PT Distributor Performance Report Reveals Significant Gap
in Profit Margins Among High-Profit and Typical Firms
Chicago, Ill. – May 26, 2010 – The recently
completed 2010 PT Distributor Performance Report reveals that
high-profit distribution firms had a pre-tax profit margin nearly 5
percentage points higher in 2009 than the typical firm’s pre-tax
profit margin. The annual report, released by the Power
Transmission Distributors Association (PTDA), demonstrates a wide
variance in financial performance.
When asked in October 2008 to forecast sales for 2009, nearly
one-third of distribution firms predicted sales declines. According to
the 2010 PT Distributor Performance Report, the typical sales
volume of power transmission/motion control distributors in 2009 was
down 19.2 percent.
Gross margins for typical- and high-profit distribution firms showed
little variance at 27.1 percent for typical firms and 27.4 percent for
high-profit companies.
The median “high profit” distribution firm (top 25
percent of firms based on ROA) also diverged in other important ways
from the median “typical” firm. The results suggest
the most successful firms continue to exhibit critical profit variables
well above those of the typical firm. Sales per employee at high-profit
distributors totaled $554,771 in comparison to $384,819 for typical
firms. Additionally, high-profit distribution firms kept operating
expenses to 21.7 percent, whereas they crept to 26.3 percent for typical
firms.
The PT Distributor Performance Report, conducted annually
for PTDA by Profit Planning Group of Boulder, Colo., is a compilation of
operational statistics from 42 distribution firms throughout North
America. This valuable resource examines five-year distributor
performance trends in return on investment, income statement, and
balance sheet line items and examines financial ratios, asset
productivity ratios, growth and cash sufficiency ratios and employee
productivity ratios.
Data is reported for three U.S. regions (Eastern, Southern, Midwest)
and Canada, and four sales volume categories, ranging from less than $10
million to more than $75 million. Additional breakouts include
machinery, repair and operations (MRO) emphasis versus original
equipment manufacturer (OEM) emphasis and product mix (percentage of
sales by bearings, power transmission and other).
The report is designed for distributors seeking information to
benchmark their company’s performance against that of the industry
as well as manufacturers looking to obtain insight into the operational
and business needs of their distributors.
The report is available for purchase to PTDA members for $169.95 and
to non-members for $299.95. For more information, contact PTDA at
+1.312.516.2100 or visit the PTDA Store at www.ptda.org/store.
Founded in 1960, the Power Transmission Distributors Association
(PTDA) is the leading association for the industrial power
transmission/motion control (PT/MC) distribution channel. A
U.S.-based trade association, PTDA represents 198 power
transmission/motion control distribution firms that generate more than
$10 billion in sales and span 3,500 locations in North America and 11
other countries. PTDA members also include 187 manufacturers that
supply the PT/MC industry.
PTDA is dedicated to providing exceptional networking, targeted
education, relevant information and leading-edge business tools to help
distributors and manufacturers meet marketplace demands competitively
and profitably. For more information, visit www.ptda.org.
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