2016 Progress Report

OPE dealers share preseason expectations, midseason results and strategies, and end-of-year outlooks

On May 9, Outdoor Power Equipment (OPE) magazine surveyed outdoor power equipment dealers regarding their initial outlook for the 2016 season, how they have fared thus far, and what their hopes and expectations are for the rest of the year. Specifically, we asked them the following questions:

1. Heading into 2016, what were your expectations for your dealership this year?
2. How has your dealership fared thus far in meeting your expectations for 2016?
3. What in-season adjustments do you plan to make?
4. What is your outlook for the remainder of 2016?

OPE received the following written responses May 9-17, 2016:

BRIAN STANTON
OWNER
McABEE TRACTOR
(GREER, S.C.)
1. Heading into 2016, what were your expectations for your dealership this year?
Slow, steady growth, somewhere in the 5- to 10-percent range
2. How has your dealership fared thus far in meeting your expectations for 2016?
Slightly ahead of last, 2-3 percent
3. What in-season adjustments do you plan to make?
Get more price aggressive
4. What is your outlook for the remainder of 2016?
Slow to flat

MIKE McCRATE
PRESIDENT
TULSA NEW HOLLAND, INC.
(TULSA, OKLA.)
1. Heading into 2016, what were your expectations for your dealership this year?
Expected sales increase of 5 to 10 percent
2. How has your dealership fared thus far in meeting your expectations for 2016?
Good — so far. March was fantastic, April a little slower than expected, and May is off to a slow start. We believe it is mostly weather related, but the oil bust here in Oklahoma and the election-year politics may have people taking a wait-and-see attitude.
3. What in-season adjustments do you plan to make?
None at this time
4. What is your outlook for the remainder of 2016?
Guardedly optimistic

REX ROSEBOOM
PRESIDENT
PLAINFIELD EQUIPMENT, INC.
(PLAINFIELD, IND.)
1. Heading into 2016, what were your expectations for your dealership this year?
More sales than last year and better margins
2. How has your dealership fared thus far in meeting your expectations for 2016?
Very well. It is very wet here, and grass is growing faster than people can keep up.
3. What in-season adjustments do you plan to make?
Bring down our inventory levels.
4. What is your outlook for the remainder of 2016?
Look to be steady unless there is a drought.

GARY NICHOLS
THE BOSS’S HUSBAND — THEY LET US THINK WE ARE IN CHARGE
NICHOLS EQUIPMENT, INC.
(JACKSONVILLE, FLA.)
1. Heading into 2016, what were your expectations for your dealership this year?
In an election year, the economy is normally upbeat. But this is a strange and unpredictable year. We were spoiled by consistent spring rains last year, and looked forward to another growth year. Staffing capacity was great, and we anticipated another year in which growth would at least keep up with increasing expenses and slightly reduced margins.
2. How has your dealership fared thus far in meeting your expectations for 2016?
Weather always plays a part in the unpredictable nature of OPE. We have had little rain — almost none for 5 weeks — and the nights have been unseasonably cool. Our perfect storm is rain, a booming economy and cheap gasoline. Discretionary spending is weak, as high food prices have overtaken low fuel costs. Employer healthcare costs are up 20 percent this year after increasing 13 percent last year. Freight costs continue to erode at profit. Gross sales and net profit are down slightly. It was interesting to hear a prediction recently of electric/battery-powered equipment sales increasing to 50 percent of all consumer equipment within 10 years. Change is accelerating at an alarming and perhaps at an unmanageable and unsustainable rate. But we have made it for 62 years by working smarter, and we will not give in to the discounting pressures of the competition.
3. What in-season adjustments do you plan to make?
We have always operated very lean in regards to staffing and inventory. I can’t squeeze much more efficiency from our business model. We plan to hang on. Lower sales this spring are like spitting off a bridge — long gone and not easily made back up.
4. What is your outlook for the remainder of 2016?
There are always opportunities for customer-focused businesses. We remain upbeat and plan to make each customer contact a positive experience. Let it rain, let it rain, let it rain.

JEFF BRETON
OWNER
PRECISION OUTDOOR POWER EQUIPMENT
(RALEIGH, N.C.)
1. Heading into 2016, what were your expectations for your dealership this year?
Higher profits, redesign shop and showroom, add new equipment and lines.
2. How has your dealership fared thus far in meeting your expectations for 2016?
Cash flow is up and so should be profits.
3. What in-season adjustments do you plan to make?
None, just trying to turn the work out.
4. What is your outlook for the remainder of 2016?
To just get through with the work and the plans to remodel

CARL LYNCH
OWNER/TECH
CARL’S REPAIR
(CAREY, OHIO)
1. Heading into 2016, what were your expectations for your dealership this year?
More sales of new product
2. How has your dealership fared thus far in meeting your expectations for 2016?
50/50
3. What in-season adjustments do you plan to make?
Being the only one here, I just keep getting all I can done to make everyone happy — good luck with that.
4. What is your outlook for the remainder of 2016?
Will slow down come June unless it keeps raining a lot.

NATHAN DYKSTRA
PRINCIPAL
DE JONG EQUIPMENT CO., INC.
(BEECHER, ILL.)
1. Heading into 2016, what were your expectations for your dealership this year?
My expectations were down numbers in whole goods, parts and service due to the fact that we’ve been involved in the agriculture segment the past few years.
2. How has your dealership fared thus far in meeting your expectations for 2016?
My numbers are in line with last year, and margin is actually up due to higher-margin equipment sales in the construction and landscape sector.
3. What in-season adjustments do you plan to make?
We made early-order preseason parts phone calls to lock in sales. We also worked to transition from agriculture equipment stock to construction and landscape equipment stock. This customer segment of the business has been doing better than the agriculture segment.
4. What is your outlook for the remainder of 2016?
Election year, so my guess would be as good as anyone else’s guess. Things look positive for us because we have a growing rental business, which always drives new business opportunities.

DAN WEINGARTZ
PRESIDENT
WEINGARTZ
(UTICA, MICH.)
1. Heading into 2016, what were your expectations for your dealership this year?
Small increase from a terrific 2015
2. How has your dealership fared thus far in meeting your expectations for 2016?
Exceeded slightly
3. What in-season adjustments do you plan to make?
Tweak customer service procedures to make sure people are getting taken care of in a timely, friendly fashion.
4. What is your outlook for the remainder of 2016?
Relatively strong

KEVIN ROUNDS
OWNER
CJ’S KUSTOM AUTO
(ODESSA, N.Y.)
1. Heading into 2016, what were your expectations for your dealership this year?
To expand our product lines. Increase our position in our local market.
2. How has your dealership fared thus far in meeting your expectations for 2016?
So far, we are on track.
3. What in-season adjustments do you plan to make?
Increase inventory to meet product demand.
4. What is your outlook for the remainder of 2016?
If sales stay on track, very optimistic.

DALE MAGIE
PRESIDENT
MOE’S OUTDOOR EQUIPMENT & SUPPLIES
(LIBERTY TWP. AND SPRINGBORO, OHIO)
1. Heading into 2016, what were your expectations for your dealership this year?
We were looking for a good growth year overall. We were looking for strong commercial contractor sales, residential sales to be strong, Mahindra tractor sales to increase by 25-percent plus, along with good solid growth in labor and parts sales.
2. How has your dealership fared thus far in meeting your expectations for 2016?
First quarter of 2016 was very strong with total sales up over 30 percent over 2015. Most all of growth was created by parts sales, commercial contractor sales very strong, and Mahindra sales up nicely. Then, April came and the weather turned cold, and April stayed cool and wet overall, driving sales down in all areas more than they should be for a normal April. May is starting out okay but concerning on residential sales, and service isn’t at full capacity like normally this time of year. We are turning equipment faster and dollars are okay but concerning to me based on my 25-plus years in the business.
3. What in-season adjustments do you plan to make?
We will see how May continues to evolve and make adjustments as required by month’s end to ensure we obtain as much profit as possible going into June. We are watching inventory closer and not planning to stock and/or reorder like we normally do this time of year.
4. What is your outlook for the remainder of 2016?
Concerning! Cost continues to increase, margins continue to shrink, good help is hard to come by and keep as many as we desire when things are tough. We hope to have a good year overall now with solid commercial business, Mahindra sales, and parts sales staying solid and strong. The consumer business is very weak overall, as well as the small commercial contractor, which will hinder us from having the year we originally were projecting.

SAM STEARNS
OWNER
MR. MOWER MAN
(SCOTTSBURG, IND.)
1. Heading into 2016, what were your expectations for your dealership this year?
I expected that my whole goods sales would at least double from 2015 levels, and that I would slightly increase my profit margins in parts and service.
2. How has your dealership fared thus far in meeting your expectations for 2016?
Parts margins are much improved! Not completely sure about service margins, though I think they’re slightly improved as I anticipated. New equipment sales, however, are downright lousy up to this point.
3. What in-season adjustments do you plan to make?
I didn’t have any in-season adjustments in mind. I’m continuing with a direct-mail marketing schedule that I hope will bear some fruit this season and into next season.
4. What is your outlook for the remainder of 2016?
I always have to be positive, even when things aren’t going the way I’d like. The rest of the year could include a bunch of changes, especially if I’m able to purchase some land for a new and improved location.

GEORGE MILLER
OWNER
MILLER TRUE VALUE HARDWARE
(WAVERLY, IOWA)
1. Heading into 2016, what were your expectations for your dealership this year?
With the layoffs in the ag-related industries, I expected the local economy to be flat with last year. I was pleasantly surprised to be wrong.
2. How has your dealership fared thus far in meeting your expectations for 2016?
Our sales have been up double-digit percentages.
3. What in-season adjustments do you plan to make?
Increasing our in-stock position on big-ticket items.
4. What is your outlook for the remainder of 2016?
I expect the rest of the year to be good.

DAVID
VICE PRESIDENT
LEE POWER EQUIPMENT
(LEESBURG, GA.)
1. Heading into 2016, what were your expectations for your dealership this year?
Increasing sales to commercial customers
2. How has your dealership fared thus far in meeting your expectations for 2016?
We are on track.
3. What in-season adjustments do you plan to make?
Having more big mowers in stock
4. What is your outlook for the remainder of 2016?
Good

CHARLES SAUL
OWNER
SAUL’S LAWNMOWER
(WOODSTOWN, N.J.)
1. Heading into 2016, what were your expectations for your dealership this year?
Just trying to survive the weather.
2. How has your dealership fared thus far in meeting your expectations for 2016?
Way short. The worst selling year since 2012, close to $50,000 off previous years.
3. What in-season adjustments do you plan to make?
Trying to get rid of inventory and not reordering.
4. What is your outlook for the remainder of 2016?
Again, trying to maintain. Concentrate on repairs.

GLEN HOFFMAN
PRESIDENT
HOFFMAN’S OUTDOOR POWER & REPAIR
(HALIFAX, PA.)
1. Heading into 2016, what were your expectations for your dealership this year?
Similar to the end of 2015, major downturn in sales of all product lines.
2. How has your dealership fared thus far in meeting your expectations for 2016?
Slightly better than expected but is a very slow sales year.
3. What in-season adjustments do you plan to make?
Laid off three employees.
4. What is your outlook for the remainder of 2016?
Not good

SIMON
OWNER/PRESIDENT
AAA EQUIPMENT CENTER
(PEQUOT LAKES, MINN.)
1. Heading into 2016, what were your expectations for your dealership this year?
Growth! We were expecting a strong year, and so far that has been the case.
2. How has your dealership fared thus far in meeting your expectations for 2016?
On track in most departments; ahead of schedule in sales.
3. What in-season adjustments do you plan to make?
We will watch the weather and adjust our advertising to try to meet the needs of our customers and meet our goals.
4. What is your outlook for the remainder of 2016?
If we get rain, very good! If it is a dry year, we should still have a good year.

ERNIE BUTITTA
PRESIDENT
K&D
(BATON ROUGE, LA.)
1. Heading into 2016, what were your expectations for your dealership this year?
Expectations, none…I’ve been doing this too long! Seriously, to match or grow slightly comparing 2015.
2. How has your dealership fared thus far in meeting your expectations for 2016?
Even with 2015! Maybe slightly ahead through April.
3. What in-season adjustments do you plan to make?
NONE
4. What is your outlook for the remainder of 2016?
It appears as though positive…although one drought would take care of that!

BILL BAGLEY
PRESIDENT
BAGLEY TRACTOR & EQUIPMENT
(LONGVIEW, TEXAS)
1. Heading into 2016, what were your expectations for your dealership this year?
Some shrinkage due to being located in an area heavily dependent upon the oil field service industry.
2. How has your dealership fared thus far in meeting your expectations for 2016?
Better than anticipated, I think primarily due to adequate rainfall. Outdoor power equipment sales have exceeded expectations where tractor sales have fallen off significantly. Parts sales continue to be strong.
3. What in-season adjustments do you plan to make?
Much more conservative approach to whole good inventory replacement. Otherwise, business as usual.
4. What is your outlook for the remainder of 2016?
Still anticipate shrinkage overall due to weak movement of higher-dollar inventory.

ROBERT “RODNEY” GRIFFIN
OWNER/OPERATOR
WATSON LAWN & OUTDOOR LLC
(WATSON, LA.)
1. Heading into 2016, what were your expectations for your dealership this year?
I was optimistic about my business in particular, but not the servicing dealer in general. The constant and increasing pressure coming out of the box stores and Internet sales will continue to hurt the smaller shops. We’re one of those stores trying to “Jump the Hump” to a more secure place in this business. Despite the negatives, like others who didn’t throw in the towel, we redoubled our efforts. We’re determined to be leaner, smarter, and more aggressive in our business approach. At last year’s national dealer meeting in Louisville, our Anchor Mower rep and I each made an increased commitment, and we believe it’s reaping huge benefits! We invested in a new and better website! We’re on Facebook! We added another 1,200 feet of showroom, along with a new counter, computers and parts area. Also, we started working on expanding our operation to sell and service ATVs and UTVs. We dedicated an adjacent building with storefront and workshop to the motorsports side of our business. We believe this dedicated motorsports building does two things for us. It obviously gives us added space, but since perception is reality to many people, this move makes us bigger and better in the public’s eyes! Next, we hired the top crossover mechanic we could find and began taking units in for service & repair. The process of adding the right “LINE” proved more difficult and time consuming, though we’re almost there. Along with a TOP go-kart/mud buggy line added, we feel poised to maybe “Jump the Hump” in 2016.
2. How has your dealership fared thus far in meeting your expectations for 2016?
We’ve sold a lot more lawn mowers to date, than at this time last year. This season is going much smoother than I think ever before. Some of it has to do with a tightening of the nuts and bolts of the business, but definitely much more due to having the right mix of co-workers. I can’t stress this enough. I believe also that John Q. Public may finally be finding out about the upside to buying their equipment from a “Servicing Dealer.”
3. What in-season adjustments do you plan to make?
Not much really. Things are falling into place! Overall sales are well up. So much so, it’s kind of scary. We expect to do some additional advertising in the next month or so, with hopes of extending the season. Also, within the next few days, we should have solidified our motorsports division as far as the paperwork goes, and hopefully, follow with the units soon after.
4. What is your outlook for the remainder of 2016?
Great to good. I believe some sales are driven by growth in our area, but also pent-up desire to “Out with the Old — In with the New.” Let’s hope the economy and politics don’t cause trouble!

JEFF
PRESIDENT
A-1 OUTDOOR POWER, INC.
(CORCORAN, MINN.)
1. Heading into 2016, what were your expectations for your dealership this year?
Similar to 2015
2. How has your dealership fared thus far in meeting your expectations for 2016?
On course
3. What in-season adjustments do you plan to make?
None at this time
4. What is your outlook for the remainder of 2016?
Similar to last year with some snow at the end

KEVIN DORNSEIF
PRESIDENT
PERFORMANCE SMALL ENGINE CENTER INC.
(ROCKY MOUNT, N.C.)
1. Heading into 2016, what were your expectations for your dealership this year?
A slight growth in equipment sales and parts, average repair services
2. How has your dealership fared thus far in meeting your expectations for 2016?
On track
3. What in-season adjustments do you plan to make?
None, be conservative.
4. What is your outlook for the remainder of 2016?
Looks to be better than last year for now, but much can change during the summer and fall.

MARY KONOPKA
PRESIDENT
BELLVIEW SMALL ENGINE REPAIR, INC.
(PENSACOLA, FLA.)
1. Heading into 2016, what were your expectations for your dealership this year?
Continue with our excellent customer care.
2. How has your dealership fared thus far in meeting your expectations for 2016?
Very good
3. What in-season adjustments do you plan to make?
Adjust check-in policies and improve on quick assessments in the customer’s presence.
4. What is your outlook for the remainder of 2016?
Good

LEON DUIS
DUIS SALES CENTER
(SALEM, ILL.)
1. Heading into 2016, what were your expectations for your dealership this year?
Maintain sales levels. Improve overall efficiency. Improve shop billed labor ratio. Reduce parts inventory.
2. How has your dealership fared thus far in meeting your expectations for 2016?
Still a work in progress. Manager turnover, so progress slower than hoped.
3. What in-season adjustments do you plan to make?
More focus on manager transition
4. What is your outlook for the remainder of 2016?
I am positive for the remaining year.

ROYCE LIVINGSTON
OWNER
OTEGO SALES & REPAIR
(OTEGO, N.Y.)
1. Heading into 2016, what were your expectations for your dealership this year?
Increase in part sales
2. How has your dealership fared thus far in meeting your expectations for 2016?
Good
3. What in-season adjustments do you plan to make?
Carry more lines
4. What is your outlook for the remainder of 2016?
Great

ANONYMOUS DEALER
1. Heading into 2016, what were your expectations for your dealership this year?
Maintain sales in units vs. 2015 while increasing margins.
2. How has your dealership fared thus far in meeting your expectations for 2016?
Not very well — margins remain below 2015.
3. What in-season adjustments do you plan to make?
Did not reorder whole goods as inventory is reduced.
4. What is your outlook for the remainder of 2016?
Service side is stable to growing.

BRIDGET
CEO
ACE HARDWARE
(WHITEHALL, MONT.)
1. Heading into 2016, what were your expectations for your dealership this year?
Sell more
2. How has your dealership fared thus far in meeting your expectations for 2016?
Pretty good
3, What in-season adjustments do you plan to make?
Waiting for spring
4. What is your outlook for the remainder of 2016?
Sell more

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