On rough day for stocks, Minnesota's top execs make pitches to local investors

Top executives from about 40 Minnesota-based companies met investors at an annual event in Minneapolis Wednesday, pitching their strategies for getting through the next year just as this year's worst sell-off unfolded on stock markets.

Tariff effects and the potential slowdown in national and global economies were top of mind for nearly everyone participating in the Intellisight conference hosted by the CFA Society of Minnesota.

The event provides a forum for leaders and investment managers from the state's publicly traded companies to give local investors and analysts a deeper look at their recent performance and near-term goals. In private meetings and public presentations, executives confronted questions about the broad economy as well as challenges their firms face individually.

Among the participants was Fastenal Co., the Winona, Minn.-based distributor of industrial supplies seen by many investors as a proxy for the manufacturing economy. It has been forced to raise prices due to U.S. tariffs on goods produced overseas.

Holden Lewis, Fastenal's chief financial officer, said it didn't fully offset its higher costs, however. "We need to neutralize the effects of inflation and tariffs," he said.

C.H. Robinson, the giant third-party logistics firm based in Eden Prairie, has seen its customers try to outsmart the effect of tariffs with mixed results. "Tariffs have made pricing more difficult," said Bob Houghton, its investor relations chief.

Global companies tried to push inventories and shipments ahead of tariff deadlines, he said. That meant less traffic in the first half of the year.

Shares in CyberOptics Corp. were already down about 20% this year — and fell 3% in Wednesday's sell-off — as it copes with another cyclical downturn in the semiconductor industry. The Golden Valley-based firm makes sensors used by chipmakers to inspect the quality of computer and cellphone chips as they are being made.

In five years, its revenue has more than doubled to around $65 million but its growth will be flat this year, Chief Executive Subodh Kulkarni told investors and analysts. He noted that's better than the semiconductor industry broadly, which some market forecasters say will see a 12% revenue decline this year.

Kulkarni said he's confident the company is on track to reach $100 million in revenue within a few years, saying the next upswing will see chipmakers delivering components for 5G phones and driverless cars. "I'm more sure about where we'll be in five or 10 years than the next six to nine months," he said.

Heather Davis, a former investor-relations executive at Buffalo Wild Wings and Ecolab, returned to the conference representing her new employer: Groupon, the Chicago-based provider of deep-discount coupons. She described some of the strategic shifts it has made over the last three years.

After building its reputation with deal-of-the-day promotions, Groupon has moved beyond vouchers and coupons. It built a system that links to credit and debit cards, aiming to erase some of the stigma consumers might have about physical coupons. Davis said the system also speeds the transaction process for merchants.

"We said 'This is worth a try,' " Benstock said. "We know there is a strong investor base here."

Benstock and two colleagues met with several investors privately and then gave a 30-minute briefing to a handful in a classroom just before lunch. Superior Group, until recently known as Superior Uniforms, has expanded beyond uniforms into specialty marketing and call-center services. Over the past five years, its annual sales growth has averaged around 18% and it had about $350 million in revenue last year.

"The history of our company has been helping other companies build their brands," Benstock said. The company got its start providing surgical garb and today is a leading supplier of uniforms used by hospitals and pharmacies.

Local heavyweight General Mills closed the day and fueled investors through the event's last hour with some of its recently launched products, like Annie's sour bunnies fruit snacks and Nature Valley wafer bars.

The Golden Valley-based food maker is a regular at the conference. In addition to presenting, representatives from the company met privately with four investors holding a position in the company.

He noted two stumbles this past year. Nature Valley, its biggest snack-bar brand, failed to get adequate merchandising for last fall's back-to-school season, which had a drag effect on the rest of the school year. And Fiber One failed to stay relevant with shifting dieting trends. General Mills recently reformulated Fiber One bars to reduce calories, sugar and net carbs.