L.S. Starrett suspends quarterly dividend

Google L.S. Starrett Co.'s Athol facility

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By Zachary Comeau

Athol precision measuring and cutting tools manufacturer L.S. Starrett Co.is suspending its quarterly dividend program indefinitely.

“This action was taken with a long-term view of our business, and we believe it its in the best interest of our company, and that of our stakeholders, to retain enough cash in the business to invest in our future,” the company said Thursday.

In fiscal 2017, the company paid a dividend of 10 cents.

“Our philosophy has been to set the dividend at a level we can support while maintaining adequate cash to improve our plant, equipment and invest in the future through acquisitions and new product development,” the company said it its annual report. “We take a long-term view of this policy; however, the board of directors evaluates the merits of a dividend distribution each quarter.”

The company in fiscal 2017, which concluded in June, resulted in a profit of $1.5 million, which was well below the company’s expectations, according to the company’s annual report for fiscal 2017.

Net sales in fiscal 2017 were $2.7 million, a 1-percent decrease from 2016.

An international net sales gain of $2.9 million was offset by a decline in the North American market of $5.6 million.

The shortfall in North America was due to reduced demand for maintenance, repair and operating products.

The company in December 2016 froze its benefit pension plan, but chose to enhance it’s 4019(k) plan for all North American participants.

The company also cited global political chaos as contributing to its recent hardships in its largest markets, Brazil and the U.S., but the company is less than thrilled with the current U.S. administration.

"Arguably, Brazil has done a better job of putting politics aside and getting on with business than we have in the U.S.” the company said, calling U.S. President Donald Trump’s administration a disappointment. “With the exception of some regulatory reform, they have been unable to enact legislation important to manufacturing, even though they have the benefit of Republican majorities in both Houses of Congress.”