Generac (GNRC) - 2025 Q1 - Quarterly Results

Financial Performance - Net sales increased by 6% to $942 million in Q1 2025, compared to$ 889 million in Q1 2024, with residential product sales up approximately 15% to $494 million[4] - Net income attributable to the Company was$ 44 million, or $0.73 per share, compared to$ 26 million, or $0.39 per share, in the same period of 2024[4] - Adjusted EBITDA was$ 150 million, representing 15.9% of net sales, up from $127 million, or 14.3% of net sales, in the prior year[4] - Gross profit margin improved to 39.5% from 35.6% in the prior-year first quarter, driven by a favorable sales mix and lower input costs[5] - Domestic segment sales increased approximately 9% to$ 782.3 million, driven by higher sales of home standby generators and energy technology solutions[9] - International segment sales slightly decreased to $185.5 million, impacted by a 5% unfavorable effect from foreign currency[11] - Net sales for Q1 2025 reached$ 942,121, an increase of 5.9% compared to $889,273 in Q1 2024[35] - Gross profit for Q1 2025 was$ 371,986, up from $316,379 in Q1 2024, reflecting a gross margin improvement[35] - Net income attributable to Generac Holdings Inc. for Q1 2025 was$ 43,840, a significant increase of 67.3% from $26,232 in Q1 2024[35] - Adjusted EBITDA for Q1 2025 was$ 149,546, representing a 17.5% increase from $127,233 in Q1 2024[39] - Domestic sales in Q1 2025 totaled$ 782,336, compared to $720,473 in Q1 2024, indicating a growth of 8.6%[39] Guidance and Expectations - The Company updated its full-year 2025 net sales growth guidance to 0 to 7%, down from the previous range of 3 to 7%[4] - Adjusted EBITDA margin guidance for 2025 is now expected to be 17.0 to 19.0%, compared to the previous range of 18.0 to 19.0%[15] - Free cash flow is expected to convert from adjusted net income between 70 to 90% for the full year[16] Expenses and Costs - Operating expenses increased by$ 38.8 million, or 15.6%, primarily due to higher employee costs and increased marketing spend[6] - Research and development expenses increased to $62,048 in Q1 2025, up from$ 49,410 in Q1 2024, reflecting a focus on innovation[35] Cash and Assets - Cash and cash equivalents decreased to $187,464 as of March 31, 2025, down from$ 281,277 at the end of 2024[37] - Total current assets as of March 31, 2025, were $1,988,539, a slight decrease from$ 2,032,170 at the end of 2024[33] - Total liabilities decreased to $2,587,429 as of March 31, 2025, compared to$ 2,611,888 at the end of 2024[33] Shareholder Returns and Stock Activity - The company repurchased $97,454 in stock during Q1 2025, indicating a commitment to returning value to shareholders[37] Adjusted Income and Other Charges - Adjusted net income for Q1 2025 was$ 75.80 million, up from $53.20 million in Q1 2024, reflecting a 42.5% growth[43] - Adjusted net income per diluted share increased to$ 1.26 in Q1 2025 from $0.88 in Q1 2024, marking a 43.2% rise[43] - The weighted average common shares outstanding on a diluted basis decreased from 60,486,125 in Q1 2024 to 59,747,589 in Q1 2025[43] - Amortization of intangible assets was$ 25.49 million in Q1 2025, slightly up from $24.75 million in Q1 2024[43] - The company incurred$ 3.75 million in legal, regulatory, and clean energy product charges in Q1 2025, compared to $2.54 million in Q1 2024[43] - Losses attributable to business or asset dispositions were$ 0.39 million in Q1 2025, significantly higher than $0.04 million in Q1 2024[43] - The change in fair value of investments resulted in a loss of$ 9.95 million in Q1 2025, compared to a loss of $6.02 million in Q1 2024[43] - The tax effect of add backs was$ (10.37) million in Q1 2025, compared to $(8.93) million in Q1 2024[43] - The company reported transaction costs and other purchase accounting adjustments of$ 0.11 million in Q1 2025, down from $0.84 million in Q1 2024[43]