Generac Continues Revenue Increases with 34.4 Percent in Third Quarter; Adds More Acquisitions
Generac reported $942.7 million in third quarter 2021 revenues compared to $701.4 million in the third quarter of 2020, a 34.4-percent increase. Residential product sales grew 33 percent to $609 million compared to $459 million in last year’s third quarter, a 32.7-percent jump. Commercial & Industrial product sales were $258 million compared to $176 million last year, a 46.6-percent leap.
Net income attributable to the company during the third quarter was $132 million, or $1.93 per share, compared to $115 million of $1.82 per share for the third quarter of 2020.
Generac was busy on the acquisition trail. On July 2, it closed on the acquisition of Chilicon Power, a designer and provider of grid-interactive microinverter and monitoring solutions for the solar market, based in California. On Sept. 1, Generac closed on the acquisition of Apricity Code Corp., a Bend, Ore.-based advanced engineering and product design company focused on developing energy technology solutions. On the same day it closed on the acquisition of Off Grid Energy, a manufacturer of industrial-grade energy storage systems, based in Rugby, United Kingdom.
On Oct. 1, Generac closed on the acquisition of Tank Utility, a provider of IoT propane tank monitoring solutions that enable the optimization of propane fuel logistics, headquartered in Boston.
And on Nov. 1, Generac signed an agreement to acquire ecobee, a provider of sustainable home technology solutions including smart thermostats that deliver energy savings and security, headquartered in Toronto.
“We continue to experience exceptional demand during the third quarter leading to all-time record revenue and further increases in our backlog,” said Aaron Jagdfeld, president and CEO. “We again hit record production levels in spite of the challenging supply chain environment that deteriorated during the third quarter. We have tremendous momentum in our business as we head into 2022 with the continuation of robust home standby demand, an expanding Energy Technology solutions portfolio, and strong global demand for our C&I products. This visibility provides support for another year of expected significant revenue growth with improving margins as we realize the full impact of pricing and cost-reduction actions. To support this growth over the long term, we are planning to make further capacity investments by expanding distribution capabilities in our new South Carolina facility and investing in additional manufacturing automation equipment for home standby generators and other products.
“In addition, we recently announced several strategic acquisitions that will accelerate our new ‘Powering a Smarter World’ strategy as we continue our evolution into an energy technology solutions company. We’re particularly excited about yesterday’s announcement to acquire ecobee as this transaction will allow us to create a clean, efficient, and reliable home energy ecosystem that will not only help homeowners reduce their energy consumption, but also help grid operators meet the challenges of an electric grid under enormous stress.”
Gross profit margin was 35.6 percent compared to 39.4 percent in the third quarter of 2020, with the current quarter’s margin pressured by higher input costs because of rising commodity prices, labor, logistics and plant start-up costs, which was partially offset by the early impacts of recent pricing actions.
The domestic segment sales increased 30 percent with the impact of acquisitions contributing about 1 percent of the revenue growth for the quarter. The core sales growth was driven by strength across residential and C&I products with strong growth with standby generators, PWRcell energy storage system, telecom national account customers and C&I mobile products.
International sales increased 61 percent to $151.9 million compared to $94.5 million in the year-ago quarter, with the impact of acquisitions and foreign currency contributing approximately 29 percent of the revenue increase for the quarter. The segment was driven by strength in all regions, particularly Europe and Latin America, experiencing a sharp hike in demand off the prior-year COVID lows and have recovered above 2019 levels.
Generac is maintaining its full-year 2021 net sales growth guidance range of between 47 to 50 percent compared to 2020, including approximately 5 percent of favorable impact from acquisitions and foreign currency.
For the first nine months of 2021, Generac posted $2.670 billion in revenue compared to $1.724 billion in the first nine months of 2020, a 54.9-percent hike.
About the Author
Michael Roth
Editor
Michael Roth has covered the equipment rental industry full time for RER since 1989 and has served as the magazine’s editor in chief since 1994. He has nearly 30 years experience as a professional journalist. Roth has visited hundreds of rental centers and industry manufacturers, written hundreds of feature stories for RER and thousands of news stories for the magazine and its electronic newsletter RER Reports. Roth has interviewed leading executives for most of the industry’s largest rental companies and manufacturers as well as hundreds of smaller independent companies. He has visited with and reported on rental companies and manufacturers in Europe, Central America and Asia as well as Mexico, Canada and the United States. Roth was co-founder of RER Reports, the industry’s first weekly newsletter, which began as a fax newsletter in 1996, and later became an online newsletter. Roth has spoken at conventions sponsored by the American Rental Association, Associated Equipment Distributors, California Rental Association and other industry events and has spoken before industry groups in several countries. He lives and works in Los Angeles when he’s not traveling to cover industry events.