Generac Reports First Quarter 2014 Results

WAUKESHA, Wis.-- May 1, 2014 -- Generac Holdings Inc., a leading designer and manufacturer of power generation equipment and other engine powered products, today reported financial results for its first quarter ended March 31, 2014.

First Quarter 2014 Highlights

Net sales were $342.0 million as compared to $399.6 million in the first quarter of 2013.

Commercial & Industrial (C&I) product sales increased 23.8% to $157.4 million as compared $127.1 million in the prior-year first quarter, due to a combination of acquisitions and continued organic growth.

Residential product sales were $164.0 million during the first quarter of 2014 as compared to $255.2 million in the prior year quarter. The prior year first quarter benefitted from elevated demand due to Superstorm Sandy, while the first quarter of 2014 was negatively impacted by colder temperatures and snow cover which delayed installations and slowed demand for home standby generators.

Net income during the first quarter of 2014 was $34.7 million, or $0.50 per share, as compared to $50.7 million or $0.73 per share for the same period of 2013.

Adjusted net income, as defined in the accompanying reconciliation schedules, was $50.7 million as compared to $83.9 million in the first quarter of 2013. Adjusted diluted net income per share was $0.72 as compared to $1.21 per share in the first quarter of 2013.

Adjusted EBITDA, as defined in the accompanying reconciliation schedules, was $77.5 million as compared to $108.8 million in the first quarter last year.

Cash flow from operations in the first quarter of 2014 was $36.4 million as compared to $38.3 million in the prior year quarter. Free cash flow, as defined in the accompanying reconciliation schedules, was $31.4 million as compared to $33.9 million in the first quarter of 2013.

For the trailing four quarters, including the first quarter of 2014, net sales were $1.428 billion; net income was $158.6 million; adjusted EBITDA was $371.3 million; cash flow from operations was $258.0 million; and free cash flow was $226.7 million.

“We are pleased with our overall financial results for the quarter as they were in line with our expectations. Shipments of residential products during the first quarter were more typical of the seasonality we historically see in winter months, which was magnified in the current season with heavy snow and colder temperatures delaying installs of residential standby units, ” said Aaron Jagdfeld, President and Chief Executive Officer. 

“Shipments of C&I products were again strong during the quarter as a result of continued organic growth and the contribution from recent acquisitions. Through a combination of our internal growth initiatives and M&A activity, we remain focused on driving a new and higher baseline of demand for our products, while also becoming a more diversified company with improved global scale.”

Additional First Quarter 2014 Highlights

Residential product sales for the first quarter of 2014 were $164.0 million as compared to $255.2 million for the comparable period in 2013. Sales of residential products during the prior-year first quarter of 2013 were positively impacted by approximately $100 million in incremental shipments as a result of satisfying the extended lead times that resulted from Superstorm Sandy, which did not repeat during the first quarter of 2014. Excluding this benefit in the prior year quarter, residential product revenue increased during the first quarter of 2014, driven by higher shipments of portable generators.

C&I product sales for the first quarter of 2014 increased 23.8% to $157.4 million from $127.1 million for the comparable period in 2013. The increase was driven by recent acquisitions along with solid organic growth for stationary generators and light towers. The strength in organic revenues was primarily driven by an increase in shipments to national account customers.

Gross profit margin for the first quarter of 2014 was 34.9% compared to 38.4% in the prior-year first quarter. Gross margin was impacted over the prior year primarily due to a notably higher mix of organic C&I product shipments and lower mix of home standby generators, together with the impact of recent acquisitions.

Operating expenses for the first quarter of 2014 declined $2.7 million, or 4.8%, as compared to the first quarter of 2013. The expense reduction was driven primarily by a decline in warranty expense driven by warranty rate improvements in recent quarters, partially offset by the addition of operating expenses associated with recent acquisitions.

Interest expense in the first quarter of 2014 declined to $11.7 million compared to $15.7 million in the same period last year, the result of a reduction in interest rate from the credit agreement refinancing completed in May 2013.

2014 Outlook

The Company is reaffirming its prior guidance for 2014 in terms of revenue growth, EBITDA margins and cash flows. For the full-year 2014, the Company still expects net sales to increase in the mid-single digit range as compared to the prior year. This top-line guidance assumes no material changes in the current macroeconomic environment, no major power outage events for the remainder of 2014, and no benefit from additional acquisitions.

Adjusted EBITDA margins are expected to remain in the mid-20% range as previously guided, as a higher mix of C&I product shipments relative to prior expectations is projected to be offset by reduced operating expenses. These attractive margins are consistent with the average levels seen during the past four years.

“We expect to continue to benefit from the long-term secular growth drivers for our business,” continued Mr. Jagdfeld. “Given the relatively low penetration for both residential and light-commercial standby generators, we believe there is a substantial opportunity for long-term growth as the leader in these emerging product categories.

We are also optimistic about the increasing need for our products used in certain end-market verticals such as telecommunications and oil & gas, as well as the overall ongoing secular shifts in the market toward natural gas generators and the rental of mobile power equipment. As we continue to execute on our Powering Ahead strategic plan, we are confident in our ability to continue to invest in the future growth of the business, both organically and through acquisitions.”

About Generac

Since 1959, Generac has been a leading designer and manufacturer of a wide range of power generation equipment and other engine powered products. As a leader in power equipment serving residential, light commercial, industrial and construction markets, Generac's power products are available globally through a broad network of independent dealers, retailers, wholesalers and equipment rental companies, as well as sold direct to certain end user customers.

Milwaukee Business Journal Executive of the Year: Generac's Aaron Jagdfeld

Executive of the Year: Public Company

Aaron Jagdfeld

President and chief executive officer, Generac Holdings Inc.

Age: 41
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.”

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ARTICLE

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.

“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

Employees: 3,000

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.

Snowstorms Boost 2010 Snowthrower Sales

January 7 -- In the 12 months ending November 2010, 38 million outdoor power equipment units were sold in the U.S., valued at $5.5 billion, according to NPD’s Consumer Tracking Service. Snowthrowers were the top-growing outdoor power equipment category, up 24% in units and 14% in dollars during the 12-month period ending November 2010, compared to the same time the previous year.

The market research firm said the East/South Central region of the U.S. showed four times the sales of snowthrowers compared to the previous 12-month period. The West North Central, South Atlantic, Middle Atlantic, and New England regions all experienced double-digit growth in snowthrower sales.

“Much of the snowfall of the early part of 2010 came unexpectedly, and seemed constant in some places, driving consumers to get that snow blower they had been putting off, particularly the aging boomer population. With storm after storm, there’s only so much shoveling and back pain we can endure,” said Peter Goldman, president of NPD’s home division.

The outdoor power equipment category, as tracked by NPD, includes chain saws, trimmers, mowers (walk-behind and riding), leaf blowers, pressure washers, and snowthrowers.

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Briggs and Stratton Merges Generator and Power Equipment Business Units

Briggs and Stratton Corp.’s recent decision to merge two of its business units has led to job cuts in the company’s management ranks.

The Wauwatosa-based manufacturer of small engines and outdoor power equipment is merging its Home Power and Yard Power groups into a single unit, company spokeswoman Laura Timm said.

“We made some staffing changes to streamline the group’s functions as part of this strategic move,” she said. “This included eliminating a limited number of management positions.”

Timm declined to reveal the exact number of jobs that were cut or the names of the executives whose positions were eliminated, citing privacy issues.

Briggs and Stratton’s Home Power Group included generators and pressure washers, while the Yard Power Group had been made up of the Simplicity, Snapper and Ferris brands of products and assets that the company bought from Murray Inc.

The consolidated Products Group will be led by Harold Redman Sr., a senior vice president at Briggs and Stratton who had been president of the Home Power Products Group. Vincent Shiely had served as president of the Yard Power Products Group. The company wouldn’t comment on whether Shiely was one of the executives who lost their jobs.

“We are confident that this new structure creates a solid business model that will allow our team to better serve our customers and consumers with products, programs and services,” Timm said.

News of the reorganization came shortly after Briggs and Stratton reported a fiscal first-quarter loss of $8.1 million, or 16 cents per share, as consumer spending remained weak.

The performance, which exceeded analysts’ expectations, represented a slight improvement from the same period last year, when the company reported a net loss of $8.7 million.

Sales for the three-month period rose 2.9 percent to $334.1 million.

Generac Reports Third Quarter 2010 Earnings

WAUKESHA, WISCONSIN, (November 4, 2010) - Generac Holdings Inc., a leading designer and manufacturer of backup power generation products, today reported financial results for its third quarter ended September 30, 2010.

Third Quarter 2010 Highlights

- Net sales increased year-over-year by 11.4% to $160.7 million as compared to $144.3 million in the third quarter of 2009.

- Net income increased year-over-year by 60.6% to $23.0 million as compared to $14.3 million for the third quarter of 2009; Adjusted net income increased 35.3% to $36.7 million from $27.1 million in the third quarter of 2009.

- Net cash provided by operating activities improved 50.0% year-over-year, from $24.3 million to $36.5 million during the third quarter 2010.

- Diluted net income per common share was $0.34 per share; Adjusted diluted net income per common share was $0.55 per share.

- The Company successfully launched its new economy home standby product, CorePowerTM Series, establishing a new lower opening price for the category.

"Despite the difficult operating environment which persisted throughout the third quarter of 2010, we achieved a double digit year-over-year increase in net sales, driven by increased sales for both our residential and industrial products.

Although we have not had the benefit of major outage activity this summer, improved industrial market conditions and our ability to expand distribution and create awareness for our residential products have helped us drive strong revenue growth in our business." said Aaron Jagdfeld, President and Chief Executive Officer of Generac.

Residential product sales of $101.0 million increased 12.6% in the third quarter 2010 from $89.7 million in the third quarter last year. This year-over-year increase was driven primarily by our marketing programs for home standby generators, continued expansion of our residential products distribution network, and a shift towards in-season buying.

Industrial and commercial product sales of $49.6 million in the third quarter increased 7.6% from $46.0 million for the comparable period in 2009. This increase was driven by an improvement in our focused end markets and expansion of our distribution.

The Company has also announced the following strategic initiatives designed to improve Generac's long-term growth profile:

- In October 2010, the Company announced it had reached a licensing agreement with Honeywell to be the exclusive licensee of Honeywell branded standby and portable generators. By leveraging Generac's product offering and support network, the Honeywell brand will provide incremental access to underpenetrated channels for the Company including security and HVAC.

- At the recent 2011 Green Industry and Equipment (GIE) Expo in Louisville, KY, the Company announced plans to re-enter the market for residential and contractor grade pressure washers, allowing it to leverage its existing customer base, supply-chain and engineering expertise.

Overall, gross profit margin increased sequentially to 41.9% from 39.0% in the second quarter 2010, but was down from 44.7% in the same period last year.The year-over-year decline in gross margins was mostly attributable to increased commodity costs versus prior year and a higher mix of lower kilowatt residential products sold during the current quarter compared to the prior year quarter.

Operating expenses for the third quarter of 2010 increased 10.9% to $37.6 million compared to $33.9 million in third quarter of 2009. The year-over-year increase in operating expenses was attributable to increased administrative costs related to operating as a public company, non-cash stock compensation expenses, higher engineering and product development costs, and higher variable operating expenses on higher net sales versus prior year.

Adjusted EBITDA of $45.7 million was relatively flat compared to $46.1 million in the third quarter of 2009.Interest expense decreased in the third quarter of 2010 to $6.5 million, compared to $17.2 million in the same period last year due to debt repayments, lower LIBOR rates, and the termination of certain interest rate swap agreements. 

Free cash flow generation remained strong, improving 51.1% year-over-year to $35.2 million during the third quarter 2010 from $23.3 million in the third quarter of 2009.

OUTLOOK

Mr. Jagdfeld concluded, "As we close out 2010, we expect to see continued year-over-year strength from our industrial and commercial products as demand in those markets continues to improve. However, more than offsetting this improvement, we see our fourth quarter 2010 residential product sales down year-over-year as certain customers have approached seasonal stocking for lower kilowatt products more conservatively this year versus last year.Despite this, we remain confident in our longer term growth initiatives including new product launches, continued expansion of our distribution network and our entry into new geographies and markets that will continue to drive sales growth and significant cash flow generation for our business."

Briggs and Stratton Announces Fiscal 1st Quarter Financial Results

MILWAUKEE, Oct 21, 2010 -- Briggs and Stratton Corporation today announced financial results for its first quarter ended September 26, 2010.

Highlights:

• First quarter fiscal 2011 consolidated net sales of $334.1 million, representing an increase of $9.5 million or 2.9% from the first quarter of fiscal 2010.
• First quarter fiscal 2011 consolidated net loss of $8.1 million, or $0.16 per diluted share, improved from a consolidated net loss of $8.7 million, or $0.18 per diluted share, one year ago.
• Net debt outstanding as of September 26, 2010 is down $106.5 million, or 40.5%, from September 27, 2009.

"We are pleased with our fiscal 2011 first quarter results as we move forward executing our strategy despite continued economic uncertainty," commented Todd J. Teske, Chairman, President and Chief Executive Officer of Briggs and Stratton. "We improved sales and operating results through a period of continued slow growth in consumer spending. Along with these improved operating results, our balance sheet remains strong as we continue to focus on efficiently managing our capital."

Consolidated Results:

Fiscal 2011 first quarter consolidated net sales were $334.1 million and the consolidated net loss was $8.1 million or $0.16 per diluted share. The first quarter of fiscal 2010 had consolidated net sales of $324.6 million and a consolidated net loss of $8.7 million or $0.18 per diluted share.  

The $9.5 million consolidated net sales increase was due primarily to increased international engine shipments as well as improved lawn and garden and snow thrower product sales volumes within our Power Products segment, offset by lower sales of pressure washers and portable generator products. The reduced net loss of $0.6 million compared to the prior year fiscal first quarter was primarily the result of increased engine sales to third party customers and improved engine plant productivity on higher production volumes, offset by Jefferson plant transition costs and lower production volumes in the Power Products segment and increased costs stemming from higher salaries and benefits expenses.

The higher salaries and benefits expenses include a $3.0 million net increase in pension and other post-retirement benefits as well as an increase in salaries and 401(k) company match benefits of $5.0 million, which have been fully restored since being temporarily reduced early in the first quarter of fiscal 2010.

Engines Segment:

Fiscal 2011 first quarter net sales were $205.0 million, which was $0.9 million or 0.4% less than the prior year. This decrease from the same quarter last year is primarily due to a reduction in intercompany sales of engines to our Power Products segment due to lower sales and production of pressure washers and portable generators, offset by an increase in international engine unit volumes to European and Asian OEMs.

The fiscal 2011 first quarter loss from operations was $5.5 million, which is $0.7 million more than the $4.9 million loss from operations experienced in the first quarter of fiscal 2010. This increase in the loss from operations over the prior year was the result of higher salaries and benefits expenses of $6.8 million, offset by improved absorption as engines produced increased 9% over the prior year first quarter.

The increase in salaries and benefits is primarily attributed to temporary reductions in salaries and 401(k) match implemented in the first quarter last year; such salaries and benefits have since been restored resulting in the increase between years.

Power Products Segment:

Fiscal 2011 first quarter net sales were $168.2 million, which was $2.3 million or 1.4% greater than the prior year. The improvement in sales compared to the same quarter last year primarily resulted from increased unit shipment volumes of lawn and garden products, offset by reduced shipment volumes of pressure washers and portable generators as retailers reduce their inventories in these categories.

The fiscal 2011 first quarter loss from operations was $5.0 million, or $7.5 million lower than the income from operations of $2.5 million in the first quarter of fiscal 2010. This decline in income from operations between years resulted from higher manufacturing spending including transition costs from the closure of our Jefferson manufacturing facility, lower absorption primarily related to the decreased production of portable generators and pressure washers, as well as increased expenses of $1.5 million related to salaries and benefits.

The increase in salaries and benefits is primarily attributed to temporary reductions in salaries and 401(k) match implemented in the first quarter last year; such salaries and benefits have since been restored resulting in the increase between years. Higher manufacturing spending is attributed to higher material costs and increased freight expense.

Corporate Items:

Interest expense was lower between years because of lower outstanding borrowings. The effective tax rate for the fiscal 2011 first quarter was a benefit of 33.4%, or $4.1 million, versus a benefit of 36.1%, or $4.9 million, in the first quarter last year. The effective tax rate benefit for the first quarter of fiscal 2011 was lower than the 2010 period because 2010included the favorable tax impact of the settlement of audits.

Financial Position:

The 8.875% Senior Notes that are due in March 2011 are classified as Short-Term Debt in the consolidated balance sheet as of the end of the fiscal 2011 first quarter. The company believes it will be able to replace these borrowings with new financing at or prior to the maturity date of the Senior Notes. In the unlikely event the company is unable to replace these borrowings with new financing upon the maturity of the Senior Notes, we believe that the availability within our existing revolving credit facility will be sufficient to pay off the outstanding Senior Notes.

Net debt at September 26, 2010 was $156.4 million (total debt of $204.1 million less $47.7 million of cash), an improvement of $106.5 million from September 27, 2009. Cash flows used by operating activities for the fiscal 2011 first quarter were $55.5 million compared to cash provided by operating activities of $11.9 million in the fiscal 2010 first quarter. The increase in cash used for operating activities is primarily due to working capital requirements to replenish inventory from lower levels at the end of fiscal 2010.

Outlook:

The company continues to project that fiscal 2011 net income will be in the range of $60 to $70 million or $1.20 to $1.40 per diluted share. Consolidated net sales are projected to be approximately 2% to 4% higher than in fiscal 2010. Engines Segment sales are forecasted higher on modest volume and pricing improvements while the Power Products Segment sales are forecasted higher primarily due to higher expected volumes of lawn and garden equipment. Demand for portable generators and the related engines due to landed hurricane activity have not been included in our fiscal 2011 sales forecast.

Operating income margins for fiscal 2011 are projected to be in the range of 5.0% to 6.0%, and interest expense and other income are forecasted to be in the range of $23 million to $25 million and $4 million to $5 million, respectively. The effective tax rate for the full year is projected to be in a range of 32% to 35%.