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Generac Holdings Inc. (NYSE: GNRC), a leading designer and manufacturer of generators and other engine powered products, today reported financial results for its fourth quarter and year ended December 31, 2012. Additionally, the Company provided its current outlook for 2013.
Fourth Quarter 2012 Highlights
Net sales increased year-over-year by 28.0% to $342.0 million as compared to $267.3 million in the fourth quarter of 2011.
Residential product sales increased 28.9% compared to the fourth quarter of 2011.
Commercial & Industrial (C&I) product sales increased 29.4% compared to the prior year fourth quarter.
The Ottomotores acquisition closed on December 8, 2012, building a more balanced, globally focused business. The entire $44.8 million net purchase price was funded using cash on hand.
Net income during the fourth quarter of 2012 was $28.3 million, or $0.41 per diluted share.
Adjusted net income, as defined in the accompanying reconciliation schedules, increased 17.1% over the prior year quarter to $60.7 million. Adjusted diluted net income per common share increased 15.3% to $0.87 per share.
Adjusted EBITDA increased 34.5% over the prior year fourth quarter to $83.1 million.
Cash flow from operations in the fourth quarter of 2012 was $106.4 million as compared to $80.7 million in the prior year quarter. Free cash flow was $97.4 million as compared to $73.1 million in the fourth quarter of 2011.
As a result of this strong free cash flow conversion, on February 11, 2013, the Company prepaid $80.0 million of principal on its existing term loan, contributing to significantly improved leverage ratios since refinancing the Company’s credit facilities in the second quarter of 2012.
Full-Year 2012 Highlights
Net sales increased year-over-year by 48.5% to $1.176 billion as compared to $792.0 million in 2011.
Residential product sales during 2012 increased 43.7% as compared to a strong 2011, which grew at a 31.7% rate over 2010.
C&I product sales increased 64.0% as compared to 2011. Excluding the impact of Magnum Products and the modest impact from the recent Ottomotores acquisition, C&I product sales increased 14.0% versus 2011 on an organic basis.
Net income during 2012 was $93.2 million, or $1.35 per diluted share.
Adjusted net income increased 50.0% over the prior year to $220.8 million. Adjusted diluted net income per common share increased 47.0% to $3.19.
Adjusted EBITDA increased 53.8% over the prior year to $289.8 million.
Cash flow from operations during 2012 was $235.6 million as compared to $169.7 million in the prior year. Free cash flow was $213.2 million as compared to $157.7 million in 2011, which represents 97% and 107% of the adjusted net income reported during the respective years.
“2012 was a tremendous year for Generac as we achieved record financial results with significant growth across all product categories and regions of the United States,” said Aaron Jagdfeld, President and Chief Executive Officer. “With 49% growth in 2012 following 34% growth in 2011, we have nearly doubled the size of our business in the past two years and have used our positive momentum to reinvest heavily in our future over that time using our Powering Ahead strategy as our roadmap. Specifically, in the fourth quarter, we launched our AMP™ marketing tool which combines data from existing owners, third party demographic data and power outage tracking to identify and direct market to potential sales prospects more effectively. This tool, coupled with our new PowerPlay™ tablet based in-home selling solution which also launched in the fourth quarter, should improve sales lead flow and closure rates for home standby opportunities through our distribution partners. In 2012, we also accelerated our re-entry into the market for power washers and have recently launched our OneWash™ product, the industry’s first and only variable speed washer, which has helped us to gain valuable shelf space for the upcoming 2013 season.”