PCHP industry survey reveals another year of sales growth.
[Editor’s note: In order to provide the most accurate listing possible and to limit the amount of company estimations, Supply House Times shortened the Premier survey to 125 companies.]
The recovery continues.
For the second consecutive year, Supply House Times’ Premier survey reveals an increase in sales made by PCHP companies. The annual survey, conducted by Supply House Times and BNP Media Market Research, ranks the Top 125 PHCP wholesalers by their sales from the past year. The 2012 survey is based on sales for fiscal 2011. Individual company sales are not disclosed.
The 2012 Premier survey shows 80% of companies reported an increase in sales, compared to 75% of responders to the 2011 survey. This year’s survey participants generated nearly $43 billion in total sales in 2011.
“I predict that this recovery will continue in 2012 at a slightly elevated rate,” Wool Supply President and CEO and Southern Wholesalers Association President Randy Wool said.
“Sales continued to improve in 2011 with stronger growth recorded in the fourth quarter. We expect sales to grow at a stronger pace in 2012 as the Southeast’s business climate improves.” stated Kip Miller, president and CEO of Eastern Industrial Supplies
That optimism is backed up by American Supply Association’s final 2011 numbers. Its members closed out 2011 with an 8% increase in sales over 2010 and a 10.1% increase over 2009. Inventories for ASA members also grew 8% over 2010.
Specialty group performance
Companies in the PVF industry reported nearly $14 billion in sales, about $2 billion more than in 2010 when 150 companies responded to the survey.
“Todd Pipe will be opening two more branches in the next 18 months,” Todd Pipe & Supply President and CEO Dan Patrick said. “We are confident that our market share will continue to grow. We had sales growth of 250% in 2011.”
For ASA members, PCHP and industrial PVF distributors were up on a quarterly basis for the first time as the fourth quarter of 2011 was up 7.2% vs. the fourth quarter of 2010. That’s also a 17% increase over the fourth quarter of 2009 and even a 0.7% increase compared to the fourth quarter of 2008.
In this year’s Premier 125 survey, the HVACR section recorded nearly $6 billion in sales, while the P&H section reported more than $7 billion in sales.
“We are projecting strong growth in 2012 after a record year in 2011,” Famous Enterprises President and CEO Marc Blaushild stated. “We are in the hiring mode, adding sales people and management to our team so that we can serve our customers most effectively.”
WinWholesale makes strides
The large-scale companies had uneven results, but WinWholesale – with its 524 branches and nearly 4,000 employees – made gains in 2011.
“We were very gratified by WinWholesale’s performance in 2011. Revenue and profit were up again, but by a larger amount than in 2010,” WinWholesale President Jack Johnston said. “First and foremost, our employees work hard every day to make sure customers have what they need when they need it. In addition, markets slightly improved in some places, although it’s still a flat recovery. Finally, we continue to emphasize what we consider the basics to be. Our mantra is to increase sales by strengthening relationships with existing customers and acquiring new ones, maintaining sensible expense control and carefully managing assets.”
2012 looks promising, but with a caveat
Confidence is high as 90% of survey responders project an increase in sales in 2012 vs. 2011. Add the 8% of responders who expect their sales will remain consistent with 2011 and the industry is looking at a third-straight strong year after the economic collapse.
“We’ve never worked harder, but we are being successful,” Mid-City Supply Co. President Jeff New said. “We think 2012 will be another good year (with a lot of hard work).”
There is one major factor that has some companies worried; the November elections. With President Obama’s unpopular tax plans, the potential for the Supreme Court to uphold the federal health-care mandate for employers and gridlock in the House and Senate, many company presidents and representatives are looking for change in leadership in Washington.
“We are optimistic about the future of our business,” stated Howard Frankel, president of Central Plumbing Specialties/ Grande Central Showrooms of New York. “However, we are concerned with the general business climate under the present administration with new regulations affecting all of us.”
Steve Bellar, president of Thrifty Supply, said: “We will be lucky to finish 2012 the same as 2011. (There is) too much uncertainty and atrocious government leadership.”
Major news from 2011
- Morrison Supply brought on former Wolseley CEO Chip Hornsby as its new CEO. The move came after Morrison Supply and global private equity firm Advent International made an investment deal with the goal of expanding Morrison’s presence in the Southwest.
- Ferguson Enterprises put the final touches on its acquisition of SG Supply. The company now runs as SG Supply Co., a Ferguson enterprise. Ferguson also acquired Summit Pipe and Supply and Louisiana Chemical Pipe, Valve & Fitting, and acquired pipeline materials distributor Groeniger & Co. Groeniger is a leading waterworks distributor in northern and central California.
- HD Supply agreed to sell its HVAC and plumbing business to Hajoca Corp. Details of the transaction were not disclosed.
- MRC Global made plenty of news in 2011. It acquired the operations and assets of Australia-based OneSteel Piping Systems. MRC said the acquisition will continue the company’s international growth in key markets and its desire to be the premier pipe, valve and fitting distributor in the world. Also, MRC purchased the legacy distribution business of Valve Systems and Controls, a business unit of Curtiss-Wright Flow Control Corp.
- WinWholesale opened Minot Winnelson Co., its third location in North Dakota. The new location was opened to provide plumbing contractors with equipment, parts and accessories.
- Interline Brands elected Kenneth D. Sweder as its company president. Sweder also continues in his role as CEO, a position he’s held since 2008.
- After 55 years with the company, Robert Wright was promoted to CEO of Arkansas Supply.
- A. O. Smith acquired Lochinvar for $418 million and did not assume any of Lochinvar’s existing debt.
- Mike Miazga was named the editor of Supply House Times magazine.
- Northwest Pipe Co. named Scott Montross its COO.
- Marmon/Keystone doubled the size of its Monterrey, Mexico location. The warehouse is now 54,000 sq. ft., and it added equipment.
- Delta Faucet Co. promoted Richard O’Reagan to president. O’Reagan succeeds Keith Allman, who was named group president of Masco Corp.
- LA-CO Industries/Markal Co. named George Bowman company president.
- Watts Water Technologies agreed to acquire tekmar Control Systems in a share purchase transaction.
- Georg Fischer acquired PVC and CPVC supplier Harvel Plastics.
- American Supply Association hired Dan Hilton as its director of government affairs.
- Knoxville, Tenn.-based Modern Supply was named the 2011 Supply House Times Wholesaler of the Year.
Changes To The Premier 125 List
These wholesale distributors appeared on the 2011 Premier 150 list - either with their reported results or as editors’ estimates – but were not included in the Premier 125 list this year. The companies were left off the 2012 list because either they were acquired, requested to be removed, or they did not fill out the survey request from Supply House Times:
- ABCO Refrigeration
- Ameripipe Supply
- Apex Supply Co.
- Blackman Plumbing Supply
- Cayce Mill Supply
- Central States Industrial Supply
- Century Bathworks
- Chicago Tube & Iron
- Collins Pipe & Supply
- Crane Supply
- Deacon Industrial Supply
- Ed’s Supply Co.
- Epting Distributors
- Hinkle Metals & Supply
- Johnstone Supply
- Kenny Pipe & Supply
- Locke Supply
- Monumental Supply Co.
- Mountain States Pipe
- MSI HVAC
- Piping & Equipment
- Noble Supply
- Plumb Supply Co.
- Redlon & Johnson
- Russell Sigler
- Smardan-Hatcher Co.
- Southern Pipe & Supply
- Standard Plumbing Supply
- Temperature Systems
- The Granite Group Wholesalers
- United Pipe & Supply Co.
- W.A. Roosevelt
- Wichita Sheet Metal Supply
Voices in the industry
Some other thoughts from wholesalers regarding the 2011 fiscal year and their expectations in 2012. Some survey responders chose to remain anonymous, but their comments are included to add additional insight into the current state of the industry.
“We have enjoyed increases of 24% in 2010 and 18% in 2011. We are budgeting a 12% increase for year 2012. The depressed economy has presented many opportunities for our company and we have been able to expand our footprint and diversify our product offering to increase revenues as contrasted to making any cuts in our compensation package or our associates’ benefits.” - Morris Cregger, president, Cregger Co.
“Although the waterworks market continues to be challenged by the economy and the depressed construction market, we continued to gain market share and expand our footprint. We have been in Southern California since 1945 and made our first significant expansion outside of that market when we opened a new branch in Salt Lake City, Utah in September 2011.” - Richard Campbell, director of marketing, Western Water Works Supply Co.
“It appears we will be gaining more commercial business this year in the forms of hotels and office buildings. Our success comes from listening to our everyday, small customer and improving vendor relationships.” - Rogers R. Earl, president and CEO, Valley Supply Co.
“Revenues for Columbia in 2011 have recovered and surpassed their best results from 2008, and 2012 first-quarter results exceed the entire first half of 2011.” - Michael N. Taylor, president, Columbia Specialty Co.
“We are budgeting and expecting sales volume increases of 10% or better for 2012. Increases are achieved through a combination of market penetration, new product lines, and hopefully an improving economy.” - Industry source
“Another survey respondent reported a small decrease in sales for 2011 and is expecting the same year again in 2012. “I look for the same in 2012 with the poor economy, election year, and most of the other contractors and customers (commercial/industrial) not looking to expand or add new employees. They are mostly looking for a change in Washington.” - Industry source