From a financial perspective, 2010 was a year of strong improvement for Industrial Distribution. From an operational perspective, it was a very active one as well, a year in which the business continued to strengthen its franchise to achieve greater competitive strength and deliver more value to more customers in more locations. Industrial Distribution’s operating income for 2010 was $30.3 million, an increase of 140% from $12.6 million in 2009. Sales rose 29% in 2010 to $832.0 million, from $645.5 million in 2009.
The results achieved in 2010 were built on the foundation laid in prior years, and much credit for this goes to Jack Cahill, who retired in 2010 after thirty-five years with Kaman, seventeen of them as President of Industrial Distribution. Jack built a culture at Industrial Distribution based on integrity, dedication, technical capability and hard work. He leaves the business in a very strong position, and we thank him for his contributions and wish him all the best in the future.
Jack was succeeded as President of Industrial Distribution by Steve Smidler, a highly experienced executive who joined Kaman in late 2009 from Lenze Americas Corporation, where he served as Executive Vice President, with responsibility for marketing, sales, finance, business systems and product technology for the Americas. Steve has spent his three-decade career in industrial automation, having previously worked at both Eaton Corporation and Rockwell Automation.
Industrial Distribution made three acquisitions last year that substantially expanded its platform. In February it acquired the assets of Fawick de Mexico, S.A. de C. V. of Mexico City, which became part of Delamac de Mexico, Kaman’s Industrial Distribution Mexican subsidiary. A distributor of Eaton Air Flex/Fawick products to a wide variety of industries throughout Mexico, this acquisition expands the bearings and power transmission platform already in place in Mexico.
In April, Industrial Distribution acquired Allied Bearings Supply Company of Tulsa, Oklahoma. Allied is a distributor of bearings, power transmission, material handling and industrial supplies to diverse markets that include the oil, gas, refinery, drilling equipment, steel, cement, paper, and food industries. Allied has a reputation for technical excellence and exceptional customer service, making it a great cultural fit with Kaman. The acquisition provides a strong position in Oklahoma and Arkansas and increases our exposure to the oil, gas and petrochemical industries.
Later in April, we acquired Minarik Corporation, the largest acquisition ever for Industrial Distribution. Minarik is a national distributor of motion control and automation products, with one of the most complete offerings in the industry, including many of the leading brands of sensors, servos and automation control products serving global manufacturers. As the only national distributor focused on the motion control and automation industries, Minarik is a great strategic fit for Kaman, increasing our geographic footprint and served market. The acquisition also increases our scale, allowing us to further leverage our existing infrastructure.
Although acquisitions contributed significantly to Industrial Distribution’s expansion during 2010, the business never lost focus on organic growth. New national account wins provided strong testament to the strength of our franchise, the value of our service and the ingenuity and commitment of our people. Investments in technology to improve productivity and support growth included enhancements to business systems, a new data warehouse and a voice over IP phone system. Over time, these investments will boost productivity, allowing Industrial Distribution to improve margins while strengthening its focus on the customer.
