Booming Residential Generator Sales Propel Generac Revenue 70 Percent in First Quarter
Generac posted $807 million in net sales in the first quarter of 2021 compared to $476 million in the first quarter of 2020, a 69.5-percent increase. Core sales growth, excluding the impact of acquisitions and foreign currency, was still an exceptional 67 percent. Residential product sales more than doubled to $542 million compared to $258 million last year, a 110-percent leap.
Commercial and Industrial product sales jumped to $202 million compared to $172 million in the year-ago quarter, a 17.4-percent hike. Net income attributable to the company during the first quarter was $149 million, or $2.33 per share, compared to $44 million, or $0.68 per share, for the same period of 2020.
“Our first quarter results continue to demonstrate the power of Generac’s business model and the fantastic execution by our team as our revenue grew at a tremendous 70 percent rate to over $800 million, driving a significant increase in adjusted EBITDA margins,” said Aaron Jagdfeld, president and CEO. “The revenue performance represents an all-time record despite the seasonally lower first-quarter time period. Growth was broad based led by a dramatic increase for home standby generators that more than doubled compared to prior year given the powerful mega trends that are driving incredible demand for these products.
“Shipments of our PWRcell energy storage systems also grew at a significant rate as compared to the prior year, and with the considerable momentum we have in the marketplace, we are increasing our outlook for these products for the remainder of the year. Shipments of C&I products returned to growth in the quarter, increasing at a strong rate as demand is recovering at a faster pace than previously expected across a number of markets and geographies. With the impact from the major outages in Texas along with further capacity expansion actions for home standby, and with demand strengthening broadly across the rest of the business, we are substantially increasing our full year revenue and earnings outlook for 2021.”
Adjusted EBITDA before deducting for noncontrolling interests was a record $214 million, or 26.5 percent of net sales, as compared to $86 million, or 18.1 percent of net sales, in the prior year.
Cash flow from operations was $153 million, a record for the first quarter of a year, as compared to $11 million in the prior year. Free cash flow was a record for a first quarter of $126 million as compared to ($1 million) for 2020.
Domestic segment sales increased 84.2 percent to $692.7 million as compared to $376.0 million in the prior year quarter, with the impact of acquisitions contributing approximately 2.0 percent of the revenue growth for the quarter. The core sales growth was primarily driven by a significant increase in shipments of residential products highlighted by home standby and portable generators. In addition, PWRcell energy storage systems experienced healthy growth as the company continues to expand in the clean energy market, and shipments of chore products also improved at a strong rate as compared to the prior year. This was supplemented by a return to growth for C&I products which was led by a substantial increase in shipments to telecom national account customers compared to the prior year.
International segment sales increased 14.8 percent to $114.7 million compared to $99.9 million in the prior year quarter. Core sales, which excludes the favorable impact of currency, increased 9.6 percent compared to the prior year. The growth for the segment was because of an increase in market activity primarily in the European region that is now recovering from the impact of the COVID-19 pandemic which began during the first quarter of the prior year.
The major outages in Texas during the first quarter have led to an acceleration in demand and backlog for home standby generators from the already elevated levels that existed prior to this event. This has resulted in a further increase in capacity expansion plans and is leading to a significant increase in the shipment outlook for these products for the full-year 2021. Also contributing to the improved outlook for residential products is a notable increase in portable generator shipments, along with higher demand for PWRcell energy storage systems due to further progress in building out distribution partners in this overall expanding market. The outlook for C&I products has also improved considerably because of a broad-based rebound in demand highlighted by a significant pickup in activity from telecom national account customers, and overall stronger outlooks for domestic and international markets.
As a result, Generac is increasing its full-year 2021 net sales growth guidance to now be approximately 40 to 45 percent compared to the prior year, which includes only approximately 2 percent of favorable impact from acquisitions and foreign currency. This is an increase from the as-reported growth guidance of 25 to 30 percent previously expected.
