Deere's Horicon Plant Supplies Hunters and the U.S. Army

Horicon – April 24 -- In a factory that made horse-drawn farming equipment in the 1800s, John Deere Corp. has a modern assembly line that employs more than 1,000 people making riding lawn mowers and utility vehicles.

The latter, especially, have grown in popularity as outdoor enthusiasts want something that can carry more passengers and cargo than three-wheel all-terrain vehicles.

In a year when much of the lawn-and-garden industry is hurting from a slow start to spring and a sputtering global economy, John Deere is glad to build the popular utility vehicles, which have bench seats, fully enclosed cabs, a heater, and work equipment such as a snowplow.

Originally used for farm work, the John Deere Gators are used for hunting and general recreation. For thrill seekers, some of the little machines can reach speeds topping 40 mph.

About 40% of the Horicon factory's production is now for Gators, compared with none before 2009 when the factory focused on lawn-and-garden equipment.

Deere closed a plant in Canada and moved the Gator production to Wisconsin and Mexico.

The Horicon plant is Dodge County's largest manufacturer, with 1,100 hourly and 300 salaried employees, according to county officials.

"We would probably have a little higher employment level if lawn-and-garden tractor sales weren't so sluggish" this spring, said Steve Johnson, John Deere Horicon Works manager.

"The utility vehicle business is more year-round and has higher sales in the fall for hunting. It helps us level out our workforce and have employees concentrating on lawn equipment in the spring. It's a very good mix for the factory," he added.

The U.S. military ordered Gators for use in the wars in Iraq and Afghanistan, where the small vehicles were dropped out of helicopters to reach remote areas.

The six-wheeled military utility vehicles, called M-Gators, have been used to haul supplies and transport injured soldiers. The military has experimented with a robotic version that can send video, sounds and sensor readings from hostile areas without putting soldiers at risk.

"There's also a pure recreational market for utility vehicles that's starting to mature. They're faster, high-performance machines," Johnson said.

John Deere has spent millions of dollars upgrading its Horicon factory that produced the company's first lawn-and-garden tractor in 1963 and has undergone a high-tech makeover that's helped save jobs.

The credit goes to the plant's employees, Johnson said.

"They give us great suggestions on how to improve quality levels, and how to move out of their way so they can be more efficient and productive. When we do that, we ultimately reduce our costs. It allows us to stay competitive with Mexico and China," he added.

For decades, the plant manufactured farm equipment. Then it morphed into riding lawn tractors, new types of riding mowers, and utility vehicles.

The latest John Deere lawn tractor, the X700 series, has a mowing deck that can be attached and removed while the operator remains in the seat.

Product research and development and testing are done in Horicon.

"Over the years, this plant has reinvented itself multiple times in order to remain a viable business," Johnson said.

Employees commute from about a 50-mile radius, including Milwaukee County, and shop employees are represented by the International Association of Machinists and Aerospace Workers.

The plant has a beneficial effect on smaller companies that supply parts and services.

"John Deere has quite a reach in this area. I have dealt with many firms that do support work for them," said Trent Campbell, executive director of the Beaver Dam Area Development Corp.

"They are a large entity. I couldn't imagine Horicon without that plant thriving," Campbell said.

Rick Barrett     www.jsonline.com      

ARI Named One of Wisconsin's Fastest-Growing Public Companies

MILWAUKEE, April 25 -- 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, announced today that it was recognized in The Business Journal's Top 25 List as one of Wisconsin's fastest-growing public companies.

"It's an honor to be included in the Top 25 List this year," said Roy W. Olivier, CEO and President of ARI. "Despite a sluggish economy in the vertical markets we serve, we have been able to successfully execute on our strategic growth objectives. We have a lot of momentum that sets the stage for sustained, profitable growth and I'm excited about our future," added Olivier. "The progress we make every day is a direct result of our employees, customers and loyal shareholders hard work and support."  According to Olivier, ARI has been on the Top 25 List in four out of the last five years.

The Top 25 List is published annually by The Business Journal . All public companies headquartered in Wisconsin with a stock price of $1 or more between February and April 2012, and positive revenue growth from fiscal 2011 to 2012 were considered for the list.  The information on each company is gathered by The Business Journal from annual reports and financial statements.

ARI Network Services, Inc. ("ARI") creates award-winning software-as-a-service ("SaaS") and data-as-a-service ("DaaS") solutions that help equipment manufacturers, distributors and dealers in selected vertical markets Sell More Stuff!™ – online and in-store. Our innovative products are powered by a proprietary library of enriched original equipment and aftermarket content that spans more than 10.5 million active part and accessory SKUs, 469,000 models and $1.7 billion in retail product value.  We remove the complexity of selling and servicing new and used inventory, parts, garments, and accessories ("PG&A") for customers in automotive tire and wheel, powersports, outdoor power equipment, marine, RV and white goods industries. More than 22,000 equipment dealers, 195 distributors and 140 manufacturers worldwide leverage our web and eCatalog platforms to Sell More Stuff!™.

Schiller Grounds Care's Classen Manufacturing Plant to Close in Norfolk, NE

April 24 -- Classen Manufacturing, a Norfolk, NE company that began in Norfolk 40 years ago, is closing its doors.

The company at 1401 Logan St. in south Norfolk manufactured commercial turf and lawn care products sold worldwide.

Larry Classen, who was president of the Norfolk operations, said the final day of production was Tuesday.

Classen said the closure came suddenly and without warning from Schiller Grounds Care of Southhampton, Pa., which owns Classen Manufacturing. Schiller Grounds Care also has plants in Johnson Creek, Wis., and Southampton, Pa.

Classen said he isn’t exactly sure why the company decided to close the Norfolk plant, which was started in 1973 by his parents, Tom and Sylvia Classen.

“It’s not the way we wanted to celebrate 40 years,” he said Wednesday morning.

After its start as a repair facility, Classen Manufacturing went on to manufacture wrought iron products, realty sign posts, automatic can crushers and other miscellaneous items in the 1970s and 1980s.

In 2004, the company was sold to Schiller-Pfeiffer, Inc. The company now goes by the name Schiller Grounds Care.

Larry Classen said the Norfolk plant had 28 employees, including other members of the Classen family. The only employee who still has a job is Matt Classen, Larry’s son, who is working in Southampton, Pa., he said.

Classen said he still owns the building in Norfolk and will be looking for a new manufacturer to locate in it.

Travis Schwartzer, who was one of the Classen employees, said workers were told about the closure Tuesday afternoon by Jim Beck.

“He said, ‘Stop your work. Put down your tools. Gather in the assembly area. I’ve got something to say,’ ” Schwartzer said.

Schwartzer said employees learned of the closure “a little past 3:30” p.m. Tuesday.

“I’m just shocked,” he said. “I can hardly believe it.”

In the past three weeks, employees had been working six days a week. Schwartzer said most of his work in recent weeks involved building blade shafts.

Some of the products the company made in recent weeks included aerators, power rakes and industrial lawn equipment, he said.

There’s a lot of good employees who are now out of work. Many of them are in their 40s and 50s and have families, he said.

Schwartzer said he isn’t sure what he will do. He just landed the job with Classen on March 11 and was happy with it because it meant he no longer had to work three part-time jobs.

“It just kills me,” he said. “It hurts. I didn’t think that just plain news could cause physical pain, but this does.”

Schwartzer said his fiance has a job that doesn’t pay much and he has an 18-month-old boy at home. He finally was able to get a job that provided health insurance and now isn’t sure what he will do.

Jerry Guenther       www.norfolkdailynews.com

Husqvarna Group Interim Report January - March 2013

Stockholm April 24, 2013

Hans Linnarson, President and CEO:

“Husqvarna’s first quarter results were impacted by unfavorable weather conditions and continued macroeconomic slowdown in Europe. Earnings were also negatively affected by the strong Swedish Krona which accounted for more than half of the decline in operating income, and reduced manufacturing utilization to meet the lower demand. Improvements in Americas and Construction were not enough to offset the downturn in Europe.

We are pleased with the results coming from operational improvements in our business area Americas. The effects of mix, channel management, price and manufacturing efficiencies all contributed to an improved development of operating income and margin in the first quarter.

The positive development for Construction continued, although it was mixed between the different regions. Operating income and margin improved over prior year, primarily due to a positive product mix impact.

We have a continued cautious outlook for demand in Europe, while the outlook for North America remains more positive. Late last year we announced actions to reduce cost and improve flexibility. The initiatives are on track and will gradually deliver savings.”

·         Net sales amounted to SEK 9,024m (9,811). Adjusted for exchange rate effects, net sales decreased -4%.

·         Operating income decreased to SEK 688m (930), which entirely relates to Europe & Asia/Pacific.

·         Changes in exchange rates negatively impacted operating income by SEK 135m year over year.

·         Operating cash flow improved to SEK -1,786m (-2,443).

·         Earnings per share decreased to SEK 0.81 (1.10).

·         Announcement of SEK 1bn investment in manufacturing of chainsaw chains and cylinders.

·         Kai Wärn was appointed new President and CEO as of July 1, 2013.

FIRST QUARTER

Net Sales

Net sales for the first quarter decreased by -8% to SEK 9,024m (9,811). Adjusted for exchange rate effects, net sales for the Group declined by -4%, for Europe & Asia/Pacific by -7%, for Americas by -2%, while sales for Construction were unchanged.

Operating Income

Operating income for the first quarter amounted to SEK 688m (930) and the corresponding operating margin amounted to 7.6% (9.5). Operating income increased for Americas and Construction, while it decreased for  Europe & Asia/Pacific.

Operating income, excluding changes in exchange rates, was negatively affected mainly by the lower sales volume, product mix and lower factory utilization levels. Price and material impacted operating income positively.

Changes in exchange rates had a total negative impact on operating income of SEK 135m compared to the first quarter 2012.

FINANCIAL ITEMS NET

Net financial items amounted to SEK -86m (-134) for the first quarter. The lower financial cost is explained mainly by lower interest rates. The average interest rate on borrowings at the end of the quarter was 3.6%

INCOME AFTER FINANCIAL ITEMS

Income after financial items decreased to SEK 602m (796) corresponding to a margin of 6.7% (8.1).

TAXES

Taxes amounted to SEK -135m (-163), corresponding to a tax rate of 22% (20) of income after financial items.

EARNINGS PER SHARE

Income for the quarter amounted to SEK 467m (633), corresponding to SEK 0.81 (1.10) per share.

OPERATING CASH FLOW

Operating cash flow for the quarter amounted to SEK -1,786m (-2,443). The improved operating cash flow was mainly related to changes in inventories and trade receivables.

Due to the seasonality of the Group’s operations, operating cash flow is normally negative in the first quarter.

FINANCIAL POSITION

Group equity as of March 31, 2013, excluding non-controlling interests, amounted to SEK 11,093m (11,261), corresponding to SEK 19.4 (19.7) per share. Group equity was negatively affected by exchange differences on translating foreign operations to SEK amounting to SEK -389m.

Net debt amounted to SEK 10,053m (10,733) as of March 31, 2013, of which liquid funds amounted to SEK 1,412m (1,434) and interest bearing debt amounted to SEK 11,465m (12,167), including pensions. The major currencies used for debt financing are SEK and USD. Net debt decreased by SEK -25m as a result of changes in exchange rates.

The net debt/equity ratio amounted to 0.90 (0.95) and the equity/assets ratio to 35% (34).

In addition to the amendment of IAS 19 “Employee benefits” which is shown on pages 12 and 13, Husqvarna Group has reclassified the net defined pension liability to interest-bearing financial liability and included the liabilities in the calculation of net debt.

On March 31, 2013, long-term loans including financial leases amounted to SEK 6,574m (6,883) and short term loans including financial leases to SEK 3,104m (3,708). Long-term loans consist of SEK 4,061m (3,158) in issued bonds, and bank loans and financial leases of SEK 2,513m (3,725). The bonds and bank loans mature in 2014 and onwards. The Group also has an unutilized SEK 6 bn syndicated revolving credit facility, with maturity in 2016.

PERFORMANCE BY BUSINESS AREA

EUROPE & ASIA/PACIFIC

Q1

Net sales for Europe & Asia/Pacific decreased by -11% in the first quarter 2013. Adjusted for exchange rate effects, net sales decreased by -7%.

Demand for lawn and garden products were negatively impacted by a late start of spring due to unusually cold weather in most European markets. Consumer demand remained weak as the macroeconomic uncertainty continued.

Due to the weak demand, the Group’s sales declined. The down-turn was related to all product categories, by sales channel it was mainly related to the retail channel.

Operating income amounted to SEK 555m (846) and the operating margin amounted to 13.4% (18.2).

Changes in exchange rates had a negative year-on-year effect of SEK 146m on operating income. Excluding impact from changes in exchange rates, the lower operating income was mainly related to the lower sales, negative product mix and lower utilization of factories.

AMERICAS

Q1

Net sales for Americas decreased by -5% in the first quarter 2013. Adjusted for exchange rate effects, net sales decreased by -2%.

Although supported by an improving economy, demand for lawn and garden equipment in North America slightly lagged 2012 levels in the first quarter, mainly because the early spring of prior year was not repeated.

The Group’s sales in Canada and Latin America increased, while sales in the U.S. were lower. Sales to the dealer channel increased in all regions.

Operating income amounted to SEK 137m (83) and the corresponding operating margin improved to 3.3% (1.9). The effects of channel management and mix, price and manufacturing efficiencies contributed to the positive result. Changes in exchange rates had a positive year-on-year effect of SEK 8m on operating income.

CONSTRUCTION

Net sales for Construction decreased by -4% in the first quarter 2013. Adjusted for exchange rate effects, sales were unchanged.

Total construction market activity during the first quarter 2013, compared with the first quarter prior year, was unchanged in North America, lower in Europe and higher in the rest of the world. The Group’s sales of construction products had a similar development.

Operating income increased to SEK 46m (39) and the operating margin improved to 6.5% (5.3). Changes in exchange rates had a positive year-on-year effect of SEK 3m on operating income. Operating income was also positively impacted mainly  by mix, as a result of new products with higher margins representing a larger share of total sales.

PARENT COMPANY

Net sales in Q1 2013 for the Parent Company, Husqvarna AB, amounted to SEK 3,217m (3,442), of which SEK 2,660m (2,836) referred to sales to Group companies and SEK 557m (606) to external customers.

Income after financial items amounted to SEK -60m (357). Income for the period was SEK -111m (222).

Investments in tangible and intangible assets amounted to SEK 92m (83). Cash and cash equivalents amounted to SEK 90m (87) at the end of the quarter. Undistributed earnings in the Parent Company amounted to SEK 17,308m (16,738).

ANNUAL GENERAL MEETING

The Annual General Meeting of Husqvarna AB (publ) was held on April 11, 2013, in Jönköping, Sweden. A dividend of SEK 1.50 (1.50) per share was resolved.

INVESTMENT IN CORE TECHNOLOGIES

Husqvarna Group has decided to invest around SEK 1bn during 2013 - 2015 in a new production facility for manufacturing of chainsaw chains in Huskvarna, Sweden, where the Group already manufactures professional chainsaws, brush cuttersand trimmers. The Group will also invest in expanded capacity for manufacturing of cylinders for two-stroke engines for chainsaws in the Group’s facilities in Nashville, U.S. and in Huskvarna, Sweden.

KAI WÄRN APPOINTED NEW PRESIDENT AND CEO AS OF JULY 1

The Board of Directors of Husqvarna AB has appointed Kai Wärn as President and CEO of Husqvarna Group effective as of July 1, 2013. Hans Linnarson, who was appointed President and CEO in 2011, will continue to work for the Group until he retires early 2014.

Kai Wärn was born in 1959 and is a graduate from the Royal Institute of Technology in Stockholm, Sweden.

Previous positions include President and CEO at Seco Tools AB, a leading global metal cutting tools company, at that time listed at NASDAQ OMX Nordic stock exchange and President of the Business Unit ABB Robotics Products within ABB Group. Most recently Kai has held the position as Operations Partner at the private equity firm IK Investment Partners.

Briggs and Stratton Reports Results for the 3rd Quarter and 1st Nine Months of Fiscal 2013

MILWAUKEE -- April 19 -- Briggs and Stratton Corporation today announced financial results for its third fiscal quarter and first nine months ended March 31, 2013.

Highlights:

Third quarter fiscal 2013 consolidated net sales were $637.3 million, or 11.5% lower than the third quarter of fiscal 2012.

Fiscal 2013 third quarter consolidated net income excluding restructuring charges was $43.9 million, or $5.6 million lower than the adjusted net income of $49.5 million in the third quarter of fiscal 2012.

The Company's restructuring program started in fiscal 2012 achieved pre-tax savings of $28.8 million during the first nine months of fiscal 2013.

The Company recorded pre-tax restructuring charges of $6.6 million ($5.4 million after tax or $0.11 per diluted share) during the third quarter of fiscal 2013.

"We continue to see soft demand across international markets for engines and products due to macroeconomic concerns weighing on the minds of consumers and unfavorable weather conditions particularly in Australasia.  Brazil continues to be a bright spot for growing our international products business as our Branco acquisition is performing as anticipated," commented Todd Teske, Chairman, President and Chief Executive Officer of Briggs and Stratton Corporation.

"Here in the U.S., the spring lawn and garden season has been delayed by at least a few weeks due to a prolonged cold and wet spring in many parts of the country. This is significantly different from last year when we had an unusually early start to spring with very warm weather across the country.  The drought that impacted our industry so significantly last season appears to be improving east of the Mississippi River which is encouraging for the upcoming season. Despite a later start to spring compared to last year, we are optimistic that the U.S. market will be in line with our anticipated growth projections of 4 to 6%."

Consolidated Results:

Consolidated net sales for the third quarter of fiscal 2013 were $637.3 million, a decrease of $82.8 million or 11.5% from the third quarter of fiscal 2012. Fiscal 2013 third quarter consolidated net income including restructuring charges was $38.5 million, or $0.78 per diluted share. The third quarter of fiscal 2012 consolidated net income including restructuring charges was $39.9 million, or $0.80 per diluted share.

Sales of engines and products to international regions decreased by approximately $37 million compared to last years' third quarter. The majority of the remaining decrease in sales in the quarter was due to our decision to no longer sell lawn and garden products to large mass retailers in the U.S.  

Included in consolidated net income for the third quarter of fiscal 2013 were pre-tax charges of $6.6 million ($5.4 million after tax or $0.11 per diluted share) related to previously announced restructuring actions. Included in consolidated net income for the third quarter of fiscal 2012 were pre-tax charges of $19.8 million ($9.6 million after tax or $0.19 per diluted share) also related to the restructuring actions. After considering the impact of the restructuring charges, the adjusted consolidated net income for the third quarter of fiscal 2013 was $43.9 million or $0.89 per diluted share, which was $5.6 million or $0.10 per diluted share lower compared to the third quarter fiscal 2012 adjusted consolidated net income of $49.5 million or $0.99 per diluted share.

For the first nine months of fiscal 2013, consolidated net sales were $1.385 billion, a decrease of $180.0 million or 11.5% when compared to the same period a year ago. Consolidated net income for the first nine months of fiscal 2013 was $21.4 million or $0.44 per diluted share. Consolidated net income for the first nine months of fiscal 2012 was $37.4 million or $0.74 per diluted share.

Included in consolidated net income for the first nine months of fiscal 2013 were pre-tax charges of $18.4 million ($13.0 million after tax or $0.27 per diluted share) related to the aforementioned restructuring actions. Included in consolidated net income for the first nine months of fiscal 2012 were pre-tax charges of $19.8 million ($9.6 million after tax or $0.19 per diluted share) also related to the restructuring actions.

After considering the impact of the restructuring charges, adjusted consolidated net income for the first nine months of fiscal 2013 was $34.4 million or $0.71 per diluted share, which was a decrease of $12.6 million or $0.22 per diluted share compared to the first nine months of fiscal 2012 adjusted consolidated net income of $47.0 million or $0.93 per diluted share.

Engines Segment

Engines Segment fiscal 2013 third quarter net sales were $451.9 million, which was $46.1 million or 9.3% lower than the third quarter of fiscal 2012. This decrease in net sales was driven by reduced shipments of engines used primarily on walk and ride equipment in European and North American markets as OEM customers manage inventory levels due to a later start to warmer spring weather. Net sales were also lower due to unfavorable foreign exchange of $5.4 million primarily due to a decrease in the value of the Euro in fiscal 2013. These decreases in net sales were partially offset by the timing of generator engine replenishment sales in the U.S. following the recent hurricane season.

The Engines Segment adjusted gross profit percentage for the third quarter of 2013 was 23.5%, which was 1.4% higher compared to the third quarter of fiscal 2012. The adjusted gross profit percentage was favorably impacted by 3.6% due to lower manufacturing costs, partially offset by 1.2% due to unfavorable foreign exchange and by 1% due to unfavorable absorption of fixed manufacturing costs as a result of a 4% reduction in engines built. The lower manufacturing costs resulted from $3.4 million of cost savings as a result of restructuring actions initiated in fiscal 2012, lower material costs, and start-up costs incurred in fiscal 2012 associated with launching our phase III emissions compliant engines.

The Engines Segment engineering, selling, general and administrative expenses were $43.9 million in the third quarter of fiscal 2013, a decrease of $1.3 million from the third quarter of fiscal 2012 primarily due to lower compensation costs of $2.5 million as a result of the previously announced global salaried employee reduction and reduced selling expenses, partially offset by $0.6 million of increased pension expense compared to the same period last year. 

Engines Segment net sales for the first nine months of fiscal 2013 were $890.6 million, which was $96.9 million or 9.8% lower than the same period a year ago. This decrease in net sales was primarily driven by reduced shipments of engines used on snow thrower equipment in the North American market as well as lower sales to OEM customers for the European and Australasian markets. European markets were off considerably given macroeconomic issues and unfavorable weather conditions.  Australasia markets were off due to a significant lack of rainfall in highly populated areas. In addition, sales were lower in fiscal 2013 due to an unfavorable mix of engines sold that reflected proportionately lower sales of large engines, and unfavorable foreign exchange of $9.7 million primarily related to the Euro.

The Engines Segment adjusted gross profit percentage for the first nine months of 2013 was 21.3%, which was 1.4% higher compared to the first nine months of fiscal 2012. The adjusted gross profit percentage was favorably impacted by 3.4% due to lower manufacturing costs, partially offset by 1% due to unfavorable foreign exchange and by 1% due to unfavorable absorption of fixed manufacturing costs as a result of a 5% reduction in engines built. The lower manufacturing costs resulted from $8.1 million of cost savings as a result of restructuring actions initiated in fiscal 2012, lower material costs, and start-up costs incurred in fiscal 2012 associated with launching our phase III emissions compliant engines.

The Engines Segment engineering, selling, general and administrative expenses were $130.0 million in the first nine months of fiscal 2013, or $4.7 million lower compared to the first nine months of fiscal 2012 primarily due to lower compensation costs of $7.4 million as a result of the previously announced reduction of 10% of the global salaried workforce and reduced selling costs in response to the softness in the global markets, partially offset by $2.7 million of increased pension expense compared to the same period last year.

Products Segment

Products Segment fiscal 2013 third quarter net sales were $231.5 million, a decrease of $49.7 million or 17.7% from the third quarter of fiscal 2012. The decrease in net sales was primarily related to our decision to exit the sale of lawn and garden equipment through national mass retailers.  In addition, sales of lawn and garden equipment and pressure washers decreased in North America from last year as a result of a later start to the spring selling season and decreased in international markets due to continued drought conditions in parts of Australasia. The net sales decrease was partially offset by net sales from the acquisition of Branco that were in line with expectations.  

The Products Segment adjusted gross profit percentage for the third quarter of 2013 was 12.0%, which was 1.2% lower than the adjusted gross profit percentage for the third quarter of fiscal 2012. The adjusted gross profit percentage decreased 3.4% due to unfavorable absorption associated with a 35% decrease in production in order to control inventory levels. This decrease was partially offset by a benefit of 1.7% due to cost savings of $4.0 million as a result of restructuring actions initiated in fiscal 2012.                                                                                                   

The Products Segment fiscal 2013 third quarter engineering, selling, general and administrative expenses were $26.8 million, a decrease of $1.7 million from the third quarter of fiscal 2012. The decrease was attributable to lower compensation costs of $0.7 million as a result of the previously announced reduction of 10% of the global salaried workforce, $0.7 million of lower bad debt expense, and reduced selling costs in response to the softness in the global markets.

Products Segment net sales for the first nine months of fiscal 2013 were $602.3 million, a decrease of $129.6 million or 17.7% from the same period a year ago. The decrease in net sales was primarily due to lower sales volumes of snow equipment due to significantly below average snowfall in North America and reduced sales of lawn and garden equipment resulting from prolonged drought conditions in the United States and Australasia. In addition, the decrease in net sales was impacted by our decision to exit the sale of lawn and garden equipment through national mass retailers. The decrease in net sales was partially offset by higher shipments of portable and standby generators in the North American market.

The Products Segment adjusted gross profit percentage for the first nine months of 2013 was 11.9%, which was 0.6% lower compared to the adjusted gross profit percentage of the first nine months of fiscal 2012. The adjusted gross profit percentage decreased 2.6% due to unfavorable absorption associated with a 43% decrease in production volume in order to control inventory levels.

This was partially offset by a 1.8% benefit due to cost savings of $11.1 million as a result of restructuring actions. We reduced production volumes in the first nine months of fiscal 2013 in order to manage inventory levels in response to a decline in near-term market demand. The McDonough, Georgia manufacturing facility was temporarily idled for four weeks in the second quarter of fiscal 2013 to reduce inventory levels in response to a decline in market demand for snow and lawn and garden products and to re-tool the plant for new products to be launched for the spring season.

The Products Segment engineering, selling, general and administrative expenses were $75.6 million in the first nine months of fiscal 2013, a decrease of $4.4 million from the first nine months of fiscal 2012. The decrease was attributable to lower compensation costs of $2.2 million as a result of the previously announced global salaried employee reduction and reduced selling expenses in response to the softness in the global markets.

Corporate Items:

Interest expense was lower compared to the prior year periods by $0.1 million for both the third quarter and first nine months of fiscal 2013.

The effective tax rate for the third quarter and the first nine months of fiscal 2013 was 27.6% and 27.5% respectively, compared to 20.4% and 13.4% for the same respective periods last year. The tax rate for the third quarter of fiscal 2013 is lower than the 35% statutory U.S. rate due to the reenactment of the U.S. federal research and development and other credits in the amount of $1.0 million and foreign tax credits in the amount of $0.5 million which were partially offset by additional taxes of $1.0 million due to non-deductible expenses related to the Ostrava, Czech Republic plant closing. 

The effective tax rate for the first nine months of fiscal 2013 was lower than the 35% statutory U.S. rate due to the aforementioned credits and non-deductible expenses and non-deductible acquisition costs increasing the tax expense by $0.5 million.  The effective rate for the third quarter of fiscal 2012 was lower as a result of recording a net benefit of $3.3 million related to Ostrava plant restructuring charges incurred during that quarter. The effective rate for the first nine months of fiscal 2012 was impacted by the aforementioned restructuring charges and a net benefit of $5.0 million related to the settlement of U.S. audits and the expiration of a non-U.S. statute of limitation period during fiscal 2012.

Financial Position:

Net debt at March 31, 2013 was $239.9 million (total debt of $262.5 million less $22.6 million of cash), or $17.7 million lower from the $257.6 million (total debt of $274.0 million less $16.4 million of cash) at April 1, 2012. Cash flows used in operating activities for the first nine months of fiscal 2013 were $73.8 million compared to $166.7 million in the first nine months of fiscal 2012. The improvement in operating cash flows was primarily related to lower working capital needs in the first nine months of fiscal 2013 associated with less of an increase in accounts receivable and inventory compared to the same period last year.

Restructuring:

The Company's execution of its previously announced restructuring actions remains largely on schedule. In the third quarter of fiscal 2013, the Company entered into an agreement to sell the Ostrava, Czech Republic manufacturing facility. The transaction closed early in the fourth fiscal quarter. The Company continues to make progress towards finalizing its exit from the Newbern, Tennessee manufacturing facility and the move of horizontal engine manufacturing from its Auburn, Alabama plant to China. As noted previously, pre-tax restructuring costs for the third quarter and first nine months of fiscal 2013 were $6.6 million and $18.4 million, respectively. The total estimated pre-tax expense related to restructuring actions in fiscal 2013 is expected to be $20 million to $22 million. In addition, the Company continues to anticipate pre-tax savings associated with restructuring actions of $32 million to $37 million in fiscal 2013 and $40 million to $45 million in fiscal 2014 as compared to 2012.

Share Repurchase Program:

On August 10, 2011, the Board of Directors of the Company authorized up to $50 million in funds for use in a common share repurchase program with an expiration of June 30, 2013. On August 8, 2012 the Board of Directors of the Company authorized up to an additional $50 million in funds associated with the common share repurchase program and an extension of the expiration date to June 30, 2014. The common share repurchase program authorizes the purchase of shares of the Company's common stock on the open market or in private transactions from time to time, depending on market conditions and certain governing loan covenants. During the first nine months of fiscal 2013, the Company repurchased approximately 1.2 million shares on the open market at an average price of $18.96 per share.

Revised Outlook:

Due to continued weakness in consumer spending for outdoor power equipment in our international markets and a significantly reduced market for snow thrower products in the U.S. and Europe, we are revising our fiscal 2013 net income projections to be in a range of $56 million to $65 million or $1.16 to $1.33 per diluted share. These net income projections include the results of the Branco acquisition closed on December 7, 2012 and are prior to the impact of any additional share repurchases and costs related to our announced restructuring programs.

The market growth estimates of 4% to 6% for the U.S. lawn and garden market remain unchanged; however, the lower end of the net income projections contemplate a later start to the spring lawn and garden season in the U.S. which could potentially have the impact of extending the season past fiscal 2013 at the end of June and into the first  quarter of fiscal 2014.

The Company previously indicated that it would exit sales of lawn and garden products to national mass retailers. The estimated impact of exiting this business in fiscal 2013 is approximately $100 million of reduced sales. Although sales in the first nine months of fiscal 2013 were favorably impacted by sales of generators in response to power outages during Hurricanes Isaac and Sandy, drought conditions and a lack of meaningful snowfall in a significant portion of the U.S. prior to February and a reduction in sales demand from many of our international markets have continued to negatively impact shipment volumes, offsetting the storm benefit.

Our fiscal 2013 consolidated net sales are projected to be in a range of $1.95 billion to $2.0 billion.  Operating income margins are expected to improve over fiscal 2012 and be in a range of 4.8% to 5.3% and reflect the positive impacts of the restructuring programs announced during fiscal 2012. Interest expense and other income are estimated to be approximately $18 million and $7 million, respectively. The effective tax rate is projected to be in a range of 30% to 33%, and capital expenditures are projected to be approximately $45 million to $50 million.  

About Briggs and Stratton Corporation:

Briggs and Stratton Corporation, headquartered in Milwaukee, Wisconsin, is the world's largest producer of gasoline engines for outdoor power equipment. Its wholly owned subsidiaries include North America's number one manufacturer of portable generators and pressure washers, and it is a leading designer, manufacturer and marketer of lawn and garden and turf care through its Simplicity®, Snapper®, Ferris®, Murray®, Branco® and Victa® brands. Briggs and Stratton products are designed, manufactured, marketed and serviced in over 100 countries on six continents.

Garden Way's Troy-Bilt Tiller Impacted Food Self-Sufficiency in the 1960's and 1970's

The legacy of the little rototiller that could has had a multigenerational impact on Troy, NY’s bustling urban agriculture

TROY, NY -- April 17 -- I don’t get enough chances to sing the song of a certain piece of Troy’s history: Garden Way and the Troy-Bilt Rototiller. I’m not a big gearhead, but this little machine left a legacy on my city, and the whole region, that I love.

Garden Way began manufacturing tillers in North Troy in the early 1960s, and the popularity of the Troy-Bilt increased with interest in food self-sufficiency into the late 1970s. A lot of social factors converged to make people want to garden or skip society entirely and go back to the land. Think of Rachel Carson’s indictment of chemicals in the environment: Silent Spring was published in 1962. In 1971, Frances Moore Lappe’s Diet for a Small Planet came out, feeding a broad band of Americans the concept of a vegetarian diet. The oil embargo of 1973 sent food prices through the roof, and drove people to dig up their lawns and tend plants that could feed them. Around this time too, a number of food-safety scares made people more curious about taking their meals into their own hands.

These elements combined to make rototillers a very hot commodity, and by the late ’70s, Garden Way was making 90,000 tillers a year. In 1975, the company started Capital District Community Gardens as a community-service project, purchasing vacant land on the corner of 11th and Eagle streets in Troy, and establishing their first community garden. The Ball Canning Corporation also served the public’s interest in feeding themselves, starting community canning centers around the country, one of them in Albany. The canning center was short-lived, but Capital District Community Gardens is going strong.

Forty-nine community gardens span the area, with locations in Rensselaer, Albany, Schenectady and Saratoga counties. People apply for plots and have access to land, water, seeds and lessons in growing food. Some of these lessons are shoulder to shoulder, as older gardeners offer advice to novices. Others are scheduled and led by garden educators. The organization tallies 4,000 families using these garden plots. I sit in a little moat of them, downhill from the first garden and above the large garden on 8th Street.

I love how you can see the gardens from the Collar City Bridge as you sail into the city, and the adjacent high tunnels of the Produce Project, the youth powered farm. (I teach a class at Russell Sage College and my students work with the Produce Project, so I am a little partial in my feelings for this farm, which is a way, way better neighbor than the new McDonalds.) The first high tunnel stands like a metal skeleton, its plastic skin whipped off by high winds, next to the one that is still wrapped and growing early vegetables. Season extension is the job of these structures, and the controlled climates they offer allow the Troy High students to work the farm nearly year-round. They sell their produce to chefs, the Veggie Mobile, and at the Delmar Farmers Market. Come June, I can visit the sidewalk stand Tuesday afternoons and get flowers and peas.

Community Gardens started a farmers market downtown when the hole that is the Uncle Sam Mall sat empty for most of the 1970s. An entire block was hollow except for the Frear Building, which was too fierce for the wrecking ball. Framed only by chain-link fencing, the hole was improved by a small farmers market that drew produce into the city. This midday, midweek market ran itself after a while, lasting into the early 2000s, when the success of the Troy Waterfront Farmers Market eclipsed it.

Street trees throughout the area are the product of Capital District Community Gardens, too. I’m a fan of them, especially the lindens in June, perfuming downtown—try to hit a night when they are nectaring the city and you’ll feel like Ulysses strapped to the mast—but I’m a bigger fan of the Veggie Mobile. This produce aisle on wheels, and its mini-cousin, the Sprout, bring fresh food to places where people don’t have good access.

People love the green cube truck, muraled with vegetables, and their weekly visits. The volunteers and staff who work the Veggie Mobile offer more than vegetables for sale, and information about how to use them. Healthy Places Program Coordinator EJ Krans spells that out quite nicely:

“The difference between throwing knowledge and info at people and throwing friends out there, people with a smile and a handshake, and a friendly manner around healthy eating,” he says, is tremendous, and the secret to the Veggie Mobile’s success. I think it’s similar to the love affairs we have at farmers markets, where food with a face tastes great, not just because it is great, but because it comes to you through very personal connections.

So revel with me, won’t you, in this bounty we have in the legacy of the Troy-Bilt. We’re in the thick of a whole other social movement toward good food—people are canning like crazy again and hatching chicks for their backyards, starting seedlings under grow lights and joining CSAs to supplement the stuff they can’t grow themselves. While this round of food self-sufficiency differs from the last, particularly in the sense that people are staying in cities to go back to the land this time, a piece of Troy stitches that round to this. The little tiller that could is still coulding for loads of people around here, as the Capital District Community Gardens tackles issues of food access in a variety of beautiful, delicious, and friendly ways.

Amy Halloran             www.metroland.com 

MTD Subsidiary Commercial Turf Products to Close Ohio Plant

April 17 -- A Streetsboro, Ohio manufacturer has announced plans to close this summer in a move that will eliminate the jobs of 290 employees.

Commercial Turf Products Ltd., a maker of lawn and garden equipment, disclosed plans to close its Streetsboro plant in a letter to the state's Office of Workforce Development. The closure of the plant at 1777 Miller Parkway is expected to begin June 14.

Commercial Turf Products is a subsidiary of MTD, a manufacturer of outdoor power equipment based in Valley City. The closure is due to excess capacity at some of MTD's other plants, said Kristee Mahler, vice president of human resources. The work at Commercial Turf Products will be split among three plants in Tennessee, Mississippi and Willard, Ohio.

The closure in Streetsboro is expected to be permanent, and employees already have been notified of their separation dates, according to the letter to the state. Employees are not members of a union and do not have “bumping rights,” the letter noted.

Ms. Mahler said the employees will receive severance packages, but she declined to share details of those packages. The employees also will receive preferential treatment for hiring at the other locations as work transfers.

The closure will affect 267 employees at the Miller Parkway location and another 23 employees at the company's warehouse and distribution operations in Aurora.

Ms. Mahler said most employees will be released by the end of June, which is the end of the company's production schedule.

“It's a pretty tight timeframe,” she said.

No other closures are planned at this time, Ms. Mahler said.

“It's an extremely unfortunate situation, and we're sorry to do it,” she said.

Crain's previously reported that Commercial Turf Products, which was started as a joint venture by Lesco Inc. and MTD, opened its Streetsboro plant in 1997. In 2003, Lesco announced plans to sell its share of the investment.

Rachel Abbey McCafferty          www.crainscleveland.com   

MTD to Add 225 Jobs in Martin, TN Plant

NASHVILLE – April 15 -- Tennessee Gov. Bill Haslam and Economic and Community Development Commissioner Bill Hagerty along with MTD Consumer Group Inc. officials announced today the company will expand operations at its Martin facility, adding 225 positions in Weakley County.

“I want to thank MTD Consumer Group for their investment in Tennessee and for the new jobs they are creating in Weakley County,” Haslam said.  “Our Jobs4TN strategy includes a focus on existing businesses already operating in state, and today’s announcement from MTD is a step toward our goal of making Tennessee the No. 1 location in the Southeast for high quality jobs.”

“MTD has been an important part of Weakley County’s business landscape for over 25 years, and a leader in the global market for 80 years,” Hagerty said.  “The Martin expansion underscores the significant job creation incumbent industries bring to our state, and I appreciate MTD’s continued confidence in the area’s superior workforce.”

MTD is a global manufacturer of residential and commercial outdoor power equipment.  The MTD Martin campus consists of a lean manufacturing facility with stamping, welding and assembly, along with logistics.

Weakley County Economic Development Board President & CEO Ronnie Price cited the impact of the expansion on the area workforce.  “The Weakley County Economic Development Board is pleased that MTD is expanding its Martin operations and bringing much needed jobs to our area,” Price said.  “MTD's commitment to this project shows their confidence in the local workforce and management team.  MTD is an excellent corporate citizen and we are excited about the expansion.”

“The City of Martin appreciates MTD and the good relationship we have had over the years.  We are elated with MTD's announcement of expansion and growth here in Martin,” Mayor Randy Brundige said.  “MTD is a great community partner, and they are active and engaged in many events in Martin, especially our Tennessee Soybean Festival.”

Additionally, Mayor Brundige praised his staff.  “I would be remiss to not mention the great people who have worked very hard on this project on behalf of the City of Martin: City Recorder Chris Mathis, Public Works Director Billy Wagster, Building Officer Billy Stout, Director of Community Development Brad Thompson, and the Martin Industrial Development Board.  All have been instrumental in helping this project along to fruition.  I am thankful to have such talented and exceptional people on my team.”

“TVA and Weakley County Municipal Electric System congratulate MTD on their expansion in Martin,” said John Bradley, TVA senior vice president of economic development.  “We are privileged to be partners with the state of Tennessee and community economic development partners to help existing companies grow and add quality jobs in this area.”

The MTD team would like to thank every individual and agency that has worked closely with them to make this project a reality.

Nick Jiannas Appointed New Stihl VP of Sales and Marketing

April 4 -- In 2012, Stihl announced the retirement of its longtime vice president of sales and marketing, Peter Burton, and the appointment of Northeast Stihl branch manager Nick Jiannas to the vacated position. In his new role as vice president of sales and marketing at Stihl Inc., Jiannas will draw from his vast experience working in many areas of Stihl.

In his time with Stihl, Jiannas has learned the value of the independent servicing dealer, and what pairing that with effective marketing can do for the success of Stihl and their independent dealer network. He hopes to further grow market share and strengthen the company's mutually beneficial relationship with their dealer network.

In almost 20 years with Stihl, Jiannas' experience has touched on many areas of the outdoor power equipment business, giving him a breadth of knowledge to build off of in his time as vice president of sales and marketing. Jiannas also speaks fluent German and works well with Stihl colleagues at their worldwide headquarters in Germany.

"This is going on my 18th year with the company. I spent eight years out in the field, eight years in the head office in Virginia Beach, and a small stint in Germany as well," says Jiannas. "My experience has included almost every position you can possibly do under the umbrella of sales and marketing. I have gained a strong understanding of what makes a Stihl dealer tick, and what kinds of things resonate with our independent retailer channel."

Jiannas says he understands the challenges independent dealers face, and plans to work closely with them to find solutions. He regularly attends dealer meetings and strives to keep the dialogue going throughout the channel.

"I'm someone whose Stihl career grew up in the dealer network," says Jiannas. "These folks are down-to-earth, hard-working Americans that give honest feedback, and that’s how we have become better at our job as a manufacturer. I will continuously reach out to them."

Stihl and Jiannas have long spoke about the power of retailing through the independent servicing dealer network. The company works with their dealers to ensure customer and brand satisfaction.

"Independent dealers help us as a manufacturer to ensure a positive ownership experience for the customer," explains Jiannas. "They qualify the customer's product needs and then provide parts and service after the sale. They also provide information and feedback to us, the manufacturer, on our products so we can always improve. The dealer provides that critical connection between the manufacturer and the end user on how we can improve our product offering."

The dealer's relationship with their customer isn’t the only thing that helps Stihl find places to improve. The passion and demands of independent dealers also push the company to make improvements to their products and overall operations.

"Stihl dealers demand the best and have really caused us to heavily invest back into our business," says Jiannas. "Whether it is research and development in Germany, or the production facility here in Virginia Beach, we want to ensure we keep providing the best product and maintain our commitment to continuous improvement. They encourage us to be a better manufacturer."

Stihl continues to invest in their technical support structure, training programs like iCademy and Stihl MasterWrench Service, their distribution network and marketing efforts. These investments, along with aggressive marketing to consumers, helps Stihl maintain their dealers' margins.

Moving forward, Jiannas hopes to help Stihl gain market share and help dealers gain the recognition of consumers. Educating the consumer on the benefits of choosing an independent servicing dealer and the Stihl brand will help grow the company's presence in the homeowner market.

"It has been a rewarding challenge for us, but it is a challenge at the end of the day because the average consumers still think of the mass channel as the place for all of their outdoor power equipment needs," says Jiannas. "We really have seen positive results when we spend the energy and money to reach out to the consumer and say, 'Hey, there is an alternative. There is a better choice with your Stihl dealer.'"

In addition to connecting with the homeowner customer base through their marketing, Jiannas plans to assess Stihl marketing efforts to be sure they are in line with the changing market and company goals. The ideal result would be continuously improving the effectiveness of the marketing efforts and maximizing the ROI of every marketing dollar.

"I hope to review and refine our advertising spending by looking at each line item and making sure we remain relevant in today's ever-changing marketplace," says Jiannas. "The marketplace is changing at an accelerated pace, so I'm challenging our team to ensure that our media mix is optimal and that our messaging continues to resonate with our target audience. Those are key questions that I will ask myself all the time."

One of the first objectives on Jiannas' list is to keep developing relationships with, and supporting, the people that he works with at Stihl. Those relationships are what give him the confidence that they have the resources and ability to get their message out there in front of dealers and consumers.

"From the inside out, we really have a unique story to tell," says Jiannas. "So my job and my challenge is educating the American consumer that we have a good product to offer, come check us out."

Lisa Danes             http://www.greenindustrypros.com