Generac shares will cost $15 to $17 in IPO; Oshkosh Corp. profits surge; Rockwell is in ‘early stage of recovery’; Quad/Graphics will become a public company with acquisition; A.O. Smith caps record year
Generac shares will cost $15 to $17 in IPO
Generac Holdings Inc., the corporate parent of Waukesha-based Generac Power Systems Inc., expects to offer more than 3 million shares of stock during its initial public offering, according to updated filings with the Securities and Exchange Commission.
The shares are expected to sell between $15 and $17 per share.
Generac will trade on the New York Stock Exchange under the symbol GNRC.
Earlier this week, Generac increased the size of its IPO by 42.5 percent to as much as $427.6 million in its IPO. The offering is expected in the late first quarter of this year. The company earlier had said it expected to raise $300 million in the offering.
The IPO is expected to net roughly $299 million, Generac’s filing states, which the company will use to pay down outstanding debt.
In the updated filing, Generac says its 2009 earnings were between $584 million and $589 million, with between $94 million and $99 million in income.
The IPO is being underwritten by J.P Morgan, Goldman Sachs & Co., BofA Merrill Lynch, R.W. Baird & Co., William Blair & Co., Stephens Inc., and Key Banc Capital Markets. The underwriters will have the option of purchasing an additional 3 million of Generac’s shares within 30 days of the IPO.
Generac Holdings is owned by CCMP Capital advisors LP, a New York-based private equity firm.
Oshkosh Corp. profits surge
Oshkosh Corp., which has received several U.S. military contracts in recent months, reported net income of $169.6 million in the first quarter of fiscal 2010, a major improvement over a net loss of $20.6 million in the first quarter of fiscal 2009.
The company reported fiscal 2010 first quarter net sales of $2.43 billion and income from continuing operations of $191.2 million, or $2.10 per share, excluding non-cash intangible asset impairment charges. This compares with net sales of $1.33 billion and a loss from continuing operations of $11.7 million, or $0.16 per share, in the first quarter of fiscal 2009.
"We kicked off fiscal 2010 with strong revenue and earnings growth, led by our industry-leading defense business," said Robert G. Bohn, Oshkosh Corp. chairman and chief executive officer. "During the quarter, we supplied more than 2,300 life-saving MRAP All Terrain Vehicles (M-ATVs) to the U.S. armed forces for use by our warfighters in Afghanistan as we ramped up production to 1,000 units per month in December 2009. Additionally, our defense team executed extraordinarily well under all of our tactical wheeled vehicle and aftermarket parts & service contracts for the U.S. Army and Marines. Our long and proud history of delivering high quality products on time is something our customers have come to expect.”
The U.S. Governmental Accountability Office (GAO) has recommended that the U.S. Army review bids won by Oshkosh Corp. to produce a family of medium-duty tactical vehicles, which could cost the Oshkosh-based company up to $3 billion and hundreds of jobs. The GAO sustained protests filed by Navistar Defense LLC of Warrenville Ill., and BAE Systems, Tactical Vehicle Systems LP of Sealy, Texas. BAE Systems, PLC, is the London-based parent company of BAE Systems, Tactical Vehicle Systems LP.
Rockwell is in ‘early stage of recovery’
Rockwell Automation Inc. posted first quarter net income of $76.6 million, or 53 cents per share, down from $118.4 million, or 83 cents per share, in the same period a year ago.
The Milwaukee-based manufacturer’s quarterly revenue fell to $1.07 billion from $1.12 million a year earlier.
Keith Nosbusch, chairman and chief executive officer of Rockwell, said, "I am pleased by our solid performance in the first quarter. Product revenues in the quarter exceeded our expectations, and the resulting favorable revenue mix contributed to sequential margin improvement in the quarter. On a year-over-year basis, organic revenue declined in the quarter, but the rate of decline has moderated considerably, and we saw strong growth in emerging Asia. We also delivered another strong quarter of free cash flow."
Commenting on the company’s outlook, Nosbusch added, "Our first quarter performance and continued improvement in the global economy seem to indicate that we are at the early stage of a recovery. However, high unemployment, historically low levels of capacity utilization and a very cautious capital spending outlook create uncertainty as to the shape of the recovery in manufacturing. Given our improved revenue baseline, we are revising our full year fiscal 2010 earnings per share guidance to $2.00 to $2.40 on a revenue range of $4.4 billion to $4.6 billion. We will continue to effectively manage our cost structure while appropriately investing in key technologies and growth opportunities. We are well positioned to take advantage of the recovery and we are ready to serve our customers’ needs when their automation spending increases."
Quad/Graphics will become a public company with acquisition
Quad/Graphics Inc. will acquire World Color Press Inc., and the merged corporation will become a publicly traded company after an initial public offering (IPO).
The combined company will be the second largest provider of print, digital and related services in the Americas. It will have nearly 30,000 employees serving customers in the U.S., Canada, Latin America and Europe.
The boards of directors of both companies unanimously have approved a definitive agreement to merge.
Worldcolor and Quad/Graphics had aggregate unaudited revenues for the 12-month period ended Sept. 30, 2009, of $5.1 billion.
The transaction is expected to close this summer.
Quad/Graphics’ management estimates that the combination will generate approximately $225 million in pre-tax net annualized synergies within 24 months.
“By combining the strengths of both companies, we will enhance our leadership position in the printing industry,” said Joel Quadracci, who will continue in his roles as Quad/Graphics chairman, president and chief executive officer. “Customer needs and demands are rapidly evolving, and our expanded company will be even better equipped to meet those demands. With increased access to capital markets, we plan to make appropriate investments in our platform and data-driven solutions to secure the future of print. With our strong commitment to innovation and customer satisfaction, combined with the greater operational efficiencies we are targeting, we will be better able to achieve our strategic objectives and continue to generate industry-leading margins and profitable growth, all while creating opportunities for our customers, shareholders and employees.”
Concurrent with the closing of the transaction, Quad/Graphics intends to become a publicly traded company. Quad/Graphics expects to register its Class A Common shares with the U.S. Securities and Exchange Commission (SEC) and proceed with a listing on a leading U.S. exchange.
Under terms of the agreement, World Color shareholders will receive at closing approximately 40 percent of the outstanding shares of Quad/Graphics, and Quad/Graphics’ shareholders will hold approximately 60 percent of the shares.
The future board will be comprised of the six current Quad/Graphics directors and two World Color directors.
Quad/Graphics’ shareholders will continue to own Class A, Class B and Class C shares for approximately 60 percent total ownership of the company. The Harry V. Quadracci family will control the company through ownership of the high-voting Class B shares. The Class C shares are owned by a qualified retirement trust for Quad/Graphics employees.
A.O. Smith caps record year
A. O. Smith Corp. announced record earnings of $81.3 million, or $3.39 per share, in 2009, despite lower revenues caused by the lingering housing crisis, a weak commercial construction market and the global recession.
The Milwaukee-based manufacturer’s annual sales fell 14 percent to $2.0 billion from 2008 sales of $2.3 billion.
Growth in higher-margin China sales, aggressive cost management, lower raw material costs, and lower restructuring costs contributed to the improved results. Additionally, the company generated record cash flow from operations in 2009 of $267.6 million.
The company earned $22.7 million, 74 cents per share, in the fourth quarter, on sales of $509.6 million, essentially flat compared with 2008 fourth quarter sales of $508.6 million.
"Our company and our employees performed extremely well under difficult circumstances last year," said Paul Jones, chairman and chief executive officer of A.O. Smith. "We recognized the onset of the global recession early, made the difficult decisions necessary to address the expected impact on the company, and then stuck by those decisions. The expense reduction and cash conservation programs we put in place had the desired effect, helping us maintain our profitability and generate significant cash flow throughout the year. Our employees deserve a lot of credit for finding countless ways to reduce expenses and generate cash while remaining focused on our customers.”