UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): February 18, 2011
Generac Holdings Inc.
(Exact name of registrant as specified in its charter)
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Delaware
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001-34627
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20-5654756
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(State or other jurisdiction
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(Commission
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(IRS Employer
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of incorporation)
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File Number)
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Identification No.)
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S45 W29290 Hwy. 59
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Waukesha, Wisconsin
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53189
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(Address of principal executive offices)
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(Zip Code)
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(262) 544-4811
(Registrant’s telephone number, including area code)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
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o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
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o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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Item 2.02 Results of Operations and Financial Condition
On February 18, 2011, Generac Holdings Inc. (the “Company,” “we,” “us” or “our”) issued a press release (the “Earnings Release”) announcing its financial results for the fourth quarter and full fiscal year 2010. A copy of the Earnings Release is attached hereto as Exhibit 99.1 and is incorporated herein by reference.
The information contained in this Current Report on Form 8-K (including the exhibits) is being furnished and shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that Section. The information contained in this Current Report on Form 8-K shall not be incorporated by reference into any registration statement or other document pursuant to the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in any such filing.
Discussion of Non-GAAP Financial Measures
In the Earnings Release, we present certain financial information, specifically Adjusted EBITDA, Adjusted net income (loss) and free cash flow, which are not in accordance with generally accepted accounting principles, or U.S. GAAP. We present Adjusted EBITDA, Adjusted net income (loss) and free cash flow in the Earnings Release because these metrics assist us in comparing our performance across reporting periods on a consistent basis by excluding items that we do not believe are indicative of our core operating performance. Our management uses Adjusted EBITDA, Adjusted net income (loss) and free cash flow:
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for planning purposes, including the preparation of our annual operating budget and developing and refining our internal projections for future periods;
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to evaluate the effectiveness of our business strategies and as a supplemental tool in evaluating our performance against our budget for each period; and
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in communications with our board of directors and investors concerning our financial performance.
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We also use Adjusted EBITDA as a benchmark for the determination of the bonus component of compensation for our senior executives under our management incentive plans.
We believe that the disclosure of Adjusted EBITDA, Adjusted net income (loss) and free cash flow offers additional financial metrics which, when coupled with U.S. GAAP results and the reconciliation to U.S. GAAP results, provide a more complete understanding of our results of operations and the factors and trends affecting our business for securities analysts, investors and other interested parties in the evaluation of our company. We believe Adjusted EBITDA, Adjusted net income (loss) and free cash flow are useful to investors for the following reasons:
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Adjusted EBITDA, Adjusted net income (loss) and free cash flow and similar non-GAAP measures are widely used by investors to measure a company’s operating performance without regard to items that can vary substantially from company to company depending upon financing and accounting methods, book values of assets, tax jurisdictions, capital structures and the methods by which assets were acquired; and
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by comparing our Adjusted EBITDA, Adjusted net income (loss) and free cash flow in different historical periods, our investors can evaluate our operating performance excluding the impact of certain items.
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Item 9.01 Financial Statements and Exhibits
(d)
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Exhibit No.
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Description
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99.1
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Press Release, dated February 18, 2011.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
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GENERAC HOLDINGS INC.
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By: /s/ York Ragen
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Name:
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York Ragen
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Date: February 18, 2011
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Title:
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Chief Financial Officer
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EXHIBIT INDEX
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99.1
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Press Release, dated February 18, 2011.
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Generac Reports Fourth Quarter and Full-Year 2010 Results
Top-line growth and strong cash flow generation allow company to deliver significant debt pre-payment in fourth quarter
WAUKESHA, WISCONSIN, (February 18, 2011) – Generac Holdings Inc. (NYSE: GNRC), a leading designer and manufacturer of backup power generation products, today reported financial results for its fourth quarter and full year ended December 31, 2010.
Fourth Quarter 2010 Highlights
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Net sales increased year-over-year by 4.6% to $161.0 million as compared to $154.0 million in the fourth quarter of 2009.
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Cash flow remained strong as net cash provided by operating activities increased 6.4% to $31.4 million as compared to $29.5 million for the fourth quarter 2009.
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Net income increased year-over-year by 55.8% to $18.6 million as compared to $11.9 million for the fourth quarter of 2009; Adjusted net income increased 27.2% to $33.0 million from $25.9 million in the fourth quarter of 2009.
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Diluted net income per common share was $0.28 per share; Adjusted diluted net income per common share was $0.49 per share.
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Debt pre-payment of $74.2 million during the fourth quarter 2010.
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Full-Year 2010 Highlights
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Net sales increased year-over-year by 0.8% to $592.9 million as compared to $588.2 million in fiscal 2009.
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Net cash provided by operating activities totaled $114.5 million for the full year 2010 compared to $74.6 million in the prior year, a 53.4% increase.
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Net income increased year-over-year by 32.2% to $56.9 million as compared to $43.1 million for the year ending 2009; Adjusted net income increased 38.6% to $115.9 million from $83.6 million for the year ending 2009.
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Total debt reduction of $434.3 million for the full year 2010, representing a 39.8% reduction from December 31, 2009.
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“I am very proud of our accomplishments in 2010 which enabled us to deliver net sales growth for the third consecutive year, generate strong cash flows, and position the Company for growth moving forward,” said Aaron Jagdfeld, President and Chief Executive Officer of Generac. “Despite certain headwinds, sales of our residential generators proved resilient throughout the year and we built a strong foundation for the future through the introduction of new products and the addition of new distribution outlets. Sales of our commercial and industrial products rebounded nicely this year and delivered solid double-digit year-over-year growth in the second half of 2010. Throughout the year, we continued to invest in our business by making strong commitments to research and development and through the addition of several key hires in our sales, marketing and service functions. T
hese investments will allow us to maintain our position as the innovation leader in the standby generator market and support our strategic growth initiatives. Our attractive cash flows and stronger balance sheet will provide us the flexibility to drive our business in 2011 and beyond.”
Residential product sales of $99.9 million for the fourth quarter of 2010 were down 1.7% on a year-over-year basis due to certain retail customers approaching their inventory levels more conservatively compared to the fourth quarter of 2009. This trend was partially offset by an increase in seasonal stocking by certain other distribution partners. For the full fiscal year 2010, residential product sales of $372.8 million increased 0.6% from $370.7 million in the prior year, driven by the continued expansion of the Company’s residential products distribution network, successful new product launches, and a continued increase in the awareness of the product category, all of which were offset by continued weakness in U.S. residential investment.
Commercial and industrial product sales for the fourth quarter of 2010 increased 16.9% to $52.4 million from $44.8 million for the comparable period in 2009, driven by our expanded distribution network for these products and renewed growth in several key end markets, with health care, telecom, and data center applications showing the greatest improvement. For the full year 2010, commercial and industrial product sales were down 2.0%, but displayed strong momentum in the second half as end markets began to recover.
Fourth quarter 2010 gross profit margin decreased to 39.6% from 41.3% in the same period last year, which was primarily attributable to increased commodity and material costs. Gross margin for the full year was 40.0%, which was consistent with 2009 gross margin.
Operating expenses for the fourth quarter of 2010 were $37.6 million compared to $34.3 million in the same period last year. For the full year 2010, operating expenses were $147.1 million compared to $137.3 million in 2009. Of this increase, $6.4 million was related to non-cash stock compensation expense to account for the time based vesting of equity awards issued in conjunction with our initial public offering. The remaining quarterly and full year operating expense increases were primarily driven by incremental engineering and product development investments and increased administrative costs associated with operating as a public company.
Adjusted EBITDA of $42.7 million in the fourth quarter 2010 decreased from $44.1 million in the same period last year. For the full year 2010, Adjusted EBITDA decreased to $156.2 million, compared to $159.1 million in 2009, as modest sales growth and consistent gross margins were more than offset by increased investment in the business. Adjusted EBITDA margins remained strong in fiscal 2010 at 26.4%.
Interest expense decreased in the fourth quarter of 2010 to $6.6 million, compared to $17.2 million in the same period last year, contributing to our strong net income growth. For the full year 2010, interest expense was $27.4 million compared to $70.9 million in 2009, due to debt repayments, lower LIBOR rates, and the termination of certain interest rate swap agreements.
Free cash flow, defined as net cash provided by operating activities less capital expenditures, was $26.1 million in the fourth quarter of 2010, a 6.5% decrease over the same period last year as we increased working capital and capital expenditure investment during the current year quarter. For the full year 2010, free cash flow increased by 49.6% to $104.9 million compared to $70.1 million in 2009. In the fourth quarter of 2010, the Company used $74.2 million of its cash flow to make a voluntary debt pre-payment on its first lien credit facility. Following this debt pre-payment, at December 31, 2010, the Company had $657.2 million of debt outstanding with $78.6 million of cash on hand.
OUTLOOK
Mr. Jagdfeld concluded, “Our long-term growth strategy, which we refer to as “Powering Ahead”, includes four key objectives of growing the residential standby generator market, gaining industrial market share, expanding our product offering to diversify our end markets, and expanding into new geographies. We have identified and started to implement initiatives to support each of these strategic objectives, and over the next several years, we believe we will make substantial progress towards achieving our long-term growth goals.”
“In 2011, while we do not expect a near-term recovery in U.S. residential investment and we are not forecasting any major outage events, we do expect growth from our residential products through additional new product introductions and increased domestic and international distribution. For our commercial and industrial products, we anticipate continued strength in 2011 led by increasing demand across certain end markets, improving market share and expanding distribution into new geographies. We are anticipating higher input costs in 2011 as a result of rising commodity prices and continued weakness in the US dollar. We intend to offset these higher costs with selective price increases and continued focus on cost reduction. As a result, we remain optimistic that we can deliver moderate sales growth overall in 2011 while ma
intaining attractive gross margins and continuing to invest prudently in our operating infrastructure to support our long-term strategic growth plans.”
Conference Call and Webcast
Generac management will hold a conference call at 9:00am EST on Friday, February 18, 2011 to discuss highlights of this earnings release. The conference call can be accessed by dialing (866) 383-8003 (domestic) or +1 (617) 597-5330 (international) and entering passcode 82911389.
The conference call will also be webcast simultaneously on Generac's website (http://www.generac.com), under the Investor Relations link. The webcast link and supporting materials will be made available on the Company’s website prior to the start of the call.
The webcast is also being distributed through the Thomson Reuters StreetEvents Network. Individual investors can listen to the call at http://www.earnings.com, Thomson Reuters' individual investor portal, powered by StreetEvents. Institutional investors can access the call via StreetEvents (http://www.streetevents.com), a password-protected event management site.
Following the live webcast, a replay will be available on the Company's web site. A telephonic replay will also be available three hours after the call and can be accessed by dialing (888) 286-8010 (domestic) or +1 (617) 801-6888 (international) and entering passcode 80572047. The telephonic replay will be available for 30 days.
Generac company news is available
24 hours a day, on-line at: http://www.generac.com.
About Generac
Since 1959, Generac has been a leading designer and manufacturer of a wide range of backup power generation products serving residential, light commercial and industrial markets. Generac's power systems range in output from 800 watts to 9 megawatts and are available through a broad network of independent dealers, retailers and wholesalers.
Forward-looking Information
Certain statements contained in this news release, as well as other information provided from time to time by Generac Holdings Inc. or its employees, may contain forward looking statements that involve risks and uncertainties that could cause actual results to differ materially from those in the forward looking statements. Forward-looking statements give Generac's current expectations and projections relating to the Company's financial condition, results of operations, plans, objectives, future performance and business. You can identify forward-looking statements by the fact that they do not relate strictly to historical or current facts. These statements may include words such as "anticipate," "estimate," "expect," "project," "plan," "intend," "believe," "confident," "may," "should," "can have," "likely," "future" and other words and ter
ms of similar meaning in connection with any discussion of the timing or nature of future operating or financial performance or other events.
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 Generac believes any forward-looking statements are based on reasonable assumptions, you should be aware that many factors could affect Generac's actual financial results and cause them to differ materially from those anticipated in any forward-looking statements, including:
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demand for Generac products;
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frequency of major power outages;
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availability of quality raw materials and key components used in producing Generac products;
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competitive factors in the industry in which Generac operates;
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Generac's dependence on its distribution network;
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Generac's ability to invest in, develop or adapt to changing technologies and manufacturing techniques;
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Generac's ability to adjust to operating as a public company;
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loss of key management and employees;
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increase in liability claims; and
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changes in environmental, health and safety laws and regulations.
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Should one or more of these risks or uncertainties materialize, Generac's actual results may vary in material respects from those projected in any forward-looking statements. A detailed discussion of these and other factors that may affect future results is contained in Generac's filings with the Securities and Exchange Commission, or SEC.
Any forward-looking statement made by Generac in this press release speaks only as of the date on which it is made. Generac undertakes no obligation to update any forward-looking statement, whether as a result of new information, future developments or otherwise, except as may be required by law.
Reconciliations to GAAP Financial Metrics
Adjusted EBITDA
To supplement the Company's condensed consolidated financial statements presented in accordance with US GAAP, Generac provides a summary to show the computation of Adjusted EBITDA, taking into account certain charges and gains that were taken during the periods presented. The computation of Adjusted EBITDA is based on the definition of EBITDA contained in Generac's credit agreement, dated as of November 10, 2006.
Adjusted Net Income
To further supplement Generac's condensed consolidated financial statements presented in accordance with US GAAP, the Company provides a summary to show the computation of Adjusted net income. Adjusted net income is defined as Net income before provision (benefit) for income taxes adjusted for the following items: cash income tax (expense) benefit, amortization of intangible assets, amortization of deferred loan costs related to the Company's debt, intangible impairment charges, and certain non-cash gains.
Free Cash Flow
In addition, we reference free cash flow to further supplement Generac's condensed consolidated financial statements presented in accordance with US GAAP. Free cash flow is defined as Net cash provided by operating activities less Expenditures for property and equipment and is intended to be a measure of operational cash flow taking into account additional capital expenditure investment into the business.
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 US GAAP. Please see our SEC filings for additional discussion of the basis for Generac's reporting of Non-GAAP financial measures.
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Generac Holdings Inc.
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Condensed Consolidated Statements of Operations
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(Dollars in Thousands, Except Share and Per Share Data)
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Three Months Ended December 31,
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Year Ended December 31,
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2010
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2009
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2010
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2009
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(Unaudited)
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(Unaudited)
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(Unaudited)
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(Audited)
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Net sales
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$ | 161,041 | $ | 153,964 | $ | 592,880 | $ | 588,248 | ||||||||
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Costs of goods sold
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97,209 | 90,320 | 355,523 | 352,398 | ||||||||||||
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Gross profit
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63,832 | 63,644 | 237,357 | 235,850 | ||||||||||||
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Operating expenses:
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Selling and service
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14,538 | 14,960 | 57,954 | 59,823 | ||||||||||||
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Research and development
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3,916 | 3,090 | 14,700 | 10,842 | ||||||||||||
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General and administrative
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6,107 | 3,175 | 22,599 | 14,713 | ||||||||||||
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Amortization of intangibles
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13,063 | 13,097 | 51,808 | 51,960 | ||||||||||||
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Total operating expenses
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37,624 | 34,322 | 147,061 | 137,338 | ||||||||||||
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Income from operations
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26,208 | 29,322 | 90,296 | 98,512 | ||||||||||||
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Other (expense) income:
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Interest expense
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(6,645 | ) | (17,210 | ) | (27,397 | ) | (70,862 | ) | ||||||||
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Investment income
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63 | 116 | 235 | 2,205 | ||||||||||||
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Gain on extinguishment of debt
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– | – | – | 14,745 | ||||||||||||
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Write-off of deferred financing costs related to debt extinguishment
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(629 | ) | – | (4,809 | ) | – | ||||||||||
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Other, net
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(314 | ) | (265 | ) | (1,105 | ) | (1,206 | ) | ||||||||
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Total other expense, net
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(7,525 | ) | (17,359 | ) | (33,076 | ) | (55,118 | ) | ||||||||
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Income before provision for income taxes
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18,683 | 11,963 | 57,220 | 43,394 | ||||||||||||
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Provision for income taxes
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70 | 15 | 307 | 339 | ||||||||||||
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Net income
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18,613 | 11,948 | 56,913 | 43,055 | ||||||||||||
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Preferential distribution to:
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Series A preferred stockholders
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– | (4,330 | ) | (2,042 | ) | (14,151 | ) | |||||||||
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Class B common stockholders
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– | (25,983 | ) | (12,133 | ) | (100,191 | ) | |||||||||
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Beneficial conversion - see note (1)
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– | – | (140,690 | ) | – | |||||||||||
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Net income (loss) attributable to common stockholders (formerly Class A common stockholders)
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$ | 18,613 | $ | (18,365 | ) | $ | (97,952 | ) | $ | (71,287 | ) | |||||
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Net income (loss) per common share - basic (2):
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Common stock (formerly Class A common stock)
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$ | 0.28 | $ | (10,616 | ) | $ | (1.65 | ) | $ | (41,111 | ) | |||||
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Class B common stock
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n/a | $ | 1,082 | $ | 4,497 | $ | 4,171 | |||||||||
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Net income (loss) per common share - diluted (2):
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Common stock (formerly Class A common stock)
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$ | 0.28 | $ | (10,616 | ) | $ | (1.65 | ) | $ | (41,111 | ) | |||||
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Class B common stock
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n/a | $ | 1,082 | $ | 4,497 | $ | 4,171 | |||||||||
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Weighted average common shares outstanding - basic (2):
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Common stock (formerly Class A common stock)
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67,094,441 | 1,730 | 59,364,958 | 1,734 | ||||||||||||
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Class B common stock
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n/a | 24,018 | 2,698 | 24,018 | ||||||||||||
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Weighted average common shares outstanding - diluted (2):
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Common stock (formerly Class A common stock)
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67,275,465 | 1,730 | 59,364,958 | 1,734 | ||||||||||||
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Class B common stock
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n/a | 24,018 | 2,698 | 24,018 | ||||||||||||
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(1) Beneficial conversion feature related to Class B common stock and Series A preferred stock was reflected during the first quarter 2010 as a result of Generac's corporate reorganization and IPO. See discussion of Generac's equity structure and corporate reorganization in the 2009 Annual Report on Form 10-K for the fiscal year ended December 31, 2009.
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(2) 2010 Net income (loss) per common share and weighted average common shares outstanding reflect the corporate reorganization and IPO that occurred on February 10, 2010. The share structure prior to February 10, 2010 has been retroactively restated to only reflect the reverse stock split that occurred with the corporate reorganization.
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Generac Holdings Inc.
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Condensed Consolidated Balance Sheets
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(Dollars in Thousands, Except Share and Per Share Data)
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December 31,
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2010
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2009
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(Unaudited)
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(Audited)
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Assets
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Current assets:
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Cash and cash equivalents
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$ | 78,583 | $ | 161,307 | ||||
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Accounts and notes receivable, less allowance for doubtful accounts of $723 in 2010 and $1,981 in 2009
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63,154 | 54,130 | ||||||
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Inventories
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127,137 | 123,700 | ||||||
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Prepaid expenses and other assets
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3,645 | 5,880 | ||||||
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Total current assets
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272,519 | 345,017 | ||||||
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Property and equipment, net
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75,287 | 73,374 | ||||||
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Customer lists, net
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96,944 | 134,674 | ||||||
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Patents, net
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84,933 | 92,753 | ||||||
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Other intangible assets, net
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6,483 | 7,791 | ||||||
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Deferred financing costs, net
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5,822 | 13,070 | ||||||
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Trade names
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140,050 | 144,407 | ||||||
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Goodwill
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527,148 | 525,875 | ||||||
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Other assets
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697 | 282 | ||||||
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Total assets
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$ | 1,209,883 | $ | 1,337,243 | ||||
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Liabilities and stockholders’ equity
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Current liabilities:
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Accounts payable
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$ | 41,809 | $ | 33,639 | ||||
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Accrued wages and employee benefits
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6,833 | 6,930 | ||||||
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Other accrued liabilities
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38,043 | 52,326 | ||||||
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Current portion of long-term debt
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– | 39,076 | ||||||
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Total current liabilities
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86,685 | 131,971 | ||||||
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Long-term debt
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657,229 | 1,052,463 | ||||||
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Other long-term liabilities
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24,902 | 17,418 | ||||||
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Total liabilities
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768,816 | 1,201,852 | ||||||
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Class B convertible voting common stock, par value $0.01, 110,000 shares authorized, 0 and 24,018 shares issued at December 31, 2010 and 2009, respectively
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– | 765,096 | ||||||
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Series A convertible non-voting preferred stock, par value $0.01, 30,000 shares authorized, 0 and 11,311 shares issued at December 31, 2010 and 2009, respectively
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– | 113,109 | ||||||
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Stockholders’ equity (deficit):
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Common stock (formerly Class A common stock), par value $0.01, 500,000,000 shares authorized, 67,524,596 and 1,617 shares issued at December 31, 2010 and 2009, respectively
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675 | – | ||||||
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Additional paid-in capital
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1,133,918 | 2,394 | ||||||
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Excess purchase price over predecessor basis
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(202,116 | ) | (202,116 | ) | ||||
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Accumulated deficit
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(481,658 | ) | (538,571 | ) | ||||
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Accumulated other comprehensive loss
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(9,752 | ) | (4,492 | ) | ||||
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Stockholder notes receivable
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– | (29 | ) | |||||
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Total stockholders’ equity (deficit)
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441,067 | (742,814 | ) | |||||
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Total liabilities and stockholders’ equity
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$ | 1,209,883 | $ | 1,337,243 | ||||
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Generac Holdings Inc.
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Condensed Consolidated Statements of Cash Flows
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(Dollars in Thousands)
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Year Ended December 31,
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2010
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2009
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(Unaudited)
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(Audited)
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Operating activities
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Net income
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$ | 56,913 | $ | 43,055 | ||||
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Adjustment to reconcile net income to net cash provided by operating activities:
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Depreciation
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7,632 | 7,715 | ||||||
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Amortization
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51,808 | 51,960 | ||||||
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Gain on extinguishment of debt
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– | (14,745 | ) | |||||
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Write-off of deferred financing costs related to debt extinguishment
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4,809 | – | ||||||
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Amortization of deferred finance costs
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2,439 | 3,417 | ||||||
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Amortization of unrealized loss on interest rate swaps
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– | 24,222 | ||||||
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Provision for losses on accounts receivable
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(124 | ) | 227 | |||||
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Loss on disposal of property and equipment
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56 | 41 | ||||||
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Share-based compensation expense
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6,363 | 38 | ||||||
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Net changes in operating assets and liabilities:
|
||||||||
|
Accounts receivable
|
(8,621 | ) | 11,779 | |||||
|
Inventories
|
(3,151 | ) | 280 | |||||
|
Other assets
|
1,177 | (1,739 | ) | |||||
|
Accounts payable
|
7,896 | (20,886 | ) | |||||
|
Accrued wages and employee benefits
|
(197 | ) | 1,280 | |||||
|
Other accrued liabilities
|
(12,519 | ) | (32,037 | ) | ||||
|
Net cash provided by operating activities
|
114,481 | 74,607 | ||||||
|
Investing activities
|
||||||||
|
Proceeds from sale of property and equipment
|
76 | 69 | ||||||
|
Expenditures for property and equipment
|
(9,631 | ) | (4,525 | ) | ||||
|
Collections on receivable notes
|
– | 105 | ||||||
|
Acquisition of business, net of cash acquired
|
(1,649 | ) | – | |||||
|
Net cash used in investing activities
|
(11,204 | ) | (4,351 | ) | ||||
|
Financing activities
|
||||||||
|
Stockholders’ contributions of capital – Series A preferred stock
|
– | 20,000 | ||||||
|
Payment of expenses incurred in advance of stock issuance
|
– | (678 | ) | |||||
|
Proceeds from issuance of common stock
|
248,309 | – | ||||||
|
Payment of short-term and long-term debt
|
(434,310 | ) | (9,500 | ) | ||||
|
Net cash (used in) provided by financing activities
|
(186,001 | ) | 9,822 | |||||
|
|
||||||||
|
Net (decrease) increase in cash and cash equivalents
|
(82,724 | ) | 80,078 | |||||
|
Cash and cash equivalents at beginning of period
|
161,307 | 81,229 | ||||||
|
Cash and cash equivalents at end of period
|
$ | 78,583 | $ | 161,307 | ||||
|
Generac Holdings Inc.
|
||||||||||||||||
|
Reconciliation Schedules
|
||||||||||||||||
|
(Dollars in Thousands, Except Share and Per Share Data)
|
||||||||||||||||
|
Net income to Adjusted EBITDA
|
||||||||||||||||
|
reconciliation
|
Three months ended December 31,
|
Year Ended December 31,
|
||||||||||||||
|
2010
|
2009
|
2010
|
2009
|
|||||||||||||
|
(unaudited)
|
(unaudited)
|
(unaudited)
|
(unaudited)
|
|||||||||||||
|
Net income
|
$ | 18,613 | $ | 11,948 | $ | 56,913 | $ | 43,055 | ||||||||
|
Interest expense
|
6,645 | 17,210 | 27,397 | 70,862 | ||||||||||||
|
Depreciation and amortization
|
14,918 | 14,994 | 59,440 | 59,675 | ||||||||||||
|
Income taxes provision
|
70 | 15 | 307 | 339 | ||||||||||||
|
Non-cash impairment and other charges (1)
|
(144 | ) | (203 | ) | (361 | ) | (1,592 | ) | ||||||||
|
Non-cash share-based compensation expense (2)
|
1,728 | - | 6,363 | - | ||||||||||||
|
Write-off of deferred financing costs related to debt extinguishment
|
629 | - | 4,809 | - | ||||||||||||
|
Transaction costs and credit facility fees
|
169 | 20 | 1,019 | 1,188 | ||||||||||||
|
Non-cash gains (3)
|
- | - | - | (14,745 | ) | |||||||||||
|
Other
|
118 | 97 | 362 | 305 | ||||||||||||
|
Adjusted EBITDA
|
$ | 42,746 | $ | 44,081 | $ | 156,249 | $ | 159,087 | ||||||||
|
(1) Includes losses on disposals of assets and unrealized mark-to-market adjustments on commodity contracts. A full description of these and the other reconciliation adjustments contained in these schedules is included in Generac's SEC filings.
|
||||||||||||||||
|
(2) Includes share-based compensation expense to account for stock options, restricted stock and other stock awards issued in connection with Generac's initial public offering over their respective vesting periods.
|
||||||||||||||||
|
(3) Includes gains on extinguishment of debt.
|
||||||||||||||||
|
Net income to Adjusted net income
|
||||||||||||||||
|
reconciliation
|
Three months ended December 31,
|
Year Ended December 31,
|
||||||||||||||
|
2010
|
2009
|
2010
|
2009
|
|||||||||||||
|
(unaudited)
|
(unaudited)
|
(unaudited)
|
(unaudited)
|
|||||||||||||
|
Net income
|
$ | 18,613 | $ | 11,948 | $ | 56,913 | $ | 43,055 | ||||||||
|
Provision for income taxes
|
70 | 15 | 307 | 339 | ||||||||||||
|
Income before provision for income taxes
|
18,683 | 11,963 | 57,220 | 43,394 | ||||||||||||
|
Amortization of intangible assets
|
13,063 | 13,097 | 51,808 | 51,960 | ||||||||||||
|
Amortization of deferred loan costs
|
569 | 855 | 2,439 | 3,417 | ||||||||||||
|
Write-off of deferred financing costs related to debt extinguishment
|
629 | - | 4,809 | - | ||||||||||||
|
Gain on extinguishment of debt
|
- | - | - | (14,745 | ) | |||||||||||
|
Adjusted net income before provision for income taxes
|
32,944 | 25,915 | 116,276 | 84,026 | ||||||||||||
|
Cash income tax expense
|
(9 | ) | 6 | (404 | ) | (383 | ) | |||||||||
|
Adjusted net income
|
$ | 32,935 | $ | 25,921 | $ | 115,872 | $ | 83,643 | ||||||||
|
Adjusted net income per common share - diluted (4):
|
$ | 0.49 | n/m | n/m | n/m | |||||||||||
|
Weighted average common shares outstanding - diluted (4):
|
67,275,465 | n/m | n/m | n/m | ||||||||||||
|
(4) pre-IPO share and per share data is not meaningful due to the corporate reorganization which occurred in conjunction with the IPO during the first quarter of 2010.
|
||||||||||||||||
|
Free Cash Flow Reconciliation
|
||||||||||||||||
|
Three months ended December 31,
|
Year Ended December 31,
|
|||||||||||||||
|
2010
|
2009
|
2010
|
2009
|
|||||||||||||
|
(unaudited)
|
(unaudited)
|
(unaudited)
|
(unaudited)
|
|||||||||||||
|
Net cash provided by operating activities
|
$ | 31,360 | $ | 29,476 | $ | 114,481 | $ | 74,607 | ||||||||
|
Expenditures for property and equipment
|
(5,307 | ) | (1,623 | ) | (9,631 | ) | (4,525 | ) | ||||||||
|
Free Cash Flow
|
$ | 26,053 | $ | 27,853 | $ | 104,850 | $ | 70,082 | ||||||||
SOURCE: Generac Holdings Inc.
For Investor Inquiries:
Generac Holdings Inc.
York Ragen
Chief Financial Officer
262-506-6064