Click here for the 2005 Big 50.

It's been a difficult few years for industrial distributors, to say the least. But the largest companies in the marketplace are hanging in there, and most are unwilling to blame the economy for their troubles. Despite the tough times, large distributors are seeking new markets, improving their operations, and finding new ways to help customers reduce costs.

At least, that's what the top 50 companies in the industry told us, as we researched our annual report on the largest MRO distributors in North America, Distribution's Big 50. In the following pages, we've ranked the largest companies by sales volume. We've reduced the number of firms listed from 100 to 50, to provide a look at the biggest of the big, with annual sales of more than $85 million.

As we saw in last year's report, predictable sales gains are a thing of the past. Sales declined for half of the com-panies in this year's list – by an average of 11 percent. On the flip side, 23 companies reported sales gains – an average of 11.6 percent. (Two firms reported flat sales.)

Looking more closely at sales, integrated supply is an important part of the picture for the Big 50, while sales via the Web are less of a focus. Seventy-five percent of participants reported their integrated supply sales volume, which represents an average 17.8 percent of total revenues. Similarly, more than half of the companies reported their online sales volume, which represents an average 2.7 percent of sales.

For the No. 1 distributor on our list, W.W. Grainger, the economy remains one of the top three factors affecting the industry. The other two are the long-term trend of manufacturing moving offshore, and a shift in customers' buying behavior. Customers are more concerned today than they were in the past about reducing the costs associated with buying indirect materials, explains Grainger spokesman Michael McGrew.

To combat these pressures, Grainger has reached out to new markets (such as government and health care), continued to invest in itself (by improving systems and beefing up inventory levels), and leveraged its wide reach, broad product offering and technological capabilities to accommodate customers' changing needs.

'A lot of customers are looking to consolidate suppliers now and, logically, they turn to us,' says McGrew. 'Customers are focusing their efforts on consolidating suppliers, standardizing their product usage … trying to leverage that overall buy. And they're trying to hook up with suppliers that can do that.'

The folks at McJunkin Corp., No. 10, are counting on that, as well. Vice president of sales Steve Wehrle says the company plans to grow its integrated supply business, which continues to be driven by customers' demand to reduce costs and eliminate redundancies, this year. Wehrle also expects a renewed focus on acquisitions in 2003. McJunkin made some key acquisitions in 2001, and in March of this year struck a deal to buy Valvax, a Midwest valve distributor.

At Kaman Industrial Technologies, No. 16, improving internal operations has been the name of the game for the past few years. Kaman has embraced the Six Sigma and 'lean manufacturing' concepts, applying them internally to improve order and fulfillment processes. Kaman is working harder to document savings for customers, as well, says president Jack Cahill. The goal is to better understand customers' needs so that Kaman can deliver tailored solutions to individual accounts.

Sales were up 5 percent for Kaman in 2002. Success with national accounts and the opening of four new locations were the fruits of its labor to expand the business.

'I think the opportunities for growth continue to be good, even in a tough environment,' says Cahill.

For other firms on our list, bright pockets of business that emerged late in 2002 and early in 2003 were welcome signs of relief.

'We are starting to be cautiously optimistic that the economy is, indeed, getting better,' Stephen Cloud, president of IBT, No. 38, said in early April. 'We're actually four percentage points ahead in sales volume this year. That's not huge, but it's better than being behind.'

IBT has seen some large conveyor systems that had been postponed for months go forward recently, with orders flowing from those projects.

'It's not a trend yet, but there's some evidence that it's at least starting,' he said.

Similarly, Cahill says there is pent-up demand in the marketplace, which will benefit the industry once things start to turn around.

'Sooner or later we get to that point where the confidence level of the consumer starts to rebound a little bit, and then it all starts rolling,' he says.

In January, we asked each company that appeared in our 2002 Top 100 Distributors report to provide updated financial and operations information so they could be listed this year. That information was confirmed in follow-up interviews with executives from each firm and, where possible, by recently published financial information. We also checked in with companies that were not included last year. Re-appearing after not participating in last year's report is Turtle & Hughes, No. 26; there are no newcomers to the 2003 report.

There are some firms that did not return to the list this year, however. Three were purchased: Pentacon, by electrical giant Anixter International; Questron Technology, by another electrical giant, GE Supply; and Kar Products, by Barnes Distribution, No. 19. Figures for Barnes reflect the acquisition, which was finalized in January. Three other privately held companies declined to participate: Endries International, Ryan Herco Products, and The Gage Co. Other companies that did not re-appear this year did not meet the $85 million cutoff figure.

Once again, we've separated electrical distributors from our main list; these are companies for whom electrical, lighting, data-communication and related products make up more than 50 percent of sales. To determine the top electrical companies, we turned to Electrical Wholesaling magazine, which publishes a list of the largest electrical distributors in the United States each year. We took the top 10 pure electrical companies from the magazine's June 2002 list and updated their sales figures to reflect year-end, 2002 totals. In doing so, we omitted two companies that appear in our main listing: Hughes Supply, No. 2, and Hagemeyer NA, No. 5. Electrical sales comprise less than 50 percent of each firm's total volume.

Information on publicly traded companies is obtained from annual reports, earnings statements and interviews with top executives. For the privately held firms, which make up the majority of the list, we rely on self-reported data. Figures represent North American sales for the 2002 calendar year, except where noted. Figures for Canadian and European firms are reported in U.S. dollars.

Distribution's Big 50 was compiled by staff editors Victoria Fraza, Alison Lutes, Ken Brack and Al Tuttle, and contributing editor Bridget McCrea. The report is available in the ID Store. For more information, call (617) 558-4504 or click here.

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Industrial Distribution's annual list of the largest MRO distributors in North America

NYSE: GWW

Headquarters: Lake Forest, Ill.

Richard L. Keyser, Chairman and CEO

2002 Sales: $4.64 billion

Locations: 576

Employees: 15,000+

www.grainger.com

While Grainger's sales were down slightly last year, the company hit earnings targets and increased dividends for the 31st consecutive year. Grainger continued to flex its muscles, adding $90 million in inventory to its branch network, achieving double-digit growth in national accounts and integrated supply, and growing Web sales by more than 20%. The boost in national account business was especially helpful, says Grainger spokesman Michael McGrew. 'This includes customers like the U.S. Postal Service … we were able to help them reduce their total number of suppliers from around 1,000 to two. We were one of the two,' McGrew says.

NYSE: HUG

Headquarters: Orlando, Fla.

Tom Morgan, CEO

2002 Sales: $3.07 billion

Locations: 450

Employees: n/a

Despite a plunge in commercial construction, tough commodity pricing pressures and harsh weather, Hughes Supply rode out 2002. Profits increased by one-third to $58 million, as sales grew by less than 1% despite the acquisition of Utiliserve, a $230 million distributor of electrical transmission products. Comparable branch sales improved each quarter, but were well below 2001. Instead of 'battening down the hatches,' the firm looked ahead by opening three branches and targeting government/health care customers, says Tom Morgan, who became CEO this March. Hughes saw no signs of recovery in commercial construction activity early in 2003.

NYSE: GPC

Headquarters: Birmingham, Ala.

William J. Stevens, President and CEO

2002 Sales: $2.25 billion

Locations: 504

Employees: 5,500

www.motionindustries.com

Motion's 2002 sales were up slightly over 2001. 'After a sales decline in 2001, we regained some lost ground, and I feel we did a good job of responding to the market conditions,' said Ralph Buntyn, senior vice president, marketing. Motion added to its product mix in 2002, continued rolling out a new warehouse management system, and added resources to its industrial automation effort, a growth opportunity for the company. Buntyn expects modest gains this year; sales were up 3% in the first quarter. 'It still remains a year of unpredictable economic recovery,' he says.

NYSE: ARG

Headquarters: Radnor, Pa.

Peter McCausland, Chairman and CEO

2002 Sales: $1.79 billion

Locations: 800

Employees: 8,500

www.airgas.com

Figures represent Airgas' fiscal year, ended March 31, 2003. Airgas worked hard to grow sales and expand with acquisitions in a tough year. Sales were up 9% over FY 2002. 'The weak industrial economy created a very tough sales environment in fiscal 2003,' said CEO Peter McCausland in a year-end statement released in May. 'However, we remained focused on executing our strategic initiatives, pursuing growth in niches like medical and specialty gas, and integrating acquired assets.' In fiscal '03, Airgas acquired Detroit-based Welding Metals, Inc., 14 branches of Union Industrial Gas Group, Irving, Texas, and Delta Safety Supply, Stockton, Calif.

Headquarters: Charleston, S.C.

David G. Gabriel, CEO

2002 Sales: $1.54 billion

Locations: 440

Employees: 5,100+

www.hagemeyerna.com

Hagemeyer NA — consisting primarily of former top distributors Cameron & Barkley, Vallen Safety and Tristate Electrical & Electronics Supply — saw sales decline last year. Hagemeyer is owned by Dutch distributorship Hagemeyer NV. Management changes here at home are the big news this year. In May, Hagemeyer announced it would consolidate its headquarters staff with its U.S. operations management in Charleston, S.C. Former CEO David Gundling opted not to make the move and was replaced by David Gabriel, who took over in May. In addition, Jim Warren, COO, U.S. Operations, announced his retirement, effective at the end of the year.

NYSE: AIT

Headquarters: Cleveland, Ohio

David L. Pugh, Chairman and CEO

2002 Sales: $1.45 billion

Locations: 407

Employees: 4,512

www.appliedindustrial.com

President David Pugh says Applied continued to grow through the stagnant economy by sticking to its core competency: engineering and selling bearings, power systems and related industrial maintenance supplies. Although sales dropped 4% from a year earlier, Pugh is more concerned with the exodus of American manufacturing to other countries. 'For the MRO business, we are all competing for a larger share of a shrinking market,' he says. The company's new AppliedSTORE® Plus customer-based inventory management system helps fill cost-reduction needs for customers. The company will continue to look for strategic acquisitions, Pugh says.

NYSE: WOS

Headquarters: Newport News, Va.

Claude Hornsby III, President

2002 Sales: $1.07 billion

Locations: 725

Employees: 13,000+

www.ferguson.com

Ferguson's growth primarily came from acquisitions and integrating sister firms Familian Northwest and Westburne USA as operating divisions. Ferguson also is growing by 'leveraging our capabilities as a national supplier with large national contracts and industrial accounts, so we become a total solutions provider from ocean to ocean,' says Robert Samsing, vice president of marketing. The 2002 industrial sales figure adds Familian and process piping/heavy commercial and industrial PVF sales, which were not included in the past. Ferguson broke ground on a distribution center in Richland, Wash., which should be done next winter.

NASDAQ: FAST

Headquarters: Winona, Minn.

Will Oberton, President and CEO

2002 Sales: $905 million

Locations: 1,169

Employees: 7,108

www.fastenal.com

The business climate has been challenging overall, says Will Oberton, president and CEO, who blames the difficult times on the overall economy and world issues. He says the environment has been particularly challenging for manufacturers, and adds that while Fastenal continues to grow, the company isn't posting the kind of sales increases that he'd like to see. The 10.6% increase that came in 2002 was due mostly to the opening of new locations and 'working hard on our execution,' explains Oberton, who anticipates continued growth in 2003.

Headquarters: Houston, Texas

John Kennedy, President and CEO

2002 Sales: $900 million

Locations: 160

Employees: 1,700+

www.wilsononline.com

This distributor of pipe, valves, fittings and safety products is tied to the energy sector, which put a strain on business in '02. 'A majority of our business is in the petrochemical plants, and since those were identified as possible attack locations by terrorists, security was heightened, they purchased less, and they wanted less traffic in their facilities. That hurt us,' says director of marketing Harry Ng. Things are looking better this year; Ng expects growth in the third quarter. 'We're aggressively establishing ourselves, not only within our historically proven industry, but we're going after new market segments as well,' he says.

Headquarters: Charleston, W. Va.

H.B. Wehrle, III, President and CEO

2002 Sales: $805 million

Locations: 135

Employees: 1,500

www.mcjunkin.com

McJunkin's business went flat in 2002, apart from the impact of acquisitions made the prior year. In the fall, the company sold its interest in McBar, a joint venture with Cameron & Barkley, which reduced sales by about $40 million. The move 'has renewed our focus on PVF, which is our core business,' says Steve Wehrle, senior vice president of sales. He says McJunkin will pursue acquisitions this year, and in March a deal was struck to buy Valvax, a Midwest valves distributor, which Wehrle called a tough competitor. McJunkin expects continued growth in its integrated supply business this year.

NYSE: MSCO

Headquarters: Melville, N.Y.

Mitchell L. Jacobson, Chairman and CEO

2002 Sales: $794 million

Locations: 96

Employees: 2,789

www.mscdirect.com

Figures reflect MSC's fiscal year, ended August 31, 2002. Sales were down, but CEO Mitch Jacobson says 2002/2003 'has been an exciting time for our company. Over the last five years, we invested in and built the infrastructure to dramatically outperform our industry and support sustained revenue and earnings growth. We have proven our earnings power in the last two quarters with greater than 50% earnings growth.' MSC generated $145 million in cash over the last two years, Jacobson adds, and has the infrastructure and balance sheet to fuel continued investment and growth.

Headquarters: Moorestown, N.J.

Michael Grebe, CEO

2002 Sales: $640 million

Locations: 60

Employees: 2,100

www.wilmar.com

Interline Brands saw a mixture of good and poor sales last year, depending on the product group and customer segment. Privately branded products did well, says CFO Bill Sanford, and business from building contractors grew, but all segments slowed in the fourth quarter. Created two years ago by the merger of the Wilmar and Barnett companies, Interline has not had a layoff, since management was able to prop up margins in other ways. 'Ninety-five percent of our purchasing is done on our Internet hub. That represents a very large savings,' Sanford says, noting that technology is the only area in which the company is hiring.

Headquarters: Kunzelsau, Germany

Mark Alexander, General Manager, Wurth Industry Network of North America

2002 Sales: $614.8 million

Locations: 102

Employees: 2,240

www.wurth.com

General manager Mark Alexander says Würth Industrial USA companies had flat sales, similar to 2001, and were involved in some rightsizing of their operations. The fastener specialist is not involved in integrated supply, but continues to look for opportunities to acquire businesses, he says. Würth USA consists of seven companies purchased to form a specialty distribution network. In 2002, the network focused on buying as one unit, among other priorities. 'The sales year was one of 'wait and see, no great ups and downs,' but we continued to work on an e-business initiative, to buy and inventory products together,' Alexander says.

NYSE: IDG

Headquarters: Atlanta, Ga.Andrew Shearer, President and CEO

2002 Sales: $493 million

Locations: 52

Employees: 1,350

www.idglink.com

President and CEO Andy Shearer refers to 2002 as 'a transformation year for IDG.' The company consolidated technology systems, strengthened supplier relationships and focused on its Flexible Procurement Solutions business, a value-added service model that includes integrated supply business. IDG worked to get its financial house in order, as well, and was removed from the NYSE 'Watch List' in September 2002. 'We went through a tough year of transition during 2002, but we believe we've positioned ourselves very well,' says Shearer. '...When the economy helps us instead of hurts us, we'll do extremely well.'

NYSE: NOLD

Headquarters: Newport News, Va.

Lloyd U. Noland, III, Chairman and CEO

2002 Sales: $488.7 million

Locations: 98

Employees: 1,350

www.noland.com

Results were mixed for this distributor of plumbing, air conditioning and electrical/industrial supplies. Noland bought a small HVAC distributor in Florida, but closed two 'industrial branch departments,' says Ken King, vice president of marketing and branch operations. Sales declined 13.1% in 2002, but management expects a modest gain this year. Integrated supply results were mixed. Noland terminated two unprofitable contracts, but several others are doing well. Technology advances are important to the company. 'Increasingly, we are using [the Internet] on a day-to-day basis in communications and transactions with customers,' King says.

NASDAQ: KAMNA

Headquarters: Windsor, Conn.

T. Jack Cahill, President

2002 Sales: $477.2 million

Locations: 171

Employees: 1,400

www.kamandirect.com

Kaman made headway on national account business in 2002, adding new accounts such as Hershey Foods, Titan Cement and Solo Cup. Internally, the company focused on growth and expansion, opening four facilities. 'I think the opportunities for growth continue to be good, even in a tough environment,' says president Jack Cahill. Kaman also focused on improving internal processes, an ongoing goal. The firm's training curriculum was expanded, as well, offering everything from product to process management training for virtually all employees. Explains Cahill, 'Everyone's getting opportunities, and many are taking advantage of them.'

Headquarters: Tulsa, Okla.

Craig Ketchum, President

2002 Sales: $403.1 million

Locations: 72

Employees: 780

www.red-man.com

The past year saw slower sales at Red Man Pipe, compared to 2001, says Dee Paige, CFO. The company worked on strengthening customer relationships and providing value-added services, while battling to compete on price. Specializing in oil and gas field supply, this PVF distributor had customers both contract for and terminate integrated supply services, Paige says. Consolidation of the industry allows companies to geographically cover more territory, a necessity today, he adds. Red Man Pipe adds business technology upgrades on a continuous basis because the Internet and automated processes will be ever-more important in servicing accounts, Paige notes.

NASDAQ: LAWS

Headquarters: Des Plaines, Ill.

Robert J. Washlow, Chairman and CEO

2002 Sales: $387.5 million

Locations: 17

Employees: 1,250

www.lawsonproducts.com

Sales volume was up 2.1% in 2002 for Lawson Products, a distributor of fasteners and related items. The company completed the integration of the Premier Farnell business, acquired in 2001, and purchased a small distribution company in England. Lawson's foreign business includes operations in Mexico, Canada and the United Kingdom. The UK segment accounts for a small portion of that business, says chairman Robert Washlow. Lawson's OEM business was up 6% last year, while combined sales in Mexico, Canada and the UK were up 24%. MRO business in the United States – which represents 75% of Lawson's total volume — was flat.

NYSE: B

Headquarters: Cleveland, Ohio

A. Keith Drewett, President

2002 Sales: $382.7 million

Locations: 36

Employees: 3,000+

www.barnesdistribution.com

Sales figures reflect Barnes Distribution's purchase of Kar Products, a top distributor that ranked No. 37 in last year's list. The acquisition helped boost sales by almost 40% and raised the number of field sales reps to 1,600. 'We think this gives us a compelling position in national accounts,' president Keith Drewett says of the boost in field sales coverage. 'Both companies had coverage across the U.S. and Canada, so this improves the density and the reach. For some accounts, we literally services hundreds of locations in a seamless fashion.' Drewett expects Barnes to make strides in e-commerce this year, after getting its program in full swing last year.

Headquarters: Costa Mesa, Calif.

Ted Nark, Chairman and CEO

2002 Sales: $380 million

Locations: 60

Employees: 1,400

www.whitecapdirect.com

Both White Cap's overall sales and comparable store sales increased over the prior year, due to a strong finish in the second half. CFO Brian Etter points to mixed results in the company's major markets, with strong growth in residential and flat-to-declining activity in commercial sectors. White Cap sees overall construction activity remaining at current levels throughout 2003 in the markets it serves. 'We expect the residential markets to flatten out and potentially decline in some markets, while commercial should begin to improve,' he says. Tools and supplies made up 60%, or $228,000, of the volume, while concrete accessories and building materials made up the rest.

Headquarters: Burlington, Mass.

Jack Hester, Chairman

2002 Sales: $360 million

Locations: 63

Employees: 1,200

www.fwwebb.com

Big events for F.W. Webb include last year's purchase of Utica, N.Y.-based Turner and Marfone and another acquisition earlier this year – Colonial Supply in Waterbury, Conn. In addition, the company opened a pipe distribution center in central Massachusetts last year and is building a 450,000-sq.-ft. distribution center in Amherst, N.H. All in all, 2002 was a great year, says vice president of industrial sales, Ernie Coutermarsh. Sales were up, and he expects to reach $400 million this year. 'We're not big on doom and gloom here,' says Coutermarsh. 'We've been around since 1866 … and we're still here. That's not by chance.'

Headquarters: Santa Fe Springs, Calif.

Jim Ellison, Chairman and CEO

2002 Sales: $328 million

Locations: 31

Employees: 600

www.meritageinc.com

Sales reflect Meritage's fiscal year, ended Sept. 30, 2002, and mark a 28% decline – due to the sluggish market for machine tools, the company's primary product. While he doesn't expect a massive recovery in '03, chairman Jim Ellison is confident the year will end up better than 2002. A drop in spending on capital equipment has led Meritage to focus on the service side of the business. 'We're spending our time developing a broader range of service revenue opportunities, which has led us in some new directions,' Ellison says. '[We want] to re-position ourselves in the solutions business, not just the product business.'

Headquarters: Grand Rapids, Mich.

Mark Kirk, Chairman

2002 Sales: $300 million

Locations: 50

Employees: 800

www.usflow.com

COO Rick Waters attributes USFlow's sales decline — about 14% — to the sluggish economy and weak markets served by this PVF distributor. Specifically, the post-9/11 impact, uncertainty in the Middle East and lack of manufacturing expansion in the United States all have had long-lasting effects. 'There seem to be a lot of lingering questions as to when the economy is going to re-ignite itself,' Waters says. 'But we're still optimistic that [2003] is going to rebound … though to this point, it's still a little sluggish.' USFlow serves customers from Florida to Minnesota, with a concentration in Ohio and Michigan.

Headquarters: Cleveland, Ohio

Carl James, President

2002 Sales: $260 million

Locations: 124

Employees: 750

www.bdi-usa.com

Ask company president Carl James how the economy has affected business and he says, 'Economic slumps are business opportunities for both better operational efficiencies and increased market share.' Because BDI operates branches in the USA, Canada, Mexico, Hungary, Slovakia, Czech Republic, Romania and China, a particular area may be experiencing an economic slump, while others show strong growth. 'Our primary strategy is to follow the customer, both culturally, technologically and geographically,' says James, who expects 'good, solid growth' in all areas of operation in 2003.

NASDAQ: STRD

Headquarters: Bensalem, Pa.Don Woodring, CEO

2002 Sales: $253.6 million

Locations: 57 Employees: 920

www.isacs.com

Revenues fell 21% last year, but, the company says, largely for the right reasons: it terminated a contract with Kraft, which accounted for $77 million in 2002. The weak manufacturing and energy sectors reduced same-store sales by about $10 million at locations open for at least a year. Woodring says SDI improved internally with centralized stock purchasing and inventory management, cut its sales cycle nearly in half, and is now more focused on customized solutions than unit price savings and products. 'Inventory ownership has nothing to do with inventory management,' he says. The company reported a net $3.4 million loss due to Kraft-related severance costs.

Headquarters: Linden, N.J.

Frank Millard, President

2002 Sales: $250 million

Locations: 12

Employees: 450

www.turtle.com

The distribution business is slow in general, but electrical contractor sales were strong last year and integrated supply is Turtle & Hughes' fastest growing segment, says vice president J.J. Drummond. Integrated supply grew to 30% of sales in 2002, up from about 25% the year before. Electrical product sales represent 40% of the business. The first quarter of 2003 was flat, and Drummond expects little growth in 2003. The company consolidated its stock to a central warehouse and continues to find ways to reduce customers' costs. 'We have not seen any negative effect' from industry consolidation, adds Drummond, though he expects it to slow this year.

Headquarters: Baton Rouge, La.

Jay Roccaforte, CEO

2002 Sales: $225 million

Locations: 20

Employees: 300

www.edgencorp.com

The acquisition of Houston-based Sisco in April 2002 pushed Edgen Corp. into the high-yield fitting and flange market, both of which were new for the distributor. Edgen was one of few distributors to post sales gains in 2002, but Jay Roccaforte, CEO, says the company was off to a slow start in 2003, despite the gains in both revenues and profits posted last year. He expects things to pick up later in the year. Contributing to the company's 2002 performance, adds Roccaforte, was its focus on cutting expenses, increasing revenues and seeking out markets that 'appear to be strong.'

NYSE: KMT

Headquarters: Livonia, Mich.

Mike Wessner, Division President

2002 Sales: $200.3 million

Locations: 14

Employees: 615

www.jlindustrial.com

2002 was a solid year for J&L, considering that the company spent 2001 re-structuring after some major corporate changes. Vice president of marketing and supply chain management Chuck Moyer says the service end of the business has improved and that management spent considerable time taking cost out of the organization. Along with that was a push to develop more technical selling strategies to better service the firm's metalworking customers. 'As we look forward to 2003, for us, it's really about execution,' says Moyer. 'The bricks are in place. There's nothing like a major turnaround during a recession to build character.'

Headquarters: Warren, Mich.

D. Dan Kahn, President and CEO

2002 Sales: $198.3 million

Locations: 19

Employees: 447

www.ptsxpress.com

Coming off a soft 2002, Production Tool has seen increased activity during the first quarter of 2003, says Larry Wolfe, executive vice president. To boost sales and attract new customers, the distributor produced a new catalog last year that includes a wider variety of products. The firm also overhauled its Web site to make it more useful. It now includes, for example, the ability to enter and track orders. 'We've also increased inventory levels to better service our customers,' says Wolfe. 'Economy aside, with the positive response to our new catalog, enhanced technology and Web site, we're optimistic.'

Headquarters: Omaha, Neb.

Dennis P. Circo, CEO and Chairman

2002 Sales: $185 million

Locations: 110

Employees: 550

www.precisionind.com

Precision posted record sales in 2002, 'despite all we've been through,' says Dennis Circo, CEO. The branch side of the business posted strong gains, he adds, while the company's bottom line was challenged. 'It was one of the biggest growth years on the branch side of our business that we've ever had,' says Circo, who credits several large accounts and a few strategic acquisitions with helping to boost sales. Roughly 33% of the distributor's sales come through integrated supply contracts – an area that Circo calls 'surprisingly strong.' The company is running about 10% to 12% ahead of 2002 numbers.

Headquarters: Hoffman Estates, Ill.

Don Pannier, National Sales Manager

2002 Sales: $170.2 million

Locations: 9

Employees: 330

www.commercial.sears.com

The year was one of transition for Sears Industrial. Its hallmark Craftsman brand was the sales leader for 2002. By December, the industrial division had signed a marketing agreement and formed a partnership with the Danaher Tool Group to sell its products through other industrial distributors for the first time, starting in 2003, said general manager Don Pannier. 'The main question is, 'How do we drive Craftsman tools?' The answer was to turn our direct model into a distribution model,' Pannier said. It marks the first time the brand has been available outside of the Sears network, he said.

NASDAQ: DXPE

Headquarters: Houston, Texas

David Little, President

2002 Sales: $148.1 million

Locations: 37

Employees: 523

www.dxpe.com

DXP Enterprises saw revenues for the year drop by about $26 million, the bulk of which represented the slowdown in the U.S. economy, says president David Little. While looking slightly better so far, 2003 is slow, as well. Last year, the company consolidated its e-business technology into one system, including thin client structure for Java applications, he says. This bearing, pump and power transmission specialist will unbundle services this year as it looks for areas to save customers money. When customers look at the total cost of ownership, they aren't getting the best deal if they buy on price alone, and disregard engineering and other services, Little says.

Headquarters: Sunnyvale, Calif.

Bob McCollum, CEO

2002 Sales: $141 million

Locations: 35

Employees: 360

www.rshughes.com

Much like 2001, business was flat with little sign of improvement, says CEO Bob McCollum, who blames the lack of growth on the overall economy. 'This year is looking just about the same,' he says, adding that the company continues to dig deeper into existing customer accounts, while seeking new ones in an effort to keep itself righted until the economy rebounds. Fiercely independent, the company has steered clear of industry consolidation and prefers to grow and expand organically. 'There have been consolidations and buyouts,' says McCollum, 'but there are also companies that are doing well on their own, and that's the route we've taken.'

Headquarters: Chino, Calif.

Bill McCollum, Chairman and CEO

2002 Sales: $135 million

Locations: 40

Employees: 510

www.harringtonplastics.com

2002 was a slow year for Harrington Industrial Plastics, with sales down 9% as compared to figures reported last year. 'We battened down the hatches and survived,' chairman and CEO Bill McCollum says matter-of-factly. He expects much of the same in 2003. Harrington Industrial sells pipe, valves and fittings, pumps, instrumentation products and related equipment, coast to coast. Customers include those in the semi-conductor, pharmaceutical, metal finishing, petroleum and healthcare industries, among others. While the company does some selling over the Web, McCollum says there's less of a call for that by his customer base these days.

Headquarters: Charlotte, N.C.

Richard Lake, President

2002 Sales: $128 million

Locations: 45

Employees: 750+

www.nwsco.com

The big news at National Welders Supply in 2002 was its purchase of Air Products' packaged gas business in North and South Carolina, which fueled sales growth, totaling 35%. Figures provided do not include the firm's gas sales. Vice president of marketing Steve Marinelli says that while most manufacturing markets were soft, medical R&D remained strong, as did construction. The first quarter of 2003 was flat, and Marinelli expects the same for the rest of the year. The firm also managed expenses aggressively. 'We review virtually every line item,' he says. 'We watched our hiring and watched our distribution expenses.'

Headquarters: Raleigh, N.C.

Dean Wagoner, President

2002 Sales: $122 million

Locations: 22

Employees: 385

www.dillonsupply.com

'Flat.' That's the word to describe sales last year for Dillon Supply, says president Dean Wagoner. There are some positives in that, however. By reducing inventory of some items and moving more stock to branches, the company added efficiency for its customers, he says. 'We had a decrease in sales of fork lifts, which are capital equipment, while our industrial and steel sales were flat,' Wagoner says of the company's material handling division. He and his management team expect to increase Dillon's role in integrated supply. The company avoided layoffs in 2002, but did not fill some vacant positions, he adds

Headquarters: Columbus, Ohio

Charles M. Simon, President and CEO

2002 Sales: $120 million

Locations: 21

Employees: 230

www.fcxperformance.com

FCx Performance, a division of FCx International plc, acquired Simone Engineering, a manufacturers' representative and distributor, and Control Visions, a valve distributor. Increasing its strength as the largest flow control specialty distributor in the country, FCx continues to improve its services, which include systems integration through its Simone Systems Group, valve automation and repair, and pipe fabrication. The company initiated a CRM system last year, according to president Charles Simon. Figures reflect information published on the company's Web site.

Headquarters: Merriam, Kans.

Stephen R. Cloud, Chairman

2002 Sales: $119 million

Locations: 45

Employees: 420

www.ibtinc.com

Despite a tough year overall, IBT saw noticeable increases in sales activity during the final quarter, which chairman Stephen Cloud says has carried over into 2003. 'We are starting to be cautiously optimistic that the economy is, indeed, getting better,' he says. Moves IBT made in 2001 to enter the fluid power business and partner with a safety distributor paid off. For example, he says offering safety products and training often enhances mechanical sales. Fluid power sales include some new OEM accounts, which also turn to IBT for MRO items. Early in 2003, IBT purchased an Oklahoma-based belt splicing company.

Headquarters: Hampton, N.H.

Peter Vogel, President and CEO

2002 Sales: $118 million

Locations: 25

Employees: 420

www.bossard.com

Business right now is slightly better than it was a year ago, says Peter Vogel, company president and CEO, who sees sales for 2003 winding up flat or slightly higher than 2002 sales. The company closed a few branches in the last year, some because of low sales and others because the branch's primary customer closed and moved overseas. The distributor competes by focusing on three core strategies: good products, technical support and logistical support. Vogel says Bossard U.S. is 'disappointed' with how low its online sales volume is compared to that of its European counterpart.

Headquarters: St. Laurent, Quebec

Gordon Duncan, President

2002 Sales: $118 million

Locations: 65

Employees: 760

www.kinecor.com

Like the United States, Canada's economy has felt its share of bumpy ground over the last two years. However, Kinecor's marketing coordinator, Miriam Savaiano, says its U.S. division, Spencer Industries, has felt the brunt of the economic woes. After a 2001 merger in which three companies became one, Kinecor closed several overlapping locations and merged a few branches, according to Savaiano. So far, 2003 is 'going well,' she says, although the distributorship's pulp and paper customers are still experiencing a slowdown and holding back on spending.

Headquarters: St. Louis, Mo.

James Malkus, President

2002 Sales: $112.5 million

Locations: n/a

Employees: 500

www.indoff.com

The business climate was poor for this material handling and business products specialist. President James Malkus says many customers deferred major purchases, while consumables such as packaging items became a larger percentage of sales. Indoff continues to stay with 'the basics: service, reliability and dependability,' Malkus says. Indoff is constantly upgrading its customer-ordering computer system, he says. Customers are discussing integrated supply, but not implementing contracts. '[This year] is starting off better, a 10% increase over 2002 thus far. We are cautiously optimistic that we will be able to maintain that throughout the year,' he says.

Headquarters: Omaha, Neb.

Gary R. Gettle, President and CEO

2002 Sales: $108 million

Locations: 38

Employees: 400

www.csystems.com

2002 brought changes to Carlson Systems. Some locations were sold and the company consolidated in other areas, says CEO Gary Gettle, who attributes Carlson's solid performance to its regional management teams. 'We've got an excellent field management team and we try to keep me, and our other executives, out of their way,' notes Gettle. 'Our teams impacted significantly in '02 … we ended up taking a substantial amount of business from the competition.' Performance to date has been good, as well. 'We feel like '03 is going to be, probably, the best year that we've had in the last several,' Gettle says.

Headquarters: Burnaby, British Columbia

Robert S. MacPherson, President and CEO

2002 Sales: $100 million

Locations: 49

Employees: 325

www.bearings.com

North American sales were soft, while Latin America experienced a more positive trend last year, says Robert MacPherson, president and CEO. 'Had we not adjusted our strategy to the economy, we would likely have seen a rather substantial sales decrease,' he says. 'We looked at this as an opportunity to grow with our existing customers by introducing new products and solidifying long-term business further.' MacPherson points to the firm's 3-year-old ERP system as a key driver in the company's goal to re-evaluate business processes and implement a computer system to provide improved efficiencies and effectiveness. He adds, 'It's now contributing to the bottom line.'

Headquarters: Aston, Pa.

Terry L. Taylor, President and CEO

2002 Sales: $100 million

Locations: 31

Employees: 400

www.goodallonline.com

In 2002, Goodall transformed from a branch-based business into a functional one, in which sales and operations managers at all 31 locations report up their respective chains of command, directly to headquarters. 'A branch is a misnomer to us now,' says CEO Terry Taylor. 'It was a huge change … While we were doing all that, we were trying to sell some stuff, and the economy, of course, was not very kind to people in our business in 2002.' This year, Goodall is beefing up its sales force because, without a strong selling organization, 'you're just dead in the water,' Taylor says.

Headquarters: Schaumburg, Ill.

Mark Nishide, President

2001 Sales: $100 million

Locations: 11

Employees: 150

www.yamazen.com

Yamazen had a difficult 2002, says vice president Scott Fernandez, primarily due to the dismal manufacturing economy. He described the last six months of 2002 as, 'soft to depressed,' and 2003 is shaping up flat to those figures. Last year, the company focused on efficiencies, costs and redundancies in their operations, he adds. 'In the machine tool industry, I believe consolidation is just beginning,' he points out. 'The longer the industry remains depressed, the more consolidation one will see.' While Yamazen does little in e-commerce, Fernandez says 'technology will continue to be a key component in everyone's success.'

Headquarters: Saginaw, Mich.

Barbara Mahar Lincoln, President

2002 Sales: $96.1 million

Locations: 7

Employees: 155

www.mahartool.com

Production is down overall, but president Barbara Mahar Lincoln says demand for the company's management services remains strong. Year-over-year shipments are slightly down for the first quarter of 2003, she adds, but new accounts have helped offset the decline. 'We continuously strive to offer cost savings by providing new products and services to already existing customers, while simultaneously targeting new business,' says Lincoln, who points to customer satisfaction, highly technical workers, a new state-of-the-art computer system and diligence as the company's strong points.

Headquarters: Mississauga, Ontario

Farrokh Khalili, President and CEO

2002 Sales: $96 million

Locations: 32

Employees: 350

www.canadianbearings.com

Canadian Bearings' growth last year was due to new integrated supply contracts, for the most part, says vice president Don Latham. 'The Canadian economy was better than the United States economy in 2002, also,' Latham says. Upgrading to new technologies is a key ingredient in integrated supply, where Latham expects growth in 2003. 'Pure Internet selling is not very productive for us, however,' he says. In March, sales increased markedly, a trend he hopes will continue. Canadian Bearings represents the major bearing makers, and consolidation in that industry hurt business last year, he adds. Customer consolidation has both hurt and helped the business, which is 85% MRO.

Headquarters: Schaumburg, Ill.

Joseph Romanowski, President

2002 Sales: $95 million

Locations: 5

Employees: 110

www.machsys.com

Joe Romanowski is trying to stay positive. As president of Machinery Systems, he says the company had a tough year last year and had to aggressively cut costs, including two rounds of layoffs. However, the company's integrated supply solution – Cutting Tool Management Program — grew substantially, as did a new line of instruments and coordinate measuring machines. While the Web remains largely informational for his business, Romanowski understands its importance for the future. With sales concentrated in the upper Midwest, industrial production in the heartland is critical to business, and the first quarter of 2003 looks markedly better than last year.

Headquarters: Broadview, Ill.

Jim Timble, President

2002 Sales: $89.1 million

Locations: 39

Employees: 364

www.bearingheadquarters.com

Noting that the economy has suffered through 'a couple of weird years,' president Jim Timble is nevertheless focused on growing Bearing Headquarters using a market-share initiative plan. 'The plan is to put more people in front of more customers,' he says. With the plan, Timble expects a better sales year in 2003. MRO business represents 65% of all sales; the rest is OEM. Bearing Headquarters has six assembly and design centers that make special gears and bearings, and assemble OEM parts. 'Since our market is manufacturing, we did not have a very good 2002,' he says. Integrated supply contracts comprise about 10% of sales.

Headquarters: Pittsburgh, Pa.

Dave Goetz, Chairman, President and CEO

2002 Sales: $86.5 million

Locations: 20

Employees: approx. 300

www.lewis-goetz.com

Company president and CEO Dave Goetz says business with the coal industry dropped off significantly in 2002 for his company, but fortunately, the steel industry nearly made up the slack. Last year's sales growth can be directly attributed to the company's 12th acquisition in 17 years. 'We'd rather lead than follow the trend in consolidation,' Goetz says. The company has spent heavily on technology, with upgrades to purchasing/inventory management software, as well as installation of Activity Based Costing software. 'That has paid significant dividends,' Goetz says. He sees signs of a weak recovery, but expects only a 2% to 3% increase over last year.