Generac Holdings Inc. (NYSE:GNRC) Q4 2024 Earnings Conference Call February 12, 2025 10:00 AM ET Company Participants Kris Rosemann - Senior Manager of Corporate Development and IR Aaron Jagdfeld - Chairman President and Chief Executive Officer York Ragen - Chief Financial Officer Conference Call Participants Tommy Moll - Stephens Inc. George Gianarikas - Canaccord Genuity Mike Halloran - Baird Jeff Hammond - KeyBanc Capital Markets Brian Drab - William Blair Jerry Revich - Goldman Sachs Kashy Harrison - Pi ...

INVESTOR PRESENTATION INVESTOR RELATIONS Aaron Jagdfeld PRESIDENT & CEO YorkRagen CHIEF FINANCIAL OFFICER Kris Rosemann DIRECTOR CORPORATE DEVELOPMENT & INVESTOR RELATIONS (262)506 -6064 InvestorRelations@generac.com 2 Forward Looking Statements Certain statements contained in this presentation, 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 diffe ...

Core Insights - Generac Holdings (GNRC) reported quarterly earnings of $2.80 per share, exceeding the Zacks Consensus Estimate of $2.50 per share, and up from $2.07 per share a year ago, representing an earnings surprise of 12% [1] - The company achieved revenues of $1.23 billion for the quarter ended December 2024, surpassing the Zacks Consensus Estimate by 0.06% and increasing from $1.06 billion year-over-year [2] - Generac Holdings has outperformed consensus EPS estimates in all four of the last quarters and has topped consensus revenue estimates three times during the same period [2] Earnings Outlook - The sustainability of the stock's price movement will largely depend on management's commentary during the earnings call [3] - The current consensus EPS estimate for the upcoming quarter is $1.56 on revenues of $1.03 billion, and for the current fiscal year, it is $8.16 on revenues of $4.63 billion [7] Industry Context - The Manufacturing - General Industrial industry, to which Generac Holdings belongs, is currently ranked in the bottom 37% of over 250 Zacks industries, indicating potential challenges for stock performance [8] - Empirical research suggests a strong correlation between near-term stock movements and trends in earnings estimate revisions, which could impact investor sentiment [5]

Financial Performance - Fourth quarter net sales increased 16% to $1.23 billion compared to $1.06 billion in the prior-year quarter[4] - Full-year 2024 net sales increased 7% to $4.30 billion, with core sales growing approximately 6%[4] - Net sales for Q4 2024 reached $1,234,801, a 16.1% increase from $1,063,670 in Q4 2023[33] - Total net sales for the year ended December 31, 2024, reached $4,295,834, an increase of 6.8% compared to $4,022,667 in 2023[38] - Domestic net sales for the year ended December 31, 2024, were $3,635,081, up from $3,320,261 in 2023, reflecting a growth of 9.5%[38] - International net sales for the year ended December 31, 2024, decreased to $725,385 from $837,895 in 2023, a decline of 13.4%[38] Profitability Metrics - Adjusted EBITDA reached a record $265 million, representing 21.5% of net sales, up from 20.0% in the prior year[4] - Adjusted EBITDA for the year ended December 31, 2024, was $789,101, compared to $637,859 in 2023, representing an increase of 23.6%[40] - Operating income for the year increased to $536,742, representing a 39.0% rise compared to $386,199 in 2023[33] - Net income attributable to Generac Holdings Inc. for the year was $316,315, a 47.4% increase from $214,606 in 2023[33] Cash Flow and Assets - Cash flow from operations reached a record $741 million for the full year, compared to $522 million in the prior year[4] - Free cash flow for the year ended December 31, 2024, was $741,301, compared to $521,670 in 2023[35] - Free cash flow for the year ended December 31, 2024, was $604,568, compared to $395,904 in 2023, an increase of 52.7%[45] - Total current assets increased to $2,032,170 as of December 31, 2024, from $1,997,692 in 2023[31] - Cash and cash equivalents at the end of the period were $281,277, up from $200,994 in 2023[35] Sales Breakdown - Residential product sales rose 28% to $743 million, while Commercial & Industrial product sales were approximately flat at $363 million[4] - Residential products sales for the three months ended December 31, 2024, were $743,336, up from $580,391 in 2023, a growth of 28.1%[38] - Commercial & industrial products sales for the three months ended December 31, 2024, were $363,376, slightly up from $362,923 in 2023[38] Expenses and Liabilities - Research and development expenses for the year were $219,600, an increase of 26.7% from $173,443 in 2023[33] - Total liabilities decreased to $2,611,888 in 2024, down from $2,743,693 in 2023[31] Shareholder Actions - The company repurchased approximately 1.05 million shares for $153 million during 2024, with $347 million remaining under the current repurchase program[4] Legal and Regulatory Matters - The company incurred $5.4 million in legal expenses related to patent lawsuits in the fourth quarter of 2024[46] - The company reported a provision of $5.8 million for civil fines related to a matter with the Consumer Product Safety Commission for the full year 2023[46]

Core Insights - Generac Holdings Inc. reported record fourth quarter net sales of $1.23 billion, a 16% increase from $1.06 billion in the same quarter of the previous year, driven by strong demand for residential products [4][5] - The company achieved an all-time record free cash flow of $286 million in the fourth quarter, up from $266 million in the prior year [4][9] - For the full year 2024, net sales increased by 7% to $4.30 billion compared to $4.02 billion in 2023, with residential product sales rising 18% [4][5] Fourth Quarter 2024 Highlights - Residential product sales surged 28% to $743 million, while Commercial & Industrial (C&I) product sales remained flat at $363 million [4] - Net income attributable to the company was $117 million, or $2.15 per share, compared to $97 million, or $1.57 per share, in the same period of 2023 [4] - Adjusted EBITDA reached a record $265 million, representing 21.5% of net sales, compared to $213 million, or 20.0% of net sales, in the prior year [4][6] Full-Year 2024 Highlights - The company reported a net income of $316 million, or $5.39 per share, compared to $215 million, or $3.27 per share, in 2023 [4] - Adjusted net income for 2024 was $438 million, or $7.27 per share, up from $335 million, or $5.40 per share, in 2023 [4] - Cash flow from operations for the year was a record $741 million, compared to $522 million in the previous year [4] Business Segment Results - Domestic segment sales increased 20% to $1.07 billion, driven by significant growth in home standby and portable generators [10] - Adjusted EBITDA for the domestic segment was a record $242.8 million, or 22.7% of total sales, compared to $192.2 million, or 21.6% of total sales, in the prior year [11] - International segment sales decreased 1% to $187.5 million, impacted by foreign currency fluctuations, with core growth driven by Latin America [12][13] 2025 Outlook - The company anticipates net sales growth of approximately 3% to 7% for 2025, primarily from residential product sales [15] - Adjusted EBITDA margin is expected to be around 18.0% to 19.0% for the full year [16] - The company aims to maintain strong operating and free cash flow, with free cash flow conversion from adjusted net income projected between 80% to 90% [16]

Core Viewpoint - Generac Holdings Inc (GNRC) is set to report its fourth-quarter 2024 results on February 12, with expectations of revenue and earnings growth driven by increased demand for home standby generators and portable generators due to extreme weather conditions [1][2][4]. Financial Performance Expectations - The Zacks Consensus Estimate for fourth-quarter revenues is $1.23 billion, reflecting a 15.7% increase year-over-year, while earnings are estimated at $2.50 per share, up 20.8% year-over-year [2]. - GNRC has outperformed the Zacks Consensus Estimate in three of the last four quarters, with an average earnings surprise of 10.83% [3]. Demand Drivers - The anticipated performance boost is attributed to heightened demand for home standby generators amid increased power outages from hurricanes, as well as a rise in portable generator demand due to extreme weather [4]. - GNRC is focusing on increasing production rates for home standby generators, targeting $200 million in incremental shipments in 2024 due to hurricane impacts [5]. Product Innovations and Market Position - Ecobee's growth in the smart thermostat market and the introduction of the PWRcell 2 Series are expected to contribute positively to GNRC's revenue in the upcoming quarter [6]. - The launch of a new 28kW home standby generator model enhances GNRC's product offerings, providing a comprehensive home energy solution [13]. Margin and Revenue Outlook - The gross margin for 2024 is projected to improve by 450 basis points compared to 2023, with free cash flow expected to reach $500 million [10]. - Generac has raised its revenue outlook for 2024, now expecting a 5-9% increase, with residential revenues anticipated to grow in the high-teens percentage range [8]. Challenges and Concerns - Weakness in Commercial & Industrial (C&I) sales is a concern, with expectations of C&I product sales being approximately $50 million below previous forecasts [11]. - The Zacks Consensus Estimate for Residential products' revenues is $771 million, up 32.9% year-over-year, while C&I products' revenues are expected to decline by 6.1% year-over-year [12].

Core Viewpoint - Generac Holdings Inc. is set to release its fourth quarter and full-year 2024 financial results on February 12, 2025, with a conference call scheduled to discuss the highlights [1]. Company Overview - Generac is a total energy solutions company founded in 1959, recognized as a leading global designer, manufacturer, and provider of energy technology solutions [3]. - The company offers a wide range of products including power generation equipment, energy storage systems, and energy management devices, catering to residential, light commercial, and industrial markets [3]. - Generac pioneered the affordable backup generator and established the automatic home standby generator category, continuing to expand its energy technology offerings [3]. Conference Call Details - The conference call will take place at 10:00 a.m. EST on February 12, 2025, and will be accessible via a webcast [2]. - A replay of the conference call will be available on Generac's website following the live event [2].

Generac Holdings Inc. (GNRC) has unveiled its newest home standby generator design, featuring the 28kW model, the most powerful air-cooled standby generator on the market. This launch broadens Generac’s range of reliable and efficient air-cooled generators, offering options from 10kW to 28kW. The new models are designed to work seamlessly with other Generac products, such as ecobee smart thermostats and PWRcell battery systems, providing a complete home energy solution.Generac's new home standby product lin ...

The new design seamlessly integrates across Generac's product ecosystem, giving customers more control over their energy needs as they navigate severe weather, diminishing grid reliability and rising energy costs WAUKESHA, Wis., Jan. 21, 2025 /PRNewswire/ -- Generac Holdings, Inc. (NYSE: GNRC), a leading global designer, manufacturer and provider of energy technology solutions and other power products, today announced its latest home standby generator design, including the new 28kW model, the most powerful ...

Generac Holdings Inc. (GNRC) stock has surged 27.5% in the past year, outpacing the S&P 500 composite and the sub-industry’s growth of 11.1% and 24.7%, respectively.Price PerformanceImage Source: Zacks Investment ResearchThe stock is currently trading about 19% below its 52-week high of $195.94. This raises the question of whether this pullback signals a buying opportunity.To determine if it is the right time to buy, sell or hold GNRC stock, we need to consider several key factors.Increasing Demand for Gene ...