Generac Holdings Inc. (NYSE: GNRC) (the “Company”), a leading designer and manufacturer of power generation equipment and other engine powered products, today reported financial results for its fourth quarter and year ended December 31, 2013. Additionally, the Company initiated its outlook for 2014.
Fourth Quarter 2013 Highlights
- Net sales increased year-over-year by 10.0% to $376.2 million as compared to $342.0 million in the fourth quarter of 2012.
- Growth in shipments during the fourth quarter was driven by strong organic revenue growth from home standby generators and Commercial & Industrial (C&I) products, along with the contribution from recent acquisitions, partially offset by a decline in shipments of portable generators.
- Gross profit margin during the fourth quarter improved 180 basis points over the prior year.
- Net income during the fourth quarter of 2013 was $48.5 million, or $0.69 per share, as compared to $28.3 million or $0.41 per share for the same period of 2012.
- Adjusted net income, as defined in the accompanying reconciliation schedules, increased to $77.5 million from $60.7 million in the fourth quarter of 2012. Adjusted diluted net income per share was $1.11 as compared to $0.87 per share in the fourth quarter of 2012.
- Adjusted EBITDA increased 24.7% to $103.6 million as compared to $83.1 million in the fourth quarter last year. Adjusted EBITDA margin during the fourth quarter improved to 27.5% as compared to 24.3% in the prior year.
- Cash flow from operations in the fourth quarter of 2013 was $104.7 million as compared to $106.4 million in the prior year quarter. Free cash flow was $88.2 million as compared to $97.4 million in the fourth quarter of 2012.
- On November 1, 2013, the Company closed its previously announced purchase of substantially all of the assets of Baldor Electric Company’s generator division (“Baldor Generators”). Baldor Generators offers a complete line of products up to 2.5MW throughout North America.
Full-Year 2013 Highlights
- Net sales increased year-over-year by 26.3% to $1.486 billion as compared to $1.176 billion in 2012.
- Residential product sales increased 19.6% to $843.7 million as compared to a strong 2012 with revenues of $705.4 million, which grew at a 43.7% rate over 2011.
- Commercial & Industrial product sales increased 38.9% to $569.9 million as compared to $410.3 million in 2012.
- Gross profit margin during 2013 was 38.3%, representing a 90 basis point improvement over the prior year.
- Net income during 2013 was $174.5 million, or $2.51 per diluted share, as compared to $93.2 million or $1.35 per diluted share for 2012.
- Adjusted net income increased 36.6% over the prior year to $301.7 million. Adjusted diluted net income per common share increased 35.7% to $4.33.
- Adjusted EBITDA increased 38.9% to $402.6 million in 2013 as compared to $289.8 million last year. Adjusted EBITDA margin during 2013 improved to 27.1% as compared to 24.6% in the prior year.
- Cash flow from operations during 2013 was $259.9 million as compared to $235.6 million in the prior year. Free cash flow was $229.2 million as compared to $213.2 million in 2012.
- In addition to the acquisition of Baldor Generators that closed in early November, we integrated the Ottomotores acquisition during 2013 and closed the acquisition of Tower Light in early August. Ottomotores, which closed in December 2012, is a leading manufacturer of industrial generators in Mexico and other parts of Latin America. Tower Light is a leading developer and supplier of mobile light towers throughout Europe, the Middle East and Africa.
“2013 was another great year for Generac that helped drive a third consecutive year of record revenues with a compounded annual growth rate of 36% since implementing our Powering Ahead strategy three years ago,” said Aaron Jagdfeld, President and Chief Executive Officer. “Once again we experienced strong growth across all regions of the United States, as home standby generators further gain in popularity and the Generac brand is increasingly recognized as the leading name in backup power. The secular penetration themes that drive our business continue to play out for our residential and C&I products as we made significant progress on several initiatives to extend awareness for standby generators, leading to further growth. In addition to our organic growth, we executed on three important acquisitions that provide additional product breadth and global scale to our C&I business and improved balance to the overall company.”