Distributors

Graybar’s 2011: At $5.3 billion, sales up 16.4% from 2010

Q4 sales at Graybar rose 10% from Q4/2010, taking the company to $5.37 billion in 2011 sales. That’s up 16.4% over the previous year. Graybar’s sales are up a full $996,917,000 from 2009’s $4.37 billion—that’s 23.8%.

In its 10-K filing with the SEC, Graybar said that as of Dec. 31, 2011, it “distributes approximately one million products” from 4,100 suppliers. The top 25 suppliers accounted for 52% of the products sold by the company.

In its report five years ago, Graybar said it did business with “nearly 4,400 primary manufacturers.” The top 25 in that year accounted for 53% of company product purchases.

In the report on 2007, Graybar said it “stocks over 115,000 of the products it distributes.” In the recently filed 10-K, the company said that number was 75,000.

In 2011, 57% of products sold came off of Graybar’s shelves—the rest were direct-shipped by suppliers. In 2010, it was 56%. In the 2007 10-K filing, the company said the numbers were 58% in 2007 and 60% in 2006.

For 2011, Graybar said it had 115,000 customers; for 2007, that figure was 160,000. Electrical contractors (45.5% of sales) accounted for the largest customer category. Voice and data communications were reported to have made up 20.0% of 2011 sales.

Gross margin for 2011 was reported as 18.5% in the recent 10-K filing. Gross margin was 18.8% in 2010, and 19.5% in 2009, and 19.6% for 2007. The company said “rising product costs, coupled with price competition, contributed” to the decline in gross margins.

Graybar’s recent report showed $47.5 million in long-term debt, of which most ($39.8 million) is due for repayment this year. As of Dec. 31, 2011, the company had almost $72 million of cash/cash equivalents on its balance sheet. Essentially, the company could use its cash to pay down 100% of its debt and still have plenty left over. According to its cash-flow statement, Graybar repaid $43.86 million in long-term debt in 2011.

The company’s 2011 capital expenditures were almost $61 million, more than double the 2010 total. Graybar said, “The increase in capital expenditures for 2011 was primarily due to the Company’s exercise of its purchase option available under the lease agreement on its 200,000 square foot operations and administrative center in St. Louis.”

Going forward, “The Company expects its growth in net sales to closely track the growth projected for the general economy, which is expected to continue to expand slowly in 2012. The Company also projects that it will face continued downward pressure on gross margin as a percent of net sales in the year ahead.”

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