Electrical Wholesaling's annual listing of the Top 200 electrical distributors provides a fascinating snapshot of the largest distributors in the land. It's much more than just a listing of the largest companies because these companies provide some fascinating insight into their toughest challenges and growth plans for the future.

While it's always been hard to define the “average” Top 200 electrical distributor, this year's respondents were particularly difficult to categorize. For one thing, the economic fortunes of this year's Top 200 distributors varied wildly. The average sales change between 2007 and 2008 for the 107 companies that provided sales data for the past two years was an increase of 4.9 percent, but 14 of those respondents enjoyed sales increases of more than 15 percent, and four companies saw their sales spike by more than 30 percent in 2008 — Argo International Corp., New York; Wholesale Electric Supply Co. of Houston Inc., Houston; A.E. Petsche Co. Inc., Arlington, Texas; and Shepherd Electric Supply, Baltimore — saw their sales increase by 30 percent or more. Argo International had the largest increase, with a 65.8 percent spike in its U.S. sales, and a 17-percent increase in total company sales, which includes revenues from its 11 branches outside the United States. Rory Toohey, the company's sales and marketing analyst, said large projects in oil well drilling and mining markets fueled its 2008 sales increase.

Elliott Electric Supply, Nacogdoches, Texas, which opened up 14 new branches last year, enjoyed a 20-percent sales increase in its 2008 sales. James Rudd, product manager, said a strong construction market up until last November and high commodity prices sparked growth last year. Another Texas-based distributor, Wholesale Electric Supply Co. of Houston, Houston, said large projects and repair work related to damage from Hurricane Ike helped support a whopping 37-percent sales increase.

Graybar Electric Co., St. Louis, also had a solid year and established new record highs for sales ($5.4 billion) and net income ($87.4 million) in 2008. According to Timothy Sommer, the company's manager of corporate communications, “Significant cash flows from operations allowed the company to reduce year-end short- and long-term debt to its lowest level since 1993 and finish the year with a substantial cash balance. The company experienced modest sales growth in both the electrical and comm/data market sectors for the year ended December 31, 2008, compared to the same period in 2007.”

Distributors also had a wide range of 2009 sales forecasts (see chart on page 22), although the majority were expecting a historically bad year in sales. Of the 123 distributors who responded to this survey question, 70 percent were expecting a sales decline in 2009 of at least 10 percent, and 36 percent of respondents expect their sales to drop by at least 20 percent. Continue reading...

Tables & Analysis

The Top 200 Electrical Distributors
Alphabetical Guide to the Top 200 Electrical Distributors
Top 25 as Ranked by Sales Per Employee
2008-2009 Distributor Acquisitions in the Electrical Market
Top 200 Annual Sales 2004-2008
The Biggest Electrical Distributors on the Planet
The Five Largest Electrical Distributors

Back to the Top 200

Various shades of green

There were also huge differences of opinion on the green market. While 102 Top 200 distributors are either already stocking LED lamps or plan to do so within the next year, when asked if the green revolution had rolled into their town yet, only half the total respondents had seen growing demand for energy-efficient electrical products. Also, while many companies had not seen end users work on photovoltaic projects or wind farms, a few distributors were already selling photovoltaic panels to customers.

That being said, several respondents said green was becoming a big part of their companies. It's probably not surprising that the distributors who seemed the most excited about the green market were executives from those firms that had studied its sales opportunities and made green a strategic initiative for their firms. Lou Fromm, vice president of marketing, and Kirk Ericsson, vice president of sales, said green sales were very significant for Fromm Electric Supply of Reading, Reading, Pa. “We're building a foundation to become a substantial resource to our customers and end users,” they said. “Our focus on green initiatives and renewable energy solutions — tied to incentives (via the stimulus package, etc.) — has opened new revenue streams.”

Alex Kepley, vice president of operations for CBT Inc., Cincinnati, said green products are creating sales opportunities for his firm. “It provides a great lead-in for appointments and to open the door for new business,” he said, “Duke Energy also provides rebates, so there is much interest and some business in lighting retrofitting and upgrades at this point.”

On the West Coast, several distributors had already moved into the solar market. Bob LaRue, president, Alameda Electrical Distributors Inc., Hayward, Calif., said customers are listening to what his salespeople have to say about the green market and that his firm is now reviewing opportunities to stock solar panels.

Mike Pratt, CEO and president, American Electric Supply, Corona, Calif., said his company has already started selling miscellaneous items for solar installations and that so far the solar panels have been provided by utilities. American Electric Supply is looking at supplying wind farms, too, and considering expanding its presence in the green market in a big way. “We are generating a complete plan on entering the green market through several different platforms,” he said.

Andy Kawamura, vice president, Maltby Electric Supply, San Francisco, is also bullish on the green market. “It has an impact as our customer base is coming to us for ideas, recommendations and products,” he said. “We increased our market share from the alternative energy market — wind power and solar.” Continue reading...

Tables & Analysis

The Top 200 Electrical Distributors
Alphabetical Guide to the Top 200 Electrical Distributors
Top 25 as Ranked by Sales Per Employee
2008-2009 Distributor Acquisitions in the Electrical Market
Top 200 Annual Sales 2004-2008
The Biggest Electrical Distributors on the Planet
The Five Largest Electrical Distributors

Back to the Top 200

Recovery down the road

Respondents were brutally realistic about when they thought the recession would end. When asked, “How long do you think the recession will last?,” 46 distributors said they thought it would end within one year. The other responses were evenly split: end of 2009 (17); 18 months (24); two years (12); and two years or more (22) (see chart on this page).

While it's oh-so-easy to get caught up in all the economic gloom-and-doom, some Top 200 distributors are already have some reasons to be cheerful. Said American Electric's Mike Pratt, “We are expecting a gradual rebound in the California economy starting late third quarter 2009 and a full recovery by the first quarter of 2011. We are anticipating around a 12-percent decrease from our sales in 2008 compared to 2009.

“The indicators that we have seen starting in late March through April 2009 have been two-fold: 1) public work jobs are bidding and not only being awarded but the projects are starting off at a quick pace. 2) We are seeing an active market in the energy retrofit market even with the economic downturn on the private commercial level.”

CBT's Alex Kepley said his company had a strong start in 2008 compared to 2007, but then experienced a fairly significant slowdown, particularly in the third and fourth quarter “post-Lehman bankruptcy and credit market freeze.” He doesn't expect any growth until this year's fourth-quarter, but is already seeing some signs of economic life. “We are already seeing it as quote activity has increased, major customers are beginning to explore some capital projects, and our OEMs are also seeing an uptick in quoting work.”

Doug Bemis, president, Caniff Electric Supply Hamtramck, Mich., is bracing himself for a 2009 sales decline of at least 30 percent and is watching for an increase in the number of jobs his company quotes as an early indicator. He is also seeing some business improvement. “Business is improving now, but very slowly,” he said. “I expect to be back to prior levels by the second quarter of 2010,” he said. Continue reading...

Tables & Analysis

The Top 200 Electrical Distributors
Alphabetical Guide to the Top 200 Electrical Distributors
Top 25 as Ranked by Sales Per Employee
2008-2009 Distributor Acquisitions in the Electrical Market
Top 200 Annual Sales 2004-2008
The Biggest Electrical Distributors on the Planet
The Five Largest Electrical Distributors

Back to the Top 200

Meager merger numbers

Thus far 2009 has been an exceptionally quiet year for mergers and acquisitions, and no Top 200 distributors have yet been purchased. That's a notable contrast to 2008 when seven distributors on the Top 200 listing were purchased (see chart on page 20): Beacon Electric Supply, San Diego; Electric Fixture and Supply, Omaha, Neb.; Equity Utility Service Co. Inc., Marietta, Ga.; ESSCO Wholesale Electric, Chandler, Ariz.; Hagemeyer North America, Charleston, S.C.; Harris Electric Supply Co. Inc., Nashville, Tenn.; and Maurice Electrical Supply, Washington, D.C.

Strictly by the numbers

Estimated 2008 sales for the Top 200 distributors as a group slipped slightly from $54 billion in 2007 to $53.5 billion, and companies on this year's listing now control 59.3 percent of industry sales, down from the 60.7 percent posted in last year's Top 200 ranking. The ranked distributors had at least 78,881 employees and operated at least 5,587 locations. Sales-per-employee for the 120 full-line electrical distributors that provided both 2008 sales and employee counts was $644,684.

Tables & Analysis

The Top 200 Electrical Distributors
Alphabetical Guide to the Top 200 Electrical Distributors
Top 25 as Ranked by Sales Per Employee
2008-2009 Distributor Acquisitions in the Electrical Market
Top 200 Annual Sales 2004-2008
The Biggest Electrical Distributors on the Planet
The Five Largest Electrical Distributors

Back to the Top 200