Generac Holdings Inc. (NYSE: GNRC) (“Generac” or the “Company”), a
leading global designer and manufacturer of energy technology
solutions and other power products, today reported financial
results for its first quarter ended March 31, 2024 and provided an
update on its outlook for the full-year 2024.
First Quarter 2024 Highlights
- Net sales increased
to $889 million during the first quarter of 2024 as compared to
$888 million in the prior-year first quarter. Core sales, which
excludes both the impact of acquisitions and foreign currency, was
down approximately 1% from the prior year period.
- Residential product
sales increased approximately 2% to $429 million as compared to
$419 million last year.
- Commercial &
Industrial (“C&I”) product sales decreased approximately 2% to
$354 million as compared to $363 million in the prior year.
- Net income
attributable to the Company during the first quarter was $26
million, or $0.39 per share, as compared to $12 million, or $0.05
per share, for the same period of 2023.
- Adjusted net income
attributable to the Company, as defined in the accompanying
reconciliation schedules, was $53 million, or $0.88 per share, as
compared to $39 million, or $0.63 per share, in the first quarter
of 2023.
- Adjusted EBITDA
before deducting for noncontrolling interests, as defined in the
accompanying reconciliation schedules, was $127 million, or 14.3%
of net sales, as compared to $100 million, or 11.3% of net sales,
in the prior year.
- Cash flow from
operations was $112 million as compared to $(19) million in the
prior year. Free cash flow, as defined in the accompanying
reconciliation schedules, was $85 million as compared to $(42)
million in the first quarter of 2023.
“First quarter results exceeded our expectations due to strong
operating margins and execution,” said Aaron Jagdfeld, President
and Chief Executive Officer. “Home standby generator shipments
increased at a strong rate during the quarter from a softer prior
year period, as field inventory continued to decline to more
normalized levels. Additionally, we generated significant free cash
flow during the quarter which further strengthens our confidence in
executing our ‘Powering A Smarter World’ enterprise strategy.”
Jagdfeld continued, “Power security concerns have never been
more apparent as the electrification of everything, deployment of
energy intensive data centers, and rising long-term trend of severe
weather events pressure an aging electrical grid that is
increasingly reliant on intermittent renewable power generation. We
believe Generac’s products and solutions are uniquely positioned to
help homes and businesses solve the challenges that will result
from this accelerating energy transition.”
Additional First Quarter 2024 Consolidated
Highlights
Gross profit margin was 35.6% as compared to 30.7% in the
prior-year first quarter. The increase in gross margin was
primarily driven by favorable sales mix, production efficiencies,
and realization of lower input costs.
Operating expenses increased $21.5 million, or 9.4%, as compared
to the first quarter of 2023. The growth in operating expenses was
primarily driven by increased employee costs to support future
growth and higher marketing spend to drive incremental awareness
for our products.
Provision for income taxes for the current year quarter was
$12.0 million, or an effective tax rate of 31.2%, as compared to
$7.9 million, or a 35.7% effective tax rate, for the prior year.
The decrease in effective tax rate was primarily driven by
increased year-over-year pre-tax book income, which reduced the
impact of certain discrete tax items.
Cash flow from operations was $111.9 million during the first
quarter, as compared to $(18.6) million in the prior year. Free
cash flow, as defined in the accompanying reconciliation schedules,
was $85.1 million as compared to $(41.7) million in the first
quarter of 2023. The significant improvement in free cash flow was
primarily driven by higher operating earnings, a reduction of
primary working capital in the current year quarter, and a large
one-time cash tax payment in the prior year period which did not
repeat.
Business Segment Results
Domestic Segment
Domestic segment total sales (including inter-segment sales)
increased slightly to $720.5 million as compared to $720.0 million
in the prior year. Higher home standby generator shipments and
growth in C&I product sales to industrial distributors were
mostly offset by lower C&I product shipments to telecom and
national rental equipment customers and a reduction in portable
generator sales.
Adjusted EBITDA for the segment was $99.2 million, or 13.8% of
domestic segment total sales, as compared to $67.7 million, or 9.4%
of total sales, in the prior year. This margin improvement was
primarily driven by favorable sales mix and realization of positive
cost benefits.
International Segment
International segment total sales (including inter-segment
sales) decreased 14% to $186.7 million as compared to $216.5
million in the prior year quarter, including an approximate 4%
sales benefit from foreign currency and acquisitions. The
approximately 18% core total sales decline for the segment was
primarily driven by lower inter-segment sales related to softness
in the telecom market and weaker shipments in Europe, most notably
for portable generators.
Adjusted EBITDA for the segment, before deducting for
noncontrolling interests, was $28.1 million, or 15.0% of
international segment total sales, as compared to $32.4 million, or
15.0% of total sales, in the prior year. Favorable price and cost
benefits were offset by reduced operating leverage on lower
shipments during the quarter.
2024 Outlook
The Company is maintaining its full-year 2024 net sales guidance
of 3 to 7% growth as compared to the prior year, including a slight
favorable impact from foreign currency and acquisitions.
Additionally, the Company now expects net income margin, before
deducting for non-controlling interests, to be approximately 6.0 to
7.0% for the full-year 2024. The corresponding adjusted EBITDA
margin is still expected to be approximately 16.5 to 17.5%.
The Company continues to expect strong operating and free cash
flow generation for the full year, with free cash flow conversion
from adjusted net income of approximately 100%.
Conference Call and Webcast
Generac management will hold a conference call at 10:00 a.m. EDT
on Wednesday, May 1, 2024 to discuss first quarter 2024 operating
results. The conference call can be accessed at the following link:
https://register.vevent.com/register/BI89e9055e99cf4666a33a0c6ec76e63df.
Individuals who wish to listen via telephone will be given dial-in
information.
The conference call will also be webcast simultaneously on
Generac's website (http://www.generac.com), accessed under the
Investor Relations link. The webcast link will be made available on
the Company’s website prior to the start of the call within the
Events section of the Investor Relations website.
Following the live webcast, a replay will be available on the
Company’s website for 12 months.
About Generac
Generac is a leading energy technology company that provides
backup and prime power products and energy storage systems for home
and commercial & industrial applications, energy monitoring
& management devices and services, and other engine &
battery powered tools and equipment. Founded in 1959, Generac
introduced the first affordable backup generator and later created
the automatic home standby generator category. The Company has
continued to expand its energy technology offerings in its mission
to lead the evolution to more resilient, efficient, and sustainable
energy solutions.
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," "forecast," "project," "plan," "intend," "believe,"
"confident," "may," "should," "can have," "likely," "future,"
"optimistic" 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
affect Generac's actual financial results and cause them to differ
materially from those anticipated in any forward-looking
statements, including:
● |
|
fluctuations in cost, availability, and quality of raw materials,
key components and labor required to manufacture our products; |
● |
|
our dependence on a small number of contract manufacturers and
component suppliers, including single-source suppliers; |
● |
|
our ability to protect our intellectual property rights or
successfully defend against third party infringement claims; |
● |
|
increase in product and other liability claims, warranty costs,
recalls, or other claims; |
● |
|
significant legal proceedings, claims, fines, penalties, tax
assessments, lawsuits or government investigations; |
● |
|
our ability to consummate our share repurchase programs; |
● |
|
our failure or inability to adapt to, or comply with, current or
future changes in applicable laws and regulations; |
● |
|
scrutiny regarding our ESG practices; |
● |
|
our ability to develop and enhance products and gain customer
acceptance for our products; |
● |
|
frequency and duration of power outages impacting demand for our
products; |
● |
|
changes in durable goods spending by consumers and businesses or
other macroeconomic conditions, impacting demand for our
products; |
● |
|
our ability to accurately forecast demand for our products and
effectively manage inventory levels relative to such forecast; |
● |
|
our ability to remain competitive; |
● |
|
our dependence on our dealer and distribution network; |
● |
|
market reaction to changes in selling prices or mix of
products; |
● |
|
loss of our key management and employees; |
● |
|
disruptions from labor disputes or organized labor activities; |
● |
|
our ability to attract and retain employees; |
● |
|
disruptions in our manufacturing operations; |
● |
|
changes in U.S. trade policy; |
● |
|
the possibility that the expected synergies, efficiencies and cost
savings of our acquisitions, divestitures, restructurings, or
realignments will not be realized, or will not be realized within
the expected time period; |
● |
|
risks related to sourcing components in foreign countries; |
● |
|
compliance with environmental, health and safety laws and
regulations; |
● |
|
government regulation of our products; |
● |
|
failures or security breaches of our networks, information
technology systems, or connected products; |
● |
|
our ability to make payments on our indebtedness; |
● |
|
terms of our credit facilities that may restrict our
operations; |
● |
|
our potential need for additional capital to finance our growth or
refinancing our existing credit facilities; |
● |
|
risks of impairment of the value of our goodwill and other
indefinite-lived assets; |
● |
|
volatility of our stock price; and |
● |
|
potential tax liabilities. |
|
|
|
Should one or more of these risks or uncertainties materialize,
Generac's actual results may vary in material respects from those
projected in any forward-looking statements. In the current
environment, some of the above factors have materialized and may
cause actual results to vary from these forward-looking statements.
A detailed discussion of these and other factors that may affect
future results is contained in Generac's filings with the U.S.
Securities and Exchange Commission (“SEC”), particularly in the
Risk Factors section of the 2023 Annual Report on Form 10-K and in
its periodic reports on Form 10-Q. Stockholders, potential
investors and other readers should consider these factors carefully
in evaluating the forward-looking statements.
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.
Non-GAAP Financial Metrics
Core Sales
The Company references core sales to further supplement
Generac's condensed consolidated financial statements presented in
accordance with U.S. GAAP. Core sales excludes the impact of
acquisitions and fluctuations in foreign currency translation.
Management believes that core sales facilitates easier and more
meaningful comparison of net sales performance with prior and
future periods.
Adjusted EBITDA
To supplement Generac's condensed consolidated financial
statements presented in accordance with U.S. GAAP, the Company
provides the computation of Adjusted EBITDA attributable to the
Company, which is defined as net income before noncontrolling
interests adjusted for the following items: interest expense,
depreciation expense, amortization of intangible assets, income tax
expense, certain non-cash gains and losses including certain
purchase accounting adjustments and contingent consideration
adjustments, share-based compensation expense, certain transaction
costs and credit facility fees, business optimization expenses,
certain specific provisions, mark-to-market gains and losses on a
minority investment, and Adjusted EBITDA attributable to
noncontrolling interests, as set forth in the reconciliation table
below. The computation of Adjusted EBITDA is based primarily on the
definition included in our Credit Agreement.
Adjusted Net Income
To further supplement Generac's condensed consolidated financial
statements presented in accordance with U.S. GAAP, the Company
provides a summary to show the computation of adjusted net income
attributable to the Company. Adjusted net income attributable to
the Company is defined as net income before noncontrolling
interests adjusted for the following items: amortization of
intangible assets, amortization of deferred financing costs and
original issue discount related to the Company's debt, intangible
impairment charges, certain transaction costs and other purchase
accounting adjustments, business optimization expenses, certain
specific provisions, mark-to-market gains and losses on a minority
investment, other non-cash gains and losses, and adjusted net
income attributable to non-controlling interests.
Free Cash Flow
In addition, the Company references free cash flow to further
supplement Generac's condensed consolidated financial statements
presented in accordance with U.S. GAAP. Free cash flow is defined
as net cash provided by operating activities, plus proceeds from
beneficial interests in securitization transactions, less
expenditures for property and equipment, and is intended to be a
measure of operational cash flow taking into account additional
capital expenditure investment into the business.
The presentation of this additional information is not meant to
be considered in isolation of, or as a substitute for, results
prepared in accordance with U.S. GAAP. Please see the accompanying
Reconciliation Schedules and our SEC filings for additional
discussion of the basis for Generac's reporting of Non-GAAP
financial measures, which includes why the Company believes these
measures provide useful information to investors and the additional
purposes for which management uses the non-GAAP financial
information.
SOURCE: Generac Holdings Inc.
CONTACT: Kris RosemannSenior Manager – Corporate Development
& Investor Relations (262)
506-6064InvestorRelations@generac.com
|
Generac Holdings Inc. |
Condensed Consolidated Statements of Comprehensive Income |
(U.S. Dollars in Thousands, Except Share and Per Share Data) |
(Unaudited) |
|
|
|
|
|
Three Months Ended March 31, |
|
|
2024 |
|
|
|
2023 |
|
|
|
|
|
Net sales |
$ |
889,273 |
|
|
$ |
887,910 |
|
Costs of goods sold |
|
572,894 |
|
|
|
615,411 |
|
Gross profit |
|
316,379 |
|
|
|
272,499 |
|
|
|
|
|
Operating expenses: |
|
|
|
Selling and service |
|
108,586 |
|
|
|
100,688 |
|
Research and development |
|
49,410 |
|
|
|
41,820 |
|
General and administrative |
|
66,764 |
|
|
|
59,685 |
|
Amortization of intangibles |
|
24,750 |
|
|
|
25,823 |
|
Total operating expenses |
|
249,510 |
|
|
|
228,016 |
|
Income from operations |
|
66,869 |
|
|
|
44,483 |
|
|
|
|
|
Other (expense) income: |
|
|
|
Interest expense |
|
(23,605 |
) |
|
|
(22,995 |
) |
Investment income |
|
1,688 |
|
|
|
688 |
|
Change in fair value of investment |
|
(6,019 |
) |
|
|
- |
|
Other, net |
|
(422 |
) |
|
|
(166 |
) |
Total other expense, net |
|
(28,358 |
) |
|
|
(22,473 |
) |
|
|
|
|
Income before provision for income taxes |
|
38,511 |
|
|
|
22,010 |
|
Provision for income taxes |
|
12,033 |
|
|
|
7,849 |
|
Net income |
|
26,478 |
|
|
|
14,161 |
|
Net income (loss) attributable to noncontrolling interests |
|
246 |
|
|
|
1,731 |
|
Net income attributable to Generac Holdings Inc. |
$ |
26,232 |
|
|
$ |
12,430 |
|
|
|
|
|
Net income attributable to common shareholders per common share -
basic: |
$ |
0.39 |
|
|
$ |
0.06 |
|
Weighted average common shares outstanding - basic: |
|
59,849,362 |
|
|
|
61,556,044 |
|
|
|
|
|
Net income attributable to common shareholders per common share -
diluted: |
$ |
0.39 |
|
|
$ |
0.05 |
|
Weighted average common shares outstanding - diluted: |
|
60,486,125 |
|
|
|
62,294,447 |
|
|
|
|
|
Comprehensive income attributable to Generac Holdings Inc. |
$ |
23,014 |
|
|
$ |
35,362 |
|
|
|
|
|
Generac Holdings Inc. |
Condensed Consolidated Balance Sheets |
(U.S. Dollars in Thousands, Except Share and Per Share Data) |
(Unaudited) |
|
|
|
|
|
March 31, |
|
December 31, |
|
|
2024 |
|
|
|
2023 |
|
Assets |
|
|
|
Current assets: |
|
|
|
Cash and cash equivalents |
$ |
249,355 |
|
|
$ |
200,994 |
|
Accounts receivable, less allowance for credit losses of $34,594
and $33,925 at March 31, 2024 and December 31, 2023,
respectively |
|
520,725 |
|
|
|
537,316 |
|
Inventories |
|
1,182,350 |
|
|
|
1,167,484 |
|
Prepaid expenses and other current assets |
|
101,483 |
|
|
|
91,898 |
|
Total current assets |
|
2,053,913 |
|
|
|
1,997,692 |
|
|
|
|
|
Property and equipment, net |
|
605,466 |
|
|
|
598,577 |
|
|
|
|
|
Customer lists, net |
|
175,632 |
|
|
|
184,513 |
|
Patents and technology, net |
|
407,928 |
|
|
|
417,441 |
|
Other intangible assets, net |
|
23,956 |
|
|
|
27,127 |
|
Tradenames, net |
|
214,136 |
|
|
|
216,995 |
|
Goodwill |
|
1,429,495 |
|
|
|
1,432,384 |
|
Deferred income taxes |
|
16,035 |
|
|
|
15,532 |
|
Operating lease and other assets |
|
202,959 |
|
|
|
203,051 |
|
Total assets |
$ |
5,129,520 |
|
|
$ |
5,093,312 |
|
|
|
|
|
Liabilities and stockholders’ equity |
|
|
|
Current liabilities: |
|
|
|
Short-term borrowings |
$ |
78,086 |
|
|
$ |
81,769 |
|
Accounts payable |
|
381,352 |
|
|
|
340,719 |
|
Accrued wages and employee benefits |
|
46,198 |
|
|
|
54,970 |
|
Accrued product warranty |
|
61,801 |
|
|
|
65,298 |
|
Other accrued liabilities |
|
287,026 |
|
|
|
292,120 |
|
Current portion of long-term borrowings and finance lease
obligations |
|
43,438 |
|
|
|
45,895 |
|
Total current liabilities |
|
897,901 |
|
|
|
880,771 |
|
|
|
|
|
Long-term borrowings and finance lease obligations |
|
1,439,736 |
|
|
|
1,447,553 |
|
Deferred income taxes |
|
84,923 |
|
|
|
90,012 |
|
Deferred revenue |
|
172,500 |
|
|
|
167,008 |
|
Operating lease and other long-term liabilities |
|
155,031 |
|
|
|
158,349 |
|
Total liabilities |
|
2,750,091 |
|
|
|
2,743,693 |
|
|
|
|
|
Redeemable noncontrolling interest |
|
9,117 |
|
|
|
6,549 |
|
|
|
|
|
Stockholders’ equity: |
|
|
|
Common stock, par value $0.01, 500,000,000 shares authorized,
73,492,146 and 73,195,055 shares issued at March 31, 2024 and
December 31, 2023, respectively |
|
735 |
|
|
|
733 |
|
Additional paid-in capital |
|
1,081,985 |
|
|
|
1,070,386 |
|
Treasury stock, at cost, 13,087,185 and 13,057,298 shares at March
31, 2024 and December 31, 2023, respectively |
|
(1,037,227 |
) |
|
|
(1,032,921 |
) |
Excess purchase price over predecessor basis |
|
(202,116 |
) |
|
|
(202,116 |
) |
Retained earnings |
|
2,542,859 |
|
|
|
2,519,313 |
|
Accumulated other comprehensive loss |
|
(18,832 |
) |
|
|
(15,143 |
) |
Stockholders’ equity attributable to Generac Holdings Inc. |
|
2,367,404 |
|
|
|
2,340,252 |
|
Noncontrolling interests |
|
2,908 |
|
|
|
2,818 |
|
Total stockholders’ equity |
|
2,370,312 |
|
|
|
2,343,070 |
|
Total liabilities and stockholders’ equity |
$ |
5,129,520 |
|
|
$ |
5,093,312 |
|
|
|
|
|
Generac Holdings Inc. |
Condensed Consolidated Statements of Cash Flows |
(U.S. Dollars in Thousands) |
(Unaudited) |
|
|
|
|
|
Three Months Ended March 31, |
|
|
2024 |
|
|
|
2023 |
|
Operating activities |
|
|
|
Net income |
$ |
26,478 |
|
|
$ |
14,161 |
|
Adjustment to reconcile net income to net cash provided by (used
in) operating activities: |
|
|
|
Depreciation |
|
17,152 |
|
|
|
14,128 |
|
Amortization of intangible assets |
|
24,750 |
|
|
|
25,823 |
|
Amortization of original issue discount and deferred financing
costs |
|
973 |
|
|
|
954 |
|
Change in fair value of investment |
|
6,019 |
|
|
|
- |
|
Deferred income taxes |
|
(5,405 |
) |
|
|
(10,712 |
) |
Share-based compensation expense |
|
12,440 |
|
|
|
10,334 |
|
(Gain) loss on disposal of assets |
|
(52 |
) |
|
|
30 |
|
Other noncash charges |
|
1,410 |
|
|
|
(160 |
) |
Excess tax benefits from equity awards |
|
1,009 |
|
|
|
(998 |
) |
Net changes in operating assets and liabilities, net of
acquisitions: |
|
|
|
Accounts receivable |
|
13,664 |
|
|
|
33,925 |
|
Inventories |
|
(18,109 |
) |
|
|
(23,820 |
) |
Other assets |
|
(920 |
) |
|
|
(5,576 |
) |
Accounts payable |
|
44,682 |
|
|
|
(24,488 |
) |
Accrued wages and employee benefits |
|
(8,512 |
) |
|
|
1,630 |
|
Other accrued liabilities |
|
(3,681 |
) |
|
|
(53,790 |
) |
Net cash provided by (used in) operating activities |
|
111,898 |
|
|
|
(18,559 |
) |
|
|
|
|
Investing activities |
|
|
|
Proceeds from sale of property and equipment |
|
51 |
|
|
|
84 |
|
Proceeds from beneficial interests in securitization
transactions |
|
- |
|
|
|
795 |
|
Contribution to equity method investment |
|
(1,629 |
) |
|
|
- |
|
Net proceeds from (purchase of) long-term investments |
|
1,761 |
|
|
|
(2,000 |
) |
Expenditures for property and equipment |
|
(26,820 |
) |
|
|
(23,977 |
) |
Acquisition of business, net of cash acquired |
|
- |
|
|
|
(16,188 |
) |
Net cash used in investing activities |
|
(26,637 |
) |
|
|
(41,286 |
) |
|
|
|
|
Financing activities |
|
|
|
Proceeds from short-term borrowings |
|
8,970 |
|
|
|
19,515 |
|
Proceeds from long-term borrowings |
|
471 |
|
|
|
267,869 |
|
Repayments of short-term borrowings |
|
(18,489 |
) |
|
|
(5,080 |
) |
Repayments of long-term borrowings and finance lease
obligations |
|
(7,030 |
) |
|
|
(113,573 |
) |
Payment of contingent acquisition consideration |
|
- |
|
|
|
(479 |
) |
Payment of deferred acquisition consideration |
|
(6,000 |
) |
|
|
- |
|
Payment for additional ownership interest |
|
(9,117 |
) |
|
|
(104,844 |
) |
Taxes paid related to equity awards |
|
(5,455 |
) |
|
|
(4,710 |
) |
Proceeds from the exercise of stock options |
|
319 |
|
|
|
4,975 |
|
Net cash (used in) provided by financing activities |
|
(36,331 |
) |
|
|
63,673 |
|
|
|
|
|
Effect of exchange rate changes on cash and cash equivalents |
|
(569 |
) |
|
|
814 |
|
|
|
|
|
Net increase in cash and cash equivalents |
|
48,361 |
|
|
|
4,642 |
|
Cash and cash equivalents at beginning of period |
|
200,994 |
|
|
|
132,723 |
|
Cash and cash equivalents at end of period |
$ |
249,355 |
|
|
$ |
137,365 |
|
|
|
|
|
Generac Holdings Inc. |
Segment Reporting and Product Class Information |
(U.S. Dollars in Thousands) |
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Sales by Reportable Segment |
|
Three Months Ended March 31, 2024 |
|
Three Months Ended March 31, 2023 |
|
External Net Sales |
|
Intersegment Sales |
|
Total Sales |
|
External Net Sales |
|
Intersegment Sales |
|
Total Sales |
Domestic |
$ |
712,337 |
|
|
$ |
8,136 |
|
|
$ |
720,473 |
|
|
$ |
704,386 |
|
$ |
15,607 |
|
|
$ |
719,993 |
|
International |
|
176,936 |
|
|
|
9,772 |
|
|
|
186,708 |
|
|
|
183,524 |
|
|
32,942 |
|
|
|
216,466 |
|
Intercompany elimination |
|
- |
|
|
|
(17,908 |
) |
|
|
(17,908 |
) |
|
|
- |
|
|
(48,549 |
) |
|
|
(48,549 |
) |
Total net sales |
$ |
889,273 |
|
|
$ |
- |
|
|
$ |
889,273 |
|
|
$ |
887,910 |
|
$ |
- |
|
|
$ |
887,910 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
External Net Sales by Product Class |
|
|
|
|
|
|
|
|
|
Three Months Ended March 31, |
|
|
|
|
|
|
|
|
2024 |
|
|
|
2023 |
|
|
|
|
|
|
|
|
|
Residential products |
$ |
428,950 |
|
|
$ |
418,863 |
|
|
|
|
|
|
|
|
|
Commercial & industrial products |
|
353,970 |
|
|
|
362,990 |
|
|
|
|
|
|
|
|
|
Other |
|
106,353 |
|
|
|
106,057 |
|
|
|
|
|
|
|
|
|
Total net sales |
$ |
889,273 |
|
|
$ |
887,910 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA by Reportable Segment |
|
|
|
|
|
|
|
|
|
Three Months Ended March 31, |
|
|
|
|
|
|
|
|
2024 |
|
|
|
2023 |
|
|
|
|
|
|
|
|
|
Domestic |
$ |
99,175 |
|
|
$ |
67,662 |
|
|
|
|
|
|
|
|
|
International |
|
28,058 |
|
|
|
32,413 |
|
|
|
|
|
|
|
|
|
Total adjusted EBITDA (1) |
$ |
127,233 |
|
|
$ |
100,075 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) See reconciliation of Adjusted EBITDA to Net Income
attributable to Generac Holdings Inc. on the following
reconciliation schedule. |
|
Generac Holdings Inc. |
Reconciliation Schedules |
(U.S. Dollars in Thousands, Except Share and Per Share Data) |
(Unaudited) |
|
|
|
|
|
|
|
|
Net income to Adjusted EBITDA reconciliation |
|
|
|
|
Three Months Ended March 31, |
|
|
2024 |
|
|
|
2023 |
|
|
|
|
|
Net income attributable to Generac Holdings Inc. |
$ |
26,232 |
|
|
$ |
12,430 |
|
Net income attributable to noncontrolling interests |
|
246 |
|
|
|
1,731 |
|
Net income |
|
26,478 |
|
|
|
14,161 |
|
Interest expense |
|
23,605 |
|
|
|
22,995 |
|
Depreciation and amortization |
|
41,902 |
|
|
|
39,951 |
|
Provision for income taxes |
|
12,033 |
|
|
|
7,849 |
|
Non-cash write-down and other adjustments (1) |
|
510 |
|
|
|
(3,160 |
) |
Non-cash share-based compensation expense (2) |
|
12,440 |
|
|
|
10,334 |
|
Transaction costs and credit facility fees (3) |
|
1,425 |
|
|
|
1,091 |
|
Business optimization and other charges (4) |
|
486 |
|
|
|
1,100 |
|
Provision for legal, regulatory, and clean energy product charges
(5) |
|
2,535 |
|
|
|
5,800 |
|
Change in fair value of investment (6) |
|
6,019 |
|
|
|
- |
|
Other |
|
(200 |
) |
|
|
(46 |
) |
Adjusted EBITDA |
|
127,233 |
|
|
|
100,075 |
|
Adjusted EBITDA attributable to noncontrolling interests |
|
477 |
|
|
|
3,133 |
|
Adjusted EBITDA attributable to Generac Holdings Inc. |
$ |
126,756 |
|
|
$ |
96,942 |
|
|
|
|
|
(1) Includes gains/losses on the disposition of assets other than
in the ordinary course of business, gains/losses on sales of
certain investments, unrealized mark-to-market adjustments on
commodity contracts, certain foreign currency related adjustments,
and certain purchase accounting and contingent consideration
adjustments. A full description of these and the other
reconciliation adjustments contained in these schedules is included
in Generac's SEC filings. |
|
|
|
|
(2) Represents share-based compensation expense to account for
stock options, restricted stock and other stock awards over their
respective vesting periods. |
|
|
|
|
(3) Represents transaction costs incurred directly in connection
with any investment, as defined in our credit agreement, equity
issuance or debt issuance or refinancing, together with certain
fees relating to our senior secured credit facilities, such as
administrative agent fees and credit facility commitment fees under
our Amended Credit Agreement, which we believe to be akin to, or
associated with, interest expense and whose inclusion in Adjusted
EBITDA is therefore similar to the inclusion of interest expense in
that calculation. |
|
|
|
|
(4) Represents severance and other restructuring charges related to
the consolidation of certain operating facilities and
organizational functions. |
|
|
|
|
(5) Represents the following significant and unusual charges not
indicative of our ongoing operations:
- A provision for judgments and legal expenses related to certain
patent lawsuits - $2.1 million in 2024.
- Additional customer support costs related to a clean energy
product customer that filed for bankruptcy in 2022 – $0.4 million
in 2024.
- A provision for a matter with the Consumer Product Safety
Commission ("CPSC") concerning the imposition of civil fines for
allegedly failing to timely submit a report under the Consumer
Product Safety Act ("CPSA") in relation to certain portable
generators that were subject to a voluntary recall previously
announced on July 29, 2021 - $5.8 million in the first quarter
2023.
|
|
|
|
|
(6) Represents non-cash gains and losses from changes in the fair
value of the Company's investment in warrants and equity
securities in Wallbox N.V. |
|
|
|
|
Net income to Adjusted net income
reconciliation |
|
|
|
|
Three Months Ended March 31, |
|
|
2024 |
|
|
|
2023 |
|
|
|
|
|
Net income attributable to Generac Holdings Inc. |
$ |
26,232 |
|
|
$ |
12,430 |
|
Net income attributable to noncontrolling interests |
|
246 |
|
|
|
1,731 |
|
Net income |
|
26,478 |
|
|
|
14,161 |
|
Amortization of intangible assets |
|
24,750 |
|
|
|
25,823 |
|
Amortization of deferred finance costs and original issue
discount |
|
973 |
|
|
|
954 |
|
Transaction costs and other purchase accounting adjustments
(7) |
|
844 |
|
|
|
718 |
|
Loss/(gain) attributable to business or asset dispositions (8) |
|
37 |
|
|
|
(119 |
) |
Business optimization and other charges (4) |
|
486 |
|
|
|
1,100 |
|
Provision for legal, regulatory, and clean energy product charges
(5) |
|
2,535 |
|
|
|
5,800 |
|
Change in fair value of investment (6) |
|
6,019 |
|
|
|
- |
|
Tax effect of add backs |
|
(8,925 |
) |
|
|
(7,131 |
) |
Adjusted net income |
|
53,197 |
|
|
|
41,306 |
|
Adjusted net income attributable to noncontrolling interests |
|
246 |
|
|
|
1,861 |
|
Adjusted net income attributable to Generac Holdings Inc. |
$ |
52,951 |
|
|
$ |
39,445 |
|
|
|
|
|
Adjusted net income attributable to Generac Holdings Inc. per |
|
|
|
common share - diluted: |
$ |
0.88 |
|
|
$ |
0.63 |
|
Weighted average common shares outstanding - diluted: |
|
60,486,125 |
|
|
|
62,294,447 |
|
|
|
|
|
(7) Represents transaction costs incurred directly in connection
with any investment, as defined in our credit agreement, equity
issuance or debt issuance or refinancing, and certain purchase
accounting and contingent consideration adjustments. |
|
|
|
|
(8) Represents gains and losses attributable to the disposition of
a business or assets occurring in other than ordinary course, as
defined in our credit agreement. |
|
|
|
|
Free Cash Flow Reconciliation |
|
|
|
|
Three Months Ended March 31, |
|
|
2024 |
|
|
|
2023 |
|
|
|
|
|
Net cash provided by (used in) operating activities |
$ |
111,898 |
|
|
$ |
(18,559 |
) |
Proceeds from beneficial interests in securitization
transactions |
|
- |
|
|
|
795 |
|
Expenditures for property and equipment |
|
(26,820 |
) |
|
|
(23,977 |
) |
Free cash flow |
$ |
85,078 |
|
|
$ |
(41,741 |
) |
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