Wisconsin Manufacturers Turn to Long-Term Temporary Employees

November 14 -- More manufacturers are gearing up to hire temporary employees, sometimes for jobs lasting many months, as they need the help but are reluctant to make permanent commitments.

Thursday, Ariens Co. said it was seeking 150 employees to build snow throwers and lawn-and-garden equipment in Brillion. Also, the company says it will hire another 150 people in January and February.

Some of the jobs could be temporary, but many new hires will stay on as year-round employees, said company spokeswoman Ann Stilp.

"The bigger challenge for us sometimes is our location," she said, since Brillion isn't a big town and residents also commute to work in Manitowoc, Appleton and Green Bay.

Recently, Harley-Davidson Inc. added 100 temporary jobs at its Menomonee Falls plant as the company prepares for the production of model-year 2014 motorcycles.

Harley says the employees have been hired for the work that runs from January until June at the powertrain operations on Pilgrim Road.

The company used staffing agencies and its website to recruit people for the jobs that pay roughly $16.75 to $23.30 an hour — similar to the pay scale at the York, Pa., motorcycle assembly plant that's seeking 400 temporary employees.

This summer, Harley completed its first year of seasonal surge production in York. That effort, also taking place at the company's other plants, is aimed at producing motorcycles closer to market demand, increasing manufacturing efficiencies and saving hundreds of millions of dollars in costs.

The company's plant in Tomahawk needs 60 more seasonal employees to work 10 months starting in January, said Harley-Davidson spokeswoman Maripat Blankenheim.

Wages at the Tomahawk plant are comparable with Menomonee Falls and the other plants, she said.

Some companies, such as outdoor power equipment makers, have long used surge production and seasonal hiring to build products close to demand and not carry excess inventory.

That's the case for Kohler Co., which hires seasonal employees to build engines in advance of the lawn-and-garden equipment season. In Waukesha, Generac Power Systems has used temporary hires to fill a glut of orders for generators after major power outages.

But more manufacturers are using the hiring strategy to fill year-round jobs while avoiding long-term commitments to employees, according to staffing agencies.

"Employers, especially Milwaukee-based manufacturing companies, seem to be favoring that because they're trying to get a handle on whether their growth will be sustained. Everybody is still in limbo about this economy. That's the bottom line," said Wendy Koppel, president and owner of Division 10 Personnel/AeroStaff, a Milwaukee staffing agency.

"Five years after the recession, this is the slowest recovery I have ever seen. One way employers are responding to this tentative feeling is they're opting for more long-term temporary employees," Koppel said.

Some companies use temporary hires as a way to try people out before they offer them permanent positions. It gives them more flexibility to fire someone if the job isn't working out or the work suddenly ends.

People hired for jobs that sometimes last only a few months should take the time they're with a company and get the inside track on permanent positions, said Jim Golembeski, executive director of the Bay Area Workforce Development Board in Green Bay.

"Even if you come in as a seasonal worker, companies are looking for people who stand out," he said.

A short stint at a manufacturing plant can be a way to sharpen your workplace skills and enhance your chances at getting permanent employment.

"One of the big problems with people who are out of work for a long time is their skills atrophy. It's a reason why many employers are reluctant to hire someone who has been unemployed for a couple of years," said Hank Cox, who recently retired from the National Association of Manufacturers in Arlington, Va., and is now a freelance writer on manufacturing issues.

"There's some good in it, and people adapt. But for most people, it can't be a good feeling to know their job is only for a few months. Overall, I think it's a negative trend that I hope doesn't become too prevalent," Cox said.

Rick Barrett                www.jsonline.com

John Deere Opens the MyJohnDeere Platform to Collaborating Software Developers and Companies

Agricultural industry software companies will leverage MyJohnDeere to assist customers in managing machine and agronomic data.

OLATHE, Kan. , Nov. 14 -- In order to provide more value to agricultural producers, John Deere is collaborating with other businesses to deliver new applications and services that help customers more quickly turn data into management decisions. This collaboration supports improved productivity, efficiency and yield. Companies will provide software and applications to interface with MyJohnDeere, JDLink™, and Wireless Data Transfer – three important elements of Deere's overall technology strategy for the agricultural industry.

In 2012, John Deere introduced MyJohnDeere, a comprehensive information platform to help agricultural producers consolidate the management of equipment information, production data and farm operations. This centralized, online platform allows producers to access, view, archive, manage and share a wide variety of business information.

"Our goal is to provide a preferred, safe and secure environment for these applications, while building valuable features to connect customers with trusted advisors," said Cory Reed , Senior Vice President, Intelligent Solutions Group, Deere & Company. "Customers will be able to make choices about the use and flow of the data."

MyJohnDeere is an open platform that provides customers with a complete and comprehensive solution for their data management needs. Customers are able to view and manage this information from smart phones, tablets, and computers when and where they need it.

Reed said the Deere strategy of non-exclusive collaboration with other companies will enable data to be available in a convenient, easy-to-use platform, as determined by the customer, while maintaining John Deere's core principles surrounding data management. A special web site, www.JohnDeere.com/Trust, has been created to explain Deere's position on data management and security.

"The MyJohnDeere platform will allow input suppliers, ag retailers, local agronomists and software companies to provide applications and software that connect through the platform," said Reed. "A recent DuPont Pioneer announcement is an example of how these collaborations will greatly benefit our customers by expanding the choices they have to improve productivity, efficiency and yield. Producers should also expect to see more collaborative applications with other businesses going forward."

For companies or developers interested in connecting their applications to the MyJohnDeere platform, visit http://developer.deere.com/.

For more information on MyJohnDeere, Wireless Data Transfer, and JDLink, visit the web site at http://MyJohnDeere.com or contact your local John Deere dealer.

Deere & Company (DE) is a world leader in providing advanced products and services and is committed to the success of customers whose work is linked to the land - those who cultivate, harvest, transform, enrich and build upon the land to meet the world's dramatically increasing need for food, fuel, shelter and infrastructure. Since 1837, John Deere has delivered innovative products of superior quality built on a tradition of integrity. For more information, visit John Deere at its worldwide website at www.JohnDeere.com.

Former Rexnord Executive Named Kohler Engines VP

November 11 -- Former Rexnord Corp. executive Brian Melka has been named Kohler Engines vice president overseeing its Americas business, according to a Monday press release.

Melka previously worked as vice president of global mining and product management for Milwaukee-based Rexnord, according to his LinkedIn profile. He has also worked for Textron Inc., Providence, R.I. He holds a bachelor's degree in finance from the University of Wisconsin-Madison and a master’s in business administration from University of Wisconsin–Whitewater.

“Brian is a seasoned global business leader,” said Kohler Engines president Tom Cromwell. “His experience in a variety of key leadership positions will support our business initiatives moving forward.”

Kohler Engines is a division of Kohler-based Kohler Co., a privately held manufacturer of kitchen and bath products, engines and power generation systems, cabinetry, tile and home interiors.

Jeff Engel         www.bizjournals.com   

Amazon to Begin Sunday Deliveries, with Post Office's Help

November 11 -- Amazon.com Inc. will begin delivering packages on Sundays in the nation's two largest cities later this month with an unlikely partner—the U.S. Postal Service.

The marriage of one of the country's most successful enterprises with one of its most troubled underscores Chief Executive Jeff Bezos's ambitions to weave Amazon more deeply into consumers' lives. The nation's largest Internet retailer has begun same-day grocery delivery in some cities, and is developing smartphones and a set-top box.

Sunday delivery is Amazon's latest effort to chip away at a key advantage for brick-and-mortar retailers: immediacy.

"Delivery on a Sunday would be very compelling for consumers. There are certainly people who decide not to make an order on a Friday because it won't get there until Monday," said Sucharita Mulpuru, a Forrester Research analyst.

But Ms. Mulpuru said Amazon would likely incur relatively higher costs on Sunday because of lower volumes. "This has to be much more expensive than other days," she said.

Amazon and the Postal Service declined to discuss the costs, volume projections or the length of the contract.

Amazon said Sunday delivery will begin on Nov. 17 in Los Angeles and New York and expand next year to Dallas, New Orleans, Houston and Phoenix, among others. Amazon will bring packages from its warehouses to Postal Service locations on Saturday evening or Sunday morning. The agency will then deliver them to doorsteps.

Sunday delivery will be available for all Amazon customers in markets where the program is available at no additional cost. Customers won't specify Sunday delivery; eligible items will show up on Sunday if that is when they are ready.

Representatives of Amazon and the Postal Service said the Seattle-based company was taking advantage of a little-known offering available to any shipper. The Postal Service makes limited Sunday package deliveries for its own needs around the holidays, but the arrangement with Amazon represents its first large foray into Sunday delivery.

The Amazon contract will be a much-needed financial boost to the Postal Service, which continues to bleed red ink as more Americans eschew "snail mail" in favor of email, instant messaging and social networks. The agency, which said it expects to lose around $6 billion this year, has been closing locations and has proposed ceasing Saturday delivery of many items to cut costs.

A Postal Service spokeswoman said the agency wouldn't need to hire additional workers. She said officials have been working for more than a year on a "flexible" workforce that could be asked to clock in on Sundays. "We're ready for Sunday in the current markets," the spokeswoman said. "If this were to expand, we would look at staffing levels and adjust accordingly."

Amazon selected the Postal Service over United Parcel Service Inc., FedEx Corp. and others because its technology pairs well with the government agency's, said a spokeswoman, who declined to discuss specifics. The Postal Service delivers some Amazon packages on other days.

Sunday delivery is Amazon's latest initiative to expand the speed and breadth of its offerings. The company has been building a network of warehouses close to urban centers, from which it has begun offering same-day grocery delivery in Los Angeles and Seattle using its own trucks. Amazon has offered Sunday delivery through the grocery service, where consumers can select from more than 100,000 nongrocery items to be delivered along with their frozen waffles and tomatoes—an offering that will continue after Sunday parcel delivery begins.

In addition, Amazon has created mini-distribution centers in Procter & Gamble Co. plants from which it ships items directly to customers, rather than relaying them through larger warehouses. To reduce failed deliveries, it also is installing lockers in grocery, convenience and drugstore outlets where customers can later pick up their packages.

Dave Clark, Amazon's vice president of world-wide operations, said that later this month Amazon would also begin Sunday delivery in London, using its own trucks.

Adding an additional delivery day could help drive more users to Amazon's $79-a-year Prime unlimited two-day shipping program, said Mr. Clark. Amazon doesn't disclose its Prime membership rolls, though it said this month that those customers buy twice as many goods as customers opting for free shipping. Analysts estimate the company has more than 10 million Prime users.

Greg Bensinger    www.online.wsj.com  

Blount Announces Third Quarter Results

• Third quarter 2013 sales declined one percent from third quarter 2012
• FRAG segment sales up seven percent year-over-year for the third quarter of 2013
• Net debt reduced $55.7 million in the third quarter on strong free cash flow
• Company has filed its June 30, 2013 Form 10-Q

PORTLAND, Ore. --   November. 1 -- Blount International, Inc. today announced results for the third quarter ended September 30, 2013.

Results for the Quarter Ended September 30, 2013

Sales in the third quarter were $230.6 million, a one percent decrease versus the third quarter of 2012. Operating income for the third quarter of 2013 was $15.6 million compared to $22.5 million in the prior year. Restructuring charges of $5.1 million were incurred in the third quarter related mostly to consolidating the Company's two forestry-related, Portland, Oregon manufacturing facilities. Third quarter net income was $7.7 million, or $0.15 per diluted share, compared to $11.6 million, or $0.23 per diluted share, in the third quarter of 2012.

"In the third quarter, our business results were mixed. Our FLAG business improved in North America but continued to be challenged by difficult economic conditions in other regions, particularly Europe and Asia," stated Josh Collins, Blount's Chairman and CEO. "Our FRAG and CCF businesses performed well in the quarter, and both had increased sales compared to last year."

"As we navigate through the soft FLAG demand, we remain committed to managing our balance sheet and cost structure. We generated significant cash flow and reduced net debt and working capital in the third quarter," Mr. Collins continued. "Also, the closure of our Milwaukie, Oregon operation and consolidation of production into our other facilities remains on schedule and is expected to be completed in the fourth quarter."

Segment Results

Blount operates primarily in two business segments – the Forestry, Lawn, and Garden ("FLAG") segment and the Farm, Ranch, and Agriculture ("FRAG") segment. The Company reports separate results for the FLAG and FRAG segments. Blount's Concrete Cutting and Finishing ("CCF") business is included in "Corporate and Other."

Forestry, Lawn, and Garden

The FLAG segment reported third quarter 2013 sales of $149.5 million, a five percent decrease from the third quarter of 2012. Sales were lower due to unit volume decreases with lower average selling prices and unfavorable foreign exchange fluctuations contributing to the decline. Sales volumes were mostly impacted in Asia, which declined by 17% compared to the prior year on weaker demand driven by currency rates and commodity prices along with channel inventory correction. Sales in South America and Europe/Russia were also slightly lower compared to the prior year. As weather-related softness abated, North America showed a two percent gain in volume for the third quarter 2013, which partially offset the decline in other regions. Average pricing was lower in the quarter as a result of price adjustments in select markets and product mix.

Segment backlog was $115.9 million at September 30, 2013, a decrease of 18% from $141.2 million at September 30, 2012. The reduction in backlog relates primarily to soft overall demand and a reduction in backorders as FLAG distribution operations have improved on-time delivery performance.

Segment contribution to operating income was $21.6 million and Earnings Before Interest, Taxes, Depreciation, Amortization and certain charges ("Adjusted EBITDA") was $28.5 million, (after $5.9 million of allocated shared services expenses) for the third quarter of 2013. Segment contribution to operating income and Adjusted EBITDA declined by $3.4 million and $3.1 million, respectively, for the third quarter of 2013 versus 2012.

The effects of unfavorable volume and average pricing combined with higher overall costs negatively affected results. Costs were driven $2.2 million higher in the quarter as a result of increased logistics costs of $1.2 million and unfavorable fixed costs absorption on lower manufacturing volumes of $2.3 million. FLAG manufacturing facilities operated at approximately 71% of capacity in the third quarter of 2013 in concert with the Company's inventory reduction initiative. SG&A expenses were $1.3 million lower than the prior year on lower advertising spending and partially offset the profit decline from reduced volumes and efficiency.

Farm, Ranch, and Agriculture

The FRAG segment reported third quarter 2013 sales of $74.3 million, an increase of $4.6 million from the third quarter of 2012, mostly on improved sales volumes of agriculture attachments and tractor parts as well as improved log splitter sales. Average pricing and exchange rate fluctuations were minor.

Segment backlog was $31.0 million at September 30, 2013, compared to $25.6 million at September 30, 2012. Backlog has increased primarily due to increased tractor attachment and parts ordered, partially offset by the impact of improved throughput of SpeeCo products in the Company's Kansas City, Missouri distribution and assembly center.

The FRAG segment had $8.9 million of Adjusted EBITDA in the third quarter of 2013. FRAG segment contribution to operating income was $4.4 million after $1.4 million of depreciation expense, $3.2 million of non-cash acquisition accounting charges, and $2.0 million of allocated shared services expenses.

Segment costs and volumes improved over the prior year quarter. Expedited shipping and logistics costs in the prior year of $2.5 million were not repeated in the third quarter of 2013. The improvement in segment costs was partially offset by increased SG&A spending mainly in incentive compensation. Additionally, average selling prices increased as a result of normal annual price increases.

Corporate and Other

Corporate and Other generated net expense of $10.4 million in the third quarter of 2013 compared to net expense of $3.6 million in the third quarter of 2012. The $6.8 million increase in net expense was primarily due to facility closure and restructuring costs of $5.1 million, which were $4.3 million higher than in the third quarter of 2012. SG&A expense increase accounted for the balance of the change in net expense as the prior year benefited from the termination of a contingent liability related to previously divested businesses.

Additionally, a corporate sponsored manufacturing technology project was discontinued, generating a $1.2 million non-cash charge. The Company's CCF business, included in Corporate and Other, experienced increased sales of eight percent in the third quarter compared to the third quarter in 2012.

Restructuring

The Company's announced consolidation of saw chain manufacturing facilities in Portland, Oregon into one location is in process and proceeding according to plan. As part of the consolidation, saw chain manufacturing will be discontinued at the former Carlton Company facility acquired in 2008. The Carlton® brand continues to be a strong forestry brand for the Company and will continue to be sold worldwide. Manufacturing for Carlton products will be consolidated into existing FLAG production facilities in Portland and globally.

The Company continues to expect to achieve more timely delivery by manufacturing closer to its customers, an overall net reduction in global FLAG manufacturing headcount of approximately 200 positions, and annual cost savings of between $6 million and $8 million. Including the $5.1 million incurred in the third quarter, the Company expects to incur expenses of $9 million to $10 million in total to consolidate the manufacturing operations, of which approximately $4 million to $5 million are cash transition costs including severance and moving expenses and approximately $5 million represents non-cash charges for accelerated depreciation on equipment to be idled and a write-down of land and building carrying value.

Recent SEC Filings

We recently filed our June 30, 2013 Form 10-Q and expect to file a 2012 Form 10-K/A and March 31, 2013 Form 10-Q/A after filing of the September 30, 2013 Form 10-Q. As disclosed in our June 30, 2013 Form 10-Q filed on October 28, 2013, we have concluded that there was no material misstatement of our 2012 financial statements, although the 2012 Form 10-K and March 31, 2013 Form 10-Q will be amended to reflect modified conclusions regarding internal control over financial reporting. Please refer to the June 30, 2013 Form 10-Q filed on October 28, 2013 for additional details.  

Net Income

Third quarter 2013 net income declined due to lower overall operating income compared to 2012. Additionally, the impact of higher average borrowing rates increased net interest expense by approximately $0.6 million with a lower effective income tax expense rate providing a $1.7 million benefit to net income compared to last year due to settling certain tax audit issues. Finally, other expense increased by approximately $1.3 million reflecting unfavorable effects of foreign currency exchange rate movements on non-operating assets.

Cash Flow and Debt

As of September 30, 2013, the Company had net debt of $404.8 million, a decrease of $61.7 million from December 31, 2012 and a decrease of $63.0 million compared to September 30, 2012. Free cash flow of $56.1 million was generated in the third quarter of 2013 compared to $6.1 million in the prior year third quarter. Most of the increased free cash generation was driven by a reduction in working capital as well as reduced capital spending compared to the prior year.

Net working capital decreased by approximately $43.1 million in the third quarter compared to a $6.8 million decrease in the third quarter of 2012. Working capital benefited from significant accounts receivable collection in the third quarter of 2013 compared to 2012 along with inventory reduction in the third quarter of 2013.

Net capital spending in the third quarter of 2013 was $7.7 million, a reduction of $4.7 million from the prior year third quarter, primarily as a result of lower capacity capital spending in the Fuzhou, China plant as expansion of that facility nears completion of the first significant phase. The Company defines free cash flow as cash flows from operating activities less net capital spending.

The ratio of net debt to last-twelve-months ("LTM") Adjusted EBITDA was 3.1x as of September 30, 2013, a decrease from 3.4x at December 31, 2012, and a decrease from 3.5x at June 30, 2013. The decrease in leverage from the end of 2012 is primarily the result of improved free cash flow and resulting net debt reduction, partially offset by lower Adjusted EBITDA for the LTM period ended September 30, 2013.

2013 Financial Outlook

The Company has updated its fiscal year 2013 outlook. Sales are expected to range between $905 million and $915 million, and operating income to range between $64.0 million and $70.0 million. Our expectation for sales assumes FLAG segment sales are down for the full year between 4% and 5%, and that FRAG segment sales grow for the full year between 6% and 7%, both compared to 2012 levels. In 2013, operating income is expected to experience headwind from foreign currency exchange rates of between $1 million and $2 million, and steel costs are expected to have up to an overall $4 million favorable impact for the year compared to 2012.

The 2013 operating income outlook includes non-cash charges of approximately $16 million related to acquisition accounting. Free cash flow in 2013 is expected to range between $57 million and $63 million, after approximately $33 million to $37 million of capital expenditures. Net interest expense is expected to be between $18 million and $19 million in 2013, and the effective income tax rate for continuing operations is expected to be between 32 percent and 35 percent in 2013.

Blount is a global manufacturer and marketer of replacement parts, equipment, and accessories for consumers and professionals operating primarily in two market segments: Forestry, Lawn, and Garden ("FLAG"); and Farm, Ranch, and Agriculture ("FRAG"). Blount also sells products in the construction markets and is the market leader in manufacturing saw chain and guide bars for chain saws. Blount has a global manufacturing and distribution footprint and sells its products in more than 115 countries around the world. Blount markets its products primarily under the OREGON®, Carlton®, Woods®, TISCO, SpeeCo®, and ICS® brands.

ARI Network Services Announces Fiscal 2013 Results

ARI NETWORK SERVICES ANNOUNCES FISCAL 2013 RESULTS

MILWAUKEE, Oct. 29 -- ARI Network Services (ARIS), a leading provider of website, software, and data solutions that help dealers, distributors, and manufacturers Sell More Stuff!(TM), reported financial results today for its fiscal fourth quarter and fiscal year ended July 31, 2013.

Highlights For The Fiscal Fourth Quarter Included:

·         Revenues for the fourth quarter of fiscal year 2013 were $8.5 million, a 44.0% increase over the same period last year.

·         Recurring revenues for the fourth quarter of fiscal year 2013 were $7.9 million, a 65.1% increase over the fourth quarter of fiscal year 2012. As a percentage of total revenues, recurring revenues in the fourth quarter were 93.6% in fiscal year 2013 versus 81.7% for the same period in fiscal year 2012.

·         EBITDA, a non-GAAP measure, adjusted for non-cash charges, was $1.5 million in the fourth quarter, an increase of 36.4% over the same period last year.

Highlights For The Fiscal Year 2013 Included:

·         The Company reported record revenues of $30.1 million, a 33.8% increase over fiscal year 2012.

·         Recurring revenues for the fiscal year 2013 were $27.0 million, a 44.3% increase over fiscal year 2012.       As a percentage of total revenues, recurring revenues were 89.7% in fiscal year 2013 versus 83.2% in          fiscal year 2012.

·         EBITDA, a non-GAAP measure, adjusted for non-cash charges, was $3.5 million in fiscal year 2013, a decline of 19.5% from fiscal year 2012, which was related to costs associated with the two fiscal year 2013 acquisitions.

·         On August 17, 2012, the Company acquired substantially all of the assets of Ready2Ride, Inc., the first-to-market and leading provider of aftermarket fitment data to the powersports industry. The Company leveraged this data in its February 2013 release of AccessorySmart(TM), a fitment driven parts lookup solution, which won a Nifty 50 Award at the powersports industry's largest trade show.

·         On November 28, 2012, the Company acquired the assets of the retail division of 50 Below Sales and Marketing, Inc., a leading provider of eCommerce websites to the powersports, automotive tire and wheel and durable medical equipment industries. The 50 Below operation, which was purchased out of bankruptcy, is already generating positive cash flow.

·         On March 13, 2013, the Company announced that it entered into agreements with various accredited investors in a private placement of 3.2 million shares ($4.8 million) of its common stock at a purchase price of $1.50 per share. The Company also issued warrants to purchase 1.1 million shares, all but 214,000 of which have been exercised to date. The funds raised in the private placement were used to pay down a substantial portion of the Company's outstanding debt.

·         On April 25, 2013, the Company announced that it closed new senior secured credit facilities with Silicon Valley Bank. The facilities include a $4.5 million term loan and a $3.0 million revolving credit facility. The proceeds from the transaction were used to pay down the remaining portion of the Company's outstanding debt with Fifth Third Bank and with a shareholder.

Fiscal Year 2013 Financials

ARI reported revenues of $30.1 million for fiscal year 2013 versus $22.5 million for fiscal year 2012, an increase of 33.8%. Recurring revenue comprised 89.7% of total revenue during fiscal year 2013 versus 83.2% in fiscal year 2012. The increase in revenues was driven by the Company's November 2012 acquisition of the assets of the retail division of 50 Below Sales and Marketing, Inc.

Overall gross margin for fiscal year 2013 was 78.0%, versus 76.6% last year. The gross margin improvement resulted from the Company's focus on higher margin, recurring revenue streams and its continued shift away from one-time revenue sources.

The company incurred a net loss of $753,000 or ($0.08) per share for the year, compared to net income of $1,055,000 or $0.13 per share last year. The loss incurred in fiscal 2013 was driven by acquisition-related costs of approximately $1,200,000, a non-cash loss on the fair market valuation of stock warrants of $635,000, a non-cash loss of $682,000 related to the early repayment of debt and a $420,000 non-cash impairment charge to a long-lived asset. These charges were offset in part by a non-cash gain recognized on a change in estimate of contingent liabilities of $180,000 and an income tax benefit of $1,133,000.

Management Discussion

Roy W. Olivier, President and Chief Executive Officer of ARI, commented, "Fiscal 2013 was a transformational year for ARI. We completed two acquisitions, which provided us with a first-to-market opportunity in the powersports industry and introduced ARI to several new markets -- aftermarket wheel and tire and durable medical equipment. 

We raised $4.5 million in a private placement transaction that was used to reduce our post-acquisition debt and are excited about our new relationship with Silicon Valley Bank, which we believe will be a critical growth partner for the Company."

Mr. Olivier continued, "Our acquisition of 50 Below in November 2012 was a game changer for ARI. We posted record revenues in fiscal 2013, exceeding $30 million for the first time in the Company's history and now host and maintain more than 5,500 websites. 

ARI has proven time and time again that it is highly capable of acquiring and efficiently integrating companies. The 50 Below operation, which we acquired out of bankruptcy in November 2012, recorded an operating loss of $3.4 million on revenues of $9.2 million for the trailing twelve months ended October 31, 2012. By the quarter ended April 30, 2013, we had already achieved positive cash flow and EBITDA for 50 Below, ahead of our original expectations."

Darin Janecek, Chief Financial Officer of ARI, commented, "ARI's overall profitability was affected in fiscal year 2013 as a result of the one-time acquisition-related costs and other non-cash charges. Excluding these charges, ARI generated adjusted EBITDA of $1.5 million in the fourth fiscal quarter; it's the first quarter since the acquisitions of both Ready2Ride and 50 Below of year over year EBITDA growth, an indication that we are successfully integrating the acquisitions. 

Further, we continued to improve on two of our most important growth metrics -- recurring revenue and churn. Recurring revenues exceeded 90% of total revenue in the fourth fiscal quarter and our overall rate of churn improved to 12.8% in fiscal year 2013 versus 13.4% last year. The private placement and Silicon Valley Bank financing transactions enabled us to improve our balance sheet substantially following the two acquisitions, leaving us poised for continued growth as we head into fiscal 2014."

Steelworkers Union Approves 4-Year Contract at Briggs and Stratton

MILWAUKEE -- October 30 -- United Steelworkers Local 2-232, which represents about 395 employees at Briggs and Stratton Corp. plants in the Milwaukee area, voted Wednesday to accept a four-year labor contract that includes 2% pay raises in three of the four years.

The contract was approved by a vote of 268 in favor to 82 against, Briggs spokeswoman Laura Timm said.

Briggs is the world's largest manufacturer of gasoline engines used in outdoor power equipment. The company also makes generators, lawn-and-garden equipment and other products.

The new contract, effective Jan. 1, covers employees at the company's engine components plant in Wauwatosa and a distribution center in Menomonee Falls.

Employees will receive 2% raises in the second, third and fourth years of the contract. They also will receive the same health care benefits as salaried employees, Timm said.

"Everybody will be under one benefits plan," she said.

Also under the contract, permanent employees will not be replaced by temporary employees. Instead, temporary employees will only be brought in for seasonal work.

In another change, employees won't have to take an initial pay cut when they transfer to another job. That was important to the membership, said Local 2-232 President Jesse Edwards.

After meeting with a negotiations mediator on Oct. 23, the union bargaining committee recommended that members vote to accept the contract.

"Overall, I feel like it was the best we could do at this time," Edwards said.

This was the third contract vote at the Briggs plants in three months. The first two times the proposal was rejected, but the voter turnout was low.

To encourage a higher turnout Wednesday, the company shut down its plants here and gave employees their regular full pay for the day if they attended the union meeting that preceded the vote and explained the terms of the proposed contract.

Union members said they were told this was Briggs' best and final offer. If the contract had been rejected again, work could have been moved out of the area or the contract terms could have been implemented by the company, union officials said.

"I don't think the members wanted to go on strike, so they accepted the proposal," Edwards said.

Under the previous three-year contract, employees' increased health insurance costs more than offset pay raises and a one-time $500 signing bonus.

Union leaders made no recommendation on that pact, which was approved in October 2010 by a vote of 211 to 77.

Rick Barrett           www.jsonline.com     

Deere Sells Interest in Landscape Business

October 28 -- Deere and Co. announced Monday that it has agreed to sell a majority interest in its landscapes business to the private equity investment firm of Clayton, Dubilier and Rice LLC.

In a news release, Deere said that it will receive approximately $300 million in cash and initially will retain a 40 percent equity interest in the new company. In its own news release, Clayton, Dubilier and Rice, or CD&R, said the carve-out transaction is valued at about $465 million.

John Deere Landscapes has been included in the Moline-based company's agriculture and turf segment.

"This partial sale allows Deere an opportunity to remain as part of a successful landscapes distribution business," James Field, president of Deere’s Worldwide Agriculture & Turf Division, said in the release. “At the same time, Deere will continue to increase its own strategic focus on the global growth businesses in agriculture and construction and the complementary businesses in turf and forestry."

With more than $1 billion in annual revenue, John Deere Landscapes is the largest North American distributor of landscaping products sold primarily to professional landscape contractors. It distributes wholesale irrigation, landscape lighting, nursery, and turf and maintenance supplies.

"CDandR's focus on growth and deep experience with businesses like ours make them an ideal partner," said David Werning, John Deere Landscapes president, who will retain his position. "Deere's ongoing equity ownership reflects its interest in remaining part of a successful landscapes distribution business."

David Wasserman, a partner with CD&R, said John Deere Landscapes is "managed by a talented executive team that we are very excited to has as partners." "The business has many attractive features, including scale, breadth of product offering and service excellence, all of which provide significant strategic and competitive advantages in supporting the requirements of the professional landscape contractor," he added.

Paul Pressler, a CDandR operating partner, will assume the role of chairman upon close of the transaction, which is expected in December.

"The new company should benefit from a recovery in residential and commercial construction activity as well as through the meaningful value creation opportunities available to drive the business forward," said Ken Giuriceo, a CDandR partner.

Deere formed the landscapes business in 2001 when it purchased and merged wholesalers McGinnis Farms Inc. and Richton International Corp. The business later expanded with the acquisitions of United Green Mark and LESCO, Inc., in 2005 and 2007, respectively. Today, John Deere Landscapes is one of the largest U.S. wholesale suppliers of turf and ornamental agronomics, irrigation, outdoor lighting, nursery and landscape materials.

John Deere Landscapes employs more than 2,000 people at about 400 locations in 41 states. 

Field said Deere recognized the investment firm's broad experience and successful record in distribution businesses and the firm’s longevity and experience in private equity.

Since its inception in 1978, CD&R has managed the investment of more than $18 billion in 56 U.S. and European businesses with an aggregate transaction value of more than $90 billion.

In an interview with the Quad-City Times, Deere spokesman Ken Golden said John Deere Landscapes employees "were told today there is no immediate impact on them. As in any business, future decisions could be made that will result in changes," he said.

The sale is unrelated to Deere's announcement last month that it is reviewing strategic options for the future of its John Deere Water business, which produces precision irrigation equipment for agriculture customers, Golden said.

Jennifer DeWitt              www.qctimes.com   

Dane Scag Passes

October, 2013 -- Dane Scag, who founded Scag Mowers and established several other brands of landscape maintenance equipment, has died. He was 94.

Scag got his start in the industry with his founding of BOB-CAT in the 70s, a brand of mowing equipment that still exists today. It was with BOB-CAT that he designed the commercial-grade 21-inch walk-behind mower, which was used by thousands of contractors and became the leading mower in the industry.

After selling BOB-CAT to Ransomes, Sims and Jeffries, a British agricultural machinery maker, he went on to found Scag Power Equipment. The first mower Scag Power introduced to the industry was a three wheel mowing tractor. He also developed and introduced the first dual hydro drive wide area walk mower, which won him the prestigious OEMie Award in 1990. In 1986, Metalcraft of Mayville purchased the company and Scag stayed on as president.

In 1991, Scag left his namesake company and in 1996 he founded Great Dane Power Equipment. It was at Great Dane that he created the surfer stand mower, the first stand-on mower in the industry. The surfer mower earned Scag his second OEMie. Eventually he sold Great Dane to John Deere in December of 2000.

Steve Redan, chairman of KPM, started distributing for Dane in 1986. He described Scag as a clever and ingenious man who could look at a piece of equipment, and then build a better version.

“He had a great relationship with his dealers,” Redan says. “His dealers loved him. Dealers would suggest things and he would do that. Then he would come back to the dealer six months later and say ‘See what I did for you?’  He would actually buy the loyalty of the customer because he would listen and do what the customers felt was the right thing.”

Rick Cuddihe, CLP, ‎President of Lafayette Consulting Company, Lafayette Property Maintenance, was a longtime friend and business partner of Scag’s. He met Scag in 1972 and in 1996 helped him start Great Dane as a stock holder.

“Dane’s equipment innovations and creative designs have changed our industry for the better and I’ll never forget him,” Cuddihe says. “I learned a lot about equipment design and production from him, but more about life from watching him do the right thing time and time again.”

Katie Tuttle         www.lawnandlandscape.com 

The Toro Company Will Celebrate 100 Years of Industry-Changing Innovation in 2014

BLOOMINGTON, Minn., Oct 23, 2013 -- As The Toro Company nears its 100th anniversary in 2014, it is reflecting upon its past as it continues to drive to the future. Since its beginning, Toro has created innovative products, services and solutions to help customers care for their outdoor environments - from golf courses and sports fields to public green spaces, commercial and residential properties, and agricultural fields. The principles that have guided the company from the very beginning - a commitment to innovation and building lasting relationships - remain a key focus today as Toro looks to its next hundred years.

Driven By Innovation From the company's first patent in 1920 for a convertible cultivator tractor, to the more than 20 U.S. patents it received in 2012, Toro has obtained over 800 U.S. patents - in addition to many corresponding patents outside the U.S. Toro demonstrates its commitment to innovation by annually dedicating at least 3 percent of net sales to research and new product development. Recently, in the Minneapolis/St. Paul Business Journal's list of annual RandD spending among Minnesota public companies, Toro ranked 11th with investments of just over $60 million in fiscal 2012.

The combination of intensive product development and a deep understanding of customer needs has enabled Toro to achieve and maintain market leadership. In 1919 at the request of The Minikahda Club in Minnesota, Toro created a mechanized mowing machine to replace horse-drawn equipment typically used by golf courses at that time. After Minikahda put the new machine to the test, the chairman of the grounds committee, Senator William F. Brooks, predicted it would "revolutionize the cutting of grass on golf courses." His prediction came true and helped establish Toro as the leader in the industry.

More recently, in a broader effort to help customers better manage water resources, Toro introduced the Precision(TM) Soil Sensor - the first wireless moisture sensor for the residential irrigation market. This award-winning technology was recognized for its compatibility with most irrigation controllers, including competitive units, long-range wireless connectivity, and the ability to help homeowners save water by knowing when to water based on moisture levels beneath the surface.

Innovative People Core to the company's success is the drive of its employees in continually seeking new products to deliver top-quality performance, enhance productivity, and improve efficiency for customers. Another key contributing factor to Toro's success is its partnership with researchers worldwide to advance the science of turf management, and help customers conserve water and other resources.

One unique, solutions-based approach was the formation of Toro's Center for Advanced Turf Technology (CATT) in 1998. Comprised of a team of leading agronomists and engineers, CATT has been influential in the development of products that increase productivity, save water, reduce fuel consumption and improve growing conditions. This group also has created the foundation for future innovation in robotics, fuel cells, advanced battery technologies, and site assessment - including Toro's patented PrecisionSense(TM) site assessment solution. Used by golf courses and sports fields around the world, this innovative mobile soil sensing and data collection technology measures the variability of key site attributes - such as soil moisture, salinity, compaction and plant performance - to help improve water and resource efficiency, and produce healthy turf.

Industry Leading Products Understanding the needs of its customers and empowering product development teams to strive for innovation enables Toro to deliver industry-leading advancements in its products. This focus has created all-new product categories, increased customer productivity, and advanced more efficient use of resources.

Generac Reports Third Quarter 2013 Results

Strong organic revenue growth from commercial and industrial products and home standby generators drives continued growth in earnings

WAUKESHA, Wis. -- Oct. 24, 2013-- Generac Holdings Inc., a leading designer and manufacturer of generators and other engine powered products, today reported financial results for its third quarter ended September 30, 2013.

Third Quarter 2013 Highlights

Net sales increased year-over-year by 20.9% to $363.3 million as compared to $300.6 million in the third quarter of 2012.

Net income during the third quarter of 2013 was $47.1 million, or $0.67 per share, as compared to $25.5 million or $0.37 per share for the same period of 2012.

Adjusted net income, as defined in the accompanying reconciliation schedules, increased to $73.7 million from $54.1 million in the third quarter of 2012. Adjusted diluted net income per share was $1.06 as compared to $0.78 per share in the third quarter of 2012.

Adjusted EBITDA increased 31.2% to $100.1 million as compared to $76.3 million in the third quarter last year. Adjusted EBITDA margin during the third quarter improved to 27.5% as compared to 25.4% in the prior year primarily due to warranty rate improvements resulting in a favorable adjustment to warranty reserves.

Cash flow from operations in the third quarter of 2013 was $80.9 million as compared to $69.5 million in the prior year quarter. Free cash flow was $76.7 million as compared to $61.6 million in the third quarter of 2012.

For the trailing four quarters, including the third quarter of 2013, net sales were $1.452 billion; net income was $154.3 million; adjusted EBITDA was $382.1 million; cash flow from operations was $261.6 million; and free cash flow was $238.4 million.

On August 1, 2013, the Company closed on the previously announced acquisition of Tower Light Srl, a leading developer and supplier of mobile light towers throughout Europe, the Middle East and Africa.

Subsequent to the end of the quarter, the Company entered into a purchase agreement on October 7, 2013 to acquire substantially all of the assets of Baldor Electric Company’s generator division (“Baldor Generators”). Baldor Generators offers a complete line of generators ranging from 3kW to 2.5MW throughout North America.

“We experienced double-digit organic revenue growth again during the quarter as a result of increased spending from our national account customers and continued adoption of standby generators for both residential and commercial applications,” said Aaron Jagdfeld, President and Chief Executive Officer.

“We believe our expanded dealer base, targeted marketing efforts and continued roll-out of our PowerPlay® in-home sales process are having an impact on extending the awareness and distribution of standby generators, which is leading to a new and higher baseline level of demand for these products. In addition, over the last twelve months, we have announced several acquisitions that provide us with immediate access to new global markets and new products, helping to further grow and diversify our business.”

Additional Third Quarter 2013 Highlights

Residential product sales for the third quarter of 2013 increased to $192.7 million from $191.0 million for the comparable period in 2012. Shipments of home standby generators were higher sequentially and over the prior year due to a combination of factors including the additional awareness and adoption created by major power outages in recent years, the Company’s expanded distribution, increased sales and marketing initiatives, overall strong operational execution and a more favorable environment for residential investment.

The strength in home standby generators was partially offset by a decline in shipments of portable generators due to less severe power outage events in the current year quarter relative to prior year, although expanded placement for these products continued to lead to year-over-year market share gains. In addition, increased revenue from power washer products also contributed to the year-over-year sales growth in residential products.

Commercial and Industrial (CandI) product sales for the third quarter of 2013 increased 61.8% to $151.5 million from $93.6 million for the comparable period in 2012. Organic net sales increased at a strong double-digit rate during the current year quarter primarily driven by a significant increase in shipments to national account customers and increased sales of natural gas generators used in light commercial/retail applications. In addition, the Ottomotores acquisition, which closed in December 2012, and the Tower Light acquisition, which closed in August 2013, contributed to the year-over-year growth in CandI products.

Gross profit margin for the third quarter of 2013 was 38.4%, which was approximately flat as compared to the third quarter of 2012. Gross margin was affected by the mix impact from the addition of Ottomotores sales along with a higher mix of organic CandI product sales, mostly offset by the positive impact from a moderation in commodity costs and continued execution of cost-reduction initiatives.

Operating expenses for the third quarter of 2013 declined $4.5 million, or 8.0%, as compared to the third quarter of 2012. The expense reduction was driven primarily by warranty rate improvements resulting in a favorable adjustment to warranty reserves, as well as a decline in the amortization of intangibles. These reductions were partially offset by the addition of operating expenses associated with the Ottomotores and Tower Light businesses, and increased sales, engineering and administrative infrastructure to support the strategic growth initiatives and higher baseline sales levels of the Company.

Interest expense in the third quarter of 2013 declined to $12.5 million compared to $16.9 million in the same period last year. The decline was primarily the result of a reduction in interest rate from the current-year credit agreement refinancing completed in May 2013.

Outlook

The Company is revising upward its sales guidance for full-year 2013 primarily due to continued strong demand for home standby generators, as well as a modest impact from the expected closing of the Baldor Generators acquisition in the fourth quarter of 2013.

Full-year 2013 net sales are now expected to increase in the low-to-mid 20% range over the prior year, which is an increase from the low-20% rate previously expected. This top-line guidance continues to assume no material changes in the current macroeconomic environment and no major power outage events for the remainder of 2013.

Gross margins for full-year 2013 are now expected to increase approximately 50 basis points as compared to the prior year, which is an improvement from the previous expectation of approximately flat as compared to the prior year.

Operating expenses as a percentage of net sales, excluding amortization of intangibles, are now expected to decline by approximately 75 to 100 basis points as compared to 2012, which is an improvement from the previous expectation of approximately flat as compared to the prior year.

As a result of the higher sales outlook and the improved gross margin and operating expense guidance, adjusted EBITDA for the full-year 2013 is now expected to increase in the low-30% range, which is an increase from the low-20% range previously expected.

“We remain excited about the compelling secular penetration opportunities for our products,” continued Mr. Jagdfeld. “These organic growth drivers are highlighted by the substantial opportunity to increase the penetration of standby generators in both the residential and light commercial markets, the significant opportunity to provide backup power for critical communications infrastructure, along with the overall ongoing shift in the market toward natural gas generators. At the same time, we continue to remain active on the acquisition front in recent months with the closing of the Tower Light transaction and the agreement to purchase Baldor Generators. These acquisitions are an integral part of our Powering Ahead strategic plan to become a more balanced company with improved global scale.”