Feds say factory orders continue to climb; Generac’s sales slide while income rises; Magnetek reports record quarterly sales
Feds say factory orders continue to climb
American businesses increased their demand for industrial machinery, computers and automobiles in March, lifting factory orders for the fifth consecutive month, according to the latest data from the U.S. Commerce Department.
Factory orders rose 3 percent in March after a 0.7 percent increase in February, the department reported.
The March increase pushed total orders to $462.9 billion, up 31.2 percent from the recession low of March 2009.
The manufacturing sector has been one of the strongest segments of the economy since the recession ended nearly two years ago. On Monday, the Institute for Supply Management reported that manufacturing activity rose for a 21st consecutive month in April.
Generac’s sales slide while income rises
Generac Holdings Inc., a Waukesha-based designer and manufacturer of backup power generation products, reported first quarter net income of $4.8 million, or 7 cents per share, up from $2.5 million in the same period a year ago.
The company’s total net sales decreased year-over-year by 5.2 percent to $124.0 million from $130.7 million in the first quarter of 2010.
"Our first quarter 2011 results were impacted by headwinds in our residential markets, partially offset by improving demand in our Commercial & Industrial markets," said Aaron Jagdfeld, President and Chief Executive Officer of Generac.
"We continue to see strong year-over-year growth in our Commercial & Industrial (C&I) products. We have been able to improve our closure rates on sales of C&I products by offering cost effective, innovative back-up power solutions that continue to be adopted by specifying engineering firms and our national account customers. As capital spending for commercial projects further improves, we believe that demand for our C&I products will show continued strength," Jagdfeld said. "As we look forward, we are committed to our strategic growth initiatives and are confident in the strong cash flow generation of the business, which allowed us to pre-pay another $24.7 million of term loan debt in April 2011. Our disciplined capital allocation has strengthened our balance sheet, affording us the ability to invest in future growth. For our Residential product sales, the first quarter of 2011 was challenging given difficult prior year comparables with regards to severe power outages. The prior year first quarter had more severe power outage events as compared with the current year first quarter, impacting year-over-year sales growth for our lower kilowatt portable generators."
Magnetek reports record quarterly sales
Menomonee Falls-based Magnetek Inc. reported fiscal third quarter net income of $971,000, or 3 cents per share, compared with a net loss of $1.6 million, or 5 cents per share, in the same period a year ago.
The company reported record third quarter net sales of $27.8 million, up from $19.2 million a year earlier.
“Our third quarter results exceeded our expectations, highlighted by record sales of nearly $28 million and bookings of more than $31 million,” said Peter McCormick, Magnetek’s president and chief executive officer. “Our end markets continue to show signs of accelerating recovery, as evidenced by strong levels of bookings and sales in each of our major served markets. Third quarter sales of renewable energy products more than doubled from prior year levels, while sales into material handling markets were up 30 percent year-over-year. We believe we are well positioned to outpace overall economic growth rates with our continuing focus on new product introductions, the expected increasing demand for our traditional products, and our growth prospects in renewable energy markets.”
The company currently expects sales for the fourth quarter of fiscal 2011 to increase, mainly due to expected higher seasonal demand in material handling markets. Gross margins in the fourth quarter of fiscal 2011 also are expected to increase.
"Order rates and backlog levels continue to increase in our traditional markets and recent economic data indicates a continued expansion in U.S. manufacturing activity. As a result, we remain optimistic that conditions will continue to improve in our business during the fourth quarter of fiscal 2011, which has historically been a seasonally stronger quarter for us," said McCormick. "In addition, the prospect of future higher energy prices could positively impact our business going forward, as our product offerings across all served markets focus on efficient delivery and consumption of energy,"
