JohnsonDiversey to close Sturtevant plant; Modine’s losses are slowing; Snap-on’s earnings slashed in half; Manitowoc’s 3Q sales 20 percent lower than one year ago; Johnson Controls lost $338 million in fiscal 2009;
JohnsonDiversey to close Sturtevant plant
Less than a month after the Johnson family sold a 46-percent ownership interest in JohnsonDiversey Inc., the company has announced it will close its polymer plant in Sturtevant, eliminating 65 jobs.
The company is moving the work to a plant in Wyandotte, Mich., according to a notice filed with the Department of Workforce Development.
The company had announced on Oct. 7 that the Johnson family of Racine sold a 46-percent equity interest (worth $477 million) in the firm to a fund managed by Clayton Dubilier & Rice Inc. (CD&R).
With the new investment, the company’s name is being changed to Diversey Inc.
The company is a leading global provider of commercial cleaning, sanitation and hygiene solutions. The company serves commercial customers in the building, retail, health care and food and beverage sectors, as well as large, public sector clients such as the National Health Service in the U.K. and the State of New York. Among its private-sector customers are The Coca-Cola Company, PepsiCo., Walgreens and global facilities services provider ISS.
Modine’s losses are slowing
Racine-based Modine Manufacturing Co. posted a fiscal second-quarter net loss of $6.5 million, or 19 cents per share, an improvement over a loss of $13.2 million, or 41 cents per share, in the same period a year ago.
The company’s quarterly net sales fell to $282.3 million from $390.5 million a year earlier.
"We are pleased with Modine’s performance during the second quarter of fiscal 2010, especially given the current economic environment," said Thomas Burke, Modine president and chief executive officer. "On a sequential basis, sales rose 11 percent, and we saw significant improvements in gross margin and adjusted EBITDA since the first quarter … As we move into the second half of fiscal 2010, we are encouraged by the sales trends in our business and the early signs of stabilization and selective, modest improvements within our end markets. Yet we are mindful of continued recessionary pressures, along with the impact that restructuring, new program launch activities and recent increases in material costs may have on our future financial results. As we execute our Four-Point Plan, we are positioning Modine for profitable growth as market volumes recover."
Snap-on’s earnings slashed in half
Snap-on Inc. reported third-quarter earnings of $25.4 million, or 44 cents a share, down from $54.6 million, or 94 cents a share, in the same period a year ago.
The Kenosha-based tool manufacturer’s quarterly sales fell to $582 million from $698 million a year earlier.
"Snap-on’s third quarter performance showed some encouraging progress despite the continuing economic headwinds, which were particularly evident in Europe," said Nick Pinchuk, Snap-on chairman, president and chief executive officer. "We simply cannot predict the timing or shape of an economic recovery. During this challenging period, however, Snap-on is aiming to balance its RCI and other value creation initiatives with those growth investments that will be decisive as we move forward. In that approach, we believe we are making quarter by quarter financial and strategic progress and will emerge from this turbulence in a stronger position."
Manitowoc’s 3Q sales 20 percent lower than one year ago
The Manitowoc Company Inc. has reported a loss of $17.7 million, or 14 cents per diluted share, for the third quarter, compared a net loss of $26.1 million, or 20 cents per share in the same period a year ago.
The company reported $881.5 million in sales for the third quarter, a 20-percent decrease from $1.1 billion in the third quarter of 2008. The company’s crane sales fell about 52 percent during the quarter.
"Despite lower sales and operating earnings, cash flow improved as a result of working-capital reductions, operational improvements, and cost reductions that we have implemented over the past year," said Glen Tellock, Manitowoc’s chairman and CEO. "Our cash flow from operations of $198 million during the third quarter enabled further progress toward our aggressive debt reduction goals. Thus far in 2009, we have reduced our debt by $262 million.
"We are well positioned to resume our long-term growth trends as the world economy improves."
Johnson Controls lost $338 million in fiscal 2009
Taking hits from the recession, Glendale-based Johnson Controls Inc. reported that it lost $338 million, or 57 cents per share, in fiscal 2009, compared with a profit of $979 million, or $1.63 per share, in fiscal 2008.
"We entered 2009 with two of our markets already depressed–North American automotive and residential HVAC. As the year progressed, we navigated through customer and supplier bankruptcies and deteriorating global economic conditions," said Johnson Controls chairman and chief executive officer Steve Roell.
The company’s automotive experience sales in the fourth quarter declined 14 percent to $3.5 billion, down from $4.1 billion last year due to lower production volumes in North America and Europe.
Its power solutions sales in the fourth quarter were $1.1 billion, down 17 percent from $1.3 billion in the fiscal fourth quarter of 2008. However, the company said that in the fourth quarter it received the single largest grant, $299 million, from the United States Department of Energy under the American Recovery and Reinvestment Act (ARRA) to build domestic manufacturing capacity for advanced batteries for hybrid and electric vehicles. Johnson Controls also said it had secured new hybrid battery agreements with Jaguar Landrover and Volkswagen and that it expects to announce additional new business in early 2010.
Johnson Controls is bidding on approximately 3,300 projects, worth approximately $2.7 billion, that are directly attributable to the ARRA stimulus package. It continues to see delays of projects where customers are waiting to determine funding eligibility under the program. Johnson The company’s executives continue to believe, however, that the stimulus program will have a meaningful positive impact on financial performance in the second half of fiscal 2010.
The company’s building efficiency segment had income of $138 million in the fourth quarter of fiscal 2009 compared with $316 million in 2008.
Sales, earnings and margin improvements are expected in all three of its businesses in 2010.
"Our strategies and offerings enable us to take advantage of the global growth megatrends around energy efficiency, sustainability and the emerging markets," Roell said. "Johnson Controls has the global presence and customer relationships that allow us to continue to lead industry change. We have the financial strength to accelerate our investments in growth, both organically as well as through acquisitions. We believe we have positioned the company for the sustainable, profitable growth that has long been a hallmark of Johnson Controls."
