The Big 50
2004 is shaping up nicely, but cautiousness prevails among North America's largest industrial distributors
Staff -- Industrial Distribution, 6/1/2004
Click here for the 2006 Big 50.
Despite the good news of a recovering economy, many distributors are reluctant to breathe a sigh of relief just yet. The ups and downs of the past few years have left many U.S. companies with a lingering sense of cautious optimism, even as business conditions begin to improve.
A recent economic outlook by the Institute for Supply Management predicts economic growth to continue at a relatively strong level this year. The report shows that revenue in the manufacturing sector, for instance, is expected to grow by 9.7 percent in 2004, compared to a 2.8 percent increase re-ported in 2003. Though this bodes well for distributors, it exists alongside other concerns, such as rising fuel and raw materials costs, and the erosion of the domestic manufacturing base.
To combat these pressures, distributors are tapping into global markets, expanding their reach here at home and continuing efforts to drive costs out of the supply channel. That's what executives told us as we researched our annual report on the largest industrial distributors in North America, Distribution's Big 50. In the following pages, we've ranked the largest companies in the industry by sales volume.
For the most part, distributors' efforts to grow are paying off. More than half of the companies in this year's list (54 percent) reported a sales increase in 2003—by an average of 9 percent. In contrast, 38 of the Big 50 companies saw sales decline—also by 9 percent, on average. The remainder reported flat sales. This is a change from last year's report, when sales dropped by an average of 11 percent for half of the companies on the list.
In addition to sales performance, we tracked the growth of three industry trends among the Big 50—integrated supply, online sales and consolidation. Eighty-two percent of the companies estimated their integrated supply volume for us, with most reporting that it's a growing part of their business, representing an average 19 percent of total sales. Seventy-six percent of the companies estimated their online sales for us; they represent an average 4 percent of total sales volume.
Consolidation has long ceased its frenzied pace of the late '90s, but several Big 50 companies are back on the acquisition trail. Nineteen firms made offers to buy other distributorships in 2003. Most notably, Airgas, Inc., No. 4, made five acquisitions last year, and announced plans for yet another in March (the U.S. packaged gas business of The BOC Group, which is expected to close next month). On the flip side, 23 companies refrained from acquisition activity, and eight companies refused to share information on their consolidation efforts.
A changing climateA major issue affecting the Big 50 distributors is the shrinking domestic manufacturing base. To address the problem, companies such as Applied Industrial Technologies, No. 7, are expanding their product portfolios and filling in geographical gaps in their sales territories. Applied's focus is North America, where company president Bill Purser says there are still opportunities for growth, especially in Canada, where Applied's coverage is concentrated in the West.
'We're looking at anywhere in North America where we have geographical voids,' says Purser. 'There are opportunities still in the U.S., we're looking at Mexico and…Canada.'
Others, such as Fastenal, No. 8, are attacking the problem by entering new markets at home and abroad. Fastenal started a national construction program to boost business with large U.S. contractors, an effort that is paying off, says CEO Will Oberton. Fastenal also set up operations in Shanghai last year, to take advantage of product sourcing in Asia and to serve U.S. customers who've set up shop there.
Still others are keeping a narrow focus, concentrating on building business in their long-established territories. One example is F.W. Webb, No. 18, which sells to customers in New England and New York.
'We are all impacted by outsourcing and the globalization of the industry, and by manufacturing moving offshore,' says Ernie Coutermarsh, F.W. Webb's vice president of industrial sales. 'But our job is to help our customers be competitive here.'
Commodity pricing is another global issue affecting distributors, and competitors Ferguson Enterprises, No. 2, and Hughes Supply, No. 5, are keeping close tabs on the subject.
'The one concern we've all got is the rapid escalation in commodity product pricing,' explains Robert Samsing, vice president of marketing at Ferguson. 'That's the only cloud on the horizon that we see.'
Hughes Supply's David Bearman, executive vice president and CFO, echoes those concerns.
'If there is demand out there, and demand is picked up, the price increases are passed on to our customers,' Bearman says. 'It's a fairly volatile situation. You have to be smart in the way you manage it.'
MethodologyIn January, we asked each company that appeared in our 2003 Big 50 report to provide us with updated financial and operations information so they could be listed this year. That information was confirmed in follow-up interviews with company executives and, where possible, by recently published financial information. We also checked in with companies that were not included last year. Re-appearing after not being listed in 2003 are DoAll Co., No.24; Endries International, No. 37; Redlon & Johnson, No. 43; Ewie Co., No. 46; and Purchased Parts Group, No. 49. There are no newcomers to this year's list.
Five companies did not return to the Big 50 this year: USFlow Corp., Sears Industrial Sales, National Welders Supply Co., Yamazen, Inc. and Machinery Systems. USFlow, which ranked among the top 25 last year, declared Chapter 11 bankruptcy in August 2003, then Chapter 7 bankruptcy in September 2003, citing the economic downturn and the recession in the construction sector as catalysts to its downfall. The company's locations, employees, assets and territories were snapped up by local and regional competitors.
Sears Industrial Sales, which ranked in the top half of the list last year, was purchased by the Danaher Tool Group Professional Tools Division. National Welders Supply, No. 35 in last year's report, is in a joint venture with Airgas, Inc., and its sales are included in Airgas' total of $1.9 billion this year.
Privately held Yamazen, Inc., which ranked No. 45 last year, declined to share sales information, after the company reportedly split into several joint ventures last October. Machinery Systems did not meet our $80 million cutoff figure.
There were some significant shifts within the Big 50 list this year. Ferguson Enterprises, for instance, moved up five spots to No. 2, and Hughes Supply dropped three spots to No. 5. This was a result of re-classifying each company's sales figures. Figures reflect their sales of industrial and plumbing products, as reported by the companies, which represent a portion of their total revenues.
Kinecor, Inc. moved up 12 spots, from No. 40 to No. 28. The company's growth was due mainly to cost-reduction and margin-improvement activities undertaken in late 2002 and early 2003, according to president Gordon Duncan.
Finally, Strategic Distribution, Inc. dropped eight spots, from No. 25 to No. 33. This is the result of a 47 percent decline in revenue, which the company attributes to the termination of several integrated supply contracts and ongoing weaknesses within its core customer base.
Also, White Cap Construction Supply, No. 14, remains on our list, despite an announcement last month that it would be acquired by The Home Deopt. The move extends the giant retailer's reach into the professional contractor market.
In keeping with recent tradition, a breakout list of the top 10 electrical distributors appears at the end of the report. This list represents the largest distributors of electrical, lighting, data-communication and related products in the United States. To determine the top electrical companies, we turned to Electrical Wholesaling magazine, which publishes a list of the largest electrical distributors in the country each year. We took the top 10 companies from the magazine's June 2003 list and updated their sales figures to reflect year-end 2003 totals.
Information on public 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 sales for the 2003 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 Kickham, Alison Lutes, Kimberly Griffiths and Joe Nowlan, and contributing editor Bridget McCrea.
To purchase the entire Big 50 report, visit the ID store.Click here for the 2005 Big 50.
1 W.W. Grainger, Inc.
NYSE: GWW
Richard L. Keyser, Chairman and CEO
Headquarters: Lake Forest, Ill.
2003 Sales: $4.67 billion
Locations: 575
Employees: 15,000
www.grainger.com
Grainger is focused on driving sales growth in 2004, after falling short of achieving sales goals in recent years. The company has a three-pronged approach to doing so: continuing to target large, multi-use customers; building business with local customers through an expansion program that adds branches and salespeople in high-potential markets; and 'by providing superior service that not only attracts but also keeps customers coming back to Grainger,' according to chairman Dick Keyser. Earlier this year, Grainger realigned its operating structure to help fulfill this mission. Jim Ryan now heads up the largest business unit as president of the Grainger-branded businesses in the United States.
Click here to find out where this company's ranking in the 2005 Big 50.
2 Ferguson Enterprises, Inc.
NYSE: WOS
Claude Hornsby III, President and CEO
Headquarters: Newport News, Va.
2003 Sales: $3.2 billion
Locations: 738
Employees: 14,000
www.ferguson.com
2003 was a good year for Ferguson Enterprises, which sells plumbing, HVAC, and waterworks products, as well as industrial PVF, safety supplies and tools. Sales figures reflect the company's industrial and plumbing sales; total company revenues for 2003 were $5.3 billion. 'The fact that we were able to grow the business overall by 26% in a market in decline, we were very happy with that,' says Robert Samsing, Ferguson's vice president of marketing. Some of the company's growth was through acquisition, but most was organic. Ferguson is part of publicly-traded Wolseley, a global distributor of plumbing and heating products.
ClClick here to find out where this company's ranking in the 2005 Big 50.
3 Motion Industries
NYSE: GPC
William J. Stevens, President and CEO
Headquarters: Birmingham, Ala.
2003 Sales: $2.25 billion
Locations: 463
Employees: 4,945
www.motionindustries.com
2003 was a challenging year, says Bob Summerlin, Motion Industries' group vice president, sales and marketing. Sales growth was flat compared to 2002, though the firm expanded market share and focused on cost-reduction strategies and operational performance. Summerlin looks forward to better results this year. 'We are optimistic for 2004,' he said. 'We should see low- to mid-single-digit growth, though we're keeping our fingers crossed for something better.' Motion launched a multi-faceted marketing campaign this year called 'Delivering the Difference.' Salespeople were given a new set of tools to help them penetrate additional market segments. One aspect of the program involves targeting MRO customers.
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4 Airgas, Inc.
NYSE: ARG
Peter McCausland, Chairman and CEO
Headquarters: Radnor, Pa.
2003 Sales: $1.9 billion
Locations: 800
Employees: n/a
www.airgas.com
Airgas will complete its largest acquisition to date next month—the U.S. packaged gas business of The BOC Group, Inc. The transaction includes about 120 locations in 21 states selling packaged indus-trial, specialty and medical gases, as well as welding equipment and supplies. 'I'm excited about our growth opportunities ahead,' chairman Peter McCausland said in early May. 'During the last several years, we have built a tremendous infrastructure and product offering. With that behind us, we are now focused on growing our business, branch by branch, with those core customers who use gases, welding and safety products…' Figures reflect Airgas' fiscal year ended March 31, 2004.
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5 Hughes Supply, Inc.
NYSE: HUG
Tom Morgan, CEO
Headquarters: Orlando, Fla.
2003 Sales: $1.6 billion
Locations: 489
Employees: 8,400
www.hughessupply.com
Figures reflect Hughes Supply's sales of industrial PVF, MRO, plumbing/HVAC and 'other' industrial products for the fiscal year ended January 30, 2004. Hughes, which also sells water and sewer products, utilities and electrical supplies, had total sales of $3.3 billion last year. Overall sales were up 6% despite continued difficulty in the PVF market. 'That industry has seen an economic downturn which, in our experience, has been the most severe in 30 years,' says CFO David Bearman. 'But, we are beginning to see some signs of recovery there.' In December, Hughes acquired Century Maintenance Supply, a large distributor serving the apartment MRO market.
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6 Hagemeyer NA Holdings, Inc.
David G.Gabriel, President and CEO
Headquarters: Charleston, S.C.
2003 Sales: $1.5 billion
Locations: 440+
Employees: 4,500
www.hagemeyerna.com
2003 was a challenging year, as Hagemeyer's Netherlands-based parent company announced a EUR $1.5 billion refinancing package. President David Gabriel looks to 2004 as a year of transformation and growth for the North American business. 'We're very bullish on our opportunities in '04 and beyond,' he says. Among the issues shaping distribution are technology and rising customer service expectations, Gabriel adds. 'I think that you have to be incredibly efficient, and we certainly have to be very good at articulating our value proposition to our customer base,' he says. 'For us, that starts first and foremost with excellent customer service.'
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7 Applied Industrial Technologies
NYSE: AIT
David L. Pugh, Chairman and CEO
Headquarters: Cleveland
2003 Sales: $1.46 billion
Locations: 389
Employees: 4,389
www.applied.com
Figures reflect AIT's fiscal year ended June 30, 2003. President Bill Purser says that AIT spent the year working on what the company calls 'operational excellence.' Focusing on improved internal operations helped AIT achieve five consecutive quarters with 20% growth in EPS. Purser points out that AIT has focused on improving efficiencies, not cost-cutting. As for 2004, business conditions are improving. 'Most customers are still very cautious. We see them building some inventories, which is a good sign,' he says. 'So, we feel pretty good that [the growth] appears sustainable. At this point in time, it does appear that things are moving forward.'
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8 Fastenal Co.
NASDAQ: FAST
Will Oberton, President and CEO
Headquarters: Winona, Minn.
2003 Sales: $994.9 million
Locations: 1,314
Employees: 7,013
www.fastenal.com
'We had a good year, not a great year,' says Fastenal's Will Oberton. 'We're looking for better things in 2004.' The company opened 151 new stores in 2003, and will continue that growth strategy this year. In addition, Fastenal is broadening its inventory—adding fastener-related products and general-line industrial supplies. Fasteners represent 55% of total sales. Erosion of the U.S. manufacturing base remains a concern, says Oberton. To address that, Fastenal is working to build business with large contractors. The company also set up shop in China last year, continuing efforts to source products there, and serving U.S. customers with locations in Asia.
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9 Wilson Industries
John Kennedy, President and CEO
Headquarters: Houston
2003 Sales: $917 million
Locations: 209
Employees: 2,100
www.iwilson.com
Wilson Industries saw business improve in 2003, but is more optimistic about 2004. The economy continues to get better and customer activity is picking up, says company president John Kennedy. Wilson is focusing on a hub-based business model to efficiently deliver products to end-users and reduce operating costs. The company is consolidating suppliers to form strong partnerships, says Kennedy. Those relationships will maximize buying and selling potential, he adds, resulting in improved overall margins. Like other distributors, Wilson is faced with customers who are moving production overseas. To counter this, the company is expanding into new markets outside of North America.
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10 MSC Industrial Direct Co., Inc.
NYSE: MSM
Mitchell L. Jacobson, Chairman and CEO
Headquarters: Melville, N.Y.
2003 Sales: $845 million
Locations: 93
Employees: 2,800
www.mscdirect.com
MSC Industrial had a 'terrific 2003, surpassing the expectations of all of our stakeholders, and our momentum is increasing in 2004,' says company CEO Mitchell Jacobson. 'We have attracted and retained an industry-leading group of associates, and grown market share, revenues, and earnings at industry-leading rates. Our solid balance sheet, with [more than] $150 million in cash, will provide the resources to grow our sales team by 10% in 2004.' Jacobson adds that MSC has grown its sales force by 30% during the last three years, and will continue to do so 'as others struggle with the challenges of the economy.'
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11 McJunkin Corp.
H.B. Wehrle, III, President and CEO
Headquarters: Charleston, W. Va.
2003 Sales: $800.2 million
Locations: 100+
Employees: 1,500
www.mcjunkin.com
McJunkin made two key acquisitions last year—Valvax, a distributor and fabricator of valve products, and CIGMA LLC, which sells gas products and integrated supply services. Long focused on the chemical and refining industries, McJunkin is seeing the most growth in its gas product business, says Steve Wehrle, senior vice president, sales. 'Chemical and refining has been stagnant, so we've found a way in a slow market to grow in some areas—parti-cularly gas distribution,' he says. After a few years of slow growth, Wehrle says business appears to be on the upswing, with McJunkin's sales up 25% in the first quarter of 2004.
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12 Interline Brands
Michael Grebe, CEO
Headquarters: Jacksonville, Fla.
2003 Sales: $641 million
Locations: 56
Employees: 2,200
www.interlinebrands.com
2003 was a relatively flat year for Interline Brands, whose main customer segment, the multi-family housing market, was down for most of the year. 2004 started off strong, says executive VP Bill Sanford, pointing to two acquisitions that helped boost the com-pany's brand-focused strategy. Interline Brands has a multi-faceted approach to selling, using priced catalogs, outbound telesales and electronic commerce in addition to traditional field sales reps. National accounts is a growing portion of the business. In addition to the multi-family housing market, Interline Brands sells MRO products to educational, lodging and health care facilities; contractors; hardware stores; and other distributors.
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13 Würth
Dr. Reinhold Würth, President
Headquarters: Kunzelsau, Germany
2003 Sales: $612 million
Locations: 108
Employees: 2,787
www.wurthindustry.com
2003 was similar to the last two years, says general manager of the industrial division, Mark Alexander. 'It was still a difficult business environment, but in late '03 and into 2004, the customers seem to be coming back.' Alexander expects a good 2004, saying that the atmosphere is the best since Würth started buying companies in the last 10 years. With financial backing from a larger company, says Alexander, Würth has been able to expand business, buy inventory and compete for more OEM business. Like other companies, the division's concerns revolve around the steel shortage, and watching for falling gross profits.
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14 White Cap Construction Supply
Ted Nark, Chairman and CEO
Headquarters: Costa Mesa, Calif.
2003 Sales: $500 million*
Locations: 60
Employees: 1,250
www.whitecapdirect.com
In 2003, White Cap Contruction Supply continued to fulfill its mission—becoming a premier nationwide supplier of hardware, tools and materials to the professional contractor—by acquiring Albu-querque-based Nail Fast, Inc., a fasteners, tools and materials distributor. In a prepared statement, White Cap chairman and CEO Ted Nark said of the acquisition, 'We think Albuquerque is a good market…so this will strengthen our position in the area.' In early 2004, White Cap was acquired by The Home Depot, for an undisclosed sum, becoming part of Home Depot's strategy to expand its professional customer market base, according to a Home Depot statement.
* Estimated sales figure
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15 Kaman Industrial Technologies
NASDAQ: KAMNA
T. Jack Cahill, President
Headquarters: Windsor, Conn.
2003 Sales: $497.9 million
Locations: 175
Employees: 1,488
www.kaman.com
'2003 was a changeable market,' says company president T. Jack Cahill. 'The first quarter started good, the second and third came down, but we had a robust fourth quarter.' Cahill attributes that to maintaining a focused strategy and working hard to execute it. As to significant issues facing Kaman, Cahill lists steel's incredibly fast rising costs, globalization, the cost and availability of energy, and new compliance regulations for customers, suppliers and distributors. Also in 2003, Kaman acquired Industrial Supplies, Inc. in Birmingham, Ala. 'I'm optimistic about opportunities in 2004,' says Cahill, 'and the companies who focus and execute will succeed.'
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16 IDG
NYSE: IDG
Andrew Shearer, President and CEO
Headquarters: Atlanta
2003 Sales: $483 million
Locations: 52
Employees: 1,350
www.idglink.com
There is a real uncertainty in the industrial environment, says IDG president/CEO Andrew Shearer, almost repeating his pronouncement from last year's Big 50. '2003 was a challenge for traditional business in the overall economic environment,' he says. 'But we're very satisfied with the growth of integrated supply, which is higher, by about 14%.' Shearer says that '04 shows signs of improvement, as IDG continues to focus on value-added services, its customers both current and new, and in strengthening the overall business. 'The manufacturing sector concerns on consolidation and moving offshore are important, and we're looking at different customers and different industries,' he says.
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17 Noland Co.
NASDAQ: NOLD
Lloyd U. Noland, III, Chairman and CEO
Headquarters: Newport News, Va.
2003 Sales: $471.8 million
Locations: 102
Employees: 1,290
www.noland.com
2003 was 'a mixed bag,' says Ken King, vice president–marketing and branch operations. 'Comm-ercial construction was weak, and record rainfall in most of our territories delayed housing construction and weakened demand for water systems.' The economic outlook for '04 is brighter, he says, and issues facing the company include capitalizing on the improving economy and achieving the sales growth goals for key vendors. 'By buying better and focusing on improving the profitability of our sales, we realized significantly higher gross margins in '03,' says King. 'This, coupled with controlling expenses, led to record earnings of $12.4 million, 30% more than '02.'
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18 Red Man Pipe & Supply
Craig Ketchum, President and CEO
Headquarters: Tulsa, Okla.
2003 Sales: $423.9 million
Locations: 65
Employees: 780
www.red-man.com
Red Man Pipe & Supply has always been a sales-oriented company with a can-do attitude, says com-pany president/CEO Craig Ketchum. Red Man did well last year, he says, and looks at 2004's rising steel prices as the catalyst behind a better first quarter in 2004. 'People are buying steel to be sure they have it for the shortage,' he says. Ketchum also says the Internet has been important to the company, pointing out that customers can use Red Man's online catalog to order, do field estimates, see mill test reports, link to the company's suppliers, and take advantage of the Web Reporting System, which keeps track of orders.
Click here to find out where this company's ranking in the 2005 Big 50.
19 F.W. Webb
Jeff Pope, Chairman
Headquarters: Bedford, Mass.
2003 Sales: $400 million
Locations: 65
Employees: 1,100
www.fwwebb.com
In 2003, F.W. Webb opened a branch in Poughkeepsie, N.Y.; acquired a small company in New Haven, Conn.; and began construction on a distribution center in Amherst, N.H., as well as a new pipe fabrication shop in Canton, Mass. '2003 was a record year for us, and 2004 is ahead of forecast already,' says Ernie Coutermarsh, vice president of industrial sales. 'Our company has diversity, our products are varied, and when customers are looking for a vendor with a lot of product from a single source, we are the ideal.' F.W. Webb sells plumbing, heating, cooling and piping products to customers throughout New England and New York.
Click here to find out where this company's ranking in the 2005 Big 50.
20 Lawson Products, Inc.
NASDAQ: LAWS
Robert J. Washlow, President
Headquarters: Des Plaines, Ill.
2003 Sales: $381 million
Locations: 16
Employees: 3,150
www.lawsonproducts.com
2003 was 'certainly challenging,' says Lawson Products president, Robert Washlow. 'There are several markets hurting because of the displacement of industry.' But in the end, because of deeper penetration into its markets, Lawson ended 2003 on a good note, he says. Lawson's OEM market dropped in production, but has since gone up, and continues to rise. Lawson has continued its 10-year technology investment and is experimenting with a different ordering system; has made inroads with its inside sales department; and is revamping and modernizing its accounting and inventory control. '2004 looks good,' says Washlow. 'But we don't talk about projections.'
Click here to find out where this company's ranking in the 2005 Big 50.
21 Barnes Distribution
NYSE: B
A. Keith Drewett, President
Headquarters: Cleveland
2003 Sales: $373 million
Locations: 20
Employees: 3,000+
www.barnesdistribution.com
The market for the products that Barnes Distribution sells was soft in 2003, but company president A. Keith Drewett expects modest growth in '04, after an uptick in the final quarter of the year. 'We're well positioned going forward,' he says, stating that although Barnes is financially strong and carrying a solid balance sheet, the company still combats the same issues as other distributors: manufacturing moving offshore and a shrinking job market. Barnes counts its three new distribution centers and eight reconfigured centers as new assets, along with its 2003 acquisition, Kar Products, a full-service distributor of maintenance, repair and operating supplies.
Click here to find out where this company's ranking in the 2005 Big 50.
22 BDI
Carl James, President
Headquarters: Cleveland
2003 Sales: $300 million
Locations: 129
Employees: 825
www.bdi-usa.com
'We are continuing to grow in all areas,' says BDI president Carl James. 'Our philosophy is to follow the customer—culturally, technologically and geographically.' James accounts for BDI's 2003 performance by citing the company's strategic focus on power generation, aggregate mining and food processing, as well as a staff supported by Internet tools and continuous learning. 'Globalization, for us, is an opportunity—not competition. Our business model is based on it,' says James, referring to BDI's presence in markets around the world. 'A customer opportunity lost in the United States is an opportunity gained in another country.'
Click here to find out where this company's ranking in the 2005 Big 50.
23 Meritage, Inc.
W. J. Ellison, Chairman and CEO
Headquarters: Santa Fe Springs, Calif.
2003 Sales: $264 million
Locations: 18
Employees: 545
www.meritageinc.com
Though orders for machine tools in 2003 were more than 20% lower than the previous years for the total U.S. market, the results followed a year (2002) that saw business decline by 40%, says company president W.J. Ellison. 'We went into 2004 planning for no growth and structuring our businesses for this scenario,' he says, adding that new orders have increased Meritage's fiscal position. Ellison says he expects the balance of 2004 to follow suit. He credits a concentrated effort to help customers become more efficient and productive as the catalyst for the growth. Regarding manufacturing moving offshore, Ellison says that America can still compete, and is still the most productive nation in the world.
Click here to find out where this company's ranking in the 2005 Big 50.
24 DoAll Co.
Michael Wilkie, President
Headquarters: Des Plaines, Ill.
2003 Sales: $249 million
Locations: 53
Employees: 850
www.doall.com
For the first three months of this year, DoAll saw business improving compared to last year, says senior vice president David Crawford. 'We've done a lot in the customer service area, with new technology that routes a problem to the best-qualified person,' he says. 'This enhanced service, a new warehouse rationalization management program, and a new phone system allow us to use the synergies of our company much better.' Integrated supply remains the most active segment of the company's business, Crawford adds, and electronic sales, though small, are gaining momentum. 'Margin erosion is something we'll be concentrating on in the future,' Crawford says.
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25 Turtle & Hughes
Sue Millard, President and CEO
Headquarters: Linden, N.J.
2003 Sales: $221 million
Locations: 9
Employees: approx. 500
www.turtle.com
Turtle & Hughes has increased its integrated supply business, explains president Sue Millard. 'There is no stopping as far as integrated supply. We really kind of pick and choose, making sure we're the right fit for [a customer],' she says. 'We want to be sure we can service an account properly.' Among the issues facing the company, says vice president J.J. Drummond, are the difficulties facing manufacturing in general. 'It is difficult in the distribution side of business, since more manufacturers are closing or moving out of the country,' he says. 'On the integrated supply side of the business, though, it's been a boom year.'
Click here to find out where this company's ranking in the 2005 Big 50.
26 Production Tool Supply Co.
D. Dan Kahn, President and CEO
Headquarters: Warren, Mich.
2003 Sales: $201.5 million
Locations: 19
Employees: 421
www.ptsxpress.com
2003 was a good year for PTS, says executive vice president Lawrence Wolfe. Sales increased compared to 2002, as did profit. So far in 2004, 'we see tremendous opportunity, as our sales are increasing by double digits at this point,' he says. 'March was our best month in the last two years.' Wolfe credits PTS's use of real-time inventory accuracy for much of this good showing. This helped PTS's distributor network check stock, get back to customers, and order immediately. Like many companies, PTS is concerned about the country's diminishing manufacturing base. 'There are fewer customers, but more people vying for their dollar,' Wolfe explains.
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27 J&L Industries
NYSE: KMT
Mike Wessner, Division President
Headquarters: Livonia, Mich.
2003 Sales: $200.1 million
Locations: 9
Employees: 576
www.jlindustrial.com
Division president Mike Wessner says J&L Industries saw modest growth at the end of 2003, and that for '04 'we're seeing nice growth…mid-teens to low 20% growth' through March. He credits J&L's 'very robust e-commerce capability. That, in particular, is very important for us,' he explains. J&L's customers continue to focus on their manufacturing costs. 'To the extent that we can help them be more intelligent about lowering costs and increasing productivity, it's the right kind of partnership,' Wessner says of J&L's customers. The company invested more than $1 million in a new e-commerce site in mid 2003. 'E-commerce capability is very important for us,' Wessner says.
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28 Kinecor, Inc.
Gordon Duncan, President
Headquarters: St. Laurent, Quebec
2003 Sales: $199.9 million
Locations: 65
Employees: 760
www.kinecor.com
With a significant presence in the forest products, primary metals and industrial processing industries, Kinecor has found itself suffering through a negative economic environment right along with those customers over the last two years, says Gordon Duncan, company president. To work through it, he says the firm works to continually lower its operating costs, while at the same time improving its operating efficiencies. Heading up a distributorship that's not very reliant on technology or e-commerce, Gordon expects Kinecor's results to improve as the steel sector and other key customer markets begin to show signs of recovery.
Click here to find out where this company's ranking in the 2005 Big 50.
29 Precision Industries
Dennis P. Circo, CEO
Headquarters: Omaha, Neb.
2003 Sales: $183 million
Locations: 125
Employees: 700
www.precisionind.com
CEO Dennis Circo says, '2003 was a good year. We picked up many new clients and had a great year on the supply chain services side, with double-digit growth on the branch side as well.' 2004 is even stronger. March was 'an all-time record month in the history of the company,' he says. Precision owns two software companies, so 'technology is a huge part of what we do,' Circo adds. However, the Internet has had minimal impact on Precision. 'It's a very insignificant piece of our overall business. We do a lot of business over EDI and electronically, but people aren't using the Internet as a huge [ordering] tool,' Circo says.
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30 R.S. Hughes Co., Inc.
Bob McCollum, CEO
Headquarters: Sunnyvale, Calif.
2003 Sales: $153 million
Locations: 36
Employees: 360
www.rshughes.com
R.S. Hughes ended 2003, and continued into the new year, on an upswing and in an optimistic mood. 'In the last year, things have started to get better,' says Bob McCollum, R.S. Hughes' CEO. 'The turnaround is happening.' He thinks the company could see double-digit growth if these conditions continue through the remainder of the year. 'We just do the usual unusually well,' he explains. 'There are no gimmicks or tricks to it.' Key concerns for R.S. Hughes? Like many other executives, McCollum is concerned about the loss of manufacturing jobs. 'After all, that's where our customer base is—in the manufacturing world,' he says.
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31 DXP Enterprises, Inc.
NASDAQ: DXPE
David Little, President
Headquarters: Houston
2003 Sales: $150 million
Locations: 43
Employees: 462
www.dxpe.com
President David Little calls 2003 a good year overall, although 'our existing customer base purchased less. But we made up for them by going out and finding new customers.' Little is somewhat more optimistic for 2004, and has seen more purchasing activity through the first quarter. 'We've gone from being a product-driven to a customer-driven company,' he explains. 'Our goal is to save them money, and, also, save ourselves money by streamlining how we do business together.' A big challenge he sees facing DXP is 'attracting good people and then investing the dollars to train them properly to execute your strategies.'
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32 Edgen Corp.
Dan O'Leary, President and CEO
Headquarters: Baton Rouge, La.
2003 Sales: $150 million
Locations: 17
Employees: 200
www.edgencorp.com
In 2003, Edgen went through 'an extremely difficult' time, president/CEO Dan O'Leary admits. The continuing decline in the power generation business and 'a continuing hangover from 'Enron-itis,' ' are among the factors O'Leary cites for eliminating some locations and positions. Many of Edgen's customers are in the general gas and petrochemical markets, 'and they weren't doing a lot of work last year.' The first quarter of 2004 is up from 2003, though O'Leary attributes that to 'our improved cost-structure efficiency, not from the market.' The price of carbon steel and specialty metals, he adds, will be vital if Edgen is to continue that growth.
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33 Strategic Distribution, Inc.
NASDAQ: STRD
Don Woodring, CEO
Headquarters: Bensalem, Pa.
2003 Sales: $134.6 million
Branches: 57
Employees: 920
www.sdi.com
CEO Don Woodring says 2004 will 'provide challenges. I don't think it will be a case that the economy has turned and everything will be booming. It will be a year of change and challenge.' Among the challenging issues he sees for SDI is changing customer demand, 'and the ability to change your service offering to meet that demand.' Woodring is optimistic SDI will meet these challenges. 'The real key to our success has been aggressive investment in technology,' he says. 'However, that alone doesn't create the success. You need the people who know how to employ the technology. We also invest heavily in our management teams.'
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34 Harrington Industrial Plastics
Bill McCollum, Chairman and CEO
Headquarters: Chino, Calif.
2003 Sales: $125 million
Locations: 36
Employees: 435
www.harringtonplastics.com
For Harrington Industrial Plastics, 2003 was slow, admits chairman and CEO Bill McCollum. 'The economy and all the industrial sectors were slow. But we think we did a good job of holding on to market share,' he says. McCollum says he is optimistic about 2004 so far, but concedes, 'it's hard to tell with the reckless economy we have. It doesn't take much to flip it.' Among the business-related issues he's most concerned about are insurance and workers' compensation, as well as jobs going offshore. McCollum also points to 'competitive pricing and supply demand. There's just more supply than there is demand in the overall market.'
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35 Bossard U.S.
Peter Vogel, President and CEO
Headquarters: Hampton, N.H.
2003 Sales: $121 million
Locations: 25
Employees: 390
www.bossard.com
Over the past year, Switzerland-based Bossard has focused on optimizing its activities in America, which it calls its 'largest individual market by far.' The firm also focused on integrating the technical and operational aspects of the various acquisitions it made between 1998 and 2000. 'In order to fully exploit the growth potential in our successful business with large multinational OEM customers,' says Heinrich Bossard, CEO, 'we restructured to allow each customer access to the full range of products and services via one contact.' Bossard expects those efforts to be reflected in improved volume and earnings in the United States this year.
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36 Dillon Supply Co.
Dean Wagoner, President
Headquarters: Raleigh, N.C.
2003 Sales: $120.5 million
Locations: 22
Employees: 389
www.dillonsupply.com
2003 was a challenging year for Dillon Supply, says president Dean Wagoner. But things are looking
better this year. 'The first three months exceeded last year's sales, so we're optimistic. We're getting some business from customers who had been reluctant to spend in the past,' he says. Dillon deals quite a bit in the steel business, so steel prices are something to watch. Along those lines, the company is 'trying to diversify our business more,' he says. 'We try to go after the integrated supply business, but without putting all our eggs in that basket. We want to pursue the small- to medium-sized customers as well.' In addition, Dillon has upgraded its entire com-puter and software system.
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37 Endries International
Steve Endries, President
Headquarters: Brillion, Wis.
2003 Sales: $120 million
Branches: 70
Employees: 450
www.endries.com
This year is shaping up to be 'very, very strong across multiple industries,' says company president Steve Endries. 'Our expectations are considerably above 2003,' he says. This distributor of fasteners, PVF and electrical/mechanical components is challenged by the changes in raw materials pricing, but is finding considerable opportunity in the United Kingdom. Investment in its engineering support services has allowed the distributor to provide more to its customer base, and the Internet has provided boosted communication with both the supplier and customer. 'We're seeing more and more applications and opportunity for it,' says Endries.
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38 Indoff, Inc.
Jim Malkus, President
Headquarters: St. Louis
2003 Sales: $120 million
Locations: 300
Employees: 500
www.indoff.com
'Steady, but not spectacular,' is how Jim Malkus, company president, describes the demand for Indoff's products during the last year. He blames the economic downturn for causing the flat results, but says 2004 is shaping to up to be much better than 2003 for the company. Malkus credits the distributorship's size and longevity in the market with helping it navigate the slumped market. 'We're of a size that allows us to weather the slowdowns,' says Malkus, who adds that the company also uses technology to its advantage, and that it will roll out a new customer ordering system in late 2004. The company covers the United States and Mexico, with more than 350 salespeople.
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39 The BC Bearing Group
Robert S. MacPherson, Vice President and CEO
Headquarters: Burnaby, British Columbia
2003 Sales: $114 million
Locations: 50
Employees: 300
www.bearings.com
'Last year was pretty spotty,' says Robert MacPherson, vice president and CEO of The BC Bearing Group, which managed to post a 14% sales increase last year, compared to 2002. MacPherson blames the economy with causing the 'spotty' conditions, but says that 2004 is looking 'quite strong.' The company upgraded its computer system a few years ago with an Eclipse software package, which MacPherson says has worked out well. Also, the Internet continues to play a larger role in the distributor's business—both on the customer and the supplier side. The company sells bearings, power transmission components, material handling products and related supplies.
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40 Carlson Systems
Gary R. Gettle, President and CEO
Headquarters: Omaha, Neb.
2003 Sales: $110 million
Locations: 35
Employees: 380
www.csystems.com
The team at Carlson Systems knows it has no control over national economic conditions, but says it has 100% control over the size of the firm's market share. That philosophy has helped the distributorship work through the last year, says Gary R. Gettle, president and CEO, and look forward to an improved 2004. 'We expect it to be an outstanding year,' says Gettle, who saw company sales rise 1.8% last year. He credits the company's focus on hiring the best talent available, then training them at Carlson College (an in-house training academy), with helping to drive company growth throughout the downturn.
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41 IBT, Inc.
Mike Nemechek, President
Headquarters: Merriam, Kans.
2003 Sales: $110 million
Locations: 40
Employees: 400
www.ibtinc.com
IBT's sales decreased 8% last year, thanks to a national economy that affected many industrial distributors the same way, says Mike Nemecheck, company president, who calls the 12-month period 'flat at best.' Things are looking up in 2004, with sales accelerating during the first quarter. 'We just had the best month's sales in March that we've had in four years,' says Nemechek, adding that the com-pany made operational changes in late-2003 that have yet to provide solid results. IBT is expanding its focus on technology—and making a few 'targeted technology investments'—in response to customers' changing buying habits.
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42 Canadian Bearings, Ltd.
Don Latham, President
Headquarters: Mississauga, Ontario
2003 Sales: $105 million
Locations: 37
Employees: 380
www.canadianbearings.com
Business slowed down in the fourth quarter of 2003 for Canadian Bearings, says Don Latham, president, thanks to an unfavorable exchange rate with the U.S. dollar. 'Some of our customers were having diffi-culty exporting, and that affected our sales volumes,' Latham explains. 'Some of our larger customers also cut back on purchases.' Citing 'slow improvement' in early 2004, he says the firm's emphasis on integrated supply has helped it post positive overall sales gains for the last three years. To meet the demands of integrated supply customers, Canadian Bearings has expanded its product scope and its use of EDI and the Internet.
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43 Redlon & Johnson
Thomas Mullen, President
Headquarters: Portland, Maine
2003 Sales: $101 million
Locations: 13
Employees: 250
www.redlon-johnson.com
This wholesale distributor of plumbing and heating supplies has grown well beyond its first little plumbing shop in Bath, Maine, both in size and product breadth. First-quarter sales are up 25% over last year, and expectations for the remainder of the year are 'outstanding,' says Thomas Mullen, company president. Upgrading computer software and business systems is the company's main concentration in the near future. 'Technology is extremely important,' says Mullen. With locations and distribution in five states along the East Coast, 'we are con-stantly looking for ways to become more efficient and productive with the aid of technology.'
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44 FCx Performance, Inc.
Charles M. Simon, President and CEO
Headquarters: Columbus, Ohio
2003 Sales: $100 million
Locations: 18
Employees: 225
www.fcxperformance.com
COO Russ Frazee says FCx has noticed a slight upswing in business during the past 12 months. 'We've seen a couple of percentage point increases in bookings compared to the previous year,' says Frazee. The company closed a few sales locations in 2003 and tapped technology to open numerous virtual sales offices that he says are working out well. The company also uses technology to analyze its sales territories, products and product mixes, and is looking for a much better 2004 in terms of sales. 'Bookings are considerably ahead of last year,' Frazee adds. FCx sells industrial process control products, process instrumentation and high-purity products.
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45 Goodall Rubber Co., Inc.
Terry L. Taylor, President and CEO
Headquarters: Aston, Pa.
2003 Sales: $95 million
Locations: 33
Employees: 400
www.goodallonline.com
In 2003, Goodall Rubber took a major step when it changed its operational strategy from branch- centered to functional. Terry Taylor, company president and CEO, explains that instead of having branch managers handling sales, purchasing and other functions at each of its 33 locations, the company now has branch sales managers who report to an operations executive. 'That way, we have our salespeople selling, and our buyers buying,' says Taylor, who calls the move 'very beneficial.' 'The past year was difficult,' he says, 'but 2004 is looking quite good, thanks to some general economic improvement, and the fact that we're doing our jobs a little better.'
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46 Ewie Company, Inc.
Dilip Mullick, President
Headquarters: Ann Arbor, Mich.
2003 Sales: $94.4 million
Locations: 7
Employees: 167
www.ewie.com
This distributor of specialty cutting tools and abrasives saw sales decline slightly in 2002, but company president Dilip Mullick is optimistic about 2004. 'There is not a lot of new business out there, but we are picking up [market share],' says Mullick, who founded the company in 1981 with his partner, Manoj Sachdeva. The company sells to the automotive industry and related businesses, with contracts to supply 95% of Ford plants in the United States, and all Ford plants in Canada, according to Mullick. The company opened three locations last year—in Louisville, Ky., St. Louis, and Cleveland.
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47 Mahar Tool Supply Co., Inc.
Barbara Mahar Lincoln, CEO
Headquarters: Saginaw, Mich.
2003 Sales: $93.2 million
Locations: 6
Employees: 110
www.mahartool.com
Competitive pressure and the loss of a key customer in the automotive industry took a toll on Mahar Tool Supply's sales last year, but Barbara Mahar Lincoln, CEO, says the company has since broadened its business base and brought on a new, large contract. 'We're trying to be not so heavy into automotive,' says Lincoln, who credits the distributorship's focus on fee-based, unbundled and value-added services with helping the company through 2003. Lincoln sees more Internet services in her company's future, and says a new computer system that automated its tool management two years ago has paid off.
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48 Bearing Headquarters Co.
Jim Timble, President
Headquarters: Broadview, Ill.
2003 Sales: $88.5 million
Locations: 38
Employees: 349
www.bearingheadquarters.com
Business is better than the last three years, but only a small part of that can be attributed to the slightly improved economy, says Bearing Headquarters' president Jim Timble. 'We started a market share initiative study in early 2003, where we could iden-tify industries that are recession proof,' he says. 'Now we're seeing the fruits of that program.' Manufacturing moving offshore is a major concern, along with interest rates and inflation. Joining the IBC distributor alliance has helped the company become a technically focused organization, Timble says; it is now developing an Internet store, expected to open in summer 2004.
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49 Purchased Parts Group
A. Lee Mulkey, President
Headquarters: Memphis, Tenn.
2003 Sales: $85 million
Locations: 23
Employees: 280
www.purchasedparts.com
The automotive market, the largest customer segment for Purchased Parts Group, remains flat with last year, though truck manufacturing and heavy industry are up slightly, says Alan Heflin, the company's marketing director. The state of industrial manufacturing and volatile steel prices are concerns, as is the struggle over how to best serve global customers, he says. 'We've made improvements in our internal efficiencies, servers and warehouse technology. Our customer base is not conducive to online sales, but we do have customers that are doing competitive online bidding, so we need to be savvy and gather information quickly,' states Heflin.
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50 Lewis-Goetz and Co., Inc.
David R. Goetz, President and CEO
Headquarters: Pittsburgh
2003 Sales: $83.9 million
Locations: 22
Employees: 310
www.lewis-goetz.com
Though Lewis-Goetz is seeing double-digit price increases for steel products compared to last year, the company remains cautiously optimistic and expects business in 2004 to be better than 2003. 'We're doubling our budget for IT upgrades,' says company president Dave Goetz. Lewis-Goetz has hired an outside consultant to spend a week with the company, consult with all departments and assess their needs. 'They'll look at us and say 'You can do this,'' and we'll then use this information as our roadmap to move forward; then we start prioritizing and implementing,' Goetz says.
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