Category Archives: Manufacturing

UTC Forecast Hurts Shares On Down Day For Markets

by Categorized: Aerospace, Manufacturing, Wall Street Date:

United Technologies Corp. delivered a less-than-stellar profit forecast Thursday, sending its shares down $2.92, or 2.5 percent, to $112.89 on a day when every company in the Dow Jones Industrial Average lost ground.

UTC said it expects to earn a net $1.25 a share in the current quarter, down from $1.39 in the 2013 first quarter, as the Pratt & Whitney union settlement, one-time restructuring and “headwinds” in commercial aerospace sales dragged down organic gains.

For the full year, the Hartford-based conglomerate repeated an earlier estimate for per-share income of $6.55 to $6.85 a share, up from $6.21 in 2013, with sales up less than 1 percent to $64 billion.

The first-quarter numbers, coming from a company known for consistent, double-digit growth, fell short of estimates by analysts surveyed by Bloomberg.  Markets were already spooked by fears of a growth slowdown in China, as the Dow fell by 231 points, or 1.4 percent and UTC, with major exposure in China, was the second-biggest percentage loser in the bellwether index.

UTC’s own presentation to financial analysts showed a forecast for a smaller increase in commercial construction in China this year.

Legrand North America Hits $1 Billion in Sales

by Categorized: Corporate finance, Manufacturing Date:

Legrand North America, the West Hartford electrical and digital building systems manufacturer that includes the old Wiremold franchise, said late Friday it reached $1 billion in sales in 2013.

Worldwide sales for Limoges, France-based Legrand, a publicly traded company, were $5.9 billion last year, the company said.

When Legrand bought The Wiremold Co., which was family owned,  in 2000, the West Hartford manufacturer had $460 million in annual sales and a local staff of about 600.  Legrand moved its North American headquarters there two years later.

West Hartford employment remains over 500 people, including corporate, engineering and manufacturing, despite at least one significant layoff during the recession. Gains have come from organic growth, new products and acquisitions.

“Legrand is a company committed to innovation, and that core value has led to this remarkable milestone,” said John Selldorff, the regional CEO.

 

 

STR Holdings Fighting To Trade Higher Than Its Bank Account

by Categorized: Energy, Manufacturing, Wall Street Date:

Despite an agreement with a Chinese contract manufacturer to begin production, STR Holdings Inc., the East Windsor-based maker of solar encapsulation materials, is hovering around a rare distinction that all publicly traded companies want to avoid.

STR closed at $150 a share on the New York Stock Exchange Friday, for a total market value of $62.6 million. As of Sept. 30, the last date for which it reported, the company had $62.25 million in cash — with zero debt.

That puts STR perilously close to the Maginot line, where the total value of all its publicly traded shares is less than the cash it has on hand. Basically, it’s the market saying the company’s operations have no value.

Nine times in the 16  trading days of 2014, STR has closed at or below that level, which is $1.49 a share. On Jan. 14, STR closed at $1.33, a market value of $55.5 million, fully 6.7 million less than its Sept. 30 bank account.

This is all the more amazing considering the company listed $132 million in assets as of Sept. 30, including not only the cash, but $10.7 million in inventory and $28.7 million in property, plants and equipment, and just $16.9 million in liabilities, with no debt at all.

Situations like this, sometimes called “negative enterprise value,” are rare, with just a small handful of companies facing it at any given time.

Does this mean the troubled company and its stockholders’ investments are doomed? Not necessarily, and in fact some see it as a buying opportunity — but not for the meek.

STR in 2013 lost its largest customer, First Solar, and closed an East Windsor factory and research center that was just two years old. In November, the company fired four executives at the level of vice president or higher, to save money, after announcing a $6.2 million loss from operations in the third quarter.  It’s closing a plant in Malaysia that opened in 2009.

The company, based in Enfield since its founding in 1944 under a different name, now lists its headquarters as East Windsor.

But this week the company said demand for its latest products in China is picking up, and it reached a deal to hire ZheJiang FeiYu Photo-Electrical Science & Technology Co., Ltd. to make materials under its specifications. It’s also revamping a leased facility in China.

Analyst Houman Tamaddon wrote a report this month in the investor service Seeking Alpha, in which he called STR a “cigar butt,” a reference to Warren Buffett’s 1989 shareholder letter that compared some bargain companies to cigar butts on the street, cheap but perhaps with a few good puffs left.

Tamaddon’s Seeking Alpha report makes the point that STR management has been frank about the problems:

The bullish case for STR is that at the current stock price, the company is very attractive. The poor performance of the company has been mostly due to macroeconomic shifts out of the control of management. A “hiccup” in the environment would drive the stock price considerably higher. If no hiccup materializes, investors can be comforted that loss of their investment is limited due to the company’s strong balance sheet. At current prices, STR, like the house wallpapered with $100 bills, presents an opportunity for investors.

Of course, as he notes, shareholders can’t easily get at all those $100 bills. And it’s possible that STR has less cash on hand, as we’ll find out when the company reports fourth-quarter results.

One way to look at odd situations like STR is through book value — assets minus liabilities. While typical, healthy industrial companies trade at 2 to 3 times book value, STR is trading at barely more than half of its $2.75 a share net worth.

That means one of two things: Either the company is worth more dead than alive, as a liquidation, or it has nowhere to go but up.  The shares went public in 2009 at $10 and reached a high of $27.68 a year later.

For Connecticut, the game is largely lost, as STR, which had 300 local employees in 2011, has just a bare bones home-state staff. One bright note: Although STR did receive $829,000 in federal tax credits, it’s one of the rare firms that did not see any state assistance.

 

 

Pratt Workers Stage Rally Inside East Hartford Plant

by Categorized: Aerospace, Labor, Manufacturing Date:

About 200 Pratt & Whitney workers in the Machinists union marched through the East Hartford factory Tuesday morning, shouting “solidarity forever” and blowing whistles.

Workers at the Pratt & Whitney East Hartford factory in a 1-hour job action Tuesday.   Handout photo

Workers at the Pratt & Whitney East Hartford factory in a 1-hour job action Tuesday.
Handout photo

The one-hour march came five days before the deadline for the company and the union to reach a new contract for 2,700 Machinist members in East Hartford and Middletown. There is still no agreement on Pratt’s major demand, that the union give back 252 jobs and allow the company to bring in outside vendors to pack and move parts and materials inside the plants.

Health insurance costs are also at issue, according to postings by the company and the union.

It’s customary for the union to hold a solidarity march inside the plant as talks reach the final stretch. While the event is technically a work-stoppage, production is not typically disrupted as not all union members participate for the entire time.

The union is scheduled to vote on Pratt’s final offer Sunday and could strike as soon as Monday morning at 12:01 a.m. both sides are preparing for a walkout but, it should go without saying, both sides hope to avoid it.

Zygo Ousts CEO; Former Chief Is Interim Leader

by Categorized: Manufacturing, Technology Date:

Zygo Corp. said late Monday that Chris L. Koliopoulos had resigned as chairman and chief executive officer effective immediately, by mutual agreement with the company’s board.

The Middlefield-based maker of precision optics and optical measuring equipment named former CEO Gary K. Willis as interim CEO and Michael A. Kaufman as chairman. No reason was given for the change in a written release from Zygo.

Carol Wallace, a Zygo director and CEO of Middlefield-based Cooper-Atkins Corp., said in the release that the board is “focused on achieving Zygo’s full potential for the benefit of our shareholders, and continuing to enhance Zygo’s leadership position in its markets. We believe that Mr. Willis has the requisite experience and leadership qualities to lead the company forward.”

Koliopoulos joined Zygo as CEO in January, 2010 and was named chairman a month later. An expert in optical interferometry — measuring waves of electricity — he holds a doctorate and had long competed against Zygo, launching two companies and heading a third.

Koliopoulos, listed as age 60 in last month’s annual report, led Zygo’s expansion in California and Taiwan in its post-recession recovery, returning yearly operating profit to nearly $30 million in the fiscal year ending June 30, 2012. But in the recent fiscal year, sales slipped to $149 million to $167 million and operating profit fell to $12 million.

Shares of Zygo closed at $16.24 on the Nasdaq Monday before the announcement, ahead of the 12-month average of $15.56, and up more than 60 percent from the time Koliopoulos arrived — the same month when Zygo rejected a takeover offer of $10 a share.

“It has been a privilege for me to work with many fine colleagues at Zygo” he said in the release. “I am proud of Zygo’s many accomplishments, and look forward to its continued success.”

Willis has helped make Zygo a homegrown Connecticut success story in technology. He has been a board member from 1992 to 2000 including two years as chairman, and from 2009 to the present. He was the Zygo CEO from 1993 through 1999.

Zygo last month named Tony Allan as chief operating officer. He joined the company in February as senior vice president. It’s unclear whether he’ll be a candidate to lead the company.

Smith & Wesson Profits Triple For Fiscal Year

by Categorized: Manufacturing, Wall Street Date:

Smith & Wesson Holding Corp., one of two publicly traded gunmakers, said its per-share profit for the fiscal year ended April 30 tripled to $1.22, and sales were up 43 percent to $588 million.

The Springfield-based gunmaker, along with Fairfield-based  Sturm, Ruger & Co., is considered a proxy for the entire gun industry. Sales were up in 2012 on fears that President Obama’s re-election would bring new gun controls, and the Newtown tragedy heightened that trend further.

Smith & Wesson issued the preliminary report on Thursday. The company, with $100 million in cash on hand, also said it upped its share-buyback authorization to $100 million, from $15 million, after buying back $20 million earlier this year.

Shares were up 5 percent Friday to $9.78 on the Nasdaq market.

Smith & Wesson Holding Corporation (NASDAQ Global Select: SWHC), a leader in firearm manufacturing and design, today announced preliminary net sales and earnings per share results for its fiscal 2013 fourth quarter and full year periods ended April 30, 2013.

Preliminary net sales for the fiscal fourth quarter were $179 million, an approximate increase of 38% over the comparable quarter last year. Preliminary GAAP net income from continuing operations is expected to be approximately $0.44 per diluted share compared with net income of $0.27 per diluted share from continuing operations for the comparable quarter last year.  The company ended the fiscal year with a cash balance of $100.5 million.

Preliminary net sales for fiscal 2013 year were $588 million, an approximate increase of 43% over fiscal 2012. Preliminary GAAP net income from continuing operations is expected to be approximately $1.22 per diluted share compared with net income of $0.40 per diluted share from continuing operations for the prior year.

Gunmakers In Connecticut Will Host Two Governors Next Week, Not Just One

by Categorized: Economic Development, Manufacturing, Politics Date:

Connecticut gun manufacturers will welcome not one red-state governor on Monday, but two — as Texas Gov. Rick Perry’s tour is followed by a visit from South Dakota Gov. Dennis Daugaard that afternoon and Tuesday.

Both of the Republican governors will tour the Colt companies in West Hartford and O.F. Mossberg & Sons in North Haven, and perhaps other firearms makers. While Perry announced his foray to Connecticut and New York with fanfare and an ad campaign, Daugaard planned his trip quietly.

Perry, keeping with his higher-key tone, will host a lunchtime reception for Connecticut firearms firms at Max Downtown restaurant in Hartford, in addition to touring several plants in a whirlwind day.

Both governors hail from states that offer low taxes and a business climate that’s more than friendly to the makers of military-style guns of the sort that Connecticut banned for sale on April 4.

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Stanley Black & Decker Unveils New Logo, Tagline

by Categorized: Manufacturing, marketing Date:

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Stanley Black & Decker has unveiled its first new corporate logo since 1995, and fans will be relieved to see the famous black-on-yellow color scheme is still in force for the New Britain-based maker of tools and security systems.

Some things are sacred in corporate life despite constant change.  The difficulty this time was that since the 2010 merger with Black & Decker, the company has two names — Stanley and Stanley Black & Decker.  Unlike many firms, I’ve yet to see SBD catch on, though headline writers would appreciate that moniker.

sbd

The idea behind the brand identity, Stanley says, is to portray the company’s heritage and modern global scope at once. The company hired Lippincott as a consultant, and came up with the a tagline that sounds sleek:

“Performance in Action”

“The brand now participates in a vast array of markets, from Healthcare and Security to Engineered Fastening and Oil Pipeline Services to Hand Tools and Power Tools,” said  John F. Lundgren, the Stanley chairman and CEO. “We wanted a logo that truly represented the size and scope of the brand.”

The thought is that the angular cut does the trick.  For a company like Stanley, messing around with the logo and tagline is a big deal because it its history.

“In 170 years, we’ve had three basic logos,” said Scott Bannell, vice president of corporate brand management. “I believe that this new logo has the strength and power to carry us for decades to come.”

Bannell was with the company when I wrote about the brand retooling in 1998. At the time, Stanley was not in the security industry other than the core automatic door business, and hardware such as door hinges was still a key product.

The old, homey, “Stanley helps you do things right” was replaced by the more modern “Make something great.”

800px-Stanley_Works_logoAnd back then, the marketing chief, Kenneth O. Lewis, talked about the yellow and black.  With the company becoming ever more global it was a big job, he said, just to get the yellow tone and hue correct in all places.

Two Months After Gun Control, Stag Arms Prepares To Ship Connecticut-Legal Rifles

by Categorized: law, Manufacturing Date:

Stag Arms will begin shipping its new, Connecticut version of the AR-15 military-style rifle to retailers in the state this week, two months after Gov. Dannel P. Malloy signed into law the strict gun controls that outlawed sales of Stag’s entire product line.

The new version is in some ways a breakthrough, in other ways not. Using modified components, it fires a smaller bullet, the standard .22 round, which is much less powerful than the round typically shot by military-style weapons.  The .22 bullet is specifically permitted under the Connecticut law in any firearm.

There are other companies that make a .22 version of the AR-15, including O.F. Mossberg & Sons in North Haven. So it’s not a radical design, but it gives Connecticut Stag customers access to the brand, and it gives the New Britain company sales in its home state.

Stag president Mark Malkowski said his firm worked with the state police firearms unit not only for approval in writing, but also for suggestions. The company made a few modifications that the firearms unit said would make the weapon harder to modify back into a traditional AR-15, taking larger, more powerful rounds known as the Remington .223.

Stag will assemble the first of the firearms this week after receiving components from some vendors, said Malkowski, who said he expects solid sales of the new model.

One retailer, Vic Benson of The Freedom Shoppe in New Milford, said he has already been carrying a brand of the .22-caliber AR-15.

“They’re not flying off the shelves,” Benson said. “Here’s the irony: You come in here you can buy a .22-caliber AR rifle…change the upper caliber in about two seconds. ”

Changing the upper chamber would allow the larger, .223 rounds to be fired again. “It’s illegal to do it but criminals don’t obey the law.”

The Stag version should be less easy to modify. The hope is that Malkowski’s willingness to work with the law doesn’t hurt sales any more than are already hurt. And the breakthrough is that a Connecticut company celebrating its 10th anniversary was able to move a redesigned, manufactured product onto the market in two months.

Benson, like many in the industry, has nothing positive to say about the law.  “They say we should also embrace the spirit of the law but I’ll be honest, the spirit of the law is not anything I care about,” he said. As for the gun control rules themselves, he added,  “What we had before was a big block of swiss cheese with big holes in it. Now we’ve got the same block with a whole bunch of little holes in it.”

 

 

A Southern Lawmaker Sweet-Talks Connecticut Yankee Gunmakers

by Categorized: Economic Development, Manufacturing Date:

Alan Clemmons knew he had to act when he saw pictures of Texas Gov. Rick Perry arm-in-arm with a Connecticut gun company owner just a few weeks ago.

Clemmons, a state representative in South Carolina whose district includes Myrtle Beach, is a friend of Perry’s and supported his presidential run last year.  But Texas and South Carolina are fierce rivals for the hand of the jilted firearms makers, so Clemmons booked a trip to Connecticut to make his case personally.

On Friday, Clemmons met with executives at five companies, including Mark Malkowski, the owner of Stag Arms in Nee Britain, who appeared in that photo with Perry at the NRA convention; and Josh Fiorini, president of PTR Industries in Bristol, who has already said his firm is exiting Connecticut, and visited Clemmons’ district recently.

Tony Terzi, My colleague from Fox CT, traveled with Clemmons and found a colorful guy with plenty to say about his state — and ours.

“The nation has heard from your gun manufacturers and we saw the opportunity, we know what we have in South Carolina,” Clemmons told Terzi. “We know it to be a great place to do business and we know how we feel about the Second Amendment.”

We have a tax-free week for clothing; they have a tax-free weekend for guns. Enough said about that.

“I’m here today to offer a lifeline,” Clemmons said. “Your gun manufacturing businesses are looking for an exit strategy from Connecticut.”

Not necessarily.  Among the four firms that make military-style rifles banned for sale in their home state, the officials at the Colt Companies, the largest, have not said they’re looking to move. O.F. Mossberg in New Haven may look to expand elsewhere but has only said it always looks at options. Malkowski has said, and reiterated to me Friday, that he remains undecided but is actively listening to offers; and PTR is leaving.

The bald, goateed, jocular Clemmons  is confident about his chances of prevailing. One company — presumably PTR, but he didn’t say — asked its employees to choose among three locations, he told Terzi. “myrtle Beach won hands-down,” he said.

For south Carolina, the offer is not just money. Taxes are lower, but, like Texas, it’s a “right to work” state, meaning union organizing is nearly impossible. And Clemmons said, “We can train your employees on your schedule and not at your cost.”

Boeing and BMW are among the global manufacturers that have relocated to the Palmetto State in recent years.

Clemmons’ section of the state is not Shangri-la. It has high unemployment in the counties around Myrtle Beach, he said, because they were hard hit by the recession and abandoned by the old textile industry.

Aside from meeting with gunmakers and suppliers, Clemmons added, “I feel like I’m here for another reason and that is to extend South Carolina’s condolences for the tragedy that happened in Newtown.”

He added that Connecticut foisted more tragedy with the gun control law adopted by lawmakers and signed on April 4 by Gov. Dannel P. Malloy.

“I’ve always respected Connecticut, the Constitution State,” Clemmons said.

Malloy Spokesman Andrew Doba was unapologetic, restating a comment to Terzi that he has made often since the law took effect, banning the sale of military-style rifles and magazines that carry more than 10 rounds.

“The Governor thinks about job creation 24 hours a day. However, on this particular issue, we’ve made a decision that public safety needs to be our top priority.”