Generac Holdings Inc. (NYSE: GNRC, the “Company”), a designer and
manufacturer of generators and other engine powered products, announced
today that it was adjusting its previously disclosed recapitalization
plan in light of recent financing market conditions. The Company has now
determined that it will decrease the total size of its previously
announced $1.2 billion financing and will not proceed with its private
offering of unsecured notes. The Company instead expects to increase the
amount of new senior secured debt to approximately $900 million. If
incurred, the Company will use the proceeds of this new debt financing
together with cash on its balance sheet to refinance its existing senior
secured credit facility and to pay a special cash dividend of up to
$6.00 per share on its common stock. The Company still expects to
replace its current $150 million unfunded revolving credit facility with
a similar sized asset-based revolving line.
“We believe this revised transaction structure is a disciplined approach
towards creating long-term shareholder value and represents an
attractive return of capital to shareholders,” said Aaron Jagdfeld,
President and Chief Executive Officer. “Given our track record of strong
free cash flow generation, we are confident this new capital structure
will allow us to further invest in our organic growth initiatives and
will provide the flexibility for potential acquisitions in the future.”
The declaration of the special cash dividend remains subject to market
and other conditions, and will not occur unless the new senior secured
credit facility is finalized on acceptable terms. Assuming that this
financing is obtained, the Company expects its Board of Directors to
declare and the Company to pay the special dividend by or shortly after
the end of the second quarter of 2012.
Forward-looking Information
Certain statements contained in this news release, as well as other
information provided from time to time by Generac Holdings Inc. or its
employees, may contain forward looking statements that involve risks and
uncertainties that could cause actual results to differ materially from
those in the forward looking statements. Forward-looking statements give
Generac's current expectations and projections relating to the Company's
financial condition, results of operations, plans, objectives, future
performance and business. You can identify forward-looking statements by
the fact that they do not relate strictly to historical or current
facts. These statements may include words such as "anticipate,"
"estimate," "expect," "project," "plan," "intend," "believe,"
"confident," "may," "should," "can have," "likely," "future" and other
words and terms of similar meaning in connection with any discussion of
the timing or nature of future operating or financial performance or
other events.
Any such forward looking statements are not guarantees of performance or
results, and involve risks, uncertainties (some of which are beyond the
Company's control) and assumptions. Although Generac believes any
forward-looking statements are based on reasonable assumptions, you
should be aware that many factors could cause outcomes to differ
materially from those anticipated in any forward-looking statements. In
particular, the forward looking statements contained in this press
release are subject to the risk that the Company will not be able to
obtain the financing discussed above on acceptable terms. In addition,
the forward-looking statements regarding our future performance are
subject to the risks and uncertainties identified in our Annual Report
on Form 10-K for the year ended December 31, 2011 and other filings made
with the Securities and Exchange Commission.
Any forward-looking statement made by Generac in this press release
speaks only as of the date on which it is made. Generac undertakes no
obligation to update any forward-looking statement, whether as a result
of new information, future developments or otherwise, except as may be
required by law.
SOURCE: Generac Holdings Inc.
