Thursday, November 4, 2010

Distributors and manufacturers continue to post strong results

Helped by an improving industrial economy, some of the nation’s largest distributors and manufacturers posted double-digit third-quarter sales gains this week

Industrial distributors and manufacturers produced further evidence of an improving business climate this week, as third-quarter results from distributors such as Kaman Industrial Technologies and DXP Enterprises revealed double-digit sales gains.

Connecticut-based Kaman Industrial, which specializes in bearings, power transmission and motion control products, reported third-quarter sales of $223 million, a 37% increase over the same period last year. The results reflect growth from acquisitions as well as a healthier overall business environment, the distributor said in a statement announcing the results.

For the full year, Kaman Industrial said it expects sales to grow 10% to 13%, to between $810 and $830 million.

At DXP Enterprises, which specializes in pumping solutions and MRO supplies, sales rose 20% in the third quarter to $172 million; earnings rose 17% to more than $5 million, or 36 cents a share.

DXP’s sales for the first nine months of the year rose 9% to $487 million compared to the first nine months of 2009. Earnings for the first nine months of the year totaled nearly $14 million, or 93 cents a share, compared to just $8 million, or 57 cents a share, in the same period a year ago.

In addition to strong quarterly results, industrial distributor Fastenal reported solid monthly gains in October, as net sales increased 17% and daily sales increased 22% compared to October 2009. Fastenal also opened seven new stores during the month, bringing the company’s year-to-date new store openings to 97.

Manufacturers reported strong results this week as well, especially in the bearings/power transmission/motion control segment. Motion control manufacturers Regal Beloit and Allied Motion, as well as bearings makers RBC Bearings and NN Inc., all posted strong third-quarter results:

Regal Beloit
Third-quarter net sales roses 27% for the Wisconsin-based manufacturer, to $465 million, reflecting growth in nearly all of the company’s end markets, including strong demand for energy-efficient products (which accounted for 18% of sales).

Sales in the company’s electrical segment rose 25%, reflecting 5% growth in residential HVAC motors, 23% growth in commercial and industrial motor sales, and 34% growth in global generator sales.

Sales in the manufacturer’s mechanical segment grew by 46%, including $9.5 million of incremental sales from acquired businesses.

The company also grew its international business during the quarter, as sales to regions outside the United States represented 31% of total sales compared to 26% of sales in the same period a year ago.

Allied Motion
Third-quarter sales for Allied Motion rose 47% to $22 million, and the company posted a $1.1 million profit, its highest profit since restructuring in 2002. Third-quarter results include the June acquisition of Agile Systems Inc., which now operates as Allied Motion Canada.

For the first nine months of the year, Allied’s sales rose 35% to nearly $60 million. The company posted net income of more than $2 million, or 33 cents a share, compared to a net loss of $13 million, or $1.67 per share, in the same period last year.

RBC Bearings
Bearings-maker RBC Bearings reported $83 million in sales in its 2011 fiscal second quarter ended Oct. 2; that’s an increase of 31% over sales in the same period last year. Earnings rose 95% to nearly $9 million compared to just over $4 million in the same period a year ago.

RBC credited the strength of various industrial segments, including OEM and distribution markets, for the strong results.

NN Inc.
Bearings maker NN Inc. posted a 38% sales increase for its third quarter, to $91 million, citing improved demand for its products in industrial and automotive end markets.

However, the company reported a net loss of $1 million, or 6 cents a share, during the quarter, which included nearly $5 million in non-operating costs, including close to $4 million for plant closings and restructuring; more than $1 million in foreign currency exchange losses on intercompany loans, and $1 million in start-up costs associated with new products in its Precision Metal Components segment.

NN’s sales for the first nine months of the year totaled $269 million, a 49% increase compared with the first nine months of 2010.

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