Generac Holdings increased net sales by 7.4 percent in the fourth quarter of 2014, posting $404 million compared to $376.2 million in the fourth quarter of 2013. The Commercial & Industrial segment jumped 17.1 percent to $185 million, compared to $157.9 million in the fourth quarter of 2013, primarily driven by strength in the oil-and-gas markets and contributions from recent acquisitions.
The jump in Commercial & Industrial was partially offset by a decline in shipments to certain telecom customers.
For the full year, the company’s revenue declined 1.7 percent, from $1.486 billion in 2013 to $1.461 billion in 2014. Commercial & Industrial was the strongest segment for the full year as well, with sales increasing 14.4 percent to $652.2 million, compared to $569.9 million in 2013. Residential product sales dropped from $843.7 million in 2013 to $722.2 million in 2014, a 14.4-percent decline. The previous year benefited from approximately $140 million in incremental shipments in the aftermath of Superstorm Sandy, which did not repeat in 2014.
“Home standby generator sales exceeded our expectations during the fourth quarter, with activation rates proving to be resilient as we leveraged our innovative sales and marketing techniques to help create awareness for the product category in a below-normal power outage environment,” said Aaron Jagfeld, president and CEO. “For full year 2014, organic sales improved over 2013 when excluding approximately $140 million sales headwind in the prior year from Superstorm Sandy, allowing us to hold a new and higher baseline of demand despite certain of our end markets performing below our expectations during the year. In addition, the revenue base for our C&I products continued to increase in scale during 2014, and now represents nearly half of our total sales.
“We also once again generated a strong level of free cash flow, generating over $200 million for the third consecutive year. We enter 2015 as a more diversified company, with a strong balance sheet and free cash flow generation capability that provides us with the flexibility to drive our Powering Ahead strategic plan forward.”
Generac expects net sales to increase in the low-to-mid-single digit range in 2015, assuming no major power outage events during 2015, but does assume a more normalized baseline level of power outage severity during the year.
“While the near-term outlook in certain end-market verticals such as telecommunications and oil and gas point to softer demand, we are optimistic about the long-term need for our products used in these applications, as well as the opportunity to increase our share of the C&I market through our recently expanded product offering,” added Jagdfeld. “We believe the overall secular shifts in the market toward natural gas generators and the rental of mobile power equipment remain in place.”
Generac is based in Waukesha, Wis.
