TTI Reports Record Sales Gross Margin and Profit in the First Half of 2014

HONG KONG, Aug. 20 -- Hong Kong-based global power equipment and floor care company Techtronic Industries Co. Ltd. announced that it achieved record sales, gross margin and profit for the first half of 2014.

Net profit attributable to shareholders reached US$ 136 million, a 15.9% increase over the first half of 2013.  Basic earnings per share was US 7.45 cents, 15.9% higher than the same period last year.  Sales rose by 10.2% over the six month period to US$ 2.25 billion.

TTI achieved double digit growth and continued delivering excellent financial performance.

The Power Equipment segment delivered US$ 1,678 million, a 10.5% sales increase, and generated exceptional organic growth in the professional and DIY power tool businesses.

The Floor Care and Appliance segment grew 9.3% to US$ 572 million in sales. The company's double digit sales growth is a result of a series of successful new product launches and highly effective, targeted geographic expansion.

Mr. Horst Pudwill, Chairman of TTI, said, "With our ongoing focus on generating organic growth, improving operating margins, and managing our robust balance sheet, we expect continued strong performance in the second half of 2014. We are excited about our momentum and are well-positioned to build on our record first half performance."

Mr. Joseph Galli, CEO of TTI, commented, "New product introductions, geographic expansion and a relentless focus on operational efficiency propelled our continued outstanding performance. A highlight of our strong first half result was the 100 basis point improvement in gross margin increasing from 34% last year to 35% this year, through new products introduction and aggressive productivity gains across our supply chain network."

About TTI

Founded in 1985 and listed on the Stock Exchange of Hong Kong Limited in 1990, TTI is a world-class leader in quality consumer, professional and industrial products marketed to the home improvement, hardware, and construction industries. An unrelenting strategic focus on Powerful Brands, Innovative Products, Exceptional People and Operational Excellence drives our success. TTI's powerful brand portfolio includes MILWAUKEE, AEG® and RYOBI® power tools, accessories and hand tools, RYOBI® and HOMELITE outdoor products, EMPIRE layout and measurement products, and HOOVER, ORECK , VAX and DIRT DEVIL Floor Care and Appliances.

MILWAUKEE, HOMELITE, EMPIRE, HOOVER, ORECK, VAX and DIRT DEVIL are trademarks of the TTI Group. AEG® is a registered trademark of AB Electrolux (publ) and is used by the TTI Group pursuant to a license granted by AB Electrolux (publ). RYOBI® is a registered trademark of Ryobi Limited and is used by the TTI Group pursuant to a license granted by Ryobi Limited.

The Toro Company Reports Record Third Quarter Results

• Third quarter sales increase 11.3 percent to a record $567.5 million driven by strong retail demand for both professional and residential products
• Quarterly net earnings per share increase 28 percent to a record $0.87
• Company is well-positioned to achieve Destination 2014 goals as it launches its second century

BLOOMINGTON, Minn. --  Aug. 21, 2014-- The Toro Company today reported net earnings of $50 million, or $0.87 per share, on a net sales increase of 11.3 percent to $567.5 million for the third quarter of fiscal 2014. In the comparable fiscal 2013 quarter, the company delivered net earnings of $40.1 million, or $0.68 per share, on net sales of $509.9 million.

For the first nine months, Toro reported net earnings of $163 million, or $2.82 per share, on a net sales increase of 6 percent to $1.759 billion. In the comparable fiscal 2013 period, the company posted net earnings of $149.9 million, or $2.53 per share, on net sales of $1.659 billion.

“Our team is especially proud to deliver record results and double-digit sales and earnings growth for the third quarter in which we also celebrated our Centennial milestone,” said Michael J. Hoffman, Toro’s chairman and chief executive officer. “After successfully managing through the challenges of a late spring, our quarterly results benefited from favorable summer growing conditions in key markets that, similar to last year, helped drive retail sales across most of our businesses.

Shipments of golf equipment and irrigation products increased on strong retail demand for our innovative product offerings. In addition, we returned to a more normal quarterly flow for channel purchases of professional equipment subject to Tier 4 emission standards. Landscape contractor customers continued to invest in turf maintenance equipment, which also helped drive sales.

On the residential side of our business, early demand for snow products increased as channel partners began to prepare for the anticipated strong retail pre-season.”

“We are optimistic as we enter the final quarter of our fiscal year and Destination 2014 journey,” said Hoffman. “With our Centennial on July 10, 2014, we officially launched the company’s second century. Looking ahead, we will continue to focus on the key things that have driven our past performance: developing innovative products, serving our customers and executing in the marketplace. We will keep a close eye on both retail demand and field inventory levels and make adjustments as necessary. We also will continue to seek opportunities across the enterprise to improve productivity and leverage expenses.

Of course, we remain mindful of the things outside of our control, such as unfavorable weather or economic conditions, that could create potential challenges for our customers. That said, a strong snow pre-season and continued productivity gains, somewhat offset by product mix, should drive solid fourth quarter revenue and earnings results. As such, today we are changing our full-year outlook.”

The company now expects revenue growth for fiscal 2014 to be about 6 percent, and net earnings per share to be about $2.94 to $2.96.

SEGMENT RESULTS

Professional

Professional segment net sales for the third quarter totaled $384.7 million, up 11.9 percent from the comparable fiscal 2013 period. Sales of golf equipment and irrigation products increased on strong retail demand for our innovative product offerings, including our new INFINITY™ sprinklers. Sales also benefitted from the return to a more normal quarterly flow of channel purchases of equipment subject to Tier 4 emission standards, as compared to fiscal 2013 when sales were pulled from the third quarter to the first quarter in connection with the regulatory transition.

Turf maintenance and ground engaging equipment sales were up due to continued demand by landscape contractors for our productivity enhancing products. In addition, global micro irrigation sales increased with continued demand for more efficient solutions for agriculture. For the first nine months, professional segment net sales were $1.209 billion, up 3.4 percent from the comparable fiscal 2013 period. Sales for the year-to-date period increased on strong retail demand for landscape maintenance equipment and increased demand for our micro irrigation, construction and rental products.

Professional segment earnings for the third quarter totaled $74.8 million, up 23.7 percent from the comparable fiscal 2013 period. For the first nine months, professional segment earnings were $244.7 million, up 4.8 percent from the comparable fiscal 2013 period.

Residential

Residential segment net sales for the third quarter totaled $175.7 million, up 13 percent from the comparable fiscal 2013 period. Sales of snow products were up due to increased early demand as channel partners began to prepare for the anticipated strong retail pre-season. Sales of our residential zero turn mowing products also grew on continued retail demand for these mowing platforms.

For the first nine months, residential segment net sales were $533.7 million, up 11.7 percent from the comparable fiscal 2013 period. Sales for the year-to-date period increased on strong in-season and pre-season demand for our snow products, as well as increased channel and retail demand for our residential zero turn mowers.

Residential segment earnings for the third quarter totaled $18.7 million, up 24.1 percent from the comparable fiscal 2013 period. For the first nine months, residential segment earnings were $60.7 million, up 16.9 percent from the comparable fiscal 2013 period.

OPERATING RESULTS

Gross margin for the third quarter was 35.6 percent, an increase of 70 basis points compared to the same fiscal 2013 period, primarily due to favorable product mix and realized pricing, somewhat offset by higher commodity costs. For the first nine months, gross margin was 35.8 percent, a decrease of 10 basis points, primarily due to higher commodity costs and unfavorable segment mix and currency exchange rates, somewhat offset by realized pricing.

Selling, general and administrative (SG&A) expense as a percent of sales for the third quarter was 22.9 percent, a decrease of 50 basis points compared to the same fiscal 2013 period. For the first nine months, SG&A expense as a percent of sales was 22 percent, also a decrease of 50 basis points. For both periods, the decrease primarily was due to the leveraging of expenses over higher sales volumes.

Third quarter operating earnings as a percent of sales improved 120 basis points to 12.7 percent compared to the same fiscal 2013 period. For the first nine months, operating earnings as a percentage of sales improved 40 basis points to 13.8 percent.

The effective tax rate for the third quarter decreased to 29.4 percent from 30.5 percent in the comparable fiscal 2013 period primarily due to a one-time tax benefit. For the first nine months, the effective tax rate increased to 31.7 percent from 31 percent in the comparable fiscal 2013 period when the company benefited from the retroactive reinstatement of the Federal Research and Engineering Tax Credit in the first quarter of that fiscal year.

Accounts receivable at the end of the third quarter totaled $215.6 million, up 6.7 percent from the same fiscal 2013 period. Net inventories were $293.8 million, up 13.5 percent from the same period last year. Trade payables were $169 million, up 36 percent compared to the same fiscal 2013 period, primarily due to recent purchases in anticipation of product demand.

About The Toro Company

The Toro Company (NYSE: TTC) is a leading worldwide provider of innovative turf, landscape, rental and construction equipment, and irrigation and outdoor lighting solutions. With sales of more than $2 billion in fiscal 2013, Toro’s global presence extends to more than 90 countries through strong relationships built on integrity and trust, constant innovation and a commitment to helping customers enrich the beauty, productivity and sustainability of the land. Since 1914, the company has built a tradition of excellence around a number of strong brands to help customers care for golf courses, sports fields, public green spaces, commercial and residential properties and agricultural fields.

Walbro Engine Management Plant in Cass City, MI Plans to Expand

Cass City, WI -- July 25 -- A Michigan Strategic Fund grant to Walbro Engine Management LLC will help the business expand in Cass City and create 28 new jobs.

The company plans to invest about $4.2 million in its facility with help from a $165,000 grant.

Walbro Engine Management was established in 1950 in Fenton and relocated to Cass City in 1954. It is a manufacturer of carburetors, ignition systems, fuel storage systems, and other components for power equipment, marine, and recreational applications.

Those interested in employment opportunities with Walbro should visit www.walbro.com/careers.

“Walbro Engine Management has been in Cass City for 60 years, and I’m proud that they chose to expand and create jobs right here in the Thumb,” said State Rep. Terry Brown (D-Pigeon) noting the company chose its Cass City location for the expansion over a competing site in Mexico. “This is a great example of state and local officials working together with businesses to support the local economy and improve our communities.”

“This grant is excellent news for Cass City,” said U.S. Rep. Candice Miller (R-Harrison Township). “I applaud this grant to help Walbro Engine Management LLC with their expansion, and I believe it will have a significant economic impact on the community.”

The Michigan Strategic Fund was created in 1984 to promote economic development and create jobs in Michigan.

Cass City Village officials also offered Walbro a 12-year property tax abatement.

Mary Drier        www.michigansthumb.com

Briggs and Stratton Reports Results for the Fourth Quarter and Fiscal Year 2014

MILWAUKEE, Aug. 14 -- Briggs and Stratton Corporation today announced financial results for its fourth fiscal quarter and fiscal year ended June 29, 2014.

Highlights:

•         Fourth quarter fiscal 2014 consolidated net sales increased 4.1% to $496.8 million compared to the prior year
•         Fourth quarter fiscal 2014 engines segment sales increased 6.3% to $317.8 million compared to the prior year
•         Fourth quarter 2014 consolidated adjusted net income increased 36% to $14.6 million, from adjusted net income of $10.7 million in the fourth quarter of fiscal 2013
•         Fourth quarter 2014 adjusted diluted earnings per share were $0.31, or $0.09 higher than the prior year
•         Fiscal 2014 full year consolidated net sales of $1.86 billion were consistent with the prior fiscal year; 
•         Fiscal 2014 organic sales growth of 4% after excluding approximately $100 million of storm related sales in the previous fiscal year and acquisition-related growth
•         Quarterly dividend increased by 4% to $0.125 per share
•         Board of Directors authorized an additional $50 million in share repurchases

"Despite a slower than normal start to the lawn and garden season this spring, we saw improved sales results for our engines and products due to the new innovative products launched this year and market share gains made within the large engine category," commented Todd J. Teske, Chairman, President and Chief Executive Officer of Briggs and Stratton Corporation.

Teske continued, "In addition to higher sales, we saw margin expansion in our engines business even as we continued to invest in our future with new product launches and building out our international sales distribution in emerging regions. Within our Products segment, our new pressure washer product launches and our commercial lawn and garden business continued to perform well even as we saw reduced demand for generators in the U.S. following an uneventful storm season and lower pre-season snow thrower sales to our European customers due to a significantly below normal snow season in Europe last winter."

Also commenting on the fiscal year end results was David J. Rodgers, Senior Vice President and Chief Financial Officer, who said "Given our continued strong cash flow from operations of $127 million during fiscal 2014 and the ongoing strength of our balance sheet, the Board authorized an additional $50 million for share repurchases and a 4% increase in our quarterly cash dividend."

Teske also commented on the recent announcement that Briggs and Stratton would acquire Allmand Bros., Inc., a Holdrege, Nebraska based designer and manufacturer of high quality towable light towers, industrial heaters and solar LED arrow boards. "We are pleased to announce a combination of these two well-established and great companies. We believe the acquisition of Allmand diversifies our higher margin commercial product portfolio, provides an entry into the construction and energy job site channels, and provides higher sales growth opportunities in the U.S. and abroad," said Teske.

Consolidated Results:

Consolidated net sales for the fourth quarter of fiscal 2014 were $496.8 million, an increase of $19.6 million or 4.1% from the fourth quarter of fiscal 2013, due to higher sales of large engines used on riding lawnmowers, pressure washers, and service parts used on lawn and garden equipment. The increase in sales was partially offset by lower sales of smaller engines used in walk lawnmowers and decreased sales of generators. The fiscal 2014 fourth quarter consolidated net income, which includes restructuring actions and goodwill and tradename impairment charges, was $7.8 million or $0.17 per diluted share. The fourth quarter of fiscal 2013 consolidated net loss, which included restructuring charges, goodwill and tradename impairment charges, and a litigation settlement, was $55.0 million or $1.17 per diluted share.

Consolidated net sales for fiscal 2014 were $1.9 billion, a decrease of $3.4 million or 0.2% from fiscal 2013, due to lower sales of generators and the engines that power them. The impact of fewer weather related events creating demand for generators and the related engines was an estimated sales decrease of $100 million for fiscal 2014. This decrease was offset by higher sales of engines used on U.S. lawn and garden equipment, increased sales of pressure washers and sales from Branco, which was acquired mid-year in fiscal 2013.

Fiscal 2014 consolidated net income, which included restructuring actions and goodwill and tradename impairment charges, was $28.3 million or $0.59 per diluted share. Fiscal 2013 consolidated net loss, which includes restructuring charges, goodwill and tradename impairment charges, and a litigation settlement, was $33.7 million or $0.73 per diluted share. The estimated impact of the reduced storms on generator and related engine sales in fiscal 2014 was $0.20 per diluted share compared with fiscal 2013 which had storms including Hurricanes Isaac and Sandy.

Engines Segment:

Engines segment net sales of $317.8 million in the fourth fiscal quarter increased $18.7 million or 6.3% from the prior year. Total engine volumes shipped in the quarter increased 2% to approximately 2 million units. Net sales increased partially due to increased placement of large engines used on lawn and garden equipment in the North America market, higher sales into the European market due to an improved season and higher service parts sales. Partially offsetting this increase was lower sales of small engines due to a decrease in the market for walk lawnmowers this season. New innovations, including Quiet Power Technology™ ("QPT™"), Mow-and-Stow™ and Ready Start® for Ride, were well received by the market this selling season.

Engines segment adjusted income from operations in the fourth fiscal quarter was $22.2 million, an increase of $8.1 million from the prior year. Engines segment adjusted gross profit margin improved 50 basis points on favorable net pricing and mix, including the impact of new product introductions.

In addition, we benefitted by 27% higher production of engines in the quarter improving adjusted gross profit margin by 160 basis points. Lastly, engine segment adjusted gross profit margin benefited by 130 basis points due to reduced manufacturing costs and improved plant efficiencies compared to the prior year. Engineering, selling, general and administrative increased $6.2 million due to increased international sales and marketing expenses, research and development costs, corporate development and legal expenses, and compensation and benefits.

Products Segment:

Products segment net sales of $206.6 million in the fourth fiscal quarter increased by $3.5 million or 2% from the prior year. This increase was due to higher sales of pressure washers, commercial lawn and garden equipment and service parts in the North America market. Partially offsetting the increase were lower sales of generators as a result of fewer weather related events during fiscal 2014 and lower replenishment of snow throwers in Europe following last year's dry winter. Sales volume increases in both Australia and Brazil were offset by unfavorable foreign exchange related to the devaluation of the currencies.

Products segment adjusted loss from operations in the fourth fiscal quarter was $1.4 million, an increase of $0.5 million from the prior year adjusted loss from operations. Products adjusted gross profit margins were consistent year over year. Products segment adjusted gross profit margin benefited from a 12% increase in manufacturing throughput as well as improved product sales mix in fiscal 2014. Offsetting the increase in adjusted gross profit margin was an unfavorable foreign exchange impact of approximately 60 basis points. Engineering, selling, general and administrative increased $1.0 million due to increased spending to support international growth.

Corporate Items:

Interest expense for the fourth quarter of fiscal 2014 was $0.1 million lower compared to the same period a year ago. For fiscal 2014, interest expense was comparable to fiscal 2013.

The effective tax rate for fourth quarter of fiscal 2014 was 14.8% compared to 32.6% for the same period of fiscal 2013. The tax rate for the fourth quarter of fiscal 2014 was driven by the impact of foreign operations subject to different statutory tax rates. The tax rate for the fourth quarter of fiscal 2013 was impacted by a non-deductible goodwill impairment charge.

Financial Position:

Net debt at June 29, 2014 was $30.3 million (total debt of $225.0 million less $194.7 million of cash), or $6.6 million lower than the $36.9 million (total debt of $225.3 million less $188.4 million of cash) at June 30, 2013. Cash flows provided by operating activities for fiscal 2014 were $127.1 million compared to $160.8 million in fiscal 2013. The decrease in operating cash flows was primarily related to changes in working capital as higher fourth quarter sales in fiscal 2014 led to a larger accounts receivable balance year over year. The change was partially offset by no contributions to the pension plan in fiscal 2014 compared to $29.4 million of contributions in fiscal 2013.

Restructuring:

The restructuring actions that were in progress at the beginning of fiscal 2014 have concluded as planned. These restructuring actions resulted in pre-tax restructuring costs for the fourth quarter and twelve months ended June 29, 2014 of $1.4 million and $6.5 million, respectively. Incremental pre-tax restructuring savings for fiscal 2014 were $2.5 million.

In the first quarter of fiscal 2015, the Company announced further restructuring actions to narrow its assortment of lower-priced Snapper consumer lawn and garden equipment and consolidate its Products segment manufacturing facilities in order to reduce costs. The Company will continue to focus on premium residential products through its Snapper and Simplicity brands and commercial products through its Snapper Pro and Ferris brands. The Company will close its McDonough, Georgia location and consolidate production into existing facilities in Wisconsin and New York.

Total restructuring charges related to these actions are anticipated to be approximately $30 to $37 million, including non-cash write-downs of approximately $15 to $20 million, to be recorded during fiscal 2015. Total cash costs related to these actions are anticipated to be approximately $15 to $17 million, with the majority of the cash costs being incurred in fiscal 2015. Total annual cost savings as a result of these actions are anticipated to be approximately $15 to $20 million with approximately $5 million to $7 million expected to be realized in fiscal 2015 and the remainder realized in fiscal 2016 upon completion of the transition in the fourth quarter of fiscal 2015. Products segment sales are estimated to be lower by approximately $20 to $25 million in fiscal 2015 and $35 to $45 million annually beginning in fiscal 2016 as a result of these actions.

Pending Acquisition:

On August 14, 2014, the Company announced that it signed a definitive agreement to acquire Allmand Bros., Inc. Founded in 1938 and based in Holdrege, Nebraska, Allmand is a leading designer and manufacturer of high quality towable light towers, industrial heaters, and solar LED arrow boards. The transaction is expected to close in the next 30 days.

Share Repurchase Program:

On August 8, 2012, the Board of Directors of the Company authorized up to $50 million in funds associated with the common share repurchase program with an expiration date of June 30, 2014. On January 22, 2014, the Board of Directors of the Company authorized up to an additional $50 million in funds for use in the Company's common share repurchase program with an extension of the expiration date to June 30, 2016. On August 13, 2014, the Board of Directors of the Company authorized up to an additional $50 million in funds for use in the Company's common share repurchase program with an expiration date of June 30, 2016.

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 fiscal 2014, the Company repurchased 2,100,499 shares on the open market at an average price of $20.49 per share. Since the end of the fiscal year, the Company has repurchased an additional 658,167 shares on the open market at an average price of $19.35 per share. As of August 12, 2014, the Company has remaining authorization to repurchase up to approximately $75 million of common stock with an expiration date of June 30, 2016.

Outlook:

For fiscal 2015, the Company projects net income to be in a range of $50 million to $60 million or $1.07 to $1.27 per diluted share prior to the impact of acquisitions, additional share repurchases, or costs related to our announced restructuring actions. Our fiscal 2015 consolidated net sales are projected to be in a range of $1.88 billion to $1.94 billion.

We estimate that the retail market for lawn and garden products will increase 1-4% in the U.S. next season. Sales estimates do not include the impact of landed hurricanes. Operating income margins for fiscal 2015 are expected to improve over fiscal 2014 and be in a range of 4.5% to 5.0% and reflect the positive impacts of the restructuring actions, particularly in the last quarter of the fiscal year. Interest expense and other income are estimated to be approximately $19 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 $60 million to $65 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 marketer 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®, SnapperPro®, Ferris®, Murray®, Branco® and Victa® brands. Briggs and Stratton products are designed, manufactured, marketed and serviced in over 100 countries on six continents.

Briggs and Stratton Corporation to Acquire Allmand Bros. Inc.

Towable light towers, industrial heater products, and flashing arrow boards provides diversification into higher margin, higher growth vertical industries and access to new distribution channels

MILWAUKEE, Aug. 14 -- Briggs and Stratton Corporation announced today that it has signed a definitive agreement to acquire U.S. based Allmand Bros., Inc. Founded in 1938 and based in Holdrege, Nebraska, Allmand is a leading designer and manufacturer of high quality towable light towers, industrial heaters, and solar LED arrow boards.

Allmand has sales of approximately $80 million annually. Briggs and Stratton will acquire all of the outstanding shares of Allmand for approximately $62 million in cash, subject to customary due diligence and working capital adjustments. The transaction is expected to close in the next 30 days.

"This acquisition helps us to further our strategic initiative of focusing on attractive higher margin, commercial end use products," commented Todd J. Teske, Chairman, President and Chief Executive Officer of Briggs and Stratton Corporation. Mr. Teske continued, "The acquisition of Allmand augments our higher margin commercial product portfolio, expands our market access to include the rental channel, and helps diversify our business into industry segments that we do not meaningfully participate in today.

In addition, we believe this acquisition will accelerate our sales growth in the U.S. and abroad. We look forward to welcoming the management team and the employees of Allmand to our team, and building upon the strong foundation that has made Allmand a highly successful company."

"For over 75 years, Allmand has been producing innovative products that make customer worksites brighter, warmer, safer, and more productive," commented Roger C. Allmand, Chairman of Allmand Bros., Inc. Mr. Allmand continued, "The combination of Allmand with Briggs and Stratton will provide even more opportunities for our people and our customers. With a proven track record of operating successfully for over 100 years, we believe that Briggs and Stratton will be able to accelerate our presence globally."

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 marketer 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®, SnapperPro® Ferris®, Murray®, Branco® and Victa® brands. Briggs and Stratton products are designed, manufactured, marketed and serviced in over 100 countries on six continents.

About Allmand Bros., Inc.

Allmand Bros., Inc is a leading designer and manufacturer of high quality towable light towers, industrial heaters, and solar LED arrow boards used in a variety of industries including construction, roadway, oil and gas, mining, and sporting and special events. The Company's products are generally powered by diesel engines, and distributed through national and regional equipment rental companies, equipment dealers and distributors. Allmand currently sells its products and service parts in approximately 40 countries.

Honda Power Equipment Manufacturing Announces North Carolina Plant Expansion

Swepsonville, NC -- August 5 -- Honda Power Equipment Manufacturing Inc. announced Wednesday it will invest $8.5 million in its Swepsonville facility to begin making a new snow blower by next year and prepare for the production of a new portable generator.

The announcement came as part of a Honda event to celebrate the 30th anniversary of the plant, which produces a wide variety of outdoor power equipment including lawn mowers, string trimmers, snow blowers, water pumps and general purpose engines.

As the popular song "Happy" played in the background before the 10 a.m. presentation began, throngs of employees donning white uniforms and safety glasses waited with anticipation as Honda officials, Gov. Pat McCrory, N.C. Commerce Secretary Sharon Decker and state Sen.Rick Gunn took the stage at the massive 375,000-square-foot facility.

The plant employs more than 620 full-time associates and 340 contract associates. The $8.5 million investment is not expected to immediately require the addition of new jobs. But J.R. Cunningham, the company's senior manager of compliance and risk management, said there is potential for additional jobs, although he said it is "too early to tell at this time."

Cunningham did say that production on Honda's new snow blower should begin at the Swepsonville facility "in a little over a year." He said there is no precise timeline on when exactly production will begin on Honda's new, small portable generator, but did say that market potential for the product is high, adding that the product can be used for everything from camping to tailgating to inclement weather.

"People would use those in emergencies or to power some lights in your house," Cunningham said. "It will be small, it will be portable, two people will be able to pick it up and put it in the back of a trailer or car."

During the presentation, McCrory said he met with the management team of Honda this morning to talk about several issues, including making sure North Carolina continues to be business friendly the quality of training and education provided by local community college.

McCrory said Honda officials told him "the talent is No.1 right here in Alamance County" and that the company would not have made this investment without the strong employee base.

McCrory joked that he had to take some credit for the investment, adding that during the 16 months he has been governor, the state had the "three worst snowstorms in North Carolina history so what better place to build more snow blowers and generators than right here in North Carolina?"

The additional investment comes 30 years after Honda's first lawnmower rolled off the facility's assembly line. The original model produced in August 1984 sat adjacent to the company's 30 millionth lawnmower produced last year at the facility. Honda Power Equipment products are assembled at 11 Honda manufacturing facilities around the world.

Honda, the parent company of Honda Power Equipment, continues to invest in the Triad and North Carolina as locations for its subsidiary companies.

Honda Aircraft Co. is making of a lightweight HondaJet at the Piedmont Triad International Airport in Greensboro and Honda Aero in Burlington is making the HondaJet's engines. American Honda Finance Co., which provides financing to consumers who buy Honda products, is also located in Charlotte,

Takuji Yamada, Honda COO of North American Regional Operations, noted this, saying that Honda is well known for its automobile business and will soon begin its aviation business with the small lightweight jet being produced at PTI.

"In my view we are all part of one Honda family that I like to call Team Honda," he said.

After the presentation was over, it was right back to work for the employees, who quickly moved to their stations and showed off the products being made in Swepsonville. There was literally a buzz in the air as machines cranked, engines moved down the conveyor belt and the smell of oil and gas filled the air on a facility tour.

Alamance County Chamber of Commerce President Mac Williams, who also was in attendance, said Honda is among the largest manufacturing companies in Alamance County and that Honda officials often tout the area and meet with potential businesses that are also considering the county for operations.

‎"They are always very happy and willing to do that," Williams said. "They have got a good story to tell about their experience."

ARI and Fidelitone to Deliver Unified eCommerce and Supply Chain Solutions

MILWAUKEE, Aug 07 -- ARI Network Services, Inc. has partnered with Fidelitone Logistics to offer manufacturers and distributors end-to-end eCommerce technology and supply chain management, lowering the barrier for entry into B2C eCommerce sales for enterprises traditionally focused on a B2B distribution model. 

"This solution marries ARI's SaaS and DaaS technologies with Fidelitone's industry-leading supply chain capabilities to deliver robust solutions to handle every step of product fulfillment from the online order to pick, pack and shipping," said ARI President and CEO, Roy W. Olivier.

"Our combined capabilities will help our customers who are set up for B2B distribution to quickly move to a B2C model without extensive changes to their infrastructure. Through our combined capabilities, we can quickly provide a turnkey B2C solution that will compete with any current online retailers."

ARI and Fidelitone Logistics offer true full-service parts and product distribution management solutions, which include:

• ·         Product data conversion and optimization
• ·         eCommerce website development
• ·         Forecasting and inventory management
• ·         Vendor management
• ·         Procurement
• ·         Order management
• ·         Valued-added warehousing
• ·         Fulfillment

"The combination of a powerful eCommerce website matched with a robust inventory forecasting model will provide laser focus to the complexities of parts and product management," said Fidelitone Logistics Vice President of Business Development, John Bauschka. "Add in the operational benefits of working with an experienced supply chain management company to bring the execution of the plan together, and you have a compelling solution."

Generac Reports Second Quarter 2014 Results

Strong home standby shipments drive sequential sales improvement in residential products as increased sales from C&I products further diversifies business

WAUKESHA, Wis.-- July 31 -- Generac Holdings Inc., a leading designer and manufacturer of power generation equipment and other engine powered products, today reported financial results for its second quarter ended June 30, 2014.

SECOND QUARTER 2014 HIGHLIGHT

   -- Net sales increased over the prior year by 4.6% to $362.6 million as

      compared to $346.7 million in the second quarter of 2013.

          -- Commercial & Industrial (C&I) product sales increased 22.5% to

             $163.5 million as compared $133.4 million in the prior-year second

             quarter, primarily due to the contribution of recent acquisitions

             and continued strength in the oil & gas market.

          -- Residential product sales were $179.6 million during the second

             quarter of 2014 as compared to $196.6 million in the prior year

             quarter. The prior year second quarter benefited from

             approximately $40 million in shipments due to Superstorm Sandy.

             Excluding this prior year benefit, residential product sales

             increased approximately 15% primarily as a result of strong home

             standby generator shipments.

   -- Net income during the second quarter of 2014 was $54.0 million, or $0.77

      per share, as compared to $28.3 million, or $0.40 per share, for the same

      period of 2013.

   -- Adjusted net income, as defined in the accompanying reconciliation

      schedules, was $57.1 million, or $0.82 per share, as compared to $66.6

      million, or $0.95 per share, in the second quarter of 2013.

   -- Adjusted EBITDA, as defined in the accompanying reconciliation schedules,

      was $84.5 million as compared to $90.1 million in the second quarter last

      year.

   -- Cash flow from operations in the second quarter of 2014 was $48.9 million

      as compared to $36.1 million in the prior year quarter. Free cash flow,

      as defined in the accompanying reconciliation schedules, was $40.5

      million as compared to $30.3 million in the second quarter of 2013.

   -- For the trailing four quarters, including the second quarter of 2014, net

      sales were $1.444 billion; net income was $184.3 million; adjusted EBITDA

      was $365.7 million; cash flow from operations was $270.9 million; and

      free cash flow was $236.9 million.

"Our second quarter results for residential products were seasonally higher as we saw shipments increase as compared to the first quarter of 2014 due to strength in home standby generators. We remain focused on a number of key initiatives to continue to grow the market, further building on our leadership position in this product category," said Aaron Jagdfeld, President and Chief Executive Officer.

"C&I products continue to represent a growing portion of our sales as we have recently increased our exposure to new markets such as oil & gas, broadened our industrial product line, and strengthened our industrial distribution network to further diversify our business. We also continue to convert a significant amount of our earnings to free cash flow, providing us with the flexibility to drive our Powering Ahead strategic plan forward."

ADDITIONAL SECOND QUARTER 2014 HIGHLIGHTS

Residential product sales for the second quarter of 2014 were $179.6 million as compared to $164.0 million in the first quarter of 2014, and as compared to $196.6 million for the second quarter of 2013. Sales of residential products during the prior-year second quarter were positively impacted by approximately $40 million in incremental shipments as a result of satisfying the extended lead times that resulted from Superstorm Sandy, which did not repeat during the second quarter of 2014.

Excluding this benefit in the prior year quarter, residential product revenue increased approximately 15% during the current year quarter, driven by strong shipments of home standby generators. In addition, increased revenue from power washer products contributed to this year-over-year sales growth in residential products.

C&I product sales for the second quarter of 2014 increased 22.5% to $163.5 million from $133.4 million for the comparable period in 2013. The improvement was driven primarily by contributions from recent acquisitions and strength in oil & gas end markets, along with increased sales of natural gas generators used in light commercial and retail applications.

Partially offsetting this strength was a year-over-year decline in sales within Latin America driven by the combination of a difficult prior-year comparison related to certain large projects which did not repeat, as well as overall economic softness in the region.

Gross profit margin for the second quarter of 2014 was 35.3% compared to 37.8% in the prior-year second quarter. Gross margin was impacted over the prior year due to the addition of recent acquisitions along with a return to regular promotional activities consistent with a period of normal seasonality.

Operating expenses for the second quarter of 2014 declined $4.7 million, or 8.6%, as compared to the second quarter of 2013, primarily driven by a $4.9 million gain recorded in the current year quarter relating to a re-measurement of a contingent earn-out obligation from a recent acquisition. Excluding this gain, operating expenses were approximately flat relative to prior year despite the addition of SG&A costs associated with recent acquisitions.

Interest expense in the second quarter of 2014 declined to $11.4 million compared to $14.3 million in the same period last year, resulting from a reduction in interest rate from the credit agreement refinancing completed in May 2013. In conjunction with the May 2013 refinancing and other debt prepayments made in the prior year quarter, a $13.5 million loss on extinguishment of debt was recorded during the second quarter of 2013.

Beginning in the second quarter of 2014, there was a further 25 basis point reduction in borrowing costs as a result of the leverage ratio as defined in the credit agreement falling below 3.0 times, resulting in a $16.0 million non-cash gain being recorded in the current year quarter.

2014 OUTLOOK

The Company is reaffirming its prior guidance for 2014 in terms of revenue growth, EBITDA margins and cash flows. For the full-year 2014, the Company still expects net sales to increase in the mid-single digit range as compared to the prior year. This sales outlook assumes an increased level of power outage severity in the second half of 2014 as compared to recent quarters, returning to a more normalized annual baseline level.

Adjusted EBITDA margins are expected to remain in the mid-20% range as previously guided, which are consistent with the average levels seen during the past four years. Free cash flow is still expected to be approximately 90% of full year 2014 adjusted net income.

"We remain excited about the compelling penetration opportunities for our residential and light commercial standby generators as we continue to focus our efforts on several high impact initiatives to increase the adoption for these products," continued Mr. Jagdfeld.

"These initiatives are targeted at improving the awareness, availability and affordability of standby generators and are highlighted by our innovative sales and marketing processes, our efforts to increase and develop distribution, and our introduction of new products. In addition, we have several initiatives aimed at increasing our share of the C&I market by leveraging our recently expanded product offering.

We also believe the overall secular trends toward natural gas generators, rental of mobile power equipment, and the penetration of certain end markets such as telecommunications and oil & gas will continue to drive additional growth. Through the execution of our Powering Ahead strategic plan, we expect to capitalize on these long-term opportunities, while also becoming a more balanced company as we further implement our diversification and international expansion strategies."

ABOUT GENERAC

Since 1959, Generac has been a leading designer and manufacturer of a wide range of power generation equipment and other engine powered products. As a leader in power equipment serving residential, light commercial, industrial and construction markets, Generac's power products are available globally through a broad network of independent dealers, retailers, wholesalers and equipment rental companies, as well as sold direct to certain end user customers.