Generac Reports Third Quarter 2024 Results
Generac Holdings reported strong Q3 2024 financial results with net sales of $1.17 billion, up 10% year-over-year. Residential product sales increased 28% to $723 million, while Commercial & Industrial sales decreased 15% to $328 million. Net income rose to $114 million ($1.89 per share), compared to $60 million ($0.97 per share) in Q3 2023. The company generated strong cash flow from operations of $212 million and repurchased shares worth $102 million. Due to elevated power outage activity, Generac updated its full-year 2024 guidance, expecting net sales growth of 5-9% and adjusted EBITDA margin of 17.5-18.5%.
Generac Holdings ha riportato risultati finanziari solidi per il terzo trimestre del 2024, con vendite nette di 1,17 miliardi di dollari, in aumento del 10% rispetto all'anno precedente. Le vendite di prodotti residenziali sono aumentate del 28%, raggiungendo i 723 milioni di dollari, mentre le vendite commerciali e industriali sono diminuite del 15%, attestandosi a 328 milioni di dollari. Il reddito netto è salito a 114 milioni di dollari (1,89 dollari per azione), rispetto ai 60 milioni di dollari (0,97 dollari per azione) nel terzo trimestre del 2023. L'azienda ha generato un forte flusso di cassa operativo di 212 milioni di dollari e ha riacquistato azioni per un valore di 102 milioni di dollari. A causa dell'attività elevata di interruzioni di corrente, Generac ha aggiornato le previsioni per l'intero anno 2024, aspettandosi una crescita delle vendite nette compresa tra il 5% e il 9% e un margine EBITDA rettificato del 17,5% - 18,5%.
Generac Holdings reportó resultados financieros sólidos para el tercer trimestre de 2024, con ventas netas de 1.17 mil millones de dólares, un aumento del 10% en comparación con el año anterior. Las ventas de productos residenciales aumentaron un 28%, alcanzando los 723 millones de dólares, mientras que las ventas comerciales e industriales disminuyeron un 15%, totalizando 328 millones de dólares. La utilidad neta aumentó a 114 millones de dólares (1.89 dólares por acción), en comparación con 60 millones de dólares (0.97 dólares por acción) en el tercer trimestre de 2023. La empresa generó un fuerte flujo de caja operativo de 212 millones de dólares y recompró acciones por valor de 102 millones de dólares. Debido a la elevada actividad de cortes de energía, Generac actualizó su guía de ventas para todo el año 2024, esperando un crecimiento de ventas netas del 5% al 9% y un margen EBITDA ajustado del 17.5% al 18.5%.
Generac Holdings는 2024년 3분기 재무 실적을 발표하며 순매출 11억 7천만 달러를 기록했으며, 이는 전년 대비 10% 증가한 수치입니다. 주거용 제품 판매는 28% 증가하여 7억 2천 3백만 달러에 달했지만, 상업 및 산업 부문 판매는 15% 감소하여 3억 2천 8백만 달러를 기록했습니다. 순이익은 1억 1천4백만 달러(주당 1.89 달러)로 상승했으며, 이는 2023년 3분기 6천만 달러(주당 0.97 달러)에서 증가한 것입니다. 회사는 2억 1천2백만 달러의 견고한 운영 현금 흐름을 창출했으며, 1억 2천2백만 달러에 해당하는 주식을 재구매했습니다. 전력 정전 활동이 증가함에 따라, Generac은 2024년 전체 판매 성장률을 5-9% 예상하고 조정된 EBITDA 마진을 17.5-18.5%로 업데이트했습니다.
Generac Holdings a annoncé des résultats financiers solides pour le troisième trimestre 2024, avec des ventes nettes de 1,17 milliard de dollars, soit une augmentation de 10 % par rapport à l'année précédente. Les ventes de produits résidentiels ont augmenté de 28 % pour atteindre 723 millions de dollars, tandis que les ventes commerciales et industrielles ont diminué de 15 % pour s'établir à 328 millions de dollars. Le bénéfice net a grimpé à 114 millions de dollars (1,89 dollar par action), contre 60 millions de dollars (0,97 dollar par action) au troisième trimestre 2023. L'entreprise a généré un solide flux de trésorerie d'exploitation de 212 millions de dollars et a racheté des actions d'une valeur de 102 millions de dollars. En raison de l'activité accrue des coupures de courant, Generac a mis à jour ses prévisions pour l'année 2024, s'attendant à une croissance des ventes nettes de 5 à 9 % et à une marge EBITDA ajustée de 17,5 à 18,5 %.
Generac Holdings hat starke Finanzzahlen für das dritte Quartal 2024 veröffentlicht, mit Nettoverkaufszahlen von 1,17 Milliarden Dollar, was einem Anstieg von 10% im Vergleich zum Vorjahr entspricht. Verkäufe von Wohnprodukten stiegen um 28% auf 723 Millionen Dollar, während die Verkäufe im gewerblichen und industriellen Bereich um 15% auf 328 Millionen Dollar zurückgingen. Der Nettogewinn stieg auf 114 Millionen Dollar (1,89 Dollar pro Aktie), verglichen mit 60 Millionen Dollar (0,97 Dollar pro Aktie) im dritten Quartal 2023. Das Unternehmen erzielte einen starken operativen Cashflow von 212 Millionen Dollar und hat Aktien im Wert von 102 Millionen Dollar zurückgekauft. Aufgrund der erhöhten Aktivität bei Stromausfällen hat Generac seine Prognose für das gesamte Jahr 2024 aktualisiert und erwartet ein Nettovertriebswachstum von 5–9% sowie eine bereinigte EBITDA-Marge von 17,5–18,5%.
- Net sales increased 10% YoY to $1.17 billion
- Residential product sales grew 28% to $723 million
- Net income nearly doubled to $114 million from $60 million YoY
- Gross profit margin improved to 40.2% from 35.1%
- Cash flow from operations increased to $212.3 million from $140.1 million
- Raised full-year 2024 guidance for sales growth and EBITDA margin
- Commercial & Industrial product sales declined 15% to $328 million
- International segment sales decreased 20% to $166.7 million
- Operating expenses increased 12.0% compared to Q3 2023
Insights
The Q3 results showcase impressive performance with
Strong cash flow generation is particularly noteworthy, with operating cash flow of
The surge in power outage incidents through 2024 has created a robust demand environment for Generac's residential products. This trend, coupled with grid vulnerability concerns and the transition to renewable energy sources, establishes a strong long-term growth narrative. However, the
The international segment's
Return to robust overall sales growth with continued margin expansion; increasing 2024 outlook due to recent major outage events
WAUKESHA, Wis., Oct. 31, 2024 (GLOBE NEWSWIRE) -- 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 third quarter ended September 30, 2024 and provided an update on its outlook for the full-year 2024.
Third Quarter 2024 Highlights
- Net sales were
$1.17 billion during the third quarter of 2024 as compared to$1.07 billion in the prior-year third quarter, an increase of approximately10% . Core sales, which excludes both the impact of acquisitions and foreign currency, increased approximately9% from the prior year period.- Residential product sales increased approximately
28% to$723 million as compared to$565 million last year. - Commercial & Industrial (“C&I”) product sales decreased approximately
15% to$328 million as compared to$385 million in the prior year.
- Residential product sales increased approximately
- Net income attributable to the Company during the third quarter was
$114 million , or$1.89 per share, as compared to$60 million , or$0.97 per share, for the same period of 2023. - Adjusted net income attributable to the Company, as defined in the accompanying reconciliation schedules, was
$136 million , or$2.25 per share, as compared to$102 million , or$1.64 per share, in the third quarter of 2023. - Adjusted EBITDA before deducting for noncontrolling interests, as defined in the accompanying reconciliation schedules, was
$232 million , or19.8% of net sales, as compared to$189 million , or17.6% of net sales, in the prior year. - Cash flow from operations was
$212 million during the third quarter, as compared to$140 million in the prior year. Free cash flow, as defined in the accompanying reconciliation schedules, was$184 million as compared to$117 million in the third quarter of 2023. - The Company repurchased 690,711 shares of its common stock during the third quarter for approximately
$102 million . There is approximately$347 million remaining under the current repurchase program as of September 30, 2024. - The Company is updating its overall net sales growth guidance for the full-year 2024 to be 5 to
9% compared to the prior year on an as-reported basis, an increase from the previous guidance range of 4 to8% . Adjusted EBITDA margin, before deducting for non-controlling interests, is now expected to be 17.5 to18.5% as compared to the previous expectation of 17.0 to18.0% .
“Our third quarter results outperformed our expectations as elevated power outage activity drove increased shipments of our residential products and strong execution helped to deliver significant margin expansion,” said Aaron Jagdfeld, President and Chief Executive Officer. “Shipments of home standby and portable generators increased at a very strong rate from the prior year period, more than offsetting expected softness in C&I product sales. As a result, we are updating our full year 2024 guidance to include higher residential product sales with further improvements in adjusted EBITDA margins.”
Jagdfeld continued, “The vulnerability of our nation’s electrical grid has never been more evident with the U.S. experiencing the highest level of power outage hours through the first nine months of the year since we began tracking outage data in 2010. In addition to more volatile weather, the rapid adoption of renewable, intermittent power generation sources and accelerating demand for electricity will likely lead to additional stresses on our aging grid. The elevated outage activity and growing grid related supply-demand imbalances are expected to drive both continued near-term demand as well as long-term awareness of the growing need for backup power products.”
Additional Third Quarter 2024 Consolidated Highlights
Gross profit margin was
Operating expenses increased
Provision for income taxes for the current year quarter was
Cash flow from operations was
Business Segment Results
Domestic Segment
Domestic segment total sales (including inter-segment sales) increased
Adjusted EBITDA for the segment was
International Segment
International segment total sales (including inter-segment sales) decreased
Adjusted EBITDA for the segment, before deducting for noncontrolling interests, was
2024 Outlook
As a result of higher than previously expected power outage activity, including the impact of Hurricane Helene and Hurricane Milton, the Company is increasing its full-year 2024 net sales guidance. The Company now expects full-year 2024 net sales growth between 5 to
Additionally, the Company now expects net income margin, before deducting for non-controlling interests, to be approximately 7.0 to
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 well above
Conference Call and Webcast
Generac management will hold a conference call at 10:00 a.m. EDT on Thursday, October 31, 2024 to discuss third quarter 2024 operating results. The conference call can be accessed at the following link: https://register.vevent.com/register/BIabec574e36cc43abb7ea58d0150702c4. 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
Founded in 1959, Generac is a leading global designer, manufacturer, and provider of a wide range of energy technology solutions. The Company provides power generation equipment, energy storage systems, energy management devices & solutions, and other power products serving the residential, light commercial, and industrial markets. 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. 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, provision for certain legal and regulatory charges, 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, provision for certain legal and regulatory charges, 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 Rosemann
Director – Corporate Development & Investor Relations
(262) 506-6064
InvestorRelations@generac.com
Generac Holdings Inc. | |||||||
Condensed Consolidated Balance Sheets | |||||||
(U.S. Dollars in Thousands, Except Share and Per Share Data) | |||||||
(Unaudited) | |||||||
September 30, | December 31, | ||||||
2024 | 2023 | ||||||
Assets | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 214,177 | $ | 200,994 | |||
Accounts receivable, less allowance for credit losses of | 658,649 | 537,316 | |||||
Inventories | 1,095,758 | 1,167,484 | |||||
Prepaid expenses and other current assets | 104,791 | 91,898 | |||||
Total current assets | 2,073,375 | 1,997,692 | |||||
Property and equipment, net | 639,733 | 598,577 | |||||
Customer lists, net | 166,016 | 184,513 | |||||
Patents and technology, net | 391,841 | 417,441 | |||||
Other intangible assets, net | 21,419 | 27,127 | |||||
Tradenames, net | 210,308 | 216,995 | |||||
Goodwill | 1,454,172 | 1,432,384 | |||||
Deferred income taxes | 12,179 | 15,532 | |||||
Operating lease and other assets | 217,896 | 203,051 | |||||
Total assets | $ | 5,186,939 | $ | 5,093,312 | |||
Liabilities and stockholders’ equity | |||||||
Current liabilities: | |||||||
Short-term borrowings | $ | 65,540 | $ | 81,769 | |||
Accounts payable | 424,812 | 340,719 | |||||
Accrued wages and employee benefits | 78,209 | 54,970 | |||||
Accrued product warranty | 60,377 | 65,298 | |||||
Other accrued liabilities | 291,360 | 292,120 | |||||
Current portion of long-term borrowings and finance lease obligations | 99,176 | 45,895 | |||||
Total current liabilities | 1,019,474 | 880,771 | |||||
Long-term borrowings and finance lease obligations | 1,360,637 | 1,447,553 | |||||
Deferred income taxes | 62,260 | 90,012 | |||||
Deferred revenue | 186,465 | 167,008 | |||||
Operating lease and other long-term liabilities | 145,641 | 158,349 | |||||
Total liabilities | 2,774,477 | 2,743,693 | |||||
Redeemable noncontrolling interest | - | 6,549 | |||||
Stockholders’ equity: | |||||||
Common stock, par value | 736 | 733 | |||||
Additional paid-in capital | 1,115,525 | 1,070,386 | |||||
Treasury stock, at cost, 14,149,513 and 13,057,298 shares at September 30, 2024 and December 31, 2023, respectively | (1,192,435 | ) | (1,032,921 | ) | |||
Excess purchase price over predecessor basis | (202,116 | ) | (202,116 | ) | |||
Retained earnings | 2,715,716 | 2,519,313 | |||||
Accumulated other comprehensive loss | (27,987 | ) | (15,143 | ) | |||
Stockholders’ equity attributable to Generac Holdings Inc. | 2,409,439 | 2,340,252 | |||||
Noncontrolling interests | 3,023 | 2,818 | |||||
Total stockholders’ equity | 2,412,462 | 2,343,070 | |||||
Total liabilities and stockholders’ equity | $ | 5,186,939 | $ | 5,093,312 | |||
Generac Holdings Inc. | |||||||||||||||
Condensed Consolidated Statements of Comprehensive Income | |||||||||||||||
(U.S. Dollars in Thousands, Except Share and Per Share Data) | |||||||||||||||
(Unaudited) | |||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2024 | 2023 | 2024 | 2023 | ||||||||||||
Net sales | $ | 1,173,563 | $ | 1,070,667 | $ | 3,061,033 | $ | 2,958,997 | |||||||
Costs of goods sold | 701,294 | 694,880 | 1,896,824 | 1,982,290 | |||||||||||
Gross profit | 472,269 | 375,787 | 1,164,209 | 976,707 | |||||||||||
Operating expenses: | |||||||||||||||
Selling and service | 145,310 | 117,929 | 382,049 | 334,360 | |||||||||||
Research and development | 56,936 | 43,312 | 160,342 | 129,074 | |||||||||||
General and administrative | 77,242 | 83,052 | 209,392 | 199,108 | |||||||||||
Amortization of intangibles | 24,157 | 26,718 | 73,698 | 78,934 | |||||||||||
Total operating expenses | 303,645 | 271,011 | 825,481 | 741,476 | |||||||||||
Income from operations | 168,624 | 104,776 | 338,728 | 235,231 | |||||||||||
Other (expense) income: | |||||||||||||||
Interest expense | (22,910 | ) | (24,707 | ) | (69,833 | ) | (72,862 | ) | |||||||
Investment income | 1,757 | 1,160 | 5,286 | 2,789 | |||||||||||
Change in fair value of investment | 5,198 | - | (2,938 | ) | - | ||||||||||
Loss on extinguishment of debt | (4,861 | ) | - | (4,861 | ) | - | |||||||||
Other, net | (577 | ) | (1,167 | ) | (1,949 | ) | (1,664 | ) | |||||||
Total other expense, net | (21,393 | ) | (24,714 | ) | (74,295 | ) | (71,737 | ) | |||||||
Income before provision for income taxes | 147,231 | 80,062 | 264,433 | 163,494 | |||||||||||
Provision for income taxes | 33,453 | 19,428 | 65,124 | 43,184 | |||||||||||
Net income | 113,778 | 60,634 | 199,309 | 120,310 | |||||||||||
Net income attributable to noncontrolling interests | 36 | 257 | 220 | 2,305 | |||||||||||
Net income attributable to Generac Holdings Inc. | 113,742 | 60,377 | 199,089 | 118,005 | |||||||||||
Net income attributable to common shareholders per common share - basic: | $ | 1.91 | $ | 0.98 | $ | 3.29 | $ | 1.74 | |||||||
Weighted average common shares outstanding - basic: | 59,493,640 | 61,368,440 | 59,720,597 | 61,552,949 | |||||||||||
Net income attributable to common shareholders per common share - diluted: | $ | 1.89 | $ | 0.97 | $ | 3.25 | $ | 1.72 | |||||||
Weighted average common shares outstanding - diluted: | 60,312,393 | 62,091,163 | 60,475,478 | 62,362,743 | |||||||||||
Comprehensive income attributable to Generac Holdings Inc. | $ | 129,284 | $ | 37,041 | $ | 186,245 | $ | 141,463 | |||||||
Generac Holdings Inc. | |||||||
Condensed Consolidated Statements of Cash Flows | |||||||
(U.S. Dollars in Thousands) | |||||||
(Unaudited) | |||||||
Nine Months Ended September 30, | |||||||
2024 | 2023 | ||||||
Operating activities | |||||||
Net income | $ | 199,309 | $ | 120,310 | |||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||
Depreciation | 54,236 | 45,215 | |||||
Amortization of intangible assets | 73,698 | 78,934 | |||||
Amortization of capitalized debt fees and original issue discount | 2,592 | 2,902 | |||||
Change in fair value of investment | 2,938 | - | |||||
Loss on extinguishment of debt | 4,861 | - | |||||
Deferred income taxes | (23,546 | ) | (18,715 | ) | |||
Share-based compensation expense | 38,270 | 30,306 | |||||
Gain on disposal of assets | (34 | ) | (538 | ) | |||
Other noncash charges | 2,904 | 380 | |||||
Excess tax benefits from equity awards | (642 | ) | (920 | ) | |||
Net changes in operating assets and liabilities, net of acquisitions: | |||||||
Accounts receivable | (120,137 | ) | (68,975 | ) | |||
Inventories | 73,390 | 101,894 | |||||
Other assets | (4,348 | ) | 32,175 | ||||
Accounts payable | 87,343 | (57,866 | ) | ||||
Accrued wages and employee benefits | 22,482 | 10,244 | |||||
Other accrued liabilities | (11,469 | ) | (70,622 | ) | |||
Net cash provided by operating activities | 401,847 | 204,724 | |||||
Investing activities | |||||||
Proceeds from sale of property and equipment | 144 | 1,933 | |||||
Proceeds from beneficial interests in securitization transactions | - | 2,533 | |||||
Contribution to tax equity investment | (1,629 | ) | (6,627 | ) | |||
Purchase of long-term investments | (37,118 | ) | (2,592 | ) | |||
Proceeds from sale of long-term investment | 2,000 | - | |||||
Expenditures for property and equipment | (83,399 | ) | (77,718 | ) | |||
Acquisition of businesses, net of cash acquired | (21,784 | ) | (15,974 | ) | |||
Net cash used in investing activities | (141,786 | ) | (98,445 | ) | |||
Financing activities | |||||||
Proceeds from short-term borrowings | 29,219 | 49,078 | |||||
Proceeds from long-term borrowings | 506,465 | 345,384 | |||||
Repayments of short-term borrowings | (48,868 | ) | (25,910 | ) | |||
Repayments of long-term borrowings and finance lease obligations | (560,644 | ) | (233,101 | ) | |||
Stock repurchases | (152,743 | ) | (100,267 | ) | |||
Payment of debt issuance costs | (3,616 | ) | - | ||||
Payment of contingent acquisition consideration | - | (4,979 | ) | ||||
Payment of deferred acquisition consideration | (7,361 | ) | - | ||||
Purchase of additional ownership interest | (9,117 | ) | (104,844 | ) | |||
Taxes paid related to equity awards | (12,268 | ) | (10,068 | ) | |||
Proceeds from the exercise of stock options | 12,366 | 7,139 | |||||
Net cash used in financing activities | (246,567 | ) | (77,568 | ) | |||
Effect of exchange rate changes on cash and cash equivalents | (311 | ) | 91 | ||||
Net increase in cash and cash equivalents | 13,183 | 28,802 | |||||
Cash and cash equivalents at beginning of period | 200,994 | 132,723 | |||||
Cash and cash equivalents at end of period | $ | 214,177 | $ | 161,525 | |||
Generac Holdings Inc. | |||||||||||||||||||||
Segment Reporting and Product Class Information | |||||||||||||||||||||
(U.S. Dollars in Thousands) | |||||||||||||||||||||
(Unaudited) | |||||||||||||||||||||
Total Sales by Reportable Segment | |||||||||||||||||||||
Three Months Ended September 30, 2024 | Three Months Ended September 30, 2023 | ||||||||||||||||||||
External Net Sales | Intersegment Sales | Total Sales | External Net Sales | Intersegment Sales | Total Sales | ||||||||||||||||
Domestic | $ | 1,011,347 | $ | 8,853 | $ | 1,020,200 | $ | 886,365 | $ | 7,640 | $ | 894,005 | |||||||||
International | 162,216 | 4,485 | 166,701 | 184,302 | 23,293 | 207,595 | |||||||||||||||
Intercompany elimination | - | (13,338 | ) | (13,338 | ) | - | (30,933 | ) | (30,933 | ) | |||||||||||
Total net sales | $ | 1,173,563 | $ | - | $ | 1,173,563 | $ | 1,070,667 | $ | - | $ | 1,070,667 | |||||||||
Total Sales by Reportable Segment | |||||||||||||||||||||
Nine Months Ended September 30, 2024 | Nine Months Ended September 30, 2023 | ||||||||||||||||||||
External Net Sales | Intersegment Sales | Total Sales | External Net Sales | Intersegment Sales | Total Sales | ||||||||||||||||
Domestic | $ | 2,541,242 | $ | 26,571 | $ | 2,567,813 | $ | 2,395,292 | $ | 33,960 | $ | 2,429,252 | |||||||||
International | 519,791 | 18,127 | 537,918 | 563,705 | 84,078 | 647,783 | |||||||||||||||
Intercompany elimination | - | (44,698 | ) | (44,698 | ) | - | (118,038 | ) | (118,038 | ) | |||||||||||
Total net sales | $ | 3,061,033 | $ | - | $ | 3,061,033 | $ | 2,958,997 | $ | - | $ | 2,958,997 | |||||||||
External Net Sales by Product Class | |||||||||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||
2024 | 2023 | 2024 | 2023 | ||||||||||||||||||
Residential products | $ | 722,787 | $ | 565,087 | $ | 1,690,136 | $ | 1,482,538 | |||||||||||||
Commercial & industrial products | 327,956 | 384,533 | 1,026,095 | 1,131,876 | |||||||||||||||||
Other | 122,820 | 121,047 | 344,802 | 344,583 | |||||||||||||||||
Total net sales | $ | 1,173,563 | $ | 1,070,667 | $ | 3,061,033 | $ | 2,958,997 | |||||||||||||
Adjusted EBITDA by Reportable Segment | |||||||||||||||||||||
Three Months Ended September 30, 2024 | Nine Months Ended September 30, | ||||||||||||||||||||
2024 | 2023 | 2024 | 2023 | ||||||||||||||||||
Domestic | $ | 211,567 | $ | 160,270 | $ | 450,416 | $ | 331,134 | |||||||||||||
International | 20,298 | 28,332 | 73,371 | 94,088 | |||||||||||||||||
Total adjusted EBITDA (1) | $ | 231,865 | $ | 188,602 | $ | 523,787 | $ | 425,222 | |||||||||||||
(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 September 30, | Nine Months Ended September 30, | ||||||||||||||
2024 | 2023 | 2024 | 2023 | ||||||||||||
Net income attributable to Generac Holdings Inc. | $ | 113,742 | $ | 60,377 | $ | 199,089 | $ | 118,005 | |||||||
Net income attributable to noncontrolling interests | 36 | 257 | 220 | 2,305 | |||||||||||
Net income | 113,778 | 60,634 | 199,309 | 120,310 | |||||||||||
Interest expense | 22,910 | 24,707 | 69,833 | 72,862 | |||||||||||
Depreciation and amortization | 43,152 | 42,951 | 127,934 | 124,149 | |||||||||||
Provision for income taxes | 33,453 | 19,428 | 65,124 | 43,184 | |||||||||||
Non-cash write-down and other adjustments (1) | 468 | 2,055 | 2,863 | (5,257 | ) | ||||||||||
Non-cash share-based compensation expense (2) | 13,115 | 9,927 | 38,270 | 30,306 | |||||||||||
Transaction costs and credit facility fees (3) | 1,337 | 921 | 4,029 | 3,161 | |||||||||||
Business optimization and other charges (4) | 1,564 | 5,291 | 3,190 | 8,151 | |||||||||||
Provision for legal, regulatory, and clean energy product charges (5) | 2,382 | 22,113 | 5,280 | 27,913 | |||||||||||
Change in fair value of investment (6) | (5,198 | ) | - | 2,938 | - | ||||||||||
Loss on extinguishment of debt (7) | 4,861 | - | 4,861 | - | |||||||||||
Other | 43 | 575 | 156 | 443 | |||||||||||
Adjusted EBITDA | 231,865 | 188,602 | 523,787 | 425,222 | |||||||||||
Adjusted EBITDA attributable to noncontrolling interests | 81 | 493 | 521 | 4,146 | |||||||||||
Adjusted EBITDA attributable to Generac Holdings Inc. | $ | 231,784 | $ | 188,109 | $ | 523,266 | $ | 421,076 | |||||||
(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. | |||||||||||||||
(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, settlements, and legal expenses related to certain patent and securities lawsuits - | |||||||||||||||
• Additional customer support costs related to a clean energy product customer that filed for bankruptcy in 2022 – | |||||||||||||||
• 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 - | |||||||||||||||
(6) Represents non-cash (gains)/losses from changes in the fair value of the Company's investment in Wallbox N.V. warrants and equity securities. | |||||||||||||||
(7) Represents fees paid to creditors and the write-off of the unamortized original issue discount and deferred financing costs in connection with the refinancing of the Company's Tranche B Term Loan Facility. | |||||||||||||||
Net income to Adjusted net income reconciliation | |||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2024 | 2023 | 2024 | 2023 | ||||||||||||
Net income attributable to Generac Holdings Inc. | $ | 113,742 | $ | 60,377 | $ | 199,089 | $ | 118,005 | |||||||
Net income attributable to noncontrolling interests | 36 | 257 | 220 | 2,305 | |||||||||||
Net income | 113,778 | 60,634 | 199,309 | 120,310 | |||||||||||
Amortization of intangible assets | 24,157 | 26,718 | 73,698 | 78,934 | |||||||||||
Amortization of capitalized debt fees and original issue discount | 644 | 981 | 2,592 | 2,902 | |||||||||||
Transaction costs and other purchase accounting adjustments (8) | 747 | 356 | 2,272 | 1,743 | |||||||||||
Loss/(gain) attributable to business or asset dispositions (9) | - | - | 65 | (119 | ) | ||||||||||
Business optimization and other charges (4) | 1,564 | 5,291 | 3,190 | 8,151 | |||||||||||
Provision for legal, regulatory, and clean energy product charges (5) | 2,382 | 22,113 | 5,280 | 27,913 | |||||||||||
Change in fair value of investment (6) | (5,198 | ) | - | 2,938 | - | ||||||||||
Loss on extinguishment of debt (7) | 4,861 | - | 4,861 | - | |||||||||||
Tax effect of add backs | (7,317 | ) | (13,887 | ) | (23,762 | ) | (28,476 | ) | |||||||
Adjusted net income | 135,618 | 102,206 | 270,443 | 211,358 | |||||||||||
Adjusted net income attributable to noncontrolling interests | 36 | 257 | 220 | 2,305 | |||||||||||
Adjusted net income attributable to Generac Holdings Inc. | $ | 135,582 | $ | 101,949 | $ | 270,223 | $ | 209,053 | |||||||
Adjusted net income attributable to Generac Holdings Inc. per common share - diluted: | $ | 2.25 | $ | 1.64 | 4.47 | $ | 3.35 | ||||||||
Weighted average common shares outstanding - diluted: | 60,312,393 | 62,091,163 | 60,475,478 | 62,362,743 | |||||||||||
(8) 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. | |||||||||||||||
(9) Represents (gains)/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 September 30, | Nine Months Ended September 30, | ||||||||||||||
2024 | 2023 | 2024 | 2023 | ||||||||||||
Net cash provided by operating activities | 212,285 | 140,136 | 401,847 | 204,724 | |||||||||||
Proceeds from beneficial interests in securitization transactions | - | 1,061 | - | 2,533 | |||||||||||
Expenditures for property and equipment | (28,627 | ) | (23,818 | ) | (83,399 | ) | (77,718 | ) | |||||||
Free cash flow | $ | 183,658 | $ | 117,379 | $ | 318,448 | $ | 129,539 |
FAQ
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