16.03.2011

Bronto drops 32%

Finnish based truck mounted lift manufacturer Bronto, has reported a fall in revenues for 2010, but an improving trend in order intake.

The full year’s revenues were $108.8 million - down 32 percent on 2009, however the order intake during the same period increased by over six percent to $101.3 million. Operating income for the year fell 48 percent to $10 million.

The fourth quarter continued to decline with sales plunging 42 percent to $34 million, while order intake was roughly flat at $28.6 million. Operating income reflected that of the year as a whole being 55 percent lower than the same quarter in 2009.

Bronto's owner - Federal Signal posted revenues down over three percent to $726.5 million, while turning last year's pre-tax profit of $25.1 million into a loss this year of $88.4 million. At the same time it has reported that it is not in compliance with the interest coverage ratios of its credit agreements.

The company has agreed amendments to the agreements, which include new restrictions which will limit its ability to take on additional debt, make investments, pay dividends and engage in other transactions.

Bronto chief executive Dennis Martin said: "We recognised significant charges in the fourth quarter. Some will result in improved future profitability, and some were non-cash charges driven by accounting guidelines. With the fourth quarter now behind us, we are focused on delivering improved results as we move through 2011. Many of our industrial businesses performed well in 2010, with solid growth at good margins - while our municipal-focused businesses faced a challenging environment."

"My goal is to drive margin and cash flow improvement across all of the businesses in our portfolio. We have begun the process of segmenting, simplifying and improving our lower-margin businesses, while identifying ways to further enhance our better-performing businesses.”

“Orders for the fourth quarter increased 10 percent, versus the third quarter, with most of those gains coming in our longer lead-time businesses at Bronto and ESG. This is an encouraging sign for 2011 as these orders will be turned into higher sales and profits in the second quarter and beyond."

Vertikal Comment

While this is not a great result for Bronto the comparison was with a very strong year in 2009. The company’s profit is not at all bad given some of the challenges that the industry has faced in recent years.

Bronto has come through the recession exceptionally well compared to most. But will need to be lifting its market share in the industrial truck mounted sector. While looking to extend its market coverage for its fire fighting equipment. Yesterday’s announcement of a deal with Pierce could be one step in that direction.