the first quarter of 2007.
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IR
revenues up 9.5 percent
Ingersoll-Rand announced that total revenues increased by 9.5 percent
and operating income increased by 18 percent for the first quarter of
2008 compared with the 2007 first quarter. The company reported net
earnings of $181.6 million, or diluted earnings per share of 66 cents,
on sales of $2.16 billion.
In the Industrial
Technologies segment, revenues increased by approximately 11 percent to
$743 million.
“Our first-quarter 2008
performance continued to demonstrate the benefits of our transformed
business portfolio, which is characterized by significantly improved
product, market and geographic diversity, compared with our previous
reliance on capital-intense, heavy machinery businesses,” said Herbert
L. Henkel, chairman, president and chief executive officer.
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Timken posts 12 percent gain
The Timken Company reported sales of $1.43 billion during the first
quarter of 2008, an increase of 12 percent over the same period a year
ago. The increase was driven by strong sales in global industrial
markets, as the company benefited from its capacity-expansion
initiatives, as well as the favorable impact of pricing, surcharges and
currency.
First-quarter income from
continuing operations was $84.5 million, or 88 cents per diluted share,
compared to $74.3 million, or 78 cents per diluted share, in the first
quarter of 2007.
The Bearings and Power
Transmission Group had first-quarter sales of $1.05 billion, up 13
percent from $930 million for the same period last year, primarily
resulting from organic growth in the process industries and aerospace
and defense segments, and the favorable impact of acquisitions and
currency.
“We achieved record
first-quarter earnings as execution of our strategic initiatives and a
more efficient operating model allowed us to take better advantage of
continued strong global demand for our industrial products,” said James
W. Griffith, Timken’s president and chief executive officer. “We
continue to have a positive outlook for 2008 performance as we bring
more capacity online in attractive markets and advance our pricing and
execution initiatives.”
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SPX reports big sales gain
SPX Corporation revenues for the first quarter increased 37.2 percent to
$1.39 billion from $1.02 billion in the year-ago quarter. Organic
revenue growth was 7.1 percent, while completed acquisitions and the
impact of currency fluctuations increased reported revenues by 25.6
percent and 4.5 percent, respectively. Revenues from operations
discontinued during the quarter were $17.4 million.
Diluted net income per share
from continuing operations was $1.14, compared with 53 cents in the
year-ago quarter.
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Jackson Safety buys Chinese company
Jackson Products Inc., a privately held manufacturer and distributor of
personal and traffic safety products, has entered into an agreement to
acquire a 70 percent stake in Changzhou Shine Science & Technology Co.,
Ltd. of the People's Republic of China for an undisclosed amount. Based
in Shanghai, Shine is a manufacturer of welding safety products.
“This acquisition supports
our global strategy of being the preferred supplier of safety products,”
said Tom Burns, president and CEO. “Shine’s innovative products broaden
our welding product offering and strengthens our position as the number
one manufacturer of auto-darkening filters. The acquisition of Shine
will also provide us a manufacturing base in Asia and adds Shine’s
excellent engineering talent that will complement our own expertise in
auto-darkening technology.”
The transaction is expected
to close sometime in the third quarter of this year.
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APICS
moves to Chicago
APICS, The Association for Operations Management has completed
relocating the association’s corporate headquarters from Alexandria,
Va., to Chicago in order to better serve its 43,000 members. The
association said Chicago’s labor force boasts a large population of
operations management and association professionals and represents a
talent pool uniquely suited to meet the needs of APICS members.
“Our move to Chicago
perfectly situates us to make the necessary leap forward to help our
members succeed not only here at home, but across the globe,” said Abe
Eshkenazi, CEO of APICS. “The move solidifies our commitment to
attracting only the finest of employees and ensures the absolute best
team possible is serving our members. The organization’s next 50 years
will defined by increased competition, increased globalization and
ever-changing technology and best practices.”
With 43,000 individual
members from 20,000 companies worldwide, APICS focuses on operations
management, including production, inventory, supply chain, materials
management, purchasing, and logistics.
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True
Value inks agreement with Louisville Ladder
The True Value Company announced that Louisville Ladder would become the
new warehouse partner vendor for ladders across the United States,
replacing Werner Ladder. John Bonnot, divisional vice president of
merchandising for True Value, said the competitive situation, and recent
changes with the hardware cooperative’s existing vendor, dictated the
change.
“The decision to change was
not an easy one,” said Bonnot, “The previous vendor has been our
supplier partner for many years and has been a mainstay brand for some
stores for over 100 years. But with escalating prices and increased
competition, a dramatic change was needed. Louisville Ladder stepped up
with an incomparable program.”
“We’re excited and honored
to be a part of the True Value family,” said Patrick Hanna, director of
retail sales for Louisville Ladder.
True Value will roll out
Louisville Ladder climbing products throughout the spring and summer
with the Fall Market in Atlanta serving as the program’s kickoff. New
Certified True Blue assortments, displays and products will be shown to
the thousands of members attending that show.
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BSA
elects Durston president
Steve Durston, executive vice-president, Jamaica Bearings Company, was
elected president of the Bearing Specialists Association (BSA) at the
2008 BSA Annual Convention, April 26-29 at Loews Ventana Canyon Resort,
Tucson, Ariz.
Durston listed four goals
for the coming year:
1. Simplify the Strategic Plan, ensuring BSA is concentrating on
providing members with what they are looking for from the association
for the coming years.
2. Continue to enhance the programs available to the members through the
various committees.
3. Provide a convention second-to-none in 2009.
4. Ensure the BSA continues to be the association everyone both must,
and wants to belong to.
Durston was born in
Cambridge, England, and attained an FTC in Aerospace, Operational
Technology from Southall College of Technology. After working first for
British Airways and Saudi Arabian Airlines in an engineering capacity,
he joined Barden Bearings in the UK 1984. He joined Jamaica Bearings in
November 1989 to become European Sales Manager, and in 1993 moved to New
York to become director aerospace sales.
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IDG accepts LKCM offer
Industrial Distribution Group announced that it will accept the $12.10
per share buyout offer from Luther King Capital Management, its largest
shareholder. The company had been in the middle of a bidding war between
LKCM, Platinum Equity Advisors and WESCO Distribution.
Last week, WESCO removed
itself from the process after LKCM upped its previous offer of $11.70
per share. Late on Friday, Platinum Equity informed IDG that it would
not exercise its right to match or exceed the LKCM offer.
In order to execute the LKCM
merger agreement, IDG terminated the Platinum Merger agreement, which
entitles Platinum Equity to a 3 percent break-up fee based on the $10.30
per share price established in that agreement.
"We are very excited about
this transaction with Luther King Capital Management, which we believe
provides excellent value to our stockholders," said Richard M. Seigel,
IDG's chairman. "We believe that this transaction with our largest
stockholder is a great fit for both IDG and Luther King Capital
Management."
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Regal Beloit buys
Chinese motor maker
Regal Beloit Corporation has acquired Joyce Court Holdings Ltd. and
Grand Delight Investments Ltd., sole shareholders of Wuxi Hwada Motor
Co. and Wuxi New Hwada Motor Co. (collectively Hwada) located in Wuxi,
China.
Hwada is a designer and
manufacturer of Integral IEC and NEMA electric motors, which are used in
various industrial applications such as compressor, pump, paper and
steel processing, and power plants. Approximately 50 percent of Hwada's
product sales are in the China industrial markets. The other 50 percent
is exported to Europe, the U.S. and Southeast Asia. The business is
expected to add up to $80 million in sales in 2008.
“The acquisition represents
our first wholly owned industrial motor facility in China. Hwada is
currently one of the top industrial motor companies in China. It enjoys
a reputation of product excellence and rapid growth and comes with an
excellent management team,” said Henry W. Knueppel, chairman and CEO of
Regal Beloit.
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Curtiss-Wright’s sales up 30
percent
Curtiss-Wright Corporation posted net sales for the first quarter of
$433.4 million, a 30 percent increase from $332.6 million in the first
quarter of 2007. Operating income increased 16 percent to $40.7 million,
while net earnings rose12 percent to $21.8 million, or 48 cents per
diluted share.
Sales growth was generated
by organic growth of 10 percent and the contribution from 2007
acquisitions, which provided $67.5 million in incremental sales for the
first quarter of 2008 compared to the prior year. In 2007, the company
acquired IMC Magnetics Corporation, Benshaw Advanced Controls & Drives,
and Valve Systems and Controls.
The Motion Control segment
experienced organic sales growth of 13 percent, while the Flow Control
and Metal Treatment segments grew by 9 percent and 6 percent,
respectively.
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News from the week of April 21, 2008
Praxair reports record sales
Praxair Inc. reported first quarter net income of $307 million and
diluted earnings per share of 96 cents, on sales of $2.6 billion. The 22
percent sales gain compared to $2.1 billion in the first quarter of
2007.
The company said growth came
primarily from new business, plant start-ups, and strong pricing trends.
In North America,
first-quarter sales reached $1.4 billion, 21 percent above the prior
year. Sales grew in all major end markets, led by energy and general
manufacturing. Operating profit grew 21 percent to $262 million.
For 2008, Praxair expects
year-over-year sales growth in the range of 13 percent to 16 percent.
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Applied Industrial
Technologies posts slight gain
Applied Industrial Technologies reported net sales for the third quarter
increased 1.7 percent to $530.15 million from $521.12 million in the
comparable period a year ago. Net income for the quarter increased 8.7
percent to $23.5 million from $21.6 million and earnings per share
increased 12.2 percent to 55 cents per share from 49 cents per share in
the third quarter last year.
"Although our quarterly
sales growth rate declined slightly more than we thought it would, we
are pleased in our ability to leverage our productivity improvements and
continued cost controls to achieve a double-digit increase in earnings
per share," said David L. Pugh, chairman and CEO. "Sales during the
quarter were impacted by the continued deterioration of the housing and
the automotive markets, and this weakness appears to be migrating into
other sectors as consumers and businesses are becoming a bit more
anxious about the economy.”
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WESCO posts slight increase
WESCO International Inc. reported net sales for the first quarter of
2008 of $1.46 billion compared with $1.45 billion in the first quarter
of 2007. Consolidated sales grew 2.9 percent after adjusting for a
previously announced divestiture. Sales for the quarter from
acquisitions made in the second half of 2007 were approximately $12
million. Gross margin as a percent of sales for the quarter was 20.2
percent versus 20.6 percent for the comparable quarter last year.
Diluted earnings per share
in the current quarter were $1.02, compared with 93 cents in the first
quarter of 2007.
"We have seen some
deterioration in certain markets related to residential construction
activity,” said Roy W. Haley, WESCO's chairman and CEO. “We are
cognizant of the near-term risks of a slowing economy, and we are
balancing the increased investment in business development initiatives
with cost containment actions in other areas of our business."
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B&D sales decline
The Black & Decker Corporation announced that net earnings for the first
quarter of 2008 were $67.4 million or $1.09 per diluted share, versus
$108.1 million or $1.61 per diluted share for the first quarter of 2007.
Sales decreased 5 percent for the quarter to $1.5 billion, including a
positive 4 percent impact from foreign currency translation.
"Black & Decker's results
this quarter reflect an increasingly difficult business environment.
Demand for tools and home improvement products decreased sharply in
North America, and commodity costs continued to rise. We offset some of
this pressure on sales and operating income with outstanding growth in
developing markets,” said Nolan D. Archibald, Chairman and CEO.
Sales in the Power Tools and
Accessories segment decreased 10 percent for the quarter. In the U.S.
Industrial Products Group, sales decreased at a double-digit rate,
primarily due to the downturn in residential construction. Sales in the
U.S. Consumer Products Group decreased more than 25 percent.
Sales in the Hardware and
Home Improvement segment decreased 14 percent for the quarter, while the
Fastening and Assembly Systems segment increased 4 percent.
The company expects
single-digit sales decline for the rest of the year, and is making cost
cutting moves, particularly in the power tools business, to reflect its
revised business outlook.
"Today's business climate,
including the housing downturn and related credit tightening, poses one
of the toughest challenges Black & Decker has faced in many years. We
remain confident that our efforts to improve the company's geographic
balance and cost structure will enable us to manage through this period
effectively. As we reduce expense levels, our experienced management
team will protect our core strengths – innovation, end-user focus,
global distribution and superior brands – and continue to position the
company for growth in the eventual economic recovery," said Archibald.
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Stanley’s sales up 3 percent
The Stanley Works announced first quarter 2008 net sales were $1.10
billion, up 3 percent vs. the prior year. Sales in Stanley’s
construction and do-it-yourself segment were flat, while industrial
segment sales increased 8 percent. The security segment’s sales
increased 3.
"The early 2008 operating
environment is one of the most difficult in recollection. Our solid
balance sheet and strong cash flow, coupled with our ongoing portfolio
diversification strategy, has positioned us well for success. We view
2008 as an opportunity to further advance the company's strategy as well
as a year which will demonstrate the inherent strength of our
franchise," said chairman and CEO John F. Lundgren.
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3M reports 8.9 sales gain
3M announced first-quarter sales of $6.5 billion, an increase of 8.9
percent over last year. Net income was $988 million, or $1.38 per share,
versus $1.4 billion, or $1.85 per share in the first quarter of 2007.
“Our first-quarter results
demonstrate the strength of 3M’s global presence and the power of our
diverse business portfolio,” said George W. Buckley, 3M chairman,
president and CEO. “Two-thirds of our sales came from our international
subsidiaries, and growth in many developing economies enabled us to
overcome economic challenges in the U.S. and to fund investments to
secure the future of our enduring franchises.”
Four of the company’s six
global businesses achieved double-digit profit growth in the quarter,
namely Industrial and Transportation, Health Care, Safety Security and
Protection Services, and Electro and Communications, which more than
offset profit declines in 3M’s Consumer and Office and Display and
Graphics businesses.
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Kennametal hits record sales
Kennametal Inc. reported that sales for its fiscal 2008 third quarter
increased 12 percent from the prior year quarter, including organic
sales growth of 4 percent. Sales for the quarter were $690 million,
compared with $616 million in the same quarter last year.
Diluted earnings per share
were 30 cents compared to the prior year quarter EPS of 66 cents, a
decrease of 55 percent. The current quarter reported EPS included a
non-cash goodwill impairment charge of 45 cents per share related to the
company's surface finishing machines and services business.
"Our global growth
strategies and initiatives continued to deliver results as we grew sales
in both of our business segments at a solid pace in the March quarter.
The team achieved this growth despite reduced industrial activity in
North America and in some market sectors," said chairman, president and
CEO Carlos M. Cardoso. "Our sales gains, along with a robust improvement
in the operating margin of our metalworking business, made a strong
contribution to Kennametal's overall operating performance."
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Newell Rubbermaid reports higher sales
Newell Rubbermaid announced its first quarter 2008 net sales grew 3.6
percent to $1.43 billion in the first quarter, compared to $1.38 billion
in the prior year. Foreign exchange contributed 3.3 percent to sales
growth. Also contributing to the sales improvement were double-digit
increases in the Home & Family segment and the Rubbermaid Commercial and
Rubbermaid Food business units, offset by declines in the Tools &
Hardware and Office Products businesses in the U.S.
Gross margin during the
first quarter was 34.2 percent, flat compared to last year, as higher
productivity and favorable pricing was offset by increased cost
inflation.
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IDG bidding war continues
In the latest twist to the bidding war that has erupted over ownership
of Industrial Distribution Group, IDG announced after the close of the
market April 22 that it received a definitive offer from affiliates of
Luther King Capital Management to acquire all outstanding shares of the
company's stock for a price of $12.10 per share. The approximately $134
million cash offer increased LKCM's earlier proposed offer of $11.70 per
share.
The LKCM offer followed
IDG’s announcement yesterday that it had received an offer from Platinum
Equity Advisors to buy the company for $11.80 per share, or $130.6
million.
At a special meeting Tuesday
afternoon, IDG’s board of directors unanimously determined that the LKCM
offer is a "Superior Proposal," and that IDG would not accept the offer
from Platinum Equity.
Platinum Equity has until 5
p.m. April 25 to match or exceed the LKCM offer. Under IDG’s existing
merger agreement with Platinum Equity, IDG would be required to pay a 3
percent break-up fee to Platinum Equity if the board accepts and
recommends the LKCM Merger Agreement. LKCM has agreed to reimburse the
company for the payment of the break-up fee to Platinum Equity under
certain conditions.
Previously on Tuesday, WESCO
Distribution Inc. announced its decision not to continue with its
earlier interest in acquiring IDG. On April 15, WESCO offered to acquire
IDG at a price of $11.75 per share, or $130 million.
"We are pleased that Luther
King Capital Management, our largest stockholder at approximately 15
percent, has expressed this tangible belief in the value of IDG and is
willing to deliver that value to all of our stockholders," said Richard
M. Seigel, IDG's chairman. "Consistent with our obligations to Platinum
Equity, however, we will cooperate with Platinum Equity as it develops
its response."
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Apache buys Hose Central
Apache Hose and Belting of Cedar Rapids, Iowa, announced completion of
the acquisition of Hose Central.
“This is a strategic
addition to Apache’s retail business and represents a significant step
for Apache to accelerate growth in our core business sectors. Apache
will be focused on developing attractive opportunities to increase
top-line growth as well as achieve significant cost synergies,”
according to a press release issued by Apache.
Hose Central began shipping
product from the Apache corporate warehouse on Dec. 4, 2007.
"This is an exciting
milestone for our company and we look forward to the growth
opportunities Hose Central brings. The product mix will enhance our
existing lines and bring new channel opportunities in multiple national
locations," said Tom Pientok, Apache president and COO. "We believe the
acquisition of Hose Central has great potential to increase our
footprint in the marketplace."
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Rockwell Automation income
grows
Rockwell Automation reported fiscal 2008 second quarter revenue of $1.4
billion, up 17 percent compared to $1.2 billion in 2007. Foreign
currency translation contributed 6 percentage points and acquisitions
contributed 4 percentage points to the growth rate. Fiscal 2008 second
quarter income from continuing operations was $142.8 million, 96 cents
per share, compared to $107.1 million, 65 cents per share, in 2007.
"We delivered solid top line
results, with strong revenue growth in the United States, Asia and Latin
America offsetting lower than expected organic growth in Europe,” said
Keith D. Nosbusch, chairman and chief executive officer. The company
expects to see continued strength in emerging economies, steady demand
in the United States and improved performance in Europe.
“While we continue to
acknowledge that there is significant uncertainty in the economic
environment, particularly in the United States, we have not seen a
fundamental change in customer demand for our products, services or
solutions,” he added.
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Bosch Rexroth posts 8.8 percent
gain
Bosch Rexroth AG, parent company of Bosch Rexroth Corporation in North
America, announced $7.4 billion (5.4 billion Euros) in sales for 2007,
up 8.8 percent from the previous year. During the last fiscal year, the
drive and control company invested $517 million (377 million Euros) and
increased the number of employees around the world by approximately
3,100, bringing the total number to nearly 33,000. The company is also
expecting continued strong growth in the mobile applications, industrial
automation and renewable energy sectors in 2008.
Despite the uncertain
economic situation, 2007 sales in the Americas region grew by 3.1
percent in dollars. However, because of the changing currency rate, the
company recorded a 5.5 percent decline in Euros.
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WESCO backs out of IDG
bidding war
WESCO International Inc., announced today that it would not submit any
further bids based on Industrial Distribution Group Inc.'s press release
issued this morning that it had received a higher offer. Unless IDG
receives a higher bid from Luther King Capital Management, the board
will move to accept the bid received from the private equity firm
Platinum Equity Advisors of $11.80 per share, or about $130.6 million.
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IDG
bidding war continues
In the latest move to determine ownership of Industrial Distribution
Group, the private equity firm Platinum Equity Advisors has upped its buyout offer.
The firm
has agreed to increase its bid to acquire the outstanding shares of IDG
stock to $11.80 per share in cash, from its earlier $10.30 per share
price. The increase follows an offer on April 16 by WESCO Distribution
to acquire IDG for $11.75 a share.
At a special meeting held
late yesterday, IDG’s board determined unanimously that Platinum
Equity's new $11.80 per share offer would be accepted if the company
does not receive an executed definitive offer, with superior terms for
the company's stockholders, from WESCO or Luther King Capital Management
by 3 p.m., Eastern Time, today, April 22, 2008. Both WESCO and LKCM were
informed last night of the board's determination.
"We are pleased by Platinum
Equity's decision to offer more value to IDG's stockholders for their
company," said Richard M. Seigel, chairman of the board. "At the same
time, we obviously want to take advantage of the opportunity to permit
WESCO and Luther King Capital Management to assess their respective
interests in possibly acquiring the company at a price above the $11.80
per share that has been offered by Platinum Equity. In light of the due
diligence and evaluations that each has performed over the past weeks,
each should be able to respond definitively within the timeframe we are
allowing before the expiration of Platinum Equity's revised offer, if it
remains interested."
If either WESCO or LKCM were
to respond by the deadline with a definitive Superior Proposal to
Platinum Equity's new $11.80 per share price, Platinum Equity would then
have an additional right, under the Platinum Merger Agreement, to match
or top any such Superior Proposal within three business days.
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Parker posts 14.4 percent sales gain
Parker reported third quarter sales of $3.2 billion, an increase of 14.4
percent from $2.8 billion in the same quarter a year ago. Net income
increased 22.0 percent to $255.4 million from $209.3 million in the same
quarter a year ago. Earnings per diluted share increased 25.2 percent to
$1.49 as compared to $1.19 in the same quarter a year ago.
"We are clearly headed to
another record year for Parker, which will be the fifth record year in a
row. The company continues to perform very well, showing strength during
an economic cycle that has resulted in a challenging economic
environment, particularly in North America,” said chairman, CEO and
president Don Washkewicz.
Of the 14.4 percent sales
growth this quarter, 4.3 percent was organic, 4.0 percent was the result
of strategic acquisitions, and the remainder was from the movement of
foreign currency exchange rates. In the Industrial North America
segment, third-quarter sales increased 3.7 percent to $1.1 billion, and
operating income increased 0.8 percent to $148.0 million.
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Snap-On achieves higher sales and
earnings
Snap-on Incorporated announced that net sales increased $15.9 million
over prior year to $721.6 million. Higher sales of tools to industrial
customers, increased sales of diagnostics and information products, and
continued sales growth in emerging markets were more than offset by
$19.5 million of lower sales from the timing of OEM essential tool and
facilitation programs and by lower North American franchise sales.
Net earnings from continuing
operations of $56.6 million, or 97 cents per diluted share, compared
with $38.0 million, or 64 cents per diluted share, in 2007.
"Snap-on's first quarter
results clearly reinforce the strategic importance of our global scope
and customer diversification initiatives, particularly in light of the
more challenging economic environment in the United States," said Nick
Pinchuk, Snap-on's president and chief executive officer.
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Rockwell Automation to buy Incuity Software
Rockwell Automation has reached a definitive agreement to acquire
Incuity Software, Inc., a privately held company that supplies
Enterprise Manufacturing Intelligence (EMI) software. Incuity's software
provides real-time intelligence for business decision support to improve
operations and reduce production waste by providing valuable management
insight into a company's operations. Terms of the transaction were not
disclosed.
Headquartered in Mission
Viejo, Calif., with regional offices in the U.S., Canada and South
Africa, Incuity Software currently has more than 45,000 seats of its
products installed in more than 40 countries in 13 languages. The
Incuity Software management team and their employees will become part of
Rockwell Automation's Architecture & Software operating segment.
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Kimberly-Clark reports 9.7 percent sales increase
Kimberly-Clark Corporation reported that net sales in the first quarter
of 2008 advanced 9.7 percent to $4.8 billion, a new quarterly record.
Sales in developing and emerging markets climbed 22 percent, with
particular strength in the Personal Care and K-C Professional
businesses. Diluted net income per share was $1.04 compared with 98
cents in the prior year.
Sales of K-C Professional (KCP)
and other products advanced 9.1 percent compared with the year-ago
quarter. KCP continued to post strong sales volume gains in Latin
America and volumes were up 2 percent in North America and 4 percent in
Europe, reflecting continued growth of the Kleenex, Scott and Cottonelle
washroom brands and Kimtech and WypAll wiper products.
Sales of health care
products decreased 1.6 percent in the first quarter.
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Survey says recession fears widespread
Recent data offer evidence that the U.S. recession and financial crisis
are having a material impact on the near-term prospects for economic
growth in key industrialized regions, most notably Canada, the Eurozone,
and the United Kingdom, according to a new report. But while weaker
growth is likely in these areas, there are not signs of significant
instability in the global picture and a “soft landing” for
industrialized countries and overall world growth remains within reach.
Further, economic activity remains robust in South Asia and East Asia
outside of Japan.
In the MAPI Quarterly
Forecast of U.S. Exports, Global Growth, and the Dollar: Second Quarter
2008 Through Fourth Quarter 2009 (ER-652e), economist Cliff Waldman
predicts a weaker but still stable global economic climate, although
forecast risks are clearly on the downside in a world in which multiple
concerns include virtually uncharted financial uncertainty. Much, he
argues, will depend on the implementation of appropriate policies,
particularly by central banks.
U.S. exports should continue
to be somewhat of a safety valve for the domestic economy in the next 18
months. As weaker global growth and a weaker dollar offset each other,
U.S. export growth in 2008 is expected to remain essentially unchanged
from 2007 at 8.1 percent. Moderately stronger growth in the
industrialized countries outside of the U.S., in tandem with the
continuing benefits of a weaker dollar, should result in a modest
acceleration of export growth to 8.7 percent in 2009.
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News from the week of April 14, 2008
Timken opens two plants in
Asia
The Timken Company opened two new manufacturing facilities in Asia,
adding to its ability to serve aerospace and industrial markets.
The company will continue to ramp up
production over the coming quarters at its industrial bearing
manufacturing plant in Chennai, India, and its aerospace and precision
products facility in Chengdu, China. Timken now operates a total of
seven manufacturing plants in Asia.
“The opening of our plants in Chennai and
Chengdu is not only important to our ability to serve customers in Asia,
it represents a major step forward in our strategy of driving growth in
global industrial markets,” said James W. Griffith, Timken president and
chief executive officer. “We will continue to make investments, both
organic and inorganic, to take advantage of strong global demand in our
targeted industrial growth markets.”
Timken employs more than 4,500 people in
Asia and has operations in six Asian countries. The company had revenue
of more than $400 million in the region in 2007.
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HD Supply launches private brands
HD Supply launched two new proprietary brands, Seasons and Brigade. The
Brigade brand will be carried on tools and hardware used by professional
contractors and trades people on the job, while the consumer-oriented
Seasons brand will be carried on products such as kitchen and bath
fixtures and ceiling fans.
"As a large, market-leading
company, we are constantly looking for ways to create value for our
professional customers," said Arleen Quiñones, HD Supply VP of marketing
and communications. "Through the Seasons and Brigade brands, we are able
to offer our customers additional product options with the same level of
quality, reliability and performance they are accustomed to receiving."
The company said Brigade is
used with better quality professional-grade products, and Brigade 5-Star
is reserved for best quality products. Currently, Seasons and Brigade
branded products are primarily being sold through HD Supply's Facilities
Maintenance, Plumbing and White Cap businesses.
"The launch of these new
proprietary brands is a cornerstone to HD Supply's long-term growth and
value creation story and clearly differentiates us in the marketplace,"
said Quiñones. "We provide added value to our customers by filling a
product assortment gap and expanding product selection."
To ensure the integrity of
proprietary branded products, HD Supply has implemented rigorous
screening processes to ensure both the supplier and product meet
specific requirements.
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Simpson
Strong-Tie opens new facility
Simpson Strong-Tie opened a new warehouse in Jessup, Md. The 39,600 sq.
ft. facility will operate as a product distribution center and will-call
desk for local area customers. Shipping from Jessup will begin May 1.
The facility will house more than 1,400 products.
The Jessup warehouse will
stock inventory to fill orders for Maryland, Delaware, Virginia,
Washington D.C., eastern West Virginia, eastern Pennsylvania, and
southern New Jersey. Previously, orders from these areas would have
shipped from the Simpson Strong-Tie facility in Columbus, Ohio.
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Acme United posts 17 percent sales gain
Acme United Corporation announced that net sales for the quarter ended
March 31 were $14.3 million, compared to $12.2 million in the comparable
period of 2007, an increase of 17 percent. Net income was $753,000 or 21
cents per diluted share, compared to $650,000 or 17 cents per share for
the comparable period last year.
The sales gain were credited
to market share gains in the cutting and first aid product categories.
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Praxair announces price hikes
Praxair Distribution announced discount reductions and price increases
for its industrial, medical and specialty gas cylinder customers in the
U.S. and Canada. Increases will be up to 30 percent for helium, fuel
gases and rare gases; 15 percent for argon, hydrogen and carbon
dioxide/dry ice; 10 percent for oxygen, USP oxygen, nitrogen and nitrous
oxide; and 15 percent for cylinder rental and facility fees.
Praxair said the increases
are related to escalating labor, energy and fuel costs and reflect the
limited global availability of raw materials for certain products,
particularly helium.
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Wesco offers to buy IDG
Industrial Distribution Group Inc. announced that its board of directors
intends to withdraw its recommendation of the pending acquisition of the
company by an affiliate of Platinum Equity Advisors LLC in order to
recommend a new offer from WESCO Distribution Inc. WESCO agreed to
acquire IDG for $11.75 per share, or approximately $130 million. The
pending cash acquisition by Platinum Equity, approved on February 20,
would pay the company's stockholders $10.30 per share.
Platinum Equity has until
close of business on April 21 to match or top the WESCO proposal. IDG
also announced that Luther King Capital Management, whose affiliate on
April 4, 2008 proposed a cash offer of $11.70 per share to acquire the
company, can continue its evaluation of the company during this period.
"We are pleased by this
definitive recognition of additional value for IDG that can be delivered
to our stockholders,” said IDG chairman Richard M. Seigel. “While we do
not know whether Platinum Equity or the Luther King companies will
decide to offer a superior outcome for our stockholders, it is
consistent with our contractual obligations to Platinum Equity and
fiduciary duties to our stockholders to provide both of them a
reasonable opportunity to do so."
"WESCO is the leading
provider of large scale integrated supply services to Fortune 100
companies. IDG's small site integrated supply services is a great
strategic fit for WESCO and extends our capabilities to a broader array
of customers seeking comprehensive and cost effective solutions to their
procurement and management of maintenance and indirect items,” said
Stephen A. Van Oss, Wesco's senior vice president and chief financial
and administrative officer.
He added that IDG’s past
financial performance has been stable, but believes Wesco can achieve
“significant improvement in performance.”
“We intend to incorporate
IDG into Wesco's infrastructure and utilize our LEAN processes to
achieve significant improvement in financial results and in value for
their customers," he said.
Industrial Distribution
Group Inc., is an Atlanta-based nationwide specialty distributor of
maintenance, repair, operating, and production products and services to
manufacturers and industrial users, and through its Flexible Procurement
Solutions programs, provides an array of value-added business process
outsourcing services and other arrangements.
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Motion Industries posts 6
percent sales gain
Motion Industries reported quarterly sales of $881.2 million, compared
to $833.3 million in the comparable period in 2007. The power
transmission/motion control distributor posted profits of $68.9 million,
compared to $64.5 million in the same quarter last year.
“We are pleased to report
that the first quarter of 2008 was another period of sales and earnings
growth for Genuine Parts Company,” said Thomas C. Gallagher, chairman,
president and CEO of GPC, Motion’s parent company. “EIS, our Electrical
Group, had another fine quarter, generating the strongest sales growth
among our four business segments. They were up 7 percent in the quarter
and continue their trend of solid progress. Motion Industries, our
Industrial Group, also reported strong results, with a 6 percent sales
increase for the quarter. We believe that both EIS and Motion are
positioned to have another good year in 2008.”
GPC’s sales for the quarter
totaled $2.74 billion, up 3 percent compared to the first quarter of
2007.
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Sandvik
to buy Teeness ASA
Sandvik reached an agreement with the Norwegian company Teeness ASA to
acquire 92.55 percent of the shares in the company. The acquisition
price is approximately $34 per share or about $40.6 million, and is
expected to close by the end of May.
Based in Trondheim, Norway,
Teeness produces anti-vibration tools under the registered trademark
Silent Tools. Teeness had 2007 sales of approximately $34 million. It
will be consolidated in the Sandvik Tooling business.
“The acquisition is in line
with Sandvik’s long-term strategy for profitable growth. Through the
acquisition, we intend to further develop and strengthen the global
business for these products, particularly in the rapidly growing
aerospace and energy segments,” says Anders Thelin, president of Sandvik
Tooling.
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Simpson subsidiary buys Leibig
companies
Simpson Manufacturing Co.’s newly formed subsidiary, Simpson Strong-Tie
Ireland Limited, purchased certain assets of Liebig International Ltd.,
an Irish company. Simpson also acquired the German companies Heinrich
Liebig Stahldübelwerke GmbH, Liebig GmbH & Co. KG and Liebig
International Verwaltungsgesellschaft mbH, and Liebig Bolts Limited, an
English company, and Liebig International Inc., a U.S. company.
Liebig manufactures
mechanical anchor products in Ireland and distributes them primarily
throughout Europe through warehouses located in Germany and in the
United Kingdom. The purchase price was $18.3 million in cash.
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Manufacturing index declines
Manufacturing is showing signs of strain according to the Manufacturers
Alliance/MAPI Survey on the Business Outlook (ER-653e), an indicator for
the industrial sector. The March 2008 composite index fell to 57 from
64, reported in the December 2007 survey, the lowest since the 54
recorded in the December 2006 survey. A business index above 50
indicates that overall manufacturing activity is expected to increase
over the next three to six months. It should be noted, however, that the
index measures the direction of change rather than the absolute strength
of activity in manufacturing.
Three indexes fell by 12
points. The U.S. investment index, which queried executives on their
expectations regarding capital investment in 2008 compared to 2007, fell
to 62 percent in the March 2008 report from 74 percent in December 2007.
The backlogs index, which compared the first quarter 2008 backlog of
orders with the backlog of orders one year earlier, fell to 55 percent
from 67 percent. The prospective U.S. shipments index, based on
expectations of anticipated shipments in the second quarter of 2008
compared with the same quarter last year, declined to 62 percent from 74
percent in the previous report.
“Despite the fact that all
the indexes remain above the 50 percent threshold separating growth from
contraction, the fact that they all fell indicates that the growth of
U.S. manufacturing activity is slowing,” said Donald A. Norman, Ph.D.,
Manufacturers Alliance/MAPI Economist and survey coordinator. “At the
same time, most of the companies represented in the survey are global,
and the outlook for business abroad is somewhat rosier. Global growth
will help offset any slowing of activity in the United States.”
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Danaher posts sales increase
Danaher Corporation announced that net earnings from continuing
operations for the quarter ended March 28 were $277 million, or 83 cents
per diluted share, compared to first quarter net earnings of $252
million, or 77 cents per share.
Revenues for the quarter
were $3.03 billion, 20 percent higher than the $2.52 billion reported
for the 2007 first quarter.
"We are pleased to announce
another record first quarter. Growth from existing businesses, also
known as core revenues, was 2 percent as continued strength in our Hach-Lange,
Fluke, Radiometer and Leica businesses was offset by lower demand in
certain of our OEM and consumer-driven operations, primarily in the US.
We were encouraged by strong orders during the quarter which gives us
confidence in our ability to deliver positive results for the balance of
2008," said H. Lawrence Culp, Jr., president and CEO.
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Textron earnings rise
Textron Inc. reported a 19.2 percent increase in earnings per share from
continuing operations on a revenue increase of 18.7 percent. First
quarter 2008 income from continuing operations was 93 cents per share,
compared to 78 cemts in the first quarter of 2007.
Revenues in the Industrial
segment increased $62 million, reflecting favorable foreign exchange and
higher pricing, which more than offset slightly lower overall volumes.
The lower volumes reflected decreases at Jacobsen and E-Z-GO, which
offset increases at Fluid & Power and Kautex. Profit in the Industrial
segment decreased $10 million primarily due to inflation, which was only
partially offset by higher pricing.
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Swagelok buys Coreflex
Swagelok Company has completed its acquisition of Coreflex LLC. Located
in Bowie, Md., Coreflex manufactures hose products used mostly in
semiconductor, biopharmaceutical, and other applications. Terms of the
agreement were not disclosed.
“We are excited about this
acquisition because these innovative hose products, combined with our
network of authorized Swagelok sales and service centers, will help us
provide better solutions to our customers worldwide, ” said Arthur F.
Anton, Swagelok president and CEO.
Headquartered in Solon,
Ohio, Swagelok is a developer and provider of fluid system solutions,
including products, assemblies, and services for the research,
instrumentation, pharmaceutical, oil and gas, power, petrochemical,
alternative fuels, and semiconductor industries.
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ITW reports sales gain
Illinois Tool Works reported 11.4 percent growth in 2008 first quarter
revenues and a 16.2 percent decline in diluted income per share from
continuing operations. The earnings decline was directly attributable to
impairment and European tax charges.
The operating revenue
increase of 11.4 percent in the quarter was due to a 6.3 percent
contribution from acquisitions and a 4.8 percent contribution from
translation. Base revenues increased 0.4 percent in the quarter, with
international base revenues growing 4.6 percent and North American base
revenues declining 2.5 percent.
"We are very pleased with
our operating performance in the 2008 first quarter, especially in light
of difficult end market conditions in North America and the modest
slowing but still positive growth in international end markets," said
David B. Speer, chairman and chief executive officer. "We believe end
markets will continue to be challenging in North America over the
foreseeable future. We also remain optimistic about our acquisition
opportunities based on our strong pipeline of potential deals."
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Machine tool consumption rises
February U.S. manufacturing technology consumption totaled $308.50
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 4.0 percent from January, but up 4.4 percent from the total of
$295.39 million reported for February 2007. With a year-to-date total of
$624.28 million, 2008 is up 1.2 percent compared with 2007.
These numbers and all data
in this report are based on the totals of actual data reported by
companies participating in the USMTC program.
“Industry forecasters called
for a first-half downturn in manufacturing technology orders,” said John
B. Byrd III, AMT president. “The economic stimulus package has kept
orders from falling in the first quarter, but the full impact of the
package won’t be realized until the fourth quarter.”
The United States
Manufacturing Technology 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. Analysis of manufacturing technology consumption provides a
reliable leading economic indicator as manufacturing industries invest
in capital metalworking equipment to increase capacity and improve
productivity.
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PrimeSource to acquire Coast to Coast Building Products
PrimeSource Building Products Inc. has agreed to acquire Coast to Coast
Building Products Inc. Terms of the acquisition were not disclosed.
Coast to Coast is headquartered in Miami with warehouses in Pompano
Beach, Orlando and Tallahassee, Fla., and Atlanta.
"PrimeSource is very pleased to announce
this acquisition as it further expands our distribution base into the
southeast region and allows us to take additional advantage of Coast to
Coast's established markets in the Caribbean and Central America," said
Ken Fishbein, co-CEO of PrimeSource. "Since 1996, Peter Daniels and
Richard Marcus have grown Coast to Coast into one of the major
distributors serving Florida, Georgia and Alabama, and portions of
Tennessee and North and South Carolina. Their network and warehouses are
the perfect complement to PrimeSource as we continue to grow our
geographic presence."
Daniels will remain with PrimeSource,
leading the company's southeast market. Fishbein said customers and
suppliers of both companies should expect normal business operations to
continue throughout the course of the transaction.
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Grainger’s sales up 7 percent
Grainger reported record quarterly sales, earnings and earnings per
share for the quarter ended March 31. Sales of $1.7 billion were up 7
percent versus first quarter 2007. Net earnings for the quarter
increased 12 percent to $114 million versus $102 million in 2007.
Earnings per share grew 22 percent to $1.43, versus $1.17 for the 2007
first quarter.
Sales in the branch-based
businesses in the United States, Mexico and China, increased 6 percent.
During the quarter, the company opened five new full-service branches
and closed one in the U.S., and opened one will-call express branch in
China, bringing the total number of branches in the segment to 462.
Sales for Acklands-Grainger
were up 25 percent versus the 2007 first quarter. Strong sales to
mining, oil and government customers were partially offset by weakness
in the forestry sector. During the quarter, Acklands opened one branch,
ending the quarter at 154 branches.
At Lab Safety Supply (LSS),
sales were up 3 percent versus the 2007 first quarter. Sales from the
May 2007 McFeeley's acquisition contributed 3 percentage points to the
growth; excluding the acquisition, the rest of the business was
essentially flat.
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Eaton reports 12 percent sales gain
Eaton Corporation announced net income per share of $1.64 for the first
quarter of 2008, an increase of 5 percent over net income per share of
$1.56 in the first quarter of 2007. Sales in the quarter were $3.5
billion, 12 percent above the same period in 2007 and a record for the
first quarter. Net income was $247 million, also a record for the first
quarter.
Hydraulics segment sales
were a record $657 million, up 14 percent compared to the first quarter
of 2007. Global hydraulics markets were up 4 percent in the quarter,
with non-U.S. markets up 8 percent while U.S. markets were flat.
Operating profits in the
first quarter were $78 million. Excluding acquisition integration
charges of $2 million during the quarter, operating profits totaled $80
million, an increase of 14 percent over the first quarter of 2007.
“The hydraulics markets in
the first quarter performed as expected, with continued strong
international growth offsetting flat U.S. markets,” said Alexander M.
Cutler, Eaton chairman and chief executive officer. “Based on the
strength outside the U.S., we now believe the global hydraulics markets
for 2008 will grow 2 percent versus our prior estimate of 1 percent
growth.”
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Veyance begins plant expansion
Veyance Technologies Inc., the exclusive manufacturer and marketer of
Goodyear Engineered Products, has begun construction of an $18 million
expansion at its conveyor belt plant in Marysville, Ohio. When completed
in September, the 24,000 square-foot addition will add new technology
for the production of heavy-duty conveyor belts, according to Plant
Manager Bryan Thompson.
“The company recently
purchased a U.S. heavy-duty conveyor belt fabric plant, created a China
joint venture that is the country’s largest heavy-duty conveyor belt
producer, and acquired a central Appalachian heavy-duty conveyor belt
service operation,” he said.
The company also signaled
its intent on focusing on heavy-duty industrial products when it
announced that it is exploring the possible sale of its North
Carolina-based lightweight conveyor belt business.
Veyance’s Marysville complex
is also home to the company’s global conveyor belt Technical Center,
which includes the world’s largest splice test equipment.
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News from the week of April 7, 2008
Honeywell to buy Norcross Safety
Honeywell announced an agreement to acquire Norcross Safety Products
L.L.C., a manufacturer of personal protective equipment (PPE), for
approximately $1.2 billion.
Norcross, based in Oak
Brook, Ill., and majority owned by Odyssey Investment Partners,
manufactures a wide range of protective and safety equipment for the
fire service, utility and general industrial worker segments. Norcross
will be integrated into Honeywell Life Safety, part of Honeywell's
Automation and Control Solutions (ACS) group. Norcross's revenue was
approximately $609 million in 2007.
"From emergency responders,
to electrical workers to the industrial workforce, Norcross's innovative
solutions protect those who work in environments where safety protection
is paramount," said Roger Fradin, president and CEO of Honeywell ACS.
"With more than 100 years of industry experience, best-in-class
solutions and trusted brands, and a strong management team with
exceptional talent and depth, Norcross is a globally recognized industry
leader that will bolster our offerings to our customers in key Life
Safety segments."
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PTDA member sales up 11.6 percent
Sales trends for distributors and manufacturers in the power
transmission/motion control industry are still strong, reporting
month-to-month sales gains in both U.S. and Canadian markets. According
to the February 2008 data released by the Power Transmission
Distributors Association, U.S. distributors’ sales of PT/MC products
were up 11.6 percent in February 2008 compared to January 2008. When
matched up against sales in the same month last year, sales in February
2008 gained 6.7 percent. Accounts receivable collection days were down
5.4 percent from January 2008. The confidence index of U.S. distributors
remained flat for the third month in a row at 5.8 (on a 10-point scale).
Canadian distributors also
continue to post positive gains in PT/MC sales, rising 10.1 percent in
February 2008. Sales growth over the same period last year was up 1.1
percent. Days sales in account receivables dropped 2.7 percent as
compared to January 2008. In February 2008, the confidence level of
Canadian distributors rose to 5.7 (on a 10-point scale), its highest
level since September 2007.
U.S. manufacturers’ sales
were up again for the second month. Sales in February 2008 increased 8.5
percent compared to January 2008. Orders were also up, posting a 6.3
percent gain over January 2008. The confidence level of U.S.
manufacturers held steady at 5.5 (on a 10-point) for the eighth month in
a row.
Canadian manufacturer’s
sales were also positive in February, posting a 6.8 percent gain over
January 2008. Sales were also up compared to the same period last year
with a gain of 3.5 percent over February 2007. The confidence level of
Canadian manufacturers showed a decrease, dropping 0.1 to 5.1 (on a
10-point scale) from January 2008.
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Fastenal reports 15 sales gain
Fastenal reported net sales for the three-month period ended March 31 of
$566.2 million, an increase of 15.8 percent over net sales of $489.1
million in the first quarter of 2007. Net earnings increased from $54
million in the first quarter of 2007 to $68 million in the first quarter
of 2008, an increase of 26.0 percent. Basic and diluted earnings per
share increased from 36 cents to 46 cents for the comparable periods.
During the quarter, Fastenal
opened 53 new stores, an increase of 2.5 percent since December 31,
2007.
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Parker acquires Vansco
Parker Hannifin has acquired Vansco Electronics, a designer and
manufacturer of electronic controls, displays and terminals,
communication and operator interfaces, and sensors. The company, which
employs about 1,000 people in the U.S. and Europe, had $180 million in
sales in fiscal 2007. Terms of the deal were not disclosed.
Vansco will become a part of
the global operations of Parker's hydraulic technology business.
"We are very excited to
welcome Vansco to Parker," said Jeff Cullman, group president -
Hydraulics. "Its controls are complementary to our IQAN controllers and
sensors, which will allow us to completely integrate motion control
systems for mobile equipment produced by leading international
manufacturers. Parker and Vansco share a common customer base and the
combined strength of the two companies will further our ability to
engineer complete systems and improve the productivity and profitability
of our customers' products."
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IDG considers unsolicited acquisition proposals
Industrial Distribution Group Inc.'s (IDG) board of directors will
consider two recently-received, unsolicited acquisition proposals: one
with a proposed price of $11.70 per share, and the other with a proposed
price of $11.00 per share, in cash to the company's stockholders.
IDG will weigh the proposals
against the previously announced proposed merger with an affiliate of
Platinum Equity Advisors LLC at a price of $10.30 per share in cash.
The board has determined
that each of the two proposals is credible and could reasonably lead to
a superior transaction, and that fiduciary duties require the board to
permit both bidders to conduct due diligence and require the company to
discuss the respective proposals with the bidders.
On the evening of April 4,
2008, the company received a letter from Luther King Capital Management
Corporation, which presently owns approximately 14.9 percent of the
company's outstanding stock, describing a proposal to acquire all of the
company's outstanding common stock at a price of $11.70 per share in
cash.
The letter stated that,
subject to due diligence, LKCM would execute a definitive agreement in
substantially the same form as IDG's agreement with Platinum Equity and
with no closing conditions other than those required for the Platinum
Equity transaction. The board determined on April 6 that the proposal
was credible.
LKCM has now publicly
announced its acquisition proposal, and has signed a confidentiality
agreement to permit discussion and due diligence consistent with the
company's merger agreement with Platinum Equity.
On March 31, 2008, IDG
received a letter from a strategic buyer that participated in the
bidding phase of the company's strategic review process (referred to as
Bidder D in the company's March 31 proxy statement) that clarified its
earlier indication of interest relating to a proposed acquisition at a
price of $11.00 per share.
The board determined on
April 2 that the proposal set forth in Bidder D's March 31 letter was
credible and could reasonably be expected to lead to a transaction.
Because Bidder D's proposal remains subject to due diligence and is
otherwise non-binding, the board determined that it could be disruptive
to the company's ongoing operations to identify Bidder D specifically at
this stage.
IDG is providing information
to and is beginning to discuss the above proposals with LKCM and Bidder
D to ascertain whether either entity will enter into a binding agreement
that is in fact superior to the Platinum Equity merger agreement. If
either were to be willing to do so, Platinum Equity would have the right
and opportunity to match or top the terms of such a proposed agreement.
Because each proposal is
subject to some level of due diligence, it is possible that neither
proposal will lead to a binding agreement to acquire IDG at any price.
"These recent indications of
interest at higher prices to our stockholders, from credible sources,
obviously warrant prudent consideration to see whether they may actually
lead to a superior outcome," said Richard M. Seigel, IDG chairman. "Our
fiduciary obligations to our stockholders, as well as our contractual
obligations to Platinum Equity, are consistent with allowing a
reasonable and appropriate opportunity for the due diligence and
discussion both bidders have requested. However, both proposals are
subject to significant conditions that are beyond IDG's control, and
thus we remain committed to our binding agreement with Platinum Equity,
which, if approved by the stockholders and consummated, would deliver
significant value to all of our stockholders, as discussed in IDG's
proxy statement."
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Lincoln Electric acquires Electro-Arco
Lincoln Electric Holdings Inc. has acquired Electro-Arco S.A., a
privately-held manufacturer of welding consumables based near Lisbon,
Portugal. Terms were not disclosed.
Founded more than 70 years
ago, Electro-Arco has been continuously owned and operated by the
Rodrigues family. The company has forged a leading position in the
Portuguese welding market and has grown to be a significant exporter to
markets throughout Europe. Electro-Arco has sales of approximately $40
million and 165 employees.
"This acquisition
significantly expands our European consumables manufacturing capacity
and widens our commercial presence in western Europe," said John M.
Stropki, chairman and CEO.
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Grainger secures $500 million loan
W.W. Grainger Inc. has engaged Wachovia Capital Markets LLC to syndicate
a four-year term loan of up to $500 million. The final amount of the
loan will depend on financial market conditions. Proceeds are expected
to be used primarily to pay off short-term debt.
"We believe a modest level
of intermediate to long term debt is in the best interest of our
shareholders," said senior vice president and chief financial officer
Ron Jadin. "Grainger will continue to maintain a financial position that
provides us operational flexibility and best supports us for profitable
growth."
The loan is expected to
close May 1, 2008.
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News from the week of March 31, 2008
Bunting
Magnetics acquires Magnet Applications
The Bunting Magnetics Company has acquired Magnet Applications Group
Ltd. (MAGL). With manufacturing operations in Berkhamsted, England and
Dubois, Pa., MAGL manufactures and distributes a wide variety of
technical bonded magnets, precision magnetic assemblies and
complementary magnet products.
“This acquisition represents
a strategic combination that significantly expands Bunting’s product and
market scope. MAGL has outstanding market recognition as a premier
manufacturer of bonded NdFeB magnets and technical assemblies,” said
Bunting president Robert J. Bunting.
Based in Newton, Kansas,
Bunting manufactures magnetic separation equipment, and magnetic and
non-magnetic conveyors for use in food, plastics, chemical,
manufacturing, and recycling industries.
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Construction spending slips in February
Construction spending during February 2008 was estimated at a seasonally
adjusted annual rate of $1,121.6 billion, 0.3 percent below the revised
January estimate of $1,124.8 billion, according to the Commerce
Department. The February figure is 3.5 percent below the February 2007
estimate of $1,162.2 billion.
During the first two months
of this year, construction spending amounted to $155.1 billion, 2.6
percent below the $159.3 billion for the same period in 2007.
Spending on private
construction was at a seasonally adjusted annual rate of $826.6 billion,
0.5 percent below the revised January estimate of $831.2 billion.
Residential construction was at a seasonally adjusted annual rate of
$456.9 billion in February, 0.9 percent below the revised January
estimate of $461.1 billion. Nonresidential construction was at a
seasonally adjusted annual rate of $369.7 billion in February, 0.1
percent below the revised January estimate of $370.1 billion.
In February, the estimated
seasonally adjusted annual rate of public construction spending was
$294.9 billion, 0.4 percent above the revised January estimate of $293.7
billion. Educational construction was at a seasonally adjusted annual
rate of $85.5 billion, 0.2 percent below the revised January estimate of
$85.7 billion. Highway construction was at a seasonally adjusted annual
rate of $78.9 billion, 0.9 percent above the revised January estimate of
$78.2 billion.
Click here to
download the report as a PDF.
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ProBuild acquires Khempco Building
Supply
ProBuild Holdings has purchased Columbus, Ohio-based Khempco Building
Supply. Khempco is comprised of a lumberyard and truss facility located
in Delaware, Ohio, a truss plant located in Dry Ridge, Ky., and a
commercial door facility in Columbus. Terms of the sale were not
disclosed.
“We are pleased to welcome
the employees of Khempco to ProBuild,” said Dale Kukowski, president
ProBuild North Region. “The addition of Khempco fortifies ProBuild’s
position in the Ohio market while strengthening our manufacturing and
installed sales capability. Khempco’s trading area compliments
ProBuild’s existing coverage, allowing our customers to benefit from the
availability of additional products and services Khempco has to offer.”
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Bosch Rexroth to buy Eppensteiner
Bosch Rexroth plans to acquire K. and H. Eppensteiner, the hydraulics
equipment company based in Ketsch, Germany. A purchase agreement was
signed on March 31. Terms of the acquisition were not disclosed. The
acquisition is subject to approval by antitrust authorities.
Eppensteiner develops,
manufactures, and sells fluid filters for installation in hydraulic and
lubrication oil systems. Its product portfolio also includes complete
systems for purifying and recycling hydraulic and lubrication oil. With
more than 200 associates, the company generated sales
