Cats and Air Conditioning
Cats and Air Conditioning
Cats and Air Conditioning
Economy Issues Affect Change in Consumer Shopping Habits
By Betty Stephens
American household buying habits accounts for around 70% of the U.S. economy. What consumers shop for is seperated into two main categories. First, they spending on such items as food, clothing and shelter. Second, there is more discretionary spending. This is on items such as entertainment or non-essentials.
The good fortune of some and mis-fortune of others have caused financial ups and downs and a shift in the shopping habits of Americans have led to uneven outcomes for retailers. Companies like WalMart and Mattel have continued to struggle as people spend more cautiously in this type of uncertain economy. Amazon has however done well, as more consumers choose to shop on line.
Americans are very price conconscious, and will check as many as seven store or web sites for the best price before makes their purchases. I believe frugal is the the best word to describe the average American these days. Internet shopping rose 10% to $46.5 billion in November and December, according to research firm Comscore. However, sales at retail stores rose just 2.7% to $265.9 billion, according to ShopperTrak, which tracks data at 40,000 stores in the U.S. And the number of customers in stores dropped 14.6%.
Industry exucutives are starting to say this new American frugallity may be beccoming a new reality and a new permanet way of life in America and they don’t expect to see it go away anytime soon, if ever, even as the economy shows signs of improvement. With family budgets under pressure since the recession of 2008, consumers have headed to discount stores, switched from name brand goods to private-label alternatives and shopped more often at discount stores or online rather than spending on expensive fuel to drive to out-of-town hypermarkets.
Those trends have benefited discounters as well as retailers that have the widest own-label ranges and networks of smaller stores, prompting consumer goods firms to retaliate with brand promotions and smaller packaging.
“If you look at data from Millennials, who have really sort of grown up with this, price is more important to them than it was to the last generation,” WalMart U.S. Chief Executive Bill Simon told the Reuters Global Consumer and Retail Summit, referring to the generation born between 1980 and 2000.
WalMart U.S. is the largest unit of WalMart Stores Inc (WMT.N), the world’s largest retailer which benefited from trading-down during the recession, but cut its forecasts last month, citing weak results in many key markets.
The U.S. economy is expected to pick up towards the end of the year, helping cut unemployment, while Europe’s lack luster recovery looks set to continue, although wage growth will continue to lag inflation, hurting consumer purchasing power.
The Dollar Channel
Dollar store has been on an upward trend for several years now. They have had a big impact on the discount store market and are competing head to head with other discount stores on the routine shopping trip stop. The Family Dollar Stores are adding cooler space to more than 1,000 locations this year, and Dollar Tree is adding to its food and beverage assortment as well as opening a third-party pharmacy in a Florida location. Efforts like these have contributed to dollar retailers winning over shoppers from other discount stors. The most sizeable change is the shift of heavy drug store shoppers—the top one-third of spenders within the catagory -into the dollar store family of stores. This is not a big surprise, as the both dollar stores and drug stores carry many of the same type of goods and both are well positioned, geographically, for easy-access, fill-in trips.
During the last year, Americans have been making less but larger shopping trips. Trips declined across grocery and large box stores. You might think the decline in stock-up trips would hurt Sam’s Club and Costco type stores, however trips have actually increased by 2.1% during the past year due to a number of factors. The club retailers are expanding the number of stores. Also, club trips are being bolstered by lower gas prices and low food inflation, which makes it easier for them to absorb bulk pricing. The dollar stores also saw trips increase significantly during the past year, which reinforces the notion that consumers are viewing dollar stores as a “smarter” choice for affordable solutions.
While people will continue to shop, the question now is what will they purchase, when will they purchase and where will they purchase. Name brand items are taking a backseat to generic or store brand products. Malls are beginning to show signs of weakness – a lot more stores are closing while consumers make their way to other, more affordable alternatives. Instead of going to one of the mall’s “anchor stores,” they are now going to places like WalMart, Target or K-Mart to purchase the things their families “need” rather than the things their families “want.”
Energy Savings Tips
By Betty Stephens of Quest Media
Whether you own or rent your home, you typically need lighting, heating, air conditioning, power for equipment, and other services. Here are some tips to help you to maximize energy efficiency and save you money all the while helping the environment.
Energy Saving Tips
Here are some Heating and Air Conditioning suggestions to save you on your energy costs.
1. Maintenance – Tune-up the heating, ventilating and air-conditioning (HVAC) system with annual maintenance. Even a new system declines in performance without regular maintenance. Having a contract automatically ensures that your HVAC contractor will provide pre-season tune-ups before each cooling and heating season. You can save energy and money, and your system should last longer with minimal costs for yearly maintenance fees.
2. Cleaning – Changing (or cleaning if reusable) HVAC filters every month during peak cooling or heating seasons. New filters usually only cost a few dollars. Dirty filters cost more to use, overwork the equipment and result in lower indoor air quality.
3. Sun Light – Control direct sun through windows, depending on the season and local climate. During cooling season, block direct heat gain from the sun shining through glass on the East and especially West sides of the house. You may choose solar screens, solar films, awnings, and vegetation can help keep homes cooler. Trees shade the house and help clean the air. Interior curtains or drapes can help, but it’s best to prevent the summer heat from getting past the glass and inside. During heating season, with the sun low in the South, unobstructed southern windows can contribute solar heat gained during the day.
4. Fans – Use fans to maintain comfortable temperature, humidity and air movement, and save energy year round. Moving air can make a somewhat higher temperature and/or humidity feel comfortable. Fans can help delay or reduce the need for air conditioning, and a temperature setting of only three to five degrees higher can feel as comfortable with fans. Each degree of higher temperature can save about 3 percent on home cooling costs. When the temperature outside is more comfortable than inside, a box fan in the window, or large whole house fan in the attic can push air out and pull in comfortable air.
5. Caulking – Plug leaks with weather stripping and caulking. Caulking and weather stripping let you manage your ventilation, which is the deliberate controlled exchange of stuffy inside air for fresher outdoor air.
No matter the season your home is competing with the weather outside to make sure the inside temperature remains comfortable. As outside temperatures cool off in the winter and heat up in the summer, your heating and cooling equipment requires more energy to keep your home at the desired comfort level.
Home heating and cooling accounts for approximately 50 percent of the average home owner’s energy costs. You can get control of your home’s comfort level and your heating and cooling costs by following the above simple tips.
Who Owns That HVAC Brand?
Ever wonder who owns whom in the HVAC industry? If you have a very old furnace or air conditioner you can look it up and see who now owns this name and possibly makes HVAC parts for the old unit. HVAC Manufacturers are constantly changing as one large HVAC entity buys up the smaller HVAC entities or someone decides to change their name. The manufacturing arrangements change constantly.
Today there are a limited number of major manufacturers of HVAC equipment left in the marketplace. Over time the large manufactures bought up the smaller ones and merged those product designs into their own product lines. They now produce products under the various brand names they own. Many times there are just a few cosmetic differences in the appearance, while the mechanical workings are very close and even in some cases the same.
Top 10 HVAC Manufacturers
The US HVAC equipment manufacturing industry includes about 1,500 companies with combined annual revenue of about $37 billion. Major companies include Goodman Global, Lennox, Nortek, Trane, and the climate control divisions of Johnson Controls and United Technologies. The industry is concentrated: the top 50 companies account for about 70 percent of revenue.
The top ten air conditioning companies in America are: (Listed in order of rank)
5. American Standard
The following chart reviews many of the manufacturers. It does not cover every manufacturer, but it gives you a good idea about who actually makes all those HVAC equipment.
Here is a chart of ownership:
Amana Formerly a division of Raytheon, now part of Goodman Manufacturing. It’s owned by the Whirlpool Corporation. Amana produces wide range of products. It first began the production of air conditioners in 1954. It is one of the leaders of air conditioner market. This company is in the first position in the Top 10 Lists of air conditioner manufacturers.
Carrier Carrier began in marketing air conditioners in 1950. Carrier Corporation is now among the biggest manufacturers of (HAVC) system and the biggest manufacturer of air conditioner in the world. This company is in the second position in the Top 10 Lists of air conditioner manufacturers.
Lennox Lennox: Lennox International Inc. is American manufacturing company. The company was founded 1895. Through the subsidiaries, it provides the climate control products for ventilation, heating, refrigeration and air conditioning. This company is in the third position in the Top 10 Lists of air conditioner manufacturers.
Trane Trane Company purchased GE’s climate control division in 1982. Trane was purchased by American-Standard in 1984. In 2007 American Standard spun off non HVAC lines and will be changing the corporate name to Trane. Now owned by Ingersol-Rand.
American Standard Became Tappan Air Conditioning division in 1972. American-Standard purchased the Trane Company in 1984. American-Standard name revived in 1988. In 2007, American-Standard spun off WABCO, sold the plumbing division and changed the corporate name to Trane in November.
Brand Name Owner
Haier Haier Group Corporation is one of the world’s top-selling makers of home appliances. The Qingdao, China-based company has grown rapidly. At home, Haier has captured the lead in that segment, accounting for more than one-third of all refrigerators sold each year, and is also the leader in a number of other appliance categories, such as air conditioners.. Since the late 1990s Haier has pursued an aggressive globalization effort, building a sales network in more than 160 countries, with a presence in more than 38,000 retail outlets worldwide.
LG LG Electronics USA is a division of LG Group founded in 1947. LG Group has thirty six business units manufacturing goods and providing services in the chemical electronics, telecom, lighting systems, consumer appliances, solar energy, and air conditioning. In July 2010 LG Group was ranked 67th in the Fortune 500® list of largest companies.
GE GE’s HVAC division was purchased by the Trane Company in 1982.
Kenmore Kenmore appliances, including air conditioners, are made for Sears stores by several manufacturers such as Gibson, Fedders and Whirlpool, and then branded with the Kenmore name. Sears
Sharp Sharp is the worldwide multi-national giant, popular in the electronic devices and manufacturers industry. Their brand name became one of the Asian giants, and is also known around the world. They are made in China.
Lennox Divests Service Experts
BY: Betty Stephens of Quest Media
Lennox International, Inc. is known for its design, manufacture and marketing for the heating, ventilation, air conditioning and refrigeration (HVACR) products. Its products and services are sold through multiple distribution channels under brand names, including Lennox, Armstrong Air, Ducane, Bohn, Larkin, Advanced Distributor Products, Service Experts and others. The Company operates in four market segments:
1. Residential Heating & Cooling
2. Commercial Heating & Cooling
3. Service Experts
Lennox International Inc. is a global leader in the heating, air conditioning, and refrigeration markets. Its stock is traded on the New York Stock Exchange under the symbol “LII.”
Lennox Divests Service Experts
Lennox International Inc. plans to divest its Service Experts business, which consists of dealer-contractors providing heating and cooling equipment installation and service primarily to the residential market. Service Experts consists of 108 dealer-contractor branches. With the recovery in the North American residential market this year and the interest from potential acquirers Lennox plans to establish a supply agreement for equipment with the future owner of Service Experts.
The company retains the commercial service business called Lennox National Account Services (NAS) that was reported within its Service Experts business segment. Revenue for the Service Experts business segment was $529 million in 2011, $80 million of which was from the NAS business. Lennox International announced the sale of its Service Experts business to a majority-owned entity of American Capital, Ltd. It was an all-cash deal that closed on March 22 and included a two-year equipment supply agreement. Terms of the sale and supply agreement have not been made public.
After seeing its revenue slip amid soft consumer demand and a sluggish market for new residential construction, Lennox reported in July its second-quarter revenue rose 2.2%, although earnings edged down 0.7% as margins shrank on a lower product mix and foreign exchange.
Lennox Original Buyout of Service Experts
Lennox bought Service Experts for $157 million in June of 2000. The purchase gave Lennox an additional $600 million in sales which, added to the estimated $400 million volume which put it at about $1 billion. This acquisition made them the largest residential dealer in the country, with nearly 200 retail outlets. The acquisition ends the three-year life of Service Experts one of four nationally consolidated and publicly traded contractors that sprang up in 1996-97. Service Experts’ stock soared to $35 after opening at $13. However, 18 months after its formation, the contractor’s stock price eroded, and last week it was trading at the $7 range. The company’s 1999 sales were report to be in the $450 million range.
Since its formation, Service Experts acquired more than 300 dealers using a combination of cash and equity. Many of the acquired contractors were members of the Contractor Success Group (CSG). At the time of its sale, Service Experts had 120 service centers in 36 states.
American Capital, Ltd The Buyer
On March 25, 2013, American Capital, Ltd. announced its buyout of Service Experts, a leading provider of sales, installation, maintenance and repair of HVAC systems for the residential and light commercial markets. American Capital’s investment took the form of preferred and common equity and a revolving credit facility.
Service Experts investment provides AC with a solid opportunity to partner with an industry veteran to strengthen a company with a large installed infrastructure ready for growth. AC has a very talented management team with tremendous industry expertise that is focused on driving value creation. American Capital’s complete financing package and operational support make them an ideal owner for Service Experts,” said Scott J. Boxer, newly appointed President and CEO of Service Experts.
American Capital, Ltd. is a publicly traded private equity firm and global asset manager. American Capital, both directly and through its asset management business, originates, underwrites and manages investments in middle market private equity, leveraged finance, real estate and structured products.
American Capital’s complete financing package and operational support make them an ideal owner for Service Experts,” said Scott J. Boxer, newly appointed President and CEO of Service Experts. Mr. Boxer is an internationally recognized leader in the HVAC industry with a three-decade track record of successfully leading businesses through transformations and growth initiatives. After 40 years in the industry, Mr. Boxer retired from Lennox International, Inc. in 2010, where he had spent a decade-long tenure in various executive positions, including President and Chief Operating Officer of Service Experts from 2003 to 2010.
Consolidation of HVAC Contractors
The Mechanical Service Contractors of America organization has expressed concerns about the merger trend in the United States heating, ventilation and air conditioning industries (HVAC). They have express a concern of the pros and cons of consolidation; Skepticism over claims about the size of the HVAC market; and Skepticism over statement that a fragmented industry can be improved by mergers.
Background: The 1990s brought consolidation and excitement to the industry with companies such as Service Experts, GroupMac, and American Residential Services (ARS) to name a few. These companies paid multiples of earnings for prime contracting companies, and the world of HVAC began consolidation.
The first HVAC service consolidators were small groups of contractors who decided to put their companies together, sell some stock, and cash in some of their hard-earned chips. The initial sale of stock for cash was great for the original company owners, but things soon began deteriorating. Some consolidators changed the scope of business by focusing on growth through acquisition. This way they could continue to show Wall Street good revenue and profit numbers. But they needed more cash to keep everything going. When the cash dried up, the acquisitions began offering stock rather than cash for newly acquired companies.
Things seemed to be going OK at first. Then the bottom dropped when Wall Street figured out that growth and fat balance sheets were occurring mostly due to acquisition, not profitability. The largest problems for the consolidators were they didn’t have plans for increasing market share, sales volume, and profitability.
A number of the consolidators of the companies eliminated the reason the companies were successful in the first place: their independent spirit and ability to be flexible. And too, their ability to adapt. There have been successes. Many locations have done well, growing steadily and showing a respectable profit.
Since consolidation’s start, there have been many changes: Service Experts was purchased by Lennox International Inc., and the entity represented a huge part of that company’s earnings and now Lennox has sold them; GroupMac became Encompass, and then they were gone; and ARS became ARS Service ExpressÂ®, a ServiceMaster brand.
Daikin Industries Bought Goodman Global
Written By: Betty Stephens of Quest Media
Daikin Industries (Japan) has struck an agreement to buy Goodman Global for about $3.7 billion, completing the Japanese air-conditioner maker’s long quest to buy its American rival. Goodman is currently owned by the private equity firm Hellman & Friedman, which bought the company in 2008 for about $1.9 billion. Founded in 1975, Goodman makes heating, ventilation and air-conditioning products for homes and businesses.
Daikin had 1.22 trillion yen of sales in the year ended March and employs more than 44,000 people globally, with manufacturing and sales in more than 90 countries. Daikin generates 10 percent of its revenue in the Americas, according to data compiled by Bloomberg. Air conditioning accounts account for 85 percent of its global sales.
Daikin Industries, Ltd History
Daikin Industries, Ltd. (ダイキン工業株式会社) is a Japanese multinational air conditioner manufacturing company headquartered in Osaka. It has operations in Japan, China, Australia, India, Southeast Asia, Europe, and North America.
The company was founded in 1924 by Akira Yamada in Osaka, Japan. Daikin was founded as a chemical corporation, with a focus on air conditioning systems. It has since diversified its manufacturing division to take advantage of experience in fluorine chemistry. Daikin began as a manufacturer of aircraft radiator tubes and fluorine refrigerants, entering the air-conditioning business in 1951.
In 2006 Daikin purchased OYL Industries. This made Daikin the second largest HVAC manufacturer in the world after Carrier Corporation. Daikin co-developed a R-410A refrigerant with Carrier and is an innovator in the Split System Air Conditioning Market, and is the inventor of Variable Refrigerant Flow (VRF) air conditioning systems.
Daikin developed the hybrid hydraulic systems using technology from their Air Conditioning division. Facing the global demands on C02 reductions and the serious energy issues facing the world, this product aims to cut energy consumption in the manufacturing sector. The acquisition of Goodman expands Daikin’s presence in the United States and in duct-type air-conditioners, and makes Daikin the world’s largest maker of heating, ventilation and air-conditioning systems.
Daikin is the official sponsor of Galatasaray Daikin women’s volleyball team
Daikin’s large financial resources allow them to buy its American competitor. The company reported about $510 million in profit for the 12 months ended June 30. And it had some $1.5 billion in cash and short-term investments on its books as of June 30. The deal would be the third-largest overseas acquisition by a Japanese company this year. The deal gives Daikin more than 900 distribution points as it tries to boost sales for home heating and air-conditioning systems. The deal is an opportunity for Daikin to increase its business and will also help it expand in emerging and high-volume markets.
Goodman Global History
Goodman Global is a company which manufactures commercial grade room air conditioners and specialty cooling products for residential and light commercial applications. The company operates under the Goodman, Amana and QuietFlex brands. The company was founded in 1975 and is based in Houston, Texas.
Goodman Global, Inc. is the second largest domestic manufacturer of heating, ventilation and air conditioning products for residential and light commercial use based on unit sales. Their products include engineering, manufacturing, assembling, marketing and distributing an extensive line of HVAC and related products. Their products are predominantly marketed under the Goodman® and Amana® brand names. Goodman® is one of the leading HVAC brands in North America and appeals to the large section of the market that is price sensitive and desires reliable and low-cost climate comfort, while their premium Amana® brand includes enhanced features such as higher efficiency and quieter operation.
Goodman began as a manufacturer of flexible air ducts and plastic blade registers. In 1982, the company acquired Janitrol and entered the HVAC market, expanding its product offering in 1986 to include gas heating products.
In 1997, Goodman acquired Raytheon Appliances, the predecessor of Amana Corporation, a manufacturer of appliances and HVAC units. In 2001, Goodman separated its appliances business from its HVAC business and sold the appliances business to Maytag Corporation. In 2004, Goodman was acquired by Apollo Management firm for approximately $1.43 billion. April 2006, Goodman completed an initial public offering, listing on the New York Stock Exchange.
October 2007, Goodman acquired by Hellman & Friedman a San Francisco-based private equity firm in a $1.8 billion transaction. In August 2012, Hellman & Friedman
Q: I need to replace some of my vents. When I called the hardware store they asked me grills or registers? How do I know which ones I need, what is the difference?
A: Registers go in the floor. They are used with systems that are installed in basements. They are flat, with no raised louvers. There are some very nice decorative finishes available now. There are wood as well as different metal tones that are very attractive. Remember to try not to cover your registers up with furniture.
Grills are installed in ceilings or walls and have directional louvers to direct the air flow. They are used when your system is installed in the attic, closet or street level garage. Be sure to use the right type of paint if you want to paint your grills to match your ceiling or wall color. Ask a professional painter for advice. Some diffusers are plastic now. It has been my experience plastic does not take paint well.
Hope you home improvement project turns out great!
Pictures courtsey of Google Images.