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WAUKESHA, Wis., May 13, 2024 /PRNewswire/ -- Generac Power Systems (NYSE: GNRC), a leading global designer, manufacturer and provider of energy technology solutions and other power products, today announced that Shree Dandekar, executive vice president of Corporate Engineering at Generac, will assume leadership responsibilities for Corporate Engineering and Product Management. Dandekar will report to Generac president and CEO Aaron Jagdfeld. He replaces Patrick Forsythe, Chief Technical Officer, who will be ...

Key PointsGenerac owns a 70% market share in the backup power generation industry.Generac will gain from mega-trends like the Grid 2.0, clean energy, climate change, and the home as a sanctuary.Q1 2024 gross profit margins improved to 35.6%, up from 30.7% in the year-ago period, attributed to lower input costs, favorable sales mix, and production efficiencies.5 stocks we like better than GeneracGenerac Holdings Inc. NYSE: GNRC is attempting to recover from its Q1 2024 earnings selloff. The computer and tech ...

Market Opportunities - Generac's residential standby generator market has only approximately 6.25% penetration in the U.S., indicating significant growth opportunities[113] - The demand for natural gas generators is expected to grow faster than traditional diesel generators, as they represent a cleaner transition fuel[116] - The electric utility landscape is projected to change significantly due to rising utility rates and grid instability, creating market opportunities for renewable energy and energy storage technologies[114] - The increasing frequency of power outages is driving consumer awareness and demand for backup power solutions, with expectations of continued growth in this area[112] - Generac is positioned to capitalize on the growing demand for energy-as-a-service models and "beyond standby" applications, enhancing its market share in commercial and industrial sectors[115] - The rapid increase in data center power consumption is expected to double from 2022 to 2030, driving demand for backup power solutions[118] - Legislative support from the Inflation Reduction Act is expected to create long-term investment opportunities in renewable energy and energy storage markets[114] - Generac maintains a leading position in the telecommunications market, with approximately half of existing tower sites lacking backup power solutions[117] - The aging electrical grid infrastructure and climate change concerns are increasing the need for resilient energy solutions, further expanding Generac's addressable market[112] Financial Performance - Net sales for the three months ended March 31, 2024, were $889.3 million, a slight increase of 0.2% compared to $887.9 million in the same period of 2023[130] - Gross profit increased to $316.4 million, resulting in a gross profit margin of 35.6%, up from 30.7% in the prior year[133] - Net income attributable to Generac Holdings Inc. rose to $26.2 million, an increase of 111.0% from $12.4 million in the prior year quarter[137] - Adjusted EBITDA for the domestic segment was $99.2 million, representing 13.8% of total domestic sales, compared to 9.4% in the prior year[138] - Operating expenses increased by $21.5 million, or 9.4%, primarily due to higher employee costs and increased marketing spend[134] - International segment total sales decreased by 14% to $186.7 million, impacted by lower inter-segment sales and weaker shipments in Europe[132] - The effective tax rate for the current quarter was 31.2%, down from 35.7% in the prior year, due to increased pre-tax book income[136] - The company implemented multiple price increases over the past couple of years to mitigate rising costs, which continued to benefit results in 2024[122] - The domestic segment's total sales, including inter-segment sales, increased slightly to $720.5 million compared to $720.0 million in the prior year[131] Cash Flow and Liquidity - As of March 31, 2024, the company had total liquidity of $1,348.6 million, consisting of $249.4 million in cash and cash equivalents and $1,099.2 million available under the Revolving Facility[147] - The company reported net cash provided by operating activities of $111,898 thousand for the three months ended March 31, 2024, a significant increase of 702.9% compared to the prior year[154] - The outstanding balance under the Tranche B Term Loan Facility was $530 million, while the Tranche A Term Loan Facility had an outstanding balance of $740.6 million as of March 31, 2024[145] - The company has a total debt repayment obligation of $1,420,625 thousand scheduled from 2024 to 2027, with the largest payment of $750 million due in 2027[146] - The Tranche A Term Loan Facility and Revolving Facility bear interest rates based on adjusted SOFR, with rates of 6.93% as of March 31, 2024[145] - Total dealer purchases financed under the floor plan financing arrangement accounted for approximately 12% of net sales for the three months ended March 31, 2024[151] Stock Repurchase and Debt Management - The company has repurchased a total of 13,937,188 shares of common stock for $1,028.9 million since the inception of its stock repurchase programs[149] - Net cash used in investing activities for the three months ended March 31, 2024, was $26,637 thousand, a decrease of 35.5% compared to the prior year[154] - The company’s total leverage ratio was 1.99 to 1.00 as of March 31, 2024, well below the covenant requirement of 3.75 to 1.00[146] - The company has a new stock repurchase program approved on February 12, 2024, allowing for the repurchase of up to $500 million of common stock over the next 24 months[148] Adjusted Financial Metrics - Adjusted EBITDA for Q1 2024 was $127,233,000, compared to $100,075,000 in Q1 2023, representing a 27% increase[167] - Net income attributable to Generac Holdings Inc. for Q1 2024 was $26,232,000, up from $12,430,000 in Q1 2023, reflecting a 111% increase[179] - Adjusted net income attributable to Generac Holdings Inc. for Q1 2024 was $52,951,000, compared to $39,445,000 in Q1 2023, indicating a 34% increase[179] - Adjusted net income per diluted share for Q1 2024 was $0.88, up from $0.63 in Q1 2023, a 40% increase[179] - Interest expense for Q1 2024 was $23,605,000, slightly higher than $22,995,000 in Q1 2023[167] - Non-cash share-based compensation expense for Q1 2024 was $12,440,000, compared to $10,334,000 in Q1 2023, a 20% increase[167] - Provision for legal, regulatory, and clean energy product charges in Q1 2024 amounted to $2,535,000, down from $5,800,000 in Q1 2023[179] - Adjusted EBITDA attributable to Generac Holdings Inc. was $126,756,000 in Q1 2024, compared to $96,942,000 in Q1 2023, a 31% increase[167] - The company reported a change in fair value of investment of $6,019,000 in Q1 2024, with no comparable figure in Q1 2023[179] - Adjusted EBITDA does not reflect capital expenditures or changes in working capital needs, highlighting its limitations as an analytical tool[168]

Key PointsA value stock is a share in a company considered to be underpriced based on its fundamentals that offers the potential for substantial growth.With their unique products, high profit margins, and strong returns on capital, three companies today are showing signs of becoming value plays: Generac Holdings, Southwest Airlines, and Sprouts Farmers Market.Despite various challenges, these companies maintain their investment appeal through strategic financial management and market niche exploitation.5 st ...

Generac Urges Americans to Prepare for Power Outages Early Recent Generac/Harris Poll survey provides insights into preparedness for widespread power outages* 36% of Americans have medical devices powered by electricity that they or someone in their home use daily More than half of Americans (52%) would only have enough food in their home for 1-2 days if there was a widespread power outage in their area 77% of pet owners would risk their own comfort to stay home with pets during extended power outages WAU ...

Financial Data and Key Metrics Changes - Overall net sales increased slightly to $889 million in Q1 2024 compared to $888 million in the prior year [44] - Residential product sales rose 2% to $429 million, driven by a mid-teens increase in home standby generator shipments, partially offset by a decline in portable generator shipments [19][29] - Adjusted EBITDA for the quarter was $127 million, or 14.3% of net sales, compared to $100 million, or 11.3% of net sales, in the prior year [46] - GAAP net income for Q1 2024 was $26 million, up from $12 million in Q1 2023 [22] - Free cash flow improved significantly to $85 million from negative $42 million in the same quarter last year [23] Business Line Data and Key Metrics Changes - Home standby shipments increased at a mid-teens rate, while activations declined modestly due to a softer outage environment [5][6] - Global C&I product sales decreased 2% year-over-year, primarily due to declines in domestic telecom and rental markets, but growth was seen in North American industrial distributor channels [13][29] - Residential Energy Technology Products, particularly ecobee, saw year-over-year sales growth despite a challenging retail environment [10] Market Data and Key Metrics Changes - International segment total sales decreased 14% to $187 million, primarily due to declines in intercompany shipments and lower shipments in certain European markets [21][40] - Strong growth in shipments to Latin American markets partially offset softness in other regions [16] Company Strategy and Development Direction - The company is focused on expanding its network of installers and enhancing operational efficiencies to drive future growth [8][33] - Investments are being made in energy technology solutions, including collaborations with Wallbox for EV charging solutions [12][36] - The company aims to leverage its position in natural gas generators to capture growth in energy storage markets [15] Management's Comments on Operating Environment and Future Outlook - Management reiterated the overall 2024 outlook for net sales and adjusted EBITDA margin, expecting a mid to high single-digit decline in C&I product sales compared to prior guidance of a 10% decline [24][25] - The company anticipates a significant year-over-year increase in home standby generator shipments as field inventory normalizes [50] - Management expressed confidence in the long-term growth potential driven by increasing demand for backup power due to rising power consumption forecasts and aging infrastructure [42][63] Other Important Information - The gross margin for Q1 2024 improved to 35.6% from 30.7% in the prior year, attributed to a favorable sales mix and improved production efficiencies [20] - The company expects capital expenditures to be approximately 3% of forecasted net sales for the year [56] Q&A Session Summary Question: Can you reconcile the increase in shipments with the decline in activations for home standby? - Management explained that activations were slower due to a weaker outage environment, but shipments increased as field inventory challenges were resolved [82][84] Question: What is the strategy regarding the surge in data center power demand? - Management noted that while the backup generator market for data centers is dominated by diesel, there is growing interest in natural gas solutions due to permitting challenges for diesel engines [88][90] Question: Can you provide insights on gross margin improvements? - Management highlighted that gross margins exceeded expectations due to earlier-than-anticipated improvements in input costs and operational efficiencies [121][122] Question: What is the outlook for energy technology revenue? - Management indicated that while near-term market dynamics are challenging, they remain optimistic about capturing incremental revenue as they launch new products later this year [115][117]

Generac Holdings (GNRC) reported $889.27 million in revenue for the quarter ended March 2024, representing a year-over-year increase of 0.2%. EPS of $0.88 for the same period compares to $0.63 a year ago.The reported revenue represents a surprise of +0.43% over the Zacks Consensus Estimate of $885.51 million. With the consensus EPS estimate being $0.72, the EPS surprise was +22.22%.While investors closely watch year-over-year changes in headline numbers -- revenue and earnings -- and how they compare to Wal ...

Generac Holdings Inc (GNRC) reported first-quarter 2024 adjusted earnings per share (EPS) of 88 cents, which beat the Zacks Consensus Estimate of 72 cents. GNRC reported adjusted EPS of 63 cents in the prior-year period.Net sales came in at $889.3 million compared with $887.9 million in the prior-year quarter. The figure also topped the consensus estimate of $885.5 million. An increase in Residential product sales cushioned the top-line performance.  In the quarter under review, core sales growth (excluding ...

Generac Holdings (GNRC) came out with quarterly earnings of $0.88 per share, beating the Zacks Consensus Estimate of $0.72 per share. This compares to earnings of $0.63 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of 22.22%. A quarter ago, it was expected that this generator maker would post earnings of $2.10 per share when it actually produced earnings of $2.07, delivering a surprise of -1.43%.Over the last four quarters, the ...