Power Generation Equip. Co. Posts Record Sales in Q4/21

Source: Streetwise Reports   02/16/2022

Generac Holdings shares traded 14% higher after the firm reported Q4/21 and FY/21 financial results featuring a 40% YoY increase in net sales and advised that it estimates FY/22 sales will rise further by 32-36%.

Energy technology solutions designer and manufacturer Generac (GNRC:NYSE), which provides power generation equipment, energy storage systems and grid service solutions for residential, light commercial and industrial markets, today announced financial results for its fourth quarter and full-year of 2021 ended December 31, 2021.

The company advised that is continuing to benefit from its strong execution and significant ongoing end market demand and that it expects the broad-based growth trend will continue during FY/22.

Generac Holdings stated that net sales during Q4/21 increased by 40% to a record $1.07 billion, compared to $761 million in Q4/20. The company provided a breakdown by product line and noted that in Q4/21, residential product sales grew by 42% to $706 million and commercial and industrial (C&I) product sales increased by 43% to $284 million, compared to $499 million and $199 million, respectively in Q4/20.

The firm reported that for Q4/21, it recorded net income of $143 million, or $2.04 per share, versus net income of $125 million, or $1.97 per share in Q4/20.

The company added that adjusted net income in Q4/21 came in at a record $162 million, or $2.51 per share, compared to $136 million, or $2.12 per share in Q4/20.

Generac mentioned that during Q4/21, it finalized two previously announced acquisitions. This included the purchase of Tank Utility, a provider of IoT propane tank monitoring solutions and the acquisition of ecobee, a sustainable home technology and smart home energy devices solutions company.

The company reported that FY/21 net sales increased by 50% to a record $3.74 billion, compared to $2.49 billion in FY/20, adding that core sales net of the impact of acquisitions and currency adjustments rose by about 46%. Generac indicated that for FY/21, residential product sales were up 58% year-over-year to $2.46 billion and C&I product sales increased by 42% y-o-y to $1.0 billion.

The company advised that in FY/21 it achieved record net income of $550 million, or $8.30 per share, versus net income of $351 million, or $5.48 per share during FY/20. Similarly, the Generac posted record adjusted net income of $619 million, or $9.63 per share, compared to adjusted net income $412 million, or $6.47 per share in FY/20.

Generac Holdings’ President and CEO Aaron Jagdfeld commented, “We continued to experience exceptional demand during the fourth quarter and achieved record quarterly shipments and production levels as we exited 2021…We’re proud of our execution during the quarter as the continued progress on our capacity expansion helped drive top line results ahead of our expectations despite ongoing supply chain challenges. We enter 2022 with considerable visibility and momentum given ongoing robust home standby demand, an expanding Energy Technology solutions portfolio, and strong global demand for our C&I products.”

“We are making important progress on Generac’s evolution into an energy technology solutions company as we completed several strategic acquisitions during the year and introduced a number of innovative technologies that will significantly expand our addressable markets. We also introduced a new enterprise strategy called ‘Powering a Smarter World’ focused on improving energy resiliency, optimizing energy efficiency, and protecting critical infrastructure. Our strong balance sheet and cash flow generation give us the confidence to make the necessary investments to further capitalize on the key mega-trends that support our long-term growth outlook,” Jagdfeld added.

The company noted that in FY/21, domestic sales increased by 39% y-o-y to $896.4 million and international sales grew by 47% y-o-y to $170.7 million.

Generac Holdings offered some forward guidance and advised that for FY/22 it expects net sales will grow by 32-36% over FY/21. The firm added that is estimates net income margin, before deducting for non-controlling interests, will be in the range of 13.0-14.0% and adjusted EBITDA margin, before deducting for non-controlling interests will be approximately 22.0-23.0%.

Generac is a global energy technology firm based in Waukesha, Wis. that designs and manufactures a wide range of products that provide backup and prime power systems for both homes and businesses. In addition to residential and industrial uses, the firm engineers, manufactures and markets advanced power grid software platforms, engine- and battery-powered tools and equipment, smart home energy management devices and energy services and solar + battery storage solutions. Generac claims that “it introduced the first affordable backup generator and later created the category of automatic home standby generator.”

Generac Holdings started the day with a market cap of around $17.5 billion with approximately 63.09 million shares outstanding and a short interest of about 2.1%. GNRC shares opened nearly 8% higher today at $290.56 (+$21.89, +7.91%) over yesterday’s $276.70 closing price. The stock has traded today between $290.56 and $320.30 per share and closed for trading at $316.44 (+$39.74, +14.36%).

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