Distributors Positioning For Success In 2009

Each year, The MHEDA Journal interviews a diverse group of MHEDA Member distributors across North America to find out expectations for the year to come. According to this year's survey of more than 70 distributor members, 2009 is shaping up to be one of the most uncertain years in recent memory for many material handling distributors.

As recently as last year, roughly 72 percent of those interviewed projected sales increases. This year, that number is down to just over 31 percent. Almost 53 percent expect sales to remain level and more than 13 percent are bracing for declines.

The uncertainty holds across product lines, as no more than 38 percent of distributors in any product segment expect sales growth. There are some geographic differences, however. More than 55 percent of distributors in the Southwest are preparing for increases, by far the highest of any region. Only 18 percent of those in the Northeast are anticipating higher sales numbers.

Much of the explanation for such uncertainty lies in the credit crunch and with the bailout measures passed during October. Some members point out that uncertainty would persist regardless of who had won the presidency, since their policies are not yet explicitly articulated. On the bright side, distributors are expecting upticks in service and maintenance as customers look to save money by repairing old equipment rather than buying new. Technological advancements and more focused training will also be positives.

For the most part, MHEDA distributors are making sure their Powerful Positioning will pay dividends in '09. Read on to learn how they plan to do it.

ENGINEERED SYSTEMS Distributors Forecast Level Market
Distributors of engineered systems are being measured in their predictions for 2009. Thirty percent of integrators project sales increases, and 60% see 2009 remaining the same. ES distributors will be looking at more aggressive marketing and diversified product and service offerings as ways to combat the down economy.

Compared to a normal year, sales at FloStor Engineering (Hayward, CA) will be flat, says Vice President David Rebata. However, they will be up over a down 2008 because of larger opportunities in the pipeline at the end of the year. “Traditional end-users are more selective in how they spend money,” he says. “We are looking at market segments that are still spending on capital projects, such as solar and other energy.” Rebata expects to hire two or three sales engineers and project managers. The company's Southern presence will be bolstered by offering a new line from its Tennessee branch.

Growth of 10% is the prediction of Bob Giberson, president of PeakLogix (Midlothian, VA), thanks to a concentration on robotic palletizing and depalletizing. PeakLogix is also looking to do more facility improvement work for clients. “We're expanding our range of services to help penetrate our clients a little more horizontally.” Giberson says that the additional work will require the addition of experienced project managers and controls experts.

“We're partnering with our vendors and outside consultants to have them come in and train us.” Bob Giberson, President PeakLogix (Richmond, VA)   “I'm trying to keep morale up by showing employees my appreciation for their hard work.” Paul Wanous, President Skarnes Inc. (Plymouth, MN)   “The customer base will be moving from an expansion mode to a consolidation mode.” Christopher Paulsen, CEO Wepco Inc. (Pittston, PA)   “Gas prices have come back down, which will help our expense budget.” Peter Lauder, President McCombs-Wall (Garden Grove, CA)   “The challenge this year will be bringing new ideas to customers to satisfy their needs.” Tim Gorham Jr., President Warehouse Systems Inc. (Northbrook, IL)   “We will re-focus our employees on maintenance rather than installation.” Mark Nelson, President Nelson Equipment Company (Shreveport, LA)   “I'm excited about more stability in the markets for financing and raw materials.” Bob Iwrey, President McNichols Conveyor Company (Southfield, MI)   “We must focus on profitable projects, creditworthy customers and gross profits.” David Rebata, Vice President FloStor Engineering (Hayward, CA)

The impact of the down American economy will be felt in Canada, where President Stewart Raynor predicts sales at his company, Norpak Material Handling (Port Hope, ON, Canada), will remain level. “Canada is not forecast to go into a recession, but many of our manufactured goods are exported to the U.S. Their recession will certainly have an impact on the investments of Canadian manufacturers,” he says. Fortunately, Norpak will spend more time in retail distribution and the food and beverage industries.

Level sales are also the hope for Paul Wanous, president, Skarnes Inc. (Plymouth, MN). Wanous will be focusing on local brand awareness, including some additional Internet marketing. Otherwise, he's going to rely on his strengths. “We're not going to change what we're doing,” he says. “We're going to continue to market, try to drive sales and train our employees.” Wanous sees end-users starting to come full circle with lean principles. “Some of our customers went lean, but now they are coming back to the way they used to be.”

Wepco Inc. (Pittston, PA) CEO Christopher Paulsen sees end-user needs changing in a different way. “When things are bad, they consolidate or combine into a smaller number of warehouses,” he explains. “We still then need to work with them to reconfigure the existing warehouses to handle more volume.” Paulsen, who predicts level sales, says the company will add two engineers and turn to more stable industries like pharmaceuticals.

Peter Lauder, president of McCombs-Wall (Garden Grove, CA), will be target-marketing third-party logistics companies to try to keep sales level or down slightly. “If we can show that projects have an ROI of less than three years, they will have a better chance of being approved,” Lauder says. He will be controlling costs by not making any large investments in personnel or equipment.

“Rather than doing things from scratch, people are needing to fix what they have, which for us involves a lot of retrofits,” says Tim Gorham Jr., president, Warehouse Systems Inc. (Northbrook, IL). Gorham doesn't see much growth in any other facets of the company, so he will be increasing marketing efforts, both in print and online, and adding a salesperson. Gorham anticipates level sales.

Perhaps the most optimistic forecast comes from S&H Industrial Services (Batesville, AR), where Director of Sales & Marketing Monte Himschoot is anticipating 60% growth through expanding territory coverage of Arkansas and the surrounding sales areas. S&H will be aggressively enhancing all areas of the company, including sales, marketing, engineering and installation. “The end-user is looking for a complete material handling company that can provide everything from casters to doors to rack and shelving,” he says, adding that S&H is positioning itself to do so.

Mark Nelson, president of Nelson Equipment Company (Shreveport, LA), expects a sales gain of 4%, based on a focus on customized equipment and the addition of one new sales and engineering employee. “End-users depend more and more on us to provide solution services, particularly for things like general conveyor maintenance and dock-and-door maintenance,” Nelson says. Nelson will focus his team on these issues, as well as a new team sales approach whereby a customer relations manager is in front of the customer on a more frequent basis, while the field sales engineers work on the time-consuming projects.

The automotive sector is the primary customer base for McNichols Conveyor Company (Southfield, MI), and Bob Iwrey, president, doesn't foresee much growth in that market until 2010. Therefore, he's seeking customers outside that traditional market, a move he thinks will help the company maintain level sales figures. “Our closure rate with those types of sales is much better than it is with automotive sales,” Iwrey says, adding that he's looking forward to less volatility in financial and raw materials markets next year. McNichols Conveyor will also add an associated product line.

Uncertainty Pervades INDUSTRIAL TRUCK Sector
Judging by the responses, distributors of industrial trucks aren't really sure what to think in 2009. Almost 24% of interviewees forecast a decline, but a third foresee an increase and 42% are expecting sales to remain level. Reasons for the responses include new product technology, revamped marketing efforts and renewed concentration on parts and service business.

For Ronald Wirshing, general manager at EMPCO Material Handling (Ponce, PR), a few new initiatives will help him achieve level sales. He would like to open up a smaller branch facility in a different region of Puerto Rico and will begin manufacturing industrial batteries. “A few competitors already manufacture their own batteries, which I purchase from them. I want to keep my money here,” he explains. Another new program, a parts delivery and on-site tire press service, should pay dividends as well. The addition of another parts employee and two salespeople will also help. During the first quarter of '09, Wirshing will begin to purchase equipment for the rental fleet to give customers more options as the rental market expands. He's also begun training his 12 technicians to become salespeople to their existing customers.

“We must be prepared as end-users look to prolong the life of current equipment.” Shilo Monney, General Manager Southern Field Maintenance (Victoria, TX)   “We're going into a maintenance segment of the market that we've never gone into before.” Jeff Darling, Vice President Washington Liftruck (Seattle, WA)   “There's more focus on 'green' trucks as customers continue to be more cost-conscious.” Vann Williford, President Atlantic Coast Toyotalift (Winston-Salem, NC)   “Service billing will increase slightly because of changes in service rates and parts costs.” Greg Costa, President/CEO Delta Materials Handling (Memphis, TN)

Andrew Decker, president, Decker Forklifts (Solon, OH), says that maintaining current sales levels through the down economy will be a challenge, which he will overcome by growing his in-house leasing business. He believes that more seasoned employees and stronger customer relationships for the four-year-old company will be worth looking forward to and will help the company achieve level sales in 2009. “I do that by discouraging excessive use of e-mail and encouraging more face-to-face and telephone contact with customers,” he says.

Level sales are the expectation for Shilo Monney, general manager at Southern Field Maintenance (Victoria, TX). The economy is definitely going to be a challenge, but Monney is relying on training and debt payment to help the company through. “We will be paying off some debt that we have by the first part of next year so we're not left holding the bag if the economy does tank,” he says.

For Jeff Darling, vice president at Washington Liftruck (Seattle, WA), sales will be down 10-15%. He will try to combat the drop by offering block time discounts and other creative pricing programs. The company is also poised to sign an agreement to get into a maintenance segment of the market that it previously did not participate in. “I think there's deferred maintenance that's going to catch up to customers and require significant repairs.” Darling will look to hire 5-10 service technicians.

Atlantic Coast Toyotalift (Winston-Salem, NC) will be expanding its product line, a move President Vann Williford expects to result in a sales increase of 3-5%. The company will be selling a new Aichi scissor lift and more JCB construction equipment. “We're offering more of what we call industrial products, which are more like consumable products used on a daily basis,” Williford says. To help sell the new products, he will look to add a salesperson or two. “We must take advantage of the opportunities that are out there,” he says. “As opportunities present themselves, we must make sure we're ahead of the curve and not behind; we must be proactive and not reactive.”

“We don't have any control over the housing or banking industries, but we do have control over how we run our business,” says Greg Costa, president/CEO of Delta Materials Handling (Memphis, TN). “Customers' long-term outlooks are being consumed with short-term needs, so they are having a hard time making long-term decisions. We have to figure out how to fulfill their short-term needs and transfer those into long-term relationships.” One way to do that is through rentals, which Costa says has been a growth area in the last several months because customers like the flexibility of not being locked into a long-term agreement. Delta will also increase its service billing rate as costs rise. All in all, Costa anticipates an overall sales increase of 3-5%.

Fixed-cost sales are the strategy at Prolift of NJ (Ocean, NJ). “We give the customer a fixed cost over 60 months, including maintenance and total cost of ownership, and that's working out well,” says President Ray Ortega. He predicts flat sales, adding, “This economy will weed out a lot of the weak companies. We must get the accounts that are dropped by competitors who go away.”

As the economy falters, Hank Ogden, president, Ogden Forklifts (Atlanta, GA), is turning to service to mitigate a drop in equipment sales. “In times like these, we must be sure that we give world-class customer service so that customers deal with us instead of shopping around for somebody else,” Ogden says. To do that, Ogden will invest even more in training, 85% of which will be done in-house.

Deep South Equipment Company (Shreveport, LA) suffered through a rough year in 2008, but President John Parsons sees growth ahead in 2009. He's expecting pent-up demand and booming business in the natural gas and oil fields in his area to lead to 10-15% growth. “We are targeting the energy field a little more strongly, and there is quite a bit of business in Louisiana, Mississippi and Texas,” Parsons says. He plans to add a facility sometime during 2009, though that process is still in negotiations.

“We will keep everybody focused and working on the same goals.” Ray Ortega, President Prolift of NJ (Ocean, NJ)   “The customers who survive will be more service-oriented and expect the best from all their suppliers.” John Parsons, President Deep South Equipment Company (Shreveport, LA)   “We will hire service technicians and grow the back end of our company.” Tom Mitchell, CEO Toyota Materials Handling (Irondale, AL)   “We must make sure our customers know that it's in their best interest to do business with us.” Dick Shaw, President Shaw Materials Handling (Bartlett, TN)   “Providing high quality service is good business whether it's a good economy or not.” John Christiansen, President Yale Lift Trucks of Florida and Georgia (Tampa, FL)   “We will develop our consignment parts program to save costs for our customers.” Frank Viccaro, President Viccaro Equipment Corporation (Hauppauge, NY)   “We're doing training on internal controls and software to improve efficiency.” Glen Corlett, President G&J Industrial dba Union Machinery (Union, MO)   “We're very sensitive to the efficiency of our operations. Cost control is paramount.” Ted Springer, President Springer Equipment Company (Birmingham, AL)

Tom Mitchell, CEO of Toyota Materials Handling (Irondale, AL), is predicting level sales because “some new truck sales will end up as used sales, some used truck sales will end up as rentals and the service and parts will pick up if people aren't buying new.” A new service manager was hired at the end of 2008, and Mitchell wants to add technicians for the anticipated growth in aftermarket. He will be encouraging up-selling to PM customers and changing his pay structure to incentivize salespeople. “We had them on salary plus a bonus if they hit a certain level, but we're going back to a draw system now,” Mitchell says. He also plans to reduce inventory to decrease interest expenses.

The rental market is also an important indicator for Dick Shaw, president of Shaw Materials Handling (Bartlett, TN). “One trend we're noticing is people putting off big projects but keeping their rental trucks,” he says. Shaw also is implementing some new financial merchandising strategies to stimulate business, and he will maintain good relationships with finance sources to keep everything flowing smoothly. Even with these measures in place, Shaw anticipates an 8-10% slowdown in business because of the economic uncertainty.

John Christiansen, president of Yale Lift Trucks of Florida and Georgia (Tampa, FL), will lean on a veteran managerial team and sales force to weather the effects of a 3% sales downturn. “Our guys are experienced, and they don't get nervous and drop their margins,” he says. He will invest heavily in product training for all five of the major manufacturers his company represents. Customers are looking to contract out more service work, an area where Christiansen sees some growth. “The core of our focus and vision for the next two years will be warehouse products,” he says.

Similar results are expected for Don Herman, president at Lift Inc. (Lancaster, PA), who expects a 4-5% decrease. He will focus on retaining his service technicians using a three-pronged strategy. “We survey the market to make sure our wages and benefit packages are competitive, try to give a good work environment and give bonuses for behavior that helps the company,” Herman says.

Aftermarket will be an area of focus for Steve Evans, president of Universal Forklift Supply (Houston, TX), who predicts a decline in new equipment sales. “Hopefully we can make it up in used sales, parts, service and rental,” says Evans, who will look for two technicians to help with the expected increase in service business. Evans will also be adding equipment to his rental fleet and focusing on Web-based marketing to get the word out about the company's offerings. Taken all into account, it adds up to level sales.

Sales are good at Viccaro Equipment Corporation (Hauppauge, NY), where President Frank Viccaro is planning for a level year. The company just received its largest-ever order, and Viccarro says, “There's money out there to be had; it's just a matter of finding it.” The addition of another salesperson and an aftermarket rep will help as well.

A 5% increase is in the offing for Glen Corlett, president of G&J Industrial dba Union Machinery (Union, MO), thanks to improved products from Komatsu and Tusk and better-trained salespeople. “We're conducting training in controls,” he says. “We're working hard to get our sales team to write follow-up letters and use our software the way they should.” Part of the sales training includes making sure they know what they're selling. “The customer is better educated. They're able to use the Internet to get more information quickly.”

Springer Equipment Company (Birmingham, AL) is poised for a 3% sales gain thanks to business from hybrid automobile manufacturers moving into the area. President Ted Springer says, “Primarily what we're focusing on are those plants that are producing the fuel.” He acknowledges that overcoming the buyers' mindset will be challenging. “The media has done an excellent job of beating everyone down. We need to take a positive message to our customers.” Springer also expects to hire five technicians to handle an uptick in aftermarket work.

Robert Stoffel, president of Stoffel Equipment Company (Milwaukee, WI), was predicting a flat year until the credit crisis hit in October. Now he's bracing for a 5% drop in sales. “Interest rates are up on the leasing end of things, which will keep people from moving forward unless a project is rock-solid justifiable,” he says. Stoffel will implement a new computer system to help produce more complete and timely information about customers' fleets.

Frontier Forklift & Supply (Pearland, TX) is a young company in growth mode, so President Russ Wilkins is hoping its natural growth cycle will be enough to balance out a slow economy and produce level sales. He believes that the continuation of government programs will help new equipment sales remain steady. “The Texas Railroad Commission offers grant money for customers to replace older gas and diesel units. As long as that grant money stays there, sales will at least stay the same.” He plans to spend about $100,000 in the 2^nd Quarter to update his service fleet with three pick-up trucks. Rising medical insurance premiums are the number one challenge facing the company.

National Lift Truck Service (Fort Lauderdale, FL) will move to a new 40,000 sq. ft. building in the 1^st Quarter, which President Robert Siano thinks will energize the company. The new location is located in Pompano, about six miles north of the current facility, and gives Siano good reason to start a new telemarketing campaign. “A lot of big companies are moving out, and a lot of start-ups are moving in,” he says. He will have the sales force perform a monthly “sales blitz,” where the whole sales staff goes into one salesperson's territory to pass out fliers for a day and a half. “We're picking up sales that way,” he says. The company will also start selling JCB construction equipment and add four or five parts and service employees.

“Usually rentals go up in a down economy, but I'm not convinced that's the case this time.” Robert Stoffel, President Stoffel Equipment Company (Milwaukee, WI)   “Diversification is good, as long as it's done in a careful, methodical way.” Bob Levin, President Material Handling Supply Inc. (Brooklawn, NJ)   “We will step up our advertising to promote our company to the market.” Ken Turnmyre, President Vesco Toyotalift (Hickory, NC)   “We will look to sell more used equipment and weed out our non-producers.” James Hall, President Mid-Florida Forklift (Orlando, FL)   "It will take creativity to meet our customers' needs while remaining profitable.” Gary Fairchild, President Yale Materials Handling - Green Bay (Green Bay, WI)   “We're continuing to enhance our fleet services and fleet reporting capabilities.” Steve Buehler, President Lift Solutions Inc. (Omaha, NE)   "We're finding much success with truck safety devices.” Robert Kehley, General Manager Key Material Handling Equipment (Brooklyn, NY)   “Fleet management is a big part of the business, and we expect that to show rewards.” Tim Heesacker, General Manager NMC (Omaha, NE)   "Much like the cable company does, we will bundle all our products and services for customers.” Mark Jones, President Miami Industrial Trucks (Dayton, OH)   “We use our monthly newsletter to share our vision with all employees and build morale.” Cory Thorne, President Southeast Industrial Equipment (Charlotte, NC)   "Confidence and vision are a leader's most important skills in today's environment.” Walter Albasi, CEO Accurate Lift Truck (West Berlin, NJ)   “I look forward to finding creative ways to maximize my customers' dollars.” Jesse Thacker, Vice President B&J Forklift Services (Anchorage, AK)

A new facility is also in the plans for Bob Levin, president of Material Handling Supply Inc. (Brooklawn, NJ), who will be renovating a newly purchased 25,000 sq. ft. building next door to the current 30,000 sq. ft. facility. It will be a place to service customers and generate service-department revenue while the company experiences a 20% sales decrease. Levin will make a 1^st Quarter investment to replace the rental fleet and service vans as well. “We must observe what our customers are doing. If they are putting units aside, we may offer to buy them so our customer has some cash flow,” he says. “We'll do whatever we can to help the customer.”

At Mid-Florida Forklift (Orlando, FL), customers are cutting back on their maintenance. “We haven't lost customers but some who used to do planned maintenance every 30 days are now doing it every 90 days,” explains President James Hall. To counteract that, he will look to purchase more used equipment to sell. 2008 was a rough year, and Hall predicts sales will remain level until the housing market in Florida recovers. “About 50 percent of our business is from people who build houses. That's where the challenge is.”

Ken Turnmyre, president of Vesco Toyotalift (Hickory, NC), thinks that price increases will lead to slightly higher revenue, but unit sales will remain flat until things get back on track, which he expects to happen in the 3^rd Quarter. To combat this, he recently added the Nilfisk sweeper/scrubber line and has a dedicated salesperson excited to make headway with that product. “We made a pretty good capital investment into that just in the last part of '08, and we think that's going to be a good product for us.” Turnmyre is making a concerted effort to get some young blood into the company to take it forward.

Diversification is also a point of emphasis for Steve Buehler, president, Lift Solutions Inc. (Omaha, NE), who will be taking on vertical carousels in the warehouse equipment division of the company. Also, Buehler will implement incentives for finding extra work on service calls and PMs. “We are scrutinizing the profit centers and trying to curb expenses wherever possible,” Buehler says. “We have recently created a new position for corporate trainer, so we've gone through more technical training for all technicians in all divisions.” These programs will help the company see growth of 5% in the face of the challenging economy.

The economy is main obstacle for Gary Fairchild, president of Yale Materials Handling-Green Bay (Green Bay, WI). “If you don't already have great customer relationships, now is not the time that you're going to gain a lot of customers.” As such, Fairchild will be focusing on customer retention and introducing a new product. He thinks it all points to level sales.

A similar expectation comes from Tim Heesacker, general manager at NMC (Omaha, NE), who predicts level sales. “We're really pushing our salespeople to sell the whole store, including allied products and equipment,” he says, cautioning, “If we spread out too far, we won't be experts on anything so we need to really understand those products.” He expects decisions that would normally get made in the 1^st Quarter to get pushed into 2^nd Quarter. NMC will move into a corporate office facility.

Robert Kehley, general manager of Key Material Handling Equipment (Brooklyn, NY), is focusing on refurbishing used equipment and selling complementary lift truck safety products. “There have been a lot of accidents in our area over the last few years, and our customers are more in tune with the importance of safety.” He sees his customer base changing from manufacturing to distribution and pushing toward more electric trucks. Kehley forecasts level sales.

An optimistic outlook comes from Cory Thorne, president of Southeast Industrial Equipment (Charlotte, NC), who says entrance into markets like personnel carriers and aerial work platforms will help the company grow as much as 8-12%. Southeast is also changing the way it services customers. “Rather than giving a call to anyone in the service department who's available, we're going to assign a specific person to each account,” Thorne explains. “We're trying to get to a point that our people are accountable and can relate to each customer's specific needs.” End-users are “switching to a mode of caution and emergency response rather than planning and forethought,” Thorne says. To respond, Thorne is drastically downsizing his fleets of both rental and new equipment in order to have a manageable level of inventory.

Mark Jones, president, Miami Industrial Trucks (Dayton, OH), expects sales to be down slightly, but will continue to invest in technology to counteract that. “Customers are looking to reduce their vendor base and do more with a select few quality companies,” he says. “We want to look and maximize what's within our current customer base.” Jones expects continued pressure on the credit market to be a challenge and implores people to be more careful to whom they extend credit.

A major focus on cross-marketing will be made by Jesse Thacker, vice president at B&J Forklift Services (Anchorage, AK). “We will promote each department of our business through the others. Our rental agreements will have sales information on them, and our invoices will have information about other services,” he explains. Thacker anticipates a sales gain of 20% as the company expands its digital footprint. “We're expanding our presence on the Web and we're really trying to go paperless.” B&J will begin offering heavy-duty forklifts with capacities up to 100,000 pounds and add three to five employees in sales and parts positions.

Steve O'Leary, president of Northland Industrial Truck (Wilmington, MA), is bracing for an 8-10% sales decline, due to a drop-off in racking and engineering work. O'Leary opened a new facility at the end of 2008 and will look to hire six to eight technicians throughout 2009. The company also will feature an upgraded Web site. “We've always got to have better, quicker access to information. We want to make it seamless for people to do business with us.”

A 5% sales increase is the expectation for Audie Burgan, president of J.M. Equipment Company (Modesto, CA), thanks to the implementation of emissions compliance rules from the California Aire Resources Board. “Customers are making the adjustments to be compliant next year, and it should be a reasonably good year for electric sales especially,” he explains. Burgan will also look for 15-20 sales and service personnel as the company negotiates with contractors to build a new facility on land it has already purchased.

Flat equipment sales will be offset by a 10% growth in aftermarket, says Walter Albasi, CEO, Accurate Lift Truck (West Berlin, NJ). “I think maybe by the end of the 1^st Quarter, customers will begin to regain some visibility and go back to making long-term commitments.” Albasi will hire two to six service techs to complement a revamped sales strategy implemented in 2008. “It's going to be exciting to implement the changes we've planned. I love watching a plan work.”

STORAGE & HANDLING Distributors Look To Diversify
Distributors of storage & handling products mainly expect the status quo in 2009, with 56 percent of them forecasting level sales. Only one distributor looks for sales to slow down, and he set a sales record in 2008. Reasons for these positive vibes include new product offerings, new facilities and increasing investments in technology.

“We're in an ever-changing, global industry, and I'm excited to see what's around the next corner,” says Steve Schmitz, president of Star Equipment (Blaine, MN). Schmitz, who forecasts level sales, is planning to train his employees to sell value and service and provide resources to customers who have gone lean over the last few years. “The most important thing is exposure. Customers need to know who we are,” he explains. “Even if we're not their current provider, we need to be number 2 so that if number 1 falters, we're in position to be the next option. Number 2's not a horrible position to be in.”

Gregory Meyer, president of Meyer Material Handling Products (Indianapolis, IN), expects to have some additional development of his company's Web site. “We're going to expand our existing site and offer more products through the e-commerce platform we have currently set up,” Meyer says. Coupled with more promotional sales events and increased customer contacts, Meyer is predicting a slight sales increase of 4-5%.

A similar forecast is given by Jeff Conger, president, Bernie's Equipment Company (Holmen, WI), who sees stabilizing steel prices as an indicator of growth ahead. He expects a modest increase of 5%, thanks to relatively new salespeople who, with another year of seasoning, can be more effective in the field. Conger also sees customers slowly starting to accept more technology in their products. “More of our customers are finally starting to move to hydraulic rather than mechanical dock levelers,” he explains. “We're going to try to push the more technologically advanced products.”

Growth of 15-20% is predicted by John Stephens, vice president of Allied Caster & Equipment (Charlotte, NC). “We're trying to do a little bit more with shelving and storage products,” says Stephens, whose product mix is currently 85 percent casters, wheels, dollies and carts. “We've had the storage products for a while, but we'll be looking for different avenues to get these items to our existing customers.” Allied Caster is also branching out geographically, selling more into neighboring states as competition gets tougher. “Forklift sales will be slower, so those dealers will be trying to sell more allied products. We're banking on our expertise and ability to ship material quickly,” he says.

McKinley Equipment Corporation (Irvine, CA) President Greg Larsen relishes the challenge ahead, expecting a dip in new construction to be offset by work in existing facilities for level net sales.“Our core business of loading dock and door installation is focused largely on new construction, which is expected to be down,” he says. “But there's still a lot of building inventory that can go into existing structures.” Larsen is working to improve response time to customers by making some improvements in the yard so that “we can inventory more products to help us with quick turnaround.” To help achieve the response time goal, Larsen will continue his weekly internal training programs, every Friday at 3:00 p.m., to teach employees proper procedures and techniques for customer service.

“We will continue to provide resources for corporations that make their operations more lean.” Steve Schmitz, President Star Equipment (Blaine, MN)   “I encourage my staff with positive feedback about how important their work is.” Gregory Meyer, President Meyer Material Handling (Indianapolis, IN)   “Steel pricing has leveled off. That's a good indicator of economic improvement.” Jeff Conger, President Bernie's Equipment Company (Holmen, WI)   "We are expanding our capabilities for the service of industrial doors.” Greg Larsen, President McKinley Equipment Corporation (Irvine, CA)   “We have to act lean and mean at the top so that everyone knows we can't waste money.” Steve Stein, President Stein Service & Supply (Charlotte, NC)   "We're in good position to work with customers who are still expanding.” Mike Willham, President Allied Handling & Equipment (Greenwood, IN)   “We're going to stay with what we know, and we're going to do it the best.” Russell Caldwell, President/CEO Memphis Material Handling (Memphis, TN)   "We're helping our end-users focus more on managing their fleets.” Ken Fearn, President Advanced Battery Technologies (Greensboro, NC)   “We will upgrade our Web site and get out of the 20th century.” Mike Burskey, President Shelving & Rack Supply (Walled Lake, MI)   "Communication and teamwork are the most critical skills in this economic climate.” Kevin Rowles, President Storage Solutions (Westfield, IN)   “I will offer more guidance and be more hands-on than normal with employees.” Rod Jack, President Storage Solutions (Knoxville, TN)   “We have weekly meetings to brainstorm and concentrate on what we can do better.” Jack Alexander, President BMH Equipment (Sacramento, CA)   “There are more players in our marketplace, so profit margins are dropping.” Eric Landtbom, President Allied Engineering (Big Oak Valley, CA)   "Our biggest investment next year will be the time we put in to maintain market share.” Mike Wall, President Container Systems (Westmont, IL)

Broadening the product line into more mezzanines is the plan for Steve Stein, president of Stein Service and Supply (Charlotte, NC). “I want to be able to offer a full product line of good/better/best products. Not everybody is going to be able to afford the best, so I want to have economy-line products as well,” Stein says. As a wholesale distributor, he points to the challenge of competing against manufacturers as they get more aggressive to try to move product. He projects this will all amount to maintaining level sales.

The same goes for Mike Willham, president of Allied Handling & Equipment (Greenwood, IN), who forecasts level sales. “I see a pickup in service, but the bidding opportunities for new projects are few and far between right now,” Willham explains. He will be replacing two or three service vehicles during the 2^nd Quarter. “We need higher productivity with less downtime so we can respond to our customer needs more efficiently,” he says.

2008 was a record year for Memphis Material Handling (Memphis, TN) and President/CEO Russell Caldwell, due to the purchase of a new facility and the area-wide rebuilding effort necessary after tornadoes last spring. Caldwell sees sales dropping 15-20%, but will hire two new employees as the company focuses on installation work. Caldwell will also buy more rolling stock, primarily forklifts and scissor lifts, to replace some older equipment offerings. “We're booked until March 2009, and we still need to watch every dime we spend. We're sitting on inventory, which is where I'd rather have my money than in the bank,” he says.

For Advanced Battery Technologies (Greensboro, NC), 2008 also was a great year, as President Ken Fearn says sales grew 50 percent. For that reason alone, 2009 growth will be difficult to achieve, so Fearn forecasts level sales. He will continue to market the company's GuaranteedPOWER program, which charges customers by the month for their battery power requirements to include full maintenance based on truck hours. “Our customers can plan on a fixed cost for five years of battery power,” Fearn says. The company will open a new facility in Greenville, South Carolina, during the 1st Quarter, and Fearn is looking to add a COO and three to five service technicians.

Although Mike Burskey, president of Shelving & Rack Supply (Walled Lake, MI), is forecasting level sales, he does have a lot going on at his company. “We have to take charge of our destiny, and that's what we're doing,” he says, referring to adding a conference room to his facility and hiring two to three salespeople. Burskey is also upgrading the company's entire warehouse management system in an effort to increase customer contact. “End-users are becoming more dependent on us for consulting, and that requires more interaction with our customers to know exactly what they expect from us.”

A new facility will allow Storage Solutions (Westfield, IN) to increase its inventory threefold, according to President Kevin Rowles. “This will enable us to handle additional inventory and give us the flexibility to consider other business opportunities in the future,” he says, adding that the biggest challenge will be to coordinate the move without interrupting normal business. He expects to overcome that challenge and see sales growth in the neighborhood of 10-15%.

Another optimistic outlook comes from Curtis Ward, president, Certified Handling Systems (Salt Lake City, UT), who says more aggressive marketing will help the company see 15% growth. “There's a tax break still out there for people who invest in their companies, and I think we may see people turn back toward taking advantage of that to make themselves more efficient,” Ward says. He will be using headhunters to make sure the three salespeople he wants to add are the right fit.

“I'm always looking for something larger than a little shelving order, but there just isn't that much to go around right now,” says Eric Landtbom, president of Allied Engineering (Big Oak Valley, CA). He sees level sales next year and also notices that customers are beginning to demand more and more that workers have the proper documentation. Landtbom has no employees, so he's able to secure some jobs that others are not. “Larger material handling houses are letting people go, so a lot more people are out on their own and don't realize what all they need to be in business,” Landtbom explains.

According to Rod Jack, president of Storage Solutions (Knoxville, TN), there is a silver lining to the economic downturn. “Steel and fuel prices have dropped, and I think our products should be more affordable and people will have more money to spend on material handling equipment,” he says. Jack has some large projects set to come through in the first half of the year, which should lead Storage Solutions to maintain its sales levels. He will upgrade the company's accounting software and add one salesperson. “We're planning a more aggressive attack on the larger accounts that will still be buying,” he says.

A similar approach will be made by Container Systems Inc. (Westmont, IL), where President Mike Wall says, “There's less business out there to be had, and we have to stay close to our good customers. I've reminded my sales force that competitors will try to make inroads with our customers as the general economy slows down.” Wall expects the addition of a new product line and continued focus on customer service to lead to a 5% sales increase. His big focus will be monitoring accounts receivable. “Diligence is required to make sure we're collecting within the terms of our invoices.”

BMH Equipment (Sacramento, CA) will concentrate on the medical industry to try to achieve 10-20% sales growth. Jack Alexander, president, says that increased internal efficiency will be critical. “We're not going to move physically, but we're going to continue to clean house internally. One of the big areas will be making the warehouse better organized and more efficient.” External factors like the economy and administration change are affecting the business climate, but Alexander is focused on the internal. “I'm looking forward to our company being cohesive and proactive. I have a vision of it being a great year,” he says.

DIVERSE MIX Companies See Opportunity In Flat Market
Distributors with a diverse mix of product lines are further expanding their offerings to try to achieve growth in 2009. Only 23% of these distributors are forecasting growth, while 69% are looking at sales to be level. Economic concerns are among the most-cited challenges, but those who are predicting increases anticipate growth of 19%.

One distributor looking forward to 2009 is Peter Murphy, president/CEO of Boston Rack International (North Easton, MA), who is pushing to grow by as much as 30-40% next year. “We're taking an aggressive role during these bad times, looking at alternative ways of going to market and finding a way to buy another company,” he says. Murphy is looking to hire a total of four to five salespeople for the California, New Jersey, Illinois and Texas markets in addition to hiring professional, degreed people as engineers and project managers. Murphy is motivating his employees to work harder and smarter. “Don't let any order go. We have to analyze every opportunity,” he says.

Bruce Industrial Equipment (Wilmington, DE) will place more emphasis on its mechanical contracting division, the side of the company that does construction, installation and fabrication work. “We're looking to see some sales gains there because we are working with more pre-fab steel structures,” says President Clement Bason. “We're quoting to various government agencies. For a small company like us, that could be a sizable increase in business if we're successful.” That change in focus should offset the general economic downturn, leading Bason to forecast level sales.

Level sales are also the prediction for Kenn Harper, senior vice president of operations at Southwest Materials Handling Company (Dallas, TX). “We haven't seen a slowdown yet, but it's coming,” says Harper, adding that 2008 was one of the company's best-ever sales years. Part of the reason is customers' increasing demand to move away from LP trucks to electric trucks. Harper expects to add a total of four or five employees in sales, parts and service throughout the year and add 20,000 sq. ft. of storage to the company's facility in the 1st Quarter. “We're cram-packed here. Being able to store our inventory better will be great.”

A new facility is also going to be a centerpiece for Cornerstone Supply Company (Madison, AL). “There's more room in the warehouse and space for the reps,” says Vice President Mike Powers, adding that the slowdown has one silver lining. “Customers in these times are often much more open to looking at new vendors, so that's where we need to concentrate.” However, maintaining cash flow will be a challenge in 2009, as customers are slower to pay. “It's a constant juggling act. We're trying to accommodate customers the best we can and slow down the terms from our manufacturers at the same time,” Powers says. The company may upgrade its operations and accounting software and will invest heavily in training. It all adds up to a forecast of level sales.

Many industries in northwest Ohio are experiencing major slowdowns, so Bill Nordholt, owner of HG Handling Company (Tiffin, OH), is expanding his business footprint. The company has revamped its Web site and is targeting a larger audience. “The new Web site is very professional and will allow us to gain more exposure,” Nordholt explains. HG will focus more on value-added services, such as plant ergonomic studies, inspections of below-the-hook tools and rigging and workstation design. “To remain a valuable supplier, we must provide services that help the customer save money and enhance worker safety. We are currently providing these services to our existing customers and promoting them as a means to get our foot in the door with prospective customers.”

At National Lift Truck (Franklin Park, IL), General Manager Jim Dietz has several initiatives in the works to jump-start business next year. Two of those are more aggressive telemarketing and using the Internet to sell equipment wholesale. He consequently expects equipment sales to increase and rentals to decrease, resulting in a level sales year. “Internally, we're getting much stricter about accepting large orders. We will have some kind of deposit or non-cancellable purchase order for orders over a certain threshold,” Dietz explains. He hopes that such deals will help counteract what he sees as the year's biggest challenge—collections.

“As one division slows down, we re-create or expand another to keep things level.” Jim Dietz, General Manager National Lift Truck (Franklin Park, IL)   “There's too much of a low-price mentality among customers.” George Pimpl, President Reno Forklift (Sparks, NV)   “We've got our team focused on providing worry-free service for our customers.” Jeff Schmeck, President The Miner Corporation (New Braunfels, TX)   "The drying up of the credit market will affect us in the first two quarters.” Ryan Mouritzen, Vice President Powerfleet Inc. (Round Rock, TX)   “Fall protection and fall prevention items are hot in our market.” Jack Norton, President Warner Specialty Products (Cheshire, CT)   "The ability to attract, train and retain the next generation is a bit of a challenge.” Richard Sinclair, President/CEO Jefferds Corporation (St. Albans, WV)

For Peter Hoj, vice president of Hoj Engineering and Sales Co. (Salt Lake City, UT), an expected uptick in sales of used equipment will be something to look forward to in '09, as will a growing cash reserve. “With declining new sales, our working capital starts coming home so our cash will actually increase at the bank, giving us a chance to take advantage of discounts and warehouse liquidations,” he says. Otherwise, Hoj does not see a lot of new activity and forecasts level sales.

Sparks, Nevada-based Reno Forklift has a similar outlook, according to President George Pimpl. He is aggressively cutting costs to try to maintain a flat year. “We're trying to save time on dispatch calls and every little thing, even being diligent about turning out the lights,” he says. “It's truly surprising how much we waste.” Pimpl held what he calls a “come-to-Jesus” meeting to let his staff know that he would not tolerate slackers. He lost four employees after that meeting but says it's worth it. “The rest of the staff is holding everyone accountable. Holding on to the key people is the important thing.”

“We're not going to pull in our horns. We can't afford to just ride out the economy,” says Jeff Schmeck, president of The Miner Corporation (New Braunfels, TX). As such, Schmeck has retooled the construction side of the business and developed a new marketing plan to concentrate on specific end-users. He is planning to hire six to ten employees, mostly in sales and marketing. Miner does business from Florida to California, so Schmeck believes the various local economies will lead to sales growth of at least 12%. “There are going to be good opportunities out there,” he says.

Similar optimism comes from Ryan Mouritzen, vice president of Powerfleet Inc. (Round Rock, TX), who is anticipating a sales gain of 15-20% thanks to unique products for the shipping industry. “People are going to have to look at alternate ways to handle their processes. They didn't have a push to change but now they do.” Mouritzen plans to add three technicians and an administrative staff person to accommodate for the sales growth.

On the other hand, Jack Norton, president, Warner Specialty Products (Cheshire, CT), is bracing for a 10% drop in sales. He attributes that to a very strong 2008 that will be difficult to match, particularly in a different economic climate. Warner will add a sales rep or two, do more Web marketing and focus on specialty projects to drum up business. “We've gotten involved with doing some special applications, mainly for government, defense and aerospace contractors who need custom lifts and stands,” Norton says. Customers are also demanding more safety products.

Richard Sinclair, president/CEO, Jefferds Corporation (St. Albans, WV), points to the uncertainty in the market and likely changes in tax policy as reasons to forecast level sales, even though he is seeing consistent growth in maintenance of dockboards, conveyors, balers and compactors. “That piece of our business seems to be growing as fast as we can get competent people online to do it,” Sinclair says. He has job postings for a dozen service employees and will be relocating an existing facility to give it heightened visibility.

President John Stromsness is looking forward to celebrating Minnesota Supply Company's (Eden Prairie, MN) 90^th year in business. “I think it will be a year that we can look back on and say it was pretty good,” he says, forecasting level sales. Stromsness will encourage more face-to-face sales calls and training on customer service. “Customers are going to want better service whenever they need it. A lot of people don't want to work weekends, but we have to.” In order to have the equipment customers need, Stromsness will focus on having a good backup of material handling stock and parts.

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The MHEDA Journal • First Quarter 2009 • Volume 38, No. 1 • Contents are Copyright © Data Key Communications, Inc.
All rights reserved. • Nothing may be reproduced in whole or part without written permission of the publisher.