With news about cutbacks in Racine, an acquisition by Bucyrus and a new cycle line from Harley-Davidson
Key Racine employers announce job cuts
Johnson Outdoors Inc. and InSinkErator, two of Racine’s most prominent employers, announced they will need to eliminate jobs to react to the economic downturn.
Johnson Outdoors reported a fiscal fourth quarter loss of $74.6 million and announced it is in breach of its debt agreements and will have to cut 7 percent of its workforce to reduce costs. That translates to about 90 jobs.
The Racine-based company also is enacting a hiring freeze.
The company’s quarterly loss amounted to $8.18 per share. The firm’s quarterly net sales fell to $81.8 million from $87.3 million in the same period a year ago.
The company recorded non-cash goodwill and other intangible asset impairment charges of $41.0 million and a non-cash deferred tax asset valuation allowance of $29.5 million during the fourth quarter.
In addition, Johnson Outdoors announced it was intensifying efforts to reduce operating costs, working capital and capital spending by more than $30 million combined.
Although the manufacturer of outdoor recreational products remains current with scheduled principal and interest payments, as a result of the non-cash charges, the company announced it is "in breach of the net worth covenant in its debt agreements" and is working with its banks to amend the agreements.
"This was a challenging year and given the 2009 economic outlook, we are acting quickly to protect profitability going forward while making smart investments behind future growth opportunities. While we work to scale back our cost-structure, we remain focused on leveraging our marketing and innovation expertise to create consumer demand and drive increased volume in the year ahead. We have tremendous brand equities that held or gained share throughout 2008 due to innovative new products that generated a third or more of total company sales for the fifth straight year," said Helen Johnson-Leipold, chairman and chief executive officer of the company.
"The outdoor recreational industry is particularly volatile during uncertain economic times, which is why we have moved decisively to align operations for greater flexibility in addressing the ebb and flow of our markets and by doing so, enhance profitability and cash flow. Importantly, targeted cost savings and spending reductions are highly strategic, intended to scale our cost structure to the current environment while maintaining our competitive position in the coming year and beyond," Johnson-Leipold said.
Meanwhile, InSinkErator announced it will eliminate 50 jobs as the stagnant housing market has slowed demand for its residential garbage disposers.
"We’re tied closely with housing and remodeling," Drew Abram, vice president of human resources for InSinkErator, told the Racine Journal Times. "Ours (garbage disposer) is the last thing to go in the house, along with the dishwasher."
Bucyrus acquires Czech firm
Bucyrus International Inc. recently completed its acquisition of OKD, Bastro a.s., an engineering services and manufacturing support company located in the Czech Republic.
Bastro’s primary capabilities will support Bucyrus International’s long-term strategic initiatives in the region. The price of the acquisition was not disclosed.
Bastro was acquired from OKD, a.s., which is a wholly owned subsidiary of New World Resources N.V., Central Europe’s leading hard coal producer. Bastro will continue to supply mining equipment support and engineering services to OKD.
Tim Sullivan, president and chief executive officer of South Milwaukee-based Bucyrus International, said, "This acquisition is in-line with our goal for adding support of strategic initiatives in key regional areas. We are pleased that we have been able to add Bastro in support of our underground equipment segment in Europe."
Harley unveils new dirt bike model in America
Milwaukee-based Harley-Davidson Inc. announced that it is making its new XR1200 dirt track racing motorcycle model available for sale in the United States.
Inspired by the XR750, the most dominating American dirt track racing motorcycle of all-time, the XR1200 was initially designed and launched only in European markets in April.
The XR2200 features technical innovation to provide potent street performance and handling. Harley-Davidson dirt track racers Scott Parker and Rich King participated in the XR1200 development.
"The XR1200 is an exciting motorcycle with an aggressive attitude," said Bill Davidson, Harley-Davidson’s vice president of core customer marketing. "This bike will provide the performance and distinct style demanded by uncompromising riders. In fact, hundreds of XR1200s were ordered by enthusiastic customers before we really even promoted it."
The XR1200 is available in black, orange pearl and pewter denim colors. The motorcycle has a suggested retail price of $10,799.
