Snowblower business: no great shakes without flakes

When up to 19 inches of snow fell on some parts of New England Dec. 5 and 6, the phone started ringing at Turf Products Corporation, a snowblower distributor.

''We had two wonderful days,'' says Turf Products vice-president Donald Therrien. On the first day after the storm, the Auburn, Mass., company sold $100 ,000 worth of snow clearing equipment to retail stores.

''All of a sudden snowblower dealers went from the doldrums to ecstasy,'' Mr. Therrien says.

The level of glee is markedly lower at the nation's snowblower manufacturers. Bullish production schedules and light snowfalls the last two years combined to leave manufacturers sitting on a drift of unsold products. So a profitable season for snowblower makers looks about as likely as a blizzard in Florida.

In the face of bulging inventories and sluggish sales, Toro Company, the largest snowblower maker, is laying plans to trim its emphasis on snow removal products. ''We have a strategy to put a lid on the portion of the business accounted for by snowblowers,'' says John Szafranski, Toro marketing vice-president.cq

And Ariens Company, the market leader in heavy-duty snow throwing equipment, is planning ''to be more cautious in what we forecast'' for the snow removal business, says James Youngworth, the Ariens advertising manager.

Toro, which accounts for roughly 50 percent of US snowblower sales, has the worst inventory problems. The Bloomington, Minn.-based company has ''more than 200,000'' unsold blowers clogging its distribution channels, says Morton L. Siegel, an analyst at Arnold Bernhard & Co., publishers of Value line.

Other analysts, who asked not to be named, say Toro has as many as 300,000 unsold blowers on hand. Because of the high inventory level, that's about as many as the entire industry will ship to dealers in the current winter selling season.

''If we got a number of blizzards in December and January, we could clean out'' excess blower supplies, says Toro marketing vice president John Szafranski. ''But odds are slim.''

Sears, Roebuck & Co., which markets a house brand of blowers made by outside manufacturers, also had inventory problems. The retailer's inventory postion was ''not quite as bad'' as Toro's, a spokesman says.

With warehouses filled to the rafters, both Toro and the Ariens Company did not produce any blowers in 1981 for sale in the United States this winter. ''We did get hit like everyone else,'' says James Youngworth, Ariens's advertising manager. The company is based in Brillion, Wis.

As a privately held firm, Ariens does not release financial information. So in examining the plight of snowblower makers, more information is available on publicly owned Toro.

''Toro entered the 1979-80 winter with bullish expectations.'' notes Michael J. Monahan, an analyst with Dain Bosworth Inc. in Minneapolis. These expectations were understandable, since the industry had enjoyed two years of sellouts in the winters of 1977-78 and 1978-79. So in the 1979-80 winter, Toro shipped roughly $129 million worth of blowers.

Light snowfall that winter was viewed as a freak occurrence, even though it left Toro, its distributors, and its dealers with bloated inventories.

So for the winter of 1980-81 Toro slashed production, making roughly $60 million worth of blowers. ''However, in the winter of 1980-81 snowfall was even less than the year before . . . sales never got off the ground,'' Mr. Monahan recalled.

If snowfalls are normal this winter, retailers should be able to dispose of their inventories of snowblowers, says Mr. Siegel, the Bernhard analyst. But since stores have had to sit on snowblower supplies for as much as two years, Siegel has doubts they will go to distributors and buy more blowers.

And unless distributores can unload their supplies, Toro and other manufacturers cannot sell them more. ''You have to keep in mind that as long as anyone has (excess inventory), it affects all the other manufacturers,'' says Mr. Youngworth at Ariens. ''Any dealer sitting on inventory will move that out before he purchases new equipment'' from anyone.

Because it will take at least this winter to clear out supply channels, Toro is predicting continued red ink for the accounting year that ends next July. Analysts say the company will lose $2 a share in 1982, vs. a loss of $2.66 a share this year. In 1979 it made $3.12 a share.

While slumping snowblower sales account for most of the decline in Toro's profits, sales of its consumer lawn equipment division also fell 31 percent in 1981, to $107 million, as the recession hurt lawn mower sales. But the lawn care business, while cyclical, ''is a much more stable business'' than snowblowers, notes Monahan at Dain Bosworth.

So Toro's revised strategy includes placing increased emphasis on its lines of consumer lawn care, professional turf equipment, and turf irrigation equipment. The goal is to ensure that snow equipment will never again account for as much as 33 percent of sales, as it did in 1980.

A 20 percent share of sales for snowblowers ''is closer to'' the company's unannounced target for snow equipment, says Szafranski at Toro.

-30-

Business, page 11Graph by Joan Forbes; cartoon by staff artistSales-frozen snow-blower makers are 'thinking snow'By David T. Cook Business correspondent of The Christian Science MonitorBoston

When up to 19 inches of snow fell on some parts of New England Dec. 5 and 6, the phone started ringing at Turf Products Corporation, a snow blower distributor.

''We had two wonderful days,'' says Turf Products vice-president Donald Therrien. On the first day after the storm, the Auburn, Mass., company sold $100 ,000 worth of snow clearing equipment to retail stores.

''All of a sudden snow blower dealers went from the doldrums to ecstasy,'' Mr. Therrien says.

The level of glee is markedly lower at the nation's snow blower manufacturers. Bullish production schedules and light snowfalls the last two years combined to leave manufacturers sitting on a drift of unsold products. So a profitable season for snow blower makers looks about as likely as a blizzard in Florida.

In the face of bulging inventories and sluggish sales, Toro Company, the largest snow blower maker, is laying plans to trim its emphasis on snow removal products. ''We have a strategy to put a lid on the portion of the business accounted for by snow blowers,'' says John Szafranski, Toro marketing vice-president.

And Ariens Company, the market leader in heavy-duty snow throwing equipment, is planning ''to be more cautious in what we forecast'' for the snow removal business, says James Youngworth, the Ariens advertising manager.

Toro, which accounts for roughly 50 percent of US snow blower sales, has the worst inventory problems. The Bloomington, Minn.-based company has ''more than 200,000'' unsold blowers clogging its distribution channels, says Morton L. Siegel, an analyst at Arnold Bernhard & Co., publishers of Value line.

Other analysts, who asked not to be named, say Toro has as many as 300,000 unsold blowers on hand. Because of the high inventory level, that's about as many as the entire industry will ship to dealers in the current winter selling season.

''If we got a number of blizzards in December and January, we could clean out'' excess blower supplies, says Toro marketing vice president John Szafranski. ''But odds are slim.''

Sears, Roebuck & Co., which markets a house brand of blowers made by outside manufacturers, also had inventory problems. The retailer's inventory postion was ''not quite as bad'' as Toro's, a spokesman says.

With warehouses filled to the rafters, both Toro and the Ariens Company did not produce any blowers in 1981 for sale in the United States this winter. ''We did get hit like everyone else,'' says James Youngworth, Ariens's advertising manager. The company is based in Brillion, Wis.

As a privately held firm, Ariens does not release financial information. So in examining the plight of snow blower makers, more information is available on publicly owned Toro.

''Toro entered the 1979-80 winter with bullish expectations.'' notes Michael J. Monahan, an analyst with Dain Bosworth Inc. in Minneapolis. These expectations were understandable, since the industry had enjoyed two years of sellouts in the winters of 1977-78 and 1978-79. So in the 1979-80 winter, Toro shipped roughly $129 million worth of blowers.

Light snowfall that winter was viewed as a freak occurrence, even though it left Toro, its distributors, and its dealers with bloated inventories.

So for the winter of 1980-81 Toro slashed production, making roughly $60 million worth of blowers. ''However, in the winter of 1980-81 snowfall was even less than the year before . . . sales never got off the ground,'' Mr. Monahan recalled.

If snowfalls are normal this winter, retailers should be able to dispose of their inventories of snow blowers, says Mr. Siegel, the Bernhard analyst. But since stores have had to sit on snow blower supplies for as much as two years, Siegel has doubts they will go to distributors and buy more blowers.

And unless distributores can unload their supplies, Toro and other manufacturers cannot sell them more. ''You have to keep in mind that as long as anyone has (excess inventory), it affects all the other manufacturers,'' says Mr. Youngworth at Ariens. ''Any dealer sitting on inventory will move that out before he purchases new equipment'' from anyone.

Because it will take at least this winter to clear out supply channels, Toro is predicting continued red ink for the accounting year that ends next July. Analysts say the company will lose $2 a share in 1982, vs. a loss of $2.66 a share this year. In 1979 it made $3.12 a share.

While slumping snow blower sales account for most of the decline in Toro's profits, sales of its consumer lawn equipment division also fell 31 percent in 1981, to $107 million, as the recession hurt lawn mower sales. But the lawn care business, while cyclical, ''is a much more stable business'' than snow blowers, notes Monahan at Dain Bosworth.

So Toro's revised strategy includes placing increased emphasis on its lines of consumer lawn care, professional turf equipment, and turf irrigation equipment. The goal is to ensure that snow equipment will never again account for as much as 33 percent of sales, as it did in 1980.

A 20 percent share of sales for snow blowers ''is closer to'' the company's unannounced target for snow equipment, says Szafranski at Toro.

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