Wednesday, June 30, 2010

Acuity Brands posts Q3 results; expects a continued challenging 2010

Manufacturer to accelerate its investments in creating energy-efficient products and expand business with renovation and relight markets

Acuity Brands reported its fiscal third-quarter results today, pointing to an ongoing challenging business climate marked by declines in non-residential construction activity and increases in material and component costs.

The manufacturer of lighting fixtures and related products posted third-quarter sales of $407.6 million, a 3% increase compared with the same period a year ago. Third-quarter income was $21.3 million, down slightly compared with $22.3 million reported in the third quarter of 2009. Earnings per share fell too, at 48 cents compared with 52 cents in the prior-year period.

Sales for the first nine months of fiscal 2010 fell 4.2 percent compared to 2009 while operating profit rose slightly—to $109.7 million compared with $103.8 million last year.

Vernon J. Nagel, Acuity Brands’ chairman, president, and CEO, said he is pleased by the company’s performance in a continued challenging environment, pointing to a 140 basis-point improvement in gross margin during the quarter—to 40.1.

“We improved our gross profit margin while experiencing price competition in certain channels and geographies, which we anticipated, and unfavorable changes in the mix of products sold,” he said in a statement announcing the results.

Nagel said the company expects the balance of fiscal 2010 to remain challenging, pointing to expected declines in non-residential construction for the remainder of the year and into 2011. The company will focus on creating innovative and energy-efficient lighting products as well as expanding its service to key sectors such as home centers and the renovation and relight markets as avenues for growth.

“We believe these strategic initiatives provide growth opportunities in 2011 which should enable us to outperform the overall markets we serve,” he said.

Nagel also pointed to potential material and component cost increases as a key area of concern. In May, the company increased the price of most products to combat these issues, and Nagel said they will continue to be “as vigilant as possible in our pricing strategies to protect our margins.”

Friday, June 25, 2010

Gulf Coast distributors grapple with oil spill

Distributors tied to the Gulf Coast oil and fishing industries are devastated by the recent oil spill there; others fear a trickle down effect in the months ahead

Distributors serving the Gulf Coast oil and fishing industries have been hit hard by the recent oil spill, some dealing with immediate consequences while others worry about the trickle down effect in the months ahead. The moratorium on deepwater drilling has put people out of work and closed the supply line for products needed to keep the oil rigs up and running, and the oil-laden waters have stopped fishing boats in their tracks. Both situations are causing big problems for distributors like Ed Fabacher, president of Harvey, La.-based hose and accessories firm Fabacher Inc.

Fachbacher says no one can imagine the impact of the oil spill “unless you see it for yourself. People outside this area really have no idea of what is happening down here.

“This is even worse than [Hurricane] Katrina," he says, referring to the continuous effect on business from the ongoing spill that is spewing oil into the Gulf every day.

Fabacher says his business is down dramatically since the oil spill began in late May. His company does a substantial amount of business with the marine and fisheries industries. In particular, he sells expansion joints, hydraulic hoses, and braided metal hose to those sectors.

“The boats are just sitting there and not going out,” he said in an interview this week.

While there has been a slight pickup in selling products to battle the oil spill, it doesn’t equate to the business lost from the marine industries, he adds.

Fabacher also sells products to the oil industry and is concerned about the moratorium on oil drilling in deep and shallow waters. The Obama Administration imposed a six-month ban on deepwater drilling May 27 following the explosion and fire that killed 11 people on a drilling platform and caused the massive, ongoing oil spill. Although a Louisiana judge ruled against the ban in a court case heard earlier this week, the White House has said it will appeal the decision; in the meantime, oil companies have said they will not start drilling again until the legal wrangling is over.

“We just don’t know what’s going to happen…if this moratorium continues,” Fabacher said.

Some oil rigs have left the Gulf and headed elsewhere while many others have shut down.

Fabacher said in some areas of Louisiana, 75 percent of employment is tied to oil.

“Long-term this could be devastating to the region,” he says.

Other distributors share Fabacher’s concerns. Dan Petron, regional vice president for Fastenal’s Louisiana/Coastal Area says sales at the distributor’s branches closest to the affected coastline are down about 20% since the spill occurred. Fastenal’s local branches provide a range of industrial MRO supplies to companies that build and service the region’s oil rigs.

“The trickle down is happening pretty quickly,” Petron says, pointing to a large customer—a local Halliburton yard—that virtually shut down, operating now with just a “skeleton crew.”

“We hope that if [the moratorium] is lifted, things will go back pretty quickly,” he adds. “[The situation] is really affecting the folks down there. People are frustrated. They wish the moratorium would be lifted quickly.”

Dan Ahuero, president of GHX Inc., a hose and accessories distributor based in Houston, agrees. GHX does business with the upstream oil and gas industry in the Gulf from locations across Texas, Louisiana, Alabama, and Florida. Most of GHX’s customers in that sector are service providers to the oil companies. While Ahuero says that area of his business has not been negatively affected yet, he says he’s concerned about the long-term outlook. Like Fabacher and Petron, he worries about what will happen if the moratorium on drilling lasts much longer.

“We’re concerned, number one, about the service providers, primarily in Louisiana, contemplating having to have major layoffs if that portion of their business goes away as a result of the six-month moratorium—and especially if that moratorium is extended,” he says. “The economy is already [affected], then to have layoffs on top of it–that’s just a compounded effect.”

The environmental factor
The other devastating aspect of the disaster is the environmental impact of the oil that continues to pollute the Gulf waters every day. As Fabacher pointed out, it has devastated the fishing industry. Cleanup efforts are ongoing and will be for months and perhaps years.

“It’s so hard to believe what this is doing to the environment down here,” Fabacher says.

Some reports have indicated that hundreds of birds a day have been pulled from the Gulf waters, cleaned and relocated. Turtles and other forms of wildlife are dying daily.

Restaurants have few patrons other than those who are working on the cleanup, and there is a feeling that the oil spill is getting worse, since it could be some time before the leak is fixed.

As devastating as that is, the cleanup is likely to bring new business to distributors down the road, especially those in the hose business. Ahuero says his company has received orders for equipment going directly to the cleanup.

“Anybody in the hose industry is probably going to get some business out of this because a lot of the types of cleanup they are doing involves suction pumps, hose, and rigid nozzles—to suction up the oil on the surface,” he says, noting the unfortunate nature of the business. “So there will be some hose and fittings used for that purpose.”

Fabacher says his company has supplied some products for the cleanup, but notes that the business is nothing compared to what he’s lost, particularly from his marine business. Petron says Fastenal has supplied some products for the cleanup as well.

Other distributors have seen their business improve as they support the cleanup. In reporting its May sales figures recently, W.W. Grainger said it has seen, and expects to continue to see, increased sales related to the Gulf oil spill. The distributor said it saw an increase in sales for products such as oil booms, degreasers, and safety supplies, and expects oil spill-related sales to contribute to growth for some time.

Grainger said oil spill-related sales contributed about 50 basis points to its 10 percent increase in the United States in May.

Looking ahead
In addition to the economy and the environment, local residents are also worried that a hurricane could be brewing in the Gulf soon. If there is a strong hurricane, water could flow over the barriers that have been set up to keep oil out.

Fabacher, a former president and founder of NAHAD—The Assn. for Hose & Accessories Distribution, says his company will tighten its belt and work extra hard to get through this environmental disaster.

“Sure we’re concerned, but we’re also optimistic,” he says, praising his staff as well as other employees who work in the Gulf region. “There will be many bumps in the road for us, but trust me we’re going to get through this. I promise you that.”

While those in New Orleans have been affected by the moratorium on oil drilling, the Florida Panhandle is worried about the effects of the spill on its pristine beaches. Tar balls are rolling up onto many Florida beaches and tourism is down significantly. Cancellations at hotels are increasing daily and the fishing industry there has been hit hard as well.

This report was compiled by Jack Keough, or 508-734-0029, and Victoria Fraza Kickham, or 617-875-5956.

Wednesday, June 23, 2010

MAPI Report: 2011 Federal budget tax proposals will hurt manufacturers

Bipartisan Tax Fairness and Simplification Act of 2010 would have a more positive effect on business, report finds

A new report from the Manufacturers Alliance/MAPI finds that tax increases in President Obama's 2011 budget proposals will have unintended adverse consequences on American businesses, particuarly manufacturers, and that an alternative bipartisan proposal would have more positive effects.

The new report is titled: A Closer Look at the Business Tax Burden: C-Corps, S-Corps, and the Impact of the Federal Budget's 2011 Tax Proposals. In it, economic consultant and report author Jeremy Leonard says that while the plan calls for the corporate tax rate to remain unchanged, efforts to broaden the base would increase the aggregate business tax bill by more than $350 billion over the next 10 years, amounting to a 6% tax increase relative to the pre-budget baseline.

Leonard also says the Administration's proposal results in an increase in the federal deficit of $100 billion relative to the baseline. Alternatively, he says a competing proposal from Sen. Ron Wyden (D-OR) and Sen. Judd Gregg (R-NH) adds to GDP growth and employment and reduces the deficit by $300 billion relative to the baseline. That proposal is the 2010 Bipartisan Tax Fairness and Simplification Act.

The MAPI report also examines the effects of the 2011 federal budget's tax provisions on "pass-through" businesses, which include nearly four million S corporations and more than three million partnerships, accounting for 80% of U.S. businesses and a third of U.S. business activity, according to MAPI. The report claims that pass-through businesses in the manufacturing sector will see their tax bills increase by an average of 14 percent.

Actuant reports strong 3Q results

Manufacturer indicates it will continue to pursue acquisitions

Diversified manufacturer Actuant Corp. has reported core revenue growth of 16 percent in the 3rd quarter ended May 31st. The company reported sales growth of 20 percent in its industrial segment and 43 per cent in its engineered solutions segment.

Actuant, headquartered in Milwaukee, Wisc., also said in an earnings call report with analysts that it will continue to pursue acquisitions in the $10 million to $15 million range. “We are predominantly focused on Energy and Industrial segments, but there are also some smaller attractive niches within Electrical and Engineered Solutions segments that are logical places for tuck-ins as well,” said Bob Arzbaecher, Actuant’s CEO.

Consolidated sales for the quarter of $335 million were the highest Actuant has seen since the first quarter of 2009. With the exception of the Energy segment, all segments posted core sales gains led by a 43% increase in Engineered Solutions due to a sharp rebound in OEM demand in vehicle markets, as well as a 20% increase in the Industrial segment, according to a transcript of the call reported by

The 26% third quarter industrial operating profit margin was the highest the company has seen in the last six quarters. The Energy segment posted an 11% core sales decline in the quarter.
Arzbaecher also commented on the BP accident in the Gulf of Mexico and its potential impact on Actuant. “Our deepwater exposure in the Gulf of Mexico today is pretty small, less than $5 million a year,” he said. “ Our deepwater exposure is more heavily weighted towards places like the North Sea, Brazil and Southeast Asia.

“While the ongoing spill is devastating on a number of fronts, we believe deepwater oil extraction will continue given the simple fact that existing oil reserves are depleting at the same time global energy demand is increasing. Alternative energy while exciting and beneficial to Actuant does not create enough supply now. So the deepwater reserves must be developed and utilized.

“While the incident creates a lot of uncertainty in the short term, we believe that in the long term, both Hydratight and Cortland will benefit from a likely increase in maintenance, inspection and regulation,” he said.

The company expects fourth quarter sales to be lower than the third quarter on account of about $10 million headwind from the stronger U.S. dollar as well as about $15 million of impact from European summer plant shutdowns.

BSA presents lifetime achievement award

The Bearing Specialists Association (BSA) honored long-time legal counsel William Ives with its Lifetime Achievement Award at the association's 2010 Annual Convention. Florida.

In making the presentation, Steve Durston, chairman of BSA’s Past Presidents Council, noted that “Bill has been a part of our industry since BSA was formed in 1966. He is the only legal counsel BSA has ever had.” Ives is a graduate of Knox College in Galesburg, Illinois, and earned his law degree at Harvard University. He served as a Field Office Commander with the U.S. Army Counter-Intelligence Corps in Germany. During more than three decades with Keck, Mahin and Cate, a national law firm with 350 lawyers and 10 offices, his leadership abilities were tapped repeatedly, including service as Chairman of the firm’s Management Committee.

In 2001 BSA awarded the first Lifetime Achievement Award to Wendy McDonald of BC Bearing Engineers. In 2004 two additional Lifetime Achievement Awards were given to Jim Fitzpatrick, Sr. of Bearings Specialty Company and John Nations of Bearings & Drives. In 2006, a Lifetime Achievement Award was presented to James Martin III, who retired in late December 2005 as Director-Distribution, Marketing Services & Integration, The Timken Company. It marked the first time the award was presented to a manufacturer. In 2007, BSA honored Dennis B. Clark, who retired in 2003 as president of North American Industrial Distribution, SKF, and Richard Gipson, Gipson Bearing Co.

Arrow Electronics acquires Sphinx Group

Purchase expands Arrow's security and networking business in Europe

Arrow Electronics acquired Sphinx Group Limited, a United Kingdom-based distributor of security and networking solutions, the company announced this week.

Sphinx serves the UK market, has 100 employees, and generated $82.5 million in sales in 2009. The distributor will become part of Arrow's Enterprise Computing Solutions' European business, increasing Arrow's security and networking capabilities and expanding its presence in Europe.

Based in Melville, N.Y., Arrow sells electronic components and enterprise computing solutions to customers around the world. The distributor has 310 locations in 51 countries.

Monday, June 21, 2010

Grainger forms joint venture in Colombia

Deal builds on MRO distributor's investments in Latin America

W.W. Grainger has formed a joint venture in Colombia with an affiliate of Torhefe SA, THF International SAS, the distributor announced today. Grainger owns an 80% stake in the joint venture, with THF International SAS maintaining a 20% interest. The joint venture acquired the assets of Torhefe and will be known as Grainger Colombia, the company said. Terms of the deal were not disclosed.

Torhefe is a leading MRO distributor in Colombia with an emphasis on fasteners. The distributor has five locations in Colombia and had 2009 sales of $23 million (US).

Grainger said the joint venture will operate under the Torhefe brand name in its existing locations, transitioning to the Grainger name over the next year.

The deal builds on Grainger's other business in Latin America, which includes locations in Mexico, Panama, Puerto Rico, and Trinidad as well as export business through representatives in Brazil, Chile, Colombia, Costa Rica, the Dominican Republic, El Salvador, Peru, and Venezuela.

Thursday, June 17, 2010

Manufacturing activity slowing

An economic report issued today suggests that the economic recovery in manufacturing may be slowing.

The Philadelphia Federal Reserve Bank reported that its business activity index dropped to 8.0 in June from May's 21.4.

Economists had forecasted a much higher reading. Any reading above zero indicates expansion in the region's manufacturing, so growth is still occurring but at a slower rate than many had expected.

The survey covers factories in eastern Pennsylvania, southern New Jersey and Delaware.

The report follows on Monday that showed manufacturing growth in New York state increased only slightly in June.

Wednesday, June 16, 2010

Industrial production rises 1.2% in May

Data continues recent growth trend

Industrial production rose 1.2% in May, according to a report from the Federal Reserve, released today.

The May data continued a recent growth trend, following a 0.3% rise in March and a 0.7% gain in April. Industrial production had slipped 0.1% in February.

The May gains were led by a 4.8% rise in the utilities sector. The manufacturing sector rose 0.9% while mining fell slightly, by 0.2%. Compared to the same period a year ago, industrial production for May was up 7.6%.

The news follows other positive economic signals from earlier this week. Yesterday, the Federal Reserve Bank of New York said manufacturing activity in the Empire State rose for the 11th straight month and that the outlook for future conditions remains positive. And on Monday, the monthly United States Manufacturing Technology Consumption Report showed a more than 50% gain in machine tool consumption year-to-date compared with 2009.

Tuesday, June 15, 2010

PT sales drop in U.S, Canada

U.S. and Canadian manufacturers’ sales dropped in April, after increases in February and March , according to sales data released by the Power Transmission Distributors Association (PTDA) in its monthly Market Outlook Report.

PT sales in the U.S. dropped by 0.7 percent, while Canadian sales dropped 10.4 percent. For U.S. manufacturers, sales for April 2010 are up 12.7 percent compared to sales at this time last year. Canadian manufacturers’ year-to-year sales rose 15.2 percent for the same period.

Breaking a three-month neutral position of 5.0, U.S. manufacturers’ confidence gained a tenth of a point, rising to 5.1 on a scale of 1 (very pessimistic) to 10 (outstanding). Canadian manufacturers also rose from a negative position of 4.8 to a positive outlook of 5.1.

NY State manufacturing index rises in June

Empire State business conditions improve for 11th straight month

Business conditions for New York manufacturers improved in June and the future outlook remains in positive territory, according to the Federal Reserve Bank of New York's Empire State Manufacturing Survey, released today.

The report's current business conditions index rose slightly to 19.6 compared with a reading of 19.1 in May, marking the 11th straight month of growth. The survey's new orders and shipments indexes rose as well. Inventories remained near zero for a second straight month, indicating that the state's manufacturing inventory levels are beginning to stabilize.

Looking ahead, the survey's future index remained above 40, indicating optimism among manufacturers, but fell for the second straight month--to 40.7.

The survey also asked manufacturing business leaders about their capital spending plans for 2010; 46% of respondents said they plan to increase capital spending this year, up markedly compared with the 20% of respondents who indicated growth in spending last June. Respondents expect to invest in computer software, hardware, and non-computer equipment and said they will cut spending on structures.

In other economic news, the machine tool industry released its April manufacturing technology consumption report yesterday, revealing a year-to-date increase of more than 50%.

April machine tool consumption fell 15.6% to $222.36 million compared to March, but rose more than 100% compared to figures from April 2009, according to the latest United States Manufacturing Technology Consumption Report from AMT--The Assn. for Manufacturing Technology and AMTDA, the American Machine Tool Distributors' Assn. Year-to-date, U.S. manufacturers' machine tool consumption rose 50.6% to $783.03 million.

"Cautious spending on manufacturing technology in January and February pushed higher levels of inevestment into the later part of the first quarter, propping up March results," AMT president Douglas K. Wood said in a statement announcing the results. "While April dipped slightly as compared to March, the level of activity was more than 100% better than a year ago. We expect this investment level to be more typical as the year porgresses, reflecting manufacturers' continued cautious optimism."

Monday, June 14, 2010

HD Supply sales drop 5.7 percent

HD Supply has reported a $202 million loss for the first quarter, which includes an $84 million non-cash charge.
Sales for the quarter dropped 5.7 percent to $1.8 billion.

HD Supply recorded a $10 million profit for the same quarter in 2009.

The company restructured more than $3 billion in debt during the quarter.

“I am exceptionally proud of the HD Supply teams’ execution and although our industry remains challenged, we are beginning to see signs of recovery,” Joe DeAngelo, HD Supply CEO, said in a prepared news release. “Our growing liquidity and the extension of the majority of our debt maturities to 2014 enables continued investment in our business to accelerate future profitable growth. Our teams are intensely focused on earning new business and providing outstanding service to our customers.”

Friday, June 11, 2010

Manufacturing showing signs of recovery

The U.S. domestic manufacturing sector is showing signs of health and continued recovery, according to the Manufacturers Alliance /MAPI quarterly report that analyzes 27 major industries.
“A recovery is clearly well under way, and the industrial rebound is stronger than that in the general economy,” said Daniel J. Meckstroth, Ph.D., Chief Economist for the Manufacturers Alliance/MAPI and author of the analysis. “Consumer spending has returned to moderate growth, and the exceptionally severe winter prompted strong gains in non-automotive durable goods like clothing and utilities. An equally strong contributor is the swing in inventories. Since the beginning of the year, manufacturing has added about 100,000 jobs. Production grows faster than sales when firms move to less liquidation and then to rebuild inventories.”
Manufacturing industrial production, measured on a quarter-to-quarter basis, grew at a 7 percent annual rate in the three months ending April 2010, after expanding at a 6 percent annual rate in the three months ending January 2010. MAPI predicts the trend will continue, increasing 6 percent overall in 2010 and 6 percent in 2011.
Production in non-high-tech manufacturing expanded at a 6 percent annual rate during the February-to-April 2010 period. According to MAPI’s most recent economic forecast, non-high-tech manufacturing production is expected to increase approximately 5 percent both in 2010 and in 2011. High-tech industrial production rose at a 28 percent annual rate in the February-to-April 2010 time frame. MAPI anticipates that it will post strong 18 percent growth in 2010 and 15 percent growth in 2011.
There was a significant upward trend in the February-to-April 2010 figures for the various components of the manufacturing economy. Nineteen of the 27 industries tracked in the report had inflation-adjusted new orders or production above the level of one year ago, seven more than reported in the previous three months ending in January 2010, and one industry remained flat. Iron and steel production grew by 101 percent in the three months ending in April 2010 compared to the previous three months, while oil and gas well drilling activity advanced by 100 percent in the same window.
The largest drop came in private nonresidential construction, which declined 22 percent, while engine, turbine, and power transmission equipment production experienced a 14 percent decline.
Meckstroth reports that 19 industries are in the accelerating growth (recovery) phase of the business cycle; no industry is in the decelerating growth (expansion) phase; one industry, private nonresidential construction, appears to be in the accelerating decline (either early recession or mid-recession) phase; and seven are in the decelerating decline (late recession or very mild recession) phase of the cycle.
The report also offers economic forecasts for 24 of the 27 industries. The manufacturing sector will show improvement in 2010, with MAPI forecasting 20 of 24 industries to show gains, led by iron and steel production with expected 54 percent growth and industrial machinery with 42 percent growth. The recovery should continue in 2011 with growth likely in 22 of 24 industries, including nine industries which are predicted to grow at double-digit rates, led by housing starts at 63 percent—albeit from current historically low levels—and engines, turbines and power transmission equipment at 28 percent.

Industrial energy tax in Baltimore?

To help cover a budget gap, the Baltimore City Council is studying a proposed city energy tax on manufacturers. The council could take up the matter next week, according to the Baltimore Busindess Journal.
The city is facing a $120 million shortfall in its budget.

Baltimore’s finance department estimates the industrial energy tax would bring in $9.1 million each year. Stu FitzGibbon, refinery manager of the Domino Sugar plant in South Baltimore, said it would cost his business alone $1.4 million a year. The Journal reported.

Thursday, June 10, 2010

Grainger’s sales rise 16 percent in May

W.W. Grainger reported today that its daily sales for May increased 16 percent versus May 2009. By segment, daily sales in the U.S. increased 10 percent. .Sales in Canada increased 23 percent. Results for the month included a 5-percentage point positive contribution from acquisitions and a 2-percentage point contribution from foreign exchange.

Excluding acquisitions and foreign exchange, daily sales for the company increased 9 percent.

Wednesday, June 9, 2010

3M acquires J.R. Phoenix

3M has acquired J.R. Phoenix Ltd., a manufacturer of hand hygiene and skin care products for health care and professional use including soaps, hand cleansers, moisturizing and protecting creams, antimicrobial soaps and sanitizing gels, shampoo and body wash. Terms of the transaction were not disclosed.

J.R. Phoenix’s hand hygiene products are sold under the Laura Line brand in Canada.

“The Laura Line brand products complement and build on our 3M brand hand sanitizers and skin creams product line,” said Debra Rectenwald, president and general manager, 3M Infection Prevention Division.

“Adding the Laura Line brand to our offering allows us to deliver a complete line of hand hygiene skin care products to the healthcare market in Canada,” said Brian Young, president and general manager, 3M Canada.

Tuesday, June 8, 2010

WESCO, IDG finalize deals

WESCO completes joint venture sale; IDG closes Alamo Iron Works acquisition

Two of the industry's largest players closed some big deals this week.

Pittsburgh-based electrical distributor WESCO International completed the sale of its interest in LADD Industries LLC to Deutsch Engineered Connecting Devices Inc., and MRO distributor Industrial Distribution Group finalized its purchase of San Antonio-based Alamo Iron Works.

WESCO was sole owner of LADD, which distributes electrical connectors and accessories, until the first quarter of 2008, when it entered the joint venture with Deutsch, retaining a 40% interest in the company. As part of the joint venture, Deutsch was entitled to purchase WESCO's 40% after January 1, 2010. Deutsch notified WESCO of its intent to purchase WESCO's share in April.

As part of the sales agreement, WESCO received $40 million plus repayment of a $15 million promissory note and accrued interest, the distributor said in a statement announcing the deal.

In the IDG/Alamo deal, IDG finalized its acquisition of 135-year-old Alamo Iron Works, which filed for Chapter 11 bankruptcy protection in April. Alamo is now a wholly owned subsidiary of IDG, which is owned by LKCM Capital Group in Fort Worth, Texas.

Friday, June 4, 2010

Industrial business drives RBC Bearings

RBC Bearings has reported fourth quarter net sales of $79.8 million, a decrease of 4.8% from $83.8 million in the fourth quarter of fiscal 2009 and an 18.3% increase over the third quarter of fiscal 2010. The decrease of 4.8% was driven by a 24.3% decrease in net salesfrom its aerospace and defense business, partially offset by an increase of 30.6% in its industrial business

"I am encouraged by the strong expansion we saw in our industrial business during the fourth quarter and the industry wide outlook for our aerospace and defense products," said Dr. Michael J. Hartnett, Chairman and Chief Executive Officer. "Our strategy of preserving operating capacity and flexibility allowed us to quickly revive our industrial volumes and we are in good position to support this increased demand in our new fiscal year."

RBC Bearings Incorporated , headqurtered in Connecticut, is an international manufacturer and marketer of highly engineered precision bearings and components. Founded in 1919, the Company is primarily focused on producing highly technical or regulated bearing products requiring sophisticated design, testing, and manufacturing capabilities for the diversified industrial, aerospace and defense markets. Headquartered in Oxford, Connecticut, RBC Bearings currently employs approximately 1,791 people and operates 23 manufacturing facilities in four countries.

Tuesday, June 1, 2010

Manufacturing expanded again in May

Economic activity in the manufacturing sector expanded in May for the 10th consecutive month, and the overall economy grew for the 13th consecutive month, according to the nation's supply executives in the latest Manufacturing ISM Report On Business released today.

The PMI in May registered 59.7 percent, a decrease of 0.7 percentage point when compared to April's reading of 60.4 percent. A reading above 50 percent indicates that the manufacturing economy is generally expanding; below 50 percent indicates that it is generally contracting.

A PMI in excess of 42 percent, over a period of time, generally indicates an expansion of the overall economy. Therefore, the PMI indicates growth for the 13th consecutive month in the overall economy, as well as expansion in the manufacturing sector for the 10th consecutive month.

Norbert Ore, chair of the Institute for Supply Management Manufacturing Business Survey Committee said, "The past relationship between the PMI and the overall economy indicates that the average PMI for January through May (58.9 percent) corresponds to a 5.7 percent increase in real gross domestic product (GDP). In addition, if the PMI for May (59.7 percent) is annualized, it corresponds to a 6 percent increase in real GDP annually."

ISM's New Orders Index registered 65.7 percent in May, which is the same rate of growth reported for the preceding month. This is the 11th consecutive month of growth in the New Orders Index. A New Orders Index above 50.2 percent, over time, is generally consistent with an increase in the Census Bureau's series on manufacturing orders (in constant 2000 dollars).

The 15 industries reporting growth in new orders in May are: Wood Products; Electrical Equipment, Appliances & Components; Plastics & Rubber Products; Fabricated Metal Products; Miscellaneous Manufacturing; Paper Products; Primary Metals; Furniture & Related Products; Transportation Equipment; Computer & Electronic Products; Printing & Related Support Activities; Chemical Products; Nonmetallic Mineral Products; Machinery; and Food, Beverage & Tobacco Products. The only industry reporting a decrease in new orders in May is Petroleum & Coal Products.

McJunkin Red Man buys South Texas Supply

Acquisition expands MRC's commitment to customers in the oil and gas shale plays across North America

McJunkin Red Man Corp. acquired The South Texas Supply Co. Inc. as part of its strategic plan to increase business with customers in the active shale plays across North America. Terms of the deal were not disclosed.

The acquisition will help MRC support customers in the oil and gas exploration as well as pipeline and transmission infrastructure markets, the distributor said. South Texas Supply supports customers in the Eagle Ford Shale, a rock formation across several counties in South Texas where oil and natural gas can be found.

South Texas Supply operates two branches in the region, in Carrizo Springs and Dilley, Texas. Selling shareholder Mark Hassell will continue to manage the two locations, MRC said in a press release. The branches enhance MRC's coverage in South Texas, which includes locations in Laredo, Corpus Christi, Gonzales, Mission, and Jourdanton, Texas. MRC plans additional expansion in the area with a regional hub and major pipe yard, increased inventory, and enhanced logistics to meet local customers' needs.

MRC is also focused on organic growth to serve the activce shale plays nationwide. Earlier this year, the distributor opened a new facility in Horseheads, N.Y., to support northern activity in the Marcellus Shale, and has plans to open branches in Shreveport, La., and Center, Texas, to support the Haynesville Shale in the Gulf Coast area.