Mechanical Access (MAS) organic sales were up slightly as modest growth in the residential lock business offset mid-single digit organic revenue declines in the commercial mechanical lock and automatic door businesses driven by soft U.S. retrofit markets and national accounts, respectively.
The segment profit rate, excluding charges, was 16.5%. Excluding Niscayah and charges, segment profit was a very strong 18.8%, reflective of the cost actions taken to offset volume pressures within the commercial mechanical lock and automatic door businesses.
- Organic sales in the Industrial segment fell 2% due to weakness in Europe. Unit volumes fell 2%, price was relatively flat, and currency was down 4%. Acquisitions added 4%, bringing total sales growth down 2% for the quarter. Organic sales for the Industrial and Automotive Repair (IAR) platform fell 4% as low-single digit declines in the U.S. due to soft government spending and high-single digit declines in Europe more than offset strength in the emerging markets. Engineered Fastening grew 7% organically, outpacing global light vehicle production, which grew 3%. Organic revenues in Europe fell 3% as continued growth in automotive due to increased platform penetration was more than offset by weakness in industrial fasteners.
Overall Industrial segment profit excluding charges fell 150 bps versus prior year to 15.4% due to the negative mix and deleveraging associated with lower European sales.
Executive Vice President and Chief Operating Officer, James M. Loree, commented, “As we assess global macroeconomic conditions, we do not see any obvious signs of substantial externally driven growth acceleration in the foreseeable future. In this regard, we have opted to embark upon a major organic growth initiative as outlined last quarter: (1) game changing investment in emerging markets (power tools, hand tools and commercial hardware), (2) expansion of offshore oil and gas pipeline services, (3) growth in “smart” RFID/RTLS enabled tools and storage, (4) leveraging newly acquired AeroScout RTLS capability into the electronic security market including a major thrust into the healthcare vertical, (5) aggressive pursuit of U.S. government business and (6) continuing to exploit revenue synergies associated with the Black & Decker merger. We feel confident these will deliver $800-$900 million run rate incremental revenue in three years. In lieu of large bolt-on acquisitions for the next several quarters our management team is laser focused on these growth initiatives which are being managed as if they were an acquisition integration. We have embedded the rigor, rhythms and processes to execute them as this management team has done successfully with acquisitions. We look forward to providing milestones along the way and communicating our progress as well as showcasing them at our Analyst Day which is planned for next spring.”
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