Walbro Appoints New President and CEO

April 22 -- Headquartered in Tuscon, Ariz., Walbro Engine Management, the world’s largest carburetor manufacturer and leading supplier of ignition, fuel delivery and storage components and systems, announced April 20 the appointment of Matthew Riddle as president and chief executive officer. He will immediately assume responsibilities and succeed Tony Martin, who has stepped down.

Riddle, 48, is a seasoned international executive, having served operational and leadership roles at FMC Corporation, United Defense Industries Inc., BAE Systems Inc., and most recently as president of Raytheon International Inc. During his tenure at Raytheon, Riddle helped grow its international business almost two-fold.

“I am honored by the opportunity to lead Walbro into its next chapter, continuing our focus on the customer and our drive on improving performance” said Riddle. “Walbro has tremendous talent, a long legacy of innovation, and a unique position of strength in ignition- and fuel-system solutions. I look forward to working closely with our leadership team and employees worldwide to drive profitable growth through solutions that help our customers achieve competitive advantage.”

A patented inventor, Riddle is active with the Boy Scouts and sits on the board of the National Philharmonic. He holds a Bachelor of Science in Mechanical Engineering from California Polytechnic State University. Riddle is married with three children, and his interests include his family, the outdoors, reading, automobiles, hunting and fishing.

Steve Noe    www.outdoorpowerequipment.com  

Husqvarna Interim Report January - March 2015

21 April, 2015

Kai Wärn, President and CEO:

"Since January 1, Husqvarna Group operates under a new brand-driven divisional structure. The new organization shall be seen as a proactive measure to position Husqvarna Group for the next phase 2016 and beyond, with a stronger focus on profitable growth. In 2015 however, the main focus will remain on operating margin recovery through the Accelerated Improvement Program (AIP).

Overall, the year has started well for us. Group operating income increased by 22% to SEK 1,112m (908), despite a currency adjusted sales decline of -3%. The corresponding operating margin rose to 10.2% (9.4). Even if total sales declined, the development in terms of divisional mix was positive. Sales increased 9% in both of our higher margin forest and garden divisions Husqvarna and Gardena.

Consumer Brands’ sales were down by -21% predominantly reflecting a late start of the season due to another cold winter in the U.S., and our ambition to prioritize value before revenue. Construction was off to a slow start, mainly due to external reasons, but sales gradually improved and ended at an increase of 2% but with a significantly higher run-rate in March.

AIP continues to deliver according to plan and the trend of improving gross and operating margins for the Group remains. Margins were positively affected by continued impact from the two main components in our improvement program; Operational Excellence driven cost reductions and sales growth in our product leadership areas - the latter having a favorable impact on the mix.

Some of the progress was offset by unfavorable volume impact due to the lower sales in Consumer Brands. On the other hand, income for the Group was supported by a positive impact from changes in exchange rates, as currency hedges offset most of the negative transaction effects.

The recent currency movements have helped us short term, but the longer-term impact, mainly referring to the strengthening of the USD, is expected to have a negative impact. So whereas operating income and margin recovery have been solid since the launch of the AIP program, additional improvement areas to balance the negative currency impact have been identified, such as indirect material and logistics as well as capacity and efficiency measures.”

First quarter, January - March

•       Net sales increased by 13% to SEK 10,928m (9,685). Adjusted for exchange rate effects, net sales           decreased -3%.
•      Growth for Husqvarna, Gardena and Construction, while Consumer Brands declined substantially.
•       Operating income rose 22% to SEK 1,112m (908)     Operational Excellence cost reductions           and favorable divisional mix.
•           Earnings per share increased to SEK 1.37 (1.08).
•       Operating cash flow amounted to SEK -2,410m (-1,969).

Management Change in Husqvarna Group's Consumer Brands Division

STOCKHOLM – April 20 -- Effective May 1, 2015, Jeff Hohler has been appointed President of the Consumer Brands Division and member of Husqvarna Group Management.

Most recently, Jeff Hohler has held the position as President of the Tools Business Segment within Newell Rubbermaid, Inc. in the U.S. Jeff has held several different divisional president positions within Newell Rubbermaid since joining the company in 2001. Between 1991 and 2001, Jeff held numerous managerial positions within the Black and Decker Corporation.

Jeff Hohler has a Bachelor of Science in Journalism from the Bowling Green State University, the U.S. in 1988 and an MBA in Marketing from the John Hopkins University, the U.S. in 2000.

“I’d like to welcome Jeff to Husqvarna Group. His management and leadership skills, his solid retail experience and turnaround track-record will be great assets for our Consumer Brands division as well as for the Group,” says Kai Wärn, President and CEO of the Husqvarna Group.

Alan Shaw, President of the Consumer Brands Division will leave Husqvarna Group in order to pursue other interests.

"I want to thank Alan for his valuable contributions during his time with the Husqvarna Group", says Kai Wärn, President and CEO of Husqvarna Group. ”I am also grateful to Alan for remaining with the Group until we found his successor and wish him the best of luck in the future.”

The above information has been made public in accordance with the Securities Market Act and/or the Financial Instruments Trading Act. It was released for publication at 15:30 CET on April 20, 2015.

Husqvarna Group

Husqvarna Group is a world leading producer of outdoor power products including chainsaws, trimmers, robotic lawn mowers and garden tractors. The Group is also the European leader in garden watering products and a world leader in cutting equipment and diamond tools for the construction and stone industries. The Group’s products and solutions are sold under brands including Husqvarna, Gardena, McCulloch, Poulan Pro, Weed Eater, Flymo, Zenoah and Diamant Boart via dealers and retailers to end-customers in more than 100 countries. Net sales in 2014 amounted to SEK 33 billion, and the Group had more than 14,000 employees in 40 countries.

EETC Sets Bold Agenda For Technician Training

April 13 -- The Equipment and Engine Training Council (EETC) just wrapped up its 19th annual conference in Mundelein, IL. The event, hosted by area manufacturers Echo Inc. and Subaru Industrial Power Products, was attended by roughly 100 of the industry's brightest minds in small engine and power equipment repair—from students and educators to manufacturers, distributors and service technicians themselves.

The EETC is a non-profit association whose goal is to address the shortage of qualified equipment service technicians in the outdoor power equipment industry.

According to the EETC's Erik Sides, this year's conference saw a 25% jump in attendance compared to 2014. "Growth" has been the operative word since Sides took over as executive director in 2013. "We've seen membership growth in just about every segment of our association," Sides points out.

For instance, when comparing 2015 to 2014:

·         Dealer memberships up 81%

·         College memberships up 16%

·         High school memberships up 11%

  

Both manufacturer and distributor memberships are also up modestly. Additionally, the EETC has seen a better than 40% increase in certification testing (2014 vs. 2013). These are all signs that the association is headed in the right direction and that interest in small engine repair is not waning—which is a good thing for all key stakeholders in this industry, including manufacturers, dealers, and equipment users such as landscape contractors.

That said, Sides and the EETC Executive Board want to do more. They discussed several new programs and initiatives to further increase awareness of the association, gain new members, and certify and recertify more technicians.

New education and testing materials. Numerous test books have been updated for 2015. These include, among others, two-stroke engines, four-stroke engines, electrical, drivelines and compact diesel.

Additionally, EETC is now helping distribute a host of other educational materials related to small engine and power equipment repair. These include vocational education resources from Briggs and Stratton, American Technical Publishers (ATP) and Goodheart-Willcox. Also, brand new textbooks in electrical and two-stroke engines are under development.

Online education. Through a partnership with a provider of online cloud-based technical education, EETC is ramping up its online education and testing capability. "This is a great alternative to the more traditional textbook format," Sides says.

EETC actually began offering online testing in 2013. Its popularity has steadily grown. Roughly 24% of tests taken in 2014 were online. This partnership will only accelerate growth in this area. George Klein, an instructor at Walla Walla Community College in Walla Walla, WA, says he's quite excited about that—because the ability to access education and testing online has become vital. "My students absolutely love it," he exclaims. "They are all doing their testing online now."

GROWING TECHNICIANS STATE BY STATE. 

The EETC Board approved an initiative to appoint "state directors". These would be EETC member volunteers who would serve as liaisons to colleges and high schools, and FFA and SkillsUSA organizations within each state. This kind of grassroots outreach, state by state, is designed to help keep the EETC—and small engine repair in general—in front of both educators and students, while also providing invaluable assistance to educators looking to build up their small engine-related programs.

New program for high school students. On that note, EETC is also rolling out a new program specifically designed for high schools. "First Step to Power - Small Engine Technology" has two primary objectives: 1) enhance EETC brand recognition among high schools, 2) equip high school and perhaps even junior high school students with just a basic understanding of two- and four-stroke engine theory and preventive maintenance, better laying the groundwork for continued pursuit of a career in small engine repair.

First Step to Power is ideal for those schools that simply do not have the resources nor budget to offer a full-blown small engine program. Instructors will need to be EETC-certified in the "First Step to Power - Small Engine Technology program in order to administer tests. Furthermore, the schools themselves will need to be EETC-accredited in the First Step to Power program, and also maintain EETC membership. More details will become available as the program is further developed and ultimately rolled out in coming months.

Longer certification period. The EETC Board agreed to extend technician certification from three years to five, which is far more common in similar technical trades. Re-certifications will also be good for five years. Hopes are that both certifications and re-certifications will increase dramatically as a result.

Complimentary parts catalog subscription. ARI Network Services Inc., a leading provider of electronic parts lookup solutions, will offer EETC member educators with a small engine or power equipment program a complimentary subscription to PartSmart, ARI’s premier parts lookup solution. Catalogs included in the EETC educator’s subscription include Blount (Oregon), Briggs and Stratton, Echo, Honda, Husqvarna, Jacobsen, Kawasaki, Kohler, MTD, Stihl, Subaru and Toro. 

Scholarship winners announced. Six recipients of the 2015 Paul H. Scholten Memorial Scholarship Program were announced. The program is designed to award individuals pursuing a certificate or degree in power equipment technology at an EETC-accredited school.

Winners were:

·         Easton Marie Murray, SUNY Cobleskill College in Cobleskill, NY

·         Michael Massick IV, Fox Valley Technical College in Appleton, WI

·         Kilen Warmka, Alexandria Technical and Community College in Alexandria, MN

·         Robert Waddel, Texas State Technical College in Waco, TX

·         Ross Ryan, North Dakota State College of Science in Wahpeton, MN

·         Kendall Pettey, Walla Walla Community College in Walla Walla, WA

2016 Conference. Next year's conference will be hosted by Kohler Engines in Kohler, WI, at The American Club Resort. An amazing room rate has been secured, so make plans now to attend. "This will be our 20th annual conference, and we want it to be big," Sides points out.

Greg Wartgow              www.greenindustrypros.com

iRobot Hasn't Given Up on Developing Roomba's Lawn Mowing Sibling

April 10 -- You know how long it's been since we first heard that iRobot's making a robotic lawn mower?  Nine years.   After almost a decade of wondering if we'll ever see Roomba's more outdoorsy sibling, iRobot's finally giving us a glimpse of how the device will work through an FCC filing. 

Other robot lawn mowers require you to prep your lawn by burying wires around the perimeter -- the machines will recognize those wires and won't venture beyond them. iRobot, however, plans to use a wireless beacon system that entails burying four to nine beacons to mark the edges of your lawn. Those beacons will calculate the robots' position within the property and transmit it to the machine.

Sounds good, thus far, right? After all, beacons are already being used for both indoor and outdoor navigation, in airports, stores, ballparks, among other locations. Unfortunately, iRobot wants its beacons to broadcast data in the 6240-6740 MHz range. That's the same frequency the National Radio Astronomy Observatory (NRAO) is using to watch the universe. The radio telescopes operating in that range are scouring space for an abundance in methanol, which usually indicates a star-forming region.

NRAO's astronomers aren't happy with iRobot's plans and are officially contesting the company's request. iRobot, on the other hand, argues that NRAO's facilities are far from residential areas, and there's very little chance of its lawnmowers disrupting the astronomers' research. Thus, the future of Roomba for lawns depends on the FCC's decision and on iRobot's backup plans, in case the agency sides with NRAO.

Mariella Moon      www.engadget.com    

Briggs and Stratton Adding Warehouse Operation in Glendale

April 6 -- Briggs and Stratton Corp. plans to open a warehouse and distribution center in a former ATandT building in the 4300 block of North Richards Street in Glendale.

The plan will be discussed by the Glendale Plan Commission Monday night.

Nanette Behrens, representing the property owner Phoenix Investors, said Briggs and Stratton (NYSE: BGG) will lease the 200,000-square-foot warehouse. She was not able to offer additional details on the company’s plans for the building.

Briggs and Stratton, based in Wauwatosa, produces engines for outdoor power equipment including lawnmowers, generators, pumps and pressure washers.

Astronomers Keep iRobots Lawnmower Bot Out of Our Back Yard

April 6 - iRobot, the maker of the Roomba, is hoping to find another consumer hit with robots that can mow your lawn. But those plans are causing some friction with astronomers who are mapping the galactic regions that produce new stars.

Scientists from the National Radio Astronomy Observatory have formally objected to iRobot’s early plans for a lawn-mowing bot, telling the Federal Communications Commission that a radio-frequency fence meant to keep the product from wandering away would interfere with their sensitive equipment.

iRobot has to ask the FCC for permission to market its lawnmower robot because the company plans to use a series of radio transmitters mounted on two-foot lawn spikes to define the boundary of an owner’s lawn, sending signals that would halt the mower before it starts motoring down the street. There are other robotic lawnmowers in the world, but they typically use hard-wired fences to keep the bots in place.

Officials from the federally funded observatory say one way to solve the problem could be forcing iRobot to remotely disable any lawnmower bots if they’re too close to an installation of radio telescopes.

In its official response, Bedford, Mass.-based iRobot says that while it “respects the work of the radio astronomy community,” the remote location of the radio telescope facilities and the low-power signals proposed for iRobot’s radio fence system mean “there is an exceedingly low practical risk” of any interference with the work of mapping the heavens.

That’s where things get a little snarky. In response to iRobot, Harvey S. Liszt, an astronomer and spectrum manager with the National Radio Astronomy Observatory implied that iRobot’s claims about the need for its autonomous mechanoid landscapers were both wildly overblown and utterly trivial:  “iRobot cited multiple statistics of grim accidents and spilt gasoline to assert the public benefit of approving its wireless robotic lawn mowers. 

However, there is already a competitive market for robotic lawn mowers using wire loops, which has somehow failed to stanch the stream of ghastly accidents and spilt gasoline that iRobot associates with the mundane practice of lawn-mowing. Robotic lawn devices are expensive, typically several thousand dollars, and meant for situations where mowing is performed far more frequently than in the typical front yard.”

It’s too early to tell who will win this particular fight, which was previously noted by Bloomberg. But iRobot’s proposed lawnmower bots are a long way from hitting the market. The company’s plans to enter the lawn-care field were teased earlier this year, right after a lackluster earnings report dinged iRobot’s shares on Wall Street. In its initial FCC paperwork, iRobot acknowledges the lawnmower idea is still “in the early design phase.”

iRobot has pushed into several other robotics categories in the dozen years since it debuted the Roomba, its original disc-shaped robotic vacuum. But most consumers would probably be hard-pressed to name iRobot’s bots for cleaning gutters and pools or mopping household floors — iRobot says that Roomba remains the company’s biggest seller.

Curt Woodward       www.betaboston.com 

TTI Reports Record Sales, Gross Margin and Profit for 2014

HONG KONG, March 18 -- Hong Kong-based global power equipment and floor care company Techtronic Industries Co. Ltd. announced its results for the financial year ended December 31, 2014, achieving record sales, gross margin and profit. Shareholders' profits grew by 20.0% to US$300 million, with earnings per share increasing by 20.0% over 2013 to US 16.41 cents. Driven by new product innovations and growth in all geographic regions, sales rose by 10.5% over 2013 to a record US$4.8 billion.

TTI's largest business unit, Power Equipment, grew in sales by 13.0% to US$3.6 billion, accounting for 74.7% of total sales, and improved operating profit by 16.7% compared to 2013. The Floor Care and Appliance business grew 3.8% to US$1.2 billion in sales with operating profit expanding 15.4% from last year.

Gross profit margin improved for the sixth consecutive year to 35.2% from 34.2% in 2013 driven by the introduction of new products along with our global cost improvement initiatives in purchasing, supply chain, value engineering and manufacturing. 2014 earnings before interest and tax increased by 15.4% to US$351 million, with the margin improving by 30 basis points to 7.4%. The Board is recommending a final dividend of HK19.00 cents (approximately US2.45 cents) per share, which will result in a full-year dividend 32.6% higher than last year.

Mr. Horst Pudwill, Chairman of TTI, said, "TTI had an outstanding year in 2014, and I am delighted to report record sales, gross margin and profit. Our focus on product innovation and execution allows us to deliver consistently strong results, and will continue to drive our future success."

Mr. Joseph Galli, CEO of TTI, commented, "We enter 2015 with our strongest product lineup ever and are at the forefront of the shift to lithium cordless products across the industrial and consumer tool, outdoor products and floor care segments. Superior products, a disciplined operational approach, and a passionately committed team are central to our identity, and will continue to propel our growth."  

Highlights
		2014 US$ million	2013 US$ million	Changes
Turnover		4,753	4,300	+10.5%
Gross profit margin		35.2%	34.2%	+100 bpt
EBIT		351	304	+15.4%
Profit attributable to Owners of the Company		300	250	+20.0%
Basic earnings per share (US cents)		16.41	13.68	+20.0%
Dividend per share (approx. US cents)		4.05	3.06	+32.6%

•          Sales increased 10.5% to a record US$4.8 billion
•          Our high margin Milwaukee Industrial Tool business grew 22.2% globally, delivering a 3 year CAGR +20%
•          Growth in all geographic regions
•          Gross profit margin expanded 100 basis points
•          Net profit increased 20.0% for the year, delivering double digit growth for seven consecutive years
•          Efficient working capital management at 14.6% of sales

About TTI

Founded in 1985 and listed on the Stock Exchange of Hong Kong Limited in 1990, TTI is a world-class leader in quality consumer, professional and industrial products marketed to the home improvement, hardware, and construction industries. An unrelenting strategic focus on Powerful Brands, Innovative Products, Exceptional People and Operational Excellence drives our success. TTI's powerful brand portfolio includes MILWAUKEE, AEG® and RYOBI® power tools, accessories and hand tools, RYOBI® and HOMELITE outdoor products, EMPIRE layout and measurement products, and HOOVER, ORECK , VAX and DIRT DEVIL Floor Care and Appliances.

TTI is one of the constituent stocks of the MSCI Hong Kong Index (Mid Cap security) under MSCI Global Standard Index. The Company is also one of the constituents on the Hang Seng Consumer Goods Index under the Hang Seng Composite Industry Index, Hang Seng Composite MidCap Index under the Hang Seng Composite Size Index, Hang Seng Global Composite Index, Hang Seng Broad Consumption Index, Hang Seng HK 35, FTSE Multinationals Index, classified as a Hong Kong Stock, FTSE RAFI All-World 3000 Index and FTSE Hong Kong Index and classified as a Large Cap stock in FTSE Global All Cap Index. 

MILWAUKEE, HOMELITE, EMPIRE, HOOVER, ORECK, VAX and DIRT DEVIL are trademarks of the TTI Group. AEG® is a registered trademark of AB Electrolux (publ) and is used by the TTI Group pursuant to a license granted by AB Electrolux (publ). RYOBI® is a registered trademark of Ryobi Limited and is used by the TTI Group pursuant to a license granted by Ryobi Limited.

iRobot Corporation's Robotic Lawn Mower Could Be on its Way

iROBOT CORPORATION'S ROBOTIC LAWN MOWER COULD BE ON ITS WAY

 April 1 - Since iRobot Corporation released its first Roomba robotic vacuum more than 12 years ago, it has sold over 10 million home robots worldwide. But if iRobot has its way, your lawn could be its next destination in the near future.

The U.S. Federal Communications Commission recently revealed that iRobot has requested a waiver of certain rules prohibiting the unlicensed operation of certain fixed wideband wireless systems. iRobot's end goal, according to the request, is to be able to market and receive certification for a robotic lawn mower.

Of course, this shouldn't be a huge surprise. Robotics-industry watchers have already uncovered related robotic lawn mower patent applications from iRobot dating to 2007. And just last year, iRobot Chief Technology Officer Paulo Pirjanian hinted in an MIT Technology Review interview, "Through our government and defense business we have a lot of experience with things that work in rugged outdoor environments, so you can imagine us going into the backyard."

iMowbot? Yes, please!

Lucky for us, iRobot's request reveals several juicy details regarding its new robotic lawn mower plans.

First, iRobot points out that electric robotic lawn mowers are not only better for the environment than gas-powered mowers but would also reduce deaths and injuries related to lawn mowing, minimize noise pollution, and improve quality of life for the elderly, disabled, and anyone who wants additional free time to spend with friends and family -- or, as I can attest as a longtime Roomba owner, to watch in amusement as the robotic lawn mower does its thing.

iRobot also notes that while robotic lawn mowers are already "well accepted in Europe," the only models available in the United States require the placement of underground electric fences. That requires digging a trench and installing buried wire, "a cumbersome and costly process that has limited greatly the public's adoption of [robotic lawn mower] technology."

As a result, iRobot states its own robotic lawn mower -- which has yet to be named -- "will not require buried wire, but instead will rely on stakes (i.e. portable beacons) in the yard that transmit to the robot to map out and stay within the designated mowing area."

By iRobot's estimation, the typical user with a lawn between one quarter and one third of an acre would require between four and nine battery-powered stakes. And after an initial setup procedure "of a few minutes' duration," those beacons would communicate only with the robot via unique addressing. That means each user's beacons are capable of talking only to their respective robot, even if several other neighbors operate their own robotic lawn mowers at the same time.

What To Expect Next

If you were hoping to unleash a robotic lawn mower from iRobot in time for this summer, however, you're probably out of luck. iRobot states that the product is currently in the "early design phase," so it's unclear exactly when it will be ready for mainstream adoption. Either way, that day couldn't come soon enough to appease iRobot skeptics, who worry about the fact that its fast-growing Roomba line currently generates around 85% of total sales.

But in the end, it's hardly surprising that iRobot would want to get this right the first time. iRobot CEO Colin Angle has made it clear that he prefers baby steps in robotics, and to "pick applications that have real concrete value to customers, deliver on or exceed their expectations, and move on." With that in mind, you can bet iRobot will introduce the mower at a relatively attractive price to maximize both profits and its value proposition.

Steve Symington     www.fool.com

Blount International Announces 4th Quarter and full Year 2014 Results

• Fourth quarter 2014 sales increased seven percent compared to 2013
• Fourth quarter 2014 Adjusted EBITDA increased 24 percent compared to 2013
• Full year 2014 sales were $945 million and Adjusted EBITDA was $138 million
• Full year 2014 free cash flow was $46 million

PORTLAND, Ore., March 11 -- Blount International, Inc. today announced results for the fourth quarter and full year ended December 31, 2014.

Results for the Quarter and Full Year Ended December 31, 2014

Sales in the fourth quarter were $232.2 million, an increase of $15.3 million or seven percent compared to the fourth quarter of 2013. Operating loss for the fourth quarter of 2014 was $2.5 million compared to an operating loss of $16.5 million in the same quarter last year. Adjusted EBITDA in the fourth quarter was $30.5 million, an increase of $6.0 million or 24 percent compared to the fourth quarter of 2013. Fourth quarter net loss was $2.4 million, or $0.05 per diluted share, compared to net loss of $21.5 million, or $0.43 per diluted share, in the fourth quarter of 2013.

Sales for the full year were $944.8 million, an increase of $44.2 million or five percent compared to full year 2013. Operating income for 2014 was $64.2 million compared to operating income of $37.5 million for full year 2013. Adjusted EBITDA for full year 2014 was $138.0 million, an increase of $14.5 million or 12 percent compared to full year 2013. The full year 2014 net income was $36.6 million, or $0.73 per diluted share, compared to net income of $4.8 million, or $0.10 per diluted share, for full year 2013.

"We operated well in 2014, and our results reflect our performance and stronger demand in our core business compared to the previous year," stated Josh Collins, Blount's Chairman and CEO. "Our continued focus on Operational Excellence and our targeted cost reductions positively impacted our results for the quarter and the full year."

Collins continued, "Looking ahead to 2015, we remain focused on operating well and executing on our strategic plan. While the underlying fundamentals of our business are sound, we are experiencing significant headwinds from foreign currency markets related to the strength of the U.S. Dollar."

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 had fourth quarter 2014 sales of $160.4 million, which was $12.7 million higher than the fourth quarter of 2013. Sales volume increases were partially offset by foreign exchange rate impacts on reported sales and a reduction in average prices. Fourth quarter 2014 sales increased in all geographic regions compared to fourth quarter of 2013. North America generated approximately 11 percent growth, Europe and Russia improved about one percent, Asia sales increased 19 percent, and the rest of the world generated nearly 10 percent growth. 

Foreign exchange rates reduced segment sales by more than three percent as the U.S. Dollar strengthened versus nearly all currencies in the quarter. The largest impacts came from the Euro and Russian currencies. Lower average prices resulted primarily from targeted price reductions put in place earlier in 2014 in certain geographic markets.

Segment contribution to operating income and Earnings Before Interest, Taxes, Depreciation, Amortization, and certain charges ("Adjusted EBITDA") was $23.9 million and $31.2 million, respectively, for the fourth quarter of 2014, and includes $8.1 million of allocated shared services expenses. Contribution to operating income improved 46.1 percent and Adjusted EBITDA improved 18.1 percent for the fourth quarter of 2014 versus the fourth quarter of 2013.

Segment contribution to operating income and Adjusted EBITDA improved primarily due to higher sales volumes and favorable foreign exchange rates. Increased steel costs, lower average pricing, and slightly higher costs partially offset the improvements in those areas. The closure of a higher cost FLAG manufacturing plant announced in 2013 and higher plant utilization rates (89 percent in the fourth quarter of 2014 compared to 65 percent in the fourth quarter of 2013) contributed to improved overall operating efficiency. 

The manufacturing cost improvement was more than offset by an increase in SG&A spending, driven mostly by incentive compensation expense as 2014 results compare more favorably to target than in 2013 and higher training, travel, and relocation expenses.

Farm, Ranch, and Agriculture

The FRAG segment reported fourth quarter 2014 sales of $63.3 million, an increase of $0.2 million from the fourth quarter of 2013, mainly due to stronger average pricing. Sales volumes declined approximately one percent, but were more than offset by increased average pricing of nearly two percent.

The FRAG segment had $2.3 million of Adjusted EBITDA in the fourth quarter of 2014. FRAG segment contribution to operating loss was $21.4 million after $3.9 million of depreciation and amortization expense, $2.5 million of allocated shared services expenses, and $19.7 million in non-cash charges related to impairment of certain acquired intangible assets. The change in the fourth quarter 2014 contribution to operating loss compared to the fourth quarter of 2013 is presented below.

The benefit of improved average pricing was more than offset by slightly lower volumes and higher costs in the FRAG segment, mainly due to additional spending in SG&A related to wages and benefits. Wages and benefits increased primarily due to additional headcount, wage inflation, and higher incentive compensation expenses. Product sales mix in the fourth quarter of 2014 included relatively lower margin products compared to 2013. The FRAG operating loss is also partially attributed to an impairment of purchased intangible assets.

Corporate and Other

Corporate and Other generated net expense of $4.9 million in the fourth quarter of 2014 compared to net expense of $8.9 million in the fourth quarter of 2013. Fourth quarter 2014 net expense improved primarily as a result of lower restructuring expenses and professional fees. Higher professional fees in the prior year were driven mostly by financial statement audit costs.

Net Income

Fourth quarter 2014 net loss decreased primarily due to higher overall operating income in the fourth quarter of 2014 compared to 2013 and lower intangible asset impairment charges. Fourth quarter 2014 net interest expense was flat. Other income improved $2.2 million primarily as a result of foreign exchange impacts on non-operating assets.

Cash Flow and Debt

As of December 31, 2014, the Company had net debt of $356.9 million, a decrease of $38.2 million from December 31, 2013 and an increase of $5.9 million compared to September 30, 2014. The decrease in net debt since December 31, 2013 was primarily the result of generating free cash flow of $45.6 million in 2014 partially offset by the CCF-related acquisition of Pentruder and foreign exchange impacts on cash. Fourth quarter 2014 free cash flow was a use of $6.3 million compared to generation of $7.8 million in the fourth quarter of 2013.

The decrease in free cash flow in the fourth quarter of 2014 as compared to 2013 was the result of a large conversion of working capital to cash in the prior year and an increase of $1.8 million of capital spending in the fourth quarter of 2014, mostly on continued capacity increases in China and Canada. 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 2.6x as of December 31, 2014, which is an improvement compared to December 31, 2013 and reflects lower net debt and increased Adjusted EBITDA.

2015 Financial Outlook

Prior to the recent significant movement in currency exchange rates, our expectation was for FLAG sales to return to historic rates of growth with a modest headwind related to ordering patterns from our largest OEM customer. However, we now assume that the recent, significant change in foreign currency markets related to the strength of the U.S. Dollar will override those patterns. The Company has significant foreign sales denominated in U.S. Dollars. As a result, many of the Company's products are effectively priced higher for our customers.

While it is still early in the year and significant uncertainty exists, we now estimate the Company's fiscal year 2015 sales to range between $900 million and $950 million, operating income to range between $78 million and $94 million, and Adjusted EBITDA to range between $130 million and $145 million. Our expectation for sales assumes FLAG segment sales decline one percent to seven percent and FRAG segment sales remain flat to an increase of three percent, both compared to 2014 levels.

In 2015, steel prices are expected to increase by $1 million to $2 million compared to 2014. The 2015 operating income outlook includes non-cash charges of approximately $12 million related to acquisition accounting amortization. Free cash flow in 2015 is expected to range between $40 million and $50 million, after approximately $40 million to $50 million of capital expenditures. Net interest expense is expected to be between $17 million and $18 million in 2015, and the effective income tax rate for continuing operations is expected to be between 34 percent and 37 percent in 2015.

The Company's outlook range for Sales, Operating Income, and Adjusted EBITDA in 2015 versus 2014 is presented in the table below. The table illustrates the foreign currency translation impact at prior year business volumes as well as the expected 2015 unit volume effect resulting from market and currency driven demand pressure related to effectively higher U.S. Dollar denominated prices.

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®, ICS® and Pentruder® brands.

Delta Systems Introduces Bluetooth Innovation: Delta Blue Technology (tm)

STREETSBORO, OH – March 17 -- Delta Systems, a leading manufacturer of electronic controls, displays and switches, is breaking new ground by introducing a first of its kind wireless connectivity platform called Delta Blue Technology™.

Delta Blue Technology uses Bluetooth Low Energy (BLE) technology to wirelessly connect smart devices directly to any equipment that utilizes specific Delta Systems modules and controllers. The technology not only allows equipment to broadcast real-time diagnostic information, but it also provides the ability to control machine actions–like shutdown and startup–from any BLE-enabled device. Currently, Delta Blue Technology can be added to most of the company’s electronic product offerings.

Delta Blue Technology is already making waves in the OPE industry. One of Delta System’s major customers is debuting the technology on several models this spring. “We’re excited to acknowledge that a mobile app powered by Delta Blue Technology was named as a finalist for the Bluetooth Breakthrough Awards at this year’s International CES," said Spencer Allemang, Product Marketing Engineer at Delta Systems. The app enables owners to access information about oil changes, blade maintenance, air filter replacements and track key mechanical vitals over the life of their lawn tractor or zero-turn mower.

“This technology has the power to change the OPE landscape. With uses beyond consumer-facing apps such as fleet management and generator monitoring & control, we’re bringing innovations to the OPE market that are must-haves for the next generation of consumers,” said Allemang. “By connecting products with Delta Blue Technology, manufactures can offer disruptive and expandable functionality within their existing markets,” said Advanced Technology Manager Tony Nohra.

The company is in the process of rolling out Delta Blue Technology across their entire product line. “In addition to remote diagnostics, data mining, and market intelligence, Delta Blue Technology enables a competitive advantage and smart presence in the new, connected world,” added Nohra.

About Delta Systems:

Delta Systems is a designer and manufacturer of electronic controls, displays and switches based out of Streetsboro, Ohio. Delta Systems has been partnering with customers to provide innovative solutions to the Outdoor Power Equipment industry for more than 40 years

Generating Power from Waste Gas

Milwaukee -- February 28 -- When satellite photos showed bursts of light coming from the black night sky of rural North Dakota, it raised awareness about the practice of "flaring" wasted natural gas from the Bakken oil fields.

Huge flames light up the sky as the gas, a byproduct of oil production, is burned off day and night where there's no economical way to capture and use it.

In some places, "You can't see the stars. The sky is kind of a dark orange," said Sean Arithson, spokesman for Dakota Resource Council, an environmental group based in Bismarck, N.D.

Generac Power Systems of Waukesha and Kohler Power Systems, a division of Kohler Co., have equipment that captures some of the gas and turns it into usable electricity.

The portable generators, some roughly the size of a large pickup truck, burn the gas as fuel and provide electric power to the oil pumping operations.

The equipment captures "a fair amount of fuel" that otherwise would be burned off into the atmosphere, said Terry Dolan, a Generac executive vice president.

Generac and Kohler make generators for commercial and industrial uses as well as backup power for homes. Some of the largest units can provide enough emergency power to run an oil refinery or hospital.

The Bakken oil field units, which run 24 hours a day in remote areas of the Dakotas, are a growth area for Generac, Dolan said.

"A lot of these places are really far from where the utility lines go, but they need the electric power. With the flared gas, they have a constant flow of fuel coming out of the ground," he said.

Generac and Kohler sell the gas-driven generators to companies in the oil fields, which set them up to provide electric power that otherwise would come from diesel-powered generators.

A diesel-powered unit would burn 9 gallons of fuel an hour, 24 hours a day, to provide the electricity that comes from a generator burning the waste gas, said Mark Wald, president of Blaise Energy Inc., a Bismarck firm that provides the equipment and uses Generac products.

"It's crazy. There's a great big flare and fuel going up in smoke, while right next to it you have a diesel generator using fuel that has to be trucked in," Wald said.

Oil companies say they've spent more than $13 billion to capture the waste gas, mostly through pipelines, rather than burn it into the sky. But sometimes they have difficulty obtaining permission from landowners to place pipelines on their property, and it's cost prohibitive in remote areas.

North Dakota is considering state legislation that would drastically cut the time oil companies can burn off natural gas. It would require companies to begin paying royalties and taxes on wasted natural gas within 14 days after an oil well begins production. Companies are given a year now, but often they receive extensions because of the high cost of moving the gas to market.

The burned-off gas is valued at more than $1 million a month in lost state revenue, according to an Associated Press article.

"We want to get this gas, no question about it," Ron Ness, president of the North Dakota Petroleum Council, said in a recent hearing on the issue.

The Generac and Kohler generators use only a small amount of the waste gas from an oil well, but the units provide valuable power in areas where it would cost millions of dollars to run a utility line. They run year-round even in the harshest weather.

Reliability is important. It can cost a petroleum company $10,000 an hour in lost revenue if an oil well is not pumping because the generator shut down or something else went wrong.

Kohler has dozens of the gas-powered generators in the Bakken oil fields, said Nolan Landes, a senior products manager for the company's generator product line.

The units also are used in oil fields in Texas, Oklahoma, Canada and overseas.

Once a well is established, the waste gas is essentially a free source of fuel, Landes said.

But it's difficult to maintain machinery in remote locations, where the temperature can drop to 30 below zero. Also, the gas coming out of the ground from an oil well contains impurities that have to be removed before it's suitable for powering a generator.

"It's not like the gas that comes out of a pipe into your home," Dolan said.

Sensors in the generators are constantly checking the fuel quality and adjusting the units to run on it. Backup systems, such as propane tanks, can be used if a problem arises with the gas coming out of the ground.

The gas is valued at only a fraction of the value of the oil being produced. But there's still incentive to capture it as an energy source, Blaise Energy's Wald said.

With lower oil prices, "Everybody's looking at trimming costs," he said. If an oil field operator can save money by replacing diesel generators with gas-driven units, they're moving in that direction.

"We are not slowing down with the drop in oil prices," Wald said.

"We have seen significant growth in the call for generators to use the waste gas that's been flared for years," Dolan said.

http://www.jsonline.com/                        Rick Barrett