Profits Soar as Fastener Prices Rise on Steel Hikes

Jason Sandefur

Steel hikes have allowed publicly-held fastener companies to raise prices, driving profits up. \Several prominent fastener firms reported significant net earnings gains in 2004, both in North America and abroad.
Bossard Earnings Double
Bossard Group”s net profit doubled in 2004 to about 18 million Swiss francs ($15.2 million), the Swiss fastener maker reported. Full-year sales rose 18.2% to 497 million Swiss francs. Bossard stock gained almost 30% during the year.
Bossard sold its Sigma unit to Swiss cable systems maker Komax Holding Group. Sigma makes flexible assembly workstations, with annual sales of Swiss francs 11 million (US$9.1 million) and a workforce of 40.
The year also delivered some traumatic news for the company. Longtime CEO Heinrich Bossard, 61, died in a plane crash off the coast of New Zealand in December. Bossard”s widow, Silvia Bossard-Eichenberger, was injured in the crash and continues to recover at her home in Switzerland.
Bossard promoted CFO David Dean to lead the company, and named controller Stephan Zehnder as CFO.
Anixter Fastener Sales Increase
Recent fastener acquisitions boosted Anixter International”s overall revenue by 142.8 million in 2004, driven by the purchase of Distribution Dynamics in June 2004 and Walters Hexagon Group in September 2003. Anixter reported sales rose 25% to $3.27 billion, while profit soared 75.6% to $73.6 million.
DDI added $15.9 million to overall revenue of $848.3 million during the fourth quarter of 2004. The results showed a 27.6% increase in Q4 sales, while quarterly profit nearly doubled to $25.6 million.
Anixter reported Q4 sales from Pentacon grew 37% “resulting from improved demand from existing customers as well as the addition of new customers.” Walters Hexagon also showed strength in the quarter, setting a business sales record of $30.2 million.
ITW Profit Soars in 2004
Illinois Tool Works Inc. reported revenues for 2004 grew 17% to $11.7 billion from $10.036 billion, while operating income increased 26% to $2.1 billion.
Revenues for the fourth quarter of 2004 grew 16% to $3.1 billion largely from improved demand in North America. Q4 operating income increased 24% to $535.2 million. ITW said its overall operating margin “improved 17.5%, largely due to fourth quarter inventory revaluations related to higher raw material costs in previous quarters.”
Q4 revenue from North American Engineered Products, including fasteners, improved 9%, largely from growth in its industrial and construction business units. Operating income increased 11% during the quarter. Full-year revenues for the segment grew 9% while operating income gained 13%.
International Engineered Products Q4 revenues grew 28%, while operating income improved 26% from gains in its construction and automotive units. International Engineered Products revenue jumped 32% in 2004, while operating income soared 42%.
“By all financial and operational measures, the fourth quarter was a very successful conclusion to a strong performance in 2004 by our ITW businesses around the world,” declared CEO James Farrell. “I want to personally thank all of our employees who worked diligently and effectively to help us achieve 30 percent earnings growth in 2004.”
For 2004, ITW completed 24 transactions accounting for $624 million of annualized revenues. In addition, the company spent $1.73 billion to repurchase 18.9 million shares under a program launched in April 2004.

Textron Fastener Revenue Grows
Higher fastener sales boosted overall revenues at Textron Inc. in 2004. Textron Fastening Systems reported revenue increased 10.7% to $1.92 billion during the year, while TFS profit dipped 19.7% to $53 million.
For the fourth quarter TFS revenue gained 4.8% to $479 million, while profit declined 52.9% to $8 million. Textron said segment revenues benefited from higher prices, which were offset by lower sales volume.
“Profit decreased due to inflation, new plant launch costs and lower volumes & Inflation included higher steel costs, which were only partially offset by pricing actions during the quarter,” the company reported.
Overall Textron revenue improved 4.6% to $10.2 billion, while profit jumped 40.9% to $365 million.
Overall Q4 revenues increased 5.7% to $2.83 billion, while profit swelled 50.6% to $125 million.
CEO Lewis Campbell said Textron expects 2005 revenues to grow about 7%. “Our outlook for growth in 2005 and beyond is increasingly positive as we see continuing expansion in our markets,” Lewis stated.

Nucor Profit Soars on Steel Hikes
Skyrocketing steel prices helped Nucor Corp. post dramatic earnings and profit results in 2004. The steel giant and fastener manufacturer reported revenue grew 82% to $11.38 billion during the year, while net earnings soared to $1.12 billion compared with $62.8 million in 2003.
In 2004, the average scrap and scrap substitute cost per ton increased 74% to $238. In the fourth quarter of 2004, that same cost jumped 79% to $278.
Sales of cold-finished steel, including fasteners, gained 14.3% to 271,000 tons in 2004.
Q4 sales grew 86% to $3.09 billion, while average sales price per ton increased 85%. Net earnings in Q4 ballooned to $341.4 million compared with $20.6 million during the fourth quarter of 2003.
During the year, Nucor established records for steel production, shipments and sales. Production grew 13% to 19.74 million tons, while shipments increased 10% to 19.46 million tons. Steel shipments to outside customers improved 9% to 17.8 million tons. �2005 FastenerNews.com