Tuesday, June 26, 2012

Midwest Dry Spell Threatens to Intensify


June 24 -- A year after enduring massive floods, much of the Midwest faces a drought expanding in size and intensity, damaging crops and raising concerns about the threat of fire from fireworks as July 4 approaches.

Large sections of Illinois, Indiana, Missouri and Kansas face drought conditions after a mild winter, little spring rain and recent scorching temperatures. The National Weather Service predicts drought conditions will persist or even intensify over the next three months in much of the lower Midwest.

Prices for crops have surged recently on concerns the dry weather will lead to a lower harvests. Corn prices for the coming crop hit their highest level since March, while soybean prices climbed to a nine-month high at the Chicago Board of Trade.

Rising commodity prices can translate into higher food costs, especially as producers of beef, pork and chicken look to pass on higher animal-feed costs.

The summer months tend to be a dry period for the central U.S., limiting the chances for rain to replenish parched soil.

"Going into that dry period already dry is not looking good," said Jim Keeney, weather program manager for the National Weather Service in Kansas City.

Swaths of Texas and the western U.S. have faced drought conditions for much of the year, including parts of Colorado where wildfires continue to burn. But drought conditions only recently have built in the Midwest—a sharp change from a year ago when heavy rains and swollen rivers led to historic flooding.

Jeff Scates, a farmer in Southern Illinois, said about 75% of his family's farm was underwater last spring, and he didn't finish planting his corn crop until early June. This year, he got his crop into the ground by late April, but dry conditions are now causing damage and reducing the number bushels his fields will produce."I don't remember anytime when it was this dry, this early," the 42-year-old farmer said.

Meteorologists say the dry conditions in the Midwest started with a lack of snow, which usually replenishes soil with moisture.

The spring brought below-average rainfalls in states such as Illinois and Indiana, and the warmest average temperatures in the Midwest for the first five months of the year on record, according to the Midwestern Regional Climate Center.

Data from the National Drought Mitigation Center shows rainfall in the southern Illinois city of Carbondale totaled 7.5 inches from the start of March to last week, down from 30.3 inches last year and 16.8 inches in a normal year. In northern Ohio, Akron is similarly dry, with rainfall of 8.2 inches compared with 20 inches a year ago and 12.9 inches in a normal year.

The dry weather is raising worries about fire as dry conditions fueled recent grassland blazes in rural Nebraska and other parts of the Midwest. July 4 fireworks displays present an additional threat.In Indiana, fire officials are cautioning against shooting off fireworks, with some counties banning their use by residents.

In LaPorte County, Ind., nestled along Lake Michigan southeast of Chicago, the emergency management department has been getting a steady stream of calls from people asking whether fireworks shows will be canceled. While the county is telling residents not to set off their own fireworks, community displays are still on, said Fran Tibbot, the county's emergency management director.

"Hopefully we will get some rain," she said.

Not all of the Midwest is dry. Duluth, Minn., was inundated last week by a record 7.2 inches of rainfall in about 24 hours. Rising water damaged hundreds of homes and caused about $100 million in infrastructure damage alone, according to city officials. Miles of roadways were torn up, bridges and rail lines were washed away and the city zoo is a mess.

The city's port operation—based largely on shipments of taconite for the steel industry—has been severely curtailed. "Railcars can't get to ships," said Amy Norris, 59, a public information coordinatorfor the city.

Northern states including Minnesota, Wisconsin and North Dakota are closer to normal rainfall levels as a high pressure system over the middle of the country pushed wet weather northward during the last month. But they are expected to be dry this week, while southern areas such as Kansas City, Mo. will face intense heat, said Rick Hluchan, a National Weather Service meteorologist in Duluth.

In Colorado, meanwhile, wildfires threatened some of the state's most popular summer tourist destinations over the weekend, demolishing nearly two dozen homes near Rocky Mountain National Park and emptying hotels and campgrounds, according to the Associated Press. A wildfire near Colorado Springs prompted the evacuations of more than 11,000 residents, the AP reported.

Tropical Storm Debby hunkered down in the central Gulf of Mexico on Sunday, forcing oil and gas companies to cut production while forecasters debated which way the system would go next—west toward Texas or east into Florida.

Meanwhile, Tropical Storm Debby hunkered down in the central Gulf of Mexico on Sunday, forcing oil and gas companies to cut production while forecasters debated which way the system would go next—west toward Texas or east into Florida.

Mark Peters      www.wsj.com

Friday, June 22, 2012

OPEI Says EPA Decision Puts Consumers and Equipment at Risk


Alexandria, Va. – June 18 — The Outdoor Power Equipment Institute issues a warning today that the EPA’s ruling providing their approval of the sale of 15 percent ethanol (E15) into the U.S. consumer marketplace for automobiles made since 2001, is dangerous. The government’s test results that show E15 is harmful to outdoor power equipment, boats and marine engines and other non-road engine products. The fuel used for automobiles and other engine products would have to be divided, substantially increasing the risk for misfueling, significant engine damage and consumer hazard.

“For the first time in American history, fuel used for some automobiles may no longer safe for any non-road products. It may, in fact, destroy or damage generators, chain saws, utility vehicles, lawn mowers, boats and marine engines, snowmobiles, motorcycles, ATVs, and more,” says Kris Kiser, President and CEO of the Outdoor Power Equipment Institute, one of the industry groups who have been sending warnings to the federal government about E15.

In September 2011, members of the Engine Products Group (OPEI, National Marine Manufacturers Association, Alliance of Automobile Manufacturers and Global Automakers) filed a formal legal challenge to EPA’s E15 partial waiver decision.  The EPG asked the DC Circuit Court of Appeals to reverse the E15 waiver decision. The decision on this matter is expected to be issued at any time by the court.

Said OPEI’s Kiser, “EPA purports to educate tens of millions of Americans using hundreds of millions of engine products, asserting it will educate these users with a 3 inch by 3 inch pump label. It’s frighteningly inadequate.”

Many times OPEI has pointed out that the EPA’s prior experience with the introduction of new fuels shows that labeling alone is insufficient to prevent misfueling. As the EPA led the transition to unleaded fuels, the Agency reported a misfueling rate of nearly 15 percent almost ten years after the introduction of unleaded gasoline, and even with a physical barrier at the pumps.

The Outdoor Power Equipment Institute (OPEI) is an international trade association representing more than 80 engine and equipment manufacturers worldwide in the utility, forestry, landscape, and lawn and garden industry. OPEI is a recognized Standards Development Organization for the American National Standards Institute (ANSI) and active internationally through the International Standards Organization (ISO) in the development of safety standards. For more information, visit www.OPEI.org.

Wednesday, June 20, 2012

Fire Temporarily Halts Work at Husqvarna Orangeburg Plant


ORANGEBURG, SC -- June 20 --  A Tuesday morning fire at Orangeburg’s Husqvarna plant cut operations short for the day, with employees evacuating the building.

The fire occurred around 11:01 a.m. in the plant’s powder-coating area, where lawn mowers are painted.

“The incident was contained to a small area of the plant and employees were safely evacuated immediately,” Husqvarna Marketing Communications Manager Evin Ellis said. “No injuries or casualties have been reported.

“The cause of the fire is still under investigation.”

Husqvarna is Orangeburg County’s largest manufacturer. It employs an average of 1,500 making riding lawn tractors, tillers and snow throwers. At its height, the company typically employs upward of 2,300.

After the fire, some employees were told to leave and report back to work the next day.

Employees standing outside during the evacuation asked to remain anonymous, saying they did not officially know what had transpired.

“All we heard was ‘boom, boom,’” one employee said. He can’t remember a similar incident in his seven years at the plant.

Orangeburg Department of Public Safety Capt. Mike Adams said the fire began in one of the plant’s three powder-coating machines.

“When officers got to the rear of the building, they found heavy smoke and fire at which time they made an interior attack from the east and west side of the building,” Adams said.

Adams said the fire was confined to one machine, which is about 12 feet high and 40 feet long.

"There was extensive damage to the machine and some damage to the roof,” he said. “The fire is not suspicious.”

The fire was put out within 40 minutes.

The fire caused about $50,000 in damage to the machine and $50,000 to the roof, Adams said.

The Jamison Fire Department also responded to the fire.

ARI Network Services Announces 3rd Quarter 2012 Financial Results


MILWAUKEE, Wis., June 14 -- ARI Network Services, a leader in creating, marketing, and supporting software, SaaS, and DaaS solutions that connect consumers, dealers, distributors, and manufacturers in selected vertical markets, reported financial results today for the third quarter of fiscal year 2012 ended April 30, 2012.

Highlights for the third quarter of fiscal 2012 included:
  • Total revenue for the third quarter of fiscal 2012 increased 6.7% to $5.7 million compared to $5.4 million in the third quarter of fiscal 2011.
  • Recurring revenue for the quarter increased 9.8% to $4.8 million, or 83.7% of total revenue, from $4.4 million, or 81.3% of total revenue, in the third quarter of fiscal 2011; compared to the second quarter of fiscal 2012, recurring revenue increased 2.7%, representing the seventh straight quarter of growth.
  •  During the quarter, the Company invested $851,000 in strategic research and technology investments to support future new product introductions and revenue growth.
  • The Company paid down $398,000 of debt in the third quarter.  In fiscal 2012 the Company reduced its total debt from $5.6 million at July 31, 2011 to $4.5 million at April 30, 2012.
  • In the third quarter, the Company added 103 new customers and 2 new reseller agreements;
  • For the nine-month period ended April 30, 2012, churn (the measure of customers that do not renew) improved 15% compared to the end of the third fiscal quarter of 2011.
Third quarter 2012 Financials

For the third fiscal quarter ended April 30, 2012, ARI reported revenue of $5.7 million versus $5.4 million in the comparable quarter of fiscal 2011; an increase of 6.7%. Total operating expenses in the third quarter were $4.0 million, up 11.8%, compared to $3.6 million in the fiscal 2011 third quarter. This increase resulted from investments made in product research and development, the Company's internal technology infrastructure and the roll out of the Company's fiscal 2012 investor relations initiative.  As a result of these investments, operating income for the third quarter was $327,000 compared to $675,000 in the third quarter of 2011.

The company reported net income of $210,000, or $0.03 per share, in the third quarter of 2012, compared to net income of $541,000, or $0.07 per share in the third quarter of 2011.  The decline was largely due to a $433,000 gain on the disposition of a component of the business recognized in the third quarter of fiscal 2011 that did not recur in fiscal 2012. Recurring revenue for the quarter was $4.8 million, or 83.7% of total revenue, versus $4.4 million, or 82.8% of total revenue, for the third quarter last year.

EBITDA for the third quarter was $1.1 million, comparable to EBITDA of $1.9 million in the third quarter last year.

Management Discussion

Roy W. Olivier, president and chief executive officer of ARI, commented, "We are pleased with the results of the quarter in regards to top line revenue growth. Our fiscal 2012 recurring revenue has increased to 84.0% of total revenue, compared to 81.4% last year, and we reduced our rate of churn by 15% over this same period.  These improvements resulted in an increase in recurring revenue of nearly 8%. We have signed on two new resellers, added over 100 new customers and signed a deal with a national retailer to use our catalog content in their 1,200 service centers, all of which will contribute to recurring revenue growth."

Mr. Olivier continued, "We are very focused on the execution of our revenue growth strategy and are making strategic investments in technology to achieve this growth.  We have expanded our product research and development resources to focus solely on providing our customers with easy access to the innovative technology they need to grow their businesses.  We continue to integrate several of our core product offerings and have updated our lead management tools to allow us to electronically distribute them to a large number of potential new users in an extremely cost efficient manner, which is a critical driver of revenue growth. "

Darin Janecek, chief financial officer of ARI, commented, "We had a year over year decline in operating income for the quarter of 27.7% or $381,000 due to planned investments in our products, technology infrastructure and our investor relations program.  These investments are critical components of executing on our growth strategy and increasing shareholder value. Since the beginning of Fiscal 2012, we have seen substantial increases in both our average daily trading volume and our stock price during this time. Several of these costs are one-time and will not continue into the fourth quarter."

About ARI

ARI Network Services, Inc. ("ARI" or the "Company") is a leader in creating, marketing, and supporting software, software as a service ("SaaS") and data as a service ("DaaS") solutions that enhance revenue and reduce costs for our customers. Our innovative, technology-enabled solutions connect the community of consumers, dealers, distributors, and manufacturers to help our customers efficiently service and sell more whole goods, parts, garments, and accessories worldwide in selected vertical markets that include power sports, outdoor power equipment, marine, and white goods.  We estimate that approximately 18,000 equipment dealers, 125 manufacturers, and 150 distributors worldwide leverage our technology to drive revenue, gain efficiencies and increase customer satisfaction.