NAED’s 2004 PAR Shows Increase In Distributor Profit Margin

Distributors’ profitability increased by more than 5 percentage points, according to the recently released National Association of Electrical Distributors (NAED) 2004 Performance Analysis Report (PAR) Highlights.

The electrical distribution industry showed improved financial performance for the second consecutive year, according to the report. A benchmark for electrical distributor operations, results profiled in the report are based on financial survey data of 165 participating NAED distributor members throughout the United States.

The 2004 PAR Highlights, using 2003 data, reports a more than 5 percentage point increase in annual sales change (see chart below). This upward trend appears to be continuing as the latest NAED Quarterly Sales Change Expectations Survey shows; more than 80 percent of respondents anticipated continued increased sales for the first and second quarter of 2004.

PAR Highlights includes a five-year trend analysis of key ratios. For the second consecutive year, net profit margin rose slightly. Profit margins for the “high profit” distributor also improved slightly, from 3.4 percent to 3.5 percent. In addition, the “typical” and “high profit” distributors also saw increases in return on assets and return on net worth. The inventory turnover rate remained stable at 4.1 turns per year.

For more information on the PAR Highlights, contact NAED customer service at (888) 791-2512 or [email protected].