Minnesota Business Updates
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■ Cold winter hits Johnson The bitter cold of the past winter hurt the quarterly earnings of Racine-based Johnson Outdoors, according to the Milwaukee Journal Sentinel. The company reported lower sales for the fiscal second quarter, “due primarily to prolonged harsh winter weather during the period,” the company said an earnings report. The harsh weather coupled with record-high revenue a year ago made for a tough comparison, the company said. Johnson Outdoors said it reduced operating expenses but the savings were not enough to offset the effects of lower sales on operating profit. “Unpredictable weather conditions are always challenging for the highly seasonal outdoor recreational industry, and this year’s unusually long and frigid winter has shifted the pacing of customer orders to more closely align with the retail-selling period of our products during the spring and summer months,” Helen Johnson-Leipold, chairman and chief executive, said in the report.
■ General Growth partners with RetailMeNot
Chicago-based General Growth Properties, owner of River Hills Mall in Mankato, announced a strategic partnership with Austinbased digital coupon website
RetailMeNot. The deal makes RetailMeNot the preferred digital coupon provider for the malls under the GGP banner, according to the San Antonio Business Journal. For GGP, the partnership could prove to be a very strategic plan for increasing both foot traffic and sales for the stores in its centers. GGP’s CEO spoke about mixing digital convenience with bricks-and-mortar shopping in a recent story at CNBC.com.
■ End of an era at Fastenal Fastenal co-founders Bob Kierlin and Steve Slaggie, whose names are inseparable from the company’s nearly 50-year legacy, officially cut ties with management of the Fortune 500 company when they stepped down from the board of directors. Both having reached the mandatory retirement age of 75, according to the Winona Daily News. Of the company’s original Founding Five, only Mike Gostomski still sits on the board, and will reach retirement age next year. Kierlin, Slaggie, Gostomski, Jack Remick and Henry McConnon formed Fastenal in 1967 after the five friends pooled together $30,000 to open the first Fastenal store in Winona. The company recorded first-month sales of $157. Compare that to the more than $876 million in sales reported in the first quarter this year. Kierlin came up with the idea for what would become Fastenal while working in his father’s store in the 1950s, noticing that no single store in town could stock all of the parts customers needed for their projects.
10 • June 2014 • MN Valley Business
■ Enventis net income up 27 percent Enventis reported net income of $2.1 million for the first quarter ending March 31, an increase of 27 percent yearover-year. EBITDA totaled $12.1 million in the first quarter, an increase of 11 percent. Revenue totaled $44.2 million and was down 9 percent from first quarter 2013, primarily due to lower equipment sales, which were down 35 percent year-over-year. Services revenue, which accounts for 77 percent of the company’s revenue, increased 2 percent.
■ 3M aims at bigger acquisitions 3M says it wants to shop more big-ticket, less bargain-basement. Chief executive Inge Thulin reiterated that point recently as he released the company’s financial results, according to the StarTribune. Thulin said 3M can do deals that exceed $1 billion. “I think the biggest acquisition 3M had done ... is a $1 billion or so,” Thulin told analysts during 3M’s earnings call in late April. “In some spaces, in order for us to be more relevant, we maybe need to do slightly bigger than that as we move ahead.” The $30 billion conglomerate plans to spend anywhere between $5 billion and $10 billion on acquisitions between 2013 and 2017, a move that could extend 3M’s already vast reach and fortify its existing businesses. Some Wall Street analysts have speculated that 3M will pursue companies that can foster its security ID or its medical records software businesses, areas that are likely to see robust growth given recent security breaches and the increasing desire by the medical community to protect patient information.
■ Shareholders OK Enventis name HickoryTech shareholders made it official last month, ratifying the company’s new name as Enventis Corporation. The Mankato-based telecom has been operating under the Enventis name for months but needed shareholder approval to make it official. Later this week the company will begin trading its stock under the new NASDAQ ticker symbol “ENVE.” The 116-year old company began as Mankato Citizens Telephone Co. and later became HickoryTech. In 2006, HickoryTech acquired Enventis, a business-to-business provider, which more than doubled the reach of the company’s fiber network. In 2009, the company acquired CP Telecom to bolster its small- and medium-business services. Two years ago, Enventis acquired IdeaOne, a Fargo-based business and broadband provider.