Full-year declines for Generac
By Helen Wright18 February 2016
Manufacturer Generac has reported lower revenues and income for 2015, but said it expected to see growth this year thanks to its acquisition of Pramac.
The company reported revenues of US$1.32 billion (€1.18 billion) last year, down from US$1.46 billion (€1.31 billion) for 2014. Net income slipped to US$77.7 million (€69.8 million), from US$175 million (€157 million) the year before.
In the residential sector, Generac said it had been hit by lower demand for home standby generators as a result of the significant decline in the power outage severity environment during 2015.
And as far as the commercial and industrial sector goes, the company said it had seen a significant reduction in shipments into oil and gas and general rental markets and, to a lesser extent, reduced shipments to telecom national account customers and the negative impact of foreign currency.
President and CEO Aaron Jagdfeld said, “While several of our major end markets experienced significant down-cycles during 2015, we still made important progress on a variety of strategic initiatives throughout the year.
“These included driving awareness for our products, developing and expanding our distribution, further investing in innovative new products, and implementing manufacturing improvements. In addition, we continued to execute on our capital allocation priorities including paying down debt, making another strategic acquisition and returning capital to shareholders.
“Despite a weaker demand environment that persists entering 2016, we remain optimistic regarding the overall long-term growth prospects for our business.
"With the Pramac acquisition, we enter the current year as a more globally diversified company with a strong liquidity position that gives us the flexibility to drive our Powering Ahead strategic plan forward.”
Indeed, the company forecast a 2016 revenue increase of between 10% and 12%, assuming the contribution from Pramac. Stripping out this deal, it said organic revenues were expected to decline by between 5% and 7% this year – nearly all of which would be attributable to the ongoing weakness in mobile product shipments into the oil and gas, and general rental markets.