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Dec 31, 2019
Generac Q4 2019 Earnings Report
Generac's Q4 2019 earnings exceeded expectations with strong home standby demand and record performance for the quarter and full year.
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
Revenue by Segment
Residential Products Revenue
CapyFin.comCommercial & Industrial Products Revenue
CapyFin.comRevenue by Geographic Location
Domestic Revenue
CapyFin.comInternational Revenue
CapyFin.com 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