Generac Reports Third Quarter 2010 Earnings

WAUKESHA, WISCONSIN, (November 4, 2010) - Generac Holdings Inc., a leading designer and manufacturer of backup power generation products, today reported financial results for its third quarter ended September 30, 2010.

Third Quarter 2010 Highlights

- Net sales increased year-over-year by 11.4% to $160.7 million as compared to $144.3 million in the third quarter of 2009.

- Net income increased year-over-year by 60.6% to $23.0 million as compared to $14.3 million for the third quarter of 2009; Adjusted net income increased 35.3% to $36.7 million from $27.1 million in the third quarter of 2009.

- Net cash provided by operating activities improved 50.0% year-over-year, from $24.3 million to $36.5 million during the third quarter 2010.

- Diluted net income per common share was $0.34 per share; Adjusted diluted net income per common share was $0.55 per share.

- The Company successfully launched its new economy home standby product, CorePowerTM Series, establishing a new lower opening price for the category.

"Despite the difficult operating environment which persisted throughout the third quarter of 2010, we achieved a double digit year-over-year increase in net sales, driven by increased sales for both our residential and industrial products.

Although we have not had the benefit of major outage activity this summer, improved industrial market conditions and our ability to expand distribution and create awareness for our residential products have helped us drive strong revenue growth in our business." said Aaron Jagdfeld, President and Chief Executive Officer of Generac.

Residential product sales of $101.0 million increased 12.6% in the third quarter 2010 from $89.7 million in the third quarter last year. This year-over-year increase was driven primarily by our marketing programs for home standby generators, continued expansion of our residential products distribution network, and a shift towards in-season buying.

Industrial and commercial product sales of $49.6 million in the third quarter increased 7.6% from $46.0 million for the comparable period in 2009. This increase was driven by an improvement in our focused end markets and expansion of our distribution.

The Company has also announced the following strategic initiatives designed to improve Generac's long-term growth profile:

- In October 2010, the Company announced it had reached a licensing agreement with Honeywell to be the exclusive licensee of Honeywell branded standby and portable generators. By leveraging Generac's product offering and support network, the Honeywell brand will provide incremental access to underpenetrated channels for the Company including security and HVAC.

- At the recent 2011 Green Industry and Equipment (GIE) Expo in Louisville, KY, the Company announced plans to re-enter the market for residential and contractor grade pressure washers, allowing it to leverage its existing customer base, supply-chain and engineering expertise.

Overall, gross profit margin increased sequentially to 41.9% from 39.0% in the second quarter 2010, but was down from 44.7% in the same period last year.The year-over-year decline in gross margins was mostly attributable to increased commodity costs versus prior year and a higher mix of lower kilowatt residential products sold during the current quarter compared to the prior year quarter.

Operating expenses for the third quarter of 2010 increased 10.9% to $37.6 million compared to $33.9 million in third quarter of 2009. The year-over-year increase in operating expenses was attributable to increased administrative costs related to operating as a public company, non-cash stock compensation expenses, higher engineering and product development costs, and higher variable operating expenses on higher net sales versus prior year.

Adjusted EBITDA of $45.7 million was relatively flat compared to $46.1 million in the third quarter of 2009.Interest expense decreased in the third quarter of 2010 to $6.5 million, compared to $17.2 million in the same period last year due to debt repayments, lower LIBOR rates, and the termination of certain interest rate swap agreements. 

Free cash flow generation remained strong, improving 51.1% year-over-year to $35.2 million during the third quarter 2010 from $23.3 million in the third quarter of 2009.

OUTLOOK

Mr. Jagdfeld concluded, "As we close out 2010, we expect to see continued year-over-year strength from our industrial and commercial products as demand in those markets continues to improve. However, more than offsetting this improvement, we see our fourth quarter 2010 residential product sales down year-over-year as certain customers have approached seasonal stocking for lower kilowatt products more conservatively this year versus last year.Despite this, we remain confident in our longer term growth initiatives including new product launches, continued expansion of our distribution network and our entry into new geographies and markets that will continue to drive sales growth and significant cash flow generation for our business."

Briggs Contract Boosts Pay, But Health Insurance Costs Also Grow

www.jsonline.com

Oct. 22, 2010 -- Briggs and Stratton Corp. workers will lose ground financially under a newly approved labor contract despite a signing bonus and 2% annual raises for the next three years, the head of the union representing the employees said Friday.

A company spokeswoman, however, called approval of the contract "a win-win for everyone."

Members of United Steelworkers Local 2-232 on Thursday voted 211-77 to accept the three-year pact.

"To the public, it may appear that we're getting a raise, but in reality, we're not," said Jesse Edwards, president of Local 2-232.

Employees' increased health insurance costs under the contract more than offset the boost in pay and the one-time, $500-a-person signing bonus, he said.

"We feel that it was a bad contract, but it gives the members a chance to work a little longer and maybe come back after the three years and try to improve the contract," Edwards said.

He said the union leadership made no recommendation to members on the pact. It covers about 350 employees at Briggs' plant in Wauwatosa, where the firm also has its headquarters.

Union-represented workers there average about $16 an hour, Edwards said.

Under the new contract, he said, the amount employees must pay annually in health insurance deductibles before coverage kicks in will rise by $1,200 for a single person and by $1,800 for a family.

He said the contract allows the company to bring in temporary workers to supplement production in the generator division at Wauwatosa as it sees fit.

Major Wisconsin manufacturers increasingly are seeking to use lower-paid temporary, or casual, labor, which gives management production flexibility and cost savings.

Laura Timm, director of corporate communications for Briggs, said by e-mail that the company recently added jobs at Wauwatosa with the introduction of home-generator manufacturing. The new contract reflects the seasonal production of the generators, she said.

Virtually all of Briggs' U.S. employees already have seen or will see the same changes in health insurance plans that the contract with the Steelworkers incorporates, Timm said.

Edwards also said Friday that Briggs plans to move production of engine coils out of Wauwatosa in 2012. The work will go to China and the Dominican Republic, he said. About 20 to 25 Wauwatosa employees now do the coil work, Edwards said.

Timm said Briggs has had coils made in the Dominican Republic for "a very long time."

"We continue to evaluate the best possible source for coils both domestically and internationally," she said.

Husqvarna Interim Report January - September 2010 - Excerpts

Stockholm October 22, 2010

Magnus Yngen, President and CEO:

”End-user demand continued to recover in most of our markets during the quarter. Sales as well as operating income for the Group as a whole increased. Europe & Asia/Pacific and Construction showed strong performances. Operating income for Americas was negative due to lower sales and increased costs. Despite a recovery in the market, our sales for Americas decreased due to the reduced listings of low-end lawn mowers with a major retailer in North America for the 2010 season.

Strong growth in sales to the dealer channel continued to be an important driver for the Group’s positive earnings development during the year, as were innovative new product launches. Our estimate is that we have gained market shares for lawn and garden products during the season in Europe.

In the fourth quarter, which is the smallest quarter of the year for the Group, we expect Group shipments to be slightly higher than in the fourth quarter of 2009.”

THIRD QUARTER

Net sales

Net sales for the third quarter increased by 3% to SEK 6,907m (6,709).  Adjusted for exchange-rate effects, sales increased by 5%. Prices were unchanged. Europe & Asia/Pacific accounted for 6 percentage points of the adjusted increase and Construction for 1 percentage point while Americas accounted for a decrease of 2 percentage points.

Efforts to grow sales in the dealer channel continued to be successful and increased double digit both in Europe and Asia/Pacific and in Americas. In North America, the reduced listings with a major retailer for the 2010 season had a negative impact on sales, which were partly offset by sales to other accounts. Sales of forestry and construction products are relatively more important in the third and fourth quarter when the gardening season in most of our markets normally comes to an end. Sales of garden products in the third quarter predominantly consist of replenishment orders from the trade.

Operating income

Third quarter operating income increased by 137% compared to the corresponding quarter 2009 and amounted to SEK 411m (173). Currency had a positive effect of approximately SEK 17m and the net positive effect from items affecting comparability was SEK 59m. Adjusted operating income increased by SEK 162m.

The increase in operating income for the Group was mainly a result of a favorable mix as well as higher sales. Selling and administrative costs increased, mainly due to higher distribution and IT costs. The operating margin, excluding items affecting comparability, increased to 5.9% (3.5). Third quarter operating income 2009 included restructuring charges of SEK 59m.

Operating income and operating margin for Europe  and Asia/Pacific and Construction increased. Operating income and operating margin for Americas decreased, due to lower sales and production volumes as well as higher distribution and IT costs.

Changes in exchange rates, including both translation and transaction effects net of hedging, had a total positive effect on operating income of SEK 17m (-74). Hedging contracts had a positive effect of SEK 36m (-30).

FIRST NINE MONTHS

Net sales

Net sales for the first nine months declined by 6% to SEK 27,446m (29,342). Adjusted for exchange-rate effects, sales were unchanged. Prices were also unchanged. Europe & Asia/Pacific accounted for a sales increase of 2 percentage points of the adjusted change and Americas for a negative 3 percentage points while Construction’s contribution was 1 percentage point. Efforts to grow sales in the dealer channel continued to be successful.

Operating income

Operating income for the first nine months increased by 21% compared to the first nine months of 2009 and amounted to SEK 2,508m (2,075). Currency had a positive effect of approximately SEK 130m and the net negative effect from items affecting comparability was SEK 95m. Adjusted operating income increased by SEK 398m.

Operating income 2010 includes charges of SEK 207m for the previously announced closure of one factory in North America and one in Greece and costs related to a legal case in North America. For further information see page 6. The first nine months of 2009 included items affecting comparability totaling SEK 112m related to restructuring charges.

The increase in operating income was mainly a result of favorable mix and currency effects, lower costs for direct material and higher sales, which was partly offset by higher IT and distribution costs. The operating margin, excluding items affecting comparability, increased to 9.9% (7.5)

NET FINANCIAL ITEMS

Net financial items for the third quarter amounted to SEK -101m (-65) and for the first nine months to SEK -258m (-433). The higher net financial cost in the third quarter is mainly due to a negative mark-to-market impact of the interest rate component in the Group’s hedge contracts. The improvement for the first nine months is primarily due to lower net debt. The average interest rate on borrowings at the end of the third quarter was 3.6% (3.2).

INCOME AFTER FINANCIAL ITEMS

Income after financial items for the third quarter increased by 187% to SEK 310m (108) corresponding to a margin of 4.5% (1.6). For the first nine months income after financial items increased by 37% to SEK 2,250m (1,642) corresponding to a margin of 8.2% (5.6).

TAXES

Taxes for the first nine months amounted to SEK -377m (-287), corresponding to a tax rate of 17% (17) of income after financial items. The tax rate is affected by utilization of tax-losses carried forward. The utilization of tax-losses carried forward are mainly related to the third quarter.

EARNINGS PER SHARE

Income for the third quarter increased by 209% to SEK 402m (130), corresponding to SEK 0.70 (0.23) per share after dilution. For the first nine months, the increase was 38% and amounted to SEK 1,873m (1,355), corresponding to SEK 3.25 per share (2.50). Due to the rights issue implemented in 2009, the average number of shares for the first nine months of 2010 has increased compared with the first nine months of 2009.

OUTLOOK FOR THE FOURTH QUARTER 2010

Due to seasonality, the fourth quarter is the smallest quarter of the year in terms of sales and operating income. Inventories in the trade of the Group’s products at the end of the third quarter were estimated to be on low levels in both the dealer and retail channels. To date in 2010, end-user demand has increased in most markets compared to the preceding season. However, the trade remains reluctant to build inventory.

The positive development for Europe & Asia/Pacific and for Construction is expected to continue, while shipments in Americas are expected to be down. In total, Group shipments in the fourth quarter of 2010 are expected to be slightly higher than in the fourth quarter of 2009.

PERFORMANCE BY BUSINESS AREA

As of 1 January 2010, external reporting comprises three business areas:

• Europe & Asia/Pacific, comprising forestry and garden products sold in Europe, Asia and the

Pacific region.

• Americas, comprising forestry and garden products sold in North America and Latin America

• Construction, comprising products for the global construction and stone industries.

Restatement of the third quarter 2009 between Americas and Europe & Asia/Pacific

Operating income for the third quarter as well as for the first nine months 2009 has been restated between Americas and Europe & Asia/Pacific due to correction of an intercompany transaction. The restatement had no impact on the Group’s operating income.

Third quarter operating income for Europe and Asia/Pacific has been restated from SEK 135m to SEK 190m and the first nine months of 2009 from SEK 1,649m to SEK 1,704m. Operating income for the third quarter for Americas has been restated from SEK 47m to SEK -8m and for the first nine months of 2009 from SEK 597m to SEK 542m.

Europe & Asia/Pacific

Sales for Europe & Asia/Pacific in the third quarter increased 8%. Adjusted for exchange-rate effects the sales increase was 11%. In the first nine months, sales decreased 1%. Adjusted for exchange-rate effects, sales in the first nine months increased by 5%. Prices were unchanged.

Sales to the dealer channel developed strongly throughout the first nine months. Most regions, except for UK and France, had higher sales than in the preceding year. Several new products, including Husqvarna branded lawn mower range, mini rider and an expanded Automower® range, contributed to the increase.

Sales of watering products were also strong. It is estimated that the Group gained market share in Europe

during the first nine months.

Operating income and operating margin increased substantially in the third quarter. Performance was especially strong for watering products and accessories. The higher operating income was mainly a result of higher sales and an improved mix.

Operating income for the first nine months the preceding year was charged with restructuring costs amounting to SEK 111m, whereof SEK 59m in the third quarter. Operating margin for the first nine months, excluding items affecting comparability, increased to 17.0% (12.9).

Americas

Sales for Americas in the third quarter decreased 4%. Adjusted for exchange-rate effects the decrease was 5%. In the first nine months, sales decreased 14%. Adjusted for exchange-rate effects, sales in the first nine months decreased by 7%. Prices were stable during the period.

The reduced listings with a major retailer in North America for the 2010 season had a negative effect on sales, especially for low-end lawn mowers. Efforts to grow sales in the dealer channel and with other retail accounts continued to pay off, but could not compensate for all of the reduced listings.

Operating income in the third quarter was negative and the margin amounted to -3.7% (-0.3). Operating income was negatively affected by lower sales and production volumes and higher costs for distribution and IT.

Operating income for the first nine months in 2010 includes items affecting comparability amounting to SEK 160m. SEK 110m is related to the closure of the factory in Beatrice and the transfer of the production to the Group’s plant in Orangeburg in the second quarter. SEK 50m is related to the settlement of an engine-capacity lawsuit in the first quarter. Operating margin for the first nine months, excluding items affecting comparability, decreased to 3.1% (4.1)

Construction

Sales for Construction in the third quarter increased 6%. Adjusted for exchange-rate effects the sales increase was 8%. In the first nine months, sales increased 2%.  Adjusted for exchange-rate effects, sales in the first nine months increased by 7%.

The market for construction products improved in both North America and Europe during the first nine months.

Sales to rental companies increased. A number of new products have been successfully launched during the year and the Group’s market shares are estimated to have increased.

Operating income and margin in the third quarter improved, mainly as a result of higher sales and production volumes as well as new products with higher margins. The third quarter operating income includes a cost of SEK 16m related to a legal settlement. Operating margin for the third quarter increased to 5.9% (4.3).

Operating income for the first nine months was charged with restructuring costs amounting to SEK 47m, whereof all was charged in the second quarter. Operating margin for the first nine months, excluding items affecting comparability and the above mentioned charge of SEK 16m, increased to 5.7% (-2.6).

PARENT COMPANY

Net sales in the first nine months of 2010 for the Parent Company, Husqvarna AB, amounted to SEK 8,416m (7,049), of which SEK 6,452m (5,352) referred to sales to Group Companies and SEK 1,964m (1,697) to external customers. Income after financial items amounted to SEK 2,505m (2,187). Income for the first nine months was SEK 2,093m (1,857).

Investments in tangible and intangible assets for the first nine months amounted to SEK 205m (191). Cash and cash equivalents amounted to SEK 503m (1,311) at the end of the period. Undistributed earnings in the Parent Company at the end of the period amounted to SEK 17,985m (16,416). A dividend payment to shareholders in the amount of SEK 574m (0) was made during the second quarter.

RESTRUCTURING

In the second quarter 2010, the Group announced further restructuring in line with its strategy which includes increasing efficiency by consolidating the manufacturing footprint. The factory in Beatrice, Nebraska, will be closed and the production will be transferred to the factory in Orangeburg, South Carolina. The factory for construction equipment in Athens, Greece will also be closed.

Annual savings from the initiatives will amount to SEK 60m and will be realized gradually with full effect from the first quarter of 2012. Second-quarter operating income was charged with SEK 157m, of which the closure of the Beatrice factory accounted for SEK 110m.

In October 2009, the Group announced the implementation of a number of structural changes in 2009-2011. These measures are aimed at eliminating overlaps and increase efficiency within production and administration and involve consolidation of production in Sweden and the US, and of the sales organization in Europe & Asia/Pacific. The total cost of these measures amounts to SEK 399m and annual savings from these activities are expected to amount to approximately SEK 400m, and will be realized gradually from the second half of 2010 with full effect from the first quarter of 2012. Capital expenditure related to the restructuring is expected to amount to approximately SEK 400m, of which a new plant in Poland will account for approximately SEK 250m.

In September 2008, an initiative to reduce fixed costs through personnel cut-backs was announced. The total costs for the cut-backs were SEK 369m and the annual savings are SEK 450m as of the third quarter 2009.

Operational risks

Operational risks include general economic conditions, as well as trends in consumer and professional spending, particularly in North America and Europe, where the majority of the Group’s products are sold.

An economic downturn in these markets may have an adverse effect on Group sales and earnings. Shifts in product technology as well as shifts in distribution structure could also have a negative impact on Group sales and earnings.

Demand for the Group’s products is also dependent on weather conditions. Dry weather can reduce demand for such products as lawn mowers and tractors, but can stimulate demand for irrigation products.

Demand for chainsaws normally increases after storms and during cold winters.

Husqvarna’s operations are also subject to seasonal variations. Demand for consumer garden products and commercial lawn and garden products normally peaks in the second quarter, while the peak season for chainsaws is normally in the third quarter. Husqvarna has adapted its production processes and supply chain to respond to these conditions. However, parameters such as cash flow and production levels follow the seasonal variations in demand, which results in relatively greater risk exposure for the Group over short periods of time.

The Group is currently implementing a number of structural changes as well as a new organization.  Restructuring and organizational changes always involve the risk of creating higher costs than anticipated and losing key personnel.

Financial risks

Financial risks refer primarily to exchange rates, interest rates, financing, and credit risks. Risk management within the Husqvarna Group is regulated by a financial policy established by the Board of Directors. A higher indebtedness resulting from the seasonality of the Group’s operations involve greater exposure to changes in exchange rates and interest rates, as well as financing risks.

Acquisitions

Husqvarna has completed a number of acquisitions. Although the Group has historically demonstrated ability to successfully integrate acquired businesses, such integration always involves certain risks. Net sales can be adversely affected and costs can be higher than anticipated.

Briggs and Stratton Announces Fiscal 1st Quarter Financial Results

MILWAUKEE, Oct 21, 2010 -- Briggs and Stratton Corporation today announced financial results for its first quarter ended September 26, 2010.

Highlights:

• First quarter fiscal 2011 consolidated net sales of $334.1 million, representing an increase of $9.5 million or 2.9% from the first quarter of fiscal 2010.
• First quarter fiscal 2011 consolidated net loss of $8.1 million, or $0.16 per diluted share, improved from a consolidated net loss of $8.7 million, or $0.18 per diluted share, one year ago.
• Net debt outstanding as of September 26, 2010 is down $106.5 million, or 40.5%, from September 27, 2009.

"We are pleased with our fiscal 2011 first quarter results as we move forward executing our strategy despite continued economic uncertainty," commented Todd J. Teske, Chairman, President and Chief Executive Officer of Briggs and Stratton. "We improved sales and operating results through a period of continued slow growth in consumer spending. Along with these improved operating results, our balance sheet remains strong as we continue to focus on efficiently managing our capital."

Consolidated Results:

Fiscal 2011 first quarter consolidated net sales were $334.1 million and the consolidated net loss was $8.1 million or $0.16 per diluted share. The first quarter of fiscal 2010 had consolidated net sales of $324.6 million and a consolidated net loss of $8.7 million or $0.18 per diluted share.  

The $9.5 million consolidated net sales increase was due primarily to increased international engine shipments as well as improved lawn and garden and snow thrower product sales volumes within our Power Products segment, offset by lower sales of pressure washers and portable generator products. The reduced net loss of $0.6 million compared to the prior year fiscal first quarter was primarily the result of increased engine sales to third party customers and improved engine plant productivity on higher production volumes, offset by Jefferson plant transition costs and lower production volumes in the Power Products segment and increased costs stemming from higher salaries and benefits expenses.

The higher salaries and benefits expenses include a $3.0 million net increase in pension and other post-retirement benefits as well as an increase in salaries and 401(k) company match benefits of $5.0 million, which have been fully restored since being temporarily reduced early in the first quarter of fiscal 2010.

Engines Segment:

Fiscal 2011 first quarter net sales were $205.0 million, which was $0.9 million or 0.4% less than the prior year. This decrease from the same quarter last year is primarily due to a reduction in intercompany sales of engines to our Power Products segment due to lower sales and production of pressure washers and portable generators, offset by an increase in international engine unit volumes to European and Asian OEMs.

The fiscal 2011 first quarter loss from operations was $5.5 million, which is $0.7 million more than the $4.9 million loss from operations experienced in the first quarter of fiscal 2010. This increase in the loss from operations over the prior year was the result of higher salaries and benefits expenses of $6.8 million, offset by improved absorption as engines produced increased 9% over the prior year first quarter.

The increase in salaries and benefits is primarily attributed to temporary reductions in salaries and 401(k) match implemented in the first quarter last year; such salaries and benefits have since been restored resulting in the increase between years.

Power Products Segment:

Fiscal 2011 first quarter net sales were $168.2 million, which was $2.3 million or 1.4% greater than the prior year. The improvement in sales compared to the same quarter last year primarily resulted from increased unit shipment volumes of lawn and garden products, offset by reduced shipment volumes of pressure washers and portable generators as retailers reduce their inventories in these categories.

The fiscal 2011 first quarter loss from operations was $5.0 million, or $7.5 million lower than the income from operations of $2.5 million in the first quarter of fiscal 2010. This decline in income from operations between years resulted from higher manufacturing spending including transition costs from the closure of our Jefferson manufacturing facility, lower absorption primarily related to the decreased production of portable generators and pressure washers, as well as increased expenses of $1.5 million related to salaries and benefits.

The increase in salaries and benefits is primarily attributed to temporary reductions in salaries and 401(k) match implemented in the first quarter last year; such salaries and benefits have since been restored resulting in the increase between years. Higher manufacturing spending is attributed to higher material costs and increased freight expense.

Corporate Items:

Interest expense was lower between years because of lower outstanding borrowings. The effective tax rate for the fiscal 2011 first quarter was a benefit of 33.4%, or $4.1 million, versus a benefit of 36.1%, or $4.9 million, in the first quarter last year. The effective tax rate benefit for the first quarter of fiscal 2011 was lower than the 2010 period because 2010included the favorable tax impact of the settlement of audits.

Financial Position:

The 8.875% Senior Notes that are due in March 2011 are classified as Short-Term Debt in the consolidated balance sheet as of the end of the fiscal 2011 first quarter. The company believes it will be able to replace these borrowings with new financing at or prior to the maturity date of the Senior Notes. In the unlikely event the company is unable to replace these borrowings with new financing upon the maturity of the Senior Notes, we believe that the availability within our existing revolving credit facility will be sufficient to pay off the outstanding Senior Notes.

Net debt at September 26, 2010 was $156.4 million (total debt of $204.1 million less $47.7 million of cash), an improvement of $106.5 million from September 27, 2009. Cash flows used by operating activities for the fiscal 2011 first quarter were $55.5 million compared to cash provided by operating activities of $11.9 million in the fiscal 2010 first quarter. The increase in cash used for operating activities is primarily due to working capital requirements to replenish inventory from lower levels at the end of fiscal 2010.

Outlook:

The company continues to project that fiscal 2011 net income will be in the range of $60 to $70 million or $1.20 to $1.40 per diluted share. Consolidated net sales are projected to be approximately 2% to 4% higher than in fiscal 2010. Engines Segment sales are forecasted higher on modest volume and pricing improvements while the Power Products Segment sales are forecasted higher primarily due to higher expected volumes of lawn and garden equipment. Demand for portable generators and the related engines due to landed hurricane activity have not been included in our fiscal 2011 sales forecast.

Operating income margins for fiscal 2011 are projected to be in the range of 5.0% to 6.0%, and interest expense and other income are forecasted to be in the range of $23 million to $25 million and $4 million to $5 million, respectively. The effective tax rate for the full year is projected to be in a range of 32% to 35%.

Husqvarna Plans Continued Beatrice Operations With Tentative Closure Dec. 31, 2010

HUSQVARNA CONTINUES OPERATION

October 16 -- Not much has changed for Husqvarna Turf Care Company since the lawnmower manufacturer announced it would be closing its Beatrice location and merging business to South Carolina in May.

The Swedish company said the consolidation would streamline its business.

Husqvarna spokesperson Beth Wiseman said the plant closure date is tentatively set for Dec. 31, 2010.

“A few employees may remain until mid-January, 2011 to close down the building,” Wiseman wrote in an email to the Daily Sun.

Wiseman said the employment level at the plant has not fluctuated much since the announcement of the closing and more than 300 people are still employed.

Over the next few months, Husqvarna will begin to reduce its workforce, culminating in the Dec. 31 closing.

“To date, we have only laid off two employees,” Wiseman wrote. “Several employees resigned having found employment with other companies in the area.”

Further reductions in the workforce are scheduled for Oct. 29, Dec. 9 and Dec. 31.

Wiseman said some employees, including hourly, professional and management have accepted positions within Husqvarna in Charlotte, N.C. and Orangeburg, S.C., site of Husqvarna’s U.S. headquarters.

Beginning in mid-December, Husqvarna will remove its equipment and machinery from the plant.

“We plan to begin packing up equipment for shipment during the week of December 13, 2010,” Wiseman wrote.

Currently, once Husqvarna leaves Beatrice, there are no other companies lined up to move into the 274,000 sq. feet facility located just off U.S. Highway 77 in north Beatrice.

John DeHardt, managing principal of Kessinger Hunter, the owner of the Husqvarna building, said he has had one “lukewarm” lead on a company interested in leasing the building.

“We’re holding out hope on one unnamed company that would be a manufacturer,” DeHardt said in a phone interview Monday.

DeHardt said he is optimistic a company would seize opportunity to set up shop in Beatrice.

“Unfortunately, no one has immediately come forward, but we have every hope that we will secure a quality firm that wants to set up business in Beatrice,” he said.

In addition to Kessinger Hunter, a Husqvarna brokerage firm has also been marketing the building to sublease to companies needing factory space.

DeHardt said Husqvarna has 4.5 years remaining on its lease of the facility, and both Kessinger Hunter and the City of Beatrice hope to secure another company to fill the building.

“Both of us would like to see a major manufacturing presence in that building and I have a fair degree of optimism we will succeed in securing a company in the not too distant future,” DeHardt said. “It’s a great facility and more importantly a great local workforce.”

“A combination of those two should be a great way to attract new business,” he added.

CPSC, Briggs and Stratton Recalls Riding Mowers

Briggs and Stratton Recalls Riding Mowers Due to Injury Hazard from Projectiles; Sold Exclusively at Sears

October 15, 2010

The following product safety recall was voluntarily conducted by the firm in cooperation with the CPSC. Consumers should stop using the product immediately unless otherwise instructed. It is illegal to resell or attempt to resell a recalled consumer product.

Units: About 500

Manufacturer: Briggs and Stratton Power Products Group, LLC, of Milwaukee, Wis.

Hazard: These riding mowers came to consumers with the side discharge chute not fully secured to the mower. Bolts can be forcefully discharged from mower if not properly tightened, posing an injury hazard to consumers.

Incidents/Injuries: The firm received one report of a bolt that discharged forcefully, breaking a window.

Description: This recall involves Craftman riding mower with model number 107.28034 and serial numbers listed below. The rear engine mounted riding mower is black. The model and serial numbers can be found on the data tag on the back of the riding mower.

Serial numbers included in this recall

2014033403 through 2014034552

2014082112 through 2014082861

2014149995 through 2014151266

2014346290 through 2014346803

Sold exclusively at: Sears stores nationwide between February 2010 and May 2010 for about $1,400.

Manufactured in: USA

Remedy: Consumers should immediately stop using these recalled riding mowers and contact Sears for a free inspection and repair. Sears is sending consumers letters with information on scheduling an inspection and repair.

Consumer Contact: For additional information, contact Sears at (800) 859-7026 between 8 a.m. and 10 p.m. ET Monday through Friday, or visit the firm’s website at www.sears.com

OPEI Issues Consumer Alert on New Ethanol (E15) Fuel

ALEXANDRIA, VA -- Oct 13, 2010 -- The Outdoor Power Equipment Institute (OPEI) today advised outdoor power equipment users to be aware of new fuel coming on the market with higher levels of ethanol that could harm equipment sitting in their garages, tool sheds and maintenance buildings. Over two hundred million pieces of outdoor power equipment could be at risk of product failure or voided warranty, including chainsaws, lawnmowers, utility vehicles, generators, snow throwers, trimmers, edgers, pruners, chippers, shredders and blowers.

This advisory comes after the decision by the Environmental Protection Agency (EPA) to approve higher levels of ethanol (E15 or 15% ethanol) in gasoline for use in only 2007 and newer automobiles.

Consumers need to be aware that until today, the maximum allowable limit of ethanol in gasoline was E10 or 10%. That means, all engine products in use today, with the exception of "flex-fuel" automobiles, were designed, built and warranted to run on gasoline containing no more than 10% ethanol. Use of E15 or higher ethanol blended fuels in any engine product, with the exception of a "flex-fuel" automobile, could cause performance issues, damage engines, and void the manufacturer's warranty.

Consumer Advisory: OPEI advises consumers of the following measures to protect their products and prevent voiding warranties:

1. Consumers should read and follow the owner's manual. The owner's manual will clearly explain what fuels can be used to ensure a properly functioning product.

2. Do not put any fuel containing more than 10 percent (E10) in small engine products (EPA's decision only applies to 2007 and newer highway vehicles), unless otherwise stated.

3. Consumers must check the pump to be sure that it is dispensing E10. Some gas pumps at local gas stations may offer both E10 and E15, or have blender pumps that dispense mid-level ethanol fuels for "flex-fuel" automobiles. Higher ethanol fuel (E15) may be less expensive than regular (E10) fuel, but putting E15 into an E10 approved product could cause product failure and void its warranty.

4. Many consumers fill their vehicle gas tank and the gasoline can at the same time. Be sure that the gas can is filled only with E10 fuel.

"The Department of Energy's (DOE) own testing has shown that putting anything other than E10 in non-road, small engines can cause performance irregularities and equipment failure," said Kris Kiser Executive Vice President at the Outdoor Power Equipment Institute. "Consumers need to understand this or they could encounter performance irregularities, increased heat and exhaust temperatures, failure or unintentional clutch engagement when using outdoor lawn and garden equipment."

Added Kiser, "Consumers should understand that current outdoor power equipment may be permanently damaged and could pose a safety risk if E15 fuel is used. Almost without exception, current equipment is not designed, built or warranted for mid-level blends."

OPEI supports Congressional efforts towards energy independence and the use of biofuels, including ethanol, and manufacturers can design and build future equipment to run on specific blends. However, current equipment was not designed to run on any fuel exceeding 10% ethanol.

Background Growth Energy, an ethanol industry trade group, petitioned the EPA in March 2009 to raise the limit on ethanol in gasoline from 10 to 15 percent. OPEI urged EPA to be deliberative in its review process, assuring thorough and adequate testing to assure that E15 would not harm existing products or pose safety risks. By approving E15 use in a small subset of engines on the road, there is a high risk that consumers will unknowingly or mistakenly put E15 in products for which it has not been approved.

About OPEI OPEI is an international trade association representing the $15 billion landscape, forestry, utility and lawn equipment manufacturing industry. OPEI is committed to ongoing efforts to ensure consumer safety and access to outdoor power equipment in order to maintain and enhance outdoor landscapes. OPEI works with federal, state and local groups to ensure that equipment operates efficiently, safely and is fully emission compliant. OPEI is a recognized Standards Development Organization for the American National Standards Institute (ANSI) and active internationally through the International Standards Organization (ISO) in the development of safety standards. For more information on OPEI visit www.OPEI.org.

OSHA Proposes Penalties Against Briggs McDonough, GA Plant For Safety Violations

Oct 11, 2010 -- OSHA is proposing $78,000 in penalties against Briggs and Stratton Corp. in McDonough, Ga., for nine safety and health violations following a worker being injured.

In April, an employee sustained thermal and chemical burns when he stepped off a platform into a tank that contained hot caustic chemicals while repairing a wash line. The company is being cited with one serious safety violation for allowing the platform above the chemical tank to have open sides without a railing or guards.

"If the proper safety precautions had been taken by management, this injury could have been prevented," said Bill Fulcher, director of OSHA's Atlanta-East Area Office. "It is the employer's responsibility to ensure all aspects of OSHA standards are followed."

Briggs and Stratton is also being cited with one willful and six additional serious safety violations, along with one serious health violation. The willful citation with a $55,000 proposed penalty is due to the company exposing employees to danger by failing to develop lockout/tagout procedures to control hazardous energy.

Serious safety violations include exposing employees to amputation hazards by failing to install machine guards; electrical hazards including improper use of electrical equipment, improper electrical connections and making electrical equipment inaccessible for maintenance; unused openings in cabinets, boxes and fittings that were not effectively closed; and material data sheets on hazardous chemicals that were not readily available to employees. The serious health citation was issued because the employer did not provide training to employees on hazards associated with the specific chemicals being used in the plant.

Fines for the serious citations total $23,000.

According to the company’s website, Briggs and Stratton is the world’s largest producer of gasoline engines for outdoor power equipment.

The company has 15 business days from receipt of the citations and proposed penalties to comply, request an informal conference with OSHA's area director or contest the findings before the independent Occupational Safety and Health Review Commission.