Generac Q4 2019 Earnings Report
Key Takeaways
Generac reported a 4.9% increase in net sales to $590.9 million in Q4 2019, driven by strong home standby demand. The company's adjusted EBITDA was $129.1 million, or 21.9% of net sales. They also made the first shipments of their new PWRcellTM energy storage system during the quarter.
Net sales increased 4.9% to $590.9 million compared to the prior-year quarter.
Residential product sales increased 9.7% to $322.5 million year-over-year.
Adjusted EBITDA was $129.1 million, representing 21.9% of net sales.
Cash flow from operations was $175.1 million, and free cash flow was $160.3 million.
Generac
Generac
Generac Revenue by Segment
Generac Revenue by Geographic Location
Forward Guidance
The Company is initiating guidance for 2020 with net sales expected to increase between 6 to 8% as compared to the prior year on an as-reported basis, and 5 to 7% on a core basis. Net income margin, before deducting for non-controlling interests, is expected to be approximately 11% for the full-year 2020, with corresponding adjusted EBITDA margin expected to be approximately 20.0%.
Positive Outlook
- Net sales expected to increase between 6 to 8% as compared to the prior year on an as-reported basis
- Net sales expected to increase between 5 to 7% on a core basis
- Net income margin expected to be approximately 11%
- Adjusted EBITDA margin expected to be approximately 20.0%
- Operating and free cash flow generation is expected to be strong
Challenges Ahead
- Baseline guidance does not assume the benefit of a major power outage event
- Slower economic growth and geopolitical headwinds caused softness in certain key regions
- Increased regulatory tariffs
- Higher operating expense investments
- Decreased operating leverage on the lower sales volumes
Revenue & Expenses
Visualization of income flow from segment revenue to net income