Industry Sales Improved but Profitability Slipped Somewhat in 2012

ARLINGTON, Va., Sept. 5, 2013 /PRNewswire/ -- Recently released results from the National Association of Chemical Distributors' (NACD)  Company Productivity Report (CPR) for 2012 show that industry firms reported higher "real" sales growth versus the prior year.   However, only one of the three industry segments reported higher profitability levels in 2012 than in 2011. In particular, the performance ratio "before tax return on net worth" (i.e., net profit before tax as a percent of net worth, or owner's equity) for 2012 was 30.0%, 39.6%, and 24.7% for the Liquid (LIQ), Factory Pack (FPP), and Balanced Product Mix (BPM) groups respectively.   This compared to 28.3%, 52.7%, and 25.1% for the three groups in 2011.

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While overall industry profitability was down slightly from the previous year, NACD member company sales growth for 2012 was generally higher than in 2011.  When measured by actual physical throughput of pounds of chemicals moving through the warehouse (without 3^rd party), sales growth in 2012 was 2.1% for LIQ group firms (as compared to a flat 0.2% growth in 2011), while FPP firms grew 2.6% (down from a 3.7% gain in 2011), and BPM firms reported a 5.2% advance (up from a 2.1% growth in 2011).

"We're pleased to see NACD members' continually strong performance," said NACD Interim President Kurt McMillan. "This annual report tracks members' profitability, productivity, and financial management.  The resulting data helps our members evaluate their operating results and make adjustments year over year.  This year's results demonstrate our members' commitment to more effective operations while showing that they are still experiencing tightness in the marketplace. "

Other noteworthy highlights of 2012 industry performance include:

• "Accounts receivables days outstanding (i.e., "average collection period on receivables") improved for all three industry segments, going from 40.4 days in 2011 to 38.1 days in 2012 for LIQ firms, from 40.4 to 36.4 days for FPP firms, and from 40.2 to 39.3 days for BPM firms.
• "Sales per employee" declined in the aggregate among survey participants during 2012, going from $1,314,270 in 2011 to $1,191,940 in 2012. 
• "Total payroll expense (including fringe benefits) as a % of sales" increased from 8.9% in 2011 to 9.3% in 2012, based on all NACD participants in the aggregate.  However, this payroll cost performance tended to be much lower than that of most other wholesale distribution industries tracked by Industry insights.

NACD and its over 400 member companies are vital to the chemical supply chain providing products to over 750,000 end users. They make a delivery every eight seconds while maintaining a safety record that is more than twice as good as all manufacturing combined. NACD members are leaders in health, safety, security, and environmental performance through implementation of Responsible Distribution, established in 1991 as a condition of membership and a third-party verified management practice. For additional information on our members, their safety record or NACD, visit NACD at www.nacd.com.

Contact: Lucinda Schofer
703/527-NACD(6223)

SOURCE National Association of Chemical Distributors (NACD)