The Greensheet Issue #10-21 (Full)

Quick Hits …
(A few short items to get us started this week)

The Greensheet has learned of the recent death of Joe Owen, former vice chairman of General Parts Inc. (GPI). Owen spent 31 years with the Genuine Parts Company, eventually becoming group vice president for U.S. parts distribution as well as the president of NAPA. Owen joined GPI/Carquest in 1983. He became president in 1987 and vice chairman in 2001. We plan to have additional coverage of Owen’s life and legacy in our March 15 issue.

O’Reilly Automotive has honored DMA Sales LLC with its 2020 Sales & Service award for DMA’s innovation and new product development efforts, as well as meeting and exceeding O’Reilly’s service standards. It marked the second time in four years that DMA has received the award.

MERA – The Association for Sustainable Manufacturing has honored GB Remanufacturing President and CEO Michael Kitching with its Michael Cardone Leadership Award, which recognizes people who demonstrate exceptional leadership in remanufacturing and sustainability. MERA presented the award Feb. 25 during its 10th Anniversary Celebration.

• The Meineke Dealers Purchasing Co-op Inc. (MDPCI) has presented its Vendor Appreciation Award to Corcentric, a provider of business spend management and revenue management solutions and services. Corcentric is the technology group behind MDPCI Transact, the co-op’s platform for centralized procurement and billing.

Messe Frankfurt has announced new dates and a new location for the 2021 edition of INA PAACE Automechanika Mexico. In light of the ongoing coronavirus pandemic in Mexico and globally, the show is moving to Dec. 1-3 at the San Luis Potosi Convention Center in the central Mexican city of San Luis Potosi, which serves as an automotive hub for various automakers and suppliers. Event organizers anticipate returning to Centro Citibanamex in Mexico City for the 2022 show. Click here for more information about Automechanika Mexico.


IMR Says Shops Are Buying More Private-Label Products

A January 2021 IMR Inc. survey shows that more independent repair shops are purchasing private-label and store-brand parts than last summer. Compared to August 2020, the percent of private-label purchases grew from 45.4% to 47.6%, and the percent of shops reporting that they’ve increased their purchases of private-label brands rose from 65.8% to 75.4%.

IMR surveyed 500 independent repair shops in January 2021, and 73.6% of these shops expect to increase their purchase of these products. Respondents cited shop customers trying to save money due to the pandemic (57.9% – up from 33.9%), affordability of private-label parts (45.4% – up from 19.2%) and customer preference (17.9% – up from 3.7%) as the main reasons for the expected increase.


AutoZone Reports 15.2% Rise In Domestic Same-Store Sales

The fiscal second quarter ended Feb. 13, 2021, was a strong one for AutoZone Inc., with net income up 15.6% to $345.95 million and gross profit up 14.2% to $1.56 billion. Gross margin, however, slipped 77 basis points to 53.6%, attributable to higher supply chain costs (including a one-time benefit from last year that didn’t repeat in the current fiscal year), as well as pricing initiatives, accelerated loyalty program participation and a shift in mix.

Net sales increased 15.8% to $2.91 billion. Domestic same-store sales rose 15.2% on top of a 0.8% decrease a year ago, giving AutoZone a two-year stack of +14.4%. Retail comps were up 16%, while commercial comps were up 15%. Notably, commercial came on strong toward the end of the quarter and comped similarly to retail over the last four weeks.

TRENDS … On AutoZone’s March 2 earnings call, Chairman, President and CEO Bill Rhodes walked analysts through the company’s sales cadence. “We told you on our last call that we ran an 8.8% comp for the last four weeks of Q1. In the first four weeks of this quarter, our sales accelerated to a 10.7% comp,” Rhodes said. “As the holidays arrived, we saw further acceleration, which was sustained for the balance of the quarter. We were in a 17.5% comp pretty consistently over the last eight weeks of the quarter.”

He added that traffic versus ticket growth rose, with ticket slightly stronger. “It was encouraging for us to see sales inflect upward starting in January with both ticket and traffic moving higher,” Rhodes said. “Our ticket growth was stronger this quarter due to hard parts sales mixing higher than what we experienced in the first quarter.”

Rhodes also noted that, while there were some geographical differences, there continued to be interesting trends across the company’s categories, particularly on the retail side.

“Our sales floor categories continue to be strong with categories like tools, antifreeze, small repair and floormats showing strength, but our hard parts business definitely picked up. In fact, our hard parts business comped in line with our sales floor for the quarter,” he told analysts on the call. “This was the first quarter since the pandemic began where we saw our hard parts grow in line with sales floor.

“While business improved in many merchandise categories, such as batteries, categories like brakes and rotors are not comping as high as the overall business. We believe this performance gap with certain categories will close as miles driven continue to improve.”

In terms of geography, the majority of the United States performed well across both the retail and commercial businesses; however, the Midwest and Northeast underperformed. “These markets, which represent just over 25% of our store base were solid but not as strong as the remaining markets,” Rhodes said. “For example, the spread in comp sales between these markets and the others was approximately 300 basis points for the quarter.

“We believe the separation was due to lingering effects of a mild winter last year and colder weather happening later this winter. But winter did come this year (boy, did it!), and the performance gap closed. We’re encouraged about the summer and believe we won’t have to discuss why mild winter affected comp sales during our upcoming fourth quarter.”

Stimulus also played a role in AutoZone’s strong sales performance. “In the first week of January, over $100 billion in stimulus was distributed to Americans. The majority of these funds were one-time checks as part of the $600-billion stimulus package passed in late December,” Rhodes said on the call. “While smaller in size than the April disbursements, we did see our business pick up nicely, and our sales remained elevated throughout the remainder of the quarter.”

COMMERCIAL … AutoZone’s domestic commercial business reported $638.91 million in sales for the 12 weeks ended Feb. 13, 2021 — an increase of 14.7%. Notably, commercial sales growth was nearly 3 points higher than the first fiscal quarter. Average sales per commercial program per week grew 11.7% year-over-year to $10,500.

Rhodes noted that there are still elements of AutoZone’s commercial business that aren’t as strong as they were pre-pandemic, particularly some national accounts. “The up-and-down-the-street business has been stronger than the national account business,” he said.

During the quarter, the company opened 45 net new commercial programs, finishing with 5,088 total. AutoZone now has commercial programs in 85% of its domestic stores.

Executive Vice President and CFO Jamere Jackson told analysts on the call that AutoZone’s megahub strategy is improving parts availability. “We opened one more megahub this quarter, bringing our total to 48 locations, and we expect to open between seven and 10 more megahubs by the end of the fiscal year,” he said. “Given the success of our megahubs and increasing parts availability and driving meaningful sales lift, we are now raising our target from 75 to 90 megahubs at build out to 100 to 110.”

Jackson also told analysts that management believes the commercial business grew share during the quarter. “We remain focused on repeating this for the balance of fiscal 2021,” he said.

RETAIL … According to Jackson, the investments in improving coverage and availability also had a meaningful impact on trial and repeat purchase activity on the retail side. At the same time, AutoZone continues to focus on improving the customer shopping experience with work being done on the digital front.

Jackson added that the company is focused on being competitively priced in the marketplace, using analytics to drive pricing decisions in categories where AutoZone typically competes with non-traditional competitors like mass merchandisers and online-only sellers.

“We have tested our approach in key categories and markets, and this effort is yielding increased top-line and gross profit dollar growth, albeit at slightly lower gross margins,” he said. “This is a data-rich environment, and our tools and capabilities give us a meaningful competitive advantage.”

SHARE GAINS … Rhodes told analysts that, “based on the retail sales data we have for our industry,” AutoZone continues to experience historically unprecedented share gains. “The data shows the industry has been growing in the mid-single-digit range with our sales closer to three times the industry’s growth rate,” he pointed out.

Rhodes also stated that AutoZone is picking up a lot of share from the mass merchandiser channel, adding that “a lot of people are not frequenting those large stores at the same rate that they did in the past.”

“I think we’re also not losing share that we might have been losing before to the online channel, and in fact, maybe gaining some of that share back over time,” he said. “In the commercial sector, I think it’s hard to say where the share is coming from. We are less than 4% in market share in the commercial industry today. I think it’s likely coming from multiple different places.

“We certainly have intensified our understanding of what the wholesale distributor market is doing, and we are paying more attention to them in our competitive analysis and building our strategy. We think that, over time, we’ve significantly changed our competitive position, particularly against the WDs.”        — Marc Vincent



AutoZone Talks Supply Chain, Inventory And The Year Ahead

On AutoZone’s March 2 earnings call, Chairman, President and CEO Bill Rhodes told analysts that, while the company has experienced significant supply chain disruptions over the last 11 months, the disruptions have been lower recently compared to what AutoZone experienced in June, July or August.

“I think I mentioned on one of these calls, we couldn’t get sandpaper for a while. We had trouble with fuses. We had trouble with tools. We had such enormous surges in certain parts of our business that we couldn’t keep up, and many of those came with an extended supply chain that ran into China or Asia,” Rhodes said. “We’ve worked through most of those. I have to give our team and our battery suppliers some kudos that the battery business has been as strong as it’s been for as long as it’s been, and then we had this huge cold snap, and we did just fine.

“Our team was very creative and worked with lots of different suppliers to make sure we’re in good shape, so we don’t have any acute needs right now. Some issues on the edges. Our in-stock position has significantly improved, but it’s not back to our normal levels yet, probably going to take a few more months.”

Rhodes said management is optimistic about the sales environment heading into the third fiscal quarter, acknowledging that AutoZone will have a much more difficult comparison in the fourth fiscal quarter as last year’s fourth quarter benefited from the April 2020 stimulus package.

“For now, it remains difficult for us to predict sales for the remainder of the year. This is especially true for the fourth quarter of this year when we were up against the fourth quarter of the previous year’s 21.8% comp-store sales growth,” he said. “While we continue to expect that our sales growth will moderate over time, we believe our products and services will be in high demand during these more difficult economic times.”

Analysts with Jefferies LLC wrote in a March 2 report that recent pandemic-driven shift in behavior toward DIY and stimulus-related demand are likely to remain in the near term. They expect AutoZone to be a primary aftermarket beneficiary of any future government stimulus.

“Further, we note the company’s focus on improving inventory coverage and availability through larger hub store distribution facilities — combined with growth in omnichannel sales and competitive pricing strategies — appear to be the primary drivers of recent share gains, likely to the detriment of traditional mass retailers in DIY and wholesale distributors in commercial,” Bret Jordan, Mark Jordan and Ethan Huntley wrote. “We also believe AutoZone may be regaining some previously lost share from pure-play e-commerce platforms with AutoZone’s growing emphasis on omnichannel and some loss of category focus at broad online retailers such as Amazon.

“Going forward, we expect DIY trends to remain favorable in the near term, but we note that, while Q3 laps pandemic-impacted demand, Q4 faces a historic DIY comp hurdle of +24%.”

The Jefferies team also expects AutoZone’s DIFM business to continue to grow above industry trends, albeit from a smaller base than peers, with likely share gains coming at the expense of smaller WDs.

MISCELLANEOUS … A few other items of interest from AutoZone’s quarterly report and earnings call …
• The company’s inventory rose 2.8% to $4.74 billion on a 15.8% rise in net sales, attributable to new stores and improved product assortment.
• Inventory-per-store growth was flat on a year-over-year basis, but inventory per store increased from $713,000 last year to $715,000 for the three months ended Feb. 13, 2021.
• During the quarter, AutoZone opened 27 new stores in the United States, seven in Mexico and one in Brazil. As of Feb. 13, 2021, the company had 5,951 stores in the United States, 628 stores in Mexico, and 46 stores in Brazil for a total store count of 6,625.
• AutoZone repurchased more than 752,000 shares of its common stock for $900 million during the quarter at an average price of $1,197 per share. At quarter’s end, the company had $717.60 million remaining under its current share repurchase authorization.         — Marc Vincent


APA Annual Shareholders & Suppliers Conference Is Going Virtual

Automotive Parts Associates (APA) will host its 39th Annual Shareholders & Suppliers Conference in a virtual format March 23-25, using the same meeting platform as the Virtual AAPEX Experience and including private one-on-one meetings. APA will provide high-definition webcams as well as other technology items to all participating shareholders to facilitate productive face-to-face meetings with suppliers and with other shareholders.

“While we would love to see everyone’s faces this year, we must continue to make safety a top priority for everyone,” said APA Creative & Marketing Manager Sara Griewing. “We are committed to the health and safety of all of our attendees, and we’ve worked hard on creating an engaging interactive experience for everyone to come together and get down to business.”

The conference is scheduled to return to a live format March 16-18, 2022 at the InterContinental Buckhead Atlanta hotel.


Icahn Auto Narrows Losses In Q4 Despite 15.2% Drop In Revenue

The Icahn Automotive Group segment of Icahn Enterprises LP reported $596 million in net sales and services revenue for the fourth quarter of 2020 — a decline of $107 million, or 15.2%, compared to the same period a year ago.

Management attributed the decrease to the COVID-19 pandemic and the impacts of actions taken by governments and others. This had a large effect on automotive services revenue and commercial sales revenue which, until March 2020, were experiencing growth on an organic basis.

Icahn Automotive’s adjusted EBITDA (which excludes losses associated with closed stores) improved from a loss of $31 million in the prior-year period to a loss of $3 million for the three months ended Dec. 31, 2020. The group’s net loss came in at $49 million — a $20 million improvement over the $69 million net loss it reported for the fourth quarter of 2019.

Ichan Enterprises CFO SungHwan Cho told analysts on a Feb. 26 earnings call that Icahn Auto has accelerated closures of certain parts stores, implemented significant cost savings and reduced capital spending to minimum levels. “All these initiatives helped Icahn Auto offset the impact of significant sales decline and position the company for profitability as sales return,” Cho said.

Management’s transformation plan for Icahn Auto includes separating its aftermarket parts and automotive service businesses into two separate operating companies, “streamlining” its corporate and field support teams, facility closures, consolidations and conversions, and inventory optimization. Along these lines, Icahn Auto has reduced its inventory by $135 million since December 2019.

On the call, Icahn Enterprises President and CEO Keith Cozza stated that Icahn Auto has substantially completed the legal separation, “which will position the service business for new growth and value-enhancing opportunities.”

Other priorities for Icahn Auto include …
• Improving certain business processes, including investments in supply chain and information technology capabilities.
• Positioning the service business to take advantage of opportunities in the DIFM market and vehicle fleets.
• Optimizing the value of the commercial parts distribution business in certain high‐volume core markets.
• Improving inventory management across Icahn Auto’s parts and tire distribution network.
• Exiting the auto parts distribution business in certain low-volume, non‐core markets.
• Investing in customer experience initiatives, such as select facilities upgrades.
• Investing in training and career development.

Icahn Auto is engaged in the retail and wholesale distribution of auto parts (AutoPlus and Pep Boys) as well as providing automotive repair and maintenance services (AAMCO, Precision Tune and Pep Boys). Icahn Auto’s net sales for 2020 represented approximately 28% of Icahn Enterprises’ consolidated net sales.         — Marc Vincent



New Ownership Coming For Mavis

An investor group led by the private investment firm BayPine LP has entered into a definitive agreement to acquire Mavis Tire Express Services Corp. This is being done in partnership with the private equity firm TSG Consumer Partners LP and existing “significant equity holder” West First Management, a holding company controlled by David and Stephen Sorbaro.

Golden Gate Capital, Mavis’ current lead financial partner, will retain a minority interest in the company. Terms of the transaction — which is expected to close in the second quarter of 2021 — were not disclosed.

Millwood, NY-based Mavis is one of the largest independent tire and service providers in the United States. It has more than 1,100 service centers across 27 states, primarily in the Northeast, Midwest and South. In addition to its core offering of tires, Mavis performs a variety of repair and maintenance services, including brake, alignment, suspension, shocks and exhaust work.

Marion and Victor Sorbaro started the company in 1972. Mavis has rapidly grown its platform via acquisition in recent years, including Express Oil in 2018 and Town Fair Tire in 2020, to name a few.

Upon closing of the BayPine transaction, David and Stephen Sorbaro will continue to serve as co-CEOs of Mavis, supported by a management team that includes leaders from Mavis, Express Oil, Brakes Plus and Town Fair Tire.

BayPine Managing Partner Anjan Mukherjee said, in an announcement dated March 5, that BayPine looks forward to working closely with management as they continue to execute their successful consolidation strategy.

“Mavis is a clear leader in attractive markets across the country with a proven track record of driving consistent growth through economic cycles,” Mukherjee said. “By leveraging BayPine’s digital transformation and technology expertise, we believe there is a significant opportunity to enhance Mavis’ customer experience, capture operating efficiencies and bolster the company’s position as the go-to brand for auto care nationwide.”

TSG Managing Director Pierre LeComte added: “We are thrilled to leverage our consumer expertise to support David, Stephen and the entire Mavis team as the company looks to capitalize on a number of exciting growth opportunities, including expanding its geographic footprint and increasing its digital capabilities.”

The investor group also includes the StepStone Group. Additionally, a group of financing partners led by Jefferies LLC and Owl Rock Capital — and including Ares Capital Management and certain affiliates and funds managed by affiliates of Apollo Global Management — is supporting the transaction.

Jefferies acted as sole financial adviser to Mavis.


Obituary: Tim Fritz, Aftermarket Journalist

Tim Fritz, longtime editor at Akron-based Babcox Media, died Feb. 23. He was 53. Fritz had been with Babcox since 1990, working on a variety of the company’s vehicle repair-oriented publications. Most recently, he was digital editor for the publications Brake & Front End, ImportCar, Shop Owner and Tomorrow’s Technician.

Fritz also was a board member at The Wildnerness Center (TWC), a conservation and education facility in Wilmot, OH that was co-founded by his father. He grew up in Jackson Township, OH and graduated from Malone University in Canton, OH.

Jeanne Gural, executive director of the Wilderness Center, recalled Fritz as a welcoming member of the organization when she stepped into her role just before the pandemic. “Tim practically grew up at the Wilderness Center as his father was instrumental in the beginnings of the organization,” Gural said. “Tim volunteered on projects of all sorts, such as trail maintenance, public programming and even fundraising efforts. It was natural for him to then step into the role of board member.

“He had a warm and welcoming manner and a great love for The Wilderness Center and our mission. Tim and his family were such a large part of the history of TWC, that his family chose our Foxfield Preserve as his forever resting place.”

Jennifer Clements, group editor at Babcox, worked with Fritz and remembered his warmth, generosity and kindness as both a friend and co-worker.

“I was lucky to call Tim my friend for over 20 years — and he was a dedicated friend,” Clements said. “He even thought of everyone else on his team when it was his turn to celebrate his 30th work anniversary. He had gift bags for each one of us, with chocolates and personalized gifts. He just was always thinking of others. And that’s something we can remember him by and remember to be more like him in that way.”

Brian Cruickshank, executive director of the University of the Aftermarket, worked with Fritz at Babcox in the ’90s and 2000s.

“Tim was one of the very first editors at Babcox Media I worked with when I joined the company back in 1995, and I am so saddened by his untimely passing. Tim was one of the most knowledgeable and versatile journalists in the entire aftermarket, having worked on so many different aspects of the industry during his career,” Cruickshank said. “He was utterly reliable, uncommonly loyal and a true friend to many, many people, both at Babcox Media and around the aftermarket. He will be missed.”

No information about services was available, but Babcox published a tribute to Fritz on the Shop Owner website.


Meyer Distributing Opens Second Canadian Location

Meyer Distributing has added a location in London, Ontario, giving the Jasper, IN-based specialty products marketing and distribution company its second location in Canada, joining Milton, Ontario. More locations are coming, according to CEO Jeff Braun. “Hopefully, we will see the pandemic in the rear-view mirror soon and resume our expansion plans in Quebec, British Columbia and Alberta in 2021,” Braun said.

“We look forward to another year of servicing our ever-expanding customer base in Canada,” said John Thompson, general manager of Meyer Canada. “We’re adding deliveries to increase frequency, expanding our service range, and we also now have a French-speaking sales queue in our Milton sales room.”



Op-Ed: New PFAS Actions And Why Manufacturers Should Care

Before 2021 ends, the U.S. Environmental Protection Agency (EPA) plans to implement some new restrictions and regulations around the use of perfluorooctanoic acid and perfluorooctane sulfonate — better known as PFOA and PFOS, or PFAS for short.

Why would manufacturers care? Because these two chemicals are used broadly across multiple industries and have been used for more than 50 years. If you haven’t checked your company’s use, you should. You could be using PFAS and not realize it because they are such a staple of everyday use.

A recent article in the National Law Review provides background on these two chemicals and what the EPA plans.

DEFINITION OF PFAS: “Per- and poly-fluoroalkyl substances (PFAS) are a class of over 7,000 manmade compounds. Chemists at 3M and Dupont developed the initial PFAS chemicals by accident in the 1930s when researching carbon-based chemical reactions. During one such experiment, an unusual coating remained in the testing chamber, which, upon further testing, was completely resistant to any methods designed to break apart the atoms within the chemical. The material also had the incredible ability to repel oil and water. Dupont later called this substance PFOA (perfluorooctanoic acid), the first PFAS ever invented. After World War II, Dupont commercialized PFOA into the revolutionary product that the company branded Teflon.

“Only a short while later, 3M invented its own PFAS chemical, perfluorooctane sulfonate (PFOS), which they also commercialized and branded Scotchgard. Within a short period of time, various PFAS chemicals were used in hundreds of products. Today, they number in the thousands.

“The same physical characteristics that make PFAS useful in a plethora of commercial applications, though, also make them highly persistent and mobile in the environment and the human body — hence the nickname, ‘forever chemicals.’ While the science is still developing regarding the extent of possible effects on human health, initial research has shown that PFOA and PFOS are capable of causing certain types of cancer, liver and kidney issues, immunological problems, and reproductive and developmental harm.”

EPA PLANS … The EPA intends to update the national drinking water regulation specifically for these PFAS. The EPA also states that it may add variations of PFAS to the changes as well. There are many administrative steps to make these modifications, but the EPA is aggressively attempting to implement them before the end of 2021.

The EPA is also reissuing and reinforcing the “Fifth Unregulated Contaminant Monitoring Rule – UCMR 5.” This requires water systems to be checked for 30 different substances every 12 months. This is an effort to preemptively catch contaminations and identify the sources more frequently and rapidly.

HOW THIS IMPACTS YOU … At the surface, many manufacturers, distributors and other businesses may think the Safe Drinking Water Act does not apply. It can and probably does. This also means your business can be susceptible to penalties and fines — up to and including closing of your plant or facility.

Here are some quick checks to see if your business could be impacted by these changes …
• You use any PFAS in the manufacturing of products — this includes Teflon and other brands.
• Parts that you acquire for manufacturing contain PFAS.
• Your business has effluent discharges into any water source — this may include runoff from manufacturing processes or cleaning processes used to protect or sterilize.
• Your business uses waste landfills and potentially disposes of products containing PFAS.
• Your business property is abutting or in the near vicinity of a water source.

Since manufacturers who have effluent discharges into water are easier to identify, there is a good chance they will be the first to be targeted. But, make no mistake, other businesses will be susceptible as well.

Waste management and recycling companies will have new guidelines to monitor and properly dispose of items containing PFAS.

In an extreme case, a business that may have had a fire at one time and the extinguishing foam used may have contained PFAS. This would be hard for a business to detect and know.

STATES MAY DO THEIR OWN THING … Just to make things a little more challenging, states could implement their own restrictions on top of the EPA regulations. The National Law Review article states …

“Our prediction remains that in 2021, PFAS drinking water rules will be finalized at the federal level. This will require states to act, as well (and some states may still enact stronger regulations than the EPA). Both the federal and the state level regulations will impact businesses and industries of many kinds, even if their contribution to drinking water contamination issues may seem on the surface to be de minimus. In states that already have PFAS drinking water standards enacted, businesses and property owners have already seen local environmental agencies scrutinize possible sources of PFAS pollution much more closely than ever before, which has resulted in unexpected costs.”

There are businesses that can check your property and inspect for PFAS. If you are interested in an inspection, feel free to contact Strobel Professional Services, and we can help to connect you to a local resource.

– Karen Strobel, President
Strobel Professional Services


SMP Hires Senior Product, Content Marketing Manager

Brian Wheeler has joined Standard Motor Products (SMP) as its senior product and content marketing manager, responsible for developing and implementing content marketing strategies designed to enhance the influence of SMP’s products and services through a variety of media and channels.

“We’re excited to have Brian join the Standard Motor Products marketing team,” said John Herc, vice president of marketing for the company’s Engine Management division. “Working with our strong marketing services team and utilizing Brian’s experience in the global market, we will continue driving our marketing and communications initiatives while also supporting our sales and product management teams and, ultimately, our customers.”

He joins the company from Deloitte, where he served as a senior manager of strategic marketing planning and an automotive marketing leader. Wheeler’s résumé also includes time as the vice president of business development and marketing for Cloyes Gear & Products, as well as a global marketing and communications manager with Dayco.


Tenneco Announces $800 Million Notes Offering

Tenneco Inc. is offering and has agreed to issue and sell, $800 million in 5.125% senior secured notes due 2029. The notes are to be sold to investors at par. The offering is expected to close March 17.

The notes will be guaranteed by each of Tenneco’s subsidiaries that guarantee its credit facility and outstanding notes. The notes and the subsidiary guarantees will be secured by first-priority security interests in substantially all of Tenneco’s and the subsidiary guarantors’ assets, subject to certain excluded assets, exceptions and permitted liens.

Management intends to use net proceeds of the offering, together with cash on hand, to redeem all of Tenneco’s outstanding 5.00% senior secured notes due 2024 and all of the company’s outstanding floating-rate senior secured notes due 2024, including the payment of any premiums, accrued and unpaid interest, and expenses related to such redemption.


Tool & Equipment Company Seeks To Raise $1.59 Billion Via Notes Offering

Vontier Corp. — parent company to Matco Tools and Hennessy Industries, among others — has announced the private offering of $500 million in 1.80% senior notes due 2026, $500 million in 2.40% senior notes due 2028 and $600 million in 2.95% senior notes due 2031.

The notes will be Vontier’s senior unsecured obligations and will be guaranteed by certain of its subsidiaries. The sale is expected to close March 10.

Vontier expects the net proceeds of the offering to be roughly $1.59 billion, after deducting commissions and before offering expenses payable by Vontier.

Management intends to use net proceeds from the offering to repay certain of its existing indebtedness, including the repayment in full of its two-year term loan and $400 million of its three-year term loan. It expects to use the remainder of the net proceeds for working capital and other general corporate purposes, which may include capital expenditures, acquisitions or strategic transactions.



Kinderhook Acquires Truck Accessory, Trailer And Shed Retailer

Kinderhook Industries has acquired LAUB Holdings LLC/Leonard Building & Truck Accessories from Copeley Capital Management, which partnered with management to acquire Leonard from the company’s founding shareholders in 2015. Leonard is a full-service specialty retailer of truck accessories, trailers and sheds with 59 stores across North Carolina, Virginia, South Carolina, West Virginia and Tennessee.

The company sells products geared towards professionals, DIYers and truck enthusiasts, ranging from storage sheds, carports and backyard barns to bedliners, toolboxes and tonneaus. Leonard’s sheds are manufactured at the company’s Mount Airy, NC facility, and its trailers are contract manufactured in the United States.

“Kinderhook is excited to partner with [CEO] Mike Pack and his executive leadership team as they continue the geographic expansion of Leonard’s unique retail model, which provides for a high-touch, in-person experience that is beneficial to customers who are in the market for high-quality sheds, trailers and truck accessories,” Kinderhook Managing Director Paul Cifelli said in an announcement dated March 4.

Tom Tuttle, also a managing director at Kinderhook, added: “Leonard offers a unique opportunity to invest in a distinct business model with an experienced management team in a sector in which Kinderhook has deep experience. Kinderhook plans to leverage its relationships within the automotive aftermarket to help accelerate Leonard’s growth.”

Kinderhook has a wide range of experience in the aftermarket. Its current portfolio includes Bestop, Original One Parts, ProCare Automotive & Collision, Race Winning Brands, AsTech, Vehicle Accessories Inc., the Automotive Keys Group and All States Ag Parts.

Leonard marks Kinderhook’s 26th automotive or light-manufacturing platform since its inception. Piper Sandler & Company served as the exclusive financial adviser on the Leonard transaction. Financial terms of the transaction were not disclosed.


Tonneau Cover Maker Looking At Plants In Canada

In a March 2 shareholders update, Worksport Ltd. indicated that it’s in the final phases of discussions with Tier-1 and Tier-2 manufacturers in Canada to expand its manufacturing into North America with facilities ranging from 20,000 square feet to 50,000 square feet of operating space.

This comes as Worksport is shipping more than 1,900 tonneau covers to a new U.S.-based private-label customer and at a time when the company is in active discussions with two additional private-label customers in the United States.


US Motor Works Acquires Assets Of OSC Automotive

US Motor Works (Santa Fe Springs, CA) has signed an agreement to acquire the assets of OSC Automotive Inc., which has a strong position in the heat transfer market. US Motor Works is known for its performance, cooling and fuel systems products. The companies supply the aftermarket, as well as the OEM and OES channels, with stock and performance products.

The combination is seen as allowing US Motor Works and OSC Automotive to operate leaner, stronger and better suited for growth, according to management. The two companies are no strangers. US Motor Works has had the exclusive rights to market OSC radiators in Mexico.

Todd Erwin, president and CEO of OSC Automotive, will continue to run the OSC Automotive brand of US Motor Works, which will continue to operate from its current facilities. US Motor Works will continue to operate out of its current locations.


PerTronix Purchases Taylor Cable

PerTronix Performance Brands has acquired Taylor Cable Products of Grandview, MO. Taylor is known for its performance and racing spark plug wires, battery boxes, battery cables and other accessories.

“Taylor Cable has a very strong brand in the performance spark plug wire market, making it the perfect complement to our PerTronix Ignition brand,” said PerTronix Performance Brands CEO Robyn Hetland. “We are pleased to add the Taylor brand to the PerTronix Performance Brands portfolio.”

PerTronix Performance Brands, based in San Dimas, CA, manages the PerTronix Ignition, Aeromotive, JBA Performance Exhaust, Doug’s Headers, Patriot Exhaust, Waterman Racing Components, Compu-Fire and Spyke brands. It produces high-performance ignition, fuel delivery and exhaust products for hot rods, muscle cars and late-model vehicles, along with the racing, motorcycle, VW, agriculture and industrial markets.

Financial terms of the Taylor deal were not disclosed.

Boston-based Lineage Capital invested in PerTronix Performance Brands in 2016 and has continued to support the company’s growth with the Taylor acquisition along with the acquisition of Aeromotive in November 2020.

Lineage invests exclusively in owner-managed businesses. It provides business owners with liquidity while allowing them to retain a “meaningful” ownership stake in their company and continued control of the board of directors. Lineage focuses on high-quality, lower-middle-market businesses with at least $4 million in EBITDA.


Edelbrock Veteran Steve Whipple Joins JEGS High Performance

Steve Whipple has joined JEGS High Performance as its director of private-label sourcing. Whipple has spent the last 21 years with Edelbrock Corp., most recently as its vice president of sales and marketing. Prior to his tenure with Edelbrock, Whipple was general manager of Nitrous Oxide Systems (NOS) and national sales manager for Super Shops Inc. He currently serves on the SEMA board of directors.


DCi Data Director Chris Fellows To Serve Powersports Market, Too

Chris Fellows — director of data sales and internet solutions, retailer/WD sales at Direct Communications Inc. (DCi) — is now also director of internet solutions at Powersports Support. In addition to DCi, Fellows will support companies in the powersports industry, offering automatic integrations for eBay, Amazon and Walmart.

Fellows has a strong background in cataloging and content management, including three years as a content data and catalog manager with Motor State Distributing and nearly a dozen years with Summit Racing Equipment in technical data management and data coordination in addition to copywriting work and sales.



Auto Care Association Adds Product Groups To Demand Index Tool

The Auto Care Association has added new product groups to the Demand Index tool on its TrendLens interactive data platform. The tool lets subscribing automotive aftermarket manufacturers know how their products are performing against the market. The expansion of the Demand Index’s new product groups includes batteries (automotive, powersports, lawn and garden, HD, and marine); belt tensioners and idler pulleys; brake boosters; CV axles; fluids (HDMO, coolant and antifreeze, hydraulics, ATF and DEF); master cylinders; and spark plugs.


PDM Automotive Touts New Content Management Features

PDM Automotive has released five new features for improved content management …
• Export validations in Excel: In this new export option, users are able to export reports for duplicate applications, overlapping applications and general application/fitment errors.
• Attribute segments have been rebuilt: This allows users to edit attributes and attribute values while keeping them assigned, select multiple parts and add new attributes at the same time, copy and paste attributes across multiple parts, and use translation tools to languages like German and Spanish within attributes.
• More options are available when switching between applications, allowing users to toggle between application records and add new applications on the fly, as well as navigate complex fitments.
• Digital assets now show to which brand they belong. The updated Digital Assets table shows which brand owns which digital asset. Additionally, users can download the list to make sure each brand has the correct digital assets.
• A new “Export Started” screen: A new user experience was added to streamline the data export process.


PhaseZero Touts Integration With WHI

Business-to-business and business-to-consumer e-commerce software provider PhaseZero has announced an integration with WHI Solutions to offer WHI’s electronic catalog and offer connectivity with other business systems.

PhaseZero reports that it’s working toward certification with WHI’s electronic catalog and ordering tools, which offer DMS integration for most business systems in the aftermarket and OEM marketplaces.

According to PhaseZero, its CxCommerce technology integrates with e-catalog and product information management (PIM) systems for automated content updates from internal and third-party content providers.

CxCommerce is billed as a Digital Commerce 2.0 and unified customer experience offering for the heavy-duty, automotive and industrial marketplaces.


Cooper Recalling 430,300 Tires

The Cooper Tire & Rubber Company is recalling nearly 430,300 Discoverer, Evolution, Courser, Deegan, Adventurer, Hercules, Back Country, Multi-Mile Wild Country and Big O brand tires. According to the company, the recalled tires may develop a bulge or separation in the sidewall that may cause the tire to rapidly deflate, increasing the risk of a crash. The recall is expected to begin March 25.


Continental Recalls 94,000 Tires

Continental on Feb. 25 announced a voluntary recall program involving approximately 94,000 Continental, General and Barum passenger tires that were produced at the company’s Mt. Vernon, IL plant and sold to vehicle manufacturers and the aftermarket. According to the company, the recalled tires may experience sudden air loss or belt edge separation, which could lead to partial or full tread loss. Continental reports that it has not received any reports of accidents or injuries resulting from this condition and that it believes 203 of these tires may be defective.


ALI Debuts New Lift Inspection Process, New Inspection Label

The Automotive Lift Institute (ALI) has developed a new lift inspection process for the more than 500 ALI Certified Lift Inspectors across North America to follow when inspecting any car lift, truck lift or other vehicle lift. The institute’s “Check360 Certified Lift Inspection” process is designed to provide a comprehensive examination of the lift structure as well as its electrical and mechanical components. It also includes a review of training logs, operating instructions and safety material.

According to ALI, Check360 lift inspections meet all the requirements of the national safety standard governing lift operation, inspection and maintenance, ANSI/ALI ALOIM. The standard requires that all vehicle lifts be inspected by a qualified lift inspector at least annually and provides guidance on what must be inspected.

To ensure consistency and compliance, only ALI Certified Lift Inspectors can perform a Check360 lift inspection. At the conclusion of the inspection, the inspector will provide the customer with a report and will apply a new Check360 Certified Lift Inspection label to every lift that passes.

“As the ALI Lift Inspector Certification Program has grown, we’ve seen an increasing number of inspection companies offer multiple tiers of inspection and apply misleading inspection labels to lifts inspected outside of our program parameters,” said ALI President Bob O’Gorman. “To make it easier for customers to have confidence that they’re getting what they paid for … we developed a new lift inspection process customers can ask for by name and a new lift inspection label that’s harder to counterfeit. Check360 is the only lift inspection backed by ALI.”

ALI’s Lift Inspector Certification Program started in 2012 to provide a resource for standardized lift inspection procedures and qualified lift inspectors to perform them.




AutoNation’s Parts & Service Revenue Decreased 5.9% In Q4

AutoNation Inc., the largest U.S. automotive retailer, reported $838.40 million in parts and service revenue for the fourth quarter of 2020 — a decline of 5.9% when compared to the same period a year ago. Same-store service and parts revenue decreased 4.7% to $829.40 million.

Without citing specifics, Executive Vice President and CFO Joe Lower implied during AutoNation’s Feb. 16 earnings call that customer-pay and warranty revenue were both down low to mid-single digits, while collision repair revenue was down high single digits.

Fourth-quarter 2020 parts and service gross profit declined 4.3% to $385.40 million. On a same-store basis, AutoNation’s parts and service gross profit decreased 3.0% to $382.60 million, with same-store gross margin increasing from 45.4% to 46.1% on a year-over-year basis.

As of Dec. 31, 2020, AutoNation owned and operated 315 new vehicle franchises from 230 stores located predominantly in major metropolitan markets in the Sunbelt region. The company also owned and operated 74 AutoNation-branded collision centers.


Sonic Automotive Reports Slight Decrease In Q4 Customer-Pay Gross Profit

For the fourth quarter of 2020, Sonic Automotive turned in $319.07 million in parts, service and collision repair (fixed operations) revenue, which was down 7.9% compared to the same period a year ago. Franchised dealership fixed operations revenue declined 9.2% to $307.86 million, with same-store revenue down 6.7%.

Franchised dealership fixed operations gross profit decreased 5.8% to $156.07 million, with customer-pay gross profit down 0.5%. However, gross margin increased 180 basis points to 50.7%.

“Our franchise dealerships’ parts and service business continues to recover more slowly than we’d like but is showing signs of improvement,” President Jeff Dyke told analysts on Sonic’s Feb. 17 earnings call. “Adjusted for calendar differences year-over-year, our fixed operations gross was down roughly 4% in January compared to nearly 6% for the fourth quarter. We believe — as the vaccine rollout continues to gain momentum and Americans feel more comfortable resuming daily activities as the year progresses — our parts and service business will bounce back.”

Charlotte-based Sonic is a Fortune 500 company and one of the largest automotive retailers in the United States. The company also operates the EchoPark used vehicle sales network.

EchoPark’s fixed operations revenue rose 52.6% to $11.21 million in the fourth quarter of 2020.


Dickinson Fleet Services Expands In Minnesota

Indianapolis-based Dickinson Fleet Services has acquired Diesel Minnesota (DMI) of St. Paul, MN. The move expands Dickinson’s geographic reach as well as DMI’s maintenance services in Minnesota. DMI marks Dickinson’s 11th acquisition since 2017. Under the ownership of Cox Automotive, Dickinson will continue to pursue additional acquisitions across North America, according to a Feb. 16 company announcement.


Rush Appoints Senior VP Of Aftermarket Sales, Truck Sales

Rush Enterprises has named Jody Pollard as its senior vice president of truck sales and aftermarket sales. Pollard’s appointment follows the retirement of Jim Thor as senior vice president of truck sales. Pollard has been Rush’s senior vice president of operations since 2017. Prior to that, he was the company’s North Texas and Oklahoma regional general manager.

The San Antonio company owns and operates Rush Truck Centers, which is billed as the largest network of commercial vehicle dealerships in the United States. Rush has more than 100 dealership locations across 22 states.


Dinex Group Adds VP Of Sales

The Dinex Group has added Dayco Products veteran Brett Lucht as its vice president of sales – aftermarket, North America and South America. Lucht is tasked with supporting and implementing Dinex’s new 2021-‘23 strategy in the Americas as well as developing business together with the entire U.S. team.

Lucht has spent the last 18 years with Dayco, most recently as its national heavy-duty business development manager.

Dinex is a supplier of exhaust products to the heavy-duty aftermarket.


TSC In Deal To Purchase Midwest-Based Orscheln Farm & Home

The Tractor Supply Company (TSC) has entered into an agreement to acquire Orscheln Farm & Home for roughly $297 million in cash, net of acquired estimated future tax benefits of $23 million. As of Dec. 26, 2020, TSC had 1,923 stores in 49 states. Orscheln operates 167 stores in 11 states: Missouri, Kansas, Nebraska, Iowa, Indiana, Oklahoma, Arkansas, Texas, Kentucky, Illinois and Ohio.

Orscheln’s automotive offerings include batteries, cleaning products, oil, additives, filters, trailer accessories, jacks, truck boxes and tools.



NEW … Dayco: Seeking An Aftermarket Catalog Team Leader

As a Catalog Team Leader, you will be reporting to the Catalog Department Director in which your main responsibility will be to supervise two Catalog Analysts as well as supply the required catalog information to the customer in the North America region. … (more) … Click here to find out more.

NEW … Holstein Parts: Automotive Aftermarket Data Applications Analyst

Holstein Parts is seeking an automotive aftermarket data applications analyst to join their company. The analyst will report to the president and is a full-time position. … (more) … Click here to find out more.

Seeking Regional Sales Manager – US Aftermarket

As a leading Manufacturer of Brake Products, we are seeking a motivated, driven, and professional individual to join our Sales Team. The ideal candidate will bring the following attributes to our Sales Team. Candidate will report to the Vice President of Sales and will be responsible for … (more) … Click here to find out more.

Seeking Senior Level Category Manager for Motor Oils, Chemicals, Functional Fluids, other

Location: Mid-Atlantic Region — Candidate will report to the Executive Vice President of Merchandising and will be responsible for increasing sales, maintaining and improving profitability and market share for assigned product lines and/or categories, and … (more) … Click here to find out more.

Seeking Senior Level Category Manager for Automotive Hard Parts

Location: Mid-Atlantic Region — Candidate will report to the Executive Vice President of Merchandising and will be responsible for increasing sales, maintaining and improving profitability and market share for assigned product lines and/or categories … (more) … Click here to find out more.


People Watching 3/8/21

Nexus Automotive International has added Alla Muntian as its business development director for Europe. Prior to joining Nexus, Muntian was a global key account manager for international trading groups at Osram. She also has served in various other sales and marketing roles in the automotive and chemical industries.

• The Genuine Parts Company (GPC) board of directors has appointed Senior Vice President of Finance Napoleon Rutledge Jr. to the additional role of chief accounting officer. In this expanded role, Rutledge will be responsible for GPC’s corporate finance and accounting, including its regulatory accounting matters, financial reporting, financial planning and analysis, and accounting policies. Rutledge has been a key financial officer of the company for more than 10 years.

Alex Goodemoot, regional manager for N.A. Williams, is now a “World Class Technician.” He is one of only 42 people to earn this recognition for 2021. Goodemoot grew up in the industry, spending most of his childhood in his family’s Carquest store. Throughout his 20s, he worked in multiple repair facilities as both a technician and manager. He has worked at every level from jobber store to warehouse and from installer to manufacturer.

• The Goodyear Tire & Rubber Company has named Chris Helsel as its senior vice president of global operations and chief technology officer. Helsel currently serves as senior vice president and chief technology officer, a role he has held since 2018. He succeeds Jon Bellissimo, who is retiring after 43 years with Goodyear.

• Goodyear also has tapped Ryan Patterson, currently president of its Asia/Pacific business unit, to lead the Cooper Tire integration effort as senior vice president of business integration. Nathaniel Madarang, currently managing director of Goodyear China, will succeed Patterson as of Asia/Pacific president.

Yvette Dapremont Bright, president of the Brighter Horizon Foundation, and Jeff Kramer, CEO of Schweitzer-Mauduit International, have joined Myers Industries’ board of directors. Kramer is a former vice president of lubricants at Brenntag, which supplies passenger vehicle engine oils antifreeze and automatic transmission fluids, among other products. Akron, OH-based Myers Industries is the parent company to Myers Tire Supply.


News Briefs 3/8/21

Michelin North America has launched a new accessory kit for automotive technicians and DIYers. The new kit, which is available on Amazon, bundles Michelin’s serpentine drive belts with the appropriate idler and tensioner. The new line of serpentine belts, idlers and tensioners is exclusively manufactured under license by Steigentech and distributed in North America by International Brake Industries.

Denso Products & Services Americas is celebrating the company’s 50th anniversary in the United States. The company plans to mark the anniversary this year with various employee celebrations across its administrative, sales, manufacturing and distribution centers.

• Tenneco’s DRiV division is offering $30,000 in scholarships to future automotive technicians who are accepted or currently enrolled in accredited, U.S.-based automotive technical schools, colleges and universities, or enrolled full-time at a U.S. high school. Applications are now available on the Garage Gurus website for an opportunity to receive one of a dozen $2,500 awards for the 2021-‘22 school year. All material must be submitted by April 30.

• Catalogs from AAW Auto Parts and Riebes Auto Parts are now available on PartsTech. Pasco, WA-based AAW has been serving customers in Southeastern Washington for more than 25 years. Riebes has 21 locations throughout Northern California.

• Turn 14 Distribution has added Moroso Performance Products automotive equipment for racing and street performance applications to its line card.

PartWerx Automotive, an auto collision parts WD in the Carolinas and Mid-Atlantic regions, has moved its business operations to the DX+ Warehouse System on DMS Cloud.

• Openbay Inc. has launched a new website for its automated chat and messaging platform, Otis. The site focuses on the features and business benefits of Otis, emphasizing how the adoption of artificial intelligence technology, combined with the use of data, can help shops create new online relationships with consumers.

• The Automotive Service Councils of California (ASCCA) has announced a corporate partnership with Facepay Inc., which operates a relational payments platform that offers businesses a low-cost, fixed monthly subscription instead of paying 2.5% of their revenue to credit card processors. Facepay can be integrated directly into a shop’s regular email and text messaging process.

• Michelin North America has announced as much as 8% in price increases on select Michelin, BFGoodrich and Uniroyal passenger and light-truck tires, as well as on select urban delivery offers, attributable to “changing business dynamics and rising costs of raw materials.” This increase will be effective April 1 in the United States and Canada.

Rancho, a brand of Tenneco Inc.’s DRiV division, is partnering with Jeep Jamboree (JJUSA) for the sixth consecutive year as its official suspension and shocks company and as a primary sponsor of the 2021 event.

4 Wheel Parts plans to celebrate its 60th anniversary throughout March with in-store celebrity appearances, special sales and giveaways.

LSI Chemical has announced TechMotive Imports as its distributor for Trinidad and Tobago as well as Guyana. The company is now authorized to sell LSI Chemical oil and fuel additives in addition to the full line of Hot Shot’s Secret products via retail in Trinidad and Tobago.


Financial Briefs 3/8/21

• The Safety-Kleen segment of Clean Harbors Inc. reported $282.68 million in third-party revenue for the fourth quarter of 2020 — a decrease of 14% compared to the same period a year ago. Safety-Kleen’s direct revenue declined 14.6%. Segment adjusted EBITDA fell 21.1% to $52.67 million. Management expects the company’s Safety-Kleen branch business to experience a steady recovery in 2021 as vehicle miles driven increases with the rollout of vaccines across North America.

Heritage-Crystal Clean’s Environmental Services segment — which includes parts cleaning, containerized waste, vacuum services, antifreeze recycling and field services — saw its revenue decline 6.2% to $90.90 million during the fourth quarter of 2020. Management attributed the decrease to the lingering impacts of pandemic-related volume declines. This was only partially offset by favorable pricing in parts cleaning. The company’s Oil Business segment — which includes used oil collection activities, sales of recycled fuel oil and re-refining activities — saw its revenue decreased 2.0% to $41.10 million, mainly because of lower selling prices of base oil. This was partially offset by higher base oil gallons sold.

• Fox Factory Holding Corp. saw its Powered Vehicles Group (PVG) come through with a 38.7% increase in fourth-quarter 2020 sales, primarily attributable to growth on the powersports side as well as sales from the specialty vehicle manufacturer SCA Performance Holdings. For the full year 2020, PVG sales increased 16.1%, primarily because of the addition of SCA. Excluding the impact of the SCA acquisition, PVG revenue declined approximately 1% year-over-year due, in large part, to OEM customers being shut down for roughly 60 days near the onset of the coronavirus pandemic.

• The Donaldson Company’s engine products segment reported $330.20 million in aftermarket sales for the fiscal second quarter ended Jan. 31, 2021 — an increase of 7.2% (up 5.5% in constant currency). U.S. and Canadian sales were down 0.6%, while Europe, Middle East and Africa (EMEA)sales were up 14.2%, Asia/Pacific sales were up 17.4% and Latin America sales were up 5.9.%.


Event & Trade Show Briefs 3/8/21

• The AASA Mobility Technology Council’s quarterly meeting on March 10 will address the next generation of ADAS calibration targets, data access and electrification. Click here for more information on the MTC meeting.

Registration is open for the MERA – The Association for Sustainable Manufacturing Spring 2021 Remanufacturing Conference, a virtual event that will take place March 30-31.

Latin Press Inc. is planning a new conference and expo for the international aftermarket auto parts industry of South Florida, the Caribbean and Latin America. The event, AutoAmericas, is scheduled for Feb. 25-26, 2020 at the Miami Airport Convention Center. AutoAmericas is aiming at buyers and sellers who want to come together for a greater understanding of the changes affecting their business. For more information, visit



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