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Generac Reports Record Quarterly and Full-Year 2019 Results
Fourth Quarter 2019 Highlights
- Net sales increased 4.9% to
$590.9 million during the fourth quarter of 2019 as compared to$563.4 million in the prior-year fourth quarter. Core sales growth, which excludes both the impact of acquisitions and foreign currency, was approximately 4%.- Residential product sales increased 9.7% to
$322.5 million as compared to$293.9 million last year, with core sales growth of approximately 7%. - Commercial & Industrial (“C&I”) product sales decreased 2.7% to
$217.1 million as compared to$223.2 million in the prior year, with core sales also declining approximately 3%.
- Residential product sales increased 9.7% to
- Net income attributable to the Company during the fourth quarter was
$69.6 million , or$1.12 per share, as compared to$75.6 million , or$1.20 per share, for the same period of 2018. See accompanying reconciliation schedules for related earnings per share calculations. - Adjusted net income attributable to the Company, as defined in the accompanying reconciliation schedules, was
$96.5 million , or$1.53 per share, as compared to$88.1 million , or$1.42 per share, in the fourth quarter of 2018. - Adjusted EBITDA before deducting for noncontrolling interests, as defined in the accompanying reconciliation schedules, was
$129.1 million , or 21.9% of net sales, as compared to$126.1 million , or 22.4% of net sales, in the prior year. - Cash flow from operations was
$175.1 million as compared to$108.2 million in the prior year. Free cash flow, as defined in the accompanying reconciliation schedules, was$160.3 million as compared to$87.3 million in 2018. The increase was primarily driven by the monetization of previous working capital investments, together with lower capital expenditures compared to the prior year quarter. - As previously announced, on
December 13, 2019 , the Company amended its Term Loan credit agreement, which among other things extended the maturity of the term loan fromMay 2023 to December 2026. In conjunction with the amendment, the Company paid down$49 million of debt on the term loan.
Full-Year 2019 Highlights
- Net sales increased 8.9% to
$2.20 billion during 2019 as compared to$2.02 billion in 2018, including$41.2 million of contribution from acquisitions. Total core sales growth for the year was approximately 8%.- Residential product sales increased 9.7% to
$1.14 billion as compared to$1.04 billion last year, with core sales growth of approximately 9%. - C&I product sales increased 6.3% to
$871.6 million as compared to$820.3 million in the prior year, with core sales also increasing approximately 6%.
- Residential product sales increased 9.7% to
- Net income attributable to the Company during 2019 was
$252.0 million , or$4.03 per share, as compared to$238.3 million , or$3.54 per share for 2018. - Adjusted net income attributable to the Company was
$317.8 million , or$5.06 per share, as compared to$292.2 million , or$4.70 per share, in 2018. - Adjusted EBITDA before deducting for non-controlling interests for 2019 was
$454.1 million , or 20.6% of net sales, as compared to$424.6 million , or 21.0% of net sales, last year. - Cash flow from operations was
$308.9 million as compared to$247.2 million in the prior year. Free cash flow was$250.7 million as compared to$203.6 million in 2018.
“The fourth quarter was a great finish to a very strong 2019 with record performance for both the quarter and the full-year for net sales, adjusted EBITDA and free cash flow,” said
Additional Fourth Quarter 2019 Consolidated Highlights
Gross profit margin improved 130 basis points to 37.6% compared to 36.3% in the prior-year fourth quarter. Pricing actions and favorable sales mix, as well as lower realized commodity and foreign currency input costs, were partially offset by increased regulatory tariffs, and the unfavorable mix impact from acquisitions.
Operating expenses increased
Provision for income taxes for the current year quarter was
During the fourth quarter of 2019, the Company completed the termination of its domestic pension plan, which did not result in a reduction of benefits to plan participants. This resulted in pre-tax settlement charges of
Business Segment Results
Domestic Segment
Domestic segment sales increased 7.7% to
Adjusted EBITDA for the segment was
International Segment
International segment sales decreased 4.9% to
Adjusted EBITDA for the segment, before deducting for noncontrolling interests, was
2020 Outlook
The Company is initiating guidance for 2020 with net sales expected to increase between 6 to 8% as compared to the prior year on an as-reported basis, and 5 to 7% on a core basis. This guidance assumes a level of power outages in line with the longer-term baseline average, but includes the benefit of one significant power shut-off event in
Net income margin, before deducting for non-controlling interests, is expected to be approximately 11% for the full-year 2020, with corresponding adjusted EBITDA margin expected to be approximately 20.0%. Should there be a more active outage environment during 2020, we would expect margins to increase by approximately 50 basis points above this baseline guidance, resulting in an upside case adjusted EBITDA margin of approximately 20.5%.
Operating and free cash flow generation is expected to be strong, with the conversion of adjusted net income to free cash flow expected to be approximately 90%.
Conference Call and Webcast
The conference call will also be webcast simultaneously on
Following the live webcast, a replay will be available on the Company's website. A telephonic replay will also be available approximately two hours after the call and can be accessed by dialing (855) 859-2056 (domestic) or +1 (404) 537-3406 (international) and entering passcode 9159339. The telephonic replay will be available for 7 days.
About
Founded in 1959,
Forward-looking Information
Certain statements contained in this news release, as well as other information provided from time to time by
Any such forward looking statements are not guarantees of performance or results, and involve risks, uncertainties (some of which are beyond the Company's control) and assumptions. Although
- frequency and duration of power outages impacting demand for our products;
- availability, cost and quality of raw materials and key components from our global supply chain and labor needed in producing our products;
- the impact on our results of possible fluctuations in interest rates, foreign currency exchange rates, commodities, product mix and regulatory tariffs;
- the possibility that the expected synergies, efficiencies and cost savings of our acquisitions will not be realized, or will not be realized within the expected time period;
- the risk that our acquisitions will not be integrated successfully;
- difficulties we may encounter as our business expands globally or into new markets;
- our dependence on our distribution network;
- our ability to invest in, develop or adapt to changing technologies and manufacturing techniques;
- loss of our key management and employees;
- increase in product and other liability claims or recalls;
- failures or security breaches of our networks or information technology systems; and
- Changes in environmental, health and safety, or product compliance laws and regulations affecting our products or operations.
Should one or more of these risks or uncertainties materialize,
Any forward-looking statement made by
Non-GAAP Financial Metrics
Core Sales
The Company references core sales to further supplement
Adjusted EBITDA
The computation of adjusted EBITDA attributable to the Company is based on the definition of EBITDA contained in
Adjusted Net Income
To further supplement
Free Cash Flow
In addition, we reference free cash flow to further supplement
The presentation of this additional information is not meant to be considered in isolation of, or as a substitute for, results prepared in accordance with U.S. GAAP. Please see the accompanying Reconciliation Schedules and our
SOURCE:
CONTACT:
Vice President – Corporate Development & Investor Relations
(262) 506-6064
InvestorRelations@generac.com
Generac Holdings Inc. | ||||||||||||||||
Consolidated Statements of Comprehensive Income | ||||||||||||||||
(U.S. Dollars in Thousands, Except Share and Per Share Data) | ||||||||||||||||
(Unaudited) | ||||||||||||||||
Three Months Ended December 31, | Year Ended December 31, | |||||||||||||||
2019 | 2018 | 2019 | 2018 | |||||||||||||
Net sales | $ | 590,932 | $ | 563,404 | $ | 2,204,336 | $ | 2,023,464 | ||||||||
Costs of goods sold | 368,710 | 359,098 | 1,406,584 | 1,298,424 | ||||||||||||
Gross profit | 222,222 | 204,306 | 797,752 | 725,040 | ||||||||||||
Operating expenses: | ||||||||||||||||
Selling and service | 58,729 | 50,013 | 217,683 | 191,887 | ||||||||||||
Research and development | 19,488 | 11,897 | 68,394 | 50,019 | ||||||||||||
General and administrative | 30,852 | 28,228 | 110,868 | 103,841 | ||||||||||||
Amortization of intangibles | 8,645 | 5,320 | 28,644 | 22,112 | ||||||||||||
Total operating expenses | 117,714 | 95,458 | 425,589 | 367,859 | ||||||||||||
Income from operations | 104,508 | 108,848 | 372,163 | 357,181 | ||||||||||||
Other (expense) income: | ||||||||||||||||
Interest expense | (10,116 | ) | (10,017 | ) | (41,544 | ) | (40,956 | ) | ||||||||
Investment income | 878 | 798 | 2,767 | 1,893 | ||||||||||||
Loss on extinguishment of debt | (926 | ) | – | (926 | ) | (1,332 | ) | |||||||||
Loss on pension settlement | (10,920 | ) | – | (10,920 | ) | – | ||||||||||
Other, net | (65 | ) | (2,946 | ) | (1,933 | ) | (5,710 | ) | ||||||||
Total other expense, net | (21,149 | ) | (12,165 | ) | (52,556 | ) | (46,105 | ) | ||||||||
Income before provision for income taxes | 83,359 | 96,683 | 319,607 | 311,076 | ||||||||||||
Provision for income taxes | 13,423 | 19,986 | 67,299 | 69,856 | ||||||||||||
Net income | 69,936 | 76,697 | 252,308 | 241,220 | ||||||||||||
Net income attributable to noncontrolling interests | 322 | 1,122 | 301 | 2,963 | ||||||||||||
Net income attributable to Generac Holdings Inc. | $ | 69,614 | $ | 75,575 | $ | 252,007 | $ | 238,257 | ||||||||
Other comprehensive income (loss): | ||||||||||||||||
Foreign currency translation adjustment | $ | 9,862 | $ | (7,214 | ) | $ | 2,210 | $ | (5,976 | ) | ||||||
Net unrealized gain (loss) on derivatives | 1,043 | (7,479 | ) | (13,855 | ) | 2,924 | ||||||||||
Pension liability adjustment | 10,541 | 437 | 10,541 | 437 | ||||||||||||
Other comprehensive income (loss) | 21,446 | (14,256 | ) | (1,104 | ) | (2,615 | ) | |||||||||
Total comprehensive income | 91,382 | 62,441 | 251,204 | 238,605 | ||||||||||||
Comprehensive income attributable to noncontrolling interests | 1,371 | 679 | (635 | ) | 1,647 | |||||||||||
Comprehensive income attributable to Generac Holdings Inc. | $ | 90,011 | $ | 61,762 | $ | 251,839 | $ | 236,958 | ||||||||
Net income attributable to common shareholders per | ||||||||||||||||
common share - basic: | $ | 1.14 | $ | 1.21 | $ | 4.09 | $ | 3.57 | ||||||||
Weighted average common shares outstanding - basic: | 62,056,624 | 61,669,467 | 61,926,986 | 61,662,031 | ||||||||||||
Net income attributable to common shareholders per | ||||||||||||||||
common share - diluted: | $ | 1.12 | $ | 1.20 | $ | 4.03 | $ | 3.54 | ||||||||
Weighted average common shares outstanding - diluted: | 63,219,078 | 62,201,066 | 62,865,446 | 62,233,225 | ||||||||||||
Generac Holdings Inc. | ||||||||
Consolidated Balance Sheets | ||||||||
(U.S. Dollars in Thousands, Except Share and Per Share Data) | ||||||||
(Unaudited) | ||||||||
December 31, | ||||||||
2019 | 2018 | |||||||
Assets | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 322,883 | $ | 224,482 | ||||
Accounts receivable, less allowance for doubtful accounts of $6,968 and | 319,538 | 326,133 | ||||||
$4,873 at December 31, 2019 and 2018, respectively | ||||||||
Inventories | 522,024 | 544,750 | ||||||
Prepaid expenses and other assets | 31,384 | 25,404 | ||||||
Total current assets | 1,195,829 | 1,120,769 | ||||||
Property and equipment, net | 316,976 | 278,929 | ||||||
Customer lists, net | 55,552 | 61,194 | ||||||
Patents and technology, net | 85,546 | 29,970 | ||||||
Other intangible assets, net | 8,259 | 3,043 | ||||||
Tradenames, net | 148,377 | 152,283 | ||||||
Goodwill | 805,284 | 764,655 | ||||||
Deferred income taxes | 2,933 | 163 | ||||||
Operating lease and other assets | 46,913 | 15,308 | ||||||
Total assets | $ | 2,665,669 | $ | 2,426,314 | ||||
Liabilities and stockholders’ equity | ||||||||
Current liabilities: | ||||||||
Short-term borrowings | $ | 58,714 | $ | 45,583 | ||||
Accounts payable | 261,977 | 328,091 | ||||||
Accrued wages and employee benefits | 41,361 | 40,819 | ||||||
Other accrued liabilities | 132,629 | 144,236 | ||||||
Current portion of long-term borrowings and finance lease obligations | 2,383 | 1,977 | ||||||
Total current liabilities | 497,064 | 560,706 | ||||||
Long-term borrowings and finance lease obligations | 837,767 | 876,396 | ||||||
Deferred income taxes | 96,328 | 71,300 | ||||||
Operating lease and other long-term liabilities | 140,432 | 95,647 | ||||||
Total liabilities | 1,571,591 | 1,604,049 | ||||||
Redeemable noncontrolling interest | 61,227 | 61,004 | ||||||
Stockholders’ equity: | ||||||||
Common stock, par value $0.01, 500,000,000 shares authorized, 71,667,726 | ||||||||
and 71,186,418 shares issued at December 31, 2019 and 2018, respectively | 717 | 712 | ||||||
Additional paid-in capital | 498,866 | 476,116 | ||||||
Treasury stock, at cost, 9,103,013 and 9,047,060 shares at December 31, | ||||||||
2019 and 2018, respectively | (324,551 | ) | (321,473 | ) | ||||
Excess purchase price over predecessor basis | (202,116 | ) | (202,116 | ) | ||||
Retained earnings | 1,084,383 | 831,123 | ||||||
Accumulated other comprehensive loss | (24,917 | ) | (23,813 | ) | ||||
Stockholders’ equity attributable to Generac Holdings Inc. | 1,032,382 | 760,549 | ||||||
Noncontrolling interests | 469 | 712 | ||||||
Total stockholders’ equity | 1,032,851 | 761,261 | ||||||
Total liabilities and stockholders’ equity | $ | 2,665,669 | $ | 2,426,314 | ||||
Generac Holdings Inc. | |||||||
Consolidated Statements of Cash Flows | |||||||
(U.S. Dollars in Thousands) | |||||||
(Unaudited) | |||||||
Year Ended December 31, | |||||||
2019 | 2018 | ||||||
Operating activities | |||||||
Net income | $ | 252,308 | $ | 241,220 | |||
Adjustment to reconcile net income to net cash provided by operating activities: | |||||||
Depreciation | 32,265 | 25,296 | |||||
Amortization of intangible assets | 28,644 | 22,112 | |||||
Amortization of original issue discount and deferred financing costs | 4,712 | 4,749 | |||||
Loss on extinguishment of debt | 926 | 1,332 | |||||
Loss on pension settlement | 10,920 | – | |||||
Deferred income taxes | 18,733 | 23,600 | |||||
Share-based compensation expense | 16,694 | 14,563 | |||||
Other | 1,086 | 2,474 | |||||
Net changes in operating assets and liabilities: | |||||||
Accounts receivable | 8,231 | (43,243 | ) | ||||
Inventories | 26,369 | (152,594 | ) | ||||
Other assets | (358 | ) | (6,362 | ) | |||
Accounts payable | (69,404 | ) | 86,359 | ||||
Accrued wages and employee benefits | (3,724 | ) | 12,626 | ||||
Other accrued liabilities | (16,252 | ) | 16,972 | ||||
Excess tax benefits from equity awards | (2,263 | ) | (1,877 | ) | |||
Net cash provided by operating activities | 308,887 | 247,227 | |||||
Investing activities | |||||||
Proceeds from sale of property and equipment | 95 | 214 | |||||
Proceeds from beneficial interest in securitization transactions | 2,630 | 3,933 | |||||
Expenditures for property and equipment | (60,802 | ) | (47,601 | ) | |||
Acquisition of business, net of cash acquired | (112,001 | ) | (65,440 | ) | |||
Net cash used in investing activities | (170,078 | ) | (108,894 | ) | |||
Financing activities | |||||||
Proceeds from short-term borrowings | 73,340 | 53,965 | |||||
Proceeds from long-term borrowings | 1,660 | 51,425 | |||||
Repayments of short-term borrowings | (59,518 | ) | (27,880 | ) | |||
Repayments of long-term borrowings and finance lease obligations | (53,049 | ) | (101,827 | ) | |||
Stock repurchases | – | (25,656 | ) | ||||
Payment of contingent consideration | (5,550 | ) | – | ||||
Cash dividends paid to noncontrolling interest of subsidiary | (285 | ) | (314 | ) | |||
Payment of debt issuance costs | (1,473 | ) | (1,702 | ) | |||
Taxes paid related to equity awards | (6,438 | ) | (5,659 | ) | |||
Proceeds from the exercise of stock options | 9,395 | 5,614 | |||||
Net cash used in financing activities | (41,918 | ) | (52,034 | ) | |||
Effect of exchange rate changes on cash and cash equivalents | 1,510 | (289 | ) | ||||
Net increase in cash and cash equivalents | 98,401 | 86,010 | |||||
Cash and cash equivalents at beginning of period | 224,482 | 138,472 | |||||
Cash and cash equivalents at end of period | $ | 322,883 | $ | 224,482 | |||
Supplemental disclosure of cash flow information | |||||||
Cash paid during the period | |||||||
Interest | $ | 35,465 | $ | 41,007 | |||
Income taxes | 61,767 | 41,044 | |||||
Generac Holdings Inc. | |||||||||||||
Segment Reporting and Product Class Information | |||||||||||||
(U.S. Dollars in Thousands) | |||||||||||||
(Unaudited) | |||||||||||||
Net Sales | |||||||||||||
Three Months Ended December 31, | Year Ended December 31, | ||||||||||||
Reportable Segments | 2019 | 2018 | 2019 | 2018 | |||||||||
Domestic (1) | $ | 470,058 | $ | 436,339 | $ | 1,742,898 | $ | 1,566,520 | |||||
International (1) | 120,874 | 127,065 | 461,438 | 456,944 | |||||||||
Total net sales | $ | 590,932 | $ | 563,404 | $ | 2,204,336 | $ | 2,023,464 | |||||
Product Classes | |||||||||||||
Residential products | $ | 322,490 | $ | 293,949 | $ | 1,143,723 | $ | 1,042,739 | |||||
Commercial & industrial products | 217,137 | 223,151 | 871,595 | 820,270 | |||||||||
Other | 51,305 | 46,304 | 189,018 | 160,455 | |||||||||
Total net sales | $ | 590,932 | $ | 563,404 | $ | 2,204,336 | $ | 2,023,464 | |||||
Adjusted EBITDA | |||||||||||||
Three Months Ended December 31, | Year Ended December 31, | ||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||
Domestic (1) | $ | 122,920 | $ | 116,343 | $ | 428,667 | $ | 388,495 | |||||
International (1) | 6,228 | 9,724 | 25,448 | 36,057 | |||||||||
Total adjusted EBITDA (2) | $ | 129,148 | $ | 126,067 | $ | 454,115 | $ | 424,552 | |||||
(1) In the fourth quarter of 2019, management determined that the Latin American export operations of the legacy Generac business (GPS LATAM) should have been included in the International reportable segment. Previously, GPS LATAM was reported in the Domestic segment, in amounts that were not material. To reflect this change, management has chosen to correct the net sales and adjusted EBITDA by segment as follows: For the first, second and third quarters ended in 2019, net sales of $2,705, $4,406, and $3,353, respectively, and adjusted EBITDA of $(253), $845, and $384, respectively, were moved from the Domestic segment to the International segment. For the first, second, third, and fourth quarters ended in 2018, net sales of $3,822, $5,907, $2,577, and $1,499, respectively, and adjusted EBITDA of $312, $815, $(94), and $(843), respectively, were moved from the Domestic segment to the International segment. | |||||||||||||
(2) See reconciliation of Adjusted EBITDA to Net income attributable to Generac Holdings Inc. on the following reconciliation schedule. | |||||||||||||
Generac Holdings, Inc. | |||||||||||||||||||
Reconciliation Schedules | |||||||||||||||||||
(U.S. Dollars in Thousands, Except Share and Per Share Data) | |||||||||||||||||||
(Unaudited) | |||||||||||||||||||
Net income to Adjusted EBITDA reconciliation | |||||||||||||||||||
Three Months Ended December 31, | Year Ended December 31, | ||||||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||||||
Net income attributable to Generac Holdings Inc. | $ | 69,614 | $ | 75,575 | $ | 252,007 | $ | 238,257 | |||||||||||
Net income attributable to noncontrolling interests | 322 | 1,122 | 301 | 2,963 | |||||||||||||||
Net income | 69,936 | 76,697 | 252,308 | 241,220 | |||||||||||||||
Interest expense | 10,116 | 10,017 | 41,544 | 40,956 | |||||||||||||||
Depreciation and amortization | 17,926 | 12,284 | 60,767 | 47,408 | |||||||||||||||
Provision for income taxes | 13,423 | 19,986 | 67,299 | 69,856 | |||||||||||||||
Non-cash write-down and other adjustments (1) | (433 | ) | 10 | 240 | 3,532 | ||||||||||||||
Non-cash share-based compensation expense (2) | 5,217 | 4,653 | 16,694 | 14,563 | |||||||||||||||
Loss on extinguishment of debt (3) | 926 | – | 926 | 1,332 | |||||||||||||||
Loss on pension settlement (4) | 10,920 | – | 10,920 | - | |||||||||||||||
Transaction costs and credit facility fees (5) | 677 | 1,413 | 2,724 | 3,883 | |||||||||||||||
Business optimization expenses (6) | 763 | 202 | 1,572 | 952 | |||||||||||||||
Other | (323 | ) | 805 | (879 | ) | 850 | |||||||||||||
Adjusted EBITDA | 129,148 | 126,067 | 454,115 | 424,552 | |||||||||||||||
Adjusted EBITDA attributable to noncontrolling interests | 1,243 | 2,126 | 4,965 | 7,759 | |||||||||||||||
Adjusted EBITDA attributable to Generac Holdings Inc. | $ | 127,905 | $ | 123,941 | $ | 449,150 | $ | 416,793 | |||||||||||
(1) Includes gains/losses on disposals of assets, unrealized mark-to-market adjustments on commodity contracts, and certain foreign currency and purchase accounting related adjustments. A full description of these and the other reconciliation adjustments contained in these schedules is included in Generac's SEC filings. | |||||||||||||||||||
(2) Represents share-based compensation expense to account for stock options, restricted stock and other stock awards over their respective vesting periods. | |||||||||||||||||||
(3) Represents the write-off of original issue discount and capitalized debt issuance costs due to voluntary debt prepayments. | |||||||||||||||||||
(4) Represents pre-tax settlement charges related to the termination of the Company’s domestic pension plan in the fourth quarter of 2019. | |||||||||||||||||||
(5) Represents transaction costs incurred directly in connection with any investment, as defined in our credit agreement, equity issuance or debt issuance or refinancing, together with certain fees relating to our senior secured credit facilities. | |||||||||||||||||||
(6) Represents severance and other non-recurring restructuring charges related to the consolidation of certain of our facilities. | |||||||||||||||||||
Net income to Adjusted net income reconciliation | |||||||||||||||||||
Three Months Ended December 31, | Year Ended December 31, | ||||||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||||||
Net income attributable to Generac Holdings Inc. | $ | 69,614 | $ | 75,575 | $ | 252,007 | $ | 238,257 | |||||||||||
Net income attributable to noncontrolling interests | 322 | 1,122 | 301 | 2,963 | |||||||||||||||
Net income | 69,936 | 76,697 | 252,308 | 241,220 | |||||||||||||||
Provision for income taxes | 13,423 | 19,986 | 67,299 | 69,856 | |||||||||||||||
Income before provision for income taxes | 83,359 | 96,683 | 319,607 | 311,076 | |||||||||||||||
Amortization of intangible assets | 8,645 | 5,320 | 28,644 | 22,112 | |||||||||||||||
Amortization of deferred finance costs and original issue discount | 1,115 | 1,195 | 4,712 | 4,749 | |||||||||||||||
Loss on extinguishment of debt (3) | 926 | – | 926 | 1,332 | |||||||||||||||
Loss on pension settlement (4) | 10,920 | – | 10,920 | - | |||||||||||||||
Transaction costs and other purchase accounting adjustments (7) | (499 | ) | 1,062 | 874 | 2,578 | ||||||||||||||
Business optimization expenses (6) | 763 | 202 | 1,572 | 952 | |||||||||||||||
Adjusted net income before provision for income taxes | 105,229 | 104,462 | 367,255 | 342,799 | |||||||||||||||
Cash income tax expense (8) | (8,247 | ) | (15,355 | ) | (47,945 | ) | (47,064 | ) | |||||||||||
Adjusted net income | 96,982 | 89,107 | 319,310 | 295,735 | |||||||||||||||
Adjusted net income attributable to noncontrolling interests | 530 | 1,031 | 1,488 | 3,522 | |||||||||||||||
Adjusted net income attributable to Generac Holdings Inc. | $ | 96,452 | $ | 88,076 | $ | 317,822 | $ | 292,213 | |||||||||||
Adjusted net income attributable to Generac Holdings Inc. per | |||||||||||||||||||
common share - diluted: | $ | 1.53 | $ | 1.42 | $ | 5.06 | $ | 4.70 | |||||||||||
Weighted average common shares outstanding - diluted: | 63,219,078 | 62,201,066 | 62,865,446 | 62,233,225 | |||||||||||||||
(7) Represents transaction costs incurred directly in connection with any investment, as defined in our credit agreement, equity issuance or debt issuance or refinancing, and certain purchase accounting adjustments. | |||||||||||||||||||
(8) Amount for the three months and year ended December 31, 2019 is based on an anticipated cash income tax rate of 15% for the full year ended 2019. Amount for the three months and year ended December 31, 2018 is based on an anticipated cash income tax rate of 15% for the full year ended 2018. Cash income tax expense for the respective periods is based on the projected taxable income and corresponding cash tax rate for the full year after considering the effects of current and deferred income tax items, and is calculated for each respective period by applying the derived cash tax rate to the period’s pretax income. | |||||||||||||||||||
Free Cash Flow Reconciliation | |||||||||||||||||||
Three Months Ended December 31, | Year Ended December 31, | ||||||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||||||
Net cash provided by operating activities | $ | 175,085 | $ | 108,229 | $ | 308,887 | $ | 247,227 | |||||||||||
Proceeds from beneficial interests in securitization transactions | 594 | 1,108 | 2,630 | 3,933 | |||||||||||||||
Expenditures for property and equipment | (15,355 | ) | (22,024 | ) | (60,802 | ) | (47,601 | ) | |||||||||||
Free cash flow | $ | 160,324 | $ | 87,313 | $ | 250,715 | $ | 203,559 | |||||||||||
GAAP Earnings Per Share | |||||||||||||||||||
Three Months Ended December 31, | Year Ended December 31, | ||||||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||||||
Numerator | |||||||||||||||||||
Net income attributable to Generac Holdings Inc. | $ | 69,614 | $ | 75,575 | $ | 252,007 | $ | 238,257 | |||||||||||
Redeemable noncontrolling interest redemption value adjustment | 1,054 | (1,088 | ) | 1,253 | (17,970 | ) | |||||||||||||
Net income attributable to common shareholders | $ | 70,668 | $ | 74,487 | $ | 253,260 | $ | 220,287 | |||||||||||
Denominator | |||||||||||||||||||
Weighted average shares, basic | 62,056,624 | 61,669,467 | 61,926,986 | 61,662,031 | |||||||||||||||
Dilutive effect of stock compensation awards | 1,162,454 | 531,599 | 938,460 | 571,194 | |||||||||||||||
Diluted shares | 63,219,078 | 62,201,066 | 62,865,446 | 62,233,225 | |||||||||||||||
Net income attributable to common shareholders per share | |||||||||||||||||||
Basic | $ | 1.14 | $ | 1.21 | $ | 4.09 | $ | 3.57 | |||||||||||
Diluted | $ | 1.12 | $ | 1.20 | $ | 4.03 | $ | 3.54 |
Source: Generac Holdings Inc