gnrc20220331

gnrc20220331_10q.htm

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 10-Q

(Mark One)

☑	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

	For the quarterly period ended March 31, 2022

OR

☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

	For the transition period from to

Commission File Number 001-34627

GENERAC HOLDINGS INC.

(Exact name of registrant as specified in its charter)

Delaware	20-5654756
(State or other jurisdiction of	(IRS Employer
incorporation or organization)	Identification No.)

S45 W29290 Hwy 59, Waukesha, WI	53189
(Address of principal executive offices)	(Zip Code)

(262) 544-4811

(Registrant’s telephone number, including area code)

Not Applicable

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $0.01 par value	GNRC	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☑ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☑ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☑	Accelerated filer ☐
Non-accelerated filer ☐	Smaller reporting company ☐
Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☑

As of May 4, 2022, there were 63,829,951 shares of registrant’s common stock outstanding.

Table of Contents

GENERAC HOLDINGS INC.

TABLE OF CONTENTS

		Page
PART I. FINANCIAL INFORMATION

Item 1.	Condensed Consolidated Financial Statements (Unaudited)

	Condensed Consolidated Balance Sheets as of March 31, 2022 and December 31, 2021	1

	Condensed Consolidated Statements of Comprehensive Income for the Three Months Ended March 31, 2022 and 2021	2

	Condensed Consolidated Statements of Stockholders’ Equity for the Three Months Ended March 31, 2022 and 2021	3

	Condensed Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2022 and 2021	4

	Notes to Condensed Consolidated Financial Statements	5

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	15

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	26

Item 4.	Controls and Procedures	26

PART II. OTHER INFORMATION

Item 1.	Legal Proceedings	26

Item 1A.	Risk Factors	26

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	27

Item 6.	Exhibits	27

	Signatures	28

Table of Contents

PART I. FINANCIAL INFORMATION

PART I. FINANCIAL INFORMATION
Item 1. Financial Statements

Generac Holdings Inc.

Condensed Consolidated Balance Sheets

(U.S. Dollars in Thousands, Except Share and Per Share Data)

(Unaudited)

	*March 31,*			*December 31,*
	*2022*			*2021*
Assets
Current assets:
Cash and cash equivalents	$	206,023		$	147,339
Accounts receivable, less allowance for credit losses		609,870			546,466
Inventories		1,236,772			1,089,705
Prepaid expenses and other assets		72,736			64,954
Total current assets		2,125,401			1,848,464

Property and equipment, net		443,480			440,852

Customer lists, net		231,513			238,722
Patents and technology, net		482,947			492,473
Other intangible assets, net		56,246			66,436
Tradenames, net		237,854			243,531
Goodwill		1,412,187			1,409,674
Deferred income taxes		11,779			15,740
Operating lease and other assets		150,126			121,888
Total assets	$	5,151,533		$	4,877,780

Liabilities and stockholders’ equity
Current liabilities:
Short-term borrowings	$	84,995		$	72,035
Accounts payable		697,486			674,208
Accrued wages and employee benefits		50,443			72,060
Other accrued liabilities		415,955			331,674
Current portion of long-term borrowings and finance lease obligations		4,279			5,930
Total current liabilities		1,253,158			1,155,907

Long-term borrowings and finance lease obligations		1,002,685			902,091
Deferred income taxes		163,843			205,964
Operating lease and other long-term liabilities		351,724			341,681
Total liabilities		2,771,410			2,605,643

Redeemable noncontrolling interests		71,511			58,050

Stockholders’ equity:
Common stock, par value $0.01, 500,000,000 shares authorized, 72,589,905 and 72,386,017 shares issued at March 31, 2022 and December 31, 2021, respectively		727			725
Additional paid-in capital		959,890			952,939
Treasury stock, at cost		(471,833	)		(448,976	)
Excess purchase price over predecessor basis		(202,116	)		(202,116	)
Retained earnings		2,067,868			1,965,957
Accumulated other comprehensive loss		(46,402	)		(54,755	)
Stockholders’ equity attributable to Generac Holdings Inc.		2,308,134			2,213,774
Noncontrolling interests		478			313
Total stockholders' equity		2,308,612			2,214,087
Total liabilities and stockholders’ equity	$	5,151,533		$	4,877,780

See notes to condensed consolidated financial statements.

Table of Contents

Generac Holdings Inc.

Condensed Consolidated Statements of Comprehensive Income

(U.S. Dollars in Thousands, Except Share and Per Share Data)

(Unaudited)

	*Three Months Ended March 31,*
	*2022*			*2021*

Net sales	$	1,135,856		$	807,434
Costs of goods sold		775,108			485,620
Gross profit		360,748			321,814

Operating expenses:
Selling and service		98,243			68,424
Research and development		39,744			22,388
General and administrative		41,972			32,899
Amortization of intangibles		26,054			8,979
Total operating expenses		206,013			132,690
Income from operations		154,735			189,124

Other (expense) income:
Interest expense		(9,554	)		(7,723	)
Investment income		77			603
Other, net		246			3,309
Total other expense, net		(9,231	)		(3,811	)

Income before provision for income taxes		145,504			185,313
Provision for income taxes		28,608			35,368
Net income		116,896			149,945
Net income attributable to noncontrolling interests		3,038			952
Net income attributable to Generac Holdings Inc.	$	113,858		$	148,993

Net income attributable to Generac Holdings Inc. per common share - basic:	$	1.61		$	2.39
Weighted average common shares outstanding - basic:		63,449,380			62,478,734

Net income attributable to Generac Holdings Inc. per common share - diluted:	$	1.57		$	2.33
Weighted average common shares outstanding - diluted:		64,828,819			64,099,073

Comprehensive income attributable to Generac Holdings Inc.	$	122,365		$	153,816

See notes to condensed consolidated financial statements.

Table of Contents

Generac Holdings Inc.

Condensed Consolidated Statements of Stockholders' Equity

(U.S. Dollars in Thousands, Except Share Data)

(Unaudited)

	*Generac Holdings Inc.*
														*Excess Purchase Price*					*Accumulated*
					*Additional*									*Over*					*Other*			*Total*
	*Common Stock*				*Paid-In*			*Treasury Stock*						*Predecessor*			*Retained*		*Comprehensive*			*Stockholders'*			*Noncontrolling*
	*Shares*		*Amount*		*Capital*			*Shares*			*Amount*			*Basis*			*Earnings*		*Income (Loss)*			*Equity*			*Interest*		*Total*
Balance at January 1, 2022		72,386,017	$	725	$	952,939			(8,667,031	)	$	(448,976	)	$	(202,116	)	$	1,965,957	$	(54,755	)	$	2,213,774		$	313	$	2,214,087
Unrealized gain on interest rate swaps, net of tax of $6,326		–		–		–			–			–			–			–		18,728			18,728			–		18,728
Foreign currency translation adjustment		–		–		–			–			–			–			–		(10,375	)		(10,375	)		182		(10,193	)
Common stock issued under equity incentive plans, net of shares withheld for employee taxes and strike price		203,888		2		(1,876	)		–			–			–			–		–			(1,874	)		–

SEC Form 10-Q filed by Generac Holdlings Inc.