Wisconsin Manufacturing News

Generac makes quarterly debut as public company; Douglas Dynamics Inc.’s stock makes debut; New Jersey company acquires Jefferson Electric; Magnetek’s earnings tumble

Generac makes quarterly debut as public company

In its first quarter as a publicly traded company, Waukesha-based Generac Holdings Inc. reported net income of $2.5 million, which was down from $5.8 million for the same period in 2009.

The company’s net sales fell 6.9 percent to $130.7 million from $140.4 million a year ago. The firm’s adjusted EBITDA increased 10.2 percent to $31.8 million from $28.9 million a year earlier.

On Feb. 17, 2010, Generac completed its initial public offering (IPO) of 18.75 million shares of common stock at a price of $13.00 per share.

"We are pleased with our increased adjusted EBITDA results during the first quarter of 2010. Despite difficult comparables in our residential markets and continued softness in our industrial markets, we were able to improve operating income versus the prior year quarter as a result of normalized commodity costs, cost reduction initiatives and the full impact of price increases that were implemented during the prior year quarter," said Aaron Jagdfeld, chief executive officer of Generac.

Looking ahead, Jagdfeld said, "We continue to be cautious about the economic environment as our end customers closely monitor big ticket capital spending. We believe that in the short term, we will continue to see similar year-over-year sales trends that we have seen over the last nine months, given weaker storm activity over the last several quarters and the softness in non-residential construction. We are confident that we will continue to see the benefits of our expanded distribution, new product introductions and efforts to increase awareness of residential and light commercial stand-by generators in the second half of 2010. We have invested in future growth through increased new product development and marketing efforts and given our high market share in our focused end markets, we believe we are well positioned for growth as markets recover."

Douglas Dynamics Inc.’s stock makes debut

Milwaukee-based Douglas Dynamics Inc announced the pricing of its initial public offering of 10 million shares of its common stock at $11.25 per share last week.

The offering consisted of 6.5 million shares of common stock offered by Douglas Dynamics and 3.5 million shares sold by certain Douglas stockholders.

The company’s common stock now trades on the New York Stock Exchange under the symbol "PLOW."

Credit Suisse Securities (USA) LLC and Oppenheimer & Co. Inc. acted as joint book-running managers for the offering.

Douglas Dynamics designs, manufactures and sells snow and ice control equipment for light trucks, which is comprised of snowplows and sand and salt spreaders, and related parts and accessories.

New Jersey company acquires Jefferson Electric

Jefferson Electric Inc. of Franklin has been acquired by Pioneer Power Solutions Inc., a Fort Lee, N.J.-based manufacturer of liquid-filled electric transformers for utility, industrial and commercial applications.

Jefferson Electric manufactures and supplies dry-type transformers.

The transaction, valued at approximately $10 million, includes a combination of restricted stock and warrants issued to Thomas Klink, previously the sole stockholder of Jefferson, as well as extending the term of Jefferson’s existing credit facility.

As a result of the acquisition, Jefferson will operate as a wholly owned subsidiary of Pioneer and Klink will remain as Jefferson’s president.. Klink will also join Pioneer’s board of directors.

Jefferson recorded 2009 revenues of approximately $20 million and is expected to be immediately accretive to Pioneer’s earnings per share in 2010.

All of Jefferson’s design, engineering, sales, executive management and related support functions are performed by the company 35 employees at its headquarters in Franklin. Jefferson also recently acquired a plant in Reynosa, Mexico, and maintains a centralized warehouse location in Pharr, Texas.

Nathan Mazurek, chairman and chief executive officer of Pioneer, said, "We are also delighted to welcome Mr. Klink to our Board of Directors. He brings with him a wealth of experience and in-depth industry knowledge that will be greatly beneficial to advancing Pioneer’s long term vision. We look forward to working with him and the whole Jefferson team."

Magnetek’s earnings tumble

Magnetek Inc. reported a fiscal third quarter net loss of $1.6 million, or 5 cents per share, compared with net income of 178,000, or 1 cent per share, in the same period a year ago.

The Menomonee Falls-based company’s quarterly net sales fell to $19.2 million from $25.1 million.

Peter McCormick, Magnetek’s president and chief executive officer, said: "We believe our served material handling markets are late cycle by nature, and accordingly, our business began to slow down about a year ago, later than many companies experienced. As a result, we believe we’ll emerge from the downturn a bit later than other industrial companies. While interest levels remain high based on current quotations, capital projects aimed at expanding capacity remain constrained. On the positive side, renewable energy projects continue to gain funding and our renewable energy revenues for calendar year 2010 are now projected to be near $18 million. Growth in this area of our business not only helps to offset softness in sales of our other products, but should also help the Company to regain profitability, perhaps as early as the June quarter."



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