PERSPECTIVE: Fastener Companies Struggle With Sales Growth
8/18/2015
HEADLINES
Fastener companies seem to be struggling with top-line growth even as margins improve.
The dilemma comes at a time of weakening fastener activity in the U.S., where fastener imports and exports weakened in June for the third straight month.
U.S. fastener exports of iron and steel fasteners (HTS Code: 7318) were flat at $329.1 million in June, according to Zepol data analyzed by GlobalFastenerNews.com. U.S. fastener imports of iron and steel fasteners (HTS Code: 7318) declined 4% in June to $432.4 million.
Chicago Rivet Fastener Sales Decline
“Fastener segment demand remained uneven during the second quarter,” Chicago Rivet added.
Fastenal’s Fastener Sales Flatline
“Our market share gains continue to be strong, but the contraction from our existing customers has eliminated our (fastener) growth,” the company added.
Wesco Aircraft Reports Sales Decline
Aerospace fastener supplier Wesco Aircraft reported sales for the third quarter of fiscal 2015 fell 7% to $368.7 million. Organic sales fell 4%, while EBITDA declined 32% to $42.6 million. Net income in the fiscal 2015 third quarter was $16.5 million.
TriMas Fastener Segment Sees Growth
TriMas Corp. reported second quarter revenue in its Aerospace segment – which consists of Allfast Fastening Systems, Monogram Aerospace Fasteners, Mac Fasteners, and Martinic Engineering – increased 35.8% to $43.2 million, primarily due to the results of Allfast, which was acquired for $360 million in October 2014. Segment operating profit gained 27.5% to $7.2 million.
Profit Down Despite Higher Dorman Sales
Dorman Products reported sales, including fasteners, increased 1% to $198.7 million in the second quarter of 2015. Gross profit nearly doubled to $76.6 million, while net income declined 0.4% to $23.1 million. Gross profit margin improved to 38.5% due to a favorable sales mix shift and lower transportation costs.
Carpenter Tech Fastener Material Sales Rise
“Fastener activity continued to be strong, with sales up both year-over-year and sequentially,” the company stated.
Stanley Black & Decker Sees Organic Fastener Growth
Stanley Black & Decker reported its Engineered Fastening business achieved 4% organic growth in the second quarter of 2015, “driven by strong global automotive and electronics revenues, which more than offset weaker North American industrial volumes.”
Precision Castparts Reports “Flat” Fastener Sales
Precision Castparts Corp. reported sales in its Airframe Products segment, including fasteners, declined 3% to $779 million in the first quarter of fiscal 2016, driven by lower military and general industrial sales. Commercial aerospace sales were relatively flat year-over-year, reflecting fastener demand timing and impact of new development work on aerostructures sales.
ITW Fastener Segments Report Falling Revenue
ITW reported Automotive OEM organic revenue, including fasteners, fell 3.4% in the second quarter of 2015 to $649 million, despite 6% organic growth. Organic revenue increased 10% in Europe, 5% in North America and 8% in China. Operating income reached $159 million, with operating margin of 24.5%, up 80 basis points.
Grainger Profit Outpaces Sales Growth
Grainger reported sales, including fasteners, increased 1% to $2.5 billion in the second quarter of 2015, with operating earnings growing 5% to $357 million and net earnings gaining 7% to $221 million.
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