Electricalmarketing 65 20120608top50
Electricalmarketing 65 20120608top50
Electricalmarketing 65 20120608top50
Electricalmarketing 65 20120608top50
Electricalmarketing 65 20120608top50

Acquisitions Shake Up Top 200 List

June 7, 2012
The general tone of the Top 200 respondents was decidedly optimistic. Considering how slow the all-important commercial market was for many local markets in 2011, it’s surprising that so many electrical distributors enjoyed decent growth last year in the 5%–8% range

Electrical Wholesaling’s annual Top 200 listing always offers one of the best reality checks of what’s really happening in the electrical market. Each year, senior executives from more than 100 of the industry’s largest distributors offer invaluable insight into the inner workings of the biggest in the business.

As one might expect, 2012 has been a bit of a mixed bag for them. On the bright side, 53 of the 116 executives (46%) who offered sales forecasts expect sales increases of at least 10%. However, 40 respondents (34%) expect their year to be flat and at best offer 5% growth. Some of the electrical distributors expecting sluggish sales pointed to the poor residential construction market and a scarcity of new commercial jobs. Still, the general tone of the Top 200 respondents was decidedly optimistic. Considering how slow the all-important commercial market was for many local markets in 2011, it’s surprising that so many electrical distributors enjoyed decent growth last year in the 5%–8% range.

Langdon Scott, the vice president and general manager of Peninsular Electrical Distributors, West Palm Beach, Fla., is expecting 5% growth for his company. Scott says commercial construction in his marketplace is mostly treading water but that, “Residential construction, surprisingly, is growing.”

Tammy Miller, CEO, Border States Electric, Fargo, N.D., believes sales will increase 10% in 2012, led by robust growth in the industrial market and slow, steady growth in the construction market. She says Border States is also currently enjoying expanded products sales to existing customers and strong oil patch and utility sales.

Several other distributors mentioned the oil and gas segment as a source of strength. Bill Elliott, president, Elliott Electric Supply, Nacogdoches, Texas, expects this niche to help fuel a 20%-sales increase. He also acquired Key Electrical Supply, Houston, and several branches of Treadway Electric Co., Inc., Little Rock, Ark.

Rick Teaberry says Winkle Electric Co. Inc., Youngstown, Ohio, has benefitted from a major capital project in its northeastern Ohio market area — a greenfield pipe manufacturing plant that will support the Marcellus Shale Gas find in western Pennsylvania and eastern Ohio. Teaberry, the company’s president, sees a 15% increase in 2012 sales due to this project, other oil and gas projects, and an increase in market share from existing customers.

The industrial market has also been strong for Graybar Electric Co., St. Louis, says Kenton Sorenson, senior accountant, while the residential contractor market has lagged behind. “Growth in industrial production helped push plant capacity utilization rates and capital expenditures on business equipment to their highest levels in three years,” he said. “Non-residential construction grew moderately during 2011, driven by investment in the energy sector.”

Graybar was one of the Top 200 distributors that launched new branches in 2011, with new locations in California, Indiana, Missouri, Minnesota and New York. This year, the company also opened the doors of new branches in North Charleston, S.C.; Joplin, Mo.; and Lincoln, Neb.

With a 20% increase baked into his 2012 sales forecast, Doug Borchers, vice president, Dickman Supply, Sidney, Ohio, was one of nine respondents looking for sales to increase more than 20%. His optimism is based in large part on a strong industrial market and a construction market that’s starting to wake up in west-central Ohio.

“The industrial automation market is very strong and the construction market just now showing small signs of activity after a couple years of stagnation,” he said. “The strong industrial market contributed heavily to growth. We’re expecting another 20% increase in 2012 based on activity so far and backlog at our customers.”

You will notice some new members of EW’s Top 200 distributors this year — several of the largest independent Canadian electrical distributors. Since several of the largest national distributors now provide EW’s editors with their North American sales for this list and don’t break out their U.S. sales, we thought including the largest Canadian distributors would offer a more accurate reflection of the largest distributors on the continent. Also of note in this year’s Top 200 listing that 10 distributors on it have been acquired in the last 18 months.

Strictly by the numbers. With an estimated $58.3 billion in sales, Electrical Wholesaling estimates the Top 200 distributors controlled more than 60% of the $86.9 billion in 2011 sales through electrical distributors. According to Electrical Wholesaling’s estimates, these 200 companies had at 68,924 employees and 5,500 North American locations.