ROCKFORD, Ill. - Woods Equipment Company, manufacturer of attachments and implements for the lawn and landscape, agricultural and construction markets, announced April 9, 2001, net sales of $261.8 million for the year ended Dec. 30, 2000, a 38.5 percent increase from net sales of $189.0 million in the prior year. The primary reasons for the increase were the acquisitions of TISCO, Central Fabricators and Alitec in July 1999 and a $7.2 million increase in net sales in 2000 resulting from an accounting rule change that requires freight charged to customers to be included in net sales, according to the company. Prior year sales were not restated for the accounting rule change.
GROUNDS MAINTENANCE BUSINESS. Woods manufactures attachments for grounds maintenance surrounding industrial and office parks, large estates, resort complexes, universities, golf courses and individual homes. For the year ended Dec. 30, 2000, Woods' grounds maintenance business experienced a 40.2 percent increase, with net sales of $200.2 million compared to 1999 net sales of $142.8 million. The company cited the acquisition of TISCO in July 1999, the $7.2 million increase in net sales in 2000 required by the accounting rule change and internal growth of 13 percent as primary reasons for the increase. The internal growth was primarily in the product categories of batwing cutters, turf batwing finish mowers and zero-turn radius riding mowers.
CONSTRUCTION BUSINESS. Construction attachment net sales for the year were $55.7 million versus $40.1 million in the prior year, or an increase of 38.9 percent. This increase is the result of the acquisitions of Central Fabricators and Alitec, as Woods' core business in this area decreased $5.4 million in net sales for the year, or 18.6 percent, due largely to increased competition and a decline in demand for attachments supporting prime movers used in the equipment rental market.
OVERALL COMPANY FINANCIALS. Gross profit for 2000 was $67.4 million, up 33.3 percent from $50.6 million in 1999. Net sales for Woods' core business, which the company defines as those product lines it has owned for at least two years, was up $6.5 million, or 4.2 percent year to date. Loss from operations for the year totaled $35.3 million compared to income of $8.7 million in 1999.
Woods operates in seasonal markets, resulting in less than 45 percent of Woods' net sales being generated in the second half of the calendar year. In the fourth quarter of 2000 sales were $57.7 million, a 7.0 percent increase from fourth quarter 1999 sales of $53.9 million. Excluding the $7.2 million increase in net sales resulting from the accounting rule change requiring freight charges to be included in net sales, sales in the fourth quarter of 2000 were down 6.4 percent compared to the prior year fourth quarter. The decrease was primarily due to a decline in net sales for the company's construction business.
Gross profit for the fourth quarter was $12.4 million, or 21.5 percent of net sales, a decrease of $1.0 million, or 7.2 percent from the fourth quarter of 1999. Excluding the freight adjustment for the accounting rule change, gross profit was down 55.8 percent from the prior year's quarter.
COMPANY OUTLOOK. "During the last three months, we have continued to experience a significant decline in demand for our attachments used with excavators and tractor loader backhoes," said Edward Olson, president and CEO of Woods. "In addition, during this same period we have experienced increased manufacturing labor costs. In response to these conditions, we have undertaken a plan to restructure certain of our operations. The restructuring plan has included changes in senior management, reductions in workforce and temporary plant shutdowns where inventory is greater than current needs. We are continuing to look at additional opportunities to permanently reduce costs which may include plant consolidations and additional workforce reductions."
For more information about Woods Equipment Company visit www.woodsonline.com.
