TheAmerican Supply Associationdistributor members reported a 2.3% improvement in revenues during the second quarter 2010 as compared to the same quarter in 2009, although year-to-date the plumbing, heating, cooling and industrial and mechanical pipe, valve and fitting distributors are still behind last year by 1.4% and behind by 15.2% as compared to 2008.
For the month of June, the wholesalers reported only the third improved month in the last 18 months over the same periods of the previous year with a 2.8% improvement, although the month remained 14.1% behind 2008.
For the second month in a row, one-third more distributors reported improved margins in 2010 as compared to 2009. On a year-to-date basis, there is an equal amount of distributors reporting improved margins as there are reporting reduced margins. Interestingly, this month the larger distributors have flattened out in revenue improvements, but the $10-15 million of revenue distributor is growing at a significantly faster pace on a percentage of revenue basis than all other PHCP distributors on both the monthly, year-to-date and 2-year YTD comparative numbers.
Inventories continue to be reduced as another 2.3% reduction has been achieved as compared to 2009, and 9.3% reduction as compared to 2008. Account receivable days sales outstanding has also improved for the distributors as 1.3 days has been taken out since 2009. These two facts should be providing a strong cash flow boost to the industry as it appears the industry is rebuilding its balance sheet. And for the second consecutive year, distributors overwhelmingly have reduced head count, which will help productivity and the industry income statement.
All of this points to a continued, albeit slow recovery for the PHCP industry with about two thirds of the distributors reported improved profitability as compared to 2009 when 83% of the members reported reduced profitability.
For a full report containing statistical evaluation by regions of the country, market segments and distributor size, companies should contact Chris Murin atcmurin@asa.netor 312.464.0090 ext. 204.
Source: ASA
