sept 2015

IN THIS ISSUE:3 Observations from the Field4 Association News6 Always Hire the Best Employees Possible8 How to Get the Most Out of Your Sales Team10 Warranties11 Affordable Care Act Information

12 Is Fraud Impacting Your Dealership?14 Penton's EquipmentWatch Launches First Heavy Duty Residual Value Report16-17 Tax Tips19 Human Resources20 Buyer/Seller Beware: Inventory Transfers22 Noncompeting Agreements25-26 Equipment Industry News

ADVERTISER’S:2 Haylor, Freyer & Coon 5 Kioti7 Electronic Merchant Systems9 BallastStar13 Fastline Publications13 SouthWestern Association21 Diversified Financial27 Federated Insurance

DEALERNortheast

The Newsletter of NoRThEAsT EquipmENT DEALERs AssociATioN, iNc.SEPTEMBER 2015 c Vol. 17, No. 198www.ne-equip.com

NEDA Salutes our Supporting Advertisers. It is our pleasure to list the names of those advertisers who support NE Dealer each month. We trust their advertisement will be remembered when goods and services are required by you, our dealer members. It is good to do business with companies who are interested in doing business with you and your industry association.

EMV Is your business ready?

EMV® is a global standard for credit and debit payment cards based on chip card technology" taking its name from the card schemes Europay, MasterCard, and Visa -

the original card schemes that developed it.

Why EMV? EMV chips offer a higher degree of security throughout the transaction process, as opposed to the old magnetic-stripe cards, which could easily be compromised and duplicated. EMV promises to substantially reduce U.S. credit-card fraud. Currently, card-present fraud totals $6 billion each year and 66% of that can be attributed to counterfeit card fraud, which will be directly addressed by chip card technology, whether or not a PIN is used. Today, financial institutions typically bear the brunt of liability when it comes to fraudulent transactions. Effective October 1st, 2015 (the current federal dead-line), those issuers and merchants using non-EMV com-pliant devices that choose to accept transactions made with EMV-compliant cards assume liability for any and all transactions that are found to be fraudulent. Have questions? Contact EMS representative, Steve Miller at 585-285-9954 for more information.

To see if you qualify, call Patrick Burns at Haylor, Freyer & Coon 800-289-1501, Ext. 2148or fax a current declaration page to 315-684-9801 or call

Ralph Gaiss (Executive Director of NEDA) at 800-932-0607 for more information.You may also visit us at www.haylor.com

Northeast Dealer | AUGUST 2015 … 3

This publication is designed to provide accurate and authoritative information in regard to the subject matter co v ered. It is furnished with the understanding that the Northeast Equipment Dealers Association, Inc., the publisher, is not engaged in rendering legal, accounting or other professional service. Changes in the law duly render the information in this pub-lication invalid. Legal or other expert advice should be obtained from a competent professional. Some of the editorial material is copyrighted and may be reproduced only when permission is obtained from the publisher and the association.

Board of DirectorsOfficers

JOhn e. KOMArisKY, President / Past Pres. 2012Main & Pinckney Equip Inc. / Auburn, NY315-253-6269 - FAX 315-253-5110New Holland, Simplicity, Brillion, Bush Hog [email protected]

JOsh AheArn, First Vice President / Treasurer /NAEDA OPE Dealer CouncilAhearn Equipment, Inc. / Spencer, MA508-885-7085 • Fax: 508-885-7261Kubota, Cub Cadet, Stihl, NAPA [email protected]

rOBerT sPOhn, Second Vice President / Past President - 2005Sharon Springs Garage / Sharon Springs, NY518-284-2346 • Fax: 518-284-2774AGCO, White, Hesston, Gehl, Kubota, Allis, [email protected]

eD hines, Immediate Past President 2014, 2001Hines Equipment / Cresson, PA814-886-4183 • Fax: 814-886-8872Case IH, Gehl, New Idea, Cub [email protected]

BriAn cArPenTer, NAEDA DirectorChamplain Valley Equipment / Middlebury, VT802-388-4967 • Fax: 802-388-9656New Holland, Case IH, Kubota, [email protected]

rALPh GAiss, CEO and Executive Vice Pres.800-932-0607, Ext. [email protected]

DirecTOrs

scOTT BAir, Director ElectMountain View Equipment, Inc. / Plattsburgh, NY518-561-3682 • Fax: 518-561-3724John Deere AG/CCE, Claas, Kuhn Knight, Kverneland, Stihl, Husqvarna, Frontier, Servis, [email protected]

BrAD hersheYHoober, Inc. / McAlisterville, PA717-463-2191Case IH, JCB, [email protected]

nATe shATTUcK, Past President - 2010Devon Lane Farm Supply, Inc. / Belchertown, MA413-323-6336 • Fax: 413-323-5080Yanmar, Landini, Monosem, Ferris, Simplicity, Stihl, [email protected]

scOT L. sTAnTOn, Past President - 2003Stanton Equipment Inc. / East Windsor, CT860-623-8296 • Fax: 860-627-9832John Deere Ag., Knight, Athens, [email protected]

WenDeLL WALLDrOff, Past President - 2002Walldroff Farm Equip., Inc. / Watertown, NY315-788-1115 • Fax: 315-782-4852New Holland, Hesston, Woods, White-New Idea, AGCO, [email protected]

DAviD WArner, will be completing Jeff Bull's termWarner Tractor & Equipment Inc., Troy, PA570-297-2141Case, Case/IH, Takeuchi, LinkBelt, LandPride, Agr. & Construction [email protected]

NoRThEaST EquiPMENTDEalERS aSSociaTioN

128 Metropolitan Park Drive • Liverpool, NY 13088 800-932-0607 • www.ne-equip.com

Reports that I have received from dealers and manufacturers exhibiting at Ag Progress were overwhelmingly upbeat. That’s not to say that everyone was wearing rose colored glasses and singing Kumbaya: there are definitely significant challenges both in the current equipment market place and regarding long term concerns! Market Share (performance, data, calculations, etc.), Milk prices, a surplus

of late model Used Equipment (particularly High Horse Power Tractors and Combines), contracting labor pool (particularly Service Technicians), and the possibility of an Avian Flu outbreak were some of the most popular worries voiced. Increased demand for construction equipment, lack of quality used tractors in the 70-130 HP range, a correspondingly-stable demand for new trac-tors in the same HP category, and stable/increased demand for precision Ag (new and used) equipment to include support/service were some of the most popular “bright spots”. Of all the conversations I had at Ag Progress, the one that had the most impact on my view of “our” (the Northeast’s) piece of the equipment market place was with a “main-line” regional sales manager. I must say that I’m very grateful to have had the conversation and value the insights shared. As with most, the con-versation started out with polite “small talk”; however, the con-versation quickly moved on to an insightful discussion centered on Market Share, it’s impact on a dealerships volume bonus, and ulti-mately the dealership’s decision making processes (to include new wholegoods sales, used equipment valuation, stocking/ordering, owner equity/assets, UCC filings/data, dealer owned rental fleets/leasing companies). We covered a lot of ground with there being a healthy, forthright and vibrant discussion. That being said, the comment I least expected to hear, particularly from a sales man-ager, was that a dealership’s service department is quite often the single biggest limitation on a dealership’s ability to grow market share! “They simply don’t have the service (support) staff necessary to support an increase in sales.” No doubt you’ve heard the same from Mr. Johnny Walker (repeatedly), fellow 20 group members and facilitators! Add in the reality that a substantial number of “our” service staff will quickly be of retirement age, and one quickly comes to the conclusion that not only do we as dealers and an association have to enhance our ability to sell IRON, but

continued on page 4

Observationsfrom the FIELD

Tim WentzField Director717.576.6794

4 …”Committed to Building the Best Business Environment for the Northeast Equipment Dealer”

Observationscontinued from page 3

we had better figure out how to sell our industry as a career path with ample opportunity for growth, income and fulfillment quickly! Keep in mind, our most difficult “customers” will be the Guidance Counselors, Parents, Grandparents, and Government Officials/Policy Makers (particularly those in Labor and Industry). I encourage those that have not already read Mike Lessiter’s article “Vision for Tomorrow Requires Solutions Today” recounting his visit with Dave Dum and Don Hoover at Binkley & Hurst (B&H) to look at the article when they can.

Vision for Tomorrow Requires Solutions Today

REAP the benefits of membership and your PROFITS will follow!

Sarah Peavey Chosen for North American Equipment Dealers Association (NAEDA) Scholarship Award Sarah Peavey, of Vernon Center, NY, has been selected as a recipient of the NAEDA Equipment Dealers Foundation (EDF) Scholarship for the 2015-16 academic year. Peavey’s total scholarship of $2,000.00 includes matching funds from her spon-soring equipment dealership, White's Farm Supply, headquar-tered in Canastota, NY. Sarah Peavey will be attend-ing SUNY Cobleskill, studying Agricultural Business in the upcoming school year. "Sarah has been deeply involved in the Ag community in the region and we support her in her efforts to obtain an asso-ciated degree in Agri-Business," said Jeff White, Sales Manager, White’s Farm Supply. NAEDA Equipment Dealers Foundation scholarship funds are awarded to assist in the training, re-training, or advancement of employees or potential employees of equipment dealers in order to create a larger pool of qualified, commit-ted, long-term employees for those dealerships.


Gold Level Status

2015

WinnerGold Level Status

2014

Winner

to

transformyour

business.

powerThe

There’s a reason KIOTI® is one of the fastest growing tractor brands in North America. Our tractors and UTVs are setting the new standard for innovation, power and quality. Oh yeah, and no one takes better care of its dealers – 2014 and 2015 NAEDA Gold Status Winner for exceptionally high ratings among its dealer network.

Visit Kioti.com or call 1-877-GO-KIOTI to join the pack.Kioti.com

© 2015 KIOTI Tractor Company a Division of Daedong-USA, Inc.

2014 and 2015 Gold Level Status Presented to Kioti for attaining an outstanding level of achievement based on dealer ratings from the NAEDA Dealer/Manufacturer Relations Survey


This is part one of a two-part article. Part two will appear in October's NE Dealer.

Successful equipment dealers discovered long ago that their employees are the dealership’s most important assets! Successful dealers know that results are only achieved through and with their personnel. There is an old adage that advises successful equipment dealers to “always be looking for good people,” like the U.S. Marines, dealers should always look for great people to fill their ranks. Successful dealers and managers do just that. How many times in an interview have you found yourself saying: “We like you but we think you are over qualified for the position!” If that comment is sincere and not just a convenient way to end the interview, then why not attempt (right then and there) to interview the individual for an opportunity to fill a void within the dealership. Again, successful dealers realize that while they may not have a position open right now, they could have an opportunity or an opening tomorrow, next week or next month. Successful dealers and managers know that whether there are two, twenty or one hundred employees in the dealership, sooner or later there will be a need to hire someone new, upgrade an employee or reassign an employee. Personnel change is an equipment dealership’s one constant. Therefore, continually looking for individuals that one day might work for the dealership is just good business. No one needs to tell today’s equipment dealers the difficulty in hiring technicians. It is a task that we will continue to face well into the coming years. Bob Currie, a consultant to the equipment industry, predicts in his dealership model that shortly typical equipment dealerships will have 50% of their employees being technicians. Some dealers have already reached that point . . . Recently we talked with an exceptionally successful dealer in the east. This dealer currently employs in excess of 150 trained technicians and cannot find enough. He has four employees on staff whose major responsibility is to locate and hire additional technicians for his operations. Another dealer called recently to tell me that in order for him to achieve plans for the coming three years he requires 30 additional trained technicians. Yet another dealer started up his own employment agency for finding technicians.

Hiring technicians is a tough job, hiring qualified technicians is an even tougher job. Successful equipment dealers recognize that it is a task that must be constantly worked to achieve results. It is a task that requires planning and projecting into the future. Successful dealers do not wait until the shop is filled with work to hire technicians; this happens to too many dealers and is a lack of planning and particularly projecting what their labor sales will be one year, three years or even five years in advance. Successful equipment dealers try to maintain their technician staff during any business recession. I was working with a dealer in the mid-west whose technicians were unionized. He had a few more than fifty technicians and better than half of those fifty faced retirement three years down the road. I asked him whether or not he had plans to replace those 25-30 technicians when retirement came along, because I believed he was faced with a “mass exodus” in three years. More than likely pay increases would not maintain the group. They have a healthy pension and when retirement came along they would be gone. If you have a pension plan of any kind, recognize that when the employees’ retirement time comes up they are gone! Several years ago we were conducting seminars at a large construction equipment distributorship located in central Michigan. The corporate service manager was delayed. He was delayed because he had spent the morning counseling a group of eighth graders about the benefits open to them in becoming equipment technicians. This gentleman was going beyond what most would believe to be the limits of searching for technicians. This gentleman was enthusiastic, dedicated and committed to finding the best personnel available over a period of time to staff his service departments. His goal was to “home-grow” his technicians! The practice of always looking for talented personnel eases the burden of replacing personnel within the dealership. It provides a starting point in the search for qualified candidates. Your dealership should prepare in advance for hiring new personnel. Doing this will assist management in establishing an action attitude which will avoid the panic button approach to hiring. It will put the hiring task in reasonable perspective with its true importance to the dealership.

ALWAYS HIRE THEBEST EMPLOYEES POSSIBLE

ThE aFTER MaRKET SalES FoRcE

BY JOHN WALKERPresident, After Market Services Consulting Co., Inc. – 817 Stockbridge Drive, #399, Ft. Mill, SC 29708 • Cell 918-230-0791

www.amsconco.com

DON’T BE CAUGHTWITH OUTDATED EQUIPMENT

TheChargeCardGuys.com866.367.1818

credit & debit - processing - pos solutions - merchant funding - loyalty & giftcheck - mobile processing - wireless solutions

- Make sure you are EMV card, chip and PIN ready- All merchants must be updated by October 1st- Complimentary equipment provided- Complimentary annual PCI Insurance assistance


BY JOHN CHAPIN

How to Get the Most Out of youR SalES TEaM

Getting the most out of your sales team will most likely take some work and effort. That said, here’s a fairly straight-forward, step-by-step process that will maximize team sales and performance.

FiVE STEPS To MaxiMuM SalES TEaM PERFoRMaNcE

Step 1: Remove the roadblocks. Roadblocks include: paperwork, computer work, order entry, and all the other day-to-day items that don’t have your salespeople in front of a prospect or customer. These should all be delegated to highly capable, compe-tent people. The only activities that pay your salespeople, and ultimately you, are: prospecting, presenting, and clos-ing. In addition to those three activities, your salespeople should also be spending about 20% of their time build-ing relationships and following up with current customers, especially the top 20% that give you 80% of your business.

Step 2: Provide the right environment. Once you’ve removed task and activity roadblocks, you need to provide a supportive environment which is conducive to doing business. This is a professional envi-ronment of positive, proactive people which includes the tools and resources necessary to sell at the highest level possible. CRM tools, telephone systems, e-mail, technol-ogy, and all other support items should be in place and run smoothly and efficiently. The environment needs to be void of negativity, negative people, red tape, and any other obstacles that slow down or hinder business.

Step 3: Develop sales skills. Now that your people are spending the most time pos-sible in front of prospects and customers, the next step is to ensure they are as effective as possible when they are having those conversations. Your salespeople should have well-thought-out, scripted answers to everything they need to say in a prospect or client interaction. Their presentation, all answers to objections, closes, and any-thing else they might possibly need to say, should be well crafted and tight. They also need to have these committed to memory to the point where if someone were to wake them at 3 a.m., they’d be able to respond immediately. In order for this to happen, they each need their own person-al “play book” of scripts that they refer to and practice on a daily basis. You should also be role playing and practic-ing during sales meetings. Even when you walk by them in the office, ask them questions, give them objections, and test their preparedness. All of your salespeople need to be constantly im-proving and getting better at prospecting, presenting, overcoming objections, closing, follow up, and all other aspects of selling. Encourage them to read, listen to pro-grams, watch videos, and study everything they can get their hands on that relates to selling.

Step 4: help them find their motivation. One of your jobs as the leader of a sales organization is to know how to motivate your team. While external positive (money and prizes), and external negative (“do business or else”) methods can work temporarily, ideally you want to help them find their internal, lasting motiva-tion. Help them find this by focusing on the big picture. Why are they working there and what is the end game? What is their ultimate vision for themselves, their family, friends, and their life in general? What do they want and, more importantly, WHY do they want it? It’s simple, if they know where they are headed in life for themselves and friends and family, and they have powerful reasons WHY they must get there, they’ll get there, but it’s going to come down to having a powerful WHY. Once you know their vision and why they must achieve it, it’s your job to show them how their daily activities are getting them closer to the “vision” and how a lack of activity takes them in the other direction. Let them know you care about them, support them, and you want them to be successful. Finally, continue to tie daily activity to what they want most and remind them that they can have anything they want if they’re willing to work for it.

Step 5: Set standards and hold them accountable. This step is the one that is most often ignored by lead-ers of sales teams. It is imperative that you set standards for sales activity and hold everyone accountable. With newer salespeople you need to watch activity more closely until they are on track with good, sound habits. With your top performers and veterans, you can and should be more hands off. Each salesperson needs to have reasonable but challenging goals. They should be pushed out of their comfort zone but they have to believe they can do what you’re asking of them. again, you must hold each salesperson accountable. No one gets a buy here. If a salesperson is not hitting their numbers, you need to find out why. Is it a skill set or attitude issue? If it’s a skill set issue, do what you need to do to help them to develop the skills they need. If they can’t or won’t develop the necessary skills, you’re eventually going to need to let them go. If, on the other hand, they have the skills but are simply not doing the nec-essary activities, while you can start with the “nice” velvet-glove approach, you more than likely will need to use the iron fist and introduce the “fear” of losing their job if they don’t do what needs to be done. If at this point they con-tinue to miss their numbers and skirt the necessary work, put your foot down and move them out the door

John Chapin is a sales and motivational speaker and trainer. For his free newsletter, go to: www.completeselling.com John has over 27 years of sales experience as a number one sales rep and is the author of the 2010 sales book of the year: Sales Encyclopedia.


E-log Mandate on Schedule for September

By Vincent J. Dinino Jr., CDS, Emerson Express Co., Inc. The Electronic Logging Device (ELD) mandate is forecast to meet the Sept. 30 deadline. This is the final version and it will not have a public comment period. The regulations within the rule will likely take effect in late 2017. What does that mean and who is affected? It means that all vehicles engaged in commercial transportation with a GVW of 10,001 lbs. or more are obligated to record vehicle movement, GPS positioning and a driver's hours-of-service. It must also have the ability to upload, print and maintain back-office support. Additionally, a supply of blank paper logs must also be on board the vehicle in case there is an ELD failure. Whether your fleet is one vehicle or one thousand vehicles, the rules will apply. If your company or vehicle is not so equipped currently, it is time to do some very in-depth research on what type of ELDs best suit your fleet. As an industry we are now inundated daily with emails, and phone calls from suppliers coming to the market. When you choose, make sure that you will be compliant with the implemen-tation date and have future support on updates for the ongoing changes in hours-of-service and required technology.

EETc offers New Training Sets The Equipment & Engine Training Council (EETC) recent-ly added three new technician training systems to its online store offerings: an Electronic Fuel Injection Training Board and Basic Electrical Training Board developed by Briggs & Strat-ton, plus a Power Equipment Electrical Trainer system that allows trainers to construct live working circuits for trouble-shooting. For more information about these innovative training sys-tems, visit the Equipment & Engine Training Council website at http://www.eetc.org/. Power Equipment Trade


Not Just What You saY– ImplIed WarraNtIes are part of everY sale

WaRRaNTiES Most dealers are well versed in the terms of express warranties that attach to product sales. These warranties are usually extended by a manufacturer and given to a customer with a new equipment purchase. There are also warranties that are implied by law that can arise in the sale of equipment, both new and used. This article looks at how implied warranties are created and discusses some tips as to how they can be limited.

Product Description Perhaps the most basic warranty is that the customer is getting the equipment that he or she is supposed to be getting. In other words, the product description on a bill of sale is accurate. For this purpose, the more detailed the description, the better. Identifying the make, model and serial number is a good starting point. If the equipment is used, however, more information is prudent. A product description implies that the equipment is what is says it is and, more importantly, can fulfill the “ordinary purpose” for which it was intended. This is the UCC implied warranty of merchantability. For used equipment, something more than make and model should be included. For instance, the number of hours could limit the implied warranty – equipment with 5,000 hours on the meter might be expected to fulfill a different ordinary purpose than one with 100 hours. Likewise, a product description might describe the status of equipment. If equipment is being sold for rebuilding or to use for spare parts, that should be noted in the product description. After all, including “for use as spare parts” removes any doubt as to whether the equipment can function. It changes the “ordinary purpose” significantly.

Fitness For a Particular Purpose Another common UCC implied

warranty is the warranty of fitness for a particular purpose. The scenario is not uncommon. A customer comes in and says he or she is looking for a piece of equipment to perform a specific function, like a used tractor to bale hay using a specific baler that the customer already has. The customer asks whether you can match these needs with anything on the lot. Answering “I have just thing” triggers the warranty of fitness for a particular purpose: the dealer warrants that the equipment will fulfill that purpose and can be held liable for damages if the equipment fails. A simple way to limit the risk of this warranty is to have the customer specify what he or she is looking for. In this example, ask for a horsepower range, four or two wheel drive, new or used, age range or hour range, specific brand, etc. Generally, the more details specified by the customer, the less likely that this implied warranty applies. Finally, let customers inspect and test the equipment. A thorough inspection can go a long way toward establishing that the customer decided suitability of the equipment. Couple an inspection/demonstration with a statement like “Customer acknowledges that he or she is relying upon his or her own judgment to determine the suitability of the equipment selected.” That will go a long way toward eliminating this implied warranty.

Warranty of Title Customers expect a dealer to provide good title to equipment that a customer purchases and the UCC includes an implied warranty of title. Dealers, however, do not always have good title and this must be disclosed. For instance, some dealers that are unwilling to accept trade-in equipment are willing to sell their customers’ equipment as a favor. Because the

dealer lacks title, the dealer cannot convey title. The lack of title should be disclosed and the sale completed in the name of the customer. Disclaimers Dealers can try to manage the risk of implied warranties through the use of disclaimers, but they are not always effective. Terms such as “as is” or “with all faults” can be used to disclaim implied warranties. There are a couple of important caveats: (1) the equipment sold must still match the description; and (2) some states prohibit disclaiming warranties in consumer transactions (including transactions with family farmers). Consult your local attorney to determine whether consumer protection laws apply.

conclusion Warranties are extended in sales transactions even when there is no written warranty provided. The law implies warranties for the benefit of the purchaser and dealers must be aware of the warranties that are extended and ways to limit their application. Describe the equipment being sold accurately and make the customer provide detailed specifications to limit the risks from implied warranty claims.

Dave Shay and Shannon Cohorst Johnson are members of the Equipment Dealer Practice Group at Seigfreid Bingham, P.C. The firm also serves as legal counsel to the North American Equipment Dealers Association. Dave may be contacted at [email protected] or 816-265-4173 and Shannon may be contacted at [email protected] or 816-265-4139, www.seigfreidbingham.com. This article is intended to provide general recommendations and is not intended to be legal advice. You should always consult your attorney for advice unique to you and your business.

DAvID E. SHAY & SHANNON COHORST JOHNSON


hEalTh iNSuRaNcE ... aFFoRDaBlE caRE acT ... MEDical

OvERvIEW OF THEEMPLOYER SHARED RESPONSIBILITY PROvISIONS

The Affordable Care Act contains specific respon-sibilities for employers. The size and structure of your workforce – small, large, or part of a group – helps de-termine what applies to you. Employers with 50 or more full-time equivalent employees will need to file an an-nual information return reporting whether and what health insurance they offered employees. In addition, they are subject to the Employer Shared Responsibility provisions. All employers that are applicable large em-ployers are subject to the Employer Shared Responsibil-ity provisions, including federal, state, local, and Indian tribal government employers. An employer’s size is determined by the number of its employees. Generally, if your organization has 50 or more full-time or full-time equivalent employees, you will be considered a large employer. For purposes of this provision, a full-time employee is an individual em-ployed on average at least 30 hours of service per week. Under the Employer Shared Responsibility provisions, if an applicable large employer does not offer affordable health coverage that provides a minimum level of cover-age to their full-time employees and their dependents, the employer may be subject to an Employer Shared Re-sponsibility payment. They must make this payment if at least one of its full-time employees receives a premium tax credit for purchasing individual coverage through the Health Insurance Marketplace. The Employer Shared Responsibility provisions gen-erally are effective at the beginning of this year. Employ-ers will use information about the number of employees they have and those employees’ hours of service during 2014 to determine if they are an applicable large em-ployer for 2015. If you are a self-insured employer – that is, an em-ployer who sponsors self-insured group health plans – you are subject to the information reporting require-

ments for providers of minimum essential coverage whether or not you are an applicable large employer un-der the employer shared responsibility provisions. For more information, visit the employer shared responsibility page. For information about transition relief available for employers related to the shared re-sponsibility provision, visit IRS.gov/aca.

HOW THE HEALTH CARE LAW AFFECTS AggREgATED COMPANIES The Affordable Care Act applies an approach to common ownership that also applies for other tax and employee benefit purposes. This longstanding rule generally treats companies that have a common owner or similar relationship as a single employer. These are aggregated companies. The law combines these companies to determine whether they employ at least 50 full-time employees including full-time equivalents. If the combined employee total meets the thresh-old, then each separate company is an applicable large employer. Each company – even those that do not individually meet the threshold – is subject to the

employer shared responsibility provisions. These rules for combining related employers do not determine whether a particular company owes an employer shared responsibility payment or the amount of any payment. The IRS will determine pay-ments separately for each company. For more information about how the employer shared responsibility provisions may affect your com-pany, see our Questions and Answers on IRS.gov/aca. For details about how to determine if you are an applicable large employer, including the aggregation rules, see Determining If You Are an Applicable Large Employer.

Reporting Social Security Numbers to your health insurance company Recently, your health insurance company may have requested your Social Security number, as well as the Social Security numbers of your spouse and your qualifying dependents. Due to a recent reporting requirement, you will need to report qualifying health coverage (referred to as “minimum essential coverage”) on your yearly income tax return. Here are some common questions you may have re-garding this process.

Why has my health insurance company requested that i provide them with my Social Secu-rity number? Your health insurance company is required to provide Form 1095-B to you and the IRS. This form will contain the Social Security numbers of you, your spouse and any qual-ifying dependents. You will use this form to prepare your individual income tax return. Health insurance companies need time to program and test systems to ensure the new reporting requirement is done correctly and efficiently.

~ Submitted by Haylor, Freyer & Coon


iS FRauDIMPACTINg YOUR DEALERShiP?

Can you trust your employees? Better yet, should you trust your employees? According to Rex Collins, a senior manager at Som-erset CPAs in Indianapolis, who handles farm equip-ment dealerships for the firm, in the last 5 years, 80% of all dealership employees stole something. He says fraud costs the U.S. economy $400 billion each year. On the dealer level, one study concluded that dealers are los-ing $9 per employee per day from fraud. Over the course of the year, if you have 100 employees that can amount to $328,500, he says. “It is rampant, and it does hap-pen. It’s everything from little and insignificant up to very significant. It may be insignificant but it goes to character,” he says. Collins ref-erenced one dealership he worked with whose office manager had stolen over $10 million over the course of about 12 years. Fraud isn’t limited to the office manager though. If you look at your employees, Collins says 10% will never steal from you. “You can hand them your bank card and PIN and they’re never going to steal from you,” he says. Then there are about 10% who will always steal from you. In the middle, that 80% are the ones who could steal, and would steal if the opportunity were there. “I’m not telling you every-one is an innate thief, but if the situation is proper that 80% will take advantage of it.” Fraud is worse today than it was 5 years ago, ac-cording to a survey of certified fraud examiners. But, fraud detection is better. “In essence, the thieves are developing new ways to do this. We live in an elec-tronic world. The number one way internal theft is discovered is through internal controls and the second is through internal audits. A customer reporting something comes in at third and the employee admitting to it is fifth. Collins says the top reason fraud happens is poor controls. “We discover it if we have controls in place, and it occurs if we don’t have those controls in place. In essence, if you put the policies and proce-dures in place and monitor them and enforce them, you will prevent fraud. Those dealers who are run-ning a tight ship are running a tight ship for a reason

and know they are saving $9 a day per employee,” Collins explains. The second most common way fraud occurs is through a third-party collusion, which would be working with a vendor to send a false bill. For exam-

ple, a parts employee works with a vendor and receives a bill for a part the dealership never gets and the employee approves it for pay-ment and splits the money with the vendor. According to Collins, there are three legs to fraud. First there’s the pressure or incentive to com-mit the fraud, which could be as simple as being greedy. Then there’s the rationalizing the fraud and the third is the perceived op-portunity. That opportunity is the one dealers can control. So what can a dealer do to eliminate that opportunity? Col-lins says controlling cash is huge

and only one person should have access to each cash drawer and strict accountability should be main-tained. It’s also very important to have an office man-ager who really knows the business because as the saying goes, “you don’t know what you don’t know.” An office manager who really knows the business will be able to better recognize when something is askew. You need to have control over all the electronic bank-ing that goes on and account reconciliation needs to happen every month, he says. For payroll, Collins says the dealer should hand out the paychecks so he has the interaction with the employees and see every check. When it comes to hiring new employees, be sure to check their references and prior employment. Ask if the individual is available for rehire, if the answer is no, then you don’t hire them. “Why would you want somebody else’s dirty laundry,” Collins asks. So back to my original question, should you trust your employees? Collins quotes Ronald Reagan say-ing, “Trust, but verify. So I trust my employees, but I’m going to verify that they’re doing what they are supposed to be doing.”

~ Farm Equipment

“I’m not telling

you everyone is an

innate thief, but

if the situation is

proper that 80%

will take advantage

of it.”


DIRECT MAIL

Just as precision ag helps maximize profits for farmers, Fastline’s multi–layered precision marketing plans help

maximize profits for dealers.

By layering a mix of custom designed postcards or brochures distributed directly to your customers and/or our

qualified database, Fastline is laser focused to address specific challenges that your business faces.

Fastline has a marketing specialist in your area that can help you address your challenges.

We are PRECISIONMARKETING

Let us help you discover the precision solution that's right for your business.

Call 800-626-6409 to speak with a sales representative.

EQUIPMENT. FOUND. FAST.

When to call a CVA

Here are some of the events that trigger the need for a business valuation:

• Buy/Sell Agreements

• Succession Planning

• Mergers and Acquisitions

• Liquidation or Reorganization

• Estate and Gift Tax Planning

• Divorce Proceedings

To be sure you know the actual value of

your most important financial asset, contact

Western Association, your equipment and

hardware specialist.

buying • selling • merging

reorganizing

CERTIFIED BUSINESS VALUATIONSPhone 816.561.5323 Fax 816.561.1249

Toll Free 800-762-5616


Caterpillar, Deere, Komatsu, Case, Clark, Toyota, JCB, Massey Ferguson, New Holland and Kubota. "With this report, EquipmentWatch builds on its 50-year history as the leading valuation supplier in the construction and lift equipment markets," said Gar-rett Schemmel, managing director, EquipmentWatch. "Powered by the largest sales transaction database in the world, we process nearly $20 billion in transactions each month, supported by the industry's largest team of analysts. The Residual Value report is our launching point into a deeper set of solutions for those needing reliable, future asset valuations, including the equip-ment finance, inland marine insurance, OEM remarket-ing and contractor (equipment manager) segments to name a few." While the report covers 10 core equipment cate-gories, EquipmentWatch also tracks more than 1,400 types of equipment and can create custom reports based on its proprietary database and ValueTrend En-gine. The company also provides individualized con-sulting services throughout the industry, and publishes critical industry trends and reporting to its Equipment-Watch Intelligence site, EquipmentIntel.com. For more information, visit EquipmentWatch.com.

aBouT EquiPMENTWaTch EquipmentWatch is the trusted source for heavy equipment data. EquipmentWatch produces the lead-ing database information products for the construc-tion equipment industry and is the world leader in heavy construction research and serves more than 15,000 professional, high-volume users of construction and lift-truck data. Our online and print products are valuable tools in decisions surrounding the purchase, valuation, operation, and disposal of equipment. For nearly 50 years, EquipmentWatch has served contractors, equipment manufacturers, dealers, lend-ers and insurers, and government agencies involved in large infrastructure construction.

aBouT PENToN Penton drives performance for more than eighteen million professionals each and every day. They rely on us to deliver: Insights, information, data & workflow tools to inform critical business decisions; networking & community to engage them with industry peers & partners; and marketing services to advance their busi-ness performance &deliver ROI. Penton is a growth company with a track-record of strong performance and success and is backed by its co-owners: MidOcean Partners and U.S. Equity Part-ners II, an investment fund sponsored by Wasserstein & Co., LP.

Penton's EquipmentWatch, a provider of data, software and insights for the heavy equipment indus-try, has published its first Heavy Equipment Residual Value Report. The introductory 2015 report supplies the industry's first source of precise, data-driven residual values. Additionally, EquipmentWatch has also launched a new consultative service to provide residual values solutions for large scale customers, also a first in the industry. The premium report is included in the subscriptions of current EquipmentWatch Values subscribers, but is also purchasable by non-subscribers for $750. Resid-ual values for construction, lift truck and agricultural equipment are estimated out to five years, and repre-sent a percentage of current resale (FMV) and auction (FLV) value. The report also sets benchmarks and high-lights the top three models by sales in 10 product cat-egories (wheel loaders, crawler excavators, skid steers, crawler dozers, backhoes, pneumatic tire lift trucks,telescoping boom rough terrain lift trucks, balers, com-bines and mowers/shredders). Leading brands represented in the data include

Penton's EquipmentWatchlaunches First heavy Equipment

Residual Value Report

Reminder To update hR Policies Due To Same-Sex Marriage court Decision the immediate impact of the us supreme Court decision is the legalization of same-sex marriages in all states, regardless of where the marriage was performed. that means that all spousal privileges associated with employment must be extended to same-sex married couples. examples include: fmla: time off to care for a spouse with a serious medical condition and time off associated with a spouse's military deployment. spousal participation rights in group medical or other employer-provided fringe benefits plans, including the right to CoBra coverage in the event of divorce or other qualifying event that triggers spousal election rights. application of employer poli-cies with spouse-specific terms, such as bereavement or other time off policies. protections afforded by state or local law or employer-adopted policies that prohibit discrimination based on marital sta-tus. also, employers that have adopted policies extending benefits or other privileges to "domestic partners” may decide to re-visit the need for those policies in light of the Court's decision. In reviewing any existing policies concerning domestic partner benefits, be aware that some state and local governments have enacted laws mandat-ing equal treatment for domestic partner relationships.

~ porter Wright llp via maera Weekly Bytes


WhaT'S NEW iN iRB? Effective August 1, 2015 The International Registra-tion Bureau will be expanding payment options to Inter-national Registration Plan (IRP) customers. IRP customers who are making a payment for a transaction costing less than $5,000, will now have the ability to pay with uncer-tified funds. To utilize the option of paying with uncerti-fied funds your IRP account must be in "Good Standing". An IRP Account in Good Standing must meet the fol-lowing criteria:

• Have an established IRP account for a minimum period of 1 year

• Have a timely filing history with appropriate doc-umentation› Renewal application and required documenta-

tion received by the IRB office at least 45 days prior to the expiration date of your current registration.

• Have a timely payment history› Payments and all other required documenta-

tion must be received in the IRB office 20 days prior to the expiration date of your current registrations.

• Have not had any current suspensions/revoca-tions

• Is current and active with FMCSA All checks presented for payment must have the fol-lowing information pre-printed on the check:

• Name• Check Number• Account Number on Micro-Encoding Line• Routing Number• Made out to the Commissioner of Motor Vehicles

or Department of Motor Vehicles (DMV) The following checks are not accepted as payment for any Motor Vehicle transaction:

• Starter Check: Nothing is pre-printed on the check

• Name and Bank Account Number are typed or handwritten

• Blank Check: All information is handwritten• Foreign Currency: As all currency must be in US

currency• Third Party Checks

In the event a check is deemed insufficient funds:• A $35.00 bad check penalty is immediately as-

sessed• If payment is not received within 30 days, all ve-

hicles in the account will be suspended• The IRP account status will be set to "inactive",

allowing no further activity until funds are re-ceived

• Upon submission of payment for insufficient funds to the Department of Motor Vehicles, you are denied the ability to pay by uncertified funds for a minimum period of 5 years.

BY LEAH EITINg, MARkETINg SPECIALIST

STANDINGOUT

Be yourself; everyone else is already taken.Oscar Wilde

Such a simple quote, but also very powerful. At Diversified Financial, we don’t want to be like every other company out there, offering the same products with little differentiation between the two compa-nies. We strive to be unique and to offer products and services you can’t find anywhere else. So what makes Diversified stand out among the many equip-ment finance companies?

PERSoNal SERVicE When you submit an application to Diversified, we will not just send an email with a yes or no an-swer. You can expect a personal phone call from your assigned Relationship Manager (RM) who will go over any questions or concerns you may have about the application. What if you have questions outside of the applica-tion process regarding loans or leases? Of course, you can always call or email your RM, but Diversified also has Regional Sales Managers (RSM) that are out in the field ready to help with any questions you may have. Every region of the country is different, therefore the needs are different. Diversified has RSM’s assigned to every region of the continental United States and are just a phone call or email away. Personal service at its best.

FlExiBiliTy Every application is different and there is never going to be a one size fits all loan or lease products. Diversified offers a multitude of products that can be tailored to your individual needs. Our RM’s are highly qualified and have had experience with many com-plex loans and leases. Their goal is to make sure that you’re receiving the best product available and that it makes sense for you or for your customer. Here at Diversified, the relationships we have with our customers is the single most important aspect of our business. Give us a call and see for yourself that we are like no other equipment finance company.

~ Submitted by Diversified Financial

16 …”Committed to Building the Best Business Environment for the Northeast Equipment Dealer”16 …”Committed to Building the Best Business Environment for the Northeast Equipment Dealer”

TAX TIPS Under the Internal Revenue Code, the heavy vehi-cle use tax is not owed on a vehicle otherwise subject to the tax unless and until the vehicle travels 5,000 miles or more on the highway during the tax year, which runs from July through June. If the owner of such a vehicle reasonably expects its operations won't reach 5,000 miles, the owner may apply to IRS to have the HVUT suspended until the vehicle's travel reaches 5,000 miles or, if it never does, to suspend the tax for the whole year. A memorandum from the Chief Counsel's office of the Internal Revenue Service has now addressed the question of how these suspension rules apply to a used vehicle that was purchased early in the tax year, and on which the tax was under suspension for low mileage. Could the new owner continue to have the tax suspended? The catch is that the new owner did not know how many miles the vehicle traveled during the tax year prior to the point at which he bought it. Sorry, says the IRS, but without evidence of how much travel the vehicle actually did, the new owner will have to pay the tax immediately. For additional information, see IRS Chief Counsel Memo no. POSTN-146385-14, dated March 23, 2015, and released July 2015.

~State Laws Newsletter

HvUT Reminder The IRS has changed the rules for a taxpayer claim-ing an HVUT credit for a tax-paid vehicle that is sold during the tax year. As of right now, IRS will not grant the credit unless the applicant provides to it the name, address, and telephone number of the party to which the vehicle was sold.

~State Laws Newsletter

The Internal Revenue Service today reminded truckers and other owners of heavy highway vehicles that in most cases their next federal highway use tax return was due Monday, Aug. 31, 2015. The deadline generally applies to Form 2290 and the accompanying tax payment for the tax year that begins July 1, 2015, and ends June 30, 2016. Returns must be filed and tax payments made by Aug. 31 for vehicles used on the road during July. For vehicles first used after July, the deadline is the last day of the month following the month of first use.Though some taxpayers have the option of filing Form 2290 on paper, the IRS encourages all taxpayers to take advantage of the speed and convenience of filing this form electronically and paying any tax due electronically. Taxpayers reporting 25 or more vehi-cles must e-file. A list of IRS-approved e-file providers can be found on IRS.gov. The highway use tax applies to highway motor vehicles with a taxable gross weight of 55,000 pounds or more. This generally includes trucks, truck trac-tors and buses. Ordinarily, vans, pick-ups and panel trucks are not taxable because they fall below the 55,000-pound threshold. The tax of up to $550 per vehicle is based on weight, and a variety of special rules apply, explained in the instructions to Form 2290. For more information, visit the Trucking Tax Center.

IRS Rules on Suspension of HvUT

IRS Reminds Truckers: For Most, Highway Use Tax Return Was Due Aug. 31


An Alternative to COBRA With the rising cost of health care electing CoBra coverage may not always be the most cost effective option for former employees. Working together Neda and hf&C has a solution that will allow you to offer your former employees what could potentially be very similar coverage at a savings to them all while working with our partner team of experts at Gohealth. Call or email your trusted advisor(s) from haylor, freyer & Coon, Inc. below at 315-451-1500 -- sales: - daniel elliott - [email protected] for additional information on Compliance: Jim mcGarvey - [email protected] -- lauren marecek - [email protected] Neda /hf&C will be offering members a health care plan that will help you manage your health Insurance affordable Care act (aCa) compliance Irs regulations. health Insurance continues to be, by far, the most important employee benefit to your entire crew. Watch for our announcement!


TAX TIPS When you need tax help, the Irs has many online tools that are easy to use. You can e-file your tax return free, check your re-fund’s status or get your tax questions answered. use our tools on Irs.gov any time of day or night. here’s a list of popular self-help tools that millions have used to get free tax help:

• IRSFreeFile. You can use Irs free file to prepare and e-file your federal tax return for free. free file will do much of the work for you with brand-name tax software or fillable forms. If you still need to file your 2014 tax return, free file is available through oct. 15. the only way to use Irs free file is through the Irs website.

• Where’sMyRefund? Checking the status of your tax refund is easy when you use Where's my refund? You can also use this tool with the Irs2Go mobile app.

• DirectPay. use Irs direct pay to pay your tax bill or pay your estimated tax directly from your checking or savings account. direct pay is safe, easy and free. the tool walks you through five simple steps to pay your tax in one online session. You can also use direct pay with the Irs2Go mobile app.

• OnlinePaymentAgreement. If you can’t pay your taxes in full, apply for an online payment agreement. the direct debit payment plan option is a lower-cost hassle-free way to pay your tax each month.

• WithholdingCalculator. did you get a larger refund or owe more tax than you expected the last time you filed your tax return? If so, you may want to change the amount of tax withheld from your paycheck. the Withholding Calculator tool can help you determine if you need to give your employer a new form W-4, employee's With-holding allowance Certificate. the tool can also help you fill out the form. Give the new form to your employer to make the change.

• InteractiveTaxAssistant. If you need to know about 2014 taxes, you should try the Interactive tax assistant tool to get what you need. If you do not have qualifying health insurance coverage, the tool can help. for instance, you can find out if you must make an individual shared responsibility payment or if you are eligible for an exemption, when you file your income tax return. You can also use the tool to find out if you are eligible for the premium tax credit.

• IRSSelectCheck. If you want to deduct your gift to charity, the organization you give to must be qualified. usethe Irs select Check tool to see if a group is qualified.

• TaxMap. the Irs tax map gives you a single point to get tax law information by subject. It integrates your topic with related tax forms, instructions and publications into one research tool.

If you, your spouse or a dependent are heading off to college in the fall, some of your costs may save you money at tax time. You may be able to claim a tax credit on your federal tax return. Here are some key IRS tips that you should know about e-tax credits:

• american opportunity Tax credit. The AOTC is worth up to $2,500 per year for an eligible stu-dent. You may claim this credit only for the first four years of higher education. Forty percent of the AOTC is refundable. That means if you are eligible, you can get up to $1,000 of the credit as a refund, even if you do not owe any taxes.

• lifetime learning credit. The LLC is worth up to $2,000 on your tax return. There is no limit on the number of years that you can claim the LLC for an eligible student.

• one credit per student. You can claim only one type of education credit per student on your tax return each year. If more than one stu-dent qualifies for a credit in the same year, you can claim a different credit for each student. For instance, you can claim the AOTC for one stu-dent, and claim the LLC for the other.

• qualified expenses. You may use qualified expenses to figure your credit. These include the costs you pay for tuition, fees and other re-lated expenses for an eligible student. Refer to IRS.gov for more on the rules that apply to each credit.

• Eligible educational institutions. Eligible schools are those that offer education beyond high school. This includes most colleges and universities. Vocational schools or other post-secondary schools may also qualify. If you aren’t sure if your school is eligible:– Ask your school if it is an eligible educational

institution, or– See if your school is on the U.S. Department of

Education’s Accreditation database.continued on page 18

IRS Offers Easy-to-Use Online Tools

Back-to-School Education Tax Credits


aRE ThERE holES iN youR uMBRElla Policy? When was the last time you reviewed your umbrella limits? four years ago? five years? more? that’s probably four or five years too many. Why? Can you name anything that costs less than it did five years ago? probably not. that goes for legal costs and settlements too—they continue to increase exponentially.accidents happen. how they happen and the outcome typically defines the extent of the damages. for example, picture a slip and fall incident at your business, then imagine the claim difference between “just” a broken arm and a claim that involves a head injury resulting in traumatic brain damage. or, what might be the consequences if your employee driver was in a head-on collision with a single- occupant vehicle versus one carrying a family of four? It’s easy to grasp the difference in claim costs when comparing a serious accident to a less severe one. If you haven’t reviewed your umbrella limit recently, how confident are you it’s enough to cover claims? are you ready to pay for what it can’t? Insurance is intended to help protect you after catastrophic events, but it can do so only if you have purchased ad-equate limits. If it’s time for a policy review, don’t wait. Your provider should look at your umbrella limits; examine your exposures (large auto fleet, potentially hazardous product, etc.); and help you determine the business and per-sonal assets you could lose, social responsibil-ity, requirements of vendors or others you do business with, and any unique situations that should be taken into account when determin-ing your policy limit. If you don’t have an umbrella, adding one now may be more important than ever. ask your provider to explain the advantages and help you determine the limits you may need to protect the business you’ve worked so hard to build. as your association’s recommended insur-ance carrier, federated Insurance is also ready to help you make sure your umbrella policy provides adequate coverage.

Education Tax Creditscontinued from page 17

• Form 1098-T. In most cases, you should receive Form 1098-T, Tuition Statement, from your school by Feb. 1, 2016. This form re-ports your qualified expenses to the IRS and to you. The amounts shown on the form may be different than the amounts you actu-ally paid. That might happen because some of your related costs may not appear on the form. For instance, the cost of your text-books may not appear on the form. However, you still may be able to include those costs when you figure your credit. Don’t forget that you can only claim an education credit for the quali-fied expenses that you paid in that same tax year.

• Nonresident alien. If you are in the United States on an F-1 Student Visa, the tax rules generally treat you as a nonresident alien for federal tax purposes. To find out more about your F-1 Student Visa status, visit U.S. Immigration Support. To learn more about resident and nonresident alien status and restrictions on claiming the education credits, refer to Publication 519, U.S. Tax Guide for Aliens.

• income limits. These credits are subject to income limitations and may be reduced or eliminated, based on your income.

Visit IRS.gov and use the Interactive Tax Assistant tool to see if you are eligible to claim education credits. Visit the IRS Education Credits Web page to learn more. Also see Publication 970, Tax Benefits for Education. You can get it on IRS.gov/forms at any time.

TRAINYOUR

TRAINERForklift

OperatorSafety

Training&

Certification Courses

required every three years

If you do not have a certified trainerat your dealership or have mistakenly

let your certifications lapse ...

NEDA cAN hElp!

If you do not have a certified trainerat your dealership or have mistakenly

let your certifications lapse ...

NEDA cAN hElp!

NEDA staff provides one forklift safety training

& certification course at your dealership

for all staff personnel authorized to operate

your forklift(s)[must be over 18 years of age or older]

$400.00Plus Expenses for on-site training

Training Materials IncludedPrices Subject to Change

If you would like to schedule acErtIfIcAtIoN/

rEcErtIfIcAtIoNCall Kelli or Dave

at the Association, 800-932-0607


RESOURCESHuman

Have you ever felt your eyelids drooping or experi-enced a fleeting moment of daydreaming or inattention behind the wheel? Increasingly, fatigue and drowsiness are causing serious driving problems. While driver fa-tigue is normally associated with “long-haul” truck driv-ers who may operate tractor-trailers for full 10-hour days, the drivers at your business are also at risk. Consider your employees who make sales and service calls, and those who pick up and deliver equipment or supplies. Are they always well-rested and alert? Driver fatigue is a common cause of road crashes for the general population. Many times drivers in fatigue-related crashes admitted they had an inadequate amount of sleep.

how many hours are your employees driving? Research from the Motor Accidents Authority of NSW in Australia shows "Sixty-two percent of fatigue crashes or near-crashes occurred when drivers had driven less than two hours, often on everyday trips near home, where most driving is done.” While most driver fatigue crashes may occur after long hours behind the wheel, driving is not the only cause of fatigue. Work and sleep schedules have been associated with involvement in sleep-related crashes. A study by the Uni-versity of North Carolina, funded by the AAA Foundation for Traffic Safety, shows that drivers involved in crashes often reported difficulties in falling asleep or staying asleep at night and are more likely to rate the overall quality of their regular sleep as poor. According to the National Sleep Foundation's “Sleep in America” poll:

• 60% of adult drivers said they had driven a vehicle while feeling drowsy

• 37% had actually fallen asleep at the wheel The National Highway Traffic Safety Administration conservatively estimates that 100,000 police-reported crashes are the direct result of driver fatigue each year. This results in an estimated 1,550 deaths, 71,000 injuries, and $12.5 billion in monetary losses. These figures may be the tip of the iceberg, since currently it is difficult to attribute crashes to sleepiness.* When these sleep and fatigue-related statistics are coupled with driving, there truly is cause for alarm. The National Transportation Safety Board research suggests that fatigue and lack of sleep are the number one cause

Are Your Drivers Awake Behind the Wheel?of heavy truck crashes—a greater danger than either al-cohol or drugs. The occurrence of sleep-related crashes does relate to the known circadian variations in sleepiness. Accident rates peak in the mid-afternoon, when alertness dips. An even higher peak occurs in the overnight hours between 2:00 and 6:00 a.m. when alertness is at its lowest point of the day. Your drivers may be driving in the early morning hours, but are more likely to be driving during the mid-afternoon time span

are your drivers truly awake when they are behind the wheel? Alert drivers to these danger signs relating to drowsiness:

• Eyes closing or going out of focus• Trouble keeping your head up• Yawning nonstop• Wandering, disconnected thoughts• Not remembering driving the last few minutes• Drifting between lanes, tailgating, or missing

traffic signs• Jerking the vehicle back into the lane• Drifting off the road

If your drivers have any of the symptoms of drowsi-ness, they should pull off the road and find a place to take a short nap. If that is not possible, the driver should be encouraged to stop, walk around, and drink some caf-feine (the equivalent of two cups of coffee). Other coun-termeasures used by drowsy drivers are rolling down the windows, turning up the radio, and stopping to stretch—but these measures are unsupported by research as being effective. Defensive driving strategies involve being on the alert for other drivers who may be suffering from driver fatigue or sleepiness. Staying awake for 17 hours has a similar effect on human performance as having a blood alcohol level of .05 percent. Twenty-four hours without sleep corresponds to a blood alcohol level of .10 percent. The drivers at your business need to be aware of the symptoms of driver fatigue. Reminders to stay alert while driving and to be aware of the danger signals of drowsi-ness should be stressed. Safe driving demands full atten-tion. The actions of drivers whose eyelids are becoming heavy may not just determine if they stay awake, they may determine if they stay alive!

~Submitted by Federated Insurance Co.


Buyer / Seller Beware INveNtorY traNsfers: BuY-BaCk laWs do Not

alWaYs provIde the aNsWer

BY LANCE FORMWALT, SEIgFRIED BINgHAM, P.C.

Over the course of the last several years, our firm has had the privilege of representing many of you in the sale, purchase or mergers of dealerships. During that process, I’ve discovered that most dealers view the transfer of new inventory (including parts) as almost an afterthought. This view is based on the confidence dealers place in the buy-back laws championed by dealer associations over the last few decades. But that confidence is sometimes misplaced and dealers on both sides of a deal need to be aware of situations where the buyback laws will not come to their aid.

Benefits of buy-back laws in dealership transfers Before we talk about the exceptions, we need to remember that the buy-back laws generally bring certainty in dealership transfers:

• The price for the inventory returnable under the buyback law is often set to match the price required by the buyback law.

• The buy-back law can help resolve disagreements about inventory levels. If a buyer thinks inventory levels are too high (particularly with parts inventory), the seller has the option of using the buy-back law to return inventory to the manufacturer after closing for the same price.

• Most major manufacturers have well-defined processes relating to the transfer of inventory in transactions.

These processes have typically been refined to comply with the buy-back laws.

Don’tassumethatabuy-backlawwill take care of everything Even though buy-back laws provide the framework for successful

inventory transfers in transactions, the buy-back laws will not apply in certain situations, leading to surprises that can cost you a lot of money. The most common issues occur when the buyer doesn’t want to continue with a specific product line. In this situation, either the buyer or the seller will have responsibility for terminating the dealer agreement and getting paid for the inventory through the buy-back law. The party with responsibility can be left with the option of liquidating the unwanted inventory for pennies on the dollar if the buy-back law does not apply. Here is a list of some of the most common situations where I’ve seen this scenario occur:

Does the law apply if you terminate the dealer agreement? In a transfer situation, it is the dealer that terminates the dealer agreement. However, there are a handful of buy-back laws that only apply if the manufacturer terminates the dealer agreement. Other buy-back laws will not apply to dealer initiated terminations of a dealer agreement unless a certain volume threshold of purchases from that manufacturer is reached (typically meaning short lines).

how old is the inventory? Many buy-back laws only apply to new whole goods purchased within a certain time period before the dealer agreement is terminated. This type of limitation is often tied to a 24-36 month period in the case of agricultural, construction and outdoor power equipment and references to recent model years in the case of golf carts, ATVs, UTVs and similar vehicles.

Were you expected to maintain a stock of inventory? A number of buy-back laws only

require a manufacturer to repurchase inventory if the dealer agreed to maintain a stock of inventory as part of the relationship. This is a pretty easy requirement to satisfy with most dealer/ manufacturer relationships, but some parts distributors have taken the position that they will not comply with these laws because of this requirement.

is the category of inventory covered by the buy-back law? Buy-back laws don’t always cover every type of equipment you sell. The most common examples of issues relate to ATVs and UTVs. Certain manufacturers of these products look very carefully at the buy-back laws and search for reasons to avoid complying with them, especially if the law does not specifically mention ATVs or UTVs. Buy-back laws are of great value to dealers and help facilitate transactions by removing most of the uncertainty out of the transfer of new inventory. However, buy-back laws almost always have exceptions and it is important for you to take these into account when buying or selling a dealership to avoid unexpected costs.

Lance Formwalt is a member of the Equipment Dealer Practice Group at Seigfreid Bingham, P.C. The firm also serves as legal counsel to the Western Equipment Dealers Association. Lance may be contacted at [email protected] or 816-265-4106. Also see www.seigfreidbingham.com. This article is intended to provide general recommendations and is not intended to be legal advice. You should always consult your attorney for advice unique to you and your business.


Equipment dealers have diff erent needs when it comes to retail fi nancing.

Equipment dealersare like fi ngerprints…no two are alike.

Diversifi ed Financial’s retail fi nancing,leasing and insurance programs provide value and benefi ts that meet the unique needs of every equipment dealer.

Discover the diff erence today!

• No Recourse, No Reserves - Diversifi ed funds 100% of amount fi nanced with no contingent liabilities

• Increased Profi t Margins - Using origination fees

• Low, Competitive Interest Rates - Fixed rates36-72 months

• User-Friendly Programs - Same rates for new and used equipment. Leases available.

• Sales Bonuses - Paid directly to sales personnel

• Quick Dealer Settlements - You get your money faster with Diversifi ed (via ACH or overnight)

• Physical Damage Insurance - One-stop fi nancing and insurance

Diversifi edFinancialPH. 800-648-8026www.dfsfarm.com


The undersigned understands and agrees that the Company has a vital interest in retaining the loyalty, fidelity and continued employment and association of its employees and customers. He/she warrants, cov-enants and agrees that while employed by the Com-pany and for a period of one (1) year following termi-nation of his/her employment with the Company for any reason, he/she shall not, directly or indirectly, (i) induce, solicit, offer or recruit or attempt to induce, solicit, offer or recruit any registered representative of the Company to apply for or accept employment with any other person or entity engaged in the securi-ties business, or which is in any manner in competition with the Company; or (ii) induce, solicit, or attempt to induce or solicit any customer of the Company to move his, her or its account out of the Company. “Notwithstanding any provision set forth in this paragraph, upon termination of employment with the Company, the Employee may contact, solicit or do business with any customers whose accounts he/she serviced at any time prior to employment at the Com-pany. To avoid any misunderstanding regarding the identification of such customers, the Employee agrees to provide the Company a written list of such custom-ers within ten (10) days of his/her date of hire.”

WhaT'S aT iSSuE? Citizens who disclose state secrets to foreign gov-ernments are typically jailed. But ex-employees who share your hard-won trade secrets with competitors—or go into competition with you themselves—can be hard to curb. Given the potential financial stakes, there’s good reason for the growing interest among employers in asking key employees to sign noncom-peting agreements. These agreements are designed to ensure that moonlighting or former employees won’t use what you’ve taught them to compete with you. The agree-ments often include nondisclosure clauses. Employers hope that by adding them to their policy arsenals, and by having them signed as a condition of employment (or continued employment), they’ll protect them-selves. Trouble is, such agreements are easier signed than enforced, for a number of reasons.

ENFoRcEMENT PRoBlEMS: • laws vary from state to state. Many courts

and legislatures consider noncompetes a violation of public policy because they restrain competition and limit the individual’s right to earn a living. California is perhaps the most stringent; it will

enforce noncompetes only against a company’s shareholders—nonshareholder employees can’t be held to them.

• The agreement or its terms may be judged unreasonable. You have to go to court (or arbitration) to enforce a noncompeting agree-ment. Thus, it’s up to the judge or arbitrator to decide whether it’s reasonable. If you can’t show the agreement is necessary to protect a legitimate business interest, such as a trade secret, the judge may consider it a restraint of trade and throw out your case. In New York, for example, you’ll need to prove that (1) the agreement is necessary to prevent disclosure of trade secrets; (2) the depart-ing individual is unique, probably impossible to replace and, if working for a competitor, likely to disclose trade secrets; and (3) the terms and scope of the agreement meet a test of reasonableness. In other words, you can’t make an agreement so restrictive that your ex-employee can’t earn a living.

• you offered no quid pro quo. The agreement isn’t legally binding unless the employer offers the employee something in return for signing it.

• Enforcement is costly. You’ll probably have to sue the ex-employee, a move that entails major expenditures of time and money. But if you don’t fight breaches of contract, your noncompetes will be meaningless.

• Firing the employee may nullify the agree-ment. A court ruled against an employer who tried to enforce a noncompeting agreement against a salesperson that it fired for poor per-formance. The judges said that by firing him, the company “deems the employee worthless.” Thus, they reasoned, there couldn’t be any harm if he went to work for a rival. However, they ruled the agreement’s nondisclosure provisions were still enforceable.

Policy coNSiDERaTioNS: If, despite the foregoing, you’d still like to draw up a noncompeting agreement for your key employ-ees to sign (or continue using your present agree-ment), carefully consider the following issues: State law: Does it restrict noncompeting agreements? Enforcement: Is your state judiciary gener-ally friendly or hostile toward noncompeting agree-ments?

continued on page 24

SAMPLE POLICY

NoNcoMPETiNg agREEMENTS


CREDIT CARD PROgRAMEMS (ELECTRONIC MERCHANT SYSTEMS)Steven Miller866-367-1818, direct 585-285-9954f: [email protected] FINANCIALYour Financing ChoiceTerry Boer at 800-648-8026 [email protected]

FEDERATED INSURANCE COMPANYproperty & Casualty Insurance (8 states except vt), health Insurance (pa only)Workers' Comp (all states except NY)Matt Johnson at 800-241-4925, C: 606-923-6350fax [email protected] • www.federatedinsurance.com

HAYLOR, FREYER & COON, INC.health Insurance program Lauren Marecek mgr., Group Benefit Consulting315-703-3215/800-289-1501, [email protected] • www.haylor.com Jim Mcgarvey supervisor Benefit Consulting 315 703 3239 • [email protected]

physical damage Insurance (hf&C, Inc.),rental / leasing equipmentPatrick Burns at 800-289-1501, ext. [email protected] • www.haylor.comWorkers' Comp (return dividend program for NY dealers only)property & Casualty Insurance for vt Patrick Burns at 800-289-1501, ext. [email protected] • www.haylor.com

LEgAL ASSISTANCE – FREE LIMITED Dave Shay at 816-421-4460Fax: 816-474-3447 • [email protected]

NEDA ON-LINE CAMPUSDave Close at 800-932-0607 x [email protected]

OSHA WORkPLACE SAFETY COMPLIANCE PROg.Dave Close at 1-800-932-0607 ext. [email protected]

PARTNERSHIP FREIgHT PROgRAMYellow freight, ups freight, fedex Groundkeith korhely at 800-599-2902 x [email protected]

POWER PRO ACCREDITED DEALERJoe Dykes at [email protected]

REgULATORY CONSULTANTS, INC.CERTIFIED SPCC PLANDave Close at 800-932-0607 x 235Robb Roesch at 800-888-9596 x 222www.rci-safety.com

TELEPHONE DISCOUNT PROgRAMWorldNet solutions, Inc.866-532-7653 mention Naeda

Ralph gaiss, executive vp/Ceo800-932-0607 x [email protected]

Dave Close, operations manager800-932-0607 x [email protected]

kelli Neider, administrative assistant800-932-0607 x [email protected] (Business forms)

Tim Wentz, field services directorC: 717-576-6794, p: 717-258-1450f: [email protected]

Scott grigor, NY farm show manager800-932-0607, ext. [email protected]

Art Smith, Consultant/editor, Ne dealer717-258-8476, f: [email protected]

CHARTER SOFTWARE BUSINESS SYSTEMSMelissa Amen303-932-6875 - ext. 219www.chartersoftware.com

CERTIFIED BUSINESS vALUATIONSWestern financial Consulting, p.C.Curtis A. kleoppel / Bob Charbonneau816-561-5323 x 116 & 117fax: 816-561-1249 or 800-762-5616

For Service / SPoNSoreD ProGrAMS,cAll Your ASSociAtioN

800-932-0607 • 315-457-0314 • Fax: 315-451-3548 • www.ne-equip.com

Contact NEDA today to get your copy of the:EquipmENt BluE Book, CompACt trACtor GuiDE,FArm EquipmENt GuiDE, ANtiquE trACtor GuiDE

or CoNstruCtioN EquipmENt GuiDE.

SPECIALPRICEFORDEALERS!

NortheastEquipmentDealersAssociationEstablished 1901

Committed to Building The Best BusinessEnvironment for Northeast Equipment Dealers

Call NEDA at 800-932-0607 and ask for Kelli or email [email protected]

for individual prices or to purchaseany of these guides.


if disaster strikes …

employee something in return. In many states, that “something” for a new hire may be the job itself. For established employees, you’ll probably have to offer a bonus or promotion. Again, consult with your lawyer to ensure that your quid pro quo passes muster under your state’s laws. clarity: Is the agreement written in plain Eng-lish? The less complex the wording, the less room for argument or challenge by the employee. Judicial discretion: Does your agreement con-tain a “blue-pencil provision”: that is, a provision that allows the judge to change some of the terms? If not, the judge may have to invalidate the entire agree-ment if she finds even one term unreasonable. Tailoring: Owing to widely differing state laws, judicial preferences and the like, you’ll need to tai-lor any off-the-shelf agreements to your particular situation. So plan to consult long and hard with your attorney. This is one area in which any agreement is definitely not better than none at all. Noncompeting agreements can help protect your business from unscrupulous ex-employees—but only in certain states and only if they are carefully drawn. Work with an attorney who is familiar with the laws of your state and the general tenor of applicable judi-cial rulings.

Noncompeting Agreements continued from page 22

Business necessity: Does your company have legitimate trade secrets to protect? unique individual: Can you demonstrate that the individual’s contribution is such that you can’t replace him or that the loss of his services will cause your business irreparable injury? Merely being a key or senior executive won’t necessarily cut it. limitations: Does your agreement, or one you are considering, include time and geographic limita-tions? The courts not only favor free trade but also try to prevent ex-employees from suffering undue hard-ship in marketing their skills. Thus, enforceable agree-ments include time frames (typically with a maximum of one to two years) and geographic restrictions suit-ed both to the scope of the ex-employee’s job and to your business operations and industry. Geographical limits should reflect only the areas in which you oper-ate or reasonably expect to operate. Generally, the more restrictive the agreement, the tougher it will be to enforce because individuals must be given a reasonable opportunity to pursue a liveli-hood in their chosen fields. However, the courts do allow more severe restrictions on top managers than on lower-level employees. quid pro quo: What do you offer the employee in return for signing the agreement? The court will consider it coerced, thus null, if you fail to give the

In recent years we’ve experienced a chain of disasters in the United States—record-breaking hurricanes, severe winter storms, floods, wildfires, and landslides. Natural disasters are the leading cause of property dam-age and the main reason we buy property insurance. While many property insurance policies include the same provisions and similar coverage, the value of your policy depends on the insurance company you choose. In your industry, your customers may not know the true value of their purchased equipment until it needs ser-vice, repair, or replacement. Customers can buy the same equipment from different dealerships, but they may not get the same value. An equipment dealer who continually under-prices stock can’t afford to provide the same level of service as a dealer with a better profit margin. It’s the same with insurance. You often don’t realize the value of your insurance program until you experience a claim and learn first-hand how your insurance company lives up to its promises. Then you find out whether their risk management assistance helped you minimize the loss, whether they are prepared to handle large-scale disasters and whether their claims department provides fast and fair service.

…Federated personnel prepare to help When disaster strikes, many Federated employees are involved and ready to shift workloads to help with the possible large volume of claims.

• Marketers try to contact clients in advance to let them know how to report claims and remind them to do so as soon as possible.

• Field Services risk consultants are ready to offer ad-vice on minimizing damage.

• Underwriters help identify the exposures and an-swer questions about policies and coverage.

• Information Services employees work long hours to extend mainframe time and process claims informa-tion.

• Home Office claims staff monitors claims volume, positions field staff where needed, and assists with coverage questions. They also handle the reporting required by the states after a catastrophe.

When storm seasons approach, make sure you know the value of your insurance protection. Also, take advan-tage of any risk management assistance your insurer of-fers that may help you reduce your losses if disaster should strike.

~ Submitted by Federated Ins. Co.


Farm Balance sheets Remain solid, But is That Good Enough? It would seem that the lackluster pace of U.S. farmers’ spending for big ticket items, most notably equipment, during the first half of the year will continue into the second six months of 2015. Nonetheless, USDA is reporting that farmers are expected to continue to maintain solid balance sheets, which is a good sign, for the most part. While overall farmland values, which remain the asset anchor of producers’ balance sheets and give farmers their strongest leverage for borrowing, have held fairly steady, bankers are noting some regional weaknesses. This together with high farm input and cash rent costs could signal another sluggish year for ag machinery sales in 2016. In other words, strong balance sheets may not be enough to keep farmers profitable in the near-term. In other words, maintaining a strong balance sheet is important for the longer-term health of the industry. But in the short term, “profit and loss and cashflow dynamics” are the metrics that lenders are watching closely. In addition to commodity prices, input costs, particularly cash rents will bear close scrutiny.

~ AEI

EquiPMENT iNDuSTRy NEWS

sluggish Ag Equipment sales continue in First half 2015 Headwinds created by lower commodity prices and a strong U.S. dollar continued to challenge ag equipment manufacturers through the first half of this year. This was reflected in their quarterly earning reports that were issued over the past few weeks. While industry outlook picked up when corn crossed the $4 per bushel line last month and soybeans topped $10 per bushel, USDA’s Aug. 12 World Agricultural Supply and Demand Estimates report, brought that sentiment to a screeching halt. In that report, the ag agency took the indus¬try off guard as it unexpectedly increased corn production for 2015-16 by nearly 3% more than pre-report expectations.

~ AEI

Ag Equipment Intelligence/August/2015 7

North American large ag equipment sales declines continued in July. 4WD tractors lead the dropoff with sales down 30.1% year-over-year, followed by row-crop tractors at down 22.9% and combines sales declined 22% vs. the same period last year, accord-ing to the latest unit sales figures released by the Assn. of Equipment Manufacturers on Aug. 11.

Mid-range tractor sales provided some good news at up 19.6% fol-lowing a 1.1% increase the previous month, while compact tractor sales had an impressive 27.5% year-over-year increase.

U.S. and Canada large tractor and combine sales decreased 23% year-over-year in July, down from a 19% drop in June. U.S. sales were down 27%, while Canadian sales were down just 3%.

Combine sales declined by 22%, which was an improvement from the nearly 40% decrease reported in June. U.S. combine inventories were 28.8% lower year-over-year in June vs. down 30.8% in May. July is typically an above-average month for combine sales, accounting for 10.4% of annual sales over the last 5 years.

Row-crop tractor sales posted a 22.9% decline in July, deteriorating from the 11.8% decrease observed in June. U.S. row-crop tractor inven-tories were down 10.3% in June vs. a 0.3% decrease in May. July is typically a slightly above-average month for row-crop tractor sales, accounting for 8.9% of annual sales over the last 5 years.

4WD tractor sales experienced a 30.1% year-over-year decline in July, down from the 26.5% decrease expe-rienced in June. U.S. dealer invento-ries of 4WD tractors decreased 37% in June.

Mid-range tractor sales demon-strated some improvement at up 19.6% year-over-year compared to up 1.1% last month.

Compact tractor sales, mean-while, improved as well at up 27.5% year-over-year, up from the 2.7% increase last month.

Equipment Sales Slump Continues

JULY U.S. UNIT RETAIL SALES

Equipment July 2015

July 2014

Percent Change

YTD 2015

YTD 2014

Percent Change

June 2015 Field

Inventory

Farm Wheel Tractors-2WD

Under 40 HP 13,040 9,954 31.0 75,292 69,458 8.4 67,424

40-100 HP 6,534 5,379 21.5 35,161 34,364 2.3 32,293

100 HP Plus 2,100 2,768 –24.1 14,964 18,401 –18.7 10,575

Total-2WD 21,674 18,101 19.7 125,417 122,223 2.6 110,292

Total-4WD 232 351 –33.9 1,798 3,178 –43.4 1,061

Total Tractors 21,906 18,452 18.7 127,215 125,401 1.4 111,353

SP Combines 511 777 –34.2 2,840 4,772 –40.5 1,411

JULY CANADIAN UNIT RETAIL SALES

Equipment July 2015

July2014

Percent Change

YTD 2015

YTD 2014

Percent Change

June 2015 Field

Inventory

Farm Wheel Tractors-2WD

Under 40 HP 1,302 1,291 0.9 7,910 8,212 –3.7 8,862

40-100 HP 563 555 1.4 3,132 3,561 –12.0 4,291

100 HP Plus 373 438 –14.8 2,670 3,099 –13.8 2,431

Total-2WD 2,238 2,284 –2.0 13,712 14,872 –7.8 15,584

Total-4WD 40 38 5.3 530 699 –24.2 355

Total Tractors 2,278 2,322 –1.9 14,242 15,571 –8.5 15,939

SP Combines 296 257 15.2 940 1,013 –7.2 865

— Assn. of Equipment Manufacturers

U.S. UNIT RETAIL SALES OF2-4 WHEEL DRIVE TRACTORS & COMBINES

JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC

30,000

28,000

26,000

24,000

22,000

20,000

18,000

16,000

14,000

12,000

10,000

8,000

6,000

2015 5 year average

10 Ag Equipment Intelligence/August/2015

CNH Industrial 2Q15 Ag Equipment Net Sales Decline 32%

CNH Industrial plans to continue to adjust production as it enters the second half of 2015 after second quarter revenues were reported at down 22% vs. the same period in 2014 in its earnings report on July 29. Ag equipment net sales were also down nearly 32% compared to the second quarter of 2014.

CNHI says its key product segments in NAFTA for ag equipment, over 140 horsepower tractors, as well as com-bines, were down 31%, while under 40 horsepower trac-tors were up 5% and 40-100 horsepower tractors were up 2% in the region for the quarter. EMEA markets were down 7% for tractors and 9% for combines. The LATAM region saw the steepest declines with tractors down 26% and combines down 19%. APAC markets saw 3% decreases for tractors and 17% for combines.

Unit production for ag equipment in the second quarter was 14% below retail sales and the company says finished goods inventory for CNHI and its dealers has declined $700 million year-over-year. The company reports that cur-rent production levels are expected to further drive down inventory levels for the rest of 2015.

CNHI’s revenue outlook for 2015 remains unchanged at $26-$27 billion.

Trimble 2Q15 Total Revenues Down 9%, Ag Field Solutions Slide 24%

Trimble reported its earnings results for the second quar-ter on Aug. 4. Total revenues were down 9% vs. the same period last year. The company’s Field Solutions segment, which includes its ag products and services, saw a 24% decrease in revenues this quarter.

Commenting on Trimble’s performance, president and CEO Steven Berglund said, “Our agriculture revenue was pressured in the quarter, particularly because of continued performance issues among the OEMs.

“Although, this OEM performance shortfall caused us to add more conservatism to the third quarter estimate, we continue to model more stability late in the year and contin-ue to see flat to potentially up slightly year-to-year revenues,

starting in the fourth quarter. The volatility in the ag market remains unprecedented and this outlook represents our best effort view of it.”

Looking ahead to 2016, Berglund says Trimble appears to be outperforming other suppliers in the market. The compa-ny expects ag related revenues to be flat in 2016. Berglund says this should allow them to begin to demonstrate the impact of the new emerging product categories and avoid being a drag on the rest of the company.

Alamo’s Ag Division Holding Up Better Than Industry; Sales Slip Only 1%

Alamo Group issued its second quarter earnings on Aug. 5. The company reported net sales of $215.7 mil-lion, a 4% increase from the same period of 2014. These results include the effect of the acquisition of Specialized Industries, completed in May 2014, and Herder in Brazil, completed in March 2015. These two acquisitions added $16 million in sales in the second quarter, but also took $9.8 million in currency translation effect.

Alamo’s Agricultural Division reported net sales of $53 million in the second quarter, a 1% decrease year-over-year. While the company expects the ag market to remain soft for the rest of 2015, it says, the division’s results are hold-ing up much better than the overall agricultural market.

Ron Robinson, Alamo Group’s president and CEO, said in the earnings report, “While we did not have as much growth in the second quarter as we had hoped, all in all we felt it was a good quarter given the circumstances that include the weak agricultural conditions.”

Looking ahead, Robinson said in the earnings report, “The company in total ended the quarter with a record backlog of over $162 million. This healthy level is above both last quarter and the same period last year. This, plus our margin improvement and continued stability in our various sectors, gives us confidence in the outlook for the

CNH Industrial 2Q 2015 Selected Financial Information

(in millions $)

2Q 2015 2Q 2014 % Change

Net Sales 6,634 8,564 −22.5%

Total Revenue 6,958 8,911 −21.9%

Segment Revenue

Ag Equipment 3,035 4,436 −31.6%

Const. Equipment 740 931 −20.5%

Com. Vehicles 2,470 2,704 −8.7%

Powertrain 947 1,250 −24.2%

Net Income 122 358 −65.9%

Source: company report

Trimble 2Q15 Selected Financial Information(in millions $)

2Q 2015 2Q 2014First Two Quarters

2015

First Two Quarters

2014

Revenues

Product 394.6 468.9 795.2 911.5

Service 105.7 100.1 206.6 193.4

Subscription 85.5 73.2 166.6 142.0

Total Revenues 585.8 642.2 1,168.4 1,246.9

Gross Margin 303.9 354.6 611.1 681.5

Gross Margin (%) 51.9% 55.2% 52.3% 54.7%

Operating Income 36.0 97.2 75.5 172.2

Net Income 25.8 78.1 59.8 146.2

2015 2014 % Change

Field Solutions $87.1 $114.4 −24%

Total Revenues $585.8 $642.2 −9%


cNh industrial 2q15 Ag Equipment Net sales Decline 32% CNH Industrial plans to continue to adjust production as it enters the second half of 2015 after second quarter revenues were reported at down 22% vs. the same period in 2014 in its earnings report on July 29. Ag equipment net sales were also down nearly 32% compared to the second quarter of 2014. CNHI says its key product segments in NAFTA for ag equipment, over 140 horsepower tractors, as well as combines, were down 31%, while under 40 horsepower tractors were up 5% and 40-100 horsepower tractors were up 2% in the region for the quarter. EMEA markets were down 7% for tractors and 9% for combines. The LATAM region saw the steepest declines with tractors down 26% and combines down 19%. APAC markets saw 3% decreases for tractors and 17% for combines.

~ AEI


With No pick up in sight, AGco to continue Reducing production AGCO Corp. isn’t looking for a turnaround any time soon in the sales of its farm equipment, so the company says it will continue its efforts to control expenses. It says it will do this by continuing planned production cutbacks and minimizing product inventory. At the same time, AGCO management says it is also planning a price hike of 1.5-2% to offset costs associated with the introduction of its new Tier 4 engines. “Last year, we saw pricing soften on used equipment and this year it could be down 10-15%, depending on the market and which products we’re looking at,” Greg Peterson, director of investor relations for AGCO, said in a call to analysts. “It’s been our major focus to support our dealers as they continue to work down their inventory levels, both new and used. As we look at 2015 compared to 2014, our dealers’ new and used equipment inventory is down to high single digits or low double digits, so, we are making progress.”

~ AEI

Need forms?Contact Kelli at the NEDA Office 800-932-0607 for a FREE quote

on all your forms and supply needs.

Ag Equipment Intelligence/August/2015 9

With No Pick Up in Sight, AGCO to Continue Reducing Production

AGCO Corp. isn’t looking for a turnaround any time soon in the sales of its farm equipment, so the company says it will continue its efforts to control expenses. It says it will do this by continuing planned production cutbacks and minimizing product inventory. At the same time, AGCO management says it is also planning a price hike of 1.5-2% to offset costs associated with the introduction of its new Tier 4 engines.

On July 28, AGCO reported its second quarter net sales declined 24.8%, to $2.1 billion from $2.8 billion in the same period of 2014. Net sales for the first 6 months of 2015 were about $3.8 billion, a drop of 25.8% vs. the first half of last year.

North American net sales for the second quarter were down 17.9% year-over-year. South America saw the biggest decline for the quarter with net sales down 36.3% in the region. Europe, Africa and Middle East sales were down 25.3% and Asia/Pacific saw a 12.8% decline in net sales for the second quarter.

The company says it expects its third quarter 2015 sales and earnings to be “significantly lower” compared to the third quarter of 2014 as a result of lower sales and produc-tion levels.

AGCO reports it expects sales for 2015 to be down 19-21% between $7.7-$7.9 billion year-over-year, but says

this could be partially offset by pricing and modest market share gains.

“Last year, we saw pricing soften on used equipment and this year it could be down 10-15%, depending on the market and which products we’re looking at,” Greg Peterson, director of investor relations for AGCO, said in a call to analysts. “It’s been our major focus to support our dealers as they continue to work down their inventory levels, both new and used. As we look at 2015 compared to 2014, our dealers’ new and used equipment inventory is down to high single digits or low double digits, so, we are making progress.”

Sluggish Ag Equipment Sales Continue in First Half 2015

AGCO Regional Net Sales — 2014 vs. 2015(in millions $)

6 Months Ended

June 30

Change due to currency translation

2015 2014 % Change from 2014 $ %

North America 1,035.6 1,333.7 –22.4 –25.4 –1.9

South America 529.3 793.8 –33.3 –151.2 –19.0

Europe/Africa/ Middle East

2,045.1 2,757.8 –25.8 –454.9 –16.5

Asia/Pacific 161.9 198.4 –18.4 –21.8 –11.0

Total 3,771.9 5,083.7 –25.8 –653.3 –12.9


Headwinds created by lower commodity prices and a strong U.S. dollar continued to challenge ag equipment manufacturers through the first half of this year. This was reflected in their quarterly earning reports that were issued over the past few weeks.

While industry outlook picked up when corn crossed the $4 per bushel line last month and soybeans topped $10 per bushel, USDA’s Aug. 12 World Agricultural Supply and Demand Estimates report, brought that sentiment to a screeching halt. In that report, the ag agency took the indus-try off guard as it unexpectedly increased corn production for 2015-16 by nearly 3% more than pre-report expectations.

For the week ended on Aug. 10, just prior to the WASDE report, September futures for corn closed at $3.90 per bushel, a 6.6% increase from the previous week, according to Farmland Forecast. September soybeans ended at $10.08, a 6.7% increase from a week earlier, and September

wheat ended the week at $5.25, a 5.2% increase from the previous week. At that point, year-over-year corn prices were up 9.6%, soybeans were down 9%,and wheat was down 3.8%.

The most recent WASDE report saw these prices decline. USDA’s outlook for corn for the 2015-16 marketing year was projected at $3.35-3.95, soy-beans dropped to $8.40-9.90 per bushel, and wheat prices fell to $4.65-5.55 per bushel.

For 2015-16, analysts are projecting major crop cash receipts to be $97.3 billion, down 7% year-over-year from $97.9 billion, or –6% year-over-year from last month. Adjusted for the calendar year, other crops as well as livestock-related expectations, overall farmer cash receipts are forecast to be down 6% in 2015 (including –12% for major crops).

Following is a rundown of the most recent earnings results from several ag equipment com-panies. John Deere will be releasing its third-quar-ter financials for fiscal 2015 on Friday, Aug. 21.

Bonus Section

EquiPMENT iNDuSTRy NEWS

10 WayS SuccESSFul PEoPlE iNcREaSE SalES From the book

'99 Of The Greatest Sales Tips Of All Times

1. They are not afraid of change. 2. They build relationships with their

prospects and customers. 3. They dare to be different. 4. They watch their expenses. 5. They know their cost of doing

business. 6. They have and use a sales

marketing plan. 7. They delegate duties. 8. They only market to their perfect

prospects. 9. They run promotions, not sales. 10. They respect their competition, but

do not fear them. Bob Janet-www.Bob Janettom

• represent all retail equipment dealers - agriculture, construction/industrial, large property/rural lifestyle, and outdoor power.

• conduct meaningful dialog with equipment manu-facturers about critically important issues related to the operations of equipment dealerships.

• provide member dealers with effective legislative representation at the federal, state and provincial levels of government, effectively advocating on the dealers' behalf.

• get involved in the regulatory process to prevent harmful policies from placing a financial burden on your business or your employees.

• accomplish what individual dealers cannot do alone. Few dealers have the time, expertise or money to take on major governmental or manufacturer concerns.

• achieve great results and provide tremendous bene-fits in terms of saving individual dealers time, money and stress.

NAEDA and NEDA . . . Helping Dealers Succeed!

Did you know?

NAEDA NEDA&

Precision agriculture requires precision insurance targeted to help protect your dealership from human error. Call today to learn more about our

innovative Precision Agriculture Liability Coverage.

Visit www.federatedinsurance.com to find a representative near you.

Smart Equipment Requires Smart Insurance

*Not licensed in the states of NH, NJ, and VT. © 2014 Federated Mutual Insurance Company

Our purpose is to improve and perpetuate the agricultural, construction and rural lifestyle dealer business. We are about helping our member dealers improving their gross margins and to sell, service and supply replacement parts to their customers successfully and profitably. NEDA is widely recognized and respected as the equipment industry organization representing the collectiveinterests of American equipment dealers in the Northeast region.

OutdoorPower Equipment Dealers Welcome Here!

Committed to Building The Best Business Environment for Northeast Equipment Dealers

ne-equip.comEstablished 1901

NortheastEquipmentDealersAssociation

sept 2015

Documents