Monthly Archives: September 2016

Confidence Growing in Snow and Ice Removal Equipment Sales

September 29th, 2016

Inventory at Western Products

Despite a sluggish start to early season sales of ice and snow removal equipment, confidence is starting to grow in the industry, creating some pockets of hope we might see a good year after all. First, let’s look at why some people in the industry are struggling.

Why the Snow and Ice Equipment Industry is Sluggish this Quarter

Mild 2015-2016 Winter

The slow start of early season sales is due to the very mild 2015-2016 weather. Snow contractors did not make a lot of money nor did they put a lot of hours on their equipment creating lower than normal product demand. Pete Simpson at Plow Parts Direct speaks for most in the industry, “We expected the season to have a bit of a soft start due to the mild winter last year, and so far that has been true.”

Long Summer

Then comes along our extended summer. The extended summer weather is both good and bad. It is good because landscapers, who still make up a majority of snow removal contractors, are making more money and they can better afford new equipment. On the flip side, they are so busy in the field, they do not have time to think about getting ready for winter; for the most part they just are not buying new snow plows yet.

Terry Wendorff, president of plow manufacturer Sno-Way Intl, tells us, “Sales have been at a steady but slow pace largely due to the warm weather throughout September.” The industry knows a lot of people just don’t buy their snow plow until it is cold outside, and even then, some wait until the snow starts flying.

Extra Inventory

Inventory at Western Products — Take a look, there are hundreds upon hundreds of plows sitting at this Douglas Dynamics Property.

Added to the lack of sales is the huge amount of inventory throughout the supply chain, especially in the hands of dealers. The dealers are reluctant to buy when they have inventory still sitting from last year and distributors are in the same boat. Until clear winter forecasts came out, most dealers were reluctant to take the financial risk of ordering stock they may not need.

With so many variables leaning toward negativity and conservatism, the industry is at a teetering point waiting on some good news that will bring growth back into the viewfinder. That good news seems to have come from the latest winter weather forecasts and sales of niche and money saving equipment.

As Snow Plow News did its own research these past few weeks, we found a few bright spots and a growing number of indicators that an uptick in sales is at hand with a look toward the positive.

Snow Plow Buyer Confidence is Returning

2016 a Best Year for Sales?

Jeen Stork shared with us “so far we are ahead of our best year.” Jeen is responsible for sales at Stork’s Plows who snatches up old inventory and sells it off at discount prices. Jeen added, “The snow predictions look to be in our favor; we hope to keep it up.”

All We Need Now is Snow!

WI blizzard

“We need snow activity to be above last winter in order to clear dealer inventories,” comments Wendorff at Sno-Way. That snow is exactly what the weather forecasters are predicting, snows returning back to normal, and those forecasts are helping prod sales along.

Optimistic Contractors Helping Current Sales

Todd Riley at PACE, Inc. wrote in to us his agreement. “Some products are still moving, so there must be some optimism with commercial contractors, most likely based on the solid long-range forecast.” PACE, Inc. is a distributor for several major brands in the snow and ice industry, and it appears they are seeing across the board movement, not just inventory from a single manufacturer.

Manufacturers Trying to Jump Start Sales

It is not just the weather, as Riley points out, “Manufactures have made some effort to jump start sales mostly with financing and some special pricing.” Some manufacturers are even giving out free financing until the snow comes. That means while most of us are yet to see our first snow flake, it still appears to be a market favoring the early bird who gets the plow.

Most manufacturers are glad to see an uptick. As Steve Sepaniak at Arctic Sectional Plows mentions, “The season started slow but is picking up speed. In our business everyone understands that it’s not a matter of if it snows, it’s when!”

New Trucks Mean New Snow Plow Sales

New Trucks like this 2017 Ford F-350 create new sales.

The snow is not here yet, but the “when” to buy a new plow appears to be now. Simpson adds his two cents, “We expected the season to have a bit of a soft start due to the mild winter on the east coast last year. In the last week or so we have seen a big jump in requests for quotes on new plows for 2017 trucks getting ready to hit the market. We are also seeing an uptick in the number of clients who are interested in the more versatile plows.” Simpson is referring to plows like Western’s MVP 3 V-plow or Boss’s Power V-plows that can act as a straight blade, a v-plow, or a scoop plow and referring to straight blades with various wing accessories. Should we tell you he has already order more plows from the manufacturer to keep up with demand with these versatile plows?

New Technology Influencing Sales

The new technology certainly helps sales as well. People are replacing their straight blade plows with the newer versatile plows because they just move more snow faster than the old technology. Parking lots can be cleaned with less people and less equipment when one new snow plow can move more than 6 cu. feet of snow; that means buying that new plow actually save you money.

Those that manufacture niche snow plows are also seeing strength from their growing markets. Chuck Kimmel at Blackline Snow Plows commented, “The ATV and UTV industry seems to be growing and with more people putting plows on Zero turn mowers it should be a great year.”

Salt Systems Technology Helping Too

It is not just newer snow plows that are spurring on sales. Simpson also shared, “I expect some interest in pre-wet systems this season as more clients realize the value of adding a liquid solution to their salting fleets.” It is not just pre-wetting systems, but brine application systems are also on the rise. The liquid systems (brine or pre-wet) help reduce the overall use of salt and also allows the salt to work faster in icy conditions.

Looking Forward to that First Snow Storm

watertown

As dealers, distributors, and manufacturers are seeing the industry pick up steam, everyone is still wondering when that first snow will hit. Early snows can hit as early as October, but for most of the states that see the bulk of snow and ice removal, that snow will likely come in mid-November. Speaking of a pre-Thanksgiving storm, Simpson also mentioned, “all the fence sitters will jump to the purchase side and it will be a busy holiday!”

If sales keep on building steam, hopefully those fence sitters will still find the snow plow they are looking for to move that white gold from the sky. Here’s to looking at a great snow and ice industry year this season, folks, and if you are buying a new plow this year, be sure to make a comment on our Facebook page about what plow that is!

Mike Stevens is Editor of Snow Plow News. He has been in the industry for decades working for and closely with the biggest names in the industry.

Of Big Snows and First Flakes

September 28th, 2016

Snow Is Coming!

We are coming up on October and we have already passed the earliest recorded snow fall in some parts of the country (Minneapolis, Sept. 24th). The question on everyone’s mind is, how much will it snow this year? Yes, we know that La Nina is weak or even non-existent, but for those of us in the industry, those white flakes can shimmer like gold. Don’t talk to me about La Nina, tell me how much white gold is going to fall this year.

We keep talking to our in-house forecasters about the snow and they keep telling us, “Yes, more snow than last year.” It should be a good year for snow. How can they be sure when they don’t even know if we have a La Nina or a neutral year?

This is what they told us, because regardless of where if falls on the La Nina versus neutral condition year, we are still going to get moisture and cold winds in either scenario, dumping snow in everyone’s back yard (well, maybe not if you are the odd person reading about snow removal in Miami, but the rest of us look forward to the white stuff).

When are we going to get real snow? For most of us, we will start seeing significant snow falls beginning the second half of November or the beginning of December. Get ready to start off protecting the public in just a few more weeks. Isn’t this a great job? We get to help keep people safe and make an honest dollar doing it.

With snow about to hit in just a few short weeks, that means October is the time to get your plow ready to go or to get that new plow installed. It is no longer time to look at that V-Box spreader on the show room floor, it is time to load that machine on the back of your truck. With a normal winter returning to us, the industry is looking to rebound from the slim winter we had last year, and your business should see that rebound too.

Remember, the early bird gets the worm. If you are looking for a good deal on a snow plow, now is the time to look for early season specials as a lot of dealers are looking to clear out some of their new stock of plows and spreaders that just arrived. Look for those early specials because when the snow starts flying we find the sale prices often go away because the dealers need to hold onto enough plows to replace old plows that break down mid-season.

Just for fun, I borrowed off of our “first snow” forecast so you can see how early snow hits in your area. You can see the video and other cities below. Happy plowing my friends!

First Snow in Portland, ME is October 10th

First Snow in Pittsburgh, PA is oct. 18th

First Snow in Milwaukee, WI is October 7th

First Snow in Hartford, CT is November 3rd

Niche Snow Plow Manufacturer Survives in a Sea of Giants

September 15th, 2016

Industry Spotlight: Blackline Snow Plows

Blackline Snow Plows is known for making their niche market plows that are designed to work hard on ATVs, UTVs, Mini-Trucks, and even Zero Turn mowers. The question is, how does a little snow plow manufacturer survive in an industry with such big names as Douglas Dynamics and Toro? They survive at being really good at something the big dogs are weaker in.

Blackline strives to be really good at snow plows for a wide variety of small vehicles. Blackline was bought out in 2015 and is striking out to dominate in its niche. Chuck Kimmel is now general manager for the company. Chuck has been in the snow and ice removal industry for over 40 years, and he is really excited about what Blackline offers. Chuck is also excited about the new direction the company has taken under his tenure.

Why a Blackline Snow Plow?

Focusing on their niche for years has allowed Blackline to figure out how to make their snow plow compatible with probably the widest range of small vehicles, from ATVs to mini-trucks. Beyond the range of vehicles, Blackline has many features that make them an attractive buy.

First off, the hitch system is based on either a 2” or 1 ¼” receiver hitch mounted to the vehicle. Mounting the plow becomes a snap, just slide the plow into the receiver, put the pin in place, hookup power, and you are off and plowing.

The Blackline plow has a huge 17” clearance to match the off-roading capabilities of some of the more popular vehicles you can put this plow on. The Blackline plow is also a full trip plow, has power angle adjustments, a dash mountable controller, and replaceable moldboard.

Blackline has also overcome one of the most common problems in the ATV/UTV plow market. Because these small style plows are so light, the average ATV/UTV plow can ride up on hard packed snow and if you want to back drag…well, get the shovel out instead. Blackline solves both of these problems by using its hydraulics to put up to 600 lbs. of downward pressure on the edge of the plow, keeping the plow on the ground where it belongs. This downward pressure also allows more weight distributed to the back wheels for superior handling on wet pavement.

An extra benefit Blackline threw in is “bulldozer mode.” Simply insert a couple of pins to prevent the blade from tripping, then you can use the Blackline plow like a bulldozer on landscaping. We watched the Blackline move some impressive piles of heavy mud making you wonder what a Blackline couldn’t push around.

USA Snow Plow Manufacturing

Most of the plow components are manufactured in western Michigan, near Hastings and Grand Rapids. The corporate headquarters are a little further northwest in Norton Shores, Michigan. Good steel, powder coat finish, easy usability, and engineering excellence make the Blackline Snow Plows something you can appreciate.

Douglas Dynamics Dividend & What it Means

September 13th, 2016

Record Breaking 2^nd Quarter for
Douglas Dynamics

After record breaking second quarter sales of $113.8 million (up from $107.1 million in Q2 of last year), Douglas Dynamics has announced a $0.235 per share cash dividend this quarter. This payout is the same as the other dividend payouts in 2016, up $0.012 from last year and it comes on the heels of a forecast that has been revised upward with more sales expected than they thought just a few months ago.

Not only has Douglas Dynamics sold more, they made more money this year too. The gross profit went from 34.5% of sales in 2015 to 36.5% of net sales this year bringing home $41.5 million and an adjusted EBITDA of $32.7 million Q2 of this year. Cash flow has improved over last year, receivables are up, inventories are down, and James Janik, Chairman and CEO of Douglas Dynamics, appears to be a happy man.

Mr. Janik stated, “While we have seen slight increases in field inventory and slightly lower growth levels for light truck sales, we believe that both dealers and end users remain cautiously optimistic about the future and that our ongoing efforts to improve both service and quality through DDMS are paying off.”

So far it has been an exciting year for Douglas Dynamics, with strong sales despite the weak winter last season. Added to that was the acquisition of the Dejana Truck & Utility Equipment Company and Douglas Dynamics’s successful patent infringement lawsuit conclusion against Buyers Products (with almost $10 million received into its coffers in 2016 because of it) the company seems to be busier than ever making its own news this year.

What does a Healthy Douglas Dyanmics Mean for the Average Snow Plow Contractor or Snow Plow Dealer?

First, if you use one of the Douglas Dynamics brands (Western, Fisher, Henderson, SnowEx), having a stable manufacturer means they are likely to support your product for several years to come and they will be able to invest in future improvements to the products they sell.

Second, it suggests the market is returning in the industry. Dealers are expecting a better year this year than last year as they are taking on inventory at a faster pace than last year. For the contractor, having that inventory with what is expected to be an average snow year means you should be able to still find a snow plow to buy mid-season if one of your current plows has a complete failure (note: heavy snow years have created shortages of new plows where people could not replace broken units).

Third, Mr. Janik may be right, the efforts of the Douglas Dynamics brands to improve quality and service may be attracting more buyers to the D.D. brands and away from its competitors. Will this mean some competitors will step out of the ring in the near future? Only time will tell.

Fourth, the consolidation in the industry will likely continue. With Douglas Dynamics buying more companies within the industry and seeing the acquisitions pay off, other companies will be more likely to follow suit and may even feel compelled to do so just to keep up with Douglas Dynamics. This poses an opportunity and risk for the small dealer or contractor. Larger companies have more economies of scale in manufacturing and in R&D which makes having a few large players good news for the sake of price and innovation, but if there are too few players in the industry, the lack of competition could potentially drive up prices, drive down service levels, or both.

Overall, we need healthy manufacturers in order to have a healthy industry. We hope to hear similar news about a healthy year from other snow and ice equipment manufacturers over the next few months.

What do Hurricanes Mean for Snow?

September 7th, 2016

Do More Hurricanes Equal More Snow?

With a very active hurricane season, many people wonder if that pattern of storms will continue into the winter. It turns out there is little correlation between the hurricane season and the winter season in North America.

Weather Calming in the Fall

As we see the big hurricane pattern continue to churn in the Atlantic, the continual storms allowed in by the weaker weather patterns in the west will die out and we will find a calm fall staying close to seasonal averages. Instead of correlating to a big winter, we are expecting to see a notably average winter.

Outlook for Winter 2016-2017

Our initial forecast of average temperatures throughout the US still holds true as well as our expectation for slightly more snow in the North and slightly less precipitation in the South this year.

So this Big Hurricane season will leave us with an average winter season. This winter will still be harsher than last year’s extremely mild winter, but the 2016-2017 winter will keep far away from those other record breaking years.

Do you know your El Nino versus La Nina? Read our blog post about the difference between El Nino and La Nina!

Thank you to Bonnell Industries for sponsoring this post. For more information on quality Truck and Roadside Equipment see Bonnell or check out our review of Bonnell equipment.