Generac, manufacturer of power generation equipment and other engine-powered products posted a net sales increase of 16.7 percent in the fourth quarter of 2016 with $417.4 million compared to $357.8 million in the fourth quarter of 2015. The increased revenue included about $50 million of contribution from the Pramac acquisition.
Domestic segment sales jumped 4 percent to $339.7 million compared to $326.6 million in the year-ago quarter, primarily because of an increase in sales of portable and home standby generators. The hike was partially offset by a decline in shipments of mobile products caused by ongoing oil and gas weakness.
International segment sales more than doubled to $77.7 million compared to $31.2 million in the year-ago frame, primarily because of contributions from the Pramac purchase.
Net income for the fourth quarter was $41.5 million or $0.64 per share compared to $9.2 million or $0.14 per share in the previous year’s fourth quarter.
For the full year, net sales leaped 9.7 percent to $1.444 billion in 2016 compared to $1.317 billion in 2015. Domestic segment sales were $1.174 billion compared to $1.205 billion, a 2.6-percent drop, primarily because of declines in shipments of mobile products into oil and gas and general rental markets. Partially offsetting the impact was the contribution from the Country Home Products acquisition, which closed on August 1, 2015, along with increased shipments of portable and home standby generators.
International segment sales more than doubled from $112.7 million in 2015 to $270.9 million, because of the contributions from the Pramac purchase. Partially offsetting the impact were declines in organic shipments of mobile products into Europe.
“Overall fourth quarter results provided a strong end to 2016, with organic sales improving over the prior year and operating and free cash flow achieving quarterly records,” said Aaron Jagdfeld, president and CEO. “Hurricane Matthew drove significant shipments of residential products during the quarter as our team executed well to fulfill the increased demand from this event. We continued to generate a strong level of free cash flow that exceeded $220 million for the year, which allowed us to deploy cash in a variety of strategic ways including acquisitions and certain capital expenditures, as well as paying down debt and returning capital to shareholders.”
The company expects net sales to increase between 5 and 7 percent in 2017, with organic sales on a constant currency basis increasing between 1 and 3 percent.
“Entering 2017, our market position for residential products remains strong and we believe demand trends in a number of our commercial and industrial markets are at or near the bottom,” said Jagfeld. “As a result, we are cautiously optimistic in returning to organic growth during 2017.”