2/17/2015
HEADLINES
PERSPECTIVE: Fastener Segments See Growth
Organic growth was a key term in 2014 for many companies with fastener holdings.
Stanley Black & Decker, B/E Aerospace and Precision Castparts were among the big winners, achieving double-digit growth in their fastener segments.
Organic Sales Drive Grainger Gains
Grainger reported daily sales in January increased 3%, which included 1 percentage point from acquisitions and a 2 percentage point decline from unfavorable foreign exchange.
Excluding acquisitions and foreign exchange, organic sales increased 4 percent on a daily basis, driven by 4 percentage points from volume and a 2 percentage point benefit from favorable comparability to the business disruptions in January 2014 due to extreme weather. This increase was partially offset by a 2 percentage point decline from lower sales of seasonal products.
Sales in the U.S. increased 4% in January, while sales in Canada declined 4% and sales in Grainger’s Other Businesses category grew 14%.
Fastenal OEM Sales Top 10% Growth
Fastenal Co. reported January sales increased 6.9% to $313.5 million, with daily sales up 12% to $14.9 million.
Daily sales to manufacturing customers grew 10.5% during the month, while daily sales to non-residential construction customers gained 9.8%.
The company’s workforce increased 5.4% to 18,615 personnel, driven by a 6.2% increased in non-store selling personnel to 1,321; a 6.2% increase in distribution personnel to 2,213; and a 6.3% gain in administrative personnel to 966.
During January Fastenal opened no new stores.
In 2014, Fastenal sales growth doubled, primarily from volume. Net sales rose 12.2% to $3.7 billion, impacted by slight inflationary price changes in non-fastener products and some price deflation in fastener products.
Those results included steady gains in the company’s fastener products. Fastenal reported 6.9% growth in fasteners during 2014, including 1.6% growth in the first quarter, 5.5% growth in Q2, 9.9% growth in Q3, and 11.4% growth in the final quarter of the year.
Fasteners totaled 39.2% of 2014 sales for Fastenal, down from 40.6% the previous year.
Fasteners Achieve Solid Organic Growth at SWK
Stanley Black & Decker reported its Engineered Fastening division achieved 10% organic growth in the final quarter of 2014, driven by both strong global automotive and electronic revenues.
Engineered Fastening is part of Stanley Black & Decker’s Industrial segment, which reported Q4 sales rose 1% to $891.4 million, with profit up 1.2% to $136.7 million.
Full-year Industrial segment revenue gained 5.9% to $3.5 billion in 2014, while operating profit increased 21.2% to $553.5 million.
B/E Aerospace Fastener Sales & Profit Jump
B/E Aerospace reported commercial aircraft segment (“CAS”) revenues – primarily fasteners – rose 15.4% to $2.06 billion in 2014. Adjusted operating earnings increased 17.1% to $375.1 million, and adjusted operating margin of 18.2% increased 30 basis points. On a GAAP basis, CAS operating earnings were $356.3 million.
Full-year CAS results included fourth-quarter revenue of $480.4 million, adjusted operating earnings of $88.3 million, and adjusted operating margin of 18.4%, and increase of 80 basis points.
“2014 was a defining year in the history of the company,” stated executive board chairman Amin Khoury. “We completed the spin-off of KLX, our consumables management segment, which was comprised of the aerospace distribution and energy services businesses.”
KLX, which began operating as KLX Aerospace Solutions on January 1, 2015, distributes fasteners and other consumable products to over 4,700 global customers.
ITW Automotive Fastener Segment Grows
ITW reported automotive OEM organic revenue growth of 7% outpaced fourth quarter worldwide auto builds of 1%. Organic revenues grew 12% in Europe, 4% in North America and 7% in Asia Pacific. Operating margins of 22.3% increased 190 basis points.
Automotive OEM segment revenue, including fasteners, totaled $620 million in Q4, with operating income of $138 million and 22.3% operating margin.
Construction Products revenue, including fasteners, totaled $402 million, with operating income of $63 million and an operating margin of 15.7%.
Overall Q4 declined 1.4% to $3.5 billion. Operating income gained 9.5% to $686 million, while net income increased 10.3% to $450 million.
Full-year Automotive OEM sales reached $2.6 billion, with operating income of $600 million and an operating margin of 23.2%.
Full-year Construction Products segment revenue totaled $1.7 billion, with operating income of $289 million and an operating margin of 17%.
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