Second-quarter net income at Generac fell 39% from the same period a year ago to $9.3 million despite a 48% jump in net sales to $239.1 million, the company revealed today.
An increased interest expense, which rose $4 million to $9.9 million, and a $10 million payment of debt helped drive net income downwards. The Waukesha, Wis.-based generator producer posted a 71% increase in income from operations to $37.2 million. Adjusted EBITDA was $54.6 million, up 45% from the same period a year ago.
“Our second quarter results continue to demonstrate the progress we are marking in executing our Powering Ahead strategic plan,” said Aaron Jagdfeld, Generac’s president and CEO.
Residential product sales grew 33.8% to $123.4 million and commercial and industrial product sales rose 76.4% to $101.1 million for the quarter. The manufacturer said double digit increases in shipments for home standby and portable generators helped drive residential sales. The commercial sales increase was primarily the result of its acquisition of Magnum Products.
On May 30, Generac completed a refinancing of its senior secured credit facilities, pursuant to which it incurred $900 million in loans to replace its $575 million term loan facilities. The refinancing brought on a $11 million non-recurring charge as well as higher debt levels, which raised the interest expense.
“Given the relatively low awareness and penetration of home and light-commercial standby generators, we believe there is significant growth opportunity as the leader in this emerging product category,” said Jagdfeld. “Our Powering Ahead strategic plan focuses on baseline sales growth within new and existing products and markets, and complements the powerful secular trends that continue to drive our business.”
