A Collection of Current Outdoor Power Equipment (OPE) Industry Related News Articles From OPEESA's (Outdoor Power Equipment and Engine Service Association) Newsletter "OPE-In-The-Know," the Business of OPE.
Australia -- February 15 -- Building fixture and household fittings supplier GWA International Ltd has sold its mowing business Rover to the Australian arm of a US lawn and garden power equipment group.
GWA said the final proceeds from the sale are dependent on Rover's working capital levels at completion, but are expected to be in the range of $10 million to $12 million.
"The lawn mower industry has changed substantially in recent years and Rover does not have the scale to be competitive in its own right," GWA managing director Peter Crowley said on Monday in a statement.
The sale to MTD Australia, part of US-based MTD Products Inc, will be completed on April 1.
"MTD is a major global business, and being a specialist in this sector, will provide a strong base for Rover to trade successfully in the future," Mr Crowley said.
GWA will book a net loss of $3.4 million in its first half accounts to reflect trading results and asset write-downs as a consequence of the Rover sale.
This won't impact in dividend payments, GWA said.
"Overall this is a good result for Rover, which now has a new owner focused on the lawn care market," Mr Crowley said.
"GWA shareholders will also benefit with the additional funds being available to focus on our core building fixtures and fittings businesses."
MILWAUKEE -- February 13 -- Evidence of this winter's fury: The phones won't stop ringing at Ariens Co. in Brillion and Briggs & Stratton Corp. in Milwaukee.
Ariens and Briggs make snow throwers. And with history-making blizzards blanketing the East Coast while the Midwest coped with its own round of storms, the companies' customer-service centers have handled thousands of calls.
Many have come from customers who can't get their snow throwers started. With cell phone in gloved hand, they'll stand next to the balky machine and hope that an Ariens or Briggs agent can help them get it going.
"You can just hear the frustration in the caller's voice. They want us to wave a magic wand that will fix their machine over the phone," said David Miller, Ariens product support team leader.
And when the engine roars to life? "There's usually a loud cheer," said Mary Johns, customer service manager.
Overall, February's blizzards have been a blessing for Ariens and Briggs & Stratton, which is the world's largest manufacturer of small gasoline engines.
Snow throwers are made in the summer and fall, based on what manufacturers and dealers expect to sell.
In 2009, the industry produced 779,640 units, up 25% from 2008 and up 42% from 2007.
That's big business for Wisconsin manufacturers that sell snow throwers globally under brands including Ariens, Brute, John Deere, Simplicity and Snapper.
Early winter storms triggered the sales increases, said Kris Kiser, executive director of the Outdoor Power Equipment Institute, a trade association based in Arlington, Va.
Despite the recession, "this is largely a weather-driven item," Kiser said, with most sales in the first two months of winter.
By February, the companies have geared up to produce garden tractors and other outdoor power equipment for the spring and summer.
But with some help from a long-range weather forecasting service, Ariens had placed its bets on a February storm for the East Coast. The company was still making snow throwers, in limited quantities, last week.
Briggs kept its snow thrower assembly lines running through the end of December, about a month longer than usual.
The company's customer-service center, based in Milwaukee, handled double the normal number of calls last week.
It has between 35 and 60 people on staff, depending on call volumes driven by big storms.
"People around here accuse me of being an amateur meteorologist," said Todd Teske, Briggs president and chief executive officer. "We plan for these kinds of things. Once you start changing production lines over to lawn and garden products, it becomes very disruptive to reconfigure everything back to snow throwers."
Normally, storms that come later in the winter don't provide much of a sales boost because consumers think the season is mostly over.
In the Northeast, however, consumers digging out from back-to-back blizzards have swamped some dealers.
"We have people standing in line up the wazoo," said a salesman at Laurel Lawnmower in Chews Landing, N.J.
Inventory levels are dropping, which could mean increased production for next season, according to Briggs.
At the same time, some people are hesitant to buy new snow throwers when they could save money by fixing up their older ones.
"We are seeing repairs that we have never seen before. And there are a lot of do-it-yourselfers out there," said Joe Medinger Jr., co-owner of J.H. Medinger Co., a West Allis outdoor equipment dealer in business since 1942.
Ariens still has parts for snow throwers it made in the 1960s. It's not unusual for the company to get calls from consumers saying their machine has been handed down from one generation to the next, along with garden tractors from the 1940s.
The Ariens customer service center, staffed by 10 people, handled nearly 1,000 calls last Tuesday - about triple the normal volume.
It can be hard on customer service reps as they deal with anxious and sometimes short-tempered people.
"The strain has showed on a few folks," Miller said. "Your hat is constantly on a swivel. You don't know where the next call is coming from, and sometimes you can't solve their problem. At some point you have to refer someone to a dealership for service, and that's the last thing they want to hear."
It also can be difficult for the customer-service reps to troubleshoot a snow thrower or garden tractor made before they were born.
"You have product manuals scattered the entire width of your desk," Miller said.
To deal with the avalanche of calls and e-mails, Ariens has pulled people from their jobs in the factory to answer customers' questions.
A long technical support call can last more than 20 minutes, although typically calls are wrapped up in about three minutes.
The shortest can last less than 30 seconds to solve a simple problem.
Miller emphasizes that the Ariens customer service reps do feel your pain. But if a call gets ugly, they won't tolerate abusive language.
"If someone is doing that, we give them fair warning," he said. "If it continues, we end the call."
People rarely call customer service just to praise a company and its products.
But sometimes they call from their cell phone, at a store, before they've even bought a snow thrower.
That type of question: "How do the hand warmers work?"
NEW YORK, Jan 25 - Private equity-backed generator company Generac Holdings Inc raised the maximum size of its initial public offering 42.6 percent to $427.7 million on Monday.
The Wisconsin-based company had filed to raise up to $300 million in October. It said that it still plans to use proceeds from the IPO to pay down debt and for general corporate purposes.
The company, which makes generators fueled by natural gas, liquid propane, gasoline, and diesel, was bought by a group led by private equity firm CCMP Capital LLC in 2006. It sells generators to consumers as well as industrial clients such as telecommunications firms.
Generac had sales of $434.3 million in the nine months ended Sept. 30, up 7.5 percent from the same period a year earlier. It reported a net profit of $31.1 million compared with a $40.2 million loss in the year-ago period.
The company narrowed its interest expense loss 34.1 percent to $53.7 million and nearly tripled its gain on extinguishment of debt.
But Generac said in the prospectus with the U.S. Securities and Exchange Commission that its business is sensitive to "unpredictable major power-outage events" such as storms.
The company plans to list on the New York Stock Exchange under the symbol "GNRC."
Underwriters are being led by JP Morgan and Goldman Sachs Co.
MUNNSVILLE — The key for a business to survive in today’s trying economic times is everyone working together, said Phil Wenzel, president and chief operating officer of the Briggs and Stratton Power Products Group-owned Ferris Industries.
Wenzel said he is proud of the way the some 300 Munnsville employees have responded to the challenges of the recession.
“Our workforce here is just great,” he said. “We all have had to tighten our belts a little bit and be a little sharper, but I think they have really come together to help out. Our people here are very practical, and they‘ve all rolled up their sleeves to get the job done.”
While industry-wide commercial mower sales are down an average of 33 percent two years in a row, sales of their product was only down 15 percent, Wenzel said. The purchase by Briggs and Stratton certainly has helped them weather the trying economically times, he explained. It gives them better buying power since they can place orders as part of the group, and when Briggs and Stratton closed a factory in Wisconsin, they sent the production of their high-end lawn tractors to Munnsville.
“We’ve been through a lot over the years and we would have survived this, but under Briggs and Stratton we’ve not just survived but been able to thrive,” Wenzel said.
The business started in 1909 as businessman Jesse Ferris and milking machine inventor William Uebler began the Uebler Milking machine Company. Unfortunately, as a third generation of the Ferris family was running the company by the mid-1980s, their small dairy farm customer base was dwindling along with profits.
Dave Ferris saw another company’s lawn mower and decided they could build one even better, so in 1986 they debuted their first Ferris mower at a trade show in New York City -- and the rest is history. In 1987 they introduced the first-ever hydrostatically driven walk-behind mower, using familiar technology from their feeding machines. It revolutionized a market that until then had seen only belt-driven models and earned Ferris the Innovation Award at Expo ‘89.
In 1998 Ferris again made history with their independent suspension system, riding mower technology that would now cushion the rider from bumps and jolts. This earned them the OEMmie Award for Innovative Engineering Solutions. Also that year, Ferris moved from Vernon to their current location at the old Stockbridge Valley Central School on Main Street in Munnsville.
“That was absolutely a milestone in our history,” Wenzel said of the move. “Without that, we were struggling to get to the next level. We looked around at a lot of manufacturing sites around the area but brick and mortar doesn’t make the company. It’s the people, and this was the best location for our people.”
Simplicity Manufacturing bought Ferris in 1999, and within six months of the purchase their sales increased by 40 percent. An additional 50,000 square feet of assembly area was added to the facility in 2003, and Briggs and Stratton Power Products Group bought Simplicity -- along with Ferris and its other subsidiaries -- in 2004. That sale brought another addition of 10,000 square feet to the Munnsville location.
“One of the key things Briggs and Stratton has done is to recognize that we have a unique culture here that serves the business very well,“ Wenzel said. “They have let us keep as much of that as possible and I think that is a credit to their management for letting us do it.”
There’s a lot going on to reach out to new dealers, said Bill Shea, the vice-president of commercial sales.
“It’s not easy out there, but as long as our competition is selling stuff we’re going to sell more,” Shea promised. They are expanding their work with current dealers, as well as looking into areas where their products haven’t seen much of a presence before like Florida and Texas, he said.
Their major selling points are the unique independent suspension, complete product line, best sales support in the industry and the best quality product available, Shea said.
Power equipment built in Munnsville is now available all over the country and beyond, and the Ferris brand is sold locally at White’s Farm Supply’s three locations in Canastota, Waterville, and Lowville, and at Clinton Tractor and Implement Company.
Art White recalled the beginning of his company’s longtime work with the Ferris family, dating back to even before their was a Ferris Industries. One day in the mid-1980s he sat with Jeff Ferris -- then taking orders Uebler Milking Machine Company equipment -- and Scag mower representative Roy “Dusty” Dust at lunch discussing the possibility for them to start building mowers to provide more work in their winter downtime. “Dusty” jumped right on it, White said, and White’s Farm Supply is now their oldest dealer and also was the largest in the state and fifth in the nation of Ferris mowers.
“The inspiration was just a thought, as we were talking after the orders were done and we were finishing our lunch I’d asked Jeff what they were building at the time which was about this time of year,” White said. “Jeff responded that they had laid off their staff as this was their slow time. I stated that they should be building mowers like what Dusty was selling as all the equipment they already have to work with for the steel they would need to build them with.”
White said it has been fun watching the company grow over the years.
“The Ferris line is one of the top manufacturers in the world noted for quality components and innovative design. They pioneered the independent suspension design critical to high speed mowing on lawns with a smooth ride for less operator fatigue as well as less wear and tear on the machine from the smoother ride -- a big plus all the way around. White’s takes pride in the lines they represent. Over the 60-plus years of watching trends and different manufacturers we take great pride ourselves in knowing that we only carry the best built as well as value lines for our customers. Ferris mowers are a perfect example of the effort that we work closely to the companies that we carry,” he said.
White said often they deal with only a voice on a telephone when communicating with their vendors, but with the proximity of the Munnsville location means they are neighbors as well as business associates. Each of the White’s Farm Supply location offers a full line of their products, and the White’s sales people regularly attend training and have used many of the products to have their own first-hand experience.
Besides the commitment to quality seen in the Munnsville-built products, another main selling point is the fact that they are locally made, White said.
“Many will come in to buy the Ferris Mowers just because they are built here,” he said. “We often find when talking that many people know someone that works there, or often it’s a relative. We also find people coming in with someone that does work there to help them with their choices. It is so rewarding knowing what White’s has done with the Ferris company and to know that it is putting people to work and helping to support the manufacturing base of this great area. Central New York has a lot to be proud of and you can see it with this fine quality product being built here. You can see the pride in the faces of the employees when we are at the plant; we can only hope that the next 25 years of growth will be as good as the first.”
Joshua Collins is no Jim Osterman. He’ll be the first one to tell you.
The Harvard-bred and Wall Street-trained Collins took the helm as CEO of Portland’s Blount International Inc. last month, replacing the retiring Osterman, a man who spent half a century with the company that revolutionized the manufacturing of sawchain.
Collins, 44, a five-year Blount board member, says he cannot replicate Osterman’s legacy. But he was hired for a different reason, and one that ties to his experience in the deal-making world of investment banking.
“I was put in this position by the board to grow the business,” he said.
Collins’s strategy is part organic growth and part growth-by-acquisition as he hunts for companies to complement Blount’s smaller business units.
Doing so will build on the legacy of a company that dominates its segment of the outdoor products world.
Blount International Inc.’s Portland roots date back to 1946, when Joe Cox developed a cutting chain technology after watching how timber beetle larva chewed through wood fiber. Cox’s company, Oregon Chipper Chain, evolved into the Oregon brand of sawchain, Blount’s signature product line.
Collins’ ties to the company are far more recent.
He is a Spokane, Wash., native, whose resume is draped in camouflage, ivy and the pin-striped suits of Wall Street.
After graduating from the University of Pennsylvania in 1987, he became a Marine Corps. infantryman and served in the Persian Gulf War. He later entered Harvard Business School, where he graduated with an MBA in 1995.
Collins joined the once-vaunted Lehman Bros. Inc. in 1996 where he was principal and managing partner of Lehman Bros. Merchant Banking Inc., the firm’s private equity arm.
While there, Collins took the lead in one of the private equity group’s biggest deals: the 1999 acquisition of Blount, then based in Montgomery, Ala., in a $1.35 billion deal that took the company private.
At the time, Blount operated three primary businesses: the Oregon brand sawchain and guide bar business, an ammunition production business, and an automated forestry division that made timber harvesting equipment and tractors.
“The Oregon brand business was what was attractive,” Collins said.
With Lehman Bros. in control, the company shifted strategy to focus largely on the sawchain business.
Over time the company sold off the other divisions — the ammunition business went to Minneapolis-based Alliant Techsystems in 2001 for $250 million, while Caterpillar Inc. bought the automated forestry business in 2007 for $77.3 million.
In 2002, Blount relocated from Montgomery to Portland, the home of the Oregon brand led by Osterman, who took over as CEO.
Lehman maintained a controlling stake in the company until taking it public again in 2004.
Collins remained tied to the company when he was elected to the board in 2004 to represent shareholders.
He left Lehman in January 2008 — nine months before the company filed the biggest bankruptcy in U.S. history — and co-founded Collins Wilmott & Co. LLC, a New York private equity firm.
But his aspirations weren’t necessarily tied to Wall Street.
“What I really wanted to do was be involved with running an operating company,” he said.
He takes the helm at a time when the company’s annual sales, to be released March 9, are projected to fall 16 percent to $502 million. Operating income is expected to fall 36 percent to around $56 million.
Collins believes there are signs of growth in the market, which has been battered by the housing crunch.
The company was able to hold its margins, which Collins called “incredible” in this economy, while the second half of the year marked a significant improvement over the first half.
“The question has become, how much of that positive trend is inventory restocking versus end-use sell-through,” he said. “We still don’t know.”
Perhaps a bigger question is how a company grows when it already dominates a market.
The company’s biggest competition comes from Stihl Group Inc., the $3 billion German maker of chain saws, and low-cost Chinese manufacturers.
Even so, Blount holds as much as 65 percent of the global market for sawchain and more than half of the market for chainsaw guide bars, said Mark Rupe, an analyst with Longbow Research in Independence, Ohio.
“The question is, how big can they become in a market that’s not growing much more than (gross domestic product),” Rupe said. “Their next biggest competitor is a massive German company that’s not going to be easy to take share from.”
The wild card, Rupe said, is Blount’s decision to bring in Collins, “a guy with private equity background and a growth bent.”
Acquisitions will play a key part in Collins’ strategy.
Blount isn’t going to buy another sawchain business, Collins said, but it will consider deals that supplement its smaller businesses, such as its segment that makes products like diamond-tipped chainsaws for the construction industry.
There’s also amble growth opportunities in the company’s $50 million outdoor equipment segment, which sells more than 12,000 products — like plastic gas cans and weedwhacker string — into the forestry and lawn and garden markets.
Collins estimates that business, with around a 5 percent global market share, could double to $100 million in the next three to five years.
Meanwhile, Collins said its principal market should grow between 5 percent and 7 percent annually.
To bolster that growth, the company must continue its legacy of innovating in its core sawchain segment.
Blount this year will launch what it calls the PowerSharp system, a new product line of sawchain and portable, do-it-yourself sharpeners that allow chainsaw users to quickly sharpen blades in the field.
“We’re innovating continually and know as much or more about sawchain than anybody else,” Collins said.
That expertise is largely attributable to a work force in which the average tenure is 17 years, and decades of consistent leadership.
“Really, the leadership up to this point has been a big feather in their cap in terms of placing the company in the position it’s in,” said Dan Shell, managing editor of Montgomery, Ala.-based Power Equipment Trade magazine.
“It will be real interesting to see how that plays out in the future.”
