Oil and Gas and Residential Standby Markets Power Generac’s Q2 Growth
Generac Holdings, a leading designer and manufacturer of power-generation equipment and other engine powered products posted a 4.6-percent increase year over year for the second quarter, coming in with $362.6 million compared to $346.6 million in the second quarter of 2013. Commercial and Industrial product sales jumped 22.5 percent in the quarter to $163.5 million compared to $133.4 million a year ago, primarily as a result of recent acquisitions and continued strength in the oil and gas market.
Residential product sales were $179.6 million compared to $196.6 million a year ago. Last year’s second quarter benefited from about $40 million in shipments because of Superstorm Sandy. Excluding this huge boost in last year’s numbers, residential product sales increased about 15 percent because of strong home standby generator sales.
Net income during the second quarter of 2014 was $54 million, compared to $28.3 million in last year’s second quarter, a 90.9-percent hike.
“Our second quarter results for residential products were seasonally higher as we saw shipments increase as compared to the first quarter of 2014 due to strength in home standby generators,” said Aaron Jagdfeld, president and CEO. “We remain focused on a number of key initiatives to continue to grow the market, further building on our leadership position in this product category. Commercial and Industrial products continue to represent a growing portion of our sales as we have recently increased our exposure to new markets such as oil and gas, broadened our industrial product line, and strengthened our industrial distribution network to further diversify our business.
“We also continue to convert a significant amount of our earnings to free cash flow, providing us with the flexibility to drive our ‘Powering Ahead’ strategic plan forward.”
Generac is reaffirming its prior guidance for 2014 in terms of revenue growth, EBITDA margins and cash flows. For the full year 2014, Generact still expects net sales to increase in the mid-single digit range compared to 2013. The sales outlook assumes an increased level of power outage severity in the second half of 2014 as compared to recent quarters.
“We remain excited about the compelling penetration opportunities for our residential and light commercial standby generators as we continue to focus our efforts on several high-impact initiatives to increase the adoption for these products,” added Jagdfeld. “These initiatives are targeted at improving the awareness, availability and affordability of standby generators and are highlighted by our innovative sales and marketing processes, our efforts to increase and develop distribution, and our introduction of new products. In addition, we have several initiatives aimed at increasing our share of the C&I market by leveraging our recently expanded product offering. We also believe the overall secular trends toward natural gas generators, rental of mobile power equipment, and the penetration of certain end markets such as telecommunications and oil and gas will continue to drive additional growth.”
Generac is headquartered in Waukesha, Wis.
