The trek back up the mountain continues.
For the third-straight year, the PHCP wholesale distribution industry saw an overall total sales increase, according to companies responding to Supply House Times’ Premier 125 survey. The annual survey, conducted by Supply House Times and BNP Media Market Research, ranks the top 125 PHCP wholesalers by their reported sales for the past year. The survey is based on PHCP sales for fiscal 2012 and individual plumbing supply house company sales are not disclosed.
The 2013 survey shows 81% of companies reported an increase in sales, a slight increase from 2012 (80%). This fell short of the 90% of wholesalers who responded in 2012 that they expected to increase sales in 2013. Distributors reported a total just under $51 billion in sales during 2012, up from nearly $43 billion in 2011.
“2012 was good and I see 2013 as being a little better,” stated Greg Brown, vice president of Pontiac, Mich.-based Hodges Supply.
Winston-Salem, N.C-based Murray Supply, featured in the May 2012 issue of Supply House Times as part of the 2012 Premier 125 presentation, reported another strong year and sees more prosperous opportunities in its marketplace during 2013.
“We anticipate 2013 being another up year for us and we expect to outperform the local market,” CEO Charlie Murray said. “Many of the initiatives we’ve been working very hard on the past few years are starting to bear fruit and we’re seeing nice growth opportunities. Commercial construction in North Carolina is still pretty flat, but we seem to be growing market share.”
Specialty group performance
There were no major changes in the Top 20 companies, but sales increased for each of those 20 companies. In terms of market sector, HVACR saw the biggest improvement. In 2011, the survey showed nearly $6.5 billion in total HVACR sales, but in 2012 the survey reveals that number rocketed to $10.5 billion. Some companies noted HVACR was a primary focus throughout the year.
“We achieved in excess of 10% growth in 2012 from the prior year,” said Tony LoRosso, general manager of Spring Valley, N.Y.-based Ramapo Wholesalers. “Recently, we have taken a much more aggressive approach in the development of our HVAC business. We are anticipating a minimum growth of 15% for 2013.”
The Premier 125 survey shows the plumbing and hydronics market experienced a slight downturn in sales to $7.1 billion in 2012 from just more than $7.3 billion in 2011. Also, the PVF industry saw a decrease in 2012 with responding companies registering $12.5 billion in total sales, down from $13.9 billion.
“There was a large lack of commercial activity through Q3 and Q4 of 2012,” said Rogers Earl Jr., president and CEO of Elkins, W.Va.-based Valley Supply Co. “We have seen it break free in one market area (Q1) and expect more commercial starts in late Q2 and early Q3.”
Survey results show a slight increase in companies with total annual sales that range from $50 million to $99.9 million (rising from 35 to 38). The was a decrease in the number of smaller scale distributors ($34.9 million & under), going from 19 companies in 2011 to 11 companies in 2012.
Large-scale companies with sales of $500 million or more rose to 15 in 2012, up from 14 in 2011. Sales for companies in that volume range were more robust in 2012.
“We experienced another double-digit growth year of 12% and have expectations for a double-digit growth expansion in 2013,” Cregger Co. President Morris Cregger said.
More of the same in 2013
The streak of sales increases is expected to continue when this survey comes out again in 2014. Distributors are excited for another strong year in 2013. This time, 88% of survey responders expect sales to increase in 2013, while another 8% say sales will stay flat. In 2012, wholesalers worried about how business would be shaped by November elections. This year, distributors did not note any major red flags.
“Our 2012 was up over 2011 and we are expecting our 2013 to be up over 2012 in all three divisions,” says Jack Stapley, a vice president partner of Mesa, Ariz.-based Farnsworth Wholesale. “We are encouraged by the signs we see in the economy. Goodbye to the past five years. Hello and welcome to the next five years.”
Major news from 2012
- Respected industry veteran Morris Beschloss joined Supply House Times as a columnist and was honored with the 2012 Fred V. Keenan Lifetime Achievement Award at NetworkASA 2012 in October.
- HD Supply sold its industrial PVF business to Shale-Inland Holdings, an affiliate of investment firms Tower-Brook Capital Partners and The Stephens Group.
- Ferguson acquired New York City-based Davis & Warshow in a stock transaction.
- American Standard named Jay D. Gould as its new president and CEO.
- Briggs Plumbing Products management team, led by Bob Robison and Chuck Dockery, purchased the company from its Chile-based parent company Cisa. Briggs is now a fully-owned American company.
- Affiliated Distributors promoted Jack Templin to president of its industrial supply division. Jeffrey S. Beall was appointed president of PHCP divisions.
- WinWholesale acquired Kansas City, Kan.-based Midwest Industrial Sales and rebranded it Kansas City Winfastener Co. The company also opened a new facility in Bismarck, N.D., called Bismarck Winnelson. It’s the company’s fourth location in North Dakota. Distribution centers also were opened in Middletown, Conn., and Aurora, Colo.
- Uponor named Bill Gray president of Uponor North America.
- MRC Global opened a new distribution center in Cheyenne, Wy. The facility has a 12-acre pipe yard, an 80,000-sq.-ft. warehouse, 5,000 sq. ft. of office space and a 4,000-sq.-ft. automation shop.
- Northwest Pipe Co. started expansion on its manufacturing facility in Saginaw, Texas, which included improvements to its mill and the opening of two new buildings.
- Wisconsin-based distributor W.A. Roosevelt joined forces with Dakota Supply Group.
- The Forte Buying Group announced its own private-label fixture line and a new software program for members’ virtual showrooms.
- F.W. Webb President Jeff Pope and Columbia Pipe & Supply President Tim Arenberg were added to the Affiliated Distributors Board of Directors.
- Central States Industrial Supply named Todd Ford its new president and CEO.
- M. Cooper Supply appointed Greg Goode CEO.
- Wisconsin-based First Supply opened the first Kohler Signature Store in the Minneapolis-St. Paul suburb of Edina. The store is the first to be solely owned and operated by an independent wholesaler.
- Your ‘other’ Warehouse relocated its business operations to Atlanta from Baton Rouge, La.
- PVF Outlook, a new publication sponsored by the American Supply Association, debuted in June with a total circulation of 20,000.
- A.Y. McDonald appointed Rob McDonald president and CEO.
- MRC Global and Shell agreed to a five-year global enterprising framework agreement for distribution of valves and automation services.
- Ihrie Supply named David Price president.
- Global Pipe Supply broke ground on a new, 62-acre pipe yard near the company’s Houston headquarters.
- Cooney Brothers President and CEO Marion Cooney Valaro retired and President of Sales Gerry Cooney was selected to succeed Valaro.
- Texas Pipe & Supply opened a new 40,000-sq.-ft. warehouse and 18-acre pipe yard in Charlotte, N.C.
- Richard Blackman, chairman of Blackman Plumbing Supply, died Sept. 19, 2012.
- Beaumont, Texas-based Coburn Supply was honored as Supply House Times’ 2012 Supply House of the Year.
- Morrison Supply acquired the showroom assets of Shreveport, La.-based Kitchen Design Group, Enid-Okla.-based Enid Supply and Dixie Utility Supply of Texarkana, Texas.
Premier 125 Notes
Some interesting numbers from the 2013 Premier 125 survey results:
- The state with the most Premier 125 companies? It’s a tie between Texas and California with 11 each. Illinois was next with 10.
- Ferguson leads the way with the most branches (1,300) and employees (18,000). No.3 Watsco has the second-most branches with 573 and MRC Global reports the second-most employees at 4,750.
- Ferguson is the total sales leader in the Plumbing & Hydronics market followed by WinWholesale.
- MRC Global is the top sales leader in the PVF market followed closely by Ferguson.
- Watsco leads the way in total sales among HVACR companies for 2012, followed by Portland, Ore.-based Johnstone Supply.
Voices in the industry
Some other thoughts from wholesalers regarding the 2012 fiscal year and expectations in 2013. Some survey responders chose to remain anonymous, but their comments are included to add additional insight into the current state of the industry.
“2012 was a tough year on margins. Industrial business is on the rise. 2013 will see more industrial growth and some mid-rise construction in Chicago.” – Jim Porter, Porter Pipe and Supply president.
“The Southeast continued its climb from the downturn in 2009 and growth is projected to continue in the first half of 2013.” – Kip Miller, Eastern Industrial Supplies president and CEO
“Last year continued to be a second healthy year of recovery from the economic fall, but we anticipate the pace of growth will slow and/or we may see some additional economic obstacles challenge growth later in 2013.” – Industry source
“2012 started out strong and ended on somewhat of a downturn. 2013 will be a crapshoot. We have high hopes and continue to position ourselves for growth.” – Industry source
“We feel like we’ve bounced off the bottom and that our certain strategic efforts over the last five years are beginning to pay off. We plan to further optimize and fine-tune our operation again this year and intend to build on a good 2012.” – Industry source
“The past fiscal year was interesting. Sales increased overall, but there were large swings in month-to-month sales. Margins continue to be a challenge and we were fortunate enough to keep ours about even. So much (for 2013) is going to hinge on when money is released by the state and local governments to fund the projects on the books and how comfortable the banks will be lending to private investors.” – Industry source
See below for a list of the 2013 Premier 125 rankings, charts and graphs.
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- 2013 Premier 125 Rankings (1-49). Source: Supply House Times/BNP Media Market Research 2013
- 2013 Premier 125 Rankings (50-99). Source: Supply House Times/BNP Media Market research 2013
- 2013 Premier 125 Rankings (100-125). Source: Supply House Times/BNP Media Market Research 2013
- Sales Trends for 2013 Premier 125 (Year-to-year comparison and projection). Source: Supply House Times/BNP Media Market Research 2013
- Segment Leaders for 2013 Premier 125. Source: Supply House Times/BNP Media Market Research 2013
- Combined Sales (in billions of dollars) and Consolidation Update (by millions of dollars) for 2013 Premier 125. Source: Supply House Times/BNP Media Market Research 2013