Generac Q2 2021 Earnings Report
Key Takeaways
Generac reported exceptional second-quarter results with a 68% increase in net sales, reaching a record $920 million. The company also achieved record adjusted EBITDA and increased its full-year 2021 net sales growth guidance.
Net sales increased 68% to a record $920 million compared to the prior-year second quarter.
Net income attributable to the Company during the second quarter was $127 million, or $2.01 per share.
Adjusted EBITDA was a record $218 million, or 23.7% of net sales.
Cash flow from operations was $122 million, a record for the second quarter, and free cash flow was $96 million, also a second-quarter record.
Generac
Generac
Generac Revenue by Segment
Generac Revenue by Geographic Location
Forward Guidance
The Company is increasing its full-year 2021 net sales growth guidance to now be approximately 47 to 50% compared to the prior year. Net income margin is now expected to be approximately 15.5 to 16.0% for the full-year 2021. The corresponding adjusted EBITDA margin is now expected to be 24.5 to 25.0%. Operating and free cash flow generation is still expected to be strong.
Positive Outlook
- Production of home standby generators is expanding at a better-than-expected rate.
- Demand for PWRcell® energy storage systems continues to increase.
- Additional supply chain execution is leading to a further increase in the shipment outlook for these products for the full-year 2021.
- The outlook for C&I products has also improved due to a further broad-based rebound in demand.
- Continued pickup in activity from telecom national account customers and overall stronger outlooks for domestic and international markets.
Challenges Ahead
- The Company continues to experience higher input costs relative to our previous guidance due to rising commodities.
- Significantly higher logistics costs are impacting the guidance.
- Net income margin, before deducting for non-controlling interests, is now expected to be approximately 15.5 to 16.0% for the full-year 2021 as compared to the prior expectation of between 16.0 to 17.0%.
- The corresponding adjusted EBITDA margin is now expected to be 24.5 to 25.0%, as compared to the previous guidance range of approximately 24.5 to 25.5%.
- The conversion of adjusted net income to free cash flow is still expected to be approximately 90%.
Revenue & Expenses
Visualization of income flow from segment revenue to net income