Slide 1: Fourth Quarter and Full Year 2010 Earnings Presentation
Fourth Quarter and Full Year 2010 Earnings Presentation – Friday February 18, 2011
Slide 2: Forward Looking Statements
Forward Looking Statements Certain statements contained in this presentation, 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 mater
Slide 3: Quarterly Overview
Quarterly Overview Net Sales: +4.6% to $161.0 million in Q4; +0.8% to $592.9 million for FY 2010 – Third consecutive year of Net Sales growth Net Income: +55.8% to $18.6 million Adjusted Net Income: +27.2% to $33.0 million Full year Free Cash Flow(1) of $105 million, enabling a $74.2 million debt pr
Slide 4: "Powering Ahead" Strategic Plan
“Powering Ahead” Strategic Plan Grow Residential Standby Market Gain Industrial Market Share Increase penetration of US Households Increase share of commercial and industrial beyond current 2% figure products sold in North America Diversify End Markets Enter New Geographies Introduce new products an
Slide 5: Grow Residential Standby Market
Grow Residential Standby Market Increase use of targeted direct marketing Awareness Outage response advertising Pre-season marketing campaigns Add dealers in underserved markets Expand private label programs to target new Availability distribution channels Leverage retail relationships to create awa
Slide 6: Gain Industrial Market Share
Gain Industrial Market Share Upgrade / expand current North American distribution footprint for industrial products; Upgrade & Leverage residential and light commercial dealer Expand network Distribution Grow private label programs to further improve penetration opportunity for commercial gensets In
Slide 7: Diversify End Markets; Enter New Geographies
Diversify End Markets; Enter New Geographies Diversify End Markets Enter New Geographies Development of new products to Build sales and marketing team for leverage brand, customer base, Latin American market supply chain and manufacturing footprint Expand Latin American distribution already in place
Slide 8: Q4 & Full Year 2010 Financial Overview
Q4 & Full Year 2010 Financial Overview ($ in millions) Actual Y/Y % Actual Y/Y % Q4 2010 Change FY 2010 Change Residential $ 99.9 (1.7%) $ 372.8 0.6% Industrial 52.4 16.9% 183.6 (2.0%) Other 8.7 17.2% 36.5 21.1% Net Sales $ 161.0 4.6% $ 592.9 0.8% Gross Profit $ 63.8 0.3% $ 237.4 0.6% % Margin 39.6%
Slide 9: Fiscal Year 2011 Guidance
Fiscal Year 2011 Guidance Operating environment in 2011 similar to 2010 Moderate sales growth overall; Maintain attractive gross margins Continue to invest prudently in our operating infrastructure Interest Expense: $26-$29 million, which includes $24-$27 million of cash interest and ~$2 million for
Slide 10: Continued Strong Free Cash Flow Generation
Continued Strong Free Cash Flow Generation ($ in millions) Unlevered Free Cash Flow (1) Free Cash Flow Strong Post-IPO Cash Flow → 10% Current Free Cash Flow Yield (2) (1) Unlevered free cash flow defined as Free Cash Flow plus cash interest expense. (2) Based on $105 million December 2010 LTM Free
Slide 11: Key Investment Highlights
Key Investment Highlights Powerful long-term industry fundamentals Low penetration of residential and light commercial standby generators Differentiated operating model creates sustainable competitive advantages Driving growth through innovation and distribution expansion Best-in-class profitability
Slide 12: Appendix
Appendix CONFIDENTIAL
Slide 13: Adjusted EBITDA Reconciliation
Adjusted EBITDA Reconciliation ($ in thousands) 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
Slide 14: Adjusted Net Income & Free Cash Flow Reconciliation
Adjusted Net Income & Free Cash Flow Reconciliation ($ in thousands) 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 f