A Collection of Current Outdoor Power Equipment (OPE) Industry Related News Articles From OPEESA's (Outdoor Power Equipment and Engine Service Association) Newsletter "OPE-In-The-Know," the Business of OPE.
Husqvarna and a number of other parties have reached a settlement in a lawsuit in a Federal District Court in Illinois, USA, regarding alleged inaccurate specification of engine capacity in lawn mowers. The lawsuit, which has been pending since 2004, will thus be withdrawn.
The other parties are manufacturers or sellers of lawn mowers or engines for lawn mowers.
The settlement includes more than 65 similar or parallel lawsuits in all 50 states in the US.
Husqvarna's settlement cost amounts to approximately SEK 100m (USD 13.7m), of which SEK 50m (USD 13.7m) was not previously expensed and will be charged against operating income for the first quarter of 2010.
Husqvarna agreed to the settlement in order to avoid a prolonged and expensive legal process in which the results are uncertain. The Group continues to deny that there is any justification for the claims against the company.
The settlement is subject to court approval in the US.
MILWAUKEE, Feb 26 -- Briggs & Stratton announced today that it has entered into a Stipulation of Settlement that, if given court approval, will resolve over 65 class-action lawsuits that have been filed against Briggs & Stratton and other engine and lawnmower manufacturers alleging, among other things, misleading power labeling on its lawnmower engines.
As part of the settlement, Briggs & Stratton and the other settling defendants have agreed to establish a class wide cash settlement fund totaling $51 million, as well as certain injunctive relief concerning the power labeling of engines for the next ten years.
In addition, Briggs & Stratton will offer a one year extension of its current warranty for all class members filing a claim. As part of the Stipulation, Briggs & Stratton has denied that it has done anything wrong and seeks a resolution to avoid further protracted and expensive litigation.
Briggs & Stratton is required to fund its portion of the cash settlement in conjunction with specified approval dates that are projected to occur at various times between the execution of the settlement agreement and June 2011. The Company expects to recognize a pretax expense of approximately $31 million ($19 million after tax) in the third quarter of fiscal 2010 to reflect the impact of the settlement. This settlement was not in the earnings guidance in the Company's January, 2010 earnings release.
The Stipulation, once approved, will resolve nationwide class-action litigation that first commenced in June 2004. Since that time, plaintiffs filed actions across the country, as well as the District of Columbia and Puerto Rico, seeking to certify classes of all persons in each of the 50 states, Puerto Rico and the District of Columbia. In these various actions, plaintiffs sought injunctive relief, compensatory and punitive damages, and attorneys' fees. Plaintiffs also filed state and federal antitrust and RICO claims and sought a nationwide class based on these claims.
The Stipulation of Settlement has been submitted to Judge Adelman of the United States District Court for the Eastern District of Wisconsin for preliminary approval (In Re: Lawnmower Engine Horsepower Marketing and Sales Practices Litigation, Case No. 2:08-md-01999). If preliminary approval is granted, broader notice of the Stipulation of Settlement will be given and the parties of the Stipulation will seek to have the Stipulation finally approved.
Income climbs 19 percent on a 6 percent decline in net sales and revenues.
Solid execution and disciplined asset management drive stronger results.
Earnings forecast for year increased to $1.3 billion.
MOLINE, Illinois (February 17, 2010) — Net income attributable to Deere & Company was $243.2 million, or $0.57 per share, for the first quarter ended January 31, compared with $203.9 million, or $0.48 per share, for the same period last year.
Worldwide net sales and revenues declined 6 percent, to $4.835 billion, for the first quarter compared with $5.146 billion a year ago. Net sales of the equipment operations were $4.237 billion for the period compared with $4.560 billion last year.
"Results for the quarter reflected solid execution of our operating and marketing plans throughout the company and are especially gratifying in light of global economic conditions that remain stubbornly weak," said Samuel R. Allen, president and chief executive officer. "We are clearly seeing benefit from efforts to win customers with advanced new products while taking cost and asset discipline to an even higher level."
Summary of Operations
Net sales of the worldwide equipment operations decreased 7 percent for the quarter, including a favorable currency-translation effect of 5 percent and improved price realization of 2 percent. Equipment net sales in the United States and Canada declined 8 percent for the quarter. Net sales outside the United States and Canada were down 6 percent, with a favorable currency-translation effect of 12 percent.
Deere's equipment operations reported operating profit of $315 million for the quarter, compared with $307 million last year. The improvement primarily was due to lower raw-material costs, improved price realization and the favorable effects of foreign exchange and product mix. Partially offsetting these factors were lower shipment and production volumes and higher postretirement benefit costs.
The company's focus on disciplined asset management continued to produce solid results. Trade receivables and inventories ended the quarter at $5.873 billion, representing a reduction of $1.439 billion, or 20 percent, from a year ago. Trade receivables and inventories at the end of the quarter were equal to 29 percent of previous 12-month sales compared with $7.312 billion, or 28 percent of sales, last year.
Net income of the company's financial services operations was $85.1 million for the quarter compared with $46.8 million last year. Results were higher primarily due to improved financing spreads.
Company Outlook & Summary
Company equipment sales are projected to be up 6 to 8 percent for fiscal 2010 and up 4 to 6 percent for the second quarter compared with the same periods a year ago. Included is a favorable currency-translation impact of about 3 percent for the year and about 5 percent for the quarter. For the full year, net income attributable to Deere & Company is anticipated to be approximately $1.3 billion.
According to Allen, the company's focus on rigorous cost and asset management puts Deere on a strong footing to respond to a recovery in the global economy and, longer term, to help meet a growing need for food, shelter and infrastructure. Said Allen, "In our view, positive developments based on the world's prospects for population and economic growth hold great potential and should help our company deliver value to customers and investors well into the future."
Equipment Division Performance
Agriculture & Turf. Sales declined 6 percent for the quarter largely due to lower shipment volumes, partially offset by the favorable effects of currency translation and improved price realization. Operating profit was $352 million for the quarter, compared with $289 million last year. The increase in profit primarily resulted from lower raw-material costs, improved price realization and favorable effects of foreign exchange and product mix. Partially offsetting these factors were lower shipment and production volumes and higher postretirement benefit costs.
Construction & Forestry. Construction and forestry sales declined 15 percent for the quarter mainly due to lower shipment volumes, partially offset by favorable effects of currency translation. The division had an operating loss of $37 million for the quarter compared with operating profit of $18 million last year. The decline primarily was due to lower shipment and production volumes and higher postretirement benefit costs.
Market Conditions & Outlook
Agriculture & Turf. Worldwide sales of the company's agriculture and turf division are forecast to increase by 4 to 6 percent for full-year 2010, with a favorable currency-translation impact of about 4 percent.
Across the industry, farm machinery sales in the United States and Canada are forecast to be comparable to 2009. Cash receipts and commodity prices have remained at healthy levels, which along with low interest rates are lending particular support to the sale of larger equipment. In other parts of the world, industry farm-machinery sales in Western Europe are forecast to decline 10 to 15 percent for the year mainly due to weakness in the livestock, dairy and grain sectors. Sales in Central Europe and the Commonwealth of Independent States are expected to remain under pressure as a result of challenging economic conditions and low levels of available credit.
In South America, industry sales are projected to increase by 10 to 15 percent for the year as a result of a return to more normal weather patterns and improvement in the key Brazilian market. Conditions in Brazil are being supported by good prices for soybeans and sugarcane and the availability of attractive government-supported financing. Industry sales of turf equipment and compact utility tractors in the United States and Canada are expected to be roughly flat for the year as a result of sluggish U.S. economic conditions.
Construction & Forestry. Deere's worldwide sales of construction and forestry equipment are forecast to increase by about 21 percent for full-year 2010. Sales are expected to benefit from last year's aggressive inventory reductions, positioning the company to align production with retail demand in 2010. U.S. construction-equipment markets are forecast to remain deeply depressed for the year as a result of a decline in non-residential construction and relatively high used-equipment levels. Global forestry markets are expected to be stronger in relation to last year's extremely weak levels, driven by higher worldwide economic output and somewhat-improved U.S. housing starts.
Credit. Full-year 2010 net income attributable to Deere & Company for the credit operations is forecast to be approximately $260 million. The forecast increase from 2009 is primarily due to more favorable financing spreads.
John Deere Capital Corporation
The following is disclosed on behalf of the company's credit subsidiary, John Deere Capital Corporation (JDCC), in connection with the disclosure requirements applicable to its periodic issuance of debt securities in the public market.
Net income attributable to John Deere Capital Corporation was $63.9 million for the first quarter compared with $35.0 million last year. Results were higher primarily due to improved financing spreads.
Net receivables and leases financed by JDCC were $18.510 billion at January 31, 2010, compared with $18.459 billion last year. Net receivables and leases administered, which include receivables administered but not owned, totaled $18.626 billion at January 31, 2010, compared with $18.628 billion a year ago.
BLOOMINGTON, Minn., Feb 18, 2010 -- The Toro Company (NYSE: TTC) today reported net earnings of $10.9 million, or $0.32 per share, on net sales of $331.4 million for its fiscal first quarter ended January 29, 2010. In the comparable fiscal 2009 period, the company reported net earnings of $6.7 million, or $0.18 per share, on net sales of $340.2 million. Financial results for last year's first quarter were reduced by a pre-tax charge of $1.3 million, or $0.02 per share on an after-tax basis, to account for workforce adjustments.
"Even with a slight decline in net sales, the leaner cost structure we put in place last year helped improve our profitability," said Michael J. Hoffman, Toro's chairman and chief executive officer. "Additionally, field inventories are down significantly and our customers, channel partners and key retailers are excited about our new product offerings for the coming season. On another positive note, our cash flow strengthened as a result of higher earnings and driving improvement in all three areas of working capital including reducing accounts receivable, lowering inventory and increasing trade payables."
SEGMENT RESULTS
Professional
Professional segment net sales for the fiscal 2010 first quarter totaled $212.8 million, down 7.2 percent compared with the same period last year. While retail sales activity suggests that demand is starting to move in the right direction, shipments were lower across most professional categories as customers aligned their orders closer to the selling season, leading to a further reduction in field inventories. Declines in the segment were somewhat offset by increased worldwide shipments for micro irrigation products as agricultural growers look to conserve water resources and improve crop yields.
Professional segment earnings for the fiscal 2010 first quarter were $25.8 million, down $4.3 million from last year's first quarter.
Residential
Residential segment net sales for the fiscal 2010 first quarter totaled $116.8 million, up 9.1 percent compared with the same period last year. Sales benefited from strong orders of irrigation products in Australia as a result of improved weather conditions, and increased worldwide shipments for snowthrowers.
Residential segment earnings for the fiscal 2010 first quarter were $13.4 million, up $8.6 million from last year's first quarter.
REVIEW OF OPERATIONS
Gross margin for the fiscal 2010 first quarter was 35.1 percent, up 30 basis points from 34.8 percent in last year's first quarter. The improvement in gross margin reflects the benefit of lower commodity costs, favorable currency movements and cost reduction efforts, which were partially offset by unfavorable product mix.
Selling, general and administrative (SGA) expenses for the fiscal 2010 first quarter declined $8.0 million, or 7.6 percent, compared with last year's first quarter. As a percentage of net sales, SG&A expenses declined to 29.2 percent compared with 30.7 percent in the same period last year. The decline in SG&A expenses, in both dollars and as a percent of net sales, resulted primarily from cost structure actions taken in fiscal 2009, most of them subsequent to the close of last year's first quarter. The decline in SG&A was somewhat offset by higher incentive costs.
Interest expense for the fiscal 2010 first quarter was $4.2 million, down 2.6 percent compared with last year's first quarter.
The effective tax rate for the fiscal 2010 first quarter was 33.6 percent compared with 33.7 in last year's first quarter.
Accounts receivable at the end of the fiscal 2010 first quarter totaled $167.3 million, down $130.7 million or 43.9 percent from last year's first quarter, on a sales decline of 2.6 percent. The majority of the difference is attributable to the sale of receivables to the Red Iron Acceptance joint venture. Net inventories were $191.1 million for the fiscal 2010 first quarter, down $47.6 million or 20.0 percent from last year's first quarter. Trade payables were $109.6 million, up $20 million or 22.3 percent from last year's first quarter, driven mostly by a supply chain initiative.
BUSINESS OUTLOOK
"After a very difficult fiscal 2009, we are encouraged with how the new fiscal year has begun. With the peak selling season still ahead, we remain guarded in our market outlook, but believe our many new products will help drive retail sales and share gains," said Hoffman. "Given our leaner cost structure, and continued focus on innovation and asset management, we believe we are well positioned to benefit from a recovery in retail demand as our markets improve."
The company now expects fiscal 2010 net earnings per share to be about $2.15 on revenues comparable with fiscal 2009. For its fiscal 2010 second quarter, the company expects to report net earnings per share of about $1.15.
The Toro Company is a leading worldwide provider of outdoor maintenance equipment and beautification products to help customers care for golf courses, sports fields, public green spaces, commercial and residential properties, and agricultural fields.
ALEXANDRIA, Va.—February 15 --The Outdoor Power Equipment Institute (OPEI) today announced that Dr. Amy Townsend-Small of University of California – Irvine (UC – Irvine) acknowledged a computation error of carbon used to maintain turf in the recently released UC-Irvine study published January 19, 2010, titled “Carbon Sequestration and Greenhouse Gas Emissions in Urban Turf.” With the error corrected, ornamental grass is in fact shown to be a net sequester of carbon even when inputs are accounted for in grass maintenance. The correction has been submitted to the American Geophysical Union (AGU) who published the paper.
Upon review of the report, various flaws were discovered, including one significant math error that was made in computing the carbon consumed during mowing. The carbon from fuel consumption was multiplied by 12, one too many times, to convert from monthly to annual data. The error was not caught during the peer review process prior to publication of the paper by the AGU. When the computation is corrected, turfgrass actually is a net sequesterer of carbon dioxide, reversing the conclusions of the original report that was widely reported in the media.
“Blaming grass for contributing to global warming is a non-starter when you look at the facts. The grass in your backyard is working hard to keep us cool, soak up carbon, capture particulates, produce oxygen, capture rain water and reduce run-off. We need to focus on the right plant in the right place and on management practices that maximize the environmental benefits potential of turfgrass,” said Kris Kiser, Executive Vice President of OPEI.
Kiser added that, “While the UC-Irvine study, rightly so, highlights that mismanagement of turfgrass can occur via excessive fertilization and irrigation, and inefficient maintenance practices, the focus should be on proper management techniques.” OPEI stressed that proper management techniques can minimize carbon emissions and maximize the benefits of carbon sequestration in turfgrass; for example, proper selection of turf based on climatic region (drought resistant species) and leaving grass clippings on the grass to serve as a natural nitrogen fertilizer.
OPEI also noted that the UC-Irvine study did not acknowledge the dramatic reductions of emissions and fuel use profile for today’s gasoline and diesel equipment, nor did the study disclose what model equipment and corresponding fuel use numbers were used.
Mowers and outdoor power equipment today are the cleanest in history and fully regulated by the U.S. EPA and California’s Air Resources Board since 1997. EPA Phase 3 and CA Tier 3 compliant product are 90 percent cleaner than pre 1997 models. Coupled with improvements in emissions, there have been substantial improvements in mower fuel efficiency. Additionally, outdoor power equipment manufacturers have introduced a number of electric, battery, biodiesel, gasoline-electric and diesel-electric hybrids, propane, CNG, solar and other alternative fueled products with corresponding reductions in carbon output.
Other issues found with the UC-Irvine urban turf study:
The paper uses a technique (passive flux chambers) that is often inaccurate in measuring surface flux because it is not clear that what is being measured is at equilibrium.
The UC-Irvine study focused on one urban center in Southern California. Management techniques across the country are variable and therefore, can’t be applied broadly. Future studies should look at sites in other parts of the country.
The UC-Irvine study did not measure actual inputs of water and nutrition but made estimates based upon standards or agriculture averages. Future studies should measure actual inputs or use the best available technology to estimate inputs of water and fertilization.
To learn more about the carbon sequestration benefits of turfgrass, see the paper, Technical Assessment of the Carbon Sequestration Potential of Managed Turfgrass in the United States by Dr. Ron Sahu.
About the Outdoor Power Equipment Institute
OPEI is an international trade association representing the $15 billion landscape, forestry, utility and lawn and garden equipment manufacturing industry. OPEI is a recognized Standards Development Organization for the American National Standards Institute (ANSI) and active internationally through the International Standards Organization (ISO) in the development of safety standards. Founded in 1952, OPEI represents and promotes the outdoor power equipment industry before federal, state and international legislative and regulatory bodies. For more information on OPEI, visit www.OPEI.org.
AUGUSTA -- February 10 -- Relocation plans of two major companies with Augusta headquarters are progressing after the approval Tuesday of economic incentive packages from local governing boards in Charlotte, N.C.
Swedish-based appliance maker Electrolux will receive about $1.28 million over the next five years from a combined award from the city of Charlotte and Mecklenburg County, while Husqvarna Outdoor Products Inc. will receive about $241,700 over the next five years, said Melissa Johnson, deputy city clerk for Charlotte.
North Carolina also is giving Electrolux a $1.2 million grant from the state’s One North Carolina Fund.
Both companies announced plans to relocate from Augusta last year in favor of Charlotte.
They will have to pay back the grants if they move from Charlotte before five years.
Husqvarna, which makes lawn mowers, chain saws and other garden equipment, was spun off from Electrolux in 2006. The company has previously said its move should be complete by this summer. It has employed about 100 people at its Stevens Creek facility.
Electrolux is consolidating seven of its U.S. offices into one location. That included the move of its Major Appliances North America headquarters in Martinez and will result in the loss of about 315 jobs.
The company’s customer service center on Bobby Jones Expressway will remain in Augusta.
Australia -- February 15 -- Building fixture and household fittings supplier GWA International Ltd has sold its mowing business Rover to the Australian arm of a US lawn and garden power equipment group.
GWA said the final proceeds from the sale are dependent on Rover's working capital levels at completion, but are expected to be in the range of $10 million to $12 million.
"The lawn mower industry has changed substantially in recent years and Rover does not have the scale to be competitive in its own right," GWA managing director Peter Crowley said on Monday in a statement.
The sale to MTD Australia, part of US-based MTD Products Inc, will be completed on April 1.
"MTD is a major global business, and being a specialist in this sector, will provide a strong base for Rover to trade successfully in the future," Mr Crowley said.
GWA will book a net loss of $3.4 million in its first half accounts to reflect trading results and asset write-downs as a consequence of the Rover sale.
This won't impact in dividend payments, GWA said.
"Overall this is a good result for Rover, which now has a new owner focused on the lawn care market," Mr Crowley said.
"GWA shareholders will also benefit with the additional funds being available to focus on our core building fixtures and fittings businesses."
MILWAUKEE -- February 13 -- Evidence of this winter's fury: The phones won't stop ringing at Ariens Co. in Brillion and Briggs & Stratton Corp. in Milwaukee.
Ariens and Briggs make snow throwers. And with history-making blizzards blanketing the East Coast while the Midwest coped with its own round of storms, the companies' customer-service centers have handled thousands of calls.
Many have come from customers who can't get their snow throwers started. With cell phone in gloved hand, they'll stand next to the balky machine and hope that an Ariens or Briggs agent can help them get it going.
"You can just hear the frustration in the caller's voice. They want us to wave a magic wand that will fix their machine over the phone," said David Miller, Ariens product support team leader.
And when the engine roars to life? "There's usually a loud cheer," said Mary Johns, customer service manager.
Overall, February's blizzards have been a blessing for Ariens and Briggs & Stratton, which is the world's largest manufacturer of small gasoline engines.
Snow throwers are made in the summer and fall, based on what manufacturers and dealers expect to sell.
In 2009, the industry produced 779,640 units, up 25% from 2008 and up 42% from 2007.
That's big business for Wisconsin manufacturers that sell snow throwers globally under brands including Ariens, Brute, John Deere, Simplicity and Snapper.
Early winter storms triggered the sales increases, said Kris Kiser, executive director of the Outdoor Power Equipment Institute, a trade association based in Arlington, Va.
Despite the recession, "this is largely a weather-driven item," Kiser said, with most sales in the first two months of winter.
By February, the companies have geared up to produce garden tractors and other outdoor power equipment for the spring and summer.
But with some help from a long-range weather forecasting service, Ariens had placed its bets on a February storm for the East Coast. The company was still making snow throwers, in limited quantities, last week.
Briggs kept its snow thrower assembly lines running through the end of December, about a month longer than usual.
The company's customer-service center, based in Milwaukee, handled double the normal number of calls last week.
It has between 35 and 60 people on staff, depending on call volumes driven by big storms.
"People around here accuse me of being an amateur meteorologist," said Todd Teske, Briggs president and chief executive officer. "We plan for these kinds of things. Once you start changing production lines over to lawn and garden products, it becomes very disruptive to reconfigure everything back to snow throwers."
Normally, storms that come later in the winter don't provide much of a sales boost because consumers think the season is mostly over.
In the Northeast, however, consumers digging out from back-to-back blizzards have swamped some dealers.
"We have people standing in line up the wazoo," said a salesman at Laurel Lawnmower in Chews Landing, N.J.
Inventory levels are dropping, which could mean increased production for next season, according to Briggs.
At the same time, some people are hesitant to buy new snow throwers when they could save money by fixing up their older ones.
"We are seeing repairs that we have never seen before. And there are a lot of do-it-yourselfers out there," said Joe Medinger Jr., co-owner of J.H. Medinger Co., a West Allis outdoor equipment dealer in business since 1942.
Ariens still has parts for snow throwers it made in the 1960s. It's not unusual for the company to get calls from consumers saying their machine has been handed down from one generation to the next, along with garden tractors from the 1940s.
The Ariens customer service center, staffed by 10 people, handled nearly 1,000 calls last Tuesday - about triple the normal volume.
It can be hard on customer service reps as they deal with anxious and sometimes short-tempered people.
"The strain has showed on a few folks," Miller said. "Your hat is constantly on a swivel. You don't know where the next call is coming from, and sometimes you can't solve their problem. At some point you have to refer someone to a dealership for service, and that's the last thing they want to hear."
It also can be difficult for the customer-service reps to troubleshoot a snow thrower or garden tractor made before they were born.
"You have product manuals scattered the entire width of your desk," Miller said.
To deal with the avalanche of calls and e-mails, Ariens has pulled people from their jobs in the factory to answer customers' questions.
A long technical support call can last more than 20 minutes, although typically calls are wrapped up in about three minutes.
The shortest can last less than 30 seconds to solve a simple problem.
Miller emphasizes that the Ariens customer service reps do feel your pain. But if a call gets ugly, they won't tolerate abusive language.
"If someone is doing that, we give them fair warning," he said. "If it continues, we end the call."
People rarely call customer service just to praise a company and its products.
But sometimes they call from their cell phone, at a store, before they've even bought a snow thrower.
That type of question: "How do the hand warmers work?"
NEW YORK, Jan 25 - Private equity-backed generator company Generac Holdings Inc raised the maximum size of its initial public offering 42.6 percent to $427.7 million on Monday.
The Wisconsin-based company had filed to raise up to $300 million in October. It said that it still plans to use proceeds from the IPO to pay down debt and for general corporate purposes.
The company, which makes generators fueled by natural gas, liquid propane, gasoline, and diesel, was bought by a group led by private equity firm CCMP Capital LLC in 2006. It sells generators to consumers as well as industrial clients such as telecommunications firms.
Generac had sales of $434.3 million in the nine months ended Sept. 30, up 7.5 percent from the same period a year earlier. It reported a net profit of $31.1 million compared with a $40.2 million loss in the year-ago period.
The company narrowed its interest expense loss 34.1 percent to $53.7 million and nearly tripled its gain on extinguishment of debt.
But Generac said in the prospectus with the U.S. Securities and Exchange Commission that its business is sensitive to "unpredictable major power-outage events" such as storms.
The company plans to list on the New York Stock Exchange under the symbol "GNRC."
Underwriters are being led by JP Morgan and Goldman Sachs Co.
MUNNSVILLE — The key for a business to survive in today’s trying economic times is everyone working together, said Phil Wenzel, president and chief operating officer of the Briggs and Stratton Power Products Group-owned Ferris Industries.
Wenzel said he is proud of the way the some 300 Munnsville employees have responded to the challenges of the recession.
“Our workforce here is just great,” he said. “We all have had to tighten our belts a little bit and be a little sharper, but I think they have really come together to help out. Our people here are very practical, and they‘ve all rolled up their sleeves to get the job done.”
While industry-wide commercial mower sales are down an average of 33 percent two years in a row, sales of their product was only down 15 percent, Wenzel said. The purchase by Briggs and Stratton certainly has helped them weather the trying economically times, he explained. It gives them better buying power since they can place orders as part of the group, and when Briggs and Stratton closed a factory in Wisconsin, they sent the production of their high-end lawn tractors to Munnsville.
“We’ve been through a lot over the years and we would have survived this, but under Briggs and Stratton we’ve not just survived but been able to thrive,” Wenzel said.
The business started in 1909 as businessman Jesse Ferris and milking machine inventor William Uebler began the Uebler Milking machine Company. Unfortunately, as a third generation of the Ferris family was running the company by the mid-1980s, their small dairy farm customer base was dwindling along with profits.
Dave Ferris saw another company’s lawn mower and decided they could build one even better, so in 1986 they debuted their first Ferris mower at a trade show in New York City -- and the rest is history. In 1987 they introduced the first-ever hydrostatically driven walk-behind mower, using familiar technology from their feeding machines. It revolutionized a market that until then had seen only belt-driven models and earned Ferris the Innovation Award at Expo ‘89.
In 1998 Ferris again made history with their independent suspension system, riding mower technology that would now cushion the rider from bumps and jolts. This earned them the OEMmie Award for Innovative Engineering Solutions. Also that year, Ferris moved from Vernon to their current location at the old Stockbridge Valley Central School on Main Street in Munnsville.
“That was absolutely a milestone in our history,” Wenzel said of the move. “Without that, we were struggling to get to the next level. We looked around at a lot of manufacturing sites around the area but brick and mortar doesn’t make the company. It’s the people, and this was the best location for our people.”
Simplicity Manufacturing bought Ferris in 1999, and within six months of the purchase their sales increased by 40 percent. An additional 50,000 square feet of assembly area was added to the facility in 2003, and Briggs and Stratton Power Products Group bought Simplicity -- along with Ferris and its other subsidiaries -- in 2004. That sale brought another addition of 10,000 square feet to the Munnsville location.
“One of the key things Briggs and Stratton has done is to recognize that we have a unique culture here that serves the business very well,“ Wenzel said. “They have let us keep as much of that as possible and I think that is a credit to their management for letting us do it.”
There’s a lot going on to reach out to new dealers, said Bill Shea, the vice-president of commercial sales.
“It’s not easy out there, but as long as our competition is selling stuff we’re going to sell more,” Shea promised. They are expanding their work with current dealers, as well as looking into areas where their products haven’t seen much of a presence before like Florida and Texas, he said.
Their major selling points are the unique independent suspension, complete product line, best sales support in the industry and the best quality product available, Shea said.
Power equipment built in Munnsville is now available all over the country and beyond, and the Ferris brand is sold locally at White’s Farm Supply’s three locations in Canastota, Waterville, and Lowville, and at Clinton Tractor and Implement Company.
Art White recalled the beginning of his company’s longtime work with the Ferris family, dating back to even before their was a Ferris Industries. One day in the mid-1980s he sat with Jeff Ferris -- then taking orders Uebler Milking Machine Company equipment -- and Scag mower representative Roy “Dusty” Dust at lunch discussing the possibility for them to start building mowers to provide more work in their winter downtime. “Dusty” jumped right on it, White said, and White’s Farm Supply is now their oldest dealer and also was the largest in the state and fifth in the nation of Ferris mowers.
“The inspiration was just a thought, as we were talking after the orders were done and we were finishing our lunch I’d asked Jeff what they were building at the time which was about this time of year,” White said. “Jeff responded that they had laid off their staff as this was their slow time. I stated that they should be building mowers like what Dusty was selling as all the equipment they already have to work with for the steel they would need to build them with.”
White said it has been fun watching the company grow over the years.
“The Ferris line is one of the top manufacturers in the world noted for quality components and innovative design. They pioneered the independent suspension design critical to high speed mowing on lawns with a smooth ride for less operator fatigue as well as less wear and tear on the machine from the smoother ride -- a big plus all the way around. White’s takes pride in the lines they represent. Over the 60-plus years of watching trends and different manufacturers we take great pride ourselves in knowing that we only carry the best built as well as value lines for our customers. Ferris mowers are a perfect example of the effort that we work closely to the companies that we carry,” he said.
White said often they deal with only a voice on a telephone when communicating with their vendors, but with the proximity of the Munnsville location means they are neighbors as well as business associates. Each of the White’s Farm Supply location offers a full line of their products, and the White’s sales people regularly attend training and have used many of the products to have their own first-hand experience.
Besides the commitment to quality seen in the Munnsville-built products, another main selling point is the fact that they are locally made, White said.
“Many will come in to buy the Ferris Mowers just because they are built here,” he said. “We often find when talking that many people know someone that works there, or often it’s a relative. We also find people coming in with someone that does work there to help them with their choices. It is so rewarding knowing what White’s has done with the Ferris company and to know that it is putting people to work and helping to support the manufacturing base of this great area. Central New York has a lot to be proud of and you can see it with this fine quality product being built here. You can see the pride in the faces of the employees when we are at the plant; we can only hope that the next 25 years of growth will be as good as the first.”
Joshua Collins is no Jim Osterman. He’ll be the first one to tell you.
The Harvard-bred and Wall Street-trained Collins took the helm as CEO of Portland’s Blount International Inc. last month, replacing the retiring Osterman, a man who spent half a century with the company that revolutionized the manufacturing of sawchain.
Collins, 44, a five-year Blount board member, says he cannot replicate Osterman’s legacy. But he was hired for a different reason, and one that ties to his experience in the deal-making world of investment banking.
“I was put in this position by the board to grow the business,” he said.
Collins’s strategy is part organic growth and part growth-by-acquisition as he hunts for companies to complement Blount’s smaller business units.
Doing so will build on the legacy of a company that dominates its segment of the outdoor products world.
Blount International Inc.’s Portland roots date back to 1946, when Joe Cox developed a cutting chain technology after watching how timber beetle larva chewed through wood fiber. Cox’s company, Oregon Chipper Chain, evolved into the Oregon brand of sawchain, Blount’s signature product line.
Collins’ ties to the company are far more recent.
He is a Spokane, Wash., native, whose resume is draped in camouflage, ivy and the pin-striped suits of Wall Street.
After graduating from the University of Pennsylvania in 1987, he became a Marine Corps. infantryman and served in the Persian Gulf War. He later entered Harvard Business School, where he graduated with an MBA in 1995.
Collins joined the once-vaunted Lehman Bros. Inc. in 1996 where he was principal and managing partner of Lehman Bros. Merchant Banking Inc., the firm’s private equity arm.
While there, Collins took the lead in one of the private equity group’s biggest deals: the 1999 acquisition of Blount, then based in Montgomery, Ala., in a $1.35 billion deal that took the company private.
At the time, Blount operated three primary businesses: the Oregon brand sawchain and guide bar business, an ammunition production business, and an automated forestry division that made timber harvesting equipment and tractors.
“The Oregon brand business was what was attractive,” Collins said.
With Lehman Bros. in control, the company shifted strategy to focus largely on the sawchain business.
Over time the company sold off the other divisions — the ammunition business went to Minneapolis-based Alliant Techsystems in 2001 for $250 million, while Caterpillar Inc. bought the automated forestry business in 2007 for $77.3 million.
In 2002, Blount relocated from Montgomery to Portland, the home of the Oregon brand led by Osterman, who took over as CEO.
Lehman maintained a controlling stake in the company until taking it public again in 2004.
Collins remained tied to the company when he was elected to the board in 2004 to represent shareholders.
He left Lehman in January 2008 — nine months before the company filed the biggest bankruptcy in U.S. history — and co-founded Collins Wilmott & Co. LLC, a New York private equity firm.
But his aspirations weren’t necessarily tied to Wall Street.
“What I really wanted to do was be involved with running an operating company,” he said.
He takes the helm at a time when the company’s annual sales, to be released March 9, are projected to fall 16 percent to $502 million. Operating income is expected to fall 36 percent to around $56 million.
Collins believes there are signs of growth in the market, which has been battered by the housing crunch.
The company was able to hold its margins, which Collins called “incredible” in this economy, while the second half of the year marked a significant improvement over the first half.
“The question has become, how much of that positive trend is inventory restocking versus end-use sell-through,” he said. “We still don’t know.”
Perhaps a bigger question is how a company grows when it already dominates a market.
The company’s biggest competition comes from Stihl Group Inc., the $3 billion German maker of chain saws, and low-cost Chinese manufacturers.
Even so, Blount holds as much as 65 percent of the global market for sawchain and more than half of the market for chainsaw guide bars, said Mark Rupe, an analyst with Longbow Research in Independence, Ohio.
“The question is, how big can they become in a market that’s not growing much more than (gross domestic product),” Rupe said. “Their next biggest competitor is a massive German company that’s not going to be easy to take share from.”
The wild card, Rupe said, is Blount’s decision to bring in Collins, “a guy with private equity background and a growth bent.”
Acquisitions will play a key part in Collins’ strategy.
Blount isn’t going to buy another sawchain business, Collins said, but it will consider deals that supplement its smaller businesses, such as its segment that makes products like diamond-tipped chainsaws for the construction industry.
There’s also amble growth opportunities in the company’s $50 million outdoor equipment segment, which sells more than 12,000 products — like plastic gas cans and weedwhacker string — into the forestry and lawn and garden markets.
Collins estimates that business, with around a 5 percent global market share, could double to $100 million in the next three to five years.
Meanwhile, Collins said its principal market should grow between 5 percent and 7 percent annually.
To bolster that growth, the company must continue its legacy of innovating in its core sawchain segment.
Blount this year will launch what it calls the PowerSharp system, a new product line of sawchain and portable, do-it-yourself sharpeners that allow chainsaw users to quickly sharpen blades in the field.
“We’re innovating continually and know as much or more about sawchain than anybody else,” Collins said.
That expertise is largely attributable to a work force in which the average tenure is 17 years, and decades of consistent leadership.
“Really, the leadership up to this point has been a big feather in their cap in terms of placing the company in the position it’s in,” said Dan Shell, managing editor of Montgomery, Ala.-based Power Equipment Trade magazine.
“It will be real interesting to see how that plays out in the future.”
