Generac Revenue Drops Compared to Last Year’s Q3

Nov. 7, 2014
Generac Holdings, a leading manufacturer of power generation and other engine-powered products brought in net sales of $352.3 million during the third quarter compared to $363.3 million in the third quarter of 2013, a 3.1-percent decrease, falling a bit short of expectations.

Generac Holdings, a leading manufacturer of power generation and other engine-powered products brought in net sales of $352.3 million during the third quarter compared to $363.3 million in the third quarter of 2013, a 3.1-percent decrease, falling a bit short of expectations. Residential product sales were $183.7 million during the third quarter, compared to $192.7 million a year ago, because of a decline in portable generator sales and shipments of home standby generators.

Commercial and industrial product sales were $146.4 million during the third quarter, compared to $151.5 million in the year-ago frame. Contributions from recent acquisitions and strength in oil and gas markets were offset by a drop in shipments to telecom national account customers.

Adjusted EBITDA was $83.1 million, compared to $100.1 million in the third quarter last year, a 17-percent decline.

On Sept. 1, Generac acquired Pramac America, and its Powermate trade name, as well as the right to license the DeWalt brand name for certain residential engine-powered tools. The transaction also included working capital associated with these products. The acquisition helps to expand the Generac brand portfolio across its residential product platform and increases its product offering in the portable generator category.

And on Oct. 1, Generac acquired MAC Inc., a manufacturer of premium-grade commercial and industrial mobile heaters within the United States and Canada.

“Home standby generator sales improved at a solid rate as compared to the second quarter of 2014, as we continue to build awareness and expand our leadership position for this product category,” said Aaron Jagdfeld, president and CEO. “Despite current market conditions where power outage severity has been well below normal, we believe the penetration opportunity that exists for home standby generators remains significant. Our C&I product sales continued to experience good momentum within the oil and gas market, while capital spending with certain telecom customers was lower in the quarter resulting in reduced shipments to this end market.

“On the acquisition front, we have been active in recent months by closing two transactions which broaden our residential engine powered tool product line and expand our C&I mobile products platforms, while also increasing our exposure to the oil and gas market.”

Jagdfeld added that while third quarter sales didn’t reach expectations he believes long-term growth opportunities that impact the company’s business remain in place. “With our strong balance sheet and free cash flow generation profile, we are confident in our ability to continue to invest in the future growth of the business, both organically and through acquisitions. In doing this, we expect to drive further penetration of standby generators as well as benefit from being a more balanced and globally focused company.”

Generac is based in Waukesha, Wis.