Generac Holdings, a manufacturer of generators and other engine-powered products, last week reported first-quarter 2013 net sales increased year-over-year by 35.7 percent to $399.6 million as compared to $294.6 million in the first quarter of 2012. Residential product sales increased 45.8 percent compared to the strong first quarter of 2012, in which year-over-year sales growth was 153.1 percent. Commercial & Industrial product sales increased 21.0 percent compared to the prior-year first quarter.
Gross profit margin during the first quarter improved 70 basis points over the prior year, contributing to an overall improved outlook for gross margins for full-year 2013. Net income was $50.7 million or $0.73 per share as compared to $30.1 million or $0.44 per share for the same period of 2012. Adjusted EBITDA increased 43.5 percent to $108.8 million as compared to $75.8 million in the first quarter last year.
“We have started 2013 with yet another record quarter in revenues and earnings,” said Aaron Jagdfeld, president and CEO at Generac. “Organic revenue growth continues to be very strong and broad based across all major regions of the United States as the market for standby generators continues to expand with more homeowners and businesses becoming aware of the importance of having a backup power solution. Additionally, we took the initial steps in accelerating our Latin American expansion efforts with the first full quarter of the Ottomotores acquisition and we’re excited about the opportunity to execute on the potential revenue and cost synergies of the combined companies.”
Commercial & Industrial product sales for the first quarter of 2013 were $127.1 million from $105.0 million for the comparable period in 2012. The increase in net sales was primarily driven by the Ottomotores acquisition. Strong shipments to national account customers as well as increased sales of natural gas generators used in light commercial/retail applications also contributed to year-over-year organic growth.
The company revised upward its sales guidance for full-year 2013 primarily because of continued strong demand for home standby and portable generators. Full-year 2013 net sales are now expected to increase at a low-to-mid teens rate over the prior year, which is an increase from the approximately 10-percent rate previously expected. Specifically for the second quarter of 2013, net sales are forecasted to increase between 30 to 35 percent in comparison to the second quarter of 2012.
In addition to the upwardly revised outlook for full-year 2013, Generac said it plans to execute a recapitalization in which it intends to incur, subject to market and other conditions, approximately $335 million of additional debt to fund a special cash dividend of up to $5 per share on its outstanding common stock. As part of this transaction, the company expects to enter into new debt financing in the aggregate amount of approximately $1.15 billion, which is expected to be comprised entirely of senior-secured term-loan credit facilities, the proceeds of which will be used to pay the special cash dividend and refinance the company’s existing senior-secured term-loan credit facilities. The new debt financing would also include a $150 million asset-based revolving credit facility, which is expected to be undrawn at the closing of the financing.
Generac, based in Waukesha, Wis., manufactures a wide range of generators and other engine-powered products that are available internationally through a network of independent dealers, retailers, wholesalers and equipment rental companies.
