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generac holdings inc (GNRC) Key Developments

Generac Holdings Inc. Announces Unaudited Consolidated Earnings Results for the Third Quarter and Nine Months Ended September 30, 2014; Revised Earnings Guidance for the Full Year of 2014; Provides Earnings Guidance for the Fourth Quarter of 2014

Generac Holdings Inc. announced unaudited consolidated earnings results for the third quarter and nine months ended September 30, 2014. For the quarter, the company announced net sales of $352,305,000 compared to $363,269,000 for the same period a year ago. Income from operations was $70,794,000 compared to $87,289,000 for the same period a year ago. Income before provision for income taxes was $54,862,000 compared to $74,045,000 for the same period a year ago. Net income was $36,497,000 compared to $47,093,000 for the same period a year ago. Net income per common share, diluted was $0.52 compared to $0.67 for the same period a year ago. Adjusted EBITDA was $83,060,000 compared to $100,068,000 for the same period a year ago. Adjusted net income before provision for income taxes was $64,364,000 compared to $83,245,000 for the same period a year ago. Adjusted net income was $57,894,000 compared to $73,735,000 for the same period a year ago. Adjusted net income per common share, diluted was $0.83 compared to $1.06 for the same period a year ago. Net cash provided by operating activities was $57,226,000 compared to $80,895,000 for the same period a year ago. Investments for property and equipment were $9,405,000 compared to $4,206,000 for the same period a year ago. Free cash flow was $47,821,000 compared to $76,689,000 for the same period a year ago. Third quarter results reflect seasonally higher home standby sales that improved at a solid rate as compared to the second quarter of 2014 as the company continues to build awareness and expand leadership position in this product category. For the nine months, the company announced net sales of $1,056,922,000 compared to $1,109,529,000 for the same period a year ago. Income from operations was $214,260,000 compared to $260,247,000 for the same period a year ago. Income before provision for income taxes was $191,508,000 compared to $200,258,000 for the same period a year ago. Net income was $125,223,000 compared to $126,021,000 for the same period a year ago. Net income per common share, diluted was $1.79 compared to $1.81 for the same period a year ago. Adjusted EBITDA was $245,090,000 compared to $298,966,000 for the same period a year ago. Adjusted net income before provision for income taxes was $193,762,000 compared to $240,828,000 for the same period a year ago. Adjusted net income was $165,732,000 compared to $224,148,000 for the same period a year ago. Adjusted net income per common share, diluted was $2.37 compared to $3.22 for the same period a year ago. Net cash provided by operating activities was $142,511,000 compared to $155,213,000 for the same period a year ago. Investments for property and equipment were $22,722,000 compared to $14,257,000 for the same period a year ago. Free cash flow was $119,789,000 compared to $140,956,000 for the same period a year ago. Net debt was $938.9 million. The company revised earnings guidance for the full year of fiscal 2014. The company is revising its prior guidance for revenue growth and adjusted EBITDA margins for full year 2014 resulting from a power outage environment that remains well below normalized levels, a reduced level of capital spending with certain telecom customers and the continued overall economic softness in Latin America. For the full-year 2014, the company now expects net sales to decline in the mid-single digit range over the prior year which compares to the previous expectation for net sales of an increase in the mid-single-digit range, and adjusted EBITDA margins are now expected to be in the low-to-mid 20% range compared to the previous margin expectation of the mid-20% range. Free cash flow is expected to remain strong for the full year 2014 as a result of this strong margin profile, together with a low cost of debt, favorable tax attributes and capital-efficient operating model. Cash income tax rate for the full year is now anticipated to approximately 14% versus previous expectation of a range of 17% to 18%, primarily due to the reduced full year outlook and, to a lesser extent, a higher level of benefit from certain tax credits than previously expected. Cash income tax rate is expected to be significantly lower than currently projected 32% to 33% GAAP income tax rate in 2014. As the company drives higher profitability over time, cash income taxes can be estimated by applying a projected longer-term GAAP income tax rate of approximately 36% on pretax profits going forward, and then deducting the approximately $49 million of annual cash tax savings from the tax shield each year through 2021. Updating interest expense guidance, cash debt service cost are now projected to be approximately $41 million for the full year 2014, while amortization of deferred financing cost and original issue discount is now expected to be approximately $7 million during the year for a full year 2014 GAAP interest expense total of approximately $48 million. With regards to gross margins, the company expects an approximately 150 basis point decline sequentially in the fourth quarter of 2014 as a result of a higher mix of C&I product sales, partially offset by price cost improvements expected during the quarter. Adjusted EBITDA margins, specifically during the fourth quarter of 2014, are now expected to decline approximately 50 basis points on a sequential basis as compared to the third quarter.

Generac Holdings Seeks Acquisitions

Generac Holdings Inc. (NYSE:GNRC) will consider acquisitions. Generac Holdings said, "With our strong balance sheet and free cash flow generation profile, we are confident in our ability to continue to invest in the future growth of the business, both organically and through acquisitions."

Generac Holdings Inc. to Report Q3, 2014 Results on Nov 06, 2014

Generac Holdings Inc. announced that they will report Q3, 2014 results at 9:00 AM, Eastern Standard Time on Nov 06, 2014

Generac Holdings Inc., Q3 2014 Earnings Call, Nov 06, 2014

Generac Holdings Inc., Q3 2014 Earnings Call, Nov 06, 2014

Generac Holdings Inc. Presents at Baird 2014 Industrial Conference, Nov-11-2014 03:30 PM

Generac Holdings Inc. Presents at Baird 2014 Industrial Conference, Nov-11-2014 03:30 PM. Venue: Four Seasons Hotel, 120 East Delaware Place, Chicago, Illinois, United States.

 

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