Average net profits before taxes for electrical distributors decreased 11 percent in 2007 to 4.74 percent of sales from 5.35 percent in 2006, according to a study by the Electrical Manufacturers Credit Bureau (EMCB), Murrieta, Calif. In “2007 Financial Norms of the Electrical Wholesaling Industry,” average gross profits for electrical distributors that provided EMCB with financial information decreased 0.92 percent to 20.11 percent.
Profit data for the 25 distributor respondents with a net worth of more than $10 million were reported separately. The gross profit percentage of WESCO Distribution, Pittsburgh, decreased slightly to 20.36 percent and Graybar Electric Co. Inc., St. Louis, stayed at around 19 percent. While profit margins for The Home Depot, Atlanta, and Lowe's, Mooresville, N.C., were not included in the study, their net profits before taxes were 8.56 percent and 9.34 percent respectively, much lower than 2006. Their gross profit percentages were 33.61 percent for Home Depot (up from the prior year) and 34.64 for Lowe's (about the same). Gross profit percentage for Rexel was 24.43 percent, up from 23.26.
Other key data in EMCB's “2007 Financial Norms of the Electrical Wholesaling Industry” was as follows: Electrical distributors' assets consisted of 5.36 percent cash, 50.89 percent receivables and 41.68 percent inventory; distributors' average current ratio was 1.81 to 1, quick ratio 1.02 to 1 and worth debt ratio 0.50 to 1. For more information, contact EMCB at (951) 834-9540.
The charts: Electrical Wholesalers' Operational Statistics National Norm Past Ten Years