Electrical Marketing's LiveWire

Electric Supply Inc. (Tampa): Matt Coffey (left), was recently promoted to Executive V.P. and COO, and Shaker Brock (right), was recently promoted to V.P. of C&I Sales. Coffey was previously V.P. and has been employed at Electric Supply for nine years, while Brock was previously the V.P. of operations and has been with the company for 10 years.

The National Association of Electrical Distributors (NAED), St. Louis, released its annual Performance Analysis Report (PAR) Highlights, which compiles performance data from NAED electrical distributors to provide a benchmark for distributor operations in the industry.

The report shows that electrical distributor profit margins increased to a median of 2.4% in 2010, compared to medians of 1.1% in 2009, 2.6% in 2008, 3.2% in 2007, and 3.7% in 2006. Among the top performing 25% of “high profit” distributors, the 2010 profit margin was 4.7%, consistent with last year’s profit margin.

The report’s author, Dr. Al Bates of Profit Planning Group, Boulder, Colo., offered insight into this year’s results. “NAED distributors started the process of bouncing back from the recession in 2010,” he says. “Sales were up a healthy 8%, gross margin held constant and expenses fell as a percent of sales. As a result, profits rose to 2.4% of sales, about where they were in 2008. Nobody is back to the good old days, but they are at least moving steadily in the right direction.”

PAR survey participants receive a free copy of the PAR Highlights. The report is now available to NAED member non-participants for $300 (first copy) and $20 (additional copies), as well as non-members for $495 (each copy). For more information about PAR Highlights, contact NAED Member Services at (888) 791-2512 or memberservices@naed.org.

With stratospheric new product development costs and new product failure rates in excess of 90 percent, product development and launch systems and processes must be carefully evaluated and more effectively implemented. That’s why the Construction Marketing Association (CMA), Naperville, Ill., is offering a free webinar, “New Product Development and Launch Best Practices for CMA members and non-members on Thursday, July 14 at 1 p.m.

“New product development and launch is both the greatest growth opportunity, and riskiest undertaking due to expense,” said Neil Brown. “This webcast will demonstrate new product development examples, and provide some tools and resources for construction marketers.”

Brown will be joined in the webinar by panelists Jeff Kotz, product marketing manager for Weather Guard Div. Emerson Electric, and Debbie Miller Pierce, president, MillerPierce, a full-service marketing agency based in Indianapolis, to review new product best practice examples. CMA Chairman Neil Brown will share results of a national survey on product development, along with a new product launch checklist. Click here to register for the free New Product Development and Launch webcast.

Eaton Corp. commissioned its new twin data centers in Tennessee this week. Electrical Wholesaling talked at length with Rob Agar, V.P., infrastructure services and corporate information technology for Eaton, about the thinking behind designing, building and operating the identical, fully redundant data centers for a cover story in April. Local business website Business First has a write-up of the opening celebration and the tax incentives that helped make it happen.

Rexel, Dallas, has launched a new online magazine at www.electrical-efficiency.com that will focus on energy regulation, solutions, projects, markets and related global news. In announcing the launch, Chris Hartmann, executive V.P. and CEO of Rexel Holdings USA, said, “As a key player in the electrical industry, Rexel aims to share its recognized experience as a distributor and its knowledge of electrical solutions to raise awareness of electrical efficiency issues, sharing information with the widest possible audience.

Although the electrical business remains mired in a sluggish recovery, some of its largest players are spending big bucks on acquisitions. Bloomberg reported today that “ABB Ltd. and Schneider Electric SA have announced a combined $10 billion in industrial and technology deals since the start of 2010. General Electric Co. has announced 21 such deals for a total $7.3 billion, Bloomberg data shows.”

The folks at the Motley Fool investor site posted an interesting examination of trends in accounts receivable (AR) and days sales outstanding (DSO) among major publicly traded wire and cable companies, looking at how General Cable’s trends compare to competitors’ and what AR and DSO may suggest about how a company is being managed.

“AR that grows more quickly than revenue, or ballooning DSO, can also suggest a desperate company that’s trying to boost sales by giving its customers overly generous payment terms. Alternately, it can indicate that the company sprinted to book a load of sales at the end of the quarter, like used-car dealers on the 29th of the month. (Sometimes, companies do both.)”

The upshot is that potential investors need to dig further into the details of company financial statements, but that General Cable’s recent rise in AR could signal missed revenue estimates in the next few quarters.