Outdoor Power Equipment and Engine Service Association
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Husqvarna to Add 75 Permanent Positions and 800 Temporary Positions As It Ramps Up Robotic Cutter Production

Husqvarna Group is taking on around 800 temporary staff to meet seasonal summer demand at its factory in Newton Aycliffe, County Durham, England.  However, bosses also aim to fill 75 permanent posts.

The plans come just months after Husqvarna told its local newsletter, The Echo, that it expected Aycliffe to double output, with spending planned on equipment to ensure the plant retains its place as the company’s headquarters for robotic mowers.

The proposals overshadow Husqvarna’s temporary take-up last year, when officials sought 650 staff to cover warm weather demand when clamour for its products traditionally rises as customers tackle their gardens.
A spokeswoman for the wide-ranging Husqvarna group, which is known for its Flymo, Gardena and McCulloch brands, told the Echo the plans were a reflection of the business’ commitment to Aycliffe, where robotic mowers will be paramount to its future.

She said: “We see continued growth and demand for robotic mowers and will need to hire around 800 temporary workers this year and are planning to hire around 75 people permanently during the course of this year. ” As world-leader in robotic mowing, we continuously launch new models to support our future growth.

“We will continue to invest in new equipment in the form of assembly lines and injection moulding machines, as well as making investments in the facilities we have on site, such as more storage space.

“We are also looking to recruit a number of technical personnel, in particular maintenance staff in moulding and assembly, to support and continue production.

“There’s a lot of exciting things going on.”

The plans follow a vow from Pavel Hajman, Husqvarna division president. Speaking to the Echo in September, Mr Hajman said the business would install new moulding machines and assembly tools to cater for the rising appeal of robot cutters across Europe, as gardeners are increasingly drawn to the machines’ ability to work unassisted at night and in the wet.

Speaking from the company’s Swedish headquarters, he said: “We have seen a very high growth in robotic mowers and believe that will continue in the coming years.

“For that reason, we need to increase capacity and there are further opportunities (to take on) people over time.

“Aycliffe is tremendously important for us; it is the headquarters for robot mowers and the only plant that is making them. The production capacity volume has tripled over the last two years and I expect it to treble the size it is today in terms of output by 2019 or 2020.”


OPEI Continues to Raise Awareness of Higher Ethanol Blends

OPEI, the trade association representing power equipment, engine and utility vehicle manufacturers and suppliers, has updated its free consumer and dealer education materials for its “Look Before You Pump” consumer protection campaign. As these updates were made available to consumers, the Environmental Protection Agency issued a final regulation, requiring refineries to blend 19.28 billion gallons of corn-based ethanol and other biofuels into the gasoline supply in 2017.

Consumers remain confused about the changing fuels marketplace. Less than one third – only 31 percent of poll respondents – knew that gasoline blends in excess of E10 are harmful to outdoor power equipment. Only five percent knew that gasoline blends in excess of E10 are not approved for use in small engines, according to 2016 national polls by Nielson/Harris and OPEI.

“Almost two-thirds (64 percent) of consumers who own outdoor power equipment said in a 2016 national poll that they are not sure (42 percent) or do not pay any attention (22 percent) to what type of fuel they are using,” said Kris Kiser, OPEI president and CEO.

Gasoline containing greater than 10 percent ethanol (E10) can be harmful to outdoor power equipment and other small engine products, including lawn mowers, snow throwers, power washers, string trimmers, chain saws, and other small engine equipment such as boats, snowmobiles and utility vehicles.

“It’s important for everyone involved in the outdoor power equipment, marine, snowmobile and motorcycle industries to remind our consumers to ‘Look Before You Pump,'” Kiser added.

As higher ethanol blends continue to enter the fuel marketplace in 2017, consumers must remember to select gasoline based on product specifications, and not just choose fuel based on price. With more than 250 million pieces of outdoor power equipment currently in home garages, utility and maintenance sheds, and facility management stations, OPEI urges consumers to remain vigilant and always check their product manuals for proper fueling instructions. For more information visit www.OPEI.org.

Click Here to Obtain a User I.D. and Password.


Ariens Co. Establishes New Distribution Center

OPE manufacturer Ariens Co. has leased a 600,000-square-foot building in Kenosha, Wisconsin, to establish a new distribution center.

Ariens says the Kenosha facility is strategically located and “consolidates operations the company had throughout the Midwest into a single larger, more modern and more efficient facility.”

Delivery to Ariens dealers and their customers will improve, the company said. “Finding the right distribution center is critical to our growth strategy,” said Dan Ariens, the privately held company’s chairman and CEO. “Even a small improvement in delivery time is important to a customer waiting for a new machine to clear their driveway or keep their lawn under control. And this is a significant upgrade to our previous supply chain network.”

Ariens says it will use the warehouse as a central hub for distribution of outdoor power equipment as well as parts and accessories. Based in Brillion, Wisconsin, Ariens makes OPE under the Ariens, Gravely, Sno-Tek, Countax and Westwood brands. –


The Toro Company Completes Previously Announced Acquisition of German-Based Regnerbau Calw GmbH

BLOOMINGTON, Minn.–(BUSINESS WIRE)–The Toro Company (NYSE:TTC) today announced that it has completed the acquisition of Regnerbau Calw GmbH, a privately held manufacturer of professional irrigation equipment. Toro previously announced that it entered into an agreement for the acquisition on November 3, 2016, and a copy of that news release can be found at www.thetorocompany.com/news. Terms of the transaction were not disclosed.

Headquartered in Althengstett, Germany, Regnerbau Calw GmbH manufactures a variety of irrigation products under the Perrot brand, including retractable sprinklers for sports fields, impact sprinklers and coupling systems for agricultural fields, and rain guns for industrial applications. The long-distance casting range and fast rotation of Perrot’s sports field sprinklers make them an ideal choice for maintaining both natural and synthetic turf on soccer, tennis, rugby, cricket, golf and equine venues.

About The Toro Company
The Toro Company (NYSE:TTC) is a leading worldwide provider of innovative solutions for the outdoor environment including turf, snow and ground engaging equipment, and irrigation and outdoor lighting solutions. With sales of $2.4 billion in fiscal 2016, Toro’s global presence extends to more than 90 countries. Through constant innovation and caring relationships built on trust and integrity, Toro and its family of brands have built a legacy of excellence by helping customers care for golf courses, landscapes, sports fields, public green spaces, commercial and residential properties and agricultural fields. For more information, visit www.thetorocompany.com.


Kohler Acquires UK-based Clarke Energy

Kohler Co. recently announced that its Power Group, a global leader in engines and power generation systems, has acquired Clarke Energy Ltd., Liverpool, England. Clarke Energy is a multinational specialist in the engineering, construction, installation and maintenance of engine-based power plants and is an authorized distributor of GE’s reciprocating engines in 19 countries worldwide.

“Clarke Energy’s end-to-end capabilities are very highly regarded around the world, and the company’s products and services are an excellent fit within our existing power systems business,” said David Kohler, president and CEO of Kohler Co. “We’re excited about this acquisition because it adds the distribution of large gaseous generators – viewed as a clean power source – to our product portfolio. We believe Clarke Energy’s prime and continuous gaseous solutions are an ideal complement to our existing diesel generator offering for standby applications.”

Founded in 1989, Clarke Energy provides comprehensive distributed power solutions in multiple industries for mostly prime and continuous power requirements. The privately held firm employs more than 1,100 people and has established a vast network of service locations with highly trained, localized professionals. Company founder Jim Clarke, as well as current CEO Jamie Clarke, and all other company leaders will be maintaining their roles following the acquisition.

A global force in power solutions since 1920, Kohler is committed to reliable, leading-edge products and comprehensive after-sale support. Kohler’s acquisition of SDMO in 2005 created one of the world’s largest manufacturers of generators. The companies have a combined 150 years of experience in industrial power and now benefit from global R&D, manufacturing, and sales and service. For additional information, visit www.kohlerpower.com, www.kohlersdmo.com or www.clarke-energy.com.


Caterpillar Announces Executive Officer Retirement

PEORIA, Ill. – Following a distinguished career of more than 30 years – spending the last 16 years as chief legal officer – Caterpillar Inc. (NYSE: CAT) announced recenty that Law and Public Policy Executive Vice President Jim Buda is retiring.

“Jim has been a trusted advisor to countless leaders at Caterpillar, not the least of which is four CEOs, including myself,” said Caterpillar Chairman Doug Oberhelman. “Not only does he lead a world-class, diverse legal team, but he also designed and built a strategic organization that looks seamlessly at the company’s influential policy, communications and governmental affairs initiatives on a worldwide basis. I have considered him a close colleague and count him and his wife, Susan, among my dear friends. I wish him only the best in his well-deserved retirement.”

Buda has been awarded numerous national awards from a variety of law and public policy organizations, including various organizations naming him “General Counsel of the Year” multiple times. He also won the “Legends in Law” honor by the Burton Awards in association with the Library of Congress. His organization has also received several national awards for its pro bono program and was nationally recognized for diversity and inclusion. Buda will be recognized in March 2017 by the National Association of Women Lawyers for his ongoing commitment to recruiting and developing women attorneys and legal leaders.

“Jim has built a strong foundation for our critical legal and public policy work,” said Caterpillar CEO Jim Umpleby. “But perhaps his greatest passion and legacy is sharing his and his team’s talents through pro bono legal work in communities throughout the world – assisting those who could use a guiding hand. I wish him and his family a happy and healthy retirement.”

Buda joined Caterpillar in 1987 after 13 years serving clients in both private and corporate practice. He filled a number of senior corporate attorney positions and was named Associate General Counsel for Litigation in 1996. In 1998, Buda assumed the position of Associate General Counsel for the Legal Services Division in the United Kingdom before becoming the company’s General Counsel in 2001. He became the company’s Senior Vice President in 2010 and ascended to his current position as Executive Vice President of Law and Public Policy in 2012. Buda is a member of numerous legal associations including the American Bar Association, Association of General Counsels and the Board of Directors of the Institute for Legal Reform of the United States Chamber of Commerce.

His retirement is effective May 1, 2017.

About Caterpillar
For more than 90 years, Caterpillar Inc. has been making sustainable progress possible and driving positive change on every continent. Customers turn to Caterpillar to help them develop infrastructure, energy and natural resource assets. With 2016 sales and revenues of $38.537 billion, Caterpillar is the world’s leading manufacturer of construction and mining equipment, diesel and natural gas engines, industrial gas turbines and diesel-electric locomotives. The company principally operates through its three product segments – Construction Industries, Resource Industries and Energy & Transportation – and also provides financing and related services through its Financial Products segment. For more information, visit caterpillar.com. To connect with us on social media, visit caterpillar.com/social-media.


Husqvarna Summary and Year-End Report 2016

From Kai Wärn, President and CEO:
“The seasonal operating loss in the fourth quarter was reduced to half, from SEK -212m to SEK -108m, excluding the items affecting comparability prior year. Efficiency improvements offset the slightly lower sales in the seasonally small fourth quarter. In particular there were strong improvements in the Consumer Brands and Construction Divisions.

We are proud of the performance during 2016. Compared to the previous year, operating income has improved quarter by quarter due to the strong focus on efficiency improvements which enabled us to mitigate the negative currency headwind of some SEK 430m for the full year and at the same time step up our investments to support our profitable growth ambitions. Group operating income for 2016 improved by 8% to SEK 3,218m and the corresponding margin rose to 8.9% (8.2), excluding items affecting comparability. As a result of the continuing good earnings trend, the Board of Directors proposes that the dividend for 2016 is increased to SEK 1.95 (1.65) per share.

An example of the strength of our efficiency improvements in 2016 can be seen in the Consumer Brands Division. In a challenging environment with a 10% reduction of sales and currency headwind of some SEK -160m, we reached the milestone of a break-even result. Going forward, in parallel to continuing to focus on cost efficiency, we will pursue new profitable business opportunities.

Our other three Divisions showed a combined net sales growth of over 3% in 2016 and improved operating income. The acquisition of Pullman Ermator, finalized mid-January 2017, is an excellent strategic fit for our Construction Division and brings further growth opportunities in the attractive surface preparation segment. It also reflects our ambition to grow the Construction Division’s share of the Husqvarna Group.

Another area where I am proud to see that we are increasing ambitions is in sustainability. We are one of the first Swedish companies to have our specific climate targets approved by the “Science Based Targets Initiative”. Our commitment is to reduce carbon emissions in line with the Paris/COP21 conference and contribute with our fair share to keep global warming below 2°Celcius compared to pre-industrial levels.

I expect that we will take another step forward with respect of our financial performance in 2017 and deliver profitable growth.”

Fourth quarter 2016

  • Net sales amounted to SEK 5,768m (5,672), corresponding to -3% adjusted for changes in exchange rates.
  • Operating income improved to SEK -108m (-212), excluding items affecting comparability.

Full-year 2016

  • Net sales amounted to SEK 35,982m (36,170).
  • Operating margin reached 8.9% (7.8).
  • Operating income increased 14% to SEK 3,218m (2,827), despite unfavorable currency impact of approximately SEK 430m.
  • Earnings per share after dilution rose to SEK 3.66 (3.28).
  • The Board proposes an increase of the dividend to SEK 1.95 per share (1.65

Generac Posts 4th Quarter and 2016 Results

Fourth Quarter 2016 Highlights
Net sales increased 16.7% to $417.4 million during the fourth quarter of 2016 as compared to $357.8 million in the prior-year fourth quarter, including approximately $50 million of contribution from the Pramac acquisition.

  • Domestic segment sales increased 4.0% to $339.7 million as compared to $326.6 million in the prior-year quarter, which was primarily due to an increase in sales of portable and home standby generators, partially offset by a continued decline in shipments of mobile products given ongoing oil & gas weakness.
  • International segment sales increased to $77.7 million as compared to $31.2 million in the prior-year quarter, which was primarily due to the contribution from the Pramac acquisition.

Net income attributable to the Company during the fourth quarter of 2016 was $41.5 million, or $0.64 per share, as compared to $9.2 million, or $0.14 per share, for the same period of 2015.  The prior-year net income includes the impact of $40.7 million of pre-tax, non-cash charges for the impairment of certain intangible assets.

Adjusted net income attributable to the Company, as defined in the accompanying reconciliation schedules, was $71.4 million, or $1.12 per share, as compared to $65.3 million, or $0.97 per share, in the fourth quarter of 2015.

Adjusted EBITDA attributable to the Company, as defined in the accompanying reconciliation schedules, was $91.0 million as compared to $80.1 million in the fourth quarter last year.

Cash flow from operations was a quarterly record of $123.9 million as compared to $111.8 million in the prior year quarter.  Free cash flow, as defined in the accompanying reconciliation schedules, was also a quarterly record of $114.3 million as compared to $101.2 million in the fourth quarter of 2015.

The Company repurchased 1.24 million shares of its common stock during the fourth quarter for $50.0 million under its share repurchase program.

On November 2, 2016, the Company amended its Term Loan credit facility which, among other items, extended the maturity date from May 31, 2020 to May 31, 2023.  In conjunction with this amendment, the Company made a $25.0 million voluntary prepayment of the Term Loan.

As previously announced, the Company on January 1, 2017 closed on the acquisition of Motortech GmbH & affiliates (“Motortech”), headquartered in Celle, Germany.  Motortech is a leading manufacturer of gaseous-engine control systems and accessories, which are sold primarily to European gas-engine manufacturers and to aftermarket customers.  Motortech has over 250 employees located at its German headquarters, manufacturing plant in Poland and sales offices located in the U.S. and China.

Full-Year 2016 Highlights
Net sales increased 9.7% to $1.444 billion during 2016 as compared to $1.317 billion during 2015.

  • Domestic segment sales were $1.174 billion as compared to $1.205 billion in the prior year, which was primarily due to significant declines in shipments of mobile products into oil & gas and general rental markets.  Partially offsetting these impacts was the contribution from the Country Home Products acquisition, which closed on August 1, 2015, along with increased shipments of portable and home standby generators.
  • International segment sales increased to $270.9 million as compared to $112.7 million in the prior year, which was due to the contribution from the Pramac acquisition.  Partially offsetting this impact were declines in organic shipments of mobile products primarily into the European region.

Net income attributable to the Company during 2016 was $98.8 million, or $1.50 per share, as compared to $77.7 million, or $1.12 per share for 2015.  Net income for 2016 includes the impact of $7.1 million of non-recurring, pre-tax charges relating to business optimization and restructuring costs to address the impact of the significant and extended downturn for capital spending within the oil & gas industry.  The prior-year net income includes the impact of $40.7 million of pre-tax, non-cash charges for the impairment of certain intangible assets.

Adjusted net income attributable to the Company was $198.3 million, or $3.03 per share, as compared to $198.4 million, or $2.87 per share, in 2015.

Adjusted EBITDA attributable to the Company for 2016 was $274.6 million as compared to $270.8 million last year.

Cash flow from operations was $253.4 million as compared to $188.6 million in the prior year.  Free cash flow was $222.9 million as compared to $158.0 million in 2015.

On March 1, 2016, the Company acquired a majority ownership interest of PR Industrial S.r.l and its subsidiaries (collectively Pramac), headquartered in Siena, Italy.  With over 600 employees, four manufacturing plants and 14 commercial branches located around the world, Pramac is a leading global manufacturer of stationary, mobile and portable generators sold in over 150 countries through a broad distribution network.

The Company repurchased nearly 4.0 million shares of its common stock during 2016 for approximately $150 million under its share repurchase programs.

Uses of cash during 2016 included $30.5 million for capital expenditures, $76.7 million related to the Pramac and Motortech acquisitions, $25.0 million for the pre-payment of term loan debt, and approximately $150 million for stock repurchases.

“Overall fourth quarter results provided a strong end to 2016, with organic sales improving over the prior-year and operating and free cash flow achieving quarterly records,” said Aaron Jagdfeld, President and Chief Executive Officer.  “Hurricane Matthew drove significant shipments of residential products during the quarter as our team executed well to fulfill the increased demand from this event.  We continued to generate a strong level of free cash flow that exceeded $220 million for the year, which allowed us to deploy cash in a variety of strategic ways including acquisitions and certain capital expenditures, as well as paying down debt and returning capital to shareholders.”

Additional Fourth Quarter 2016 Consolidated Highlights

Net sales increased 16.7% to $417.4 million during the fourth quarter of 2016 as compared to $357.8 million in the prior-year fourth quarter.  Residential product sales increased 20.3% to $238.9 million as compared to $198.5 million in the prior year.  Commercial & Industrial (C&I) product sales increased 12.3% to $148.1 million as compared to $131.9 million in the prior year.

Gross profit margin improved 30 basis points to 36.9% compared to 36.6% in the prior-year fourth quarter.  Gross margin was positively impacted by the ongoing favorable impacts from lower commodity prices seen in prior quarters and continued overseas sourcing benefits from a stronger U.S. dollar, along with an overall favorable organic product mix.  These benefits were largely offset by the mix impact from the Pramac acquisition.

Operating expenses declined $26.9 million, or 25.9%, as compared to the fourth quarter of 2015, which the prior year included the impact of the aforementioned $40.7 million of intangible impairment charges.  Excluding the impact of these charges in the prior-year quarter, operating expenses for the quarter increased $13.8 million, or 21.8%, as compared to the prior year.  The increase was primarily driven by the addition of recurring operating expenses associated with the Pramac acquisition, including the impact of increased amortization expense.

Cash flow from operations was $123.9 million as compared to $111.8 million in the prior-year fourth quarter, and free cash flow was $114.3 million as compared to $101.2 million in the same quarter last year.  The improvements in cash flow were primarily driven by the increase in operating earnings as compared to the prior year.
The Company repurchased 1.24 million shares of its common stock during the fourth quarter of 2016 for $50.0 million under its new share repurchase program which was announced in October 2016. The program authorizes the Company to repurchase up to $250 million of its common stock over a 24 month period.

Domestic Segment
Domestic segment sales were $339.7 million as compared to $326.6 million in the prior-year quarter.  The increase was due to Hurricane Matthew driving strong shipments of portable generators and, to a lesser extent, home standby generators, with home standby shipments also benefitting from successful promotional campaigns.  Partially offsetting this increase was ongoing significant declines in shipments of mobile products into oil & gas and general rental markets.

Adjusted EBITDA for the segment was $87.9 million, or 25.9% of net sales, as compared to $74.9 million in the prior year, or 22.9% of net sales.  Adjusted EBITDA margin in the current year benefitted from overall favorable product mix, lower commodity costs and overseas sourcing benefits from a stronger U.S. dollar, the benefit of cost-reduction actions within domestic mobile products, and improved overall leverage of fixed operating expenses on the organic increase in sales.


Thoughts for the Day

“Ambition is the spur that makes man struggle with destiny. It is heaven’s own incentive to make purpose great and achievement greater.”
-Donald G. Mitchell

“Some of us have great runways already built for us. If you have one, take OFF! But if you don’t have one, realize it is your responsibility to grab a shovel and build one for yourself and for those who will follow after you.”
-Amelia Earhart

“One never learns by success. Success is the plateau that one rests upon to take breath and look down from upon the straight and difficult path, but one does not climb upon a plateau.”
-Josephine Preston Peabody

“Take a look at those two open hands of yours. They are tools with which to serve, make friends, and reach out for the best in life. Open hands open the way to achievement. Put them to work today.”
-Wilfred A. Patterson

Stanley Black & Decker Is Re-Tooling Its Portfolio With More Iconic Brands

From Greg Wajda – Analyst Seeking Alpha 

Portfolio management is one of the things that I believe many corporate leaders get oh, so wrong.

There are many examples of this but perhaps my favorite is when Kraft (NASDAQ:KHC) spun off their frozen pizza business following and M&A transaction and the CEO got outright criticized by the Oracle of Omaha for the move.

Anyone who has gone down the isle has witnessed this business in action. The portfolio of brands it contains makes it a veritable frozen pizza monopoly. Luckily one of the smartest companies around and one of my top holdings, Nestle (OTCPK:NSRGY), snatched up the business.

Another company I believe is doing all the right portfolio moves in tool and security stalwart Stanley Black & Decker (NYSE:SWK).

Let’s take a look at the latest moves, a recent history of the company’s earnings and dividend growth, and see if the valuation is reasonable.

Newell Brands Acquisition, Locks Divestiture, & Craftsman
Back in October SWK announced they had acquired Newell Brand’s tool unit which contains strong brands like Lenox and Irwin for $1.95b in cash. The acquisition is expected to add up to $.50 in EPS by year three as $80-90m in synergies are extracted.

Not knowing much about the business acquired I like it for two reasons. One, is that it is an almost perfectly complemented business with what the company’s tools segment focuses on. Manual and power tools for professionals and amateurs is Stanley’s bread and butter.

More recently, Stanley acquired the rights to the coveted Sears Craftsman brand. The terms of the deal were unusual and complex.

Stanley is has to pay a sum up front and is able to expand the Craftsman brand to stores outside Sears while paying a royalty on all sales outside of Sears. In 3 years Stanley also owes Sears another $300 million.


2017 STIHL Tour des Trees to benefit TREE Fund

25th Anniversary Ride
July 30 – Aug. 5, 2017
Maryland, Virginia, Washington D.C.

The STIHL Tour des Trees, an annual weeklong, 500 to 600-mile cycling adventure, is the primary public outreach and engagement event of the Tree Research and Education Endowment Fund (TREE Fund). Since 1992 Tour riders have cycled to communities large and small in the US, Canada and the U.K, planting trees, educating children and shining a light on the work done by arboriculture professionals and the importance of science-based tree care. The Tour also serves to advance the TREE Fund’s mission to support scientific discovery and dissemination of new knowledge in arboriculture and urban forestry. Funds raised by riders support research grants, scholarships and arboriculture education programs administered by the TREE Fund.

Full-Tour cyclists commit to raising at least $3,500 for the TREE Fund. With these funds, TREE Fund researchers have discovered better ways to propagate, plant and care for urban trees, making them more resilient, more resistant to pests and less prone to failure. The Tour also supports education programs aimed at connecting young people with the environment and career opportunities in green industries. The legacy of the STIHL Tour des Trees includes an ever-expanding urban forest planted by its cyclists and a growing legion of civilian tree stewards in the communities visited by the Tour.

Donate to the 2017 Tour through Dec. 31, 2017, to help keep the urban trees in your neighborhood healthy and thriving. Or mail a check, payable to TREE Fund, to 552 S. Washington St., Ste. 109, Naperville, IL 60540. Please specify if your contribution is to be applied to a specific rider or team.

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