BITS AND PIECES PVF ACQUISITIONS & EXPANSIONS Flowserve Corp. has acquired Valbart Srl, a privately owned Italian manufacturer of trunnionmounted ball valves (TMBV) used primarily in the oil and gas industry, for about $200 million in cash. In December 2009 the two companies entered into a joint venture agreement that focused on combining Valbart’s ball valve technology with Flowserve’s high performance noise and cavitation-reducing trim designs, which led to the creation of a trunnionmounted control ball valve designed to deliver high performance. Tyco Flow Control opened its $25 million Advanced Nuclear Testing & Development Facility, one of the largest testing facilities of this type in the world, in Mansfield, MA.The 118,000-sq.-ft. facility stretches larger than two football fields. TMK IPSCO opened a sales office in Calgary, Alberta, Canada.The new office will serve as its Canadian headquarters for sales and will be managed by Dmitry Butorin, director of sales — Canada. PEOPLE ON THE MOVE Cornerstone Valve has named 30-year valve industry veteran Dwight Anderson as its new president.The Houston-based, global severeservice valve manufacturing and engineering company was recently purchased by Robert Clay of Clay Development & Construction, an industrial real estate developer. Engineered Software Inc. named Steven Stoyles as its new software development manager.Stoyles has more than 30 years of experience in software development and most recently spent 17-plus years working for the Weyerhaeuser Co. NEW ON THE WEB Tyco Fire Suppression & Building Products announced the launch of its newly re-designed GRINNELL Products Web site at www.grinnell. com.It includes new features such as a My Submittals section and a cross reference tool. Parker Fluid Control Division said its new Shameless Self-Promotion PVF e-News is a twice-monthly e-newsletter written and edited by me, and subscribed to by more than 6,800 PVF industry citizens. You can check out past editions by visting www.supplyht.com, and visit the “PVF e-News Archives” in the left-hand column.To subscribe, go to the right-hand column and click on the PVF e-News logo.It looks like this. The Yin & Yang Of PVF Distributor Performance The American Supply Association’s 2010 Operating Performance Report (OPR), a detailed examination of PHCP distributor fi nancial performance metrics, showed PVF fi rms reporting a staggering -24% median decline in sales last year. This compares with a - 17.2% drop for all PHCP product categories combined. (See “In Closing” on page 78 for an analysis of the cumulative results.) The PVF companies surveyed reported deriving 89.8% of their sales from PVF products.Their massive plunge in sales volume in 2009 was almost fi ve times as great as the previous record drop of -5.2% in 2002. On the plus side, PVF fi rms responding to the OPR survey reported what on the surface seems to be some sterling fi nancial results. For instance, PVF fi rms had the highest bottom line of all the product categories, 3.9% net profi t before taxes,1. 7% after taxes. I suspect this refl ects the positive impact of spiraling commodity prices last year. Moreover, gross margins for PVF fi rms reporting actually rose to 27.6%, up from 25.5% in 2008 and the highest level in the 20-year historical results reported in the latest OPR. Also, average receivable days for PVF fi rms dropped to 43, down from 44 the previous year, and was the lowest among all PHCP product categories. I asked around for an explanation of this counterintuitive data, and got the following response from Tom Noon, a principal with Industry Insights Inc., the consulting fi rm that has put together ASA’s OPR throughout its 28-year history. “While it is diffi cult to know why (these ratios) improved without actually interviewing the companies involved, my suspicion is that two things may have occurred. First, given the down economy and signifi cant sales decline, many companies became fi xated on expense management and receivables management in order to squeeze at least some profi ts from the lower sales. Second, given the decrease in industry sales, marginal customers may have been de-emphasized in favor of stronger, better-paying customers,” said Noon. In any case, you can’t pay bills with percentages. PVF distributors all know that gaining a couple of percentage points in margins doesn’t come close to compensating for sales dollars plummeting to an abyss.
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