Exchange rates and market weakness impact Bronto orders
By Maria Hadlow10 August 2010
Federal Signal, the parent company of Bronto Skylift has reported a 23% increase in orders across the company in the second quarter but the improvement does not extend to the Bronto business.
William H Osbourne, president and chief executive officer said, "We continued to see positive signs across many of our businesses in the quarter, but our near term expectations have been tempered by economic conditions in Europe. We saw a 23% increase in total company orders versus last year, including a 16% increase in our existing businesses. ......... However, as the European debt crisis unfolded we saw a significant drop in the order rate for some of our European based businesses. As an example Q2 orders for our Bronto Skylift business were 37% below Q1 orders."
Bronto is part of the Fire Rescue division, which, as a whole, experienced a drop in sales from Q2 2009 to Q2 2010 of $11.9 million (28.7%), and a drop in orders of $1.3 million (6%). Orders for the first half of the year are, however, still 22% ($9.6 million) ahead of last year although sales are lower by 26%.
Federal Signal attributes falling orders in Q2 to weakness in the European fire-lift market and an unfavourable currency impact of $1.6 million. Growth in year to date orders is primarily due to demand for the fire-lift product in Asia. "Demand for the industrial market continues to lag as a result of the global economic recession," says Federal.
The company reported that, "Net sales declined 28.7% in the second quarter primarily as a result of the lower volumes with the weaker industrial and rental markets and unfavourable currency impacts of $20 million."