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Dixie Chopper survives declining mower market: Zero-turning-radius pioneer rebounds with new units

November 20, 2006

This year was not kind to Dixie Chopper, the company near Greencastle known for making the "world's fastest lawn mower." Selling season is over, and Dixie Chopper sold 12,000 mowers, 3,000 fewer than forecasted.

But company founder Art Evans said 2006 wasn't as bad as rumored in the industry.

"We're not going bankrupt, we're not upside down financially, and we're not being bought out," Evans said.

Dixie Chopper laid off 10 to 15 employees, temporarily cut its workweek from 40 hours to 32, and put its second shift on hiatus in reaction to sales creeping up just 2 percent.

That's a far cry from the 25-percent-plus increases Dixie Chopper saw each of the last five years, a period of growth that pushed sales for the company to above $80 million.

"The price of gas sucked the air right out of the economy, and that really hurt us," said Evans, who founded the company in his parents' garage in 1980. "It became obvious we weren't going to make our 15,000-unit projection, so we cut production and had to cut some people. I don't make any apologies for keeping this company lean and agile."

Dixie Chopper missed its 2006 forecasts-which was a 40-percent sales increase-by a country mile, but Evans, 64, said he was happy just to come out ahead after a brutal spring selling season.

Sales at Dixie Chopper were off 25 percent in May and 50 percent in June, as businesses hit by high gas prices decided to delay capital expenditures and homeowners-a growing part of Dixie Chopper's business-tightened the belt on discretionary spending.

"The entire industry took a big hit this year," said David G. Cassidy, executive editor of Turf Magazine, an industry trade publication based in Vermont.

Walk-behind lawn mower sales dropped 6.1 percent this year and riding mowers declined 8.6 percent, according to the Outdoor Power Equipment Institute, a Virginia-based industry think tank.

At Dixie Chopper, sales rebounded after midyear because of falling gas prices and the weather.

"This summer was wetter than usual, and that pushed the grass growing season through August and September, and that probably helped our sales," Evans said.

But not all industry challenges will be alleviated by a rainy summer or falling gas prices, said Steve Schaefer, owner of Fort Wayne-based Schaefer Sales & Service.

"One of the biggest dangers facing this industry is imports, especially from China," said Schaefer, who deals several mower brands, including Dixie Chopper.

Japanese imports made by Honda and Suzuki are another threat, Schaefer said. Those manufacturers got into the mower business about a decade ago when the motorcycle industry began to slow.

"The Chinese are even more dangerous, because they're selling products for one-third of the cost of American brands," Schaefer said. "And the mass merchants like Lowe's and Home Depot are getting in and stepping all over us."

Providing a superior product and service is Dixie Chopper's best hope, said Bill Wiggam Jr., co-owner of Carmel Welding on South Range Line Road.

"Dixie Chopper is still known for its quality and mowing speed, and I think that will sustain the company's growth," said Wiggam, whose company derives 80 percent of its revenue from power equipment sales. "We're seeing growth in several of the lines we carry, but Dixie Chopper is growing faster than the rest right now. They still have a very loyal following."

Evans said production is picking up steam at his company's facilities dotting the countryside in Putnam County. Dixie Chopper plans to restart its second shift by month's end and start a third shift by year's end.

"Based on orders, we're expecting 20-percent sales growth in 2007," Evans said.

Dixie Chopper is unveiling two highend units next year.

The Xcaliber is the mother of all mowers, with a 74-inch-wide cut-the biggest in the industry. It will increase grass-mowing productivity 20 percent, Evans said, and will mow through just about anything short of an Amazon thicket. The $11,500 price is more than double what Dixie Chopper charges for its most basic riding mowers.

"I've been developing the unit for three years and testing it in the field for two years," Evans said. "When you get someone on it, you can't get them to ride anything else."

Dixie Chopper is also unveiling a propane unit. While propane is slightly more expensive than gas and more difficult to find, Evans said the mower is proving popular with parks officials, municipalities and more environmentally conscious companies.
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