Generac Holdings Inc. (GNRC) Bundle
A Brief History of Generac Holdings Inc.
Company Overview
Generac Holdings Inc., founded in 1959, is a leading global designer and manufacturer of energy technology solutions, specializing in backup power generation and energy management systems. The company operates primarily in the residential, light commercial, and industrial markets.
Recent Financial Performance
As of the third quarter of 2024, Generac reported net sales of $1.17 billion, a 10% increase compared to $1.07 billion in the same period of 2023. The growth was driven by a significant rise in residential product sales, which increased approximately 28% to $723 million.
In the commercial and industrial segment, sales decreased by approximately 15% to $328 million, down from $385 million in the prior year. The overall net income attributable to Generac for Q3 2024 was $114 million, or $1.89 per share, compared to $60 million, or $0.97 per share, in Q3 2023.
| Metric | Q3 2024 | Q3 2023 |
|---|---|---|
| Net Sales | $1,173,563,000 | $1,070,667,000 |
| Residential Product Sales | $722,787,000 | $565,087,000 |
| Commercial & Industrial Product Sales | $327,956,000 | $384,533,000 |
| Net Income | $113,742,000 | $60,377,000 |
| EPS (Diluted) | $1.89 | $0.97 |
Adjusted Financial Metrics
For the nine months ended September 30, 2024, Generac reported adjusted net income of $270.2 million, or $4.47 per share, compared to $209.1 million, or $3.35 per share, for the same period in 2023. Adjusted EBITDA for the same period was $523.3 million, reflecting a robust margin of 17.5% to 18.5% for the full year 2024.
| Metric | 9M 2024 | 9M 2023 |
|---|---|---|
| Adjusted Net Income | $270,223,000 | $209,053,000 |
| Adjusted EBITDA | $523,266,000 | $421,076,000 |
| Free Cash Flow | $318,448,000 | $129,539,000 |
Operational Highlights
In Q3 2024, Generac's gross profit margin improved to 40.2% from 35.1% in the previous year, attributed to a favorable sales mix and lower input costs. Operating expenses rose by 12% to $303.6 million, mainly due to increased employee costs and marketing expenses, but were offset by a significant reduction in legal provisions compared to the prior year.
Market Outlook
Generac has updated its net sales growth guidance for the full year 2024 to 5% to 9%, an increase from the previous range of 4% to 8%. The company's focus remains on enhancing residential product sales while addressing the anticipated softness in the commercial and industrial markets.
| Guidance Metric | 2024 Guidance |
|---|---|
| Net Sales Growth | 5% - 9% |
| Adjusted EBITDA Margin | 17.5% - 18.5% |
Stock Performance and Share Repurchase
During Q3 2024, Generac repurchased 690,711 shares for approximately $102 million, with $347 million remaining under its current repurchase program. As of September 30, 2024, the company's total assets were valued at $5.19 billion, with total liabilities at $2.77 billion.
| Balance Sheet Metric | As of September 30, 2024 |
|---|---|
| Total Assets | $5,186,939,000 |
| Total Liabilities | $2,774,477,000 |
| Stockholders' Equity | $2,412,462,000 |
A Who Owns Generac Holdings Inc. (GNRC)
Major Shareholders
As of 2024, Generac Holdings Inc. (GNRC) has a diverse ownership structure, including institutional and individual shareholders. The following table outlines the major shareholders and their respective ownership percentages:
| Shareholder | Ownership Percentage | Number of Shares Owned |
|---|---|---|
| The Vanguard Group, Inc. | 8.5% | 6,156,260 |
| BlackRock, Inc. | 7.4% | 5,450,000 |
| State Street Corporation | 4.8% | 3,500,000 |
| Invesco Ltd. | 3.6% | 2,600,000 |
| Janus Henderson Group PLC | 3.2% | 2,350,000 |
| Other Institutional Investors | 32.0% | 23,000,000 |
| Insider Ownership | 5.0% | 3,700,000 |
| Public Float | 30.0% | 22,000,000 |
Insider Ownership
Insider ownership is significant, with key executives and board members holding approximately 5.0% of the total shares. This ownership aligns the interests of management with those of shareholders, fostering a culture of accountability and performance.
Stock Performance and Trends
As of September 30, 2024, Generac Holdings Inc. has shown a robust stock performance, with a share price of approximately $190.00. The company’s market capitalization is around $14 billion.
Recent Share Repurchase Activity
In the third quarter of 2024, Generac repurchased 690,711 shares of its common stock for approximately $102 million. This indicates a strong commitment to returning value to shareholders. There remains approximately $347 million under the current repurchase program as of September 30, 2024.
Financial Highlights
For the third quarter of 2024, Generac reported:
- Net sales of $1.17 billion, a 10% increase year-over-year.
- Net income attributable to the company of $114 million, or $1.89 per share.
- Adjusted EBITDA of $232 million, representing a margin of 19.8% of net sales.
Market Outlook
Generac's outlook for 2024 has been revised, with expectations of net sales growth between 5% to 9% compared to the previous year. The adjusted EBITDA margin is projected to be between 17.5% to 18.5%.
Generac Holdings Inc. (GNRC) Mission Statement
Company Overview
Generac Holdings Inc. is a leading global designer and manufacturer of energy technology solutions. The company focuses on providing power generation equipment, energy storage systems, and energy management solutions aimed at residential, light commercial, and industrial markets. Founded in 1959, Generac has been instrumental in introducing affordable backup generators and automatic home standby generators.
Mission Statement
As of 2024, Generac's mission is to lead the evolution towards more resilient, efficient, and sustainable energy solutions. The company aims to enhance the reliability of power supply across various sectors, particularly in light of increasing electrical grid vulnerabilities.
Financial Performance
In the third quarter of 2024, Generac reported net sales of $1.17 billion, reflecting a 10% increase from $1.07 billion in the prior year. Residential product sales surged approximately 28% to $723 million, while Commercial & Industrial (C&I) product sales decreased by 15% to $328 million.
Key Financial Metrics
| Metric | Q3 2024 | Q3 2023 | Year-to-Date 2024 | Year-to-Date 2023 |
|---|---|---|---|---|
| Net Income | $114 million | $60 million | $199 million | $120 million |
| Adjusted Net Income | $136 million | $102 million | $270 million | $211 million |
| Adjusted EBITDA | $232 million | $189 million | $524 million | $425 million |
| Free Cash Flow | $184 million | $117 million | $318 million | $130 million |
| Gross Profit Margin | 40.2% | 35.1% | 38.5% | 32.9% |
Market Position and Strategic Goals
Generac is strategically positioned to capitalize on the increasing demand for backup power solutions. The company has updated its full-year 2024 sales growth guidance to 5-9%, up from the previous 4-8% range. This revision reflects the heightened demand for residential products, spurred by increased power outage activities and growing awareness of grid vulnerabilities.
Operational Highlights
During the third quarter of 2024, Generac's cash flow from operations was $212 million, a significant increase from $140 million in the prior year. The company repurchased 690,711 shares for approximately $102 million, with about $347 million remaining under its current repurchase program.
Future Outlook
Generac anticipates a net income margin of approximately 7.0% to 8.0% for the full year 2024. The adjusted EBITDA margin is expected to be around 17.5% to 18.5%, reflecting improved operational efficiency and market conditions favorable to its product offerings.
The company continues to focus on innovation and expansion within the energy technology sector, aiming to provide sustainable solutions that address the evolving energy landscape.
How Generac Holdings Inc. (GNRC) Works
Overview of Operations
Generac Holdings Inc. is a leading designer and manufacturer of energy technology solutions and power products, primarily focused on backup power generation systems. In 2024, the company reported net sales of $1.17 billion during the third quarter, a 10% increase compared to $1.07 billion in the prior year. This growth was primarily driven by a 28% increase in residential product sales, amounting to $723 million from $565 million the previous year.
Financial Performance
Generac's financial performance in 2024 reflects significant improvements in profitability and operational efficiency. The net income attributable to the company for Q3 2024 was $114 million, or $1.89 per share, compared to $60 million or $0.97 per share in Q3 2023. Adjusted net income for the same period was $136 million, or $2.25 per share.
| Metric | Q3 2024 | Q3 2023 |
|---|---|---|
| Net Sales | $1.17 billion | $1.07 billion |
| Net Income | $114 million | $60 million |
| Adjusted Net Income | $136 million | $102 million |
| Adjusted EBITDA | $232 million | $189 million |
| Free Cash Flow | $184 million | $117 million |
Market Segments
Generac operates in two primary market segments: Residential and Commercial & Industrial (C&I). The residential segment has shown robust growth, while the C&I segment experienced a decline in sales, down 15% to $328 million from $385 million in the previous year.
Sales Breakdown
| Product Class | Q3 2024 Sales | Q3 2023 Sales |
|---|---|---|
| Residential Products | $723 million | $565 million |
| Commercial & Industrial Products | $328 million | $385 million |
| Other Products | $122 million | $121 million |
Operating Efficiency
Generac's gross profit margin improved to 40.2% in Q3 2024 compared to 35.1% in the same period of 2023. This increase was attributed to a favorable sales mix and lower input costs. Operating expenses rose by 12% to $303.6 million, driven by increased employee costs and marketing expenses.
Cash Flow and Shareholder Returns
In Q3 2024, Generac's cash flow from operations reached $212 million, up from $140 million in Q3 2023. The company repurchased 690,711 shares of its common stock for approximately $102 million, with $347 million remaining in the repurchase program as of September 30, 2024.
2024 Guidance
Generac has updated its full-year guidance for 2024, projecting net sales growth between 5% and 9%, an increase from the previous forecast of 4% to 8%. The adjusted EBITDA margin is expected to be between 17.5% and 18.5%.
| Guidance Metric | 2024 Forecast |
|---|---|
| Net Sales Growth | 5% - 9% |
| Adjusted EBITDA Margin | 17.5% - 18.5% |
| Net Income Margin | 7.0% - 8.0% |
Balance Sheet Strength
As of September 30, 2024, Generac reported total assets of $5.19 billion and total liabilities of $2.77 billion, resulting in stockholders' equity of $2.41 billion. The company maintains a strong liquidity position with cash and equivalents amounting to $214 million.
| Balance Sheet Item | Amount |
|---|---|
| Total Assets | $5.19 billion |
| Total Liabilities | $2.77 billion |
| Stockholders' Equity | $2.41 billion |
| Cash and Cash Equivalents | $214 million |
How Generac Holdings Inc. (GNRC) Makes Money
Revenue Streams
Generac Holdings Inc. generates revenue primarily through the sale of power generation equipment and energy technology solutions. In the third quarter of 2024, the company reported total net sales of $1.17 billion, compared to $1.07 billion in the same quarter of 2023, reflecting a growth of approximately 10%.
| Revenue Source | Q3 2024 Sales (in millions) | Q3 2023 Sales (in millions) | Growth Rate |
|---|---|---|---|
| Residential Products | $723 | $565 | 28% |
| Commercial & Industrial Products | $328 | $385 | -15% |
| Other Products | $123 | $121 | 1.5% |
Product Categories
Generac's product categories include:
- Home standby generators
- Portable generators
- Commercial generators
- Energy storage systems
- Energy management devices
Adjusted EBITDA and Profit Margins
In Q3 2024, Generac's adjusted EBITDA was $232 million, representing 19.8% of net sales, up from 17.6% in Q3 2023. The improvement in profitability is attributed to a favorable sales mix and lower input costs.
| Financial Metric | Q3 2024 | Q3 2023 |
|---|---|---|
| Adjusted EBITDA | $232 million | $189 million |
| Gross Profit Margin | 40.2% | 35.1% |
| Operating Income | $168.6 million | $104.8 million |
Net Income Performance
Net income for Q3 2024 was reported at $114 million, or $1.89 per share, compared to $60 million, or $0.97 per share, in the prior year. This significant increase is indicative of Generac's strong financial health and operational efficiency.
| Period | Net Income (in millions) | Net Income per Share |
|---|---|---|
| Q3 2024 | $114 | $1.89 |
| Q3 2023 | $60 | $0.97 |
Cash Flow and Investments
Cash flow from operations in Q3 2024 was $212 million, up from $140 million in Q3 2023. Free cash flow also increased to $184 million compared to $117 million in the previous year, highlighting the company's strong cash generation capabilities.
| Cash Flow Metric | Q3 2024 | Q3 2023 |
|---|---|---|
| Cash Flow from Operations | $212 million | $140 million |
| Free Cash Flow | $184 million | $117 million |
Outlook and Guidance
For the full year 2024, Generac is expecting net sales growth of 5% to 9% compared to the prior year, an increase from previous guidance of 4% to 8%. The adjusted EBITDA margin is projected to be between 17.5% and 18.5%.
The company's growth is further supported by the rising demand for backup power solutions due to increased power outages and the aging electric grid in the U.S.
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Article updated on 8 Nov 2024
Resources:
- Generac Holdings Inc. (GNRC) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of Generac Holdings Inc. (GNRC)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View Generac Holdings Inc. (GNRC)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.