Photo by Brian Harkin/Getty Images
Electricalmarketing 270 Gettyconstruction72593753595
Electricalmarketing 270 Gettyconstruction72593753595
Electricalmarketing 270 Gettyconstruction72593753595
Electricalmarketing 270 Gettyconstruction72593753595
Electricalmarketing 270 Gettyconstruction72593753595

Top 200 Electrical Distributors Still Expect Solid Sales Growth in 2015

May 22, 2015
One of the more interesting areas of commentary in this year’s responses was the variety of views on exactly where the electrical economy is at right now. The sales forecasts provided by Top 200 distributors ranging in size from several billion in sales on the high end to $15 million or so on the low end seem to be much wider than in past Top 200 surveys.
Photo by Brian Harkin/Getty Images
Electrical Wholesaling magazine got a record response for its upcoming Top 200 listing to be published next month, with over 140 distribution execs providing detailed data on their companies’ operations. One of the more interesting areas of commentary in this year’s responses was the variety of views on exactly where the electrical economy is at right now. The sales forecasts provided by Top 200 distributors ranging in size from several billion in sales on the high end to $15 million or so on the low end seem to be much wider than in past Top 200 surveys.

For instance, one large Texas distributor with broad exposure to the oil industry sees a 20% drop for his company, while 39 respondents — 32% of the 121 Top distributors offering a forecast — expect their 2015 sales to increase by at least 10%. Surprisingly, only six respondents expect their 2015 sales to decline from 2014. (See charts on page 2 for more information on Top 200 distributor forecasts for 2015).

The market drivers fueling distributors’ forecasts were all over the map. As expected, the plunge in the oil & gas business cut into the forecasts of distributors active in the energy market. But Top 200 distributors had different takes on the health of the commercial, industrial and residential markets.

Jared Colker, president of the 80-year-old West Virginia Electric Supply, Huntington, W.Va., had an interesting perspective in that his company saw some growth over the past year in gas and oil fracking projects and upgrades to industrial facilities and utilities. But Colker and has team wrestled with a decline in the OEM and mining segments of the coal market. One growth sector for West Virginia Electric Supply has been LEDs. “Stocking LED was a growth factor with replacement bulbs and lighting fixtures in  the educational, commercial and small industrial facilities,” said Colker, who has tweaked his 2015 sales forecast down a few points but still sees single-digit 2015 growth.

Matt Brnik, Schaedler/YESCO, Harrisburg, Pa., also sees a mix of growth opportunities in his company’s core markets. He pegs overall 2015 growth at a solid 6% for his company, but his forecasts for key  niches vary, with commercial sales up 22%, government business down 10%, contractor business up 2% and industrial OEM up 2%. “The first quarter was strong across the board but April was horrible industrially,” he said.

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Brnik wasn’t the only Top 200 distributor who sees a variety of sales growth in different niches. Doug Feustel, business analyst, Shealy Electrical Wholesalers, West Columbia, S.C., says the company is looking for total 2015 sales to increase about 8% in 2015, due in part to a 200% increase in Shealy’s international business last year, which had been down 50% in 2014 from 2013. He sees a more moderate 5% to 7% increase in the company’s 2015 construction sales and an increase of 3% to 4% in industrial sales. Shealy made a big acquisition in 2014 with its acquisition of the Charlotte, N.C.-based Nova Lighting and made a move into the industrial market last year, too.

Lighting also will continue to provide growth opportunities in Southern California for Mike Pratt, president/CEO, American Electric Supply, Corona, Calif. Pratt expects green business, as well as privately funded new commercial projects and the tenant improvement market to do well in 2015. “Our Green Solutions market through utility-based programs will see a 22% plus growth this year,” he said. “The one segment in our market that we participate in that is down is both the state/municipality/school, public works construction and the federal military market. It still has not fully recovered from the recession.

“The key factor that kept our 2013/2014 sales almost identical was the California Energy Regulation Title 24 going into effect on July 1, 2014. This put a stop on the programs until both contractors, distributors and manufacture were able to comply with required technology. We are just seeing this come back in late first quarter of 2015.”

The green growth theme colored forecasts all over the country for both full-line and specialty distributors. Doug Root, CEO, Atlanta Light Bulbs, Tucker, Ga., said the transition from being a light bulb and ballast supply house to an energy solutions provider for lighting retrofits has been a big paradigm shift for the company. This lighting specialist’s MRO, stock-and-flow business for legacy lamp and ballasts has lagged, but Root has seen an increase in the need for complete lighting audits and energy consulting on lighting upgrades, rebate calculations and installations. “With the company’s transformation into an energy solutions provider have come changes in some customers and personnel and increase in competitors looking to cash in on the LED revolution. The Internet has proven to be a part of our business that has seen decline due to prices declining and customer demand for free shipping and more services,” he says.