Net profits for electrical distributor profitability climbed more than a full percentage point in 2004, according to the Electrical Manufacturers’ Credit Bureau (EMCB), Temecula, Calif.
Net profits (before taxes) in the EMCB study averaged 3.56 percent in 2004, up from 2.41 percent in 2003. That’s the highest net profit margin reported by the EMCB study in the last 10 years.
Gross profit also increased. The 20.93 percent gross profit figure in the EMCB study was the second time gross profits topped 20 percent since 1999; gross-profit margins were at least 20 percent from 1993-1999, according to EMCB.
The 2004 EMCB National Norms for electrical wholesalers show the current assets were composed of cash (7.14 percent); receivables (46.04 percent); and inventory (43.35 percent). The current ratio (current assets divided by current liabilities) was 1.97 to 1.0; the quick ratio (cash and receivables divided by current liabilities) was 1.05 to 1.0; and the worth debt ratio was 0.71 to 1.0.
Most of the electrical distributors participating in the EMCB study had a net worth ranging from less than $150,000 to $10 million. Financial data from approximately 25 companies with a net worth in excess of $10 million is also included in the report; those findings can be found under “Large Companies” in the chart on page 2.
According to EMCB, gross-profit percentages for Graybar Electric Co., St. Louis, and WESCO Distribution, Pittsburgh, were approximately 19 percent. Rexel Inc., Dallas, and Hagemeyer NA, Atlanta, had gross profit percentages of 25.20 percent and 22.78 percent respectively.
The EMCB report is compiled annually to establish a basis for comparing and measuring the financial status of electrical wholesalers. Financial statements for fiscal years ending 2004 and early 2005 were received from distributors. The statistics compiled in this report reflect EMCB’s National Norm for 2004. For more information on the EMCB, call (951) 296-6767.