Toro expects a flat year for sales
A weakening economy and late spring season have put Toro’s second-quarter earnings 16.3 percent lower than the same quarter last year, according to the company.
The manufacturer of landscaping equipment reported net earnings at $62.8 million, down from $74.9 million last year.
Net sales were $638.5 million, down 7 percent from $686.7 as reported last year.
“We remain focused on managing our business in light of these difficult conditions and will continue to drive customer demand for our innovative products,” said Michael Hoffman, chairman and CEO.
For the year, the company expects net sales to roughly equal 2007, at $1.9 billion.
Ply Mart to close
Ply Mart, the Norcross, Ga.-based pro dealer, is closing down its operations after struggling with declining housing starts in the Atlanta market. Randy Mahaffey, Ply Mart’s chairman, told Home Channel News that the company is in negotiations to sell its installed sales and stair manufacturing divisions. Its four remaining lumberyards will be closed, Mahaffey said. “We’re selling off our inventory,” he added.
Ply Mart was one of the Southeast’s largest LBM players before the downturn, pulling in $335 million in revenues in 2006, when it operated 14 units in Georgia, North Carolina and South Carolina.
The housing market slowdown hit Atlanta and the Carolinas late, but unfortunately, it still arrived. Housing permits have declined 25 percent in Atlanta, Ply Mart’s primary market, since August of 2007, according to Mahaffey.
“It fell off a cliff in September,” he said. “It was an absolute free fall.”
During the last 18 months, the company’s accounts receivables ballooned to $20 million. Ply Mart began reducing staff and mothballing lumberyards, and members of the Mahaffey family began pumping their own money into the company to keep it afloat. But it wasn’t enough.
“Every time we made a cut, we thought we were where we needed to be,” Mahaffey said. “But we were still bleeding. We just couldn’t cut expenses as fast as our revenues were dropping.”
Mahaffey said he did not consider selling the business to one of the national LBM chains; nor were there any real offers forthcoming. “The market is so bad in Atlanta, everybody is taking a whipping,” he observed. “It is not the time to buy in this segment.”
Earlier this year, Wheeler’s Building Materials, another privately owned pro dealer based in Atlanta, filed for Chapter 11 bankruptcy protection. The company’s owners bought three of the chain’s original 17 lumberyards at auction in April. Last February, ProBuild bought Jasper Lumber, a small independent with three locations in the Atlanta area.
Stanley in deal with RFID company
Stanley Works will purchase Xmark, the Canadian subsidiary of radio frequency identification (RFID) systems maker VeriChip, for $45 million in cash, according to the companies.
Xmark’s products include child security products as well as asset tracking systems for hospitals. Brands include “Halo” infant security systems, wander protection systems for children under the “Hugs” brand and hospital and asset tracking systems under the “RoamAlert” brand.
Xmark had revenues of $30 million last year.
“The combination of Xmark’s capabilities, including its products, associates and dealer channels, with those of our own personal security business enables us to provide our customers a wider array of value-added products and services,” said John Lundgren, chairman and CEO of Stanley Works, “which should help our security business achieve higher growth and enhance its already strong profitability.”