Thursday, July 29, 2010

Kennametal reports 40% sales growth in 4Q

For fiscal 2010, sales decreased 8%

Kennametal reported today that sales in its 4th quarter totaled $539 million, compared with $386 million in the same quarter last year. Sales increased 40 percent due to organic growth of 39 percent and a 1 percent favorable impact from foreign currency effects. Sales improved sequentially from the March quarter by 9 percent, representing the fourth consecutive quarter of sequential sales growth.

For fiscal 2010, the metalworking manufacturer recorded sales of $1.9 billion compared to $2.0 billion in the previous fiscal year. Sales decreased 8 percent on an organic basis, partially offset by a 1 percent favorable impact from foreign currency effects and a 1 percent increase from a business acquisition made in the prior fiscal year.

The company also said it expects organic sales growth to rise between 14 and 17 percent in fiscal 2011.

"Our fiscal 2010 fourth quarter performance clearly reflects that we are realizing continuing sales growth and higher incremental margins," said Carlos Cardoso, Kennametal's Chairman, President and Chief Executive Officer.

The company’s Metalworking Solutions & Services Group (MSSG) sales increased by 44 percent from the prior year quarter, driven by organic growth of 43 percent and favorable foreign currency effects of 1 percent. On an organic basis, sales in Latin America, Asia Pacific and India increased 66 percent, 65 percent and 64 percent, respectively. North America and Europe reported organic sales increases of 42 percent and 34 percent, respectively, compared with the prior year quarter. Sequentially, sales increased by 8 percent as global industrial production continued to improve. This represents the fourth consecutive quarter of sequential sales growth for MSSG.

Its Advanced Materials Solutions Group (AMSG) sales increased 34 percent from the prior year quarter, driven by 33 percent organic growth and 1 percent favorable foreign currency effects. The organic increase was primarily driven by higher sales of mining and construction products, as well as increased demand for energy related and engineered products. Sequentially, sales increased by 11 percent, driven by better performance in all AMSG end markets.

The company's outlook for fiscal 2011 assumes that the global economy and worldwide industrial production will continue to gradually improve and that overall economic trends will remain in positive territory. As a result, the company expects to experience positive growth during the fiscal year in all geographies, albeit more modest growth in its European markets.

Here is the outlook for fiscal 2011 , according to a company press release:.
Global industrial production is anticipated to be in the mid single digits for the full year with higher growth in the first half of the fiscal year.

Sales volumes and related capacity utilization are expected to yield strong incremental margins and offset year-over-year cost increases for salary restoration and merit increases as well as for pension and incentive compensation.

The company's restructuring programs remain on track to deliver annual ongoing savings of $155 million to $160 million.

Based on current exchange rates, foreign currency may negatively impact results primarily due to the relationship of the U.S. dollar to the Euro.
Seasonal earnings are expected to revert back to historical patterns with approximately 40 percent of earnings occurring in the first half and 60 percent in the second half of the fiscal year.

Under these assumed conditions, Kennametal expects organic sales growth to be 14 percent to 17 percent higher than in fiscal 2010 and total sales growth to be higher by 11 percent to 14 percent. This is in line with the company's goal of growing at least two times the rate of increase in global industrial production.

The company expects EPS for fiscal 2011 to be in the range of $1.85 to $2.15 per share, excluding charges related to previously announced restructuring actions

Kennametal also announced its implementation of a new operating structure at the start of its new fiscal year that began on July 1, 2010.

The new structure provides for an enhanced market sector approach coupled with a more customer-centric focus for the sales organization and other key market-facing functions such as customer service, marketing, product management, engineering and product development.

The new structure also involves the formation of a single, global integrated supply chain and logistics organization that unleashes additional opportunities to achieve higher customer satisfaction and realize lower costs to serve.

A key attribute of the new structure is the establishment of two new operating segments by market sector which replace the previous two operating segments that were based on a product focus. The two new reportable operating segments are named Industrial and Infrastructure. The Industrial business is focused on customers within the transportation, aerospace, defense and general engineering market sectors. The Infrastructure business is focused on customers within the energy and earthworks industries.

Wednesday, July 28, 2010

Durable goods orders fall 1% in June

New orders for manufactured durable goods declined for the second straight month, U.S. Census Bureau reports

New orders for manufactured durable goods fell 1%--to $190.5 million—in June, the U.S. Census Bureau reported today. This marked the second consecutive monthly decline in durable goods orders, following a 0.8% decrease in May. Excluding transportation, new orders fell 0.6%; excluding defense, new orders fell 0.7%.

Transportation equipment, which was down four of the last five months, saw the largest decrease in June--2.4% to $45.9 billion. The decrease was due to nondefense aircraft and parts, which fell $1.8 billion, according to the Census Bureau report .

Inventories, up six consecutive months, rose 0.9% in June following a 1.1% rise in May.

After release of the report, Cliff Waldman, economist for the Manufacturers Alliance/MAPI, said that although manufacturing is still on track for recovery, business is slowing.

“Amidst a sluggish and increasingly uncertain economic recovery, the June report on demand for long-lasting consumer and capital goods shows that the manufacturing recovery, while still on track, is clearly slowing,” said Cliff Waldman, Economist for the Manufacturers Alliance/MAPI. “Total new orders for durable goods fell by 1 percent in June after a 0.8 percent decline in May. Excluding the volatile transportation category, orders fell by 0.6 percent, the second decline in three months. Year-to-date total orders excluding transportation were up more than 15 percent but the data from pivotal sectors of the manufacturing supply chain suggest that the underpinnings of the strong factory sector recovery are clearly weakening. Primary metals demand fell by 2 percent, the second consecutive monthly decline, while machinery demand declined by 0.7 percent, the second drop in the past three months.

“On a brighter note, the modest increase in new orders for non-defense capital goods excluding volatile aircraft demand shows that business equipment investment remains positive,” he added. “Capital spending is an essential ingredient for keeping the shaky U.S. economic recovery alive, given a troubled household sector that is confronting high unemployment, a continued need to deleverage amidst weaker housing and financial wealth, and tighter credit conditions. If consumer demand becomes depressed enough to stall total U.S. economic growth, the manufacturing recovery will slow even more than recent data suggest.”

Anixter sales increase 12 % in Q2

Company remains “cautiously optimistic” about economic conditions

Anixter International Inc. a global distributor of communication and security products, electrical and electronic wire & cable, fasteners and other small parts, yesterday reported sales of $1.37 billion, a increase of 12 percent compared to the year ago quarter.

Major items affecting current quarter sales comparisons versus the prior year include:

$12.9 million of favorable foreign exchange effects versus prior year were:
$19.6 million of favorable copper price effects versus prior year
$33.0 million of unfavorable effects from exiting a major customer contract in 2009
Exclusive of the effects of those items, sales increased by 12 percent organically.
Second quarter operating income of $70.1 million compares to a loss of $58.7 million in the prior year quarter, which included a $100.0 million goodwill impairment charge and a $5.7 million severance charge.

Commenting on second quarter sales trends, Robert Eck, President and CEO, stated, “Three months ago we were cautiously optimistic as we saw improving daily sales trends in late March moving into early April. These improving trends accelerated through the current quarter and helped fuel growth in most of our businesses around the world. Improvement in our day-to-day business was supplemented by higher levels of project activity in both our enterprise cabling and industrial wire and cable businesses. These growth trends are even more encouraging considering sales were negatively affected in the current quarter and first half of the year by $33.0 million and $64.7 million, respectively, as a result of the exit of a major customer contract.”

“We are very pleased with the company’s strong organic sales increase of 12 percent in the current quarter,” continued Eck. “Equally as positive is the fact that this was the first quarter since the third quarter of 2008 that we have delivered a year-on-year sales increase in all three geographic segments, as well as all three of our end markets. We are encouraged by the rate and breadth of the company’s sales rebound despite the uncertain macroeconomic conditions that continue to exist.”

Eck added: “The improved economic conditions that we saw around the world in the second quarter give us more confidence in our ability to generate year-on-year sales growth in 2010 However, the uncertainty that still remains in Europe and more recent concerns about a moderating growth rate in the U.S. cause us to remain cautiously optimistic. Accelerating daily sales rates that we saw through much of the second quarter began to level off in June and have continued at that pace through the first three weeks of July."

Tuesday, July 27, 2010

Tomkins approves takeover

Belt/hose manufacturer Gates Corp. is a wholly-owned subsidary of Tomkins

The board of Tomkins PLC has approved a $4.5-billion takeover offer from Onex Corp. and the Canada Pension Plan Investment Board, which have teamed up to buy the U.K.-based global manufacturing company.

The U.K.-based Tomkins has two divisions, one of which makes systems and components for automobiles and industry while the other handles air systems components and bathroom fixtures.

Tomkins is the parent of the Gates Corp., headquartered in Denver, Colorado. Among its many products, Gates is a well-known manufacturer of power transmission V-belts for specialty drives and hose and tubing for automotive and industrial customers. Gates also offers a broad line of hydraulic hose and couplings for high pressure and high impulse hydraulic applications, featuring fabric and wire braid designs.

Gates, including Gates Mectrol, manufactures hoses internationally in 19 plants in 8 different countries.

The deal is 2010’s largest buyout globally, according to Thomson Reuters data..

Tomkins employs 25,000 people in 25 countries around the world.

Under terms of the friendly deal, shareholders of Tomkins will get 325 pence a share..

“We believe that our offer represents a great reward for Tomkins' shareholders and a chance for us to build value over a long investment horizon,” said Seth Mersky, a managing director at Onex.

Tomkins chairman David Newlands said the company's independent directors are unanimously recommending that shareholders vote in favor of the transaction.

“After careful consideration the independent directors of Tomkins believe that the cash offer from Onex and CPPIB provides Tomkins' shareholders with certain value today and fairly reflects both the value of the group today and its future potential,” Mr. Newlands said in a statement.

CPPIB, which manages one of Canada's largest pools of capital on behalf of the federal Canada Pension Plan, said it expects the senior management of Tomkins — including chief executive James Nicol — will continue to be involved in the ongoing business after the takeover, according to news reports.

“Tomkins is a strong company with leading positions in its key businesses. We look forward to working with Onex and the management team to continue to support the company in pursuing its growth ambitions,” CPPIB's senior vice-president Andre Bourbonnais said in a statement..

The deal is being made through Pinafore Acquisitions Ltd., a company formed by Toronto-based Onex and the CPP Investment Board.

Lincoln Electric sales rise 25% in Q2

For the first six months, sales rise nearly 20%

Lincoln Electric Holdings, Inc. today reported 2010 second quarter net income of $32.5 million, or $0.76 per diluted share, on sales of $515.6 million. Operating income for the second quarter increased sequentially to $51.1 million, or 9.9% of sales, from $34.7 million, or 7.4% of sales, in the first quarter of 2010. Adjusted operating income in the quarter was $49.8 million or 9.7% of sales.

Sales were $515.6 million in the second quarter 2010 versus $413.3 million in the comparable 2009 period, an increase of 24.8%.

"Our second quarter results were excellent and demonstrated a steady and significant improvement in operating results," said John M. Stropki, Chairman and Chief Executive Officer. "The improving economic environment and important new product introductions delivered a significant increase in sales. Our cost improvement initiatives resulting from the rationalization actions taken throughout 2009, early 2010 and our ongoing strategic capital investments drove increases in margins.

"While demand levels have significantly improved in most markets and geographic regions on a year-over-year basis, volume trends are stabilizing. Although recent economic forecasts are more guarded, we remain cautiously optimistic as we continue to pursue market share gains. We believe that our strong financial position will continue to provide the required flexibility to execute our long-term strategic objectives to the benefit of our shareholders."

Sales for the first half of 2010 were $986.5 million versus $825.0 million in the comparable 2009 period, an increase of 19.6%.

Lincoln Electric designs, develops and manufactures arc welding products, robotic arc-welding systems, plasma and oxyfuel cutting equipment and has a leading global position in the brazing and soldering alloys market. Headquartered in Cleveland, Ohio, Lincoln has 37 manufacturing locations, including operations and joint ventures in 18 countries and a worldwide network of distributors and sales offices covering more than 160 countries

Monday, July 26, 2010

EC clears Schlumberger /Smith International merger

Smith International's businesses include MRO distributor Wilson

Schlumberger Ltd and Smith International, Inc. jointly announced today that the European Commission has cleared their proposed merger under the EC Merger Regulation without any conditions.

The closing of the proposed merger remains subject to clearance by the U.S. Department of Justice, approval by Smith stockholders, and the satisfaction or waiver of other closing conditions contained in the merger agreement between the companies. As previously announced, the 2010 annual meeting of stockholders of Smith is scheduled for August 24, 2010, at which meeting stockholders of Smith will consider and vote upon matters including the proposed adoption of the agreement and plan of merger between Smith and Schlumberger.

Schlumberger and Smith expect that the merger will close in the third quarter of this year. Until that time, Schlumberger and Smith will continue to operate as separate and independent companies and continue to serve their respective customers

Smith International is the parent company of Wilson, a distributor of pipe, valves, valve automation products, fittings, mill and tool supplies, safety products, and artificial lift systems to energy and industrial markets. Wilson has more than 250 locations across the United States and Canada and is expanding its business in Europe.

Small business owners remain pessimistic

Economic confidence drops again

Small business confidence fell for the second month in July as a higher percentage of small business owners rated the current economy as poor and see it only getting worse, according to the Discover Small Business Watch. The index dropped to 83 in July from 86.1 in June. It has been below 83 only once since the beginning of 2010.

July Confidence Indicators:

58 percent of small business owners rated the economy as poor, up from 51 percent in June, while 7 percent rated the economy as excellent or good, down from 12 percent in June.

57 percent of small business owners said the economy is getting worse, up from 51 percent in June; 27 percent think the economy is getting better; 14 percent think it is the same; and 3 percent are not sure.

45 percent of small business owners report economic conditions for their businesses were worse in July, up 2 percentage points from June; 30 percent of respondents said conditions were better; 22 percent reported conditions were the same; and 3 percent weren't sure.

75% of owners think another recession likely before full recovery; 75 percent of small business owners believe it is likely or highly likely that the economy will slip into another recession before it fully recovers, with 15 percent believing another recession is not very likely to happen and 10 percent feeling unsure

Record number of small business owners taking home less pay; 73 percent of small business owners surveyed also report current economic conditions have caused them to take home less money in July, up from 69 percent in July 2009 and 55 percent in February 2008, when the Watch first posed this question.

Friday, July 23, 2010

Sales rise at DXP, WESCO

Distributors see positive signs in their respective end markets

Following other positive earnings reports this week, pumping solutions and MRO products distributor DXP Enterprises and electrical/industrial distributor WESCO International both reported a boost in sales and earnings for the second quarter of 2010.

DXP’s second-quarter sales rose 16%--to $167.3 million—compared to the same period a year ago, and were up nearly 14% sequentially, the company reported Thursday. Net income for the six months ended June 30 was $8.1 million compared with net income of $5.3 million for the first half of 2009. Sales for the first half of 2010 rose 4% to $314.3 million.

DXP’s chairman and CEO David R. Little predicted continued growth ahead in 2010.
"We are pleased with our sequential growth from the first quarter to the second quarter and our operating leverage that resulted in a 27.6 percent increase in net income. As we continue to drive our sales and operational excellence programs, we are optimistic that we can show continued top line and bottom line growth for the second half of 2010," Little said in a statement announcing the results.

At WESCO, second-quarter sales rose 8.6% to $1.26 billion compared to the same period in 2009 while sequential sales rose 9.6%. The distributor reported net income of $27.8 million compared with $26.4 million in the same period a year ago and $19.2 million in the first quarter of 2010.

WESCO’s six-month sales rose 2.9% to $2.4 billion.

Company CEO John Engel pointed to growth in all of WESCO’s major end markets and product categories during the quarter.

"All four of our major end markets and all six of our major product categories experienced positive sequential sales growth during the quarter. The last time we saw all our end markets and product categories grow sequentially was the second quarter of 2008, and the third quarter of 2004, respectively," said John J. Engel, CEO.

The news follows positive results from another industrial distributor—Airgas, Inc.—earlier this week. Airgas’ fiscal first-quarter sales rose 6% while earnings rose 26%, the company reported Wednesday.

Thursday, July 22, 2010

3M sales rise 18 percent in Q2

Company raises outlook; industrial sales rise 23 percent

3M today reported record second-quarter earnings of $1.54 per share on sales of $6.7 billion. Sales and per-share earnings increased 17.7 percent and 37.5 percent, respectively, versus the second quarter of 2009.

Sales improved in all businesses and geographic regions, with particular strength in Electro and Communications at 32 percent, Display and Graphics at 30 percent and Industrial and Transportation at 23 percent. On a geographic basis, sales growth was strongest in emerging economies, where sales expanded by 38 percent versus the second quarter of 2009. Total-company sales rose 18 percent year-on-year and 6 percent sequentially, and have now returned to second quarter 2008 levels.

3M generated record second-quarter operating income of $1.596 billion and operating margins were 23.7 percent. All six of the company's business segments posted operating margins of 22 percent or higher.

"Our growth strategy continues to gain momentum as we again delivered strong top-line growth and outstanding leverage to the bottom line," said George W. Buckley, 3M chairman, president and chief executive officer. "I thank the 3M team around the world for continuing to deliver during these uncertain times."

Buckley added that the second-quarter results reaffirm the company's long-term strategy of accelerating investment in higher growth opportunities.

"Our new product vitality index is the highest in recent memory and we are taking share in many of our businesses," he said. "3M's improved engine of organic growth, combined with our commitment to operational excellence positions us well to deliver sustainable increases in sales, earnings and free cash flow."
For the third consecutive quarter, 3M increased its full-year 2010 performance expectations. The company now expects organic sales volumes to grow 13 to 15 percent versus a prior expected range of 10 to 12 percent.

Second-quarter worldwide sales totaled $6.7 billion, up 17.7 percent compared to the second quarter of 2009. Local-currency sales including acquisitions increased 17.9 percent. Divestitures and foreign exchange impacts each reduced sales by 0.1 percent.
Sales growth was broad-based, with year-on-year increases of 32 percent in Electro and Communications, 30 percent in Display and Graphics, 23 percent in Industrial and Transportation, 10 percent in both Consumer and Office and in Safety, Security and Protection Services and 5 percent in Health Care. On a geographic basis, sales rose 42 percent in Asia Pacific, 21 percent in Latin America and Canada and 9 percent in the United States. Sales rose over 4 percent in Europe in the quarter, as organic volume growth of nearly 11 percent was partially offset by 6-plus points of negative currency impact, primarily due to the weaker Euro.

Second-quarter worldwide sales totaled $6.7 billion, up 17.7 percent compared to the second quarter of 2009. Local-currency sales including acquisitions increased 17.9 percent. Divestitures and foreign exchange impacts each reduced sales by 0.1 percent.
Sales growth was broad-based, with year-on-year increases of 32 percent in Electro and Communications, 30 percent in Display and Graphics, 23 percent in Industrial and Transportation, 10 percent in both Consumer and Office and in Safety, Security and Protection Services and 5 percent in Health Care. On a geographic basis, sales rose 42 percent in Asia Pacific, 21 percent in Latin America and Canada and 9 percent in the United States. Sales rose over 4 percent in Europe in the quarter, as organic volume growth of nearly 11 percent was partially offset by 6-plus points of negative currency impact, primarily due to the weaker Euro.

Second-quarter net income was $1.121 billion, or $1.54 per share, versus $783 million, or $1.12 per share, in the second quarter of 2009. Total-company operating income was $1.596 billion, a record for any second quarter in 3M's history, and margins were 23.7 percent.

Here is a look at some of 3M’s markets:

Industrial and Transportation
Sales of $2.2 billion, up 23.2 percent in local currency.
Broad-based double-digit local-currency growth across much of the portfolio; renewable energy up 71 percent, automotive OEM up 45 percent, abrasives up 28 percent and industrial adhesives and tapes up 22 percent.
All businesses delivered year-on-year profit growth.
Double-digit sales and profit growth across all major geographic regions, led by Asia Pacific.
Operating income up 66 percent to $476 million with operating margin of 22 percent.
percent. All six of 3M's business segments posted operating margins of 22 percent or higher.

Industrial and Transportation
Sales of $2.2 billion, up 23.2 percent in local currency.
Broad-based double-digit local-currency growth across much of the portfolio; renewable energy up 71 percent, automotive OEM up 45 percent, abrasives up 28 percent and industrial adhesives and tapes up 22 percent.
All businesses delivered year-on-year profit growth.
Double-digit sales and profit growth across all major geographic regions, led by Asia Pacific.
Operating income up 66 percent to $476 million with operating margin of 22 percent

Safety, Security and Protection Services
Sales of $842 million, up 10.3 percent in local currency.
Double-digit sales increases in security systems, roofing granules and building and commercial services; high single-digit growth in the personal protective equipment business.
Broad-based geographic growth with double-digit sales gains in Canada, Asia Pacific, Latin America and the United States.
Operating margin of 23.4 percent, with profits up 9 percent year-on-year

Airgas reports first-quarter earnings, raises full-year guidance

Distributor rejects revised unsolicited tender offer from Air Products & Chemicals

Industrial, medical, and specialty gases distributor Airgas Inc. reported an increase in sales and earnings for its fiscal first quarter ended June 30, 2010.

First-quarter sales were $1.05 billion, up 7% compared to the previous quarter and up 6% compared to the same period a year ago. Adjusted earnings per share rose 26% compared to the same period a year ago and were up 20% sequentially. Airgas’ adjusted earnings exclude legal and professional fees of 3 cents per share related to an unsolicited takeover attempt by Air Products & Chemicals, Inc., debt extinguishment charges of 2 cents per share, and multi-employer pension plan withdrawl charges of 2 cents per share.

Also, Airgas said its board voted unanimously to reject a revised unsolicited tender offer from Air Products & Chemicals, Inc. to acquire all outstanding common shares of Airgas for $63.50 per share in cash. Air Products initiated its takeover attempt late last year, and Airgas rejected a $60 per share offer in February, saying that it undervalued the company.

Chairman and CEO Peter McCausland said the revised offer continues to “grossly undervalue” Airgas.

“The Airgas board of directors is unanimous in its belief that the revised offer from Air Products continues to grossly undervalue Airgas and does not fairly compensate stockholders for Airgas’ extraordinary track record, outstanding recent results, excellent growth prospects or industry-leading position. In our Board's judgment, the new Air Products offer, like Air Products' previous offers, is grossly inadequate and an extremely opportunistic attempt to cut off the Airgas stockholders' ability to benefit as the domestic economy continues its recovery," McCausland said in a prepared statement.

Airgas also revised its full-year earnings guidance, saying it expects adjusted earnings per share of $3.15 to $3.30 for the year, up from its previous estimate of $2.95 to $3.05 per share.

Tuesday, July 20, 2010

Timken expands high-performance PT business

Bearings manufacturer acquires QM Bearings and Power Transmission; also, Flowserve expands with acquisition in the motion and control industry

Bearings and power transmission products maker The Timken Co. announced this week that it will acquire QM Bearings and Power Transmission, Inc., of Ferndale, Wash. Terms of the deal were not disclosed. QM makes spherical roller bearing steel housed units and elastomeric and steel couplings used in demanding processes such as sawmill and logging operations.

The deal is part of Timken’s strategy to expand its penetration in high-performance applications and extend its power transmission capabilities beyond its original, core bearing business, the company said.

In addition, Timken said QM’s product offering will strengthen the company’s presence in the roller housed unit category and provide additional offerings for markets such as forestry, which require high-performance, durable products.

The acquisition is expected to close by the fourth quarter of 2010.

In other acquisitions news, Dallas-based fluid motion and control products maker Flowserve Corp. announced late last week that it acquired Valbart Srl, a privately owned Italian maker of trunnion-mounted ball valves used primarily in the oil and gas industry.

Flowserve acquired Valbart in a cash transaction valued at 156 million EUR (roughly $200 million), which includes about 25 million EUR (roughly $32 million) of existing Valbart net debt that was repaid at closing, the company said. Other terms of the deal were not disclosed.

Friday, July 16, 2010

Industrial Production rose 0.1% in June

Slight drop in manufacturing production is no cause for alarm, analysts say

U.S. industrial production rose unexpectedly in June, according to a report released by the Federal Reserve this week.

Production at factories, mines, and utilities rose 0.1%, following a 1.3% gain in May. Economists had forecast a 0.1% drop in June, according to various reports. Utility output rose 2.7 percent, while manufacturing production declined 0.4%.

Economists from the Manufacturers Alliance/MAPI, said the slight drop in manufacturing prouction in June is no cause for alarm, and pointed to the sector's strong pace of growth to date.
“The decline in factory production was primarily concentrated in consumer-related industries such as motor vehicles, home construction materials (wood products, furniture), and food," Daniel J. Meckstroth, MAPI's chief economist said in response to the report. "After a growth spurt earlier this year based primarily on the inventory cycle, the rest of the year’s activity will depend more on fundamentals. For the consumer, meager job gains and the need to repay debt are still constraints on spending growth. Fortunately, business equipment industries are rebounding at a surprisingly strong pace in light of the widespread surplus capacity in manufacturing and in the general economy.

“Firms clearly overdid the capital goods retrenchment during the recession and with improved profitability are spending more on long neglected machinery and equipment,” he added. “A small decline in manufacturing activity should not be alarming given the exceptionally strong pace of growth to date. Even with the June decline in factory output, manufacturing production increased at a 7.9 percent annual rate, well above the 3 to 3.5 percent pace of growth economists estimate that occurred in the general economy in the second quarter. A deceleration in the pace of industrial production growth in the second half of this year is inevitable.”

In other news, manufacturing activity in the New York and Philadelphia regions grew at slower paces this month, according to the New York Fed’s Empire State Index, which covers manufacturing activity in New York, northern New Jersey, and southern Connecticut, and the Philadelphia Fed’s general economic index.

The Empire State Index fell to 5.1 in July, its lowest level this year. The Philadelphia index fell to 5.1 as well, its lowest level since August 2009. Despite the drops, both reports indicate expansion in the manufacturing sector, as the readings are above zero.

Thursday, July 15, 2010

Grainger’s sales surge 16 percent in Q2

MRO distributor’s sales increase 15 percent for first six months of 2010

Grainger , the giant MRO distributor, today reported second-quarter sales of $1.8 billion, an increase of 16 percent versus the 2009 second quarter. Net earnings for the quarter increased 40 percent to $129 million versus $92 million in 2009. Earnings per share increased 43 percent to $1.73 versus $1.21 for the second quarter of 2009.

"We are very encouraged by the strong organic growth in the quarter and the resulting earnings power demonstrated by our business," said chairman, president and chief executive officer Jim Ryan. "Performance this quarter was the result of a complete team effort. Our businesses in the United States and Canada, along with the majority of our international operations, contributed to a solid quarter for both sales and earnings."

Ryan added: "Although there continues to be uncertainty as to the extent and duration of the economic recovery, our strong execution and results in the first half of the year give us confidence to raise and narrow our 2010 sales growth guidance to a range of 12 to 14 percent and our earnings per share guidance to a range of $6.10 to $6.40, excluding unusual items."

Previous guidance, issued by Grainger in April 2010, forecasted sales growth of 9% to 12% and earnings per share of $5.70 to $6.10 for the full year 2010.

Daily sales for the company increased 16 percent in April, 16 percent in May, and 18 percent in June. For the quarter, foreign exchange contributed 2 percentage points to the increase. Acquisitions added another 5 percentage points to the growth in the quarter. Pricing was flat while volume increased 9 percent. Sales of products used to assist with the oil spill clean up in the Gulf of Mexico contributed approximately 1 percentage point to sales growth in the quarter. This growth was, however, essentially offset by sales in the 2009 second quarter of H1N1-related product that did not repeat.

The company has two reportable business segments, the United States and Canada, which represent approximately 96 percent of company sales. The remaining operating units (Japan, Mexico, India, Puerto Rico, China, and Panama) are included in Other Businesses and are not considered a reportable segment. In June of 2010, Grainger announced its investment in a joint venture in Colombia. Results of operations for the Colombian business will be included in the Other Businesses beginning in the 2010 third quarter.

Sales for the United States segment increased 11 percent, 9 percent excluding acquisitions, in the 2010 second quarter. Daily sales increased 8 percent in April, 10 percent in May, and 14 percent in June. Sales of products used for the oil spill clean up contributed approximately 1 percentage point to growth in the quarter, although this contribution was essentially offset by the strong sales of H1N1-related product in the 2009 quarter that did not repeat in 2010. There was no material effect in the quarter from the sale of seasonal products. All customer end markets within the United States posted sales growth versus the 2009 second quarter with the exception of the contractor and government sectors, which were down slightly.

Growth was led by the heavy manufacturing sector, which was up more than 20 percent versus the prior year. The Lab Safety Supply/Grainger Industrial Supply integration also contributed to segment performance. When the integration was announced in late 2008, the company forecasted total integration benefits of $70 million -$100 million in incremental revenue and $20 million -$30 million in cost savings over an 18-month period. The integration is now substantially complete and has generated more than $88 million of additional revenue and $40 million of cost savings.

Sales for the Acklands-Grainger business in the quarter were up 29 percent in U.S. dollars versus the 2009 second quarter. In local currency, sales were up 14 percent for the quarter and on a daily basis were up 17 percent in April, up 12 percent in May, and up 14 percent in June. Comparisons were more difficult in May and June due to strong sales of H1N1-related product in 2009, which did not repeat in 2010. The sales increase in Canada was led by strong growth to customers in the agriculture and mining, oil and gas, heavy manufacturing and forestry sectors of the economy, partially offset by a decline in sales to the government.

Sales for the Other Businesses, which include Japan, Mexico, India, Puerto Rico, China and Panama, increased 226% in the quarter versus prior year, due primarily to incremental sales from the acquired businesses in Japan and India, along with strong growth in Mexico, China and Puerto Rico.

Operating earnings for the Other Businesses were $2 million for the second quarter 2010 compared to a $3 million loss a year ago. In addition to the earnings contribution from Japan, the business in Mexico returned to profitability and the business in China reduced its loss versus the prior year.

For the six months ended June 30, 2010, Grainger reported sales of $3.5 billion, an increase of 15 percent versus the six months ended June 30, 2009. Net earnings increased 21 percent to $228 million versus $189 million in the first half of 2009. Earnings per share for the six months increased 24 percent to $3.04 versus $2.46 for 2009, before unusual items

Wednesday, July 14, 2010

Fastenal reports sales growth of 20 percent

Sales for first six months increase 13.2 percent; construction still weak

Fastenal, the giant MRO/construction distributor reported yesterday that its second-quarter sales increased a strong 20 percent to $571.2 million, giving impetus to indications that the economy may be showing signs of life. For the first six months of 2010, net sales were up 13.2 percent.

The improvement in the first six months of 2010 continues a trend the company saw in the latter half of 2009, the company said. The slow-down in the final three months of 2008 and all of 2009 relate to the “general economic weakness in the global marketplace.”

Several additional factors positively impacted Fastenal’s sales growth in the first six months of 2010.

The strengthening Canadian dollar (when compared to the United States dollar) added approximately 0.9 percentage points to its daily sales growth and its Holo-Krome business, which was acquired in December 2009. That acquisition added approximately 0.5 percentage points to Fastenal’s daily sales growth.

Here are some of the highlights from Fastenal’s earnings report:.

During the first six months of 2010, Fastenal opened 45 new stores (Fastenal opened 42 new stores in the same period of 2009). The 45 new stores represent an increase of 1.9% since December 31, 2009.

Sales to Fastenal’s manufacturing customers grew nearly 30 percent, improving each month since May 2009 (with the exception of July and December 2009 and April 2010 due to the holiday impact and February 2010 due to the impact of poor weather). This reversed the negative trend which began in October 2008. This improvement has been partially offset by continued weakening in Fastenal’s non-residential construction business in 2009 and in the first four months of 2010. The company’s non-residential construction business enjoyed nominal growth in both May and June 2010.

Non-residential construction customers have historically represented 20% to 25% of Fastenal’s business. The daily sales of this business contracted approximately 14.7% in the first quarter of 2010 and grew 0.5% in the second quarter of 2010. In the first, second, third, and fourth quarters of 2009, the contraction was 6.4%, 19.6%, 25.3%, and 24.8%, respectively. The total sales contraction for 2009 was 19.4%.

Fastenal previously said that its original goal was to hit the $125 thousand per month store average by 2012. “We believe the duration of the economic weakness could delay the timing of when we achieve the $125 thousand per month average by several years,” the company said in a statement.

The company said that based on current economic conditions, it anticipates opening 80 to 95 new stores during the second half of 2010, or an annualized rate of 6.8% to 8.0%. Over the last several years, Fastenal has closed/consolidated eight stores in 2008, ten in 2009, and seven in the first six months of 2010. While it intends to continue this practice, Fastenal does not anticipate closing more than one or two for the remainder of 2010.

Fastenal has reduced its full-time equivalent employee headcount at its store locations 14.0% since its peak of 8,280 FTE headcount in third quarter of 2008; much of this decrease relates to a reduction in part-time hours worked as its absolute headcount numbers related to store personnel declined by 7.9% during this time period.

PTDA develops guidelines for contracts

Guidelines will help implement a manufacturer/distributor agreement

The Power Transmission Distributors Association (PTDA) has created a comprehensive distributor/manufacturer agreement template focused on the elements that need to be considered when entering a formal relationship.

The "Guidelines for Developing a Distributor/Manufacturer Agreement: A Components Checklist" is a powerful resource for outlining the parameters of a mutually profitable partnership.

Rex Davis, VP Supply Chain, Warehouse and Aerospace Division, IBT Inc., served as chair of the task force charged with developing the guidelines.

In a press release Davis said: "PTDA is an association of both distributors and manufacturers. We need to work together to deliver solutions to our mutual customers. To do that effectively, we have to be solid in our business relationship and understand what each of our strengths are. We analyzed these guidelines from many different perspectives: small, mid-sized and large companies; distributors and manufacturers; relationships and processes. The input we received from PTDA manufacturer and distributor members throughout the development process influenced the committee to create a usable resource that is relevant to all of our members."

The "Guidelines" include practical, customizable language for 38 contract clauses grouped in several sections including:

Introductory Clauses
Terms and Conditions Clauses
Product and Price Policy Clauses
Sales Policy Clauses
Inventory Clauses Concluding Clauses

Developed using sample agreements from many of PTDA's member companies, each clause includes a description of when the clause may be applicable and provides sample language to use in writing a mutually acceptable contract. Recognizing that manufacturers and distributors must reach their own individual business decisions in determining which components to include and the content of each components of any agreement, the "Guidelines" also include a Word document, allowing you to edit, delete or add to each of the sample clauses.

"Communicating on important issues and laying out the expectations in advance with our distributors make it possible for us to focus our joint efforts on helping the customer," said task force member Dennis Tanrikulu, vice president of aftermarket sales for NTN Bearing Corporation.

"A written agreement that addresses all of those details allows us to spend our time on the activities that drive profitability for both of us. These Guidelines will help both parties ensure that each of the components of an agreement are discussed and negotiated before an issue can arise."

The "Guidelines" are available for purchase at $349 for non-members at As a benefit of membership, PTDA member companies can download the "Guidelines" at no charge.

Tuesday, July 13, 2010

Machine tool consumption up 53% year-to-date

News accompanies year-to-date sales increase for U.S. and Canadian distributors of power transmission products

Year-to-date, U.S. consumption of manufacturing technology (machine tools and related items) rose nearly 53% through May, according to the latest United States Manufacturing Technology Consumption report from the American Machine Tool Distributors Assn. and AMT-The Assn. for Manufacturing Technology.

On a monthly basis, May’s consumption total of $178.34 million was down nearly 23% compared to April, but up nearly 59% compared to May 2009.

“While we would like to see first-quarter growth rates continue, we are not surprised by the typical second-quarter ebb and flow in capital spending,” said AMTDA president Peter Borden. “We have seen an additional month of substantial orders which helps to confirm that a sustainable recovery is taking place despite the buzz of those forecasting a W-shaped rebound. Industry forecasts for the year have been revised slightly upward by many sources and, if Congress passes the bonus depreciation allowance, this could accelerate growth even further.”

Regionally, year-to-date machine tool consumption was up in all sectors of the country, with the highest growth in the South and Central areas.

In other news, U.S. manufacturer’s month-over-month sales of power transmission/motion control (PT/MC) products rose 2% in May while sales by Canadian manufacturers dropped 13%, according to May 2010 sales data released by the Power Transmission Distributors Association (PTDA) this week in its Market Outlook Report.

When comparing May 2010 sales figures to May 2009, however, U.S. manufacturers’ sales rose 13.2 % and Canadian manufacturers’ sales rose 5.5%.

Both groups remain neutral when it comes to market confidence. U.S. manufacturers held steady at 5.0 and Canadian manufacturers at 4.9 on a scale of 1 (very pessimistic) to 10 (outstanding) measuring market confidence, according to PTDA.

Newark Windustrial opens in N.J.

Newest WinWholesale affiliate to serve contractors in Newark, NJ, area

WinWholesale Inc. announced the opening of its newest affiliate, Newark Windustrial, this week. The Newark, N.J.-based distributor sells fire protection equipment systems and associated products to Newark area contractors who previously were served by a sister company, Newburgh Windustrial, in Newburgh, N.Y.

Both Newark Windustrial and Newburgh Windustrial are independently operated distribution companies in which WinWholesale is an equity partner. WinWholesale includes a nationwide network of such independently operated locations, as well Noland Co., its wholly owned subsidiary.

Newark Windustrial provides local customers with convenience and easy access to products and services, said company president Dean Lucas.

“Newark Windustrial is the only fire protection equipment wholesale supplier in this geographic area within driving distance for customers,” Lucas said. “We provide day-to-day and emergency service for any order size.”

The opening of Newark Windustrial follows the opening earlier this month of Lehigh Valley Windustrial, in Bethlehem, Pa., and two new Noland branches—in Baton Rouge, La., and Cape Coral, Fla.—earlier this year.

Friday, July 9, 2010

MSC's strategy pays off

In releasing its third-quarter fiscal earnings results last week, MSC Industrial Direct reported a net sales growth of 28.5 percent compared to the same quarter last year and clearly indicated that its strategic plan to deal with the recession is paying off. Net sales for the first nine months of fiscal 2010 for the giant MRO distributor were $1.231 billion compared with $1.135 billion in the first nine months of fiscal 2009.

While other companies slashed headcount during the deep recession, MSC did not lay off one employee. Instead, MSC focused on increasing its sales training and education for employees; instituted a next-day delivery, same day shipping system; and continued its investment in e-commerce, all of which have paid off extremely well, according to company executives.

"Given our experience in past downturns and our deep understanding of how these times impact local and regional competitors in our fragmented market, we believed in our plan and the share gains it would produce. I am happy to say we are now beginning to see our investments validated in our results," said David Sandler, president and chief executive officer. "Although there remains significant uncertainty relating to the economic environment and the current recovery, we are confident that our growth in market share will continue to accelerate."

In an earnings call report with financial analysts, Sandler that said unlike many of his competitors, MSC is “not scrambling”to fill gaps in service, to hire and train new people to support growth, and does not have the supply chain issue that many others have. “Although there remains significant uncertainty relating to the economic environment and the current recovery, we are confident that our growth in market share will continue to accelerate. As customer businesses have begun to recover, the demand on MRO distributors have grown quickly," he said.

“The supply chain has begun to stretch and customers do not want to or cannot afford to restock their inventories of supplies. Increased production and backlogs mean that customers can no longer wait several days for their orders. This is now a just-in-time world.

“We've increased our spending on electronic channels, and this will continue throughout Q4, as the results are excellent. Our broader e-commerce initiative remains on track and continues to hold great promise for further revenue growth and earnings leverage in the future. Our large account program continued its robust growth as we build upon our success in this sector.

"And our investment in Asian sourcing, private branding, and our product management initiatives also continue. We are using these programs to offset near-term gross margin headwinds, and ultimately, to expand our gross margins over time.”

Meanwhile, customer inventory levels of MRO products have increased over last quarter but remain well below historical levels, according to Erik Gershwind, executive vice president and chief operating officer.

"We are seeing what we describe as cautious restocking among our customers, with an overall level of caution and a desire to run lean and preserve cash," Gershwind said.

For the fiscal 2010 fourth quarter, the company expects net sales to be between $446.0 million and $458.0 million.

Graybar acquires Canadian distributor, AVAD Industrial Sales

Distributor of electrical and communication products expands in Canadian market

Graybar Canada has acquired AVAD Industrial Sales Inc., an Ontario-based distributor serving automation, control, power distribution, and energy monitoring markets.

Graybar Canada is the Canadian division of St. Louis-based Graybar, an electrical and communications products distributor with more than $4 billion in revenues and nearly 240 locations in North America. Graybar Canada serves customers throughout Canada, particularly in British Columbia and Nova Scotia.

The acquisition will help Graybar expand its business with Canada’s industrial market, according to a news release announcing the deal.

“The technical expertise of our Industrial Automation group is phenomenal and they are actively serving our current market,” said Frank Hughes, CEO of Graybar Canada. “We look forward to tapping into additional market potential in Ontario with the acquisition of AVAD Industrial Sales.”

Earlier this year, Graybar expanded in the United States with a new logistics center in Brooklyn Park, Minn. The center serves as a primary shipping location for Graybar's 13 branches across Minnesota, Iowa, North Dakota, and South Dakota, and as a secondary shipping location for its five locations in northeast Wisconsin.

Wednesday, July 7, 2010

BSA continues fight against counterfeiting

The Bearing Specialists Association’s (BSA) Board of Directors has approved a motion embracing an anti-counterfeiting distributor partnership proposal from the American Bearing Manufacturers Association (ABMA). Counterfeiting represents a $600 billion a year problem that is costing U.S. businesses $200 - $250 billion annually, BSA said in a press release.

With its approval, BSA agreed to support the World Bearing Association ‘s (WBA) Awareness Campaign and help market it to end users via the association websites and member e-blast; to market BSA’s Top Ten reasons to buy from authorized distributors, and to encourage members to share this with end users.

In addition, BSA agreed to publish Organizational Statements and Articles Against Counterfeiting, including denouncing any involvement in counterfeiting throughout the bearing supply chain; voicing support for ABMA and WBA anti-counterfeiting activities; and sharing news on lawsuits, raids and other anti-counterfeiting activities with memberships. BSA also agreed to create association position papers on various topics against counterfeiting. Finally, if a BSA member is convicted of selling counterfeit bearings, the Board will carefully review its BSA membership status in light of that conviction.

BSA’s opposition to counterfeit products is well-established. Its Top Ten program of reasons to buy products and services from authorized BSA member distributors was launched in 2007 to help distributors educate end users about the value of authorized distribution. The association welcomed ABMA’s Scott Lynch to its 2010 Winter Meeting for an update on anti-counterfeiting efforts. The association also presented its own program on counterfeit bearings at the 2010 Annual Convention.

Lehigh Valley Windustrial opens in Pennsylvania

Bethlehem-based distributor of pipe, valves, and fittings is newest WinWholesale location

WinWholesale Inc. announced the opening of its newest affiliate, Lehigh Valley Windustrial. The Bethlehem, Pa.-based distributor sells a range of industrial supplies, including pipe, valves, and fittings, to customers in central and eastern Pennsylvania and western New Jersey.

“With a combined 65 years of industry experience and product knowledge at Lehigh Valley Windustrial, our goal is quality products and timely service at a reasonable price,” said Richard Raidline, company president. Raidline’s experience includes 22 years as a master distributor selling to other distributors, according to WinWholesale.

Based in Dayton, Ohio, WinWholesale includes a network of independently operated distribution companies in which WinWholesale is an equity partner and Noland Co., a wholly owned subsidiary. The company sells plumbing and heating supplies; industrial pipes, valves and fittings; heating, ventilation, air conditioning and refrigeration equipment; electrical equipment; industrial and commercial fastening hardware; waterworks and utility supplies; and domestic, commercial and industrial pumps.

The Pennsylvania location follows the opening of two new Noland branches earlier this year—in Baton Rouge, La., and Cape Coral, Fla.

Tuesday, July 6, 2010

ProBuild expands its construction reach

Construction supplier is owned by Fidelity Investments

Everyone knows Fidelity Investments as one of the largest financial service companies in the world. But few know that its parent company, FMR LLC, owns a dozen diversified companies, including a tomato farm in Maine, a limousine service, a temporary staffing firm, and the second largest building materials supplier company in the country, ProBuild Holdings.

ProBuild, headquartered in Denver, Colorado, is owned by Fidelity’s investment arm, Devonshire Investors. Until recently it was the largest building supplies company in the U.S. according to ProSales magazine That changed when ABC Supply, ProBuild’s major competitor, completed its acquisition of Bradco Supply last week.

But ProBuild, despite the downturn in construction spending, continues to grow in selective geographical areas.

Also last week, ProBuild reached an agreement to purchase some of the assets of Chopp Lumber, a building materials supplier based in Waldorf, Md., and also announced the opening of a new millwork facility in San Antonio, Texas.

The transactions give ProBuild an increased presence in two of the top 20 housing markets in the country, both of which analysts predict will see significant growth in the next several years.

The Maryland location will supply trusses, wall panels and lumber to the residential and commercial markets of the greater Washington, D.C market and southern Maryland. The new location follows ProBuild's opening of a components manufacturing facility in Winchester, Va., this past March to serve the western and northern segments of Metro DC.

The new millwork facility in San Antonio enables ProBuild to serve the market more quickly and efficiently than had been the case from its millwork operation in Austin.

"These are two very important markets for us," said ProBuild CEO Paul Hylbert. "Our teams in both areas understand this, and the combination of their local market expertise and ProBuild's national scope will be of tremendous value to our customers in these markets."

The new facilities in Maryland and Texas build upon ProBuild's national presence of more than 470 centers in 42 states and follow its acquisition in May of Oso Lumber in the greater Seattle market. ProBuild has sales of more than $4 billion and employs nearly 12,000.

But ProBuild, like many construction distributors, has been severely impacted by the four-year-old housing downturn. The company has closed more than 60 locations in recent years but continues to grow through acquisitions, expanding its geographical reach.

A recent story in the Boston Globe pointed out that the deep decline in construction, has caused ProBuild to accrue hundreds of millions of dollars in losses for Fidelity.

The Globe based some of its story on a Standard & Poor's report that said Fidelity spent $345 million over six months in 2009 to cover losses at ProBuild. The Globe article said it could be on the hook for another $105 million through this year under a recapitalization plan for the firm, quoting a recent story from the Reuters news agency, citing a confidential prospectus for a Fidelity debt offering. The report predicted ProBuild will again lose money this year, though not nearly as much as it did in 2009.

Company officials said ProBuild is positioning itself for growth when the housing industry recovers, with an experienced management team in place and the hiring of key sales personnel in its facilities throughout the country.

Meanwhile, ProBuild’s parent company, Fidelity, continues to do extremely well in a challenging economic environment. Its financial services group remains solidly in the black. Fidelity reported operating income of $2.5 billion last year, up from $2.4 billion in 2008, even though its revenue fell 11 percent to $12.9 billion. Standard & Poor’s noted that Fidelity’s operating margins were higher because of both the stock market rebound and significant reductions in headcount. Fidelity cut its worldwide payroll from 46,500 employees at the end of 2007 to about 37,000 today, according to the Globe report.

Monday, July 5, 2010

They said what?

Many respondents to a new survey didn't know we won our independence from Great Britain.

As we return to work after the celebrating our Independence Day, here's something that's bound to generate conversation around the water cooler: a new survey shows that 26 percent of the respondents didn't even know we won our independence from Great Britain.

The poll conducted by the non-profit Marist Institute of Public Opinion shows that six percent
named a different country, including France, China, Japan, Mexico, and Spain. Twenty percent said they weren’t sure.

Respondents were simply asked: "From what country did the United States win its independence?"

Breaking down the numbers, the research group found variations in knowledge according to region: 32 percent of Southerners were not sure or named the wrong country; 26 percent of Midwesterners were in the same category, as were 25 percent of Westerners and 16 percent of Northeasterners.

Meanwhile, a separate survey released by the research firm Rasmussen Reports shows that 63 percent of adults believe that The Fourth of July is one of our nation's most important holidays.

Thursday, July 1, 2010

Manufacturing fell in June

Manufacturing fell in June to 56.2 percent in June from 59.7 in May, according to a report issued today by the Institute for Supply Management. The numbers were below what many economists had forecast and the stock market fell after the report. The drop comes after three solid months of growth in manufacturing. This is the lowest monthly manufacturing number since December.

A reading above 50 indicates expansion.

“The sector appears to be solidly entrenched in the recovery," said Norbert Ore, head of the ISM's survey committee. "Comments from the respondents remain generally positive, but expectations have been that the second half of the year will not be as strong in terms of the rate of growth, and June appears to validate that forecast."

Manufacturing also fell in China and Europe. China’s purchasing manager’s index fell to 52.1 in June from 53.9 in May. Factory output in 16 countries in Europe fell to 55.6 in June from 55.8 the month before.

WESCO buys Alaskan distributor

WESCO, a provider of electrical and industrial MRO products, construction materials, and advanced integrated supply procurement outsourcing services, has acquired the business of Potelcom Supply, Inc. headquartered in Anchorage, Alaska. Potelcom is a single branch operation with annual sales of approximately $25 million that supports the utility, industrial and government markets in Alaska.

In making the announcement, Stephen A. Van Oss, Senior Vice President and Chief Operating Officer of WESCO said: "This acquisition strengthens and expands our utility, industrial and government market positions in Alaska, as well as broadens our supplier lines. Combining Potelcom's cabling expertise, with WESCO's industrial MRO and construction expertise, and data communication product offerings provides a complete solution for our customers in Alaska.
The Potelcom organization is well regarded in the Alaskan marketplace and we are pleased to welcome them as part of WESCO. The acquisition should be immediately accretive to earnings."
Gary Erber, Potelcom's President added, according to a WESCO press release added: "Our association with WESCO provides growth opportunities for our employees and additional resources and programs for our customers. We are pleased to become a member of the WESCO organization and to continue to serve our base of customers in Alaska under the Potelcom banner."