Winter Chill Means Hot Market for Generac: CEO
The freak Halloween weekend snowstorm left a lot of people in the cold and dark, but was a hot opportunity for generator-maker Generac Power Systems, its chief executive told CNBC Tuesday.
"We’ve been benefiting from the age of the [nation's power] grid, the underinvestment in the grid. That’s the macrothesis for our business. We’re a generator manufacturer," said CEO Aaron Jagdfeld.
It wasn't just the snowstorm — if such a thing can be said, Hurricane Irene was a great opportunity for the Wisconsin-based company.
"Outages happen for any number of reasons. Certainly the weather that’s gone on here in the third quarter and the snowstorm are just exacerbating the already fragile grid," Jagdfeld said.
Right now, Generac's generator business has a market penetration of 2.5 percent, he said, but he expects that to increase.
"I don’t know how many manufacturers can say that they have 97.5 percent of opportunity out there," he said. "That’s one of the neat things about the business we are in."
Besides residential, commercial, and industrial generators, the company is branching into other industrial products through its October purchase of Magnum Products, which makes light towers as well as generators.
"There’s opportunity out there for additional bolt-on acquisitions," Jagdfeld said. "We like branching out a little bit more beyond our core products to give us a little more stability."