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.
WASHINGTON, May 5 -- The Auto Alliance, the American Petroleum Institute and the Outdoor Power Equipment Institute urged EPA to delay action on the agency's proposal to allow higher levels of ethanol in gasoline. Higher levels of ethanol have not been proven safe or effective according to industry projections based on preliminary results of testing introduced today at a meeting of the Mid-Level Ethanol Blends Research Coordination Group.
Dave McCurdy, president and CEO of the Alliance of Automobile Manufacturers; Jack Gerard, president and CEO of the American Petroleum Institute; and Kris Kiser, executive vice-president of the Outdoor Power Equipment Institute issued the following statement: "As the EPA proceeds with important decisions about ethanol and biofuel blend rates, it is imperative that those decisions be made with the end user market in mind. These decisions will have real world impacts and we urge the EPA to refrain from setting a premature deadline that ignores reliable, scientific data about the effects of higher ethanol blends on emissions, durability and consumer safety. We remain committed to finding the right market solutions for renewable fuels and look forward to continuing our work with the EPA on this matter."
In addition to government funds, the auto and oil industries have spent more than $6 million over the last two years testing engine performance and durability of higher ethanol fuels, as well as testing storage and dispensing of fuels with 15 percent ethanol (E15). Currently, fuels are allowed by EPA to contain only up to 10 percent ethanol (E10).
Approval of E15 should wait until testing is complete. This testing looks at the potential for vehicle engine and fuel system component damage when operating on this fuel blend. "The impacts of higher ethanol blends will fall on consumers, who will be ill-prepared to determine the right fuel for their car, lawn equipment, boat or motorcycle," said Al Jessel, senior fuels policy advisor for Chevron. "EPA should delay changing the gasoline mix in this country until research into all aspects of vehicle and engine performance is complete."
"Testing for engine and vehicle compatibility and environmental issues is scheduled for completion in 2011," said Coleman Jones, biofuel implementation manager for General Motors. "There's no need for precipitous action when the scientific results are so close at hand."
MADISON, Wis. (May 3, 2010) - With a 100-year legacy of environmental stewardship, Briggs & Stratton Corporation of Milwaukee has prided itself on its community involvement; long-standing commitment to finding smart, eco-friendly business solutions; and aggressive energy saving efforts.
Since 2008, the small engine and outdoor power equipment manufacturer has built on its knowledge and experience to become a leader in energy efficiency and has saved more than 8.5 million kilowatt-hours of electricity and 10,000 therms of natural gas annually - enough energy to power 870 homes for a year. The manufacturer will also benefit from $677,000 in savings on its energy bills each year.
With the help of Focus on Energy, Wisconsin's statewide program for energy efficiency and renewable energy, in partnership with WE Energies, Briggs & Stratton received $538,000 in financial incentives since 2008 to help move energy efficiency projects forward. Some of the projects include:
* Upgrading more than 5,500 light fixtures to high-efficiency models
* Installing over 4,000 occupancy sensors to control the lighting
* Adding variable-speed drives on ventilation fans
* Purchasing ENERGY STAR® food service equipment
* Completing ongoing tune-ups on the compressed-air system
* Sending staff members to advanced energy efficiency courses to find more ways to save
"Saving energy is not only good for the environment, it's good for the bottom line," said Todd Teske, president and CEO of Briggs & Stratton Corporation. "As an organization, we are very committed to the principles of sustainability and this is a great example of that dedication."
Not only have these upgrades saved Briggs & Stratton money, but they have also had positive environmental impact. The annual environmental benefits are equivalent to offsetting 17,000 barrels of oil from being burned - eliminating 14.6 million pounds of carbon dioxide (CO2) from being released into the atmosphere.
And the savings do not stop here. Briggs & Stratton continues to investigate new technologies to find more ways to save energy throughout the business. This year Briggs & Stratton will receive an additional $203,000 from Focus on Energy to install an innovative power regenerating system that will capture some of the lost power generated during engine and generator endurance testing. By recovering this "waste" energy, the project will save/generate more than 1.2 million kilowatt-hours of electricity annually - enough energy to power 128 homes for a year and save more than $104,000 on annual energy costs.
"Briggs & Stratton has made energy efficiency a top priority in its business plan and is going above and beyond to adopt sustainable practices," said Ken Williams, Focus on Energy's business programs director. "I applaud their persistence and dedication to keep energy savings on the forefront and constantly find new solutions."
Focus on Energy can help businesses and residents across the state identify and evaluate energy-saving opportunities, provide specific recommendations, develop energy management plans, arrange technical training opportunities about energy conservation, and offer financial incentives. For more information, call (800) 762-7077 or visit www.focusonenergy.com
Acquisition broadens Toro's offering of compact utility equipment in the rental and landscape markets
BLOOMINGTON, Minn., Apr 30, 2010 -- The Toro Company today announced it has acquired certain assets from USPraxis, Inc., a manufacturer of outdoor power equipment. Through the acquisition, Toro adds a dedicated lineup of stump grinders, wood chippers and log splitters to its product portfolio to strengthen its offering to the rental market.
"Toro has a rich history of offering innovative products for rental and landscape professionals, starting with the introduction of the Toro(R) Dingo(R) compact utility loader in the 1990s and continuing with the launch of our popular TRX walk-behind trenchers and new STX tracked stump grinder," said Rick Rodier, general manager of Toro's Sitework Systems Business.
"USPraxis is an established brand in the rental industry known for innovative, high-quality professional products. The addition of these products allows Toro to continue to broaden and strengthen its compact equipment solutions for the rental and landscape markets."
To complement the acquisition of these product lines, Toro also acquired, and will provide, a tip and blade sharpening service that offers a cost-effective way for rental stores to ensure their equipment is in optimum operating condition.
Moving forward, USPraxis products will be marketed under the Toro brand and sold through Toro's compact utility equipment distribution channel in the United States and international markets.
USPraxis has a solid reputation for its innovative lightweight cutting blades for stump grinding machines and for developing the industry's first walk-behind stump grinder with specialty blades that reduce weight and optimize cutting action.
Net sales for the first quarter declined by 19% to SEK 9,082m (11,152). Adjusted for currency exchange-rate effects, sales declined by 9%. Prices were unchanged. Americas accounted for 7 percentage points of the adjusted decline, Europe & Asia Pacific for 2 percentage points and Construction was flat. Dealer sales increased.
The first quarter predominantly consists of sell-in to the trade for the coming gardening season. The long and cold winter in Husqvarna’s main markets had a negative effect on sales for both garden and construction products. Customers remained cautious regarding build-up of inventory.
Operating income
Operating income for the first quarter decreased by 1% compared to the corresponding quarter 2009 and amounted to SEK 778m (786). Currency had a positive effect of approximately 11% and the net effect from items affecting comparability was negative 2%. Adjusted operating income declined by 10%.
Operating income includes a charge of SEK 50m for settlement of an engine-capacity lawsuit in the US.
The first quarter of 2009 included restructuring charges of SEK 35m related to personnel cut-backs.
The decline in operating income was mainly due to lower sales. Savings from previously implemented cost-reductions had a positive effect and costs for materials were slightly favorable.
Changes in exchange rates, including both translation and transaction effects net of hedging, had a total positive effect on operating income of SEK 100m (90). Hedging contracts had a positive effect of SEK 26m (74).
Operating income and operating margin for Europe & Asia/Pacific and Construction increased, but decreased for Americas.
Financial net
Net financial items amounted to SEK -88m (-196). The improvement is primarily due to lower interest rates and lower net debt. The average interest rate on borrowings at the end of the quarter was 2.9% (3.9).
Income after financial items
Income after financial items increased by 17% to SEK 690m (590) corresponding to a margin of 7.6% (5.3).
Taxes
Taxes amounted to SEK -155m (-126), corresponding to a tax rate of 22% (21) of income after financial items.
Earnings per share
Income for the period increased by 15% to SEK 535m (464), corresponding to SEK 0.92 (0.98) per share after dilution. Due to the rights issue in 2009, the average number of shares has increased compared with Q1 2009.
OUTLOOK FOR THE SECOND QUARTER 2010
Inventories in the trade of the Group’s products at the end of the first quarter were estimated to be slightly lower than a year ago, as result of continued uncertain market conditions as well as a later start to the season due to the late spring.
The sell out in the trade is expected to improve slightly compared to the preceding season, both in Europe and in North America. Despite this, retailers are expected to remain cautious about re-stocking inventories due to the remaining economic uncertainty.
In light of the late start to the season and the expectation of a better sell-out, it is estimated that Husqvarna’s sales in the second quarter will be in line with the second quarter of 2009 despite reduced listings in North America.
OPERATING CASH FLOW
Operating cash flow for the first quarter amounted to SEK -2,433m (714). Cash flow in the first quarter 2009 was positively affected by the sale of trade receivables totaling approximately SEK 2,000m. No trade receivables were sold during the first quarter 2010.
Inventory build-up during the first quarter was higher compared to the first quarter of 2009. Inventory at the end of March 2010 was still well below the level at the end of March 2009. Cash flow from change in trade payables during the quarter was lower due to later ramp up of production compared to the first quarter of 2009.
Due to the seasonality of the Group’s operations, operating cash flow is normally negative in the first quarter.
PERFORMANCE BY BUSINESS AREA
A new organization was implemented as of 1 January 2010. According to IFRS 8 Operating segments, the external reporting should reflect the internal reporting structure and Husqvarna has therefore adapted its external financial reporting.
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.
Europe & Asia Pacific
Sales for Europe & Asia/Pacific declined 11% compared with the first quarter of 2009. Adjusted for currency exchange rate effects, sales declined 5%. Prices were unchanged. Dealer sales were down less than retail sales in the quarter.
The late spring delayed the start of the season in all major markets, and customers were cautious about building up inventories ahead of the season. Sales in Russia and in Eastern Europe increased compared to the first quarter of 2009 while sales in Western Europe declined.
Operating income and operating margin improved compared with the first quarter of 2009. Operating income for the first quarter of 2009 includes a restructuring charge of SEK 34m. Lower sales had a negative effect on operating income which was compensated by lower selling and administration costs.
Americas
Sales for Americas declined 26% compared to the first quarter of 2009. Adjusted for currency exchange rate effects, sales declined 14%. Prices were unchanged. Dealer sales increased.
Sell-in was weak due to the late spring and retailers remained cautious about building up inventories.
Reduced listings with a major retailer in North America also had a negative effect on sales, especially for low-end lawn mowers.
Operating income for the first quarter of 2010 includes a charge of SEK 50m for settlement of an engine capacity lawsuit. Operating income was negatively affected by lower sales and increased marketing costs in order to grow sales in the dealer channel.
Construction
Sales for Construction declined 8% compared to the first quarter of 2009. Sales were unchanged adjusted for currency exchange rate effects.
The long winter had negative impact on construction activity in several markets, thus reducing demand for construction products. In Europe, sales were slightly higher compared to the first quarter of 2009 and sales to rental companies increased. The North American market remained soft and sales decreased.
Operating income and margin improved, mainly due to a better mix and lower selling and administration costs.
PARENT COMPANY
Net sales in the first quarter 2010 for the Parent Company, Husqvarna AB, amounted to SEK 3,036m (3,039), of which SEK 2,460m (2,482) referred to sales to Group Companies and SEK 576m (557) to external customers. Income after financial items amounted to SEK 766m (-258). The increase in income after financial items is mainly related to changes in market value of net investment hedges of SEK 509m (-417).
These hedges are made in the Parent Company to limit the effects on the Group's consolidated equity resulting from translation differences. In the Group's financial statements these effects are included in Other comprehensive income. Income for the period was SEK 572m (-188).
Investments in tangible and intangible assets amounted to SEK 69m (52). Cash and cash equivalents amounted to SEK 30m (27). Undistributed earnings in the Parent Company at the end of the period amounted to SEK 17,272m (14,411).
RESTRUCTURING
As communicated in October 2009, the Group is implementing a number of structural changes in 2009- 2011. These measures are aimed at eliminating overlapping 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 for these measures amounts to SEK 399m. Approximately SEK 175m of the SEK 399m refers to non-cash items. 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.
No restructuring charges were booked in Q1 2010.
LEGAL MATTERS
Belgian gas explosion judgement
In a judgment on 22 February 2010, the criminal court of Tournai in Belgium dismissed all claims against Husqvarna in a case regarding a gas explosion on Husqvarna’s property in Ghislenghien, Belgium, in July 2004.
The ruling has been appealed by the public prosecutor, as well as by other parties, to the Court of Appeal.
The appellate proceedings are expected to commence in the second half of 2010.
Settlement of engine-capacity lawsuit
On 1 March 2010, Husqvarna and a number of other parties 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 net settlement cost amounts to approximately SEK 50m (USD 7m) and was charged against operating income in the first quarter of 2010.
Husqvarna agreed to the settlement in order to avoid a prolonged and expensive legal process in which the results were 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.
EVENTS AFTER 31 MARCH 2010
Decision to close production site in Greece
A decision has been taken to close the Group’s production site for construction products in Greece.
Together with logistical rationalization of Construction’s operations in Belgium, the initiatives are estimated to cost SEK 50m and will be charged to operating income in the second quarter.
Annual savings from the initiatives are estimated at SEK 20m with full effect as of 2012.
President Barack Obama's goal of doubling U.S. exports over the next five years will be difficult to meet, business leaders and economists say, because of the lack of momentum on demolishing trade barriers and the shift by more American companies toward producing overseas.
U.S. exporters want Washington to put more pressure on trading partners to eliminate tariffs, crack down on intellectual-property violations and take a harder line on trading partners' currency policies. American firms say stronger action by the federal government could substantially boost prospects for U.S. exports.
Todd Teske, chief executive of Briggs & Stratton Corp., a Wauwatosa, Wis.-based small-engine maker, says he is partly counting on more exports to rebuild his sales after the recent downturn. Briggs & Stratton already receives about a fifth of its $2 billion in revenue from sales abroad, particularly in Europe. Mr. Teske calls the U.S. goal of doubling exports a "lofty goal" and one worth pursuing. But he's realistic. "It seems like every country or region wants to fuel their recovery plan with exports," he said.
Kearney -- April 22 -- Buffalo County has hired a Delaware attorney to pursue unpaid property taxes the former Coleman Powermate plant owes.
The Buffalo County Board of Supervisors ratified a decision to hire Mark Hurford of the Campbell and Levin law firm in Wilmington, Del., at a regular meeting last week.
Deputy County Attorney Andy Hoffmeister said when Coleman Powermate, a former Kearney manufacturing plant, closed in 2008, it owed $24,411 on its 2007 taxes.
“While that was pending, 2008 ticks by and the county had to involuntarily prepare a personal property tax return for them, which we’re empowered to do. The county calculated taxes for 2008 at $18,956,” Hoffmeister said.
That means in total, the company owes Buffalo County $43,367.
Hoffmeister said the company owes taxes only on personal property because the real estate is owned by the Buffalo County Economic Development Corp.
Powermate Corp. filed for bankruptcy and closed its Kearney plant in March 2008 after 22 years of doing business in the city. The manufacturer of portable generators, air compressors and pressure washers employed 200 people.
The company operated as Coleman Powermate for many years and employed as many as 700 in its heyday.
The plant re-opened under new ownership when Italian company Pramac America purchased the assets of Powermate in May 2008 and began production later that year.
“The plant’s up and running now, and Pramac is paying obligations as they’re coming due. In the meantime, we’re trying to sort out what appears to be in excess of $40,000 and get some money and priority out of the liquidated assets of the bankruptcy, so we find ourselves having to obtain Delaware counsel,” Hoffmeister said.
He said Buffalo County’s interests in the company’s assets will be considered in a Delaware bankruptcy court May 17.
“We’re just one of many that are trying to get some of our tax money,” he said. “We’re hoping at least we didn’t drop off the radar screen.”
Ryan Cos. U.S. Inc. broke ground earlier this month on an $11.5 million distribution center for The Toro Co. in Tomah, Wis.
The 354,000-square-foot building, which will be used to distribute Toro’s lawn-maintenance equipment, will replace a 310,000-square-foot distribution center Toro has operated in Baraboo, Wis., for almost two decades. Toro's lease there expires at the end of 2010.
The Tomah building is much closer to the company’s 490-employee, 35-year-old manufacturing plant in Tomah.
“The selected site in Tomah provides the greatest benefit in helping reduce operational costs while improving our productivity,” said Judy Altmaier, vice president of operations at Toro, in a press release.
The new distribution center, which will have 15-20 employees, will shorten the distance from factory to warehouse from 60 miles to one. The employees at Baraboo have been offered positions at the new facility, according to Toro.
Minneapolis-based Ryan will own the building, which sits on a 39-acre parcel about a mile southeast of Toro’s plant.
Ryan bought land from the city of Tomah and a private economic development group called Forward Tomah for a total of $192,000, said Casey Hankinson, director of development for Ryan who led the project for the developer.
The project faced a tight time frame and many obstacles, including access to highways and the mitigation of wetlands, he said.
Tad Jellison, from Jones Lang Lasalle, assisted Toro in its site search and the selection of Ryan.
The Tomah project is one of three manufacturing and logistics changes that Toro has announced recently.
In December, Toro said it’s closing its Simi Valley, Calif., plant bought in 2007 and transferring that work to its plants in Riverside, Calif., and Juarez, Mexico.
Toro also said last year that it was consolidating its Lincoln, Neb., distribution facility into its Beatrice, Neb., manufacturing plant.
The last time that Toro built a facility in the United States was in 1984 when it opened its Lakeville, Minnesota distribution center.
MILWAUKEE, April 22, 2010 -- Briggs & Stratton today announced third quarter fiscal 2010 consolidated net income of $24.1 million or $0.48 per diluted share, that when adjusted for a litigation settlement of $30.6 million ($18.7 million after-tax) would result in an adjusted consolidated net income of $42.7 million or $0.85 per diluted share on consolidated net sales of $694.6 million. The litigation settlement relates to a class action lawsuit regarding horsepower labeling that was previously disclosed in a Current Report on Form 8-K filed on March 2, 2010.
The third quarter of fiscal 2009 had consolidated net income of $25.4 million or $0.51 per diluted share on consolidated net sales of $673.8 million. Consolidated net sales increased $20.8 million or 3% from the third quarter of the prior year. The increase is primarily attributable to higher sales volumes in the Engines Segment. Third quarter adjusted consolidated net income increased $17.3 million from net income in the same period a year ago. Engines Segment operating results were the primary driver of the improved adjusted net income.
For the first nine months of fiscal 2010, consolidated net income was $18.4 million or $0.36 per diluted share, that when adjusted for the litigation settlement of $30.6 million ($18.7 million after-tax), would result in an adjusted consolidated net income of $37.1 million or $0.73 per diluted share on consolidated net sales of $1.412 billion.
For the same period a year ago, consolidated net sales were $1.609 billion, and consolidated net income was $26.6 million or $0.53 per diluted share. The majority of the $197.0 million or 12% decrease in consolidated net sales was the result of lower sales volume in the Power Products Segment. The remainder of the net sales decrease reflects lower engine volume and lower prices. The nine-month adjusted consolidated net income increased by $10.5 million from net income in the same period a year ago. Engines Segment operating results were the primary driver of the improved adjusted net income.
Engines:
Third quarter net sales for fiscal 2010 were $498.9 million versus $480.2 million for the same period a year ago, an increase of $18.7 million or 4%. The increase in net sales was primarily the result of an engine unit shipment increase of 6% from the same period a year ago. Offsetting the volume improvement were lower average prices in effect for fiscal 2010. Shipments of engines increased in the third quarter for lawn and garden applications due to the shift of OEM production to the last half of the fiscal year from the fiscal second quarter reflecting the desire of the channel participants to control their working capital commitments at the end of the calendar year.
Net sales for the first nine months of fiscal 2010 were $983.6 million versus $1.078 billion in the prior year, a decrease of $94.5 million or 9%. Unit volume decreases of 7% through nine months were the result of lower engine demand for portable generators, soft engine shipments to European lawn and garden equipment manufacturers and minor market share losses in various engine categories. The majority of the remainder of the net sales decrease was due to lower pricing implemented for fiscal 2010.
Income from operations for the third quarter of fiscal 2010 was $43.8 million. Income from operations, after adjusting for the $30.6 million litigation settlement, was $74.4 million, a $27.8 million improvement from the $46.6 million reported for the same period in the prior year.
The $27.8 million improvement was primarily the result of lower manufacturing costs for materials, labor and fixed overhead. Improvement in the adjusted income from operations from sales and manufacturing volume increases was offset by the previously discussed lower prices.
Income from operations for the first nine months of fiscal 2010 was $56.0 million. Income from operations after adjusting for the litigation settlement was $86.6 million, a $23.5 million improvement from the $63.1 million reported for the same period a year ago. The $23.5 million improvement for the first nine months was the result of similar lower manufacturing costs as mentioned for the third fiscal quarter, offset by lower sales volume, production volume and pricing.
Power Products:
Fiscal 2010 third quarter net sales were $245.3 million versus $250.2 million for the same period a year ago, a decrease of $4.9 million. The net sales decrease was primarily the result of lower portable generator sales in the quarter, as the current year's quarter did not have hurricane replenishment shipments that were experienced in last year's third quarter. The portable generator sales decrease was partially offset by stronger pressure washer volume and a small improvement in shipments of lawn and garden equipment.
Net sales for the first nine months of fiscal 2010 were $565.5 million versus $697.7 million in the prior year, a $132.2 million decrease. Lower portable generator sales for this nine-month period accounted for almost all of the net sales decrease primarily due to the absence of any hurricane activity in fiscal 2010.
There was a loss from operations of $7.1 million in the third quarter of fiscal 2010, a $4.2 million greater loss than experienced in the prior year. The increase in the loss from operations resulted from lower plant utilization, primarily production of portable generators that decreased over 90% in the current third quarter compared to the same period a year ago.
The loss from operations for the first nine months of fiscal 2010 was $8.0 million, a small improvement from the $8.9 million operating loss generated for the same period a year ago. The improvement in the loss from operations for the quarter was the result of lower manufacturing costs, primarily related to lower commodity costs and planned cost saving initiatives. The improvements were offset by lower sales and production volumes primarily related to the significantly lower portable generator shipments and production in fiscal 2010.
General:
Other income for the third quarter and first nine months of fiscal 2010 was greater than the same periods last year primarily because of improved earnings in our joint ventures. Interest expense for the third quarter of fiscal 2010 was less than the prior year because of lower borrowings offset by a premium expense of $1.4 million to repurchase a portion of outstanding senior notes during the quarter. Interest expense for the first nine months of fiscal 2010 was also lower due to lower borrowings offset by a premium expense of $2.4 million to repurchase a portion of outstanding senior notes during fiscal 2010.
The effective tax rate was 27.1% for the third quarter and 22.3% for the first nine months of fiscal 2010 versus 31.4% and 23.4% for the same periods last year, respectively. The variation reflected between years was due to the required recognition of the tax effect of certain events as discrete items in the quarter in which they occurred rather than in the overall expected annual tax rate.
The 8.875% Senior Notes that are due in March 2011 have been classified as a Current Maturity on Long-term Debt in the consolidated balance sheet as of the end of fiscal March 2010. The company believes it will be able to replace these borrowings with new financing.
Outlook:
The company, after recognizing the litigation settlement in the third quarter, now projects that fiscal 2010 net income will be in the range of $24 to $31 million or $0.48 to $0.62 per diluted share. This current forecast range is the same as the forecast provided in January 2010, except it now incorporates the litigation settlement and the bottom end of the forecast has been increased.
Consolidated net sales are projected to be approximately 6% lower between years primarily due to the absence of hurricane related sales of portable generators and their related engines, the continued impact of year over year pricing changes and lower engine shipments to Europe for lawn and garden applications.
While the lawn and garden season has started, there remains uncertainty that the market growth built in to our projections should be changed at this time. Production levels for substantially all products are planned to be lower in fiscal 2010 to decrease our investment in working capital.
Operating income margins are projected to be in the range of 2.8% to 3.1% after recognition of the litigation expense but still in the previously disclosed 4% to 5% range if the litigation expense is removed. Interest expense and other income are forecasted for the full year at $26 million and $5 million, respectively. The effective tax rate for the full year is projected to be in a range of 27% to 30%.
HORICON, Wis., April 19 -- John Deere recently rolled the five millionth lawn tractor off its assembly line at the Horicon, Wis., manufacturing facility. A model from the Select Series™ X700 Ultimate™ Tractor line-up was manufactured as the five millionth lawn tractor in time for spring and the peak outdoor power equipment selling season.
"Reaching 5 million lawn tractors is a significant milestone for us. Over the last 47 years, the John Deere Horicon Works has built a reputation for manufacturing durable and reliable products for millions of homeowners," said Dan Hoffman, factory manager, John Deere Horicon Works. "Our co-workers have dedicated themselves and worked hard to consistently provide products that meet and exceed customer expectations, and we're extremely proud of our accomplishments."
In 1963, production of the first lawn and garden tractor began at the Horicon facility during which year John Deere built 1,000 units of the 110 Lawn Tractor. An original 110 Lawn Tractor now resides at Smithsonian Institution's National Museum of American History in Washington, D.C.
In May 1984, John Deere Horicon Works reached the 1 million mark, when a Model 318 lawn and garden tractor rolled off the assembly line. The 2 million mark was surpassed in 1992 with the production of the LX188.
In 1998 the factory reached the 3 million mark with the production of an LT133 lawn tractor and in March 2003 John Deere Horicon Works exceeded 4 million tractors built.
VIRGINIA BEACH, Va., April 7, 2010 -- STIHL Inc. announced that first-quarter sales exceeded those of the previous year despite the softened handheld outdoor power equipment market. "We are sensing that in a challenging economy, consumers want to buy reliable, long-lasting products to make their dollars go further," said STIHL Inc.'s President Fred Whyte. "We are experiencing renewed optimism from our customers for continued economic recovery, and these results are certainly encouraging."
STIHL Inc., which employs over 2,000 people in its manufacturing facility and branch offices in the U.S., reported that sales of its handheld equipment were up over 5 percent for the first quarter 2009. The company credited its distribution channels and the release of several new products as contributing to the performance. "When money is tight, consumers buy from someone with whom they have a relationship and they trust," said Whyte. "The only place you can purchase our line of equipment is at a dealer who not only sells but services our product, assuring the buyer of quality and performance throughout the life of the product."
An increasing eco-consciousness among consumers is also seen as contributing to the increase in sales. "We are launching twelve new products this year under our 'Caring for Nature' line in our commitment to socially responsible environmental stewardship," said Whyte. "As a leader in the industry, we believe it is our duty to deliver the performance our customers demand, while reducing emissions and noise."
April 7 -- Spring has finally arrived, and with it the obligation to get the yard back in shape. But this year consumers finally have a reason to be thankful for their lawnmower: a class action lawsuit settlement that entitles scores of people to a check and/or a warranty extension.
The settlement concerns a lawsuit, filed last May, contending that advertisements for over 20 lawnmower brands exaggerated the machines' horsepower. The complaint, filed in federal court in Wisconsin, claimed the defendant companies "defrauded the public" by "significantly overstating" the horsepower of the subject lawnmowers, and by "failing to disclose...[their] true, significantly lower horsepower."
Specifically, the complaint stated that the defendants sold "identical, but differently and misleadingly labeled, engines at different prices -- with higher prices for engines labeled with purported higher horsepower." In other words, the companies took two identical engines, slapped different labels on them, and sold them at significantly different prices.
The suit also claimed that several of the companies created a so-called "Power Labeling Task Force," a group that they used to plan and organize their conspiracy. The group held meetings "at various locations," and even kept minutes that were distributed once the task force had adjourned.
By discovering the task force, the plaintiffs were able to include a count for violation of the Racketeer Influenced and Corrupt Organizations Act (RICO). According to the complaint, the defendants' "repeated acts of mail and wire fraud" -- namely, mailing false and misleading advertisements -- rose "above mere fraud."
The suit concerns lawnmowers with the brand names Yard-Man, Cub Cadet, Honda, Bolens, Exmark, Deere, Sabre, Scotts, Toro, Yard Machines, Craftsman, Troy Bilt, Husqvarna, Poulan, Poulan PRO, Lawn-Boy, Weed Eater, White Outdoor, Snapper, Simplicity, Brute, and Murray. The suit also covers "numerous other brands" with engines manufactured by Briggs & Stratton, Tecumseh, Kawasaki, Honda or Kohler.
Under the settlement, class members who submit timely claim forms can receive $35 for every eligible walk-behind lawnmower they own, and $75 for every eligible ride-on mower. Consumers who own a Briggs & Stratton, Toro, Tecumseh, TecumsehPower, Kawasaki, or Kohler mower, which was under a manufacturer's warranty when purchased, can receive a one-year warranty extension.
Additionally, MTD, Kawasaki, Kohler, Sears, Deere, Tecumseh, Briggs & Stratton, Toro, Electrolux, and Husqvarna have agreed to begin using a "new uniform standard" to measure horsepower.
A final approval hearing is scheduled for June 22. Class members who wish to object or opt out of the class must do so by June 4. Claim forms for the above-detailed cash benefits are due by August 31. Consumers have one year following final approval to submit claim forms for a warranty extension. Additional information is available at the official settlement website.
In addition to the RICO claim, the complaint alleged unjust enrichment, antitrust violations, conspiracy, and violations of state consumer protection laws.
Minneapolis-based Ryan Companies US, Inc., is breaking ground this Friday on a large new distribution center for the Bloomington-based Toro Co. in Tomah, Wis. The small Wisconsin city is approximately 170 miles southeast of Ryan’s downtown Minneapolis headquarters.
The $11.65 million project calls for a 350,000-square-foot distribution facility on a 38.5-acre site. Ryan will own the property and lease it to Toro. Toro already operates a 320,000-square-foot manufacturing plant in Tomah. The project is slated for completion in September.
The new project will replace an existing 310,000-square-foot warehouse/distribution center it leases in Baraboo, Wis., about 60 miles away from Tomah.
The formal groundbreaking ceremony on Friday morning will include representatives of Toro, Ryan and Tomah city officials.
“With the total package that we put together for them…it made a lot of sense for them. It was the right time to do this project,” said Casey Hankinson, director of development for Ryan Companies.
Hankinson said that a key component of the deal was being able to acquire the land cheaply from the city.
“The city owned the land where the site was. We were able to buy the land from them at a very economical rate. Land pricing is a huge component of all real estate deals. The city recognized the importance of Toro,” Hankinson said.
Toro, founded in 1914, is best known for its lawnmowers. Today the company makes an array of turf and landscape maintenance equipment and precision irrigation systems. Equipment manufactured at the Tomah plant is used for maintaining golf courses, athletic fields, public green spaces and commercial properties.
“Various sites in neighboring communities were evaluated for convenient proximity to the Tomah manufacturing facility, site access, land size, location to highway infrastructure, and price,” wrote Branden Happel, a spokesman for Toro, in an email.
“After a thorough, independent analysis of several groups we selected Ryan for several reasons. Being a general contractor, they handle all aspects of the build; everything from start to finish. We have a strong history with the company as they have done several projects for us in the past. And, they had the financial stability which was important in today’s economy,” Happel added.
In December, Toro reported revenue of $1.52 billion and net earnings of $62.8 million for its fiscal 2009, which ended in October.
Hankinson said that Ryan has a long-standing relationship with Toro, but landed the project through a competitive process after the company issued a call for proposals.
Hankinson said that the developers need to have their eyes open today to find fresh business.
“The projects are fewer and far between, you’ve got to have your antenna up for all different sorts of opportunities,” Hankinson said. “Development is hard right now unless you have a really good, quality tenant.”
