Husqvarna Interim Report January - March 2014

Stockholm

April 24, 2014

 Kai Wärn, President and CEO:

“We are pleased to see that the first quarter performance is benefiting from the Accelerated Improvement Program and a good market demand. The program that was launched last year and which aims at substantially strengthening the profitability of the Group is delivering encouraging results. In particular, direct material costs have been reduced and the distinct focus on our premium brands and product leadership areas is beginning to have a positive impact.

From a market perspective, the year has started well in Europe, affected favorably by an early spring. Demand in North America developed positively, driven by retail inventory stock-up, despite another long winter across much of the region. Total currency adjusted net sales for the Group increased 7%, with higher sales in all business areas. Operating income rose 31% to SEK 903m – despite a negative currency development – and the operating margin increased to 9.3% (7.6).

Substantial profitability improvements were achieved in Americas. Direct material costs were reduced and the channel mix developed favorably, supporting a continued recovery of the operating income and margin to SEK 218m (142) and 4.8% (3.3) respectively. First experiences of the new organization, based on separate profit centers for retail and dealer operations, is reinforcing our view that this structure will be an important vehicle for further profitability improvements.

In Europe & Asia/Pacific, we are especially pleased with the product mix. Sales developed well for the prioritized areas, including robotic lawn mowers and watering products. Total sales for the business area rose 5% adjusted for currency, and operating income increased 22% to SEK 669m (550).

Construction reported another strong quarter with higher sales in all regions. The margin rose to 9.8% (6.5), leveraging primarily on a sales growth of 11%.

Going forward, we will continue the execution of the Accelerated Improvement Program. In addition, we are cautiously optimistic about the underlying demand.”

First quarter, January - March

•         Net sales increased to SEK 9,685m (9,024). Adjusted for exchange rate effects, net sales increased 7%.
•          Operating income rose 31% to SEK 903m (688), including negative foreign exchange impact of SEK -45m.
•          Higher sales and operating income for all business areas.
•          Operating income positively impacted by lower costs for materials, product mix and channel mix.
•          Earnings per share increased to SEK 1.07 (0.81).
•          The net debt/equity ratio improved to 0.73 (0.90).

FIRST QUARTER, JANUARY – MARCH 2014

Net sales

Net sales for the first quarter 2014 increased by 7% to SEK 9,685m (9,024). Adjusted for exchange rate effects, net sales for the Group increased 7%, by 5% for Europe & Asia/Pacific, by 9% for Americas and by 11% for Construction.

Operating income

Operating income for the first quarter increased 31% to SEK 903m (688), corresponding to an operating margin of 9.3% (7.6). Operating income and margin rose for all business areas.

Operating income was positively impacted primarily by the higher sales volume and lower direct material costs. Costs for selling and administration as a percentage of sales declined, although logistics costs increased due  to the higher sales activity. Operating income also benefitted from savings of SEK 34m related to the staff reduction program from 2012.

Changes in exchange rates had a total negative impact on operating income of SEK -45m compared to the first quarter 2013.

Financial items net

Financial items net amounted to SEK -96m (-86), of which net interest amounted to SEK -82m (-91). The average interest rate on borrowings at March 31, 2014, was 3.3% (3.6).

Income after financial items

Income after financial items increased to SEK 807m (602) corresponding to a margin of 8.3% (6.7).

Taxes

Tax for the first quarter amounted to SEK -191m (-135), corresponding to a tax rate of 24% (22) of income after financial items.

Earnings per share

Income for the period increased to SEK 616m (467), corresponding to SEK 1.07 (0.81) per share.

OPERATING CASH FLOW

Operating cash flow for the first quarter amounted to SEK -1,892m (-1,786). Cash flow from operations, excluding changes in operating assets and liabilities, increased due to the higher result. Cash flow from changes in receivables decreased as a result of the higher sales. The increase in capital expenditure was mainly related to the previously communicated investments within the new manufacturing facility for chainsaw chains in Huskvarna.

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, 2014, excluding non-controlling interests, amounted to SEK 11,975m (11,093), corresponding to SEK 20.9 (19.4) per share.

Net debt decreased to SEK 8,698m (10,053) as of March 31, 2014, of which liquid funds amounted to

SEK 1,755m (1,412) and interest-bearing debt amounted to SEK 9,096m (10,043), excluding pensions. The major currencies used for debt financing are SEK and USD. Net debt decreased by SEK 375m during the last twelve months as a result of changes in exchange rates.

The net debt/equity ratio improved to 0.73 (0.90) and the equity/assets ratio rose to 38% (35).

On March 31, 2014, long-term loans including financial leases amounted to SEK 6,852m (6,574) and short- term loans including financial leases to SEK 2,041m (3,104). Long-term loans consist of SEK 4,946m (4,061) in issued bonds, and bank loans and financial leases of SEK 1,906m (2,513). The bonds and bank loans mature in 2015 - 2018. During the first quarter the Group has entered into a new long term loan amounting to SEK 425m with a five year maturity. The Group also has an unutilized SEK 6 bn syndicated revolving credit facility, with maturity in 2016.

PERFORMANCE BY BUSINESS AREA

Europe & Asia/Pacific

Net sales for Europe & Asia/Pacific increased by 6% in the first quarter.   Adjusted for exchange rate effects, net sales increased by 5%.

Efforts to grow sales of premium brands, in the prioritized product areas and sales channels, developed well. Robotic lawn mowers, watering products and professional chainsaws showed the best development. By sales channel, the sales growth was mainly related to the dealer channel. Market demand was positively impacted by favorable weather conditions due to an early spring.

Operating income increased 22% to SEK 669m (550) and the operating margin improved to 15.4% (13.5), mainly as a result of the higher sales volume, lower direct material costs and favorable product and channel mix.

Changes in exchange rates had a positive year-on-year impact of SEK 5m on operating income.

Americas

Net sales for Americas increased by 8% in the first quarter 2014. Adjusted for exchange rate effects, net sales increased by 9%.

The market continued to gain support from an improving U.S. economy, but was also negatively impacted by the severe winter conditions across much of North America.

Sales increased in the U.S. and Latin America, with the majority of the growth in the wheeled product category. Dealer channel sales continued to develop strongly, increasing 12% in the quarter.

Operating income improved to SEK 218m (142) and the corresponding margin rose to 4.8% (3.3), mainly due to lower direct material costs and the higher sales volume, which partly was offset by higher logistics costs.

Changes in exchange rates had a negative year-on-year effect of SEK -36m on operating income.

Construction

Net sales for Construction increased by 11% in the first quarter 2014. Adjusted for exchange rate effects, the increase in sales was also 11%.

Market demand for construction products developed positively in all regions. Sales increased in all regions, with the best development in the rest of the world, primarily driven by continued strong growth in Brazil.

Operating income increased to SEK 77m (46), mainly as a result of the higher sales volume. The corresponding operating margin improved to 9.8% (6.5).

Changes in exchange rates had a negative year-on-year effect of SEK -13m on operating income.

PARENT COMPANY

Net sales in the first quarter 2014 for the Parent Company, Husqvarna AB, amounted to SEK 3,398m (3,217), of which SEK 2,835 (2,660) referred to sales to Group companies and SEK 563m (557) to external customers.

Income after financial items amounted to SEK 113m (-60). Income for the period was SEK 15m (-111). Investments in tangible and intangible assets amounted to SEK 129m (92). Cash and cash equivalents amounted to SEK 93m (90) at the end of the quarter. Undistributed earnings in the Parent Company amounted to SEK 17,479m (17,308).

CONVERSION OF SHARES

According to the company's articles of association, owners of A-shares have the right to have such shares converted to B-shares. Conversion reduces the total number of votes in the company.

In January 2014, 3,110,239 A-shares were converted to B-shares at the request of shareholders. In April 2014, another 66,454 A-shares were converted to B-shares at the request of shareholders. The total number of votes thereafter amounts to 168,709,835.3.

The total number of registered shares in the company at March 31, 2014 amounted to 576,343,778 shares of which 123,483,629 were A-shares and 452,860,149 were B-shares.

ONE OF THE WORLD'S 100 MOST SUSTAINABLE COMPANIES

Husqvarna Group has been recognized as one of the 100 most sustainable companies by the 2014 Global 100 list. Since 2005, Canadian Corporate Knights Inc. have been compiling The Global 100, which is an extensive data-driven corporate sustainability assessment, where inclusion is limited to a select group of the top 100 large-cap companies in the world. It is based on 12 key indicators, including energy, carbon, water and waste productivity, innovation capacity, safety performance and leadership diversity.

ANNUAL GENERAL MEETING 2014

The Annual General Meeting of Husqvarna AB (publ) was held on April 10, 2014, in Jönköping, Sweden. A dividend of SEK 1.50 (1.50) per share was resolved.

Lars Westerberg, Magdalena Gerger, Tom Johnstone, Ulla Litzén, Katarina Martinson and Daniel Nodhäll were re-elected as Board members. David Lumley, Lars Pettersson and Kai Wärn were elected as new members while Ulf Lundahl and Anders Moberg declined re-election. Lars Westerberg was elected Chairman of the Board.

The AGM approved the Nomination Committee's proposal to elect Ernst & Young AB as auditor for the period from the AGM 2014 up until the end of the AGM 2018.

Furthermore, the AGM approved the Board's proposal for a performance based long-term incentive program for 2014, and the proposal for principles of remuneration to Husqvarna Group Management.

Husqvarna Group Celebrates 325 Years of Innovative Swedish Engineering

On April 27, (2014), Husqvarna Group celebrates 325 years of innovative Swedish engineering. The Group reflects on a unique history, from weapons to robotic mowers, constantly setting new standards in technology and usability.

Since starting out in 1689, Husqvarna Group has manufactured a wide range of quality products. Excellent engineering skills, a strong entrepreneurial spirit and a passion for quality has led to innovative solutions, successfully taking the company from weapons, via sewing machines, stoves and motorcycles, to today's cutting-edge outdoor power products.

"For 325 years Husqvarna has developed and manufactured quality products, to help users achieve great results," says Kai Wärn, President and CEO for Husqvarna Group. "As we look into the future we will continue to deliver high performing products and solutions building on our values of entrepreneurial spirit and staying close to our customers."

Our heritage

In the late 1600's, the wars that raged across Europe resulted in an increase in Sweden's weapons production. Hydropower was required for production, so in 1689, a drilling works was established beside the water falls in Huskvarna in southern Sweden (at that time spelled Husqvarna), where many products are still produced today.

As the need for weapons declined, the company saw an opportunity to branch out by applying the precision engineering skills achieved from producing weapons, to a whole new set of other products ranging from sewing machines, hunting weapons, wood stoves, mincing machines, bicycles, motorcycles, gas stoves, microwave ovens and much more. Since the 1960's, the company focuses on outdoor power products for parks, gardens, forests and products for the construction industry.

Environmental and ergonomic concerns

The know-how gained from developing and manufacturing so many different products became an asset when designing new products and challenging existing solutions, an early way of "thinking outside the box".

Throughout the years, Husqvarna Group has proved its technological leadership by introducing ground breaking and award winning solutions and products with a strong user focus:

  · X-Torq® predominantly used in handheld products, that delivers lower fuel consumption and reduced exhaust emission levels in accordance with the most stringent environmental regulations.

  · AutoTune™, a technological and environmental breakthrough in professional chainsaws, minimizes exhaust emissions and optimizes engine performance, omitting the need to spend time on carburettor adjustments.

  · Battery-powered mowers and chainsaws for semi-professionals; light-weight, quiet and free from direct emissions.

  · Robotic mowers, the quiet self-operating mowers that frees up time for homeowners and facility managers produces no direct emissions during use and consumes very little energy.

  · Demolition robots for the construction industry deliver high power despite of low weight, equipped with remote-control that enables demolition tasks in areas where it is too dangerous for workers to enter.

Our milestones

1689: Rifle factory

When Swedish weapons production took off in the late 17th century, hydropower was needed to handle certain mechanical operations. The drillingwork at the waterfalls in Huskvarna, southern Sweden, is our first plant. At the beginning of the 18th century this state-owned rifle factory had some 1,000 employees. The last shotgun was produced in 1989.

1867: Limited company

The limited company Husqvarna AB is formed.

1872: Breaking new ground

Husqvarna's rifle contract with the Crown comes to an end and the company decides to branch out. This becomes the start of a very innovative and ambitious period, resulting in a broad array of new products including sewing machines (1872), hunting weapons (1877), wood stoves (1884), mincing machines (1890), the first Swedish typewriter (1895). Household equipment is still sold in the Nordics by Electrolux. The sewing machines are now part of SVP Worldwide.

1896: Bicycles

The era of bicycles is started in the factory and Husqvarna-branded bicycles become popular. A large number of patents are registered. The last bicycle is produced in 1962.

1903: The motorcycle era begins

The production of motorcycles gives Husqvarna a world-wide reputation, when lightweight yet powerful engines helped make some of the most successful track racing and motocross bikes in history. Years later, in 1982, a Husqvarna motorbike, MC 258, wins the 250cc class of the legendary Paris-Dakar rally. The motorcycle division was divested in 1987, and is now part of KTM in Austria.

1919: The first lawnmower

When Husqvarna acquires `Norrahammars Bruk', the product range expands to include heating boilers and lawn mowers. This acquisition turns out to be the first step in the Group's current focus on outdoor power products. The first motorized Husqvarna lawnmower for commercial use is launched in 1947, and in 1959 the first homeowner model reaches the market.

1959: The first chainsaw

As demand for bicycles, mopeds and motorcycles declines, forestry becomes increasingly important in Sweden. Husqvarna's expertise in engines from the production of motorcycles is now utilized in new product areas. Husqvarna introduces its first chainsaw, Husqvarna 90. The chainsaw was shaped by iconic Swedish designer Sixten Sason and used motorcycle muffler technology to achieve lower noise levels than its competitors. The chainsaw is later further developed into power cutting tools for the construction industry.

1968: Flymo

Acquisition of the hover lawn mowers company AB Flymo.

1969: Setting new standards for ergonomics

When the Husqvarna 180 chainsaw is released it features a groundbreaking anti-vibration function that prevents `white fingers disease', a common problem for forestry workers around the world.

In 1973, Husqvarna introduces the world's first chainsaw with an automatic chain-brake. In 1999, the feature TrioBrake™ is introduced enabling users to activate the chain break with the right hand - further reducing the risk of injury for forestry workers.

1970: First female board member

When Lil Wettergren is elected to the Husqvarna Board of Directors, she becomes the first female board member of a Swedish listed company.

1978-79: Outdoor power products expands

Electrolux acquires Husqvarna and the outdoor operation continues to expand both through organic growth and through acquisitions, such as AB Partner and Jonsereds AB. Power products now include chainsaws, motorcycles, lawn mowers and power cutting machines.

1980's: Strengthened positions in the U.S.

Organic growth and acquisitions expand Husqvarna's operations in lawn and garden. Two major acquisitions, Poulan/Weed Eater and Roper Corp, are complementing Husqvarna's product range making the U.S. the largest market for garden equipment.

1995: The birth of the robotic mower

Husqvarna Group pioneered the market by launching the world's first solar powered robotic lawn mower. This is the world's first fully robotic lawnmower, running on nothing but solar power; a predecessor to today's Husqvarna Automower®. In 2013, a third generation model with built-in GPS is introduced. It took almost 15 years until sales started to take-off for robotic mowers making it a big success story.

2002: Power cutters and diamond tools

When Partner AB launches the first power cutter as a saw accessory in 1958, it is the starting point of what today is the business area Construction. When Diamant Boart International was acquired in 2002, the construction business doubled its' the size, turning into a world leader within its segment.

2006: On its own feet

Husqvarna becomes independent again and is listed on NASDAQ OMX Stockholm. Headquarters is based in Stockholm.

2007-2008: Expansion

Husqvarna expands in watering when acquiring the Gardena brand. The acquisition of Zenoah in 2007 brings strong brands, complementary products and geographic expansion in Japan. In 2008, the production in China is expanded through the acquisition of the Jenn Feng operation and the construction of a new plant for chainsaws and other handheld products.

2009: Husqvarna demolition robot

Husqvarna's first remote-controlled demolition robot is launched, designed for all demolition tasks, also where it is too dangerous for workers to enter.

2012: Battery products

Husqvarna introduces a range of battery products for semi-professionals; chainsaws, trimmers, hedge trimmers and a rider. These are emission-free, with less noise, vibration and maintenance.

Troy-Bilt Electric Leaf Blowers Recalled by MTD and CPSC

April 22, 2014

Recall Summary

Name of product:

Troy-Bilt electric leaf blowers

Hazard:

The blower’s impeller can break and strike the operator during use, posing a laceration hazard.

Consumer Contact:

Troy-Bilt toll-free at (888) 848-6038 from 8 a.m. to 5 p.m. ET Monday through Friday or online at www.troybilt.com and click on Recalls under the Owner’s Center tab for more information.

Units

About 134,000

Description

This recall involves Troy-Bilt electric leaf blowers with model TB180B, item number 41BA180G966 and serial numbers ranging from S1D111XK0001 through S1F152XK2008.  They were manufactured between April 11, 2011 and June 15, 2012. The third through sixth characters of the serial number identify the manufacturing date.  The third character is the month, for example D for April, E for May and F for June. The fourth and fifth characters are the day of the month. The sixth character is the last digit of the year of manufacture. Model, item and serial number are located on a white label on the bottom of motor housing. The 7.5 amp electric blowers are red. Troy-Bilt and TB180B appear on a sticker on both sides of the unit.

Incidents/Injuries

MTD has received 17 incident reports, including 12 injuries that resulted in lacerations requiring stitches, cuts and bruises.

Remedy

Consumers should stop using the recalled blowers immediately. Lowe’s customers should return them to Lowe’s for a free replacement.  Consumers who bought their blowers online at www.troybilt.com should contact Troy-Bilt for a free replacement.

Sold at

Lowe’s stores nationwide and online at www.troybilt.com from May 2011 through November 2013 for about $34.

Importer

MTD Southwest Inc., of Tempe, Ariz.

Manufacturer

KingClean Electric Co., Ltd., of China

Manufactured in

China

Remington Leaf Blowers Recalled by MTD and CPSC

April 22, 2014

Recall Summary

Name of product:

Remington electric leaf blowers

Hazard:

The blower’s impeller can break and strike the operator during use, posing a laceration hazard.

Units

About 24,000

Description

This recall involves Remington electric leaf blowers with model RM180B, item number 41AA180G983 and serial numbers ranging from S1E131XK0001 through S1E162XK2008. They were manufactured between May 13, 2011 and May 16, 2012. The third through sixth characters of the serial number identify the manufacturing date.  The third character is the month, for example D for April, E for May and F for June. The fourth and fifth characters are the day of the month. The sixth character is the last digit of the year of manufacture. Model, item and serial number are located on a white label on the bottom of motor housing. The 7.5 amp electric blowers are black. Remington, Mighty Sweep and RM180B appear on a sticker on both sides of the unit.

Incidents/Injuries

One incident has been reported by MTD and that incident resulted in cuts and bruises.

Remedy

Consumers should stop using the recalled blowers immediately and contact Remington for a free replacement.

Sold at

Various retailers nationwide and online at mtdproducts.com from May 2011 through December 2013 for between $30 and $40.

Importer

MTD Southwest Inc., of Tempe, Ariz.

Manufacturer

KingClean Electric Co., Ltd., of China

Manufactured in

China

Clark Pulley Celebrates 25 Years

April 1, 2014 marked a milestone for a local company.

On this date 25 years ago, Agri-Fab Incorporated, based in Sullivan, Ill., purchased Clark Pulley Industries located in the Russellville Industrial Park.

Agri-Fab, a manufacturer of lawn and garden grooming equipment, purchased Clark Pulley, which manufactures pulleys for the lawn and garden industry. Both companies service a customer base that includes MTD, Husqvarna, Hydro Gear, Briggs & Stratton and Ariens, all of which have a strong presence in the market.

Ron Harshman, President/CEO and one of the original six founders of Agri-Fab, commuted between Sullivan and Russellville for two years after the purchase, spending one week each month helping develop operating systems for Clark Pulley. This was the framework for the success that Clark Pulley has enjoyed for the past 25 years.

Since being purchased in 1989, Clark Pulley has served the local economy with stable employment for local residents, as 20 percent of the original workforce at the time of the purchase continues to be with the company today.

Clark Pulley maintains an average workforce of 45 full-time employees and current temporary employment of 22 employees.

Joining in the 25-year celebration were members of the AF Holding management team who made the trip down to Russellville to enjoy time with all the employees of Clark Pulley.

Coinciding with the anniversary, Clark Pulley produced its 147,500,000th pulley, which was added to a plaque that was presented by Clark Pulley president Terry Moore to Harshman.

http://www.franklincountytimes.com/       April 9, 2014

Wright Lawn Mowers Survive Great Recession and Cut a Path to Commercial Success

April 6 -- I get a million pitches to write about professional services companies, health firms, staffing services and consultants. But a lawn mower manufacturer? In Washington’s back yard?

It conjured up romantic images of Henry Ford-like industrialists strutting through their factories, building fortunes, commanding legions of blue-collar workers.

Then I interviewed William Wright, a 58-year-old tinkerer and inventor who had to raise millions, mortgage his home, fire dozens of workers, iron out a million mechanical problems and fight off a financial crisis to give birth to his vision of the perfect — and profitable — lawn mower.

The Frederick, Md., manufacturer’s sales dropped by more than a third in three months and stayed there for a year during the Great Recession. The company went into the red. Cash was drying up. Banks were not lending.

Chief executive Wright went into cost-cutting mode, slashing head count from 125 employees to 75. The layoffs left him with a lean, highly motivated workforce, “the best of the best,” said the former Volvo mechanic.

Thanks to those moves and to a resurgent economy, Wright Manufacturing came out the other end of the Great Recession a leaner, stronger company. It expects to ring up more than $40 million in sales this year and produce enough profit to send its 22 investors a monthly dividend.

Nearly 85 percent of its 170 employees are factory workers, turning out between 600 and 800 lawn mowers a month. The machines sell for $7,000 to $11,000 apiece, depending on size and horsepower. Most Wright lawn mowers are known by a distinctive perch that allows the operator to ride standing at the back.

The company’s lawn mowers are sold to dealers across the United States and Europe. Wright’s best markets are Massachusetts, Florida, Chicago and Kansas City. Wright also makes mowers sold under the John Deere brand.

Wright would not provide the scope of his profit except to say, “We make a serious margin.”

He said the company’s edge is its ability to keep warranty claims to about 1 percent of revenue. The industry average is 2 percent.

“We went through skin, muscle and bone and were left with an amazing team. We had a lot of brain power. We got rid of costly traditions. We gave people permission to improve their work.”

The company encouraged workers to share training tips, including more efficient ways to perform the same tasks. Basic things such as new ways to store tools became part of the company’s “goof proofing” campaign to reduce mistakes.

“If you wait for management, it may take years to get done,” said Wright. “But the workers come up with more, smaller ideas, more frequently and get [them] implemented faster.”

During the recession, Wright’s managers became fanatics about hiring, looking for highly motivated employees.

“We don’t take weak employees,” the founder said.

The company increased its hiring standards. Prospective hires are interviewed by three Wright employees, who must unanimously agree to make the hire. Prospective employees must also tour the plant and meet people so they get a taste of the culture.

“We are careful,” Wright said. “We are extremely selective. We got paranoid about hiring good people. We hire for attitude and aptitude, not prior experience or credentials. We like to train for the jobs in-house.”

Take the all-important welders. Each lawn mower has hundreds of parts that must be skillfully welded so the machine holds together. Because of the skill and training involved, welders tend to be higher paid than other factory employees, earning between $14 and $18 per hour, depending on their skill and productivity.

But Wright didn’t necessarily want longtime, skilled welders. He wanted young, inexperienced — less expensive — laborers whom he could mold into Wright Manufacturing employees.

“We would rather have somebody who worked at McDonald’s and has good character and work ethic and teach them how to weld,” he said. So Wright instituted a welding school to train workers from scratch.

Wright grew up north of New York City, and after a year of studying engineering at Clarkson College, he quit to go to a small Florida college.

He started off his professional life three decades ago repairing Volvos in the Baltimore-Washington area. In his spare time, he and his wife began a lawn mowing business to make extra cash.

Wright loves tinkering with gadgets, and around 1983 he decided to build an all-metal grass catcher to attach to his lawn mower. He then approached a local lawn mower dealer about selling his contraption. The dealer sold 200 Wright-made grass catchers the first summer.

Making such a small number of the accessories was not yielding enough profit, so Wright rented a 1,200-square-foot space in Gaithersburg, bought a welding machine and scaled up his grass catcher manufacturing.

“We could make them cheaper if we could make more of them,” he said.

He recruited 400 dealers across the United States, charging $300 each for customized grass catchers that fit more than a dozen different mowers.

He also designed and built a “sulky,” which allowed the person operating the lawn mower to ride standing at the back.

As the business was getting off the ground, he could fall back on other revenue streams. Wright’s lawn mowing enterprise had grown into a $1 million-a-year operation, with 12 trucks, 500 customers — mostly Potomac homeowners — and netting him a $200,000 a year living. He had learned computer programming during his one-year stint at Clarkson, so he put that to work in 1983 by writing software that helped keep track of his mowing service.

As his manufacturing business grew, he decided he wanted to build not just grass catchers but the entire mower. He sold the software business for $125,000 in 1993. The same year, he sold the lawn mowing business for a six-figure profit.

He still needed more money. He mortgaged his multimillion-dollar home, twice. He contacted friends and others through word of mouth, raising between $1.5 million and $2 million. He took out bank loans and maxed out his credit cards.

“When you are an entrepreneur, you get creative and desperate at the same time,” Wright said.

The first year he made mowers, he lost $18,000, and the business grew in fits and starts after that, turning a profit one year, then losing money. Wright struggled to control its warranty costs and figure out a price that allowed both the company and its dealers to turn a profit.

Over the past three years, though, Wright Manufacturing has hit its stride, turning its 20 investors into happy campers.

“You work on every angle until one day, you sort of come out of the woods,” said Wright, who owns 57 percent of the company. “Running a business means eliminating as many problems as you can. You always have problems. But when enough parts start to work well . . . the profits start rolling in.”

Thomas Heath       http://www.washingtonpost.com/business    

Lawn Mowers Cut Decibels For a Price

March 25 -- How much will Americans pay to avoid annoying their neighbors?

Briggs and Stratton Corp. hopes they will cough up roughly $40 to $50 extra for a quieter lawn mower. The Milwaukee-based company this spring is introducing a mower engine that it said is 64% less noisy than standard versions.

So far, this quieter engine is available only on two Craftsman mowers sold at Sears stores. Briggs, the world's largest maker of gasoline engines for outdoor power equipment, based on sales, said the new engines may be installed in other mower brands eventually.

Rival engine maker Kohler Co. said it also has made its motors quieter but declined to provide details. A Honda Motor Co. spokeswoman said she lacked the data needed to say whether that company's mowers had become less noisy in recent years.

Briggs said it has been able to reduce the racket mainly because it has found a way to slow the spinning of the blade without sacrificing cutting ability.

Mowers are noisy partly because much of the time they are running faster than necessary to cut the grass. Standard engines typically run at about 3,100 revolutions a minute when they are started, then slow as the blade hits resistance in slicing through grass, Briggs said. The rotation of the crankshaft varies from around 2,800 rpm when the blade is cutting thick or wet patches of grass to more than 3,000 rpm where the grass is less dense.

A fuel governor on the new Briggs engine increases the flow of gas to the engine when it runs into denser patches of grass, so the speed remains steadier at around 2,800 rpm, Briggs said, and the use of a flatter blade reduces noise further. The two Craftsman mowers offered by Sears with the quieter engine are priced at about $340 and $450.

Briggs's chief executive, Todd Teske, hopes to achieve further sound improvements by "tuning" mower mufflers to make the noise less harsh. Still, he conceded, "it's never going to sound like Bach."

It isn't clear that many people will pay a premium for less noise. Stihl Group, a Germany-based maker of power lawn equipment, introduced in 2008 a quieter leaf blower known as the BG 66 L. Baffles inside the blower smooth air flow to eliminate whistling noises. This model, also available in other parts of the world, typically retails in the U.S. for around $230, or roughly $60 more than a similar model that makes more noise. Sales of the lower-priced model remain much higher than those of the quieter one, Stihl said.

Malcolm Crocker, a soft-spoken acoustical engineer who directs the International Institute of Acoustics and Vibration at Auburn University, said he wears ear-protecting muffs when he mows. He likes the idea of a quieter mower but thinks some people may be wary.

"Humans tend to equate loudness with power," Dr. Crocker said, "so if you make it quieter people think it's not so powerful."

James R. Hagerty         http://online.wsj.com/