Global Fastener News

2011 FIN – Precision Castparts Fastener Products Poised for Growth

December 16
00:00 2013

June 14, 2011 FIN – Precision Castparts is catching lots of attention from industry analysts lately, in part due to the size and capacity of its Fastener Products segment.

During fiscal 2011 Fastener Products revenue gained 2% to $1.34 billion — or 21% of overall sales. Just over 70% of fastener sales ($950.1 million) were generated by the aerospace industry, with another 28% of sales ($377.5 million) coming from general industrial and other customers, and an additional 1% ($17.2 million) generated by the Power industry.
“Strong general industrial sales helped to increase year-over-year sales by approximately $59 million, or 19%,” the company stated.
Offsetting this increase was a decline in aerospace fastener sales of approximately $40 million, or 4%, compared to the prior year.
“Aerospace volume suffered from delays in the Boeing 787 production schedule and continued weakness in orders from distributors, as current aircraft production was supplied out of existing customer inventory. This segment was able to increase sales of lower margin, non-core aerospace products in order to maintain volume and mitigate the impact of the decline in core aerospace sales.”
Fastener Products operating income dropped 7% to $411 million, or 30.6% of overall income.
“Segment operating margins were negatively affected by the shift away from core aerospace products to lower margin, less complex fasteners, and increased general industrial volume.”
The most significant future catalysts for segment growth continue to be the Boeing 787 ramp-up and the recovery of fastener distribution orders.
“As those inventory levels fall, and production demand increases, the segment is poised to benefit from market improvement and additional share gains anticipated to begin toward the latter half of fiscal 2012. These increased volumes, driven across the business’ improved cost structure, will help the segment achieve stronger operational performance.”
PCC’s Fastener Products segment lists 52 facilities worldwide, including 32 in the U.S. Just over half of the company’s domestic production square footage — 1.42 million sq ft — is owned, with an additional 1.13 million sq ft leased. Its 20 foreign facilities comprise 1.07 million square feet of production space.
PCC’s Fastener Products segment employs 5,500 workers worldwide and lists its direct competitors as Alcoa Fastening Systems and LISI.
Precision Castparts is catching lots of attention from industry analysts lately, in part due to the size and capacity of its Fastener Products segment.
In the past decade Precision Castparts has forged a powerhouse fastener division that includes Cherry Aerospace, Air Industries and Shur-Lok.
Precision Castparts assembled its fastener division by acquiring SPS Technologies in 2003 for $893 million and airframe fastener maker AIC in early 2005 for $194 million.
In May 2011 Precision Castparts agreed to acquire the assets of PB Fasteners.
Gardena, CA-based PB designs and manufactures fastener products for airframe applications, including the development of the SLEEVbolt  fastening system.  The company’s sleeve bolt technology is critical to mitigating the impact of lightning strikes on the Boeing 787 aircraft.  PB entered the aerospace fastener business in 1967.
“We have been looking at PB for a long time as part of our continued strategy to expand our critical aerospace fastener portfolio,” said PCC CEO Mark Donegan.

“PB provides the technology to accelerate our growth into composite-based aircraft like the 787, as well as other new, advanced aerospace platforms.  We will look to leverage their knowledge base across our other fastener operations.”
“In addition, PB will now be our ninth fastener manufacturing operation in southern California, providing further opportunities for synergies and leverage.” ©2011/2013 GlobalFastenerNews.com
For information on permission to reuse or reprint this article please e-mail: FIN@GlobalFastenerNews.com.

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