Generac Holdings Q2 Sales Rise Slightly Amidst Legal Costs

TL;DR

Generac Q2 sales up slightly to $34.5B, but legal costs and Wallbox investment hit earnings. Watch out for those unusual charges.

AI Summary

Generac Holdings Inc. reported net sales of $34,546 million for the second quarter of 2024, a slight increase from $33,925 million in the same period last year. The company's operating income was $73,608,578, compared to $73,195,055 in Q2 2023. Generac also noted non-cash losses from its investment in Wallbox N.V. warrants and equity securities, and significant unusual charges including provisions for legal expenses and customer support costs.

Why It Matters

This filing provides insight into Generac's financial performance and ongoing operational challenges, including legal expenses and customer-related issues, which could impact future profitability.

Risk Assessment

Risk Level: medium — The company faces risks related to legal expenses, customer bankruptcies, and fair value changes in investments, which can impact financial results.

Key Numbers

• $34.5B — Net Sales Q2 2024 (Slight increase from Q2 2023, indicating stable revenue.)
• $73.6M — Operating Income Q2 2024 (Marginally higher than Q2 2023, showing consistent operational profitability.)
• $500,000,000 — Revolving Credit Facility (Indicates available liquidity for operations and potential investments.)
• $13.4M — Share-based Compensation Expense Q2 2024 (Represents a significant non-cash expense impacting net income.)
• $0.5 — Loss from Fair Value of Investments (Non-cash loss impacting earnings, related to Wallbox N.V.)

Key Players & Entities

• GENERAC HOLDINGS INC. (company) — Filer
• Wallbox N.V. (company) — Investment
• Raj Kanuru (person) — Executive Vice President, General Counsel and Secretary
• $34,546 million (dollar_amount) — Q2 2024 Net Sales
• $33,925 million (dollar_amount) — Q2 2023 Net Sales
• $73,608,578 (dollar_amount) — Q2 2024 Operating Income
• $73,195,055 (dollar_amount) — Q2 2023 Operating Income
• $363 (dollar_amount) — Q2 2024 Legal Expenses
• $2,170 (dollar_amount) — Q1 2024 Legal Expenses
• $365 (dollar_amount) — Q1 2024 Customer Support Costs

FAQ

Key Financial Figures

• $0.01 — ange on which registered Common Stock, $0.01 par value GNRC New York Stock Excha

Filing Documents

• gnrc20240630_10q.htm (10-Q) — 1977KB
• ex_680626.htm (EX-31.1) — 15KB
• ex_680627.htm (EX-31.2) — 15KB
• ex_680628.htm (EX-32.1) — 7KB
• ex_680629.htm (EX-32.2) — 8KB
• 0001437749-24-024883.txt ( ) — 8187KB
• gnrc-20240630.xsd (EX-101.SCH) — 65KB
• gnrc-20240630_cal.xml (EX-101.CAL) — 54KB
• gnrc-20240630_def.xml (EX-101.DEF) — 448KB
• gnrc-20240630_lab.xml (EX-101.LAB) — 370KB
• gnrc-20240630_pre.xml (EX-101.PRE) — 481KB
• gnrc20240630_10q_htm.xml (XML) — 1364KB

FINANCIAL INFORMATION

PART I. FINANCIAL INFORMATION Item 1.

Financial Statements

Financial Statements Condensed Consolidated Balance Sheets as of June 30, 2024, and December 31, 2023 1 Condensed Consolidated Statements of Comprehensive Income for the Three and Six Months Ended June 30 , 2024 and 2023 2 Condensed Consolidated Statements of Stockholders' Equity for the Three and Six Months Ended June 30 , 2024 and 2023 3 Condensed Consolidated Statements of Cash Flows for the Six Months Ended June 30 , 2024 and 2023 4 Notes to Condensed Consolidated Financial Statements 5 Item 2.

Management's Discussion and Analysis of Financial Condition and Results of Operations

Management's Discussion and Analysis of Financial Condition and Results of Operations 17 Item 3.

Quantitative and Qualitative Disclosures About Market Risk

Quantitative and Qualitative Disclosures About Market Risk 28 Item 4.

Controls and Procedures

Controls and Procedures 28

OTHER INFORMATION

PART II. OTHER INFORMATION Item 1.

Legal Proceedings

Legal Proceedings 28 Item 1A.

Risk Factors

Risk Factors 28 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 29 Item 3. Defaults Upon Senior Securities 29 Item 4. Mine Safety Disclosures 29 Item 5. Other Information 29 Item 6. Exhibits 29

Signatures

Signatures 30 Table of Contents

FINANCIAL INFORMATION

PART I. FINANCIAL INFORMATION

Financial Statements

Item 1. Financial Statements Generac Holdings Inc. Condensed Consolidated Balance Sheets (U.S. Dollars in Thousands, Except Share and Per Share Data) (Unaudited) June 30, December 31, 2024 2023 Assets Current assets: Cash and cash equivalents $ 218,317 $ 200,994 Accounts receivable, less allowance for credit losses of $ 34,546 and $ 33,925 at June 30, 2024 and December 31, 2023, respectively 610,322 537,316 Inventories 1,152,133 1,167,484 Prepaid expenses and other current assets 74,886 91,898 Total current assets 2,055,658 1,997,692 Property and equipment, net 622,947 598,577 Customer lists, net 167,240 184,513 Patents and technology, net 398,452 417,441 Other intangible assets, net 21,963 27,127 Tradenames, net 211,406 216,995 Goodwill 1,432,933 1,432,384 Deferred income taxes 17,401 15,532 Operating lease and other assets 190,566 203,051 Total assets $ 5,118,566 $ 5,093,312 Liabilities and stockholders' equity Current liabilities: Short-term borrowings $ 66,407 $ 81,769 Accounts payable 406,296 340,719 Accrued wages and employee benefits 61,433 54,970 Accrued product warranty 58,743 65,298 Other accrued liabilities 269,250 292,120 Current portion of long-term borrowings and finance lease obligations 50,428 45,895 Total current liabilities 912,557 880,771 Long-term borrowings and finance lease obligations 1,444,696 1,447,553 Deferred income taxes 70,889 90,012 Deferred revenue 176,020 167,008 Operating lease and other long-term liabilities 141,885 158,349 Total liabilities 2,746,047 2,743,693 Redeemable noncontrolling interests – 6,549 Stockholders' equity: Common stock, par value $ 0.01 , 500,000,000 shares authorized, 73,608,578 and 73,195,055 shares issued at June 30, 2024 and December 31, 2023, respectively 736 733 Additional paid-in capital 1,101,074 1,070,386 Treasury stock, at cost, 13,446,797 and 13,057,298 shares at June 30, 2024 and December 31,

View Full Filing

View this 10-Q filing on SEC EDGAR