A year or two ago, Generac wasn’t exactly a household name around the country.
But times have changed.
After going public in February 2010 and a seemingly endless string of major storms and massive power outages, particularly on the East Coast, the Genesee-based company and its line of generators have been thrust firmly into the spotlight.
Aaron Jagdfeld, president and chief executive officer, Generac Holdings Inc.
“We’ve been kind of this quiet little company out here in western Waukesha County for a long time. And I think that changed overnight,” said Aaron Jagdfeld, president and chief executive officer of Generac Holdings Inc., parent company of Generac Power Systems Inc.“Now with all the outages and the categories of product being top of mind for people and our brand being so strong in the marketplace, we’re really, I think, capitalizing on that today in a way that we just couldn’t before. It’s going to launch us in a place we’ve never been before as a company.”
Founded in 1959 by Robert Kern, Generac grew sales more than 33 percent in 2011 to almost $800 million. The company said in October it expects to grow more than 30 percent in 2012, surpassing $1 billion.
“Coming into this year I don’t know that I really thought that we would be able to achieve the kind of success that we had last year. But we have completely outdone ourselves,” Jagdfeld said. “We’ve hit a number of milestones this year that I think are really important for us.”
Those milestones include topping $1 billion in sales, initiating a $10 million headquarters renovation and expansion, buying back a former Generac manufacturing facility in Jefferson that recently went operational, acquiring a company that gives Generac its first international operations and adding more than 800 jobs through organic growth and acquisition.
The company’s 2012 success under Jagdfeld’s leadership led The Business Journal to name him Executive of the Year in the public company category.
“Aaron Jagdfeld has been instrumental in Generac’s success story,” said Michael Halloran, a Milwaukee-based financial analyst with Robert W. Baird & Co. Inc. who follows Generac.
Halloran said Generac’s 38 percent compound annual growth rate since 2010 is “impressive amid the slow growth environment in the U.S.” and is driven in part by “strong management execution to capitalize on recent major power outage events” and Jagdfeld-led efforts to improve the company’s marketing and distributor penetration.
Jagdfeld, 41, started working at Generac 18 years ago in the finance department. He was named CEO in 2008.
He is perhaps perfectly suited for the top role at a generator manufacturer. His accounting background gives him the chops to run the business, and the self-proclaimed “gear head” understands how the products work.
Jagdfeld, who comes from humble roots on Milwaukee’s northwest side, has built a reputation as one of the hardest workers at Generac. He made a point throughout his career of never going home before his boss left.
“That created for me a way to, I think, get the most out of the people that started working for me,” Jagdfeld said. “People really appreciate when you lead by example. People respect that if you’re the guy who’s in the office last, you’re turning the lights out last and you’re the first guy in the morning to get there and turn the lights on, people will work incredibly hard for you.”
That work ethic hasn’t changed now that he doesn’t have a boss. It helps that he loves his job.
“I feel like my role, and I’ve told my board this, if you didn’t pay me anything I’d still be here because I like what I do,” Jagdfeld said. “I ended up in a role where I’m happy to be building something.”
Tim Sullivan, former president and CEO of mining equipment giant Bucyrus International Inc. and new member of Generac’s board, said Jagdfeld has “unlimited potential.”
“I think the responsibilities he’s been given at his age, learning what he has in his career so far, positions him better than most young CEOs that I’ve met,” said Sullivan, who spent 35 years with Bucyrus in South Milwaukee. “I think he’s got all the attributes to be one of the best ever. I think he has that desire and that drive to be one of the best.”
Generac chief financial officer York Ragen said he knows few people with the same level of drive and energy that Jagdfeld possesses. Jagdfeld has made an impression at investor conferences in Generac’s early stages as a public company.
“(Investors and analysts) talk to a lot of CEOs obviously, and there’s a lot of people that don’t come to the table with the same level of passion,” Ragen said. “If you want to talk about intangibles, those are probably things you spend 30 minutes talking with him, (and) the energy radiates as you talk to him.”
Jagdfeld, an avid sports fan, talks about his strategy for Generac in terms of building a strong program that attracts top talent and has a certain aura of success surrounding it.
Key to that strategy are acquisitions. Ragen said Jagdfeld has led that charge over the past two years, which have seen Generac’s first acquisition in its history and its first international presence.
“It’s a huge world out there, and it’s something that I think if we continue to be shrewd about it, I think we can really add scale to this company over the next few years,” Jagdfeld said. “This is one of those situations where success breeds success.”
Generac Holdings Inc.
Company: Manufacturer of generators and other engine-powered products
Headquarters: Town of Genesee
Top executive: Aaron Jagdfeld, president and chief executive officer
2012 projected sales: Nearly $1.2 billion
Generac’S 2012 in review
Generac had arguably its most successful year to date. Here are some of the highlights:
• Feb. 1: Generac announces one of its subsidiaries acquired Gen-Tran Corp., a transfer switch and portable generator accessory manufacturer in Alpharetta, Ga.
• Feb. 7: Generac says it will invest as much as $10 million to remodel and expand its corporate headquarters in the town of Genesee, create a technical center at the location and add more than 200 jobs.
• Feb. 22: Forbes names Generac’s Aaron Jagdfeld one of the 20 most powerful CEOs who are 40 years of age or younger.
• July 30: Generac says it will sell its automatic home backup power systems and other products in Australia and New Zealand through a distribution contract signed with Allpower Industries of Victoria, Australia.
• Oct. 1: Generac raises its 2012 guidance to about 30 percent sales growth over 2011, which would push it past $1 billion in annual sales.
• Oct. 31: Generac says it will hire more than 100 production workers and start manufacturing operations in a Jefferson facility that it initially intended to use for warehousing and distribution, driven by superstorm Sandy’s impact on the short-term demand for Generac’s portable generators and the expected long-term demand for its home standby generators.
• Nov. 20: Generac announces $46.5 million purchase of Ottomotores UK Ltd., which includes Mexican and Brazilian affiliates. The acquisition, completed Dec. 8, adds 500 employees and gives Generac its first international manufacturing operations.
Executive of the Year: Public Company
President and chief executive officer, Generac Holdings Inc.
Family: Wife, Christy, an accountant; daughters, Abby, 16, Meghan, 11; son, Adam, 14
Education: Bachelor of business administration degree in accounting, University of Wisconsin-Whitewater
Grew up: Milwaukee and Hartland
What book is on your nightstand? “Actually on my tablet, as I am trying to go paperless, is ‘The Complete Short Stories of Ernest Hemingway.’”
What other profession would you like to try and why?“For the longest time, I really wanted to be a high school teacher so that I could teach U.S. history and coach high school track. I’ve always been a big history buff and the desire to coach is something that comes from my high school and college track career.”
What was your first job? Newspaper delivery
Favorite film? “Planes, Trains and Automobiles”
What’s something about you that would surprise people?“I really hate to golf. Most people assume that a CEO spends all of his or her spare time on a golf course, but the truth is that I would rather be running or biking.”
Favorite vacation spot? “We are fortunate to have a place in the north woods of Wisconsin that has been in my wife’s family since the 1940s and even if it’s only for a weekend, the opportunity to unwind and relax on Pelican Lake has always been my favorite retreat.”
Biggest perk of your job? “That one is easy: I get to spend every day doing something I really enjoy.”
What is playing on your iPod? “Every Beatles song imaginable”
iPhone or Blackberry? BlackBerry. “I’m still tied to the physical keyboard on the BlackBerry. I just haven’t found myself to be quite as productive with emails on an iPhone.”